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Rural and Regional Affairs and Transport Legislation Committee
25/05/2017
Estimates
AGRICULTURE AND WATER RESOURCES PORTFOLIO
Australian Bureau of Agricultural and Resource Economics and Sciences

Australian Bureau of Agricultural and Resource Economics and Sciences

[11:05]

CHAIR: Welcome, Mr Gooday and officers.

Senator KETTER: In the recent Labour Force report, the key findings indicate that farmers are not experiencing challenges filling vacancies or recruiting staff. Are you confident in your findings?

Mr Gooday : I will get Mr Galeano to help me in a minute with some more detail. Senator, you need to be careful in interpreting the results of that survey, as with any other survey. The overall result that you mentioned we are confident with, but it is the case that a good proportion of larger horticulture and vegetable businesses with, say, more than 20 employees were experiencing difficulty recruiting staff. Do you want to add to that, Mr Galeano?

Mr Galeano : Yes, I can give some numbers around that, if you like. As Peter said, farmers with fewer than 20 workers tended to say that they did not have as many troubles, but around half of the ones who employed over 20 farmers reported difficulties recruiting labour. The reason our headline number is lower is that there are a lot of horticulture and vegetable farms that actually do not recruit labour. They are family operated type farms, so they do not recruit much labour at all.

Senator KETTER: Would it also be the case that many farm employees are seasonal workers?

Mr Galeano : Yes, that is correct. In particular, in the horticulture and vegetable industries most of the workers are seasonal workers, and most of those workers are in Australia working on visas—in particular, the working holiday-maker visas.

Senator KETTER: There was a report in the Illawarra Mercury, no less, on 16 May for which the headline was: 'Unsustainable labour challenges leave Australia's vegetable supplies to rot.' You may be familiar with that article. That report said:

A quarter of Australia's vegetable growers are forced to abandon valuable produce which is left to rot because they can't find enough workers to pick and pack it.

It goes on to report on a study done by Associate Professor Joanna Howe. Do you have a comment on that report?

Mr Gooday : We are aware of that report and we have had a look at the estimates that are in it. There were things that they looked at that overlapped with our report. The basic finding, in terms of the statistics that they are reporting, is broadly similar, in that they are finding that larger businesses are having difficulty recruiting. There are some differences in their methodology, though, that explain why their estimates are higher than ours. Whereas the Adelaide university study used grower lists that came from different places, so it will not be representative of the population as a whole. They recognise that in their study.

The second difference is that our survey was on the back of a broader survey regarding financial returns in vegetable industries. It was not specifically aimed at people who had difficulty recruiting or who wanted to participate in a survey. Their study was about labour recruitment issues. Our survey probably does not have a self-selection bias in that people who had difficulty wanted to be in it.

The third reason—and probably this is just as important as the other two—is the time period which the two surveys looked at. Our survey looked at whether people had difficulties in the previous year. The Adelaide university study looked at whether people had difficulties in previous five years. We knew that their study was going on, and we had spoken to the people undertaking it, so it was not a surprise to us. We understand the statistics that are in it. Their report goes much further than our reporting of what people are saying about whether they are having difficulty in recruiting, what their future intentions are, and we have not really looked into the conclusions that they have drawn. They have gone on to draw a whole range of conclusions, and we have not looked at that.

Senator KETTER: Your report found that farmers had indicated that there top three workforce difficulties over the next five years were going to be farm profitability and quantity and quality of labour. Your findings suggest that, even though there is no labour force challenges at the moment, there is anticipated to be some over coming years. Did you make any conclusions as to why that would be the case?

Mr Gooday : No. We have not made any specific conclusions, other than the general observation that, like most of our other agriculture industries, there is a good deal of competition. In order to remain profitable people have to find ways to improve productivity. For businesses that are heavily reliant on labour, access to labour at a reasonable cost is a big issue.

Senator KETTER: I understand, just coming back to that University of Adelaide Law School study, that you have identified why you think there are different findings in relation to that study as opposed to your own, but, on reflection, are you concerned that your survey research method could be flawed?

Mr Gooday : No, we are confident in our survey research method. It is the same method we use for our other surveys. We are confident that the extrapolation that we do to the population is as accurate as we can do. Obviously, there are sampling errors and other things, which we report. You have to read survey results with a grain of salt, obviously, but we are confident that is as good as can be done at the moment.

Senator KETTER: Has the report been discussed with the Department of Agriculture and Water Resources?

Mr Gooday : Our report?

Senator KETTER: Yes.

Mr Gooday : The department are aware of the results that are in our report, yes.

Senator KETTER: And what about the University of Adelaide Law School report?

Mr Gooday : I have not discussed it with anybody in the department. Mr Galeano may have.

Mr Galeano : We have had some conversations with people within the relevant line areas within the department, but it is around trying to understand the differences in their results versus ours.

Senator McCARTHY: What conclusion did you come to when you were discussing those differences?

Mr Galeano : It was those three things that Peter went through just before.

Senator KETTER: So you are not anticipating any changes to your study methodology, in the future, to take onboard some of the differences that occurred there.

Mr Gooday : No, we are re-running those surveys, at the moment, in the vegetable and horticulture industries using a very similar questionnaire, and it is using, basically, the same methodology. If there is anything we would do it would be to delve into the results a bit more, to pull out where we think the issues lie, which is where we started, really—that the headline 'There's no problem' is not accurate for a large proportion of the population.

Senator KETTER: And it is certainly not accurate for the vegetable growing—

Mr Gooday : For people who are employing large numbers of workers, it is obvious that a good proportion of those have had difficulty recruiting. The follow-up survey will be able to compare that to the results we found in the first one.

Senator KETTER: Does ABARES provide the minister or his office with a written brief on ABARES reports?

Mr Gooday : For every ABARES report that comes out we provide a notification to the minister's office, a week before it comes out, that it is coming out, with some key points about what is in it. The day before it comes out we will send a similar notification with the final report attached.

Senator McCARTHY: Can I ask what your strategy is, in the department, for Indigenous employment?

Mr Quinlivan : Could we deal with that next, in the corporate area, when we will have the people who deal with—

Senator McCARTHY: Will you be ready to deal with that then?

Mr Quinlivan : Yes, they will be.

Senator BACK: My understanding from material I have read is that our agricultural production in 2016-17 looks like it is significantly higher than previous years. Is that what the trend is looking like? If it is, how much is it and what do you believe to be the factors? I want to ask you about domestic production. I then want to get onto exports. I also want to ask you what trends, globally, you believe are having an effect on Australian agriculture. Start with the domestic, if we can.

Mr Gooday : As you would be aware, this financial year has been a very good year off the back of extremely high—record—winter-crop production and good returns in the beef industry, with high prices.

Senator BACK: I won't boast, Minister, about the fact that Western Australia recorded its record harvest. Please keep going.

Mr Gooday : In terms of the value of production, it was $63.8 billion in 2016-17, which would be a record.

Senator BACK: You said $63.8 million? That is significant.

Mr Gooday : That is expected to fall slightly next financial year, because we are expecting a return to average seasonable conditions, so we will not have that record winter crop production. But it is still expected to be very high at a bit over $61 billion next year. Export earnings for 2016-17 were about $47.7 billion. That is expected to increase in 2017-18 to around $48.7 billion.

Senator BACK: Despite what you predict to be an overall slight decline.

Mr Gooday : That is right.

Senator BACK: In agricultural production you are expecting exports to go up by about two per cent, by the sound of it.

Mr Gooday : That is right. And that rise in export earnings, basically, reflects increased export earnings for livestock and livestock products, which will partially offset a fall in the value of crop exports.

Senator BACK: So there is a higher than predicted return this year for grain production, beef, livestock and horticulture?

Mr Gooday : Yes.

Senator BACK: In terms of horticulture, or in terms of any of them, as a matter of fact, since we are speaking about exports, can you point to any impact of the free trade agreements with China, Korea and Japan as having had an effect on each of them, including in horticultural products?

Mr Gooday : I might get Ms Gleeson to help me out here in a minute. Obviously, there have been some substantial benefits from the free trade agreements, and we have done some work, which has been published in the different versions of the agricultural commodities publication.

Ms Gleeson : Yes, our exports to China, Korea and Japan have been benefiting from the FTA arrangements. In Japan, our value of exports of beef and veal is, in the nine months of this financial year compared to the previous financial year, up five per cent. The value of vegetable exports is up 14 per cent for the same period.

Senator BACK: Beautiful.

Ms Gleeson : Tree nuts have particularly benefited—up 38 per cent.

Senator BACK: While we were sitting here talking about importing peanuts from Argentina yesterday—

Mr Quinlivan : Tree nuts, not legumes.

Ms Gleeson : Tree nuts, including almonds, macadamias—

Senator BACK: Thank you for that. I thought you said 'peanuts'. Tree nuts—I do not know what they are, actually.

Mr Quinlivan : Almonds are one of our fastest growing production industries at present.

Ms Gleeson : There have been very large gains in our fruit exports to China. For that nine-month period, the value of our fruit exports to China is up 29 per cent.

Senator BACK: Gee whiz!

Ms Gleeson : That will include things like nectarines and cherries et cetera. Those are some good gains.

With the negotiation of those three FTA agreements, ABARES did publish some articles in 2015 looking at what the tariff changes were. We did some modelling as well, particularly for the Korean FTA. With those, we focused on beef and cheese rather than horticulture.

Senator BACK: In terms of your predictions, we know that at the moment rice to Japan is not included in any of the provisions under the free trade agreement. Is that correct?

Ms Gleeson : That is correct.

Senator BACK: But we also know that the average age of Japanese famers, including rice farmers, I think, is now 68 or 69 years of age and that the size of their farms and their land title systems are such that they are not able to amalgamate farms to get the economies of scale. So the day is going to come reasonably soon, I would have thought, where they are not going to be self-sufficient in rice. Is it the case that we have most favoured nation status with Japan as part of our free trade agreement in the sense that, if and when they are looking at rice imports, Australia will be well positioned to meet that demand?

Mr Quinlivan : We will just see if we have any people from our Trade and Market Access Division here.

Senator BACK: I will ask that question later on or I will put it on notice.

Mr Quinlivan : They will certainly know the answer to that question.

Senator BACK: When I spoke at an event in Tokyo not long ago, I spoke about the average age of our farmers and a parliamentarian came and told me that information and he made the prediction. He said, 'Despite their protective views about rice production, they will find themselves in that position.' I am interested in knowing whether we are planning for that eventuality. How do you select the locations for your Regional Outlook conferences? Where, for 2017—indeed, 2018—are you proposing to have those?

Mr Gooday : We do a Regional Outlook conference in each state each year. The idea is that we will move it around the state from year to year. We try to put it in an area where we are going to draw a reasonable crowd. They are generally around some of the major towns. This year we kicked off with a Regional Outlook conference in Renmark in South Australia. It was the first time for a while that we had been to Renmark. We had been to Port Lincoln the year before.

Senator BACK: Well attended?

Mr Gooday : Reasonably well attended—probably a bit lower than we had in Port Lincoln the year before, but it was a well engaged crowd with lots of questions. It was a good program. We got a lot out of it and it would seem to be that the people who came along had lots of questions, so that was good. We are off to Darwin next, I think. Is that right, Trish? Do you have the list?

Ms Gleeson : I have the list here.

Senator BACK: That would be in the dry season, I imagine.

Ms Gleeson : Yes. We get more people along to our conference that way.

Senator BACK: When is that occurring?

Ms Gleeson : We are in Darwin on 5 July. We go to Ararat in Victoria on 26 July, Devonport in Tasmania on 23 August, Kununurra on 20 September, Toowoomba on 5 October and Tamworth on 26 October. That is this year.

Senator BACK: That is a tremendous spread. I have a particularly keen interest in Latin America and Australia's prospects in that space. I know the TPP did not proceed because of the US withdrawing, but I have no doubt that will be corrected. Do you in ABARES have any view of or are you looking at Mexico, Chile, Peru and others in that Latin American area as potentials for agricultural export markets? They keep telling me where the prospects are in those spaces.

Ms Gleeson : The studies that we have done on Latin America recently have been more about competition with South American countries. We have not done any research looking at the potential for export to those countries. We do have a small export to those countries currently, but we have a tariff disadvantage to nations that already have FTAs with those countries. If we were able to negotiate FTAs with South American countries such as Peru, which I understand has just been announced, that will benefit us in terms of our competitiveness with others who already have FTAs.

Senator BACK: Good. Thank you.

Mr Quinlivan : Our Trade and Market Access people can speak to that as well. I think it is the case that, because they have similar production sectors, we think of them more as competitors than complementary economies with market potential.

Senator BACK: The discussions I have with them at different levels over there suggest that they are looking to Australia into the future. Anyhow, we might have that discussion with that group. Thank you very much.

Senator LINES: Ms Gleeson, in response to a question from Senator Back, you outlined where you were travelling and you mentioned Kununurra and Darwin, but there were a few places in between. Given it takes an hour to fly between Kununurra and Darwin, why wouldn't you have put some economies of scale together on that trip?

Ms Gleeson : We tend to focus the selection based on state or territory. Kununurra is in Western Australia and this year we were looking for a northern Western Australia location. In the Northern Territory we have for the last several years always gone to Darwin rather than elsewhere. That is where we draw the crowd. In the past we have gone to Alice Springs and Katherine, but it is much easier for us in the Northern Territory.

Senator LINES: My question was really why you would not do Darwin and then Kununurra or Kununurra-Darwin, because there is an economy of scale in terms of flights and travel. It is an hour's flight. You mentioned going south. That was all.

Ms Gleeson : We tend to do them a month apart. We do not do them concurrently.

Senator LINES: So you would not, in trying to save money, do them concurrently.

Mr Gooday : It would not be very useful for us to run two regional outlooks within one week, so it probably would not be a saving at all.

Senator LINES: Fair enough.

Senator KETTER: I have a follow-up question on the line that I was pursuing earlier. In terms of the report in relation to labour force challenges and your finding that one of the top 3 workforce difficulties that people are expecting to face over the next five years is farm profitability, I am wondering if on the back of those concerns about farm profitability the department is looking at policies to assist vegetable growers or the horticultural sector.

Mr Quinlivan : Do you mean with labour supply?

Senator KETTER: With farm profitability.

Mr Quinlivan : Profitability is always a concern for all industries all the time. I think that would be a fair comment. Our main two areas of engagement with the horticulture sector are support for the very large R&D investments that are made there and which are designed to try to keep Australian industries competitive with their offshore competitors, and horticulture is our largest area of both operational and financial investment in biosecurity measures, which, again, is essential for costs and access to market. They are the two biggest areas of intersection, and both of those are done in a very cooperative way with the horticulture sectors, as the people from HIA explained yesterday.

Senator KETTER: Yes, I understand that, but my question related specifically to this particular report and the finding that there are concerns about farm profitability. Has the department developed any policies as a result of the findings of this report?

Mr Quinlivan : I would say all of our work is related to profitability. There is nothing more beneficial you can do for an industry than win market access for them in new, lucrative markets. I think Ms Gleeson was talking just before about the new market access—the horticulture sector in particular—in North Asia. Nectarines was an example of the huge benefit for the horticulture sector. We have our continuing work programs in each of those areas. These are worked out with the relevant industries—horticulture and all the others—and we are working away at those all the time.

Senator KETTER: Okay.

Senator RICE: I wanted to know whether ABARES is familiar with the study published by CSIRO in February this year on climate impacts on wheat yields. Australia's yield potential, determined by climate and soil type, declined by 27 per cent over the past quarter of a century.

Mr Gooday : Yes, we are familiar with that.

Senator RICE: I am interested to know whether you agree with the findings of this CSIRO report.

Mr Gooday : We have done some work of our own looking at the impact of climate on productivity in the cropping sector, and it comes to very similar conclusions as the CSIRO report. I cannot comment on the specific methods that CSIRO used, but in terms of the general finding our work shows similar things.

Senator RICE: Can you expand on that work? What work have you done in terms of looking at things like water stress, higher ambient heat, storm frequency and severity, and migration of pests?

Mr Gooday : Our work is at a higher level. I will get Mr Galeano to help me out again in a minute, but our work was looking at the impact of climate on productivity of cropping farms. We also looked at the impact of climate on wheat yields. It was using statistical methods to unpick the impacts of climate from what was happening to underlying productivity and yields—

Senator RICE: Other productivity, which is what the CSIRO study was doing as well.

Mr Gooday : What we found was that previously there had been a narrative about productivity growth in agriculture slowing fairly substantially, and this work was able to demonstrate that, while it is true that in aggregate productivity growth has slowed, once you take the climate signal out of that, underlying productivity growth has actually been very good and has been offsetting the impact of poorer seasonal conditions. That is basically what we have found. Investments in R&D, on-farm management techniques and other things have been successful in keeping productivity relatively constant in the face of some fairly challenging climate conditions. That has been done by farmers really focusing on improving their productivity in dry conditions. That has come at a bit of a cost in terms of what they are able to do in a really good year, so it is interesting that there is a bit of a trade-off there between—

Senator RICE: They are maintaining their production in the dry years but then not maximising their production in the other years.

Mr Gooday : Overall, we took it to be a reasonably positive story in that you can see that adaptation to changing conditions is happening. Obviously, we think that the climate is going to remain variable and difficult and we need to keep investing in the sorts of things that allow people to adapt.

Senator RICE: Right. Have you got any expectation as to whether you think ongoing productivity and adaptation techniques are going to be able to keep up with the declining conditions as our climate gets hotter and drier?

Mr Gooday : We really have not looked at that yet. We have looked back in the past to see what has happened in the recent past.

Senator RICE: Did you want to add—

Mr Galeano : I think Pete has explained it quite well, actually, so I do not have anything to add.

Senator RICE: Are there any regions that have been particularly stressed and affected?

Mr Gooday : The inland parts of the cropping zone are most affected. The areas that are most affected by increased temperatures and lower water availability are the areas that have relatively high temperatures and low water availability already. It is the western side of eastern Australia and the eastern side of western Australia. There are some regions that look like they have benefited a little bit. Some of the wet areas have actually improved their productivity because waterlogging and things are not such issues for them.

Senator RICE: But overall that has not outweighed the losses in the other areas?

Mr Gooday : No.

Senator RICE: Have you disaggregated the negative impact in those drier areas compared with the other areas? Have you done a region-by-region analysis?

Mr Gooday : The report that was released a couple of weeks ago now has maps that show how productivity has changed by region. That is all available. We are happy to point you to it if you would like.

Senator RICE: Yes, that would be good.

Mr Quinlivan : In fact, we have a hard copy here. We might give it to you. It is a very good report.

Mr Gooday : It is. It is well worth reading.

Senator RICE: Do you do any projections of what increasing climate change is likely to mean for yields?

Mr Gooday : No, we do not have those at the moment, but we are considering whether we should put that on our work program. For example, it would be to run some scenario analysis: if the temperature increased by X, what would this mean?

Senator RICE: When will you decide whether or not you are going to do that?

Mr Gooday : We are in the process now of forming our work program for the next 12 months, so we should know by the start of the financial year.

Senator RICE: I look forward to hearing whether you have decided to do that. It seems like it would be a very useful and very important area of work to do. On the flipside of dealing with climate, I turn to energy use. Does ABARES track energy use in the agriculture sector and differentiate between whether it is fossil fuel or renewable energy use?

Mr Gooday : No, we do not. We collect some information in our farm surveys on energy use on farm, but it is in the process of collecting a set of accounts for the farm business so we can report on farm financial performance. It does not break down that fuel use into what source it comes from.

Senator RICE: But you do keep overall energy use statistics?

Mr Gooday : Yes, we have an idea about expenditure on fuel and electricity on farm.

Senator RICE: Do you track energy use in the wider food-processing and agribusiness sector?

Mr Gooday : No.

Senator RICE: Just on farms?

Mr Gooday : Yes.

Senator RICE: What have the trends been over the short, medium and long term in terms of energy use on farms?

Mr Gooday : We would not have that with us. We can take that on notice, but the general observation would be that energy use will have improved reasonably substantially because the types of equipment that people are using will be allowing that to happen.

Senator RICE: Do you think there will be declining energy use per unit of production?

