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Foreign Affairs, Defence and Trade Legislation Committee - 22/10/2015 - Estimates - FOREIGN AFFAIRS AND TRADE PORTFOLIO - Austrade



CHAIR: Thank you, Mr Gosper. Do you wish to make an opening statement?

Mr Gosper : No, thank you.

CHAIR: I will go to Senator Fawcett.

Senator FAWCETT: We just had a lot of folks on free trade agreements, which has been great. One of the things Australia needs is inbound direct investment. I was wondering if you could tell us what change we have had since financial year 2013-14 and into 2014-15.

Mr Gosper : Indeed investment has been another focus in the portfolio and for the Minister for Trade and Investment, Andrew Robb. He has held now some 68 roundtables in 27 countries over the course of the last couple of years as well as innumerable bilateral meetings with investors. Investment has been a big focus. A big focus coming up, of course, will be the northern Australia summit, something that the Commonwealth is doing in conjunction with the Northern Territory, Queensland and Western Australia.

In a situation where global investment has contracted somewhat, last year we pleasingly showed some improvement to $140 billion, which I think was around $21 million ahead of the year before that. We in supporting Minister Robb have been associated with some important outcomes in this area. According to the statement that the minister made in parliament, that amounts to some $7.75 billion. We are putting a lot of emphasis, of course, into the priority areas that the Commonwealth and the states and territories have agreed around economic infrastructure, tourism infrastructure, resources and energy, agriculture and, of course, advanced manufacturing. Infrastructure is an important part of that, so attracting investment from funds in the Northern Hemisphere has been a particular priority around that. It is a major focus of effort, and there have been some quite pleasing take-up of that, but there is a need to keep improving the climate for investors, working with the states and territories, which are responsible for a lot of the projects, and working with investors to assure them that the climate here is a welcoming one and that we are doing our best to facilitate the investment prospects.

Senator FAWCETT: Thank you for that. The answer to my question was $21 billion more this year than last year.

Mr Gosper : 2014 over 2013.

Senator FAWCETT: Sure. Do you have any modelling that shows what that means in terms of employment around Australia?

Mr Gosper : Of those specific figures, no, but the minister did release something that the Economic Intelligence Unit had produced earlier this year which showed modelling suggesting that each $1 billion in additional FDI was associated with 1,000 jobs. Obviously the figures we are talking about amount to a substantial amount of employment creation but are also, of course, important for new technology infusion in our industry, the creation of infrastructure which will have benefits for our agricultural sector and other sectors, and all those sorts of flow-on benefits to the economy.

Senator FAWCETT: Terrific. Thank you.

Senator WONG: First, I think you had 56 questions. I think all of them were late. Is that right?

Mr Gosper : Yes, I understand that is the case.

Senator WONG: We had a significant number on the last occasion. I understand they were with the minister's office for some time, which is disappointing. Even given that, they were in fact provided to him after the deadline.

Mr Gosper : Indeed, Senator—I think some 10 days. I apologise to the committee for that and we will attempt to do better next time.

Senator WONG: I want to go to Match Australia. You provided some answers to me. I first go to question on notice 52.

Mr Gosper : I do not have that with me.

Senator WONG: It would be useful if you could bring your answers to the questions on notice that you provided to the committee. It would not be unusual for people to come back to them.

Mr Gosper : Okay.

Senator WONG: I will ask a few questions on these. I asked you about the success of the program. You said metrics had not been finalised. Have you finalised any metrics?

Mr Gosper : During the course of the estimates we may have given some sense of the sorts of outcomes.

Senator WONG: I asked you this question and your answer was: 'Metrics have not been finalised, but Austrade will likely measure—' I will come to a couple of things you said, but I am asking: have you finalise metrics or not?

Mr Gosper : I will ask Mr Barty and Ms Dawson.

Mr Barty : I can indicate that the Kuwait Foreign Petroleum Exploration Company indicated that it was planning an additional $2.5 billion investment in the sector—

Senator WONG: No, I am not asking whether anything has happened as a result of people going. I am asking: when you are putting money into taking people to sporting activities, at taxpayer's expense, I understood from our discussion last time and your response here that you were still constructing the metrics of the program. I asked, 'How will the success of the program be measured?' and your answer was: 'Metrics have not been finalised, but we will likely measure—' This is something I asked in June and it is now October, so I am asking: have you finalised metrics and, if so, what are they?

Mr Barty : The metrics is: actual business engagement with Australian investors' interests.

Senator WONG: In June it was: the number of investors and customers across key investment priority industry sectors and global trade theme industry sectors. Can you tell me what 'global trade theme industry sectors' are?

Mr Barty : Global trade theme sectors include things like the energy and resources sector. They also include interests in tourism and harassment. They include interests in agricultural products and projects and advanced manufacturing.

Senator WONG: So you are actually going to construct metrics for this program or not?

Mr Barty : The metrics are: businesses indicating interest and/or undertaking activities in Australia as a result of the activities.

Senator WONG: So the metrics are: the number of events run, the number of investors and customers across—

Mr Barty : That is right.

Senator WONG: I just want you to explain where I can find how you will measure the program, because you have given me a couple of answers tonight and they are not the same as the answers you gave me in June.

Ms Dawson : With the Match Australia program, we are working on a detailed implementation plan, of which the key metrics are the performance measures indicated by Mr Barty.

Senator WONG: What are they?

