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Rural and Regional Affairs and Transport Legislation Committee
22/11/2016
Estimates
INFRASTRUCTURE AND REGIONAL DEVELOPMENT PORTFOLIO
Office of Transport Security

Office of Transport Security

CHAIR: We resume this hearing of the Senate Regional Affairs and Transport Committee's supplementary estimates. We are now on the Office of Transport Security.

Senator FARRELL: I have a question regarding the ANAO audit of passenger safety screening. In its performance audit released on 31 August this year, the ANAO made its conclusion. It said:

The Department has implemented a regulatory framework that establishes minimum standards for passenger screening and a program of compliance activities at security controlled airports. However, the Department is unable to provide assurance that passenger screening is effective, or to what extent screening authorities comply with the Regulations, due to poor data and inadequate records. The Department does not have meaningful passenger screening performance targets or enforcement strategies and does not direct resources to areas with a higher risk of non-compliance.

Mr Mrdak, are you familiar with that reference?

Mr Mrdak : Yes I am.

Senator FARRELL: I would like to ask you a number of questions in relation to that. Can you tell us what steps the department is taking to address the criticisms made by the ANAO?

Mr Mrdak : I would say at the outset, as we made clear the response to the ANAO, we do not share the ANAO's view in relation to the effectiveness of the system. I will ask Ms Wimmer to take you through the steps we have been taking over a period. As the Executive Director of Transport Security, she has been handling our response to the ANAO report.

Ms Wimmer : I would just like to preface, it is very difficult in security to often measure how well you are doing because the measure is that security events do not occur and sometimes that can be quite a difficult thing to measure. That said, we are doing a number of things to follow up on the ANAO's findings. Firstly, we are working with industry on sharing industry's performance data to support the development of measurable key performance indicators so that we can actually, as much as we are able, measure the performance of passenger screening. We are conducting a training and needs analysis to inform—

Senator FARRELL: What is the key performance indicator?

Ms Wimmer : We are developing them. We do not collect data around how screening points operate, because we do not operate them ourselves. We are working with industry to access their data so that we can come up with some useful key performance indicators. Does that make sense?

Senator FARRELL: No. Can you be a little bit clearer?

Ms Wimmer : Sure. The way screening points operate is that they are actually industry owned. They have service providers that have the screeners that look at the X-rays et cetera. So they collect data around how those screeners perform. We do not have access to that data—

Senator FARRELL: Why not?

Ms Wimmer : because we regulate what they do. The only time we have access to their data is when we are conducting an audit or some kind of a compliance activity around whether they are meeting our regulations.

Senator FARRELL: Why wouldn't that be in the contract?

Ms Wimmer : We do not have a contract with them. The way it works is that we regulate an airport and the airport contracts service providers to provide the screening. So we do not have a direct regulatory relationship with the service providers.

Senator FARRELL: Do the airports have that information?

Ms Wimmer : The airports can get that information, and that is with whom we are working to access that data.

Senator FARRELL: I get it.

Mr Mrdak : It is important to differentiate what we are talking about in terms of data. The data could be issues of throughput: how many passengers they are processing, and also what they are detecting in terms of whether the equipment detects a certain item. How many of those are false—what we call 'false positives'—where they might have detected something and someone will have to go back through and, after divesting themselves of shoes or belts, they will be fine. It is those types of data. What the ANAO was focusing on was: how do you know that a screening point is actually meeting the test of ensuring that there is not an attack on an aircraft or a piece of aviation infrastructure? The difficulty for us is: how do we make that judgement? We can collect all of what is essentially output data of what is happening at the screening point. The difficult point for us is: how do you manage the outcome in terms of performance data, which gives you that performance management system, because, as Ms Wimmer has indicated, the ultimate test is that the aircraft and the system remain secure?

Obviously, we are continually picking up items through screening points. That is happening. What we are unable to identify is how many we are not picking up. But based on the outcomes that we are seeing—that is, the safety of the whole system—we do not believe there is a threat taking place through the screening points. That is where we diverge in opinion from the ANAO. The ANAO are always asking us to develop a performance measure for an outcome for which we think it is very difficult.

Senator FARRELL: Ms Wimmer was starting to explain to me how that process was going to develop, weren't you?

Ms Wimmer : I was just explaining how we were going to work with industry to get their data, and we were going to work with industry to see if we can identify some things that will give us an indication of how effective the system is, noting the challenges that the secretary has just outlined.

Senator FARRELL: How far down the track are you in that respect?

Ms Wimmer : We have set up a committee, or a working group, with industry to work with them around their screening points and accessing data for the activities that they undertake at screening points. I think that has met about two or three times—three times is what is being indicated to me. We are progressing, but there is a way to go yet.

