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Economics Legislation Committee
21/11/2013
Estimates
INDUSTRY PORTFOLIO
Commonwealth Scientific and Industrial Research Organisation

Commonwealth Scientific and Industrial Research Organisation

[10:46]

CHAIR: The committee will begin today's proceedings with the Commonwealth Scientific and Industrial Research Organisation and will then follow the order as set out in the circulated program. I welcome Senator the Hon. Michael Ronaldson, Special Minister of State, Minister for Veterans' Affairs and Minister Assisting the Prime Minister for the Centenary of ANZAC, representing the Minister for Industry; and officers from the CSIRO. Minister or officers, would you care to make an opening statement?

Dr Clark : No, I do not have an opening statement.

CHAIR: Minister?

Senator Ronaldson: I do not have an opening statement either.

Senator KIM CARR: Before I begin, Mr Chair, perhaps you could draw my attention to where cross-portfolio questions will be asked for this portfolio.

CHAIR: In terms of the—

Senator KIM CARR: In terms of the program you have published.

CHAIR: They will not be in CSIRO. The general—

Senator KIM CARR: No, but this is the first agency for this portfolio. I would like to know where cross-portfolio questions will be asked.

CHAIR: In terms of—

Senator KIM CARR: The whole portfolio.

CHAIR: So in terms of corporate type questions and things like that?

Senator KIM CARR: They are cross-portfolio. That is what we have been doing here, in my experience, for 20 years. When are they asked?

Senator BERNARDI: Whilst you are establishing that, Chair, perhaps I could ask some questions of CSIRO.

CHAIR: That would be—

Senator KIM CARR: No, we have to establish where these are being asked, because they might be matters—

Senator BERNARDI: No, we do not. What we have to do is ask questions.

CHAIR: At 1.45 would be where I would presume that would be asked.

Senator KIM CARR: Are they listed as cross-portfolio?

CHAIR: That is outcome 1.

Senator KIM CARR: Why have they not been listed?

CHAIR: They are listed in accordance with the normal practice.

Senator KIM CARR: That is not the normal practice.

Senator BERNARDI: I have some questions for CSIRO.

Senator KIM CARR: What do you have? Is it half an hour for this agency?

Senator BERNARDI: If Senator Carr is unprepared—

Senator KIM CARR: I am very much prepared, as you are about to discover.

Senator BERNARDI: I am prepared to ask questions of the agency.

CHAIR: Senator Carr, I have indicated where they are. Have you questions for the CSIRO?

Senator KIM CARR: I have.

CHAIR: Please proceed with your questions. Otherwise I will give the call to Senator Bernardi.

Senator KIM CARR: Could I ask Dr Clark about the staffing cuts in the CSIRO. I understand that the Prime Minister has said that these are matters for you and that you are responsible, presumably as the chief executive officer of the CSIRO. The email that has been distributed to all staff by you, dated 31 October—I presume that is the day on which you received the edict from the Public Service Commissioner about non-ongoing staff—says:

In line with the announcement by the Government today regarding APS recruitment, I announce an immediate recruitment freeze covering the following: external recruitment; and, entering into any new, or extending existing term or contract employment arrangements.

Who was responsible for the freeze on external recruitment and the ending of contracts for people who were on short-term arrangements?

Dr Clark : It is correct to say that managing CSIRO is a matter for the management of CSIRO within our four year budget outlook. In terms of the announcement that was made, we were really looking at and being mindful of the fact that there was an announcement to come out regarding the APS that would be of immediate concern to our staff. We were also mindful of the fact that the federal government and many of the departments are research partners with CSIRO and part of our external revenue—which, as you would be aware, is 40 per cent of our revenue. So, mindful of both of those things, it was very important that we provided clarity to staff.

In terms of the decision, we track our staff headcount regularly and report it within our executive and to the board. In September and October we reported and the chief financial officer highlighted the fact that our staffing levels were above those which were in our portfolio budget statements and above our budget position. So we had taken decisions that we needed to make sure that we were operating within the staffing levels that we had set under the portfolio budget statements and within our budget parameters. Having made that decision, it was important then to provide clarity to our staff and be mindful of what was happening around us.

