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Tuesday, 10 August 2004
Page: 26054


Senator HARRADINE (7:09 PM) —Senators may recall that some weeks ago I noted my concern at the unexplained increase in funding for the National Stem Cell Centre Ltd from $43.55 million in 2002 to around $100 million in the last budget. The funding has more than doubled, the normal funding processes do not appear to have been followed and the money is not properly accountable to the public.

At the budget estimates hearings a couple of months ago, I asked Biotechnology Australia and the Australian Research Council how and why that extra money was allocated. I did not really get any answers. What I did find out was that the performance of the National Stem Cell Centre had not been evaluated and no funding committee had recommended that funding to the NSCC be more than doubled. To try to find out whether the NSCC had had such success that it warranted this $57.9 million increase, I asked for details of the NSCC's achievements. But the officers could not or would not tell me what they were. Industry minister Ian Macfarlane later intervened to say that I could not have information on the centre's performance because it was commercial-in-confidence.

The funding deeds the Commonwealth has with the NSCC include a number of milestones or critical dates that the NSCC has to meet in order to satisfy its obligations to the Commonwealth for funding. The Australian Research Council gave me a copy of the NSCC business plan which was part of the funding deed, but most of the milestone information had been blacked out—`redacted' is the current jargon. One of the Biotechnology Australia officials said to me:

I think you have requested those—

the milestones—

as part of the business plan in the past, and the minister has made a judgment that some of those are commercial-in-confidence and should not be released ...

Since then I have been very helpfully handed a set of papers that include the performance of the National Stem Cell Centre against a number of milestones. I was given this not by the department, mind you, but by someone else. The papers contain the same milestone tables, without the blacking out. They reveal that last year the NSCC was running so far behind with a number of milestones that the deadlines had to be extended. Out of the 26 short-term milestones in the business plan, the NSCC was running behind in eight milestones, or 30 per cent.

The eight milestones were extended because the centre was: three months behind in establishing a control framework for research operations at the Monash Science Technology Research and Innovation Precinct, named STRIP; four months behind in completing the fit-out for moving into the STRIP; three months behind in ensuring the formal opening of the NSCC facility at the Monash STRIP; three months behind in commencing training of major national research facility technicians; three months behind in opening the new major national research facility; three months behind in having the first non-centre user of the major national research facility; seven months behind in the NSCC awarding the first postgraduate student scholarships; and seven months behind in the first NSCC funded postgraduate students commencing training.

And these are just the short-term milestones as recorded in those papers from last year. We still do not know whether those milestones were met or whether the centre is meeting its key performance indicators. Remember these are not voluntary activities; they are obligatory milestones which the NSCC had committed to meet as part of its contract for funding and which had to be changed to give it more time. Given that the government would not give me more up-to-date information, this is the best indication we have of the NSCC performance thus far.

In answer to one of my questions at the estimates committee about the achievements of the NSCC, the officials from Biotechnology Australia said:

There are milestones that we have set for the centre and we are actually due to get a quarterly report from them today. We will be assessing whether they have met those milestones and then making determinations about funding to be released based on them meeting those milestones.

Yet, despite a substantial list of milestones that have been changed to give the centre more time, its overall funding was more than doubled. Officials from the ARC and Biotechnology Australia were careful not to say where this impetus for more than double the funding had come from, but the implications of their careful answers were from the industry and education ministers' offices. The papers also give some indication of the `care' with which the National Stem Cell Centre reports to the Commonwealth.

Some of you may remember the controversy in mid-2003 when Professor Alan Trounson stepped down from running the NSCC and took on a new role within the centre. Apparently, the Department of Education, Science and Training only found out about the new management arrangements by email after the fact. DEST officers were understandably a little concerned, especially given the funding contract requires DEST approval for such changes in personnel. A DEST officer emailed the NSCC to say:

We do not appreciate being notified of strategic organisational changes via a press article after the event. We require formal notification of such significant changes in accordance with the requirements of the ... Deed.

The centre does not apologise for this either. Instead, the NSCC wrote to DEST in August 2003 to say:

We would like to improve our communications with our Commonwealth supporters, and will work diligently in future to communicate on all pertinent matters and to provide appropriate notices. In future, all matters of relevance ... will be copied to you directly.

DEST was not the only Commonwealth funding agency to be formally informed after the event. Biotechnology Australia was given a day's notice of the NSCC's restructure as a fait accompli. But Biotechnology Australia does not seem to have been too concerned. A Biotechnology Australia officer emailed the NSCC stating:

The Commonwealth needs to formally approve change in specified personnel. I will probably need an email from you to which we will respond ...

Incredibly, the NSCC then suggested this email be delayed until after the new management structure was formalised. It amazes me that a company so dependent on government funding for its survival deals with its funding agencies in such an offhand way. Or perhaps the National Stem Cell Centre feels so secure in its funding—whatever it does or does not do—because of political patronage which guarantees it continued funding whether or not it performs or whether or not it complies with the funding deed.

I have previously dealt with the ethically contentious issues surrounding the work of the centre. Tonight I am focusing on the important issue of scrutiny of government expenditure. The situation is not good. The Australian parliament needs to have access to information to reassure the Australian public that funding decisions are being taken correctly. The public needs to be reassured that political patronage is not defining research funding in this controversial area. A company should not be given $100 million and funded to 2010-11 without even a formal evaluation of its performance. The government stands condemned on this particular matter. (Time expired)