Ms Dawson : The number of business events that we will run around the events and particularly the number of investors, customers and clients that participate in the program, and then aligning those to some of the outcomes that Mr Barty was about to refer to.

Senator WONG: How many events have been held?

Ms Dawson : The Match Australia events to date—we have had 30—

Senator WONG: Thirty events and you are still working on an implementation plan?

Ms Dawson : No, the implementation plan is for the new Match Australia going forward. The 30 events held were specifically around the Asian football cup held in Australia, the ICC Cricket World Cup and also—

Senator WONG: The Australian Open.

Ms Dawson : the Australian Open.

Senator WONG: There were no metrics for that?

Ms Dawson : We were using the same metrics, but we were assessing it to move forward into the new program.

Senator WONG: So what were the metrics for those events?

Ms Dawson : The number of business events run and the investors, customers and clients that participated in the program.

Senator WONG: So, essentially a networking event?

Ms Dawson : No, there were a number of investor roundtables and different types of events, not networking events.

Senator WONG: So the implementation plan is for the revised program? I think that is what you said.

Ms Dawson : Yes, the program going forward.

Senator WONG: When did that program start?

Ms Dawson : The program is from this financial year moving forward.

Senator WONG: When are we likely to see an implementation plan for that program?

Ms Dawson : It is in a draft at this stage and we are just finalising it.

Senator WONG: On notice, can I get a copy of that?

Ms Dawson : Yes.

Senator WONG: Thank you. I do not quite understand the way you have constructed this. I think it is attachment A to question 6 from the budget estimates round. There are 'Sporting events attended by Austrade officers' and attachment B is Match Australia events. You go to sporting events and you grow to match a stronger events, which are also sporting events.

Ms Dawson : No—the difference is things at sporting events per se and then the other events, like investor roundtables that were held—

Senator WONG: Right—at the events?

Ms Dawson : No, not always.

Senator WONG: They are, because: Match Australia, Australian Open—

Ms Dawson : For example, around—

Senator WONG: AFC Asian Cup, ICC Cricket World Cup. I think that all but one on the list you have given me is in fact a sporting event.

Ms Dawson : But the events were held in the margins of those. An example would be around the Asian football cup final where an investor roundtable was held in the city, not at the sporting event itself.

Senator WONG: I will go to sporting events. The sporting events are different to the Match Australia events—correct?

Ms Dawson : Yes.

Senator WONG: How do you fund attendance at the sporting events?

Ms Dawson : It depends on the nature of the sporting event. The majority of them were working with either our Commonwealth Office of Sport colleagues, where there had been federal government arrangements for tickets in relation to some of the sporting events or, indeed, through relationships with our state and territory government colleagues.

Senator WONG: To be frank, what are the metrics for the non-Match-Australia sporting events? How do you decide what you should go to and what you should not go to, what taxpayers' money should be spent on and what it should not be spent on? What are the parameters of that?

Ms Dawson : The Match Australia events that were held to date—

Senator WONG: No, the non-Match-Australia events. This is attachment A to question on notice 6, I think.

Ms Dawson : In terms of deciding the sporting events, it is all related to the sporting events. It is looking at where there are significant investment opportunities—around the Asian football cup it was targeting particular markets—and then deciding whether it is better to have an investor roundtable or where we would have the most return.

Senator WONG: Can you look at attachment A? I understand your rationale. I still think there seems to be a lot of attendance at sport, but anyway, we will leave that aside—not that I am opposed to it. I am just not sure that—

CHAIR: Value.

Senator WONG: The value to the taxpayer of buying lots of tickets. Leaving aside the Match Australia event, I am trying to understand attachment A, which is 'Sporting events attended by Austrade officers'. I want to understand your process for determining it, your parameters around it, the transparency associated with it and your budget for it. Are you able to help me with any of that?

Ms Dawson : In terms of deciding the events? I am not quite sure of the specifics of your question, Senator. Are you asking—

Senator WONG: You are going to a whole heap of sporting events that are not Match Australia events. Correct? That is what attachment A shows me.

Ms Dawson : They are events that we have held to raise awareness—

Senator WONG: But you go and watch the event? You go and watch the cricket. You might have a round table as well, but you buy a ticket for the cricket.

Mr Gosper : Could I—

Ms Dawson : No.

Senator WONG: No? That is what the $4,000 plus GST is.

CHAIR: Mr Gosper, you might be able to throw some light on the situation.

Mr Gosper : Can I make the basic observation that what we are doing with Match Australia is using international attendance at sporting events which have some interest for international visitors, or involve, indeed, other countries, to bring together potential investors or business people to engage with ministers or counterparts.

Senator WONG: Okay, Mr Gosper. Can you look at attachment A for me.

Mr Gosper : Indeed.

Senator WONG: Attachment B is the Match Australia events. You have given me a list of people you say are representatives from the Future Fund, the office of the minister, a Korean investor, another office of the minister—a range of things. I am not asking you questions about that. I am asking questions about the first schedule, which has 'Sporting events attended by Austrade officers'. 'Event: Australian Open. Cost: $4,000. Investors … invited: 7. Minister involved: Robb. Advisers: Yes. Austrade attended: Yes'. I am trying to understand what this set of sporting events tells me and how they relate. I am not asking about the next schedule; I am asking about attachment A. Can someone explain that to me.

Ms Dawson : The Australian Open tennis was a round table at the quarter-final that the minister hosted—a round table of 10. That is what the event was.

