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Environment and Communications Legislation Committee
CLIMATE CHANGE AND ENERGY EFFICIENCY PORTFOLIO
Low Carbon Australia Limited
- Committee Name
Environment and Communications Legislation Committee
Birmingham, Sen Simon
Boswell, Sen Ronald
McKenzie, Sen Bridget
Fisher, Sen Mary Jo
Cash, Sen Michaelia
Singh, Sen Lisa
Macdonald, Sen Ian
Wong, Sen Penny
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Environment and Communications Legislation Committee
(Senate-Monday, 13 February 2012)
CLIMATE CHANGE AND ENERGY EFFICIENCY PORTFOLIO
Department of Climate Change and Energy Efficiency
Senator IAN MACDONALD
Office of the Renewable Energy Regulator
Low Carbon Australia Limited
Senator Ian Macdonald
- Department of Climate Change and Energy Efficiency
SUSTAINABILITY, ENVIRONMENT, WATER, POPULATION AND COMMUNITIES PORTFOLIO
Department of Sustainability, Environment, Water, Population and Communities
Bureau of Meteorology
Great Barrier Reef Marine Park Authority
Senator IAN MACDONALD
Director of National Parks
Senator IAN MACDONALD
- Department of Sustainability, Environment, Water, Population and Communities
- CLIMATE CHANGE AND ENERGY EFFICIENCY PORTFOLIO
Content WindowEnvironment and Communications Legislation Committee - 13/02/2012 - Estimates - CLIMATE CHANGE AND ENERGY EFFICIENCY PORTFOLIO - Low Carbon Australia Limited
Low Carbon Australia Limited
CHAIR: Afternoon, Ms McDonald. Do you have an opening statement?
Ms McDonald : I do, but just a very short one. This is our first appearance before a Senate estimates committee. I am happy to table the statement in the interests of time. I will simply to say that we are quite a young company, set up in 2010, and we are a Corporations Act company, for those of you who have not been familiar with our operations. Our initial funding agreement was signed with the Department of Climate Change and Energy Efficiency on 25 February 2010. We commenced operations in July 2010. We conduct an energy efficiency program and also the carbon neutral program under the National Carbon Offset Standard. I am happy to answer any of your questions.
CHAIR: Just before we do that, I can see we have a photographer here. Can we take it that the committee approves media and photography, subject to the criteria established by the President? We will do that for the rest of the hearing unless there is anything different on that.
Senator BIRMINGHAM: Welcome today to your first Senate estimates, Ms McDonald. I understand the government is providing Low Carbon Australia with $100 million in initial funding. Was that provided as a lump sum and is it now entrusted to Low Carbon Australia?
Ms McDonald : We have received the funding upfront from the Commonwealth. It was not provided in a lump sum but under a series of funding agreements with the Commonwealth for administrative purposes and for conduct of the individual programs, but the capital is in the hands of Low Carbon Australia.
Senator BIRMINGHAM: And is that an all-inclusive sum that covers the administrative costs for Low Carbon Australia as well or have there been any additional or different sums provided aside from that $100 million?
Ms McDonald : No, that $100 million is a total of both the amount which was provided under our administrative funding deed and under our funding deed for the energy efficiency program and also our funding deed for conduct of the carbon neutral program.
Senator BIRMINGHAM: Is the approach taken to that funding by Low Carbon Australia to operate and set up as an independent company? Do you operate in terms of investing and using the proceeds of that to provide returns? I understand some of it is used as loans. How does that work in terms of the funding outlays and maintaining a funding base for Low Carbon Australia?
Ms McDonald : Under the terms of the funding that we have received from the Commonwealth—and it is all contained in the annual report which was tabled here in October last year—under the funding deed for the energy efficiency program, which is the bulk of our programs and makes up 84 percent of the funding, that forms a revolving loan fund. So we loan funds to corporations, to local governments and to other organisations for the purpose of undertake investment in energy efficiency improvements and we construct the loans around the energy savings that those companies realise as a result of those investments. They repay us. We do charge commercially based interest; obviously it is not fully commercial, but we look to make an appropriate risk weighted return on all of the investments that we make. The intention is that we would then put that into a revolving fund and those funds would then be available for future loans. As we are so young we are only just now making the first sets of loans, but that is the principle and the intent is to make us a self-sustaining as possible through time. We think it is a very sensible use of public funds because it enables us to construct loans for companies that would not otherwise be able to undertake the investment. That is the criterion that we use—that our involvement does enable an investment to take place earlier than it would normally do or at a larger scale than it would otherwise do. We look for leverage from other private sector companies. For instance, we have now out in the marketplace $30 million of low-carbon funds being made available, co-financed with other private sector investors, and that is making total loan of funds of $110 million available in the marketplace. So we are achieving quite significant private sector buy-in into the energy efficiency investment.
Senator BIRMINGHAM: That possibly answered my next question, which was: have you concluded loan agreements with parties and, if so, to what value? Does that mean that you have engaged in $30 million worth of loans to date?
Ms McDonald : In terms of the model that we are using, we decided that we could go out to the market and make individual loans to individual companies, and as a small operation that would have benefited a few but it would not have achieved the kind of leverage and reach we could get in the marketplace. So we went into arrangements with a number of other financial institutions and major energy companies so that they are the ones that actually undertake the financing into the marketplace and we co-finance with them and co-conduct those programs. That is how we have managed to get companies like National Australia Bank, Macquarie Bank, a leasing company called Alleasing and also Origin Energy, who are offering the finance on our behalf, co-branded with us. They are able to achieve a much wider market reach then we alone as a very small company would. In addition, we have made a number of one-off loans to both individual building owners and some local councils where we deemed that it was appropriate to do so to have an impact in the market.
We are quite a small fund. We had some work done in the department in preparation for the design of our program and that estimated that in the commercial building sector alone it would take $12 billion worth of investment to undertake the kind of energy efficiency improvements necessary. With $100 million we can hope to leverage and provide a demonstration, but we really cannot hope to actually get that sort of reach.
Senator BIRMINGHAM: Is $30 million committed through those partnership arrangements—is that where that figure comes from? How much is committed or available through those partnership arrangements with NAB, Macquarie and others?
Ms McDonald : That $30 million includes some of the one-off loans that we have also made. That is the total that we have committed at the moment. We have an additional $23.8 million currently under negotiation which we expect to be able to announce in similar sorts of programs in the next couple of months.
Senator BIRMINGHAM: Can you provide, on notice, some detail to us about the actual form of loans that have been completed: how many of the one-off loans have been completed and what value they are and what energy efficiency they return, as well as those details for the loans that have been completed through the partnership arrangements. I assume there are some that have been completed out those partnership arrangements to date.
Ms McDonald : I am happy to provide that data. I should emphasise, though, that we are operating commercially with these companies and therefore some of the data on individual projects may not be made available. We have an agreement with every party with which we have undertaken finance that they will participate in providing case studies. They understand that they are doing this as part of a demonstration into the marketplace, but you will understand why some organisations do not want to share some of the commercial data that we are using as a basis on which to make our loans.
Senator BIRMINGHAM: Yes, I appreciate that. If you need to delete the name of the partner organisation or the recipient of the loan to be able to provide the information to us that essentially then provides a series of case studies, that is totally understandable in terms of those commercial arrangements. Through the partnership agreements, does Low Carbon Australia get a final sign-off to the loans that are made under those agreements?
Ms McDonald : Yes, every one of the projects actually comes through our company for a sign-off on the carbon abatement that is going to be achieved. We have developed quite a sophisticated carbon abatement methodology as a basis on which to assess the energy savings from every one of the investments over the lifetime of that investment. Also that allows us to work with the financing partner to make sure that we are developing finance, either leasing arrangements or loans, which are essentially cash flow positive for the firms that are undertaking them from the outset. So sometimes it is increasing the length of term of the finance to make sure the firms are actually going to be able to see the return that they are assuming. We sign them off. Part of our requirement is that data is then provided back to us by the companies concerned.
In one of the projects that we are involved in with Origin Energy, Origin provides an energy savings guarantee to every company that is taking up finance under their program, and that enables us to keep an assessment of the impact that we are having. After all, it is a relationship that Origin has with its customers, ongoing for the lifetime of the contract.
The other way in which we assess that is through maintenance of NABERS ratings for buildings. So if a building has an upgrade using our finance, with the objective of bringing it from 0 to 4-star NABERS, that NABERS rating process then is one which is ongoing for life of the project.
Senator BIRMINGHAM: I gather you are now being provided funding of $2.4 million to establish a pledge fund to assist with purchase and cancellation of carbon permits. How much work has Low Carbon Australia undertaken on the establishment of that pledge fund and what do you see as the potential capacity to reduce or cancel carbon permits into the future?
Ms McDonald : Senator, we are currently in discussion with the Department of Climate Change and Energy Efficiency around the scope of that pledge fund. That is something we have not been formally approached by the department on in terms of the design of the pledge fund. Any questions around the expectations and the scope of the pledge fund are really things that are still with the department.
CHAIR: Ms McDonald, you indicated you were going to table your statement. Do you still want to table that statement?
Ms McDonald : I am very happy to do so, Senator.
CHAIR: That is tabled; thanks. In the couple of minutes remaining, could you take me to the environmental upgrade agreement with the City of Melbourne and tell me how that is going?
Ms McDonald : Next week I am going to visit the first of the buildings that we will be financing under the environmental upgrade agreement legislation. The Sustainable Melbourne Fund, which is a vehicle similar to us set up by the City of Melbourne, has funded two small buildings. I might add we are also discussing with the City of Sydney, the City of North Sydney and also the City of Parramatta using environmental upgrade agreement financing in those jurisdictions as well. So this is a unique form of financing and one which we and those councils are very hopeful will provide an opportunity for a lot of B-grade and C-grade buildings to be upgraded to 4-star NABERS as a result of the availability of that financing.
CHAIR: Ms McDonald, thanks for your initial appearance. I am sure you will have plenty more appearances here. We will now break for lunch.
Pr oceedings suspended from 12:59 to 14:01
CHAIR: I now call officers from the department in relation to program 1.2, Improving Australia's Energy Efficiency, and invite questions. Senator Birmingham?
Senator BIRMINGHAM: Thank you, Chair. Can I turn firstly to the joint release of last week from Minister Combet, Minister Crean and Mr Dreyfus about the Community Energy Efficiency Program. Can you tell me who is eligible for grants under the Community Energy Efficiency Program?
Mr Cahill : The major people who are eligible for the Community Energy Efficiency Program are actually local governing bodies, local governments and not-for-profit organisations. They have to be the owner of the building, the facility or the site that is subject to the proposal. And the project has to be, for want of a better description, located in Australia, directed towards an energy efficiency upgrade or retrofit and will have achieved clear measurable gains. That is my really the main points of eligibility.
Senator BIRMINGHAM: Would a proposal to achieve energy efficiency improvements in council buildings, sports stadiums, educational facilities, town halls or nursing homes be proposals that could be in order?
Mr Cahill : Some of those—community facilities and such. Nursing homes, no. It will be a merit based program, so obviously we are looking at the best proposals that give the best gains for the community.
Senator BIRMINGHAM: In that case, we might go through each of those, just to be clear, because there were two versions of the media release issued last week. One version said that the program would allow for organisations to undertake energy efficiency upgrades to 'community infrastructure, including council buildings, stadiums, education facilities, town halls and nursing homes'. The other version deleted all words from 'including' thereafter, thereby taking all of the examples out. So nursing homes, contrary to the first of the releases from the ministers last week, are not eligible for this grant scheme?
Mr Cahill : No, they are not eligible.
Senator BIRMINGHAM: Are town halls or council buildings—which strike me as one and the same—eligible?
Mr Cahill : Yes.
Senator BIRMINGHAM: Are sports facilities eligible?
Mr Cahill : Yes.
Senator BIRMINGHAM: Are education facilities eligible?
Mr Cahill : In the construct of the criteria about local government facilities and community facilities, yes, in some instances.
Senator BIRMINGHAM: Okay, but not schools or those types of education facilities?
Mr Cahill : No, in fact those guidelines have been published on the web and applications for that program open today.
Senator BIRMINGHAM: Is there anywhere within the myriad programs related to carbon tax compensation that can provide some assistance to nursing homes, for example?
Mr Comley : My recollection is—and Dr Kennedy may want to comment—that part of the issue here is that many nursing homes receive Commonwealth assistance or state assistance and the indexation arrangements that come for the assistance for those bodies have a component that will reflect the increase in the CPI that occurs as a result of the carbon price. So they, in a sense, get some automatic assistance because of those indexation arrangements.
Senator BIRMINGHAM: My recollection, from participating in the joint select committee that looked at the package of Clean Energy Future legislation, is that organisations like Anglicare, UnitingCare, Wesley and those organisations that run nursing homes were anticipating that there would be some assistance beyond them either seeing indexation of their aged-care payments or having to separately lobby government for assistance during that process. But you are telling us there is nothing particular for those organisations that they can apply for, aside from their normal funding arrangements.
Mr Cahill : There is the Low Income Energy Efficiency Program, which is focussed on low-income households, where we are expecting organisations such as Anglicare and UnitingCare to be able to, again, in a consortia, apply for grants to be able to work out means and ways of being able to support low-income households with energy efficiency measures. That is one area we know they are very interested in and is also a program that opened today.
Mr Comley : Dr Kennedy, do you want to add anything?
Dr Kennedy : I do not profess to be an expert on this part. The Department of Health and Ageing would be much better placed to refer to this assistance. Some of the household assistance paid to residents of aged-care facilities will be distributed to their aged-care facilities, which pay for most of their residents' costs of living. Household assistance, in the case of aged-care residents, would be shared between aged-care providers and their residents in an approximate 55 to 45 split by increasing the percentage of the basic pension payable to the provider. Grandfathering arrangements will be established for around two percent of existing residents not in receipt of a pension or other income support and not holding a Commonwealth Seniors Health Card, so their fees do not increase as a result of the change in the fee structure. Aged-care facilities will be provided with additional funding to address the costs they incur in respect of their grandfathered residents. This is a program administered by DHA. I apologise for not having more detail with me at the moment but I would be happy to take it on notice and consult with that department to provide you with more information.
Senator Wong: Alternatively, you could put it to DHA during their estimates hearing, Senator.
Senator BIRMINGHAM: Dr Kennedy was trying to be helpful.
Senator Wong: Yes, well he has plenty of work. I would rather he focussed on other things.
Senator BIRMINGHAM: It is not your department anymore.
Senator Wong: I am the Minister for Finance and Deregulation; we worry about everything!
Senator BIRMINGHAM: You would rather I had to find the time this week to fit DHA estimates into my schedule.
Senator Wong: I am sure there will be someone in DHA who can assist you. I am not sure when the FaHCSIA estimates are on.
Senator BIRMINGHAM: Thanks for your assistance, Minister. I am sure Dr Kennedy will appreciate having those extra five minutes. Is there any direct program that education facilities and schools, be they government or non government, childcare centres, universities and the like fit into the eligibility criteria for to seek any compensation or assistance?
Mr Cahill : Not the CEEP LIEEP programs as open today.
Senator BIRMINGHAM: Let us just go then to the detail of the community energy efficiency program to start off with. Under this program, how many grants are anticipated to be allocated in the course of the next financial year?
Dr Richards : Round one just opened. We know we have a strong interest from local government. The sense of the projects that we will get is yet to be clear to us in terms of numbers. We would expect a series of large and small projects, so the number is hard to predict. We expect that in the order of 15 to 25 is likely for the first round but it is hard to predict.
Senator BIRMINGHAM: In the order of 15 to 25 successful applicants. I am just trying to break your $200 million down into how much is available in this financial year and in the forward years, and the additional estimates statements are not being terribly helpful to me in that. I am sure you can tell me, Dr Richards, how much—
Dr Richards : It is $28 million this financial year.
Senator BIRMINGHAM: That is for what is described in the portfolio statements as 'low carbon communities'?
Mr Cahill : Yes.
