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Finance and Public Administration References Committee
11/04/2017
Operation, effectiveness and consequences of the Public Governance, Performance and Accountability (Location of Corporate Commonwealth Entities) Order 2016

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ARTHY, Ms Kareena, Chief Executive Officer, Australian Pesticides and Veterinary Medicines Authority

HELGEBY» , «Mr» «Stein» , Deputy Secretary, Governance and APS Transformation, Department of Finance

JANIEC, Mrs Stefanie, Chief Operating Officer, Australian Pesticides and Veterinary Medicines Authority

McDONALD, «Mr» Andrew, Special Adviser, Agvet Chemicals Branch, Department of Agriculture and Water Resources

NORDEN, «Mr» Alan, Executive Director, Registration Management and Evaluation, Australian Pesticides and Veterinary Medicines Authority

THOMPSON, «Mr» Ian, First Assistant Secretary, Sustainable Agriculture, Fisheries and Forestry Division, Department of Agriculture and Water Resources

WILLIAMSON, «Mr» David, Deputy Secretary, Department of Agriculture and Water Resources

CHAIR: I welcome officers from the Department of Finance, the Department of Agriculture and Water Resources and the Australian Pesticides and Veterinary Medicines Authority. Information on parliamentary privilege and the protection of witnesses in giving evidence to Senate committees has been provided to you. The Department of Finance has lodged submission 1, the Department of Agriculture and Water Resources has lodged submission 125 and the APVMA has lodged submission 35. Does anyone wish to make any alteration or amendment to their submission?

«Mr» Williamson : No.

CHAIR: I remind senators that the Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policy or factual questions about when and how policies were adopted. Officers of the department are also reminded that any claim that it would be contrary to the public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for the claim. I now invite you to make an opening statement before we go to questions.

«Mr» Williamson : I thank you for the opportunity to appear before the committee. As you mentioned, the department has provided a submission against each of the terms of reference for the inquiry and presumably the sorts of questions that you want to talk about. I just want to touch on a couple of key aspects and a little bit of history. As you are no doubt aware, on 9 June 2016 the Deputy Prime Minister announced that a re-elected coalition government would establish a centre of excellence at the University of New England by co-locating the APVMA with the university and its specialised research centres. Since then, we as a department have worked with the APVMA to implement this policy of the government. This has involved looking at a range of issues around how best to give effect to that commitment. This includes costs, risks, opportunities, logistics, administrative arrangements and, of course, risk mitigation.

As a result of the election commitment and the cabinet's subsequent consideration of its implementation, two things have happened. Firstly, the Minister for Finance made the government policy order, under the PGPA Act, on 23 November last year. Secondly, the government agreed to provide $25.6 million, over six years, to support the relocation. The government's focus on implementing the election commitment has been informed by the independent cost-benefit and risk analysis undertaken by Ernst & Young and, secondly, the APVMA's own relocation strategy, which it is now implementing.

Our submission notes that any major organisational change, such as relocation, inevitably poses a range of challenges and opportunities both for the organisation itself and for affected stakeholders. For us, this highlights the importance of robust planning, resourcing, communication, consultation and innovation. Our view is that the work that the APVMA is now taking forward in implementing this election commitment—supported, of course, by the department—has a focus on those issues. We are happy to take your questions.

Ms Arthy : The APVMA welcomes the opportunity to speak at this hearing. In line with the announcement by the Deputy Prime Minister in November last year that the government had approved $25.6 million to fund the relocation of the APVMA to Armidale, we have been undertaking extensive planning to be able to relocate our agency. While this has been challenging for the agency, we are still working very diligently to make sure our daily business gets done and to be able to deliver for our clients during this period. We have released our relocation strategy, which I am aware a number of people have referred to this morning, and we are in the planning phase for that relocation. This planning phase is due to end at the end of June 2017. The focus at the moment is around developing the business model for how we will operate in Armidale; developing the digital strategy and getting the final approval and finance and budget for that; and developing the approach for our long-term accommodation needs in Armidale. We will shortly be opening a transition office in Armidale as well.

We are also, of course, continuing our long-term change agenda. We have been undergoing change for a few years now—looking at how we can improve our efficiency, implement lower regulatory pathways to registration and improve our customer service. We began to see the results of this work in the middle of 2016, and we were very pleased to see our time frame performance get over 80 per cent in the September quarter.

I can ensure the committee and others that business continuity is a major focus for us in making sure that we are able to deliver for the stakeholders and industry clients that we service. In addition to the recruitment that is underway, we are also looking at a range of measures such as fast-track training to make sure we can deliver with a less experienced workforce and removing our regulatory and administrative burden to ensure that our evaluators who are there are not distracted onto 'administrivia'. We have also implemented a range of initiatives in line with the white paper and other reform activities that we have been doing. Most recently, we have released our approach on how we will use international data standards and assessments and we have recently also released all the international guidelines that we will accept. I am very proud of the focus of the staff. It is a difficult time for them, and they are just getting on with business to make sure we provide access to safe chemicals for Australian farmers and the community. I look forward to taking your questions.

CHAIR: I would like to start our questions by revisiting the time line around the making of this decision. When did work start inside the department on the proposal to relocate APVMA?

«Mr» Williamson : Work commenced as soon as the returned government was sworn in. As would usually be the case, the department provided advice on implementing the election commitments that had been made during the campaign.

CHAIR: Can I take you back to May 2015, when it was announced that there were plans to move the APVMA to either Toowoomba or Armidale. How were those locations chosen?

«Mr» Williamson : You are referring to an announcement by the minister?

CHAIR: There is a media release I can take you to. A media release on 15 May indicated that «Mr» Joyce was seeking to move the APVMA to Armidale or Toowoomba.

«Mr» Williamson : Yes, that was a media release in our submission—I apologise for that. Those locations came from the Deputy Prime Minister.

CHAIR: Were you speaking to stakeholders about that relocation prior to that?

«Mr» Williamson : Pretty much since the 2013 election the coalition has had a broad policy of looking to relocate agencies and entities within our portfolio. So there had been ongoing discussions relating not just to APVMA but several of our research and development corporations as well. There was, if you like, an iterative process for several years on those issues.

CHAIR: And had you provided advice that the two most suitable locations would be Toowoomba or Armidale?

«Mr» Williamson : I would have to take that on notice, but I do not believe so.

CHAIR: On 12 May, just before that announcement, the minister wrote to the APVMA about the possible relocation to either Toowoomba or Armidale, and he asked whether it was possible to relocate and which location suited it. Ms Arthy, is it possible to get a copy of that letter? It was not included in your submission, although the information about the fact that the letter had been written was.

Ms Arthy : I can certainly table that letter.

CHAIR: That would be terrific. Some months later, on 31 July, you wrote to the minister advising that you were unable to support the proposed relocation. Can we have a copy of that letter?

Ms Arthy : I can certainly provide that to you. I am sure we have provided that as part of the submission, but we can make sure that you do get a copy.

CHAIR: We certainly have a copy of your subsequent letter responding to the making of the order. But I do not know that we have a copy of the corro from 31 July.

Ms Arthy : I can certainly table that for you.

CHAIR: Can you talk us through your concerns at that time.

Ms Arthy : My concerns at that time were that we had done some staff surveys looking at who may or may not intend to move to either Toowoomba or Armidale. Really, the location did not matter. Based on the information at that time, very few regulatory scientists were willing to move. At that point, we were working on the assumption that the agency would basically be picked up from Canberra and put into another location without looking at any other mitigating factors. At that point, with so few regulatory scientists willing to move, I had to provide the advice that on the assumption that I would have only less than 10 per cent of staff I would not be able to meet any of the statutory requirements for which I am responsible. That was the basis of my advice.

CHAIR: Have those survey results been prepared in a report or was there other written advice provided to you at that time?

Ms Arthy : It was prepared in a report. We can certainly provide that to you. It has been provided publicly before, so it is in the public domain. I am happy to provide that to you.

CHAIR: Terrific. By February 2016 Armidale was the only location under consideration. There was a Department of Agriculture and Water Resources media release that was provided in the papers. For the benefit of senators, it is in our pages at page 139. Why was Toowoomba removed from consideration? Was there any analysis, «Mr» Williams or Ms Arthy, that suggested that Toowoomba was unsuitable or that Armidale had significant benefit over Toowoomba?