Senator WONG: Seven customers.

Ms Dawson : Yes.

Senator WONG: No. That is attachment B. I am asking about attachment A. These are not my documents. Explain to me what attachment A tells me and attachment B tells me.

Ms Dawson : The attachment A that I have in front of me is talking about the investment round table, and then I have a list of attendees there.

Senator WONG: No. That is attachment B. Question 6—

Ms Dawson : Sorry, I have it as attachment A, and I have attachment B as the Asian Cup.

Senator WONG: I am looking at question 6—question on notice from the budget estimates—that refers to pages 83, 84, 88, 89 and 90 of the proof Hansard. There is quite a long list. There is then an attachment—attachment A and attachment B. Attachment A is entitled at the top 'Sporting events attended by Austrade officers.' The first one is 'Australian Open. Cost: $4,000'. Do you have that?

Ms Dawson : Yes, I do.

Senator WONG: Attachment B is Match Australia events. I do not understand the difference between the two.

Ms Dawson : It is the same event. If you look on attachment A, the first line item 'Australian Open' and you look on attachment B at the top, the invitees, it is the same. It is a reference across.

Senator WONG: What are you telling me with the different attachments, then?

Ms Dawson : One question was around which events had Austrade staff attendance, and then one was a more detailed question about who attended the events.

Senator WONG: Right. Okay. Thank you. That is clear. So if I want to look at that first one, or the second one, 'Asian Cup: Australia versus Kuwait', will I find that the list of—no, I do not think I do. 'Asian Cup: Australia versus Kuwait. Stakeholders invited: 7.' But nothing in attachment B tells me who was there. You have not given me names; you have given me company names—and I accept that.

Ms Dawson : Yes.

Senator WONG: This is what I want to understand, and maybe you can update it. How many more have there been since we last met—since the end of this?

Ms Dawson : There have not been any more since we last met.

Senator WONG: Really? This is it?

Ms Dawson : Yes.

Senator WONG: We are not doing any more?

Ms Dawson : We are. It is just that there have not been major sporting events in that time.

Senator WONG: Big call!

CHAIR: We have the Melbourne Cup coming up, and presumably the AFL grand final was included.

Mr Barty : They are Australian icon events. They are not major international sporting events.

CHAIR: The Melbourne Cup is a major international event, Mr Barty, isn't it? It is won by overseas horses every year, Mr Barty.

Senator WONG: In attachment A there are no costs listed for a range of these events. Can you explain why.

Ms Dawson : Yes—because we did not incur costs. I think the original question was around hospitality costs. We did not incur those because the events were held, as I mentioned, by partnering with state and territory governments—

Senator WONG: And ticket costs?

Ms Dawson : No. We did not incur ticket costs.

Senator WONG: For any of these events where there is no costs associated?

Ms Dawson : Correct.

Senator WONG: So you just got a freebie from—

Mr Gosper : I think there may have been minor ticket—

Mr Barty : Catering costs of $5,180 for—

Senator WONG: What are you talking about? Which event are you talking about?

Mr Barty : Australia versus India in the IPL cricket—

Senator WONG: With respect, you have given me a number. I have quite a number of events. It is a bit difficult to know what you are talking about.

Mr Barty : You just asked: which events did we provide hospitality? We provided hospitality in the Australia versus India cricket test match.

CHAIR: That was $5,000—

Mr Barty : $5,180. We provided hospitality at the Australian Open tennis quarter-final: $4,400. We provided hospitality to the Australia versus Sri Lanka Cricket World Cup: $3,750. The total hospitality provided across Match Australia was $13,330.

Senator WONG: $13,000?

CHAIR: $13,330.

Senator WONG: Can I ask: why didn't you just put this in these questions on notice? I think you were asked these questions. It would just be easier than trying to work our way through it like this. You are saying there have been no further Match Australia programs since the world cricket events?

Ms Dawson : That is correct.

Senator WONG: Okay. What is planned?

Ms Dawson : The Rio Olympics are the next major event that we are focused on.

Senator WONG: Who is going to get a guernsey to that—from you?

Mr Gosper : We have not thought about implementation.

Mr Barty : In the previous event, for the FIFA World Cup, there were only Austrade representatives in Brazil, and they were responsible for the logistics and administration of the guests, who were primarily from countries at those particular events where Australia was being engaged. Our intention would be to participate in activities where a country and Australia were involved and invite guests appropriately.

Senator WONG: Will the implementation plan go to how you choose the events, the investors and who gets to go?

Mr Gosper : It will go to a framework for the particular events that we would be looking to target and the level of resource that we would be looking to put into that event, yes.

Senator WONG: Was it the 2015-16 year that you got funded for?

Mr Gosper : We have funding of $5.2 million over four years.

Senator WONG: I assume at some point during the financial year you will get an implementation plan?

Mr Gosper : That is right. We are looking at an implementation plan. It will look at not just the 2016 Olympic Games, but the Commonwealth Games on the Gold Coast and the Tokyo Olympic Games, of course, in 2020.

Senator WONG: If 'metrics' is not the right word—I used that phrase because you use that phrase in your answer. I am interested in what your KPIs are for the program.

Mr Gosper : Last time when you asked the question, we gave you some specific examples of firms that were involved, but—

Senator WONG: That is an anecdotal proposition.