Senator KIM CARR: Can you tell me the staffing assessment for the department in the 2013-14 budget.

Dr Clark : In terms of our portfolio budget statements and then in our internal budget? Which number are you actually looking at?

Senator KIM CARR: I am looking at the staffing establishment declared in the PBS.

Ms Hazel Bennett : In the PBS the staffing establishment for 2013-14 is 5,550.

Senator KIM CARR: What is the internal budget number?

Ms Hazel Bennett : The internal budget is the same on an ASL basis.

Senator KIM CARR: How many of those staff are employed on fixed-term contracts?

Dr Steele : In the current situation, we have 933 who are non-casual term appointments and 430 who are casual appointments. That is a headcount, not an ASL number.

Senator KIM CARR: That is individuals. What is the ASL number?

Dr Steele : I do not think it is possible to tell exactly what the ASL number is. That is an average number and we have not actually calculated it out because we do not yet know how many of those appointments will in fact be continuing under the provisions of the announcement that has been made.

Senator KIM CARR: It says in that memorandum that 'when existing non-ongoing employment arrangements cease at the end of the current term, you are to refrain from entering into new arrangements other than where an agency approves a particular requirement in order to meet a critical business demand'. How many people do you think will be affected by that?

Dr Steele : Which document are you referring to?

Senator KIM CARR: I am quoting from the Public Service Commissioner's letter to you of 31 October. How many staff were affected by that?

Dr Clark : We had the jobs that we were advertising around the organisation, and we were mindful of making sure it was jobs that were mission-critical and could not be met elsewhere. Secondly, there were jobs where the term of appointment was coming up within the next 12 months and also our casual term renewals. In the normal course of events many of those would not be renewed. What I was asking of our leaders and managers was to make sure there was additional consideration and approvals put in place before those renewals were formalised. But I was very clear that we would not compromise the good work that we do for the nation and we would not compromise our partnerships with our external partners, our industry partners and the community. So I was simply asking my managers and leaders, as is appropriate and prudent in this environment, to make sure there was additional consideration for those renewals.

Senator KIM CARR: Precisely how many will be affected?

Dr Clark : In 2013-14 it is 265 casuals and 315 term appointments. Be mindful that, in the normal course of business, many of those would not be renewed in any given year.

Senator KIM CARR: I appreciate the fact that you perform a wide range of functions and that people do quite short-term contracts for the organisation. But I am still interested to know what the numbers are. In terms of the budgetary implications, what sort of budgetary saving will there be?

Dr Clark : We do not have a target. We are simply asking for our processes and recruitment procedures to have additional consideration. I did mention that I was also going to cover exceptions. Excepted from this is the recruitment of our postdoctoral fellows and also our Indigenous employment and training programs. We also employ seasonally field staff who are important to support our research programs, particularly in agriculture, and we have students, fellows, visitors and affiliates. None of those will be within the scope of this.

Senator KIM CARR: What percentage of the numbers you mentioned this morning performs work for the CSIRO that you regard as mission-critical?

Dr Clark : As to where we stand today, I cannot provide you with information on where they are and the areas.

Senator KIM CARR: Can you take that on notice.

Dr Clark : I can take that on notice and provide you the information as it stands at the close of business today.

Senator KIM CARR: I appreciate that it is obviously a time-sensitive issue. Can I have the number of postdoctoral fellows and Indigenous cadets that will be quarantined.

Dr Clark : I can provide you that today. My understanding is that we have 10 postdoctoral fellowships and five Indigenous traineeships that are currently advertised and they are exempt.

Senator KIM CARR: They are not affected by this in any way?

Dr Clark : No.

Senator KIM CARR: That is good. Which CSIRO sites will be affected and how?

Dr Clark : We will provide that information on notice.

Senator KIM CARR: What impact will this have on research flagships, particularly in regard to non-ongoing staff?

Dr Clark : As I mentioned, our overriding principle is not to compromise the work that we do with our partners through our flagships—the critical work that we do across CSIRO and for the nation.

