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STANDING COMMITTEE ON RURAL AND REGIONAL AFFAIRS AND TRANSPORT
10/10/2008
Natural resource management and conservation challenges

CHAIR —I now welcome Professor David Pannell. Do you wish to make a brief opening statement before we go to questions?

Prof. Pannell —I will not reiterate anything that is in my submission, but in relation to the matters that are under inquiry, I note that there have been further developments since I sent in my submission. In particular, last week the Caring for our Country program released a document of its outcome statements for the new program. I have some concern that the outcomes that are stated within that document are relatively short-term in their focus. I understand why they are short-term. They have been designed so that they can be achieved within the five-year time frame for evaluating the program, and that is fair enough, but the problem is that there still remains a lack of clear statement of genuine environmental and natural resource outcomes that are to be achieved by what I would call those short-term outputs. That is the only issue that I would like to add to the material that I have raised in my submission.

CHAIR —Thank you. I will go to questions from Senator Siewert.

Senator SIEWERT —I would like to start there and then go back to some of the detail of your submission. Can you go into a little bit more detail about your concern about the outcome statements? If I understand it correctly, you are more concerned about where we are going in the long term with the program.

Prof. Pannell —That is right. One of the issues that I raised in my submission was a concern that in this type of program generally, and in the initial design of Caring for our Country, there is often a lack of a clear connection between the activities that the program supports and the long-term environmental and natural resource outcomes that the program states that it wishes to achieve. In my submission I raised concerns about the lack of the use of technical and scientific information to draw out those links. Often information about the degree of threat or damage is used and considered, but the additional scientific and technical information about the link between actions and outcomes is often neglected. Those outcomes are typically longer term than the duration of a program; so a program that limits itself to evaluating itself on what it can achieve within the five-year time frame of a program is really unable to consider those longer term outcomes, which are the real outcomes that you are trying to achieve.

Senator SIEWERT —If I understand it correctly, that has been the criticism of the original programs. It was not the original, because we can go back a couple of decades to earlier Landcare programs, but for NHT1 and 2 that has been the criticism all along: what are those long-term objectives?

Prof. Pannell —I agree. That has been a missing ingredient in NHT1, NHT2 and the National Action Plan as well.

Senator SIEWERT —Is it your interpretation that Caring for our Country is going down that same road?

Prof. Pannell —Yes. There is a degree of faith required that the actions that are there supported will lead to environmental outcomes. My view is that we do not need to be relying on so much faith and that the program should use processes and information in a way that gives a lot more confidence that the programs will lead to outcomes.

Senator SIEWERT —I would like to go back to your paper, in particular to the NRM integrated framework and how that could be used. Do you think that could be used to help identify those longer term outcomes? Could you also advise how it addresses some of the problems that we all know have been around within NHT1 and 2 and how we could use that to make Caring for our Country a better program?

Prof. Pannell —I have been involved for about eight years in developing investment frameworks that are designed for this exact purpose, beginning with work on salinity, but over the last year or so adapting that to be a much more general and broad-ranging investment framework to support assessment of public investment in environmental programs. We have a tool called INFFER, which is referred to in the submission and which is currently being used by 10 regional natural resource management bodies around Australia. There are six in Western Australia, two in Victoria, one in New South Wales and one in South Australia. In each of those regional bodies we are actively supporting them to prioritise and evaluate the investments they could make, propose to make or are making in natural resource management. At the moment the main focus is in helping them evaluate possible investments for which they could apply for funds under Caring for our Country or under state programs.

The INFFER process does attempt to address the missing ingredients that we have already been talking about and several others as well, so it draws in, in a very overt way, information about cause and effect relationships between actions and outcomes. It requires that to be expressly and explicitly described. It draws in information about the value of the different assets that you could invest in, the degree of threat or damage that they are facing and also information about the likely landholder responses to policy so that you can anticipate whether a policy or an investment response will achieve the changes that you want. In addition, it provides guidance about the appropriate policy tools to be used in a particular circumstance; so should we be relying on extension, incentive payments, regulation or whatever to achieve the changes.