Mr Gosper : of course we are looking to ensure that we record the number of events, the number of investors and—

Senator WONG: If a taxpayer wants to understand what their money is being used for and why, what do they look at? In a government department, there are outcomes to which departments work. They might be quite high level and then there are outcomes which programs are supposed to deliver. I do not understand what your outcome is articulated as being and where that is. Every time we have a discussion, it seems to change.

Mr Gosper : We will look at the number of events, the number of investors and companies that participated in the events and record key outcomes that we think may be associated—

Senator WONG: Are you going to write this down anywhere? Is it going to be on a website anywhere? Is it going to be public? Is it going to be articulated?

Mr Gosper : It will be part of our reporting process, yes.

Mr Barty : I would point out that it is not just the events. Inviting designated businesses to an event allows us to engage them well before the event and allows us to engage them after the event. All at that level of engagement is activity that we would be recording.

Senator WONG: I do not want to go round and round in circles. Is it $5.2 million?

Mr Gosper : It is $5.2 million.

Senator WONG: I asked this last time and, frankly, I got a number of answers. You have given a different set of answers in the question on notice. With respect, you are now giving me a different set of propositions. I just want to understand. If a taxpayer wants to know the outcomes that are being sought, what the KPIs of this program are, what the metrics are—whatever the phrase is—what do they look at? Do they look at the Hansard over three estimates or is there something that is clear about what we are trying to achieve with this program and how we will assess this from a value for money perspective?

Mr Gosper : Of course, we have an outcomes and performance statement. This is an important program so we will indicate against that the sorts of outcomes that I have suggested—the events that we conduct, the number of investors and companies that we engage and the particular outcomes that can be associated with the event.

Senator WONG: On notice, could you report against those metrics on the Match Australia events that you provided to me? Previously I raised the issue of a Mr Peter Aitken with you.

Mr Gosper : Yes, I do recall that—from South Australia. I think I wrote to you about that.

Senator WONG: Yes, you did. He sought and obtained some advice from Austrade in relation to an export of his products to China. He is still unable to ship his products. I think the company is Environmental Organic Nutrients.

Mr Gosper : Yes, I do recall that now.

Senator WONG: You did send me a letter.

Mr Gosper : Yes, I did and I am just retrieving a copy of it now.

Senator WONG: Yes, I am too. You refer to a paid service agreement in the last paragraph on the first page.

Mr Gosper : This presumably would be an agreement that Austrade makes with someone to deliver a service.

Senator WONG: Is this a regular thing? Do you enter into many of these agreements?

Mr Gosper : Yes, we do fee for service of a number of million dollars a year. I cannot tell you off the top of my head precisely how many.

Senator WONG: Are you able to provide me with a copy of a template of such an agreement?

Mr Gosper : Yes, we can give you that on notice.

Senator WONG: Is it on a website?

Mr Gosper : Yes, I think so. We can give you that.

Senator WONG: Just give me the link on that—the fee schedule and warranties provided.

Mr Gosper : Yes, we can give you that.

Senator WONG: So is there a fee schedule and there is a warranty?

Mr Gosper : There is a fee schedule, yes.

Senator WONG: How do you determine whether you provide advice and service without an agreement or with an agreement? Is there a policy that is available?

Mr Barty : When there is a public benefit then the service is usually for free. When it is for a direct personal benefit of the company then a fee is charged.

Senator WONG: Mr Gosper, you asserted, I think, that the lack of a defined service agreement may have resulted in incomplete advice to my constituent about the extent of Austrade services and an incomplete understanding on his part, et cetera. Can I ask: why did you never seek to enter an agreement with EON over the three-year period between 2012 and 2015?

Mr Gosper : I do not think I have got a copy of the letter, Senator. I think it was probably a mistake on our part not to be more definitive about expectations under such an arrangement—if I can recall the letter.

Senator WONG: I think the proposition is that you did not make that offer, or you did not indicate that this service was available on a paid basis—a paid service agreement. If that is the case, do you know why that would be?

Mr Gosper : I would have to refresh my memory, Senator, but I do not know why it would have been. I think it was probably, as I said, something where we were not clear about relative expectations that should have been had in that circumstance.

Senator WONG: You do not have a copy of that letter here?

Mr Gosper : I have just asked for it but it does not seem to be available just at the moment. I apologise.

Senator WONG: You have explained also that Austrade goes through a process designed to ensure that the referral entity can provide specialised service to Australian exporters. What is involved in this process?

Mr Gosper : Usually it is making ourselves familiar with the service provider and making some assessment of their capability and their suitability to provide service to an Australian interest.

Senator WONG: Was this process followed for the three companies that were referred—

Mr Gosper : I understand it was, yes.

Senator WONG: The information I have been provided with is that one of the three companies was not in business and the other did not return phone calls.

Mr Gosper : That may well reflect the period of time over which this occurred. Businesses do go in and out of operation, of course.

Senator WONG: Were you aware that the third company that was recommended failed to lodge any registration application on behalf of EON?

Mr Gosper : I was, on looking into the matter, yes.

Senator WONG: Is this consulting company still a recommended referral on your list?

Mr Gosper : I would have to check on that. I would assume not.

Senator WONG: On what basis?

Mr Gosper : The basis that you have just indicated, Senator.

Senator WONG: Did you know that before this constituent matter was raised?

Mr Gosper : I believe not.

Senator WONG: Why would that be?

Mr Gosper : I do not know whether the people in China were aware of that, but I was not. I can find that on notice.