Mr Gooday : There will have been, over a long period of time, some fairly substantial savings made in the way in which things are grown.

Senator RICE: Is that information publicly available, or can I put it on notice and you can provide it to us?

Mr Gooday : We have not produced it in a report, but we can take it on notice and provide you with some information.

Senator RICE: Again, in terms of the role of agriculture and the potential mitigation impacts of shifting more of the energy use to renewables—I spoke to the dairy RDC yesterday and they were saying they are quite actively involved in encouraging the use of renewables—you do not currently track the amount of renewables versus fossil fuel energy?

Mr Gooday : No.

Senator RICE: Do you think it would be a valuable statistic to track?

Mr Gooday : We would have to think about what we would do with the information and whether we would be the right people to collect it, I suppose.

Senator RICE: If not you, who would be the right people to collect it?

Mr Gooday : Some of the RDCs who are collecting information on management practice and other things. This information about where your energy is coming from and whether it is a renewable source or some other source might be easier to collect there. The collection mechanism we have is essentially we get a set of accounts from each farm, so we know how much they spend on different things, and it would be possible, but there are questions for us about what we would be doing with it and whether the extra burden in terms of collecting it would be worthwhile.

Senator RICE: But do you agree it would be a valuable data set to have so that the Australian community could be looking at how reducing our carbon emissions from agriculture is a critical thing to do to be reducing our overall carbon emissions.

Mr Gooday : I suppose more data is always useful, depending on what cost it comes at.

Senator RICE: It depends on how important you see it is?

Mr Gooday : Yes. It is not costless to collect, and we are already imposing a reasonable burden on people, collecting information from them, so it depends on how hard it would be to untangle it all.

Senator RICE: But, given Australia has signed up to the Paris targets of keeping global warming to 1.5 degrees, that means that we need to be essentially zero carbon across all sectors by 2050.

Mr Gooday : I suppose the issue for us in collecting that sort of information would be whether the relatively small sample size that we have is going to be large enough to draw conclusions about the population from. If renewable energy is being used relatively sparsely and not generally related to some of the other variables we know about, like value of production, then we might not be able to do the statistics to form a population estimate, so that is why I am thinking—

CHAIR: Can I just make a point there. Additionally, as a user of energy—me on my farm—how am I going to determine what the production source was of the energy? I mean, I turn on a switch—I do not know what the mix is.

Mr Gooday : Yes, I think we were talking about whether there was some sort of on-farm—

CHAIR: The candidates in South Australia know what it is, because when you turn the switch on, the lights do not come on. As for everywhere else, it is—

Senator RICE: I am particularly interested in on-farm renewable generation, of which there is an increasing amount, and having a dataset that says across the agricultural sector: in 2017, it is at this rate; and then in five years' time, it is at this rate. I think it would be a critical dataset to know how effective we are at reducing our carbon pollution from agriculture.

Mr Gooday : My point is: our survey is a survey—and we survey probably 2,000 farmers a year; maybe a few more—so, if we were wanting to get a good idea about some of these variables, then it might be that it is more a question for an ABS survey or for each of the RDCs, which have grower surveys and management practice surveys.

Senator RICE: Does ABARES have a role in providing advice as to what datasets would be useful, even if you aren't the appropriate agency to undertake them?

Mr Gooday : We discuss, as the department does, with the ABS about what they are collecting.

Senator RICE: Do you provide advice to government as to what are necessary datasets in order to track relevant statistics over time?

Mr Gooday : Certainly, we talk to the ABS about what we think are the highest priority datasets.

Senator RICE: Finally, do you track fertiliser input across Australian agriculture?

Mr Gooday : We collect information on fertiliser inputs as part of our farm survey, yes.

Senator RICE: Can you tell me what the trends have been with that.

Mr Gooday : The trend over the last 20 years or more would have been that we have been using more materials and services, which is what fertiliser falls into. We have been using more of that, especially in the cropping industries. That is how the technology has gone.

Senator RICE: So there would be a trend of increasing use. Have you seen a commensurate increase in yield with that use or, as it has increased, has the relative effectiveness dropped off? Maybe take this on notice.

Mr Gooday : There has been an increase in yield, which is what CSIRO and other people report.

Senator RICE: I am interested in tracking fertiliser use. Again, it is embodied energy and it is embodied fossil fuel energy so, if that has increased over time but your overall yields have only increased at a lesser rate, I think that is also a very important statistic that we need to know.

Mr Gooday : We have not done any studies on the relationship between increased fertiliser use and increased yield, but we do have productivity estimates and other things to show what has been happening in aggregate.

Senator RICE: If you could take on notice and provide whatever information you do have on fertiliser trends and any correlation with yield trends, that would be useful. Thank you.

CHAIR: We are done on ABARES. I thank ABARES, Mr Gooday and your team, and we really appreciate—

Senator BACK: Keep up the increases in agricultural production year to the year, and we will keep inviting you back.

CHAIR: We are going gangbusters in the bush, we are. Thank you for your contribution to it. Safe travel back to your port and destination, and we will now go to corporate matters, Mr Quinlivan.

Senator STERLE: I still want to know, Chair, how this testing machine was called Barry for cows and the one for the sheep was called Dolly. Is that something we need to know?

CHAIR: Have you heard about this: they have affectionately named the DXA machines in sheep Dolly and now they have announced that they have named the beef one Barry?

Mr Quinlivan : I think that is fair enough.

CHAIR: And they have actually reflected upon me.

Senator RUSTON: Is it Big Barry?

Mr Quinlivan : No, I think they are picking up the interest you expressed in the Senate in the project.

CHAIR: You don't think it has anything to do with carcass size and profile?

Mr Quinlivan : I could not possibly comment.

CHAIR: I have had only one other thing named after me and that is the barbed-wire pie at Longreach, so if you are in Longreach you need to get the barbed-wire pie.

Senator RUSTON: Barry, I have to confess that there is something else named after you.

CHAIR: Yes?

Senator RUSTON: My photocopier is actually named after you.

Senator STERLE: Do tell, while we are on it.

CHAIR: No, we are done. The next thing 'Big Spender' will be out there. We are not going into names.

Senator McCARTHY: Mr Quinlivan, the 2017-18 departmental portfolio budget papers report average staffing level numbers as 4,531 for 2016-17 and 4,488 for 2017-18, a decrease of 43 staff. Which areas in the department will have staff cuts?

Mr Quinlivan : We might just confirm those numbers. They sound right to me, but we will look to confirm that. We are not seeing that as having an impact on any specific area of the department. It is well within the normal turnover and white noise in our overall staffing allocations and budgets. We will need to manage to that lower ASL cap over the course of the year, but in itself it will not be having an impact on any specific area. That is not to say that there will not be resource reallocations within the department for other reasons, but they will be not primarily driven by the reduction in the ASL cap.

Senator McCARTHY: Were you going to refer across with any of the details?

Mr Quinlivan : No, I was just looking for confirmation that those numbers are right. I think we are getting that, yes.

Senator McCARTHY: The 2016-17 departmental portfolio budget papers report average staffing level numbers for outcome 1 in 2016-17 to be 603. In the 2017-18 PBS, for 2016-17 outcome 1 actual staffing levels were reported to be 586, and that is a decrease of 17 staff members. Staffing levels for 2017-18 are reported to be 537, and that is a further decrease of 49 staff members. Which areas in outcome 1 will have staffing cuts?

Ms Canning : It is directly relating to programs that we have that are terminating.

Senator McCARTHY: Which programs are they?

Ms Canning : Carbon Farming Futures is an outcome 1 program that terminates at the end of this financial year. We have a small amount of funds directly appropriated to us for the National Landcare Program, which ends at the end of this financial year. They are the two programs that relate to outcome 1.

Senator McCARTHY: Why is the Carbon Farming Futures program coming to an end?

Ms Canning : It was a terminating program

Senator McCARTHY: And this was the due date for completion?

Ms Canning : Yes.

Senator McCARTHY: Does the department use any labour hire companies to source departmental staff?

Ms Canning : Yes.

Senator McCARTHY: How long have you been using labour hire agreements?

Ms Canning : It is an ongoing need for the department to use a mix of resources between ongoing permanent staff and contract staff, depending on our resourcing levels, ongoing/terminating programs and the nature of the work.

Senator McCARTHY: How long have you been using labour hire companies?

Ms Canning : Always.

Senator McCARTHY: How many staff are employed under these arrangements?

Ms Canning : The information I have got from my colleagues down the end of the table is that at the end of March we had 226 contract staff. That obviously fluctuates throughout the year, so that was a point-in-time number at the end of March.

Senator McCARTHY: The 226—all of them are contractors? They are all contracted?

Ms Canning : Yes.

Senator McCARTHY: Who authorised the use of labour hire companies? How does that process work?

Ms Canning : It is up to the individual manager to determine the needs for their own work and whether they use labour hire firms or not.

Senator McCARTHY: It is within the department—just your managerial areas?

Ms Canning : Yes.

Senator McCARTHY: Minister, are you aware of the reliance on these labour hire arrangements?

Senator Ruston: Obviously it is up to the agency to work out how they best deal with their resourcing issues, so it is not something we would get involved in at a ministerial level.

Senator McCARTHY: Do staff under these labour hire arrangements receive as much training and security clearance as permanent staff?

Ms Canning : I will defer to Mr Smalley.

Mr Smalley : It is not necessarily the case that we would have them on a program of training. With security clearances, we do inquire about the level and currency of security clearances through the labour hire agency. So we do know the status of them before they come in.

Mr Quinlivan : Obviously it depends on the nature of the job they are engaged for.

Senator McCARTHY: We will come to that later.

Mr Quinlivan : Also, I think you can see from the numbers—the 200, as opposed to 4,500—that this is not our preferred method of employment, in a general sense.

Senator McCARTHY: Do staff under these arrangements get the same pay and conditions as permanent staff?

Mr Smalley : They are not under our enterprise agreement.

Senator STERLE: We know that, but do they get the same pay and conditions?

Mr Smalley : In effect, they are contractors, so their arrangements can vary widely depending on the nature of the job they are doing.

Senator STERLE: That is a no.

Mr Smalley : It is a no, because they are not under our enterprise agreement.

Senator McCARTHY: Do these temporary staff have access to the same systems and databases?

Mr Smalley : I am not quite sure what you mean. Do you mean our general work systems?

Senator McCARTHY: Yes.

Mr Smalley : They would have access relevant to their jobs to our normal business systems, yes.

Senator McCARTHY: Is this a concern from a security perspective?

Mr Smalley : We do not believe so, because we do check their security status before they come in.

Senator STERLE: Are any of the people under these labour hire arrangements undertaking biosecurity duties?

Mr Power : The labour hire roles are in a variety of different positions across the organisation. Most of them are concentrated in the corporate functions, but there are certainly some who work in different parts of the biosecurity system. I could not tell you exactly—

Senator STERLE: Perhaps you can take it on notice to provide a breakdown for the committee.

Mr Power : I am happy to do so.

Senator STERLE: Would any of these labour hire contractors use that Plutus system—you know, the mob who have just got themselves in trouble?

Mr Quinlivan : Yes.

Senator STERLE: They do?

Mr Quinlivan : No, I meant you have the right company.

Ms Canning : We are looking at that at the moment. We are still confirming with the contractors. We are going back through the labour hire firms to confirm. As yet I do not have an answer.

Senator STERLE: Could you please take it on notice to let the committee know when you do find out?

Ms Canning : Yes.

Senator McCARTHY: Does it impact productivity of the department if staff employed via labour hire arrangements are unable to access the resources to do their job, or are you saying they have access to everything?

Mr Smalley : I am saying they have access to the systems that are relevant to their jobs.

Senator McCARTHY: How many of the 226 contracted staff are Indigenous?

Mr Power : I am afraid we do not have that information here. We could certainly look at that.

Senator McCARTHY: Would you be able to take that question on notice?

Mr Power : Absolutely.

Senator McCARTHY: How many of your staff—4½ thousand it is, Mr Quinlivan, generally?

Mr Quinlivan : For actual people, it is a higher number than that. You were quoting average staffing level numbers. On what we beautifully term our 'head count' I think the number is a bit higher.

Mr Smalley : 5,271.

Mr Quinlivan : It is 5,271.

Senator McCARTHY: Of your 5,271, how many are Indigenous staff?

Mr Power : Senator, 108 staff across the department are Indigenous.

Senator McCARTHY: So the labour hire firms that you work with, how many companies do you interact with?

Mr Power : I am afraid we do not have—I would not know how many companies we have. It would be a broad variety.

Ms Canning : It is a couple of hundred. It is about 500 different suppliers.

Senator McCARTHY: Five hundred providers?

Ms Canning : Yes. At any one time that we use—there are a number of IT companies that we use for IT contractors. There is a range of suppliers available.

Senator McCARTHY: And how many of those would be Indigenous companies?

Ms Canning : Sorry, I could not tell you that, but we can find that out.

Senator McCARTHY: That would be good if you could. Thank you. At previous estimates we certainly were asking lots of questions around the ministerial office in Armidale and how many meetings were held in the Armidale ministerial office. I want to take you to the Armidale ministerial office, Minister, and these questions are perhaps more associated with you. The answers to questions on notice Nos 37, 38 and 39 all stated:

The department does not have access to the Deputy Prime Minister’s diary.

Even if the department did not have access to the minister's diary, wouldn't there still be a general record of ministerial meetings regardless of which office they are being held in?

Mr Quinlivan : I am sorry, can you repeat that question?

Senator McCARTHY: In the previous estimates we were asking around the regularity or otherwise of ministerial meetings in Armidale, and your response to those questions on notice was that you did not have access to the Deputy Prime Minister's diary. My question to you or to the minister is: if the department does not have access to the Deputy Prime Minister's diary, there must be another way of recording general ministerial meetings taking place regardless of which office they are being held in.

Mr Quinlivan : We would have no visibility of that, and nor is it really any of our business who the minister is meeting with in his electorate office.

Senator McCARTHY: No, I am not asking who he is meeting; it is just a general ministerial—

Mr Quinlivan : Or even how many meetings. The only visibility we would have is meetings that would involve departmental staff, and we do not record that centrally.

Senator McCARTHY: So departmental staff would not be present in the Armidale office for ministerial meetings?

Mr Quinlivan : Not unless there was some specific reason for them to be there.

Senator McCARTHY: And have there been any specific requests?

Mr Quinlivan : There certainly are from time to time, but we do not keep a central record of it.

Senator McCARTHY: So you do not have a record of any of your staff going to Armidale to a ministerial meeting?

Mr Quinlivan : No, nor do we for going to Sydney or Melbourne or anywhere else for that matter.

Senator Ruston: Senator McCarthy, maybe I can give you a bit of a snapshot of my circumstances?

Senator McCARTHY: Sure.

Senator Ruston: Whenever I have a ministerial meeting I would seek a briefing from the agency for that meeting. Where I require the assistance of a departmental officer as part of that meeting, if it is offsite I would more often than not seek to have that person ring into a meeting I was having, whether it be in my Renmark office or whether it be onsite with that person I am meeting. It would be very unusual for me to require a departmental official who is located in Canberra to travel to a more remote location to have a meeting. We would usually avail ourselves of the telephone facilities.

Senator McCARTHY: Okay, so it is very unusual.

Senator Ruston: I cannot actually tell you that I have ever required an official to go to Renmark. On a couple of occasions it has been advantageous to have them come to Adelaide if I have meetings in Adelaide, but that would be very, very rare.

Senator McCARTHY: So it is not standard practice?

Senator Ruston: No. But that is not to say that it is not standard practice to have meetings in my office in Renmark. Admittedly, it is my electorate office, not my ministerial office, but it is kitted out as a ministerial office to all intents and purposes and I do have meetings there. I am just saying that I certainly do not notify the department of the time of my meetings. They provide me with briefings for them, but they do not necessarily have details of when the meetings are being held.

Senator McCARTHY: Is your Renmark office a ministerial office?

Senator Ruston: It is combined as both, yes.

Senator McCARTHY: So it is standard practice to perhaps not have departmental staff attend in your regional offices, and, Mr Quinlivan, it is standard practice to not note when your departmental staff might be going to a ministerial meeting?

Mr Quinlivan : We do not keep a centralised recording of that.

Senator McCARTHY: In that instance, just to finish off with that, do departmental staff members travel to Armidale at all to attend meetings or to support the minister and his staff in any way?

Mr Quinlivan : Yes, they do from time to time.

Senator McCARTHY: When has that occurred?

Mr Quinlivan : We do not keep a record of it.

Senator McCARTHY: Okay, but you know they do this?

Mr Quinlivan : Yes, I think last time we talked about travel that members of the executive had made to Armidale because we were personally familiar with it, but not more generally in the department.

Senator McCARTHY: So you do not keep a record of where your staff go to support the minister and ministerial staff, but you know they go?

Mr Quinlivan : By 'go' as in when their participation in meetings or other events is sought. And, as the minister has just said, as often as not the participation might be by telephone.

Senator McCARTHY: I want to take you to the resignation of Kareena Arthy on 21 April. Has that caused disruption to APVMA to replace her?

Mr Quinlivan : I think you are well placed to judge that, because you have just seen the interim CEO in action. She seemed to be right across the organisation's business. She is doing that job for a couple of weeks, and, as we also discussed earlier this morning, an interim CEO, who is well credentialed for the job, has been appointed by the government. We are looking to advertise and make a recommendation to the government for a permanent appointment as soon as possible. There is always some dislocation when you have changes in CEOs, but we are looking to minimise that.

Senator McCARTHY: What was the process followed for the appointment of the interim CEO?

Mr Quinlivan : We went through that in some detail earlier this morning.

CHAIR: Can I just interrupt? We did seriously canvas this stuff this morning.

Senator McCARTHY: I had stepped out.

CHAIR: But if we all pop in and do it again, we will be here till dark. I just encourage Mr Quinlivan to bring it to the senator's attention if it has been canvassed well, and Senator McCarthy will choose whether she pursues it.

Mr Quinlivan : You will find the Hansard gives a complete description of the process we have been through.

Senator McCARTHY: All right. I am happy there.

Senator STERLE: I want to ask the department about the sugar code. Can I ask that here?

Mr Quinlivan : Agricultural productivity. That is the complete corporate matters section? Senator, can I offer some information in response to a question that Senator McCarthy—

CHAIR: Let us just clear this up: do not let anybody leave. They misrepresented to me that they were finished, and now they want more.

Mr Quinlivan : Senator McCarthy asked a question about Indigenous employment in the department, and we did provide an answer to the question about the overall numbers of direct employees, and you might recall yesterday we talked a little bit about the Indigenous rangers program—I think that was when we were discussing Landcare—but we have got a document here which shows the geographic distribution of the employment of those rangers, whom we employ under a program but not as direct employees. But it is obviously an area of increasing effort for us and for the government. We have got this map that shows you where they are across northern Australia, if you are interested in seeing it.

Senator McCARTHY: Are you providing that information in response to those—

Mr Quinlivan : No, just in addition, because it is relevant to the question you asked and I thought you would be interested. We have got the document here.

Senator McCARTHY: Absolutely. Can you table that document?

Mr Quinlivan : We will table it now.

Ms O'Connell : Also, Senator, you asked for this yesterday, so we are providing it—and we have got colour copies.

CHAIR: Is there any objection to that being tabled? There is no objection. Mr Quinlivan, on that point, I do not know if you guys are aware of just how successful those programs are with the Indigenous rangers. We have had a discussion with Senator Scullion about the prospect of a slight broadening of that in the desert channels area, to do with the prickly acacia that I raised yesterday. You may have some knowledge as to whether there is a plan to expand it with numbers in the Longreach district. If not, could you take it on notice?

Mr Quinlivan : I think I would need to. I am certainly well aware of the value of the program to both the communities that are involved and the Commonwealth departments who are involved in it. I am also well aware of the overall value of the program and looking to expand it wherever we can.

CHAIR: There are some terrific people in it out there.