Ms Arthy : That was not a matter for the APVMA; that was a government policy decision. I am not aware of whether the department has any further information.

«Mr» Williamson : No, sorry. I do not have anything further to add, no.

CHAIR: My question was on whether there was any analysis undertaken or provided to the minister that narrowed the selection from what had previously been two sites to just one—Armidale.

«Mr» Williamson : Not that I am aware of. I can take it on notice and check. My understanding is that the Deputy Prime Minister had undertaken various consultations, including the correspondence you have just referred to, with APVMA but also with industry and some of the universities as well. Following that, the announcement that you have alluded to in early 2016 was made.

CHAIR: By May you had tasked Ernst & Young with undertaking a cost-benefit analysis of the move. Had there been additional work done between that February announcement and the decision in May to engage Ernst and Young?

«Mr» Williamson : No. The work that was being done was scoping the task for Ernst and Young. So there was a procurement process we followed using standard government processes. But also there was consultation that maybe «Mr» Thompson can talk more about with industry about the sorts of issues they would want canvassed in the work undertaken by Ernst & Young.

CHAIR: «Mr» Thompson, can you tell us more about that consultation.

«Mr» Thompson : All I can say is that there was discussion with some of the key industry groups about what some of the issues were, and terms of reference and a procurement program were put in place for Ernst and Young to do the work.

CHAIR: Who did you consult? Just roughly, who was involved?

«Mr» McDonald : Who we consulted is definitely in our submission. I will find the right part of our submission—

CHAIR: You are correct, «Mr» McDonald. I recall that being in there as well.

«Mr» McDonald : The scope of work for what the cost-benefit analysis and risk analysis were to examine was developed in draft form by the department. We went out to known industry participants to make sure that the coverage of that work was adequate from their perspective. We took on their concerns as best we could at that time.

CHAIR: When was the need for a cost-benefit analysis first raised, and who raised it?

«Mr» McDonald : As you have already identified, the Deputy Prime Minister wrote to the CEO in January 2016.

CHAIR: But that did not deal with the cost-benefit analysis, did it?

«Mr» McDonald : Yes.

«Mr» Williamson : Yes, I think it was to inform her that a cost-benefit analysis into the relocation was to be commissioned.

CHAIR: Did you provide any advice about a cost-benefit analysis, or was this something initiated by the minister?

«Mr» Williamson : I think the answer is both—I think the minister initiated, but the department—I will check—would have provided advice on a process to commission a cost-benefit analysis and how we would go about doing that. It was at the minister's request that the department initiated the work.

«Mr» McDonald : That is correct.

CHAIR: At that time, the request was that it examine relocation to Armidale, rather than any other alternative sites? It was to be exclusively focused on Armidale?

«Mr» Williamson : That is correct.

CHAIR: The decision to proceed with the cost-benefit analysis was ultimately signed off by the minister?

«Mr» Williamson : Yes, I believe so.

CHAIR: He was the approver? This continued, essentially, through the election period and was advanced during the caretaker period?

«Mr» Williamson : It was; the work continued through the caretaker period and, indeed, beyond.

«Mr» McDonald : Just to go back to my former answer—the details about the process on the scope of work to be commissioned under the cost-benefit and risk analysis is detailed on page 8 of our submission. It was 22 January 2016 when the Deputy Prime Minister wrote to the CEO.

CHAIR: We are working off slightly different page numbers—

«Mr» Williamson : The chapter heading—

«Mr» McDonald : The chapter heading—it is a subheading—'The process'.

«Mr» Thompson : It is section 4: 'Consultation and analysis'.

Senator McKENZIE: It will have a very positive impact for the Armidale economy of 3.7—

«Mr» Williamson : That was one of the outcomes of the analysis; that is correct.

CHAIR: Since we are on that, I might ask about that particular outcome, because I note that, in the assumptions of that Ernst and Young analysis, it imagines 189 direct jobs and 350 total jobs in the third year of operation. That is on page 6 of the Ernst and Young analysis. Is that the number of direct jobs that you currently anticipate being in Armidale as a result of the relocation?

«Mr» Williamson : I do not have an updated number beyond that analysis.

Ms Arthy : Based on the planning that we are doing at the moment, and bearing in mind that we are only in the planning phase, I would anticipate that, from day 1 in Armidale, we would have between about 100 to 125 people physically in Armidale, but building up over a period of time to around 150 to 160 as we recruit more scientists into Armidale itself. That is the figure that I am working on at the moment.

Senator GALLAGHER: In mid-2019—is that right?

Ms Arthy : Yes at this point, bearing in mind—

Senator McKENZIE: Is day 1 in 2019?

Ms Arthy : That it is right. Again, there are all these caveats around; we have to work out the building time and everything else, but at this point, our operating time frame is to be in Armidale from 1 July 2019. On that day, I am looking at having between 100 to 120 people physically on the ground, building up, as I said, as we recruit more scientists over time into the 150 mark.

CHAIR: What is the time frame when you say, 'Building up over time'?

Ms Arthy : We are still doing the workforce planning—that is part of it—but, in my mind at the moment, I have a time frame of about five years. From 1 July 2019, I would want us to be fully operational with a full complement of scientists, that are fully trained and fully experienced, within three to five years. That is the plan at the moment.

CHAIR: So there will be 150 people within that window between 2021 and 2023.

Ms Arthy : Yes, at this point, with all the caveats—

Senator McKENZIE: Sorry, can I just clarify that? We are counting day 1 as if every one of the 100 to 125 scientists that is there on day 1 is inexperienced.

CHAIR: I understand the point you are making, but I am talking about the raw numbers of personnel, in fact—not just scientists, but all personnel associated with the organisation. We might come back to the question of numbers, because I am sure that will be of interest to other senators. Can I go back to the cabinet consideration. I am familiar with the usual conventions about not providing details about what was in the advice, but I am interested to know when cabinet considered these questions.

«Mr» Williamson : I take that on notice for you. I do not recall the date. It was November last year.

Senator GALLAGHER: There is a letter from the Deputy Prime Minister to Minister Cormann indicating that cabinet made a decision on 2 November.

«Mr» Williamson : Yes, it was early November. That is my recollection.

CHAIR: Your submission says:

The department supported the Deputy Prime Minister in the Cabinet process underpinning the decisions.

What does that mean?

«Mr» Williamson : It means that the department, at the bureaucratic level, takes the lead in preparing the draft cabinet submission and accompanying advice to the cabinet.

CHAIR: I understand there was some consideration of alternative mechanisms by which to implement the cabinet decision and ultimately a GPO was chosen as the mechanism. Did the department draft the GPO, or did the APVMA do that? Who was involved in drafting that?

«Mr» Williamson : The department led on the drafting, I think it is fair to say, but APVMA were consulted, as were our colleagues in the Department of Finance. Of course, there was legal advice involved as well.

CHAIR: Did the department undertake any analysis to identify which communities would be capable of benefiting from the GPO in the terms that it was drafted in?

«Mr» Williamson : No, not that I am aware of. The drafting was more about the implementation of the election commitment, which was about centres of excellence in regional areas near regional universities. So the drafting was derived from that wording rather than from looking at including or excluding specific locations.

CHAIR: So you did not have a look at whether something drafted in this way would capture 100 regional communities, one regional community or four regional communities?

«Mr» Williamson : No, we did not. The exception was obviously that the drafting, in having regard to the election commitment, did not include capital cities.

CHAIR: What about the inclusion of the '10 kilometres by road from a university'? How was that arrived at?

«Mr» Williamson : Again, the inclusion of distances in the GPO was derived from the election commitment. It was considered that it was an appropriate way to reflect the election commitment, which was about centres of excellence in regional communities near regional universities. Kilometres are a good proxy for that.

CHAIR: What other agencies could the order conceivably apply to? The order obviously specifies that it applies to the APVMA and lists no other agency, but are there other agencies that fall within the more general terms that are specified?

«Mr» Williamson : There are. I am not sure I have the list with me. There are four or five others, I think.

«Mr» Thompson : We do have a list of the corporate Commonwealth entities that exist under the Agriculture and Water Resources portfolio. We have not looked right across the Commonwealth, but whether that would apply or not we cannot say. They are the APVMA; the Australian Grape and Wine Authority; the Cotton R&D Corporation, which is in Narrabri; the Fisheries R&D Corporation; the Grains Research and Development Corporation; the Rural Industries R&D Corporation; and the Murray-Darling Basin Authority.

