REGIONAL AUSTRALIA, LOCAL GOVERNMENT, ARTS AND SPORT

In Attendance

Senator Arbib, Assistant Treasurer, Minister for Small Business; Minister for Sport, representing the Minister for Regional Australia, Regional Development and Local Government; Minister for the Arts

Department of Regional Australia, Local Government, Arts and Sport

Executive

Ms Glenys Beauchamp, Secretary

Ms Stephanie Foster, Deputy Secretary

Mr Geoff Leeper, Deputy Secretary

Mr Dan O’Brien, Deputy Secretary

Mr Richard Eccles, Deputy Secretary

Corporate Services

Mr Jamie Clout, Chief Operating Officer

Mr Kym Partington, Chief Financial Officer

Mr Michael Nelson, Assistant Secretary, HR, Legal and Governance

Outcome 1

Mr Tony Carmichael, First Assistant Secretary, South East Australia and RDA Network Division

Mr Xavier Csar, Assistant Secretary, South East Australia

Mr Adam Stankevicius, Assistant Secretary, RDA Network

Ms Robyn Fleming, First Assistant Secretary, North West and Local Government Division

Mr Gordon McCormick, Assistant Secretary, Programs

Mr Robbie Bolton, Acting Assistant Secretary, Local Government

Mr Andrew Dickson, Acting Assistant Secretary, ONA and West

Ms Megan Lees, Assistant Secretary, Murray-Darling Basin Taskforce

Ms Karen Lindsay, Director, Regional Development Australia Fund

Mr Simon Atkinson, First Assistant Secretary, Policy and Coordination Division

Mr Bruce Taloni, Assistant Secretary, Policy and Coordination

Ms Elizabeth Wilde, Assistant Secretary, Policy and Coordination

Ms Maria Frampton, Acting Assistant Secretary, Strategic Priorities

Ms Julia Pickworth, Acting Assistant Secretary, Policy Development and Reform

Mr Shane Bennett, Assistant Secretary, Regional Economic and Evaluation

Mr Julian Yates, First Assistant Secretary, Territories and Disaster Reconstruction Division

Ms Jane Heffernan, Assistant Secretary, Engagement and Reporting

Ms Cara Little, Acting Assistant Secretary, Territories and Reconstruction Policy

Outcome 2:

Mr Julian Yates, First Assistant Secretary, Territories and Disaster Reconstruction Division

Ms Gillian Savage, First Assistant Secretary, Norfolk Island , Project Strategy and Delivery

Ms Belinda Moss, Assistant Secretary, Territories Service Delivery

Ms Cara Little, Acting Assistant Secretary, Territories and Reconstruction Policy

Outcome 3:

Ms Sally Basser, First Assistant Secretary, Office for the Arts

D r Stephen Arnott, Assistant Secretary, Creative Industries and Sector Development

Ms Lyn Allan, Assistant Secretary, Regional, Participation and National Collections

Ms Celia Street, Assistant Secretary, Strategic and Whole of Government Policy

Ms Stacey Campton, Assistant Secretary, Indigenous Culture Branch

Mr Paul McInnes, Assistant Secretary, Governance and Information

Ms Louise Doyle, Assistant Secretary, National Portrait Gallery

Mr Mark Munro, Director, Executive and Office Support

Australia Council

Ms Kathy Keele, Chief Executive Officer

Ms Robyn Cowdry, Executive Director Corporate Resources

Screen Australia

Dr Ruth Harley, Chief Executive Officer

Ms Fiona Cameron, Executive Director Strategy and Operations

Mr Richard Nankivell, Chief Financial Officer

National Museum of Australia

Mr Andrew Sayers AM, Director

Mr Graham Smith, Chief Operating Officer

Ms Helen Kon, Assistant Director, Audience Programs and Partnerships

Dr Kirsten Wehner, Acting Assistant Director, Collections, Content and Exhibitions

Ms Kylie Noonan, Chief Financial Officer

National Gallery of Australia

Dr Ron Radford AM, Director

Mr Alan Froud, Deputy Director

National Library of Australia

Ms Anne-Marie Schwirtlich, Director-General

Mr Gerry Linehan, Assistant Director-General, Corporate Services

National Film and Sound Archive

Mr Michael Loebenstein, Chief Executive Officer

Mr Steve Vogt, General Manager, Corporate and Collection Services

Ms Sonia Gherdevich, Acting General Manager, Collection Development and Outreach

Outcome 4:

Mr Bill Rowe, General Manager, Office for Sport

Mr Jaye Smith, Assistant Secretary, Sport and Event Support

Ms Natasha Cole, Assistant Secretary, Sport Development

Australian Sports Commission

Mr Simon Hollingsworth, Chief Executive Officer, Australian Sports Commission

Mr Phil Borgeaud, Acting Director, Australian Institute of Sport

Ms Judy Flanagan, General Manager, Government Relations, Communications and Research

Mr Greg Nance, General Manager, Sports Development

Mr Steve Jones, General Manager, Commercial Operations

[17.05]

CHAIR: I welcome Senator the Hon. Mark Arbib, Assistant Treasurer, Minister for Small Business and Minister for Sport, representing the Minister for Regional Australia, Regional Development and Local Government and Minister for the Arts; Ms Glenys Beauchamp, Secretary to the Department of Regional Australia, Local Government, Arts and Sport; and the officers of the department. The committee has fixed Friday, 30 March 2012 as the date for the return of answers to questions taken on notice. Senators are reminded that any written questions on notice should be provided to the committee secretariat by close of business Friday, 17 February 2012. Under Standing Order 26 the committee must take all evidence in public session, which includes answers to questions on notice. Officers and senators are familiar with the rules of the Senate governing estimates hearings. If you need assistance, the secretariat has a copy of the rules.

I particularly draw the attention of witnesses to an order of the Senate of 13 May 2009 specifying the process by which a claim of public interest immunity should be raised and which I now incorporate in Hansard.

The extract read as follows—

Public interest immunity claims

That the Senate—

(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly raising claims of public interest immunity as required by past resolutions of the Senate;

(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;

(c) orders that the following operate as an order of continuing effect:

(1) If:

(a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and

(b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which the officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify the harm to the public interest that could result from the disclosure of the information or document.

(2) If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the minister.

(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or document.

(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from the disclosure of the information or document to the committee could result only from the publication of the information or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the committee as in camera evidence.

(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement does not sufficiently justify the withholding of the information or document from the committee, the committee shall report the matter to the Senate.

(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising the matter in the Senate in accordance with other procedures of the Senate.

(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal deliberations of, government, in the absence of specification of the harm to the public interest that could result from the disclosure of the information or document, is not a statement that meets the requirements of paragraph (I) or (4).

(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be required to provide a statement in accordance with paragraph (3).

(Extract, Senate Standing Orders, pp 124-125)

Officers called upon, for the first time, to answer a question should state their full name and position for the Hansard record and witnesses should speak clearly into the microphone. I remind everyone present, Senator Macdonald included, to switch off their mobile phones or render them inaudible. Minister, do you or Ms Beauchamp wish to make an opening statement.

Senator Arbib: No.

Ms Beauchamp : Yes, thank you. I thought it might be useful just to outline, since we appeared at the last Senate estimates committee, the changes that have occurred through the machinery of government changes last December. I wanted to go through a bit of a statement in terms of the makeup of the new department.

CHAIR: Please, if you could.

Senator IAN MACDONALD: Is it brief?

Ms Beauchamp : It is very brief. The reason I have sought approval to make this statement is the, what seemed like, confusion and debate earlier this week.

CHAIR: Senator Macdonald is not being rude, but we are really short for time.

Senator IAN MACDONALD: It is very appropriate, but the chair is right; we are very constrained.

Ms Beauchamp : The department was created on 14 December and we are focused on strengthening regions and communities by improving local opportunities. The new department brings together organisations, policies and programs that facilitate innovation, productivity and liveability, that is, the functions and programs that contribute to improving the wellbeing of communities right across Australia. Our functions go to the heart of what keeps communities, towns and regions together.

We are a department of about 800 staff with 16 portfolio agencies that cover four key functions or outcomes—the provision of community infrastructure and services in regional and local government areas and financial support to local government; maintaining good governance in the Australian territories and providing essential services for the non-self governing territories; providing opportunities for participation and access to Australia’s arts and culture; to promote excellence and provide support for cultural heritage; and providing opportunities for community participation in sport and recreation; and to promote excellence in high-performance athletes. Together these functions and outcomes contribute significantly to Australia’s wellbeing and productivity.

We know that regions are key contributors to Australia’s productivity. For example, two-thirds of the nation’s export earnings are generated in the regions. The importance of regions is why the government has invested $4.3 billion in the 2011-12 budget to help drive growth, liveability and sustainability across regional Australia.

The arts, cultural activity and creativity are also strong forces in the Australian economy, with the Centre for International Economics noting the value of the creative industries alone at $31 billion in industry gross product. These industries also provide employment to 485,000 Australians, with quite strong growth rates in both the arts and sports area. The Prime Minister has noted that the new machinery of government arrangements provide a valuable opportunity for the government to focus on the delivery of sport and arts in regional Australia, as well as non-regional Australia. Having these functions together provides a great opportunity for us to influence activities and outcomes that are important for communities. The consolidation of these functions means that the department is located in over 20 locations right across Australia. As a small agency, we have achieved quite a bit on behalf of the government in terms of its commitment to regional Australia, and now with the revised machinery of government arrangements hope we can go from strength to strength in supporting regions. Thank you.

CHAIR: Thank you. Might I say, before I go to senators, that the Regional Australia and Local Government departments are no strangers to this committee. We will go to Corporate Services and Senator Joyce.

Senator JOYCE: I am quite happy to be brief with Corporate Service and put a lot of my questions on notice.

CHAIR: Thank you.

Senator JOYCE: I will ask one and then put the rest on notice, because there are many other areas that are vastly more important. I have one curiosity. At 30 November you told us you had five staff looking after climate change issues. Do you still have five staff looking after climate change issues?

Ms Beauchamp : Yes, we do.

Senator JOYCE: How are they going? Have they changed the climate yet?

Ms Beauchamp : The contribution of the department to the government’s Clean Energy Future package is quite significant. We are involved in the secretary’s group on climate change. We are involved in implementation and influencing the guidelines, particularly as the assistance package supports communities. We will continue to have an ongoing role to support implementation of the government’s policy in this area.

Senator JOYCE: Why can’t we just bang those five people in with all the other hundreds of people in the climate change department?

Ms Beauchamp : There are particular things that we have been asked to do to support the package on the Clean Energy Future. That is looking at the potential impacts on regions and communities as the Clean Energy Future package is being rolled out. It is quite relevant for us to have those functions remain in the department.

Senator JOYCE: What is the average wage of those five people?

Ms Beauchamp : I would have to take that on notice.

Senator JOYCE: Can you take that on notice?

Ms Beauchamp : Yes.

Senator JOYCE: I would like to go to the community infrastructure grants. As of 31 October 2011, 54 projects under the Community Infrastructure Grants program had not yet been approved.

CHAIR: Senator Joyce, I will just interrupt you. We are struggling to hear you. This is the first time we have had this problem.

Senator JOYCE: I will make sure it never happens again. There are 54 projects from the Community Infrastructure Grants program that had not been approved as of 31 October 2011. An answer to a question on notice came back yesterday, and now we find that 43 projects remain unapproved. What is going on? Why is it so hard to approve them? They were announced during the election.

Ms Beauchamp : As I wrote to you yesterday, we are working with the proponents of those projects to help assist them in putting together a project that meets our value for money guidelines, is achievable and deliverable, and also meets the state and local government requirements. We work with the proponents. We are not holding anything up. We are actually helping them put forward a project that is indeed deliverable and achievable over the next little while.

Senator JOYCE: I imagine that some of them would be starting to get a little irate. Are they writing to you to say, ‘What’s happening to our money? Where is it? Weren’t you serious during the election when you announced it?’ How many letters or complaints have you received?

Ms Beauchamp : The government has made clear commitments in this area to the proponents of the projects that were announced during the election campaign. I am not aware of any complaints that have been made and we have been quite active in supporting the project proponents as they develop their projects so it can actually be delivered.

Senator JOYCE: So, you are not aware of any complaints?

Ms Beauchamp : I am not personally aware. I will ask my colleagues.

Ms Fleming : I am not aware of any complaints in respect of the community infrastructure grants from proponents about the rate of progress in developing those grants. We are working closely with proponents, as the secretary has indicated.

Senator JOYCE: Have any of the original 80 projects been significantly changed in the amount that was funded, the location of the project or what the project was about?

Ms Fleming : Not to my knowledge.

Senator JOYCE: I would like to go to the Jingili BMX Club, which was allocated $1.5 million in funding. Has that project been approved?