Senator BACK: If I could just add a comment and a plea, in the context of exotic diseases, particularly animal diseases: it seems to me, with the geographic spread of the rangers and their powers of observation, that it would be possible to develop small laminated cards with the clinical signs of diseases such as foot-and-mouth disease and other exotic animal diseases. I say this because it seems to me that, if or when we do get something like foot-and-mouth disease into the country, it is going to be in the north and it is going to be many of these people in their locations who are the most likely to see the first signs. It is not going to be veterinarians. It is not going to be pastoralists. It is going to be people like the rangers. I would really make the plea that some time and effort be put into the possibility of developing just a very simple set of laminated cards and a level of training and familiarity, because these will be the first signs.

Ms O'Connell : Absolutely, and in fact I think we have gone a lot further than that. These Indigenous ranger groups—their job is about surveillance, and you are absolutely right: they are the people who can detect if anything has changed. They are identifying things that are coming to the far north well ahead of anybody else able to identify them. We had 40 ranger groups. Now, with the white paper funding, we have got 68 ranger groups, well across the north. Some of the work that they do in terms of foot-and-mouth is actually taking blood samples from feral animals and then sending those blood samples to be analysed and diagnosed. That is well before medical science—

Senator BACK: Well ahead of me.

Ms O'Connell : well ahead of that. They also play a role in assisting with the management of our sentinel herds, which, if you like, are up there to look at what potential diseases might come across. In terms of that surveillance, you are right about things coming first to the north, and they are playing a really major and key role in that surveillance of pests and diseases arriving in Australia. We have kitted them out with some technology too. It is all appropriate for what area they are in. Some of them have got weed kits, but, equally, others have got drones and are using quite advanced drone technology to assist—

Senator BACK: Don't start on that point of view!

Senator STERLE: Yes, stop there.

Ms O'Connell : I will skip the drones.

Senator BACK: No, no, no, no.

Ms O'Connell : I did not hear—

Senator STERLE: We just had them settle down.

CHAIR: You must have nodded off in the last couple of days!

Ms O'Connell : I missed the drones thing. Sorry about that. I should not have mentioned it—

Senator STERLE: Maybe we should get Cash in here to tell us about it. What do you reckon?

CHAIR: Replay 2GB this morning; it will refresh your memory.

Ms O'Connell : But you also mentioned training, and we are developing a tropical biosecurity curriculum, specifically. That is a really specific curriculum that is being developed with the assistance of Batchelor Institute to skill them in further identification of tropical pests and diseases to assist with that surveillance work. But it is really fantastic; I have been out with them up north and seen first-hand the work that they do, and it is really very impressive.

Senator BACK: I do not know how many, if any, of them would be members of NORFORCE, but I did, as part of the parliamentary ADF program, spend some time in Nhulunbuy with our NORFORCE group and, again, was incredibly impressed by their obvious local knowledge of their own areas. But, as you say, the surveillance capacity, the fact that part of their work, our work, was to check and report on the standard of launching ramps, airstrips et cetera is all feeding into that, so I am just delighted to learn that it has gone well beyond that. Thank you.

Ms O'Connell : It has, in particular up in the Torres Strait, because there are Torres Strait Islander as well as Indigenous ranger groups. They are sort of the front line in our exotic fruit fly detection and regularly, seasonally, pick up new exotic fruit flies and deal with them.

Senator BACK: We might need to add the varroa mite to this group, Ms O'Connell. Thank you. Thanks, Chair, I am really delighted to learn that.

CHAIR: Thank you, Senator Back. Senator Sterle has promised he has got one question, and then—there will not be a false release; it will be a real release?

Senator STERLE: No, it will be a real release. Thanks, Chair. I want to go to the relocation of the APVMA for just one question. I note that CropLife has urged the government to reconsider moving the agency from Canberra, which we are well and truly aware of, warning that the delays risk losing the farming sector billions in revenue. That is CropLife's concern. So I ask you, Mr Quinlivan, and your officers: have you provided a brief to the minister or his office on the serious risk that the relocation of APVMA could have on the Australian agriculture fisheries and forestry multibillion dollar industries, as raised by CropLife?

Mr Quinlivan : Not in response to their most recent communications. But you will recall we have discussed this at length in the past, and we did brief the minister on the Ernst & Young cost-benefit analysis from which those numbers were derived, so those issues have certainly been ventilated.

Senator STERLE: I think I already know the answer, but can you share those with the committee?

Mr Quinlivan : I will take that on notice.

Senator STERLE: Okay. Thank you very much. I told you it would be one.

CHAIR: Good try. Thank you.

Senator STERLE: I asked him nicely. You never know; one day someone might go 'sure'!

CHAIR: Yeah, that is right. One day someone might! Mr Quinlivan, thank you to all of the officers who have helped us out in that segment. They should not just go; they should go swiftly, and they should leave the building in case someone changes their mind!

[12:18]

CHAIR: We are now going to outcome 1. Thank you, Mr Williamson and Mr Williamson. Family team?

Mr D Williamson : Sadly not!

CHAIR: There are similarities. I would be having a talk to my mother! Senator Sterle?

Senator STERLE: You are not going to drop me to your level. Senator McCarthy has some questions.

Senator McCARTHY: I would like to go to the Regional Investment Corporation. There has been a great deal of discussion around it. I just want to understand how the RIC will be established. Is there an exposure draft of the legislation needed to establish the RIC?

Mr D Williamson : The answer to the last part of your question is that there is no draft of the legislation available yet, but we anticipate it will be available shortly.

Senator McCARTHY: When would it be available?

Mr D Williamson : I think we are aiming at the next month or so. On the establishment, the RIC will be a corporate Commonwealth entity sitting in our portfolio, Agriculture and Water Resources. It will have a skills based board, with a chair, who will appoint a CEO and staff. So it will be a stand-alone organisation. Its initial function will be to deliver two programs. The first is the National Water Infrastructure Loan Facility, which is an existing program currently being delivered by the department that will move to the RIC. The second program will be farm concessional loans, which will be a new program—effectively the next generation of the current set of concessional loans programs that the Commonwealth has been delivering, via the states, for the last four or five years.

Senator McCARTHY: There will be more of a national focus then?

Mr D Williamson : It will be a single program, yes. It will be a single entity and, yes, a single farm concessional loam program.

Senator McCARTHY: Is that the end of the states delivering it? Is that the purpose?

Mr D Williamson : It will be. That is correct. The states are currently delivering loans for us and will do so for a further 12 months, or for the 2017-18 financial year. We are aiming to have the RIC up and running from 1 July next year, with the new programs to commence then.

Senator McCARTHY: Will the government seek to consult with farm groups with regard to the legislation?

Senator Ruston: Of course we will be doing that.

Senator McCARTHY: When will you do that?

Mr D Williamson : Once we have got draft legislation available, we will. We have already commenced consultation off the back of the announcements in the budget, which announced the broad architecture for the RIC. Ms Kennedy and her team have had quite an extensive range of consultations already with industry and also with the state and territory governments.

Senator McCARTHY: Who in the industry have you consulted with already?

Ms Kennedy : I can read out the list, or I can provide it on notice if that is easier.

Senator McCARTHY: Is it a long list?

Ms Kennedy : It is relatively long. I have already had conversations with, I think, 10 different groups, and we have got another six lined up. We have talked with most of the key ones now and have flagged that we would like to have ongoing consultation with them as we move towards the RIC opening for business.

Senator McCARTHY: That is 16 groups, is it?

Ms Kennedy : I have already had conversations with 10, and another six are lined up for the next short time.

Senator McCARTHY: Would you be able to table those names?

Ms Kennedy : I can certainly take it on notice.

Senator McCARTHY: Great. Of the 10 groups that you have spoken to, what has been the response?

Ms Kennedy : The response has been really positive so far. I think that there has been a lot of positive feeling about the idea of expanding the farm concessional loans scheme, as Mr Williamson has just mentioned. That will mean that it is no longer as closely linked to drought as it has been previously—which is something that there has been feedback from stakeholders on over quite some time—and is the logical next step following from the aims for farm businesses that the Deputy Prime Minister articulated in his Agricultural competitiveness white paper. There is also a strong feeling about wanting to work with us and with the board, once it is there, because any work the department does will be to prepare information for the board, who will then make those final decisions on how to have the best service delivery offering and achieve that degree of national consistency, which has sometimes been problematic through the delivery of the program so far.

Senator McCARTHY: Will the RIC be a statutory organisation—or you said a corporate entity didn't you?

Ms Kennedy : Yes. It will be a corporate Commonwealth entity, and statutory in the sense that there will be legislation introduced to establish it.

Senator McCARTHY: Do you have any idea what the staff numbers for the RIC will be?

Ms Kennedy : The staff numbers will be a matter for the board, obviously. But the work that the department has done in working out early budgets indicate there will be around 30 staff initially for the organisation. Of course, that could grow. That is based on the initial programs that it will deliver.

Senator McCARTHY: I am going to take you to Farm Household Allowance. Has the department done any analysis as to how many farmers coming off the Farm Household Allowance will seek to obtain a concessional loan?

Mr G Williamson : We have had a look at the aggregate numbers, and we think that there is a reasonable number of farmers that may be eligible for a concessional loan. The sorts of aggregates that we looked at within that cohort have a relatively high level of commercial debt. We think they would benefit from a concession loan that offers them an opportunity to restructure that debt, and thereby have lower interest payments and, therefore, add to their cash flows. The other thing that is important to understand, I guess, in that potential for that cohort to access the loans, is that they have undergone three years of assistance that has helped them improve their personal and farm financial circumstances. We see the offer of potentially availing themselves of concessional loans as being a continuation of that pathway of improving their farm business circumstances. There are a reasonable number that could qualify, but we cannot tell you how many—

Senator McCARTHY: How many is reasonable? You do not have a ball park figure of how many would be reasonable?

Mr G Williamson : It could be in the hundreds.

Senator McCARTHY: Has the department undertaken any work post the Intergovernmental Agreement on National Drought Program Reform?

Mr D Williamson : Work in what area? We are operating under that intergovernmental agreement right now.

Senator McCARTHY: That is all you need to say.

Mr D Williamson : That is still current.

Senator McCARTHY: This is part—

Mr D Williamson : Yes, it is. It is part of the Commonwealth's approach to drought policy and more broadly to rural policy. That intergovernmental agreement expires next year. There will be a review of that over the next six months or so.

Senator McCARTHY: When does it expire next year?

Mr Hutchison : The intergovernmental agreement, which was agreed to by the Australian government and state and territory ministers, was signed onto in 2013. It was a five-year agreement so it is due to expire at the end of 2017.

Senator McCARTHY: There will be a review you were saying, Mr Williamson?

Mr D Williamson : That is right.

Senator McCARTHY: What process was undertaken to determine that the best type of assistance for farmers coming off the Farm Household Allowance is to offer them a concessional loan?

Mr G Williamson : That is certainly not the only assistance. Our starting point is that farmers coming off Farm Household Allowance are better prepared to engage in either farming or doing something else.

Senator McCARTHY: But what is the department's process? It is more about what your process is in determining that. How do you determine those things?

Mr G Williamson : We have a branch. A large part of their work is looking at the policy aspects of the farm household allowance. That is Mr Pak Poy's branch. There are policy officers in there who have looked at this issue for a number of months. We started quite early, in fact. We have also done quite extensive consultations with our partner agency, who delivers farm household allowance and also has responsibility for the farm household allowance case officers. We sought input on how farmers were going under the program from that agency and also their advice.

Senator McCARTHY: Who is your partner agency?

Mr G Williamson : The Department of Human Services. We also administer the Rural Financial Counselling Service. A lot of the farm household allowance recipients also interact with the Rural Financial Counselling Service, so we get quite a bit of input from the Rural Financial Counselling Service on how those people are going—not at a personal level, because that is all obviously confidential, but at an aggregate level.

Senator McCARTHY: What is the general advice from the Rural Financial Counselling Service? What are the main things that you look at there?

Mr G Williamson : It is highly varied, as you would imagine. Some people do not stay on the farm household allowance program for the whole time. There are, in fact, around 2,700 who have come onto the program and moved off the program. They come in and then they go out as their circumstances improve. Some are in a much better place. We know from various input, not only from the Rural Financial Counselling Service but also by other means, that they are in a better position. There are obviously some who are still finding it difficult, in a farming sense, but those are the same people who for three years have had an opportunity to consider their circumstances and make decisions accordingly.

Senator McCARTHY: When will the new concessional loan program open? You gave me a time frame earlier about next year, in June.

Mr D Williamson : That is the RIC, the Regional Investment Corporation. We are aiming to have—

Senator McCARTHY: When will the concessional loan program be open?

Mr D Williamson : For the people coming off FHA, that will be from 1 July this year. That is what we are aiming for. As I say, we are still delivering these through the states, so we are in negotiations with the state agencies about delivery. It is subject to agreement on that front.

Senator McCARTHY: Have the eligibility criteria been finalised, and when will the criteria be released?

Mr G Williamson : The minister has announced that these loans will be available under the same eligibility criteria, with the exception that they do not need to be in drought. There is one other caveat: that the loans are for refinancing purposes only. We are not adding to new debt.

Senator McCARTHY: It is existing debt?

Mr G Williamson : That is correct.

Senator McCARTHY: Thank you.

Senator RICE: I have some follow-up questions. Basically, you have had the broadening of who is now going to be eligible for the Farm Business Concessional Loans Scheme. That is the case, yes?

Mr D Williamson : That is the intention under the Regional Investment Corporation, yes.

Senator RICE: Those former farm household allowance people will now be eligible. Can I confirm, though, that there is not going to be an increase in the amount that is available? There is a $250 million cap in the scheme, isn't there?

Mr D Williamson : That is correct. At the moment there is an annual amount of $250 million available for concessional loans. That is right.

Senator RICE: Right. So we now have a bigger pool of people who are going to be eligible to apply for those loans?

Mr D Williamson : That is correct.

Senator RICE: Do you expect that you are going to reach the $250 million allocation cap?

Mr G Williamson : While we might have a slightly bigger pool, we also have a situation where there is a lot less drought in the country. Therefore, on the one hand, there is less demand because drought conditions are much less than what they were 12 months ago. So we think the amount of funding available will be sufficient.

Senator RICE: For what period of time has that yearly cap been in place?

Mr G Williamson : Since the announcement of the white paper measures.

Mr D Williamson : We are in the third year, I think.

Mr Hutchison : Second, I think. 2015-16 and 2016-17—two years. This is the second year of the $250 million.

Senator RICE: Was the cap reached in the first year?

Mr Hutchison : No.

Senator RICE: How much was used of the scheme?

Mr Hutchison : At the moment, of the applications from 2015-16—

Senator RICE: 2015-16 was the first year. We are almost coming to the end of the second year.

Mr Hutchison : I might need to take it on notice, because we have more than one loan scheme that was operating under that. I want to make sure that I get the numbers correct for you so that I am not double counting.

Senator RICE: Can you tell me what other loan schemes are included in that cap?

Mr Hutchison : Last year we had the Drought Concessional Loans Scheme, the Drought Recovery Concessional Loans Scheme and the Dairy Recovery Concessional Loans Scheme operating under the 2015-16 $250 million allocation.

Senator RICE: Have they now been amalgamated into the overall Farm Business Concessional Loans Scheme?

Mr Hutchison : From 1 November 2016, the Farm Business Concessional Loans Scheme started, and it had two products available under it. It was a drought assistance concessional loan which, effectively, replaced the two previous drought products that I mentioned as well as the continuation of the dairy recovery loans which were started late last financial year.

Senator RICE: Basically, this one scheme is now taking over those two loan schemes?

Mr Hutchison : That is right. This one scheme is now available. It has drought loans and dairy loans available. The announcement that we have been discussing in the last few moments is the addition of those concessional loans for ex-farm household allowance recipients.

Senator RICE: Could you take on notice how much was taken up by each of the previous schemes and how much has been available?

Mr Hutchison : Yes.

Senator RICE: Is it still categorised as drought assistance or dairy within this scheme?

Mr Hutchison : Yes. We will be able to identify within those which funds were allocated to farm businesses in which scheme. You will be able to see which was allocated to drought and which was allocated to dairy loans.

Senator RICE: The new eligibility, that has not begun yet?

Mr Hutchison : No, that is from 1 July, as Mr Williamson said.

Senator RICE: You do not expect that you are going to reach your cap this year given that we have not got so much drought?

Mr G Williamson : This financial year?

Senator RICE: Either this financial year or the expectation for the—

Mr Hutchison : No, we do not, for the same reasons that Mr Williamson outlined before. With the receding drought conditions across the country, there has been, as you would expect, a reduced demand for the drought loans. It is those conditions which mean that for 2016-17, the current financial year, we do not expect to hit the $250 million cap, with only five or six weeks to go.

Senator RICE: So as long as the weather holds, then. You do not think that there is the potential for people being affected by drought or on dairy assistance to potentially miss out because of the increased pool of people who will be eligible for the loans? You do not see that as being a likely scenario in the forthcoming financial year?

Mr G Williamson : That is correct.

Senator STERLE: I want to go to the Rural Research and Development for Profit program. Now, in the original competitiveness white paper funding envelope—

Mr Quinlivan : We will get the relevant people to the table.

Senator STERLE: I will put you on notice now, Mr Quinlivan, that I could be all over the place. You know what I am like.

Mr Quinlivan : We have got everybody here.

Senator STERLE: I might flip there and then I will flip around to forestry and I will flip back. At the end of the day, we will get there.

Senator Ruston: Senator Sterle, the flipping senator!

Senator STERLE: I have been called worse than that today, and that is only from my own side of politics! You are not supposed to laugh at that, Senator McCarthy.

Mr D Williamson : I think Ms Freeman can probably assist.

Ms Freeman : Could you repeat the specifics on the—

Senator STERLE: I can. I am going to ask questions to the Rural Research and Development for Profit program, which was originally announced in the Agricultural competitiveness white paper's funding envelope. I am led to believe there was an additional $100 million to be 'invested in rural research and development as a result of the Agricultural competitiveness white paper decision to extend the rural R&D for profit program until 2021-22'. Does that ring a bell?

Ms Freeman : Yes.

Senator STERLE: Great. I have some preamble. Just so I have this right, on 5 July the minister stated, 'An additional $100 million will be invested,' in this program. I am led to believe the extra $100 million was to go until 2021-21. It was to be on top of the $100 million announced in the Agricultural competitiveness white paper. Is that correct?

Ms Freeman : An additional $100 million was announced in the Agricultural competitiveness white paper. Then there is the first $100 million that was announced by government prior to the white paper, yes.

Senator STERLE: That's it! I knew you would put it in context for me, thanks. That is spot on?

Ms Freeman : Correct.

Senator STERLE: So I would not be hanged, drawn and quartered to believe that in that program there is a $200 million announcement to be delivered by 2021-22. That is what we are led to believe.

Ms Freeman : Just to be clear, there were some funds—the program is now—

Senator STERLE: I am getting to that. That is tremendous, because this is where I am going now. There was an expectation of $200 million, but what we now see, through the department's website, is there happens to be about $19½ million less than the original expectation of $200 million. Is that correct?

Ms Freeman : Yes, it has been directed to fund alternative government priorities.

Senator STERLE: What would those alternative government priorities be?

Ms Freeman : So $9½ million was allocated to the National Water Infrastructure Development Fund.

Senator STERLE: My shorthand is not that good. So $9½ million going to the National Water Infrastructure Development Fund.

Ms Freeman : That was part of the 2016-17 budget.

Senator STERLE: This new National Water Infrastructure Development Fund is part of the 2016-17 budget.

Ms Freeman : Yes. And there was $10 million directed to fund a number of 2016 election commitments that were reflected in the most recent MYEFO.

Senator STERLE: Election commitments: $10 million. What are those commitments?

Ms Freeman : There are a range of them. The MYEFO adjustment was for the following commitments, including the northern Australia rice industry.

Senator STERLE: Let's break it all up. How many dollars for each of these election commitments?

Ms Freeman : Certainly. I am just being clear that the MYEFO adjustment included a number of things, not all of which, I suspect, were funded from the $10 million, so I will just run through MYEFO.

Senator STERLE: Sure. We have had this big announcement of $100 million and we have another big announcement of $100 million—

Ms Freeman : Correct.

Senator STERLE: and now we have gone down the $19½ million less, because 19½ is being directed into election commitments from 2016.

Ms Freeman : That is, $10 million of the 19.5—

Senator STERLE: Yes, sorry, $9½ million was from the 2016-17 budget. So $10 million.

