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ECONOMICS LEGISLATION COMMITTEE
01/06/2009
INNOVATION, INDUSTRY, SCIENCE AND RESEARCH
IP Australia

CHAIR —I welcome IP Australia. Do you have an opening statement you would like to make?

Mr Noonan —No.

CHAIR —We will go straight to questions. Senator Cormann.

Senator CORMANN —Thank you. I know that Senator Heffernan will have a series of questions as well. I would like to start off at the general level. Could you describe for us the approach of IP Australia to granting patents on biological materials, such as genes?

Ms Beattie —Our approach to patenting of biological materials is the same as for all other technologies. Our approach is technology neutral.

Senator CORMANN —Do you consider there is any difference between discovery of genes or inventions?

Ms Beattie —Discoveries are not patentable under the Patents Act, but inventions are. Gene sequences are considered inventions under the current patent law. Firstly, they have to be isolated gene sequences and—and I underscore ‘and’—they must have identified an association with a particular disease. Therefore, they can be used as a diagnostic or a therapeutic. An isolated gene in its own right is not patentable.

Senator CORMANN —Can you give me a sense of the numbers involved? How many patents for biological material, such as genes, would have been lodged with IP Australia in the past year?

Ms Beattie —I can give you numbers in relation to patents that might claim a human isolated gene sequence, if you are happy with that?

Senator CORMANN —Yes.

Ms Beattie —Since 1990 Australia has been patenting isolated gene sequences for which an industrial use has been identified. From 1990 to 2008 we have granted 363 patents that do identify a human gene sequence within them. Of those, 202 are still current. Not all patents stay current for the full 20 years. They need to be renewed and if renewal fees are not paid they tend to lapse. We currently have 202 patents that claim an isolated gene sequence for which an industrial use has been identified.

Senator CORMANN —These are the patents that have been granted. How many would have been rejected over that same period?

Ms Beattie —I am sorry, I do not have those figures.

Senator CORMANN —Are you able to get that for us on notice? What would be the proportions in general terms? Are we talking half, 90 per cent or 10 per cent? Have you got a general rule?

Ms Beattie —I prefer not to speculate. I am happy to try to give you some figures in relation to total filings.

Senator CORMANN —Do you know how many patents IP Australia rejected in the past year overall across the board?

Ms Beattie —Again, it is difficult to identify what you mean by ‘rejected’.

Senator CORMANN —If somebody submits an application and you say, ‘No, it doesn’t fit within the criteria’ or ‘We don’t approve. We don’t grant the patent.’ Does that happen at all?

Ms Beattie —Maybe I can explain to you the process.

Senator CORMANN —Perhaps you can.

Ms Beattie —What generally happens is that an applicant will file a patent application. It will be examined. When the first report is issued, if the report raises objections then the applicant has 21 months in which to get the application in order for acceptance. Some applicants choose not to respond. Therefore, the application technically lapses. Some will respond by making amendments to the patent application and therefore move on to grant if all the objections are overcome.

Senator CORMANN —Let me rephrase the question. I gather that you will have to take it on notice. Out of all of the patent applications made, both generally and then specifically for patents over biological material, how many of the patents lodged are ultimately successful and how many are ultimately either not proceeded with or not accepted? That is the sort of data I am looking for. Is that something that you would be able to provide us with?

Ms Beattie —I can give you the number of applications filed that might claim an isolated human gene sequence for which an industrial use has been identified. I can give you numbers in terms of grants, so that should then identify how many have not gone to—

Senator CORMANN —I am interested in the numbers for general patents or the total number of patent applications vis-a-vis patent applications over biological material. We would like to have that comparison.

Ms Beattie —I will just clarify. Biological material is a very broad classification. I am assuming that you would like those that might claim a human gene sequence?

Senator CORMANN —Yes. What sort of system does IP Australia use to track the performance of its examiners? Presumably a patent application is submitted. Somebody will make an assessment as to whether it is appropriate. How do you track whether the people who are examining those patent applications for you have the requisite qualifications in order to be able to do that?

Ms Beattie —I might go to the beginning. A patent examiner is hired based on their technical expertise, their professional qualifications and possibly their industry experience. They then undergo training within the office, and we use competency based training. An examiner will take somewhere between 12 to possibly 18 months to become what is called an acceptance delegate. That means they are assessed to be competent to assess a patent application and make a decision about it qualifying or satisfying all of the legislative provisions.

In terms of quality assurance within the office, where an examiner objects to a patent the objections go to what is called the third report. If there is an issue about the patent not satisfying the requirements, the supervising examiner, a very senior individual within the organisation, reviews the determination by the patent examiner to ensure that the decisions being made are correct.

We also have an independent quality review, which is conducted by our senior examiners. That includes taking samples throughout the year of work both completed and in progress. That review is checked against quality standards, and we do have those quality standards available in our manual of office practice and procedure. There are a number of layers within the organisation where the quality of the decision is reviewed.

Ultimately, when we advertise that a patent application is accepted there is a three-month period within which the general public may review and oppose the granting of the patent application. That is called a pre-grant opposition process. That is another quality layer within the Australian patent system.

Senator CORMANN —Are those positions Public Service positions?

Ms Beattie —They are all public service positions.

Senator CORMANN —The remuneration would be a salary. Is there an incentive based system? You are shaking your head.

Ms Beattie —I am sorry.

Senator CORMANN —Are there any bonus arrangements?

Senator HEFFERNAN —Success rates.

Senator CORMANN —That is it. That is what I was looking for. Essentially the remuneration system is based purely on Public Service normal terms and conditions?

Ms Beattie —There are normal terms and conditions. We do have an incentive for our examiners in terms of performance, but those incentives are not related to how many applications they accept.

Senator CORMANN —What are they related to?

Ms Beattie —They are related to behaviours in the workplace, quality of work and productivity.

Senator CORMANN —How many patents would they be expected to review in a month? Is there a hard and fast rule?

Ms Beattie —There is a planning base or requirement for a number of actions. Those actions include things such as original searches, first reports and further reports. It takes into consideration all sorts of actions that an examiner might make in prosecuting a patent application.

Senator CORMANN —Other than the patent attorney profession and business users, who does IP Australia regularly consult on these sorts of issues? I am generally interested in the patent issues around human biological material.

Ms Beattie —Our examiners undertake continuing professional education throughout their careers. They are encouraged to discuss cases that they are considering with their colleagues where they feel that they need further peer input to their considerations. As I indicated, we have senior examiners who are there to assist them when they require that. At the end of the day they seek input but they have to make that decision as an acceptance delegate in their own right. They cannot be influenced by others in that decision.

Senator CORMANN —Does IP Australia have consultative or advisory bodies?

Ms Beattie —We do. We have consultative forums and bodies. Those bodies include the attorney profession, representatives from the research institutes and representatives from the Law Council. Again, the patent applications are open to public inspection from 18 months and they are available for the public to review as well.

Senator CORMANN —Other than those consultative or advisory committees, to what extent are public interest groups in areas such as health represented? You have mentioned all of the people that I already assumed you would be consulting with, such as patent attorneys, the Law Council and so on. Do you have health related interest groups represented on some of those consultative and advisory committees?

Mr Noonan —We tend to consult with particular industry sectors when there are issues about a particular part of the law. The most recent example where gene patents were considered was during the Australian Law Reform Commission inquiry, which was an extensive inquiry into gene patenting and which concluded only a few years ago. We were actively involved in that, and of course the full range of stakeholders was involved in that. The ALRC made a number of recommendations about the patent system.

Senator HEFFERNAN —Have any of those recommendations been tested at law?

Mr Noonan —I am not sure that I could understand that question, because there are a number of policy and legal questions.

Senator CORMANN —Could you perhaps provide us with a list of all of the consultative or advisory committees that currently operate in the context of IP Australia and the membership of those committees? Is that something that you would be able to provide us with on notice?

Mr Noonan —Yes. We have a number of committees where particular organisations serve with us. We also have more open forums where essentially we invite a whole cross-section of stakeholders, along the lines that Ms Beattie mentioned, to attend forums about IP matters. We held one of those in Melbourne just last month. I can certainly provide you with the names of the individual advisory committees.

Senator CORMANN —Are you aware of one advisory committee that has health interest groups represented on it; say, even those where the decisions have a potential impact on access to health care services?

Mr Noonan —We do not have an advisory committee where health interests would be represented other than in the research sector.

Senator CORMANN —I am going to conclude because I know that Senator Heffernan has some specifics.

Senator HEFFERNAN —I have.

Senator CORMANN —What is the cost to IP Australia of examining and granting a patent application?

Mr Noonan —We are a user recovery agency. Essentially we charge a fee across the different rights that is intended to cover our costs overall—not only patents but for trademarks, designs and plant breeder rights.

Senator CORMANN —Do you recover the cost of each individual patent from the individual applicant? How does it work?

Mr Noonan —Broadly speaking, we seek to recover within each of those four sectors. It is not possible to say: for a particular patent, here is the fee that they pay.

Senator CORMANN —How long would it take you to recover the costs of a particularly complex patent application in the human biological material area? Have you some case studies that you could share with us on how that works?

Mr Noonan —With the fee structure there are fees at the front end of the process, but also remember that a patent lasts for 20 years. Our policy position is to try to ask people, with increasing force, whether they want to maintain their patent. From the fifth year on there is a steadily rising annual renewal fee. It is not until we are well into that renewal period that we actually recover the costs of examining the patent.

Senator CORMANN —What would be the average cost to IP Australia of assessing a patent application in the high-technology sector—pharmaceuticals, biotechnology and software?

Mr Noonan —We would not divide the cost of assessing patents by particular sectors. Perhaps I could take that on notice.

Senator CORMANN —Would it be fair to say that the costs in some sectors would be higher than in others?

Mr Noonan —The demand varies quite a bit.

Senator CORMANN —Do you divide it up according to sector?

Mr Noonan —No, we do not.

Senator CORMANN —How do you decide on how you cost recover? How do you apply it and how do you spread those costs fairly and equitably?

Ms Beattie —We do have a differentiator that we apply for the fees. That is called the number of claims fee. At acceptance the basic application examination fee that is consistent for all patent applications is the same, but if an application has in excess of 20 claims at acceptance there is a fee that is charged for each and every one of those excess claims.

Senator CORMANN —If somebody submits a claim or patent application that is more complex than others, in terms of your cost recovery approach do you charge them more than what you would charge anybody else?

Ms Beattie —The number of claims is a proxy for complexity of the patent application.

Mr Noonan —How difficult a particular claim is going to be to evaluate is not something you can judge in advance. There is a limit to the sophistication with which you can tailor the fees to the costs of the individual application.

Senator HEFFERNAN —This is bureaucratic blather. Do you charge by the hour, the minute, the time taken or the overheads plus the rate and so on? Is there an hourly rate?

Mr Noonan —As I explained earlier, we charge a number of fees up front. There is an application fee.

Senator HEFFERNAN —What are they based on? Is it what the market will bear? There is no competition.

Mr Noonan —They are charged on the basis that we recover across the right—that is, all patent applications and all fees we charge—all the costs of administering the patent system.

Senator CORMANN —You make an assumption as to how many applications you are going to get in any given year. You make an assumption as to what your required budget is going to be, and then you spread that cost across all of the applications that you estimate you are likely get in a particular year—is that how it works?

Mr Noonan —That is probably right.

Senator CORMANN —Essentially, you do not really assess it on the basis that one is more complex or less complex or on which is going to take more hours of work. You do not necessarily have to have a certain number of claims for something to take more hours of work. You say it is a proxy, but it is not necessarily.

Mr Noonan —You are right. I can give an illustration of the difficulties in assessing complexity without working through the patent. Patents often cross technology lines. Our examination streams are broadly divided into scientific and engineering disciplines, but the novelty of a patent application may bring together two different disciplines.

Senator CORMANN —This is my final question. Even though we might not see it reflected in your charges, do you analyse your costs across various patent categories? Do you have an internal discipline of identifying: this particular category of patents costs that much across the extra process, whereas this particular category of patents costs us much less to process? Do you have some sort of internal discipline to assess your cost structure that way?

Mr Noonan —Ms Beattie mentioned the productivity component of what we do. That does vary from discipline to discipline. Broadly speaking, we allow different periods of time in our planning processes.

Senator CORMANN —I do not know if you are answering my question. I have a very specific question. We now understand how you make sure that you can recover your costs. Presumably you would have a clear indication as to which patent application, in general terms, would cost more than another category of patent application. Do you have any sort of understanding as to what a particularly expensive patent application would invariably be vis-a-vis those that would be cheaper?

Mr Noonan —At the technology level, in our planning calculations we weight them differently according to their average complexity and length of time to deal with it.

Senator CORMANN —If I were to ask you how much a patent application in the biomaterials area, in general, would cost you on average, would you be able to tell me that?

Mr Noonan —Not offhand. We could try to give you an estimate.

Senator CORMANN —It would be very much appreciated if you could do that on notice. Thank you.

Senator HEFFERNAN —It is very hard to interpret the bureaucratic speak, but we will try to come to some plainer language. In the Family Court it does not matter whether the family is arguing over $1 million or $1 billion. As I understand it, there is a filing fee which is common. Do you have that sort of arrangement?

Mr Noonan —Yes, we do.

Senator HEFFERNAN —If I was to come along with an invention that was going to get me $1 million or whatever and he came along with one that was going to get him $1 billion, then he would pay the same.

Mr Noonan —That is correct.

Senator HEFFERNAN —That is easier to understand than all the other stuff that you were going on about. So you do not have an hourly rate or any real cost recovery of charges.

Mr Noonan —The fees are the same for each application.

CHAIR —Mr Noonan has already answered that. It would assist matters if you listened to the answers.

Senator HEFFERNAN —I am hearing the answers. It just seems like a stupid idea.

CHAIR —It does not seem to me that you are listening.

Senator HEFFERNAN —Ms Beattie, are you any relation of Peter’s, by the way—or have I already asked you that? I know that is out of order.

CHAIR —Senator Heffernan, I have other senators with questions.

Senator HEFFERNAN —As to the proposition that there is some difference between an isolated gene and an in-situ gene, there is no difference.

Ms Beattie —As I said, an isolated gene for which an association with a particular disease results in a diagnostic or a therapeutic is considered an invention.

Senator HEFFERNAN —I implicitly understand that. In the case of BRCA there are three gene patents and a test patent. How the hell can you patent the actual gene, which is the problem with the BRCA1/2? They have actually patented the gene and not the test.