Ms Fleming : No.

Senator JOYCE: Why not?

Ms Fleming : We are working with proponents on their capacity to provide the information that can allow us to make a value for money assessment, and my understanding is that that information is not yet with the department.

Senator JOYCE: So, the money has not been reallocated and it is still going to go ahead?

Ms Fleming : No money has been reallocated from the community infrastructure grant, to my knowledge.

Senator JOYCE: Is it still going ahead?

Ms Fleming : We are progressing the assessment with the proponent.

Senator JOYCE: Do you have any idea when that might happen?

Ms Fleming : We continue to work with each of the proponents. In respect of the proponents, they are facing different issues, but we would work towards all proponents having funding agreements in place by the end of this financial year.

Senator JOYCE: The end of this financial year?

CHAIR: Senator Joyce, I need to interrupt you briefly for a second. I apologise, but we sort of have a layout of Corporate Services, Regional Development and Local Government, but I think your question is going into the whole gamut now.

Senator JOYCE: Yes.

CHAIR: That is not a problem, but Senator Macdonald has some questions for Corporate Services for five minutes.

Senator JOYCE: We are all in the room, anyway.

Senator IAN MACDONALD: I can do that later.

CHAIR: Are you happy to all roll one into another?

Senator JOYCE: I have a heap, but I will put them on notice.

CHAIR: We have two hours. There are a number of speakers, so we might interrupt you in 10 minutes, move to someone else and then come back to you, Senator Joyce. Carry on.

Senator JOYCE: The Burnside Hockey Club was allocated $400,000. What is happening there?

Ms Fleming : In the list that you were provided there were some 43 proponents that we are still working with to receive information from. We will expect to finalise some of those assessments in February and some are expected to be finalised in March, April and throughout the rest of this financial year. I would have to take on notice our expectation around each and every proponent.

Senator JOYCE: From what I hear, the council rejected the initial application, so the Burnside Hockey Club has to be moved to another location. Where are we putting it now?

Mr O'Brien : We are working with the proponent on those types of issues. I am happy to take that on notice.

Senator JOYCE: Are you aware of the Burnside Hockey Club?

Mr O'Brien : I am aware that we are working with proponents on all of these projects to try to resolve them.

Senator JOYCE: It is a bit of a problem if you promised something during the election and they cannot actually build it.

Ms Beauchamp : There is a commitment to deliver against each of these election commitments. We are helping each of the proponents deliver it in the best way possible. If there is a change in location—and it might be because of local and state planning requirements—then we will work with the proponents to see how those requirements can be accommodated.

Senator JOYCE: Can you tell me where we are up to now. You cannot build where you said you were going to build, so where are you going to build or are you going to build it?

Ms Fleming : The advice that I have at the moment from our engagement with Burnside is that they are to confirm for us the location, which is expected around April/May.

Senator JOYCE: They are going to tell you by April/May where it is going to be built and then when do you reckon we will have it built by?

Ms Fleming : We would have to wait for the information around the proponent’s proposal. I am sure they are taking that into account within the context of their locational choice.

Senator JOYCE: I have another one. There is a whole heap of these. Are you aware of the Margaret Olley Art Centre at the Tweed River Art Gallery?

Ms Fleming : Yes.

Senator JOYCE: This was on the list of unapproved projects presented to my office yesterday. However, it was not on the list of unapproved projects in October. Is this a new project? What is this project?

Ms Fleming : It is a new project. The Margaret Olley Art Centre was announced by the Prime Minister and it is being assessed under the Community Infrastructure Guidelines.

Senator JOYCE: Is it replacing the other programs that were announced during the election or is this additional?

Ms Fleming : It is a new project.

Senator JOYCE: Is it additional/new funding?

Ms Beauchamp : There are a number of projects that have been announced by the government that are now included under the Community Infrastructure Grants program, in terms of the guidelines. We are using the guidelines and methodology. For a number that have been identified in the budget papers, like Riverstone and others that I can point to—

Senator JOYCE: This is in the electorate of Richmond. I imagine that is going to be a tightly fought race at the next election. I am curious as to whether we have just plucked this one out of thin air and slapped it on the table. I would like to know where the funding came from.

Ms Beauchamp : As I was saying, there are a number of projects that have been announced by the government that are now included under the assessment and have been used for the methodology of the Community Infrastructure Grants guidelines. They include things like the Riverstone Football Club; Townsville Convention Centre; Port of Karumba Sea Wall; the Port Macquarie Indoor Sports Stadium and Margaret Olley Art Centre. They were separate announcements and they have now been included under the Community Infrastructure Grants program, rather than having separate guidelines for separate projects.

Senator JOYCE: In the budget papers did these things strike a feature before it was announced; someone went for a wander up into the seat of Richmond and announced it?

Ms Beauchamp : These are government announcements. Our role is to implement the announcements made by government, and these projects were part of the MYEFO that came out last year.

Senator JOYCE: Was this funding new on MYEFO?

Ms Beauchamp : Most of these are additional funding, yes.

Senator JOYCE: That is convenient. Good luck to them, but what was the premises of the funding for that? Was it deemed important to be new funding and strike a new feature in the MYEFO?

Ms Fleming : The Margaret Olley Trust wanted to re-establish, on Margaret Olley’s death, a museum in a house that she resided in in Tweed River. Funding was provided to support that, through recollection, through some underspends in some other programs.

Senator JOYCE: That is interesting. That was allocated through some underspending in some other programs?

Ms Fleming : Yes.

Senator JOYCE: That is a different story, is it not? What was the underspending in the other programs? Can you tell me about that?

Ms Fleming : I would have to take that on notice.

Senator JOYCE: That means that other people are getting less than they were allocated. I asked that question previously—in fact, only about five minutes ago—and the answer you gave me was that that was not the case, but now we are getting the case that some people are not getting what they asked for and this money is being—

Senator Arbib: You asked in regard to the 80 election commitments.

Senator JOYCE: No doubt this sounds like a noble cause. I am not here to doubt the cause, I am here to doubt the nuances of how we are funding it, and whether we are grabbing the money from other things that have been allocated during the election campaign. Did we therefore go back to the people who we announced the funding to during the election campaign and say to them, ‘We’re not going to give you what we announced. We’re going to give you less because we’re going to actually build an art gallery in the seat of Richmond’?

Ms Beauchamp : As you would appreciate, with construction projects like this there is a budget. We go through a process with the proponents in terms of the actual costs of delivering particular projects. It is not as if we are taking money away from certain projects. As you would appreciate, any construction project has unders and overs, and we try to manage that within the budget that we are given from the government. It is certainly not a matter of taking projects away.

Senator JOYCE: How many proponents have not received their funds?

Ms Fleming : During the course of some projects—and we are not talking election commitments, we are talking broader projects under RLCIP—some proponents choose to terminate a project because they cannot deliver the project as originally envisaged for a whole raft of reasons. Some people deliver the project at less than anticipated, which creates underspends. Those underspends can be put to other use.

Senator JOYCE: Was any money transferred from the Better Regions program?

Senator Arbib: The officials are taking the question on notice in regard to where the funding came from, so we will get back to you.

Senator JOYCE: Is that the answer? That was a new question. Was any money transferred from the Better Regions program?

Mr O'Brien : Again, we will take that on notice.

Senator JOYCE: That is interesting. Maybe when you take that on notice and get back to me, your answer will correlate with mine, which I got off you. I would like to go to the Regional Development Australia Fund. As at 4 November 2011, the department had received 292 requests for feedback as a result of round 1. Can you confirm that all of the 292 requests have now been completed?

Ms Fleming : Yes.

Senator JOYCE: Were all applicants satisfied with the feedback they received?

Mr O'Brien : They were all provided with an opportunity to get feedback. I would say, yes.

Senator JOYCE: So, they were all happy?

Mr O'Brien : It is not a question of being happy or not. It is a question of getting feedback.

Senator JOYCE: Were they all satisfied?

Mr O'Brien : They received feedback.

Senator JOYCE: Does that mean they were satisfied, unsatisfied or just got feedback?

Mr O'Brien : They received feedback.

Senator JOYCE: Did you get any feedback from them about their feedback? Did they ever say, ‘I got your feedback, but it doesn’t really answer my question’?

Mr O'Brien : Yes. I am sure on occasions, of course. Ms Fleming can speak to that. That is part of the feedback dialogue.

Senator JOYCE: I am interested to know how many people responded to you in a description of that manner, that they were unhappy with the feedback that they were getting regarding your feedback.

Ms Fleming : I would have to take on notice that particular article. There was a range of feedback. Some people, of course, have a variety of views about the advice that the department provides them and we had discussions around that.

Mr O'Brien : Broadly, there was a level of gratitude that there was feedback provided.

Senator JOYCE: They were grateful about the feedback?

Mr O'Brien : They got feedback.

Senator JOYCE: They got feedback?

Mr O'Brien : Yes.

Senator JOYCE: The feedback that we received about your feedback was that they were not very gratified. They were kind of unhappy. Not as much gratitude as what you are telling me.

Mr O'Brien : If there is a specific circumstance then I am happy to take that on board.

Senator JOYCE: I should come to estimates with my own answers and then tell you the answers. Maybe that should be how it works.

CHAIR: With the greatest of respect, I think that we should at least afford decency to the officers. If you do not like the answers, I cannot do much about that. I would encourage you to direct your questions to the officers and, if not, there are a number of your colleagues still waiting to ask questions.

Senator JOYCE: Thank you for your feedback.

CHAIR: Why don’t your people call my people and we will all do lunch?

Senator JOYCE: I did not say a ‘feed’. I want feedback. Have the funding arrangements for the 35 successful projects in round 1 been completed?

Ms Fleming : We have not executed all of the funding agreements at this stage, but we have executed some 22 funding agreements. We have a further five approved for proponent signing and we have eight still under negotiation.

Senator JOYCE: What is the hold-up with those eight?

Ms Fleming : We continue just to work through with proponents to ensure that all the data and the milestones are appropriately recorded in the funding agreements and that any risks identified in the funding proposal are addressed within the funding agreement.

Senator JOYCE: Is there a deadline for when all of this is going to be completed?

Ms Fleming : Yes. All funding agreements were meant to be completed within 16 weeks and we have granted extensions to those that were not able to complete within that time frame.

Senator JOYCE: What is the role of the independent advisory panel in round 2 of the fund?

Ms Fleming : The advisory panel will assess the applications that were selected by the RDAs to go through to full application.

Senator JOYCE: Who is on that independent advisory panel?

Mr O'Brien : It is the same panel as last time.

Senator JOYCE: How often are they meeting?

Mr O'Brien : The panel has not met on round 2 yet. The next meeting of the panel will be in March.

Ms Fleming : The panel is meeting on 7 March.

Senator JOYCE: How many projects do you think they will get through in each meeting, each day?

Ms Fleming : On 7 March there is a planning meeting for the panel and then they will meet for a week in April to consider applications once we have had an opportunity—

Senator JOYCE: Starting on what date?

Ms Fleming : I think it is around the 20th sometime.

Mr O'Brien : We are just going through the process from here. At close of business tomorrow the full applications of the 160-odd projects are expected. The department will do a full assessment of those projects, including independent viability assessment. The panel will come together, as Ms Fleming mentioned, on 7 March but also through April to consider the full set of eligible projects.

Senator JOYCE: I just want to ask some questions about the application process for round 2 of the Regional Development Australia Fund. Can you describe the process for applying for round 2 grants?

Mr O'Brien : Sorry?

Senator JOYCE: Do all Regional Development Australia committees have to submit their best three projects for consideration?

Mr O'Brien : Up to three projects.

Senator JOYCE: Will the successful projects chosen for funding under round 2 be from those marked ‘to proceed to full application’ on the list of projects?

Ms Fleming : The projects that were recorded as eligible to proceed to full application will be the ones that are assessed by the RDAF panel.

Senator JOYCE: That was published on 11 January?

Ms Fleming : That is correct.

Senator JOYCE: So no projects are to be funded other than those marked as such?

Ms Fleming : That is correct.

Mr O'Brien : Through this program, yes.

Ms Fleming : Through RDAF.

Senator JOYCE: Has anyone from the department asked an RDA to resubmit their projects or to otherwise alter the projects that they have selected as to proceed to full application?

Mr O'Brien : Not to my knowledge.

Ms Fleming : Not to my knowledge.

Senator JOYCE: Are you aware of any plans to alter the list to change these projects that have been selected to proceed? Do you want to change that other answer you just gave me?

Ms Fleming : I am just wondering: are you referring to the list of duplicates that we posted?

Senator JOYCE: Including the list of duplicates that you posted.