Mr Barty : Senators, it is not Austrade's responsibility to act as a legal representative for companies to provide referral advice.

Senator WONG: I appreciate that, but if you were referring Australian companies to people who are either out of business or do not actually have any track record in doing what is required, that is obviously problematic, isn't it?

Mr Barty : Sure.

Mr Gosper : We should tidy that up as best we can, as soon as we can.

Senator WONG: Obviously this is a matter that the constituent continues to be very concerned about. There has been no success rate or conversion rate—there is no practical result for this exporter.

Mr Gosper : I understand that.

Senator WONG: Is there anything further that you can provide me with, perhaps outside of this forum—on notice?

Mr Gosper : I will give some thought to that, Senator, whether I can.

Senator WONG: I appreciate that. The 'Free trade agreement promotion' budget measure on the current budget: there was a $24.6 million measure in spending, over the next two years, on trade promotion of the North Asian free trade agreements. I think your allocation was $13.4 million and $8.2 million. Is that right?

Mr Gosper : That sounds right: $21.6 million.

Senator WONG: Is that because you are paying for the advertising?

Mr Gosper : That is right; in essence, yes.

Senator WONG: How much has been spent, to date?

Mr Gosper : I do not believe I have that figure, but we are spending—as you know, the advertising campaign has commenced and we are looking to run the advertising, which is the major element of that budget expenditure over the next three months.

Senator WONG: Three months.

Mr Gosper : So we will be bringing money forward, from the next year, to this year.

Senator WONG: You are likely to spend more than $13.4 million on advertising.

Mr Gosper : We are likely to spend more than we had anticipated on the advertising part of this year's expenditure, because we are bringing the component for advertising in the next financial year forward.

Senator WONG: Does that mean there is anything of the $13.4 million not spent? Surely, you could reallocate within that.

Mr Gosper : No; I believe we will need that additional money.

Senator WONG: Can someone tell me expenditure, to date? Is there no financial consultant?

Mr Gosper : I will see if we have someone here who can do that.

Senator WONG: What I would like is expenditure, to date, and planned expenditure for the current financial year. I think you indicated over the next three months.

Mr Nichles : The money is fully committed for this financial year and, as Mr Gosper explained, we have commenced the advertising program. We will spend $10.5 million on media.

Senator WONG: That is the media buy.

Mr Nichles : That is the media buy.

Senator WONG: You have spent $10.5 million on the media buy, which includes social media, television, electronic, radio—

Mr Nichles : Yes.

Senator WONG: What else?

Mr Nichles : Print.

Senator WONG: Can you give me a breakdown?

Mr Nichles : Yes, but I cannot do it off the top of my head.

Senator WONG: Okay; on notice. What were the creatives—what was the cost of creative and production?

Mr Nichles : The contract is for $1.2 million.

Senator WONG: That is $11.7 million and you had $13.4 million, so what else has it been spent on—

Mr Nichles : On the seminar series—

Senator WONG: How much is it?

Mr Nichles : on the grants program and working with third parties.

Senator WONG: What does that mean?

Mr Nichles : Working with industry associations.

Senator WONG: So they got money.

Mr Nichles : No.

Senator WONG: How is the expenditure, then? There is a grant program to third parties but, then, working with third parties was a different expenditure item.

Mr Nichles : So—sorry.

Senator WONG: No, go on; I am waiting.

Mr Barty : Creating tool kits; information.

Mr Nichles : So that other entities can do their own amplification.

Senator WONG: Do you have anything you can table that sets out the components you have just described?

Mr Gosper : Yes, we can do that.

Senator WONG: Now?

Mr Gosper : I do not think we have it, just now—

Senator WONG: I do not really want to wait 71 days late—

Mr Gosper : We will get it, quickly, for you.

Senator WONG: Thank you. The total cost of all of these promotional activities, in the current financial year, will be how much?

Mr Nichles : Thirteen point four—

Senator WONG: Plus?

Mr Nichles : plus the $6 million that we brought forward from the next financial year.

Senator WONG: So nearly $20 million. That is a lot of money.

Mr Gosper : Yes; it is a significant amount of money.

Senator WONG: Really. What is the cost, for example, of the Push advertising on Facebook?

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

Senator WONG: Can you give me, on notice, a complete breakdown of the $20 million?

Mr Nichles : Yes.

Senator WONG: That is, the total cost of promotional activities. Who made the decision as to the scope of this? Was that a government decision?

Mr Gosper : Yes, of course. There was a new policy proposal and then the usual procurement program—including research, which looked at the sort of campaign that would be appropriate—and the usual sort of process with the ICC and the SDCC.

Senator WONG: Could you give me the seminar expenditure?

Mr Nichles : We have a budget of $1 million for this financial year.

Senator WONG: What is the rationale for bringing so much money forward?

Mr Nichles : To ensure that the advertising campaign was as effective as possible.

Senator WONG: Was that a decision made at the commencement of the campaign or subsequently?

Mr Gosper : It was a decision made subsequently.

Senator WONG: When?

Mr Gosper : In particular—I will ask Mr Nichles if there is a specific date.

Senator WONG: Was it before or after Mr Turnbull became Prime Minister?

Mr Gosper : Before.

Mr Nichles : Before.

Senator WONG: And it was a decision made to bring forward $6 million from next year's budget, which would make a total spend—in a very short period—on advertising and promotion of $20 million.