Ms Beattie —As I indicated earlier, they have isolated a gene and they have identified a particular use for that gene. The gene and its use is patentable subject matter.

Senator HEFFERNAN —They patented the actual gene, though, not the test. You think that is a fair thing?

Ms Beattie —They have patented the isolated molecule representing the function which results in a diagnostic or a therapeutic.

Senator HEFFERNAN —I do not want to labour this too much because there is an inquiry, as you know.

Ms Beattie —That is right.

Senator HEFFERNAN —I think the proposition that you can take a patent out on Senator Abetz’s bits and pieces is pretty amazing.

Senator ABETZ —Nobody would want them.

Senator HEFFERNAN —I think the great danger to the human race in all of this is the same danger that we have just seen in the collapse of the financial world—that this becomes a river of gold because these things become tradeable. For instance, if Genes Technology Australia go bust because I have asked them the question, ‘What happens to all the patents,’ and they say, ‘They just go on the market like shares,’ that is a quaint system of dealing with the human body. We will come to that also at another time. Has any of what you have just told me about—the fact that you can patent a human gene and say that it is different from the gene that is in the body because you have got it isolated—been tested in court, or do we do that by convention?

Ms Beattie —We do that based on the legal precedent that has been established over time. There has not been a legal case in relation to that specific issue that you are asking about.

Senator HEFFERNAN —What is the legal precedent?

Ms Beattie —The issue about a discovery for which a new and useful result has been identified is patentable subject matter.

Senator HEFFERNAN —That has been to court and has been tested to set the precedent?

Ms Beattie —It is an NRDC—National Research and Development Corporation—decision that has set that.

Senator HEFFERNAN —Has it been to court and been tested? It has not?

Ms Beattie —The issue of the isolated gene sequence for which an industrial use has been identified? No, there has not been a legal case in Australia.

Senator HEFFERNAN —Are you familiar with the lady who is now in the US who wanted to get the second opinion on her BRCA1 test and who could not get a second opinion because she was restricted by the patent of Myriad?

Ms Beattie —Not with the particular case that you are alluding to.

Senator HEFFERNAN —I will just recall it for you. Genae Girard received a diagnosis of breast cancer in 2006. She knew she would be facing medical challenges and so on. She did not expect to run into patent problems. She took the genetic test to see if her genes had increased risk of ovarian which might require the removal of ovarian. The test came back positive, so she wanted a second opinion from another test, but there was no second opinion. The decision by the government more than 10 years ago—this is in the States—allows a single company, Myriad, to own the patent on the two genes. This is not on the test but on the actual genes. As you know, most medical people here, including in Adelaide, Melbourne and Sydney, are intimidated and terrified by this stuff. We will give examples in another place at another time of where they have been completely intimidated by litigious letters when they want to make some meaningful contribution to research. This woman has now filed a lawsuit against Myriad. Is that the first time that has happened? You do not know the answer to that?

CHAIR —I think you can ask the department about what is happening in Australia concerning the department.

Senator HEFFERNAN —That is fair enough. The whole hurdle that we have got to jump is—

CHAIR —Is there a question here for the department?

Senator HEFFERNAN —I now have a series of questions. On or about 28 September 1992 IP Australia granted to Chiron Corporation Australian Patent No. 624105 for an invention entitled NANBV diagnostics and vaccine. I have some questions in respect of this patent. How long did the patent examiner or examiners examine the patent application?

—In 1992?

Ms Beattie —The examination was comprehensive. Objections raised included the manner of manufacture and lack of inventive steps. All objections were overcome by substantial and persuasive argument provided by the attorney. Two sets of amendments were filed in November and December 1991. The patent was comprehensively examined according to the law as it existed at the time and based on the technology as it existed at the time, including amendments being filed in order to overcome the objections raised by the examiner.

Senator HEFFERNAN —How long did all of that take? Was it a day, a week or half an hour?

Ms Beattie —No, it would be months.

Senator HEFFERNAN —Can you take that on notice?

Ms Beattie —I will just see if I can find it first.

Senator HEFFERNAN —It might speed up the process.

Senator Carr —I would just like to ask a procedural question here. In terms of the normal operations of an estimates committee, I cannot recall an occasion where officers were asked to comment on the actions of a department.

Senator HEFFERNAN —With great respect, this is not a comment. I am asking how long it took.

Senator Carr —You are seeking advice on the actions of a department from 1991, which is a fair while ago.

Ms Beattie —That information is available on our search database, called AusPat. It will give you the full chronology of that patent, including when the examination was requested, when the first report was issued and when it was ultimately granted.

Senator HEFFERNAN —What was the cost of the patent examination to IP Australia?

Senator Carr —In 1991?

Senator HEFFERNAN —In 1992.

Ms Beattie —As previously indicated by the Director General, we do not do our cost recovery on single applications. We look at all the costs involved in the patent examination area and then at the number of applications that we are likely to receive over the period of the cost recovery and we estimate those costs based on full cost recovery.

Senator HEFFERNAN —That is a very good bureaucratic answer, but it does not say anything. I would like these answered in great detail.

Ms Beattie —I do not think we can give you a response in terms of how long it took to examine that particular application and what the cost was.

Senator HEFFERNAN —Can you come back in great detail, in the required time of the committee, with how much IP—

Senator Carr —You cannot ask that. The officer has given you an answer.

Senator HEFFERNAN —No. I am putting these on notice, with great respect.

Senator Carr —You can put them on notice if you like, but your answer will not be improved. The answer will say that it has been answered on the day.

Senator HEFFERNAN —Just to get an idea of what we do and do not know, how much did IP Australia receive in fees between the time of the filing of the patent application and the date of the acceptance of the grant of the patent?

Ms Beattie —I would have to look at the number of claims that were accepted to be able to give you that answer.

Senator HEFFERNAN —Obviously we need to put these on notice. Can you give me the date of the sealing of the patent and the date of the expiration of the patent?

Ms Beattie —We can give you that.

Senator HEFFERNAN —I will assist the committee by putting four pages of very complex questions on notice and I would be delighted if you could answer them.

Mr Noonan —We will take all of those questions on notice and do our best with them.

Senator HEFFERNAN —Including those two.

Mr Noonan —I must tell you that over two decades of time there are a number of questions, including one or two that you have asked already, that it would simply not be possible to answer.

Senator HEFFERNAN —My point is that most Australians, and in fact most people on the planet, do not understand that we have let a bunch of bankers get into the act—and I have talked to—

CHAIR —Is there a question?

Senator HEFFERNAN —Yes, there is a question. Gene Technology Australia held all our public laboratories in Australia to ransom with a letter of demand, which they have since walked away from, sacking the board and all the rest of it. And it was said they have nothing to worry about. They have plenty to worry about and so have you fellows. This is what we have allowed to happen, without even knowing about it, and most people’s jaws hit the ground when they understand that we have allowed a bunch of people who are going to trade these things as financial instruments to patent the body.

CHAIR —Senators to my left are waiting to ask questions.

Senator HEFFERNAN —My question is: how is it that a naturally occurring gene in our body can be described as an invention?

Mr Noonan —I do not think that I can add to the answer that Ms Beattie has already given or to our submission that we made to the community affairs committee, which discussed this issue in detail.

Senator HEFFERNAN —It is a discovery. It is not an invention. We will see you in another place at another time.

Senator CAMERON —I am not an expert on patent laws. This is the first time I have ever been involved in a discussion of any length about it. What is the relationship between Australian patent law and the US patent law?

Ms Beattie —Patent laws are jurisdiction based, so each has its own specific requirements. There are some general principles and requirements that are common to all patent laws around the world. They are that it needs to be novel, inventive and have an industrial application. They are the key ones. There are some nuances within the various jurisdictions. A patent granted in Australia does not necessarily mean that it will be granted in the US, for example.

Senator CAMERON —I am just looking at some stuff on the web here from the US. The same debate is taking place in the US on this issue. How long has this debate about the patenting of genes been going on in Australia?

Ms Beattie —There was a debate initially when biotechnology started to be a prominent area of technology. There was a great deal of debate around the world in the early 2000s. The ALRC review was part of the Australian debate.

Senator CAMERON —In terms of the US position, there is a debate about multiple patents and different parts of the same genome sequence and whether you can patent the gene fragment, the gene and the protein. Is there a debate on that or is that settled in Australia?

Ms Beattie —Generally when a patent is filed the first inventor to isolate the particular gene sequence and find an association will then also claim the coding protein, any fragments et cetera. So there is a much broader claim based on the extent of invention that they can show.

Senator CAMERON —Also in the US there are four different tests in terms of patenting genes, gene fragments, SMPS, gene tests, proteins and stem cells. They say first you have to identify a novel genetic sequence. Secondly, you have to specify the sequence’s product. Thirdly, you have to specify how the production functions in nature as its use. Fourthly, you have to enable one skilled in the field to use the sequence for its stated purpose. Are they the same tests that we apply here?

Ms Beattie —In general principles, yes.

Senator CAMERON —The argument I see is that some scientists are arguing that by allowing patents you stop either other research or the public good from having access to this invention. Has that debate been analysed within IP Australia?

Mr Noonan —One of the recommendations of the Australian Law Reform Commission was that there should be an exemption from the Patents Act for research activities, basically to meet the point, which is not specific to gene patents but does apply in gene patents, that often researchers can feel unsure about their freedom to explore innovation if they feel they might trespass on somebody else’s patent. At the moment IP Australia has a law reform proposal out for public comment to introduce exactly such an exemption into the Patents Act in Australia.

Senator CAMERON —Could an Australian researcher come up with some new discovery, invention or however it is described, and then if the US system is more flexible move to the US and patent it there? How then does that apply in Australia? Vice versa, you could have an American scientist seek a patent in Australia. Is that the normal process?

Mr Noonan —There is a high degree of uniformity between the basic principles for the patent systems, but if one country were to allow the patenting of certain activities and another country was not, then all the incentives would be to operate within the country that offered the patent protection.

Senator ABETZ —At page 239 of the portfolio budget statement, the last line has a figure of $2,223,000 for 2008-09 in parenthesis. I read that as a deficit, a shortfall, a loss?

Mr Noonan —That is correct.

Senator ABETZ —It is estimated for 2009-10 that that will in effect more than double that loss?

Mr Noonan —That is correct.

Senator ABETZ —Can you explain to us the reason for that loss? I assume, seeing that it appears in the portfolio budget statement, that Mr Tanner ticked off on it.

Mr Noonan —The main reason for the loss this year is the impact of the global financial difficulties on IP Australia. As I mentioned, we are a cost-recovery agency. Since the additional estimates process, when we were forecasting a $10 million surplus for this year, estimated revenue for this year has declined by $7.7 million. That is a large component of the change in position for this year. Also, at the same time we are faced with a stock of patent applications that need to be addressed. We are pursuing a medium-term strategy of continuing to engage patent examiners so that we can reduce that backlog during a time when our work is a little bit quieter, so that when economic activity picks up again we will be well placed. That is adding to our costs for patent examiners, in particular where we have continued to recruit. The government has taken the position that to dip into the reserves of IP Australia would be an appropriate course in order to enable those medium-term strategies to continue.

Senator ABETZ —It would be an appropriate—

Mr Noonan —It would be an appropriate course of action to enable those medium-term strategies to address our workload to continue even during a time of economic difficulty.

Senator ABETZ —If I go to page 224 of the PBS, the agency resource statement, and I look at the issue of departmental appropriation, am I right that that is pretty well halved?

Mr Noonan —That is correct. It is about all of our departmental appropriation. We are primarily a cost-recovery agency, so this is only a small fraction of our overall funding. This is primarily interest that we earn on our accumulated surpluses. What you see there is basically the reduction in interest rates during the course of this financial year.

Senator ABETZ —Are you able to pass any comment on the Australian-US Free Trade Agreement as it applies to generics coming into the Australian market?

Mr Noonan —That is a very broad question. Can you be a bit more specific?

Senator ABETZ —Does the legislation that we passed underpinning the Australian-US Free Trade Agreement in, was it 2004, or 2003—

Mr Noonan —The agreement was in early 2000. But the—

Senator ABETZ —We then had domestic legislation?

Mr Noonan —Yes, we had the relevant domestic legislation already allowing, for instance, for the extension of pharmaceuticals patents. We had that legislation since 1998.

Senator ABETZ —After that there were some amendments dealing with market entry by generics before the patent expired?

Mr Noonan —There were essentially no substantial amendments to the legislation in the light of the free trade agreement.

Senator ABETZ —That does not ring any bells? What about the amendments that Mr Mark Latham was at the time pursuing. Does that ring a bell at all?

Mr Noonan —It was a different issue, I think. I might ask Ms Beattie if she recalls.

Ms Beattie —As I recall, there were amendments made which required that certificates be provided to TGA that they were not infringing a patent and also that the patent holder was not pursuing legal action simply as a threat to entry. That is my recollection.

Senator ABETZ —How does that compare to the regime in the United States and the United Kingdom?

Ms Beattie —I do not believe those certification requirements exist in those jurisdictions.

Senator ABETZ —So it becomes easier for these generics to come into the Australian market than it would, vice versa, into the US and UK markets? Is that correct?

Ms Beattie —Sorry, could you repeat that question?

Senator ABETZ —Does the Australian regime make it easier for the generics to come into the Australian market as opposed to other generics into the US and the UK markets?

Ms Beattie —The generics would have to be approved by TGA. I think those requirements apply during the TGA approval process, don’t they? So I do not think it matters whether they are coming or whether it is an Australian generic seeking approval through TGA. I am not qualified to speak on—

Mr Noonan —I might add we are not aware of this particular issue that you are raising.

Senator ABETZ —Time has slipped by substantially. I will add that to the questions I will put on notice.

Mr Paterson —Before you do put it on notice, I think that the issue is a Therapeutic Goods Administration issue, not a patent office issue, so in putting them on notice you should put them on notice to the health portfolio.

Senator CAMERON —As I understand it, the debate on pharmaceuticals at the it was about extending the American patent as part of the Australia-US Free Trade Agreement. Part of the argument went: if you changed the colour of the pill, then you could maintain your patent under the American law. There was an argument about stopping that. Is there anything under the free trade agreement that relates to patent law?

Ms Beattie —There is a whole chapter that relates to intellectual property in the FTA.

Senator CAMERON —I will just let you know that I may have some questions on notice on that as well.