Ms Fleming : If you are referring to duplicates, that is a different question. There were a range of applications that went through to RDA panels, and we made a ruling around duplicates consistent with the guidelines and they are publicly available on the website.

Mr O'Brien : And based on probity advice.

Ms Fleming : But that is not altering the application.

Senator JOYCE: What is the reason behind the guideline that excludes not-for-profit organisations that have an annual income of $1.5 million?

Ms Fleming : We do not exclude not-for-profits with an income of $1.5 million from being members of consortia. We do exclude them from being the lead proponent, and that was based on the view that agencies needed to have a certain level of income to sustain projects that were being put forward for beyond the life of the contract.

Mr O'Brien : That is right. It is to ensure that in future years the project could be sustained.

Senator JOYCE: So they do not exclude them?

Mr O'Brien : They are not excluded, no. They can form part of consortia, as Ms Fleming mentioned. I think we have had a fairly reasonable response from not-for-profits in the first cut of projects.

Senator JOYCE: I just want to go to a project. As to the Clunes Community and Interpretive Centre project in the Hepburn shire, can you give me an update on this project? It is something we discussed before, so I imagine you have a file.

Mr O'Brien : We did follow up from the last session and we spoke directly to the Victorian local government inspectorate and sought their views and advice on it. They have responded to us to indicate that they looked into the matter and there was no breach of the Victorian Local Government Act. That would not pick up issues like conflict of interest.

Senator JOYCE: On the status of the investigations into the project by the local government investigators and compliance inspectorate, you are saying that—

Mr O'Brien : They have completed that in regard to our project, yes.

Senator JOYCE: And there is no breach?

Mr O'Brien : No breach.

Senator JOYCE: Did they say anything else? There are no other problems with it? Everything is completely aboveboard?

Mr O'Brien : I do not have the correspondence in front of me, but they indicated that there was no breach of the Victorian Local Government Act.

Senator JOYCE: It did seem from the outset that there was a very severe conflict of interest in that.

Mr O'Brien : I am still not aware of the nature of the complaint that was before the Victorian local government inspectorate. They did not divulge the nature of the complaint with us, but they undertook to investigate or examine the issue in relation to our project, and they found there was no breach of the Victorian Local Government Act.

Senator JOYCE: Did you deem that there was a conflict of interest in that a local councillor was part of a decision to approve a multimillion-dollar facility next to his shop?

Mr O'Brien : Again, we sought advice from the Victorian local government inspectorate, the proper agency to look into those matters.

Senator JOYCE: Are you aware of any other conflicts of interest that are apparent in any of these approvals?

Mr O'Brien : In terms of approvals for round 1, no.

Senator JOYCE: Has the Australian National Audit Office reported on its audit into the RDA Fund round 1 yet?

Ms Fleming : No.

Senator JOYCE: Why not?

Ms Fleming : They are still reviewing the materials, and I understand that they will report later in the year.

Senator JOYCE: When? Later in the year—

Senator Arbib: That is a matter for the ANAO. Officials here cannot answer that question.

Ms Beauchamp : As I indicated last time, it has been a performance audit that has been on their program for some time, and they are expecting to have that towards the mid second half of 2012.

Senator JOYCE: Has the department discussed with any local governments how much money they have or are spending on consultants when applying for grants under the Regional Development Australia Fund?

Mr O'Brien : We were aware of the complexities associated with putting applications in in round 1 and that is why we undertook the changes for round 2, and we think the expression of interest process has helped to streamline that administrative or compliance burden appreciably in round 2. We took that feedback on board through the review process. I do not know any actual costs of consultants, no.

Senator JOYCE: I want to quickly go to spatial accounting.

CHAIR: Sorry—where have we gone to, Senator Joyce?

Senator JOYCE: Spatial accounting.

Ms Beauchamp : Do you have any more questions on the regional grants programs?

Senator JOYCE: I have heaps, but I am going to put them on notice.

Senator IAN MACDONALD: What are you going on to now?

Senator JOYCE: Spatial accounting, which is one of the initiatives of Minister Crean.

CHAIR: In what area is this? Someone help me out. I am just getting a little bit left behind here, which is highly usual anyway. I thought we talked about corporate services and regional development sort of flowing on to each other.

Ms Beauchamp : You are quite correct; it is in outcome 2 around regional development, but there is a broad range of functions under this outcome. Some of them are policy functions and the like and some of them relate to regional development programs. So we are happy, if you are happy, to get officers back and forth from the table.

CHAIR: I will tell you how I would prefer to work, with your indulgence. I will come back to you, Senator Joyce. What I prefer to do is go through each division, as does this committee. When we are finished with the officers they can escape, rather than keep having to come back. They have families and other things to do, too. If we can work that way, that is the preference of this committee. What I would like to do, if it is possible with you, Senator Joyce, is to come back to corporate services. Senator Macdonald does have some questions. If there is agreement that there are no further questions of corporate services, they can escape—run away—and then we will stay with regional development. Ms Beauchamp, is that all right with you?

Ms Beauchamp : Thank you very much.

CHAIR: I saw a few nods behind you that were in the affirmative, so I gather they are the ones from corporate services who will are going to get home and watch whatever it is you watch—

Ms Beauchamp : Valentine’s Day dinner.

CHAIR: Let us go back to corporate services.

Senator IAN MACDONALD: As we have been in this committee, I will try to be very brief. I know the officials will help with brief answers. With the rearrangement of the department following the December reassignment, is the Northern Australian branch still there?

Ms Beauchamp : Yes, indeed.

Senator IAN MACDONALD: Has there been any change in personnel in that particular branch, not by name but in number?

Ms Beauchamp : We have certainly strengthened some of the functions and activities related to the Northern Australia Ministerial Forum and also the Northern Australia activities there. I think we have a couple more people allocated to that function, but I would have to get the relevant people up here who have that responsibility.

Senator IAN MACDONALD: Is that corporate services or would that be better to ask when we are talking to them later perhaps?

Ms Beauchamp : I am happy to take the officer for Northern Australia and the Northern Australia functions under the program’s functions, if you like.

Senator IAN MACDONALD: I will leave it until then. Did Minister Crean’s duties change at all in the December—what did you call it?

Ms Beauchamp : Machinery of government change.

Senator IAN MACDONALD: Did Minister Crean’s duties change at all?

Ms Beauchamp : Minister Crean’s titles and ministries remain the same.

Senator IAN MACDONALD: His duties stay the same, do they?

Ms Beauchamp : Yes.

Senator IAN MACDONALD: There is no other minister that deals with any of the areas in the Regional Australia, Local Government, Arts and Sports Portfolio—is that correct?

Ms Beauchamp : We support Minister Ludwig in relation to disaster recovery efforts in Queensland.

Senator Arbib: Can you go back and ask that question again?

Senator IAN MACDONALD: Is there only one minister in the portfolio?

Ms Beauchamp : There are two ministers in the portfolio.

Senator IAN MACDONALD: Who is that?

Ms Beauchamp : Minister Arbib.

Senator Arbib: I am the Minister for Sport.

Senator IAN MACDONALD: Sorry, I was not meaning to be rude, Senator Arbib.

Senator Arbib: That is fine.

CHAIR: It has been a long couple of days.

Senator IAN MACDONALD: I used to play a lot of sport, but sport is not the focus of my parliamentary interests, I have to say. It is regional Australia and local government. There are only the two of you? There is no parliamentary secretary and no-one else, but you do help Senator Ludwig in relation to—

Ms Beauchamp : The reconstruction efforts in relation to Queensland. He is the minister assisting on Queensland floods for reconstruction up there following the floods in 2010.

Senator IAN MACDONALD: Does Mr Crean have anything to do with that or is it just—

Ms Beauchamp : Mr Crean is supporting the Prime Minister in relation to flood recovery in Victoria.

Senator IAN MACDONALD: Insofar as flood recovery in Queensland is concerned, your department supports Minister Ludwig, not the Department of Agriculture, Fisheries and Forestry—is that what you are telling me?

Ms Beauchamp : That is correct.

Senator IAN MACDONALD: Is there a particular unit in the department that helps in that area?

Ms Beauchamp : About 12 months ago the Prime Minister announced the formation of the Disaster Recovery Taskforce, which was set up in the department.

Senator IAN MACDONALD: From existing resources?

Ms Beauchamp : Additional resources were provided.

Senator IAN MACDONALD: Are you on a super efficiency dividend in this financial year?

Ms Beauchamp : We have the normal efficiency dividend and the application of the additional 2.5 per cent efficiency dividend for 2012-13. There are a number of agencies now within the portfolio that are exempt from that.

Senator IAN MACDONALD: Which are they?

Ms Beauchamp : Mostly the cultural agencies. I can go through that list if you like.

Senator IAN MACDONALD: Perhaps on notice you could tell. But they are mainly in the cultural area? That seems unusual.

Senator Arbib: You are going to get a lot of that tonight when arts starts. There will be a lot of discussion around the dividend.

Senator IAN MACDONALD: Will there?

Senator Arbib: There normally is, yes.

Senator IAN MACDONALD: I will not be here.

Ms Beauchamp : It is quite a short list, so I can just go through it: the Australia Council; the Australian Film, Television and Radio School; the Australian National Maritime Museum; the Australian Sports Commission; the National Film and Sound Archive of Australia; the National Gallery of Australia; the National Library of Australia; the National Museum of Australia; Screen Australia; the National Archives of Australia; and Old Parliament House. I should say in relation to the National Archives of Australia that it is probably the only new function Minister Crean has that was transferred from the Department of the Prime Minister and Cabinet portfolio.

Senator IAN MACDONALD: That is Mr Crean’s, not Senator Arbib’s?

Ms Beauchamp : As Minister for the Arts, it is Minister Crean. Minister Arbib is responsible and is the Minister for Sport in this portfolio.

Senator Arbib: The agency there was the Australian Sports Commission. That is what I administer.

Senator IAN MACDONALD: Can either of you just tell me in a one-liner what the rationale is for those agencies not being subject to the special efficiency dividend of 2.5 per cent when apparently everybody else is?

Ms Beauchamp : Obviously it is a decision of government.

Senator IAN MACDONALD: Yes, but what did the Prime Minister say, or whoever it was that announced that? What reason did they give for that?

Senator Arbib: One of the debates that we normally have—and I note this is a new part of the committee—is about the capacity of those organisations in terms of efficiency dividends. It is normally Senator Humphries who is arguing the case around why a number of those agencies should receive efficiency dividends.

Senator IAN MACDONALD: I am not raising an argument. I am simply asking what the rationale is. They cannot accommodate it?

Senator Arbib: There are capacity issues in terms of those agencies and organisations.

Senator IAN MACDONALD: Ms Beauchamp, do you have forward plans on how you are going to handle with the 2.5 per cent effective cut in your funding?

Ms Beauchamp : Indeed, yes, I do.

Senator IAN MACDONALD: Does it include loss of jobs?

Ms Beauchamp : We have been very fortunate over the last two budgets to have a government injection of funds—and the task force was one example of that—as a brand-new portfolio. With the last couple of budgets, we always go through ons and offs in the portfolio in terms of budget measures. I am in the process of looking at how we do plan for the 2012-13 budget. Of course, we have already taken some measures and also have some opportunities in the machinery of government changes. I mentioned having over 20 locations now right across Australia where I would like to co-locate what are now sports, arts and regional functions. That may produce some accommodation savings. Here in Canberra, I am currently negotiating with landlords to see what the best deal is that we can get around accommodation in terms of consolidating functions. For example, we have reduced our newspapers across the portfolio.

Senator IAN MACDONALD: Big saving there.

Ms Beauchamp : We have cut out plants. We are looking at overheads. We are doing as much as we possibly can so we can continue to deliver for government and reduce our overheads and increase efficiency. We are going through the process now in terms of how to deliver that.

Senator IAN MACDONALD: Ms Beauchamp, do not take this personally, but I always say that if you can find a 2.5 per cent saving you must be awfully inefficient now. Do not take that personally.

Ms Beauchamp : I am not taking that personally, but I do see the machinery of government changes as actually assisting with the consolidation of some functions and locations.

Senator IAN MACDONALD: Finally on corporate, you said you have 24 locations across the country. You are not thinking of cutting out those as part of an efficiency dividend? Could I add that, whilst some might say it may be efficient, I think it is very essential that as the regional department your department, more than any others, is located across Australia. Are you looking at closures of any offices?

Ms Beauchamp : Minister Crean is very keen for us to increase our regional footprint. We are looking at doing that over the next little while. What we do need to do is make sure we have the right people out there and we will be looking at co-location opportunities rather than cutting out offices altogether.

Senator IAN MACDONALD: I am interested in your comment about Mr Crean wanting to expand those. On notice, could you just tell me where you are at with that, how far you have gone, where you are looking and anything you can tell me that is not confidential at this stage.