Senator BIRMINGHAM: Which is otherwise known as the Community Energy Efficiency Program.
Mr Cahill : There is also the Low Income Energy Efficiency Program but there is no money allocated for that for this year.
Senator BIRMINGHAM: Excellent. When do applications for this year's funding under the Community Energy Efficiency Program close?
Dr Richards : They will close on 23 March for the first round.
Senator BIRMINGHAM: Is the department committed to ensuring that those $28 million in funds are expended in grants made in this financial year ahead of the commencement of the carbon tax?
Mr Cahill : We are committed to making sure we get quality outcomes from the program. On the current schedule and how we are approaching the exercise we consider that that funding will be expended this year.
Senator BIRMINGHAM: I assume the funding is provided upfront for activities that are committed to be undertaken, then?
Mr Cahill : Some is upfront, I think.
Dr Richards : It is possible. The individual project needs to justify the rationale for an upfront payment.
Senator BIRMINGHAM: Is it expected the projects would run over a period of multiple financial years, and therefore payments be stretched over those financial years?
Dr Richards : The range of payments possible is $20,000 up to $5 million, so we expect that there will be a variety of multiyear and single year projects possibly coming through.
Senator BIRMINGHAM: What sort of work is envisaged in order to qualify for one of these grants? What sort of energy savings do you expect to have to be achieved and how would the department be verifying those energy savings?
Dr Richards : There is a requirement in the applications process to put in a baseline energy usage according to a national standard with appropriately qualified assessors, and then there is ongoing monitoring of outcomes as well as a forecast outcome of the measures.
Mr Cahill : The sorts of things that we are looking at are upgrades or retrofits to buildings or facilities, which go through to improved glazing, sealing of buildings, upgrades to allow airflow, air movement through free cooling and a range of other matters which are specified in the guidelines.
Senator BIRMINGHAM: Is there a minimum requirement for energy efficiency to be achieved for a grant to be approved? Obviously, there is a wide range of grants—$20,000 to $5 million—which means you are unquestionably comparing apples with pears, I suspect, across the range of applications you would receive. Is there a—
Mr Cahill : One of the criteria, which is about energy efficiency improvement potential, has 30 percent weighting in the merit assessment process, and we are very clear to make sure that it is cost-effective in the measured gains and the potential for gains from the proposal.
Senator BIRMINGHAM: If there is 30 percent weighting in this energy efficiency program to energy efficiency, what is the other 70 percent of assessment weighted towards?
Mr Cahill : The second one there is potential to encourage improved energy management practices. That is 30 percent. Project design, funding and management is 20 percent. Value for money is 20 percent.
Senator BIRMINGHAM: Obviously there is some overlap between value for money and at least the first couple of those areas.
Mr Cahill : Yes, and the focus of value for money is being able to demonstrate through quotes and other means that they are putting competitive pressure into how they approach the exercise.
Senator BIRMINGHAM: Then there is the Low Income Energy Efficiency Program, for which, you have indicated, funding does not commence until the next financial year. Is that correct?
Mr Cahill : Yes.
Senator BIRMINGHAM: When do you expect to begin seeking applications for that?
Mr Cahill : It is a different process. It is a consortia based approach, and we have called for expressions of interest today. The closing date for those expressions of interest is 16 March. We will then make an assessment of those expressions of interest, and then the successful consortia will be invited to submit applications. We think that will happen in May, with a view to enhancing the successful recipients in the later half of this calendar year.
Senator BIRMINGHAM: This is where groups such as Anglicare and other community groups would be expected to tender for being a service provider and from that to provide what type of services they envisage to the community?
Mr Cahill : Yes, and that is very much where they might partner with local energy distributors and such. To some degree it is similar on one level to the solar cities program, where consortia came together to bring their unique skills focused on a particular target group—in this instance, low-income households. We are looking for innovative practices and means to be able to identify better ways to support such households.
Senator BIRMINGHAM: Do you have an estimate firstly of the number of consortia that you are looking to partner with and secondly of the number of households you expect them to be able to target or work with?
Mr Cahill : I will answer the second part of the question first. We estimate that about 25,000 homes will benefit directly from this program. In terms of consortia, it is a matter of seeing what comes out of the expressions of interest. Experience would suggest that you get 7 to 8 to a dozen, so we will look at what comes out. Usually they are in regions. You will see some come out—one or two—in a specific region in one state and such, so there will be a good spread of those. We think it will be seven or eight or up to a dozen at most.
Senator BIRMINGHAM: It is said that 25,000 homes will benefit. How exactly do you expect them to benefit, and what are they going get as a result of that?
Mr Cahill : I will answer that at two levels. Firstly, we expect that they will get improved energy efficiency, which will mean that they can either improve their lifestyle at the same energy usage or reduce their energy usage. There is a range of things that tangibly would change in the home from better ceiling windows and such to education about when to turn appliances on and how to use different things and the use of whitegoods and such. Perhaps Dr Richards would like to add to that.
Dr Richards : No, thanks.
Senator BIRMINGHAM: Are there any limits on who or what types of organisations can be one of the lead bodies in that consortia that you are looking for?
Mr Cahill : I understand that the only caveat is—and this is the case, as I understand it, in the solar cities program—state and territory governments can be involved. We have indicated in the guidelines that state and territory governments can participate in the program and can be a lead consortium when it is shown that in their absence the consortium would not work. The second rule on that is that we are looking for a test of additionality: if they are in the lead consortium, we would not want to see any substitution of state and territory funding for these households by Commonwealth resources.
Senator BIRMINGHAM: But across commercial or not-for-profit sectors there is no limit applied in that regard.
Mr Cahill : No.
Senator BIRMINGHAM: Please talk me through the Energy Efficiency Information Grants program and how that is going to work and what steps you are undertaking for the funding of the program.
Mr Cahill : We called for the applications for round 1 of the Energy Efficiency Information Grants program as of this morning and we expect that round to close by 16 March. In terms of who is eligible, we are looking for industry associations or professional institutes that are engaged with small to medium enterprises and/or community organisations—and that have a range of other characteristics, including how they are registered under the Corporations Act—and also not-for-profit organisations that are engaged with small to medium enterprises or community organisations.
We are looking for projects located in Australia that are energy efficiency information projects directed towards SMEs and community organisations to ensure that the benefits resulting from that information, provided with grant funds, will devolve to individual small to medium enterprises and community organisations. What do I mean by that? I mean that we do not want to be in a situation—and we are quite clear about this—where it is distributed to franchises and so on. We want it to get to those people who would most benefit from the information about energy efficiency in the SME and community organisations.
Senator BIRMINGHAM: Do you have an expected number of groups that you will fund?
Mr Cahill : No, not at this stage. We will see what comes out of it. There has been strong interest in terms of when we did the consultation on the guidelines—
Senator BIRMINGHAM: The funding range for applicants.
Mr Cahill : Applicants under the program may apply for funding of $100,000 to $1 million in exceptional circumstances. We will consider going above the $1 million limit where a proposal demonstrates exceptional value for money.
Senator BIRMINGHAM: So somewhere between 440 programs would be funded, one would expect, out of $40 million.
Mr Cahill : It depends on the range and the mix that comes through.
Senator BOSWELL: I am interested in asking questions on these efficiency grants, which are $100,000 to $1 million and the $40 million's worth. You outlined who is eligible for the grants but I imagine it would be people like the small business groups, like the Confederation of Industry and those sorts of—
Mr Cahill : The industry association.
Senator BOSWELL: The chamber of commerce.
Mr Cahill : Yes.
Senator BOSWELL: Have no grants been awarded yet?
Mr Cahill : No, we only opened this morning for the calling of applications.
Senator BOSWELL: Will the minister have the final say on who receives the grants?
Mr Cahill : Yes, on the recommendation of the department.
Senator BOSWELL: If the minister has the say over the grants, what measures have been put in place to ensure that the awarding of grants is done in an unbiased manner?
Mr Cahill : We have put in place a range of internal processes to make those assessments.
Senator Wong: Just while the officer is finding that information, there is a general protocol in relation to discretionary grants, which applies across government, where ministers are required in certain circumstances to notify the Minister for Finance and Deregulation. So there is an additional process.
Senator BOSWELL: Will the unions be eligible for these grants?
Mr Cahill : They have not been ruled out but obviously, with the strong criteria focused on small and medium enterprises and community groups, it is a question of how they compete with other bodies.
Senator BOSWELL: How much influence does the government have over what kind of material and information these industry groups distribute to their members?
Mr Cahill : I will mention that the weighting for that is about the project effectiveness, which is 60 per cent, which talks about the frequency, depth and nature of past interactions, the delivery approach. We also put weighting on project design and management and value for money. Once an assessment has been made of the merits of a proposal and it is successful, then we will put in place a funding agreement based on the proposal. Are we going to be clearing education material? I do not envisage that we will be looking at it for technical accuracy and its merits but in terms of other than that.
Senator BOSWELL: What safeguards are you going to put into place to ensure that government or the department will not interfere with industry groups' methods of spending the grants?
Mr Cahill : Again we have a probity adviser involved in this whole exercise and we will be putting clear recommendations—
Senator BOSWELL: If the chamber of commerce—as a case in point—decided that they would take up your offer and they were not spending your money, or the government's money, or people's money in a way that you disagreed with, would you interfere?
Mr Cahill : In terms of their funding proposal, if they put forward a proposal that goes to how they are going to reach a constituency about energy efficiency—which is the focus of this program—and they intended to deliver it, our interference would be to say whether or not they were delivering it as intended in their original proposal.
Senator BOSWELL: So would view what the group—the small business group that wins the grant—would would be putting to their members?
Mr Cahill : As part of their funding proposal they would be submitting their approach to delivering educational material, which we would consider.
Senator BOSWELL: Would you be asking them to look at various technologies?
Mr Cahill : That is part of the design, to see whether or not in terms of depth and breadth of their approach they are doing classroom through to web broadcast and such.
Senator BOSWELL: Would the information you require to be looking at, say, renewable energy or something like that?
Mr Cahill : Again, the focus is about energy efficiency.
Senator BOSWELL: So it could be to promote renewables or—
Mr Cahill : No.
Senator BOSWELL: I read the department's guidelines, and apparently people can be up for a gigantic fine if they put their prices up and nominate a carbon tax for it. They have got to go through a whole paper trail process, is that correct?
Mr Comley : I believe what you are referring to is the powers that the ACCC has to pursue misleading and deceptive conduct. Questions related to that should be directed to the ACCC.
Senator BOSWELL: I take your point and I will—which leads me into: are you are you aware of the guidelines that impose severe penalties to industries that declare the cost due to carbon tax? Are you aware of their guidelines?
Mr Comley : I am certainly aware that the ACCC has been in the business of communicating to the public about their responsibilities under the act. I have not done a precise reading and analysis of those guidelines, because that is a matter for the ACCC.
Senator BOSWELL: Did your department give guidance or support in producing these guidelines?
Mr Comley : Not to my knowledge. My understanding is that the ACCC are providing information on the application of what is existing law. There is actually no new law associated with this new power. All that is being provided by government is additional funding so that they can exercise their current obligations under the act.
Senator BOSWELL: I will ask these questions of the ACCC. Given the fact that the carbon price will drive up the cost of electricity, gas, water and transport, won't that necessarily drive up the price of manufactured products? If someone wants to put their price up, do they have to specifically detail where the rises will come from?
Mr Comley : This is a matter for the ACCC, but I believe that the chairman of the ACCC has been relatively clear on this in saying that there is no obligation to justify where a price change comes from; however, if someone makes a claim that the price change is related to the carbon price then that claim must be substantiated.
Senator BOSWELL: What is the penalty if it is not?
Senator Wong: These are questions that should be asked of the ACCC.
Senator BOSWELL: Won't that just lead people to put the prices up? I suppose that is what the government wants: to put the prices up and not blame—
Senator Wong: No, what the government wants is—
Senator BOSWELL: I know what the government wants, and so do you.
Senator Wong: No, what the government expects is that the law of the land in relation to misleading and deceptive conduct is adhered to. As I understand from the evidence, some indication has been given by the ACCC as to how they will approach this particular issue; but, if you have particular details that you want to explore, they are available from the ACCC in the Treasury estimates.
Senator BOSWELL: I will put the question to the ACCC, but I want to put this question to the head of the department. If a manufacturer runs the risk of putting his price up and having someone say it is due to the carbon tax, and if the ACCC can investigate and wants a paper trail, won't it just lead to people saying, 'Generally we're going to put our prices up?'
Senator Wong: That is not a question for Mr Comley. Your question goes to how business might respond as a result of what the ACCC does. That is probably a question to the ACCC. It may not actually even be a question they would answer, but it certainly is not a question of Mr Comley.
Senator BOSWELL: I will ask those questions. The department clearly states that grants are there to deliver information from reliable and trusted sources to industry and small business to help them deal with the introduction of the carbon price. Who does the department view as a trusted source?
Mr Comley : I am not going to sit here and provide a list. The intention of the program is to have—
Senator BOSWELL: I am quoting your lot.
Mr Comley : But I think the context of that—and Mr Cahill may want to comment—is that the trusted source is really referring to 'trusted by the recipients of the information' so that you have a natural entree. I think we all know that many business associations have longstanding relationships with their members and are trusted by those people. So what we would be looking into is how likely the information is to be received and acted upon. We would look at an assessment of whether we thought that business association was trusted for that target audience. 'Trusted' is a word that people can load a little. It could be high reputation, high reach, appropriate reach or the reach claimed in the documentation. That is the sort of thing the officers would take into account when making that assessment.
Senator BOSWELL: In your guidelines you mention productive information. What would the department see as productive information on the carbon tax?
Mr Comley : This is where we need to look at the applications people are putting forward. The intention of this information is to allow people to take actions that have a positive effect on energy efficiency and allow them to be better suited to a lower-carbon economy. The test of 'productive', in a sense, is: 'Does it provide useful information that businesses can act on in their own interest?'
Mr Cahill : To add to the secretary: we do specify in the guidelines what we mean by the quality of information. In addition to those proposed information promises to be of high quality and that information addresses an area of relevant energy efficiency need for that targeted sector, we are also looking to see that they have access to appropriate technical energy efficiency expertise in the design and development of what they are doing, the focus again being about energy efficiency.
Senator BOSWELL: How does the department measure the effectiveness of these grants? Is there some measure you use?
Mr Cahill : Yes. As part of the project we are designing an evaluation framework.
Senator BOSWELL: What are the binding terms and agreements that an industry group must conform to to keep receiving these grants?
Mr Cahill : After we have made the merit assessment, made the selections and they have been approved, we would put in a funding agreement to ensure that deliverables and the approaches they have put forward in their proposal have been accorded to.
Senator BOSWELL: Thank you for that.
Senator McKENZIE: I have a follow-up to Senator Boswell's question. In the evaluation program that you outlined, does one of those include a decrease in energy production in that industry as a whole?
Mr Cahill : We are currently finalising the evaluation framework, but with any evaluation approach we would be looking at the objectives of the program as specified in the guidelines, so that is where we would be focusing.
Senator McKENZIE: Similarly, when you talk about industry bodies and small-to-medium enterprises, that would include farmer bodies like the UDV and BFF?
Mr Cahill : If they are classified as an industry association, yes.
Senator McKENZIE: When you mention the technical support available to those organisations to make sure the information they are giving to their members is relevant, specific and useful for those industries and enterprises to lower their energy emissions, how do you see that working given the diversity of industries that you are hoping to educate?
Mr Cahill : That is where we would be looking in the proposals. Some more significant industry bodies do have their own in-house expertise. Some will access consultants or whoever is the expert in the particular sector in which any proposal is aiming to deliver its education campaign.
Senator McKENZIE: So the grant could also include a research component?
Mr Cahill : Yes. It would need to include the relevant technical expertise; and, if that means research, so be it.
Senator McKENZIE: Thank you.