Senator HEFFERNAN —I understand that this law was the first of its kind; is that your understanding? It has been organised by the American Civil Liberties Union.

Mr Noonan —Yes, this is a challenge to US patent law, and I understand it has constitutional implications. So, as to its direct application to Australian patent law, we will just have to wait and see.

Senator HEFFERNAN —My understanding is that South America does not recognise this patent regime; is that your understanding? I think we have been given that evidence.

Ms Beattie —We see all these pilot TRIPs; I think that is what you are alluding to. They do comply with the TRIPs requirements. It would appear they do have an exclusion on biological materials.

Senator HEFFERNAN —That is just a decision that Australia could take—the same as they have taken? Or are we different in that we are obliged by convention under the free trade agreement to agree with the US patent?

Mr Noonan —There is no specific provision in the free trade agreement that deals with gene patents.

Senator HEFFERNAN —Could we decided to say, as did the southern parts of the continent of America, ‘We are not interested if you have got a patent on brachial 1’, just like that with the stroke of a pen?

Mr Noonan —I think the relevant restriction would be that an area of technology could not be excluded because of the provisions in TRIPs, so we would have to assess exactly what was proposed to remove from the—

Senator HEFFERNAN —In, say, Argentina or Brazil or somewhere, there is not the restriction on research. I agree that we need to do something for the people of Westmead Hospital, Peter McCallum and Adelaide et cetera, because they are absolutely restricted by a monopoly. Gene Technologies Australia—

CHAIR —Senator Heffernan, what you are about—

Senator HEFFERNAN —have said that the only reason we are doing these tests in Australia is that they discovered Myriad Genetics breaching one of their patents so they have come to a legal settlement that allows them to do the brachial tests in Australia, otherwise they would have had to be sent, like Japan, back to America. This is all stuff that has never been tested by law; would you agree?

Mr Noonan —Our provisions and the approach of IP Australia are consistent with the approach adopted by other major—

Senator HEFFERNAN —But it has never been tested at law.

Mr Noonan —There has been no Australian case, specifically.

Senator HEFFERNAN —That is right. It has never been tested at law. As you know, in Europe it has been tested. It was a split decision on a technicality. People of dubious extraction over there are paying four or five times the numbers—

CHAIR —We are running late.

Senator HEFFERNAN —I appreciate your indulgence. So we are not restricted by the free trade agreement. If we wanted to, we could actually say, ‘Forget about it.’

Mr Noonan —As I mentioned before, you would have to look at exactly what you propose to excise. There are limits on what you can remove from the coverage of the Patents Act. They are imposed by the TRIPs—

Senator HEFFERNAN —Would you agree that under this convention, under this present arrangement—

CHAIR —No, Senator Heffernan.

Senator HEFFERNAN —there is a danger that you absolutely restrict and intimidate public laboratory research into an area where there is patent on a human gene which in good faith the public laboratory wants to investigate?

Mr Noonan —I think the Patents Act is well equipped with its provisions through compulsory licences and through Crown use to deal with any situation if it arose, but as far as we know no such situation has ever arisen in Australia.

CHAIR —Thank you to IP Australia for their assistance today.

[3.38 pm]

CHAIR —Thank you. I now call witnesses from the Department of Innovation, Industry Science and Research for outcome 1.

Senator Carr —Can I just indicate that I am obliged to attend a cabinet meeting at 4.15 today. I advise the members of the committee that, if there are specific questions that they would like me to attend to, I would appreciate it if any matters were put to me directly now. I will be back later this evening but, just as a matter of courtesy, I would like to inform the committee that Senator Conroy will be replacing me at the table.

CHAIR —Thank you. Up until 4.15 pm if any members want to ask questions directly of the minister, can they get them in first? I take it that, if there is a really urgent question, we can go back to it later on.

Senator RONALDSON —I would like to ask some questions in relation to the business enterprise centres? I understand that in the portfolio budget statement last year it said that the BECs are to report twice yearly on the increase and expansion of the services they provide—that is, those services previously provided by the BECs. Are there any BECs which failed to meet the twice yearly reporting requirement?

Mr Peel —No, there are no BECs that have failed to meet the reporting requirements.

Senator RONALDSON —Is the minister provided with a copy of these reports?

Mr Peel —Not usually. We would brief the minister on any issues that arose from them.

Senator RONALDSON —Why would the minister not be provided with a general brief in relation to the performance of these BECs?

Mr Peel —The question you asked me, I think, was whether the minister is provided with a copy of each of the reports, and my answer was: ‘No, not normally. We would brief the minister on any issues that arose from the reports that we thought needed to be drawn to his attention.’

Senator RONALDSON —You have reports from all these BECs pursuant to the twice-yearly requirement?

Mr Peel —Yes.

Senator RONALDSON —That relates to both the increase and expansion of their services over and above what they were performing—

Mr Peel —Yes, we have received reports from the BECs against the contractual arrangements that they have with us to provide additional services.

Senator RONALDSON —Is the contractual arrangement in the terms of the portfolio budget statement from last year that they are to report twice? My understanding is that the portfolio budget statement said:

BECs to report twice yearly on the increase and expansion in the services they provide … over those services previously provided by the BECs …

Mr Peel —That is correct.

Senator RONALDSON —Is that the nature of the report?

Mr Peel —That is correct.

Senator RONALDSON —Are you able to table those reports in relation to those BECs?

Mr Peel —I do not have them with me.

Senator RONALDSON —I appreciate that.

Mr Peel —I would have to take that question on notice just to check whether I can do that.

Senator RONALDSON —What would be a situation where you could not?

Mr Peel —I do not know, but there may be some confidential information within those reports, so I can take the question on notice and get back to you on it?

Senator RONALDSON —What are the performance indicators that the department has set to recognise ‘increase and expansion’?

Mr Peel —The contractual arrangements require that the BECs deliver a range of services. They are required to report back to us on what range of services they have provided to how many businesses over and above that which they did previously.

Senator RONALDSON —We might need to take them one at a time. What were the performance indicators that the department has set to recognise ‘increase’?

Mr Peel —As I mentioned, there are a range of services that each BEC has to provide. They include mentoring for new business, planning diagnostics, planning advice and development services, advice on loans and banking products, marketing plan preparation, advice on legal services, accounting services, leasing guidance, regulatory compliance advice and staff training programs.

Senator RONALDSON —How are you benchmarking that as against the services they previously provided?

Mr Peel —As I said, the contractual arrangements indicate that they need to provide these over and above what may have been provided previously and we monitor that. In relation to each report, I have figures here of the amount of services that have been provided overall by the BECs during the first reporting period. We are satisfied from those reports that they are all performing appropriately.

Senator RONALDSON —Could you take that on notice and perhaps provide me with a copy of the criteria upon which they are benchmarked?

Mr Peel —As I said, there are a range of services they have to provide in their reporting to us—

Senator RONALDSON —Perhaps if you could just provide me with that information in due course.

Mr Peel —I have already outlined them to you.

Senator RONALDSON —You just read out some performance criteria; perhaps you could provide me with that information in writing, if you would not mind. What is the difference between ‘increase’ and ‘expansion’ from a definition point of view?

Mr Peel —’Increase’ would mean that they are actually providing more services and ‘expansion’ would be increasing the range of business and services being provided.

Senator RONALDSON —What are the criteria for an expansion? In light of that $42 million, have they been required to expand into other areas?

Mr Peel —As I said, each of the contractual arrangements with each of the BECs spells out what they are required to provide during the reporting period. We examine each one of those contracts to make sure that they have done that at the end of the reporting period.

Senator RONALDSON —Under that contract were they required to expand into certain areas or just expand those businesses that they were dealing with prior to the allocation of these funds?

Mr Peel —Normally each BEC would have a particular geographic area that it is responsible for.

Senator RONALDSON —Was the expansion geographic or was the expansion the range of businesses that they were required to provide increased services to?

Mr Peel —Essentially the number and range of businesses.

Senator RONALDSON —As to those performance indicators, if a BEC was providing services to four businesses, did the performance indicators say that they had to double that, treble that or what were the performance indicators?

Mr Peel —I would have to take that on notice and look at each of the contractual arrangements.

Senator RONALDSON —Under those contractual arrangements did you actually look at what the range of services were for each BEC and then provide a separate contract for each of those with different performance indicators?

Mr Peel —We provided a contract to each BEC outlining the range of services we expected them to provide during the period.

Senator RONALDSON —Did you have individual contracts with each of those BECs in relation to what their performance requirements were going to be?

Mr Peel —Yes.

Senator RONALDSON —In that contractual arrangement did you stipulate the increase or the expansion that you required in relation to numbers of small businesses or businesses that were to be contacted or included in their operations?

Mr Peel —There was an expectation of expansion. I would have to take on notice the exact requirement that was specified in the contract.

Senator RONALDSON —If you could take on notice, please, for each particular contract what the performance indicators for an increase and expansion for each of those contracts were? Are there any BECs which have failed to increase or expand their services?

Mr Peel —There are no BECs that we have issues with.

Senator RONALDSON —That might be right, but are there any BECs which have failed to increase or expand their services?

Mr Peel —I do not believe so.

Senator RONALDSON —Do you want to take that on notice, or is that a no?

Mr Peel —I will take it on notice.

Senator RONALDSON —If you are not sure, how could you say earlier on that you were satisfied with the performance of all these BECs against the criteria of the portfolio budget statement?

Mr Peel —We have received reports from all the BECs and we have been happy with their performance to date.

Senator RONALDSON —But you do not know whether they have increased or expanded their services?

Mr Peel —The requirement was that they do that.

Senator RONALDSON —I put to you that you do not know whether they have. You have taken on notice as to whether or not they have increased or expanded their services but you say they have met the criteria; so which one is it?

Mr Peel —I believe they met the criteria. I think you were asking earlier for the precise specification for each BEC.

Senator RONALDSON —You have not reported back to the minister. Presumably you have not reported to the minister because you do not believe there are any issues with any of the BECs?

Mr Peel —We have not reported any concerns to the minister about the BECs meeting their requirements.

Senator RONALDSON —Have you any concerns about any of the BECs meeting their requirements?

Mr Peel —Not at this stage, no.

Senator RONALDSON —Do the BECs record the logs of the number of small businesses they have assisted?

Mr Peel —Yes.

Senator RONALDSON —Can you just take on notice how many small businesses each BEC is assisting today as opposed to what they were doing prior to the $42 million in last year’s budget?

Mr Peel —Yes.

Senator RONALDSON —I presume that was probably a performance criterion anyway for each individual BEC; was it?

Mr Peel —Yes.

Senator RONALDSON —Is the BEC required to display any signage confirming that they are a BEC or that they receive federal government funding?

Mr Peel —I would have to check the contract, but I do not believe so.

Senator ABETZ —There must be a plaque or something.

Senator RONALDSON —Have you been to one of these?

Mr Peel —I have been to a number of BECs over the years, yes.

Senator RONALDSON —Was there any signage confirming they were a BEC or that they receive federal government funding?

Mr Peel —The signage of course confirms that they are BECs. The question that I thought I was responding to was whether there was signage to say they had received federal government funding. I do not believe that is a contractual requirement.

Senator RONALDSON —I did ask you (a) whether they are a BEC and (b) whether they receive federal government funding. Is there any particular amount allocated for signage?

Mr Peel —I would have to check that. I am not aware of that.

Senator RONALDSON —Do you have responsibility for these contracts yourself or is there a departmental officer under you?

Mr Peel —There is a departmental officer under me.

Senator RONALDSON —Do you know what the number of inquiries registered at each BEC has been over the last 12 months, for example, since this increased funding?

Mr Peel —We have figures on the total number of businesses they have assisted since the funding was provided, but I am not sure that we have the actual number of inquiries.

Senator RONALDSON —Can you take that on notice?

Mr Peel —Yes.

Senator RONALDSON —Do you have details on the number of businesses assisted with each BEC and the services that were provided to each assisted business?

Mr Peel —Yes. I have a list of services, which I went through with you before, and I also have a number of businesses that were assisted against each of those services.

Senator RONALDSON —Given that they are individual contracts, that you benchmarked their performance and that benchmarks are in line with what services they were previously providing, for each BEC can you give me details of the number of businesses assisted and the services provided to each of those assisted businesses?

Mr Peel —Yes.

Senator RONALDSON —Thank you. That is all I have on this matter but I have one further matter.

Senator ABETZ —I would like to ask the minister a few questions before he leaves. Minister, when did you become aware of your need to attend a cabinet meeting this afternoon? We had the same difficulty the last time we met and I would just hate to see this develop into a pattern.

Senator CAMERON —Point of order! I do not think it is appropriate for a cross-examination of the minister in terms of when he was advised about a cabinet meeting.

Senator ABETZ —Of course it is.

Senator CAMERON —It is not.

CHAIR —Can you finish the point of order, please.

Senator CAMERON —I do not think it is appropriate to cross-examine the minister about when a cabinet meeting is on.

Senator CORMANN —It is core business of the Senate estimates.

CHAIR —I do not know that it is core business, but the minister might choose to answer the question.

Senator Carr —I take my responsibility at estimates committees seriously and I always have. If I am called away, it is unavoidable. I would not be leaving under any other circumstances.

Senator ABETZ —We were informed at about 3.40 pm this afternoon. If we had known about your departure at a particular time we may have been able to rearrange some of these questions.

Senator Carr —I have been urging you to stick to this timetable since this morning. You have chosen to spend the amount of time that you have on questions that you have and that is entirely a matter for you. I did draw to the chair’s attention the timetable and the fact that the committee was not following it.

Senator ABETZ —That was on the understanding that you were here. It just seems passing strange—

Senator Carr —I do not think it would make any difference. It is your lack of discipline.

Senator ABETZ —I happen to agree that having you at the table does not make much difference. Usually it is more orderly when you are absent. I think the committee is entitled to an explanation as to why it was only told at 3.40 pm this afternoon that in 20 minutes time you would need to absent yourself. In answering that, can you also indicate to us an anticipated return time?

Senator Carr —I would anticipate that the matters will be concluded by seven o’clock this evening.

Senator ABETZ —In the time left, can I draw your attention to question Nos 1427 and 1431. In a question on 12 March 2009 I asked: on what date did the minister first become aware that Pacific Brands were considering reducing employment levels in Australia and/or closing any or all of their Australian clothing manufacturing facilities? I am told in response:

The government was aware that Pacific Brands had undertaken a strategic review. The government received formal advice of Pacific Brands’ intention on 25 February.