CHAIR: Thank you, Senator Macdonald. Can I take it, colleagues, that we are finished with corporate services? So we can let the corporate services people go home, Ms Beauchamp.

Ms Beauchamp : Thank you very much.

CHAIR: I actually have to stand corrected, Senator Macdonald, because I thought you would be for the arts. In your twilight years I saw you as our new cultural attache from Queensland taking over from Senator Boswell, but I am mistaken.

Senator IAN MACDONALD: I have approached Senator Brandis for any free tickets he gets to the opera in Sydney, so that he might think of me.

CHAIR: Ms Beauchamp, at least we have fun during Senate estimates.

Ms Beauchamp : That is good.

Senator Arbib: I thought you would have more of a sport interest.

Senator EDWARDS: I have not started yet. I am going to offer to carry your bags to London.

Senator IAN MACDONALD: My sporting interest is only when the Cowboys play the grand final in Sydney. Then I will be looking for some tickets from you, Senator Arbib.

CHAIR: Let us get into regional development.

Senator EDWARDS: Welcome to our committee. It is a great committee. As to Regional Development Australia, I want to draw your attention to a press release on 8 February 2012 by the Whyalla and Eyre Peninsula division of Regional Development Australia. They state that there are almost $2 billion in investment projects either underway or due to be underway in the region. It also goes on to state that if these proceed it will bring the total investment over the next three to four years to more than $4 billion. I think Minister Carr would be interested to know that we could probably replace the car industry in South Australia with all the development in Whyalla and the Eyre Peninsula, so all the jobs would be there. That is an enormous amount of money over the next few years. Are you able to tell me what those projects are and who is responsible for them, whether they are Commonwealth projects or private?

Mr O'Brien : I cannot give you a complete description of all the projects, but I can say that they are predominantly in the energy sector and mining sector. There are enormous development opportunities in the Upper Spencer Gulf and the Eyre Peninsula and, as I say, they are mainly energy projects, as I understand it.

Senator EDWARDS: So it is mining?

Mr O'Brien : Energy and mining.

Senator EDWARDS: If you could provide me with the basis of that press release, that would be great. If they are private investments—

Senator Arbib: Just on that release, I have not seen it but I would not have thought that all that funding is government funding.

Senator EDWARDS: No.

Senator Arbib: A great deal of that would be private sector investment in the mining and energy sector.

Senator EDWARDS: That is quite right.

Senator Arbib: Sorry, I am just making sure we are clear.

Senator EDWARDS: No, there is a lot of investment going on there and I am just trying to drill down as to what the department sees as the level of investment. Some $4 billion in a region that does not have many people living in it is a lot of jobs to be had. That is my interest. Finally, what has the RDA’s involvement been in facilitating funding and help for these initiatives, if any, or in-kind support? What has their assistance been.

Mr O'Brien : As to the 55 RDAs all across the country, their core responsibility is to set a strategic plan for their region and clearly identify the key priority areas. They are also the eyes and ears for the department in terms of what is happening on the ground. It enables us to explore deeper those opportunities and canvass the potential opportunities across other areas of the Commonwealth. In a couple of days time I will be meeting with South Australian government officials and visiting Whyalla and other areas to get a greater understanding of what is actually happening on the ground.

Senator EDWARDS: Can I come with you?

Senator FAWCETT: Is the department aware of the National Airports Safeguarding Advisory Group, which is being run by the department of transport but deals with local government as well as state governments around the viability of airports, and are you having any input to that process?

Mr O'Brien : I will take that on notice. Not to my knowledge. Obviously, in the Regional Development Australia Fund round 1 there were some regional airport upgrades.

Senator FAWCETT: I am aware of that. Port Lincoln was one good example of that. Are you aware of the report released yesterday by the Local Government Association of South Australia looking at regional airports and the costing pressures they are under?

Mr O'Brien : Not that I am aware of.

Senator FAWCETT: Under round 1 of the Regional Development Australia Fund—obviously Port Lincoln was one, with $4.5 million; that is great—how many of the applications related to airports around Australia in that round?

Mr O'Brien : There were certainly more than a handful. I would have to look at the applications that came through. There were 563 applications all up. There were a number that involved regional airports.

Senator EDWARDS: Are you familiar with the white paper that the Department of Transport has created for the aviation industry in Australia?

Mr O'Brien : Yes, we are.

Senator FAWCETT: It has a very strong emphasis on regional Australia in there. Given that South Australia is not alone in terms of the funding pressures on sustaining airport infrastructure, does your department have any programs to look at a strategic approach to working with local government to sustain airports that are owned and operated by local government across Australia?

Mr O'Brien : Our core program is the Regional Development Australia Fund, which is a competitive process, and that is what we have at the moment. Obviously there are other programs in other departments. I will turn to my colleague.

Mr Carmichael : Mr O’Brien talked earlier about RDA plans. Part of what the RDAs are doing is identifying what the strategic issues are in each region. Sometimes that does include airports and the associated infrastructure and logistics around airports. That comes to our attention through those plans. For instance, in South Australia we have a state advisory committee where we bring together all of those big issues with the RDAs, the state and the local government, who are a signatory to the RDAs in South Australia. That is where those conversations occur. That is where we elevate the issues and work through the priorities. Where sensible and practical strategies are being developed we bring that to the attention of other like portfolios, including transport and infrastructure, who were here earlier.

Senator FAWCETT: Where there is a government activity, for example the white paper and the subsequent working group looking at the viability of airports, one of the key factors that they have identified is the pressure that local councils are under to sell off or have alternative use of the land just to make the airport survive, which threatens the aviation components, or where there is a whole-of-government approach around an issue like that, is there any consideration within the competitive grants assessment to make that a factor that this links in with another whole-of-government type approach?

Senator Arbib: I will make the point that the issue of airports lies with another department that was here today. It is probably a more appropriate question for them.

Senator FAWCETT: I have questioned them extensively and they deal with the policy of what can be built near airports. What they do not deal with is why the councils and other people are having to sell off land and build it. That is the issue of viability, which comes to the strategy the federal government should be having around how we support our regional communities. With respect, Minister, I think this is the portfolio.

Senator Arbib: Now you are moving into a policy area, which again is a matter for government, not a matter for the officials at the table.

Senator FAWCETT: I am asking whether they take into account if there is another government program that has a priority on an area, for example aviation transport into regions as a consideration in their competitive assessment of grant applications.

Mr Carmichael : We seek advice from other portfolios. It comes up from time to time where there are competitive neutrality issues or priorities for other portfolios. We consult other departments around particular projects. The Department of Infrastructure and Transport has a specific program of funding for regional airports, which you are probably aware of. We are aware of that program and will consult and liaise with that area, if we are having any considerations around investments through our own programs as well.

Senator FAWCETT: Thank you.

CHAIR: We will now go to Senator Macdonald.

Senator IAN MACDONALD: Mr Crean was in western Queensland with Premier Bligh a few weeks ago and made an announcement on water. He indicated that some money would be paid by the Commonwealth to CSIRO for a study. Can you tell me more about that?

Ms Fleming : It is the North Queensland Irrigated Agriculture Strategy. It was announced by Minister Crean and Premier Bligh. There is $6 million being put in from the Commonwealth through CSIRO and $3 million from the Queensland regional department. We will be working with farmers and regional communities to look at viability and farm practices around irrigated agriculture on the Flinders and Gilbert rivers.

Senator IAN MACDONALD: When is that to start?

Ms Fleming : We are working through the scoping project with the CSIRO. We have had an initial meeting of the steering committee and we are proposing in early March to have a meeting with community groups.

Senator IAN MACDONALD: Is it the same as other studies that TRaCK and CSIRO did for the Northern Land and Water Taskforce in years gone by?

Ms Fleming : It builds on the work that was done through the Sustainable Water Futures program, under the Northern Land and Water Taskforce, but it actually goes to another level of detail and includes on-farm practices.

Senator IAN MACDONALD: The Flinders River has been studied to death by the Queensland government over the last 50 years. What is the CSIRO hoping to work out that nobody else has been able to work out in the last 50 years?

Ms Fleming : I might call my colleague Mr Dickson to the table to give a bit more detail around the CSIRO elements.

Mr Dickson : The important point here is that the CSIRO, in collaboration with a number of other agencies in Australia such as the Australian National University, the Bureau of Meteorology, Geoscience Australia, and the Defence Imagery and Geospatial Organisation, recently developed some technology based on digital elevation mapping, essentially spatial imagery, which allows them to look into catchments and to do detailed water modelling at a level of detail that has never before been possible. With this technology they are now able to evaluate water capture and storage options in catchments and river reaches at levels of accuracy and elevation that enables them to look at essentially mosaic opportunities rather than just large-scale opportunities.

Senator IAN MACDONALD: So, putting that into English, what they are doing is saying what water is available for agriculture?

Mr Dickson : In this case it allows them to look at surface water opportunities, and capture and storage, both instream and offstream.

Senator IAN MACDONALD: Will they be looking at storage opportunities?

Mr Dickson : Absolutely.

Senator IAN MACDONALD: You and I know from long association, Mr Dickson, that the people of the Gilbert River, who have done a lot of work, were hoping for a bit more than another study. How long is this study supposed to go—$9 million?

Mr Dickson : Two years.

Senator IAN MACDONALD: So, it will be another two years before anything happens in relation to water storage on the Gilbert or the Flinders?

Mr Dickson : In the case of the Gilbert, you and I know that the local community have done a lot of work, but there is also a lot more work to be done. This project is looking at opportunities for the development of surface water in two catchments that are fundamentally different—the Gilbert and the Flinders river systems. It will also assess the potential environmental and social impacts under different development scenarios and climate scenarios.

Senator IAN MACDONALD: We have very limited time. Can I ask you to give me a short note on notice just on what that assessment is supposed to bring about?

Mr Dickson : Absolutely.

Senator IAN MACDONALD: I do not suppose the Commonwealth has any involvement in Ms Bligh’s announcement of accessing another 80,000 megalitres out of the Flinders? That is not anything the Commonwealth would be involved in, is it?

Ms Fleming : That was part of the joint project that Queensland has guaranteed a certain quantum of water during this trial period.

Senator IAN MACDONALD: Can you give me some more details on that?

Ms Fleming : We will include it.

Senator IAN MACDONALD: I would like to hear from you in person, but we have very limited time. Thank you, Mr Dickson, for that. I just want to go through a couple of other things. As a regional department, are you able to get for me the tax statistics in relation to the zone tax? For example, I would like to know how many people are in the special zone A and zone B, that is, how many access it and what the cost to the revenue is. You would normally tell me to go to Treasury and ask the question, but because this is very much a regional program and very much a northern program I am wondering whether you might have access to those figures.

Ms Beauchamp : We do not have automatic access to those figures. We would have to take that on notice and refer them to the Australian Taxation Office.

Senator IAN MACDONALD: Can you do that for us? I think Mr Crean and everyone else would be very interested in the response that you get. In past estimates we have asked about the Cairns Plan, which I was told was due in January 2011, then February 2011, then May 2011 and then October 2011. Has the Cairns Plan been released yet? We have been through this. The reference is page 191 of the Hansard for the estimates of October 2011.

Ms Fleming : There is more than one Cairns Plan. It is my understanding that a Cairns Plan has been released by local communities but the government Cairns Plan is still being worked through.

Senator IAN MACDONALD: Bearing in mind it was going to be released, as I said, in January 2011 and every estimates since you have told me that it is about to be released, can you tell me why it is taking so long?

Ms Fleming : New material is added and new perspectives are considered. It is just taking a bit longer to finalise than we initially anticipated.

Senator IAN MACDONALD: Your last answer on notice was that Advance Cairns was working towards a formal launch date in December 2011. That was almost three months ago.

Ms Fleming : Yes.

Senator IAN MACDONALD: Is there an explanation? We live in hope.

Mr O'Brien : I think Advance Cairns released its report late last year.

Senator IAN MACDONALD: They did. Is that the Cairns Plan that was—

Mr O'Brien : That was one of the Cairns Plans that Ms Fleming was referring to.

Senator IAN MACDONALD: The one that the Commonwealth is paying for?

Ms Beauchamp : Minister Crean is now working with the Queensland government and Minister Mulherin in looking not only at the Cairns area but the whole North Queensland zone in terms of economic and regional development. We are looking at what we can do particularly in terms of the regional development activities that are going on in North Queensland. We are looking at whether we can broaden it out under the announcement that was made between Minister Crean and Minister Mulherin.

Senator IAN MACDONALD: Is there any time line? Can I expect some action by the end of March or June? Is there anything that you can give me?

Ms Beauchamp : Not at this stage, because we will be working with the Queensland government and the relevant department up there to provide advice to both ministers.