Senator BIRMINGHAM: I now turn to closing off and wrapping up the home insulation and green loans campaigns. On home insulation, we had some evidence last year about the number of invoices that had been sent out to try to recoup funds from non-complying insulation installers. My recollection is that there were around 2,000 invoices issued in May of last year seeking to recoup around $17 million from non-compliant installers and that when we last explored this around $700,000 had been paid and $1 million had been cancelled out of those invoices. We still had about $15 million outstanding. Is somebody able to give me an update on all of that?
Mr Cahill : As at end of January, the department has now issued 2,035 letters of demand to install the businesses under home insulation. Obviously, we do letters of demand for the industry assistance element of it, which is a handful, or letters to companies that are in administration.
Senator BIRMINGHAM: Do you have numbers for either of those two?
Mr Cahill : I have them—
Senator BIRMINGHAM: So it is 2,035 letters of demand sent to current installers.
Mr Cahill : I will get Ms Anne Leo to give you those specifics.
Ms Leo : We have sent 47 proof of debt notifications to the end of December 2011 and we have also sent 57 letters in relation to IIAP.
Senator BIRMINGHAM: So 47 proof of debt notifications to administrators and insolvency practitioners or the like, and 57 in relation—
Ms Leo : To the industry assistance program.
Senator BIRMINGHAM: And funds are being recouped through the industry assistance program because of—
Ms Leo : Where businesses might later have been found to be ineligible.
Senator BIRMINGHAM: We might come back to that but, sorry, Mr Cahill, I think I interrupted you in telling us at least about the 2,035 letters of demand as to how much they tallied up for and what you have managed to recoup.
Mr Cahill : The total notified outstanding debt we have is $18.1 million. If I said that is a subset—this is as of 31 December—$21.3 million total debt has been raised; this is under the home insulation program. We have collected $844,000 of that. We have also cancelled $2.3 million of that debt and that can be for a range of reasons, including whether the person has been able to show that they substantially delivered the work. We have also written off about $9,200.
Senator BIRMINGHAM: Around 2,000 invoices were issued in May of last year, and you have told us 2,035 today, so obviously there hasn't been a great increase in the number of letters of demand or invoices issued over that period of time. It is pretty much the same as it was back then—it is correct. In terms of the actual amount collected that appears to have gone from around $7,000 in October last year to $844,000 as of now—that is also correct.
Mr Cahill : Yes.
Senator BIRMINGHAM: Most of these debts are now outstanding for a period of eight months or thereabouts.
Mr Cahill : To some extent, yes.
Senator BIRMINGHAM: In fact, say, about $3 million roughly as either being collected or cancelled out, so there is $18.1 million as you have said in outstanding debt total. So what action is the department taking to try to recoup those debts?
Mr Cahill : We have a debt collection process operating within the department. We have also looked to the process of engaging external debt collection expertise which are in part of an RFT process we are finalising at the moment. Sorry, RFQ—a request for quote versus a request for tender.
Senator BIRMINGHAM: I am not sure I want to know.
Mr Cahill : I want to make sure I call it the right lexicon when it comes to the Commonwealth procurement framework.
Senator BIRMINGHAM: I have been through the RFTs and the RFPs but I am not sure I have had the RFQ.
Mr Cahill : I need to get my Ps and Qs right there, Senator.
Senator BIRMINGHAM: It is a new TLA for you to throw at us. You are obviously escalating the debt recovery process from an internal debt recovery service to an external debt recovery service.
Mr Cahill : Potentially, we are just looking at finalising that.
Senator BIRMINGHAM: Potentially or definitely intending to go through the process?
Mr Cahill : We have gone through the request for quote. We are in conversation with a preferred provider with a view of being able to say what can practically be achieved and what is going to present good value for money in terms of pursuing that. While that is our intent I want to be confident that engaging them will present good value for money for the Commonwealth. I would like to be more definitive than that but I want to make sure that it presents good value.
Senator BIRMINGHAM: Is this a proposal where essentially the Commonwealth is looking to sell its $18.1 million in outstanding debt to a debt provider?
Mr Cahill : No, it would be looking at their services. It is still the Commonwealth's debt.
Senator BIRMINGHAM: How many businesses are you looking at for that $18.1 million?
Mr Cahill : I will get Ms Leo to answer that. I will clarify that we are still working through the detail with the preferred provider in terms of how those debt arrangements will work.
Ms Leo : There are just over 1,800 businesses in relation to those debts that have been issued.
Senator BIRMINGHAM: These are all still businesses operating as insulation installers or at least all still businesses that exist on paper and have not gone into administration as far as you are aware?
Ms Leo : Some of those businesses may have gone into administration since the debt was first issued, in which case we would then be dealing with an administrator.
Senator BIRMINGHAM: Are you just waiting to hear that or do you expect that this next process will provide some information to you as to whether they have gone into administration or not?
Mr Cahill : We are still actively pursuing those debts concurrently within the department while we look at the other approach.
Senator BIRMINGHAM: There were 47 notifications of debt provided to administrators. What volume of debts are involved there?
Ms Leo : $2.6 million.
Senator BIRMINGHAM: That is an additional to the $18.1 million that is outstanding?
Ms Leo : Yes, it is.
Senator BIRMINGHAM: In fact we have $20.7 million of debts still trying to be recovered from the Commonwealth across the Home Insulation Program—ignoring the industry assistance program, which we will come to. I assume in that instance that, with the ones under administration, you are still awaiting information as to what returns the Commonwealth may be able to expect from that as to how many cents in the dollar you might get out of that $2.6 million?
Ms Leo : Yes, that is correct.
Senator FISHER: In terms of the $2.6 million owed by companies that are now in administration, is there a point at which the department will decide to write those debts off? There must be.
Mr Cahill : My understanding is that we need to wait for the outcome of that administrator before we make any decision.
Senator FISHER: Are there any that you have written off at this stage?
Ms Leo : Three debts have been written off in relation to HIP.
Senator FISHER: Of debts owed by companies now in administration or is this in addition to the $18.1 million and the $2.6 million?
Ms Leo : I understand that was not in relation to companies that might have been in administration.
Senator BIRMINGHAM: That is the $9,200—
Mr Cahill : That is the $9,200 for three.
Senator FISHER: Mr Cahill, in response to Senator Birmingham you said that you were ensuring value for money for the Commonwealth, in terms of the $18.1 million outstanding. Does that encompass writing off some of the debt simply because it is not value for money to pursue it?
Mr Cahill : That will be a deliberation at some point where we will look at what is economic to pursue on behalf of the Commonwealth. At this stage we are looking at what mix of services the external service can provide for getting the best return for the Commonwealth's investment.
Senator FISHER: So there is a prospect that some of the $18.1 million will just be written off by the Commonwealth as uneconomic.
Mr Cahill : I think that is a reality under the FMA Act. At times you have to make that judgment call. What portion, I am not in a position to tell you.
Senator FISHER: That you, Mr Cahill. Hindsight.
Senator BIRMINGHAM: In regard to the companies that are in administration, is there a process, when it comes to writing off the debts, that the department considers—or indeed if it goes up to the minister that the minister considers—where, in line, the government and taxpayers stand for these debts versus small businesses or others who may also be caught in the web of administration for these companies?
Mr Cahill : My understanding is that we take a spot in the line with the other people that are creditors to the company. At the end of the day the administrator makes that judgment call. Then, given the outcome of that decision, it is a departmental official who will make the judgment call of what is written off.
Senator BIRMINGHAM: In terms of the industry assistance grants, how is it that 57 instances of wrongful industry assistance grant payments have been made? These are the grants, in my recollection, that were being made after the Home Insulation Program was brought to its abrupt closure and industry cried out for help. The package was put forward to assist, given the dramatic change in circumstances for the industry. This is what we might loosely describe as dodgy installers, that others have claimed grants they were not eligible for under the initial Home Insulation Program. What has transpired here to bring about these 57 instances of—
Mr Cahill : I will probably have to take that on notice. What I do have is the figures here at the moment. I am broadly aware that these are instances where we subsequently—through other information—understood that they were not eligible. Beyond that, I will have to take the question on notice.
Senator BIRMINGHAM: Is there a total value for the debts outstanding from those 57?
Mr Cahill : Yes. It is $5.39 million.
Ms Leo : It was $5.244 at the end of December.
Senator BIRMINGHAM: That pretty much brings the total outstanding to approximately $26 million across the three categories.
Ms Leo : Yes, that is right.
Senator BIRMINGHAM: I note you have taken it on notice, Mr Cahill, but are you able to give me some example of the type of breach that would have occurred in that regard?
Mr Cahill : I am not in a position to do that. I just do not have the information with me. I have not been a part of that element of the program in detail.
Senator BIRMINGHAM: Except that you are a new face at the table to answer these questions.
Mr Cahill : If I knew, I would give you the answer. I will take that on notice and get back to you as soon as practicable.
Senator BIRMINGHAM: What you realistically expect to be recoverable out of these is probably a subject of negotiations with the debt collector you are working with.
Mr Cahill : And our own internal processes. It is about getting the right mix, about where we put our effort to get the best return and about using other capabilities that exist in the market.
Mr Cahill : And our own internal processes. It is about getting the right mix of where we put our effort to get the best return and using other capabilities that exist in the market.
Senator BIRMINGHAM: Okay. My understanding is that, in terms of prosecutions, last time we met there was one incident under the Home Insulation Program in the hands of Commonwealth prosecutors and there had been 35 warrants relating to the activities that had been executed by the AFP at that stage. Have there been any changes with regard to prosecutions or other activities on the enforcement side?
Mr Cahill : No. At this stage we have the one matter referred that you have just mentioned. Other than that, we do have a range of investigations continuing within the department, and it is probably not appropriate that I comment any more on the progress of those at this stage.
Senator BIRMINGHAM: With more than 2,000 instances of people making wrongful claims under the program, I think most Australians would feel that we are right to try to get the money back from them, but surely there should be something more than just trying to get the money back from at least those who appear to have more of a track record of rorting the system to some extent. There is no consideration being given to further prosecutions for all of those wrongful claims?
Mr Cahill : We have a compliance framework we have put in place. There is obviously one end, if I put it in a continuum, where you are looking at debt recovery subject to certain criteria where you see instances where there is more of a pattern or other reasons—I am not a lawyer—that go into intent. Then we would refer that to investigations. We do have an active investigation case load. We have also referred matters to the Australian Taxation Office and to state and territory regulatory bodies with a view to making sure that there are a range of other regulatory bodies that exist that can also take appropriate action as well.
Senator BIRMINGHAM: Are you able to tell me what the largest outstanding debt is amongst those invoices that have been issued?
Ms Leo : I do not have that detail on hand. I will need to take that on notice.
Senator BIRMINGHAM: Thank you.
CHAIR: On compliance I have a couple of questions myself. Has the opposition sought any advice from the department on how direct action would be complied with?
Mr Comley : No.
CHAIR: Have you seen any compliance measures associated with the so-called 'direct action policy'?
Mr Comley : You might ask a whole sequence of questions. We prepared advice in the context of incoming government briefs, as is normal; but, as you can imagine in the context of that sort of briefing, it does not necessarily go to the level of detail we are talking about here, so in the context of serving the government of the day we have not done additional work on aspects such as the compliance regime you might put in place.
Senator FISHER: Mr Cahill, further to your answers to Senator Birmingham about prosecutions, what, if anything, does the department know of the prosecution by Consumer and Business Services in South Australia of a firm called Golden Boss Pty Ltd. It is a prosecution in the Adelaide Magistrates Court for carrying on business as a building work contractor without a licence as required under South Australian legislation in respect of installations under the Home Insulation Program.
Mr Cahill : We are aware of it but do not have any of the detail there. It is a state and territory matter in terms of the action they are taking at this stage.
Senator FISHER: Yes—South Australia is the only state that had any sort of licensing requirements at all in respect of this work. We have discovered at previous estimates that there was no insistence from the Home Insulation Program that installers be so licensed. However, the South Australian department did attempt, it says, to get licensing from this particular firm. So do I gather from what you said that the department was not involved in that prosecution at all?
Mr Cahill : No.
Senator FISHER: Okay. Are you aware that, at least as far as reporting goes, the firm Golden Boss Pty Ltd admitted that four of the 10 installations done under the Home Insulation Program and the subject of the prosecution were not done according to the appropriate standards?
Mr Cahill : No, I am not, but I can take that on notice to check within the department.
Senator FISHER: Would the department expect the state left hand to speak to the federal right hand and let you know of that? It is shoddy work done under the Home Insulation Program by a contractor who also happens to be unlicensed under the South Australian laws.
Mr Gleeson : The states and the territories have the jurisdiction for the standards and for the licensing. The Commonwealth does not do individual licensing of installers.
Mr Cahill : We liaise with state and territory counterparts and have a range of intelligence sources that give us information where something has happened not in accordance with the standards of the Home Insulation Program. As for the specifics of the case you are referring to, I do not have that information in front of me.
Senator FISHER: Can you answer on notice whether there has been any information provided to the department about the standard of the work done by this particular contractor in, at the very least, the instances that are the subject of the court case?
Mr Cahill : We certainly can.
Senator FISHER: Mr Gleeson, I take your point in terms of licensing. In this case it was only South Australia that had a requirement anyway, but the standard of the work is the particular point I am trying to pursue with the department now. Given that the company itself admitted that four of the 10 jobs it did—the ones identified publicly—were substandard, will the department now be pursuing that company to recoup the moneys paid to that company for substandard work?
Mr Cahill : I think it is best I take it on notice and have a look at what information we have within the department as it relates to the case you have raised today.
Senator FISHER: Thank you. The Acting Deputy Commissioner for Consumer Affairs in South Australia, Dini Soulio, put out a press release on 20 January. It read:
"This company was one of many set up specifically to install home insulation and benefit from the $1200 Federal Government rebate," he said.
"It appears they came to South Australia from New South Wales when the market there became flooded with competitors.
So they came to South Australia. They did not bother to license as required by South Australian laws. There were four of just 10 jobs identified by this company, which allegedly did almost 2,000 installation jobs in South Australia under the Commonwealth Home Insulation Program. Is it fair to ask whether the other 1,990 jobs that that company did are going to be littered with a whole lot of substandard jobs?
Mr Cahill : We have a process in place where we get intelligence about a company and have a look at the work they have done. It is probably unreasonable to look at all 2,000 installations.
Senator CASH: Sorry? I could not hear.
Mr Cahill : There are two things here. There is obviously, as Mr Gleeson said, the state and territory responsibilities under their licensing arrangements. In terms of the Home Insulation Program and our compliance work we look to identify instances where organisations have claimed funding under that program and have not met the conditions of the program. We receive any intelligence and we have a look at what other work we have. Obviously we have had Transfield doing inspection work and we would marry them together and then make a judgment call on each individual case about what debt or other action we might take. In terms of that specific case, as I mentioned, I will take that on notice and look at what action we are taking.
Senator FISHER: Thank you, Mr Cahill, because here is some intelligence, admittedly reported through the media, that 40 per cent, four out of 10, of the identified cases of installation were shonky. So 40 per cent of 2,000, they may be up to 800.
CHAIR: Was that the Murdoch press?
Senator FISHER: A spread, actually. Mr Cahill, would the department consider identifying the householders who had the 2,000 jobs done and write to those 2,000 householders to alert them to the fact that their work was done by an unlicensed installer, an installer who had been the subject of proceedings before the Magistrates Court and an outcome, and that those households might like to take up the federal government's offer of calling the hotline to request an inspection if they are concerned? Wouldn't that be a fair thing?
Mr Cahill : There are two issues there, Senator. Firstly and obviously in terms of the state and territory jurisdiction and the regulatory environment they are in.
Senator FISHER: Leave that aside and look at the quality of the work.
Mr Cahill : We have an approach in the compliance area where, depending on the intelligence we receive and the information, we will go through an exercise of either contacting a handful through to the full range of all households to test assertions about whether or not things have been installed. In terms of the safety program we have been quite open about people taking the opportunity to ring up and contact us at any point in time and call for an inspection to have a look at what is going on. That is the mix of the both the compliance work we do and asking people to put their hands up if they would like an inspection. There are around 200,000 homes that we have done safety inspections on already.