We have gone through a phase of piloting this approach with a number of regions and we are now at a stage of applying it with a larger number. Through this we have found it to be a very effective process. The regional bodies that we are working with understand it. They do require a lot of support and training to be able to use it, which is one of the issues that I have raised in the submission, that there is a need for upskilling and improving the capacity of the regional bodies to use it. But we are showing that with that support it is quite possible for them to use and include the method.

That is at the regional level. The same approach could be applied at a state level or at a national level as well. The same principles and processes are equally relevant.

Senator SIEWERT —I probably jumped ahead because I was keen to get to those issues, but the assumption that I would make from your submission and other submissions is that the way that we have been investing money in natural resource management has not delivered the outcomes, and you and other submissions have touched on that, that we have not had the long-term objectives. Could you briefly outline how the framework improves on where we have been? My second question is: do you think that Caring for our Country, without this, is going to achieve what it wants to achieve in terms of making that next step in delivering good natural resource management outcomes?

Prof. Pannell —I would like to start by describing some of the features of this messy problem that we are trying to grapple with in these sorts of programs. The environmental and natural resource problems that we are dealing with are complex. They are quite spatially heterogeneous, so they occur in some parts of the landscape very seriously and in others not at all. We often have difficulty getting landholders to adopt new practices at the scale that we need to address the problem. They are very reliant on technical information about cause and effect and level of threat. The other feature is that they are very expensive. Typically, they are much more expensive to deal with than we have given credit for, or realised, in the funding that we have allocated to these problems. The amount of funding typically available under NHT, NAP and now in Caring for our Country is very small compared to the scale of funding that you would need to deal with the problems in a comprehensive way. For all of those reasons it is very important to target the funds in a systematic, structured way to try to pick winners, basically, to try to choose which bits of the landscape are going to provide the best bang for the buck and achieve the highest environmental and natural resource outcomes for the available public funds.

In previous programs we have paid too little attention to that set of issues that I have just outlined, so that the funding has been distributed in ways which has not been targeted at the most cost-effective areas or policy tools that would really achieve outcomes. The colloquial phrase that the money has been spread thinly like Vegemite is very true. Over time we have slowly started to move away from the extreme extent that it was under NHT1, but it is still a very serious problem, and the money has been, until very recently, still spread much too thinly to really achieve targeted outcomes.

INFFER will help and is helping to address that problem by working environmental managers through a structured process which asks that series of questions that I have just identified: how important are these assets, how threatened are they, how feasible is it to protect them and how adoptable are the works that we would like to see adopted. They are used like a series of sieves. Once you have worked through all of those you have narrowed your focus down to a much smaller number of environmental and natural resource assets that you think have much more confidence and can be invested in to achieve environmental outcomes.

The final part of your question was how is Caring for our Country going in terms of delivering on that. My response would be that the program has recognised this set of issues and has identified that there is a need for greater targeting and a stronger evidence base to the decision-making, but so far it has not really succeeded in doing as comprehensive a job of that as I think needs to be done. We could talk about reasons for that, if you like, but so far my assessment would be that it has only made relatively modest steps down the path that needs to be taken.

Senator SIEWERT —You have touched on the reasons. Can you articulate those more clearly? If we made a set of recommendations to government, what would you suggest that we should say to government about improving the outcomes from Caring for our Country.

Prof. Pannell —One of the most serious problems that is limiting the capacity of the people who are developing Caring for our Country to really deliver what people are hoping for is the incredible rush of time that they are under. They have basically been given three months to go from a standing start to a completed program and it is simply impossible.

Senator SIEWERT —Are you talking about the people in Canberra?

Prof. Pannell —I am talking about the officers within the departments.

Senator SIEWERT —The Commonwealth departments?

Prof. Pannell —Yes, the Commonwealth departments. They are working incredible hours under ridiculous time pressure to do something that they would be hard pressed to deliver within a year, and they have been asked to deliver it within three months. That is the first thing. That is relatively easily handled by just having more realistic expectations. What is more difficult to handle is that there is still a strong remnant of philosophy and mindset coming through from the older programs, even stretching back to NHT1 and Landcare, where there is quite a bit of tension within the departments in Canberra where some officers hanker after the old days, if you like, where they did not need to be so targeted and focused. There is a belief that a very broad-ranging investment in capacity building is what is required, and so those officers who are pushing for a more targeted approach and are trying to deliver that are fighting a battle with some other people within their agencies to allow that to happen.