Can we now get an answer as to on what date you as minister—not the government, you as minister—first became aware as opposed to receiving formal advice? I would like an answer to the question put forward by myself.

Senator Carr —The 25th was the date on which I was officially advised of the decisions of Pacific Brands.

Senator ABETZ —That is the formal advice?

Senator Carr —Yes.

Senator ABETZ —When did you first become aware that they were considering reducing employment levels in Australia? What date was that?

Senator Carr —There were rumours that matters were being considered by Pacific Brands.

Senator ABETZ —Were you, for example, told by Pacific Brands to be ready for a formal announcement on 25 February 2009 prior to 25 February 2009?

Senator Carr —There were rumours.

Senator ABETZ —I am not talking about rumours. Did Pacific Brands specifically indicate to you or give you a heads up as to the likelihood of this announcement on 25 February 2009?

Senator Carr —We have been through this before. I have indicated to you that until a company that is listed on the Stock Exchange advises me that there is a formal decision being made then of course no notification has occurred until that point.

Senator ABETZ —I am not asking about official notification.

Senator Carr —It is a very important distinction.

Senator ABETZ —Formal advice is one thing but ‘first become aware’ is a different matter. Indeed, I do know that Minister Garrett, for example, rings people before a government decision is made. They are people who do not have any interest in the shareholdings. I would have thought that the company may well have told you prior to their formal announcement on 25 February that they were going to make such an announcement in a day’s time or—

Senator Carr —We dealt with this at the last Senate estimates.

Senator ABETZ —The answers were most unhelpful. That is why I was reduced to putting questions on notice, and the written answers are just as useless. That is why I have had to revisit it today.

Senator Carr —The formal decision was communicated to—

Senator ABETZ —That is not the question. When did you first become aware that Pacific Brands was considering reducing its employment levels? I am not talking about rumours that you may have picked up around the corridors. I am talking about when you first became aware that this announcement would be made on 25 February 2009.

Senator CAMERON —It was not at the same time the chief executive got that big pay rise, was it?

Senator ABETZ —Be careful; that is no longer the Labor Party’s approach on this issue. They have dropped right off on that one.

Senator Carr —I answered this question at the previous round of estimates. I have answered this question on notice.

Senator ABETZ —No, you have not.

Senator Carr —I do not have anything further to add.

Senator ABETZ —You have not answered it, because most people would agree that first becoming aware of an issue and formal advice are two different things. You have studiously avoided and you still today are studiously avoiding answering the actual question by proffering information that in fact was not sought. Is the Senate going to be favoured with a response to the question of on what date you first became aware that Pacific Brands was considering reducing its employment levels in Australia?

Senator Carr —I have answered that question on numerous occasions.

Senator ABETZ —You have not. I am asking you, yet again, whether we are going to be favoured with a response.

Senator Carr —You already have a response.

Senator ABETZ —I do not. Let us try question 2 in relation to these questions on notice.

CHAIR —I think—

Senator ABETZ —Just before the minister goes, if I may, Madam Chair.

CHAIR —Yes.

Senator ABETZ —It asked: since 1 December 2008, what discussions has the minister, the minister’s office or the department had with Pacific Brands chairman, board members, employees or any form of company representative regarding Pacific Brands future operations in Australia, if any? For each instance, please identify by whom, with whom and on what date? I am given about a 12-word answer, that the ‘government has had a range of discussions with Pacific Brands on a range of topics since 1 December 2008’. I asked for specific dates, whether by you, by your office, by your department, with whom and on what dates. Are you saying that that is a sufficient answer as well?

Senator Carr —Yes.

Senator ABETZ —Operation Sunlight does not seem to be operating much in this government, does it? I have had similar non-answers from Department of the Prime Minister and Cabinet and from the environment minister. This now makes the trifecta. Minister, if I place this question on notice again asking you as with whom you had any discussions, would you tell us?

Senator Carr —Discussions about what?

Senator ABETZ —The topic of my question. I hope that your performances at cabinet are somewhat better than here. Can I indicate to you that it is in no way, shape or form an answer to the Senate to say in response to the question ‘Since 1 December what discussions have you had, your officers had or the department had,’ for you only to respond that the ‘government has had a range of discussions’. We asked by whom, with whom and on what dates. We are entitled to that information, and we request it. If it does not come that may be something that the whole Senate may need to visit. I would have thought the crossbenchers and the Greens would be singularly unimpressed with this sort of non-answer. Are we going to get a response to the specific questions asked?

Senator Carr —I have indicated to you that I was formally advised on 25 February.

Senator ABETZ —That is not in response to question No. 2 that we have moved on to. Please, Minister!

Senator Carr —I have had a range of conversations with the chairman of the board.

Senator ABETZ —Since 1 December 2008?

Senator Carr —No, since 25 February. I have indicated to you that a formal advice was tendered to me on that date, which is extremely important given the stock exchange obligations for listed companies.

Senator ABETZ —But we want to know about informal advice.

Senator Carr —There was no decision made by the board until that time.

Senator ABETZ —We are not talking about decisions; we are talking about first becoming aware that they were considering it. I am not talking about decisions. When did you first become aware they were considering it?

Senator Carr —You are a former minister.

Senator ABETZ —And I used to be responsive.

Senator Carr —You know the difference and you understand that boards may consider a whole range of issues.

Senator ABETZ —That is right.

Senator Carr —They may contemplate a range of options.

Senator ABETZ —That is right.

Senator Carr —They may consider a multitude of opinions.

Senator ABETZ —That is also right.

Senator Carr —There may be reports in newspapers.

Senator ABETZ —That is also right.

Senator Carr —There may be all sorts of speculation.

Senator ABETZ —That is also right, but it does not answer my question.

Senator Carr —But it is not the job of a minister to comment upon these matters until the board has made a decision. The board is obliged to report that decision to the stock exchange, which occurred.

Senator ABETZ —And now that the board has made the decision and reported it to the stock exchange, I am inquiring as to when you first become aware—because the issue of reporting to the stock exchange is no longer relevant. You can now tell us when you first became aware that the board was considering this issue. Out of your very own mouth and very own explanations you have now indicated to us that you can comment on that, and I am asking you to comment on it.

Senator Carr —Thank you for your advice. I will give the matter some more thought.

Senator ABETZ —That is just outrageous. In relation to question No. 2, are we going to be told what discussions you had or if you had discussions with representatives from Pacific Brands and on what date, since 1 December 2008? Are we going to be favoured with a response to that?

Senator Carr —I have indicated the answer that I have given you.

Senator ABETZ —The answer is that the ‘government has had a range of discussions with Pacific Brands on a range of topics since 1 December 2008’. That is completely non-responsive to the question of whether it was by you with a chair, with board members, with other people of Pacific Brands. Why can’t you tell us with whom you, your office and the department have had discussions? We are not asking, at this stage, about the detail of those discussions, just whether those discussions have taken place and on what date. You are not providing any answers in relation to that.

Senator Carr —I have a range of conversations with a range of firms.

Senator ABETZ —Yes, I know that. I am only asking about Pacific Brands.

Senator Carr —I like to pride my office and the department on the confidentiality of those conversations. We will not secure the advice the government needs if people believe that any conversation they have with the government will be the subject of broader speculation or comment. I repeat: it is important for us to be able to have confidential conversations with companies, which we do on a regular basis.

Senator ABETZ —That is not in dispute. What surely is not in dispute at these estimates is that you are to give an account of whether or not you have had discussions with company representatives and on what dates. What those discussions may relate to, I fully understand that there are sensitivities, but those sensitivities in relation to Pacific Brands are now over. The decision has been made and reported to the stock exchange, so we can therefore easily traverse the discussions between 1 December 2008 and 25 February 2009. Can we not do that? What is the problem with canvassing that? There is no commercial-in-confidence. Everything is out in—

Senator Carr —That is where you are wrong.

Senator ABETZ —Why?

Senator Carr —I am not going to all those—

Senator ABETZ —Why?

Senator Carr —I have indicated to you—

Senator ABETZ —You are wrong and you are not going to explain yourself. That is about as pathetic as a minister can get in these estimate proceedings. Just to say, ‘It is wrong, but I am not going to provide you with an explanation as to why you are wrong.’ This is indicative of Operation Sunlight at its very best. We can now take an afternoon tea break, if you like.

CHAIR —Yes, certainly. We will have the afternoon tea break and return at 4.25 pm with the Department of Innovation, Industry, Science and Research.

Proceedings suspended from 4.09 pm to 4.25 pm

CHAIR —We will resume. We are continuing to examine outcome 1 with the Department of Innovation, Industry, Science and Research.

Senator ABETZ —I think we are still in the corporate general overview area. Mr Paterson, I want to ask you about answer No. 14271431 that was tabled and presented to the Senate. Without knowing what changes may have been made, is that answer in the exact form it came from the department to the minister’s office?

Mr Paterson —I could not answer that question. I do not know the answer to the question.

Senator ABETZ —Please take that on notice.

Mr Paterson —Yes.

Senator ABETZ —I would be most disappointed if the department had provided us with this sort of an answer in relation to question (2), where I asked the department: since 1 December 2008, what discussions did the department have with Pacific Brands chairman et cetera and on what dates? Mr Paterson, what discussions has the department had with anybody from Pacific Brands since 1 December 2008?

Mr Paterson —That is a question I would have to take on notice. Senator, you have a response to a question on notice. You have asked me whether there is any difference between what we put forward and what was in that answer to the question on notice. I have already said that I will take that on notice.

Senator ABETZ —I know that we do not have any comeback from that, and that is your right. But, unfortunately, it is indicative of a growing trend—I do not blame you for this, Mr Paterson—of the culture within this government of non-answers. Chair, I wonder whether it might be possible to make a phone call to the Chief Scientist to ascertain her availability, let us say, at 6.00 or 6.15 pm this evening. Being largely an independent person, I would imagine that her area of responsibility will not require the presence of Minister Carr or, indeed, a minister—and we are currently lacking a minister, let alone Senator Carr. I just wonder whether some inquiries could be made and the committee advised in due course.

CHAIR —In that case, I think we would need to have a private meeting to rearrange the schedule.

Senator ABETZ —If it could be agreed without any objection. If the Chief Scientist were not available, that answers that, and we can move on without the need for a private hearing. But I also place on notice: when was the absent minister, Kim Carr, first advised of his need to be at a cabinet meeting this afternoon and when did he first advise this committee?

Senator PRATT —I do not think this question is appropriate for these witnesses.

Senator ABETZ —That is why I am putting it on notice, Senator Pratt. You might want to come back this evening when we deal with your Southern Seas issue, which you tried to raise before lunch. I think I know what is happening with the program. I ask that those questions be put on notice as well. For the record, it is completely unacceptable for us now to be without not only the portfolio minister but any minister. Given all the days that cabinet can meet—and it might be a specific issue relating to the minister; I accept that—why such an issue could not be dealt with at lunchtime, dinner break or in the early morning, quite frankly, beggars belief and is indicative yet again of the way that this Senate is being treated by this government. Rather than putting this question to the minister, I will ask you, Mr Paterson: does the minister’s chief of staff have an office dedicated to her in the department?

Mr Paterson —No.

Senator ABETZ —Is she a regular visitor to the department?

Mr Paterson —Not an infrequent visitor. We make space available when she attends.

Senator ABETZ —When you make space available, that suggests that she works from there, in the department.

Mr Paterson —There are occasions when there may be a range of meetings with officers of the department and it is more convenient for officers to meet with the chief of staff at the department rather than the reverse.

Senator ABETZ —Does that amount to about one day per week?

Mr Paterson —No, it does not.

Senator ABETZ —Less than, more than?

Mr Paterson —Substantially less than.

Senator ABETZ —Did the minister give a speech at Questacon on the day of the budget?

Mr Paterson —Yes.

Senator ABETZ —Was that after the budget had been delivered?

Mr Paterson —No. It was prior to the budget.

Senator ABETZ —At what time?

Mr Paterson —I do not recall precisely the time, but it was in a period immediately preceding.

Senator ABETZ —What was the criteria on which attendees were selected to attend?

Mr Paterson —I would have to take that on notice. It was a broad spread of portfolio interests. There was a lockup requirement applied to that gathering. All people who attended that event attended on the clear understanding that they had no electronic devices on their person—they were all handed in—and no-one was allowed to leave the lockup until after 7.30 pm on budget night.

Senator ABETZ —Is a transcript of that speech available?

Mr Paterson —No.

Senator ABETZ —The minister is usually pretty anxious to get his speeches up on his website, but I note that this one is missing.

Mr Paterson —It is not something that I would have expected—

Senator ABETZ —Do not worry about what you would or would not have expected. I am making the observation that it is not.

Mr Paterson —I will learn the lesson not to respond to your observations then.

Senator ABETZ —Good; thank you. What would I call this—a forum?

Mr Paterson —No; a briefing.

Senator ABETZ —All right, a briefing. Did that briefing require Questacon to stay open beyond normal working hours?

Mr Paterson —It did not stay open per se. Questacon, as you know, is a science and discovery centre and the vast majority of the people who attend it are schoolchildren. It was not open for public business, but we used it as a venue to host the briefing.

Senator ABETZ —Did the department pay Questacon for that?

Mr Paterson —For it remaining open?

Senator ABETZ —Yes.

Mr Paterson —I do not believe so.

Senator ABETZ —So that would be a cost with security, having staff there et cetera, to ensure that people—

Mr Paterson —I am happy to take on notice the precise details about where the costs were borne in relation to it. I do not believe that we paid Questacon. But Questacon is a division within the department and not a separate legal entity; so it would have been the department paying the department to undertake an activity.

Senator ABETZ —Yes, but Questacon does have a separate budget.

Mr Paterson —Each division within my department has a separate budget, but I still—

Senator ABETZ —I understand that the minister made some highly critical comments about certain elements of, let us call it, the science and research community in his address. Given that he has used a taxpayer funded forum and not provided us with a copy of his speech, we will never know whether that report is true and correct.

Mr Paterson —I was there and I would assert that it is neither true nor correct.

Senator ABETZ —I know other people who were present, whom I am more than willing to believe, who have given me a completely different account of the events on that evening. So we will just have to agree to disagree, I think, at this stage. I do have other questions—

Mr Paterson —I hope there is no other inference there, Senator.