Mr Gosper : It is because our assessment was that we needed to, with the conclusion of the agreements, in particular, make sure that we were maximising the impact rather than to dissipate it over a period of time. The fourth quarter of the year is the most expensive time of the year for advertising.

Senator WONG: Who made the decision to bring forward money and expand the advertising? Tell me about the process of that decision.

Mr Nichles : It was requested by the SDCC.

Senator WONG: Which is the—

Mr Nichles : Service Delivery Coordination Committee.

Senator WONG: So this is the government advertising committee, with ministers on it and so forth. Is that right?

Mr Nichles : Yes.

Senator WONG: When did they request that?

Mr Nichles : Mid-September.

Senator WONG: You said, Mr Gosper, that it was based on an assessment of what was required. Did the SDCC undertake such an assessment?

Senator Brandis: Is that a question for me? I think it probably is.

Senator WONG: He referred to an assessment, so I want to know who the assessment was done by.

Senator Brandis: Senator, I think you know that the matters discussed by the SDCC are confidential to the process.

Senator WONG: Mr Gosper said there was an assessment of—I do not have the words in front of me but, basically, how much advertising was needed et cetera. I am just asking—

Mr Gosper : I think I gave you our assessment, which was that the program would achieve its objectives more readily if the advertising were done over a shorter period of time, and given that advertising is more expensive in the fourth quarter of the year that is another reason.

Senator WONG: When did you come to that assessment or view?

Mr Gosper : I cannot give you the specific date.

Senator WONG: Was it before or after the SDCC made the request?

Mr Gosper : I would have to look at my notes to answer that.

Senator WONG: Mr Gosper, I think your assessment was that 'it' needed—I presume that means the advertising—to be brought forward to be effective. Whose assessment was that?

Mr Gosper : It was certainly our assessment.

Senator WONG: How did that come about? Did you have a discussion, internally? Did you talk to your—is it a PR company or the media, the media-buy company, a communications company—

Mr Gosper : I cannot remember the exact details.

Senator WONG: I am sorry? I did not hear that.

Mr Gosper : If you could just bear with me, for a moment, Senator.

Mr Nichles : The media-buying agency made a recommendation to ensure that we—because the fourth quarter is the most expensive media and we were working across a number of target audiences, they recommended that we increase the expenditure at that time.

Senator WONG: Was that recommendation as a result of SDCC requesting that assessment?

Mr Nichles : I cannot recall the timing.

Senator WONG: This is a process question. You have got a political committee, a subcommittee of the cabinet which made the decision—and I think you said made the request—but you are also telling me the media company made a recommendation. I am asking what prompted someone to go to the media? Was the SDCC request the reason why the media company was approached to assess how you would make the campaign more focused?

Senator RONALDSON: The deliberations of—

Senator WONG: That is not what I asked.

Senator RONALDSON: You have. Deliberations of a cabinet subcommittee are clearly confidential. You have been around long enough to know that. Those deliberations and those discussions at SDCC—they are a cabinet subcommittee and they are, of course, confidential.

CHAIR: That was not quite the question that Senator Wong asked.

Senator WONG: There are three pieces of evidence that I am trying to trying to understand. Mr Nichles, you said it was a request of SDCC. Mr Gosper said, 'We made an assessment'—that is, Austrade. And Mr Nichles has given evidence about the media company making a recommendation. I am just trying to get the sequence. How was the request from the SDCC communicated? Was that communicated to you by the minister's office or otherwise?

Mr Nichles : The media agency—

Senator WONG: Can you answer my question? Is that possible?

Mr Nichles : The media agency often reviews the work that they have done and they made a recommendation to us.

Senator WONG: No, that was not my question. You said SDCC requested it. I am trying to get the steps. I am not trying to be difficult. Which comes first: the SDCC request, the media company's recommendation or Mr Gosper's assessment? How do they all fit together?

CHAIR: Senator Wong, you may now be going into cabinet confidentiality, as a matter of fact.

Senator WONG: Just the process. I am just trying to work out when what happened.

Senator Brandis: I think I see what Senator Wong is trying to do, Mr Chairman, if I may contribute in, I hope, a helpful way to this discussion. I have not taken objection to any but one question that Senator Wong asked and I do respect the difference between process questions—which, in my view, may properly be asked—and questions that reveal the proceedings of transactions of cabinet committees, which, of course, may not be. I think there is a little bit of grey area where dots are sought to be joined, or inferences drawn, as to what may or may not have happened at a cabinet or cabinet subcommittee as a result of the way in which carefully phrased or carefully put process questions are asked. I suspect we are close to that grey area. But if Senator Wong confines herself only to the pure process question then—

Senator WONG: Shall I rephrase? I will rephrase.

Senator Brandis: we will have nothing to object to.

Senator WONG: Mr Nichles, you gave evidence that there was a request from SDCC. I want to ask you how you became aware of it.

Mr Nichles : There are minutes from the meeting of the SDCC.

Senator WONG: So you became aware of that through reading the minutes, is that right?

Mr Nichles : Yes.

Senator WONG: Of their decision?

CHAIR: Once again, I think we are getting into what is cabinet in confidence—

Senator WONG: I am trying to understand.

Senator RONALDSON: We know what you are trying to do.

Senator WONG: Everybody knows the government determined this. I am trying to understand the sequence of events.

Senator RONALDSON: That is an allegation. That is an allegation you are making. That is not the evidence that Mr Gosper gave.