«Mr» McDonald : It is worth noting that the policy relates to agricultural policy or regulatory responsibilities, so it is notionally limited to the Agriculture and Water Resources portfolio. So it is not at this point a Commonwealth-wide general policy order, and section 5 applies it to the APVMA.

CHAIR: I have a question for the Department of Finance. I understand that cabinet allocated funds to support a move to Armidale specifically, not to any other location. Did the Department of Finance have any role in developing advice around that recommendation?

«Mr» «Helgeby» : Sorry, which specific recommendation?

CHAIR: The recommendation made and accepted by cabinet to fund the relocation of the APVMA to Armidale.

«Mr» «Helgeby» : Our role was related to the GPO and not to the policy.

CHAIR: Okay. «Mr» Williamson, in November Ms Arthy wrote to the minister responding to his notification to her about this draft GPO.

«Mr» Williamson : Yes.

CHAIR: She raised a number of quite serious issues, including the loss of regulatory scientists and the fact that, although there were mitigating strategies, they were unlikely to fully offset the risks posed in relation to access to scientific expertise. Were you concerned about that in your role within the department and the impact it might have on the agricultural sector?

«Mr» Williamson : As I alluded to earlier, we certainly acknowledge that this relocation throws up a lot of challenges for the organisation and for the affected stakeholders. Ms Arthy has captured those both in that letter and I think on other occasions. They have also been canvassed quite extensively in the Ernst & Young report. That is one of the reasons that, from the department's perspective, we were keen to ensure that Ernst & Young firstly looked at strategies to mitigate those risks and that we then as a department worked with APVMA in addressing them as well.

CHAIR: Was there any point at which you contemplated providing advice that the relocation not proceed?

«Mr» Williamson : I would not normally go to the content of advice that we provide. The department's job post election for this election commitment and all election commitments is to provide advice on how election commitments can be implemented. That certainly includes canvassing risks and the range of issues that I set out earlier. That is precisely what the department did.

CHAIR: There must be some point where you draw a line against something. You would not provide support to any election commitment without raising red flags, would you? It is part of your job to provide free and frank advice.

«Mr» Williamson : It certainly is.

CHAIR: But not on this occasion?

«Mr» Williamson : The department did its job on this occasion as we have with all of the election commitments.

CHAIR: Can I just ask you on notice about whether you can support us by providing some of the documentation around the creation of the APVMA? I understand it was created by agreement of the states and territories. That process will have been documented, including the sorts of memorandums of understanding, minutes and the agreement.

«Mr» Williamson : Yes. There are a couple of key documents that we could track down for you. We will do that.

CHAIR: Terrific. Have the states and territories been consulted about the relocation of the APVMA?

«Mr» Williamson : As far as I am aware, they were not consulted on the decision to relocate APVMA, but they have certainly been involved in discussions and kept up to date about how the relocation is proceeding and Ms Arthy's plans for the APVMA. We have a forum with state and territory officials that meets on agvet chemical issues more broadly, which I chair, and the CEO attends most of those meetings.

Senator SINGH: «Mr» Williamson, you said that you provided advice in relation to the risks of relocation.

«Mr» Williamson : I said that, part of our job in advising the government on implementation of election commitments—full stop—includes risks, costs, opportunities et cetera.

Senator SINGH: Can you share with the committee some of the detail of the risks that you provided as advice?

«Mr» Williamson : There is a cabinet process here, so I am constrained to some extent. The Ernst & Young report is a very good guide and insight into the issues around relocation that have been considered by the government, and that has been made publicly available. That walks through, at our request, the range of risks that we have talked about and also provides a range of suggestions, mitigation strategies and so on, so I would refer you to that as a good proxy of the sorts of issues that have been canvassed.

Senator McKENZIE: Thank you very much for your evidence to date. Chair, I am just wondering if we can call the previous CEO of APVMA, Alison Turner, as a witness when we have another hearing on that as well. During the recent Senate estimates, Ms Arthy, there was a lot of discussion and debate about you, or your staff, being forced to work at McDonald's. Can you clarify the situation?

Ms Arthy : I learnt a harsh lesson that day not to try and use humour at Senate estimates! It was purely a throwaway line in the middle of a Senate estimates hearing. We have not been forced to work from McDonald's or any other place whatsoever. It was just said in the heat of the moment of an estimates hearing, and I will not be doing that again!

Senator McKENZIE: Have you ever worked out of McDonald's?

Ms Arthy : I have many times.

Senator McKENZIE: While you were having a coffee and a biscuit! I just want to clarify the representation that swept through certain areas of the media that, indeed, some of my colleagues got quite worked up and outraged about. Can you allay their concerns?

Ms Arthy : Absolutely. We have been working really well with the local Armidale community, with the council and with the university, and we have identified a suitable office there. We will be making that announcement in the next couple of weeks, but whenever we have gone up there there has only been a few of us. We just go and work wherever we need to. Everything has been working very, very well within the local community.

Senator McKENZIE: Have you had that conversation to correct the record with those media organisations?

Ms Arthy : We put a statement on our website, but it was not picked up. Like everything, it just keeps getting a life of its own.

Senator McKENZIE: Yes. I nearly made a flippant remark myself then! Were you offered alternative accommodation when you came up to Armidale?

Ms Arthy : It was not really a matter of needing alternate accommodation. We were up there to go and meet with the local people and to go and actually look at office accommodation. We were not actually working. As is the case with any CEO, wherever you go you never stop working, so you just work wherever you go. But, for those particular meetings, we were going to people's offices, talking to them and then looking at whether there was suitable accommodation for us for the long term.

Senator McKENZIE: So we can also be confident that commercial-in-confidence information that you may have been accessing on an open, public wi-fi, such as that available at McDonald's—

Ms Arthy : The way our systems are set up is absolutely, totally and utterly secure. I cannot possibly give you the technical term. It goes through something—a magic box—and it is all secure.

Senator McKENZIE: So they can rest assured?

Ms Arthy : They can rest assured. I provided that assurance in writing to CropLife International, who specifically asked me about it. On that very day, I provided that assurance to them.

Senator McKENZIE: Hopefully any of those media outlets watching today can correct the record. That would be much appreciated. As you have been hearing today, the performance of the APVMA over a long period of time has been of concern. Their ability to recruit and retain scientists et cetera has been a big issue. I just want to get your comments around that and what you have been able to do in your time as CEO to address that.

Ms Arthy : I think it is fairly safe to say that any industry stakeholder will always complain about the performance of a regulator because, of course, they want their applications through. I am not resiling from the issues that we do have in terms of performance, and certainly in the last four years since I have been there we have been working incredibly hard on a whole range of fronts to set ourselves up to be able to be more efficient. We have been doing things like really looking at our internal processes to get our business process efficiency working, and we have just finished a major business processing map which will now form the basis of a digital strategy for the future, which is really quite exciting. We have also taken a good, hard look at the risk appetite that we apply to applications. So, rather than holding up applications requiring more and more information, we are looking at how we can use international assessments far more, how we use international data and how we put those applications that we do not really need to do a lot for through other means. For example, we implemented five what are called notifiable variations, so applicants do not need to put in a formal application; they can just notify us. There are a whole range of projects around that. We have, of course, also been undertaking a lot of the internal training and a lot of internal reorganisation to make sure that we have the right people looking at some of these areas, so we do have the more experienced people looking at the more difficult applications.

We have also increased contestability in what we do. Previously, we relied wholly on the Department of Health and the department of the environment, and they were not performing, so we managed to remove them from the equation—or we certainly removed the Department of Health from the equation. From 1 July last year, we took over that function, and we also contract out. With the department of the environment, we only contract to them about 10 to 11 per cent of our applications. We contract out everything else and we contract out all of our efficacy work.

So, from a combination of things, we are putting in place the building blocks for the future. The work that we have been doing places us well to position ourselves in Armidale.

Senator McKENZIE: And you are confident that, in combination with the digital strategy, the concerns of stakeholders re this ongoing inability to meet statutory deadlines will not occur?

