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Thursday, 10 May 2007
Page: 38


Mr MICHAEL FERGUSON (11:30 AM) —This morning I rise to speak in support of the Governance Review Implementation (Science Research Agencies) Bill 2007. There was some confusion with the speakers list, but it is good nonetheless to be able to debate and address this bill. The bill that we are debating this morning, and which will soon be summed up, is designed to amend the Australian Institute of Marine Science Act 1972, the Australian Nuclear Science and Technology Organisation Act 1987 and the Science and Industry Research Act 1949. The bill will implement changes to the governance arrangements of the Australian Institute of Marine Science, ANSTO and CSIRO to reflect the government’s response, and implementation of that response, to the recommendations of the Review of the corporate governance of statutory authorities and office holders, which we in this place better know as the Uhrig review.

I would like first of all to make some comments about the Uhrig review and its importance. As part of its 2001 election platform the coalition government signalled its intention to examine the efficacy of governance arrangements of statutory authorities and office holders. In November 2002, the government announced a review of the governance practices of those statutory authorities and office holders, with a special focus on those agencies which impact on the business community—a very important constituency for this government, as it should be for all of us. The Prime Minister appointed Mr John Uhrig AC to head this review, the objective of which was to examine and evaluate governance arrangements and practices and to ‘provide policy options for government to get the best from statutory authorities and office holders and their accountability frameworks’. In doing so, the government noted the impact that the performance of statutory authorities and office holders has on business and the overall health of the Australian economy.

The review focused on the areas where businesses have the right to expect higher levels of efficiency, fairness and transparency in their dealings with government. While they are agencies to anybody in the business community, for all intents and purposes they really are government organisations and the business community does have a reasonable expectation to have an open, accountable and businesslike interface with government. A key task of the Uhrig review was to develop a broad template of governance principles that, subject to consideration by government, might then be extended to all statutory authorities and office holders. As part of the process of developing this broad template, the review was asked to consider the governance structures of a number of statutory authorities and office holders with critical relationships with business and to consider best practice corporate governance structures in both the public and private sectors. The report recommended that two templates be considered to ensure good governance of statutory authorities. Agencies should be managed by either a chief executive officer or a board structure. Both templates detail measures for ensuring the boundaries of responsibilities are better understood and the relationship between the Australian government authorities, ministers and portfolio departments is made clear. However, as Mr Uhrig explained in his review, the purpose of the template is to ‘serve as a reference point’ for the development of governance arrangements and so it is ‘expressed as an ideal’ which the government ought to consider and respond to.

Uhrig recommended that the selection of the management template and financial frameworks to be applied be based on the governance characteristics of a statutory authority. The amendments that we are debating to the Australian Institute of Marine Science Act will enable the AIMS council to appoint and remove the CEO, who is currently appointed by the Governor-General, and also will remove the requirement for ministerial approval of contracts for expenditure above a prescribed value, which is currently $1 million. This will improve the efficiency and I would suggest also provide a sense of corporate respect in which the government will hold that organisation. Amendments to the Australian Nuclear Science and Technology Organisation Act will specify that the board will consist of six to nine members, including the executive director, remove the requirement for ministerial approval of contracts—in line with the other organisations—which is currently $5 million, and change the title of the chief executive of ANSTO from executive director to CEO.

Finally, the Science and Industry Research Act amendments will enable the board to appoint and remove the chief executive. Currently the chief executive is appointed by the Governor-General. The amendments also create a position of deputy chairman in recognition of the high workload—and perhaps unreasonable workload—that the chairman has been carrying, make explicit that the board may delegate any or all of its powers, remove the legislative requirement for ministerial approval of contracts, which in this case is currently $5 million, and require the chief executive to seek the approval of the board, rather than the minister, for the payment of bonuses or intellectual property rewards to CSIRO staff. They also remove the need for the minister’s consideration when the CSIRO is offered a gift.

The bill makes changes to the governance of AIMS, ANSTO and CSIRO to implement the recommendations of the Uhrig report, which the government endorsed in August 2004. It will allow them the freedom to act that was recommended in the Uhrig report while maintaining appropriate levels of accountability.

Critics have said that the proposed amendments reduce accountability. To respond to that, I believe it is important to explain to this chamber that changes to the agencies’ governance arrangements do not reduce accountability at all. Rather, they uphold strong governance and in fact enhance the ability of the bodies to interact effectively with business and the wider community.

While the amendments provide greater freedom of the board/council to act, this is entirely in accordance with the recommendations of the report. And there are still requirements which must be noted, in the enabling legislation for each agency as well as in the Commonwealth Authorities and Companies Act, which ensure an appropriate level of accountability. In addition, the minister’s statement of expectation for each agency will require the agency to keep the minister fully informed of significant events and to consult with her on significant matters.

Each agency will also be subject to a quadrennium funding agreement, which will cover the four financial years commencing 2007-08. It will specify performance indicators for the agencies and agreed key areas of reporting to the Minister for Education, Science and Training and the Minister for Finance and Administration.

As for claims that changes to appointment arrangements for the CEOs of AIMS and CSIRO represent a diminution of their current terms of appointment, they are also not correct. It has to be acknowledged that the bill contains transitional provisions that preserve the terms, conditions and tenure of the current CEOs of the Australian Institute of Marine Science and the Australian Nuclear Science and Technology Organisation. The only exception to this is that the CSIRO board and the AIMS council, rather than the minister, will approve any leave of absence for the current CEOs.