Dr Steele : The internal process now is that, if you have one of these positions that you want to recruit for, you will make a case internally for that to occur. Therefore, each of these cases will be considered on a case-by-case basis and 'mission-critical' will be applied to each individual case. So what we will be able to is go through and describe at a point in time what cases are being considered and what that looks like.

Senator KIM CARR: This measure affects people on contracts over the next two years, or all contracts?

Dr Clark : No. In terms of the announcement, we have asked people to look at those contracts that are coming up. I would expect to review this as we have clarity about our environment and well into the new year.

Senator BERNARDI: I am a little perplexed here. I am deeply concerned because I have been reading press releases from the Community and Public Sector Union, transcripts from Mr Shorten and interviews with Greens MP Adam Bandt making claims that one-quarter of Australia's scientists are going to be sacked from CSIRO. That should concern everybody. But the evidence you have given today suggests that I cannot rely on the words of Mr Bandt, Mr Shorten or the Community and Public Sector Union, who have made these outrageous claims. Are one-quarter of scientists at CSIRO going to be sacked?

Dr Clark : No. There was some unfortunate information put out in by The Sydney Morning Herald that referred to a number that was not correct. And that of course was shortened across the media to become 'one-quarter of the staff', creating deep concern across the community and among our stakeholders. We have provided clarity in a number of forums. We have provided fact-check information through the ABC which is available to all media outlets—

Senator BERNARDI: Not entirely reliable fact-checking there!

Dr Clark : I can assure you the information we have provided is accurate, so there is no excuse for misinformation. We have also provided information on our website as to the accurate information, and I informed all staff immediately as to the accuracy of the information. But you are right, it has caused deep concern within the community.

Senator BERNARDI: Is it your scientific opinion that we cannot rely on what the Fairfax press, Mr Shorten and Mr Bandt say about one-quarter of Australia's scientists being cut from CSIRO?

Dr Clark : I have tried to provide you the accuracy of information that I think this committee should have available to it. We have made it available publicly and it is our responsibility to make sure that information is there.

Senator BERNARDI: Suffice it to say that the alarmist propaganda about Australia's commitment to scientific research put out by Greens MP Mr Bandt, Mr Shorten and the Fairfax press is incorrect?

Dr Clark : It is unfortunate that there was misinformation in the media, yes.

Senator BERNARDI: You are much more diplomatic than I am.

Senator KIM CARR: What is the total percentage of staff at the CSIRO who are on short-term contracts?

Dr Steele : The total number of people who are on fixed-term or casual appointments, in aggregate, is 1,363. To put that into context, there are a total of 6,299 staff who are either on indefinite appointments or term or casual appointments. In addition to that, the organisation has 2,633 affiliates—that is, students, contractors or fellows.

Senator KIM CARR: In terms of employees, what is the percentage?

Dr Steele : Just to be clear: those were headcount numbers. To be perfectly honest, I have not done the percentages.

Senator KIM CARR: As I understand it, in headcount terms there is one number, but what is the percentage of effective full-time staff who are on short-term contracts?

Dr Steele : Effective full-time staff on short-term contracts—I do not have that number with me. We have only got headcount numbers.

Senator KIM CARR: Could you come back to me today on that.

Dr Steele : We should be able to come back to you on that today.

Senator KIM CARR: It should not be too hard to find that number. It might clear up this discrepancy, that's all. As I understand it, news reports referred to an aggregate number of staff.

Dr Clark : My understanding is that the news reports took an aggregate number over a number of years—

Senator KIM CARR: Yes, that is the point.

Dr Clark : which would be inappropriate and an exaggeration.

Senator KIM CARR: I think they did take it over a couple of years, so that is certainly true and I understand. How long is this staffing pause run for? Is it a couple of years?

Dr Clark : No, I mentioned that I will review the situation well into the new year, and of course it would be important to make sure that we have the certainty in terms of our external funding in that environment.

Senator KIM CARR: I understand your position, Dr Clark, but how long does this memorandum run for?

Dr Clark : Which memorandum?

Senator KIM CARR: This is from the Public Service. What is the time duration on that?