Senator FISHER: I do appreciate that, Mr Cahill, but off the top of my head, if I recall correctly, of the around 38,000 home insulated in South Australia about 17,000 were insulated by installers unlicensed under the South Australian laws as required, so in contravention of SA laws. Yet, I think only maybe 300 South Australian householders had requested inspections under your scheme. Yes, they can, but the message still seems to not be getting through even though, if you are a guessing person, you would have to ask if you are not licensed it is unlikely to be a pretty picture. Exhibit A with Golden Boss Pty Ltd.
CHAIR: Is there a question, Senator Fisher?
Senator FISHER: What do you think of that, Mr Cahill?
Mr Cahill : All I can say is is that we have had over 200,000 homes inspected which is well in excess—
Senator FISHER: Yes, but it is still in the hundreds in South Australia. Is the department aware of any other companies who installed in South Australia being prosecuted for doing home insulation under the program without being licensed as required under the South Australian laws?
Mr Cahill : Not to my recollection. I could make some inquiries but, realistically, I would have to see what the department holds on prosecutions and such undertaken in the states and territories.
Senator FISHER: Would that not be a standard question that the department prudently would ask?
Mr Cahill : I think we do monitor most of the regulatory activities that happen in the jurisdictions as they relate to the Home Insulation Program. I will have to take that on notice.
Senator FISHER: My final question is not entirely on the same point. The chairman's favourite press reported on 26 December about financial institutions being raided by Federal Police investigating alleged fraud under the Home Insulation Program. I presume the report was relatively accurate. Were any financial institutions in South Australia raided?
Mr Cahill : I will have to take that on notice.
Senator FISHER: Thank you; and if so, how many?
Mr Cahill : Okay.
Senator BIRMINGHAM: Continuing on the Home Insulation Program inspections, you provided in response to some questions on notice, most recently No. 204, detail of travel undertaken by inspectors. I was quite surprised to see the detail of how many inspectors seemed to be travelling and, in particular, the directions and places they seemed to be travelling from and to. Why has it been necessary for inspectors to undertake seemingly multiple flights—for example, from Brisbane to Melbourne and from Brisbane to Perth—to undertake the inspection program?
Mr Cahill : As you would be aware from the response to that question, we put in place a contract with Transfield Services who have put in place a range of contract teams in certain locations across Australia. The important thing was for those teams to have a certain level of training and expertise. Then those teams had to be put in a position based on where you think the work is going to be. In these instances, one of two instances have been the case: either we do not have any local teams there because we were not expecting very high volumes and it was not worth putting a permanent contracted expert team in that area or, in some instances, there was a surge of an extra bit of work in a region where the capability did not exist. It was about getting the right balance between where you locate the team and how you can move the teams around to assist where there is an unexpected or higher take-up.
Senator BIRMINGHAM: There seemed to be multiple flights from Brisbane to Melbourne—Brisbane seems to be a centre where there was a surplus number of inspectors—from Brisbane to Perth, from Brisbane to Townsville for many inspections to take place in those other centres of Melbourne, Perth and Townsville. Why is it the case that there were not inspectors on the ground in those major centres. When we are talking about needing to send an inspector to King Island, I appreciate it is more efficient to send somebody to King Island than to train somebody up on King Island. Surely in major centres, especially like Melbourne and Perth and even, by the looks of the numbers, Townsville, the number of inspections would justify using local people?
Mr Cahill : I will ask Mr Painting to expand. My understanding is that in some instances—again, if you look at the period of four to five months, there is not a pattern—we had to move a team. That could either be for expertise, to make up a backlog or something to that effect.
Mr Painting : Over the life of the safety inspection program, the volume and regularity have not been constant. There have been periods of time when there were significant numbers of teams in the areas you mentioned. But depending on the timing of the program, they are not always there as we got nearer the end. There have certainly been teams distributed all over the major places. The other reason for moving people is for specialist inspections, not routine ones, that required either electrical-type skills, roof plumbing or some sort of specialist skills that are not required in many inspections, but are required in some of them. Brisbane is obviously a base where there is technical expertise of electricians for the foil inspection program, because that was where the foil was concentrated. But there were some foil inspections in various places, so that team was sent around as well. Over the two years of the life of the program, doing 240,000-odd inspections, not all of the teams are in situ in all of the places all of the time.
Senator BIRMINGHAM: Will there be data from the inspection program published on the outcome of the couple of hundred thousand inspections?
Mr Cahill : At this stage, as with any program, we would look to evaluate the outcomes of the Home Insulation Program itself and obviously look to publishing the outcomes of that evaluation—as we would with any government program.
Senator BIRMINGHAM: As this program has proceeded, the department has collected data on the inspections that have been undertaken.
Mr Cahill : Yes.
Senator BIRMINGHAM: That data includes whether work was satisfactory, sub-standard or dangerous.
Mr Cahill : Yes.
Senator BIRMINGHAM: At the conclusion of the program, will a summation of all that data be made available to the public?
Mr Cahill : That is the intent.
Senator BIRMINGHAM: It has been put to me, through constituent correspondence, that there are instances of households being offered a second inspection, under the program, when it appears that there is not an appropriate record of the first inspection. Has the department seen or heard of any instances of that?
Mr Painting : Yes, I am very much aware that there has been an instance of that. We undertook a reconciliation of householder contact towards the end of last year as we were trying to think about closing the program and where we were up to with people at various stages of the core cycle or contact with the department. We were identifying those in particular areas—relative risk areas or whatever we decided to recommend for inspection. It is a bit like Senator Fisher's comment earlier about where we should take extra effort to contact certain groups of people.
We sent letters out to those people and we had a few calls back from people who said, 'Thanks very much but we've already had one.' Once we got a few more of those we did a quick check of the database. So it is not true to say that we did not have a record of those being done. Simply what had happened is that with a particular batch of data, when it was translated into a broader mail merge, a group was missing. We found out—once we had got a few phone calls and did an interrogation—that the batch that was missing was all done by the same company. We quickly did a reconciliation and found those out. There were several hundred of them. Having said that, there was some interest around the fact that what it may have translated into is duplicate inspection costs—that if someone rang in and said, 'Yes, I'll have another one' they would have got it. We can confirm that would not have been the case because once we tried to schedule it we would have soon realised. We did not go back and rewrite to all of those we identified but, as I said, it was the courtesy of the few people who rang and alerted us to it. We have identified every case and rectified it.
Senator BIRMINGHAM: I do not have the home insulation data with me but I recollect there was some area of investigation, prosecution or debt recovery happening in that original program as well. I want to check whether that is ongoing or concluded and whether all the Green Start activities are now on track for finalisation.
Mr Cahill : I can tell you that at this stage we do not have any outstanding debt in the Green Loans space. We basically have 30 assessor organisations that we have not made payments to, that we have withheld, to the value of about $420,000. We are going through some review and compliance work before we either release or intend not to pay the organisation. That is something that is in advanced stages. We are also working through the results of some work that we had done by ACOM, some audit work through our compliance framework, with a view to having a look at whether there are any cases where we need to notify the assessors of whether we believe there is potential debt. Then they have to be able to prove the work has been done to a standard before we decide whether to not pursue or to raise a debt with them. That is intended to happen in the coming months or so.
Senator BIRMINGHAM: There is $420,000 of payments withheld under that program. Those programs must be pretty long in the tooth, Green Loans itself having been—
Mr Cahill : Yes, they have been with us for some time. They are with only 30 assessors or assessor organisations, and we have been looking at those closely.
Senator BIRMINGHAM: What seems to be the cause of delay in ascertaining those payments? Are you still awaiting further information back from those 30 organisations, or are you still going through your own assessment procedures? I would have thought that those debts are probably at least one year old, if not older.
Mr Cahill : I am conscious that we are making a line of inquiry in intelligence to decide what course of action we might take regarding compliance or fraud or whatever that might be. Obviously, that is something that you have to make sure you have done the right assessment before you take action. Again they are pended claims. At times when we have pended claims, in other words, held them back, we will have the organisation come forward and say, 'I want to be paid,' and at those points in time we often say, 'Well, to make that payment this is the extra material and evidence we need to support your application.' In these instances we are still deliberating on those 30.
Senator BIRMINGHAM: Have any organisations related to the Green Loans program, including any of these 30, initiated any proceedings against the Commonwealth?
Mr Cahill : Not to my knowledge, but I will take that on notice.
Senator BIRMINGHAM: Can I pose that same question in the home insulation space. Have any businesses associated with home insulation programs initiated proceedings against the Commonwealth?
Mr Cahill : Not to my knowledge. Again, I will take that on notice.
Mr Comley : Just to be clear, there have been organisations that have lodged under the claim for defective administration. The answer just provided referred to legal action.
Senator BIRMINGHAM: And the question was intended to be legal action. Thank you.
CHAIR: Mr Cahill, can you give me a quick briefing on where the national solar schools funding is up to?
Mr Cahill : You may be aware that we have just finished the 2011-12 funding round for the National Solar School Program, and they were announced on 24 January. There is another round to come. 784 Australian schools were successful in obtaining a national solar school grant, and they will share in $25 million in grant funding. Almost 2,000 applications were received by the closing date, so it is quite competitive and there is a strong interest in the program from the school community. It is important to acknowledge that those schools that were unsuccessful are able to reapply in the round that is coming up shortly. The program has continued to be successful in that regard. We continue to solicit interest from various schools registering to put their hand up for the coming round.
CHAIR: What type of initiatives are schools proposing?
Mr Cahill : There is a range of things. They will go from putting in solar installations and water tanks to educational elements, which is quite an important feature of the program where the use of meters and such are able to demonstrate the educational benefits not only to the children in the school but the broader community that goes through the school on various days.
CHAIR: Is the National Partnership Agreement still outstanding?
Mr Cahill : I understand that all National Partnership Agreements have been signed as they relate to the government school sector.
CHAIR: Is the delivery of this a joint state-federal government initiative?
Mr Cahill : My understanding is that the National Partnership Agreement approach put in place for the latest round enables two things for the states and territories and the government schools. Firstly, they are able to adjust their parameters. It is usually a $50,000 minimum and some of the jurisdictions have elected to say that they would like to spend less than that—say, $20,000 or $30,000 per school—and have more schools in their jurisdiction put in place. The schools have an oversight role and work with the assessments quite closely with the department. We found it to be quite successful as an arrangement for the government school sector.
CHAIR: One of the areas in which I have seen some discussion is the green buildings program. Who handles the green buildings program?
Mr Bailey : That is me.
CHAIR: What I have seen, Mr Bailey, is that some of the low hanging fruit for energy efficiency is reengineering buildings. Is the green buildings program part of that type of initiative?
Mr Bailey : Just to clarify, the green buildings program is what the government has called Tax Breaks for Green Buildings program. The idea is to provide a tax-based incentive for energy efficiency retro fit to improve the energy efficiency of particular buildings. It is a supply-side measure that is designed to encourage and increase the number of such investments. I am not sure whether it is low hanging fruit, but certainly one of the key issues in that program is trying to create a demonstration effect so that more building owners can see the potential for investing in the energy efficiency of their buildings. In another program that we administer, which is the Commercial Buildings Disclosure program, there is some evidence that buildings that have a higher energy efficiency rating are able to offer better capacity utilisation and better levels of rental because of the energy efficiency that they offer tenants. So those two programs together, one on the supply side and one on the demand side, are certainly trying to increase the awareness of building owners of energy efficiency investments.
CHAIR: This is another issue which would seem to me to be related to that: the regulatory impact analysis of the Residential Mandatory Disclosure program. Where is that up to?
Mr Bailey : There was what is called a 'consultation regulatory impact statement' released in about September of last year. That was looking at the costs and benefits of mandating the disclosure of the energy efficiency of a house so that potential renters or purchases of that house are well informed about its energy efficiency performance. I think one of the key issues in that analysis was the differing costs that could be imposed upon household owners for complying with that scheme. There are quite a wide range of alternatives that were looked at. They ranged from almost a self-assessed checklist that was estimated at about $50 to comply with to, at the other end of the spectrum, $800 for a professionally done assessment. That consultation is now the subject of further discussions with stakeholders, and there is quite some way to go before we endeavour to have a decision RIS completed.
CHAIR: What is the difference between the $50 job and the $800 job?
Mr Bailey : Fifty dollars is a checklist that the householder would complete themselves. Eight hundred dollars would be a certified inspector coming in and doing a much more rigorous and thorough rating of the energy efficiency of the house.
CHAIR: So would that just be looking around for obvious problems, or do they do those tests for leakage of energy from and into the house?
Mr Bailey : That is right. It is insulation in the roof, windows, window treatments and so on.
Senator SINGH: Is the green building component in commercial buildings you were talking about earlier still using the NABERS rating system?
Mr Bailey : Yes.
Senator SINGH: And the federal government as a tenant looks for those buildings that meet a certain star rating under NABERS when it is looking for buildings to rent itself?
Mr Bailey : Yes. Perhaps I will deal with those two points separately. NABERS is used in the Tax Breaks for Green Buildings program as it was proposed last year. I should say in passing that the design of that program was the subject of further consultation after feedback was received from industry stakeholders. Quite separately, the government has its own policies on energy efficiency and government operations, and there the government sets targets for the types of buildings that it will rent and the improvements in energy intensity that it aims to achieve over a number of years.
Senator SINGH: And how is that going? Are there a decent amount of buildings available for lease in that regard? I know in Tasmania there is one developer, for example, that has really tried to meet that high standard when it comes to offering its buildings for lease under this scheme but also in seeking out certain types of tenants—for example, the federal government and the kinds of businesses that actually want to rent in those kinds of buildings.
Mr Bailey : In the most recent data on government operations it looks as though the government is on track to achieve one of the two targets that it set itself for energy efficiency and its own operations. Tenant lighting and power has a target there related to the megajoules per person per year. It is a measure that is normalised for the number of people who are using the building. The government is on track to achieve its targets. I think it is close to achieving a 35 per cent reduction in energy intensity per person between today, when the most recent data came out, and the year 2000.
The second target relates to base building systems: heating, ventilation and air conditioning. The most recent data is not quite so encouraging, and that likely reflects the fact that a lot of government leases are for five, 10 and 15 years. When the government takes long leases like that, there is a certain technology in the base systems of the building that is locked in. So improvements in that area are much slower than in the case of lighting and power, where it is much cheaper to do a retrofit and improve energy efficiency. There is also, on the base systems, the influence of heritage buildings and mixed-use buildings where it is quite complex to get a quick improvement in base-system efficiency.
Senator SINGH: In relation to the RIS that is still going through with the mandatory residential disclosure, what rating system will that be using? It will not be NABERS, will it? It will be some other kind of rating system for energy efficiency?
Mr Bailey : The rating system used for residential houses is calledNatHERS. It is a different rating tool entirely to the one used for commercial buildings.
Senator SINGH: What does it stand for?
Mr Bailey : I will have to take that on notice. The NatHERS rating tool is focused much more on the thermal shell of the house as opposed to a commercial building, where the base system is also quite important.
CHAIR: I turn to the mandatory energy performance standards for appliances. I noticed recently on dishwashers and washing machines there are two energy ratings. One is water usage—I do not know if it is an energy rating—and the other is power usage. Obviously when you use water there is a component of power to pump the water to your house and pump it through the machine. It seems a bit confusing as to which is the more beneficial. Is it low water or is it low power? Which is the more economical? All you get is the stars on water and power and you have to make a judgment as to which is the more beneficial. Is there any area where consumers can see what the best approach is, or is there a need for a new look at this: say, energy intensity, including water, for an appliance?
Mr Bailey : The rating system that is given to appliances under the MEPS program is very much the result of quite specific analysis of each individual appliance. If you would like me to go back to the analysis that was done on dishwashers, there is no one formula. There is quite a separate analysis for fridges and for other major appliances in the home. But a lot of the information for consumers that came out of that work is listed on the LivingGreener website, which people can find by going to the department's website and following the links.