Senator ABETZ —The suggestion, vice versa, is that—

Mr Paterson —I do not think that the people who were—

Senator ABETZ —the inference is that somebody else, whom I know very well, has given me a misreport. That is why both of you will have to accept that we will have to agree to disagree. If you want your honour completely maintained in this, as I can fully understand you would, of course, the other person who gave me a contrary report would also be insisting on their honour being maintained.

Mr Paterson —Mine is on the record and public.

Senator ABETZ —Somebody else does not want to encounter the sort of vindictiveness of this government that is already on the public record in relation to Mr Combet and the ETS—and the list goes on and on. This person, quite cleverly, does not want to be identified, because of the culture that has developed around this government. I am sure I do not need to remind anybody of the finding of the recent poll about a certain mean streak developing in this government.

Senator Conroy —Senator Abetz, I think you are ranging very widely.

Senator ABETZ —You are here, Minister, 12 minutes late.

Senator Joyce interjecting—

Senator Conroy —Senator Joyce, it is always a pleasure.

Senator Joyce interjecting—

CHAIR —Order!

Senator ABETZ —Minister, can you explain why you are not needed at a full cabinet meeting this afternoon?

Senator Conroy —I would always attend a full cabinet meeting, Senator Abetz.

Senator ABETZ —So it is not even a full cabinet meeting; that is interesting. What else can you tell us about this meeting that Senator Carr has been required to attend so urgently?

Senator Conroy —Senator Abetz, you know that is a silly question.

Senator ABETZ —I think it must be a silly question if—

Senator Conroy —Maybe I have been demoted from cabinet and I do not realise it yet.

Senator ABETZ —It is possibly a silly question as to why anybody would want Senator Carr’s attendance at a cabinet meeting—I can understand that—but it is not a cabinet meeting. So we are talking about a subcommittee of cabinet, are we?

Senator Conroy —I am not in a position to comment, because I do not know where Senator Carr has gone to other than that he had another commitment and I am filling in.

Senator ABETZ —No. He told us it was a cabinet commitment; we know that much. You are now—

Senator Conroy —Maybe I have been demoted from cabinet and I do not realise it.

Senator JOYCE —He said that he was going to have the book thrown at him and he was very worried about it.

Senator Conroy —Yes, I am sure he was.

Senator ABETZ —So, clearly, it is not a full cabinet meeting; thank you for that, Senator Conroy. I understand that Senator Ronaldson has a few questions.

Senator Conroy —I am pleased to see that you continue to give yourself a serious cross-examination, and you do it very well.

Senator RONALDSON —I am not entirely sure why Minister Carr would tell us that he was required in cabinet, but apparently cabinet is not meeting. So I am a little perplexed as to why he would mislead this committee, particularly given the importance of estimates. He said that he was going to a cabinet meeting and, clearly, he is not in a cabinet meeting. When he gets back, I presume that others will be asking appropriate questions.

CHAIR —That is a very interesting observation, Senator Ronaldson. Do you now have questions?

Senator RONALDSON —Madam Chair, I am not so sure that you are going to ask the minister a question, but he clearly misled this committee.

CHAIR —I will then.

Senator RONALDSON —Minister, I want to refer to an announcement early this year from the minister for small business that a bank complaints clearing house would operate from within his office. Apparently, this clearing house was designed to assist small business operators having difficulty obtaining finance from local bank branches. Complaints were apparently registered with the minister’s office and forwarded to the Australian Bankers Association. Ms Weston, do you have responsibility for this? How many complaints has the clearing house received to date?

Ms Weston —I wrote this earlier on one of my pages here. I think that, as at 27 May or around that date, some 57 complaints had been provided to that clearing house.

Senator RONALDSON —When did the clearing house start?

Ms Weston —It would have been around the time that the minister held the banking roundtable in Melbourne. Bear with me, as I have that here. That was in March. As I recall—if I am wrong, I will correct this later—that was one of the announcements from the communique that was released at that time.

Senator RONALDSON —Was that early March, mid-March or late March?

Ms Weston —I have a vague thinking that it was early March, but I will take that on notice.

Senator RONALDSON —Could you give me a month-by-month breakdown of the number of complaints, please.

Ms Weston —I will have to take that on notice, but certainly.

Senator RONALDSON —What involvement has the department had in the clearing house operation?

Ms Weston —It has been run out of the minister’s office, so we have just been kept up to date on what has happened. For instance, in meetings that we have had with the minister, occasionally there has been a discussion about it. But it has been managed largely out of the minister’s office.

Senator RONALDSON —What has he told you?

Ms Weston —We have been able to get details of how many inquiries and so on.

Senator RONALDSON —Is that the limit of it?

Ms Weston —That is all we have needed to know at this point.

Senator RONALDSON —You say that is all you have needed to know. This is a bank complaint clearing house, operating out of the minister’s office. The department knows nothing about it, except the number of complaints.

Ms Weston —We have had discussions, for instance, about the sorts of complaints there are. I was at a meeting—

Senator RONALDSON —So what are the sorts of complaints?

Ms Weston —Some of them are that people have not been able to get credit when they thought they might have been able to.

Senator RONALDSON —That is actually why it was set up, wasn’t it? So I am not surprised that that is the nature of the inquiry.

Ms Weston —Some other people are just generally distressed about the state of their businesses, as I understand it; so there is that sort of avenue as well.

Senator RONALDSON —Of those 57, how many were having difficulty obtaining finance from their local bank branches?

Ms Weston —I will have to take that on notice.

Senator RONALDSON —Does a clearing house operation monitor the outcomes of its referrals to the ABA?

Ms Weston —I understand that aggregate data is coming back to the minister’s office on how those referrals to the ABA are going.

Senator RONALDSON —Aggregate data from where?

Ms Weston —From the ABA.

Senator RONALDSON —Have you seen that?

Ms Weston —I have not seen it personally.

Senator RONALDSON —Has the department seen it?

Ms Weston —I would have to take that on notice.

Senator RONALDSON —Mr Paterson, I find it utterly bizarre that we have a clearing house operating out of the minister’s office that the department knows virtually nothing about except that there have been 57 complaints. Doesn’t it cause you some concern that you are not being briefed or having any involvement in this matter?

Mr Paterson —No, it does not.

Senator RONALDSON —It does not?

Mr Paterson —No. This matter was established by the minister in the minister’s office. We do not supervise minister’s offices; we never have and never will. We have been informed in discussion with the minister’s office. There are regular meetings between Ms Weston, other senior officers of the department and the minister. I am not concerned that we are unaware of the substance of the issues that are being raised, which is—

Senator RONALDSON —You are unaware of a lot more than the substance of the issues. Was this announcement put out by way of press releases?

Ms Weston —There was a communique—I think that is what it was called—that came out after the minister had a banking roundtable with the banking industry and industry associations.

Senator RONALDSON —Who prepared that?

Ms Weston —It was prepared at the time of the meeting with the banks.

Senator RONALDSON —Was the department present at this meeting?

Ms Weston —The department did go to the roundtable, yes.

Senator RONALDSON —Did the communique come out under the name of the department? Were any press releases put out under the name of the department? Does the department website have any reference to the clearing house?

Ms Weston —Yes, it does. The business.gov.au website refers to it and the communique is located on that website.

Senator RONALDSON —So you have been responsible for communiques, press releases, information on the website—

Mr Paterson —No. That is putting words into the mouth of the witness.

Senator RONALDSON —but you are actually not involved in the operations of this.

Mr Paterson —We have not indicated that we have been involved with press releases and the likes of that.

Senator RONALDSON —But the department was present at this roundtable.

Mr Paterson —But it is not a natural extension from being in attendance at the roundtable that the other things flow.

Senator RONALDSON —Did you assist with the preparation of the communique?

Ms Weston —That was largely done with the minister in discussion with banking and COSBOA—

Senator RONALDSON —Was the department involved in the preparation of the communique?

Ms Weston —I think I stood in a conversation where it was discussed. But it was put together by the minister and his office in consultation with the banking sector and, I think, a couple of the industry representatives.

Senator RONALDSON —Do we know who typed the communique up?

Ms Weston —I will have to take that on notice, but I believe that it was the minister’s office.

Senator RONALDSON —Did they take that away and prepare it, or did they prepare it wherever this—

Ms Weston —I would have to take that on notice. As I said, it was largely something that the minister’s office organised.

Senator RONALDSON —Did you know that the minister was going to make this announcement after the roundtable?

Ms Weston —Yes, I was aware—

Senator RONALDSON —Mr Paterson, would you like to answer the questions? It is a bit hard having a three-way conversation. If you want to answer the questions, please feel free to do so.

Senator Conroy —You are having a one-way conversation at the moment, Senator Ronaldson.

CHAIR —Yes. Senator Ronaldson, people at the table are permitted to confer, just as we have conversations here. Mr Paterson or Ms Weston?

Ms Weston —Can you repeat the question, please?

Senator RONALDSON —I was asking you about the communique and whether you were involved at all in the preparation.

Ms Weston —I was aware that there was likely to be a communique.

Senator RONALDSON —Was that as a result of discussions with the minister’s office prior to the roundtable?

Ms Weston —Yes, that would have been from discussions with the minister’s office.

Senator RONALDSON —When the minister’s office told you what the communique would say, did you have any input into the policy surrounding this clearing house?

Senator Conroy —That goes to advice to government. If you can just rephrase your question fractionally, I am sure that we will be able to get you the information that you are after.

Senator RONALDSON —Were you advised that this would be announced and did you provide any advice to the minister in relation to the clearing house?

Ms Weston —It is hard to recall. The answer is that I possibly could have.

Senator RONALDSON —Possibly could have, or in all likelihood did?

Ms Weston —I just cannot remember the timing about whether there were discussions before or afterwards.

Senator Conroy —I am sure that she is happy to take it on notice and see whether she can—

Ms Weston —I am happy to take it on notice.

Senator RONALDSON —Ms Weston, can you see why I am a little surprised? You were advised that, prior to this roundtable, there would be a communique in relation to a bank clearing house. You have told us that, in all likelihood, you were asked for some advice or you gave some advice in relation to that. You have told us that, after this roundtable, a communique was prepared, you were certainly present when it was being discussed and the department may have had some involvement in its preparation. You have told us that, since then, this has gone onto the website and press releases were put out under the department’s name, unless I am—

Mr Paterson —That is not the case. I made the point earlier: you jumped to a proposition that we had put out a press release. We have not put out a press release.

Senator RONALDSON —Was everything right up until then?

Mr Paterson —Yes.

Senator RONALDSON —Are the details of the communique on the department’s website?

Ms Weston —It is on the business.gov.au website and it is also on the department’s website.

Senator RONALDSON —Have you expressed any concerns to the minister, Mr Paterson, about the way that this matter has been handled?

Senator Conroy —That clearly goes beyond the line of questioning that is permissible at estimates. You are allowed to ask for factual information; you are not allowed to ask about what the content of advice is. The way that you have described your question would go to the content of the advice.

Senator RONALDSON —All right, I will not ask about the content. Have you lodged a complaint at all with the minister in relation to the conduct of this clearing house out of his office?

Senator Conroy —That is the same question and it goes to policy advice to government, and you know that.

Senator RONALDSON —I just asked whether the matter had been raised by Mr Paterson.

Senator Conroy —No, you did not.

Senator RONALDSON —Then I will ask it again: has the matter been raised with the minister?

Senator Conroy —That goes to the issues around advice to government. We will happily take that on notice and, if the minister has any further information that he would like to share with the committee, we will happily do so.

Senator RONALDSON —Where is his representative?

Senator Conroy —That is me.

Senator RONALDSON —No, Senator Carr is his representative and he is not here. He is off at a non-existent cabinet meeting. That is the contempt that he treats this process with.

Senator Conroy —I am representing Senator Carr. Over the lengthy period that I attended estimates—as you well know, Senator Ronaldson—the minister at the table was called away on many occasions.

Senator RONALDSON —That is right. Also, having been told by one of your colleagues what they were doing or where they were going, you quite rightly would have taken that at face value. That is exactly what we did at 20 to four, when we were advised by Minister Carr that he was going to a cabinet meeting—and there is no cabinet meeting. So I do not think you will be taken aback that we are pretty upset about the fact that we were told something that is not true. I think in these situations we have always been entitled to rely on our colleagues at least being honest with us in relation to what they were doing. Also, I do not think anyone in this room, on this side, would have objected to the minister going to a cabinet meeting. He just has not been—

Senator Conroy —Firstly, I will respond to the clear imputation that you believe that Senator Carr misled the committee. This is not true. I am not going to go into the detailed processes of government and the cabinet process, but I am sure that what Senator Carr has informed you of is correct.

Senator RONALDSON —If there is no cabinet meeting, then he has.

CHAIR —Senator Ronaldson, I think Senator Carr will be back later this evening and you can ask him those questions then.

Senator RONALDSON —But from where?

CHAIR —You can ask him that at the appropriate time. Do you have any more questions on outcome 1?

Senator RONALDSON —Yes, I do. This is a real breach of faith. We are entitled to rely on what our colleagues tell us.

CHAIR —Senator Ronaldson, do you have a question?

Senator RONALDSON —Yes. What success has the clearing house registered in actioning the 57 complaints? Actually, it is not 57 complaints about the reasonable setup, but, in relation to any complaints that have been made, what success has the clearing house had in actioning those 57 complaints?

Ms Weston —The last number I had—and I will certainly take on notice to give you an update—was that 23 reviews had been completed on those issues.

Senator ABETZ —From 9 March?

Ms Weston —From the whole of the 50-odd complaints that have come into the clearing house—that is in aggregate.

Senator RONALDSON —What has happened to the other 34?

Ms Weston —I will chase that up. They may still be in progress or there may be some other reason for why they are not being finalised, but certainly I will provide that for you.

Senator RONALDSON —Do you know how many complaints have not yielded a positive response, or is that all 57 at the moment?

Ms Weston —I understand that some of them have had a positive outcome.

Senator RONALDSON —Will you take all of these on notice?

Ms Weston —Certainly.

Senator RONALDSON —What funds have been allocated to advertising the clearing house facility?

Ms Weston —You will notice that, as part of the government’s budget announcements, part of the job for the Small Business Support Line is to take over the running of the complaints clearing house.

Senator JOYCE —Who is the minister here at the moment who is representing the government?

CHAIR —Senator Joyce, we have a line of questioning—

Senator JOYCE —I am just wondering who is the minister here at the moment who is representing the government.