Senator IAN MACDONALD: So, there will be nothing happening for a couple of months because, as you know, Queensland is just about to go into a caretaker mode. I am quite sure that the Commonwealth would not be involved in a Queensland election by making announcements during that period. Perhaps, on notice, you can tell me whether there is a timetable for that. I will have to put some questions on notice. I wrote to Minister Ludwig about providing some of the inappropriately targeted money from the live cattle ban that the government put forward—I think it was about $5 million, and nobody accessed it because the rules and regulations were so difficult that nobody could do it—into a feasibility study into a northern abattoir to try to help the beef industry. Are you aware of anything moving in the abattoir area?

Ms Fleming : Yes. We are providing $100,000 to Queensland.

Senator IAN MACDONALD: To the Queensland government?

Ms Fleming : To the Queensland government to work on phase 2 of the feasibility of the northern Queensland abattoir. That was announced as part of the package with the Northern Queensland Irrigated Agriculture project.

Senator IAN MACDONALD: Do you know who that is going to? It is going to the Queensland government.

Ms Fleming : Their regional department is taking that forward. It is in the beef agriculture section of the Queensland department.

Senator IAN MACDONALD: The Gulf Savannah Development Association was trying to get money for a feasibility study that they were looking at. Is it going to them?

Ms Fleming : I think this feasibility study is based around Cloncurry, but it may not have a specific location.

Senator IAN MACDONALD: Senator Heffernan asked another area of the department earlier about a proposal for an abattoir in Darwin by the AAco doing that themselves, but they need support for infrastructure. Is the department looking at that at all?

Ms Fleming : There are five abattoir proposals across the north at the moment. AAco’s are some of those. There are other proponents that are part of it. As part of the Northern Australian Ministerial Forum there is a project, together with the jurisdictions of Queensland, NT and WA, to look across those proposals to see what is viable. As you would be aware, northern abattoirs have a mixed history of success, and that project is looking at the logistics. We have just about finished the scope of that work. There is a very large beef project under the Northern Sustainable Futures first phase.

Senator IAN MACDONALD: That is very useful, but time has escaped me. Could you finish your answer as a question on notice, so I can pass to others.

Ms Fleming : Certainly.

CHAIR: Senator Back.

Senator BACK: I have a couple of questions regarding regional development in Australia. In Western Australia we have a regional development network based on the state government instrumentalities. When you lay one upon the other the two of them are almost the same. Can you tell me whether any moves have been undertaken to try to achieve efficiencies in terms of both expenditure and reach by having a greater level of cooperation between the two? An example is the Wheat Belt Regional Development Commission and the Wheat Belt Regional Development Authority, which are exactly the same geographically and yet, up until recently, one was based in Gingin and the other based in Northam. What, if anything, has been done to try to achieve efficiencies in those two?

Mr O'Brien : We have begun discussions with the Western Australian government. We have had some very constructive discussions with the regional development council towards the end of last year, where we looked at what could be done to bring the two organisations together and to streamline the duplication. Those discussions are underway and we are actively trying to pursue that to find out where we can get synergies.

Mr Carmichael : We are well aware of the issue. We have been working a lot of last year on how we can bring those two systems together. As to one of the things that has been successful, as you acknowledge, a lot of them have the same area. With the majority of those, our RDA committees and their regional development commissions work very closely. The wheat belt is a good example where there is a close working relationship with a common membership across those two bodies. Whilst there is a level of duplication, it is minimised in many of those sites, particularly in that region. It is a continuing process. The Minister for Regional Development in Western Australia is very supportive of the work that we are doing to bring those systems together, but he has to bring his government along with him, which is one of the challenges for him in Western Australia.

Senator BACK: It would be 15 months since we were looking at this through a Senate select committee on Federation. At that time the regional development authorities in different areas seemed to be somewhat at sea in terms of where they were going, what sort of funding they had and what sort of support they were getting in local communities. Has the funding base improved for the RDAs? In general terms, can you advise us what the benefit is to the Commonwealth and to the taxpayer as a result of the investment being made in the RDAs?

Mr Carmichael : Part of the response to that is that we needed to work through a range of processes, because there was a proposal to bring those two systems together. It was on the table in the Western Australian—

Senator BACK: I am—

Mr Carmichael : Yes, I know. Part of that was to consider, if that was not to come to fruition, what we would need to do to support our RDA system. Late last year we set up a state advisory committee. We have done some analysis on the needs of those RDAs and what additional funding they would require, and we have some proposals that we have developed now, and which we are taking forward to our minister, around how we can provide some additional support. One RDA is working across two regional development commissions, and they may require some additional support on top of that. There is a range of considerations that we have gone through. We have developed those proposals and hopefully in the near future we will be able to make some announcements around how we will take that forward.

Ms Beauchamp : The government made a significant announcement in the budget last year. It injected another $20.3 million over four years to strengthen the Regional Development Australia network and to really focus on getting the right people on the committees as vacancies arise. You would have seen a number of requests for expressions of interest. They are volunteer positions. They bring together local leaders and represent local communities. We are in the process of rolling out that money and looking at how to strengthen the RDA network. Part of that program has been the Regional Development Australia committees actually looking at developing with their local areas and state governments these Regional Development Australia plans, so there is a real coordinated effort around joint investment strategies, what the priorities are and where the region is heading. A lot of work has gone into supporting the government’s commitment to strengthen Regional Development Australia committees.

As my colleagues were saying earlier, we are working very closely with the regional development commissions in Western Australia. We are looking at aligning those areas and certainly aligning membership on the Regional Development Australia committees. We are in the process of rolling that out, which is a four-year program, and we have made some good progress so far.

Senator BACK: Thank you. More generally with the Regional Development Australia committees around Australia, do you have as an objective that they should be seeking some revenue earning activities in their own right to boost or to stimulate even further the budget that comes to them from government? Is that something that you would see as an objective or something you would not be encouraging the RDAs to do?

Mr O'Brien : The issue with Regional Development Australia committees across Australia is that each state has different arrangements in terms of the level of input that state governments provide. In the case of South Australia, it is the level of input the local government provides in terms of funding. Our No. 1 objective is to build the base capability of RDAs in a consistent fashion across the country. That is what Mr Carmichael was referring to before, in terms of endeavouring to understand the circumstances of different RDAs in each state. Our focus is to look at options to lift base funding and then look at options to supplement funding for those particularly disadvantaged. We would not encourage revenue raising activities. I think there are some issues in South Australia where the South Australian government, in its funding agreement with RDAs, requires the RDAs to undertake certain tasks and they are paid for that task.

Mr Carmichael : One of the tasks that we carried out over the last six months, in particular, is to work out the level of activity that we are expecting, what the Commonwealth was contracting and making sure that our funding matched that. That has been part of the analysis that we have done nationally. As Mr O’Brien was saying, there are different contributions coming from state governments, and of course in Western Australia we do not have a contribution because they are paying their own commissions. That is one of the things that we are looking to address to provide some additional funding. Minister Crean has talked to the RDAs in Western Australia about that and we are in the process of being able to deliver. In the meantime, every RDA in Australia has improved their plan and that is why we worked very closely with them last year. They all have better plans. They are all engaging with local government much more formally than they did before. Western Australia has a reasonable proportion of local government representatives already on those committees, but they must formally consult with each local government in their locality, which is a bit of a challenge in Western Australia where they sometimes have 30 or 40. They are doing that and that is working well. They formally need to provide each local government with a copy of their plan. It is also available on their websites, but we want that formal relationship so that they are working in concert with local government. In Western Australia we are encouraging them to share that with the regional development commission as well.

Whilst there are still a lot of challenges to go, the benchmark of where RDAs are nationally is much higher this year than it was last year. There is a range of initiatives, because we have been consulting with the sector about the sorts of things they need to improve their practice. We have a website providing them with a lot more information that they require. So, it is around building their capability. There is a lot of work that we have been doing and delivering to them directly and that we are in the process of delivering over the next couple of months.

CHAIR: That was absolutely incredible.

Senator BACK: Thank you, Mr Carmichael. Can you give us an idea of what would be the average number of full-time equivalent positions in each RDA around the country?

Mr Carmichael : In South Australia I would say it is between 14 and 17, because they get local government funding, state government funding and Commonwealth funding. In Western Australia it is more like one to two. In New South Wales it is three or four. In Victoria it is about three or four. Every state is different because of different contributions. We align our expectations with their capability. In South Australia they do a lot of service delivery, but that is not something that happens in the rest of the country.

Senator BACK: Thank you.

CHAIR: Senator Eggleston.

Senator EGGLESTON: I am interested in what the East Kimberley Development package has delivered.

Ms Fleming : The East Kimberley Development package had 29 projects, some delivered by local government and some delivered under the Western Australian government. Some 10 projects have been completed, including the Wyndham health facilities upgrade, sobering up centres, rehabilitation facilities, swimming pools, picture gardens, patient transfer facilities, airport expansions and the jetty. There are another 16 projects that are currently under construction with WA. These are the larger upgrades of the social housing, the high school and education precinct, shared office facilities, some environmental health and early education measures.

Senator EGGLESTON: This is all in Kununurra and Wyndham, is it?

Ms Fleming : That is correct. It is around that area.

Senator EGGLESTON: How much have you spent on the upgrade of the Wyndham jetty?

Ms Fleming : The Wyndham jetty was a $7 million project.

Senator EGGLESTON: What is the object of the upgrade? Do you have a defined objective?

Ms Fleming : It was to deepen the jetty harbour and to enable greater recreational fishing. It was modified during the course of the project to try to deepen it even further to allow some of the tourist boats to be able to come into that area and offer some broader economic opportunities than were there before.

Senator EGGLESTON: So, essentially, it is for the tourist boats that run up and down the coast from Broome to Wyndham?

Ms Fleming : And recreational fishing.

Senator EGGLESTON: What about harder economic uses such as ships for live animal export, sugar export and other commodities from that area?

Ms Fleming : There is a Wyndham port upgrade of $10 million.

Senator EGGLESTON: $10 million?

Ms Fleming : Yes, $10 million.

Senator EGGLESTON: I thought you said ‘billion’, but that would be a little excessive for Wyndham.

Ms Fleming : The whole package was a $200 million investment in community and social infrastructure to complement the Western Australian government’s investment in Ord 2.

Senator EGGLESTON: Stage 2, yes.

Ms Fleming : The focus was on community projects rather than economic infrastructure, but that is not to say that some of the projects that have been developed under that package do not have some economic benefit to the community.

Senator EGGLESTON: How much of the $200 million have you spent?

Ms Fleming : To date we have spent $23.25 million on completed projects, and we have $165.7 million on projects under construction. As at December 2011 we had expended $156.545 million.

Senator EGGLESTON: So, you are getting pretty close to your $200 million ceiling?

Ms Fleming : That is correct.

Senator EGGLESTON: Is there any plan to provide additional funding to enable you to continue to support local projects of social significance.

Ms Fleming : It was a standalone package and the funding goes through until 2013 and then it expires.

Senator IAN MACDONALD: I am not sure that you have answered Senator Eggleston’s question: can the port upgrade be used for sugar or cattle boats? What was your answer to that?

Senator EGGLESTON: I assumed it was a negative.

Ms Fleming : I would like to look at that and maybe come back at the end of the session. I can give you an update on the actual purpose of that particular project. As you would appreciate, we have a large number of projects.

Senator EGGLESTON: The concept of this funding really is for social infrastructure; isn’t it? The fact that you have provided funding for facilities for the cruise boats—they are not very large cruise boats, they are the cruise boats which go up and down the coast, which is essentially to facilitate the tourist industry—surprises me a little bit. Is that inconsistent with your fundamental charter?

Ms Fleming : A number of projects at the beginning of the East Kimberley development package were agreed across Commonwealth, state and local governments. During the course of that period some projects that were identified at the beginning of the project took on less importance to the community and others took on more importance. In the course of those negotiations, the community requested that we look at rebalancing some of the projects within the package to enable them to create a bigger jetty project which would enable them to attract some of the tourist traffic to that area and enhance the recreational fishing capacity of that project.

Senator EGGLESTON: You also talked about the Wyndham hospital.

Ms Fleming : Yes.

Senator EGGLESTON: What exactly have you done there?

Ms Fleming : It is not a hospital. It is the Kununurra Airport patient transfer facility. We upgraded the facility to enable a more ambient environment for patients being transferred and renal services.

Senator EGGLESTON: Do you come under the Office of Northern Australia?

Ms Fleming : I am sorry, I stand corrected. We also provided an expansion to the Kununurra Hospital of $20 million, so there was a hospital and a transfer.

Senator EGGLESTON: What was that for?

Ms Fleming : To expand the hospital.