CHAIR: In terms of water consumption, because of the weather we have had over the last 12 months or so it has gone off the radar, but if you were here two years ago water was a huge issue. To me this is an ongoing issue and I think we agree on the issue of water consumption. I do not think the star-rating on water consumption tells you a great deal. It does not tell you the cost of the water consumption. Is there a need to have another look at this to bring down energy use and water use?
Mr Comley : The water issue is, I believe, a SEWPaC responsibility, not us.
Mr Bailey : It is the department of the environment. You may want to raise it with them in their estimates.
CHAIR: I can manage that. They are on tonight so I can ask that question. I just am interested in what the relationship is and whether there is a better measurement for consumers.
Senator Wong: I cannot recall what precisely goes into measuring the water and how those ratings in terms of water efficiency are gained. I suppose that the answer might be that they are tracking different things. If the consumer is prioritising water efficiency over energy efficiency they may have some capacity to make that decision.
CHAIR: Water consumers are trying to track the dollar efficiency and, because you have a cost to part and a cost to water, I think it is hard to define the cost of water on that individual piece of equipment. Washing machines and dishwashers, I think, are the two components of that. It is just something I am interested in; it is not the be-all and end-all of this issue.
Mr Comley : You may be right.
Senator FISHER: It is done state by state so you could not have a national system anyway.
Mr Bailey : I think in the work that is done the cost of water is not a major issue. It would be more focused on the volume of water being used. As you would know water prices vary state by state whereas the labelling system that we use is a national system.
Senator BIRMINGHAM: How close does the department think it is to achieving national standards or targets for energy efficiency and are you concerned at all that some states are going to appear to be going it alone in terms of setting energy efficiency standards?
Mr Bailey : I guess it depends upon the area that you have in mind. For product we have a national system. For houses, if that is what you are alluding to, that is currently an area where there are differing approaches and that regulatory impact analysis that I referred to earlier is part of that dialogue with the states around trying to get to a single national system.
Senator BIRMINGHAM: Victoria, I think, is setting new standards in place. Is that correct, Mr Bailey?
Mr Bailey : Victoria have a different approach to other states. I do not know the details of their system but it is somewhat different to the national system that is being discussed.
Senator BIRMINGHAM: If you do not know the details, that is fine, I will put some on questions on notice in that space.
Mr Bailey : In relation to an earlier question, NatHERS stands for Nationwide House Energy Rating Scheme.
CHAIR: I knew you would come up with the answer before knock-off time. Thank you.
Proceedings suspended from 15:43 to 16:03
CHAIR: Minister, I neglected to indicate that we have finished with program 1.2. We now move to program 1.3. I call officers from the department in relation to 1.3: 'Adapting to Climate Change'.
Senator BIRMINGHAM: I start with the Climate Commission and their expected forward schedule of activities. Greetings, Professor Steffen. Have you concluded your initial circuit of events that were held around the country? What is currently planned?
Prof. Steffen : We are going to continue our forums around the country, but there will be two changes to our program compared to 2011. Last year we focused very strongly on regional centres. We had 11 or 12 forums during the year. This year we are going to cut down on the number of forums and try to do each one with a little bit more thoroughness—spend more time with the local communities and so on. We are also going to go back into some of the capital city areas—not right in the centre of the cities but to some of the suburban areas around the capital cities of Sydney, Melbourne Brisbane and so on. Our first forum, however, will be next week. It will be in Tasmania. We did not get to Tasmania last year, so that was our No. 1 priority this year. We will have forums in both Launceston and Hobart. I think one thing is to be a little bit more targeted and spent a bit more time in each location.
Probably around May we will also be releasing our international report. We are focusing really on three things in terms of the commission's issues that we deal with. One is on the science. That is the one that I am most heavily involved with myself. But we also look at the economics of carbon mitigation—how does a carbon pricing system work, what is it meant to do et cetera—and we have the economists to do that. The third thing we are going to release in May is our international report, which is: what are other countries doing or not doing in their efforts to mitigate climate change? Those are the three topics we are going to be dealing with this year.
Senator BIRMINGHAM: Professor Steffen, before I move on, just to finish off on forums and so on, you are going to Tasmania shortly. Is there a published forward schedule of what you will be doing and where you will be doing it?
Prof. Steffen : Yes, that is being developed. It is still under review this week. I was over at the department before I came here, and they are still finalising the places we will visit. But it looks like we may visit places like the hydroelectric commission, which is now really branching out into other areas of renewable energy. We will probably visit Forestry Tasmania. We will visit some community groups and have some business breakfasts and lunches and so on.
Senator BIRMINGHAM: The department is operating a range of other programs to try to improve community awareness. In particular we have canvassed some of those in relation to the foundation campaign and the way it works. Obviously there is, more generally, the advertising campaign and that type of communication activity, but has the commission been consulted at all on how the foundation campaign in particular works and how those funds may best be deployed to engage the community?
Prof. Steffen : To the best of my knowledge I do not think we have—although Tim Flannery, the chief commissioner, may know more about that. I think there is a reason for that. We were set up to be independent of government and, although we have a secretariat in the department that supports our activities, we do jealously guard our independence. We try to stay clear of any advertising campaigns or things like that. We attempt to be as straight and neutral as we can in talking about these three aspects of climate change.
Senator BIRMINGHAM: It strikes me that—and that is why I focused in on the foundation campaign; you may not know the details of it, Professor Steffen—at least the stated aims there, which appear to be to improve community understanding of issues around climate change and the policies in response to that—and I am sure Mr Comley will correct me if I am misinterpreting what the aims of the foundation campaign are—seem very much in accord with the aims of the commission.
Prof. Steffen : I think there is a subtle difference there. The commission's role is not to comment on or take sides on any particular policy, whether it be the policy of the government or of the opposition, on how to deal with climate change issues. Our role when it comes to economic instruments or pricing is to explain from an economic point of view, from fundamental economics, why that approach would be used, what it is meant to do, how it would work, how its changes behaviour and so on. We also talk about direct action as a form of at least shadow pricing also on carbon and emissions. Our role is not to say whether direct action or a formal carbon price, be it an ETS or a tax, is the way to go. It is to explain to people how this actually works—how it affects emissions, how it works through the economy and so on. In that regard I think it is a subtle but important difference from a campaign to explain or promote a particular policy.
Senator BIRMINGHAM: Is the paper you are releasing in May this year, the international report, as you have described it, being prepared in-house or has the commission engaged others to assist?
Prof. Steffen : It is mainly the work of the commission and the lead commissioner on that is Roger Beale who may be familiar to many of you. He has sourced a lot of his information from documents available overseas and also from his own overseas contacts. We do have support from the secretariat in making them into nice, attractive documents. We take full responsibility for the content of those documents. As you may recall the first one that we released was The critical decade which I was the primary author on. We had support from the secretariat, but in the foreword to that report I take full responsibility for the veracity of what was said in the report. I would do the same thing for the other reports.
Senator BIRMINGHAM: Do anybody other than the fellow commissioners consider Mr Beale's work before it is published?
Prof. Steffen : Yes, we try to get a form of peer review in terms of people who understand that aspect of climate change. So we will send that around to other people who are experts on international activity and action and get their comments and take that into account. When we did The critical decade, I sent it around to at least 20 eminent scientists in various aspects of climate change to get their critical review. We also operate with a scientific advisory panel for the climate commission. I am pleased to announce the chair, Professor Matt England from the University of New South Wales, is actually in the audience today. That is a very good question. We do try to ensure as best we can the highest quality. You are absolutely right. We do try to get critical comment from experts in the field before we publish these reports.
Senator IAN MACDONALD: These are really questions to the minister or the secretary. I have questioned before the role of Professor Flannery as chairman of the commission. I am not sure if you are aware of an incident alleged to have happened with Mr Flannery and Ray Hadley, one of the talkback commentators. Professor Flannery apparently was interacting with Mr Hadley who accused Professor Flannery of sending people round to harass and ask questions. Professor Flannery accused this person David of being an employee of Mr Hadley, an accusation that was just plainly incorrect. It is part of this series of events. It is reported that this neighbour of Professor Flannery's at his waterfront property at Port Macquarie was confronted by Professor Flannery. Apparently he went round to his house and there was quite an altercation. Are you aware of that report, Mr Comley?
Mr Comley : I am aware of the issues surrounding the discussion of Professor Flannery's residence that occurred on the Ray Hadley program. I am aware that around the same time a newspaper published what I think was a Google map photo of the location of Professor Flannery's residence. I am not aware of any allegations related to an incident between Professor Flannery—
CHAIR: Senator Macdonald, can I just indicate this is really stretching what we are dealing with in terms of this output. First of all, Professor Flannery is not here. Secondly, I am not sure that it actually relates to what we should be asking in this portfolio outcome.
Senator IAN MACDONALD: I am asking the secretary if he aware of the allegations. I am not asking whether the allegations are right, wrong or indifferent. Mr Flannery suggested that people who listened to Ray Hadley were the type of people who commit mass murder as happened in Norway—
Senator Wong: Senator, through the chair: how is this relevant? This is a very transparent way of trying to—
Senator IAN MACDONALD: Can I just finish my question, please?
Senator Wong: I am taking a point of order. I do not believe this is a relevant line of questioning. If the senator wants to stand up in the parliament and put on Hansard these allegations, that is his right as a senator. I do not know what this has to do with these departmental estimates.
Senator IAN MACDONALD: If you would let me get to the question without interruption. The question, Mr Comley, is this: is it appropriate for someone indulging in this sort of activity to be chairman of the government's climate change commission?
CHAIR: I do not see this as being consistent with the scope of the questions that should be going to anyone here today. The Senate has ruled that any questions have to go to the operation of the financial position of the departments and agencies.
Senator IAN MACDONALD: I can take it round the long way. Is Mr Flannery still being paid, what, $180,000 for an average of two days work a week? Is that still the case?
Mr Comley : On the question of the remuneration of Professor Flannery, nothing has changed from the previous evidence we have provided, which is that Professor Flannery is paid equivalent to a deputy secretary position on a pro rata basis, which is expected to be around three days per week.
Senator IAN MACDONALD: What does that mean in actual figures? What does a deputy secretary get?
Mr Comley : There is a range, but in terms of the figure you have quoted, that number of around $180,000 a year is correct.
Senator IAN MACDONALD: That has changed, though, since we last spoke about it?
Mr Comley : No. I am saying there has been no change in the remuneration arrangements of Professor Flannery since we last discussed this at estimates.
Senator IAN MACDONALD: That equates to three-fifths of a relevant deputy secretary's salary. Okay. And it is three days a week approximately. Has Professor Flannery been overseas—on government business, of course; I am not interested in his personal holidays?
Ms Sidhu : No.
Senator IAN MACDONALD: He did not go to Durban?
Mr Comley : No. Professor Flannery has not taken official overseas travel in his position as climate commissioner.
Senator IAN MACDONALD: Okay. That is good. Does he work three days a week in an office somewhere, or his job going around selling the message, so to speak?
Mr Comley : It is not like he turns up at a single point of work. He will work at different locations depending on how that fits in with his schedule.
Senator IAN MACDONALD: Professor Flannery made a number of quite strong allegations earlier in his career, before he was appointed to this job. Most of them have now turned out to be quite wrong; for example, predicting that Adelaide would run out of water by early 2009 and that Sydney and Brisbane would not get flooding rains anymore. Of course, since he made those predictions we have had two of the biggest floods in the Brisbane area. Does the government stand by its appointment of Professor Flannery as someone independent, highly regarded, receiving a lot of general public and scientific support for his position and his views? I could give you a page of this but I have just named a couple where he has clearly been right off the mark. For instance, his alleged behaviour in relation to a neighbour who rang in was, one would think, quite inappropriate. I am just wondering if the government—
CHAIR: Senator Macdonald, the minister sought a point of order. I will rule on that if I have to. It is not appropriate to go to those issues in Senate estimates. I will rule that way if you keep asking the questions.
Senator IAN MACDONALD: All I am saying is: we are spending $180,000. Does the government stand by Professor Flannery as the correct person to receive $180,000 of taxpayers' money, as chairman of this commission. You are wanting this commission to be well regarded. I am just asking: does the government still stand by the appointment o Professor Flannery?
Mr Comley : The minister may want to comment because Professor Flannery is an appointment of the government. Professor Flannery was appointed to the role of chair of the Climate Commission because of the range of attributes required for that position, which include an appreciation, knowledge and understanding of the science but, perhaps more importantly in the role of chair, a capacity to communicate that science to relevant members of the community. On the commission itself we have Professor Steffen, who is an eminent climate scientist and, I think that Professor Flannery would not take this as any disrespect, more eminent in the field of climate science than Professor Flannery. He is part of the commission to provide guidance on what are appropriate things to say in the context of the Climate Commission. As Professor Steffen has already mentioned, there is also the science advisory panel, which has got an eminent panel of climate scientists. In exercising the functions of the commission, which the commission does independently, so they are really doing this under their own auspices, I understand that there is enormous regard paid to consulting with the relevant science advisory panel and those with expertise in the fields before deciding what is the best way to engage and communicate with the public. To the best of my knowledge, Professor Flannery in that context has been discharging his duties as the chair of the Climate Commission well since appointment.
Senator Wong: I think Mr Comley has outlined the government's views on the role of the commission well. The government has previously indicated its views about the appointment of all members of that body. I make the point, Senator Macdonald, that Professor Flannery was Australian of the Year in 2007, under your government. So he does have a history of having been recognised for the work he has done. I appreciate that you do not agree with him and you are entitled to put your views about that. I think it is regrettable that they are often put in a context where he is not able to respond—
Senator IAN MACDONALD: Well, bring him along.
Senator Wong: But we think they are doing important work. I appreciate you do not agree with the science but the government has a different view on that.
Senator IAN MACDONALD: Just by the way, would Professor Flannery come to estimates if we requested his presence?
Senator Wong: I would have to take that on notice. Professor Steffen is here from the commission.
Senator IAN MACDONALD: If Professor Steffen comes along no doubt Professor Flannery would be willing and able to come as well. Thank you for those answers. I am just interested that you still do have confidence. He has been controversial to say the least, and putting it politely. I thought that perhaps his presence in the commission was contrary to what the government hoped the commission might achieve. That was the nature of the question.
Senator Wong: With respect, I do not think appointing anybody would have been something you would have agreed with unless it was somebody who did not believe that human beings contribute to climate change, because that is your view. You come to this debate with a very clear set of views. You have made that very clear over a number of years. You do not accept the consensus of science. I disagree with you. You are entitled to your view. But I make the point that it would not matter who the government chose, you would disagree with it unless it were a person who accorded with your views.
Senator IAN MACDONALD: Thank you for verballing me, Minister.
Senator Wong: I am not verballing you, Senator.
Senator IAN MACDONALD: I will not waste time by telling the Senate my views. The chairman would rightly say that is not a question for estimates. But you are allowed to tell the committee what my views are.
Senator Wong: I do not think I need to; we have all been here for the last three years.
Senator IAN MACDONALD: I am not sure how that is relevant to estimates. No doubt the chairman is just about to jump on to you about that.
Senator Wong: Senator, we have spent years listening to your views on this—over and over again—and they have not changed no matter what evidence has been put.
Senator IAN MACDONALD: You do push me to say what my—
CHAIR: Senator, do you have any questions?
Senator IAN MACDONALD: I am being verballed on my views; the minute I tell you what my views are, Chair, you rightly say that that is not a matter for estimates.
CHAIR: Do you want your views on the public record? If you think you have been verballed then I am happy to get your views and then we can move on.
Senator IAN MACDONALD: Of course, the climate is changing. Is it because of man-induced emissions? I do not know. A lot of very senior scientists say, yes, it is caused by man; a lot of very senior scientists like, I might say, Bill Kininmonth, a very distinguished head of climate change at the Bureau of Meteorology, happens to think differently. Is Mr Kininmonth one of the 'flat earthers' you referred to in a question about scientists who disagreed with the government view on this? Would you class Mr Kininmonth—
Senator Wong: I just cannot remember whether that was the phrase I used.