Ms Freeman : Yes.

Senator STERLE: Cool; fire away.

Ms Freeman : There were a number of election commitments announced as MYEFO, as part of new policy commitments, and they included invasive animal solutions.

Senator STERLE: What is that?

Ms Freeman : That would be another alternative program within the department. I will get one of my colleagues to talk to you in detail about that.

Senator STERLE: It is important. An invasive animal program is fantastic but that can—

Ms Freeman : So $4 million came from the Rural R&D For Profit program.

Senator STERLE: So $4 million of the $10 million—

Ms Freeman : Correct.

Senator STERLE: to the invasive animal—what did you call it?

Ms Freeman : Invasive animal solutions.

Senator STERLE: That is another part of your department?

Ms Freeman : Correct.

Senator STERLE: I have not heard about that one. That will be interesting!

Senator Ruston: Wild dogs—think about wild dogs.

Senator STERLE: I am not rusty on that! Coming from WA, minister, I fully understand; we do get wild dogs. It is a massive issue, and $4 million is unfortunately not going to be enough. We need a couple more zeroes behind that—

Senator Ruston: Quite right.

Senator STERLE: so you are not going to get a fight out of me. All right, so $4 million out of that—

Ms Freeman : And another $4 million went to the northern Australia rice industry.

Senator STERLE: For what?

Ms Freeman : For additional research in developing a rice industry in the North.

Senator STERLE: In the north, where we are not currently. So up in Kununurra—where are we talking about?

Ms Freeman : It is doing research and development. The funding has gone to RIRDC.

Senator STERLE: Oh, righto!

CHAIR: This is called dryland rice production.

Senator STERLE: I am well aware. They were trialling it in Kununurra.

Ms Freeman : And the remaining $2 million of the $10 million that was in the MYEFO adjustment went to the commodity milk price index.

Senator STERLE: I will ask what that is all about when we come back.

CHAIR: Thank you, all. Enjoy your lunch, and we will see you back here at a quarter to two.

Proceedings suspended from 12:46 to 13:46

CHAIR: We will resume the Senate Rural and Regional Affairs and Transport Legislation Committee estimates. Senator Sterle.

Senator STERLE: I was talking about the $100 million and Ms Freeman was going through the break-up of where the $19.5 million had disappeared from that funding stream and been syphoned or sideways moved into some election commitments. You mentioned—and I have lost my notes—the dairy commodity milk—

Ms Freeman : Price index.

Senator STERLE: Tell us what that is.

Ms Freeman : Certainly. That was a commitment by government to develop a tool for dairy farmers to help aid their business decisions, so they would have access to market information. We are currently out to tender on that task now seeking both quotes for businesses to say how they might provide that information to farmers and then off the back of the consultation with industry there was a strong request that, I think you would say, was unanimous that it needed to include an education element. There is a lot of information currently out there. But it is about actually helping farmers understand that information better. Part of the tender request includes considering what educational element might go with that information, but we are out to tender on that now.

Senator STERLE: Can you tell me how much of the $180.5 million that is left of the Rural Research and Development for Profit program has been spent so far and on what?

Ms Freeman : Certainly. I might turn to my colleague Ms Musgrave.

Ms Musgrave : Across the first two rounds of the program, $79 million has been allocated. And then with round 3, which has been run, it has been announced that there is $36 million.

Senator STERLE: I am sorry, the $79 million is round 2?

Ms Musgrave : Rounds 1 and 2 together.

Senator STERLE: Rounds 1 and 2.

Ms Musgrave : So, it was $26.7 million in round 1 and $52.3 million in round 3—

Senator STERLE: That is $36 million something? How much did you say?

Ms Musgrave : Yes, it is about $36 million. I am just looking for the exact number here.

Senator STERLE: We are not going to hang you if you are a couple of cents out.

Ms Musgrave : I would say $36 million and I will correct it if it is wrong.

Senator STERLE: That is fine. That money has been allocated and it is out there now. So, what is that being spent on?

Ms Musgrave : The 12 projects under round 1.

Senator STERLE: If it is an exhaustive list you can give it to us on notice or if you want to brag about it fire away.

Ms Musgrave : I might give you the generic thing and give you the exhaustive list later. There are 12 projects under round 1, 17 projects under round 2 and six projects funded under round 3. R&D corporations—the rural research and development corporations—are the only eligible applicants under this program, but the requirements under the guidelines mean that they have to be collaborating with others. So, other RDCs but also research institutions, partner entities, industry, whoever. It is aimed at driving some collaboration.

Senator STERLE: Is the $180.5 million rather than the $200 million still to be exhausted until 2021-22 or has the timeline been brought in?

Ms Musgrave : No, the funding profile is still over the eight years.

Senator STERLE: It is still the same profile?

Ms Musgrave : Yes.

Senator STERLE: That is fine. I do not have any further questions there. That has explained the $19.5 million difference.

Senator BACK: I want to ask some questions regarding the financial support for water management in the Great Artesian Basin. Is that appropriate at this time?

Mr Quinlivan : That matter is being handled by our water policy people who on the program are here at 9 am tomorrow morning. We can take them on notice for you.

Senator BACK: If you can. I am interested in knowing how the funds are going to be spent and particularly how it is going to reduce what has been the wastage of the water draw out of the Artesian Basin.

Mr Quinlivan : The purpose of the program is to continue with the capping program. I think it is one of those programs that has unanimous support and that is why it is going to be continued.

Senator BACK: Agricultural workforce—what is the seasonal worker incentive scheme? Is it underway and can you tell us, if it is underway, is it effective?

Ms Freeman : The announcement was the expansion of the seasonal worker programs to basically allow employers from the broader agricultural sector to access workers from nine eligible Pacific Island countries and Timor Leste. Previously, only horticulture was allowed to participate.

Senator BACK: Correct.

Ms Freeman : In 2015-16 we know there were roughly 4,500 issues of visas granted under that program.

Senator BACK: Can you tell us, on notice if not now, what industry sectors they ended up finding employment in? You are right; it was originally confined to horticulture.

Ms Freeman : Correct.

Senator BACK: Also, on notice, if you can tell us which countries they came from? I am particularly interested to see whether or not they are from Timor Leste.

Ms Freeman : Yes. I will take the industry coverage on notice, but for the worker intakes from participating countries, just from Timor Leste, so working back for 2015-16 there were 224 workers.

Senator BACK: Yes.

Ms Freeman : In 2014-15 it was 168.

Senator BACK: Yes.

Ms Freeman : In 2013-14 it was 74, and the previous year it was 21.

Senator BACK: Would there be any way of finding out repeat visits by individuals? Is that data you would have?

Ms Freeman : I would have to take on notice whether they were repeat. Normally the data just says how many visas were granted or held, whether they are in country or not. I do not know whether they would be repeats.

Senator BACK: I sat on the migration committee, which looked at that whole issue last year with recommendations to government. That is why I was particularly interested. The backpacker tax and the backpacker numbers—as a result of the changes to the tax regime—

Ms Freeman : Yes.

Senator BACK: Can you give us any early advice on the impact, if any, of those changes?

Ms Freeman : We are actually seeing the numbers are continuing. Obviously the changes to the working holiday visa that was announced by government applied a 15 per cent tax rate from 1 January this year. So, I think we are seeing the numbers for 2014—583—in 2015-16 and there was just a very small reduction on the previous year. I will take on notice to find out how many we are seeing since then. It might be too soon since the government made its announcement, but I can certainly take that on notice.

Senator BACK: There would be some predictions already, I would hope, being the end of May.

Ms Freeman : Yes, certainly.

Senator BACK: It is seven months until Christmas today, Chair, just in case you were wanting to put—

Ms Freeman : The package announced that there was an increase in the age limit. People can work for the same employer for up to 12 months. There is $10 million to Tourism Australia to support a global youth targeted advertising campaign and there is also, importantly, an additional $10 million to the ATO and the Fair Work Ombudsman to establish an employer register and assist with compliance initiatives, which are important elements as well.

Senator BACK: Yes. Secretary, I would like to go on to agricultural policy related to foreign investment. We know that there has been a reduction in the threshold in relation to FIRB scrutiny for agriculture agribusiness. When did that reduction occur?

Ms Freeman : The change in policy has been in place now for some time since 2015. We have seen a number of changes made by government but, at the end of the day, it is a matter for the Treasury. They run the foreign investment screening process.

Senator BACK: Are you able to tell us, then, or would it be them that could tell us what have been the impacts, if any, of that reduced threshold?

Ms Freeman : I would defer that matter to the Treasury.

Senator BACK: Do you have access to the register and can you tell me what the figures are in relation to foreign ownership of agricultural land and water for that matter?

Ms Freeman : The register is public and was public in September last year. That was the first report.

Senator BACK: We have not had one since September 2016.

Ms Freeman : Correct, and that is publicly available.

Senator BACK: I have those figures. Is the register to cover foreign ownership of water rights yet to be established?

Ms Freeman : Yes. My water colleagues may correct me, but I understand the government passed the legislation in December last year to establish the register and that the department has worked with the Treasury and the ATO on that. It commences on 1 July this year with a period of up to 30 November this year to compile a stocktake to use as a baseline.

Senator BACK: So, it would be Treasury that would be able to tell me whether or not there has been any adverse impact on foreign investment interests coming into Australia as a result of the reduction in the threshold?

Ms Freeman : Yes.

Senator BACK: That is not something you would be able to comment on?

Ms Freeman : No.

Senator BACK: Lastly, probably going back to about 2011 and a committee on which I sat, that was the catalyst for the first lot of data to start to be collected and I recall there were two glaring deficiencies at that time. I want to know whether they have been addressed. The first was a scenario in which nobody was capturing foreign investment in leased land. The officials at the time did not understand that a lot of our agricultural land was leasehold. Has that now been addressed?

Mr Quinlivan : Do you mean in the sense of pastoral leases?

Senator BACK: Yes, exactly. I asked them about the foreign investment in pastoral leases and I was just met with blank faces. It was not Agriculture. It was officials in other portfolios. They did not understand that it is in fact the vast majority, as you and I both know.

Ms Freeman : The FIRB released the first register in September last year, but the report in there shows that foreign investors basically hold 13.6 per cent of Australian ag land and it acknowledges that the vast majority of that foreign held land is actually leased rather than owned.

Senator BACK: Leasehold.

Ms Freeman : So, just to be clear on the number, 9.4 million hectares was held as freehold, and 43.4 million hectares was held as leasehold.

Senator BACK: In that same space, a question was raised that, if a foreign entity wanted to buy what is an agricultural property but not use it for the purposes of agriculture, for example, they might want to use it for mining or some other purpose, then it initially would not have been captured on the data, because it was not to be used for agricultural purposes. We saw that not large in terms of hectares as the leases would be, but do we know now whether that is also being captured regardless of the reason for which the foreign entity might want to purchase that land; if it is agricultural land at the time they are purchasing it, is that being captured?

Ms Freeman : I would probably defer that to Treasury just for the broader element. The department's role is quite clear that we will be asked where there might be portfolio interest in an application, but there is really a range of factors that would be considered by the government and then we would put our lens over that in that context. So, on that I would refer to Treasury.

Senator BACK: Chair, I now want to go on, at least at your convenience, to productivity research and development. I am happy to stop there if others have questions.

CHAIR: No, let us run for a bit.

Senator BACK: I will go on to R&D. In the recent budget, as I recall it, the Australian government contribution matching industry R&D levies will reach $300 million—the taxpayer contribution, I should say—an investment that will see farmers generating $12 for each dollar invested by government. Can you tell me where we are with the third round of applications for the R&D for-profit program?

Ms Freeman : My colleague, Ms Musgrave, just covered that, but basically the decision—

Senator BACK: I am sorry. I was not paying attention.

Ms Freeman : That is all right. The decisions have been made for round 3. A number of those projects have already been announced by government, but there is roughly $36 million in funds with about $16 to $17 million of projects already announced and the remainder to be announced in the coming weeks.

Senator BACK: Rather than take the time of the committee now, you might just point me to where I can obtain that information if it is in the public area and I can go and source it myself.

Ms Freeman : Certainly.

Senator BACK: The numbers of applications, total funding, first two rounds and so on.

Ms Freeman : Yes. We can do that.

Senator BACK: If you can just let me know where that is.

Ms Freeman : Certainly.

Mr Quinlivan : We did take all of that on notice to provide the detail.

Senator KIM CARR: Could I ask a question on R&D: the government's review on the R&D program is known as the three Fs review, undertaken by the Department of Industry. This goes to the question of the concession program that is available. It has been put to me within the meat industry there are—

Mr Quinlivan : I am sorry, can you just clarify: are we talking about the review of the R&D tax concessions?

Senator KIM CARR: Yes, that is right.

Mr Quinlivan : That is not necessarily something we know a lot about.

Senator KIM CARR: It has been put to me in regard to the meat industry that a number of producers there are concerned about the recommendations that come through the so-called three Fs review about the intensity measures. Are you familiar with that review?

Mr Quinlivan : Only that we obviously know it happened or is happening.

Senator KIM CARR: I want to ask whether this department has undertaken any consultation with the industry department as part of any interdepartmental committees as to the effect of the proposed changes to the R&D tax concession arrangements for companies that are engaged in agricultural or food processing?

Mr Quinlivan : Not to my knowledge.

Ms Musgrave : We do engage with the Department of Industry in relation to the three Fs review and when it came out in discussions. We have to take on notice what, if any, actual modelling has been done of the effect of the different thresholds if they were considered.

Senator KIM CARR: I am a strong supporter of the agricultural R&D program. So, do not misunderstand the import of the question. The fact is that there are significant manufacturers in food manufacturing that do not use those programs but actually use the industry department programs or the R&D tax concession that you have a direct relationship with. My question goes to whether or not you have had representations from them. That is the first question. Have you had any representations from food manufacturers? Secondly, have you made any representations to the Department of Industry in terms of the effect of those recommendations, in particular around the intensity measure, and adverse effects that may well occur for those producers?

Ms Freeman : The short answer is, no, but I would note that the AMPC, the R&D corporation for the meat processors, which is one of the 15 research and development corporations—some of them may fall into the category to which you refer.

Senator KIM CARR: Can you take that on notice?

Ms Freeman : Yes.

Senator KIM CARR: I have other questions on the meat industry.

CHAIR: Let us just see where we are at.

Senator STERLE: I have a couple I would like to get out of the way.

CHAIR: You will get the call, but you will share it as you choose. That is how it operates here. We pass on who takes the call.

Senator STERLE: Chair, if I may. Can I seek Senator Rice, Senator Siewert and Senator Carr's timetable? I am here all day. I can work around if others need to go, but I have a couple of small questions I would not mind asking now if it is possible.

CHAIR: Yes, let us do that.

Senator KIM CARR: I have some questions on the meat industry.

Senator STERLE: I will just ask this one so I can start clearing my list.

CHAIR: Where does that fit in there?

Senator STERLE: While you are looking—

CHAIR: No, I am asking out loud about the meat industry questions.

Ms Freeman : Senator Back asked a question that I have the answer for, if that helps.

Senator BACK: Yes, please.

Ms Freeman : If that is convenient. What industries were covered by the seasonal workers program?

CHAIR: Just stand by for a second.

Senator KIM CARR: My questions go to issues around trade agreements and the department.

CHAIR: Trade and market access?

Senator KIM CARR: Yes. It relates to the department's role in the establishment of those protocols.

CHAIR: So, it will be under trade and market assess?

Senator KIM CARR: That is right.

CHAIR: Ms Freeman, are you done?

Ms Freeman : No.

CHAIR: You have to talk to Senator Back.

Mr Quinlivan : Just before we do that, because I think this is a bit of an organising discussion, it looks to me like there is a fair chance that we will be wanting Fisheries Research and Development and Fisheries Management Authority here earlier than 7.30.

CHAIR: Yes.

Mr Quinlivan : Would you like us to ask them to come down now?

CHAIR: Let us do that, yes. Ms Freeman.

Ms Freeman : So, the industries covered by the seasonal worker programs are the industries that fall under the pastoral award 2010, which is horticulture, cane, cotton, aquaculture, accommodation in selected locations, the tourism pilot, which is part of Northern Australia only. Then in terms of actual numbers of workers for each sector, the Department of Employment would know that. This department does not.

Senator BACK: Thank you for that.

Senator STERLE: Chair, I have one that goes back to drought concessional loans. I am sorry to do this to you. I am talking now about the Regional Investment Corporation. It is only one question. We are clear that the concessional loans were for drought. We know why. We know that it was going to go for 10 years from 2016-17. Following on from earlier advice provided about the purpose of the Regional Investment Corporation, it appears that there is a change in program objectives and that the concessional loans will no longer focus on drought? Is that correct?

Mr D Williamson : That is correct.

Senator STERLE: What will it focus on? If you have answered this already, I apologise, but I do not think you did.

Mr D Williamson : We have alluded to it briefly. The intention is to broaden it away from just being about drought and focusing more on farmers wishing to improve or diversify their supply chains, the markets they supply, looking to expand or grow their business in a particular way. So, if you like, improving the resilience of the business. This is all driven by, again, the Agricultural Competitiveness White Paper from a couple of years ago. So, it is an expanded scope. It will not be geographic in the way that the current approach is.

Senator STERLE: So, this can go to any farmer who wants a lift, a concessional loan?

Mr D Williamson : Eligible farmers. There will be criteria for concessional loans, but it will not be limited to drought affected areas in the way that it is now.

Senator STERLE: How much money is left? I am sorry to do this to you.

Mr D Williamson : There is an annual appropriation of $250 million for concessional loans.

Senator STERLE: Annually. What is that telling us, that we are coming out of a drought? So, we have that bucket of money there if there is a desire to spend, to improve? Or will those in drought areas lose access to concessional loans they may have been able to gain access to?

Mr D Williamson : No, they will not lose money. All of the loans have already been approved. I think we have $600-odd million worth of approved loans to date. Those loans remain. And farmers in areas, whether they are experiencing drought or not, will be eligible to apply for the new loan scheme.

Senator STERLE: So, you talk about improving, diversifying, expanding or growing business and you said something about supply chains. Can you give us some examples of how a farmer can make application through the concessional loan scheme to get some money and do what? Those headings are pretty generic. Can they buy a new tractor?

Mr D Williamson : I might ask Ms Kennedy to answer but, just to put a marker down, this is commencing from 1 July next year—not the current program.

Senator STERLE: I understand. It is a good time to ask.

Ms Kennedy : Although that primary eligibility will be moving away from a geographic basis around drought, there will still be a safety net there to ensure that people who are drought affected will still be able to access it. But in terms of that primary eligibility pathway, that is going to be a focus of the ongoing stakeholder consultation that we are doing. Of course, this will be a matter that would be part of the responsible minister's operating mandate for the RIC board once it is appointed. Also, the board itself will have a role in identifying eligibility criteria. For instance, we believe that people would still be, similar to current schemes, restructuring debt or looking at a loan to increase the profitability of their business, any kind of operating expenses. There will be some exceptions that we want to work with stakeholders on. There has been a list that has existed as exceptions so far, but we want to make sure that those are still appropriate.

Senator STERLE: Are you able to provide that list? I am not knocking any assistance to our farming communities, not at all, but it is a very wide open list. So, you have a list already that targets a few examples. Can you provide that to the committee?

Ms Kennedy : I am sure we could take on notice some examples. I think the key point here is there is a list of eligible and non-eligible purposes for the current loan schemes. The point that Mr Williamson has already made is that the new expanded RIC program will not come online until 1 July 2018.

Senator STERLE: July next year?

Ms Kennedy : Yes, so we are still in the consultation phase with that.

Senator STERLE: I understand that, but from where I am sitting on this side of the table, with the best intent that may be out there, they are very big, open statements and it could lead to a lot of farmers going, 'You beauty!' and getting people excited who are not in drought affected areas, who may be in other parts of Australia, thinking, 'Great. There's another opportunity to restructure my finances.' I always have this problem with restructuring finances through concessional loans, because all I see is just more debt coming. I am not the only one who thinks that way. Can you give me some examples? Can you provide the list for the committee so we can have a look, noting that it is a work in progress and there should not be anything to hide there? You are working your way through it.