Ms Arthy : It is about the time frame in that sense as well. I am looking at how we perform now, how we perform on day one in Armidale and, then, how we set ourselves up for five and 10 years out. As CEO, I am very focused on the five and 10 years out and making sure that we are back to full operation and full performance and that, while these few years are definitely not a blip, they are seen as part of the journey for us to be a better regulator.

Senator McKENZIE: On that subject—setting yourselves up for five years time—we heard evidence today that we are not meeting our statutory deadlines now. I am assuming that you are going to be meeting your statutory deadlines before we head to Armidale.

Ms Arthy : That will not be the case. I can quite unequivocally say that we will not be meeting our 100 per cent time frame performance.

Senator McKENZIE: What sort of percentage will you achieve?

Ms Arthy : It is impossible for me to say at the moment.

Senator McKENZIE: Fifty? You would have a plan, surely.

Ms Arthy : Yes, and, coming back, we were on track to getting very close to the 100 per cent mark towards the end of last year. We hit 84 per cent after being down around 50 or 60 per cent for a long time, and we had everything ready to go. With the relocation, we have had several of our experienced scientists leave, and that happened far earlier than I expected. In some ways, I was planning for that to happen next year, not now. That is why we are now trying to rebuild much more quickly than we thought we would have to, so we are bringing on board quite a few new people to train up, but they are inexperienced and we are going to take a while to train them up. In the business we are in, we handle over 5,000 applications and we do not have a lot of staff, so we have to keep on top of them all the time and a backlog can get up really quickly. So, even with everything going brilliantly, trying to get that backlog back is going to be a lot of work.

Senator McKENZIE: Could you give me a demographic breakdown of the 90 per cent of staff from your survey who said they would be unwilling to move to Armidale?

Ms Arthy : I do not think we can. I do not think it went to that level of detail back then. I will have to check.

Senator McKENZIE: Could you give me a demographic breakdown of your regulatory scientists?

Ms Arthy : I may have to take that on notice because I do not think I have that here. We have a really broad range of staff, but I can provide that to you on notice.

Senator McKENZIE: Yes. I would like it at the time of the survey, or as close as you can back to that date. Obviously, you have had some changes and recruitment so I assume that would have changed.

Ms Arthy : Yes, it would have.

Senator McKENZIE: Yes.

Ms Arthy : We will do our best to provide that. I am not sure how robust our records are for back to 2015, but I will try that.

Senator McKENZIE: So 2015 was when that 90 per cent number was bandied about?

Ms Arthy : That is right.

Senator McKENZIE: Okay. Is the regulatory science course a good idea?

Ms Arthy : Absolutely. We started talking to UNE back in 2015 as part of this. When the Deputy Prime Minister wrote to me to ask for advice about whether we would move to Toowoomba or Armidale, part of the brilliant thing that came out of it when I was talking to all the different universities was the value in actually getting a regulatory science course up.

At the moment I think we are talking about a module within a bigger degree, which is terrific. But it is about introducing scientists to the concepts of applying law and risk. It is a terrific idea, and one that we have been working very closely with UNE on for quite a while.

Senator McKENZIE: So rather than having to do it all in-house they will be able to—

Ms Arthy : We will still have to do it in-house. Basically, the university will expose people to the concepts of risk and a different way of thinking. That is what that job is, and—

Senator McKENZIE: And the applicability will occur—

Ms Arthy : That is right. But we have to bring it back to our legislation all the time.

Senator McKENZIE: I am just conscious of time. The VMDA this morning was very critical of the confidential commercial information issue. They were very clear that it impacted significantly on the AVPMA's performance and ability to turn around approvals.

Ms Arthy : Yes.

Senator McKENZIE: Can you comment, please?

Ms Arthy : I think that this has been the subject of many Senate estimates inquiries. I am not sure that we have the time to go into the detail, but I think that it is fair to say that the VMDA and the APVMA disagree about what the—

Senator McKENZIE: So it has not affected your performance—

Ms Arthy : No—about the meaning and the implications of the Federal Court decision. What we have done is to take every application on a case-by-case basis. I think most of the applications have a three-month time frame, so we have taken a lot more time to check that we are not actually disclosing any confidential information. It has of course had implications for our time frames. I am just trying to think: we did a bit of analysis, and about three-quarters of our applications are of a three- to five-month time frame performance. At the end of December I think we were missing those time frames by two to five weeks.

Some of the ones related to confidential information things have gone on for longer, as we have had to seek a lot of legal advice to resolve issues. But it is something that we are very close to having resolved in terms of our processes, so that hopefully we can start getting them through faster from here on. We have also asked the department to look at legislative change, to clarify the legislative requirements around CCI and so make it much easier for us to administer.

Senator McKENZIE: Just for the department: how much correspondence has the department had about the relocation? Specifically, I would like to know if we have had many letters that have supported the relocation or not?

«Mr» Williamson : I might defer to my colleagues on that.

«Mr» McDonald : There is a volume of correspondence. We do not have those numbers with us right now, we would have to take it on notice—

Senator McKENZIE: Okay, thank you.

«Mr» McDonald : but there was a mixture of views put forward by members of the public.

Senator McKENZIE: Any former staff or board members in that cohort?

«Mr» McDonald : I would have to go back to the records to be sure about my answer, so I will take that on notice.

Senator McKENZIE: If you could, and then provide us with their position.

«Mr» McDonald : Yes.

Senator McKENZIE: Do you have a view on the commercial-in-confidence information issue and how that has impacted on the ability of the APVMA to do its work?

«Mr» Thompson : I would not have a lot to add to what Ms Arthy has said. I think she characterised it correctly by saying that there was a Federal Court decision which overturned the then current APVMA approach. The approach that APVMA has had to adopt has to apply to a range of chemicals beyond those which applied in the court case and, as Ms Arthy said, because the process is on a case-by-case basis it does result in somewhat longer assessment periods. We have not formulated it yet, and we have not fully consulted with industry about the nature of the amendments. But they are not intended to try and overrule the Federal Court; they are just to make it clearer so that a timely process can be put in place that does not result in adverse consequences for APVMA staff. They can be a lot clearer about the decisions they are making when they are looking at commercially confidential information, or not, and handle the process. So it is really about streamlining—and we will be consulting with industry on that when we do the amendment. In summary, the process that the APVMA had to adopt when they took that decision and applied it across the full range of chemicals has in our view resulted in some slowdowns—and the industry has told us that as well.

Senator GALLAGHER: I have questions for all of the agencies appearing here today. Perhaps I will start with the Department of Finance because it is your minister who signs the government policy order, under the PGPA Act. Is it correct that this is the first order made under the new legislation?

«Mr» «Helgeby» : Yes, it is.

Senator GALLAGHER: There was capacity, under the previous legislation, to make a similar order?

«Mr» «Helgeby» : There was. In fact, there is a long history of orders of this type. Generally speaking, there is a framework pre 2008 and a framework post 2008. Pre 2008, individual ministers could make these orders. Post 2008, it has always been the finance minister who has had a role there. The change in the PGPA was effectively about the consultation mechanisms and the sunsetting. These things have been in place over a very long period of time. They have been used for long service leave arrangements and that sort of thing.

Senator GALLAGHER: Have they been used to relocate agencies to a specific geographic location across Australia?

«Mr» «Helgeby» : Pre 2008, I cannot tell you because there was not a central system. Post 2008, obviously this is the first GPO. In 2008, there was a change—

Senator GALLAGHER: To Finance.

«Mr» «Helgeby» : There was a change to the finance minister, with a consultation arrangement in place, and that was to get greater visibility of these arrangements. Prior to 2008, there was not central visibility of these sorts of arrangements.

Senator GALLAGHER: Was there any reporting of the number of GPOs?

«Mr» «Helgeby» : No, there was not. In fact, what we know about finance is, largely speaking, the ones which directly affected us or were issued by our minister. But individual ministers, pre 2008, had the ability to make these decisions and there was not transparency about it. Post 2008, there has been transparency about these things.

Senator GALLAGHER: So despite the fact that these will presumably come with some financial implications, Finance did not have oversight of that even though it would potentially have to flow through the budget?

«Mr» «Helgeby» : Pre 2008, there was no visibility, so in fact we would not have been able to provide a view on the cost implications of an order like that. Obviously if a decision taken by government has financial implications published in an economic statement, then we would have had visibility. But pre 2008, for simply the making of an order, we would not have had visibility.

Senator GALLAGHER: Did you provide advice to the minister about the use of a GPO for a decision like this?

