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FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE
FINANCE AND DEREGULATION PORTFOLIO
Department of Finance and Deregulation
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FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE
Department of Finance and Deregulation
Department of Finance and Deregulation
Ms Van Veen
Mr de Carvalho
Mr De Carvalho
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FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE
(Senate-Tuesday, 22 February 2011)
FINANCE AND DEREGULATION PORTFOLIO
Medibank Private Ltd
Department of Finance and Deregulation
Ms Van Veen
Mr de Carvalho
Australian Electoral Commission
Senator IAN MACDONALD
- Medibank Private Ltd
PRIME MINISTER AND CABINET PORTFOLIO
Department of Regional Australia, Regional Development and Local Government
Senator IAN MACDONALD
Future Fund Management Agency
Senator IAN MACDONALD
National Capital Authority
Senator IAN MACDONALD
- Department of Regional Australia, Regional Development and Local Government
- FINANCE AND DEREGULATION PORTFOLIO
Content WindowFINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE
FINANCE AND DEREGULATION PORTFOLIO
Department of Finance and Deregulation
CHAIR —Mr Tune, do you have any opening remarks?
Mr Tune —No, Senator.
Senator FIFIELD —I might just start with a couple of contracts relating to the Independent Communications Committee?
Mr Tune —I will need to get the relevant people in to do that.
Senator FIFIELD —The Independent Communications Committee I think is staffed by three former public servants: Ms Belcher, Ms Williams and Mr Hawke?
Mr Tune —No, that is not quite correct. That was the original composition of the committee. Last year, I cannot remember the exact date but I think it was towards the end of June, something around there, Ms Belcher resigned. Ms Anthea Tinney, who was a former public servant as well and a former deputy secretary in the then department of the environment has been appointed to the committee. In the general sense you are correct, but the membership is slightly different.
Senator FIFIELD —Thank you for that. I think Ms Williams is being paid $316,000 for a two-year contract as a committee member, is that correct?
Mr Grant —That is the value of the contract but we actually pay on a daily sitting rate.
Senator FIFIELD —That is the maximum possible value depending on the number of days they sit?
Mr Grant —That is correct.
Senator FIFIELD —Mr Hawke is being paid $350,000 for being chair, so I assume his sitting day rate as chair is higher than that of another committee member?
Mr Grant —As the chair, yes.
Mr Tune —That is correct.
Senator FIFIELD —Ms Belcher was paid $11,125, so that would represent the number of days that she actually sat?
Mr Grant —That is correct.
Senator FIFIELD —I assume the new committee member, Ms Tinney, would also be on a contract to the value of $316,000 as well then?
Mr Grant —Yes.
Senator FIFIELD —So I get the phraseology right, it is called the Independent Communications Committee, is that correct?
Mr Grant —Yes.
Senator FIFIELD —That committee was already in place, was it not, at the time of the mining tax advertisements?
Mr Tune —Yes ,that is correct.
Senator FIFIELD —But I think from recollection it did not have any role in vetting those ads?
Mr Tune —No, there was an exemption for that campaign.
Senator FIFIELD —That is right. If you could just remind me, what was the actual exemption that was cited for the campaign? There was some unique and special phrase I recall. It was an emergency—
Mr Tune —I do not think it was emergency; extraordinary I think it was.
Senator FIFIELD —Extraordinary.
Mr Tune —Compelling reasons.
Senator FIFIELD —Extraordinary and compelling reasons.
Mr Tune —I think it is more compelling rather than extraordinary. I will take that on notice and check it for you.
Senator FIFIELD —Have there been any other instances where the government advertising has not been vetted by that committee that would be in the ordinary course of events, in the absence of compelling or extraordinary reasons?
Dr Helgeby —There have been only three exemptions granted of which we are aware: the mining tax, the Electoral Commission and—
Ms Van Veen —the H1N1 swine flu pandemic. We are talking about campaigns conducted by FMA Act agencies over the value of $250,000 since the guidelines were introduced in 2008.
Senator FIFIELD —What was the Electoral Commission campaign?
Dr Helgeby —To undertake its normal operations during election campaigns.
Senator FIFIELD —There have been no other exemptions?
Dr Helgeby —No.
Senator FIFIELD —How often does the committee meet? Is it just on an as-needs basis?
Mr Tune —Yes, it varies at various times. You might have a number of campaigns coming through the pipeline. It does meet on an as-required basis. Obviously, we try to schedule things in advance if we can because the members of the committee have other things that they do.
Senator FIFIELD —Could you take on notice to provide the committee with a list of all the campaigns that have been through the committee since its creation?
Mr Tune —Yes, we can.
Dr Helgeby —The website covering the Independent Communications Committee lists all the campaigns that have been considered and reviewed and commenced.
Senator FIFIELD —Going back to the payment to the committee members, what is the daily rate for the chair and for the other members?
Mr Grant —We can provide that. I am sorry; I just do not have it with me at this moment.
Senator FIFIELD —At first blush, when you look at the contracts, it looks like a large number, being $350,000 for the chair. But, as you explain, that is essentially a budget to provide for a daily rate.
Mr Tune —We will get the answer on that in about 10 minutes. We will get back to you during this hearing.
Senator FIFIELD —That would be great, thank you.
Senator FIERRAVANTI-WELLS —Is it part of the procedures of the committee to view any ads or anything like that before they give approval?
Mr Grant —Yes. They actually look at the campaigns as they are being developed, and before they give their final report they actually view the final ad, whether it is electronic or print.
Senator FIERRAVANTI-WELLS —Can you please explain to me why the advertisements in relation to the health reform were not viewed beforehand?
Mr Grant —I am sorry, Senator, they were.
Senator FIERRAVANTI-WELLS —Could you take that on notice, because we have had discussions through Health, and I asked in relation to previous evidence that was given at estimates. I will put the question on notice, but on the material that I have it is clear that some of the advertisements were not viewed. How could they have been when the committee’s approval and the secretary’s request of it appear to have been done on the same day?
Ms Van Veen —If I could just clarify: the committee reviews campaigns at three milestones. They review campaigns at the communications strategy point, at the pre-production before a campaign enters into production, and at the final point. They review the materials and the communications strategies and provide advice to the agency with respect to compliance with the guidelines.
Senator FIERRAVANTI-WELLS —Perhaps you would like to take on notice if the campaign in relation to the health reforms complied in every material way with the procedures that you have outlined this morning. Could you provide me with all the backup documents in relation to that, including approvals and documents which refer to approvals given by the Secretary of the Department of Health and Ageing, the timing of the committee’s approval for various parts of that campaign and, most specifically, if the committee looked at all the advertising before it went to air or whether it gave approval without seeing the material.
Mr Tune —Can I just clarify that, Senator? The approvals that are provided by the Secretary of the Department of Health and Ageing are their business; they are not our business. Our role stops at the point when the committee looks at the campaign and provides its recommendation to the secretary.
Senator FIERRAVANTI-WELLS —I appreciate that, Mr Tune. I do not have the documents in front of me; I am just following up on a question from Senator Fifield, and I am doing it on recollection. That is my point to you. It is my clear recollection that the filming or the advertisements that went to air were not viewed by the committee beforehand, despite approval being given. That is fine. I am happy for it to be taken on notice, Senator Wong.
Senator Wong —Before Dr Helgeby answers, I think the point Mr Tune was making is that we can take on notice a question related to documents that we deal with. Issues relating to what the Department of Health and Ageing may or may not have done are obviously matters that you will have to put in those estimates hearings.
Senator FIERRAVANTI-WELLS —I appreciate that, but there are certain approvals which the committee gives that are conditional on material that is received from the Department of Health and Ageing and the secretary. Part of that question is: was the material that was given by the secretary of Health and Ageing in accordance with your provisions and timely framework?
Dr Helgeby —Yes, it was. The way the process works is that material is submitted by the relevant department to the committee, the committee reviews it, it forms a view as to whether or not the material satisfies the four key criteria of the guidelines that the committee reviews, and it makes that report available to the relevant secretary. The secretary then adds their own letter or certification, if you like, on top of that, which essentially says that they have satisfied all their requirements in finalising an advertisement.
In relation to the health reform, the ICC has posted four reports on the website around elements of that campaign: two in May 2010, which was the health reform campaign broadly; and two in June 2010, which were to do with the workforce. Those reports are available on the web. They were provided on the back of the committee’s review of the material.
Senator FIERRAVANTI-WELLS —I know, but the question regards the dates. The dates coincide with the same day as the material was put before you. That is the question that I am really getting to. I will fish for the material and I will give it to you. My concern is that the day that the certifications were signed by the secretary of the department and the day that, apparently, the approval was given, were the same day. How can you have gone through your proper processes when it all happened on the same day? You obviously work very fast.
Senator Wong —Dr Helgeby is very efficient.
Senator FIERRAVANTI-WELLS —I am sure he is, Senator Wong. I am just concerned which one came first.
Dr Helgeby —Typically what happens is that the ICC sees the material, forms a view of the material, and prepares a letter. That letter can be prepared the same day. It will be transmitted the same day. The secretary can receive it the same day and sign off on their requirements on the same day. If you like, the timing of the signings is really the end stage of the process and they can be done very efficiently.
Senator FIFIELD —I have just one more contract question before I yield to a colleague. It regards a contract awarded to a Mr Tom Brennan, who I think is a former principal advisor to Brian Howe, to the value of $53,000. The CN number is CN364332.
Mr Edge —That contract relates to an engagement for Tom Brennan, who is a Sydney barrister, to review expenditure that the department has incurred in relation to litigation with the New South Wales government on the Sydney Airport stamp duty matter. It is to review the costs of legal services provided to date, costs that the Department of Finance and Deregulation has incurred in conducting that matter; looking at the expenditure which the department has made on legal services.
Senator FIFIELD —What prompted the review?
Mr Tune —I will give you a bit of background about this case because it is quite a difficult one. It is called the SACL case, the Sydney Airport Corporation Limited case. The New South Wales government is alleging that the Commonwealth owes it some stamp duty as a result of the sale of the Sydney Airport quite a number of years ago. The Commonwealth is defending that case quite vigorously. There have been quite a number of delays in the legal process. Our view is that those delays have been caused not by us; nonetheless they frustrate the legal process and lead to further legal work by our lawyers who are representing us.
Senator FIFIELD —Delays have been caused by the evil New South Wales government?
Mr Tune —The New South Wales government, yes. That is our view. As I said, we are defending this case quite strenuously. There is a lot of money at stake here on the stamp duty that would be payable if we lost the case. Because of these ongoing delays, we are meeting most of the legal costs, internally, to the department. There has been some supplementation for the case, but at the moment we are trying to live within our means. I asked if we could have a review of what was going on about our legal costs on the case.
Senator FIFIELD —What have been the legal costs to date?
Mr Tune —I will have to take that on notice. They have occurred over a number of years and they are not finished yet. The purpose of the review was to determine if we are proceeding on a reasonable track here, and if we are getting value for money from what we are doing. That is why it was done.
Senator FIFIELD —The $53,000 was for services for less than six months, but it was basically $53,000 for that task?
Mr Tune —For that task, to review how things were going and whether there was any improvements or greater efficiencies we could put into the process.
Senator FIFIELD —What was the process for procuring Mr Brennan’s services? Did it go to tender? Was there a requirement for it to? Was he on a pre-approved list of service providers?
Mr Edge —There was a tender process. There were responses to a tender process, and he was selected as a part of that approach to the market.
Senator FIFIELD —Who is ultimately the decision maker in the tender process? Is there a panel which assists?
Mr Edge —There was a panel, yes.
Senator FIFIELD —It is good the battle goes on against the evil New South Wales government, Mr Tune.
Senator Wong —I think this has been around since you were in government, Senator.
Senator FIFIELD —It rings loud bells, Senator Wong. Whenever I see the figure of $53,000 next to one person’s name it is always in the public interest to ask the question about the process and the background.
Senator HUMPHRIES —I wanted to ask about the review of the funding position of the Australian War Memorial. I understand this has been conducted by the Department of Finance and Deregulation.
Mr Tune —Yes, in conjunction with the Department of Veterans’ Affairs, and in consultation with the War Memorial itself.
Senator HUMPHRIES —I cannot put all three of you in the one room at the one time, so I will have to ask you some questions by yourselves. Where does that review stand at this point in time?
Mr Tune —That review is still being undertaken. We have been asked by the government to provide that review to the government in the context of the budget. That will be the decision point in the lead-up to the budget.
Senator HUMPHRIES —Who is actually physically conducting the review itself?
Mr Tune —One of my officers.
Senator HUMPHRIES —Is it you, Mr de Carvalho, who is doing the review solely, or do you have other colleagues from the other agencies?
Mr de Carvalho —I have staff in my division working on this review, along with colleagues from the War Memorial and from the Department of Veterans’ Affairs.
Senator HUMPHRIES —Can we expect any outcomes from this to be manifested in the budget?
Mr Tune —In the budget context, yes, that is right.
Senator HUMPHRIES —I assume, of course, there is no process for public submissions to be made to this review.
Mr Tune —No. It is an internal review to government.
Senator RONALDSON —When were you first given the brief in relation to this review?
Mr Tune —When the Prime Minister made a public announcement that there would be a review. There had been discussions between me and my counterpart in the veterans’ affairs department, Mr Ian Campbell. Prior to that he had written to me at some time in 2010 and asked us to have a look, on a formal basis, at the financial position of the AWM, which we did. I wrote a letter to Mr Campbell on 16 September 2010, which set down some preliminary views about the financial situation of the War Memorial. That has been released, in part, under FOI in recent times. Following that, the Prime Minister announced that there would be the formal review.
Senator RONALDSON —Are you happy to release the correspondence between yourself and Mr Campbell?
Mr Tune —The correspondence, as we are prepared to release it, is redacted in some parts, but the correspondence that we have released under FOI is on our website.
Senator RONALDSON —And there is nothing else over and above that? That is your response to Mr Campbell. What about Mr Campbell’s letter to you?
Mr Tune —I cannot recall exactly when it was sent to me.
Mr de Carvalho —I am not sure that there was any correspondence. It came through informal contacts through senior departmental officials.
Mr Tune —My response just says, ‘Thank you for your request.’ It does not refer to a letter, so it may be the case that it was informal.
Senator RONALDSON —When was the request made?
Mr Tune —I cannot tell you.
Mr de Carvalho —The request would have been made a few weeks before Mr Tune’s letter.
Mr Martine —From memory, I recall it was a phone call from Mr Campbell in, I think, early June of last year.
Senator RONALDSON —Is it usual for formal reviews to be conducted following a phone call?
Mr Martine —No.
Mr Tune —As I said at the outset, it was an informal review. At the request of Mr Campbell, we had a quick look at the financial situation of the War Memorial and I wrote back to him. Then the Prime Minister asked for a formal review.
Senator RONALDSON —So you provided Mr Campbell with the details of that review on 16 September?
Mr Tune —Yes.
Senator RONALDSON —When did the Prime Minister make the announcement?
Mr Martine —I think, from memory, the request was around October. I am not sure of the exact date.
Mr Tune —Late October.
Senator RONALDSON —When was it formally announced?
Mr Tune —Late October.
Senator RONALDSON —Are you sure?
Senator Wong —I think the Prime Minister, from memory—
Mr de Carvalho —The minister made reference to the review in a media interview. I can find the date for that.
Mr Tune —28 October 2010.
Senator RONALDSON —Didn’t the Prime Minister announce the review in mid-December?
Mr Tune —We will take that on notice. I do not have that date here in front of me.
Mr de Carvalho —I can find out for you very quickly.
Senator RONALDSON —If you would not mind, please. That would be good. When that review was announced by Minister Snowdon, in what context was that given? Did he say that it was in the context of the budget?
Mr Tune —I do not have the statement.
Senator RONALDSON —I will find that statement that Minister Snowdon made, and we will find from that the context.
Mr Tune —The Prime Minister and Minister Snowdon’s comments were in the context of some sense of urgency in relation to the matter, not in the context of it being reviewed along with everything else for the May 2011 budget, along with funding for every other institution.
Mr Tune —It has been treated with some urgency—that is correct. We are bringing it forward in the budget context to make sure that it is considered.
Senator RONALDSON —You view that as being treated with some urgency? You had a report provided on 16 September last year, and this matter will not be reviewed until the budget of May 2011, and you think that is moving quickly?
Mr Tune —I said earlier that what we did initially was an informal review to just have a quick look at it. Then we were asked to do a formal review. Since we have been asked to do that formal review, in late October as I understand it, we have been undertaking that review in conjunction with the Australian War Memorial and the Department of Veterans’ Affairs. That will lead into consideration in the budget.
Mr de Carvalho —Senator, the date of the minister’s note in reference to this was 28 October. There was an ABC news story entitled ‘War Memorial budget review amid staff cuts’ on 28 October.
Senator RONALDSON —What were the minister’s comments? Was it in the context of it being put off until the budget?
Mr de Carvalho —I am sorry, I do not have a transcript of it.
Mr Tune —We would have to check the transcript.
Senator RONALDSON —Mr Tune, what you are telling me is that this is just in the queue, like everything else, for some possible announcements in the budget?
Mr Tune —No, I am not saying that. I am saying it is being given priority. The Prime Minister has requested it, so therefore it gets priority. The appropriate place to look at these things—
Senator RONALDSON —How much are you recommending be given to the memorial?
Mr Tune —That is a government decision.
Senator RONALDSON —There has been no decision made in relation to that?
Senator Wong —Sorry?
Senator RONALDSON —Has there been a decision made in relation to additional funding?
Senator Wong —Not as yet.
Senator RONALDSON —Not as yet. Just so I am absolutely sure, Mr Tune, I am looking at the budget statement from the memorial and also the PBS. The actual ordinary annual services funding in 2008-09 was $38,597,000. Is that right? That was the actual available appropriation?
Mr Tune —Is it revenue from the government in 2010-11?
Mr Martine —This is for 2008-09.
Senator RONALDSON —Then in 2009-10, the actual was $31,407,000.
Mr Tune —Correct.
Mr Martine —Just on that, there was a change in 2009-10 where we introduced cultural heritage depreciation budgets, and that is actually separately identified. Yes, the revenue from government is correct—that was $31,407,000—but one needs to then add the cultural heritage depreciation budget, which was $7,082,000. If you add that up, if my maths is correct, it is $38,489,000.
Senator RONALDSON —Does that come under the appropriation bill too, does it?
Mr de Carvalho —Yes, it does.
Mr Martine —Yes.
Senator RONALDSON —That brings with it quite significant limitations in relation to its usage—is that correct?
Senator Wong —Usage?
Mr de Carvalho —That $7 million is for capital for collection.
Senator RONALDSON —So it is not for staff costs or other such operating costs?
Mr de Carvalho —It can be used for staffing so far as those staff are engaged in the collection and development of the capital asset.
Mr Martine —Generally you are correct in that it is not for the general, ongoing staffing costs of an organisation, but in comparing numbers one needs to add both of those together.
Senator RONALDSON —Then in 2010-11 there is a further forecast reduction down to $30,858,000. Is that right?
Mr Tune —Yes, but in that case you need to add in the cultural heritage depreciation expense of $9.963 million as well, to get a total.
Senator RONALDSON —In relation to the spending of these amounts, what requirements do you put in place for the allocation of staffing resources to offset against that cultural amount?
Mr Tune —I might get Mr Youngberry to take you through how we treat that particular expense.
Mr Youngberry —If I could just clarify your question, Senator, you have asked what limitations we place on the spending of the collection development acquisition budget?