Ms Kennedy : There is certainly nothing to hide. It is just that we are purposely keeping it quite broad until we go into the stakeholder consultations. We could take that on notice. By the time those are due we will be in a position to provide you with what we are consulting on.

Senator STERLE: I do not like the idea of taking it on notice, but you have and I will live with that. When do you think this list will be ready for the wide open paddocks for everyone to have a look and see what the limitations are, what the expectations could be and what the boundaries are?

Ms Kennedy : Within the next few weeks we will be looking to start that detailed stakeholder consultation. Perhaps to provide a little bit more context, similar to the current loan programs but without the drought requirement, eligible farmers will still have to be in need of financial assistance as well as being assessed as being financially viable in the longer term.

Senator STERLE: I understand.

Ms Kennedy : Yes. There will still be those sorts of limitations around it. You are right in saying that loans for operating expenses could represent additional debt, but there will still be the requirement that at least 50 per cent of the overall debt of that farmer is held by a commercial lender as well.

Senator STERLE: Would it be fair of me to assume that you have worked hand in hand or you are working hand in hand with ABARES and the Bureau of Meteorology to look into the future and think, 'Let's hope we don't have an ongoing drought or harder years coming at us'? That has all been done so before we have expended half the initial amount, I think it was $2.5 billion, and so we do not find out in two years time the drought has extended?

Ms Kennedy : One of the reasons that the government has made the decision to establish the RIC as a corporate Commonwealth entity with the board making decisions will be that they will be in a very good position to be monitoring demand on the ground, things like seasonal conditions and so on. As I said, there will still definitely be an eligibility pathway associated with drought effects, and it will be for the board to manage demand within a year and provide advice to government.

Senator STERLE: So, in about two weeks time we are hoping this document will be released for stakeholder involvement, and you have taken on notice that the committee has requested that we can see what that is too?

Ms Kennedy : Yes.

Senator STERLE: Thank you.

CHAIR: Senator Rice.

Senator RICE: My questions are on forests.

Mr Quinlivan : Before we go to forests, I think we have a couple of questions that we took earlier on this general area that we can answer.

CHAIR: Just before we do that, just to see where we are—farm support?

Senator STERLE: I just want to ask about sugar and then forestry.

CHAIR: So, farm support?

Senator STERLE: Yes.

CHAIR: Let us now go to Sustainable Agriculture, Fisheries and Forestry. Are there questions on that?

Senator STERLE: We have questions on forestry.

CHAIR: You lead off, Senator Rice, on Sustainable Agriculture, Fisheries and Forestry.

Mr Quinlivan : Chair, so that we can let these people go, can we just answer a question we took earlier?

CHAIR: Yes, of course.

Mr Hutchison : In response to the question before the lunchbreak from Senator Rice around the value of funds committed from the 2015-16 allocation, the figure was $197.8 million across those three loan schemes that I mentioned before—the drought concessional loans, the drought recovery loans and the dairy recovery loans.

Senator RICE: So, a substantial chunk of the $250 million?

Mr Hutchison : Yes, $197 million out of the $250 million; that is correct.

Senator BACK: Before we go on to forestry, Australian Market Access officials will continue to be here?

Mr Quinlivan : Yes, they will be here. I know that Senator Carr has questions.

CHAIR: So, just letting those dealing with farm supports know. Mr Quinlivan, where would Landcare fit in?

Mr Quinlivan : Under Sustainable Agriculture, Fisheries and Forestry. Our Landcare policy people will be here.

CHAIR: Let us notify Senator Siewert right now.

Mr Quinlivan : While we are getting organised, I took a question from Senator McCarthy that I promised to follow up. Senator McCarthy, I took this question from you earlier, which we now have an answer to.

Senator McCARTHY: Which one was that?

Mr Quinlivan : We have a list of 590 potential labour hire firms. You would recall that we have about 220 contract staff on the books at present.

Senator McCARTHY: Yes.

Mr Quinlivan : Of that number, 26 of those firms identify as Indigenous or having Indigenous principles. Then in the area of procurements from firms with Indigenous principles—I hope Hansard can get all of this.

Senator McCARTHY: Chair, I am trying to hear Mr Quinlivan. I cannot seem to hear him; there are a lot of conversations going on. I am sorry, Mr Quinlivan.

Mr Quinlivan : I will just go over that last bit again. We have 590 labour hire firms that are eligible for the provision of labour services, and of those 26 of those firms identify as Indigenous.

Senator McCARTHY: You mentioned Indigenous principles.

Mr Quinlivan : Yes.

Senator McCARTHY: What did you mean by that?

Mr Quinlivan : I was just getting to that. More generally in the area of procurements you probably are aware that Commonwealth agencies have targets for procurement from firms with Indigenous principles. Last year our target was five, which was our share of the whole-of-government target. We entered into 54 contracts. We were well ahead of the target, and in fact I know that was true for the Commonwealth as a whole. I think pretty much all agencies had contract numbers that were multiples of their target. This year our share of the whole-of-government target was 31, and we have entered into 58 contracts so far. Again, I am sure that is in line with the numbers for the whole of government.

Senator McCARTHY: Could I get the names of the 26?

Mr Quinlivan : We will take that on notice.

Senator McCARTHY: Also, of the 54?

Mr Quinlivan : I think they will be on our website, but we will give you all of the details you need.

Senator McCARTHY: And the 58?

Mr Quinlivan : Yes. We will give you everything we can in that area.

Senator McCARTHY: Thank you very much.

CHAIR: We are going to try and do 10-minute lots now across the groups to see if we can manage ourselves a bit better. Senator McCarthy.

Senator McCARTHY: I would like to have a look at the Forest Industry Advisory Council. When was the last time that the council met?

Ms Lauder : I think the FIAC last met in December last year, but there is a meeting coming up within the next month.

Senator McCARTHY: When does it meet normally? Is it every six months?

Ms Lauder : It must meet at least twice a year.

Senator McCARTHY: It must or does?

Ms Lauder : Yes, it must according to the RFA Act, but it can meet more regularly based on a needs basis.

Senator McCARTHY: What issues were raised? Was the issue of imminent wood supply shortfalls for Australian sustainable hardwoods at Hayfield or Carter Holt Harvey at Morwell raised?

Ms Lauder : No. Now that you have flagged that—it must have been a bit earlier than December, because the things that concerned them at the time were how they would implement the recommendations from the FIAC report that was provided to government. At that stage also the East Gippsland Regional Forest Agreement was about to cease. There were concerns about whether that would be extended in time before it ran out. Those were the key focuses at the time.

Senator McCARTHY: So, you now think it was before December that they met?

Ms Lauder : Yes. I have to take on notice the exact date.

Senator McCARTHY: If you could. Where is the government up to in regard to considering the recommendations of the report?

Ms Lauder : The government has been working with the FIAC committee, as has industry, on how we will implement the FIAC report and what recommendations will be a priority. FIAC has agreed to go away and come up with some suggested actions, the sorts of things that from their wide consultation have come out as being what industry believes needs to be done. The Australian government has been meeting with the state governments to look at what government across the states and Commonwealth can and should do. At this stage, it is at officials meeting level developing up the implementation plan.

Senator Ruston: As an ongoing process that started from the initial draft recommendations that came through the FIAC report, a number of the recommendations that related to government are already underway and also a number of the recommendations for industry and state governments have been taken up by those respective bodies. Probably immediately following the next FIAC meeting it would be quite conceivable that we could give you an update on delivery against those outcomes, which has actually been quite substantial.

Senator McCARTHY: Do you have those recommendations that are underway by government?

Senator Ruston: I can certainly provide them to you. If I had the report here I could probably give them to you. There were a number of recommendations that came out of it. Obviously, the renewal of the RFAs was considered as one of them. With bushfire management, we are in the process of undertaking trials for fuel load reduction not using fire. Expanding the forest estate. We are talking with the states particularly in relation to the expansion of plantation timbers, and you will note that only a few weeks ago the Victorian government announced $110 million towards increasing their forest estate.

Senator McCARTHY: Are there any in the Northern Territory?

Senator Ruston: Not specifically. I do not think there were any that were specifically state based. It is just in the instance of—

Senator McCARTHY: You just wanted to point out Victoria?

Senator Ruston: Yes, just as an example, particularly also because of the states that obviously have regional forestry agreement. The Northern Territory is not one of those. Most of the broader ones relate to all states and territories that have a forestry sector.

Ms Lauder : As far as Minister Ruston was talking about with Victoria, that was extending the plantation in Victoria, $110 million. New South Wales and the Western Australian government have also committed funds for extending plantations in their states. We have not received anything from the Northern Territory at this stage.

Senator Ruston: And another election commitment that came out as part of the last budget was funding towards the establishment of a national innovation institute for forestry products. One is being located in Tasmania and the other in the southeast of South Australia. We are also talking with the Queensland government in relation to their innovation projects that they are doing at one of their universities as well.

Senator McCARTHY: So, those are some of the recommendations that have already been implemented by the government?

Senator Ruston: Yes. There are many more. I am happy to take it on notice and give you a proper response to that.

Senator McCARTHY: But you are still considering other recommendations?

Senator Ruston: Absolutely. At the moment, there is a draft methodology being considered in relation to the ERF and the ability to get access to the ERF for forestry. There are a number of things that are ongoing, but I just wanted to draw to your attention to the fact that, despite the fact that there has not been any formalised response as yet that, many things are actually already on foot.

Senator McCARTHY: Is that document a public document?

Senator Ruston: It is the best document ever written in the world.

Senator STERLE: Who wrote that?

Senator Ruston: That would be something that I was involved in.

Senator McCARTHY: Could I just have a look at those recommendations a bit closer:

Recommendation 11:That the Australian Government immediately produces methods that enable the inclusion of commercial forest and harvested wood products in the Emissions Reduction Fund auction process.

Senator Ruston: That is what I was just talking about.

Senator McCARTHY: Yes. So that is recommendation 11?

Senator Ruston: Yes.

Senator McCARTHY: Recommendation 15. I just want to get the numbers; that is all.

Senator Ruston: That is something that is obviously in the domain of industry, is it not? Industry itself is very keen on certification for fairly obvious reasons. Third-party endorsement about sustainability of the harvested products is essential. At the moment, we operate under largely two different certification streams—the forestry standards, which is the international certification, and the Australian forestry standard, which is the Australian standard. Pretty much all of them are certified either by one or the other. Many of them are actually certified under both of them.

CHAIR: Senator McCarthy, I am so sorry. We have introduced some new rules to trial for the moment, sadly, and we are going to go in 10-minute segments. Senator Rice.

Senator McCARTHY: I will come back.

Senator RICE: Welcome. It is nice to be back talking about forests and forestry. I will start with just an update as to how the renewal of the regional forest agreements is going.

Ms Lauder : I will start with Tasmania. The Tasmanian RFA has already been reviewed, as I think we mentioned last time, and we are in the process of extending. The current Tasmanian RFA ceases in November 2017. That is why this one is progressing ahead of the others. We are in the final months of that process.

Senator RICE: When do you expect to be making an announcement of the results of the review and the evaluation and have a new RFA being signed off?

Ms Lauder : The results of the review and the joint government response are already public. That is already on the website. As far as the extension goes, we are obviously planning for it to be extended before November. We are hoping for it to be done in about August, but it really depends on the process. Tasmania needs to take it through their cabinet and first ministers. The Premier of Tasmania and the Prime Minister are the decision makers. I cannot give you an exact date.

Senator RICE: I presume you are currently in negotiations with the Tasmanian government?

Ms Lauder : Yes.

Senator RICE: Are there issues that still need to be resolved?

Ms Lauder : We are in the very final stages. It is just minor tweaking of words and things like that to agree.

Senator RICE: I asked a question on notice about the proposed expansion of the Tasmanian government's 370,000 hectares of forest.

Ms Lauder : Yes, you did.

Senator RICE: How has that been taken into account with the rollover of the RFA?

Ms Lauder : It is already noted in the RFA. As you know, the RFA agreement is a framework document and Tasmania run the day-to-day management of the wood supply and conservation reserves, et cetera, underneath that. So it is already covered under the regional forest agreement.

Senator RICE: So basically, it is not making any difference?

Ms Lauder : No, it is not.

Senator RICE: I also asked a question and got a very, let us say, succinct answer about how the changing understanding of the impacts of climate change and the role of forests in mitigating climate change is being taken into account with the new Tasmanian RFA. Can you expand on that for me?

Ms Lauder : I can. I think we mentioned last time that the Regional Forest Agreements Act is based on the National Forest Policy Statement, which talks about carbon. But from the consultation we did on the extension for Tasmania, it was raised a number of times that people did not think that climate and carbon were considered as part of the RFA. So, we are looking at trying to include a clause in the RFA extension. It has not been agreed yet and will not be agreed until it goes through to first ministers, but that is something that we are looking at.

Senator RICE: What sorts of options are you considering?

Ms Lauder : I really cannot give you the detail yet.

Senator RICE: You must have some options if you are looking at it at the moment? I am not asking you to say what you were making a recommendation about. What were the options being looked at?

Ms Lauder : It is not so much options. We are putting forward an option. We are looking at what is already being done as far as carbon and climate change was already being managed. It just was not articulated in the regional forest agreement. So, looking at articulating that so that it is very clear to members of the public that that is part of the management of forest.

Senator RICE: So, continue.

Ms Lauder : We have done Tasmania.

Senator RICE: We have done Tasmania.

Ms Lauder : We have been working with the Victorian government on the review of the five RFAs, and so the document that goes out for public consultation, which is looking at the implementation and operation of the RFA over the last five years, has been put together and is in the final stage of being completed. Then we are looking at doing consultation from July on that.

Senator RICE: What form of consultation? How long? Is it just going to be asking for submissions on that document?

Ms Lauder : We have not agreed with Victoria yet. We are still in discussion, but the discussions at this stage are looking at putting the document out and calling for submissions for the review, which is looking backwards, and then doing consultation on the extension, which would be more face to face.

Senator RICE: How long do you expect to have that document out for consultation?

Ms Lauder : Between six and eight weeks.

Senator RICE: Is it interacting with the Victorian government's taskforce process?

Ms Lauder : Not really. You might have noticed that the Victorian government put out a media release saying that the taskforce now will be an advisory group to the Victorian government. So, the Victorian government, possibly, will be using it to seek advice on not so much the review but the extension of the RFAs. We are focusing more on the review until it is open for public consultation so that we can then really focus on the extension. As you know, the review and the consultation from that will be an important input into the extension process.

Senator RICE: So, there is no expectation that there will be a report from the taskforce process before you go into that consultation process?

Senator Ruston: We are not in control of the taskforce in any way.

Senator RICE: I understand that, but clearly it is an issue in terms of your negotiations with the Victorian government, because the two processes interact.

Senator Ruston: Yes, certainly, but it is a process that has to come via the Victorian government. Whilst we would obviously welcome any information that came via any process to factor into consideration, it is not something that we have any control over so we really are just going to have to wait and see whether it comes our way or not.

Senator RICE: What about the remaining states?

Ms Lauder : Western Australia has been out for consultation on the review and the independent reviewer has—

Senator RICE: So, is that review the combined second and third assessment?

Ms Lauder : I think it is just the third for Western Australia. I think New South Wales is the combined second and third, yes. Western Australia is just—

Senator RICE: So, with Western Australia we did have a second review independently?

Ms Lauder : Yes.

Senator RICE: By itself. That is a bit remarkable, compared with New South Wales, Victoria and Tasmania, I think, as well, was it not? I am sorry. I distracted you.

Ms Lauder : That is all right. The independent reviewer has developed his report. The Western Australian government and the Commonwealth will work together on a joint government response to that. We are starting discussions on the extension of the Western Australian RFA.

Senator RICE: When is the joint government response expected to be released?

Ms Lauder : We have not even started talking about it. The independent reviewer's report has just been received. But I would expect—

Senator RICE: That could be ages. It could be 18 months.

Ms Lauder : I am hoping that it will be within three months but, as you say, we have not even agreed with the Western Australian government yet on the timeframe for that and the process.

Senator RICE: So, it would be after that response is out that you would begin the process for the extension?

Ms Lauder : Formally, yes. We will start the conversations about the extension earlier than that, partly because we have seen from the Tasmanian experience that it takes a long time, because you are going through the words and so on. Yes, we will start discussions early. There are three RFAs in New South Wales. They are at a similar stage to Victoria in that we are working up the implementation documentation over the last period that will be used for public consultation.

Senator RICE: Tell me where we are at with the implementation documentation. So, there is the second and third combined review?

Ms Lauder : Yes, for the three RFAs.

Senator RICE: For the three RFAs?

Ms Lauder : Yes.

Senator RICE: What stage is that process up to at the moment?

Ms Lauder : We are probably not in the finalisation of the implementation report but we are close. It is possibly a little bit behind where we are with Victoria. We are looking at—

Senator RICE: Is that considering all three of the New South Wales RFAs together?

Ms Lauder : Yes, it is. There will be public consultation. That document will be made public and we will be seeking submissions.

Senator RICE: When is that expected to occur?

Ms Lauder : I would say late July/August possibly for it to start.

Senator RICE: So, then what?

Ms Lauder : Then, once the consultation has been completed, the independent reviewer will take all of that into consideration as well as all of other information to put together an independent review. That will then come to Assistant Minister Ruston and the minister in New South Wales. We will then work with them to have a joint government response to that and move on to then looking at extending the New South Wales RFAs.

Senator RICE: Will that combine all three RFAs?

Ms Lauder : Yes.

Senator RICE: Will it be still three RFAs? In fact, for Victoria will it be a number or will they all be wrapped up as one?

Ms Lauder : That is an excellent question. We are looking at wrapping up the processes into one. Victoria has expressed interest in forming one RFA and we are currently getting legal advice on the possibility of that.

Senator RICE: Thank you.

CHAIR: Senator Back.

Senator BACK: I would like to stay with the RFAs if I can. I understand when they were originally signed between 1997 and 2001 about 3.5 million hectares of native forest that was previously available for timber was transferred into the conservation reserves, increasing the reserve by about 44 per cent.

Ms Lauder : Yes, that's right.

Senator BACK: Can you tell me if not now then on notice how much land through to 2016 in each state has now been formally included into the conservation reserves?

Ms Lauder : I can say what was negotiated as part of the regional forest agreements. Additions since then—so up to 2016—are reported as part of these RFA reviews that I was talking about. We probably do not have the latest exact information on that, but I can give you the breakdown of that 3.3 million hectares per state.

Senator BACK: Yes.

Ms Lauder : Is that useful?

Senator BACK: Yes, it would be.

Ms Lauder : For New South Wales, 1.334 hectares was added to the conservation reserve of the state.

Senator BACK: That would be a million.

Ms Lauder : I am sorry, yes.

Senator BACK: I understood you.

Ms Lauder : It is a lot.

Senator RICE: Sixty-two per cent, to be precise.

Ms Lauder : Yes. It increased their conservation reserves by 62 per cent.

Senator BACK: Yes.

Ms Lauder : In Victoria nearly a million hectares—965,000 hectares—was added, and that increased their reserves in forest by 52 per cent.

Senator BACK: Conservation reserves, yes.

Ms Lauder : Yes. In Tasmania, 684,000 hectares was added.

Senator BACK: Yes.

Ms Lauder : In Western Australia, there were 338,000 hectares.

Senator BACK: Obviously, we know the value of the RFAs in terms of jobs and regional economic development and growth, but if they are not extended can you summarise where the costs would be not in dollar terms but the actual impact of failing to extend the RFAs?

Ms Lauder : Yes.

Mr Thompson : I can give some answers and then Ms Lauder will give some more. The impact would be felt in two ways. One, there would be significant delays in assessment processes. We would have to go back to the old coup by coup assessment of timber production for export. But the RFAs also cover effectively all of the native forest logging in Australia, which is quite significant.

The other thing about forestry is that ABARES put out some reports today about the value of the logs at $2.3 billion, but there is a whole processing industry in Australia producing decking, palings, paper and the like which adds up to a much more significant number, around $9 billion. That industry is totally dependent on there being an Australian timber industry. When we think about the forest industry, we think about a $9 billion industry, not a $2 billion industry.

Senator BACK: That gives me the answer I wanted. The chair is very harsh on us with time.