Senator FARRELL: Have you had some discussions with the ANAO about the time frames? Are they continuing to pursue you about this?

Ms Wimmer : No, they are not; but it is in our interests to pursue this, so we are working on it with industry.

Mr Mrdak : In our response to the ANAO, we report through our audit committee any responses to ANAO. Obviously, the ANAO at some point will come back to review our progress against the recommendations we have agreed.

Senator FARRELL: What do you think is the most important KPI in this process? What would you think the Australian people would be happy with in terms of—

Ms Wimmer : I wouldn't like to speculate—

Senator FARRELL: Why not?

Ms Wimmer : what a KPI might be. But I would suggest that the confidence—

Senator FARRELL: You must have given it some thought—

Ms Wimmer : Well, obviously, the confidence in the system is how we do not have any attacks that occur through a screening point.

Senator FARRELL: Yes.

Ms Wimmer : But that is very hard to measure, as I have described.

Senator FARRELL: Yes. Well, we have not had any attacks, have we?

Ms Wimmer : No.

Senator FARRELL: And would that be a KPI?

Ms Wimmer : It could be, but it becomes a very difficult one to measure.

Senator FARRELL: Not if you do not have any.

Ms Wimmer : That is right, but that is very difficult to determine—whether that is actually as a result of the system, which we would like to think it is. But to prove that and to find the evidence for that would be difficult.

Senator FARRELL: Isn't it self-evident that if there are no attacks, and that is one of your KPIs, then—

Mr Mrdak : There are many elements to the transport security system. Screening points are one element. Whether the lack of attacks has been the result of intelligence or law enforcement activities—we know, and the law enforcement community has talked publicly, about people who have been preplanning attacks and they have been dealt with through interventions before those have been able to materialise. So whether the safety of the system is due to a single point in the system or due to early interventions or beyond is somewhat hard to determine.

Certainly, through the work that the Office of Transport Security does—through our audit and compliance work and through working with industry—we have significantly lifted the standards of our screening points. That has certainly contributed to a much safer system than had been the case some years ago

Senator FARRELL: The ANAO does not seem to think that.

Mr Mrdak : Well, as I said, I am not too sure that the ANAO has thought through some of the practicalities of its thinking in how you actually operationalise those.

Senator FARRELL: How did they interact with you? How did this audit take place?

Mr Mrdak : The audit is identified through the ANAO audit process. They identify that, they come in and do pre-meetings with our team, they do an assessment—

Senator FARRELL: Do they interview you?

Mr Mrdak : No.

Senator FARRELL: Did they interview you, Ms Wimmer?

Ms Wimmer : No, they did not, although I did meet with them on occasion. But it was not in terms of actually collecting data.

Senator FARRELL: So who did they talk to?

Ms Wimmer : They largely refer to documents that we have. Basically, they look at data that we own. They also, I think, spoke with our regional office and they also interviewed a couple of industry participants.

Senator FARRELL: I notice that Mr White just joined the table. Do you have something you would like to tell us?

Mr White : The secretary and Ms Wimmer have covered the vast majority of the background. I would only add that we do have a performance indicator that relates to risk and to threat assessments. Under our PBS we are required to undertake a number of compliance activities against high-risk areas that are assessed. We met that KPI in the 2015-16 year to 100 per cent.

Senator FARRELL: Right. Did you tell the ANAO about that?

Mr White : When we met with the ANAO the year was not complete. But, certainly, we were able to provide them with the—

Senator FARRELL: So they met with you? You were the contact person?

Mr White : No. I only joined the department in this role in February, but I was at—

Senator FARRELL: Well, your predecessor?

Mr White : Yes.

Senator FARRELL: Yes, okay. You took over from this person?

Mr White : I did.

Senator FARRELL: And they did not interview you, they interviewed your predecessor?

Mr White : We participated in what I would call an 'exit interview' by the time I was there at the department.

Senator FARRELL: I see. Is there a suggestion that there is a resourcing problem here? Is that the fundamental criticism of the ANAO, that you do not have the resources to do the sorts of activities which the ANAO expects of you? Is that the problem?

Ms Wimmer : That is not how I would read their findings. I would read their findings as these are things that we should just be thinking about in terms of our processes and systems.

Senator FARRELL: All right. Are you subject to the efficiency dividend? Is that part of—

Mr Mrdak : Yes. The department and this division are subject to the efficiency dividends.

Senator FARRELL: Are they being asked to provide savings in terms of the efficiency dividend?

Mr Mrdak : Yes. All of the divisions in the department are subject to the efficiency dividend.

Senator FARRELL: What savings are this particular department being asked to provide?