Senator RONALDSON —What requirements do you put in place for the reallocation staffing costs against that? I presume you call it an equity injection, effectively?
Mr Youngberry —Correct, it is an equity injection. There are no limitations that we specifically apply, other than accounting standards that need to be complied with. If staff are engaged in the production of assets for the collection, then they can be legitimately charged against the equity injection that they receive.
Senator RONALDSON —Are there any limitations on that?
Mr Youngberry —No.
Senator RONALDSON —Under your budget process, I think it is item number six, which is that appropriated amounts cannot be transferred between administered outcomes, between departmental and administered, between operating and non-operating, between appropriation acts including special and annual, and between agencies. Is that right?
Mr Youngberry —Generally, yes, that is right.
Senator RONALDSON —So on what basis are you allowing an appropriation between operating and non-operating, given that equity injections are a non-operating appropriated amount?
Mr Youngberry —The equity injections are provided for the acquisition of assets. Where staff are involved in the production, or improvement of those assets for the collection, then it is an asset acquisition exercise that can be charged against an equity injection.
Mr Tune —For example, if it was being used to just supplement general operations, it would not be legitimate.
Senator RONALDSON —Just so I am clear, the only way you could use it for operating expenses—is that general operating expenses or just staff?
Mr Youngberry —It would be general operating expenses.
Senator RONALDSON —It would only be for those matters that relate to the collection, is that right?
Mr Youngberry —That is right.
Senator RONALDSON —For example, a guide would not fall within that definition?
Mr Youngberry —That is right.
Mr Martine —Just on that, the head of the War Memorial put out a recent statement that quoted the council’s policy on this matter. I will read it out:
Council’s policy endorsed by the Australian Audit Office is to only fund staff from capital funds when the costs are associated with enhancing the asset, extending its useful life, or replacing the asset.
Senator RONALDSON —Are they your definitions or his?
Mr Youngberry —The definition has come from accounting standards. The War Memorial applies accounting standards, the Australian National Audit Office comes in and reviews the application of the memorial’s practices, and basically certifies that they have done the right thing in reference to the standards.
Senator RONALDSON —We have ascertained that the standards are very strict. The reallocation of staffing resources is strictly limited to those collections?
Mr Youngberry —That is right, yes.
Senator HUMPHRIES —While this urgent review is going on, of course the memorial is still grappling with a reduced budgetary outlook for this year. Whatever decisions are made in the budget of 2011-12 will not affect it until the next financial year, of course. At one point the chairman of the memorial council talked about a 20 per cent staff cut, and the Red Book talked about other serious changes to functions, including cutting core functions like printing of the peacekeeping official histories. What is the memorial actually doing now to cope with those changes?
Mr Tune —You would have to ask that of the War Memorial.
Senator HUMPHRIES —I just thought that if you people are reviewing funding the memorial, you would be able to tell us what the memorial is doing right now with respect to its funding.
Mr Tune —I am not aware of the detail, but we are focusing on the future—that is correct.
Senator Wong —Senator, as I recall the efficiency dividend that you supported, and you continued to support, was significantly higher than the one the government is imposing.
Senator HUMPHRIES —It was not as high as the 3¼ per cent dividend which the government imposed in 2008, of course.
Senator Wong —I am making the point that 1.25 per cent is our election commitment. Yours was two per cent, so when you profess sympathy for these various public entities for the purposes of your local media, perhaps you should be telling people that you actually support a policy where there is a higher efficiency dividend applied to these institutions.
Senator HUMPHRIES —Our record in government, Minister, was in fact to increase support for all of the national institutions, including the Australian War Memorial
Senator Wong —I notice it does not happen when you are interviewed about this, Senator.
Senator FIERRAVANTI-WELLS —Going back to my previous questioning, I have some further information which I would like to pursue in relation to the advertising campaign for the health changes mark 1. In February last year were the meetings of COAG, which ultimately led to Prime Minister Rudd appearing at the National Press Club on 3 March. I understand that ministerial approval to develop the campaign was given on 19 March and then the Department of Health and Aging engaged a research company. Groups were run, benchmark research was undertaken, a creative agency was appointed pursuant to some process—which I never quite got to the bottom of—and then I understand that DoHA appeared before the Independent Campaign Committee on 7 April. Can you confirm that? Can I just clarify that the first approach to you was about 7 April?
Mr Grant —The first time that the health department appeared in front of the Independent Communications Committee was 7 April. It appeared eight other times also—that was on 21 and 28 April.
Senator FIERRAVANTI-WELLS —Yes, I am coming to that. There was a series of updates, and then the department did some round concept testing, and stuff like that. I come to 11 May, and I understand there was correspondence from you too, Ms Halton. That correspondence made reference to five meetings—not eight—on 7, 21 and 28 April, and 6 and 11 May.
Mr Grant —Correct.
Senator FIERRAVANTI-WELLS —It referred to the need to check inconsistencies in the website call to action, and some things needed to be fixed. Most pertinently, you certified on the information received, but you did not review the advertising material. No TV commercial, radio ad, print ad, or digital ads were referred because you certified on the information received.
—I will have to take that on notice. I can say that the ICC views all advertisements before they provide their advice about compliance. Before the final compliance advice is provided, they see the final ads. There seems to be a gap in the information there that I will take on notice. Before the final compliance advice is provided, they see the final ads. There seems to be a gap in the information there that I will take it notice.
Senator FIERRAVANTI-WELLS —I am basing that on your letter to Ms Halton. I am not going to ply through and get it because it is in your records, but please do not make such a bald statement without at least going back and having a look at the correspondence. I have spent a lot of time trawling through the entrails of this issue. My point is this: if you have not seen the advertising material, and there was a lot of advertising material, who takes responsibility for the factual accuracy of that material? Is that then Health’s responsibility if you have not seen the ads? Do you take the responsibility for the ads sight unseen?
Mr Grant —We will take it on notice because I will have to check. My understanding is the ICC will have seen the ads, and the material that they saw is actually listed on that letter, which is on the website.
Senator FIERRAVANTI-WELLS —Interesting, because the letter does not list the material that was seen. That is my point. You make a bald statement. You spent almost $30 million, or approved almost $30 million to be spent on a campaign, and on the material that I have, which is the letter that you sent to Health, you have not actually seen the advertisement.
Senator Wong —The officer has taken the question on notice. I am not sure berating him extends the matter much further.
Senator FIERRAVANTI-WELLS —My other point is: if you did not see the material, who then takes responsibility for it?
Mr Tune —The secretary of the department is responsible for authorising the campaign.
Senator FIERRAVANTI-WELLS —So you take responsibility, Mr Tune, for the accuracy—
Mr Tune —No, the secretary of the relevant department.
Senator FIERRAVANTI-WELLS —The secretary of the relevant department takes responsibility?
Mr Tune —Under the FMA Act, the secretary of that department has the responsibility for approving the expenditure associated with the communication campaign.
Senator FIERRAVANTI-WELLS —The point that I am making is that on that same day, 11 May, you identified gaps, you certified, and Ms Halton also certified that this was a cabinet decision which was intended to be implemented during the current parliamentary session. Given that the health reforms went through their own COAG process, it just begs the question as to the accuracy or otherwise of that certification. That is a matter for Ms Halton rather than a matter for you.
Mr Tune —As Mr Grant has indicated, we will go back and have a look at exactly what the ICC looked at in terms of product, and we will get back to you on notice with that.
Senator FIERRAVANTI-WELLS —The next point is there was $29.5 million in the budget that day, the same day that the certification was done. On the day after, the minister approves the launch, and on 13 May the campaign starts. On 13 May we start seeing the television ads. On 16 May we start seeing the advertisements in the newspaper. In the end, yes, there is a difference between the workforce component because the workforce campaign was separate. I take, Mr Tune, the comments of your officials in relation to that campaign, because that seems to have gone a different route, whereas you did review the advertisement material. Because the letter of 10 June that you sent to Ms Halton refers to five meetings—24, 26 and 28 May, and 10 June—and you say in that, ‘The ICC reviewed the advertising material; i.e. TV, print ad and radio ads.’ That is why I made the point that I did, Mr Grant. Why did you state in the workforce element component of the campaign that you had reviewed the material, but you said that you had not reviewed it in the other campaign? That is my concern.
Mr Tune —We will check all that out and get back to you about what was seen by the committee in terms of product by product. Chair, I took a question from Senator Fifield earlier about the daily rates page of the Independent Communication Committee members, and I said I would get back to him as soon as I could. I would like to put on the record that Dr Allan Hawke, the chair, is paid $3,300 per day inclusive of GST, and both Ms Helen Williams and Ms Anthea Tinney are paid $2,750 per day inclusive of GST.
Senator CORMANN —During the election, the department ticked off on election costings by the government. Have there been any changes to any of those costings from the election period to MYEFO?
Mr Tune —I would have to take it on notice and check. It is quite possible that there would have been changes as parameters changed, for example. You get updated information about CPI, wages growth, GDP growth and so forth. If they impact on the costing of a commitment that the government has not yet ticked off on in terms of the formal budget process, or the MYEFO process, then you would have another look at it.
Senator Wong —Insofar as there are any changes to costings for election commitments outlined in MYEFO, those costings would be reflected in the MYEFO costings.
Senator CORMANN —Mr Tune, would you be able to provide us on notice with a detailed breakdown of any of the costings that changed between the election period and MYEFO?
Mr Tune —I think I can, but I would like to clarify what you are asking. Are you after election commitments that have since been confirmed and announced formally by the government as of today, going backwards and seeing if there was a change in the cost?
Senator CORMANN —I am looking for all election commitments that were costed by Finance and Treasury during the election period.
Mr Tune —We would not have recosted a very large number of them at this point in time.
Senator CORMANN —The question is about anything that has been recosted since the election.
Mr Tune —That is what I was trying to clarify.
Senator CORMANN —Obviously things that you have not recosted, I am not requiring.
Mr Tune —I just wanted to get clarification on what exactly you wanted.
Senator CORMANN —Senator Wong, a range of analysts and public finance experts have said that it would indeed be possible to utilise a contingency reserve to fund the flood recovery effort. Can you explain why the government did not go down that path?
Mr Tune —I did see one article earlier in the piece, just after the floods, that suggested contingency reserves could be used. That is not the case, Senator. If I can just put it this way: if the contingency reserve had been used, that would have hit the bottom line in exactly the same way as any other expense would. The contingency reserve is not set up for the purposes of funding those sorts of things; it is there as a reserve around decisions taken but not yet announced by the government, and also about trying to improve the accuracy of the estimates over time through the conservative bias allowance. It is incorrect to state that the contingency reserve is somehow a free reserve that you can just draw down for any purpose you might want to at any particular point in time.
Senator CORMANN —I object to your description and the way you have treated the question. I do not think anybody is suggesting that it is a free reserve that you can spend in any way you like.
Mr Tune —It was the implication—
Senator CORMANN —Let us just take a step back and walk through this step by step. Is it true that the contingency reserve contains about $13.6 billion for future equity injections into the NBN?
Senator Wong —Can I just—
Senator CORMANN —It is a very specific question, Minister Wong. Mr Tune, is there provision in the contingency reserve of about $13.6 billion for future equity injections into the NBN?
Mr Tune —Yes, there is.
Senator CORMANN —I thought there was. In the NBN Co. corporate plan the company indicates that government equity in the order of $5 billion will be required over the current forward estimates. That is also correct, is it not?
Senator Wong —Sorry?
Mr Tune —$5 billion for what?
Senator CORMANN —In the current forward estimates, if you look at the NBN Co. corporate plan, which I am sure you would be well aware of, it tells us that about $5 billion will be required in government equity injections by NBN Co. over the forward estimates.
Mr Tune —Yes, that is correct, and that will be updated in the near future as the government makes its decisions on the corporate plan.
Senator CORMANN —So, over the forward estimates, there are potentially excess contingency funds of about $7 billion?
Mr Tune —There is confusion here. If I can clarify: the money that is in the contingency reserve for NBN is equity injection. It does not hit the bottom line. You cannot take that money and then spend it, because then it hits the bottom line.
Senator Wong —Investment, as opposed to recurrent expenses.
Senator CORMANN —What are you proposing to do in Queensland, Minister?
Senator Wong —We are proposing to fund $5.6 billion, approximately—
Senator CORMANN —In investment?
Senator Wong —to rebuild Queensland after the quite devastating natural disaster we have seen. That does not include, of course, the additional funding the government will provide in relation to Cyclone Yasi. We have put forward a very sensible, prudent, and responsible package to fund that, in order to give Queensland the certainty we believe they need to rebuild their community—
Senator CORMANN —I ask the question again. Why—
CHAIR —Senator Cormann, please let the minister complete her answer.
Senator Wong —If I can respond on the contingency reserve, you should take Peter Costello’s advice, who I think said that CR is not a fund for a rainy day. This is a new ‘rob’ economics that the coalition seems to be putting forward, where you just rewrite budget rules to suit your political circumstances. You cannot simply raid the CR—
Senator CORMANN —To suit the national circumstances, Minister.
CHAIR —Senator Cormann—
Senator Wong —No, it is not. You cannot simply raid the contingency reserve, which is there to provision for variations into the future on government expenditure, sensibly and prudently. You cannot simply raid it because you cannot come up with a sensible package to rebuild Queensland.
Senator CORMANN —There is a lot of money, obviously, put into contingency reserve beyond the current forward estimates for the splash of taxpayer dollars on the NBN. Why couldn’t a proportion of these funds be redirected and appropriated for the specific purpose of flood reconstruction? Is it technically possible, Mr Tune?
Mr Tune —Not without it hitting the bottom line, no. As I explained, the NBN CR provision is for equity; the rest of the CR is around expenses. If you switch from equity to expenses, for example, to finance the flood relief, you are hitting the bottom line directly by the amount that you take out of the equity. It is that simple.
Senator CORMANN —It is possible, though?
Senator Wong —It would still hit the bottom line, Senator.
Mr Tune —You will increase the deficit; it is not free money.
Senator CORMANN —No, it is not free money; of course not. None of the taxpayers’ dollars is free money, including the taxpayers’ dollars you are throwing at the NBN. Senator Wong, how hard did you look for additional savings to eliminate the need for the flood tax?
Senator Wong —The government has announced its flood package. It comprises around two-thirds of the expenditure for what is likely to be the most costly economic disaster the nation has seen. We have funded two-thirds of it through cuts in expenditure, and one-third through a modest levy which we will impose at around $1 a week for around 60 per cent of taxpayers.
This stands in stark contrast to the savings package you put forward, which contained, I think, $700 million of double counting. You can come in here and talk to us about fiscal responsibility, but you have some work to do. There is a $10.6 billion black hole in your election costings, and $700 million of double counting in the savings package that not even your shadow cabinet supports.
Senator CORMANN —Have you got further savings up your sleeve should the flood recovery costs blow out, as the Prime Minister suggested?
Senator Wong —The Prime Minister has made clear that the government will fund additional expenditure over and above the $5.6 billion, and also for Cyclone Yasi, through savings measures.
Senator CORMANN —If you have capacity for further savings measures, why are you imposing the levy?
Senator Wong —We are putting forward what is a prudent and responsible package, bearing in mind that this is one amongst a range of budget pressures the government is going to have to address in the budget context.
Senator CORMANN —So you have capacity for further savings—you have conceded that—but when faced with a choice between more savings and tax hikes, you go for the tax hikes? That is your instinct?
Senator Wong —That is not what I said. I could turn it around to you and say, when faced with the opportunity to put forward a sensible package to rebuild Queensland, you play politics.
Senator CORMANN —We put forward a very sensible package.
Senator Wong —With $700 million double counted. The opposition’s attack on fiscal responsibility has absolutely no basis, because you have no credibility on this issue.
Senator CORMANN —I would expect you to say that.
Senator Wong —You have no credibility.
CHAIR —Senator Cormann, the minister had not completed her question. We are eating up valuable time by having interjections. The minister has the call.
Senator Wong —I have finished, thank you.
Senator FIFIELD —Chair, she was monologuing.
Senator CORMANN —Minister, can you run us through the savings measures identified by the government to part-fund the flood reconstruction package?
Mr Martine —I am happy to talk to that. The document to which I am referring is the announcement by the Prime Minister on 27 January 2011. Attachment No. 2 of that press release outlines it in detail. There are two pages worth of savings that add to $5.641 million. I am happy if you want to run through each of them.
Senator CORMANN —Maybe you can talk us through how those savings were identified. What criteria did you use to identify those savings?
Mr Martine —They were identified through a process internal to government that was similar to an ERC process.
Senator CORMANN —What was your criteria? If there was waste and mismanagement, you took it out? If it was not hitting the mark, you took it out? What were the criteria that you used?
Mr Martine —They are decisions of government. For various reasons, the decisions were taken. The government came to a view that they were lower priority, and—
Senator CORMANN —They were lower priority?
Senator Wong —I can take this because it is probably not reasonable to ask Mr Tune or Mr Martine that. The government made a range of savings decisions. As you would be aware, budget decisions of this type are a matter of competing priorities. It is not so much that there is expenditure that has no merit; it is more that particular programs have less merit in the face of the greater priority to be given to the rebuilding of Queensland.
In terms of the decisions made, first there was obviously a range of decisions in relation to climate programs, and the Prime Minister addressed that specifically in her speech where she referenced the government’s commitment to a carbon price. I know your view on that, Senator, but just leaving that aside for the moment—
Senator CORMANN —It was the Prime Minister’s view before the election.
Senator Wong —Just try and leave that aside so that I can finish.
Senator CORMANN —I am sure you are trying to leave that aside.
CHAIR —Senator Cormann, the minister has the floor.
Senator CORMANN —She was provoking me.
Senator Wong —I was not, actually. I was trying to be polite.
CHAIR —Minister, just return to your response.
Senator Wong —The Prime Minister addressed, I think, directly in her speech to the National Press Club, the logic behind the reduction in spending in those programs, given that we know the most efficient way to achieve much of the abatement that we are seeking is through a price in carbon to cut pollution.
In relation to the deferral of infrastructure, there are really two policy reasons for that: one of them obviously was to create some savings in the relevant period to help fund the recovery; but there was a very strong view inside government that we needed to deal with the capacity constraint issue. You would know, as a Western Australian, that there are significant approaching capacity constraints, particularly in the area of construction as a result of the mining boom, and other projects. It was our view that it was sensible to make some space for the rebuild, given those capacity restraints. The deferral of infrastructure which was negotiated with Queensland, and then subsequently with a range of other states, had an added public policy benefit or objective in mind.
Proceedings suspended from 10.30 am to 10.46 am
CHAIR —Welcome back. Before we have our next witnesses, I believe that there is a response to questions from Senator Fierravanti-Wells. Would like to put those on the record now?
Dr Helgeby —Yes, we would like to do that. Senator Fierravanti-Wells quoted some letters which are on our website in relation to health reform advertising. She quoted a letter dated 11 May and another dated 10 June. In relation to the letter dated 11 May, one paragraph states:
The Committee met with your department on five occasions (7 , 21 and 28 April 2010; 6 and 11 May 2010) to consider the ‘Health Reform Campaign’ during its development, and has considered the communications strategy, Health Reform research, final creative materials, research testing results, the proposed media plan and strategy, and a Statement of Compliance with the Principles.
The key phrase there is ‘final creative materials’, so final creative materials were assessed by the committee. There is, however, an attachment to that letter which may be the source of some confusion. Attachment A, headed ‘Final campaign advertising materials reviewed’, refers to television, radio, print and digital. In the comment column, it states, ‘Not applicable.’ The intention of the comment column was to convey any comments the committee had about those items, but those words might have led to the view that in fact the committee did not see those items. The committee did see those items. For subsequent reports, for example, in the letter dated 10 June, we adopted a different approach to that comment column in the same attachment. From then on, we basically state the date on which that particular material was reviewed.