CHAIR —We have been through that, Senator Joyce. If Senator Ronaldson has finished—

Senator RONALDSON —No, I have not finished.

Senator JOYCE —I just want to know what minister is here representing the government.

CHAIR —Senator Joyce, you are out of order, because other people are ahead of you in the list. Senator Ronaldson.

Senator JOYCE —Point of order: I just want to know who the minister is.

CHAIR —Senator Ronaldson is asking questions.

Senator JOYCE —You do not have one, do you? There is no minister from the government here.

Senator ABETZ —He has come back in. Whenever it suits your convenience, Minister—

CHAIR —Senator Pratt, do you have any questions?

Senator RONALDSON —No, I have not finished yet.

Senator PRATT —I do, thank you.

Senator RONALDSON —Madam Chair—

CHAIR —There appears to be total disorder on your side, so I am going to—

Senator Joyce interjecting—

Senator ABETZ —When the minister walks out without excusing himself—

Senator PRATT —Thank you for the call.

Senator RONALDSON —With respect, I think Ms Weston was just about to answer a question for me.

CHAIR —Until Senator Joyce interrupted. Ms Weston, were you about to answer?

Ms Weston —I was, but I have lost my train of thought. Could you repeat that questions, please?

Senator RONALDSON —I am the nice one here, Ms Weston; disregard the rest of them. In relation to the advertising of the clearing house office, are you now saying that that office is being taken over by the department?

Ms Weston —It will be taken over by a program that the department administers, yes.

Senator ABETZ —It will be, or it has?

Ms Weston —It will be, because it is a budget announcement.

Senator RONALDSON —So why has it gone from the minister’s office to the department?

Ms Weston —It makes sense, as I see it. If businesses are ringing a support line that is supporting them through the global financial crisis, some of those businesses will have banking issues; so it makes sense to incorporate the two together.

Senator RONALDSON —So why not have it through the department and not through the minister’s office in the first instance?

Senator Conroy —It is not for the department to decide the order in which the minister’s office chooses to progress a matter.

Senator RONALDSON —They have hardly been run off their feet, have they? There have been 57 complaints since early March. An unknown number of those relate to the reason that this was set up, which is the difficulty in obtaining finance from local bank branches. I think you told me in evidence that some people rang up because their businesses were not travelling too well. That is very sad, but that was not the—

Senator Conroy —Are you approaching a question?

Senator RONALDSON —I am sorry?

Senator Conroy —Are you approaching a question?

Senator RONALDSON —So you want to be the chair and the absent minister, do you?

Senator Conroy —No. I was just wondering whether you were going to ask a question.

Senator RONALDSON —You stick to your job and I will stick to mine.

Senator CAMERON —I wish you would.

Senator Conroy —Then ask a question.

Senator RONALDSON —I am putting a question to Ms Weston about this. You would acknowledge that not all of those 57 relate to the difficulty of obtaining finance from local bank branches; they are not being run off their feet, are they?

Ms Weston —I have undertaken to take on notice to provide you with information on the exact details of the inquiries.

Senator RONALDSON —Yes. My question was what amount will be spent by the department advertising this clearing house facility.

Ms Weston —We are in the process of working out how the new program will be run, and that will be determined as part of that. I do not have that information right now. It has not been decided.

Senator RONALDSON —So no decision has been made yet about how the transfer from this secretive little group in the minister’s office back to the department will occur? How that is going to be done has not been finalised yet. Is that correct?

Ms Weston —The funding for the program becomes available in the new financial year, so we are working on that at the moment.

Senator RONALDSON —So on 1 July will you be taking this over from the small business minister’s office?

Mr Peel —In the budget, the government announced a Small Business Support Line. If you look in the portfolio budget statements there is funding of $10 million over two years for that. As Ms Weston says, we are currently working on the design of that, looking at how it might work. In answer to your question about how much will be spent on advertising, we have indicated a cost at this stage of about $200,000 a year, but that could change as we go forward with the design. The objective is to roll it out as soon as possible in the new financial year.

Senator RONALDSON —Do you think for $200,000 you are going to get a wider coverage than apparently is being obtained by the minister’s office in relation to these complaints?

Senator Conroy —You are seeking an opinion from the officer at the table. Perhaps you would like to rephrase the question.

Senator RONALDSON —No, I do not want to rephrase the question. It was a quite reasonable question.

Senator Conroy —You have asked an opinion of the officer.

Senator RONALDSON —I am asking the departmental officers whether by spending $200,000 they expect to get a greater number of complaints than the fairly minimal number we have at the moment.

Mr Peel —The support line will do a range of things, not just the end clearing house operation. Obviously, we need to make it well known so that we get a number of calls to the line. Yes, if we advertise, we would expect to get more queries than if we had not advertised.

Senator RONALDSON —What resources have been allocated to the minister’s office since early March to provide this clearing house facility?

Ms Weston —I understand that there have not been any additional resources, but that is something that you will need to take up with the minister.

Senator RONALDSON —Yes, I rather hoped to ask his representative that, if he was here. But I am not asking you for a comment on that. Where is he? Still at cabinet?

Senator JOYCE —Having the book thrown at him.

Senator ABETZ —Possibly there is a question I can ask. When were you first asked to represent Senator Carr here? Today?

Senator Conroy —I am not sure that is relevant to Senate estimates.

Senator ABETZ —It is relevant.

Senator Conroy —No. Just because you say that it is relevant does not make it relevant, Senator Abetz.

Senator ABETZ —Just because you do not think it is—

Senator Conroy —Do you have a question of the officers at the table?

Senator ABETZ —No. I have been told that these are opportunities to ask ministers questions and, if ministers want to, they can answer every question.

Senator Conroy —And I am here representing Senator Carr.

Senator ABETZ —When were you first asked to represent Minister Carr at this Senate estimates?

Senator Conroy —That is not relevant to the Senate estimates program.

Senator ABETZ —When were you first asked to represent Senator Carr at these Senate estimates?

CHAIR —The minister has answered the question.

Senator Conroy —That is not relevant to Senate estimates.

CHAIR —Senator Pratt, do you have a question?

Senator PRATT —Yes.

CHAIR —Senator Pratt.

Senator ABETZ —Chair, I have a point of order.

Senator PRATT —Senator Abetz can ask the same question over and over again for another hour if he would like to.

Senator ABETZ —Are you ruling that the question is not relevant to the estimates process?

CHAIR —No. I merely made the observation that it was—

Senator ABETZ —All right. In that case, can I ask that—

Senator PRATT —I have the call, thank you.

CHAIR —Senator Pratt has the call.

Senator ABETZ —Sorry?

CHAIR —Senator Pratt has the call.

Senator PRATT —The chair gave me the call.

Senator ABETZ —I have had about one minute of questioning—

CHAIR —I will get back to you, Senator Abetz. Senator Pratt.

Senator ABETZ —and when things get embarrassing we pass over to Labor.

Senator PRATT —I have a question that I believe belongs in outcome 1, but please correct me if it belongs in outcome 2; in fact, it cuts across two different portfolios. I want to ask about the health of—

Senator RONALDSON —I have a point of order, Madam Chair.

CHAIR —Sorry, Senator Pratt. A point of order has been raised.

Senator RONALDSON —Before I was interrupted, I was just about to thank Ms Weston for answering my questions.

CHAIR —I do not think that was a point of order, Senator Ronaldson.

Senator RONALDSON —I have put that out of courtesy to Ms Weston, who is still at the table. I had not quite finished but, anyway, I thank Ms Weston for her—

CHAIR —I think it might be a courtesy to Senator Pratt not to interrupt her question halfway through. Senator Pratt.

Senator PRATT —Thank you. My question relates to the health of private investment in research and development and the role of the department in advocating for the recently announced research and development tax credit. As I understand it, there have been some calls from industry for this. I assume that some of those messages must have come through the department.

Mr Paterson —The government undertook a major review of the National Innovation System. That review was led by an expert group chaired by Dr Terry Cutler. If memory serves me correctly, that group reported to the government either at the end of July or the end of August last year. One of the recommendations that was made by that review was to move from the tax concession to a tax credit.

Senator PRATT —What was the problem that was experienced with the tax concession in the last decade?

Mr Paterson —There are a number of challenges in relation to the tax concession. It does not deal easily with people who are in a tax-loss position, so you have to be in a tax-positive position for the tax concession to prevail. It applies to a range of R&D activities. The government, in the announcements in the budget, indicated that it would move from the tax concession to a tax credit. There would be a refundable tax credit for companies with a turnover of under $20 million and a non-refundable tax credit for companies with a turnover in excess of $20 million. Consultation will be required in relation to the definition of ‘research and development’ that would be encompassed by the new tax credit regime. A number of other countries have tax credit arrangements to provide support for research and development. A strong view was put to the government, through that review process and a number of other related activities where people commented on the review’s recommendations, to support the move from the concession to the credit.

Senator PRATT —Will this help us to compete for private investment in research and development in Australia?

Mr Paterson —It certainly provides an incentive—and a higher level of incentive—for companies to undertake research and development in Australia. Part of the arrangements in relation to the tax credit provides for foreign domiciled companies undertaking research and development in Australia to participate in the R&D tax credit. They do not get access to the refundable element of the credit, but they certainly can get support under the credit arrangements for R&D undertaken in Australia.

Senator PRATT —As I understand it, the decision also reverses the previous government’s decision, which it made when it came into office, to halve the R&D tax concession. What is the current state of research and development in Australia and what are we trying to achieve with this change?

Mr Paterson —The effect of the credit is to double the benefit to the companies with a turnover of under $20 million and to apply it under the R&D tax concession. In addition, it increases by a third the concession or the benefit of the credit for those companies with a turnover in excess of $20 million.

CHAIR —Following on from that, what kind of breakdown is there between those companies? What percentage of R&D is done by companies with a turnover of under $20 million and by those with a turnover above that?

Mr Weber —Approximately 5,500 firms would be in the breakdown of under $20 million, and you have around 1,500 firms over that amount currently.

CHAIR —Currently doing R&D—

Mr Weber —Yes, currently doing R&D under the scheme.

Senator EGGLESTON —I have a question that I think comes in outcome 1, which is ‘enhanced opportunities for business innovation and growth’. I understand that, in the 2009-10 budget, the government announced $10 million of funding over two years for the establishment of a Small Business Support Line and referral service. Is that the case?

Mr Peel —Yes. We were talking about that earlier, when Senator Ronaldson was asking questions. Yes, $10 million has been allocated—$5 million over 2009-10 and $5 million the following year—for a Small Business Support Line.

Senator EGGLESTON —Is that up and running now?

Mr Peel —No, it is not up and running. We are currently designing exactly how the line will work. We are hopeful that it will be introduced very early next financial year.

Senator EGGLESTON —So it is still a potential service. For what reason did you decide that this service was necessary?

Mr Peel —It was a decision of the government in the budget. It was to provide advice to small business owners and to put them in touch with specialist advisers in relation to financial issues, business diagnostic services and counselling in relation to all sorts of issues associated with making their businesses successful. It is particularly relevant in the current economic climate with the global financial crisis. The government thought that businesses require more assistance during this time.

Senator EGGLESTON —Was it based on any sort of research through the Chamber of Commerce and Industry or any other business body identifying problems and the need for it, or was it just that you decided it would be a good idea?

Ms Weston —It was a budget announcement. I am not aware of other considerations that the government took into consideration. But, in my own experience, some industry association mentioned something along similar lines to me.

Senator EGGLESTON —This was planned to be introduced in 2009, which was pre the global financial crisis.

Mr Peel —No. It is an announcement in the current budget and it is to commence in 2009.

Senator EGGLESTON —But I presume that it was planned last year. You do not suddenly decide on an idea three weeks before the budget, do you?

Mr Peel —It was part of the budget’s considerations. The government announced it on budget night and we are now in the process of implementing the service, which we hope to run out as close as possible to 1 July next year.

Senator EGGLESTON —I understand that. I was looking for when you started to develop the idea as a concept, which presumably must have been in 2008 or earlier. I wonder upon what basis this was developed—whether it was related to information, as I said, from the CCI or some other body. But we do not seem to be proceeding there. How many staff does the department anticipate will be working in the call centre when it is established?

Mr Peel —As I said, we are currently working on the design of the system, but there will not be any departmental staff working on the call centre; that is likely to be an outsourced service. Our departmental staff numbers overseeing the service would be around two or so and probably no more than that.

Senator EGGLESTON —How many people do you think will work in the call centre? What do you anticipate will be the demand?

Mr Peel —As I have said, we are looking at that in the design. There are a number of options in the design with how it would work. We have not yet reached the point of having an exact costing.

Senator EGGLESTON —What kinds of qualifications will you be looking for in the people who man the call centre?

Mr Peel —We will be looking for people who have an empathy with small business and who understand where it is that small businesses can obtain advice to improve their situation. There will also be situations where particular small businesses may be distressed over their circumstances, so we would be looking for people who have experience in counselling or who can refer people to appropriate counselling services.

Senator EGGLESTON —Will you be looking specifically for people who have had experience in small business rather than, say, academics?

Mr Peel —Preferably in the call centre. But, where they have issues, the role of the call centre will be more to refer them to specialist advisers rather than to give that specialist advice themselves.

Senator EGGLESTON —Out of your budget allocation of $10 million, what amount has been allocated to salaries and wages of staff employed in the call centres?

Mr Peel —The budget, as I have said, is $10 million over two years: $5 million in 2009-10 and $5 million in 2010-11. As I mentioned to Senator Ronaldson earlier, we have allocated $200,000 for general marketing activities to make people aware of the call centre; a small amount of money, $10,000, for legal costs to get the system up and running; and for departmental expenses—which, as I have mentioned, would be about two staff—$268,000. The balance of $4.7 million would be available to pay for the actual call centre operations. But, as I said earlier, we have not determined yet exactly what that cost would be; but there is $4.7 million available.

Senator EGGLESTON —Thank you.

Senator ABETZ —I put on notice: when did Senator Carr’s office or Senator Carr himself—

Senator Conroy —We will take that on notice.

Senator ABETZ —personally request the attendance of Senator Conroy at these estimates? I think it is fairly obvious where he is. Is there available a transcript of the speech that the minister gave at Questacon on budget night?

Mr Paterson —You have already asked that question.

Senator ABETZ —I know that it is not on the website.