Senator IAN MACDONALD: Yes, it was. It is indelibly printed. You said you take no notice of 'flat earthers'.
Senator Wong: I am not familiar with him, apart from what you say. Perhaps Professor Steffen can assist.
Prof. Steffen : The Bureau of Meteorology did issue a statement very recently about Mr Kininmonth's status. He has now retired but he was with the bureau. He was head of the climate centre, which is an information not a research centre. So he is not a researcher in his own right. At the time he was there the research was carried out by something that was called the BMRC, the Bureau of Meteorology Research Centre. I believe it was headed by Mike Manton for many years, who is an active scientist. I have checked on Mr Kininmonth's publication record and it is virtually nil in the area of climate science. So we in the research community would not consider him as a legitimate climate scientist. It is not because we have anything against him personally; it is simply because he does not have the track record.
Senator IAN MACDONALD: What about all the other people that signed that same letter that Mr Kininmonth signed?
Prof. Steffen : I have not seen that letter. It depends on where you publish. For example, another prominent person, Professor Plimer, who has come up before in these estimates, has not published in the climate change literature. So the way we make our own assessments of credibility of scientists is whether they have a substantial publication record in the area of interest—not in some other area of science, that does not count. If I went out spouting about mineral geology I would have no standing whatsoever, and quite rightly so, in that community. The same goes with Professor Plimer in our community.
Senator IAN MACDONALD: So you are aware ofMr Kininmonth; you have done some research.
Prof. Steffen : I am aware of who he is, yes.
Senator IAN MACDONALD: Are you aware of why he has become relatively prominent in recent weeks—because he signed a letter along with a team of other very, what seemed to me, highly distinguished scientists.
Prof. Steffen : Yes, but they may be highly distinguished in other fields.
Senator IAN MACDONALD: You knew Mr Kininmonth had done something so you researched him, but you said you did not know who else had signed.
Prof. Steffen : I have been aware of Mr Kininmonth for some years, not just in connection with that letter.
Senator IAN MACDONALD: But you just said you researched him.
Prof. Steffen : No, I read Bureau of Meteorology statement which was released fairly recently.
Senator IAN MACDONALD: As a result of the letter that Mr Kininmonth signed.
Prof. Steffen : It might have even predated that; I would have to go back and look at the dates.
Senator IAN MACDONALD: What would the bureau say, 'Oh, a former employee of ours; we are going to give you a critique on him?'
Prof. Steffen : The letter that he has signed is not the only action he has taken in the climate change arena, as you are probably well aware. He has been around the game for quite a few years.
Senator IAN MACDONALD: Perhaps I can get you that letter. I thought you would be aware of it. Is nobody aware of it? It was quite prominent. It might have been a paid advertisement in a newspaper.
Prof. Steffen : What spare time I have from my duties at ANU I actually like to read the peer reviewed literature and not paid advertisers.
Senator IAN MACDONALD: I am not asking you to agree with the science, I am asking whether you could perhaps identify the other, what seemed to me to be, very prominent scientists around the world with a different view to yours, Professor Steffen.
Prof. Steffen : I would have to look at that list. There are probably some names that I would recognise as people who have been speaking out on the 'denier' or the 'sceptic' side or whatever you want to call it.
Senator IAN MACDONALD: Let us just say 'people who have a different view to you'.
Prof. Steffen : The question is this: are they reputable scientists in the climate change field? That is the question I raise. Just to satisfy yourself you would need to look that up yourself.
Senator IAN MACDONALD: I was going to ask you so you could satisfy me. You would know them better than me.
Prof. Steffen : I would be happy to take that on notice if you would send me a copy of the letter.
Senator IAN MACDONALD: I will get you the material. Are you aware of scientists who do not agree with you submitting papers for peer review and having them returned? Are you aware of that?
Senator Wong: We did this last time.
Senator SINGH: We have gone through this once—
Prof. Steffen : We have gone through the peer review process.
Senator SINGH: And this is only my second estimates.
Prof. Steffen : For the vast majority of papers and manuscripts that are submitted, those that do not get in do not get in because they are politically incorrect. They do not get in because they are bad science. The methods are shoddy, the conclusions do not match the observations that are put forward, the statistics are poor and so on and so on. I have actually looked at several of these papers. In fact, I have been asked to look at many of the things that people who do not agree with mainstream science have written and, to be quite honest, I spend a fair bit of my time reading papers of students at the ANU—it could be any major Australian university—and the students do a much better job than most f those people do of actually writing credible science. So the reason those papers that get submitted do not get up is not because they challenge the mainstream science; it is that they are actually shoddy science. I will say very quickly, though, that there are many cutting edge areas of science where the science is not settled, mainly with the forward-looking risks of climate change, and there you see illegitimate, different viewpoints using scientific observations based on good science in the literature. What you do not see are papers that question the fact that the earth's climate system is warming—and it is warming very rapidly—nor do you see papers that challenge the primary reason for that, which is the increase in greenhouse gases in the atmosphere. The physics of that is very well understood.
You did raise an interesting issue—that is, forward projections of rainfall; drought; heavy, extreme rainfall events across Australia. There is legitimate debate in the community about how that is playing out, and there is a good example where, if you go into the literature, you will find different viewpoints based on good scientific research. We do not have the 50 to 100 years behind us yet on those questions that we do on the fact that the earth is warming, and it is human causation. Let me make it clear that there are still very good debates in scientific literature, and this is the sort of thing I would like to talk about rather than rehashing stuff that has been decided decades ago.
Senator Wong: I understand, in relation to the letter to which you are referring, that a response was published in both the Wall Street Journal and the Australian by some 40 climate scientists. I assume you would be aware of that as well.
Senator IAN MACDONALD: So you do know of the letter?
Senator Wong: No, I have just been advised that that was the case. I am trying to be helpful, Senator. If you want to read both sides of the debate, I thought you might like—
Senator IAN MACDONALD: I did not see that; thank you for telling me. I will find the letter and send it along to Professor Steffan and he can tell me who these dodgy scientists are. Professor, you would be aware of the minister and others saying that global warming and warming of the oceans are going to destroy the Barrier Reef and coral reefs and so on. You would also be aware of the recently peer reviewed paper from the Australian Institute of Marine Science which said that over a 110-year period the coral reefs in the southern Western Australian coral area actually benefited by a warming. Is that in your area so that you could give me a comment on that?
Prof. Steffen : Again, I think that what you have to do is look at the bulk of research in that area. Yes, there are coral reefs in some parts of the planet that do not yet show the effects of higher temperatures, but the bulk of them do. It depends on where they sit within their temperature range. If they are near the upper limit, some additional rises of temperature will affect them. If they are sitting near the lower limit of the temperature range to which they have adapted to today, modest warming will not affect them. The concern that scientists—
Senator IAN MACDONALD: It did affect them. They grew; they got better.
Prof. Steffen : Okay. What you need to do is look, first of all, at the rate of change and whether this improved growth will continue. The answer is almost surely that it will not as temperature rises. The reason is that, once they reach the upper limit, if they are at a lower limit in the colder end of the range, yes, warming will help them, just as warming is affecting crops in the cold climates of Scandinavia and northern Russia. For a period of time it does, and we recognise that. But the risk is that, as we go further up the temperature range, the growth rate of those corals will turn around and they will start suffering as they go out of their temperature range.
CHAIR: Senator Macdonald, we will have to move on. You have had a really good go.
Senator IAN MACDONALD: Can I just finalise?
CHAIR: A very quick one to finalise it.
Senator IAN MACDONALD: What that peer review research paper said was that in the Great Barrier Reef there are problems but what they came down and said in their final conclusion was, 'We don't know quite what is happening. We don't know what is causing it.' Would you agree with that?
Prof. Steffen : No, I think we have a very good handle on what is causing it and I think the people who work on the Great Barrier Reef know what is causing it.
Senator IAN MACDONALD: AIMS is based in Townsville. I do not want to alert them but I will be asking them at estimates.
Prof. Steffen : I think you will find that corals which are near the upper temperature limit are already finding that limit exceeded on very warm periods, if you like, oceanic heatwaves. The other thing I will say is, if you go a little further north along the Western Australian coast, they have had the largest bleaching event ever on the Ningaloo Reef where, again, those corals are already closer to their upper temperature limit. When you get an oceanic heatwave, a period of very warm sea surface temperatures, you do get bleaching events. This has been found around the world.
Senator IAN MACDONALD: They are not quite the same cause, are they?
Prof. Steffen : Yes, they are.
Senator IAN MACDONALD: I have read the paper with a dictionary to find out what it actually meant. You will find that the conclusion is that, yes, it is warming and there is destruction in the Barrier Reef, but it is too early to say what is causing it.
Prof. Steffen : I would disagree with that.
CHAIR: Professor Steffen, are you aware of a paper that was put out headed, 'Scientific audit of a report from the climate commission' by Bob Carter, David Evans, Stewart Franks and William Kininmonth? This was in 2011.
Prof. Steffen : No, it was not sent to us.
CHAIR: I will take you to some of the issues raised in it because it is a critique of the commission, and that is very relevant to the work of this estimates committee. I will go to the conclusion of what is described as a scientific audit. It says:
The scientific advice contained within The Critical Decades is an inadequate, flawed and misleading basis on which to set national policy. The report is emotive and tendentious throughout, ignores sound scientific criticism of IPCC shibboleths that has been made previously, and is shotgun in its approach and at the same time selective in its use of evidence.
It goes on with even more criticism. Do you have any view? What is your response to that type of criticism in what is described as a 'scientific audit'?
Prof. Steffen : If it wants to be a credible scientific audit, it actually needs to publish those sorts of criticisms in the peer reviewed literature. Anyone can write any sort of report and publish it on blog sites or whatever. To the best of my knowledge there has been no critique of that sort that has been peer reviewed. You listed the authorship and, again, Mr Kininmonth came up. The others authors, to the best of my knowledge, have no track record whatsoever in climate change research. I would question the credentials of the people who wrote that report. I do not think they have the credentials, the background, the understanding or the knowledge to make an informed critique of the critical decade or any other summary of climate science.
CHAIR: In their introduction they go the key message of the critical decade and say:
Over many decades thousands of scientists have painted an unambiguous picture: the global climate is changing and humanity is almost surely the primary cause. The risks have never been clearer and the case for action has never been more urgent.
That is what you participated in writing.
Prof. Steffen : Yes, that is basically what I wrote.
CHAIR: This so-called scientific audit goes on to say:
This declaration establishes two things. The first sentence signals that the report is committed to repeating the conclusions of the 4th Assessment Report of the UN’s Intergovernmental Panel of Climate Change (IPCC), conclusions that are essentially reliant on computer modelling and lack empirical support. And the second signals that the report is long on opinionated analysis and political advocacy but devoid of objective risk analysis.
It is quite a criticism of your work. If that is correct, then there is an issue. Can you explain that to us?
Prof. Steffen : First of all, it is not correct. There is a fundamental mistake in the first comment they made. The IPCC fourth assessment report and much of what was published in The critical decade—virtually all—do not rely on computer models. That is a common myth that is trotted out by the denialists every time they want to make an attack. It relies on fundamental physics, observations, process studies and an understanding of how the system is changing. That does not need a computer model; that needs people who spend some time getting on top of the physics and chemistry of how the climate system works, observations of what is actually happening to that system and putting those two together.
Firstly, those comments in your quote from the report that I wrote do not rely on computer models. That is absolutely clear. Secondly, there was a criticism made about political advocacy. I fail to see where there is any hint of political advocacy in that report. There is no comment on what should be done. The only comment is that based on the science and based on the fact that Australia and many countries around the world have made a judgment that they do not want the temperature to rise more than two degrees above preindustrial—once science starts from those positions—we can say, not from any political position, that there is an urgent need to start getting emissions turned around if you want to meet that objective that all sides of politics in Australia and most countries have agreed on. We never said anything in that report about carbon pricing, about ETSs, about direct action or about carbon sequestration. We talked about the science of the carbon cycle. So that I completely reject. There is no policy advocacy in that document. These are basically straw man arguments written by people who do not understand the climate system and who have no credentials to make those criticisms.
CHAIR: They go on to say that these same characteristics apply to the scientific basis of four earlier Australian global warming documents, in order: the Garnaut review, two reports by the Department of Climate Change and Energy Efficiency, a report by the Academy of Science called The science of climate change: questions and answers2010 and, finally, a science briefing—so you get a belting twice—'that Professor Steffen provided to the Multi-party Committee on Climate Change in November, 2010, prior to that committee entering policy-setting mode.'
I am not too worried about the Department of Climate Change and Energy Efficiency in terms of their scientific approach. I am sure it is well underpinned by proper advice. But if the Australian Academy of Science has got it wrong, what is your assessment? Are you aware of that paper by the Academy of Science?
Prof. Steffen : Yes, that one I am very much aware of.
CHAIR: Have they got it wrong as well?
Prof. Steffen : Absolutely not. They are consistent with the Academy of Science in the United States, with the Royal Society in the UK, with the academies of science in Sweden, in France, in Russia, in China, in Japan and in several other countries. I find it hard to believe that four people who have absolutely no credentials in the field can criticise every major academy of science in the world. Remember, in those academies of science this goes beyond climate scientists. These are reputable scientists from many fields, who have looked over this science and have basically come up with exactly the same conclusions that the IPCC fourth assessment report did, the same conclusions that I did in The critical decade and so on. I would say those four gentlemen do not have a leg to stand on in their criticisms. They do not have the credentials to do so, they have not published in climate science, and I absolutely fail to see how you would give any credibility to something that is at odds with the considered analysis of every major academy of science around the world. This is really an antiscience attack which any civilised country should be quite concerned about.
CHAIR: This audit report goes on to say:
The overall weaknesses of the IPCC have been well documented by Melbourne researcher John McLean, and they reflect that the IPCC represents a political advocacy organisation more than it does an impartial scientific advisory body.
Are you aware of this Melbourne researcher John McLean?
Prof. Steffen : Yes, I have heard the name, but again I do not believe he has published in the scientific literature on climate change either.
CHAIR: So he has not published. He goes on to say, 'The critical decade contains no substantial new science.' I have two questions on that: is it correct that The critical decade contains, substantially, no new science, and is there any new science that we should be aware of since the publication of The critical decade?
Prof. Steffen : No new science compared to what? I assume they are implying that it is compared to the fourth assessment report of the IPCC, which was published in 2007. The answer is: yes, it does. It updates our understanding of, for example, polar icesheet dynamics, on which there is still a lot of active research. By that I mean the big icesheets in Antarctica and Greenland and their potential role in sea level rise. That was a major source of uncertainty in the IPCC fourth assessment report—estimates of what sea level rise might do this century. We have updated that as of about 12 to 18 months ago, when we finalised The critical decade. But these are continuing areas of research, so if you would do a report in 2012 then you would find areas where additional research has been done. It is an ongoing activity. But again, as I said before, you would not find any substantial research that challenged the conclusions that the earth is warming—it is warming very strongly, at a rapid rate, and this means not just the atmosphere but the oceans as well—and that human emission of greenhouse gases is a major cause for that warming. Those conclusions are secure. They have not changed for a couple of decades now.
CHAIR: This paper, which I find very interesting, says on that very issue of cooling:
Whether atmospheric warming is perceived as occurring depends entirely upon the period of time under consideration. For example—
and then there are five dot points—
Earth has cooled over the last 10,000 years (since the peak warming of the Holocene climatic optimum).
That sounds quite technical.
Earth has cooled since 1,000 years ago (the Late 20th Century Warm Period not achieving the temperatures of the Mediaeval Warm Period).
Earth has warmed since 400 years ago (post-Little Ice Warming).
Earth warmed between 1979 and 1998 (Late 20th century warming).
Earth has cooled slightly since 2001 (last 10 years).
That confuses me as a layperson. Can you explain what that means.