Mr Mrdak : The cumulative effect of the efficiency dividend—and there are several, dating back some time to successive governments—operates at around $6 million to $8 million per annum year-on-year for us.

Senator FARRELL: Those are the savings that you are expected to deliver?

Mr Mrdak : Each year.

Senator FARRELL: But in respect of this part of the process, how much of that $6 million is being—

Mr Mrdak : It would be apportioned across the division. I would need to take that on notice. The cumulative number is around $6 million to $8 million a year.

Senator FARRELL: How are you making those savings?

Mr Mrdak : Mostly, we have been looking at more efficiencies in terms of our corporate services provisions. We recently made some savings in relation to accommodation. We have been looking at our IT systems and our travel—the normal operating costs for the organisation. And, clearly, we have also been operating with a lower staffing level than in previous years.

Senator FARRELL: Has that lower staffing level contributed to some of these criticisms that the ANAO have made?

Mr Mrdak : No, I do not believe so.

Senator FARRELL: I have some other questions regarding the serious and organised crime announcement. In the incoming-government brief, the OTS identified a commitment on 28 June 2016 by the Prime Minister and Minister Keenan and in fact provided a brief. The commitment is described as being to 'strengthen the background checking regimes to ensure individuals with links to serious and organised crime cannot gain access to our airports, ports or other Commonwealth sites were security is a concern'. Is a copy of that announcement available?

Ms Wimmer : I am sure we could track it down for you. We can take that on notice.

Senator FARRELL: Thank you. Was there a media release associated with that?

Mr Farmer : I do not think there was a media release.

Senator FARRELL: But you can supply us with a copy of the announcement?

Ms Wimmer : We will see if we can find you one.

Senator FARRELL: Where will you look for that, Ms Wimmer?

Ms Wimmer : Most likely the internet.

Senator FARRELL: Thank you very much.

CHAIR: We now move on to the Surface Transport Policy Division.

Senator FARRELL: I refer to shipping policy to start with. The 2016-17 portfolio budget statement lists a target to achieve regulatory performance criteria as being to:

Amend regulations to deregulate port service providers and ships undertaking interstate voyages.

What is the department doing in terms of regulation of interstate ship voyages?

Ms Zielke : At the moment the department has been working on assisting government by reviewing the coastal trading act, which deals with licences for operators to be able to move goods around the coast—normally across state boundaries.

Senator FARRELL: Has the department had its work more precisely defined since the start of the financial year?

Ms Zielke : Not since the start of the financial year. The review of the legislation has been going on for a good 18 months now, since just prior to the election Minister Chester became responsible for maritime issues and undertook to seek feedback from stakeholders in relation to the legislation prior to the election, with the intention being that that feedback could be provided for him to act on after the election if that was appropriate. More recently, therefore, he has been receiving feedback and considering what action might be taken in relation to any amendments to the legislation.

Senator FARRELL: What sort of feedback has come back to him in that regard?

Ms Zielke : A large number of submissions have been made over the course of the review—well over 100.

Senator FARRELL: Where have these submissions come from?

Ms Zielke : From industry, whether it be people who are actually participating in the program or regulated under the legislation or shippers—so those businesses that are actually having their goods moved by the various ships and operators around the coast. They have articulated a range of issues over that period of time, and they have been the subject of not only a discussion paper, which was then responded to, but also face-to-face consultations since that time. Minister Chester, in becoming responsible for that earlier this year, has continued to engage with stakeholders and seek their feedback in relation to those issues. Largely they relate to issues regarding administrative burden in relation to the legislation, and how that is viewed, and also cost pressures for shippers, in particular, and the costs associated with moving those goods.

Senator FARRELL: You seem very familiar with this, Deputy Secretary. Have you been involved directly in some of these processes?

Ms Zielke : Yes, I have. Sorry.

Senator FARRELL: No. It is good to hear somebody so forthright and au fait with the issues. So that is the response. What is the minister proposing to do in response to this feedback?

Ms Zielke : The minister is currently giving consideration to that feedback.

Senator FARRELL: Can you anticipate anything that might come out of this feedback?

Ms Zielke : There are currently before him a range of options, of course one being that he might suggest amendments to the legislation.

Senator FARRELL: Is the department doing anything about deregulating port services at the moment?

Ms Zielke : Port services specifically are generally a state issue; they are not a Commonwealth matter.

Senator FARRELL: So you have not had any discussions with the states?

Ms Zielke : Not other than where things like Commonwealth regulation would sit across ports, but, no, nothing comes to mind.

Senator FARRELL: Can you tell us whether coastal shipping volumes increased in 2013-14 over 2012-13 and, if so, by how much?