«Mr» «Helgeby» : We support the minister in the making of the GPO. There was a decision made by government that there be a GPO. We supported the minister and he signed it—because he is the only one who can—and that is about it.

Senator GALLAGHER: In your role as the finance department advising the finance minister, you see it much more as a processing responsibility rather than an advice capacity around a decision that is going to be made by the signing of that instrument?

«Mr» «Helgeby» : A GPO is a very technical instrument that has a specific role under the PGPA as it did under the previous legislation. We support the minister to exercise his powers under the act.

Senator GALLAGHER: Under the PGPA, the objectives of the act actually go to requiring high standards of governance, performance, accountability and, amongst other things, using and managing public resources properly. With the information we have about this decision to relocate on the cost and the impact it will have, certainly in the short term—I do not think anyone is disputing that—on the performance of a Commonwealth entity, is there any requirement for Finance to draw the attention of those responsibilities or the objectives of the act to the minister's attention?

«Mr» «Helgeby» : We draw the existence and the purpose of the act to the attention of ministers as required, departments as required and parliament. We have a framework that puts in place reporting through PBSs or annual reports that goes to assuring parliament and the community about how resources are used. There is a specific provision in relation to GPOs that actually makes it very clear that with a GPO there is to be disclosure. The relevant section of the PGPA is section 22. Section 22(3) says:

If a government policy order applies in relation to a corporate Commonwealth entity, the accountable authority of the entity must ensure that the order is complied with:

(a) in relation to the entity; and

(b) in relation to any subsidiary of the entity, so far as practicable.

That, in effect, means that the accountable authority has to also ensure that they disclose and—

Senator GALLAGHER: Abide by and disclose.

«Mr» «Helgeby» : Yes, that is right.

Senator GALLAGHER: I am taking it as read that the only way to get the APVMA to move to Armidale is by issuing this GPO. Is that correct? Does anyone want to answer that? I do not mind which agency it is. I am taking the letter that you wrote on 31 July—five pages of significant concerns—as an unwillingness to move voluntarily because of your statutory obligations. So I am taking it as agreed that the only way to enact this move was to issue a GPO. Is that correct?

«Mr» Williamson : I am not sure that it was the only option. It was certainly an available option.

Senator GALLAGHER: What were the other options, then, if it was not the only one?

«Mr» Williamson : I can come back to you on that on notice, but certainly the government can always legislate.

Senator GALLAGHER: It could have a standalone, specific piece of legislation for that?

«Mr» Williamson : That is—

Senator GALLAGHER: Was that examined?

«Mr» Williamson : I would have to take that on notice.

«Mr» McDonald : The legislation that the APVMA operates under was examined as part of that.

Senator GALLAGHER: Was that looking at whether there was some clause in the APVMA's act that would allow the Commonwealth to direct it where it was to provide its services from?

«Mr» McDonald : Yes.

Senator GALLAGHER: That failed, obviously, because it did not do that. Then you went to the GPO. Is that right?

«Mr» McDonald : The cabinet made a decision that the GPO was an appropriate mechanism.

Senator GALLAGHER: So the cabinet made that decision on 2 November. «Mr» Williamson, in your opening address you very clearly said that the cabinet did not necessarily make a decision about relocation but that it made decisions around the implementation of an election commitment.

«Mr» Williamson : Yes. That was the subject of the deliberations. That is right.

Senator GALLAGHER: At that meeting, the GPO was determined to be the instrument that would deliver this relocation.

«Mr» Williamson : Yes. Part of the outcome of the government's deliberations was to settle that the GPO was the appropriate administrative mechanism to bring the relocation into effect, yes.

Senator GALLAGHER: And because of the significant concerns that have not only been raised by the APVMA but also through the EY analysis—the cost-benefit and risk analysis—without that GPO the relocation would not occur. Is that correct?

«Mr» Williamson : I am not sure. That goes to the cabinet deliberations, so I am not sure I can add to my previous answer.

Senator GALLAGHER: We have a GPO.

«Mr» Williamson : We have a GPO which the government decided was the most appropriate mechanism to bring into effect the election commitment.

Senator GALLAGHER: I am trying to put to you that without the GPO the move could not have occurred because the APVMA would never have agreed to it.

«Mr» McDonald : That is another set of circumstances.

Senator GALLAGHER: We have a letter from 31 July which says that, based on all the information available to the APVMA at the time, they would not agree to the move.

«Mr» Williamson : I am not sure we can add to what we said previously.

Senator GALLAGHER: So we will accept that the GPO is what it is. What work did the Department of Agriculture and Water Resources do alongside the cost-benefit and risk analysis around the potential impact of this proposed relocation? Presumably your policy area would have been doing its own work about the risks of a relocation like this.

«Mr» Williamson : Yes, I guess, alongside the EY report. The main focus of policy work was indeed the commissioning and then analysis of the EY report. So there had been consultation with industry prior to the Ernst & Young report the department had led, but then there was not a parallel process of consultation whilst Ernst & Young was out doing its thing. So the policy area, if you like, was responsible for overseeing the work of Ernst & Young and managing that project, and then, off the back of that, preparing the advice to cabinet we talked about before.

Senator GALLAGHER: The EY report was completed and provided to the department on, I think, 1 August, so you had a period of a couple of months before it went to cabinet. What did the department do with that work over that time?

«Mr» Williamson : The department used that work to inform its development of what turned out to be a cabinet submission and advice to government on implementing the commitment.

«Mr» McDonald : That was during the caretaker conventions as well, so there was the realisation of the government re-elected and so on. So there were delays associated with the government coming back into operation.

Senator GALLAGHER: Sure. What landed with you in early August was a report costing $272,000 and some additional work for another $7,250. Incidentally, what was the second piece of work about and why was it commissioned?

«Mr» Williamson : It was further work on the risk mitigation side of it. So the cost-benefit analysis was done and this was just a couple more weeks of work, from recollection, on some of the risk mitigation strategies.

«Mr» McDonald : In our submission we have an attachment about the risk treatments and mitigation measures. Really, that goes to that extra work that was commissioned from EY at that time.

Senator GALLAGHER: I am just looking for that. We have different numbers we are working from.

«Mr» Williamson : It is the next page on from the page we were talking about before, I think.

«Mr» McDonald : No, it is attachment Q to our submission. I will not give you the page number, but attachment Q is actually an excerpt from EY's report. That goes to some of that extra work we wanted spelt out more clearly by EY at that time.

Senator GALLAGHER: My reading of that is that you have a cost-benefit analysis which outlines significant concerns, although it did not give a cost-benefit ratio or any final conclusion, interestingly, that you would normally see in a cost-benefit analysis. That is not part of it, but they were significant. In fact, even this copy says that. I think it does use the words, 'significant concerns' or 'significant issues'. You have then gone, 'Okay, well, we're going to have to deal with this by having a response to those through this risk analysis.' Was that once you received the cost-benefit analysis that you asked, 'How do you ameliorate those challenges?'

«Mr» Williamson : I can go back and we can give you this in more detail. My recollection is that the initial piece of work did go to some detail on mitigation and how you might deal with some of those risks. What we asked for were some follow-up questions to go a bit further.

Senator GALLAGHER: Why did the report not come up with a conclusion, as a normal cost-benefit analysis would? In my experience of getting cost-benefit analyses in government, you would have the report, the pros and cons, and then, based on all of that, it would usually have either a cost-benefit ratio or some other conclusion. It does not seem to have that.

«Mr» McDonald : It does have that. It gives the—

Senator GALLAGHER: It hedges it, I think.

«Mr» McDonald : It does give those formulas that normally make up a cost-benefit analysis.

Senator GALLAGHER: I accept what you have got to say here. If I received this in government, based on what it is telling me, I would say, 'This isn't a really good idea.' That is my reading of it, in short. I accept that that decision was taken out of your hands; that is not a departmental decision to make. In your broader remit as the Department of Agriculture and Water Resources, you have got a report that indicates that an agency, if it is relocated, is going to lose a significant number of specialised staff, have significant disruption to activities and have challenges around sustaining its efforts in actually doing its regulatory responsibility. There are several uncosted elements to the relocation. How does that fit into your broader responsibilities as the department of agriculture? What are the potential impacts that proceeding with a move like this would have on Australia's agricultural sector and industry more broadly, which, presumably, you have a broader interest in?