Senator WONG: Mr Nichles' evidence was that the SDCC made a decision. As a result of that, did Austrade set in train the process of bringing forward advertising? Is that what happened?

Mr Nichles : Yes.

Senator WONG: And when does the media company's recommendation come in this process?

Mr Nichles : It may have been beforehand, as they were actively reviewing; it may have come after.

Senator WONG: Fair enough. You cannot recall the date on which the media agency advised the bringing forward of the spend? You can take that on notice, if you cannot recall it. On what date was the decision made to bring forward the spend?'

Mr Gosper : We will take that on notice.

Senator WONG: Were you asked to provide or obtain advice on the effectiveness of the campaign prior to the decision being made? Why is that such a hard question?

Mr Gosper : We will respond on notice to that question.

Senator WONG: Whether or not you were asked to provide advice on the effectiveness of the campaign?

Mr Gosper : On the timing thereof.

Senator WONG: I will come to that. You can take that bit on notice. I am asking: were you asked to?

Mr Gosper : This has been a very intensive process over a short period of time, and I do not have the exact sequence of every event in front of me, so I want to be entirely accurate about these things.

Senator WONG: But it was a substantive question, not a sequential question. It was: were you asked to provide advice?

Mr Gosper : But it related to a particular event.

Senator WONG: On the effectiveness of the campaign. What do you mean, relating to a particular event?

Mr Gosper : Sorry, could you repeat your question.

Senator WONG: I was actually asking: were you asked to provide advice on the effectiveness of the campaign?

Mr Barty : No. We evaluated the submissions from the request for a proposal and the pitches that were provided, and we submitted that to the SDCC for their evaluation.

Senator WONG: And, subsequent to that, was there a decision made to bring forward advertising? Right at the start, Mr Gosper, you said—maybe I have got this wrong—'We started the campaign and then subsequently there was a decision made, essentially, to bring forward the advertising spend.' Right?

Mr Gosper : That is right, yes.

Senator WONG: When did the campaign start?

Mr Nichles : The first radio ad went to air on Monday 14 September.

Senator WONG: So at some point after that, there was a decision to bring forward the advertising spend.

Mr Nichles : To increase the advertising expenditure, yes.

Senator WONG: From what to what?

Mr Nichles : From $6.5 million to $10.5 million.

Senator WONG: And to shorten the time frame over which the spend was to be undertaken? I thought that was one of the points raised earlier.

Mr Nichles : Yes.

Senator WONG: From when to when?

Mr Nichles : The money was being disbursed over a longer period of time.

Senator WONG: Yes, I got that. From when to when?

Mr Nichles : After the financial year.

Senator WONG: So the original campaign was $6.5 million over the financial year?

Mr Nichles : Yes.

Senator WONG: The current campaign is $10.5 million over September to December?

Mr Nichles : Correct.

Senator WONG: That second decision was made at some point after 14 September.

Mr Nichles : Yes.

Senator WONG: You cannot give me approximately when that was?

CHAIR: That is what you are taking on notice, isn't it?

Mr Gosper : That is what we are taking on notice, yes.

Senator WONG: What is the decision-making process around the advertising? Do you go to SDCC? Do you engage with the minister's office? How is the decision-making process constructed?

Senator RONALDSON: Chair—

Senator WONG: I am not asking, I am just trying to work out do they get—I think Mr Nichles said they just get the minutes. I am trying to understand—

Mr Barty : There is a government procurement process for advertising campaigns. We call off the multilist for providers. We evaluated those providers, both for the PR campaign and also for the advertising campaign. Those proposers then provide pitches, which we evaluate. Based on those evaluations, we provide those evaluations to the SDCC, who in cabinet, without our presence, make their own decisions.

Senator RONALDSON: Minister, if I may: are you aware that the government advertising guidelines were identical to those of the former government?

Senator Brandis: I believe so.

Senator WONG: Was the process that you just described followed in relation to that decision to expand and intensify the spend?

Mr Nichles : Yes.

Senator WONG: Were there are any further creatives or production costs associated with the greater spend? Did you just have, 'Here are our various products. We are just going to up the number of channels by which we are trying to communicate this,' or did you do something else?

Mr Nichles : The money that was brought forward from next financial year has been spent primarily on the media spend.

Senator WONG: I want to make sure I am clear: it was originally $6.5 million to be spent between September and June and now it is $10½ million to be spent between September and December?

Mr Nichles : Yes.

Senator WONG: But ChAFTA will not come into force this year?

Mr Gosper : But there is plenty of interest amongst businesses and others in understanding the agreement.

Senator McEWEN: I want to go to the survey of tourist accommodation. I understand Austrade funded the survey for one year and were looking to secure further funding for it. Can somebody tell me whether that permanent funding for the survey has been secured?

Mr Boyer : Not yet. We have secured funding for this financial year, but we are still in discussions with the Australian Bureau of Statistics and state and territory governments about a way forward for 2016-17 onwards.

Senator McEWEN: Do you know when an announcement might be expected?

Mr Boyer : We have a proof-of-concept pilot currently running with the Australian Bureau of Statistics that we hope to finish by March next year. We would expect to take a position to tourism ministers sometime shortly after that at the state, territory and Commonwealth level, then we would probably expect a decision by the end of this financial year.

Senator McEWEN: You said the states are involved and the ABS is involved. Is industry involved?