Senator EGGLESTON: In an unspecified way. It was not for a renal dialysis unit or something like that?

Ms Fleming : I could provide you with more details on that project. I think it was.

CHAIR: I have been fortunate enough to see a lot of the work under Minister Gray’s stewardship through that Office of Northern Australia. Could you table those projects for the committee. I know Senator Eggleston’s commitment to Indigenous issues in the north is unquestionable, but there are also some fantastic returns for Indigenous training and employment there, too. Could you do that?

Senator HUMPHRIES: I want to ask about the Commonwealth’s natural disaster recovery task force. Specifically I want to get a report on what that task force has done since it was appointed in, I think, March last year.

Mr Leeper : I could go for a while. Did you want to try to restrict me somehow?

Senator HUMPHRIES: Could you tell me if the task force has produced reports which have educated or shaped government decisions about the allocation of Commonwealth funds for the recovery from natural disasters.

Mr Leeper : It is a broad question. The task force exists to make sure the Commonwealth achieves value for money in the reconstruction effort. That is primarily a state responsibility and is done through the Queensland Reconstruction Authority. The task force provides advice to the Commonwealth government about areas for policy attention. I think one of the things I would suggest we have been successful in doing is working with the Queensland government to address some of the human and social impacts of disasters. Some of the approaches that have been developed have been deployed most recently after the flooding in January and February in Roma, Mitchell, St George and Charleville around identifying damaged properties. That has been an innovation.

We have supported the work of the reconstruction inspectorate, which has now reported to the Prime Minister twice. We are preparing a third report at the present time. The first two reports are on the internet under the reconstruction inspectorate site and the minutes of the meetings include details of visits that they have undertaken. What we have done over that period—

Senator HUMPHRIES: Are the inspectorate reports on the website?

Mr Leeper : Yes. The task force supports the inspectorate. Again, we worked with the Queensland government to develop a value-for-money approach which is designed to protect Commonwealth funding and get good value out of the reconstruction process, emphasising time, quality, cost and also community priority. That area has been an achievement as well.

Senator HUMPHRIES: How does it do that? Does it contact directly agencies which are delivering services and suggest that they should do this in a different way, or does it ask ministers to make particular decisions with respect to allocation of resources? Describe how it actually affects outcomes?

Mr Leeper : The value-for-money framework is the primary one. It is designed to make sure that the inspectorate can satisfy itself in the way that reconstruction is undertaken, that reasonable value for money is being achieved. Inside the task force, we will be doing 130 separate project reviews out of the 2,000 or so separate projects to provide a statistical level of assurance about value for money, so that is something which is an achievement.

We have been working with Queensland government agencies by having members of my task force being involved in working groups and working parties pushing the line about connecting people with services, ensuring damaged properties are restored as quickly as possible. We have been working across the Commonwealth government on issues like insurance and the Queensland floods commission. That is just part of the interconnectedness of federal government work. But I would say that the primary focus I have at the present time is on the $5 billion or so of Commonwealth funds which is actually the reconstruction work and ensuring that value for money is achieved in that space.

Ms Beauchamp : In terms of the reconstruction efforts, between 70 per cent and 80 per cent is related to roads reconstruction. There is a very clear methodology in terms of the value-for-money framework, so we have been working with the Queensland government, the Queensland Reconstruction Authority and indeed the Department of Infrastructure and Transport here around benchmarking data in terms of what it would cost to build or reconstruct parts of the Bruce Highway compared to some of the more outback areas. There is quite good data that we have been using in terms of benchmarking and making sure we do get value for money. Because most of it is going into roads, that is where a lot of the focus of the inspections has been.

Senator HUMPHRIES: Is this task force exclusively made up of Commonwealth officers or are there state officers as well?

Mr Leeper : No, it is Commonwealth officers.

Senator HUMPHRIES: It is still not clear to me how this task force actually effects changes in or outcomes from decisions made by state agencies which are spending the Commonwealth money to repair roads and do other things. Perhaps you could take on notice to give me some case studies of how the task force’s work has actually changed outcomes on the ground.

Mr Leeper : Certainly, we will do that.

Ms Beauchamp : It is through the inspectorate looking at the process for commissioning pieces of reconstruction work but also undertaking checks in terms of higher risk projects and other areas, so the inspectorate has actually gone in to look at particular reconstruction projects to see if they are actually delivering. With the expertise on the inspectorate they can bring a lot of expertise around the construction area.

Senator HUMPHRIES: The inspectorate is due to finish though some time soon; isn’t it?

Mr Leeper : At the end of 2012.

Senator HUMPHRIES: Is that still headed by John Fahey?

Mr Leeper : Yes.

Senator HUMPHRIES: Who heads the task force?

Mr Leeper : I am the head of the task force.

Senator HUMPHRIES: Minutes or papers published, or outcomes in terms of documents produced by that body though are not tabled anywhere?

Mr Leeper : reconstructioninspectorate.gov.au contains the minutes of the inspectorate meetings, of which I think there have been eight. There are the details of site visits. There are also the two former reports to the Prime Minister. The third report should be completed by the end of the month.

Senator HUMPHRIES: What work is it doing right now with respect to the flooding in Queensland and New South Wales?

Mr Leeper : The current floods? Those are the responsibility of the Attorney-General’s Department. The task force was established particularly to manage the very large-scale infrastructure and people response related to last year’s disaster. Our mandate is the 2010-11 floods, Cyclone Yasi in Queensland and also the Victorian floods.

Senator JOYCE: Back in October 2010, speaking to you as an accountant, I was fascinated to hear about the government’s spatial accounting initiative. Spatial accounting! There is something that is right out there. I always struggled with it, all those interregional—whatever they were called—social accounting matrices. Can you give me a guide to understanding the interregional social accounting matrices?

Ms Beauchamp : I will hand over to my colleagues in a moment. Minister Crean put out a regional budget statement last year which reflected our first efforts with the department of finance in terms of reporting regional versus non-regional government expenditure. We are still working with the department of finance, who has the lead on this in terms of refining how we do report government expenditure. I might hand over to my colleagues here to go through the details.

Senator JOYCE: Give me just a brief description of an interregional social accounting matrix.

Mr Atkinson : What we are talking about is the spatial accounting. The first iteration was in last year’s regional budget statement—

Senator JOYCE: Spatial accounting is highly complicated and, to be honest, I am very dubious as to whether anybody has got a clue how to incorporate it in what they are doing. For instance, can you tell me in your non-spatial framework how you considered the spatial extension?

Ms Foster : With the spatial accounting work that we have done is present information about government expenditure on a regional or non-regional basis. It is not the sort of social accounting that you are talking about.

Senator JOYCE: Well, it is called spatial accounting. I can remember it was started in Denmark. What about the commodity balance equation. From my knowledge of that it was a heap of zs, or three zs, three us, one q and a lot of little letters above them and below them. Can you give me your understanding of the commodity balance equation?

Ms Beauchamp : I think our minister and Minister Wong have spoken about spatial reporting. It is not a purely spatial accounting model that you are talking about. We are talking about spatial reporting. We are talking about—

Senator JOYCE: Unfortunately, the minister’s quote was:

In addition, we are moving to introduce a breakdown of the Federal Budget which more clearly shows the pattern and priority of Commonwealth spending across all regions of the country. Known as spatial accounting, this will be a major advance and will allow comparisons nationwide across regions.

It certainly would be a major advance. It will almost be astrophysics for most people—

Senator Arbib: Could I ask that the document be tabled so we can—

Senator JOYCE: It is a quote from the minister.

Senator Arbib: Okay, but there is context in terms of—

Senator JOYCE: I will give you the date. It was announced by Minister Crean on 9 October 2010.

Senator Arbib: Was it a press release?

Senator JOYCE: Yes, that he is now involved in spatial accounting. Does any person really have a clue about spatial accounting? Is there any person in this room who has got a clue about spatial accounting?

CHAIR: Ms Beauchamp was actually going to answer and you did jump over her, so I think in all fairness and for the purposes of time you should direct the question to Ms Beauchamp, who will answer for herself. Let us let her get the answer out before your next question.

Ms Beauchamp : We are trying to make this as simple as possible—

Senator JOYCE: That would be a trick—

CHAIR: Senator Joyce, that was very ‘Heffernanesque’ and I know you are not like that because you do respect the officers at the table, so let Ms Beauchamp finish her answer.

Ms Beauchamp : The purpose was to provide some transparency in the budget process in terms of where the money goes, regional versus non-regional. As Mr Atkinson pointed out, in last year’s statement that was the first instalment in terms of the process for identifying where the Commonwealth dollars go. We are still working with the department of finance this year in terms of this budget to see if we can refine and provide more information in terms of where the government’s budget goes in the next budget, so we will be doing some further work with the department of finance on that. It is simply reporting where the expenditure dollars from the Commonwealth go.

Senator JOYCE: It is a lot more than simple. If you want to go into spatial accounting it is absolutely at the pinnacle of complex. Mr. Atkinson, can you explain to me your knowledge of spatial accounting?

Mr Atkinson : As the secretary said, there is a spectrum of where you can go to in spatial accounting. The commitment in the agreement with the Independents was to do a breakdown of the Commonwealth budget on a regional and non-regional basis. Where we have gone in the previous ministerial budget statement provides, as you can see in the tables, a first cut of the regional and non-regional split which will be seeking to improve in the next version of it.

Senator JOYCE: Can you give me your understanding of sectors, groups of production, institutions, commodities which are all part—

Senator Arbib: Can I just say, the officials have answered the question—

Senator JOYCE: The answer to the question is—

Senator Arbib: in terms of spatial accounting, I do not think we can provide any more information on that. If Senator Joyce has other questions he may want to put those—

Senator JOYCE: I have got heaps.

Senator Arbib: but in terms of this issue I think we have gone about as far as we can go.

CHAIR: I think in all fairness for the purposes of timing, maybe Senator Joyce could withdraw the question.

Senator JOYCE: I agree with you totally, Minister. We have gone absolutely as far as we can go because no-one has a clue about spatial accounting and from my knowledge it has not been implemented so why did we announce it?

CHAIR: Minister, I will help you here. Senator Joyce, I think the officers have done everything in their power to answer your question so far. They may not be the answers that you are seeking—

Senator JOYCE: Well, the reason—

CHAIR: We do not have a habit of talking over each other in this committee. We respect each other’s position. I would urge you to remember that time is limited and I know that you do have a lot of questions to go through.

Senator JOYCE: Sure. The reason I asked it was that it has been a year since the announcement on spatial accounting I just wanted you to provide me with an update of where this spatial accounting initiative is at and why the delay.

Ms Beauchamp : There has been no delay. The department of finance has the lead. It is reporting where the government’s money is going as to expenditure—not all the other economic indicators, but exactly where the budget money is going in a regional versus non-regional sense. Further work is being done with the department of finance and we are feeding into that. It is certainly not behind and we are doing that in terms of the development of the next budget.

Senator JOYCE: I will ask you a lot of questions about spatial accounting at the next estimates. I will probably take them home and play it to myself when I need to get to sleep.

I refer to correspondence received by the RDA appeal from Carly Perkins, the engagement officer department, where she requested a contact for where they could get an update on her first spatial accounting initiative. The departmental response was that:

It is a difficult task and each agency will need to be contacted individually. I am seeking information from this department and I will let you know when I have more information about how to best go about contacting other departments.

Shouldn’t the department already be contacting other departments progressing with this initiative?

Senator Arbib: Senator Joyce is quoting from a document and the officials are very happy to try to answer the question, but we would like to see the document so we know where he is quoting from.

Senator JOYCE: Sure, I can get it to you now. I have got it now.

Senator Arbib: Thank you.

Senator JOYCE: Do you want me to give it to you now?

Senator Arbib: Please.

CHAIR: What I would probably suggest if I could, through the secretariat, let us not worry about photocopying it now. Just give a copy to the table up the front so we do not waste any more valuable time just so that, Senator Joyce, you can follow your line of questioning.

Senator JOYCE: Okay, sure. Let us say we have dealt with spatial accounting because I know we are going to get absolutely nowhere there.

I want to go to the myregion government website. When can we expect phase two of the myregion government website to commence?

Mr Atkinson : Phase two of the myregion website is expected to go live in March this year.

Senator JOYCE: Will it be completed by March this year?

Mr Atkinson : Yes.

Senator JOYCE: Can you provide a list of the levels at which the seven staff who are working on the myregion website were employed, please?

Mr Atkinson : I might just pass to my colleague.

Mr Bennett : At the moment we have six staff employed with My Regions. Their levels are the executive level officer 2, two officers at the executive level 1, one officer at the APS 6 and two officers at APS 5.

Senator JOYCE: That is a pretty substantial wage bill for a website. How long have they been at the job for now?