«Mr» Williamson : We do.

Senator GALLAGHER: How are you reconciling it, essentially?

«Mr» Williamson : As I said earlier, we analysed the report, which included those issues that you have raised, but, as I said, it also included suggestions as to how the government, and, indeed, the APVMA, might go about addressing those risks. We were analysing the report in its totality. We did that, and that informed our advice to government via the cabinet process. The other element of this, of course, is that post-election we were working very closely with the APVMA itself on how it would go about implementing the election commitment. The relocation strategy that the CEO developed subsequently was also a part of that—which is also a public document. Again, that goes into both the risks and how they might be managed and dealt with by the organisation and by the government. We were working, if you like, on all of those strands of work. That culminated in advice to government in the form of a cabinet submission.

Senator GALLAGHER: What we have heard from other witnesses today is that we have got upwards of $25 million worth of taxpayer funds being used to lift an agency from one location to another. This is not about the decentralisation agenda, which we can come to later. We have heard that that move in itself will compromise staff, staffing expertise, ability to deliver and commercial decisions—and is affecting commercial decisions now, we were told this morning. You will end up with 60 per cent of your workforce there in 2019—presumably a highly skilled workforce working from home, somehow, with some digital strategy connecting them, when all of that is looked at which is uncosted. Do you honestly believe that the APVMA is going to be able to deliver what is expected of it and maintain the high level of reputation that Australia has for safety around agricultural products and veterinary products with all of those challenges over the next couple of years? Can you honestly sit here and say that those can all be dealt with?

«Mr» Williamson : As the Ernst & Young report, the APVMA's relocation strategy and the funding that the government has appropriated to support the relocation all suggest, there is a range of strategies that can be deployed to mitigate the sorts of issues that you have raised.

CHAIR: This morning we asked a number of the stakeholders who are part of your reference group whether or not they had ever seen a comprehensive risk register associated with the relocation, and they all said no. It would be fairly standard practice to establish a comprehensive risk register so that you could assess the relative significance of different risks so you can prioritise them and also document and assess the adequacy of risk treatment. Why have stakeholders not seen something like that?

Ms Arthy : The stakeholders have.

CHAIR: Why did they all tell me they had not?

Ms Arthy : The issue is in terms of what a traditional detailed risk register is compared to the approach that we are taking. We have risk management on every agenda at every meeting of the ARAC—APVMA Relocation Advisory Committee. In January, I provided the members with the existing draft of our strategic enterprise risk profile—we have several levels of risk-profiling and management—and I provided them with the overall agency draft profile. I also provided them with the Ernst & Young risks, and I specifically asked them for advice about any other risks that they think we need to take into account.

At the last meeting in March, I provided them with an updated strategic enterprise risk profile, and I also advised them that we are in the process of engaging a consultant and other staff to develop the really detailed risk register, which is probably going to take another six weeks. I am aiming to provide that to the ARAC at the meeting at the end of May; that is the current schedule. They have been involved with seeing documentation around risk and helping in the evolution, in terms of where we actually get to, to have that more detailed risk register. We are also going to be appointing a specialised risk manager in relation to the relocation, because it is going to be absolutely critical that we continually keep up with managing the risks and identifying them and doing all the mitigation.

CHAIR: From your evidence, it sounds like—and you may correct me—that there are two levels of documentation. One is the strategic enterprise risk document, and the other is the yet to be developed risk register—is that correct?

Ms Arthy : There are actually three. If you want to go through our risk management framework—

CHAIR: I do.

Ms Arthy : It all starts at the top where we have a strategic—

CHAIR: Really quickly, though.

Ms Arthy : enterprise risk framework, which covers those very high-level risks that as CEO I look at and that management look at, where it clearly states what the risk appetite is from the CEO, in terms of how we manage it. That is one level. We then have for business as usual a very detailed process of identifying risks and mitigation strategies and monitoring. We are now adding a third element to this, which is a specific one focused only on relocation, and we are looking at how we bring it all together as well.

CHAIR: Right. So that relocation documentation is yet to be completed?

Ms Arthy : The detailed one, yes. But we have certainly been providing people with what we have at the moment.

CHAIR: Could we have copies provided? It may be that they need to be provided in confidence, but would that be possible?

Ms Arthy : Absolutely. We can certainly provide you with the high-level one in confidence. The more detailed one will not be done for another six weeks. I am not sure how that fits with your timing.

Senator SINGH: In relation to relocation, as you are the CEO, will you be relocating, Ms Arthy?

Ms Arthy : That is a private matter, which is not something that I am willing to comment on.

Senator SINGH: But the CEO position will be located—

Ms Arthy : The CEO position will be located in Armidale, yes.

Senator GALLAGHER: [inaudible].

Ms Arthy : I am.

CHAIR: Senator Gallagher, I will come to you. We are scheduled to break at half past two, and Senator McKenzie has five minutes more at some point.

Senator McKENZIE: Yes.

Senator GALLAGHER: In terms of the relocation work the APVMA have been doing, I noticed in your submission that there are a number of consultancies that have led to commissioning various pieces of work—there were three or four that I counted in your submission. Would it be possible to get an idea of the cost of all of those consultancies? I also note your appointment of an executive director of relocation operations and an ED of digital strategy to support the work of Ms Janiec. Could I have the salary range for those ED positions and how long they will be in place for? I think you mentioned another appointment just then—a risk manager.

Ms Arthy : That is part of the team.

Senator GALLAGHER: Already?

Ms Arthy : We have not appointed them yet. We are still working out the positions that sit underneath both of those. We will figure out how we can provide to you the confidential information.

Senator GALLAGHER: I am not about someone's specific employment level but the band with which they are employed at.

Ms Arthy : Yes.

Senator GALLAGHER: Are those costs being met through the $25.6 million?

Ms Arthy : Yes.

Senator GALLAGHER: Okay, so they have been factored in. Is the digital strategy due for completion by the end of June?

Ms Arthy : That is correct. That is the final strategy, done and costed.

Senator GALLAGHER: Will that be a fully costed budget proposal?

Ms Arthy : Yes.

Senator GALLAGHER: So you will miss this year's budget deadline?

Ms Arthy : My understanding is that it is not going through the standard budget processes.

Senator GALLAGHER: Right, like the commitment to relocate didn't either. That is good news!

Ms Arthy : That is with the department of agriculture and the Minister for Finance.

Senator GALLAGHER: It is side deal—is it?

«Mr» Williamson : No, it is not a side deal. It was a decision of the cabinet that the appropriation included funding for the APVMA to develop a digital strategy proposal and for that to come back via the minister for government consideration. That is what will happen.

Senator GALLAGHER: Outside of the budget process?

«Mr» Williamson : The timing, as you have just said, will take it past this year's budget process. It will be a matter for the minister and the government to decide how they deal with the proposal when it comes in.

Senator GALLAGHER: Do you have a general idea of what that is going to be? The idea that you are going to have 20 to 30 per cent of your workforce working from their home base has serious cost implications for taxpayers. What is that looking like?

Ms Arthy : I cannot give you the cost now; in about two weeks, I probably could. As you can imagine, we are moving very fast on this. We have the executive director of the digital strategy in. He is currently scoping up what is needed to essentially build systems that will support remote working, and also support more efficient work flow within the agency so that we can get applications out faster than what we can at the moment. We are going to be presenting a detailed proposal, including costings, to the advisory committee at the end of this month—so in two weeks time--and we will get advice from them before we provide it to government in May for consideration. Then we will, hopefully, have all that sorted by the end of June, but that will then depend on the processes with government.

Senator GALLAGHER: Presumably it will be a multimillion project?

Ms Arthy : Yes, it is certainly multimillion. At this point, I am not confident enough in the range of figures to give you anything more exact.

Senator GALLAGHER: That has been agreed to be funded by government?

Ms Arthy : What has been agreed is money for us to develop the strategy and for us to go back. Beyond that is outside of my area of responsibility.

Senator GALLAGHER: Stakeholders certainly made it clear this morning that they do not expect to be funding that work. I can only see one place where it will come from.

Senator McKENZIE: You said 20 to 30 per cent will work from home as part of the digital strategy. My understanding is they could be working from anywhere.

Ms Arthy : They could.