CHAIR —Thank you very much for coming back to us so quickly.
Senator FIFIELD —When I was chatting with the chair earlier, Mr Tune, you came back with an answer on the daily rate for the independent advertising review committee. Could you tell me what that was? I was distracted when I was chatting with the chair.
Mr Tune —I cannot remember what I said, but I will find it quickly. The rates were $3,300 per day inclusive of GST for the chair and $2,750 per day inclusive of GST for the two members.
Senator FIFIELD —Is that $3,300 per day for the chair?
Mr Tune —Yes.
Senator FIFIELD —Is that a lot of money? It sounds like a lot of money—$3,300 per day.
Mr Tune —It is a reasonable amount of money, but that is probably the market rate. Well, it is the market rate.
Senator FIFIELD —Is there some schedule of daily sitting fees for Commonwealth board members? Is that the reference for this?
Mr Tune —It depends on the position. In some cases, the Remuneration Tribunal will set a daily sitting fee for some activities. I cannot recall whether this one went through the Remuneration Tribunal. No, it did not, but we use the Remuneration Tribunal as a comparator for some determinations.
Senator FIFIELD —What is the Remuneration Tribunal comparator for that?
Mr Tune —It depends on the position. They will vary. They take account of the workload, the work that is being done, the expertise that is required to undertake that work, and they will set a rate. We look at that when we are trying to come up with a rate that we would provide to a member for doing a particular task for us.
Senator FIFIELD —They are sort of barristers’ rates, aren’t they?
Mr Tune —I have no idea what a barrister charges, quite frankly. I know it is a lot.
Senator FIFIELD —Maybe I am out of touch with the going rate for doing work, but $3,300 per day for sitting on a committee to review government ads does sound—
Mr Tune —It is not every day, as you would appreciate.
Senator FIFIELD —No, but it is a good day when you do, clearly.
Mr Tune —It is a busy day, too, when you are doing it. It is not just the work you do on the day; you are obviously doing a lot of preparatory work in the lead-up to a meeting. If you were, say, looking at three or four campaigns in a day, there is a lot of material to review before you actually get to the day when you look at it.
Senator FIFIELD —I am sure they work up a real sweat through the course of the day. I would be interested in what the comparator is that the department sought. I appreciate that it is not actually a Remuneration Tribunal determination but that you sought what you thought was an appropriate or an equivalent rate.
Mr Tune —We will take that on notice and come back to you, Senator.
Senator FIFIELD —Okay, thank you.
CHAIR —Thank you. Now we will move to program 1.2, Public Sector Superannuation and ComSuper.
CHAIR —I welcome Mr Peter Cormack and his officers. On behalf of the committee, I would like to acknowledge the fact that you were able to reschedule and appear earlier today. We do appreciate that. That was in request to a senator who had some other urgent matters. Thank you very much for committing to be here. Mr Cormack, do you have an opening statement?
Mr Cormack —No, I do not.
Senator HUMPHRIES —Thank you ComSuper staff for being here early. I wanted to ask about a case involving a woman who was working at the ComSuper offices in Belconnen who was subsequently asked to leave that particular workplace at the request, I understand, of a ComSuper staff member. The person concerned is Ms Giuseppina Garreffa. I think you have been made aware that I was going to ask these questions. Could you describe for the committee what were the circumstances that led to Ms Garreffa being asked not to work at the ComSuper offices by her employer, a cleaning contractor for ComSuper?
Mr Cormack —Certainly. This case goes back to 2007. We have not heard from the complainant since late 2009. On investigation, the situation is that the two families involved are related by a common grandfather. It seems there was a dispute in relation to the estate of that grandfather. You are correct in that Mrs Garreffa was working for a contractor. She never worked directly for ComSuper, and we have two staff members, two sisters, who are related. An altercation occurred in the foyer of the building, and subsequently our staff expressed some concern about their safety. Our obligations under Safe Workplace and so on were that we should look for an alternative rather than putting these people into a complex situation. For that reason, we asked the contractors if they could find alternative employment at another site for the same conditions as Mrs Garreffa enjoyed while working at ComSuper. They agreed to do that. I understand that she took up that offer.
Subsequently, ComSuper tendered the cleaning contract, and another contractor was appointed. Due to circumstances, Mrs Garreffa was back on the site at ComSuper. We were aware of the situation of the longstanding family dispute and the safety concerns expressed by two of our staff members, and we took the same approach with the new contractor, and asked if they could find an alternative site for Mrs Garreffa to work on the same conditions that she enjoyed while working there, to which they agreed.
As far as we were concerned, that was the end of it. Effectively, we thought it was a fair solution. We do not believe that Mrs Garreffa suffered in any way in terms of financial disadvantage, and we were able to avoid disputes continuing to occur.
Senator HUMPHRIES —As you would appreciate, Mrs Garreffa is somewhat distressed that she has been told to leave a particular workplace on the basis that she has done something wrong. She has not been informed of anything specifically that she has done which is wrong. You mentioned an altercation. What was the date of that altercation?
Senator Wong —Senator, as you would know, it would be reasonably unusual for these industrial issues of a particular and named employee to be ventilated in the context of estimates hearings. Obviously you are entitled to ask a question, but I would ask you to consider whether there might be a more appropriate forum for this discussion to occur. As a general rule, as the minister at the table, I have resisted dealing with individual staff matters. I appreciate that this is not in my department, but it is in the portfolio. In this sort of context, there is obviously a range of sensitivities, and my view is that it is not particularly appropriate.
Senator HUMPHRIES —In response, I will say that I have raised it in this context because my constituents, the family of Mrs Garreffa, have raised the issue on a number of occasions directly with ComSuper by way of correspondence, and have not, in their opinion, obtained a satisfactory response to basic questions like: why was Mrs Garreffa asked to leave these premises; and what has Mrs Garreffa done to disqualify her from working on this site. I have corresponded with ComSuper about it, and I have not had satisfactory responses to those questions.
Senator Wong —It would be most unusual for these sorts of industrial disputes to be tried to be resolved during an estimates hearing.
Senator HUMPHRIES —It is not unprecedented. I have heard people’s cases being raised before.
Senator Wong —And you have raised it.
Senator HUMPHRIES —I suppose it is a matter for the chair of the committee. If I had some other means of pursuing this matter, I would certainly have done so, but I have not had any other opportunity.
Senator Wong —I understand that Mr Cormack would be happy to meet with you to discuss this matter. As the relevant minister, I would be quite comfortable with that occurring. I certainly think that would be a preferable approach, and perhaps even for the people concerned than perhaps dealing with this in this context.
—I am happy to accept that offer, thank you, Mr Cormack. Obviously I reserve the right, if I am unable to resolve the matter satisfactorily, to raise it in this context again. I might say I do not accept that it is not possible to raise a matter as specific as this in the context of a committee hearing, because it has certainly happened before. But I am very grateful for the offer and I am very willing to take that up.
CHAIR —We did seek advice on this matter, because I had some concerns about the personal nature of the questioning, but the advice was that it was reasonable for Senator Humphries to ask ComSuper about this matter, including the cleaning contract, the costs and the overall administration, which may include staffing matters such as this.
Senator Wong —But that is not what he is asking.
CHAIR —That was our advice. I think the offer that has been made is a reasonable one, and I think that assists the committee and also the senator.
Senator CORMANN —The Australian Reward Investment Alliance policy for trustees does not appear to have any reference to conflicts of interest and how they should be managed. I assume you do have a board policy on conflicts of interest?
Mr Tune —I think that is a departmental issue rather than a ComSuper issue.
Senator CORMANN —Okay. I thought it was a ComSuper issue.
Mr Greenslade —It is not a ComSuper issue. Could you please repeat the question?
Senator CORMANN —I understood that ComSuper was part of the Australian Reward Investment Alliance.
Mr Greenslade —No, that is not quite correct.
Senator CORMANN —Could you educate me.
Mr Greenslade —The Australian Reward Investment Alliance, ARIA, is essentially the trustee body. It has the broad responsibilities of a trustee, and one of its major functions is investing members’ money. ComSuper is the administrator of the scheme, so it processes pension payments and so on. Mr Cormack can probably give a much more precise description of what they actually do. So there are two separate functions, essentially—two separate bodies.
Senator CORMANN —Two separate bodies for dealing with the same money, though? One operationally and one—
Mr Greenslade —Yes, one is the scheme administrator; the other is the trustee body.
Senator CORMANN —When do we get an opportunity to talk to the trustee body?
Dr Helgeby —ARIA normally appears separately.
Senator CORMANN —Does ARIA appear usually?
Mr Tune —Not usually, no—not in my experience anyway.
Senator CORMANN —But it is something that we could ask for?
Mr Tune —Yes.
Senator CORMANN —Okay. I will put on notice for the next estimates that I would like to ask some questions of ARIA, in the context of—
Senator Wong —But ComSuper is the administrator. So, if there are questions about the functions, Mr Cormack or his staff would be in a position to respond, as opposed to trustees who obviously have a different—
Senator CORMANN —I have a series of questions, just to put it into context, and I will leave it at that for today. I have a series of questions in the context of the Cooper review recommendations and how they will flow through to corporate governance arrangements for ARIA. If ComSuper is at the operational end of it and ARIA is the appropriate body to answer those questions, I would like to do that at the next estimates.
Senator Wong —We will consider that. I would also suggest that the implementation of the Cooper review might be something that you could raise appropriately with Treasury officials.
Mr Tune —That is correct, but this is getting a bit murky.
Senator CORMANN —It seems to me that we are not actually asking questions of the right people if ComSuper is not really involved in that framework of setting levels in terms of how public servants’ money is invested. Why would we be able to ask questions of ComSuper but not the body that is essentially on top of it?
Mr Tune —I am not taking issue with that. It is just that they are not here.
Senator CORMANN —How much of the spending cuts announced by the government in the context of the flood package was involved in the deferral of funding?
Senator Wong —While Mr Martine is looking at the savings measures, I will say that, other than the one infrastructure project in South Australia, the infrastructure component did comprise deferrals for the reasons I outlined prior to the break.
Senator CORMANN —I am not against deferrals.
Senator Wong —No. There are the savings, which may be a mix of some deferrals and some reductions in expenditure, but I am also just being clear that, apart from the project in South Australia that did not proceed, the remainder of the infrastructure package is deferral.
Senator CORMANN —Can I have some dollar figures around that.
Mr Tune —We are just trying to add it up at the moment.
Mr Martine —I am just going through the attachment to the Prime Minister’s statement to which I earlier referred. I do not have the aggregate number, but certainly, from looking through this—and I have been through the first page—where it does relate to a rephasing, it is clearly identified in the commentary under the title of the proposal.
Senator CORMANN —A lot of the programs that were targeted for cuts were actually programs for which you were formally responsible as minister for climate change, Senator Wong. Were they targeted because you were aware that there was a great opportunity to achieve efficiencies in programs that were not particularly efficient?
Senator Wong —I think I am well and truly on the record about my views as to a carbon price being the most efficient way to reduce Australia’s emissions. I do not think that would be a surprise to you.
Senator CORMANN —So you had inside knowledge from your previous responsibilities that the programs that were administered by your previous department were not that efficient?
Senator Wong —As much as I would like to say all of them were, some of them are; a number of them are not. Even though they were ostensibly climate programs, a number of them were obviously in different portfolios. CCS and the Solar Flagships are in Minister Ferguson’s portfolio; the car schemes are obviously in Minister Carr’s portfolio. The Solar Homes and Communities Plan and the renewable energy schemes were previously with Minister Garrett and were then transferred to my department when I was formerly the minister for climate change.
Senator CORMANN —A lot of the programs that you were defending as highly important and necessary when you were the minister for climate change have now been cut by you as finance minister—because you had inside knowledge of problems and inefficiencies that could be addressed?
Senator Wong —I think a better way of considering it is the way I described it before. Budgets—and this was a set of budget like decisions—are about priorities. In the short time I have been in this job, it is rare that the decision is between a completely worthless program and a very good program. Generally it is programs which have worth, but you have to prioritise them. The government’s judgment in the context of the Queensland floods was that that was a higher priority than these programs. As I said, the Prime Minister also articulated in her speech to the Press Club the primacy of a carbon price as the most efficient way to reduce Australia’s pollution.
Senator CORMANN —As part of this discussion on the flood package, we talked about whether or not money in the contingency reserve beyond the forward estimates currently earmarked for NBN Co. could be redirected and appropriated for the specific purpose of post-flood reconstruction. I would like to explore that a bit more. In a press release on 28 January, you said:
Investment in the National Broadband Network does not affect our net debt or affect the level of deficit or surplus, because it is an asset that will generate income over time.
We have had discussions about that at previous estimates, as to if and when that would need to be reconsidered. You went on to say:
Therefore it does not have an impact on our ability to assist in Queensland.
Can you just explain what you mean when you say the NBN does not affect net debt. Doesn’t the state that you have the budget in mean that any NBN equity is, in essence, borrowed money because you are already carrying a substantial debt and deficit?
Senator Wong —This is the equity versus expenses distinction that Mr Tune was explaining to you prior to the break. Mr Martine might be able to assist you further.
Senator CORMANN —I would like it if Mr Martine could assist me.
Senator Wong —He is very helpful.
Mr Martine —As Mr Tune was talking about earlier, the issue is really the difference between an equity investment and a government spend. The general principle that one should keep in the back of their mind is that if the government of the day spends money, you will hit the budget bottom line as opposed to what we call a balance sheet transaction which is an equity investment. In those situations, you are exchanging one asset for another. You might be exchanging cash for shares in a company, for example. That is an important distinction about this whole debate.
Senator CORMANN —Sure, I understand that distinction. However, we have explored this with the Economics Section of the Parliamentary Library, and I put to you what they have put to us in a note: ‘Irrespective as to whether such equity injections are sourced from existing cash assets (for example, allocations in the BAF), or debt issuance (for example, the sale of CGSs), the effect on the Government balance sheet is the same. Net worth and net financial worth are unaffected and net debt is increased in both instances.’ Is the Parliamentary Library correct in their advice to us, or do you have a different view?
Mr Martine —In the absence of having the advice that you received from the Parliamentary Library—
Senator CORMANN —I have just read it out to you. It really goes to the question of whether or not it is impacting on your levels of net debt. In the context of the significant borrowings the government already has, it is the only way you can finance any equity injections, surely.
Mr Martine —Certainly net debt does not include equity investments. If a government invests in a financial asset through an equity investment, that does not impact on net debt.
Senator Wong —If you want to redact parts of that advice and provide us with the bits that you want us to see, we could perhaps provide you with an explanation of any difference.
Senator CORMANN —I will get a copy of that to you at the right time. I cannot get it out of my piece of paper here. In the budget, it was estimated that NBN equity injections over the forward estimates would amount to $16.7 billion, and we have already had this discussion. I might leave the contingency reserve until I can get a copy of that note to you.
The flood tax was announced by the Prime Minister through a media release on 27 January, and we have talked about that. Where did the idea for a flood tax originate? Was it from the Prime Minister’s office or Treasury or Finance? Who came up with the idea?
Senator Wong —These are decisions the government makes. There are cabinet and cabinet committee processes associated with these decisions. I suppose much in the same way as the six levies initiated under the Howard government might have been made.
Senator CORMANN —It is fair to assume that Treasury had lead responsibility in designing the flood tax?
Mr Martine —Yes.
Senator CORMANN —When was the finance department first informed about the option of implementing a flood tax to pay for the flood damage?
Mr Tune —I do not intend to go through the finer workings of what was happening inside the government and its decision-making processes.
Senator CORMANN —But in previous times, all other issues—
Mr Tune —All of these things happened simultaneously. They happened over a reasonably short period of time because the government had identified the need to respond quickly, and there was a lot of intensive work done over a short period of time to pull together the package. That comprised work done by Finance on some aspects of the package; it comprised work done by Treasury on other aspects of the package.
Senator CORMANN —Can you give the date when you first became aware? I have to say, in previous estimates—
Senator Wong —No, he has just said he is not going to do that, Senator.
Senator CORMANN —That is a new level of secrecy.
Senator Wong —No it is not. It is not secrecy.
Senator CORMANN —When we had discussions in the past on things to do with means testing the private health rebate and other matters—
Senator Wong —It is not secrecy. I am pleased you brought up the—
Senator CORMANN —These are answers that were always provided as to when departments first became aware. I think we had a discussion about it—
Mr Tune —I do not have the date in my mind, but I can find out for you.
Senator CORMANN —If you could find out the date, I would be very grateful.
Mr Tune —I will have to go back through my diary, but obviously it was pretty soon after the floods occurred and we all became aware of the significance of the event. Obviously the government wanted to make some quick decisions, or as quickly as they could, doing it in a sensible way. So, from that point onwards, we were thinking about what response there would be to the floods in South-East Queensland and also the events in Victoria and other states, and more latterly, Cyclone Yasi.
Senator CORMANN —I am just trying to get the timings clear in my mind. While the Prime Minister was calling for Australians to dig deep and donate, was your department and Treasury and other departments in government working on the flood tax proposal at that same time?
Mr Tune —I will go back and check the date as to when the department of finance became involved. You would have to ask Treasury about their involvement.
Senator Wong —But in response to that, and if you want to play those sorts of games with this, let us get the facts on the table.
Senator CORMANN —Let us get the facts on the table; that is a good idea.
Senator Wong —I am responding to your proposition, Senator Cormann, and I listened to you. First, the money that was donated by Australians for the people of Queensland is used for different purposes than the funding of the floods package that the Commonwealth has presented. The former is to help people get on their feet. It is individual assistance, family assistance, that type of aid. The flood package, being some 30 times more than Australians have donated, is about rebuilding the infrastructure and other assets which have been damaged or destroyed as a result of the floods. So, to draw a connection between the two is most disingenuous.
Senator CORMANN —It is not disingenuous at all, with respect. I think it is a fair question as to what was the timing of the Prime Minister’s support for the flood tax, whether that was at the same time as calling on Australians to make donations and dig deep to help the recovery effort in Queensland.
Senator Wong —The Prime Minister is ensuring that the people and the state of Queensland have the funds needed to rebuild. That is the responsible thing to do.
Senator CORMANN —Were proper cabinet processes followed in the context of the flood tax proposal? That is, were normal lodgement deadlines followed, or was it a more accelerated process?
Mr Tune —No, it was accelerated, obviously, because of the speed but processes were followed, yes.
Senator CORMANN —Was it a joint submission, or was it a submission by one—
Mr Tune —I am not going into the content or who wrote cabinet submissions.
Senator CORMANN —No, I am not asking for the content. I do not think it is unreasonable to ask whether it was a joint submission by the Treasurer and finance minister.
Mr Tune —It is an issue around cabinet consideration and documents that were put before cabinet, and I do not think I can answer the question.
Senator Wong —Mr Tune has already confirmed that both Treasury and Finance worked on this package which is, if I might say, pretty unsurprising.
Senator CORMANN —Who made the decisions about what savings would be used to pay for the flood damage?
Mr Tune —Ministers.
Senator CORMANN —That was a cabinet decision?
Mr Tune —Yes.
Senator CORMANN —Did the department identify proposed savings? Were all of the savings that you put forward accepted?
Mr Tune —It is the same answer as before. I cannot go into those sorts of issues about confidential advice that the Department of Finance and Deregulation provides to the minister and to other cabinet ministers.