Dr Clark : I would direct that question to the department.

Senator KIM CARR: How long does that run for, Ms Beauchamp?

Ms Beauchamp : All the employment arrangements are being monitored on an ongoing basis to make sure all portfolios and agencies are sustainable in the longer term. So I think we are looking—

Senator KIM CARR: Is this indefinite, though, or is there a finite period for this to—

Ms Beauchamp : I do not think there is a finite period. I think agencies have been asked to ensure that they are living within their means.

Senator KIM CARR: Sure, I understand that. But how long does this particular memorandum hold?

Ms Beauchamp : I think the memorandum holds until we have reached our sustainable levels of operation for the forward estimates.

Senator KIM CARR: So it is reasonable for agencies to presume it will be there indefinitely, until you are told otherwise?

Ms Beauchamp : Until we have reached our budget aims in terms of sustainability.

Senator KIM CARR: But there is no time limit on this document, is there?

Ms Beauchamp : I think some agencies will probably reach their sustainable levels of operation earlier than others.

Senator KIM CARR: But there is no time limit—is that true or not? Is there a time line specified in this memorandum?

Ms Beauchamp : Those things will be looked at by the government in the budget context.

Senator KIM CARR: I will ask you a straight question: have I misunderstood the document? Is there a time line identified in this memorandum that has been received by all agencies across government on 31 October?

Ms Beauchamp : I do not think it is a simple equation, as you have outlined. I think it is a case-by-case basis for all agencies and portfolios.

Senator KIM CARR: Okay. Dr Clark, when do you expect the research vessel Investigator to be commissioned?

Dr Clark : We are expecting the research vessel Investigator to be arriving in Australia early in 2014.

Senator KIM CARR: And it has been delayed for a little while?

Dr Clark : It has had a few small delays. One of the things that I am stressing with the team is that we have managed this entire project without one single injury to any of the contractors. So, right at the very end of the project, everything is going well and the vessel is looking fantastic. We are just making sure that we complete this project and we complete that safety record, so a few days of delay is something that we can live with.

Senator KIM CARR: I am very pleased to hear that. As you appreciate, this is an investment that I am particularly concerned about. It has been quite a struggle to be able to replace our capacity. How much has been spent to date on the project?

Dr Clark : As you are aware, the funding for the vessel is a $120 million project. In terms of expenditure to date, I will take that on notice as of close of business today and will provide you with these—

Senator KIM CARR: But it is on budget?

Dr Clark : Yes, we are on budget. We are on scope. We have had a small delay and we have had zero lost time injuries.

Senator KIM CARR: What is the financial location for its ongoing operations?

Dr Clark : We have an ongoing $5 million for funding for the mooring and the maintenance of the vessel and we have $12.1 million for the operation of the vessel.

Senator KIM CARR: How long will that last?

Dr Clark : It was for the 2013-14 year. For the timing and the current discussions we are having on that, I will go to Hazel.

Ms Hazel Bennett : Senator, you are correct. The $12.1 million was additional funding provided by government for the year 2013-14.

Senator KIM CARR: Yes. So, come the end of this financial year, how much do you have available?

Dr Clark : We had 12 months funding in terms of the $12.1 million. We would be looking to have discussions to see if that is available for the 12 months of operation. At this point, I cannot confirm that, but we would be looking to have 12 months of operation of the vessel.

Senator KIM CARR: How many days a year will the research vessel operate? What is your expectation?

Ms Hazel Bennett : The vessel has the capacity for 300 days a year. The $12.1 million has been estimated on approximately 165 to 185 days—as you can appreciate, it does depend a little bit as to the scientific purpose.

Senator KIM CARR: Sure. So what is the cost for the vessel to operate at 300-day capacity?

Ms Hazel Bennett : Our estimate for that is in the order of $26 million per annum.

Senator KIM CARR: So I presume you will be seeking $26 million come the end of this financial year?

Ms Hazel Bennett : That matter, as Dr Clark has indicated, is certainly under consideration as part of our budget process.

Senator KIM CARR: It would be an awful shame if the Commonwealth were to spend $120 million getting a state-of-the-art vessel and not have any money to actually put it to sea—would you agree, Dr Clark?