Another constraint is on the capacity of the departments to do what is needed. Given the time frame that they are operating under, they are needing to rely very much on internal resources and the skills of the internal people. But they really do not have the experience to do those sorts of analysis, which are really quite challenge in understanding what the analyses are that are needed so that they can allow for that in their design of the program. There is an interaction there with the time frame that we have already mentioned. Also, there is something there about the skills and capacities of the people within the departments. It is not their fault. It is just that the experience of a more comprehensive and systematic approach to environmental planning is not well embedded within the agencies. Can you remind me of the second part of your question?

Senator SIEWERT —What were the reasons for it not being adopted and what could we be recommending to government to get Caring for our Country to deliver?

Prof. Pannell —That probably captures most of the main reasons why we are not making more progress. You have asked specifically about what can be done about Caring for our Country. I would like to answer slightly more broadly and say what should we be doing to really change this in the long term. One of the factors that we need to do is to stop asking what we can do now to deliver benefits now. We need to start changing the design of the program now so the next program in five years time will be ready with the analysis, data, information and mindsets in place to really deliver on the aspirations for what is stated for Caring for our Country now. I would like to see something like a group set up within the agencies in Canberra which is responsible for undertaking systematic, long-term focused, scientifically based, evidence based analysis that will mean that the next time there is a program we can really do it well. Realistically, there are limits to what we can do in the current phase of Caring for our Country, because we did not do that in NHT2. That is one answer.

The other answer is we can do the best that we can with the existing knowledge and information. There is existing knowledge and information out there that we can use and there are existing investment frameworks and structured decision processes that we can use, with INFFER being a good example of a structured process. I believe this could be adopted within the time frame of Caring for our Country, but what it needs is an acceptance that it is not something that can be done instantly. It does not need five years, but it might need six months for a group to work through the process of identifying the best investment options for a particular jurisdiction, whether it is regional, state or national, and to assess them with the best available information that they currently have.

Senator SIEWERT —You just reminded me of the issue of regions. There has been a strong investment in NHT2. We moved from NHT1 to NHT2, to NAP and to the regional approach. We will probably get to more detail later, but there has been an ongoing argument about how much money regions are or are not getting. Do you consider that in moving away from the regional approach we should be finding another way of delivering NRM or should we be building on the current investment in the regional approach? Which way do you think we should be going?

Prof. Pannell —I have to confess that I am torn on that. The regional approach has not worked well to date because it has not been given the incentives, support and carrot and sticks that it needs to operate well. It probably can be made to work a lot better with the right carrots and sticks and support and it could deliver valuable outcomes within a program like Caring for our Country. On the other hand there is a large overhead cost required to keep the regional bodies operating. With the reduction in funds that they have now had under the new program, all of the core funds will be spent in just keeping the doors open and funding the staff that they have, so they are very reliant on attracting additional funds in competitive rounds or from other sources. If they were to be unsuccessful in doing that, then you would have to ask why they are being supported; what is happening with the core funds and why are we supporting core funds without the real doing funds.

I did not support the regional model when it came in. I thought it was a mistake to do that, as I could see the problems that emerged emerging. But with it in place and with so much invested in it, as in skills, networks, information and so on, and even though it has not worked particularly well, it is a smaller step to make it work well now than it was when they first brought it in. It is feasible to keep it in place, take it seriously and make it operate better but, by the same token, I do not think it would be a catastrophe if a decision was made to dismantle it.

Senator SIEWERT —What you would do in its place? Firstly, the question that goes through my mind is that if we have invested this much in the regional approach already and there is a lot of social networking that has been built up, by incapacitating them to the point now where they are just operating on an admin basis and if they are not successful in a competitive tender, you have then got a body there that is not able to do anything. You also have a group where that region is, so is anything happening on natural resource management in that area? If they have not been successful in tendering and other regional groups have, then obviously those regional groups are going to be working in their region. I am not seeing that level of thinking going into the programs. Do you feel that level of thinking is going into the programs?

Prof. Pannell —I am sorry, I do not understand the question.