Senator Wong —I think if you asked colleagues who were in government, you would know that departments often prepare many options.
Senator CORMANN —The government has of course now reversed a whole series of proposed cuts. We have had the $50 million to reinstate higher education funding to get Andrew Wilkie on board; we have $100 million in proposed cuts to your Solar Flagships program which was reversed to get Green support; $264 million in the National Rental Affordability Scheme; and $500 million for floods rebuilding in the state of Victoria to be brought forward to get Senator Fielding on board. Have you identified alternative savings to make up for those spending increases compared to the original round of cuts?
Senator Wong —My recollection is that the total amount of alteration to the package is some three per cent of the total or less than three per cent of the total.
Senator CORMANN —How much is that in dollars?
Senator Wong —There was a proportion of the Australian Learning and Teaching Performance fund, say, which was altered by some $50 million. There was reinstatement of $60 million to the Solar Flagships program and a shift in the phasing of that. The government had reaffirmed and clarified with the Greens what occurred with the National Rental Affordability Scheme beyond the forwards but that is not an alteration of the government’s previous intention. So I think the total is, as per my public statements, $150 million. What we have also said is we will account for these changes in the upcoming budget.
Senator CORMANN —So you will account in the upcoming budget? So you have not made these alternative savings yet, Minister—is that right?
Senator Wong —Sorry, Senator. Could you give us 30 seconds?
Senator CORMANN —So you have not found those alternatives savings yet?
Senator Wong —We will be dealing with that in the budget context.
Senator CORMANN —It seems a bit hypocritical because the Prime Minister has been saying to the coalition that we have got to identify alternative savings, but you just spend another $150 million plus and you are not showing us where the alternative savings are.
Senator Wong —Do you want to do this? Let’s go through this. You had a $700 million double count in your floods package.
Senator CORMANN —That is your assertion.
Senator Wong —No, it is a $700 million double count.
Senator CORMANN —That is your assertion.
Senator Wong —Well, I am right. Second, you had a $10.6 billion grant—
Senator CORMANN —I am not asking you about our policy; I am asking you about your budget.
Senator Wong —Can I finish, Senator? You raised this.
CHAIR —Minister and Senator, I appreciate the enthusiasm but, Senator Cormann, you put a question to the minister—
Senator CORMANN —I did not ask the minister about what the coalition is doing.
CHAIR —You put a question to the minister, Senator Cormann, and I cannot direct her how to answer, as you well know. The minister has the call and is trying to respond.
Senator CORMANN —She is not responding.
Senator Wong —No, Senator, you called me hypocritical, so I am responding to that because I think really you should look in the mirror, or Mr Robb should. You had a $10.6 billion black hole in your election policy. You announced a floods package which not only does not have the support of your front bench but has $700 million of double counting. You, in the Senate, support a bill which would impose an additional $317 million impost on the budget. It is unconstitutional, so now it will not pass the House, but that was your policy.
Senator CORMANN —You will be supporting it.
Senator Wong —Can I finish? That was your policy, without offset, and Senator Ronaldson is also putting forward further legislation with a significant impact on the fiscal balance. If you want to talk hypocrisy, hypocrisy is you coming in here and having a go at our $150 million worth of savings which we will find in the budget process, when you are that many billion dollars in a black hole.
Senator CORMANN —Minister, how was the cost of the flood damage identified at $5.6 billion?
Mr Tune —That was work that we undertook. In the case of Queensland, it was very much based on very preliminary initial estimates that were coming out of the Queensland Treasury. We were discussing that with them and then we made some allowance for what was happening in the other states, with less information than in the case of Queensland at that time. I must stress, though, that it is preliminary information. We are still working through this with the states but at the moment that is our estimate. On top of that, of course, there is the Yasi stuff which is not included in the $5.6 billion.
Senator CORMANN —Was the $5.6 billion a conservative estimate where you made generous allowance on the basis that it was very preliminary information? Sorry, let me rephrase. I guess I am trying to get a sense for the level of downside risk that is still attached to this. Are we talking a couple more billions potentially once more information comes in?
Mr Tune —I do not think we will be talking about something like that, no.
Senator CORMANN —You have not made an assessment of the level of downside risk?
Mr Tune —In coming to the number, we took account of both downside and upside risk. You come to a balance and you make a judgment about these things at the end of the day. So we try and balance the two things off. Because you have to come to a point estimate, you have got to take them into account.
Senator CORMANN —I am not meaning to be cute here.
Senator Wong —Senator, if I could just also remind you, and I am sure you have not forgotten this, obviously the $5.6 billion did not include any of the costs of Cyclone Yasi nor the additional package in relation to cyclone victims which the government has announced.
Senator CORMANN —Indeed. Chances are the figure will blow out further. I think that is a reasonable prospect.
Mr Tune —I am not convinced of that.
Senator CORMANN —I am not even being critical. It is just we cannot control it. There is stuff that is not included yet; it is a preliminary estimate. You have done the best you can but chances are that the figure is going to blow out further.
Mr Tune —There is a chance—I would accept that—but we were taking account of experience with other disasters. It is probably fair to say this disaster was not comparable to others but you get a feel for the sort of severity of the disaster and what has happened through history.
Senator CORMANN —Just the fact that Yasi is not included means—
Mr Tune —All this took effect before Yasi occurred, of course.
Senator CORMANN —Yes, I understand.
Mr Tune —We will have to add it. Yasi is a quite separate event.
Senator CORMANN —Sure, Yasi is separate and yet is part of the overall exposure in terms of expenditure.
Mr Tune —The announcements the government has made in relation to Yasi are in the order of about $400 million.
Senator CORMANN —So we are now talking $6 billion roughly?
Mr Tune —Yes, in that order.
Senator CORMANN —More savings will be needed or will this be funded through another increase in the income tax?
Senator Wong —I have already answered that question, Senator. I have already made that clear, as has the Prime Minister. The Prime Minister has said that any additional funding for both the cyclone and the floods will be found from savings through the budget process.
Senator CORMANN —In terms of the government’s assistance under the Natural Disaster Relief and Recovery Arrangements, NDRRA, will that be distributed across Australia on equal terms? For example, we have had bushfires in Western Australia in the area around Kelmscott. Will they be equally eligible for federal government assistance compared to what might be allocated?
Mr Tune —Under the normal ongoing operation of those arrangements, if a natural disaster is declared and the triggers for bringing into play the NDRRA occur, regardless of whether it is a bushfire, a flood or cyclone or whatever, then Commonwealth assistance is provided under the arrangements that we have with the states and through them with local government. There is a whole lot of stuff that is going on around natural disasters that is just ongoing business. We put estimates into the budget around what we think that normal level of activity would be. It is quite difficult to estimate that because claims can come in two to three years after the event has occurred. In fact, that is happening at the moment. We are dealing with a couple of disasters from a couple of years ago still and they will gradually trail off. As a general rule, yes, as long as the provisions are triggered by the size of the damages that occur then the Commonwealth NDRR arrangements cut in.
Senator CORMANN —Would people like those in Kelmscott who were subject to bushfires be exempt from the flood tax?
Mr Tune —No, not necessarily. That is the government’s—
Senator CORMANN —Why is that?
Mr Tune —The government’s decision at the moment is that those who were subject to the floods are exempt from the levy. It would require another decision to alter that.
Senator CORMANN —Only if the natural disaster you were subject to was a flood will you be exempt from the flood tax? If it is any other natural disaster, you are not exempt at the moment?
Mr Tune —That is the situation as it stands at the moment.
Senator CORMANN —Thank you. What will be the cost of the Australian government reconstruction inspectorate?
Mr Tune —We are still working on that. I am a member of that inspectorate. It is not going to be a big outfit. It will be a rather small outfit in fact.
Senator CORMANN —How many staff will it have?
Mr Tune —We have not determined that yet but it is not going to be very big.
Senator CORMANN —When you say it will not be very big, is it one, two, five?
Mr Tune —Less than 10.
Senator CORMANN —Less than 10?
Mr Tune —Yes.
Senator CORMANN —Of course, it will be headed by former Liberal finance minister, John Fahey. Why can he do a job that your department cannot do?
Mr Tune —I think the government has come to a view that it would like some independent advice on value for money for the Queensland reconstruction efforts. Whilst I guess the department of finance has a role in that, they were seeking some independent experts’ advice as well. As well as Mr Fahey, there is a former managing director of Thiess, a construction company up in Queensland, an eminent person who has been involved in construction activities over many, many years of his career, and also a person from Deloittes up in Queensland who can provide the balance in the team to have a look at these things.
Finance, as a department, will be assisting the inspectorate in the best way it can, but the inspectorate may also want some independent advice by commissioning some work from say, engineers, quantity surveyors and so forth. We have only had one meeting of the inspectorate, which was less than a week ago and we are still finding our feet, quite frankly, and working through the terms of reference that the government has given us and working out our modus operandi on the basis of that.
Senator CORMANN —How many staff are in your department?
Mr Tune —There are 1,600-odd.
Senator CORMANN —So why can an inspectorate of less than 10 do a better job of managing spending than a department of 1,600?
Mr Tune —We are not managing spending, sorry.
Senator CORMANN —You are making sure that spending—
Mr Tune —What the inspectorate is being asked to do is to provide assurance to the government that the spending that occurs on flood reconstruction, and probably the cyclone reconstruction work up in north Queensland, represents value for money in that spending.
Senator CORMANN —Does that mean that so far the government has not been getting value for money for its spending?
Mr Tune —It has not spent anything yet.
Senator CORMANN —The government has been spending on a whole heap of things, like pink batts, school halls. Is this inspectorate recognition that the government has not been getting value for money from its past spending?
Mr Tune —The way the NDRRA works is that projects are occurring all over the place—local government is heavily involved, there is a lot of small-scale stuff and a lot of large-scale stuff. It is generally worked on the basis of reimbursement after the work is actually undertaken. In this case, it is quite separate from a normal sort of situation where you do not see what is going on or it may be the case that you do not see what is going on until the bill actually arrives. That is the way it normally operates under the NDRRA.
Senator CORMANN —So you are going to set up another bureaucracy to try and stop waste?
Mr Tune —It is just a small inspectorate, Senator, I would not call it a bureaucracy.
Senator CORMANN —We used to have the Office of the Coordinator-General to manage and make sure there was value for money out of the stimulus spending; that hardly avoided waste. That was a small little bureaucracy too.
Senator Wong —Can I just make a few points here? Firstly, in terms of stimulus, that kept Australia out of recession and people in jobs.
Senator CORMANN —It wasted a lot of money in the process.
Senator Wong —Have a look overseas at some other nations. If you are accusing us of putting jobs first, yes we did, absolutely; and, as the Prime Minister said, she would make the same call again.
Senator CORMANN —You put waste and mismanagement first.
Senator Wong —Can I finish, Senator? I do listen to you rabbiting on without constantly haranguing you. If you could do the same, I would appreciate it. The Prime Minister has made clear that yes, we put jobs first and we are unapologetic about that. Second, on this issue it seems somewhat odd that you are so opposed to us putting further oversight into a process to ensure better value—
Senator CORMANN —It is not a matter of being opposed, it is amused.
CHAIR —Senator Cormann, the minister has the floor.
Senator Wong —I do not think the floods are amusing. I do not think it is amusing.
Senator CORMANN —We are not talking about the floods.
Senator Wong —You called it amusing, I do not think it is amusing.
CHAIR —Senator Cormann, the minister had the response. She had the call from the chair. We are wasting a lot of time by this continual overtalking of one another. Minister, have you concluded your response?
Senator Wong —No, I have not. I do not think any of this is amusing, Senator. We are dealing with a very large reconstruction job, a very substantial amount of money and a lot of projects. Yes, we want to do what we can to make sure we get the best value for money, for the Queensland people and community and for the taxpayer. We have put in place an inspectorate to try and ensure that that occurs.
You can make all your political points about this but fundamentally the public policy objective is to try and make sure, at a time when there is a lot going on and there are many projects which will have to be undertaken, that this money is spent well and that we make it go as far as it can.
Senator CORMANN —If the Prime Minister was confident that you, as minister for finance, could ensure value for money from spending on the reconstruction and that there has not been wasteful spending by this government in the past, why would they need to appoint a Liberal finance minister to oversee a 10-person inspectorate, an additional layer of bureaucracy? Is it to make sure that he does the job that clearly you are not able to do?
Senator Wong —You have made a range of assertions that I do not agree with. What do you want me to say? It is just a bundle of disconnected assertions.
Senator CORMANN —It is pretty connected.
Senator Wong —Yes, I am the finance minister, I have a job to do. This is an inspectorate, which I think is in Minister Crean’s department, recognising—
Senator CORMANN —So, it is not even in your department?
Senator Wong —No, it is not.
Mr Tune —The secretariat comes out of the department of regional affairs.
Senator Wong —The NDRRA first are—
Senator CORMANN —The Prime Minister does not even have confidence for the inspectorate to report to you?
Senator Wong —Can I finish, Senator Cormann, or should I just sit here quietly letting you talk at me?
Senator FORSHAW —Point of order, Chair, and it is on the same point. I think Senator Cormann needs to appreciate that there are other senators here at the table who are interested in the minister’s answers to the questions. He is not the only one who wants to hear the minister’s answer and it appears he does not want to anyway.
Senator CORMANN —Yes, I do.
Senator FORSHAW —I am getting a bit irritated that you keep interrupting the minister’s answers.
CHAIR —On the point of order, I remind all committee members, and I have on a number of occasions, Senator Cormann, asked you to allow the witness to respond. It is unhelpful both for me as chair but also for Hansard to record these proceedings if there is continual talking over one another. Minister, have you concluded your response?
Senator Wong —Thank you. I was just trying to explain to Senator Cormann the arrangements. Generally the national disaster arrangements are in fact run out of the Attorney-General’s portfolio. Given the scale of the Queensland reconstruction task, the Prime Minister appointed Senator Ludwig as the minister assisting on this matter. Given the importance of ensuring a whole range of regional issues are managed, the secretariat for the taskforce, or the inspectorate as I understand, is being provided through Minister Crean’s department. The intent is as the Prime Minister announced, which is to try and ensure that on the ground we do as much as we can to make sure that this money goes as far as possible.
Senator CORMANN —We now have an inspectorate where your department provides the secretariat, we do not know—
Senator Wong —No, I just told you that is not the case, Senator. You are not listening. He is on the taskforce.
Mr Tune —I am a member of the inspectorate itself in my role as secretary of the department but it is the department of regional affairs that provide the secretariat to the inspectorate.
Senator CORMANN —I thought you said earlier that the 10 people were going to be based out of your department?
Mr Tune —No, I said there could be up to 10. I said it has not been decided. If I left the impression they were going to be in Finance, I am sorry. It might be a secretariat of up to 10. It might be five, we have not yet determined but it will sit with the department of regional affairs.
Senator CORMANN —You are one of the people on the inspectorate but your department is not providing the secretariat?
Mr Tune —Correct. I may draw on the expertise within the Department of Finance and Deregulation, particularly my property and construction people, to provide me with some advice which I could then feed into the inspectorate itself.
Senator CORMANN —At this stage we do not know how much it is going to cost and we do not know how many people are going to be on the inspectorate?
Mr Tune —That is correct, yes; but, as I said, it will not be large.
Senator FIERRAVANTI-WELLS —Mr Tune, in relation to the announcement that the Prime Minister made on 11 February and then subsequently the announcements made after the COAG meeting on 13 February, when did Finance first get involved? Against the background of previous discussions that we have had in this committee about work that you did in relation to the changes mark 1, if I can put them that way, when did you first become involved in relation to mark 2?
Mr Tune —A couple of weeks before the Prime Minister’s announcement at COAG.
Senator FIERRAVANTI-WELLS —You were approached by whom—by which department?
Mr Tune —I was not approached by anybody.
Senator Wong —The secretary of finance does not have to be approached.
Senator FIERRAVANTI-WELLS —No, I am just asking the question. Was it the Prime Minister’s department, the health department?
Mr Tune —There were discussions going on between the Prime Minister’s department in particular, because they were thinking about the lead-up of the COAG meeting, and the Treasury and ourselves.
Senator FIERRAVANTI-WELLS —So whatever work Finance did you did within the two weeks preceding effectively that COAG meeting?
Mr Tune —Yes, I cannot be precise about whether it was two weeks but it was in that order.
Senator FIERRAVANTI-WELLS —Could you explain to me the extent of your involvement and the work that you did, without going into the details, which I appreciate.
Mr Tune —There were a couple of aspects. One of them was the new pooling arrangement and the body that was going to be involved in administering that, and there were some technical questions about what the governance of that might be. That is a particular area where we have some expertise in our financial management group. We were asked if we could think through the issues around that and what sort of governance would be most appropriate, particularly when you have got a Commonwealth-state body where funds are coming in from two sources. So we looked at that issue and looked at some options around that.
Obviously there is the general policy advice that we provide to government when it is taking decisions about these things, and also our role in costing proposals. A lot of the costing here was done by the Treasury because it is around Commonwealth-state relations and it was an amendment to the national health agreement and that is a Treasury responsibility in conjunction with Health. We were, in effect, agreeing costings and undertaking some of the costings as well. So it was a joint effort feeding into that.
Senator FIERRAVANTI-WELLS —Could I just take a number of those, and I might start with the new entity. We have had discussions at this committee in relation to the national funding authority. I will not traverse that evidence suffice to say that its framework in health changes mark 1 was billed as the centrepiece of accountability and transparency. It was then unceremoniously dumped. At the last occasion I think you gave evidence to the effect that, shortly after 26 May, you were advised by the Department of the Prime Minister and Cabinet that that was to be dumped. Have you done an analysis, Mr Tune, in relation to the structure of the national funding authority, which Minister Roxon said was inappropriate and no longer necessary as part of the mark 1 changes, and the new funding structure, which is now so crucial to transparency, in the mark 2 changes?
Mr Tune —That is the governance work to which I earlier referred—the options around governance. Yes, we looked at that.
Senator FIERRAVANTI-WELLS —Can you give me your opinion in relation to the differences or the similarities between the two bodies?
Senator Wong —I am not sure he can give an opinion.
Senator FIERRAVANTI-WELLS —What is the difference between the two entities? Have you considered what are the differences or similarities?
Mr De Carvalho —We have not gone back to look at the original body. We are focused on providing advice to government on the current proposal, and there is quite a bit of work to be done between now and the end of the financial year to finalise the details of the funding body. We have not gone back and done a comparison, if you like, a line by line comparison, of what was proposed beforehand with what was proposed this time around.
Senator FIERRAVANTI-WELLS —I would appreciate it, if you could, because under the mark 1 changes it was billed as very much being the centrepiece for accountability. If we have a look at the Red Book, not your incoming brief but the COAG Red Book, outlined on page 49 is the need for the first funding authority and how it was necessary in relation to ensuring that the states spent their money properly. I do not have that precise wording in front of me but I think you can see that. I am very much concerned because something that was billed as being your centrepiece was then dumped and then suddenly you have got another funding authority. My concerns are twofold: firstly, why was the first one dumped in the first place; and, secondly, what are the parameters of this second one, and is it too going to suffer the same fate as the first one?
Mr Tune —I think you are asking a set of questions that we cannot really answer. They are questions that are better addressed to the department of health.
Senator FIERRAVANTI-WELLS —That is fine, I will do that tomorrow. Mr Tune, you have talked about governance. What are the governance parameters of the national funding authority? How are they different to the governance arrangements with the new authority that is proposed?