Prof. Steffen : It is actually designed to confuse you, unfortunately. I think what it means is that climate varies on many, many timescales. But I think that what you really need to get a handle on is the fact that the majority of additional greenhouse gases have been put into the atmosphere since 1950. Post Industrial Revolution, from roughly 1800 to 1950, the concentration of CO2 went up only to about 315 parts per million. It ranges during the Holocene between 280 and 290 parts per million. But since 1950 it has gone from 315 to 390, so the bulk of the additional CO2 that has gone in—and other greenhouse gases—has come since the middle of the 20th century. This is the time frame you need to look at. This is about a six- to seven-decade time frame. My rule of thumb is: do not go less than 30 years, as you are likely to see the trend masked by shorter term patterns of variability which are still there, like La Ninas, El Ninos, the Pacific Decadal Oscillation and so on.
When you look at the trend since 1950, and particularly the last three or four decades, here is what you find. This is just air temperature. In the quote, those gentlemen did not say 'atmosphere'; they said 'earth', and that is a different matter. In terms of air temperature, we find that the decade that just concluded—the first one of the 21st century, the 2000s—was significantly warmer than the 1990s, which were significantly warmer than the 1980s, which were significantly warmer than the 1970s. The trend has not stopped. Even the atmosphere is still warming. If you want to focus on short-term variability, you can find shorter periods which are warmer and cooler, but that is not what the climate system is really doing. You need longer term multidecadal trends.
The second point is that document said 'the earth'; it did not say 'the atmosphere'. Those gentlemen should know that by far most of the extra heat being trapped at the earth's surface by the extra greenhouse gases goes into the ocean. This is fundamental physics—physics 101. You learn that in the first year at university. So if you want to see a smoking gun, do not go to the atmosphere, go to the ocean. There the signal really is clear. There has been strong warming since about 1960. We have had very good measurements and that warming has even increased in rate in the last decade. That is where you go to see it.
There are three major groups around the world that do those measurements—one in Japan, one in the United States, and one in Australia based in Hobart—and we should be very proud that we have got an Australian group that is world-class. All three of those temperature records agree and show, unequivocally, that the ocean is warming and it is warming at a rapid rate. You will see some papers coming out soon based on the recent trip of the Aurora Australis down to Antarctica, which was showing warming at deeper parts of the ocean than we have seen before. Obviously, in areas where there is a good connection between the surface ocean and the deeper ocean, we are starting to see that extra warmth in the ocean now being moved down to deeper parts of the ocean. All of this fits together and it is a picture of a rapidly warming planet.
Senator SINGH: Professor Steffen, I look forward to your coming to Hobart and, yes, we are very proud in Tasmania to have CCMLR and to have an international organisation, as such, there, and also to have, I think, the highest number of scientists per capita in Tasmania than in any other state. We had a bit of discussion earlier and questions in relation to the science. How do you deal with those antiscientist sentiments that are shared by some parts of the population, be it in parliament or in business or where ever they might be? Other than obviously arguing the case, is there any other way that you deal with it?
Prof. Steffen : I think that you can communicate, and we do attempt to communicate the very best we can. It is obviously not possible for people out there in the public to read the peer-reviewed scientific literature, just as it is not possible for them to understand the medical literature on which their surgeon or doctor is basing modern medical techniques. Nor is it possible for them to understand how modern aircraft engineers maintain the 747 or the A380, whatever they trust their lives to when they step on a Qantas aircraft. In a modern society there are experts in many different fields and I think that it is the job of these experts—
Senator Ian Macdonald interjecting—
Prof. Steffen : I do not think that we have wind power yet here in Canberra, Senator—
Senator Ian Macdonald: You haven't driven over Lake George for a while, have you?
Prof. Steffen : That's in the NSW grid—
CHAIR: That all goes to Sydney.
Prof. Steffen : That goes to Sydney, yes. That was to offset the desal plant, actually.
Senator Ian Macdonald: Well, the visual impact you cannot miss.
Prof. Steffen : But getting back to your question, I think that what we attempt to do—and all professional bodies do this—is to have quality control mechanisms in the research that they do, that are jealously guarded and checked at very frequent intervals to make sure that they are working properly. Obviously allegations have been raised against the IPPC, against climate science. These academies of science around the world have examined the peer review system that climate science uses, the same one that medical science uses, the same one that astronomy users and so on, and it is certainly operating very well. So I try to tell the general public that it is not possible for them to understand all the nuances of our understanding of the climate system, how we research it and so on. But they can be assured that we apply the same very strict quality control mechanisms as other aspects of science do.
Senator SINGH: Are there any other areas in science where expert scientists are challenged so much?
Prof. Steffen : This has happened in the past, and it happens when scientific knowledge challenges either belief systems that are based not on science but on people's world perspectives, or challenges large industries. The one that is often quoted, of course, is cigarette smoking and lung cancer. It took quite a bit of research to pin down that link. It was very good medical research, but it was challenged for a long time because it did challenge big industries and it did challenge some people's world views.
Evolution is another one. Science has done a lot of work on the origin of species, starting with Charles Darwin, of course, but then going on through the biological and ecological sciences for a couple of centuries after that. We now understand very much better how organisms change, why they go extinct, how new organisms come into being, how organisms change as the environment changes and so on. That is very well understood in the scientific community. But as you might guess, that challenges some very deeply held beliefs by some people out in society. We find that, when these deep beliefs are challenged, no matter how well you communicate the science you cannot win over a certain segment of people, and we should expect that.
Senator SINGH: When you say 'beliefs', you are really talking about religion.
Prof. Steffen : Well, in terms of evolution, you were talking about religion—
Senator SINGH: But in this instance?
Prof. Steffen : Yes and no. The religious connection here, from what I have seen, is actually complex. You get some religious groups who attack climate science as being heretical, but you get many others who say that really we have to be careful about what we are doing with God's creation in terms of human behaviour and human impact, and climate is part of that. So I would not categorise all religion as being antiscience on climate.
CHAIR: The Pontifical Academy of Sciences certainly does not say that.
Prof. Steffen : I have been to two meetings at the Pontifical Academy of Sciences in Rome, and there have been some very thoughtful comments from cardinals. We have not met His Holiness himself, but those comments have certainly come from the next-highest level, who genuinely want to understand what global change, more than climate change, is and how it is affecting the wellbeing of humans—which, of course, is what they are quite concerned about. So I would be careful about criticising religion, because I think it has a very, very complex interaction with science. Religion is by no means blindly antiscience on a lot of these issues.
Senator SINGH: I did not mean to group all religions into one in that question.
Senator BIRMINGHAM: Perhaps I can move from the pontiff to the far more earthly matters of the budget papers. I would like to get some explanation with regard to 1.3. I note in the portfolio additional estimates statements that a new budget line of 'natural resource management for climate change' is identified, which was not in the original PBS for this financial year. Similarly, there seems to be a significant reduction in forward years of program support expenditure in this area. Can I get an explanation of these two items, please?
Ms Sidhu : With respect to natural resource management for climate change, that is an allocation of funds that comes from a broader natural resource management program funded out of the Clean Energy Future package. That is the reason it was not published in the portfolio budget statements. I believe you will find it published with all the other Clean Energy Future programs in the MYEFO papers. This amount has been allocated to output 1.3 to fund the development of information that will underpin the ability of natural resource managers to either develop programs to gain carbon credits or to undertake other activities in the land and natural resource management area.
Senator BIRMINGHAM: So this funding of around $12 million or so is only part of the overall NRM funding out of the CEF?
Ms Sidhu : Exactly. It is part of the larger NRM funding. I do not have the numbers off the top of my head. I think it is around $50 million, but I cannot be sure.
Senator BIRMINGHAM: Are they all administered by this department or primarily by DSEWPaC?
Ms Sidhu : No, not by this department. The environment department administers the vast bulk of it.
Dr Kennedy : I can confirm that those numbers were in MYEFO and that it was $44 million in total. The measures description outlines the two components of the program.
Mr Comley : And as for the funding that ceases—the National Climate Change Adaptation program support—that is essentially because it was time limited funding. As is common around the Commonwealth, funds were allocated from a new policy proposal for four years. That profile reflects the lapsing of those funds.
Senator BIRMINGHAM: I was just wondering, because it is unusual for these changes to the program support profile to occur mid budget year. Something has vanished out of that line and presumably out of this program area of expenditure since the budget papers were printed and the PBS was printed. It was an expected expenditure of $35.2 million for 2010-11 and a budget of $28.3 for 2011-12 and so on. It is now $20.3 million for 2010-11 and $6.4 million for 2011-12, so there are significant reductions. I am assuming they are probably easily explained by transference of responsibility somewhere.
Dr Banerjee : I can check that, Senator, if you like. I am not sure it is the case that the table that we are looking at on page 30 of the additional estimates PBS reflects only changes since the last budget. Looking at some of the line items, the Climate Change Science Program, for example, which I am familiar with, is not something that has been changed in decisions over that time. Although I will check this, my expectation is that that table is comprehensive about the program and is not attempting just to update since the last budget.
Senator BIRMINGHAM: If you could explain to me—take it on notice—the differences between the table that you have just referenced on page 30 of the additional estimates PBS and that on page 28 of the budget PBS, that would be appreciated.
Ms Sidhu : Sorry to interrupt; there is just one more point. The numbers out from 2012-13 to 2014-15 under 'program support' relate largely to program support either for the Climate Change Science Program or for the natural resource management program. The program support funds relating to the National Climate Change Adaptation Centre program drop out. That is why there is a reduction between 2011-12 and 2012-13. But we will take on notice the 2010-11 numbers, yes.
Senator BIRMINGHAM: It is just that overall it basically seems to halve or more than halve into the forward estimates from what was budgeted in May to what is now before us. If you could go through and explain those on notice, that would be fantastic. I assume that the National Climate Change Adaptation Centre and the National Climate Change Adaptation Research Facility are one and the same?
Ms Sidhu : No, the National Climate Change Adaptation Research Facility program is a part of the adaptation centre program. It is a component of it.
Senator BIRMINGHAM: Is it the bulk of it or—
Ms Sidhu : It is nearly half, I think.
Senator BIRMINGHAM: So the adaptation research facility appears to primarily undertake a grants based program. What happens with the rest of the funds going into the adaptation centre? Are they also in grants?
Ms Sidhu : They are largely grants programs, yes.
Senator BIRMINGHAM: With regard to the adaptation research facility, does the department itself have a say over what projects are funded there or is that all done at arm's length once the funds are handed over?
Ms Sidhu : The adaptation research facility decides on which grants are given to which proponents. The department does not have a direct say, although on occasions the department may be represented on some of the selection processes for some of the grants.
Senator BIRMINGHAM: Thank you. I will put the rest of my questions on notice.
Senator IAN MACDONALD: Chair, I told Professor Steffen I would find him this letter with the names on. I have found it. Rather than give it to him, I have tabled it and it has the names there. There is also a mention of a Nobel Prize winning physicist, Iva Giaever. Perhaps you could add him to the list and tell me if he is one of Senator Wong's flat earthers.
Prof. Steffen : Thank you, Senator, I will have a look at this.
Senator IAN MACDONALD: Can I just tell Professor Steffen the science magazine—you probably know this—is volume 335, 3 February this year, starting at page 593.
Prof. Steffen : Yes, thank you, Senator.
CHAIR: Thank you, Professor Steffen, for your evidence here today. We are now going to questions on program 1.4, Helping to shape a global climate change solution.
Senator BIRMINGHAM: Is there a final cost estimate for the delegation that participated in Durban?
Dr Banerjee : Yes, there is. We will find it for you.
Ms Walsh : The Durban delegation costs are still being finalised, but I can give you some indicative numbers now if that would be helpful.
Senator BIRMINGHAM: Thank you, Ms Walsh.
Ms Walsh : In terms of accommodation costs, we are looking at an amount of around $164,350. That figure is for the whole delegation, not just the DCCEE members of the delegation. In terms of travel costs, the amount was $219,365. That is just for DCCEE members of the delegation.
Senator IAN MACDONALD: That is your department, is it?
Ms Walsh : That is right. Office facilities, ground transport and incidental costs come in at $193,856. Again, that is for the entire delegation and not just our department's costs.
Senator BIRMINGHAM: Thank you very much, Ms Walsh. I turn to the outcomes from Durban. Is somebody able to inform the committee, please, on the agreement reached at Durban? Is the Platform for Enhanced Action deemed to be legally binding?
Dr Banerjee : At the moment, the agreement in Durban—the setting up of the Platform for Enhanced Action—set the frame for the future negotiations. The future negotiations talked about an outcome that would be a protocol, another legal instrument or an agreed outcome with legal force. I will need to check the exact wording of that. That then sets the frame for the discussions to come. Another part of the decision in Durban was that the negotiations would now get underway and that those negotiations would be concluded by 2015 for this agreed outcome to come into force by 2020. What was agreed or decided at Durban was the frame for future negotiations. That negotiations will continue. They are due to start again quite soon to flesh out exactly what that will mean.
Senator BIRMINGHAM: All the big players signed onto the Durban agreement, as I understand it, but, aside from agreeing to engage in forward talks to work towards a binding agreement to be settled in 2015, is there anything binding by its own nature of what was reached and agreed to in Durban?
Dr Banerjee : The part the Durban agreement that we have been talking about at the moment is the part of the agreement that goes to the future framework, the future decision. There were also, of course, some parts underneath that that relate to current commitments and the rules through which those are being brought into being and being operationalised. From your question, I do not think those are the bits that you are particularly referring to, but those are things that are reinforced and countries are already acting on the basis of that.
Mr Comley : Senator, this goes directly to your question. What was agreed at Durban was a conference of the parties decision. Conference of the parties decisions typically are not considered legally binding in the same way that a treaty level agreement would be considered legally binding. That is not to say, though, that all the countries that potentially enter a CoP decision treat them lightly at all. Certainly Australia does not, and all the other countries think very carefully before committing to it. So the agreement to negotiate that was agreed at Durban was quite significant in the fact that all the large players were prepared to sign that agreement and were prepared to establish it under a different working group of the convention. There is a spectrum here which runs from CoP decisions through to a treaty out the other end, and what this provision leaves open is the possibility of a treaty that covers all major emitters in the post-2020 world.
The fact that countries took that pretty seriously was evidenced by just how seriously some of the larger players considered whether they were prepared to accept the wording that set the time table and process for the next agreement.
Senator BIRMINGHAM: Thank you. In terms of how the negotiations proceed from here and what it actually means, the agreement states that the process shall 'raise the level of ambition'. Can somebody tell me at least what the level of ambition is being raised from? What is the starting point for that higher level of ambition?
Dr Banerjee : I think these are some of the things that are discussed and contested within the context of the negotiations. Partly our starting point would be the pledges that are currently on the table from the Cancun agreement. That would establish at one level a baseline of degree of effort or level of ambition. There was also an overarching target agreed at Cancun to make all efforts to limit overall warming of the planet to less than two degrees. That is another form of level of ambition. There are also then further inputs to come in the coming years. There is a review of the overall progress of commitments under the UNFCCC which is due in 2015 and some further advice from the IPCC. Those go to different measures of level of effort or level of ambition.
Senator BIRMINGHAM: Thank you for that breakdown. It highlights the concern I have. I appreciate that these things are difficult for negotiation, but a document that says that a process shall 'raise the level of ambition' but appears to leave ambiguous what the starting point for that is, allowing a particular range of selections of which level of ambition you think you are working from as the starting base. That makes it hard to really know where you are seeing—
Mr Comley : I do not think the agreements are quite that ambiguous. As Dr Banerjee said, all countries of the world have committed to the two-degree target, but there is a recognition that current pledges on the table are not sufficient to meet the two-degree target. So, at the very least, the raising of the level of ambition is related to having pledges and actions that would be consistent with meeting the two-degree target. The reason it is not absolutely clearer than that is that there are some parties within the negotiations who believe the two-degree target is insufficient and that, at the very least, you should have a 1½-degree target. So the form of words that is being used in the international environment has really been chosen to try to accommodate the potential countries who do not want commitments to try for 1½ degrees to be definitely taken off the table. I think it is relatively clear that that is what people mean in terms of accelerating ambition. It is to try to achieve the two-degree target at least.