Senator McKENZIE: We could have APVMA staff in Bendigo, Wodonga, Wagga Wagga or Cessnock rather than assuming that they are Canberra based staff.

Senator GALLAGHER: They are not allowed to have an office here. This is the ridiculousness of the situation.

Senator McKENZIE: You know what, Senator Gallagher, I know you might find living outside Canberra ridiculous—

Senator GALLAGHER: That is not what I said.

Senator McKENZIE: but millions of Australians would line up to say—

Senator GALLAGHER: Just for the record, that is not what I said.

Senator McKENZIE: that this is not the centre of the universe; in fact, it is not even the centre of Australia. Ms Arthy, the fact is that we are not going to have 20 to 30 per cent of staff located in homes in Canberra necessarily; this part of a wider strategy—isn't it?—and there are many options that could be adopted.

Ms Arthy : Again, this is part of the difference between the transition from our existing workforce and the future. In relation to the transition for the existing workforce, we know that our current staff are trained and we know that they would be able to operate with minimal supervision. What we are working our way through now is what that means in the future. In theory, there is no reason why we cannot bring on new staff who have something to offer us who might be anywhere in Australia, but the issue we have is making sure that they are trained. That is what we are still working through. It might be that they need to come to Armidale for a certain amount of time and then they will be able to go back out. They are the sorts of things that we are still working out.

Senator McKENZIE: A lot of the evidence this morning was around third-party contracting that sort of expertise in, being able to access that as you need it.

Ms Arthy : Again, this is part of our workforce. We have two distinct groups of regulatory scientists. There is the group that makes the decisions about whether something is registered—they are the risk managers—and then there is the scientific assessment service. They are the chemists and toxicologists. That is where there is some scope to contract out, and we already do. We are going to have to rely on that more in the future. The issue is making sure the risk managers are trained enough to be able to make decisions so that they do not inadvertently make bad decisions.

Senator McKENZIE: I appreciate that. How do you think the minor use program is going?

Ms Arthy : I will hand over to «Mr» Norden, but what sort of information would you like?

Senator McKENZIE: In your assessment, is it progressing well?

«Mr» Norden : There are a couple of components. There is the approach that the APVMA takes. We receive applications from growers to issue permits for off-label use. That is quite successful. We have—

Senator McKENZIE: What, your receipt of them?

«Mr» Norden : Our receipt of them and our processing of them.

Senator McKENZIE: Excellent! We are getting to the processing.

«Mr» Norden : There are over 1,000 minor use permits currently and 1,000 of those affect what I will call agricultural industries. Only about 150 touch the veterinary industry. Most of our throughput there is from horticultural industries, obviously. They account for about 60 per cent of the applications for minor use that we receive. Grains are around about 15 per cent, and environmental weeds get caught up in it as well. So there are a lot of different aspects to the minor use.

A number of years ago also there was an election commitment made by the government to invest $8 million in minor use. The department is administering that program. My observation of that is it is going well, with a collaborative agvet forum that was established between the agricultural industries and the animal industries. They meet annually to identify priorities. The chemical industry are also invited to come to those events. It is about trying to build relationships between the agricultural industries and the chemical industries and about pursuing options for solving minor use problems.

Senator McKENZIE: Does the department have anything to add?

«Mr» Thompson : Yes. «Mr» Norden mentioned that the department administers the program. The problem with minor use is there are some industries that want access to a chemical where it is not ordinarily in the interests of a major company to put in an application for its assessment, or there are people who want to use it for a slightly different use but there are not many of them and they cannot afford to put the assessment in themselves. So the funding is available to help them with that. The issue has always been how you prioritise that.

I would say we have been quite successful in setting up the collaborative forum, which has industry players, industry users and R&D corporations, who often help with parts of that. They sit down together and work up a priority list. Then, under effectively a grants program, we allocate money to progress the highest priority, best returning applications for assessment of chemicals for industries that are seeking a new use or are seeking a chemical for a use that would not otherwise be available. It has been quite successful. I do not have the numbers for the new—

Senator McKENZIE: But it is another government election commitment going well?

«Mr» Thompson : It is a program that is running well.

Senator McKENZIE: Thank you—the correct answer! I want to go to project involvement and resourcing the APVMA for the permit to label and crop groupings projects. Has there been timely delivery of these? I am interested in the timeliness of delivery, «Mr» Norden. Is it all within our goals?

«Mr» Norden : In relation to the permit to label, we are significantly behind in that project.

Senator McKENZIE: How significant is 'significant'?

«Mr» Norden : We have a rescheduled agenda with the department to complete that program by May 2018.

Senator McKENZIE: And what was the original plan?

«Mr» Norden : The original plan, I recall, was by the end of December 2017—this year.

Senator McKENZIE: Right.

«Mr» Norden : So it has been pushed out by five months.

Senator McKENZIE: Five months.

«Mr» Norden : Yes.

Senator McKENZIE: And the use of international assessments? We have heard a lot about that from our evidence this morning, and how we can actually incorporate those into our processing of applications.

Ms Arthy : We released the final guidelines for that about two weeks ago. This is the culmination of about two years of work with industry on getting this guidance together. The final set of guidelines is out there and we have started talking to companies about how we can use their assessments. So from here on in it is actually up to the companies to come to us. There is not much more that we can do.

Senator McKENZIE: That is a really important point, I think. So you are looking forward to that speeding up assessments?

Ms Arthy : Yes, absolutely.

Senator McKENZIE: And is there any impact on the resourcing needs? You are speeding up assessments; do you envisage a consequent lesser need for resources?

Ms Arthy : In theory, you would think so, but—

Senator McKENZIE: Yes, you would think so!

Ms Arthy : I have not turned my mind to it, but we need to put this in context. We actually do not get a lot of applications. But an international assessment—

Senator McKENZIE: But are there more complex applications in requirement of that international assessment data? I would have assumed that, rather than a tick-and-flick kind of—

Ms Arthy : Yes. Again, I am finding this hard. We already do joint assessments with Canada and the US. So we already do that and now we are talking about the next bit, which is possibly using assessments. We do not get a lot of those. I think we have about 30 on hand at the moment out of 5,000 applications that we deal with. So it is not a lot. But certainly those products which are the innovative end of the market should be able to get to market faster if we get access to it.

Senator McKENZIE: Okay. So, we heard this morning that it is years for getting that product to market through our Australian assessment processes, from whoa to go. With the changes you have been able to implement around using international assessments, can we cut that down?

Ms Arthy : It depends on what sort of rate-limiting step it is. If they have international assessments for everything that we are dealing with, and they are relevant, then we should be able to get through a lot quicker than we can now. If they are only able to bring in, say, assessments relating to chemistry, that is not actually our rate-limiting step. It is the toxicology, it is the environment and it is the residue sides of things. It is all case specific. But, again, in theory it will reduce the burden on us and it will reduce the expense on companies. We have also said to companies that even if an assessment does not directly line up to our requirements, to come in and we will talk early to see what we can use from it. So we are trying to be as pragmatic as we can to get as many through as we can.

«Mr» Norden : If I can just come in there? You had a question there on the crop-grouping project as well, and I can give you an update on that in relation to what activities happened there.

The APVMA published phase 1 of the crop-grouping project, which was to list all the crops across 20-odd different crop groups. Phase 2 is underway at the moment, where we are identifying what we call 'representative commodities' within each of those crop groups. If a registrant or an industry body were to generate data for two or three representative crop commodities that we have identified, that data is used to extrapolate to the whole crop group. So rather than generate data on 20 or 30 commodities that are in the group, we generate it on representative commodities.

Senator McKENZIE: They are going to love that, «Mr» Norden.

«Mr» Norden : We are looking at doing that not just in the area of residue data generation but also in how we apply those principles to occupational and safety assessments, environmental assessments and our efficacy assessments.

Senator McKENZIE: Good, thank you.

Senator GALLAGHER: Which department—or was it you as the APVMA—drafted the specifics of the GPO?

«Mr» Williamson : It was led by our department.

Senator GALLAGHER: What is the rationale behind it? Where did you get the instructions about the 10 kilometres by road remaining for the campus of a university, for example? And the 150 kilometres? Whose criteria were those?

Senator McKENZIE: I just do not think there would many university campuses that are more than 10 kilometres from a regional centre.

Senator GALLAGHER: That is not the point.