Mr Boyer : Industry have been actively consulted throughout the process, yes.

Senator McEWEN: Are negotiations intended to arrive at a permanent funding arrangement for the survey?

Mr Boyer : That is our hope, yes.

Senator McEWEN: Where will the funding come from? Will it be all federal; federal and state; federal, state and industry?

Mr Boyer : We do not know at this stage. At the moment for this financial year we have based it on a COAG funding approach, so half from the Commonwealth and half divided amongst the states. We have to have discussions with our state colleagues before we can venture an idea about whether that is going to happen in future years.

Senator McEWEN: Have the states agreed to anything yet?

Mr Boyer : They have agreed to funding this financial year but not beyond that.

Senator McEWEN: What is the total cost of producing the survey?

Mr Boyer : In this financial year, it is $657,000 in total, of which the Commonwealth will be contributing half—or about $328,000—and the states half.

Senator McEWEN: Has the survey this year been done?

Mr Boyer : The survey last year was done and will be released this year. The survey is being done this year. It has not been finished yet. We are currently undergoing a proof of concept pilot with the ABS on a hopefully more economical model of collecting the data, and hopefully that cost will come down, which will be an easier model, potentially, to present to the states for ongoing funding.

Senator McEWEN: Do you have the findings of this survey that is currently underway?

Mr Boyer : I do not have them yet.

Senator McEWEN: You do not have them. Thank you for that. I want to refer to the Tourism Research Advisory Board. There was an article in The Sun-Herald of 27 September entitled 'Boards inoperable as vacancies left unfilled'. That article asserted that the Tourism Research Advisory Board has not met since May 2014. Is that correct?

Mr Boyer : That is correct.

Senator McEWEN: When will the board next meet?

Mr Boyer : We are currently undergoing a review of the board's operation. We expect that to be finished in the coming month or two. We would expect that the TRAB, as we call it—the Tourism Research Advisory Board—will meet at some stage shortly after that.

Senator McEWEN: In the interim period, who or what is managing the functions of the board?

Mr Boyer : The board's function is largely to look at the forward research agenda for Tourism Research Australia. We have a range of other mechanisms that we have been employing to ensure that industry and the state and territory tourism organisations have an opportunity to contribute towards that forward work plan.

Senator McEWEN: Is there a written agenda that you could provide?

Mr Boyer : We have a written forward work program. Would that be useful? I will probably provide it on notice if that is okay.

Senator McEWEN: Yes, that would be useful. Thank you. I think there were seven vacancies on the TRAB, as you call it. Are they being filled or going to be filled?

Mr Boyer : It is not so much seven vacancies. It has always been quite a fluid membership, so part of the reason we are reviewing the operation of the TRAB is to make sure that this is workable as possible. So in some form or another we expect it to meet in the coming months, but I am not convinced that the membership will be at the same level as it was before. We have to make that decision in the coming couple of months.

Senator McEWEN: So Austrade makes that decision, and then there is the ministerial decision?

Mr Boyer : Yes—in consultation with our colleagues, in the states and territories in particular. But, yes, it is an Austrade board.

Senator McEWEN: So there are no fixed terms for board positions?

Mr Boyer : No, not as far as I am aware.

Senator McEWEN: If there is a different answer to that—

Mr Boyer : I will take it on notice.

Senator McEWEN: Can anybody provide me with information on the announcement that the Cadbury Visitor Centre will be closing later this year?

Mr Boyer : Not so much that. I can provide you with some information on the reallocation of the $60 million in funding if that is useful.

Senator McEWEN: Yes, that would be good.

Mr Boyer : The closure of the visitor centre, I think, is probably a commercial decision by Mondelez, the organisation involved. But, in terms of the $16 million, my understanding from my colleagues in the industry department is that that $16 million will be bolstered by a contribution of $8 million from the Tasmanian state government and, with a requirement for two-for-one matching-funding from the private sector, will turn into potentially a total amount of $72 million worth of funding, looking at grants to the private sector for projects and industries including advanced manufacturing, tourism and agriculture. There is not much detail about the way in which that program will be implemented yet. Those details are still being worked out. It is early stages with the industry department.

Senator McEWEN: What is being done to secure the private sector funding?

Mr Boyer : That is probably a question for the department of industry. I can take some questions on notice. I would say that it is at the very early stages of that program and I do not think they have worked through a lot of the detail—

Senator McEWEN: Has there been any ministerial announcement about that plan?

Mr Boyer : It was announced on 4 September.

Senator McEWEN: Have you been asked for any advice about keeping the visitors centre going—funding options?

Mr Boyer : No, we have not.

Senator McEWEN: Has the minister's office received any correspondence regarding the proposed closure of the Cadbury visitors centre?

Mr Boyer : Not that I am aware of.

Senator McEWEN: So the agency is not having any engagement in attempting to secure the future of the visitors centre?

Mr Boyer : No.

Senator McEWEN: You have accepted that it is closed?

Mr Boyer : As I say, it is a commercial decision by Cadbury, by Mondelez International.

Senator McEWEN: The new minister, Senator Colbeck, said in an interview on 1 October that they are more than happy to continue conversations with people who might be interested in keeping the visitors centre open, the visitor experience. Are you aware of any conversations the minister might have had with anybody about following through on that proposal?

Mr Boyer : No, I am not aware.

CHAIR: Mr Gosper, thank you to you and your colleagues.