Senator SIEWERT —We have a whole lot of regional groups now that do not have a lot of projects, they are just operating administratively. My understanding of the approach that is going to be taken with Caring for our Country is that you will go out for competitive tender, as you have just said. Presumably at the moment, if a group’s competitive tender is not successful they are going to be getting a bit more money to keep them going, because it is not politically feasible to kill them off so then, as you said, what are they going to be doing if they do not have any funding, but also what happens to the natural resource management in their region if they are not successful? Presumably, they are going to be the group that is tendering for natural resource management in their region. I would suggest that coming over the top of another community group is not going to be that successful. A state government might, but the same question applies: if they are not successful, what happens to natural resource management in their region?

Prof. Pannell —One part of the answer to that is that one of the things that Caring for our Country is trying to do, which is a good thing, is to become more targeted and to identify specific environmental and natural resource assets that it wants to spend money on. Some state governments are also going down that line, particularly Western Australia and Victoria. The inevitable reality of that is that there could be regions where relatively few or conceivably no assets make a state or national list. A hard-nosed attitude to that would be that that is all right, that that is part of the inevitable consequence of having a more prioritised approach and attempting to make sure that you do achieve the highest environmental and natural resource outcomes that you can with the available dollar. Some areas will get a lot less and some might miss out entirely. That is not necessarily a problem.

If there are important environmental assets that are identified as priorities but also miss out because of some way the program is not operating, then you would need some other way of it being picked up. The most obvious way would be through a state government stepping in and saying, ‘We have identified this as a state level priority and we will fund it on that basis.’

Senator SIEWERT —I have a concern about the level of analysis that is required which is being crunched into three months. It seems to me that will not carry out an effective analysis. I have a further concern about losing the investment that we have made over the years into the regional groups. I described that as a leap of faith to go to the regional group model; we have made that and have invested so far in it that potentially there is a lot of social good that will be lost. Putting that aside, I would be much more confident if we could allow the time to do the adequate analysis that you were talking about earlier. At the moment I am not confident that we are going to be as targeted as we should be.

Prof. Pannell —I agree with what you are saying. The logical conclusion from that is it is another reason to support the continuation of the regional bodies at some level.

Senator SIEWERT —What happens if they are not successful in this round of competitive tender? What would you suggest we do to ensure that their capacity is not lost? We are facing some tough decisions. It will not necessarily be a deliberate decision, but it will be as a consequence of other decisions.

Prof. Pannell —I am thinking on my feet here. This is not an issue I have thought about in any depth. One quick thought would be to look at merging regions so that one body could ensure that all areas are covered by regions that have received adequate funding. That is all I can think of at the moment. There is a related issue and that is that the program has not really thought through the role of regions. You have alluded to that in your question. How will the regions operate under this new scheme and what will happen if the sorts of things that you referred to eventuate? I have not seen evidence that those questions have been well thought through so far.

Senator ADAMS —Can I continue on that basis?

CHAIR —There is plenty of time. Are you finished, Senator Siewert?

Senator SIEWERT —I will probably have some more.

CHAIR —Senator Adams.

Senator ADAMS —As a farmer I would like to take you back to the grass roots side of it, work up towards the regions and expand the regions and the problems that our volunteers and community groups have with that. Can you give me an indication of the role that you would expect them to play in what we have got now as the regional model or if those regions were amalgamated? I am from down south and our big problem in the Blackwood Basin is that the south west is very different to the Blackwood River where it starts on the Great Southern. I have received submissions from the Blackwood and also from the South West, which will be quite interesting, but I would like an overview of what you think will happen at the grass roots? These are the people that are going to have hands-on involvement. It is their properties, the adjacent properties and the areas that are shut up. What influence or impact does that have on their properties?

Prof. Pannell —When you ask how they are going to be involved, do you mean the landholders?

Senator ADAMS —That is correct, and the community people who usually are the ones out there doing the work.

Prof. Pannell —Are you asking me how I think the new program will roll out?

Senator ADAMS —How will those people be involved?

Prof. Pannell —I guess you are asking me to guess how the program might evolve as it is implemented. I cannot necessarily see inside the heads of the departmental people who are putting it together, but I can guess and speculate.