Mr Tune —If you focus the question then we can come back to you on the governance per se, as that does fall within our responsibility. I would be happy to explain the differences between the two if we can take that on notice.
Senator FIERRAVANTI-WELLS —I am interested in what differences there are in terms of the structures. I assume that this will also be set up as an independent authority?
Mr Tune —Yes.
Senator FIERRAVANTI-WELLS —Just like the previous one was going to be under the financial management provisions?
Mr Tune —The new agreement actually says, ‘The parties agree that the independent, jointly governed national funding body will be a statutory body recognised by legislation in all jurisdictions.’
Senator FIERRAVANTI-WELLS —The same as the previous one?
Mr Tune —That is paragraph 21.
Senator FIERRAVANTI-WELLS —Did you have any involvement in contributing to the heads of agreement in terms of drafting?
Mr Tune —No, I do not think—
Mr De Carvalho —Our advice was sought at various stages in the drafting.
Senator FIERRAVANTI-WELLS —But you provided just the advice and some other department did that?
Mr De Carvalho —Yes.
Senator FIERRAVANTI-WELLS —In terms of your general finance advice, did that involve any assumptions coming to you in relation to the $16.4 billion?
Mr De Carvalho —Most of that work was actually done by the Treasury. It was around the national agreement.
Senator FIERRAVANTI-WELLS —When you said, ‘We provided general finance advice,’ what was the nature of that general finance advice?
Mr Tune —We provided advice, as we always do, on policy proposals that are before the government. We would provide confidential advice on that basis as it went through the cabinet process.
Senator FIERRAVANTI-WELLS —Did you look at potentially where this money was coming from?
Mr Tune —We would take account of a whole range of factors when we provide advice to the minister.
Senator FIERRAVANTI-WELLS —I would have thought $16.4 billion somewhere in that never, never in the future would be something that would occupy your mind?
Mr Tune —I suspect I would be a pretty lousy finance officer if I did not think about $16.4 billion.
Senator FIERRAVANTI-WELLS —My interest is where is the $16.4 billion coming from? Can you assist me with that?
Mr Tune —It is being financed through the budget.
Senator FIERRAVANTI-WELLS —Yes, but we are talking about 2014-15 and 2019-20.
Mr Tune —Correct.
Senator FIERRAVANTI-WELLS —Do we have any idea where that is going to come from? We do not have any forward estimates for that period.
Mr Tune —That is correct. As we move through the years that will start entering the forward estimates and we will take account of that.
Senator FIERRAVANTI-WELLS —So you have taken $16.4 billion; you do not know where the money is coming from.
Senator Wong —Senator, really you—
Senator FIERRAVANTI-WELLS —Really, it is $16.4 billion you have promised.
Senator Wong —Correct—it is.
Senator FIERRAVANTI-WELLS —You have promised this money. You are billions of dollars in debt. I am interested to know where you are going to find the money.
CHAIR —I will just remind senators yet again of the process of putting a question to the witnesses and then allowing them to respond.
Senator Wong —It is additional funding I think consistent with the approach that was taken in what you describe as mark 1, to deal with what I am sure you are very aware of, which is a significant structural funding problem in health that faces this nation, which is that state governments will run out of sufficient revenue to meet their share of the costs of health. I think you have worked enough in this area to know that that problem is not going to go away.
In terms of savings, I think it is a fairly long bow to draw to have a go at us for not providing you with savings options for a budget measure which commences in 2014-15 out to the end of the decade. Obviously, whoever is in government at that time—hopefully it is us—will have to provision for that money through that period in the normal budget processes, just as Mr Howard had to provision beyond the forwards for his $10 billion water plan when that was announced.
Senator FIERRAVANTI-WELLS —How did you come to that $16.4 billion? Did Finance have any involvement? Did Treasury?
Mr Tune —No. As I mentioned, it was Treasury money involved because that was the national agreement.
Senator FIERRAVANTI-WELLS —You may recall that at previous estimates I asked questions in relation to assumptions that were provided in relation to calculations to do with hospital beds and those sort of things. In relation to the 1,300 sub-acute hospital beds over the next four years, were you involved in any advice in relation to those?
Mr De Carvalho —The assumptions around the sub-acute beds have not substantially changed from the last time that we spoke to you. We did provide you some answers on notice last time.
Senator FIERRAVANTI-WELLS —You did, and I understand that you did the calculations for the first 800 beds and then the rest of it was done by the department; I think it was the department of health if my memory serves me correctly.
Mr De Carvalho —If my memory serves me correctly from our previous answer, the final numbers were the subject of negotiations at COAG in April last year.
Senator FIERRAVANTI-WELLS —Yes, but you did the calculations for the first 800 beds and then somebody else did the calculations for the 1,300; is that correct?
Mr De Carvalho —Yes. The total calculation in relation to the beds in total was subject to the negotiations at COAG.
Senator FIERRAVANTI-WELLS —But there was a base calculation that you did for 800 beds only.
Mr De Carvalho —That is correct, yes.
Senator FIERRAVANTI-WELLS —You provided advice only in relation to 800 beds. You gave it to PM&C or the department of health or somebody else and then they just used your 800 bed costings and took it out to 1,300 or 1,600. I think 1,350 was the last figure that we were talking about. So that same approach was used in this instance?
Mr De Carvalho —The same approach if you like, yes, in that it was a matter for negotiations at COAG. I am struggling to precisely understand what your question is but we have not had any further—
Senator FIERRAVANTI-WELLS —Can you go back to the evidence. I have got it here but I just cannot put my finger on it. Can you go back to the evidence that you gave me on the last occasion. In answer to a question on the calculations in relation to those beds, I understood that Finance did the 800, and then ,on the last occasion, 1,350 or 1,300 was done on the back of the envelope by whoever was negotiating at the time of the COAG health meeting. Can you just go back and double check that that is the situation? In the incoming brief for Department of Health and Ageing, in their red book, there is reference to a health expenditure working group established under the deputy heads of Treasury. Mr Tune, is that a committee that Finance has some involvement in?
Mr Tune —No, I do not think so.
Mr De Carvalho —It is Treasury.
Senator FIERRAVANTI-WELLS —Do you get advice that may come out of that committee?
Mr Tune —Yes, we probably would.
Mr De Carvalho —We get updates on the progress but we are not involved in that.
Senator FIERRAVANTI-WELLS —Are you aware of any advice or calculations that were done in relation to the amount of GST revenue that was necessary or that would have had to have been withheld by the Commonwealth in the Commonwealth forward estimates for dedication to health and hospitals? Regarding the proposal in relation to the 30 per cent of GST, were you aware of any work or were you given advice in relation to calculations of that 30 per cent?
Mr Tune —No. That is purely Treasury; GST is their responsibility.
Senator FIERRAVANTI-WELLS —I thought you said that you would have received advice by way of information.
Mr Tune —We would be informed of what might be going on, but as to the details of the calculations, no.
Senator FIERRAVANTI-WELLS —Could you take on notice any advice that you were provided in relation to that? Going back to the national funding and the new entity, what work will you be doing in relation to that and what is the time line for Finance’s contribution towards that?
Mr De Carvalho —As I said previously, there is a bit of work to be done before the end of this financial year, 30 June, to finalise the details of the government’s arrangements for that body. We will be working with other agencies on those arrangements.
Senator FIERRAVANTI-WELLS —If I have understood it, this one also has a requirement for going back to the states.
Mr De Carvalho —This will all have to be agreed at COAG.
Senator FIERRAVANTI-WELLS —The agreement provides that it has to be operational by 1 July. The agreement also states that it will be administered as an independent national funding body. Do the various state accounts have to be established before 1 July as well?
Mr De Carvalho —Yes.
Senator FIERRAVANTI-WELLS —Will you have some involvement in providing advice in relation to the parameters of those state bodies?
Mr De Carvalho —Yes, we will.
Senator FIERRAVANTI-WELLS —Have you commenced that work?
Mr De Carvalho —We have commenced discussions with them. From the start of the conclusion of COAG negotiations we have been talking with PM&C on how we are going to be involved in that.
Senator FIERRAVANTI-WELLS —Do I understand in summary, therefore, that the legislation at both the federal and the state level needs to be in place by 1 July for this entity to be operational? That is the effect of what is in the provisions in that agreement.
Mr De Carvalho —I am not sure. I will have to take that on notice. I will get back to you fairly quickly.
Senator FIERRAVANTI-WELLS —As I understand it, it will require legislation at a federal level and each of those bodies will require legislation at a state level.
Mr Tune —We will have to take that on notice.
Senator FIERRAVANTI-WELLS —The reason I ask is because I am somewhat confused. This agreement changes the previous agreement, this one supersedes that one, but it is not very clear as to what is superseded, which is the basis upon which I am asking the question. It is unclear how much of the state structures in this agreement survive under that one. Perhaps if you could take on notice the parameters of your involvement from the legislative perspective, where you will be having input.
Mr Tune —I will take that on notice. If you want to get to the differences between the two documents, I do not think it is us who should be answering those questions.
Senator FIERRAVANTI-WELLS —No, I appreciate that. I am only interested from Finance’s perspective and what you have to do. Will the legislation be under the purview of Minister Wong or will it be under Minister Roxon’s health legislation?
Mr Tune —We will take that on notice as well. I do not think it will sit within the finance portfolio.
Senator Wong —Which legislation?
Senator FIERRAVANTI-WELLS —This national funding.
Mr Tune —We want to check a couple of things here. First, we want to check whether legislation is required. That is one thing we will take on notice for you. Second, there is the question of where it might sit. I am pretty confident it will not sit in Finance if it is required.
Senator FIERRAVANTI-WELLS —Okay, thank you. I have questions under the hospital fund, but that is coming later.
CHAIR —Anything further on 1.1?
Senator Wong —Mr De Carvalho is one of the officials for the hospitals fund, so we could deal with that if the committee would prefer to move to that.
Mr De Carvalho —It depends on the nature of the questions.
Senator Wong —Is Dr Helgeby still around, or has he gone?
CHAIR —Senator Cormann has some further questions in 1.1 if that will help.
Senator Wong —Mr De Carvalho is here. If I can just find Dr Helgeby then we can finish the health stuff.
Senator CORMANN —We can go back to 1.1 after this.
Senator FIERRAVANTI-WELLS —From the Health and Hospital Fund perspective, you would recall that various deals were done in relation to various hospitals with Mr Windsor, Mr Oakeshott and Mr Wilkie to secure their support. With respect to Mr Oakeshott, the government supported the expansion of the Port Macquarie Base Hospital and will fund the fourth pod for the Port Macquarie Base Hospital, with estimated costs around $75 million. The agreement says that the funding will be subject to HHF board approval, and will be fully offset consistent et cetera. In relation to Mr Windsor, we were looking at the redevelopment of the Tamworth Hospital and a contribution of $20 million. With Mr Wilkie, we were looking at $300 million for the Hobart hospital. Perhaps we could take each of those separately. How are we going with that in relation to the funding that is coming out of the Health and Hospitals Fund, because a portion was coming out of the fund and some was not?
Mr Tune —This goes back to the agreement. In relation to each of those, starting with Port Macquarie, $75 million was to come out of the Health and Hospitals Fund, contingent on approval from the HHF board. With respect to the Royal Hobart Hospital expansion, $240 million was allocated out of the Health and Hospitals Fund, contingent on approval from the HHF board. The third one was the Tamworth Hospital, which was offset at the time from additional savings. Then, of course, the government made a commitment to have a regional round of the HHF which would incorporate looking at the contingency relating to the ones I have mentioned, Port Macquarie and Hobart, which will be incorporated in that round. The government will make decisions on that in due course.
Senator FIERRAVANTI-WELLS —Where are we at with that?
Mr Tune —I could not tell you, quite frankly. The round is under way, but I do not know whether we have the closing date for applications.
Dr Helgeby —In relation to the Health and Hospitals Fund, applications closed in December 2010.
Senator FIERRAVANTI-WELLS —What is the next step?
Mr Tune —The next step would be for the HHF to provide advice to Minister Roxon, and for Minister Roxon to consider those recommendations and take that through to government for decision.
Senator FIERRAVANTI-WELLS —With the $300 million for Hobart hospital, $240 million was coming out of the hospital fund, and then the balance, I understand, was going to be put in by the Tasmanian government. As part of that process, did that application have to be put in at the same time?
Dr Helgeby —All decisions relating to spending out of the funds are made by an assessment committee or a board. In a sense, they will assess the case on its merits and at an appropriate point in time the government will make decisions in relation to the recommended projects.
Senator FIERRAVANTI-WELLS —In relation to the criteria for this funding round, which gives special attention to regional and rural areas, is the criteria determined by the fund itself?
Mr Greenslade —Essentially the same evaluation criteria were applied by the advisory board.
Senator FIERRAVANTI-WELLS —So there is no difference? Surely there must be criteria that are pertinent to regional and rural areas? Where do I get those criteria? Is that determined by the fund, and the fund is housed in the finance department, or do I go to the health department for the criteria? Do you see where I am coming from?
Mr Tune —Go to the health department because it is actually providing the secretariat for this fund. We get involved when moneys are to be dispersed from the fund to pay for projects.
Senator FIERRAVANTI-WELLS —Sorry, Mr Tune, it is just that I do not want to go to health, ask them, and then they say, ‘No, you have to go off to finance.’ Could you explain to me your role insofar as these three issues are concerned?
Mr Tune —We manage, via the Future Fund, the amounts that are in the funds, whether it is the Building Australia Fund, the Education Investment Fund or the Health and Hospitals Fund. So there are balances in those funds. The process for drawing down those balances to actually pay for particular projects is done through the boards of each of those bodies. They are a group of experts providing advice to the relevant portfolio minister: the DEEWR minister in the case of the EIF; health minister in the case of the HHF; and the infrastructure minister in the case of the BAF. The government then makes decisions based on the recommendations of those boards, and once those decisions are made, money gets drawn down from the funds.
Senator FIERRAVANTI-WELLS —So you get a direction from Minister Roxon saying—
Mr Tune —Yes, a cabinet decision or whatever due process is.
Senator FIERRAVANTI-WELLS —Whatever, hospital X, et cetera?
Mr Tune —Yes, we have agreed to that one; that is $200 million to be spread over three years.
Senator FIERRAVANTI-WELLS —That is purely your involvement?
Mr Tune —Draw down the money out of the fund from that.
Senator FIERRAVANTI-WELLS —That is purely your involvement?
Mr Tune —That is our involvement, yes.
Senator FIERRAVANTI-WELLS —No other before or after?
Mr Tune —We would provide a view in the normal course of events once it came to government for decision about the efficacy of the advice provided by the boards, but that would be our normal policy role. We do not run that process. Just like virtually anything else that comes before cabinet, we would provide advice to Senator Wong about finance’s view.
Senator FIERRAVANTI-WELLS —About how health handled it?
Mr Tune —No, not so much that, but about whether we think they are the priorities, or whether there are other things around; whether you need to spend all of that money at this point in time. It is just the normal course of events that we provide this advice.
Senator FIERRAVANTI-WELLS —But not in relation to, hypothetically, which hospitals are needier than others?
Mr Tune —No. It is very difficult for us to get involved in that, because it is based on expert advice.
Senator FIERRAVANTI-WELLS —I appreciate that. But your advice would simply say, ‘Instead of spending X million on hospitals, we should spend it on school halls’?
Mr Tune —We may; we may not.
Senator FIERRAVANTI-WELLS —Okay. Thank you; that is probably as far as I can take that.
Senator MOORE —I followed this process with Senator Fierravanti-Wells, and I will be sharing these questions with her tomorrow. How do Treasury, finance and health interact? You have just explained to Senator Fierravanti-Wells about the funds, but in terms of the whole process in the health reform package, which mainly involves the two finance areas and health, how do they formally interact in the process of the reform? Do you have a specialised team in your department that actually looks after this? It would be useful to have that interaction on record. Health is the lead agency, but how do you interact? What are the interdepartmental relationships? I always ask about interdepartmental committees and how they work and who goes to them.
Mr Tune —I will give a broad outline first. In broad terms, the development of the health packages, going back a period of time, has been done largely through a secretaries group comprising secretaries of health, Prime Minister and Cabinet, Treasury and ourselves. Teams have been set up both in Prime Minister and Cabinet and in the health department to work closely together. There have been secondments, in effect, a virtual team drawn from the various agencies.
At the time, we provided secondments to that team from Finance. We also have within the department a health policy branch, which is part of Mr de Carvalho’s division responsibilities, and that was also closely involved. So it was a pretty cooperative effort, done over a longish period of time, to actually pull all of this together and provide advice to government.
Senator MOORE —I take it that the secretaries group is the high level meeting together?
Mr Tune —Yes.
Senator MOORE —The next one down is the team. Can you give me an idea of the level of that team? Is it an SES type of operational team?
Mr de Carvalho —Sitting beneath that secretaries-level group there is a senior officials group—
Senator MOORE —SOG?
Mr de Carvalho —I do not know if we would formally call it that, but it is comprised essentially of senior SES officers at below secretary level from those same departments that the secretary mentioned.
Senator MOORE —How many in that?
Mr de Carvalho —There is one formal representative from each of Finance and Treasury, but we usually bring someone else along based on their expertise or the subject matter being discussed. There are people from the transition office and there are also people from the health department. I would say a regular meeting of that next group down would be around eight to 10 people.
Senator MOORE —Are they formally constituted, minuted meetings?
Mr de Carvalho —Not generally. They discuss implementation issues and what has to be done next and who has to do what. They are more sort of management meetings, if you like, about processes that have to be gone through.
Senator MOORE —In terms of the regularity of those meetings, are they formally scheduled or are they as required? I ask that in terms of seeing how the mechanism is operating with respect to the process. I know that Senator Fierravanti-Wells is interested in these questions as well.
Mr de Carvalho —They have been fairly regular for some time. I would say on average about once every three to four weeks; certainly no less regular than monthly, but more regular than that.
Senator MOORE —As to the extent into the future, is it seen as a process that will go through a particular schedule into the future? Do you have a work program that goes through for the next six months or 12 months in terms of how formally you think this will work?
Mr de Carvalho —There is a general recognition that there is quite a substantial bit of work to be done, not just in the next six months, or up to the end of this financial year in particular, but beyond.
Senator MOORE —Mr Tune also talked about the divisional involvements within the areas. So you have the meetings of the people who are managing the whole process, then work is devolved to individual divisions back within Treasury, Finance and Health?
Mr de Carvalho —Yes, depending on the particular responsibilities, that is right.
Senator MOORE —In each of these levels, does Health take the lead?
Mr de Carvalho —No, not always, but generally they are the ones driving the policy and the implementation.
Senator MOORE —In terms of seeking accountability, it would be Health?
Mr de Carvalho —Yes. There would be some things, particularly around the GST calculation, for example, that would be set clearly in the bailiwick of Treasury. There are other issues that we are looked to specifically around governance issues on which we would take the lead.
Senator MOORE —And then feeding back to the relevant ministers—would the responsible officers within each of the departments then feed back information and progress reports to their own minister?
Mr de Carvalho —Yes, we would be providing regular briefs to our minister.
Senator MOORE —Does some of this action involve state governments?
Mr de Carvalho —Yes. The negotiations are obviously with state governments. We do not get very much involved with those; they are more in the bailiwick of Treasury, PM&C and the health department.
Senator MOORE —At any of these levels which you have described, is there regular involvement from state governments at any level—the secretaries group, the divisional meetings or the senior officers group?
Mr de Carvalho —There is a separate sort of infrastructure for engaging with the states. The structure that we have just described is Commonwealth only.