Senator Ruston: Senator Back, the other question that you asked, which I do not think we answered, was in relation to how much more forest area has actually gone into reserve—

Senator BACK: Since then.

Senator Ruston: —since the RFAs were signed.

Senator BACK: Yes.

Senator Ruston: A significant amount has gone in. I do not have the figures in front of me and I do not know whether Ms Lauder does, but we will certainly provide you on notice the additional addition to the reserves post the actual signing of the RFAs.

Senator BACK: So, the figures you gave me were at the time of signing?

Ms Lauder : Yes, that is right.

Senator BACK: I understand that and I look forward to the additional. Animal species that have become extinct due to forestry operations?

Ms Lauder : Would you like to answer that one?

Senator Ruston: As we heard in the Environment Portfolio this week and at the last estimates, no species in Australia has become extinct due to forestry operations.

Senator BACK: Thank you. There are some in the Senate who are vitally interested in the Leadbeater's possum. For the conservation reserve and in the areas for forest timber production tell me a little bit about the colonies. Where are they based? How many have been found? What would be the impact on the Leadbeater's possum if we continued with the RFA process?

Ms Lauder : There have been 617 colonies of the Leadbeater's possum found since 1998.

Senator BACK: Yes, 617.

Ms Lauder : Yes. Between 1998 and 2014, about 153. That is hard to confirm, because there were potentially duplicates in there. But from 2014 to now, in the national parks 84 colonies have been found.

Senator BACK: In the national parks, yes.

Ms Lauder : In the state forest, which is where the harvesting occurs in part, 380 colonies.

Senator BACK: How many?

Ms Lauder : 380.

Senator BACK: Are they part of the 617?

Ms Lauder : Yes, they are. They are part of the 617. These are just those that have been found to date. There is an expectation that there are more out there.

Senator Ruston: To put some context around what Ms Lauder has just said, it was brought to the federal government's attention that there was a belief that the Leadbeater's possum was at extremely low levels. As a response to that, the Victorian government put in place some measures, as would be required of them. What we subsequently found was that when we actually started looking for these particular animals there were a lot more of them there than we had anticipated. In fact, through the process of a citizen science program that was run in Victoria where they were calling on the public through a phone app to go out and see if they could find these possums, it appeared that everywhere they went to look for one of these possums they actually found one. It was a very positive response to the identification of potentially a problem to actually realise that there was not the problem that there was, and we are really gratified to say that the extremely high level of identification of these particular creatures in the forests of Victoria, both the reserve and those that are available for forestry, has been a really good news story for this animal.

Senator BACK: So, accurate collection of data helps us towards better measurement and better management?

Senator Ruston: Correct.

Ms Lauder : That is correct.

Senator BACK: Thank you.

CHAIR: Senator Carr.

Senator KIM CARR: So, you have conveyed this data to the Victorian government?

Senator Ruston: No. The Victorian government is likely the one that has collected this data.

Senator KIM CARR: So, there is an agreement that this is correct, then?

Senator Ruston: There is an agreement that this data is correct, but we also understand that the Victorian government has undertaken further research, and that information is currently with the minister in support of all of the activities the Victorian government has put in place that has resulted in this really positive outcome. Just as an example, there were a number of provisions, say, where the Victorian government put nesting boxes into the area where these animals were and we saw an in excess of 50 per cent increase with them using these boxes. We put artificial tree hollows in there. Once again, more than 50 per cent of these tree hollows we now can confirm have got these animals living in them. A number of things have been put in place. It is a pretty good news story for the Victorian government's actions.

Senator KIM CARR: Thank you. I have some questions on an entirely different matter.

CHAIR: We are trying to deal with Sustainable Agriculture, Fisheries and Forestry and we will come around to the other things.

Senator STERLE: I have some sugar questions.

CHAIR: Do we have anything more on Agriculture, Fisheries and Forestry? Anyone else?

Senator STERLE: I do not have any more for that.

Senator McCARTHY: I have a question on forestries.

CHAIR: All right. We will go to you, Senator McCarthy.

Senator McCARTHY: I am just going through your recommendations.

Senator Ruston: I am going to send you this book.

Senator McCARTHY: I look forward to it. I want to take you to recommendation 19, that 'Australian government convenes a meeting of state and territory ministers responsible for forestry to discuss issues raised in this paper.'

Senator Ruston: That has already occurred. That occurred in March. We have another one pending before September, but the date is yet to be set.

Senator McCARTHY: Could you just repeat that.

Senator Ruston: We held the first of these meetings in Sydney in March this year and it was agreed at that meeting in March that it was a very important issue and that we would continue to have an agenda in terms of the sharing of responsibilities for the broader delivery of this plan.

Ms Lauder : We have had two to date. We had the first one in December last year, and then the second one was at the end of March. As the minister said, we have another one coming up, but the ministers across the states have agreed to three within 2017.

Senator McCARTHY: In terms of the Forest Industry Advisory Council, the government has changed the membership base to different areas of expertise from what the Forest and Wood Product Council used to resemble, which was representative in the different sectors. Have the changes influenced your ability to ensure the functions of the council meet the objectives of the legislation?

Senator Ruston: Ms Lauder may not have actually been around back in the days prior to the current format of FIAC, but I can give you some advice in relation to my time since the FIAC has been reporting to me. When I was first appointed to this position, the assistant minister was the co-chair of FIAC along with an assistant, Mr de Fegely. When I took on the role, I sought to remove myself as the chair, because I wanted this to be a report to me, not by me. There has been a change in my time, but I would perhaps allow somebody who has a little bit more corporate history than I have to give you some information about what was the precursor to FIAC.

Ms Lauder : I can give you a little bit and if you need more we might need to take it on notice. You are right; the earlier committee was a representative committee whereas it is now a skills and experience based committee. My understanding is that with representatives of different sectors and companies it became difficult for some of the discussions, whereas with the skills and experience based you have the right skills in the room to discuss a whole range of different issues without being limited by who is representing who.

Senator Ruston: It is probably worth adding to that, too, that the representative bodies, such as the Forest Products Association and the FWP, the Forest Wood Products Association, are observer members. They all come to the meetings and they participate. We have never had a need to vote. There has been no purpose—

Senator McCARTHY: Are there any unions on the council, either as a member or as an observer?

Senator Ruston: No, I do not think so.

Senator McCARTHY: Is there any particular reason you do not need their skills or expertise?

Senator Ruston: It was not appointed by me, but I am certainly happy to find out.

Ms Lauder : It was not appointed in my time. We can come back to you on that. I know there is an observer from the skills and training side of things but not union.

Senator McCARTHY: So, you will come back to me?

Ms Lauder : Yes.

Senator McCARTHY: Would you also take on notice just in terms of what that process is to be on there as a member or as an observer?

Ms Lauder : Yes, absolutely.

Senator McCARTHY: You are aware that workers were locked out by their employer at Australia's largest plywood mill in Victoria, northeast Victoria, on 18 April in response to protected industrial action, and they have been locked out ever since?

Ms Lauder : We saw it in the media, yes. I think that was related to the negotiation of their enterprise agreement and pay, conditions, et cetera.

Senator McCARTHY: What has been happening down there since then, if they are still being locked out?

Mr Quinlivan : I do not think that is relevant to the Commonwealth forestry.

Ms Lauder : We do not have a role in that.

Senator McCARTHY: But does it impact in any way?

Ms Lauder : We know as much as you do from reading media articles.

Senator McCARTHY: Does it impact in any way any of the processes that you have been just speaking to me about?

Ms Lauder : No.

Senator McCARTHY: As you are aware, the Forest Stewardship Council National Standard, whose development was partly funded by the Australian government with $500,000 in the 2013-14 budget, has been submitted to FSC International in Bonne without a consensus motion for principle 2 of the standard, which is about workers' rights, putting the whole standard development process at risk.

Ms Lauder : We will need to take that one on notice. I am sorry.

Senator McCARTHY: Thank you.

CHAIR: Senator Back.

Senator BACK: As I say, I am off forests.

CHAIR: You are finished with forests?

Senator BACK: Yes.

Senator SIEWERT: I have agriculture.

CHAIR: You have agriculture.

Senator RICE: I have more forest.

CHAIR: You have more forest; then it comes to you. Then we will go around again for 30 minutes and back to you again.

Senator RICE: I was expecting that Senator Siewert would—

Senator SIEWERT: Chair, it is really hard to manage committees.

CHAIR: You want to sit here, Senator Siewert? Those are the rules here and that is how it is. We have tried it the other way and that has not worked. Senator Rice, you have the call.

Senator RICE: Is it the case that the National Forest Policy, as established in 1992, is still the fundamental forest policy document?

Mr Quinlivan : It is still the current policy, yes.

Ms Lauder : Yes.

Senator RICE: So, the goals and objectives of the National Forest Policy are still the goals and objectives that you are working towards?

Ms Lauder : Yes.

Senator RICE: And the sort of overall forest management. There is an objective as part of the National Forest Policy which is aiming for the protection of the full range of forest ecosystems and other environmental values, which is fundamental to ecologically sustainable forest management; it entails the maintenance of ecological processes that sustain forest ecosystems, the conservation of the biological diversity associated with the forests, particularly endangered and vulnerable species and communities. Do you still agree that that is one of the objectives that you are working towards?

Ms Lauder : Yes.

Senator RICE: Would you agree that that objective should mean that the populations of all forest dwelling species should at least be stable or ideally increasing?

Ms Lauder : I do not think it is as simple as that. For example, if we take the Leadbeater's possum, if we stopped all forestry in the Central Highlands today they would still be declining for the next 50 years, I am told, according to the Department of Environment, because of the impact of the fires over the last 10 to 20 years.

Senator RICE: And the impact of logging operations.

Ms Lauder : It is predominantly the loss of the hollows for nesting.

Senator RICE: It is both.

Senator Ruston: Senator Rice.

Senator RICE: I want to move on to the Leadbeater's possum as an example in the future.

Ms Lauder : I do not think it is as simple as saying, yes, they should be stable or increasing. There is a range of things that impact on that.

Senator RICE: If you have populations in decline how can—

CHAIR: Just one second. The Leadbeater's possums were given a very serious workover here. Again, as is the standard, if you have answered questions comprehensively that are asked again you just need to refer the senator back to Hansard. Senator Rice.

Senator RICE: If you have populations in decline, how is that consistent with the conservation of biological diversity associated with forests?

Senator Ruston: You are making a quantum leap here that the reason for the decline is the actions of forestry, which I am not necessarily sure you can.

Senator RICE: I am absolutely certain that I can.

Senator Ruston: I am not necessarily sure I agree.

Senator RICE: There is no point having a debate across the table here.

Senator Ruston: Yes.

Senator RICE: So, you feel that the decline in populations of animals like the Leadbeater's possum, like swift parrots, which have been listed as critically endangered, tiger quolls, giant freshwater crayfish, greater gliders, are consistent with the objective outlined in the National Forest Policy?

Ms Lauder : I am not saying that, either. I am just saying a range of things impact on declining threatened species. The relevant state governments, with the Commonwealth, are doing what they can to help turn that around, but it is not a quick or easy process. I will not say, consistent with our policy, that threatened species are declining. I am saying that we are doing what is possible to ensure that they do not.

Senator RICE: What do you mean 'doing what is possible to ensure that they do not' decline? What needs to happen?

Ms Lauder : You would be aware that the environment department, under the EPBC Act, has recovery plans for a large range of threatened species. Under those are actions that we assume with the current knowledge we have could help reduce the risk of their further declining. Together with the states' actions plans and recovery plans, or whatever they are called, they do all of that analysis. They are from the environment departments of the Commonwealth and the relevant states. That is what identifies what actions need to be taken.

Senator RICE: What if you do not have a recovery plan in place, such as with the enormous delay on the Leadbeater's possum recovery plan currently?

Ms Lauder : My understanding is the existing recovery plan stays in place until the revised one comes into action.

Senator RICE: But presumably, given the time since the last one, and with the Leadbeater's possum being uplisted to critically endangered, there will be a range of new measures that one expects to see in the Leadbeater's possum recovery plan?

Senator Ruston: I will let Ms Lauder fill in the details, but a range of measures has been put in place by the Victorian government—and I just had a discussion with Senator Carr while you were out of the room—which have actually provided us with some very positive data in terms of the number of sightings. I complimented the citizen science project in place where people have been going out with their app and they have been looking for these particular creatures and have found a lot of them. It is very positive that, since they have been identified as potentially being in a serious state of decline in numbers, we have actually found so many more.

Senator RICE: We have certainly had more people out looking for them, which has resulted in the sightings.

Senator Ruston: Yes, and they have found them.

Senator RICE: I would like to move on, because I know I am going to be cut off in five minutes time.

Senator Ruston: You do not seem to like me answering. I am actually complimenting the actions that have been taken around this. I think it is a fantastic news story that we have found so many more, but you seem to cut me off every time I want to tell you the good news story. Please continue.

Senator RICE: The Leadbeater's conservation advice when the Leadbeater's possum was uplisted to critically endangered identified the threats, which were loss through fire, as you have identified, and loss through harvesting and lack of habitat quality in regrowth forests, loss of hollow bearing trees, habitat fragmentation, altered habitat structure and loss of habitat quality. In the recovery plan for the Leadbeater's possum you would need to be addressing all of those threats, would you not?

Ms Lauder : I would assume so, but you do know that it is not this department, is the environment department that is responsible for the—

Senator RICE: Yes, but in terms of the National Forest Policy that is reflected in the regional forest agreements, you need to be addressing all of those threats.

Ms Lauder : That is my assumption.

Senator RICE: Yes. That conservation advice noted a continuing decline in populations of observed, inferred and projected, and the key reasons that was going to occur included a decline in area and extent of habitat through loss to harvesting. Do you accept that that is an accurate statement, that there is ongoing decline in the area and extent of habitat through loss to harvesting?

Ms Lauder : Is that from the existing—

Senator RICE: That is from the conservation advice from 2015, when the Leadbeater's possum was uplisted to be critically endangered. It identified that as one of the reasons as to why there is continuing decline in population.

Ms Lauder : With respect to the new data that Minister Ruston was talking about that Victoria has collected, we have not seen that yet but they will be releasing that publicly. They have also done a review of all of the prescriptions that are in place for the Leadbeater's possum. So, things like where a colony is identified there is a 12.6 hectare buffer put around that tree, and so there is no harvesting within that space, the nesting boxes and the actual hollows that the minister was talking about. They have done a review of all of those, what is working, what is not and what needs to be changed. Again, that will come out around the same time as the data. We are hearing that it will be next month.

Senator RICE: I am sorry I was not in the room—I had to go off to another committee—when Senator Back was asking questions about it. You also referred to the introduction of retention harvesting rather than clear felling as being one of the measures that has been put in place?

Ms Lauder : That is right, yes.

Senator RICE: In fact, Minister Ruston talked about that in the Environment committee the other day as it being one key element of changing practice. So, you agree that that is one of the key elements in changing practice, retention harvesting rather than clear felling?

Ms Lauder : Yes. My understanding is, as part of that, the Victorian government is looking at the risk of fire and how that form of harvesting can help reduce the risk potentially down to 50 per cent of what it is now.

Senator RICE: Yes. In 2014, the Leadbeater's Possum Action Group stated that from July 2014 at least 50 per cent of the area of ash harvested would be under retention harvesting with the target moved towards 100 per cent if the system proves to be operationally achievable. Could you reflect on whether the current forestry actions are consistent with that?

Ms Lauder : My understanding is the Victorian government is still at the 50 per cent and is now reviewing it. I have not heard—

Senator Ruston: Is it down to 20 per cent in the ash, though?

Ms Lauder : It could be.

Senator Ruston: I think you might find that it is down to 20 per cent, Senator Rice, but I will check that.

Senator RICE: I am sorry, 20 per cent?

Senator Ruston: So, 20 per cent and not 50 per cent.

CHAIR: Does anyone else have any other questions in Agriculture, Fisheries and Forestry?

Senator Ruston: I will check that number and get back to you.

Senator KIM CARR: What is the percentage of Australian made paper that the department is using? I was told in February, in the last answer I got from the Department of Finance, that the agriculture department was using 33 per cent Australian paper of the total usage. What is the current figure?

Mr Quinlivan : The people who had that information are long gone, but from memory the number is a few percentage points higher.

Senator KIM CARR: So, you will have to take that on notice?

Mr Quinlivan : We will have to take that on notice, yes. I know it has gone up a lot but not a huge amount.

Ms Lauder : I have that figure here. It is 44 per cent so far this financial year.

Senator KIM CARR: I am sorry?

Ms Lauder : It is up to 44 per cent so far this financial year, and that was to the end of March. There will be more accurate information.

Senator Ruston: Senator Carr, just for the record, can I say that in my ministerial office and in my electorate office I have always used, and continue to only use, Australian paper.

Senator KIM CARR: You should make sure your tables reflect that. Thank you very much.

Mr Quinlivan : I think the farm support people can leave. I think we have finished with that group.

CHAIR: Yes, we have done the farm support.

Mr Quinlivan : I know you see an array of passing faces here, but for Greg Williamson, one of the Williamson brothers, this is his last estimates. He has been coming here for longer than some people in the room have been born. This is his last appearance before he retires.

CHAIR: Congratulations on your time. Well done.

Mr Quinlivan : I was asked just before the break about questions on Landcare.

CHAIR: Yes. Is this the appropriate place?

Mr Quinlivan : This would be the appropriate place, but I cannot recall who raised them.

CHAIR: Do you have any further questions, Senator Carr, in relation to Sustainable Agriculture, Fisheries and Forestry?

Senator KIM CARR: No.

Senator RICE: Can we return to the issue of the Leadbeater's Possum Action Group recommendation that from July 2014 variable retention harvesting was to be in at least 50 per cent of the area of ash harvested, with the target moving towards 100 per cent if the system proves to be operationally achievable.

Ms Lauder : Yes, that is correct. We were talking about two different things. So, 20 per cent of harvesting occurs in the mountain ash forest, but it is 50 per cent of the harvesting that is using that retention-based methodology, and they are reviewing it to look at increasing it to 100 per cent.

Senator RICE: Is it your understanding that 50 per cent of ash being harvested is currently using retention—

Ms Lauder : Yes. That is my understanding from what Victoria has said, yes.

Senator RICE: Can you explain to me why, on the current Timber Release Plan, which was published in January 2007, there were only two coupes that were listed as using retention harvesting compared with 376 that were to be clear felled?

Ms Lauder : No, I am sorry. I cannot. We would have to get that information from the Victorian government.

Senator RICE: That is completely inconsistent with retention harvesting being 50 per cent, moving to 100 per cent, and completely inconsistent with what Minister Ruston has told us, that that is one of the key measures that will be used to maintain populations of the Leadbeater's possums.

Senator Ruston: We will certainly need to get clarification from VicForests on that, because the advice that we got from VicForest is that that is their intention. We will get back to you on notice.

Senator RICE: Thank you.

Senator SIEWERT: I wanted to go to Landcare and specifically the $100 million extra that was allocated to Landcare, and first confirm that the funding allocation is the same as was contained in MYEFO?

Mr Thompson : Yes, it is.

Senator SIEWERT: Next, $15 million has been allocated to IPAs. I wanted to go to the other $85 million and find out what the process is for the allocation of that. What types of projects is the money going to be allocated to? Can you confirm where that is going?

Mr Thompson : The allocation of the money to particular activities is still under consideration by ministers. As you are aware, we have just completed a review of the NLP phase 1 and we are looking at phase 2 now. We are about the enter a consultation phase or have started discussions with some people. The $100 million for additional money for Landcare has been considered as part of the rollout of the NLP phase 2, but instead of starting in the 2018-19 financial year it will start earlier, in accordance with the agreement of government.

The intention when the money was announced—and there has been no demurral from that—is that the money will be spent on what is called traditional landcare activities. We consider traditional landcare activities are those things involving Landcare and like groups doing things on the ground or supporting their action on the ground. It is those sorts of things. That is what the government has announced and we have not moved from that. That is what we are planning for.

Senator SIEWERT: So, on-the-ground landcare works and sustainable agriculture works?

Mr Thompson : Yes.

Senator SIEWERT: Is that what you meant?