Senator ADAMS —I will make it easier for you. You made a statement earlier saying that with the money available and their expertise at the present time the regions are having to spend most of that on administration and project officers and, as they are competing for the people that are going out to oversee these projects, the money is not really reaching the ground.

Prof. Pannell —That is certainly an issue. As Senator Siewert mentioned earlier, they run a risk of some regions potentially not getting very much funds for on-ground works because they are not successful in the competitive phase. That would certainly mean that the scenario that you have just painted of a large number of interested community members in that region missing out on support is a possible scenario. I could comment on the way I could see it developing in a positive way through the use of the INFFER framework in the way that we have been trying to use it with regional bodies, including the South West Catchment Council in recent months. There is a number of ways in which the community can play a positive and effective role in the delivery of these programs. One is through the identification of the most special and important environmental and natural resource assets in their region that they would like to see protected. Typically, we have tried to protect far too many assets within a region with the available funds. One of the things we have been doing with INFFER is running a very structured process with community workshops where we bring out maps of the region and ask people to identify, discuss and try to reach some consensus on which are the assets that are really the important ones for them.

Then there is an element of trying to capture community knowledge about those assets, how threatened they are and what it might take to protect them. Then there are other phases of analysis that do not necessarily involve the community. They might involve experts or community within workshops where you are trying to bring expert and community knowledge together in an attempt to make decisions. Then there is a phase of implementation where, as you mentioned, the community people are involved in one way or another, depending on the nature of the implementation. It might be that grants are provided to landholders to conduct works close to or in areas that are affecting particular assets. One of the inevitable consequences of delivering on the rhetoric of the new program would be that there will be more of a focusing of the funds in a program like this such that some landholders and community members would get more funds than they have in the past and others would get less. You are likely to see a degree of tension resulting from that change, but it is a requirement and an inevitable consequence of delivering on the aspiration to be more cost effective within these programs.

One strategy that we have adopted to attempt to deal with that tension in the regions that we have been working with—which is quite a practical approach that might be relevant to Caring for our Country—is to suggest that they make an explicit decision about the proportion of their funds that is more targeted and a proportion of their funds that is less targeted and spent in a more broad-ranging way for capacity building or for technology development across the regional extension. That is one helpful way of dealing with those community tensions and failure to meet expectations that might come from a more targeted approach. In one region that we dealt with in Victoria they decided that they would spend 30 per cent of their funds in a very targeted way, 30 per cent of their funds in a capacity building untargeted way, and 40 per cent of their funds were up for grabs, expended on the basis of making a decision about the projects that came forward. Does that help answer your question?

Senator ADAMS —Yes, it does. Rural people see things very differently. As you have amalgamations of the regions they see more and more administrative staff being employed; I have a letter that I have received which is very apposite to that. They have had projects going for a number of years which are really starting to succeed but then, all of sudden, with whoever has come in that is not what should be done and there is no funding for that anymore, and then they are off onto something else. As the regions get bigger, of course those smaller communities consider what they have got as very special, but somebody else has got something that is even more special because there are more people. We have all these scenarios going with it. You commented about the time factor with this. It is really quite ridiculous with the amount of money available. Those projects cannot get up and be done and have the analysis done on them in that time.

Prof. Pannell —I would agree with you that the chances of projects that have been developed on such a short time frame being better than the projects that are in place now are very low. On the other hand, in the longer term, if the projects were assessed well then there would very likely be plenty of scope for reallocation of funds that would improve overall outcomes. With a program of this size, being $2.25 billion over five years, it is really a very small number compared to the scale of the problems that are out there. It is inevitable that we will have to select where the money will go. Some areas will win and some areas will lose. That is an unavoidable reality. The reality in selecting where the funds have been spent to date has not been very sophisticated. It is quite likely that a number of projects that have had quite large effort and energy put into them will be re-evaluated as not being very effective projects. It will not be all of them, but some will. That is an inevitable reality.

Senator SIEWERT —I wanted to go back to the issue of funding of regional groups in terms of the social aspect and the loss of goodwill. We have built up a tremendous amount of goodwill. Some of the questions from Senator Adams reminded me that I do not know if some of the people who are doing the work on the ground out there are actually being carried along with the decisions being made. They are just seeing one project being stopped and another one starting. There is probably really good reason for that project being stopped and another one started, but it is not being communicated well.