Senator MOORE —I know that all of you have been involved in many national activities. Is this structure you are describing more or less a standard model if you have cross-agency involvement, or is it something special that has been created for now?
Mr Tune —It is based on the standard model but, because of the size and importance of this particular reform, the secretaries group has met far more frequently than it possibly would on another set of issues. If you look at an issue like climate change, a secretaries group would be set up as well because of its significance; in fact, there is one. It depends on the size of the issue, its importance and whether it does involve Commonwealth-state interactions, which are generally more sensitive than something that is just being run by us. This one has probably had a bit more effort put into it through the governance structures than others.
Senator MOORE —Is there something you can give me that is actually in a diagram that can show me all of this?
Mr Tune —I think there is a diagram around.
Senator MOORE —I have not seen it. I do like diagrams.
Mr de Carvalho —If one does not exist, Senator, we could construct one.
Senator MOORE —I am very much fond of flowcharts, so if I can get something that shows how this operates—
Senator FIERRAVANTI-WELLS —This will be really fun, Senator.
Senator MOORE —We can have it all again tomorrow, so I am looking forward to it.
Senator FIERRAVANTI-WELLS —Having a flowchart is a good idea.
Senator MOORE —I am also interested in whether you have required time frames for reports to government? You said that you report back as you go with your individual ministers. In the work plan, and in terms of how we are going, is there a set date for a formal response from this group to government? Is there a monthly report that has to be done for the health minister that is then available, that kind of thing?
Mr Tune —It is not so much driven by a particular date; it is driven more by a particular milestone. In the lead-up through the policy development process, certain things needed to be decided by certain dates, so that drives you to report on those as you get there. Once you move into the implementation phase, there are certain critical milestones in the implementation where you want to go back to check progress with the government and ministers to make sure that things are on the right track. So that would drive when you report to them. It varies. I think it is fair to say that it is not date driven; it is more event or milestone driven.
Senator MOORE —Mr Tune, are the milestones to which you refer made public?
Mr Tune —They are the implementation milestones that are set down in the implementation.
Senator MOORE —Yes, I have that. They are the same ones?
Mr Tune —Yes.
Senator MOORE —They just translate?
Mr Tune —Indeed.
Senator FIERRAVANTI-WELLS —Chair, do you mind if I just ask one more question following on from what Senator Moore has asked?
CHAIR —A follow-up question, and then I will go to Senator Faulkner.
Senator FIERRAVANTI-WELLS —Just on the last occasion, Mr Tune, I referred to your incoming brief that was part of the health reform, the National Health and Hospitals Network. There was a reference to the strategic review of the Health and Ageing portfolio administration. Since that time, I understand that Boston Consulting have been engaged for $6.8 million, I think, to undertake a review. Are you participating? Obviously, given the comments that were made in the incoming brief, I would have thought you would take a keen interest in what is happening. Have you provided input into that review? As part of that, do you have certain expectations coming out of that review?
Mr Tune —There was a governance structure in that review which involved secretaries, of which I was one, overseeing that piece of work which was done by Boston Consulting. KPMG were involved also. A report has been finalised, and the government’s consideration of that report will feed into the budget process.
Senator FIERRAVANTI-WELLS —When was that report finalised?
Mr Tune —I would have to take that on notice.
Senator FIERRAVANTI-WELLS —The reason I ask is because of your concern—
Mr Tune —We took a very close interest in that and have provided some of the funding for it.
Senator FIERRAVANTI-WELLS —Thank you.
CHAIR —That concludes Health, as I understand it, so thank you very much.
Senator FAULKNER —I am not sure if this is directed to the minister or to you, Mr Tune, but I am interested in what role and involvement the Department of Finance and Deregulation might have had in an issue that has received some public notoriety, which is, of course, whether some proposed legislation conforms with the provisions of section 53 of the Constitution. I wondered if someone might be able to outline what, if any, role Finance has had in that matter. I appreciate in saying that, if this is best directed to you, Mr Tune, that other agencies—I assume the Attorney-General’s Department, the Department of the Prime Minister and Cabinet and possibly the Treasury also—would have a role here. Can you outline for the benefit of the committee what, if any, role your department has had in consideration of these matters?
Mr Tune —Yes, Finance has been involved in that, not from the point of view of providing advice on the constitutionality; that is not our role, of course. When this was initially considered in the Senate, we had a clear role in terms of what the costings of the proposal were. We undertook some costings with DEEWR, the responsible line agency, and those costings were in effect treated as confirmed Finance costings which we provided to the government. I think they fed into the debate in some way. In fact, I think they were released, so in effect, they are official Finance costings of those particular proposals that were being debated in the Senate.
Mr Martine —The minister wrote to the leader of the Australian Greens, the Leader of the Opposition in the Senate, and a number of other senators providing those costings to the Senate. They were attached to the minister’s letter.
Senator FAULKNER —I see. Has that letter been made public?
Senator Wong —I am happy to table it. We certainly wrote to the leaders of all parties in the Senate. I may have released it publicly shortly after that.
Senator FAULKNER —Can you tell me if that is limited to just the one piece of legislation?
Mr Martine —There were two.
Senator FAULKNER —What are the names of the relevant bills about which we are speaking here?
Dr Helgeby —The two bills are the Social Security Amendment (Income Support for Regional Students) Bill 2010 and the Defence Force Retirement and Death Benefits Amendment (Fair Indexation) Bill 2010.
Senator FAULKNER —What triggers Finance’s costings process? What is the action point for when bills like this are introduced into the parliament? What triggers the costings process?
Mr Tune —It is basically a request from the government. Not every issue or proposal that is debated in parliament would come to us, or there would be a request for us to cost it, but when the government requests us to cost it, we will do so.
Senator FAULKNER —You rightly point out that of course Finance is not a lead agency in assessing the constitutional issues to which I earlier referred, and I assume that they are matters primarily for the Attorney-General’s Department, but you might be able to indicate if that is the case?
Mr Tune —That is true.
Senator FAULKNER —Is there any form of interdepartmental committee, or is there any process whereby agencies with an involvement or an interest in this matter have been able to work together?
Mr Tune —I am not aware of anything, but I will ask my colleagues if they might have been involved in something.
Dr Helgeby —In this case I think the Attorney-General’s Department, as the lead department, did contact a number of others along the way, and I think they would have consulted with Finance on some issues or some points of detail. But they are the lead on it.
Senator FAULKNER —They are the lead agency, but there is no formal or informal IDC or anything?
Dr Helgeby —Not that I am aware of.
Mr Tune —No, I do not think so.
Senator FAULKNER —Would you say your role has been limited to costings? Would it be fair to say, also, a role in relation to possible budget impacts, which is a broader issue than just costings, of course? Is it fair to say Finance has a role more broadly in that sense as well?
Mr Tune —Certainly in relation to the second bill to which Dr Helgeby referred for which there is a broader budget impact, as you suggested. It is not just a matter of costing something through the forward estimates and looking at the impact of it on the underlying cash balance. Because it has a long-term impact, that is, it impacts on pension payments, that has a cost on the fiscal balance side which is different from the underlying cash balance, and also adds to the superannuation liability over a very long period of time, which can be very significant. The work we did was trying to look at that as well as just the short-term UCB impact across the forward estimates.
Senator FAULKNER —Are you able to do that because of government tasking? If you are asked to provide a costing, a perfectly proper and reasonable thing for a government to do, of course—and I appreciate perhaps to some extent we are probably in a bit of unchartered territory for the department—does the department feel in these sorts of circumstances that it requires specific tasking from government as well, not just to look, if you like, at the immediate costing issues but underlying budget impact, or is it just interpreted by Finance?
Mr Tune —I understand your question. I guess my answer was going to be a bit of both, unfortunately. Sometimes it can be at the behest of the government that they will ask us to think about this in a broader context. Sometimes it will be us that suggests to the government that, given there is a whole range of significant issues surrounding this, it would be sensible if advice was to be given that we take account of those as well. It can cut both ways, I suppose. We would make a judgment. If it had not been suggested to us, or asked of us to do it that way, we would make a judgment about whether we think it is important enough to do so. In this case, when I was referring to the superannuation one, the long-term costs are so significant that we would think, if we had not been asked, that it would be significant enough for us to put that on the table.
Senator FAULKNER —It has been tabled, I know, and I thank you very much for tabling that, Minister; that is much appreciated. Are those longer term budget impacts contained in the minister’s letter to the Leader of the Opposition?
Mr Tune —Yes, it is contained in the same letter. Our calculations and our costings, both short and long term, are also on our website.
Senator FAULKNER —Is that a departmental decision to put that on the website?
Mr Tune —In essence, yes.
Senator FAULKNER —If I had known that, I would not have needed to ask the minister who so generously agreed to table it.
Mr Tune —I am surprised you do not browse the website every day, actually, Senator.
Senator FAULKNER —It might be a matter of surprise for you, Mr Tune, but it would not be a surprise to anyone else.
CHAIR —Does the committee accept the tabled document? So done. Thank you.
Senator STEPHENS —I think this is a question for the minister. Following on from Senator Faulkner’s discussion, have you considered the issue of perhaps the potential of future private senators’ bills being introduced, and finding a way of actually creating some kind of more formal mechanism for assessing the longer term financial impacts? Is that part of any consideration?
Senator Wong —As you know, we are in a very unusual situation, where an opposition party chooses to go against convention and introduce bills in the Senate that have a fiscal impact and that are money bills. The government’s position has been well ventilated, as you would know, Senator—
Senator CORMANN —Labor Senator Hogg disagrees with you.
Senator Wong —I think the Senate has held that position since some time in 1908. I think Senator Faulkner might be able to correct me on that. But your party is choosing to—
0Senator Cormann interjecting—
CHAIR —Senator Cormann! We are wasting a lot of time. The minister has the call. If the minister can respond, we are due to break very soon. Minister, you have the call.
0Senator Faulkner interjecting—
CHAIR —Thank you, Senator Faulkner; Minister.
Senator Wong —Very good reasons underline the constitutional provisions about why you would not have these sorts of bills introduced in the Senate. The opposition is choosing to overturn those conventions and to disregard a fair reading of the Constitution.
The reason I put these costings into the public arena is that, as Minister for Finance and Deregulation, I thought it was important that senators of all parties understand what they are voting on and that they understand the fiscal impact. After all the discussion about fiscal responsibility it should be matched by the way in which one makes decisions in the parliament. The point I was making is that those senators who supported or who are promulgating legislation that have a budget impact really need to explain how they would fund it if they are proposing to support that legislation.
My intention—and obviously the government might take a different view at a later stage—would be that we do need transparency around the fiscal impact of the legislation that non-government senators wish to put up. If they wish to support it, I think they should be accountable for how they say they will fund that. We have not yet voted on this legislation, but the legislation that Senator Faulkner was referencing has a very substantial impact on the fiscal balance, and a very substantial impact on unfunded liability—the latter, some $6.2 billion. These are an ostensible impost on the Commonwealth budget, obviously not at all resiling from the constitutional point that the government makes.
Proceedings suspended from 12.32 pm to 1.35 pm
CHAIR —I would like to just note that we are in receipt of answers to questions on notice for the Finance and Deregulation portfolio, outcome 1, program NA—Review of the conservative bias allowance. I believe you have something to add, Minister.
Senator Wong —I wanted to make a couple of comments about this. The CBA was the subject of a range of questions on notice. I think Senator Faulkner asked some questions as well and Senator Cormann asked for the release of the document. I understand from advice that it is not the normal practice for these reviews to be released. As I am advised, this particular review did not go to cabinet or a committee of cabinet so, consistent with advice, I have formed the judgment that it should be released. But I would make the point that it has not been the normal practice of governments to release these reviews.
CHAIR —We are now going to go back to program 1.1.
Senator CORMANN —In relation to the minister’s comments just now, I would like to note that the deadline for this answer of course was 3 December. Having just received this, I obviously will not be able to ask informed questions about it until I have had a chance to properly read through it, so I would just put that to one side.
Senator Wong —We did pretty well on the questions on notice.
Senator CORMANN —I am just making the point that—
Senator Wong —As you know, I asked my staff to go back and confirm again that there had been no cabinet consideration or consideration by a committee of cabinet, so the department provided—
Senator CORMANN —I do appreciate that you have tabled it, but obviously I will not be able to ask questions.
Senator Wong —I am safeguarding my reputation.
Senator CORMANN —We all care about your reputation very much! Is the Department of Finance and Deregulation providing briefings to the Greens and Independents since the election? Have you been providing briefings to the Greens and Independents?
Mr Tune —I have been involved in a couple of briefings of the Greens, along with the Treasurer, the Minister for Finance and Deregulation and the Secretary of the Treasury. I think I can recall two that I have attended, maybe three. They have mainly been around the economic outlook.
Senator CORMANN —Would there have also been briefings involving your department that you would not have been party to?
Mr Tune —No, I do not think so.
Senator CORMANN —So two or three since—
Mr Tune —Yes. We have also had a formal request for some costings from the Greens, which we provided, and I think we have released it.
Senator Wong —You would recall, Senator, that, under the arrangements into which the government entered, the Greens and I think also the Independents—so Messrs Wilkie, Oakeshott and Windsor—can submit a policy proposal for costing and the government will respond.
Senator CORMANN —My follow-up question was: on how many occasions has that happened?
Mr Tune —As to the costings, I think we had one letter that came through with a request for—I would have to confirm this—about six or seven costings. Some were tax costings, which Treasury did, and others were expense costings, which Finance did.
Senator CORMANN —Was that for the Greens?
Mr Tune —For the Greens, yes.
Senator CORMANN —You have not done any costings for any of the Independents?
Mr Tune —No, I do not think so.
Senator CORMANN —Are these matters confidential? Is it a matter for public—
Mr Tune —I think there has been an FOI in relation to the costings we did for the Greens. They have been released under FOI.
Senator Wong —At least one set—
Senator CORMANN —Yes. Just remind me what issue that was in relation to?
Senator Wong —I think it was a financial review.
Senator CORMANN —I am asking what the costings related to.
Senator Wong —Yes, I am just trying to recall.
Mr Martine —The FOI was from Mr Andrew Robb—
Senator CORMANN —I am not asking about the FOI. I repeat: I am asking what the actual costings related to the Greens—
Senator Wong —Which proposals have been costed?
Senator CORMANN —Yes. What proposals have been costed for the Greens?
Mr Martine —I will just check whether Mr Nicol has that information. From memory, as Mr Tune indicated, I think it was around five or six.
Mr Nicol —There were six costings.
Senator CORMANN —What were they?
Mr Nicol —There were six costings. Three were tax costings—
Senator CORMANN —Which taxes?
Mr Nicol —One related to the fringe benefits tax on cars. I am going from memory here. I cannot recall the other two—
Mr Tune —Another one was indexation of fuel excise.
Mr Nicol —There was one on a walkway from Parliament House to Canberra central.
Senator CORMANN —We have got two tax costings. What was the third tax costing?
Mr Tune —Give us a moment and I will look it up for you.
Senator CORMANN —While you are getting this for us, how much notice do you get when you are required to provide briefings or costings—
Mr Tune —There is a process whereby the Greens or the Independents deliver their costings via the Prime Minister and then they would come to us. We have a commitment under the agreement to cost them in a certain time frame, which I cannot actually recall, but we think it is a reasonable time frame in which to do a proper costing.
Senator Wong —I think there was also reference, from my recollection, in the agreement—I do not have it in front of me—to recognise the resourcing limitations on Finance and Treasury, particularly in the lead-up to the budget.
Senator CORMANN —Those deadlines are obviously not top of mind for you, to the extent that you are not able to tell me now whether it is 24 hours, three days—
Mr Tune —It is days.
Senator CORMANN —It is a couple of days, is it?
Mr Tune —More than a couple; it might be 10.
Senator Wong —It would be very unusual to be 24 hours.
Senator CORMANN —I am just trying to get a handle on how quickly you are expected to make some of these decisions. Do you agree with comments by Treasury secretary Ken Henry that these sorts of requirements and the flow-on implications of a hung parliament are putting additional pressures on your department, in the same way Secretary Henry has said they are putting additional pressures on his department?
Mr Tune —I do not think there is any doubt that it puts additional pressure on departments, particularly Treasury and Finance, who eventually do all the costings that are required for the government on both the revenue side and the expenses side. The work we did in the lead-up to the formation of government, for example, was a huge amount of work that was done by us both in costing policies under the Charter of Budget Honesty and then, subsequent to the election, in the further costings of the now opposition’s policies. That was something where we had done the first part but we certainly had not done the second part before, which was a major piece of work for us.
I guess the ongoing commitments the government has made for a process of additional costings and briefings for the Greens and the Independents add to the workload. To date, that workload has not been overly onerous; but, as Minister Wong indicated, there are certain times of the year, which is from about now through to the budget, where any additional costing requests would become quite onerous because we are heavily into the process of costing policy proposals being forwarded by agencies and ministers. So it is about the timing more than anything else.
The other point I would make in relation to the issue we were talking about just before lunch—that private member’s bills, for example, are now in play, whereas previously they were not in play to the same extent under the previous parliament—is that that adds to the costings load as well. It is yet to be known whether or not that is going to become onerous. At the moment it is manageable, but if a large number of costings were requested I suspect we would have an issue.
I think the other issue here is that some of these situations can put public servants in a difficult position, quite frankly. That was certainly the case in the lead-up to the formation of government; as a public servant I personally found it quite a difficult time to deal with, not having a government formed. We had a government that was there waiting for decisions to be made. We were used to a situation where we worked for the government of the day of whatever persuasion, but we were not in that situation so we were a bit in no-man’s-land, quite frankly.
Senator CORMANN —Now you work for the government of the day plus the Greens plus the Independents.
Mr Tune —I work for the government of the day and, at the request of the government, I can do work with the Greens and the Independents. But there is a process, as I mentioned, whereby everything comes through the government to us. I do not directly go and talk to the Greens.
Senator CORMANN —I understand that, that there are processes involved. Dr Henry made some other remarks in the context of—
Senator Wong —What are you quoting from?
Senator CORMANN —I think that Mr Tune is well aware of the comments I am referring to—
Senator Wong —Well, I am not.
Senator CORMANN —Well, Treasury Secretary Henry—
Senator Wong —Yes, I know who he is, but what are the public comments to which you are referring?
Senator CORMANN —I was about to say—
Senator Wong —Is this reported in the Australian, as it seems to be—
Senator CORMANN —No, it is not.
Senator Wong —Or is there actually something on the record?
Senator CORMANN —Let me just ask the question to see whether Mr Tune is comfortable with answering the question.
Senator Wong —There is a difficulty—and I have had this practice for a number of years—about quoting excerpts of what someone may or may not have said to public servants and asking them to respond to them. It is something that I do not think is particularly fair, because there is a broader context to the comments. Sometimes it is other parts of a speech which would be relevant to the topic of questioning.
Senator CORMANN —Let me put it this way: I will try and assist Mr Tune in putting into context the question I am asking. The question I will ask will stand on its own merits and then Mr Tune can decide how he would like to answer the question or if indeed he—
Senator Wong —What is the difficulty in giving the context of the comments? What is the difficulty in giving us the speech?
Senator CORMANN —Let me just ask my question; I am not sure why we have to waste time.
CHAIR —Maybe I can help. If you have got something that you are quoting from—
Senator CORMANN —I have not even asked my question yet.