«Mr» Williamson : Our submission sets out the approach we took but, broadly speaking, the drafting of the GPO was about enacting the government's election commitment, which talked about centres of excellence in regional centres near regional universities.

Senator GALLAGHER: And 150 kilometres by road?

«Mr» Williamson : Yes. We thought distance was a decent proxy to establish 'regional', particularly in contrast to capital cities. Nobody was picking particular locations. It was clear that this was not about capital cities. Those distances were used, as I say, as a proxy to give effect to the election commitment.

Senator GALLAGHER: How many locations meet those criteria?

«Mr» Williamson : I could not tell you that. We have not done that analysis.

Senator GALLAGHER: You have not done that analysis?

«Mr» Williamson : No.

Senator GALLAGHER: So you provided an instrument without knowing what it might mean—whether there were no areas that met those criteria or how many did.

«Mr» Williamson : No. We certainly did not design something that was not going to apply at all, but the question was: have we identified all the specific locations that it could apply to? The answer to that is: I do not have that with me. We could do it if—

Senator GALLAGHER: Presumably, you applied it to Armidale?

«Mr» Williamson : Yes, it applies to Armidale.

Senator GALLAGHER: So it ticked the box for Armidale, but you did not do anything else?

«Mr» Williamson : Other than, as I say, giving broad effect to an election commitment that talked about regional centres and regional universities—

CHAIR: And Armidale.

«Mr» Williamson : we felt that the proxy of using kilometres dealt with that satisfactorily. We have not gone further than that.

Senator GALLAGHER: The Parliamentary Library has done some analysis of that. It tells us there are four locations that meet those criteria. Is that correct? Have you looked at that?

«Mr» Williamson : No, I am not sure. I am broadly aware that the Parliamentary Library has done some analysis, but I have not seen it or seen the assumptions that underlie it. I am happy to take a look at it and come back to you with advice.

Senator GALLAGHER: I just find it staggering that you would draft a legislative instrument with specific criteria and you cannot tell your minister how many places it applies to. Presumably, the finance minister signs it without knowing either.

«Mr» «Helgeby» : The finance minister's role is really to make sure that the processes are—

Senator GALLAGHER: A very convenient role, I know. We have heard it before. Finance is like a processing department. Surely he has an interest in whether this instrument is right, how it applies and the basis on which it is made, though.

«Mr» «Helgeby» : The finance minister has a very specific role in relation to this type of instrument.

Senator GALLAGHER: Which is around the consultation?

«Mr» «Helgeby» : Which is around the consultation and then, ultimately, he is the one who signs the instrument. In our submission, or attached to our submission, we actually circulated a document which has the guidance we give to agencies. There is a flow chart on it and, effectively, that makes it very clear what the finance minister does versus what other ministers do in the process.

Senator GALLAGHER: It is deserving of a longer discussion, perhaps not for today, but I would argue that where you have expenditure of taxpayers' funds in excess of $25 million at the moment—who knows how much it is going end up at—the finance minister would have interests other than just whether a specific consultation process had been met. But it is an argument that we have had at estimates and it seems to just go round and round. My final question is to «Mr» Williamson. The APVMA submission outlines a number of strategic risks impacting on the APVMA that relate to current operations from Canberra and the move to Armidale. They go through them:

delivery of legislative obligations and completion of the relocation in a timely manner

potential for making inappropriate decisions …

maintenance of organisational capability and staff wellbeing

relationships with stakeholders

digital and systems capability

financial sustainability.

I am not sure that you could have added anything else to that list! But, again, your role as the department of agriculture means you have an interest in ensuring Australia's reputation, our trade in agriculture and our services to farmers and others. How is the department assuring itself that with this move the APVMA is going to be able to meet all of those challenges? Where is the role for frank and fearless advice to government around some of this?

«Mr» Williamson : There are two questions there. To answer the first question, as I said earlier, the department has worked with government and with APVMA on strategies to address the risks that you have just outlined. There has been a lot of work done. There is work continuing. Ms Arthy has explained some of it this afternoon. There is also an appropriation of $25.6 million to, in various ways, help mitigate those risks. From the department's perspective, we are obviously keen to ensure that those strategies are deployed and are successful. Our ongoing role is to work with APVMA on those issues. As for 'frank and fearless advice', as I set out earlier, the department delivered on its responsibilities to provide advice to government throughout this process and continues to do so.

Senator GALLAGHER: Based on those challenges, what is the gain that the department expects to see from the relocation?

«Mr» Williamson : The gain? In what regard?

Senator GALLAGHER: What is the benefit? With all those challenges in mind, the fact that it is going to cost significant taxpayers' money, and everything that we know, the fact that no stakeholders support it—

Senator McKENZIE: Sorry, that is misrepresenting the evidence to this inquiry.

Senator GALLAGHER: No involved stakeholders support it. What is the gain for Australia's agricultural and veterinary industry from this move?

«Mr» Williamson : That is a question, obviously, that the government has answered by virtue of its election commitment. From our perspective, the gain is a revamped, contemporary regulator delivering on its legislated responsibilities in an efficient and innovative way.

Senator GALLAGHER: Even though it is telling you it is going to have a lot of trouble doing that?

«Mr» Williamson : It is telling us that an independent analysis has confirmed that there are some challenges to overcome along the way, but it is also telling us that it has a range of strategies and initiatives well underway to deal with those challenges.

Senator GALLAGHER: The cost-benefit analysis says that the benefit is modest at best. I am wondering what we are going through all of this for, other than, essentially, an electorate gift to Armidale. 'At what cost,' is the question I leave it with.

Senator McKENZIE: Is that rhetorical?

Senator GALLAGHER: I am not sure the officials are in a position to answer.

Senator McKENZIE: My understanding is that the economic benefit to the Armidale community is—

Senator GALLAGHER: But this role is not for Armidale—it is for the whole country. That is the point.

Senator McKENZIE: I appreciate that, but the fact that you think that those sorts of roles can only be contained in Canberra—

Senator GALLAGHER: I am not saying that.

Senator McKENZIE: is actually offensive.

Senator GALLAGHER: I have never said that.

Senator McKENZIE: That is the assumption of this whole debate.

CHAIR: Order, Senators!

Senator GALLAGHER: It is not at all.

CHAIR: I have no doubt that we will have opportunities to further debate this in other forums. Before we close, I just want to place a question on notice for APVMA and your department, «Mr» Williamson. Can I please have a list of all of the contracts with service providers associated with the relocation since January 2016? I am interested in the relevant AusTender number and the value of each of those contracts. That includes, but is not limited to, any contracts assigned to Pegasus Economics, Bull & Bear Special Assignments and Seftons and any contracts associated with the development of the digital strategy. Those are the contracts mentioned in your submission, Ms Arthy. «Mr» Williamson, I am also interested in anything—

«Mr» Williamson : If we have anything to add, we will.

CHAIR: that has been commissioned by the department. There may be other questions on notice—

Senator McKENZIE: There will be.

CHAIR: provided by senators. The secretariat will—

«Mr» Williamson : I just want to say something on one question earlier around correspondence. I have a very diligent officer who has checked, and the department has had 64 pieces of correspondence since 26 January this year. That includes correspondence from a former member of the APVMA executive—I think that is what you asked about—that reflected positively on the relocation.

Senator McKENZIE: Can you table that correspondence?

«Mr» Williamson : Yes. I do not have it with me, but I can take that on notice.

CHAIR: All of it or just that single piece?

Senator McKENZIE: That single piece.

«Mr» Williamson : Okay.

CHAIR: Ms Arthy, thank you for locating the letter that you wrote around relocation on 31 July. I note that, at the time, you provided a number of attachments. If those could be located and provided to the committee subsequently, that would be terrific.

Ms Arthy : I think we did actually table them—it might be a matter of finding them.

CHAIR: We had them, but we did not copy them? Great, thank you.

Senator McKENZIE: Sorry, Chair; you have been very indulgent. «Mr» Williamson, you went through, in answer to a question from, I think, Senator Gallagher, which other agencies would be covered by this particular order. I would, please, point the department to the City of Wodonga's submission about the Murray-Darling Basin Authority. I am hoping, Chair, you will indulge the city and invite them to any regional hearings that our committee chooses to have, so that they can explore that further.

CHAIR: The committee will now suspend. I thank you for your evidence today.

Committee suspended 14:40 to 14:48