Prof. Pannell —That is true. Everybody in the whole system, including at the regional level, is in such a state of rushing and scrambling to attempt to position themselves and prepare bids for new funding and so on within the new system, so it does not surprise me at all that that sort of thing is not happening. There is a sentiment that has been expressed to me within the departments in Canberra that there is a real sense that they are trying to take more control of how the funds are spent and that more of the decisions will be made in Canberra about what the priorities really are. I have not discussed with anyone if they have considered how that can be communicated to existing recipients of funds but I suspect, as you have said, that it is not happening to a great degree.

To follow on from that, in some of the regions where we are relatively advanced with the work with INFFER we have gone back to regions where funding was being received and a decision has been made to no longer fund those regions. We have participated in regional meetings where that has been communicated to regions and the reasons for the changes have been explained. In the main I would say that those processes have been quite successful. If the explanation is convincing and well founded, it is possible to put to a community that explanation as to why the change is being made and have them accept the changes. We certainly found some community members that were quite unhappy, but we also found a fair number who were very accepting of the changes and said that they appreciated the reasons for that change.

Senator SIEWERT —That was going to be my next question. If INFFER is communicated and people understand the process of the decision making, does that help?

Prof. Pannell —It is a much more transparent process than typically happens. All of the rationalisation for a decision is made transparent in a fuller way than normally happens in these regional decisions.

Senator SIEWERT —I would like to go back to the use of INFFER at a national and state level. If I understand you correctly, you said that Western Australia is now going to be using it.

Prof. Pannell —The six regions in Western Australia are all currently participating in a process where we are training and supporting them to use it. A couple of them are quite advanced and the other four are in the early stages of using it. There is no formal agreement at this stage for the government agencies to use INFFER. The state government has provided some funding to support our work with the regions, but we have had some strong signals from government agencies that they are interested. My judgement is that the state agencies are quite likely to agree to use it as a common state approach.

Senator SIEWERT —What about the other states? I would like to know where the triggers are for the Commonwealth to use it, but also informing the states that they want them to use this rational decision making process.

Prof. Pannell —Of the other states the most advanced is Victoria, where we have had a long-term engagement with the Department of Sustainability and Environment and the Department of Primary Industries. They are currently going through a green paper/white paper process on biodiversity on climate change. We have had discussions with senior people in the Department of Sustainability and Environment about using INFFER as a guiding framework in their development of the white paper. I am quite hopeful that it will have a strong influence on their thinking. There are active discussions going on now about how they use INFFER in relation to the regions, the CMAs in Victoria, and what sorts of support or positions the state government should take in how it is used with the regions.

In the other states it is not so advanced. In New South Wales we have had engagement with the Department of Environment and Climate Change and also with the Natural Resources Commission. The Natural Resources Commission is responsible for providing guidance to all of the regions about their investment processes, monitoring and evaluation, so they have been briefed, understand the process and expressed enthusiasm for it, but it has not proceeded in an active way yet, other than in the one region that we are working actively with in New South Wales which is the Lachlan CMA.

In South Australia we have had briefings with senior people in the Department of Water, Land and Biodiversity Conservation and, again, it has been well received. They have offered and actively supported our efforts to engage with one of their regions as a trial process, so we are currently working the Kangaroo Island NRM board in South Australia and that seems to be going quite well. The department is watching that with a lot of interest and providing quite active support to it.

In Tasmania we have had quite active engagement with all three regions. One of the regions is very interested and looks like adopting.

We have not yet had briefings with the Victorian state government and we do not yet have any engagement in Queensland.

Senator SIEWERT —None at all in Queensland?

Prof. Pannell —No. We are a small project. We are very stretched even with the 10 regions that we are working with and the state and Commonwealth government, which we are trying to influence at the moment. We are working very hard. We have had to reach a limit where we could not go into all states. My view is that we are at the stage with this framework where the governments should be adopting and applying it. It is proven enough; we are really at an implementation phase. I feel like we are doing the state and Commonwealth governments’ job for them in the work that we are doing with the regions and that they really need to pick it up and allow us to withdraw somewhat back to developing the future versions of it that are improved in various ways.