CHAIR —No, but to be helpful; if committee members are quoting articles from newspapers, it is normal practice that they table those. Senator Cormann, you have—
Senator CORMANN —I do not have anything to table at the moment. I just am talking about comments that I think are well and truly in the public domain, but we will see how Mr Tune will answer the question. There have been observations—and they have been attributed to Secretary Henry—that the increasing incidence of FOI requests has an impact on the way advice is drafted to government. I guess I am interested in your comment whether the increasing incidence of FOI requests is having an impact in the way the Department of Finance and Deregulation drafts its written advice to government.
Mr Tune —I do not think so. Obviously, the new FOI laws have changed the parameters around FOI to some extent and we have been monitoring FOI requests pre and post the new laws coming into effect on 1 November last year. I think it is fair to say there has been an increase in usage of FOI, particularly by the press—the media—and some of the details that they seek go into much more detail than perhaps we had been used to. Whether that is a result of the change of the laws or not, I do not really know. It may just have been a trend that was on the increase regardless.
Senator CORMANN —When you drafted your incoming government brief, was it drafted in the knowledge that it was likely to be released under FOI?
Mr Tune —I had a mind that it might be, but I did not hold back on that basis.
Senator CORMANN —So it did not influence the way you drafted your advice?
Mr Tune —It may have affected the wording—the words I used—here and there, but certainly the thoughts that we wanted to get across as a department to an incoming minister of either persuasion were basically the same.
Senator CORMANN —Essentially, by what you are saying, it has not had a significant impact on the way you conduct your provision of budget advice and other to government.
Mr Tune —Budget advice is somewhat different in that—as it always has been—if it is going through cabinet there is a certain set of requirements around that. My advice—my view—and what I tell my people is that we are here to provide frank and—in the colloquial—fearless advice to governments of the day. We should be astute in what we say and how we say it, but if we are providing pussyfooted advice we are not even worth having as bureaucrats, so we try and provide honest advice about our views and that goes to the government of the day—minister of the day—and a lot of that is done in the context of cabinet government and therefore is protected in that sense because of that.
Senator CORMANN —In the context of providing that frank and fearless advice, is there an increasing portion of that frank and fearless advice that is now verbal rather than written?
Mr Tune —No; I do not believe so.
Senator Wong —Although, Senator, I—
Senator CORMANN —I am happy to leave it there; I accept the explanation. I am running out of time, so I am just keen to keep going through.
Senator Wong —What I was going to say, though, is that probably my practice as a minister might be a little more iterative than other ministers, so I may well seek to have a discussion with Mr Tune and the relevant official in relation to advice rather than just only look at the written document.
Mr Tune —That is not abnormal, I should add, and I have dealt with many ministers over many years.
Senator CORMANN —I am not suggesting it is. In terms of the monthly financial statements the minister released the other day, total liabilities for the year to date in December are at $388.8 billion, whereas a full-year estimate for 2010-11 is $380 billion. Can you explain what the rationale is for that?
Mr Tune —I will get Dr Helgeby to take you through that.
Senator CORMANN —I assume that somebody is still looking to provide the answer to the previous question in terms of the costs.
Mr Tune —Yes.
Senator CORMANN —You have not forgotten about it?
Mr Tune —He is out there beavering away on the net, I think.
Dr Helgeby —In relation to the monthly statements, there is a fair degree of volatility month to month. In terms of monthly statements we will pick up transactions in essentially a 30-day period and if the timing of a forecast transaction is out it will move the monthly numbers around. As a general point we would be cautious about any attempt to extrapolate from a particular set of monthly numbers to an outcome.
Senator CORMANN —Okay, but the MYEFO estimate for 30 June 2011 is $380 billion; the actual as of 31 December 2010 is $388 billion, so there is a difference there. What is driving your expectation of the difference in terms of total liabilities?
Mr Youngberry —I think we would have to take that one on notice. As Dr Helgeby mentioned earlier, there is a process we go through each month where we collect data from agencies in relation to not just the balance sheet but also the income statement, and we would have to go back and assess which agencies actually contributed to that. You cannot actually take the 31 December figure and extrapolate to 30 June because it does reflect what invoices and so on are on hand.
Senator CORMANN —I am not trying to extrapolate it. Your expectation at the end of June is $380 billion in terms of total liabilities; your actual situation at the end of December is $388 billion. So, clearly, if you are going to reach your estimate for the end of June you are going to have to bring your total liabilities down. I would like to know how that is going to happen to the tune of $8 billion, or are you now confirming that you are unlikely to reach the $380 billion estimated total liability by the end of June 2011?
Mr Youngberry —No. The liabilities are affected by a whole range of things, so one element of it is accounts payable that agencies incur over the course of the year and they are paid in the normal course of events. When we come to the end of the financial year there are also other adjustments that are made in relation to the superannuation liability and other obligations that the government has. We would need to go back and actually look through the detail of what the major contributors are to the liability balance as at 31 December to actually explain it in more detail.
Senator CORMANN —So, essentially, you cannot provide an answer to the question I have asked?
Mr Youngberry —Not specifically. Liabilities are settled in the normal course of events, so you cannot actually take 31 December and extrapolate the figures.
Senator CORMANN —You are presenting it like that. You are presenting what your actual situation is at 31 December and then you are having a column next to it with what your estimate is for the end of the financial year, so I think that it is quite reasonable—and presumably it is intended to give some sort of guide on how you are tracking in your actual circumstances compared to your targets. In relation to fuel and energy costs for the year to date as of December, they are set to be $2.8 billion, while the full-year estimate is $7.2 billion. Are you still expecting to reach the $7.2 billion? If so, that seems to be a significant increase for the second half of the year.
Mr Youngberry —I missed the first part of your question.
Senator CORMANN —The first part is—
Senator Wong —Are you reading off the—
Senator CORMANN —I am reading off your press release, Minister.
Senator Wong —Can I finish?
Senator CORMANN —We are losing time.
Senator Wong —Well, if you would let me finish each of my sentences we may not have an argument each time we speak. Are you reading off the monthly financial statement that I issued?
Senator CORMANN —That is right. ‘Minister for Finance and Deregulation media release, 11 February 2011’.
Senator Wong —That is fine; I understood that. I am just asking for a copy of the same document, but I am not sure that the officers at the table have it.
Mr Tune —No, we do not have it here.
Senator CORMANN —So, you do not have these figures? They were released by the government a couple of days ago.
Mr Tune —I do not have them.
Mr Youngberry —We just do not have them with us.
Senator CORMANN —I would have thought that if you provide an update of Australian government monthly financial statements to December 2010 and we have got the Senate budget estimates a week later, that that would be an obvious area for questioning.
Mr Tune —Yes, I am sorry; we just do not have them, but I am happy to do an explanation for you about what—
Senator CORMANN —So, I will just put all these questions on notice because you will not be able to answer them because you have not got the paperwork.
Senator Wong —We can do what we are able to; we just do not have the document with us.
Senator CORMANN —Interesting. In the 2009-10 budget, the government included a graph of the budget structural balance in statement 4 of Budget Paper No. 1. In the 2010-11 budget that graph disappeared; what is the reason for that?
Mr Martine —I do not have a copy of the 2009-10 budget in front of me, but as you have indicated, my recollection is that there was a structural budget balance included in statement 4.
Senator CORMANN —That is in statement 4, page 69.
Mr Martine —The statement is put together each budget, which varies year by year. It is a topical statement that is prepared by Treasury, so some years it might be about the terms of trade and other years it might be around other economic issues. The 2009-10 budget included references to the structural balance. Going from memory here, since the 2009-10 budget there has been an Economic Roundup article released by Treasury.
Mr Tune —Since the 2010-11 budget.
Senator CORMANN —In the 2009-10 budget chart 14 in statement 4, page 69, showed that the budget will be in structural deficit until 2015-16. Is the reason that there has not been a similar graph in the 2010-11 budget due to the fact that it would show that there would be a significant deterioration in the structural deficit to the point that it would last until 2019-20?
Mr Tune —There are a couple of points there. Firstly, that material is produced by Treasury. Secondly, there is nothing sinister in the fact that it did not appear in the 2010-11 budget because, as Mr Martine explained, Budget Paper No. 4 is a special article basically and the subject matter varies from year to year, according to what is topical at the time. Thirdly, Treasury have subsequently published in one of their Economic Roundup articles, which is a Treasury document that comes out about every two months or so, an update, so rather than it being in the 2010-11 budget, it was in the Economic Roundup article that appeared a couple of months later.
Senator Wong —As Mr Tune said, you may get some more detailed answers from Treasury on that. In fact, the government has increased the budget transparency since coming to office. From my recollection, we publish medium term projections of both the bottom line and net debt, along with a greater sensitivity analysis than had previously been provided. I think it is reasonable to look at longer term positions and think through the longer term sustainability of the budget. I have made some comments about structural deficit, including the fact that if you want to argue about that, the structural deficit that you refer to commenced under your government.
Senator CORMANN —I have here, in front of me, the opinion piece that was published in the Australian today. I assume that I will not have to table it for you so that you know what I am talking about.
Senator Wong —They might have moved a few paragraphs around—you know how they do that—but I am familiar with it.
Senator CORMANN —There you go. I have had a very good read of it. You talk about restricting real spending growth to two per cent or less in both trend growth years. Can you tell me what the percentage would be if the stimulus splurge was taken out of the spending trends and how your growth would be tracking if both trend and average spending under the stimulus package were taken out of your trend projections?
Senator Wong —You use that term. Another term might be the jobs saving package that the government undertook.
Senator CORMANN —Or the crisis levels of spending.
Senator Wong —I do not know that I have all those figures here. If you want to give some sense of the trend, in the last five budgets under Treasurer Costello, from memory, there was real growth in expenditure of around 3.6 per cent or 3.7 per cent. We are proposing, in the circumstances that you outlined, to hold that to two per cent.
Senator CORMANN —From record levels of spending. If you use record levels of spending as your base it is not hard to meet a two per cent target. You talk about our record. You do not ever mention the fact that we paid off $96 million worth of Labor debt and that we cut taxes and left about $100 billion in reserves when we left government. Why are you not mentioning the Future Fund in your opinion piece?
Senator Wong —No. That is true.
Senator CORMANN —What about the Education Endowment Fund?
Senator Wong —That may well be true, but neither do you, when you go through your assertions of fiscal responsibility, point to, again, the additional spending you are proposing with no offsets. Really, fiscal conservatives like you inside the Liberal Party room need to do something about the National Party and senators such as Senator Ronaldson who put up bills with expenditure associated with them. You all tick off on them without thinking about that fact that what you are essentially saying is we can indulge in this expenditure without any offsets. The assertion that you have offsets is not correct because that is the same set of offsets which resulted in the $10.6 million black hole. The fact is that you are behind.
Senator CORMANN —This is my last question for outcome 1. You would be aware of the Access Economics analysis which was commissioned by the Business Council of Australia where they say that the proxy for the underlying health of the budget is no longer unemployment, but rather, and I quote ‘coal and iron ore prices’. Do you accept the view that fiscal policy is now dangerously reliant on record commodity prices?
CHAIR —This is your final question before we finish this area.
Senator Wong —I accept the view that we have a once in a generation opportunity, given that the mining boom is causing the sort of surge in investment and national income that we have seen and that we need to use the benefits of the boom wisely. I have consistently said that since I had the opportunity to take the position I now hold.
CHAIR —My understanding is that we have dealt with outcome 1.
Senator Wong —We have the costings on the Greens’ policies that you sought, Senator Cormann. I also have a copy of the monthly financial statements, so officials may be in a better position to respond to that if you wish to return to that.
Senator CORMANN —Can we get the answers that were promised before in relation to the costings?
Senator Wong —Yes.
Mr Martine —There were six costings which I will read out: reform of arrangements for FBT on company cars; reintroduction of indexation of the fuel excise; end of forestry managed investment schemes; geographical disadvantage test; a new criterion for the youth allowance; differential between the government and the Greens’ paid parental leave scheme; and a feasibility study and preliminary sketch plan for a pedestrian footpath between London Circuit and Parliament House in Canberra.
Senator CORMANN —Do you have a dollar figure for those?
Mr Martine —I do not have the dollar figures. I will have to double check, in terms of the FOI, as to what was included. We can take that on notice in terms of the dollar figures. As Mr Tune indicated, we costed some and Treasury costed others.
CHAIR —My understanding and the agreement of the committee was that we would be finished with outcome 1.1 at two o’clock. We now have Senator Abetz joining us who is not sure and needs some clarity on the questions that he has. Senator Abetz, can you outline your question and whether you believe you are in outcome 2 or not?
Senator ABETZ —I will quickly ask it. It relates to question on notice 187 regarding the monies that are invested for the Fair Work Ombudsman. In the answer I was told that money is either held at call or held in term deposits. Can somebody tell us if the Fair Works Ombudsman’s money is held at call or in term deposits? In which category is that held? Surely somebody must know that. If you do not know now, I will not delay the committee and we will take that on notice.
Mr Martine —We will have to take it on notice.
Senator Wong —Have you asked this of Fair Work Australia?
Senator ABETZ —I have indeed asked the Fair Work Ombudsman and they bounced me to Finance, which is why I have asked Finance. I have got a relatively helpful answer from you, Minister, on notice from last time around. I am now trying to drill down even further.
Senator Wong —You sound surprised.
Senator ABETZ —You should sound surprised that I am praising you.
Senator Wong —That is a surprise.
CHAIR —We have established that we will take that on notice. Are there any further questions for outcome 2?
Senator Wong —That will be in outcome 1.
Senator ABETZ —I will quickly follow up and say that the government must know how much it earns at call on a daily basis from all its investments and what the aggregate figure is invested on a daily basis and also what moneys are in term deposits each day. Can you confirm that that is the case in your answer when you get back? We might then be able to drill down as to the exact quantum from the Fair Work Ombudsman.
The other aspect is that I believe I asked some questions about Shannon’s Way last time. It may well be an error in my office. I make no allegation, but I understand I have not had a response to those questions. The secretary suggests that might be the case. All I am doing, if I may, is putting that on Hansard—
Mr Tune —Was Shannon’s Way in relation to maps in some way?
Senator ABETZ —Yes.
CHAIR —We have not got to there yet.
Senator ABETZ —I will leave that with you on notice and we will deal with that at a later stage.
CHAIR —We are now moving to outcome 2.
Senator CORMANN —This relates to an article that appeared in theAustralian on 16 February 2011 titled ‘Labor’s decision to cut funding for future disasters undercuts climate rhetoric’. I am just reading the headline. Do not blame me. Do not shoot the messenger.
Senator Wong —This is the Andrew Robb—
Senator CORMANN —I think it is a very fair question. Clearly there is a proposition here on the basis of budget analysis that spending on disaster relief funding is much lower than what it has been, down to $80 million over the next three years. Your comment in the article is that these estimates are based on longer run trends determined by agencies, not politicians. That is correct, is it not? That is what you said?
Senator Wong —I do not have the article in front of me, but they are.
Senator CORMANN —That is said by experts, based on longer run trends—
Mr Tune —That is based on advice given by the Public Service, yes.
Senator CORMANN —So the Public Service expects that the incidence of natural disasters over the longer run trends is going to go down, not up?
Mr Tune —Yes, basically. That was the situation at the time. Obviously, we have had a series of extraordinary disasters in Australia in the last six months or so which may change our view about what the long-term trend may be. But that gets reflected in the forward estimates.
Senator Wong —This is outcome 1 again. Do you want us to bring—
Senator CORMANN —No, this is outcome 2. I was provided advice that this came under—
Senator Wong —It is contingency reserve and provisioning within that. We will bring Mr Martine back.
Senator CORMANN —No, that is okay. I was advised this was under outcome 2 by the secretariat. I would just conclude this point, then, on the observation that in 2009 you made the statement that climate change is expected to increase the frequency and intensity of extreme weather events, including cyclones, storms, droughts, heatwaves, bushfires and floods and that clearly the budget planning of the government is entirely inconsistent with what your assertions were back in 2009 as climate change minister.
Senator Wong —I think that is really a very tenuous set of facts to try to link together. There is—
Senator CORMANN —Are you planning to spend less on disaster relief?
Senator Wong —May I finish? I am really getting tired of this. I listen to a lot of stuff that you put to us, much of which I disagree with. The assessment by Finance and other agencies about what to provision for through the forward estimates is one set of decisions. The longer run issues of the impacts of climate change are well documented and they go well beyond the potential forward estimates. Even on your own assertions, the facts do not bear out a very substantial variation between what is being provisioned now and what was being provisioned then. But most of all the inconsistency—if you want to talk about inconsistency—between your shadow minister helping to roll a leader rather than taking action on climate change then asserting that somehow we need to do something about climate change is pretty amazing.
Senator CORMANN —You cannot have it both ways, though. Either the incidence of disasters is going to increase and then you have to make provision for it in your budget accordingly, or it is going to decrease and that is what is reflected in your budget papers. If you expect the incidence of disasters to increase then it looks to any objective observer like you are making inappropriate savings that will not be able to be sustained into the future. Either you are not allocating enough money to cover your expectations of future disasters or it was just scaremongering and the true expectations are actually much less extreme than what you asserted two years ago.
Senator Wong —The time frames differ greatly. The forward estimates period is four years. The issue around climate change, as I think I said on many occasions, is an intergenerational issue. It is true; this generation will not feel the same extent of impacts that we risk imposing on subsequent generations. So to suggest that somehow what a government provisions on advice in the forward estimates diminishes in any way our acceptance, unlike you, of the overwhelming weight of scientific evidence about the impact of climate change is simply incorrect.
Senator CORMANN —How long-term are longer run trends?
Senator Wong —That is probably a question you should ask some scientists if you are interested. I am sure we could refer you to some people—
Senator CORMANN —That was your quote. I am asking about your quote.
Senator Wong —If I could finish? It is probably a question you should ask some of the scientists, such as Professor Will Steffen and others, who have documented some of the likely impacts. From memory, I think there was a 50-decadal analysis on different temperature scenarios and looking at the frequency of severe weather events. But that is not a question for these estimates. I think I released that, from memory, when I was climate change minister and, from memory, Minister Combet has added to that since he took over.
Senator CORMANN —Indeed. Property and construction does come under outcome 2, quite clearly. Are you involved in the proposed Centrelink development which is planned for Tuggeranong? Does Finance consider that the development at Tuggeranong is good value for money?
Mr Tune —We are just double-checking, but it appears that we are not involved in that. That is being done by another agency.
Senator CORMANN —What other agency would that be?
Mr Tune —It is Family, Community Services and Indigenous Affairs.
Senator CORMANN —So the finance department does not take a role across government to make sure the government does—
Mr Tune —The property development at Tuggeranong—which I used to work at, in fact—is under a very different structure to what is normal property management in the Commonwealth.
Senator CORMANN —Why is that?
Mr Tune —There was a company that was formed to own and run that particular property.
Senator CORMANN —Would Finance normally run this—
Mr Tune —Not normally. Well, there are a variety of mechanisms. Sometimes we own a property outright. In recent years, that has become less and less the norm. In other cases departments will lease private sector accommodation. Then we run what is called a property account whereby money is paid into that and we use that money to actually provide maintenance and upgrades.
Senator CORMANN —Who takes an overall across-government view of these sorts of property investment decisions?
Mr Tune —I am sorry?
Senator CORMANN —Who has the whole-of-government perspective on whether or not investments or certain property decisions are good value for money?
Mr Tune —We do, in general.
Senator CORMANN —You do in general but not in relation to—
Mr Tune —There is a set of Commonwealth property management guidelines.
Senator CORMANN —That is what I thought. But how many government owned properties are empty across Canberra and across Australia?