Mr Thompson : Those sorts of things, yes. Traditional landcare. That's what we consider traditional landcare is, and I think that is what the government has been announcing since then.

Senator SIEWERT: But the proportion of money is actually going to start rolling out before the phase 2 comes in—is that right?

Mr Thompson : Phase 2 of the National Landcare Program commences in July 2018. The $100 million, the money in MYEFO, is some money this financial year and some money next year. There is $35 million next year and $35 million in the years after. There may be some consideration about whether $5 million will be spent this financial year or next financial year, but the money will be spent in advance of the rollout of the second phase of the NLP.

Senator SIEWERT: It will start?

Mr Thompson : It will start, yes.

Senator SIEWERT: In that case, if it is rolling out, will it be spent under the guidelines that currently operate for phase 1, if it is rolling out before phase 2?

Mr Thompson : No, because it is new money, and we would intend developing new guidelines that suit the objective of the announcement by government.

Senator SIEWERT: So that will be done under separate guidelines?

Mr Thompson : Yes. Not dissimilar to previous guidelines, but there will be new guidelines.

Senator SIEWERT: What is the timeline for those and who has been consulted on those?

Mr Thompson : The consultation phase has just begun. The time line is: we have some money to spend as soon as possible so we are looking at consultation over the next three months. Peter Ottesen was involved in some consultation with state Landcare networks and the national Landcare network this week or late last week. The consultation at that level has already begun and there will be more consultation as the program is settled. We really do need the input from the community about what their arrangements are. There is not infinite money so we have to line up their priorities with the guidelines. There will be some discussion.

Senator SIEWERT: Do you envisage allocating money per state or per region?

Mr Thompson : That has not been decided as yet, but I think the feedback that we have been getting during the review of the National Landcare Program and the feedback on the $100 million is that everyone liked the program as it was. They liked community delivery and they liked regional delivery, but they would not like it all to go through one or the other. We would be expecting that the $100 million may well be the bit that does not go through regions.

Senator SIEWERT: I did not mean to regional groups. I beg your pardon.

Mr Thompson : No, we have not made any—

Senator SIEWERT: I am thinking of the Kimberley, for example.

Mr Thompson : We have not made any allocation based on states or biogeographic regions. That will be part of the consultation phase, because some people want to look at spreading the money across lots of things and other people want to focus it on a range of particular issues and that is what we will be working through in the consultation phase.

Senator SIEWERT: So, if people have some thoughts they should send them in ASAP?

Mr Thompson : Yes, ASAP.

CHAIR: Does any senator have any further questions on Sustainable Agriculture, Fisheries and Forestry? There being none, Mr Quinlivan, you can let that crew go. We thank them for their attendance and we wish them safe travel to their next port or destination.

Mr Quinlivan : I think we have sugar next.

CHAIR: Agricultural policy, if that is where sugar sits.

Mr Quinlivan : Yes. I think sugar is the last remaining issue there, from what I can gather.

CHAIR: For agricultural policy?

Mr Quinlivan : I think so, yes.

CHAIR: Do not be so sure. We will see what happens. Senator Carr, do you have anything on agricultural policy?

Senator KIM CARR: It may well cover the meat industry, if I could do it now, because it does go to that.

CHAIR: I yield to the Labor Party for 20 minutes.

Senator KIM CARR: Thank you. I am interested in an article that appeared in The Australian on 15 May 2017. Mr 'Twiggy' Forrest is reported to have said that he was concerned about the live export of cattle as opposed to domestic processing, which, he said, was seeing 95 per cent of value-adding benefits disappear. Is the department aware of that comment?

Mr Quinlivan : We almost had a lengthy discussion about this last night when the meat processors R&D corporation was here. That was the question.

Senator KIM CARR: I was not here then.

Mr Quinlivan : I am just saying that the issue came up several times yesterday and I think all of those present at the time were aware of the media article.

Senator KIM CARR: Is the department aware of it? It is nothing about a policy. It is a question for the department. Has the department had any policy conversations on this issue?

Mr Quinlivan : No.

Senator KIM CARR: I take it, then, you have not undertaken any modelling on the economic benefits in terms of the live export trade?

Mr Quinlivan : It is just a media article.

Senator KIM CARR: No, the live export trade. Do you have any modelling on that within the department?

Mr Quinlivan : Not in my time as CEO, but there may well have been—

Senator KIM CARR: When was the last time modelling was undertaken there?

Mr Quinlivan : We would have to take that on notice. There may well have been some.

Senator KIM CARR: That is fine. I would be interested to know what, in the department's view, is required to actually maintain the national herd size.

Mr Quinlivan : Favourable seasonal weather conditions.

Senator KIM CARR: Yes, but given the circumstances at the moment, what are the impediments to maintaining the national herd size at this time?

Mr Quinlivan : The key issue is always going to be the relative profitability of beef over alternative land uses given the seasonal conditions at any point in time. ABARES talked about this earlier today. ABARES is projecting a reduction in beef production over the next two years, I think, while the number of females in the herd is increased as people respond to the higher beef prices, but at some point the growth in the herd will hit some ceilings because of seasonal conditions and the relative profitability of beef against sheep meat and cropping and so on. There is not any one ideal number.

Senator KIM CARR: Mr Forrest has expressed the view that he would be alarmed if the government encouraged Mrs Rinehart in her live export master plan to smooth a pass on her massive live export trade to China might be considered, given how detrimental it would be to our own economic and agricultural growth. Is that a view that the department has given any consideration to?

Mr Quinlivan : We have never seen any such proposal other than in the media and we do not analyse and study every proposal that we read about in the media. Those are very large numbers. It is quite difficult to envisage how that kind of scenario could come into being in anything other than the very long term. Then there would be a whole range of commercial, operational and trade issues that would be relevant, but at the moment there is no such proposal.

Senator KIM CARR: There is no such proposal? I want to be clear about this. You are suggesting that that scenario is unlikely to develop?

Mr Quinlivan : All I am saying is that everybody I have heard comment on it, including Mr Forrest, has only seen media reports. We have seen nothing more than that. They were very ambitious, but also raised a whole lot of questions about the practicality of the proposal. That is not to say the media article is wrong, just that there has been nothing with any detail, or any sort of credible proposition, put to government as far as I know.

Senator KIM CARR: That is fair enough. Nothing is before government on that matter?

Mr Quinlivan : No.

Senator KIM CARR: And nothing you are aware of is envisaged?

Mr Quinlivan : Correct. I cannot say what is intended—

Senator KIM CARR: Other than the media report?

Mr Quinlivan : by some of the identities involved in this, but we certainly have no knowledge of any such proposal other than that one media article that you referred to.

Senator KIM CARR: That is a straight response. I am particularly interested in the question of the regulatory impacts in terms of industry support and the role the department plays in the overall costs for Australian meat producers. Do you have a particular role in that matter at all? Do you do any policy work in that area at all?

Mr Quinlivan : Are you referring specifically to the meat processors?

Senator KIM CARR: Yes.

Mr Quinlivan : They are part of our R&D system that we talked about earlier. I cannot recall the precise contributions, the matching contributions, that we make to R&D spend by the Australian meat processors R&D corporation. We can probably find that number for you as I speak. That is our most direct engagement with R&D. But we are also involved, obviously, in consultations with MLA on the meat industry strategic plan and the activities of RMAC, which is the body that coordinates red meat policy across the industry and government.

Senator KIM CARR: I am trying to get to the issue about the department's role in that process. You have indicated that R&D corporations have a role. Does the department have a role in terms of policy setting?

Mr Quinlivan : We have no regulatory role and we have no necessary policy influence over commercial decisions that beef enterprises make about processing domestically as against live export.

Senator KIM CARR: And no independent research capacity?

Mr Quinlivan : Only the one I mentioned, which is matching funds into MLA and the meat processors corporations.

Senator KIM CARR: It has been put to me that the regulatory burden on the industry is around 19 per cent of processing costs. Would you have any way of assessing whether or not that is an accurate proposition?

Mr Quinlivan : We are now talking about Australia's largest food manufacturing enterprise, with a very large workforce and operating in—

Senator KIM CARR: No, this is not on wages. This is a regulatory burden.

Mr Quinlivan : Yes, I am coming to that. I am just pointing out that it is a very large industry. It is a very large workforce. A pretty high occupational health and safety risk profile, I would suggest, operating in a very large number of enterprises ranging from very large down to quite small. It is the kind of business where I think we would expect quite a large regulatory overheads. As to whether they are appropriate or not, I could not say. We have not studied it. I am not surprised it would be a large number, because it is a very large food manufacturing industry.

Senator KIM CARR: There are matters that the Commonwealth does have responsibility for, but I will come to that in a moment, in terms of the meat inspection role. On the question, though, of health certificates, there was an exercise at a meatworks recently in New South Wales and we are told that the cost for health certificates had increased for New South Wales producers from $12 to $45 over the past 18 months. Would you be familiar with those types of increases in regulatory burdens?

Mr Quinlivan : If they are associated with an export certification service, that is a cost recovery service that we provide.

Senator KIM CARR: Yes.

Mr Quinlivan : I am not sure whether that particular one is.

Senator KIM CARR: Can you confirm whether or not that figure is accurate?

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

Senator KIM CARR: I expect that. That is the figure that has been put to me at a recent visit to an abattoir in New South Wales. If you would not mind, I would ask you to confirm what the increase has been.

Mr Quinlivan : I can confirm that.

Senator KIM CARR: Has there been any increase in inspection services more generally? Is that the only increase?

Mr Quinlivan : We provide export certification services in accordance with the requirements of the importing country. The requirements of importing countries change from time to time. Again, I will have to take that on notice as to whether there have been any changes recently, but I think they do change, as I say, in response to the requirements of our export destinations.

Senator KIM CARR: If you could, I would appreciate that. Is the department aware of any complaints from producers about the inflexibility of hours and charges relating to inspection services?

Mr Quinlivan : We regularly get—

Senator KIM CARR: Complaints?

Mr Quinlivan : I do not know if I would call them complaints, but we regularly get concerns about the difficulties in managing our requirements with a relatively small number of people sometimes operating in remote locations with the commercial objectives of the processing plants. So, yes, there are regular concerns.

Senator KIM CARR: It has been put to me that there is a waiting period of up to two months to appoint or terminate inspectors. This is not in remote locations; this is in quite accessible regions in New South Wales. Are you aware of that?

Mr Quinlivan : I am not sure about termination, but I would not be at all surprised if that was the case for recruitment, because they are a small cohort of people who have quite a high average age. I think we have had a lot of difficulty recruiting people to provide these services. I am not surprised by that. As to termination, I am not sure what the issues are there. Again, I would have to take that on notice.

Senator KIM CARR: Could you please?

Mr Quinlivan : Yes.

Senator KIM CARR: What is your understanding of the level of shortage, if you are saying there is a shortage of meat inspectors?

Mr Quinlivan : I do not have precise knowledge of that.

Senator KIM CARR: You can take that on notice again.

Mr Quinlivan : Yes.

Senator KIM CARR: Is this a Commonwealth responsibility?

Mr Quinlivan : Yes, it is. The people who deal with this in the department are those who were here when we first spoke yesterday morning.

Senator KIM CARR: Producers were suggesting to me that it was a surprise to them, given that there have been plant closures in New South Wales, and yet the claim was that there were shortages of meat inspectors. The two propositions did not really sit side by side.

Mr Quinlivan : My impression is that we always have a shortage of meat inspectors.

Senator KIM CARR: So, what control does the department have over inspection services?

Mr Quinlivan : It is our regulatory responsibility.

Senator KIM CARR: Why is there not more flexibility in the service?

Mr Quinlivan : We are getting to a level of detail that I am not sure about.

Senator KIM CARR: Would you take that on notice?

Mr Quinlivan : Yes, I will have to do that.

Senator KIM CARR: Clearly, I am taking an interest in this matter.

Mr Quinlivan : Yes.

Senator KIM CARR: I am told that in the case of the United States and Brazil their inspection services are actually funded through government. Is that the case?

Mr Quinlivan : That may very well be so. We have a policy and practice of cost recovery for our export services.

Senator KIM CARR: Does that place Australian producers at a disadvantage?

Mr Quinlivan : All else being equal, yes, it would, but all else is of course not equal.

Senator KIM CARR: Has there been any consideration within the department about reducing the cost of the regulatory burden for Australian producers?

Mr Quinlivan : As to whether these service should be cost recovered or not, that would be a policy matter for the government. As to whether the cost of the services is reasonable and the services themselves are provided in an efficient way, that matter I think is more or less continuously under review. There was a review undertaken I think last year of the efficiency of our services for both plant certification and meat certification. People in the industry had an opportunity to contribute to that review. I do not know whether that review has been made public. I am pretty sure it has been provided to the meat industry. They were certainly consulted.

Senator KIM CARR: Can you take that on notice?

Mr Quinlivan : Yes.

Senator KIM CARR: If a copy can be tabled, I would appreciate that.

Mr Quinlivan : Yes.

Senator KIM CARR: Is it the case that the department has had representation on the cost of energy increases for meat processing?

Mr Quinlivan : No.

Senator KIM CARR: You have had no representation on that issue?

Mr Quinlivan : No. We discussed this earlier. We did not have anybody that was aware of that.

Senator KIM CARR: In regard to trade agreements that have been struck, is it the department's responsibility—

Mr Quinlivan : That is a new group of people. If we are moving on to trade policy, we will get the right people.

Senator KIM CARR: It is a simple question. That will see me out, if I can get some advice on this matter. I am interested to know what the process is for the establishment of protocols. Do you want me to wait on that?

Mr Quinlivan : Our understanding is we were going to sugar and then finishing and then on to trade.

ACTING CHAIR ( Senator Sterle ): Yes. Senator Carr, I am just going to go to Senator McCarthy to finish this part. Then we can send agricultural policy home and then we can move into Trade and Market Access. Senator McCarthy.

Senator McCARTHY: I will not be long. Just with respect to the process to develop the sugar code, did the minister seek advice from the department as to the impact of the code?

Ms Freeman : The code was developed by the Treasury. That was done in consultation with our department. Treasury were guiding the discussions. We obviously worked with the Treasury and I presume the officers had conversations, but you would need to talk to them.

Senator McCARTHY: To Treasury?

Ms Freeman : The Treasury were leading the development of the code and we did discuss that matter with them on a number of occasions.

Senator McCARTHY: Was information provided to the minister about the impact of the code?

Ms Freeman : We were engaged with the minister's office on a number of occasions on elements of the code as it was being developed.

Senator McCARTHY: Were there any impact concerns?

Ms Freeman : A number of issues were being considered as the code was being discussed and, obviously, the legal elements were being developed. There was a fair bit of toing and froing on the elements of the code.

Senator McCARTHY: Do you want to give some examples of what those concerns were?

Mr D Williamson : This was something that was considered by cabinet. We were part of the cabinet process around that and we would not normally talk about our advice in that context.

Senator McCARTHY: What were the dates when this was happening?

Ms Freeman : On 29 March the Treasurer and the Deputy Prime Minister announced the code and it came into effect on 5 April. We were obviously working on that matter—

Senator McCARTHY: Did you say 5 April?

Ms Freeman : Yes, on 5 April it came into effect.

Senator McCARTHY: Have there been any unintended consequences identified with the code?

Ms Freeman : Not at this time. I should say there is a review foreshadowed in the code within 18 months. Should there be—and I would say 'should there be', but none have been identified at this time—they could be considered in the context of the review, which is due to take place after 18 months.

Senator McCARTHY: After 18 months?

Ms Freeman : Yes. There is a review scheduled.

Senator McCARTHY: At this point there are no unintended consequences that have been identified?

Ms Freeman : No. The code has come into effect, but it has not actually been utilised at this time.

Senator McCARTHY: What does that mean?

Ms Freeman : The code really relates to the ability for the relevant parties to reach agreement on different elements. In particular, it goes to whether there is arbitration between the parties and they can enact the code, if you like, to do that, and to date that has not happened.

Senator McCARTHY: So, what you are saying is no-one has enacted it?

Ms Freeman : No-one has sought to take action under the code at this time.

Senator McCARTHY: If there is that review after 18 months, who would review it?

Ms Freeman : The Treasurer would be responsible for that in consultation with the Minister for Agriculture and Water Resources.

Senator McCARTHY: Mr Williamson, you said that there was a cabinet discussion and that there are confidential processes that surround cabinet. But in terms of advice provided to cabinet, was that around 29 March?

Mr D Williamson : It was prior to that. I think that was the point. The Treasurer and the Deputy Prime Minister announced the code on the 29th. There have been government processes in the lead up to that.

Senator McCARTHY: Can you give us some dates for when that might have been?

Mr D Williamson : I do not think we have that. I am happy to take that on notice.

Senator McCARTHY: Thank you very much.

ACTING CHAIR: That now completes questioning on Agricultural Policy. We will now move to Trade and Market Access. Senator Carr.

Senator KIM CARR: In terms of the trade agreements that have been struck, what is the process by which protocols are put in place to allow Australian producers market access to any particular country? Who is responsible for the development of those protocols?

Ms van Meurs : It depends on the particular protocol you are discussing. You can have a bilateral agreement with a particular country to allow our exports into that country without a free trade agreement. The issues around the free trade agreement are trying to make that agreement more competitive. So, they are trying to drop the tariffs down to a level that makes it more competitive for an Australian product. If you are talking about getting access into that country based on some technical requirements, then it is the Department of Agriculture and Water Resources. If you are talking about the lead on free trade agreements, it is the Department of Foreign Affairs and Trade.

Senator KIM CARR: I am interested to know what this department's role is in the development of those protocols. You have mentioned—

Mr Quinlivan : That is our responsibility.

Senator KIM CARR: Yes, the technical side of it. In terms of market access arrangements, particularly in regard to behind border restrictions, who is responsible for dealing with that issue?

Ms van Meurs : Again, it depends on what you are talking about when you are talking about behind border issues. If it is to do with a technical issue such as a country requiring that we are free of a particular disease in Australia, then it is the Department of Agriculture and Water Resources. If it is about a specific technical side, how much weight you need in a particular orange juice, then depending on the issue it might well be the Department of Industry or the Department of Foreign Affairs and Trade. Again, it depends on the non-tariff measure.

Senator KIM CARR: Is there a schedule I can find somewhere that explains this?

Ms van Meurs : We could provide that on notice.

Senator KIM CARR: Would you?

Ms van Meurs : Yes.

Senator KIM CARR: Could you provide on notice what protocols you have negotiated and for which countries in regard to the meat industry?

Ms van Meurs : We can. The meat industry has many exports to many countries and depending on which part of the meat industry you are talking about.

Senator KIM CARR: The broad range. Obviously, there is the beef. I take it that it is either beef, pork or white meat. Would that be the categories you would normally use? How do you divide it?

Ms van Meurs : It depends on which country. The beef industry has a lot of access into countries such as Japan, China, Korea and the United States. They are probably some of the biggest markets. And then if you go into issues around dairy, it depends on what type of dairy we are talking about.

Senator KIM CARR: I am interested in the meat industry at the moment rather than dairy.

Mr Quinlivan : Red meat?

Senator KIM CARR: Do you do it on the basis of red or white meat? What is your categorisation?

Ms van Meurs : Beef is a good categorisation but, again, it would depend on—

Senator KIM CARR: Is lamb separate?

Ms van Meurs : Lamb is separate, yes, and it also depends on the particular country and what protocols those countries have.

Senator KIM CARR: What I am interested to know is what protocols you have negotiated, the major ones you have, and what sectors of the meat industry they cover. Is it possible to take that on notice?

Ms van Meurs : Yes, we can provide that. The meat industry, for example, goes to most countries in the world or a large proportion of the countries. But it depends also whether it is competitive where they are exporting to those countries.

Senator KIM CARR: Do you facilitate trade missions? Who is responsible for the facilitation of trade missions?

Ms van Meurs : Do you mean our Australian delegations?

Senator KIM CARR: For Australian producers.

Mr Quinlivan : What sort of delegations?

Senator KIM CARR: For Australian industry who organises those?

Mr Quinlivan : There is industry. There is state government. There is a very wide range of trade delegations. Some of them we are involved in quite a lot and some not at all.