Senator SIEWERT —I would like to go back to the Commonwealth government. You went into some detail earlier about the tensions that are operating within the Commonwealth. You have, however, briefed various departmental people?

Prof. Pannell —Absolutely. We have given a large number of briefings in both departments and in joint meetings between the departments over the last several years, but quite intensively in this calendar year. We have done very regular trips to Canberra and given briefings, including the most recent one this week.

Senator SIEWERT —I refer to the point that you made to Senator Adams about the proportion of funding that should be spent on a targeted approach, capacity building and what I call the Vegemite approach. Do you still feel that there is a role for the Vegemite approach? Is that linked to the capacity building?

Prof. Pannell —It depends on what you mean by the Vegemite approach.

Senator SIEWERT —Small grant programs that fund everyone’s pet project.

CHAIR —You saved me asking that.

Prof. Pannell —The Envirofund.

Senator SIEWERT —Yes.

Prof. Pannell —There are two answers. They serve a useful purpose as a political relief valve to take the pressure off programs so that they can spend money in a more strategic, hard-nosed way. Within those programs there inevitably are some very good projects, and even some quite outstanding projects, that give really good value for money. It is very difficult to identify which ones they are because the quality of the technical information about the impacts of those activities is often not there; it is not available as it is not required in the assessment of the projects.

Senator SIEWERT —Was the proportion that you used in answering Senator Adams’s question off the top of your head?

Prof. Pannell —That is one example of a decision that has been made by one CMA in one region. We have prepared a document in which we have tried to provide some sort of guidance or at least to put some ideas to regions about how they should think about this problem: ‘Here are the factors that you should consider when weighing up how you divvy up the funds between targeted and untargeted investments.’ It would depend on things like the capacity of the landholders in the region to deliver what you want and the number of very special iconic nationally significant assets that are in your region. In Senator Adams’s area, particularly the western half, there are some fantastic nationally significant assets. In the eastern part there are fewer really outstanding ones and they are much more difficult to identify. You will find some regions that are very much like the west of Senator Adams’s regions and some more like the east, so that would influence the balance that that region would achieve.

Senator SIEWERT —I am also thinking about the national level. Could you suggest what proportion of Caring for our Country would be at a national level that is targeted, bearing in mind that at the moment they have got Envirofund out? I must admit I put Envirofund under capacity building because that is really about engaging local groups and local landholders as a way of community engagement. I know capacity building can be separate, but I do think it is part of community engagement. Would you be suggesting that we do the same federally?

Prof. Pannell —In the recent engagement that we have had with regions some of them have expressed a view that they would prefer that either state or national governments make that call so that they have a clearer expectation about what proportion of their effort is likely to end up in capacity building as opposed to targeted investment. It would be good if governments could do that.

Senator SIEWERT —If the Commonwealth did that?

Prof. Pannell —Yes. I do not have a firm view about what the split should be, but I have firm views about the factors that ought to be considered when that call is made. That would include the sorts of issues that we were discussing and others that I could find in the document if you would like.

Senator SIEWERT —Yes, that would be very much appreciated. I have another question.

CHAIR —By all means.

Senator SIEWERT —The big issue that came out of the Auditor-General’s report was monitoring and evaluation. How do we fix it?

Prof. Pannell —A particular view of mine is that we will not fix it until we sort out the selection of targets. I do not think that you can have good monitoring and evaluation of this sort of program unless the targets have been well selected. The targets need to be based on evidence about value, threat, feasibility and adoptability and the process of selecting investments needs to identify the particular works that the environmental manager judges will achieve a particular outcome and a specified goal for that—a realistic goal, not an aspirational goal—that provides very clear guidance for what the monitoring and evaluation program should be doing. They should be watching the investment to see whether it is achieving those clearly specified goals about achieving a particular thing in a particular place by a particular time. We have never done that. I just do not think we can solve the problem unless we get that specific. The sort of monitoring that has usually been done on a very broad scale with monitoring of condition trends on a very large scale is useful only as a sort of canary in a coalmine role in saying, ‘There is a real problem over here which we are not dealing with adequately.’ In terms of evaluating the performance of the program and the investments of the program, it is of no use whatsoever because the capacity to attribute changes as a result of the program investments to very large scale trends like that is almost zero.