Dr Clark : We have, as Ms Bennett has outlined, 12 months funding and we will be seeking ongoing funding for the vessel.

Senator KIM CARR: I just want to be clear about this: the money runs out at the end of this financial year.

Dr Clark : As I said, the vessel will arrive in early 2014. We had $12.1 million allocated for the 2013-14 year. As you mentioned, it has been delayed. We will be entering discussions to see if that funding can be available for the first 12 months, which would mean it would go across the two financial years.

Senator KIM CARR: There may be some carry-over?

Dr Clark : I cannot confirm that yet; we are in discussions as to—

Senator KIM CARR: Have you had sea trials yet?

Dr Clark : The vessel has been in the water, and will of course be going through sea trials. We are currently moving into trial.

Senator KIM CARR: Will that $12.1 million be available for the sea trials?

Dr Clark : In terms of the coverage of sea trials: all of the coverage, until commission of the vessel, is covered in our existing contract—so that is covered.

Senator KIM CARR: Thank you.

Senator Ronaldson: Chair, if I may: my understanding is the former government only allocated one year's funding for the operations of this boat—so I am not too sure where Senator Carr is coming from with this.

Senator KIM CARR: It is very straightforward: I knew exactly how much money was there and what was required, Minister, and I trust you will support a budget that will allow the vessel to actually go to sea.

Senator Ronaldson: You had allocated one year of funding. At the moment we are operating under a timetable that was actually imposed by you, so—

Senator KIM CARR: So the ball is in your court then, Minister!

Senator Ronaldson: we will wait and see. You certainly had not planned any further than 12 months out—

Senator KIM CARR: At the last budget.

Senator Ronaldson: which of course was the wont of the former government; and this government will clearly—

Senator KIM CARR: And now the ball is in your court, Minister—so you will have no trouble meeting that, will you!

Dr Clark, are there any proposals to amalgamate the AAO or the National Measurement Institute into the CSIRO?

Dr Clark : There are currently no proposals. We are working with the department on our portfolio view, but there are currently no proposals.

Senator KIM CARR: So you are not aware of any suggestions about a restructure of that type?

Dr Clark : We do have service activity in CSIRO that we provide to industry players which has the possibly of there being an opportunity to aggregate with other services that are provided, either in the portfolio or outside the portfolio. We look at those opportunities regularly and we will continue to look at those opportunities.

Senator KIM CARR: I know it is a long-held dream of the CSIRO to get the National Measurement Institute back within the remit of the board, but there are no current proposals before you or the government for a restructure to bring the AAO or the NMI back into the CSIRO?

Dr Clark : I cannot speak for the NMI but I would ask the departmental secretary.

Senator KIM CARR: Yes, that is a good point: Madam Secretary, how can you help me with this?

Ms Beauchamp : I hope I can help, Senator: there are no current proposals such as you have just outlined before government.

Senator KIM CARR: Thank you.

Ms Beauchamp : If I could be more helpful, in the context of the Commission of Audit—and being new to portfolio—we have been asked to look at all portfolio boards, agencies and the like. So, in a sense, I would have thought that nothing was out of scope in terms of consideration; but certainly nothing has been proposed in relation to those things you have outlined.

Senator KIM CARR: I guess we will have to wait for the audit report on that, will we?

Ms Beauchamp : You would have to talk to the Commission of Audit about what they are considering.

Senator KIM CARR: Thank you. I am wondering, Dr Clark, has the CSIRO made any recommendations in regard to the appointment to boards and committees—for instance, the Australia Telescope National Facility Steering Committee?

Dr Clark : In terms of the appointments to committees, I have made a recommendation for the appointment of members to the Australia Telescope National Facility.

Senator KIM CARR: When was that presented to government?

Dr Clark : Let me take that on notice to get the date right. It was recently, but I would like to give you the accurate date in answer to your question.

Senator KIM CARR: Could you provide me with a list of upcoming appointments to any boards or committees of the CSIRO that require ministerial decision? I do not want to know every committee in the CSIRO, but I would like to know which committees require ministerial—

Dr Clark : I can provide you with the timetable of appointments that require ministerial approval and are affiliated with the CSIRO.