Mr Paterson —No. You asked the question as to whether there was a transcript and I think the record will show that I—

Senator ABETZ —I asked that as well, did I?

Mr Paterson —You asked whether there was a transcript and I said no.

Senator ABETZ —I thought I had, unfortunately, limited the question to ‘on the website’.

Mr Paterson —No.

Senator ABETZ —I think we are agreed that the speech is not on the website.

Mr Paterson —We are agreed.

Senator ABETZ —I thought I had limited my question to just the website, but you are now advising that there was no transcript.

Mr Paterson —No. I indicated that there was no transcript of it. It was of the nature of a briefing in the lead-up to the budget. The normal lockup rules in relation to that briefing applied. No public speech was being given and, to the best of my knowledge, nothing is recorded on either the department’s website or the minister’s website.

Senator ABETZ —Thank you for that. Who is responsible for the document entitled Powering ideas: an innovation agenda for the 21st century?

Mr Paterson —You ask, ‘Who is responsible?’ It was released on budget night by the minister. It is the government that takes responsibility for the documents. We have worked with the government on that document’s preparation.

Senator ABETZ —There is a foreword by the minister but, in effect, the ownership of every word is the minister’s as opposed to the department’s. Is that correct?

Mr Paterson —The document was released by the minister as the government’s statement on these issues. We were active participants in its preparation, but it is the government’s—

Senator Conroy —It is the minister’s document, yes.

Senator ABETZ —It is the government’s document; right. I do want to know who wrote the document, given some of the highly politically charged—

Senator Conroy —I think the indication has been given to you, Senator Abetz, that it is a government document.

Senator ABETZ —Yes; and I just hope that the department was not associated with some of the highly charged comments that I would have thought potentially even Mr Hawke and Mr Keating could take offence at.

Senator Conroy —I think we have established that now, Senator Abetz.

Senator ABETZ —For example, on page 11, under ‘productivity agenda’, it says:

The Australian economy grew strongly between 1992 and 2007, thanks mainly to reforms made in the 1980s and a boom in demand for our resources.

There is no talk about the 1990 reforms of both the Hawke-Keating and the Howard eras—just whitewashed out of any sensible policy debate on innovation. Possibly I need to take that up with the minister after dinner, when he returns. People who are interested in innovation generally are serious about the issue, and these sorts of political statements that seek to deny—

Senator Conroy —We have agreed that it was the minister’s and the government’s document.

Senator ABETZ —a very important element of Australian history of both Labor and Liberal governments, frankly, do the concept of innovation no justice other than the innovative rewriting of history. However, we will revisit that. Can you provide the total media monitoring bill for the financial year to date? While that is being presented to us, can I ask whether we monitor blog sites?

Senator Conroy —As I said in a previous estimates hearing, I hope so.

Mr Paterson —I am sorry to hear that, because the answer is no.

Senator ABETZ —Confusion reigns yet again.

Senator Conroy —The digital economy will hopefully continue to grow.

Senator ABETZ —This is the man who cannot tell us when he was asked to appear here and then he mucks up one of his very first answers.

CHAIR —Thanks, Senator Abetz. Are there questions here?

Senator ABETZ —All right, so you do not monitor blogs. Thank you for that.

Mr Paterson —As part of our media monitoring service, we do not monitor blogs. You asked the question in relation to media monitoring services and then you asked whether we monitor blogs.

Senator ABETZ —So you do monitor some blogs. Can you tell us which ones, please?

Mr Paterson —No, I did not say that we monitor some blogs; I said that we do not monitor blogs as part of our media monitoring service.

Senator ABETZ —That is right. Now I am asking: do you monitor blogs?

Mr Paterson —Do you want us to answer the question in relation to media monitoring, or are we moving on to—

Senator ABETZ —We are on to blogs now, and I want to ask the questions in the order that I want to ask them in. I am now asking: do we monitor blogs?

Mr Paterson —I will take the question on notice.

Senator PRATT —I am sure that the people within the office take an active interest in what people are saying.

Senator ABETZ —You do not know whether or not your department monitors blogs? Can I ask for the budget?

Senator Conroy —Are you defining Crikey as a blog, when you use the term ‘blogs’?

Senator ABETZ —Mr Paterson had no difficulty in telling us that they do not monitor blogs. You had no difficulty the other day in saying that you hoped blogs were monitored. Now all of a sudden you are trying to hide behind a desperate definition of ‘blogs’. Really, this is disingenuous at its worst.

Senator Conroy —No. I am seeking to assist you, Senator Abetz.

Senator ABETZ —Mr Paterson—

Senator Conroy —I would say that Crikey is a blog.

Senator ABETZ —Ms Butler, what is our budget for media monitoring, in which I would not include monitoring blogs, whatever that might mean?

Senator Conroy —The answer would be that Crikey is a blog. I am sure that—

CHAIR —Minister, I am having trouble hearing the question.

Senator Conroy —I am sorry; my apologies, Madam Chair.

Mrs Butler —The 2008-09 financial year spend to 30 April 2009 is $265,877, GST exclusive.

Senator ABETZ —Thank you very much for that. I am told that your general media monitoring does not include blogs, and we are having blogs generally taken on notice by Mr Paterson.

Mrs Butler —Yes.

Senator ABETZ —I turn to the return to order dated 18 May. This is a letter by Senator Carr to the President of the Senate. Are you aware of that return to order? It is pursuant to the orders of the Senate agreed to on 24 June, relating to departmental and agency appointments, vacancy and grants. It states, ‘Please find attached the Innovation, Industry, Science and Research portfolio’s list for tabling for the period 20 January 2009 to 4 May 2009.’

Mr Paterson —Yes.

Senator ABETZ —Yes, it is a link; thank you. I wonder whether you could provide us with an explanation in relation to page 9 of that document: the money made available to the Australian Trade Commission, the $20,000 for NICTA—National ICT Australia—and the $46,500 for Australian Sustainable Built Environment Council. That just seems to come out of departmental funds, with no specific program.

Mr Paterson —Just bear with me for a moment please, Senator.

Mr Lawson —The NICTA sponsor was its sponsoring of the AusInnovation Conference. NICTA sponsored that at the CeBIT event in Sydney.

Senator ABETZ —Minister, can I congratulate you? I think you have taken over as the senior minister in the area of NICTA.

Senator Conroy —No. We have joint responsibility.

Senator ABETZ —You have joint responsibility, and you are saying that with a straight face.

Senator Conroy —We are a very cooperative government. I am not sure if I worked in your—

Senator ABETZ —You are a very gracious victim, Minister. What about the others?

Mr Lawson —With the Australian Trade Commission, there was some sponsoring of some business-matching exercises. I think that was at the CeBIT event as well. I will correct that, if necessary.

Senator ABETZ —The Australian Sustainable Built Environment Council?

Dr Green —This is a project by the Australian Built Environment Council that we have supported pursuant to our interest in a sustainable built environment under the Built Environment Innovation Council.

Senator ABETZ —But what does this money actually buy the taxpayer?

Dr Green —They are doing a project on the future sustainability of Australian cities, and we have contributed funds towards that project to help them to undertake it.

Senator ABETZ —When that project is finalised, will its findings be made publicly available?

Dr Green —Yes.

Senator ABETZ —I will have a few other questions under specific areas at a later stage. Other than questions I want to ask the minister after dinner—I dare say my saying this is not very helpful, Chair—I can now move on to outcome 1 with my questions. However, there are still some corporate issues hanging over, given the minister’s absence at what I assume is the Prime Minister’s behest. Can I ask about the ASEAN free trade agreement? As I understand it, whilst I accept that is in foreign affairs and trade et cetera, I understand that this portfolio does have an input into those free trade discussions. Specifically for Malaysia, is there currently a 25 per cent customs duty on imported manufactured ferrous products and a 10 per cent sales tax? In the discussions, have these matters been targeted for removal from the ASEAN free trade agreement as it relates to Malaysia? Do you have that specific detail or not?

Mr Miley —I simply do not have that detail.

Senator ABETZ —Please take that on notice, if it is available to the department. If it is not available to the department, please be kind enough to move it to the relevant department that might be able to assist us with it. Thank you very much for that. There are a lot of questions that really require the minister’s presence. Allow me to ask you, Mr Paterson: what are the job losses in the manufacturing sector since Senator Carr became the minister?

Mr Payne —I think your question was about job losses since Minister Carr became the minister and I do not have those statistics with me. I do have with me statistics for other periods dating back to 1999, but they are just not arranged in a way that I can answer in connection with the date that the minister assumed this portfolio.

Senator ABETZ —I would ask you to provide that to me because I did invite the minister, given the campaign that he ran before the last election, to benchmark himself on the number of manufacturing jobs that would grow under his stewardship—and, of course, to use that terrible term, the growth has been ‘negative’. But, if you can take that on notice, I would be much obliged. I take you to page 25 of the PBS. The heading there is ‘Transition from outcomes and outputs to outcomes and programs’. What was all that about? We have a transition from outcomes and outputs to outcomes and programs. What material difference does that make to the way the world goes around?

Mr Miley —My colleague can answer that for you.

Ms McClusky —The transition table is provided there so that you can do a reconciliation between the department’s previous outcome structure and our new outcome structure. Under the Operation Sunlight initiatives, we have reviewed our outcome structure as well as our output structure and we now report under outcomes and programs. That table is provided so that you can reference last year’s structures to the current year’s structures.

Senator ABETZ —Very good. Somebody undoubtedly put a lot of thought into changing the Scottsdale Industry and Community Development Fund into the North East Tasmania Innovation and Investment Fund. That is one of the changes. What other changes do we have there?

Ms McClusky —One of the most significant changes is that the department has gone from having three outcomes to two outcomes.

Senator ABETZ —But, in output group 1.1, it just seems to be very similar to that which appeared before. Is that correct?

Ms McClusky —Yes.

Senator ABETZ —In relation to outcome 1, I will ask what undoubtedly may be a policy decision—and I note that the replacement minister is dunking his biscuit and enjoying what should be his well-earned coffee; I would have said that it was well earned, if he could tell us when he was asked to appear here this afternoon. But, that aside—

Senator Conroy —I have always admired your persistence, Senator Abetz.

Senator ABETZ —why was the term ‘manufacturing’ deleted from outcome 1 in the description? It is a very, very significant deletion. The government ran an election campaign on—

Senator JOYCE —Making things different—

Senator ABETZ —You have got it in one, Senator Joyce—and defending the manufacturing sector. Senator Cameron is not here; I was wondering what the Australian Manufacturing Workers Union might think of the deletion. I thought that was why Senator Cameron had been here all day.

Senator Conroy —That is a serious misleading of the Senate: you have never cared what the Australian Manufacturing Workers Union think about anything.

Senator ABETZ —Senator Conroy, since becoming shadow minister, I have, in fact, had meaningful discussions with members of that union about industry and other matters. Can we have an explanation as to why the word ‘manufacturing’ has been deleted, other than because of the huge job losses that are now being experienced under Minister Carr’s watch? What was the thinking, the reasoning or the rationale? Why don’t we want to talk about manufacturing anymore?

Mr Paterson —That is demonstrably not the case. But, in terms of the—

Senator ABETZ —But he has deleted the words. I am sorry; you have said that it is demonstrably not the case.

Mr Paterson —It was demonstrably not the case—

Senator ABETZ —Can we go back to basics? The word ‘manufacturing’ has been deleted from the transition table.

Mr Paterson —It has not been deleted from the transition table, but it certainly no longer appears in the description of outcome 1 under the new framework.

Senator ABETZ —All right, in the description of outcome 1.

Mr Paterson —We moved from an earlier outcome framework from three outcomes down to two and we have new descriptors of those two outcomes. I accept that ‘manufacturing’ does not appear in that. It is not about hiding something and it is not that we do not talk about manufacturing. We still have a manufacturing division within the department; that has not changed.

Senator ABETZ —But this is a very important description and it is indicative of the thinking behind all the administered items, the programs, et cetera—

Senator Conroy —No. That is simply an assertion by you, Senator Abetz; it is not true. We utterly reject that.

Senator ABETZ —So why do we have this description if it does not tell us what is behind the thinking for these programs; can you tell us?

Senator Conroy —We utterly reject your assertion, Senator Abetz.

Senator ABETZ —I did not make an assertion just then.

Senator Conroy —You did make an assertion.

Senator ABETZ —I asked the question: what is the description for, if it does not describe all the administered programs in outcome 1?

Mr Paterson —We list the administered items—

Senator ABETZ —That is right.

Mr Paterson —in relation to both of those outcomes.

Senator ABETZ —That is right; you do.

Mr Paterson —The wording of outcome 1 has been recast. So it is not just deleting ‘manufacturing’ from a description of outcome 1 and then replacing that as the new outcome 1; it is a fundamentally recast outcome.

Senator ABETZ —Absolutely fundamentally recast.

Mr Paterson —But it embraces:

Enhanced opportunities for business innovation and growth through national leadership in converting knowledge and ideas into new processes, services, products and marketable devices ...

So it is talking about a whole range of business activity, including manufacturing, because you do not get new products, services and marketable devices without manufacturing participating in that process. The range of administered items are listed in detail in the PBS.

Senator ABETZ —Can you tell me where in this descriptor I come across the words ‘Australian industry’, or can you confirm that they do not appear either?

Mr Paterson —They talk about ‘enhanced opportunities for business innovation and growth’.

Senator ABETZ —So ‘Australian industry’ has been deleted.

Mr Paterson —So we have chosen a different form of words to convey a similar message.

Senator ABETZ —So reference to ‘Australian industry’ and reference to ‘manufacturing’ have been deleted. There is also a third one in this, which deletes reference to:

Improve the economic viability and competitive advantage of Australian industry ...

That has been deleted also. So the government’s description last year of:

Improve the economic viability and competitive advantage of Australian industry, including the manufacturing …

et cetera has now been altered and dumbed down to:

Enhanced opportunities for business innovation and growth through national leadership—

whatever that might mean—

in converting knowledge and ideas into new processes, services ...

That is all about the new, which is an important emphasis. But reference to the established ‘viability and competitive advantage being improved of Australian industry and manufacturing’ has been deleted from this description, hasn’t it?

Mr Paterson —As I said earlier, these are modifications as a result of the changed framework. If you look at page 25 and the subsequent pages in the PBS, there is a description of the outcome. There are now a number of programs. Industry development and investment is the suite of administered items under program 1.1. Program 1.2 is about innovative industry and there a series there. So there is a different architecture around this—

Senator ABETZ —Of course.