CHAIR —Senator Adams, you have a question.

Senator ADAMS —Coming back to the role of subregions and looking at the expansion and geographical changes, do you see a role for the subregional groups within a region?

Prof. Pannell —You are in a region with particularly strong subregional groups.

Senator ADAMS —I certainly am.

Prof. Pannell —In a region where they currently exist they are a part of the infrastructure of that region and play a very important role. To be honest, I do not see how you could do away with them and expect that the regional body in its current form could continue to operate. I am thinking specifically of your region when saying that the reliance of the regional body in that region on the subregional groups is very strong. I can think of other regions where the subregional groups are not nearly so strong and play a less significant role in guiding, influencing and supporting the regional body, and so their ongoing role is likely to be a lot less.

Senator ADAMS —Unfortunately in that particular region, because of the build up of the administration area in the South West, their money is becoming less and less to achieve what they are trying to do, so they are very concerned. When you were talking about having regions expanded I was thinking where is this all going to go, because the volunteers and these local people are absolutely passionate about improving the country and they really need to be supported. I just cannot see, in your model, how they are going to be supported.

Prof. Pannell —Let me just clarify that. I would not classify a merger of regions as being my model. It was a suggestion that I made in response to a question by Senator Siewert as to how you might respond to a problem where one region hypothetically ends up with little or no resourcing. It is not something that I have been advocating; it is not something I am pushing for now. It was a potential response that I thought of off-the-cuff. With that clarification, I think you are right that the subregional groups are currently experiencing a drought of funds and it is a consequence of the fact that the program has substantially contracted funds going to the regions. It is an unavoidable consequence of that. What remains to be seen is when the program plays out is whether or not the region is successful in getting funds to support the ongoing funding of the programs in the region, through the subregional groups that you have identified. I am not in a position to predict that, so I am having difficulty responding other than to say that I think you are correct that there has been a contraction, but it is difficult to see how that might play out; we are very much in a transition phase.

My expectation would be that the signals that have been made about the opening up of competitive funds to a broader range of groups could have one or two effects. In theory, it seems to me that a subregional group could bid for those funds itself. But on the other hand, you will also run into competition from state government agencies and NGOs, so I would expect that the pool of funds going through the regional system will inevitably shrink to some degree.

Senator ADAMS —The hardest part for them is that they have not got the administration to produce the submissions. They have not got project officers or any money to employ project officers to get up a submission of a decent standard. This is where these community groups, with all their goodwill, feel that the regional body should be doing that, but that is not their role. A lot of communication needs to be done. I was very happy when you mentioned that, because it is fine for a certain level to be informed, but if the level down on the ground who are really expected to get in and do the work and really understand the area and they are not being informed correctly, then problems arise. You then have people losing interest and all the projects fall over, so we are going backwards. Those are the issues that are coming back to me with the feedback that I am getting.

Prof. Pannell —I do not have any disagreement with that.

Senator SIEWERT —You talked about setting up a group that does that systematic, long-term analysis. Could I infer from your comments that that is a similar sort of body that you were suggesting in your submission where you talked about the one proposed by Peter Cullen?

Prof. Pannell —No, it was not. The suggestion I made this morning was referring to an internal team within the NRM joint team that would be responsible for undertaking long-term analysis to inform future investments.

Senator SIEWERT —The other group that you are talking about is an independent body that oversights all NRM?

Prof. Pannell —In my submission I referred to a proposal by Peter Cullen to establish an independent body, somewhat of the nature of the Reserve Bank, that would take ultimate responsibility for delivery of outcomes.

Senator ADAMS —Would it be more like the Murray-Darling Basin Authority which has been set up, but they are going to be changing to become more independent? It is not as independent as some of us would like, but do you mean a similar sort of thing?

Prof. Pannell —It would be the same sort of idea. That is correct.

Senator ADAMS —I just wanted to clarify that.

CHAIR —Thank you, Professor.

[10.34 am]