Ms Zielke : Basically the goods being moved by ships around the coast have not been increasing in volume if they are considered as part of the total freight volume that Australia is responsible for. Road transport has been increasing, for example; however, the maritime sector is not increasing or is not showing an uptake in relation to the goods that it is moving in comparison. But overall, yes, there has been an increase.

Senator FARRELL: Can you tell us by how much?

Ms Zielke : I think it is probably best if we take that on notice for you.

Senator FARRELL: Are we talking a large or small amount—just in the ball park?

Ms Zielke : Generally it is measured by way of either container shipments or weight of shipments. There has been an increase but—I am sorry—without checking those figures, I would be guessing.

Senator FARRELL: I had a couple of questions regarding motor vehicle standards. Can you tell us when the legislation will be available for the government's overhaul of the motor vehicle standards?

Ms Wieland : The government announced its intentions in relation to the Motor Vehicle Standards Act in February this year. Since that time, we have undertaken quite an extensive range of consultation in relation to the policy details that will inform the development of the legislation, and we are currently working on the development of that legislation package at the moment.

Senator FARRELL: What is the next step in that process?

Ms Wieland : I would expect as government continues to refine its views on the detailed policy, it needs to be resolved in the legislation, and then government will be ready to table that legislation in parliament.

Senator FARRELL: When do we think that might be?

Ms Wieland : I would hate to guess that at this point.

Senator FARRELL: Are we talking months or years?

Ms Wieland : Potentially the former.

Senator FARRELL: Is the government's position on motor vehicle standards the same as it announced in February?

Ms Wieland : As I said, there is a whole range of policy details that are being worked through at the moment.

Ms Zielke : I am sorry; I did find those figures, having said I did not have them—my apologies—but not necessarily for the years you were asking for though. Australian ports handled 104.4 million tonnes of coastal freight during 2013-14, which was a 2.5 per cent increase on 2012-13 but an average annual decline of 0.4 per cent over the five years to 2013-14. So it increased but, in comparison with what it should be as a mode of transport, it is not increasing at the same level as others.

Senator FARRELL: Thank you very much.

CHAIR: There being no further questions for the Surface Transport Policy Division, we thank you for your attendance and we wish you safe travel to your destination. We now have a slight dilemma because we are onto the Local Government and Territories Division, which really requires Minister Nash to be present.

Senator FARRELL: Should we adjourn until 7.30 then?

CHAIR: We could do that. We might ask Mr Mrdak to guide the committee with his responses, Senator Farrell, if you or Senator Sterle want to run through them and I am certain, at the same time, Senator McGrath has already sent a communique to Senator Nash.

Ms Zielke : Senator Rice asked a question earlier that we have a response to, which I could share.

CHAIR: Yes, let us do that and we can have it on the Hansard.

Ms Zielke : Senator Rice asked whether cycling participation rates, or the rate of cycling, was reducing and my colleague Ms Spencer said that she thought it was actually increasing. As the figures turn out, in 2011, 17.8 per cent was the figure of cycling participation rates, as in those cycling to and from work. In 2013, it dropped to 16.6 per cent, but in 2015 it has gone back up to 17.4 per cent, hence the inconsistencies in the discussion.

CHAIR: We will direct her attention to that; it is on Hansard. Senator Sterle, you have the call. I do not think you were here at the outset: we are in the zone now where Senator Nash would be here, so Senator McGrath will not be able to assist us with any clarifications. But we have muddled through once before, with Mr Mrdak giving us some guidance, so if you go to an area where he thinks we should wait for Senator Nash, of whom it has been reported that she will be with us in 20 minutes, we can leave it until then or you can put it on notice.

Senator STERLE: I suggest that after sitting through about 33 Senate estimate sessions, Mr Mrdak is well and truly qualified to answer any queries.

CHAIR: I agree with you, but it is not a question of that; it is a question of the standing orders—No. 22 of the Senate. We have had advice from the Clerk today, as well as the secretary, that it is about the conduct of the proceedings. But let us just have a struggle, hey? You and I will—

Senator STERLE: We will get through it. I have great confidence in Senator McGrath. Local Government and Territories Division? I am sorry, Chair, I have been working on a pet project.

CHAIR: That is okay, it is Local Government and Territories Division. Mr Mrdak, are there any questions in this area that—

Senator STERLE: You do not know the questions yet, I have not told him!

CHAIR: No, I appreciate that, but—

Mr Mrdak : I do not believe the minister would have any issues with us commencing a line of questioning.

CHAIR: No, the burden is not with you. It is with our standing orders.

Senator STERLE: Why don't we just have a go, Chair? If there is a problem, we can put it on notice.

CHAIR: Let's suspend these proceedings for a couple of moments while we have a consultation.

Proceedings suspended from 19:11 to 19:29