Senator BIRMINGHAM: The document requests parties and observer organisations to submit by the end of this month their views on options and ways for further increasing that level of ambition. Is Australia planning to make such a submission?
Mr Comley : The government has not decided yet whether it will make a submission to that. I do not have the agreement in front of me, but I think the actual language there is 'invites'.
Senator BIRMINGHAM: Requests.
Mr Comley : Requests, and the important thing about requests is that that does leave that to the option of the countries whether they actually pledge additional action.
Senator BIRMINGHAM: The end of this month is not a long period of time away. Has the department drafted any submission or anything that could be submitted on behalf of Australia?
Mr Comley : We are considering providing advice on whether anything should be provided. I am not going to say whether we have drafted anything or not.
Senator BIRMINGHAM: It does not sound like the department has necessarily provided any advice, and the government has not taken a decision as to whether we will be putting on the table our view of what the ways for further increasing the level of ambition actually are.
Mr Comley : If you are asking, 'Have we provided advice to government on this?' the answer is no. Have we done additional work? We are always doing ongoing work on what the nature of Australia's commitments would be.
Senator BIRMINGHAM: I am sure you are. But this is the last point—I will just scroll down and double-check: yes, it is the last point, point 8—of the Platform for Enhanced Action and it is pretty much the one call within this document for individual parties to the conference to take some action. It says:
8. Requests Parties and observer organizations to submit by 28 February, 2012, their views on options and ways for further increasing the level of ambition and decides to hold them in-session workshop at the first negotiating session in 2012 to consider options and ways for increasing ambition and possible further actions.
I would have thought there would be a clear decision by now, on 13 February, two weeks and one day away, as to whether Australia was going to make such a submission or not. I take the fact that there does not seem to be any work on such a submission to indicate that Australia is not.
Mr Comley : As I say, we have not advised the government and the government has not made a decision on that point as yet.
Senator BIRMINGHAM: Has the government asked for any advice on whether to do so?
Mr Comley : In terms of asking for advice, the general approach—and this has been practice, as far as I am aware, for long period of time—is that the government as a whole receives a brief on the outcomes of the international negotiating cycle on where to from here. We are providing that advice, but the government has not considered that advice yet.
Senator BIRMINGHAM: I would generally expect for a country that has been as active as Australia, especially over the last couple of years, in these fora that the department would have been eagerly provided the government with advice of what at least the department believes we should be submitting. Yes, it is ultimately for the government to decide whether to accept and lodge that or not, but I find it odd that there does not seem to be a desire to pursue action in this regard.
Mr Comley : I am not sure it is that odd. There are a couple of contextual points. One is that obviously the government will get an update on what has happened at the Durban outcome and the implications from there. The other thing in terms of reporting on matters of this type is that there is an understanding in the broader climate change negotiations of the different timing of the year, so often there are things with tight deadlines at the start of the year and there is recognition that in an Australian context that involves the summer holiday period. So if it was the case that the government decided to make such a submission and it occurred shortly after the end of March, that would not be seen as particularly unusual in the context of international climate change negotiations. And so I would not look at that, Senator, and say that is an absolute drop-dead date when you are talking about reporting of that type.
Senator BIRMINGHAM: Okay. Who is represented on the ad hoc working group?
Mr Comley : This is on the Durban platform?
Senator BIRMINGHAM: Yes.
Ms Walsh : Are you asking who will be chairing it or who is a member of?
Senator BIRMINGHAM: Which countries are members of.
Ms Walsh : All countries of the UNFCCC are. It is similar to the current Ad Hoc Working Group on Long-Term Cooperative Action, that all countries that are signatories to the UNFCCC are effectively members.
Senator BIRMINGHAM: Who is chairing it? It is a very large group.
Ms Walsh : That is the bit that has not been decided yet.
Senator BIRMINGHAM: Is that a point of ongoing dispute or just negotiation, or have we not come to the meeting where it is to be decided?
Ms Walsh : Generally the chairing of the main bodies of the UNFCCC is done by one developed and one developing country, and they also try to get regional representation. So it is just negotiations within the regional groups to settle who is chairing. It is not a contentious issue as such; it is just a process that needs to go through.
Senator BIRMINGHAM: I gather the EU and some others signed up to a second commitment period of Kyoto or talked about doing so. Did anybody actually do so?
Mr Comley : Technically, they committed to do so but they have not signed up as yet. That sounds technical. In a sense, they have made a political commitment to sign up to the second commitment period, but the point of actually signing up to the second commitment period still requires some technical work to be done, and so they will do that at a later point in time.
Senator BIRMINGHAM: That is the EU. Are there others aside from the EU?
Mr Comley : Yes, there are. We have a list.
Ms Walsh : The countries that have indicated that they are seriously considering CP2—and I use those words advisedly until they have—in addition to the 27 member states of the European Union are Belarus, Croatia, Iceland, Kazakhstan, Lichtenstein, Monaco, Norway, Switzerland and the Ukraine.
Senator BIRMINGHAM: Thank you. Is there a deadline in which they need to make their decisions under that? If they do sign on, are they signing on to a continuation of existing commitments or will they be making their commitments under the Copenhagen accord or the binding commitments under Kyoto? How would that apply?
Dr Banerjee : There is no deadline. I think earlier in the hearing Senator Milne mentioned that there are discussions in the EU about the structure and size of their targets currently underway. There is no deadline for them signing up. At the time of signing, you would expect that there would be an inscription of targets, but at the moment there is no formal target on the table.
Senator BIRMINGHAM: Has a formal decision been made by the Australian government about whether it would consider following suit in such a second commitment period?
Mr Comley : No, the government has not made a formal decision yet.
Senator BIRMINGHAM: Is it a matter that has been under any active consideration?
Mr Comley : It has been under consideration certainly within the department.
Senator BIRMINGHAM: And the department has presumably provided advice to the minister on the options of doing so.
Mr Comley : Certainly the department has provided at least preliminary advice to the minister on the pros and cons, yes.
Senator BIRMINGHAM: Did we ascertain whether there was a deadline as to when such decisions have to be taken?
Mr Comley : Dr Banerjee was correct in saying there is no deadline. Perhaps to expand on that slightly, the decision talked of inviting parties to express an intention by, I think, 31 May, but, again, the use of the word 'invite' does not rule out taking longer to form a determination as to whether you would join the second commitment period.
Senator BIRMINGHAM: Australia's position, I assume, would be somewhat influenced by what everybody else does.
Mr Comley : I think Australia's considerations across all climate change negotiations are influenced by what other people are doing, both in the Kyoto track per se and also in the totality of the negotiations.
Senator BIRMINGHAM: Can I ask about the international understanding as to how the structure of a carbon-pricing regime will impact on trade with other countries? In particular whether assistance packages set up under the carbon price scheme or the free permits for ET industries are likely to be considered by any other countries as count available, as being some form of protection measure that potentially they can impose duties on to offset?
Mr Comley : Typically, that issue has not been raised to great extent in the actual climate change negotiations themselves. To the extent that people have considered that issue outside Australia they have typically considered it in the WTO context. Typically, it is not raised in the climate change negotiations of themselves.
Senator BIRMINGHAM: Has it been raised with the department as a potential issue for any part of the clean energy future package?
Mr Comley : Some people have raised the question whether others would take that view, but, to be honest, it has not been something that we have had a lot of people coming through the door and making representations on.
Dr Kennedy : It is always an aspect of policy that we seek advice about from our colleagues at the Department of Foreign Affairs and Trade in providing advice to government on the package.
Senator BIRMINGHAM: Are you aware if any countries are treating any part of the CEF package in that manner?
Mr Comley : I am not aware of any country that has raised that in a specific way.
Senator BIRMINGHAM: Thank you. I am sure you will be able to respond, Mr Comley, although this perhaps stretches 1.4 a little: I understand that the Financial Review has sought information via FOI in relation to international carbon prices and other information from the department, and that the department has refused to waive any costs on the basis that the Australian Financial Review will derive a commercial benefit from the publication of a story based on any documents. Is that standard for the department for all media applications for FOI, that costs are imposed on all FOI applications?
Mr Comley : We could get our FOI coordinator up here, but our general approach is just to apply the act as it appears on a case-by-case basis and to determine whether we think there is a public interest benefit in waiving fees. I would not necessarily say that we had a standard approach to denying all media outlets, because we treat everything on a case-by-case basis.
Senator BIRMINGHAM: And it is, of course, that public interest test in terms of the approach taken to media outlets. Have any of them passed the public interest test?
Mr Comley : I would have to take that on notice.
Senator BIRMINGHAM: Could you, perhaps, provide some details of how many may have had costs waived or not had costs waived along the way?
Mr Comley : Certainly.
Senator SINGH: I think that Senator Birmingham has asked most of my questions in relation to Durban but I did want to ask Mr Comley or Dr Banerjee about the World Bank, which I understand has been working with a number of developing countries to help them develop carbon markets. Do you have any further information about that? Or have we been involved as a government in assisting with that from what we have already done?
Ms Walsh : I think you may be referring to the work the World Bank is doing in assisting countries who are interested in looking at market development in their own countries. I do have some details that I will just flick to now while we are speaking, but there are nine countries that have been provided with funding to do that. If you just give me a few minutes or go on to another question I will find that information. I know I have it here.
Senator SINGH: How does the government's Clean Energy Future plan place Australia to make the most of the Durban agreement?
Mr Comley : Probably the first thing that is worth saying is that the negotiating position of the Australian government was clearly influenced by the Clean Energy Future package having passed. In the discussions in Durban and before there was a fair bit of credit given for taking action on reducing emissions and having a plan that could do that. That puts in place the architecture. The other thing related to the Durban outcome is the extent to which international carbon markets can continue. There were some positive developments in the international carbon markets space. One of those which had not occurred before was the fact that carbon capture and storage could now have projects approved in the clean development mechanism, and that can potentially dovetail into the Clean Energy Future package. It is really the development of carbon markets which links into the Clean Energy Future package that was quite substantial, along with the general action on climate change which fed into the capacity of Australia to negotiate.
Ms Walsh : I am sorry not to have had this to hand immediately, but to answer your previous question, under the World Bank program we have nine developing countries that have now been giving funding approval to have a look at pricing carbon in their own economies. Those nine countries are Chile, China, Colombia, Costa Rica, Indonesia, Mexico, Thailand, Turkey and the Ukraine. There are six approved implementing countries or countries that want to participate, are yet to have their plans approved but are interest. These are Brazil, India, Jordan, Morocco, South Africa and Vietnam.
Senator SINGH: Please update the committee on China's plans to pilot an emissions trading scheme or schemes.
Ms Walsh : China is moving forward with its pilot programs on emissions trading and doing that in some four cities, three municipal areas and one what is called special economic zone. Those are underway. The government of China also indicated they will be looking at introducing a national scheme in around 2015.
Senator IAN MACDONALD: How many people constituted the Australian delegation to Durban? How many from your department and who were the others, not by name but from which departments?
Dr Banerjee : There were 46 people in the delegation altogether; 23 of those were from this department and the remainder were from other federal and state government departments and agencies.
Senator IAN MACDONALD: Did NGOs form part of the Australian delegation?
Dr Banerjee : They were not part of the Australian government delegation, no.
Senator IAN MACDONALD: They were not assisted with any money to get there?
Dr Banerjee : No.
Senator IAN MACDONALD: Okay. And who led the delegation?
Dr Banerjee : I think we discussed this at the last estimates.
Senator IAN MACDONALD: That was proposed. I want to know who did.
Dr Banerjee : The formal head of the delegation is the Ambassador for Climate Change, until the minister arrives. The negotiations formally go for two weeks. The minister was there in the second week, and so is then the—
Senator IAN MACDONALD: Sorry, I did not get the bit about the first week.
Dr Banerjee : The head of the delegation is the Ambassador for Climate Change, who was Ms Louise Hand at that time, at the start of the negotiations. The minister arrives partway through the negotiations and then of course becomes the head.
Senator IAN MACDONALD: Yes, I understand that. Does Australia have an individual person as a delegate to the ad hoc working group?
Dr Banerjee : The ad hoc working group for the Durban platform?
Dr Banerjee : That was established, or foreshadowed, in the decision right at the end of the negotiations. The secretary might remind me of exactly when that was, but it was after a couple of all-night sessions and, from my recollections, into the Saturday morning. So, until that point, it did not exist. So for the Durban negotiations themselves there were no negotiations in that ad hoc working group. It will now be established going forward.
Mr Comley : Following from the previous answer, I know it is a bit of a misleading title. You really have to think of the ad hoc working group as just being the meeting that is convened and countries and members rather than thinking about individuals.
Senator IAN MACDONALD: Okay. So we will not have a particular delegate going forward—
Mr Comley : No, because Australia is represented—and, depending what is being covered, we will have other people.
Dr Banerjee : You can think of it as a negotiating stream.
Senator IAN MACDONALD: Just briefly, Senator Birmingham was asking about international trade issues—and I acknowledge your response. I read in the paper that American airlines and Chinese airlines are ignoring the European surcharge. Are you involved at all with Qantas, or do you have a view on whether Qantas should be paying or not be paying?
Mr Comley : This is a matter for the Department of Infrastructure and Transport. But it is probably quite important to distinguish what that issue is. That issue is the European Union trying to impose their domestic, if you like, trading scheme, on flights that go into Europe, for the full amount of the trip for the last leg. So if you fly from Hong Kong to London or Paris, that full leg is covered. The issue that has been raised by those airlines is, in a sense, whether it is extraterritorial—emissions in international aviation space. I am not sure how accurate those newspaper reports are, because I think one of those reports did comment that the liability is starting now. I think they will not actually be required to comply until the first payment point, around 12 months from now. So they are asking the question about whether it is an appropriate charge. This issue of the nature of that particular arrangement has been raised at an intergovernmental level a number of times, not just by airlines themselves.
Senator IAN MACDONALD: So, whatever Australian airlines' approach to it is something you say I should ask the transport department?
Mr Comley : That is right.
Senator IAN MACDONALD: Finally, I was asking this morning—someone suggested this might be the better place to ask—about France and Europe going non-nuclear following Fukushima. Are you aware of any official approach or policy from France as to what it intends to do with regards to nuclear power?
Mr Comley : My colleagues might want to add to this, but my understanding is that the French stance on nuclear power has not changed. I have certainly asked the question directly of some international colleagues at various meetings, and my understanding is that, while it is true that there is probably a change in stance in countries like Germany, that is not the case in France.
Senator IAN MACDONALD: Knowing the French, that would be my thought on how they would approach it—even though there was some initial public comment about France cutting back. I think that is all I had, thank you, ladies and gentlemen.
Senator BIRMINGHAM: Is there any progress that we can take heart from out of Durban in terms of dealing with deforestation and REDD matters?
Ms Walsh : Yes, Senator. The REDD negotiations in Durban continued at a very good pace and there was a very positive outcome. The negotiations are now moving into quite a technical area, now there is agreement that there will be a REDD mechanism of some description. So a lot of the negotiations are now focused on technical issues, about measurement largely. The other thing that happened in Durban that is probably new from previous negotiations is that there was a specific decision to consider market mechanisms as one of the approaches to a global approach to REDD-plus.
Senator BIRMINGHAM: Is that in consideration of how to actually pay and fund activities to cease forestry activities in some developing countries?
Ms Walsh : The issue of finance is certainly an active consideration. One of the negotiations that was happening in Durban, and quite a lot of work that we were doing in the lead-up to Durban, was in establishing the Green Climate Fund. That negotiation was also focused on REDD-plus as a specific issue on which funding through the Green Climate Fund might be directed to.
Senator BIRMINGHAM: Thank you. That will do me for now.
CHAIR: As there are no further questions, we will call it quits for this session and we will move to SEWPaC after the break. Thanks for your assistance, Mr Comley, and the assistance of your team.
Proceedings suspended from 17:42 to 19:00