Senator KIM CARR: I am particularly interested in terms of market access questions. In a previous life I have actually been part of organising delegations for Australian manufacturers. What do you do for meat manufacturers in terms of international exports? What is the role of this department in that process?

Ms van Meurs : For example—but it is an example—we have 16 counsellors throughout the world. Those counsellors are located in specific countries, because of the potential and the current export market access that we have for beef and for other commodities.

Senator KIM CARR: Can I get a list of those and where those counsellors are based?

Ms van Meurs : Yes. Those counsellors quite often work with obviously Canberra but they are located in those countries. They will work with the Department of Foreign Affairs and Trade and Austrade. Depending on what that particular delegation wants to see and do, it might be a combination of the different departments in those countries helping them either to market their product, to find new importers, helping to try and deal with a particular issue. It depends on why they are going. Our counsellors often are helping the agricultural industries in those circumstances.

Senator KIM CARR: Do you work with the Department of Industry at all in this matter? You mentioned before there were some aspects which are the responsibility of the Department of Industry.

Ms van Meurs : If the Department of Industry is in country or if a particular issue is relevant to the industry that wants to go on those delegations, we will link in with the Department of Industry. We have a relationship with them, but it depends on what the particular issue is.

Senator KIM CARR: I will come back to that. Thank you very much.

CHAIR: Senator Sterle?

Senator STERLE: In trade, no, I do not.

CHAIR: Senator Back.

Senator BACK: I would like to get some advice from you in terms of each of the Korea, Japan and China free trade agreements where you can show evidence of increased trade in the agricultural space as a result of each. Can we start with Korea, which entered into force in December 2014. What, if any, change/improvements in agricultural commodity exports have we seen as a result of that?

Ms van Meurs : I have some examples here. The free trade agreement entered into force on 12 December 2014. The worth of the agricultural exports to Korea at that time was $2.6 billion. In 2016, under KAFTA, Australian exports have reached $3 billion. Australian exporters have now benefited from four tariff cuts under KAFTA, with a fourth on 1 January 2017. Some examples are that Australian beef exports to Korea have increased by nine per cent in 2016 compared with 2015, reaching $1.4 billion. The value of Australian potatoes for chipping exported to Korea has almost doubled in 2016 to just over $14 million, compared with $7.1 million in 2015.

Some other examples are dairy. The calendar year 2015 was $465 million. In calendar 2016 this has increased to $781 million, which is a 68 per cent increase. As to tariff reductions prior to the entry into force—as of 1 January 2017 this has gone from 10 per cent to 7.5 per cent. Milk powder—

Senator BACK: Will it reduce further under the agreement?

Ms van Meurs : Yes, it will. I do not have those with me, but I can take them on notice. That will continue to decline over I think it is a 10-year period. Milk powder for the 2015 calendar year was $115 million. In calendar year 2016 it is $201 million—an increase of 75 per cent. Again, that reduction in the tariff is from 10 to 7.5 per cent in the last tariff reduction, which is 1 January 2017.

Senator BACK: Is that an annual tariff reduction?

Ms van Meurs : It is. I will have to take that on notice just to be specific on that one, but it is annual.

Senator BACK: Can we shift to the Japanese partnership?

Ms van Meurs : Yes. Again, JAEPA entered into force on 15 January 2015. There have been four rounds of tariff cuts to date. The most recent was in April 2017. The next set of tariff cuts under JAEPA takes effect on 1 April 2018. Again, in 2016 beef remained the highest value agricultural export to Japan, at $1.8 billion. The value of Australian beef exports decreased slightly, by five per cent, in 2016 compared to 1.9 in 2015. The view is that the slight decrease can be attributed to the lower national herd and export quantities following a sustained drought. However, beef exports are up 10 per cent by value in comparison with 2014.Citrus exports to Japan have increased by 27 per cent in 2016 compared with 2015, reaching $50.3 million. The exports of macadamia nuts to Japan increased by 25 per cent in 2016 compared with 2015, reaching $29.7 million.

CHAIR: It is time for a break. Do you have a little bit to go?

Senator BACK: Yes, I have. Not a lot but, yes, I have.

CHAIR: We will break for afternoon tea and we will see you all back here at 4 o'clock.

Proceedings suspended from 15:45 to 15:59

CHAIR: We will now resume the Rural and Regional Affairs and Transport Legislation Committee estimates. Senator Back.

Senator BACK: Thank you for the Korea and Japan information. I think the China free trade agreement was entered into in December 2015. We have had 18 months of it now.

Ms van Meurs : Yes.

Senator BACK: Please give us some stats on how it is going there.

Ms van Meurs : China is now our largest agriculture, food, fisheries and forestry export market, worth $9.9 billion.

Senator BACK: What was that amount again?

Ms van Meurs : So, $9.9 billion in 2016. While Japan is our second largest, worth $4.7 billion, and Korea is our fifth, worth $3 billion. For China, as you said, it entered into force in December 2015. There has been significant export growth. As to the value of exports for the calendar year of 2016, compared with 2015, I will just go through a few examples. In 2016 dairy exports increased by 68 per cent, from $465 million in 2015 to $781 million in 2016. Live rock lobster exports were almost 20 times more in 2016 at $26 million, up from $1.4 million in 2015.

Senator BACK: That does not tell the whole story, does it? That does not tell the story that previously rock lobster were largely coming into China through the grey trade, and the quality of what ended up on the consumer's table was less than adequate from a safety point of view and from a health point of view, whereas the figure you have just given me of $26 million indicates that the product is actually going fresh and straight into the Chinese market.

Ms van Meurs : There is a significant increase, yes.

Senator BACK: Yes. Not only an increase in the dollar value but the quality of the product is actually as it is when it leaves the rock lobster industry. That is very important in our state.

Ms van Meurs : That is right.

Senator BACK: You said it is up by 20 or by 200 times?

Ms van Meurs : Almost 20 times.

Senator BACK: So, 20 times.

Ms van Meurs : Australia's table grape exports to China have also increased almost sixfold to $102 million in 2016, which is up from $15.6 million in 2015. That tariff to date has been reduced from 13 per cent to five per cent. The cherry industry was exporting $8 million in 2015 calendar year. It has gone to $14.6 million in 2016.

Senator BACK: Can you tell me from what states? I understand Tasmania is fairly prominent in that increase, is it? Are you able to give me those figures?

Ms van Meurs : On my memory, Tasmania is the only state that can export cherries to China.

Senator BACK: So, all of that is Tasmanian?

Ms van Meurs : Yes. I would have to take that on notice, but from memory, yes. Citrus was $53 million in 2015 exports, and in 2016 it has gone to $72.3 million, an increase of 36 per cent. Wine is—

Senator BACK: And the tariff on that?

Ms van Meurs : The tariff on that one—I will have to just look at that as I go through some of the others.

Senator BACK: That is okay. Wine?

Ms van Meurs : The stats I have is it is up 42 per cent. It was $516 million in 2016, and the tariff has been reduced from 14 per cent to 6 per cent to date.

Senator BACK: I take it all of those dollars are Australian dollars, not US dollars?

Ms van Meurs : No, that is Australian dollars.

Senator BACK: I have two other questions, if I may, in this space. What other FTAs is the government pursuing at the moment that will have an impact on agricultural exports?

Ms van Meurs : Again, the lead agency is the Department of Foreign Affairs and Trade, but the Department of Agriculture has a key role in providing input into the FTAs. Currently, there are a number of live FTAs and they include the Indonesian FTA with Australia. It is called IA-CEPA. RCEP, which is a fairly multinational FTA. It is quite complex, and that one continues to be significant for us from the point of view of making sure that we have a general agreement with a number of countries.

We have also the GCC, which is the gulf cooperation agreement. We also have one with India that continues to be ongoing, and the EU FTA. Although not yet committed to have an FTA with the UK, we are working with our Department of Foreign Affairs and Trade under the UK working group, which is looking at what we can talk about as part of preparation for an FTA with the UK.

Senator BACK: Back to the future.

Ms van Meurs : Yes. Then also there is now an agreement to do an FTA with Peru.

Senator BACK: With?

Ms van Meurs : Peru.

Senator BACK: I will not ask you about the TPP, except to say that there are still 11 countries, I understand, very keen to pursue it. I do not think we should give up on the prospect of the United States coming back in. What I will ask you, finally if I may, is if you could give the committee some advice on how technical market access is negotiated and what, if anything, have we achieved in government with technical market access?

Ms van Meurs : Technical market assess is a key. We are the lead agency to negotiate protocols with different countries. We have, I think as I said before, a number of counsellors throughout the world who help us with that negotiation. Some of the key areas where we have market access and tried to improve market access include—I am sorry, I will just find the details.

Senator BACK: Would it be easier if you took it on notice and provided me with the information?

Ms van Meurs : Yes, I can take it on notice.

Senator BACK: Thank you for that information. It is very valuable. It is gratifying to see what those figures are.

CHAIR: Now, on trade and market access.

Senator STERLE: While you are there, Ms van Meurs, can you tell us how we are going with vegetables into China?

Ms van Meurs : Do you mean access?

Senator STERLE: Yes, I mean access.

Ms van Meurs : I would have to take that on notice. I am not sure which vegetables you are talking about and which market access.

Senator STERLE: Let us have a crack. How are we going with asparagus?

Ms van Meurs : I would have to take that on notice. I would not have that detail on me.

Senator STERLE: What about beans?

Ms van Meurs : Again, I would have to take that on notice. Only other than I know that Horticulture Industry Australia, which is the peak industry body, is looking at China and particularly around vegetables and what they might be able to do to increase that market access into China. They are looking at and working with people like AUSVEG to be able to get more access into China.

Senator STERLE: The last time I looked we were not having much luck with vegetables into China, so I was asking whether anything has moved on since our last round?

Senator Ruston: It might be worth noting that last week the horticultural industry had its annual peak conference in Adelaide. There were two and a half thousand people there and one of the subjects that was greatly discussed was the amount of progress that had been made in terms of being able to get market access for a number of different vegetable types, but most particularly about the change in the way they were doing business to be able to access the market. I think there is a quite good news story there, so I will get you some more information.

Senator STERLE: Thank you. Ms Van Meurs.

Ms van Meurs : It has taken me a while, but I can give you a couple of examples with some key markets that Senator Back was interested in. There are new markets. There are the breeder cattle markets in Cambodia in March 2007. Breeder sheep and goats to Canada in 2017. Market access restored for hatching eggs and old chicks in Thailand in 2016. Re-establishment of feeder and breeder cattle into Japan in August 2016. We gained market access for split broad beans into Iran in May 2017. Bovine blood and products to China in 2017. Processed meat containing imported pork to Japan in 2017. Edible animal fats to Morocco in 2016. Hides and skins to Bosnia in 2016. Processed pork products to the Solomon Islands in September 2016. I think we all remember the nectarines to China in May 2016. Melons and watermelons to Japan in May 2016. Blood oranges to Korea in April 2016.

Senator STERLE: That might be enough.

Ms van Meurs : I can keep going.

Senator STERLE: Thank you. Minister, you will come back to us because the information in the latest table that I have—nothing has gone in yet, although we have asparagus and lettuce with a phyto cert, a certain percentage, and nil by 2019. But you are saying—

Senator Ruston: Are you talking specifically about a market or more generally in terms of exports?

Senator STERLE: To China.

Senator Ruston: I am sorry. I thought you were talking more generally about export. My apologies.

Senator STERLE: No, I was talking about China.

Senator Ruston: Now we are talking more generally about exports. Vegetables have not been a really big export area for us, but it is certainly seen as a great opportunity.

Senator STERLE: I agree and we are all excited. I have been to China three times and there are wonderful opportunities for us.

Senator Ruston: I will get you some information.

Senator STERLE: That is good. Thank you very much. I am done, but I still have some more questions.

CHAIR: I know you do in agriculture.

Senator STERLE: Yes. I know this is going to come out of the blue, because I have been negligent.

CHAIR: Do you want to hold on to access for a while?

Senator STERLE: No, it is actually more for the department than anything. I would hope that the people are still here. It is still agriculture.

Mr Quinlivan : What is the subject matter?

Senator STERLE: The subject matter goes back to the competitiveness white paper, the original one, with some funding envelopes. I talked about the Regional Investment Corporation and we walked through there, but I have been asleep at the wheel.

Mr Quinlivan : We will just check, but I suspect that people are probably gone.

Senator STERLE: If they are still here I would greatly appreciate it. It will not take long. I think it is imperative that we—

CHAIR: Do you want to bowl it over?

Senator STERLE: I just want to bowl it over, yes.

Senator Ruston: We do not think they are here.

Senator STERLE: It is going to take five or ten minutes.

Mr Quinlivan : Yes. It is just a question of whether the people are here. We are just checking next door.

Senator STERLE: If they are not, I apologise.

CHAIR: In any event, Trade and Market Access, our thanks to your people in that scope for your attendance and a safe travel back to your port or destination.

Senator STERLE: They have gone? I will put them on—

Mr Quinlivan : They have gone, but if you give us a little bit more detail.

Senator STERLE: In the white paper on funding envelopes there was $11.4 million to boost the ACCC engagement with the agricultural sector, including a new commissioner, an expert in agriculture. I just want to know if they are still there.

Mr Quinlivan : Yes, all done.

Senator STERLE: They still exist?

Mr Quinlivan : The agriculture commissioner, I am sure, is well known to you. Mick Keogh was appointed, is working away and has done at least two inquiries that I know of. I know one highly relevant to the inquiry—

CHAIR: He has actually been doing Senator Sterle's work for him on one inquiry.

Mr Quinlivan : Yes. So, yes, that one has been implemented.

Senator STERLE: So, if the funding still exists that is tremendous.

Mr Quinlivan : Yes.

Senator STERLE: And if it has not, if you could just clear it up. As to the $13.8 million in a two-year pilot program to provide knowledge and materials on cooperatives, collective bargaining and innovative business models to fund or establish alternative business models including cooperatives and manage contract negotiations, how is that going?

Mr Quinlivan : That one also has made some progress, but my recall would be pretty scratchy after that point.

Senator STERLE: I will throw them at you anyway, because I am a firm believer if we can get it out now it saves your department hours and hours and then having to come back to us. Twenty-nine point nine million for farm insurance advice and risk assessment grants?

Mr Quinlivan : We have had a pretty strong go at that program. The objective of it was to try and stimulate a private market in multiperil insurance, but I think we are getting towards the point where we think that we are not able to stimulate the development of that market in Australia for various reasons. I think we are regarding that as a policy experiment.

Senator STERLE: So, there is still a bucket of money there?

Mr Quinlivan : There are unspent funds in that program.

Senator STERLE: Take it on notice to let us know how much is unspent, unless you know now?

Mr Quinlivan : No, I do not know.

Senator STERLE: Twenty-two point eight million to increase farm household allowance case management?

Mr Quinlivan : That has been implemented.

Senator STERLE: Thirty-five million for local infrastructure projects to help communities suffering due to drought?

Mr Quinlivan : That was a program that I think was implemented quite quickly after the white paper and to the best of my knowledge it has been fully implemented.

Mr D Williamson : That is our draft communities program?

Senator STERLE: Yes, the infrastructure projects.

Mr D Williamson : Yes. That is actually being administered by the Infrastructure and Regional Development program, but I think Mr Quinlivan is right. There might be one round of funding left, but we will take that on notice and let you know.

Senator STERLE: There is $25.8 million over four years to manage pest, animals and weeds in drought affected areas. It is amazing how the weeds always still grow.

Mr D Williamson : That is over a number of years. That is being implemented.

Senator STERLE: Four years?

Mr D Williamson : Yes. I think we are two years into it. I will give you on notice an update of the program, but it is proceeding well.

Senator STERLE: I do not have many more. Fifty million to boost emergency pest and disease eradication capability. Does that ring a bell?

Mr Quinlivan : Yes. That is part of our improved biosecurity systems capacity that we talked about yesterday.

Senator STERLE: Is it ticking along?

Mr Quinlivan : Yes. We are making good progress. That is going to be a really important investment.

Senator STERLE: Fifty million for better tools and contract methods against pests, animals and weeds.

Mr Quinlivan : That is part of the same project.

Senator STERLE: So, that is $100 million all up for tackling that sort of stuff. I know it is two different ones. One point four million to match industry levies and contributions in the export fodder and tea tree oil industries. How is that going?

Mr D Williamson : Yes, that has been implemented. I think the tea tree levy was signed off and went to ExCo last week, but it has been implemented.

Senator STERLE: I am bearing in mind that if there are any questions you have got it in hand.

Mr D Williamson : Yes, I will come back to you.

Senator STERLE: What about $1.2 million to the Rural Industries Research and Development Corporation? I do not know what that is for.

Mr D Williamson : Is that rice?

Senator STERLE: I do not have what it is for. It is $1.2 million.

Senator Ruston: How much was it?

Senator STERLE: So, $1.2 million.

Mr D Williamson : I think rice was more than that.

Senator STERLE: That is RIRDC.

CHAIR: You are 24 hours late.

Senator STERLE: I told you, I have been asleep at the wheel and that is a big call for a truck driver to say that.

Mr D Williamson : That is for further R&D into the small agricultural industry, the ones that do not have a standalone one necessarily. That is being implemented. It is part of the six-monthly payments that go to RIRDC.

Senator STERLE: I have two more. Thirty point eight million to break down technical barriers to trade and appointing five new overseas agricultural counsellors.

Mr Quinlivan : Yes, that has been implemented.

Senator STERLE: All done?

Mr Quinlivan : Yes.

Senator STERLE: Twelve point four million to modernise Australia's food export traceability systems to further enhance our food safety credentials. How is that going?

Mr Quinlivan : We will take that one on notice.

Senator STERLE: In that case, thank you very much.

Senator GALLACHER: Can I get an explanation or put a question on notice?

CHAIR: Only if you have to.

Senator GALLACHER: Very quickly on barriers to trade—how are you going with blueberries into China? Do you have anything to do with that, because that will come up next week in trade and they will say to me, 'But that's in Agriculture'?

Mr Quinlivan : I am reluctant to offer an opinion on that. Is Ms van Meurs still here? Ms van Meurs has been working on it. It is a contentious issue because there are some—

Senator GALLACHER: We have an agreement with ChAFTA and we cannot get our Tasmanian blueberries into China.

Mr Quinlivan : Yes, but ChAFTA does not deal with market access. It only deals with the tariff rate once you have gained market access. I think that is a common misunderstanding about free trade agreements, and in the case of blueberries—

Senator GALLACHER: It is a very common misunderstanding that free trade agreements are not actually free, that there are non-tariff barriers.

Mr Quinlivan : They are to do with quotas, tariffs and those kinds of things, not technical market access, which is why we have just a very long list of technical market—

Senator GALLACHER: All I want to clear up is, you are directing me back to Trade?

Mr Quinlivan : No. The issues are—

Senator GALLACHER: I do not want them to direct me back to here.

Mr Quinlivan : The issues are principally ours. I know there are some freedom of pest assurances that are needed and there is some R&D required. As I understand it, the industry, the relevant state governments, Horticulture Innovation Australia, and our plant people who were here yesterday are working on that. It is a very high priority for some people in some parts of Australia, but it is not the highest priority on the part of countries to which we export. We have a bit of a difficulty getting the kind of priority that our producers would like to get.

Senator GALLACHER: Thank you.

Mr Quinlivan : At the moment the ball is, I think, largely in their court to get these technical problems solved.

Senator GALLACHER: China or the producers?

Mr Quinlivan : The producers.

CHAIR: So, your trade people need to run, Forrest, run?

Mr Quinlivan : I think they may well have done a runner.

CHAIR: So, we are into agricultural policy.

Senator Ruston: No, that is done. Chair, can I just say to Senator Sterle that the department has offered to give you a full breakdown on the agricultural white paper initiatives implementation. That will be provided to you.

Senator STERLE: Thank you very much.

CHAIR: In outcome 1, part 4 on the schedule, all of those people can leave the building, with Elvis, and we will now go on to Sustaining Natural Resources for Longer Term Productive Primary Industries.

Senator STERLE: No, FRDC.

Senator Ruston: That is still outcome 1.

CHAIR: All right. Fisheries Research and Development Corporation. We are then left with Australian Fisheries Management Authority.

Senator STERLE: That is correct.