Mr Paterson —and a different language.

Senator ABETZ —Yes; a different architecture that has dropped the terminology ‘Australian industry’ and ‘manufacturing’ and ‘improving the economic viability and competitive advantage of Australian industry, including manufacturing’.

Senator Conroy —Perhaps I could clarify something with you, Madam Chair. We are in the portfolio budget estimates for Innovation, Industry, Science and Research, aren’t we? ‘Industry’ is still in that title?

Senator ABETZ —Yes, and that is my question. Thank you for that helpful intervention.

Senator Conroy —It is in the title of the portfolio.

Senator ABETZ —Given that we are in the Innovation, Industry, Science and Research portfolio why has the word ‘Australian industry’ been deleted from the description? You make my case exceptionally well.

Senator Conroy —It is in the title of the portfolio—Innovation, Industry, Science and Research.

Senator ABETZ —So, why would you delete it from the description?

Senator Conroy —Mr Paterson has just taken you through all the relevant areas.

Senator ABETZ —It is clearly indicative of the government’s changing agenda in relation to these matters.

Senator Conroy —I utterly refute your suggestion.

Senator ABETZ —Let us wait and see what others have to say about that.

Mr Paterson —You asked a question earlier about the possible attendance of the Chief Scientist. I am not sure whether the committee resolved that you wanted the Chief Scientist here earlier. My recollection was that the question you asked was for an attendance at 6.00 pm. Can I have your confirmation that that is what you want to do now, and then we will arrange it, but I have to be able to get her here. If you say that now, then I am pretty sure we can have her here by six o’clock.

Senator ABETZ —If she were available, that would assist the workings of the committee.

Mr Paterson —We will make that call now.

Senator ABETZ —Thank you very much. I appreciate that. Mr Paterson, can you confirm for us that in relation to the textile, clothing and footwear sector in this budget $10 million has been provided over the forward estimates for Australia’s TCF sector? Am I reading that correctly?

Mr Paterson —That is an additional $10 million. It is in addition to the other elements of the program that are outlined.

Senator ABETZ —You are quite right to have made that clarification. It is an extra $10 million. Is that the sum total of the government’s response to Professor Green’s review?

Mr Paterson —The package, in total, was an innovation package of $401 million from 2009-10 to 2015-16, which was a redirection of existing resources and the $10 million in new resources. There is a new TCF innovation package worth $401 million from 2009-10 to 2015-16.

Senator ABETZ —Where do I find that in the papers? As I understood it, Professor Green was only recommending about $250 million extra for the TCF sector. I would find it surprising if the government responded with even more money, but I may well have misread the documentation.

Mr Paterson —If you go to page 18 of the PBS, you will see the money for 2009-10 and 2010-11—the administered items and the expenses items appear at the bottom of the page.

Senator ABETZ —That is right. How much was in those forward estimates in the last budget?

Mr Paterson —$391 million.

Senator ABETZ —$391 million in which column? For 2009-10?

Mr Paterson —From 2009-10 to 2015-16 is $391 million in the forward estimates, and it is now $401 million, which includes the $10 million.

Senator ABETZ —Yes. We are agreed that it is $10 million extra to that which had previously been budgeted for.

Mr Paterson —Over that period to 2015. It goes a bit beyond the forward estimates.

Senator ABETZ —Yes.

Mr Paterson —For the duration of the TCF package it was $391 million, which has been recast over that same period to $401 million with a number of measures that have been modified in that process.

Senator ABETZ —An extra $10 million over that period. And, of course, that was after Professor Green’s report was released. When was that? Was it February of this year? It was delayed from last year, if I recall correctly.

Mr Paterson —My recollection was that his report was received by the government on 31 July and was released in September of last year. I will stand corrected on that, but that is my recollection.

Senator ABETZ —Was there a government response to it prior to the budget?

Mr Paterson —There were a number of fact sheets in relation to our portfolio released on budget night which indicated the package of responses in relation to the TCF measures, and there was a response in that fact sheet to each of the recommendations. We can table that fact sheet, if that is of help to you.

Senator ABETZ —It may well be. If you could, I would be obliged. How much did the TCF review cost in total?

Mr Paterson —We did deal with that at the last estimates.

Senator ABETZ —We did and my memory has failed me. I am hoping that one of these officials is as good as IP Australia, who could refer back to something in 1991 or 1992.

Mr Payne —The total cost for Professor Green’s review was $964,691.

Senator ABETZ —In very rough terms, amongst friends, we might even call that $1 million, and the result of that review is that we find an extra $10 million spent in the forward estimates for the TCF sector. I suppose, in fairness, that is more an observation than a question.

Mr Paterson —I ran a risk earlier of responding to your observations, so I am reluctant to do so now.

Senator ABETZ —Good. I am glad we are agreed on that. Undoubtedly you would be aware of the combined industry letter of 19 February 2009.

Mr Paterson —That is another assertion.

Senator ABETZ —Mr Lawson, are you aware of it?

Mr Lawson —Yes, I think I am aware of it.

Senator ABETZ —There was a request from a substantial number of organisations—which I will not bother going through—that said that the TCF package requires a global funding allocation of at least $150 million a year. Of course, if that package were to operate for at least a five-year period, that would be $750 million, which in anybody’s language may have been a bit of an ambit claim, and I accept that. This is really more a question for the minister, which we should put on notice—as to whether the minister actually believes this to be a fair and reasonable response to Professor Green’s report, which cost nearly $1 million to put together and we had only an extra $10 million spent over the forward estimates.

Mr Paterson —I clearly cannot speak for the minister in this context, but the fact sheet that we mentioned in relation to the TCF response is issued in the minister’s name and provides a response to all of the recommendations. Whilst there was $10 million in additional resources, it is a package of $401 million over the period.

Senator ABETZ —We agreed that the $391 million was there already. That could have been taken off them, but after having $1 million spent on a review as to how to look after the textile, clothing and footwear sector, and all the promises made by the minister to this particular sector in the lead-up to the 2007 election, I think the minister may well be aware of the sector’s concern at the lack of support. Once again, Mr Paterson, you might assess that as an observation of mine and you would be correct. I would like to move on to the automotive sector. Whilst that is happening, Mr Paterson, I can ask you another question. Was the department contacted at all to have input into the announcement that BlueScope Steel in Wollongong would provide $20 million in steel for three new air warfare destroyers the government had commissioned? Was the industry portfolio consulted at all in relation to that government announcement? I accept that how it all happened is a matter for the Defence estimates; I am just wondering if this department had any input.

Mr Paterson —I am not aware that we were consulted in relation to that specific announcement. It was a procurement issue for Defence.

Senator ABETZ —Absolutely. I understand that. I do know that the steel sector has being doing it exceptionally tough of late and I am sure you would be aware of that. I am just wondering whether there had been any cross-pollination of ideas between the departments. You say you are not aware of it.

Mr Paterson —You asked a question as to whether we had been consulted in relation to a particular announcement.

Senator ABETZ —That is right.

Mr Paterson —You then broadened it out to cross-pollination of ideas between departments—active engagement between officers of my department and the defence department in relation to procurement and related issues. There is active work done in relation to industry participation plans and the like in collaboration between our department and the defence department.

Senator ABETZ —Can you take on notice whether this $20 million deal was part of that collaboration, discussion and so on between your department and Defence?

Mr Paterson —As I said, my understanding is that that particular announcement that you are talking about was in response to a particular procurement decision that had been taken.

Senator ABETZ —That is right.

Mr Paterson —Actual procurement decisions are not something that they consult with us on, and nor would you expect them to.

Senator ABETZ —In relation to the issue of whether Australian steel and Australian industry might be assisted and so on, whilst I fully accept it is a matter for Defence, all I want to know is whether there was any discussion between the industry portfolio and the Defence portfolio? Not much rides on it. I am more than happy for you to take it on notice.

Mr Paterson —The procurement decision was taken by an alliance that has been established as part of the development of the air warfare destroyers. That is an alliance that involves the Submarine Corporation, Raytheon and DMO. It was an alliance decision. We were involved in the establishment of the alliance and advice in relation to the establishment of the alliance, but the decision in relation to that procurement was a decision taken by the alliance that is managing that overall project.

Senator ABETZ —Of course. I assume that any procurement issue would be solely within the province of Defence. I was just wondering whether any discussions had taken place about that particular procurement issue. I accept that I am not necessarily allowed to know what those discussions entailed, but I believe I am entitled to know whether discussions did centre around this particular procurement.

Mr Paterson —I think I have answered that question to the best of my ability at this stage.

Senator ABETZ —You can take it on notice in the event that there is further information that might be available. I would like to ask about ACL Bearings. Do I find any money for ACL Bearings in the portfolio budget statement?

Mr Paterson —There is nothing in the PBS.

Senator ABETZ —Where would I find ACL Bearings’s moneys and related grants in the PBS?

Mr Paterson —There was money recorded in the PBS for last year. It is on page 22 of last year’s portfolio budget statement. ACL Bearings had an appropriation of $2 million for 2007-08.

Senator ABETZ —Is there anything for this year?

Mr Paterson —There is nothing in the PBS.

Senator ABETZ —I am sorry—in this coming year?

Mr Paterson —Nothing provided for in the PBS explicitly. I just need to clarify one point. There was a decision taken to grant $4 million to ACL under the Automotive Industry Structural Adjustment Program.

Senator ABETZ —That is where that came from.

Mr Paterson —It comes out of AISAP, which was a program announced as part of the new car plan.

Senator ABETZ —Is that part of the green car plan?

Mr Paterson —It is called A new car plan for a greener future. That is the name of the plan. This is not out of the green car fund. There is a component piece of that broader automotive plan called the Automotive Industry Structural Adjustment Program.

Senator ABETZ —For a greener—

Mr Paterson —No. The overall program was called A new car plan for a greener future. That was the description of the overall program. In that there is AISAP, the green car fund, the Supplier Capability Development Fund and a variety—

Senator ABETZ —That was the overarching description—’for a greener future’.

Mr Paterson —That was the overarching description and then, as a component piece of that, there was the Automotive Industry Structural Adjustment Program, and ACL has been granted $4 million under that AISAP program.

Senator ABETZ —Can you tell me how this ACL Bearings grant helps for a greener future?

Mr Paterson —As I said, there was an overarching description of the program and then there were some component pieces.

Senator ABETZ —That is right.

Mr Paterson —There was the supplier development component, the structural adjustment component, the Green Car Fund and the Automotive Transformation scheme, which is the other major fund.

Senator ABETZ —That is right. The government, for its overall descriptor, has said ‘for a greener future’ or words to that effect, which suggests that the totality of the funds under that umbrella have ‘a green component’ to them and, of course, there are numerous areas of funding that do not necessarily have a green ‘element’ to them.

Mr Paterson —I do not necessarily accept the proposition that you put: that, because of the overarching title, every single element and every dollar associated with it would necessarily be tied into the green elements of it.

Senator ABETZ —But why call it ‘for a greener future’ if it does not cover the whole gamut?

Mr Paterson —Part of it is talking about the future for the industry and ensuring that there is a viable, ongoing industry into the future with a greener future attached to it.

Senator ABETZ —’Greener’ as in a nice, growing future as opposed to green on an environmental basis?

Mr Paterson —No, ‘greener’ in the same way as you are interpreting it. As I have said, it was a package of reforms in relation to the automotive industry. One component piece of that was the green car fund and one component piece was AISAP.

Senator ABETZ —I understand all of that. There is, firstly, confusion in the marketplace and, secondly, a misdescription of this by referring to it as being part of a greener future, when in fact a number of the payments—

Mr Paterson —I do not think there is any confusion in relation to the focus of AISAP.

Senator ABETZ —Thank you for that market research that you have been able to provide to the committee. That has been most helpful.

Mr Paterson —Happy to be of service.

Senator ABETZ —I note that the minister has returned. Minister, can I ask you how the cabinet committee on climate change, water and heritage was?

Senator Carr —You can ask me what you like.

Senator ABETZ —I just have. Is that where you have just been?

Senator Carr —I am not in the business of discussing with you the meetings that I attend.

Senator ABETZ —Don’t worry about me. This is a Senate committee and I am asking you as a senator to take the personality out of it. I know you do not like me. That is fine.

Senator Carr —You should not run yourself down so quickly.

Senator ABETZ —Can I ask you whether that was the meeting that you have just attended?

Senator Carr —I have advised the chair of the reason for my absence, which was unavoidable, and I have nothing further to add.

Senator ABETZ —You were not going to a cabinet meeting, were you?

Senator Carr —I have given my—

Senator ABETZ —You were not going to a cabinet meeting, were you, as you asserted to the committee at about 3.40 pm this afternoon?

Senator Carr —I have no reason or intention to change the advice I provided to this committee.

Senator ABETZ —Why don’t you just tell us that it was a subcommittee of cabinet at least?

Senator Carr —It is a profound disappointment to you, I know. But you were a minister. You would have known, however, if you had been in the cabinet, how the cabinet functions.

Senator ABETZ —I am asking you, Minister, whether you attended a cabinet meeting, and clearly you did not. What you did attend was a subcommittee or a committee of cabinet. It does not take much guessing when Senator Conroy comes in to replace you; you serve on two subcommittees of cabinet, and one of them you serve on with Senator Conroy. It left it pretty well clear as to where you were, and the fact that you are not willing to deny it indicates to us that you were at a subcommittee.

Senator Carr —We are not in the habit of discussing—

Senator ABETZ —When did you or your office ask Senator Conroy to replace you at these hearings?

Senator Carr —Your logic is flawed, and I have nothing further to add to what I have already said to the committee.

Senator ABETZ —I am sure that my logic is flawed, but can you simply answer the question, without the personal insults, as to when you or your office asked Senator Conroy to represent you at these estimates.

CHAIR —The minister answered that question.

Senator ABETZ —He did not. He responded by saying that I have flawed logic. Whilst that is all part and parcel we actually do want an answer to the question.

Senator PRATT —The minister did provide an appropriate answer. Are there other—

CHAIR —Yes. I think we have the Office of the Chief Scientist.

Senator ABETZ —The minister can try to think of an answer as to what time he asked Senator Conroy. No government secrets there.

CHAIR —We will ask for the Office of the Chief Scientist to come to the table and then we will resume with the Department of Innovation, Industry, Science and Research.

[6.01 pm]