Mr Atkinson : The first build phase commenced—I think it was—about May of last year. There are two elements to the role. The first is creating and building the website and the second is the mediation role and ongoing content management.

Senator JOYCE: I notice that there have only been a couple of new comments posted in the forums on the myregion website since 30 October 2011. You have got a fair few resources and monies tied up. Will the department be conducting a review of the website in the future to determine its viability?

Ms Foster : As part of the development of the phase two build, we are currently looking at a range of issues which effect a website’s useability and functionality, including the number and type of data sets we have available and the kind of interfaces that are there. As part of that, we are working closely with the stakeholder group, including our RDAs, to establish how we can increase the functionality and useability of the site for them.

Senator JOYCE: What do you think is a reasonable amount of correspondence to be seen on the myregion website to support it? Because, to be honest, there is three-fifths of five-eighths of nothing there at the moment.

Ms Foster : We had over 20,000 visits to the site since August last year, so that is not an insubstantial amount of traffic on the site.

Senator JOYCE: Twenty thousand?

Ms Foster : More than 20,000.

Senator JOYCE: It is less than my email address, and I do not have that many staff working for me. What is the basis of the correspondence? What are they asking for?

Ms Foster : The site performs a couple of functions. One is to allow people to access information and the other is to allow the interactive function.

Senator JOYCE: What is the average time they are on the site for?

Ms Foster : I do not know. I would have to take that on notice.

Senator JOYCE: What are the key performance indicators of the site?

Ms Foster : We are trying to, as I said, fulfil two functions with the site. One is an opportunity for an interactive experience.

Senator JOYCE: What is the interactive experience? Spatial accounting?

Ms Foster : This is for people to participate in blogs and forums. If I could give you a couple of examples. We have hosted a forum with Victorian RDAs where they have discussed issues leading up to their state RDA forum, so they have dealt with workforce issues and a range of other things. That is a use of myregion website in a closed forum for a particular group. Another example is a forum that—just looking through my notes here—was based around Centrelink activity testing, so we have been—

Senator JOYCE: Would it not make more sense to have Centrelink activity testing on the Centrelink site?

Mr Bennett : That was a forum that was within the site, but the initial line of comment had come from a user; it was not something we had established.

Senator JOYCE: They wrote in to myregion and said, ‘I want to talk about Centrelink.’ Why did you not say, ‘Refer to Centrelink’?

Ms Foster : The website provides an opportunity for regional communities to nominate the kinds of topics that they are interested in exploring.

Senator JOYCE: How much is this costing us a year?

Ms Foster : There are the staff costs associated with it. The staff that are participating in the building of phase two will reduce dramatically this year.

Senator JOYCE: I will have another crack at it. How much is that costing us a year?

Ms Foster : We will have to take the exact cost on notice.

Senator JOYCE: I will just quickly go to the ACCs. Can you explain to me the—

Ms Beauchamp : Can I make an interruption in terms of the document you tabled?

Senator JOYCE: Yes.

Ms Beauchamp : I am not sure what the question was from the external person that asked a question of a junior officer in the department, but it looks like it has nothing to do with spatial accounting. It is called sector mapping and I am not sure what question was asked of the department.

Senator JOYCE: The question was asked, if you wanted the question—well, I have not been given back the copy of that. I referred to correspondence received by the RDA appeal from Carly Perkins, the engagement officer department, where she requested a contact for where they could get an update on her first spatial accounting initiative. I have got three emails from them. I will get it for you. We will get it tabled for you.

Ms Beauchamp : I just wanted to make it clear there was not any mention of spatial accounting, although it did actually talk about—

Senator JOYCE: There is one on spatial accounting. If it is not there, I will certainly get it for you and what I have determined is it is not one person. There is certainly a quote from Mr Crean about spatial accounting. I am absolutely certain there is not one person in this room who has a clue what spatial accounting is, so why on earth did you bring it up? Why on earth did we have an announcement about something that nobody has any idea about? I mean, it is going to be so complex to actually administer, to bring in, it is just not going to happen.

Ms Beauchamp : Can I reiterate what I said earlier in terms of the department working with the department of finance, which has got the lead on this, in rolling out the—

Senator JOYCE: There is the department of finance; explain to me spatial accounting in your own words.

CHAIR: Just wait, Mr Atkinson. Senator Joyce, I understand your frustration at times through Senate estimates, but I will urge you to just let the officers finish their answers. If you do not like it, I cannot help you there, but let us not cut them off half way through. People are watching our committee; I do not know why, but they are! Mr Atkinson.

Mr Atkinson : In the first iteration of spatial accounting, the significant change from the traditional government accounting approach was bringing a geospatial suite into accounting for government expenditure, which is the spatial element that has been brought through in this first iteration. As the secretary said, in future iterations further detail will become available.

Senator JOYCE: On the technical capacity, do you honestly have any idea, for instance, about the commodity balance equation? Could you describe to me how that is to be applied region to region?

Mr Atkinson : The commodity balance equation in the scope of spatial accounting for government expenditure, which is what the commitment was, is not part of government expenditure.

Senator JOYCE: It is part of spatial accounting; it is absolutely. I cannot remember the papers that have been written on it; it is intricate to the understanding of spatial accounting.

Mr Atkinson : Certainly, but I am not certain that applies to spatial accounting of government expenditure.

Senator JOYCE: It is like saying I have got a different form of double entry bookkeeping. You have to go through your social accounting matrix tools and you have to understand your commodity balance equation. If you can understand it and explain it to me, then you should explain it to the rest of the department, because I have not seen any examples of what would be an absolute quantum of work being delivered on the interrelationship of the regions, how they work together and consideration of the spatial extensions on all this. It is way beyond the scope of the competencies that are available to your department to do. That is basically what I am getting at.

Ms Beauchamp : I reiterate that we are working with the department of finance who has the lead on this and we are delivering what the government committed to, providing more transparency around the reporting of the government budget.

Senator JOYCE: Have you had any sort of seminars on spatial accounting to explain it to you?

Ms Beauchamp : I have an MBA and have an accounting qualification. I do not think the issues you have raised are relevant.

Senator JOYCE: They are not relevant?

Ms Beauchamp : No, they are not relevant.

Senator JOYCE: Tell Mr Crean, because he made them relevant to you when he announced them for you.

Ms Beauchamp : I can only reiterate, and I probably have no more to offer, Chair, than in terms of what we are doing to support the government’s commitments in this area.

CHAIR: That is acceptable.

Senator JOYCE: What is not relevant? You said something was not relevant; what exactly is not relevant?

Ms Beauchamp : I figured you were asking for my considerations and the like.

CHAIR: You were probably thinking aloud, Senator Joyce, but anyway.

Mr Atkinson : I would just add that in implementing the first iteration of spatial accounting in last year’s budget, it is actually about implementing one of the commitments in the agreement with the Independents. It is:

The Finance Department will develop a spatial accounting model which will provide greater visibility into government spending and service delivery.

It is focused on government expenditure and service delivery.

Senator JOYCE: He did say it. I thought he had not said it, but he did say it. Which Independent wanted an involvement in spatial accounting?

CHAIR: I will have to make this the last question.

Senator JOYCE: I am curious; which Independent has a penchant for spatial accounting?

Ms Foster : The agreement was between the government and both Mr Windsor and Mr Oakeshott.

Senator JOYCE: Was it Mr Oakeshott?

Ms Foster : That is not specified in the agreement.

Senator JOYCE: I do not think it would be Mr Windsor. Spatial accounting seems a very Oakeshotty sort of thing!

CHAIR: That ended with a smile and welcome back, Senator Joyce. It is good to have you back; it really is and I am not pretending that. We urge you to put the rest of your questions on notice.

Before the senators run away, I will just bore you officers for a quick second. The timing is probably not that perfect, but I am just going to let the committee know, and those out there—I am probably going to be belted here—but it does sadden me to announce that tonight will be the last night that—do not worry, I am not retiring—that our fantastically long-suffering, hardworking secretary will be with us. Now, I am really in the pooh here. Just as a little token of appreciation of the committee to you, Jeanette—and we know we are not going to lose you because you will be around the Senate, certainly, whipping up other senators—a little something for you to remind you of us. Thank you, Jeanette. On that, I am going to cop it, so what we will do is this:. Senator Heffernan is a longstanding member and chair and he is not here but from the coalition, I suppose, I ask Senator Macdonald to say a few words.

Senator IAN MACDONALD: Chair, you said it all, and those of us who have been around for a while have known the great work that has been done. You are not leaving the building, I take it?

CHAIR: No.

Senator IAN MACDONALD: That is one positive on an otherwise unfortunate occasion, but thank you very much for everything that you have done for this committee over a long period.

CHAIR: While we are on Hansard, to her long-suffering husband, Murray: it is not Valentine’s Day, mate; we are just saying thank you. Thank you, Senator Macdonald. Thank you, Jeanette, and thank you, officers.

Proceedings suspended from 19:01 to 20:00

CHAIR: Welcome to officers for services to territory. We will go to questions.

Senator BACK: Thank you very much, Chairman. It was about 12 months ago that Minister Crean and the Norfolk Island government signed an agreement to progress the road map. I would like to ask you some questions about it. Firstly, given what I understand to have been a considerable resistance on Norfolk Island to some of the reforms in the road map, could you give us an indication of whether the Norfolk Island government has obtained the necessary community support in the reforms for them to be implemented?

Mr O'Brien : I can say that the Norfolk Island community is still committed to the road map process that David Buffett and Minister Crean set out on. Our priority this year has really been looking at the financial situation of Norfolk Island and looking very deeply at what capacity they have to deliver services and raise revenue on island. A key element of the road map was to look at, in particular, the impost of the airline contract. We have taken steps to overcome that particular issue and renegotiate a new airline contract for Norfolk Island. That was probably the central financial problem that they had on island. We have looked at the financial capacity of Norfolk Island and we have supplemented funding there. But we have also looked at the capability of the administration, which is another key issue that I think has been a barrier to being able to make good progress on the road map.

Senator BACK: There are a number of things there. Can you tell me what the supplementary support has been financially to the island?

Mr O'Brien : There were two components of the support. There was the buying-out of the airline contract and there was some support provided to Norfolk Island around their funding deficit for 2010-11.

Senator BACK: Perhaps you could take that on notice to give me those figures. I would appreciate knowing what they were.

Mr O'Brien : Sure.

Senator BACK: You made mention of the airline contract. I understand that would be in reference now to the recently awarded Air New Zealand contract. Is that correct?

Mr O'Brien : That is right.

Senator BACK: Could you tell us then: what has been the degree of support on the island and what has been the degree of support from the federal government for that contract—in the obvious hope that it is a viable contract.

Ms Savage : In terms of the previous question and in relation to the financial assistance, in 2010-11 the assistance totalled $5.7 million. In 2011-12 it was $14.1 million.

Senator BACK: And are you able to tell us what is in the budget for next year?

Ms Savage : No. That is under consideration at the moment.

Mr O'Brien : But I can point out that the most significant element of the cost in 2010-11 was the actual airline contract buyout.

Senator BACK: I did ask the question. Regarding support on the island itself, can you give us some indicator of the strength or otherwise of the island community's interest in this?

Ms Savage : I think there is a lot of interest by the community on Norfolk Island. Certainly, the feedback that we have had in relation to changing the air services arrangements has been very positive. Members of the community have advised us that it is something that takes quite a significant financial burden away from the community. It has been seen in a very positive light. Broadly, in terms of the other reforms, the reviews that have been under way, likewise, have been viewed in a very positive light.

Senator BACK: There is no formal freight or other rebate, is there, for transport into and out of Norfolk Island—as there is, for example, with some of the islands to the south of us etcetera?

There is no formal rebate, but does the government see the financial support in some way as an offsetting of those transport costs? My understanding, from speaking to people on Norfolk Island, is that the cost of getting agricultural inputs such as fertilisers and chemicals onto the island and the cost impost of them getting agricultural produce off the island is prohibitive. Is there any plan or intention, or have your studies indicated that giving some sort of financial support in that area is likely to improve outcomes?

Mr O'Brien : The studies indicate that there has been, for some time, an underinvestment in critical infrastructure, particularly port and airport infrastructure. The port infrastructure itself is something to behold in its current state.

Senator BACK: Its parlous state, presumably?

Mr O'Brien : In the sense of its inability to take container freight. Studies are underway, and I do not want to pre-empt their conclusions, but that has certainly been highlighted as an issue that needs to be addressed by the Norfolk Island administration going forward.

Senator BACK: I understand you have, within the department, an economic evaluation by ACIL. Is that with you? Has it gone on to the minister? Is it going to be made public? Can you give us any idea at all as to ACIL's view of the future economic wellbeing and survival of the island?