As for claims that the appointment of a deputy chairperson of CSIRO is an unnecessary expense: the remuneration for the deputy chair will be set by the Remuneration Tribunal and the cost will be met out of CSIRO’s existing budget and, therefore, will have no financial impact. The considerable increase in the responsibilities of the chairperson over recent years does justify the creation of the extra position of deputy chair, and the arrangement is quite consistent with arrangements that are in place for ANSTO and other large statutory bodies.

The amendments to these acts are part of a range of changes that are being implemented by the government. I understand that they are relatively non-controversial. But they will, it is important to acknowledge, improve the governance arrangements and the effectiveness of the interface between these organisations and the government and—very importantly—business and the wider community.

I wish to direct a few comments, in relation to the bill, to some measures which were announced on Tuesday night which are terribly important to the future of these organisations. The organisations that are the subject of today’s amendment bill are implicitly involved in the mathematics and science communities and the greater goal of enhancing and improving educational standards in the areas of science and maths.

As a former maths and science teacher myself, and as a parent, I have a great concern for the future of maths and science in our schools and in our wider community. There is evidence that standards have fallen around Australia, and we must arrest that decline. That is why I was very pleased to see, on Tuesday night, that funding of $457.4 million has been made available for the national literacy and numeracy vouchers program. This has been discussed quite widely in the media in recent days and has been very warmly welcomed, particularly by parents but also by schools and teachers.

The vouchers will provide direct assistance to parents of students who have not been able to achieve minimum standards in reading, writing and mathematics in years 3, 5, 7 and 9 so that they can get additional help for their children. This help can be sourced out of the private sector, outside of school hours. This is a wonderful way that this government is showing support for those children in both government and non-government schools who, for whatever reason, have fallen behind. It would be welcome if the Tasmanian government’s education minister and his state colleagues would welcome this funding, because it is very significant and has every prospect of arresting the decline in standards in the lives of some of our young people.

There is also funding in the budget of $100 million for a brand new initiative which, again, is very significant. The new summer schools for teachers program will provide extra professional development opportunities for teachers and will have the flow-on effect, quite obviously, of improving the quality of teaching and the quality of learning outcomes in our young people. It will specifically relate to the major disciplines of literacy and numeracy, English, maths, science and Australian history.

An additional $53 million is being provided for another brand-new initiative: rewarding schools for improving literacy and numeracy outcomes. If schools can demonstrate that they have, by altering their teaching program or by improving the way in which their classes function, made sustained improvements in student literacy and numeracy, a very significant cash reward of $50,000 can be given. This can then be reinvested into school programs for continual improvement. I point out that this is not funding for schools that are performing highly; this is funding for schools that are able to improve. So there ought to be no controversy around it. It ought to be something that every school can strive to achieve.

There is also additional funding of $13 million over two years to implement something which I have been very passionate about for a long time—that is, for the Commonwealth to work with the states and territories to develop core curricula standards in a range of subjects, including English, maths, physics, chemistry, biology and Australian history for college-level students and also a range of subjects to year 10. This, I hope, will assist in raising standards in schools, and I trust that the states and territories will also contribute resources of their own to achieve the agreed goal of improving consistency around Australia for our students in very important subject areas.

I now turn to funding which has been made available to the specific organisations which are the subject of this bill. In fact, funding of $6½ billion in the coming financial year marks the highest amount ever spent by any Australian government on science and innovation programs. This will build on the very large investment of the $5.3 billion commitment made in 2004 through the Backing Australia’s Ability: Building Our Future Through Science and Innovation package.

The budget announced by the Treasurer on Tuesday night included funding of $50 million to support the Australian Synchrotron, in Victoria, in addition to a substantial package of funding for medical research facilities through the health portfolio. The Synchrotron will have wonderful benefits not just for pure science but also for the health and research sectors and the industry sector in the development of high-tech objects. In addition, it includes funding of $8 million over four years for Australia’s four learned academies.

CSIRO will receive $2.8 billion, including $244 million for new measures over the next four years, including expansion of a flagships program, which has been widely welcomed by the community. There will also be additional funding to support construction of the Australian Square Kilometre Array Pathfinder, funding of $16 million for the Australian Animal Health Laboratory to improve diagnostic testing of new and emerging diseases and an additional $2 million to develop a wellbeing plan for children.

Finally, ANSTO and AIMS will be supported. ANSTO will receive an additional $61 million for new measures. That will be used for the operation of the new OPAL reactor. There is funding for the automation of the radiopharmaceuticals and industrials production processes and $4 million for low-level radioactive waste compaction equipment which will substantially reduce the volume of low-level waste stored at ANSTO. AIMS will receive an additional $5 million to support research into marine ecosystems in north-west Australia, which will underpin environmental protection and sustainable use of marine resources.

I look forward to the Leader of the Opposition’s speech tonight. I am sure he will welcome all of those initiatives and acknowledge that they are a necessary part of the response by the Australian government and the parliament to securing Australia’s future. With those comments, I again state my support for this bill and commend it to the House.