Senator KIM CARR: Well, I will put the rest of my questions on notice.

Senator BERNARDI: Dr Clark, I just want to go back to this issue of staffing for a moment, if you do not mind. In the Finance and Public Administration estimates committee hearing on Monday morning, it was revealed that the previous government had plans to slash 14,500 jobs across the Public Service, which had forced a large number of agencies and departments to offer voluntary redundancies, which were largely unfunded. Was the CSIRO advised that they would need to make cuts in their employment by the previous government?

Dr Clark : No. CSIRO assesses the appropriate way to manage through the risks that are associated with our four-year financial sustainability, and we do that cognisant of the financial envelope that is in the portfolio budget statements and also cognisant of our assessment of the external environment. Forty per cent of CSIRO's funding comes from our industry and external partnerships so, cognisant of both of those, we simply manage the risks with a four-year view and our staffing accordingly. We try to make sure that we are managing that with enough forward outlook that we minimise the impact on our staff or minimise the requirement for—

Senator BERNARDI: The fact that in the last budget the result was going to be 14,500 total job cuts across the public sector, and the assessment by the CSIRO in respect to your own funding from government, would have had an impact?

Dr Clark : In April of this year I did announce a reduction of our staffing salary, as well as our non-staffing cost, of around 2½ per cent, and that was roughly on the order of just over 200 roles. So in the last financial year we have made redundancies, and we have further planned redundancies. That was announced in April, consistent with managing within our forward financial envelope but also consistent with our prioritisation and prioritising our activities into those biggest challenges that face the nation.

Senator BERNARDI: So the redundancies that have already been announced—the 200 in April of this year?

Dr Clark : It was just over 200.

Senator BERNARDI: I am happy to take that figure in general. Was that 200 intended redundancies, or were there 200 announced then with further to come as a result of the last year's budget?

Dr Clark : No, I announced the reduction of just over 200 in headcount, and they either have been completed or are in process.

Senator BERNARDI: So the 200 were a part of the 14,500 public sector job cuts under the Labor government.

Dr Clark : The CSIRO manages its activities within its budget envelope, so it was independent of any of those announcements. We have very clear four-year appropriation funding in the portfolio budget statements and we have, as I said, 40 per cent of our funding from our external partners. We also look at where the priorities are for the nation and make prioritisation accordingly. So those decisions are really to manage within our own assessment of the risks and support. I would note that we have just tabled our annual report for the previous year, in which we had record support from external partners, industry and the like. I would say the environment that we are going into in, certainly, the next 12 months in some sectors is quite tough and in other sectors we are seeing good investment. So we also need to adapt to and manage those risks.

Senator BERNARDI: In regard to the budget envelope which was outlined in the last budget under the previous government, which forced you to make the 200 redundancies—or did not force you but prompted the decision—were those redundancies of scientists or of support or administrative staff?

Dr Clark : I do not have the full breakdown with me today. Jack, do you want to cover that?

Dr Steele : Yes.

Senator BERNARDI: Time is a bit short, but maybe you could provide that on notice.

Dr Steele : In general terms, it cuts across, but we try to keep as many of our scientists as we can in the way in which we engineer that.

Senator BERNARDI: I understand. I would be interested if you could provide that on notice.

Dr Steele : Yes, sure. For clarity, we will provide that detail on the redundancies that have occurred to date, because some are still ongoing. But we will have precise information on the redundancies in the current financial year to date.

Senator BERNARDI: Dr Clark suggested that they had been just about completed.

Dr Clark : No, some have been completed and we are still completing some this year.

Senator BERNARDI: I do not want you to tell me who is going to be made redundant in the future, but I think to date would be good.

Dr Steele : Yes. On the ones that we have done to date—the number is about 130 to 140 at this point in time—we will be able to provide that breakdown information.

Senator BERNARDI: Thank you, and we can follow up the rest later on.

CHAIR: Thank you to Dr Clark and the CSIRO for assisting us.