Mr O'Brien : The study is not complete, so the minister does not have the study. It will ultimately be made public, as with most other studies that have focused on Norfolk Island. I do not want to pre-empt the conclusions of it, but I am happy to say that one of the key themes in that piece of work to date is the need to look at reforming many of the government business enterprises. That is a critical next step on island.

Ms Beauchamp : One of the main building blocks or platforms around the economic outcomes for the island was the renegotiation of the airline contract. Obviously tourism has a key part to play in that and, as Mr O'Brien said, we are currently looking at a draft report that has been provided to us from ACIL and we are to get comments back to them.

Senator BACK: Having administered an offshore island for seven years, I have a very acute awareness of the challenges. Can you tell us what is the current status of the tourism industry and what can be done realistically to encourage and stimulate further tourism, particularly yielding the sorts of dollars that tourism is going to need: the higher yielding type of tourist.

Mr O'Brien : It is no secret that Norfolk Island tourism has been hard hit, particularly with a high dollar and the nature of the tourism market in general. Going forward, I think the critical element here is that they need to invest in tourism product, so there needs to be a re-examination on island of what the island can offer from a tourist experience perspective. That is something that we are keen to work with the administration on.

Senator BACK: You are obviously right, but I would have thought that a huge input ought to be coming from, for example, the Australian government tourism organisation. Do Minister Ferguson and his department interact with you or through you with Norfolk Island at all in promoting tourism to the island?

Mr O'Brien : We have certainly interacted with Mr Ferguson's department on these things. We are going to have to have a concentrated effort going forward to look at how Norfolk Island tourism can be revived. You are right: it will be a whole-of-government effort. More importantly, it needs to be an effort from the island. It is their responsibility and we have to assist them to get to where they want to get to.

Senator BACK: Yes. It would appear the airline contract is critical to all of this, isn't it? If you cannot get people onto the island safely or if they do not feel confident going—

Mr O'Brien : Yes. The former carrier really was not hooked into key tourism systems. It was sort of an offline—

Senator BACK: The island can do what it likes, but, if you do not have the cooperation of the transporters to and from, you have got little chance. I would like to ask you some questions about the public service review, which I understand was undertaken by the Australian Continuous Improvement Group; is that right?

Mr O'Brien : That is correct.

Senator BACK: Before it was released, who had access to the draft and what capacity did those people have to influence any amendments that might have been made before the report was finalised?

Ms Savage : The draft was provided to the Norfolk Island administration for comment around factual inaccuracies, so there was some discussion around the crafting of some of the recommendations, but really in large part the input was around correcting anything that was inaccurate.

Senator BACK: Was the former CEO of the island still the CEO at the time the report was being undertaken? My question is: did the former CEO have access to the report and have input into it? At the time the report came down, were they the current CEO, in which case I would expect they would, or in fact was the CEO already departed formally by the time the report came down?

Ms Savage : From memory, in terms of the timing I think the Acting CEO of the Norfolk Island administration was in place by the time the comment period was occurring on that particular report.

Senator BACK: Can you tell me whether people who were adversely commented on had the opportunity to view and comment on anything that may have related to them before the report was finalised?

Ms Savage : I am not quite sure what you mean in terms of adverse comments on individuals.

Senator BACK: I have not seen the report; the question simply came to me. If I had read it, I would understand if there were people whose performance was the subject of adverse comment. Were there? If there were, did they have a chance to defend their position before the report was finalised?

Ms Savage : The intent was not to provide comment on particular individuals. The report is publicly available. It does make some comment about the Norfolk Island administration and management arrangements and the effectiveness and efficiency of that administration.

Mr O'Brien : And it examines certain functions and highlights some inadequacies in those functions.

Senator BACK: So it is publicly available now?

Mr O'Brien : It is publicly available, yes.

Senator BACK: Has the government responded to it or has the government made any statement in terms of implementation or otherwise of recommendations in the report?

Mr O'Brien : It is a key input into the broader piece of work that we are doing in terms of Norfolk Island reform, so we will look at all the recommendations, and have been looking at all the recommendations, but they are one piece of the puzzle.

Ms Beauchamp : I guess it is for the department now to work with the Norfolk Island government. We are putting together a team of public servants from across the Commonwealth, particularly around IT skills, financial skills, HR and legal and placing them on island to work with the Norfolk Island government administration to see how they might improve their processes and transfer some of the skills, so the department and the Norfolk Island government collectively are looking at how we might implement better governance and accountability arrangements on island.

Mr O'Brien : That is right, and in fact that was a core recommendation.

Senator BACK: So I understand. I understand there is also some resistance on the island to some of the reforms, particularly in terms of the Australian-style income taxation and the electronic process. Can you tell me something of that and have those concerns now been allayed on the island?

Mr O'Brien : The implementation of the Australian taxation system is something for the future. What the capability building team will be looking to do over the next 12 months is to put the necessary information in people's hands, make them understand what the implications are and help us set up the processes, so that is really one of the tasks that the capability building team will be undertaking.

Senator BACK: I understand that, because you have not stopped me, Chairman, there are not others leaping to—

CHAIR: No. You have the full time and I am quite enjoying your line of questioning.

Senator BACK: Thank you. I go then to land tenure. Can you explain to me what is the circumstance with land tenure? Is it leasehold, is it freehold, is there agitation for those who have leases to have them converted to freehold title? Can you give me some understanding of that?

Ms Savage : The short answer is that it is a combination of those things. Julian, if you have the history.

Mr Yates : I used to have some responsibilities for Norfolk Island, so I can give an overview. The ownership of land on the island is a mix between freehold land and leasehold land. The Australian government had a program of converting essentially residential leasehold land to freehold land, where people paid to have it converted. That program is now largely completed. There are some commercial leasehold lands. Some examples are where people live and run a business on that land that is still leasehold. There is an interest in a second stage of that program. But that is still subject to consideration by government. If we need to go into any more detail on that, I would need to take it on notice, because it can get quite complicated.

Senator BACK: I would be appreciative of that, particularly in terms of agricultural land. I understand the residential. Thank you for that. I would also be very interested to read the reviews over time and learn what really is the prospect for agriculture on the island, particular associated with eco- or organic farming. I understand there is quite a move on the island. In fact, it has been put to me that some of the difficulties associated with securing bank finance to advance some of these organic farming projects have been linked in some way to the insecurity associated with leasehold land. If I could receive some information on that, I would be appreciative.

Mr O'Brien : It is interesting issue. Again, it would probably come back down to your ability to transport product or produce off the island in a time-effective manner.

Senator BACK: One of the residents I was speaking to told me that she traces back her family's involvement with Sydney Cove and the provision of both plant based and animal foodstuffs to 1791 from Norfolk Island, which I was amazed at. I go to a totally unrelated area, juvenile justice. Can you tell me what arrangements are in place on the island for drug and alcohol behavioural treatment for young people?

Ms Savage : There are not specific facilities available. The Norfolk Island government, and this is a matter for the Norfolk Island government, has arrangements in place with mainland state facilities. If there is a need they call on those arrangements.

Senator BACK: There is no actual facility on the island, if they have to be incarcerated, let us say. There is no juvenile facility?

Ms Savage : That is right.

Senator BACK: Where do they go? The decision to bring them back to the mainland would be a fairly harsh one, wouldn't it?

Mr O'Brien : It can be the only option on certain occasions.

Senator BACK: Is there any plan from your department's point of view to address this question? Someone said to me the only place they can go to is in the cells in the police station, otherwise they are simply in the company of adult criminals.

Mr O'Brien : The role of our department is to support the Norfolk Island administration and building their capability, as well as looking at issues around the sustainability of the financial situation. Obviously, we are aware of these particular circumstances. We try to work closely with them to have effective service delivery, but there are issues like that on the island.

Senator BACK: Because you would be getting to the stage of whether or not we comply with international conventions in terms of the treatment of children.

Mr O'Brien : It is the Norfolk Island administration, but yes.

Senator BACK: Exactly. My final question goes to the heritage area, which I understand is the Kingston and Arthurs Vale Historic Area. Can you tell me what are the Commonwealth's plans into the coming financial years for that historic area and what funds would be necessary, and therefore what funds would be likely to be made available?

Ms Savage : Going forward into the next financial year in relation to KAVHA, Kingston and Arthurs Vale Historic Area, there is work underway around revised governance arrangements. The Commonwealth is the major contributor to funding that World Heritage area. We work in partnership with the Norfolk Island government. We are quite keen to look at it as a supplementary opportunity for tourism, so we are looking at some studies that have been undertaken on the World Heritage area and identifying opportunity for improving the interpretation aspects of that area.

Senator BACK: Presumably that would come under the direct presumably of the administrator of the island.

Ms Savage : There is a KAVHA board that the Commonwealth and Norfolk Island governments are represented on. The administrator is a member of that board. The administrator has a role to play, but generally it is chaired by the Commonwealth and there are other parties who are involved in the board.

Mr O'Brien : In the current financial year, the Commonwealth will invest just under $600,000 into that facility. That compares to the Norfolk Island contribution of $345,000. Overall over the last three years that contribution from the Commonwealth has been just under $3 million.

Senator BACK: The island just recently had a new administrator appointed?

Mr O'Brien : That is correct.

Senator BACK: That was handled by your department presumably—

Mr O'Brien : It was.

Senator BACK: the advertising of the position and the interviewing et cetera.

Mr O'Brien : It is a cabinet decision. The appointment process is ultimately a Governor-General appointment.

Senator BACK: Was it advertised?

Mr O'Brien : It was not required to be advertised.

Senator BACK: But was it? It does not matter whether it was required to be or not.

Mr O'Brien : No.

Senator BACK: I remember once seeing it advertised. In fact, I placed an application some years ago. So it was not advertised but it was a cabinet appointment.

Mr O'Brien : That is right.

Senator BACK: And what are the qualifications? It is a gentleman, isn't it?

Mr O'Brien : Yes. Mr Neil Pope.

Senator BACK: What are his qualifications to do the job?

Mr O'Brien : He has a long history in community based issues. He was a former state member of parliament, and I think a minister, in Victoria. He had also had a long and successful mediation business since he left politics.

Senator BACK: From my understanding, the residents of the island are Australian citizens.

Ms Savage : No, not all. Some are.

Senator BACK: So would they enjoy social security payments, Medicare facilities and pharmaceutical benefits? Do they enjoy the same umbrella of benefits that Australian citizens do?

Mr O'Brien : No, they do not and that is part of the issue. Nor do they pay Australian taxes. One of the issues that we will work through over the course of the next few years is how we extend services to them and, in return, have them contributing to the Australian tax system. It is that sense of mutual obligation that is very important.

Senator BACK: In the economic analysis that has been done in the ACIG report, do you have some profile now of the level or adequacy of wealth? Do you know if there are any or many people suffering severe financial stress et cetera? Do you have that snapshot?

Mr O'Brien : You mentioned the Continuous Improvement Group report, but also the Commonwealth Grants Commission updated their 2006 work. It obviously looked at the revenue raising capacity on island. It also looked at per capita income, which is pretty much on par with the mainland.

Ms Savage : That is right. The Grants Commission found that in the time between its 2006 and its most recent reports there had been a deterioration of the situation on an island. While incomes were relatively similar, there had been increases in costs. It meant that your buying power did not go as far. In terms of the service delivery, they looked at the range of Commonwealth, state and local government services that are needed in the kind of community that Norfolk is and the opportunity to fund those services through revenue raised. One of the key issues was that there was a gap between the revenue raised and the cost of providing comparable services in mainland communities.

Senator BACK: So the summary would be that its likelihood of ever standing on its own two feet economically is remote?

Ms Beauchamp : There are a range of things. We are looking at this from a number of angles, including getting the public sector administration right and that includes, as you would know, looking at some of the management of their GBEs and getting the economic development strategy right. As I said, the renegotiation of the Norfolk Island airline contract was key to that. We are looking at what we do in tourism. There is also the community well-being work, how effective the hospital is running and how the community services are being delivered on island. That, again, is linked to how the public sector is run. Then there is obviously how they strengthen their environmental credentials as well to protect the island. So we are looking at it from a number of angles. I do not think you can look at one bit without looking at the other. You mentioned the tax system and Mr O'Brien spoke about the mutual obligation, so we are working with the tax office, for example, on what it would take, not only through the Australian government putting in a lot of money but also in how we can better use the resources on island. So we are looking at the reform agenda on a number of fronts, as indicated in the road map, and it is going to take quite a few years to get there.

Senator BACK: I will be very interested to see that background information. Thank you

Mr O'Brien : The report of the Commonwealth Grants Commission is available—

Ms Savage : On the Commonwealth Grants Commission website.

Senator BACK: Thank you very much.

CHAIR: I thank the witnesses.