Mr Tune —I would have to take that on notice. I am aware of one in Canberra that is empty, which is Anzac Park East.
Senator CORMANN —As I understand it, Anzac Park has been empty for years, has it not?
Mr Tune —It has.
Senator CORMANN —So why would that not be a suitable location for—
CHAIR —Can I just raise an issue relating to the way we are running the program? We have now gone on to properties, which is program 2.2. We are dealing with outcome 2.
Senator CORMANN —I would like to say that I have been very relaxed about assisting the committee with colleagues who wanted to bring things forward and backwards. This is my last line of questioning in this outcome before anybody else can ask whatever questions they have got. I have now started this line of questioning.
CHAIR —I can appreciate that you have to negotiate with your colleagues, but I think that I have been more than flexible in the chair in terms of having the program. I am trying to assist not only the committee members but officers, so that if we are dealing with property then we should deal with property as a whole so that once you finish your line of questioning and Senator Moore has a follow-up, then we will not be coming back to it.
Senator CORMANN —Can I just conclude this and then that will be it for me?
CHAIR —Senator Cormann.
Senator Wong —Not forever, I assume.
Senator CORMANN —No, not forever, but on this outcome. Why would it not be appropriate to have Anzac Park—a building which has been empty for years—used for this purpose for the Centrelink development?
Mr Tune —The cost of refurbishing Anzac Park East is quite high. You would have to look at that. You would have to look at where the department wanting the accommodation was co-located at the moment. Tuggeranong is about 35 kilometres south of here and most of the social policy departments are located down that way in Canberra, either at Woden or at Tuggeranong. You may get quite gross inefficiencies in the operations of a building if you put the departments too far apart.
Senator CORMANN —You may and you could, so you would have to look at that. I am just talking about Anzac Park because that is the one that you have mentioned that is standing empty, but nobody is looking at it, by the sounds of it. The families and community services department is running this development totally separate, outside of what would normally be the whole-of-government consideration and I am just trying to understand how it maximises the chance of good value for money.
Mr Tune —I will have Mr Scott-Murphy explain how the property management principles work and how they apply to this particular case.
Mr Scott-Murphy —My responsibility is for the property and construction division. Going back, first of all, to Senator Cormann’s question around Centrelink, it was a commitment with a private sector developer for quite a large requirement, significantly greater than we can accommodate at the Anzac Park East building. It is probably in the order of three times the size that Anzac Park East could currently accommodate.
Going back to the Financial Management and Accountability Act 1997, responsibility for accommodation decisions rests with the chief executive officers of each line agency, so they are free to make their own choice around both the location and their needs. As Secretary Tune has outlined, the Centrelink accommodation in Tuggeranong was previously accommodated in the Tuggeranong Office Park prior to their making a commitment to co-locate into the building that has been developed for them on an adjacent site, which left the Tuggeranong Office Park available for FaHCSIA.
Senator CORMANN —Who is the private sector developer that is doing the development?
Mr Scott-Murphy —I recall that it was the Potts Morris Group that did the development originally. I believe it has been on-sold since that time.
Senator CORMANN —So no current empty office space has been considered as an alternative. You are saying the reason is that it is close to the current headquarters. Would it justify paying more to locate the next building closer to the headquarters?
Mr Scott-Murphy —If you are talking about the Tuggeranong Office Park and the media article that referred to rents being paid above the market rate, that refers to FaHCSIA rather than Centrelink. Centrelink have committed to a nearby building at market based rent, so they are not paying extra for their accommodation.
Senator CORMANN —To assist the committee, I will go quickly through a series of questions that you might want to take on notice. I would like to know what the cost is of this new development—that is, all costs including building management fees and so on. I am keen to understand why Centrelink needs a brand new building and what is driving it; whether it is the cheapest option, given Canberra office market vacancy rates which are currently at very high levels; and of course, I would also like a list of all the current empty office space across Canberra and across Australia. Finally, I would like to know how many departments have office space spread across Canberra that is in different buildings, not located in close proximity to each other, to see whether this is an extravagance to require this particular office to be located right next to the current families and community services offices.
Senator Wong —Ms Mason has some information to give you on that, but I would like to make clear a couple of things. Firstly, I assume the question about office space available across Australia is not intended to be all office space, because I can tell you right now, I am not going to be asking the department of finance to work on that.
Senator CORMANN —Let me narrow it down.
Senator Wong —Work out how much office space is available across Australia. There are resource implications to some of the list of questions. Can Ms Mason respond to you and then perhaps you can respond on both issues?
Senator CORMANN —Yes.
Ms Mason —The first of your questions would be best directed to FaHCSIA, given that we are not involved in the decision making in respect of that new development.
Senator CORMANN —I think you should be. You have responsibilities for it.
CHAIR —Can we allow the witness to complete her answer?
Senator CORMANN —Yes.
Ms Mason —Mr Scott-Murphy explained the decision making, in terms of office accommodation for agencies, is a decision taken by the relevant chief executive under the Financial Management and Accountability Act. Those decisions are not ones that Finance has been involved in, so we are probably unable to answer those questions and I would suggest that you direct them to the relevant portfolio.
In relation to vacant government buildings for which Finance is responsible, we will be able to compile a list of those buildings, but that is probably as far as we can assist.
Senator CORMANN —I would now like to take up the minister’s offer to clarify. I am looking for how many government owned properties are currently empty across Australia and across Canberra, the location and reasons why they are empty.
Given your statements just now, I would like to understand what Mr Tune said. I understood that finance did have a whole-of-government responsibility to ensure that taxpayers’ dollars are spent with the value for money rule over it in the context of property investments made across government. I am sure that Mr Tune said that the finance department had a role to ensure that there was value for money as taxpayers’ dollars are invested in property.
Mr Scott-Murphy —I can give you some information about the department of finance’s role in assessing the efficient use of accommodation, particularly leased accommodation, across the Commonwealth. Within my division I have the Commonwealth Property Review Branch, which has been undertaking a collection of data about office accommodation densities across all of the FMA agencies, validating that data through audit and then reporting on the densities. We have also set a benchmark target for improving the density of accommodation use and we have forecast savings that we expect to achieve over the forward estimates and beyond, as agencies either enter into new lease commitments or undertake major refurbishments or fit-outs of their current leases, and in freeing up space, make that available for subtenancy agreements. That work is well underway and we have identified significant savings in the forward estimates period.
Senator CORMANN —But—and this concludes it from my point of view—it is fair to say that you have no idea whether the Centrelink development at Tuggeranong is the best possible value for taxpayers’ money?
Mr Scott-Murphy —The Centrelink commitment to the development at Tuggeranong is at least four years old, to my recollection. I am not aware of a new building that they are contemplating making a commitment for, but I will certainly investigate that further following your question.
Senator CORMANN —Thank you. Could you provide as much of the detail as possible to the questions I have put on notice.
Senator Wong —I do want to emphasise what Ms Mason said, which is that we have responsibility for a whole range of financial management requirements and so forth, but agency heads—or their delegates, obviously—are responsible for compliance with those, and the sorts of decisions you are talking about would be the responsibility of the relevant secretary.
Ms Mason —May I also clarify your question in relation to vacant government buildings in Canberra and elsewhere? We can assist you, up to a point, on notice, with an answer to that question in relation to the buildings for which finance is responsible. I would also say that we can only assist you in relation to Commonwealth government buildings; there will, of course, be other government owned buildings.
Senator CORMANN —It was implied that I am talking about the federal government, obviously. We are talking about federal government estimates. I am not asking about local government buildings or state government buildings; I mean, I think that that is a given.
Mr Tune —Okay, that is fine.
Senator CORMANN —But if you cannot give us a whole picture, across the whole of the Commonwealth government, I would like to know who in the Commonwealth is responsible for ensuring that the property investment decisions maximise value for money.
Ms Mason —As I said, we can assist you up to a point, and we certainly understand what you are seeking. To the extent that we hold that information, we will provide it on notice.
CHAIR —Is there anything further in property? Senator Moore’s question was answered. Is there anything further in outcomes 2, 2.1 and 2.3? There being none, we will move on.
CHAIR —We will now move to outcome 3, Support for parliamentarians, others with entitlements and organisations as approved by government through the delivery of entitlements and targeted assistance.
Senator FIFIELD —I think usually at this point Ministerial and Parliamentary Services has a bit of a show bag of materials which they distribute to the committee of staffing in the opposition and the government.
Ms Mason —We will have, as you term it, a show bag, and one of the officers who has the show bag will bring it to the table.
Senator FIFIELD —I just thought if that is circulated at the commencement of this part it might assist colleagues and prompt some questions.
Ms Mason —We will get that material in just a moment, and, if I may, I will get some additional materials myself.
Senator FIFIELD —Sure. We might start with the CCSTU, which is the Caucus Committee Support and Training Unit. Is that what the acronym stands for?
Ms Mason —I understand that that unit has recently been renamed the Caucus Communications Team.
Senator FIFIELD —The Caucus Communications Team.
Ms Mason —Yes.
Senator FIFIELD —Is that communication within the caucus or the caucus communicating to the outside world?
Ms Mason —I understand that it is communications within the caucus to support the committees of caucus and to provide a communications link between the Prime Minister’s office and other ministerial offices.
Senator FIFIELD —Are you aware of the reason for the name change?
Ms Mason —No.
Senator FIFIELD —Minister, are you aware of the reason for the name change?
Senator Wong —No.
Senator FIFIELD —They are not communicating with you, clearly.
Senator Wong —Minister Gray handles outcome 3.
Senator FIFIELD —Clearly, the unit has not communicated to the caucus what its new name, role or function is.
Senator Wong —No. You should not take me as a sort of guinea pig on that.
Senator FIFIELD —As a typical caucus member! I shall not. How many staff are currently employed in the Caucus Communications Team?
Mr Tune —According to this, at 1 February 2011, six of the seven positions allocated to the CCT were filled.
Senator FIFIELD —What date was that at?
Ms Mason —1 February 2011. We normally do the staff establishment at the first of each month.
Senator FIFIELD —Has the establishment changed since the establishment of the CCSTU originally?
Ms Mason —There have been various changes over time.
Ms Clarke —At the last estimates, the allocation was five and it has changed over various times. Our data here goes back to January 2008 and at that stage it was ten.
Senator FIFIELD —So it has shrunk a bit and it is growing again. Have there been any new assets provided to the Caucus Communications Team since the last estimates, whether computers, phones or iPads?
Mr Tune —In the six months to the end of December 2010 we, finance, provided about $25,000 worth of support costs, excluding salary, to the CCT; $9,000 for office support, which was—
Senator FIFIELD —So, that was $25,000—
Mr Tune —Six months ending 31 December 2010.
Senator FIFIELD —in salary?
Mr Tune —No, excluding salary.
Senator FIFIELD —Okay; so $25,000 in support, which included—
Mr Tune —$9,000 for office support—that is, rental of photocopiers, stationery, office consumables; $7,000 for IT equipment; and $9,000 for telecommunications.
Senator FIFIELD —That is new, additional equipment?
Mr Tune —No, that is just the ongoing stuff. Whether there is anything new, I—
Mr Nelson —I believe that is just made up of ongoing—as the secretary said—business-as-usual type of equipment and any material that would have been required over that time.
Senator FIFIELD —Are you able to provide the salaries of all the members of the Caucus Communications Team? Obviously, I am not seeking their names but just the bands—
Ms Clarke —I can provide a total offhand now.
Senator FIFIELD —A total.
Ms Clarke —The total salary cost, excluding superannuation, as at 1 February is $618,469.
Senator FIFIELD —That is $618,469.
Ms Clarke —Yes, which excludes superannuation, and that is for the six staff currently employed there as at 1 February.
Senator FIFIELD —So, for $618,000 of staff costs for the Caucus Communications Team, they have not yet managed to communicate to people such as Senator Wong what their role actually is.
Senator Wong —They may have; I just may not have read it.
Senator FIFIELD —They might have been in—
Senator Wong —We have had a floods package to put together and a range of other things in this first part of this year, so I do not think that is fair. My recollection is that the equivalent under you had significantly more staff members.
Senator FIFIELD —But I kept hearing before the election that Labor was going to do so much better and be so much better than we were, so I am just exploring that.
Senator Wong —Fifteen staff and about $1.4 million annually. I am just making the point: it is legitimate to ask questions about the expenditure in this area, but if you want to make a range of political points, I think you should recall your own records.
Senator FIFIELD —Far be it for those to be made at Senate estimates under any regime. Could you provide a breakdown of travel undertaken by members of the caucus communications team this financial year?
Mr Tune —Can we take that on notice? There is nothing in the briefing.
Senator FIFIELD —Yes. Also, Ms Clarke, in addition to the total cost of the salaries, would you be able to provide a breakdown by band or whatever is appropriate?
Ms Clarke —By classification?
Senator FIFIELD —Yes. I assume members of the caucus communications team are paid travel allowance when they have to travel for work purposes. Are you able to provide, for this financial year, the total amount of travel allowance that has been paid to members of the caucus communications team, and also—I am not sure how you would tabulate this—the various places that overnight travel was claimed? It might be for position A, X number of nights in Sydney and X number of nights in Melbourne; for position B, X number of nights in Cairns or Tasmania; it might be that they have not travelled much at all? I would like to have that sort of breakdown.
Ms Clarke —I will take it on notice.
Senator FIFIELD —Thank you for that. I have a few more questions, but Senator Ryan is under a time pressure for another committee so I might yield to him.
CHAIR —There are other senators who have questions in this program as well, so after Senator Ryan I propose to go to Senator Ludlam.
Senator RYAN —We often get at Senate estimates a document tabled with respect to—
Senator Wong —This is the show bag.
Mr Tune —It is on its way.
Senator Wong —Is that what you called it, Senator Fifield?
CHAIR —I think that was the terminology used by Senator Fifield.
Senator FIFIELD —Yes.
CHAIR —We will accept the documents that are being tabled including this and the personal classification.
Senator RYAN —Yes.
CHAIR —It is so received.
Senator RYAN —Minister, you are probably aware of an editorial in the Australian on 1 February that referred to FOI requests for a list of government advisers in which the Australian said the request had been ‘met with an astronomical fee from the Department of Finance’.
Senator Wong —I was not aware of that.
Senator RYAN —I can table a copy of the editorial to show the minister.
CHAIR —You can table it.
Senator RYAN —I am happy to move on to a couple of other questions and then come back to that to give you a copy if that is easier.
Senator Wong —What was the nature of the FOI request?
Senator RYAN —The nature of the FOI request, from the article—and I am happy to be enlightened—was a request for a list of advisers of ministers.
Senator Wong —Names, as opposed to classification?
Senator RYAN —I am not sure, that is why I am asking the questions.
Mr Tune —We can respond to that.
Ms Clarke —It was for a list of the names of all staff above adviser level of cabinet ministers.
Senator RYAN —The implication from the newspaper article was that it was not refused, but that there was a higher cost associated with that request.
Ms Clarke —There was a cost associated with consultation with the staff members of that request.
Senator RYAN —Very briefly, can you take me through what that consultation involved and why?
Ms Clarke —If the applicant wanted to go ahead with the FOI, the consultation involved writing to each of the staff members involved and asking whether they considered it was personal information to have their names handed over to the FOI applicant.
Senator RYAN —If, for example, you wrote to a staff member and that staff member said, ‘Yes, I consider it to be personal information’—I am not familiar with the details of the new FOI regime—and if they basically objected to their name being on the list, is the approach of the department then to say, ‘We’re not going to release that information.’?
Ms Clarke —There is a process you go through to consider whether or not, under the FOI Act, information is of a personal nature and whether or not it is in the public interest to release. Perhaps my colleague Mr Taylor can go through that, being responsible for the FOI Act in the department.
CHAIR —Have we formally received the document that you have tabled? It has been received and noted by the committee.
Mr Taylor —Perhaps I can assist. The consultation process that Ms Clarke has already outlined is undertaken and then the results of that are provided to the decision maker who takes into account whatever responses are received from the people who are involved when making that decision.
Senator RYAN —It is not automatic. If I do not want my name on it, it does not go?
Mr Taylor —No, it is not automatic.
Senator RYAN —Is it true, in the past, that there have been names of advisers published in government directories?
Ms Clarke —As we understand it, it goes back in history somewhat, around 2002—and I think the article refers to it—there was a publication, which is now the government online directory, which listed the names of ministerial advisers. That seems to have ceased over the years.
Senator RYAN —The article seems to imply that this information was released for free in the past. Is this something under the new FOI regime or is it a new behaviour from the department, with respect to releasing this information?
Ms Mason —We do not have a copy of the article that you are referring to.
Senator RYAN —I have tabled it.
Senator Wong —We have a copy of the editorial.
Senator RYAN —The editorial is the article that I am referring to.
Senator Wong —You are asking the officers to respond to an editorial, which is a comment piece.
Senator RYAN —I am asking the officers to establish the facts that are asserted in this editorial. I am not asking for an interpretation. I am trying to chase up if what is asserted in this is true. In the past was this information released for free?
Ms Mason —I think Ms Clarke has answered that question, in that we understand there was information provided as part of a government directory previously for free, but that practice ceased quite some time ago.
Senator RYAN —Have you released it previously under FOI.
Senator Wong —I do not believe the directory you refer to is a departmental document.
Ms Clarke —No, it is a broad government document.
Senator Wong —It used to be just like what you had. You do not have caucus, so whatever you call it.
Senator RYAN —Coalition directory.
Senator Wong —There might have been a caucus directory which had previously been released. Is that what you are talking about?
Ms Clarke —No.
Senator Wong —There is another one.
Ms Clarke —It is now called the government online directory and it lists senior public servants, ministers and, up to about 2003, it used to list the advisers as well, but that practice, for some reason, has ceased.
Senator Wong —Since that time; that was 2003.
Senator RYAN —I understand that and that is why I am asking my next question. You have asked previously not to be interrupted and I would appreciate the same courtesy. Ms Clarke, has there been another FOI about this information in the past?
Ms Clarke —Not to my recollection, no.
Senator RYAN —Between 23 June last year and 14 September were any staff employed in the Prime Minister’s office on short-term contracts?
Ms Clarke —Our records show that there was a full-time adviser employed between 27 July and 20 August in 2010 for that period.
Senator RYAN —Only the one?
Ms Clarke —Yes.
Senator RYAN —Has that person subsequently taken up an ongoing position in the Prime Minister’s office?
Ms Clarke —Our investigation shows that the person left at the end of the contract.
Senator RYAN —And that person is not currently in the Prime Minister’s office in another role? I am asking, effectively, was someone on a short-term contract who then might have come back at a later point, maybe since the start of the year or prior to that, in an ongoing role.
—Not as far as I am aware.
Senator RYAN —If that is the case, I would appreciate being advised. I am not asking for a name; I am asking if that person on a short-term contract came back.
Mr Tune —We will take that on notice, Senator.
Senator RYAN —Thank you. Do you collect data on—I was wondering whether you might have to do this for the payment of entitlements or the recording of entitlement obligations—people who come to work under the MoPS Act, the minister’s officers, who are on secondment or a leave of absence from a state or Commonwealth public service?
Ms Mason —If they are employed under the MoPS Act, yes, we would have information about their employment. Presumably, as part of the personnel record, we may have information about their service from other jurisdictions. We would probably know whether or not they are on secondment from a Commonwealth agency, because there may be a leave liability that transfers with them. We may not be as aware if they have New South Wales or other state government experience, perhaps—although I think there are some mechanisms to allow for crediting of service in other jurisdictions.
Senator RYAN —There are. Some MoPS Act staff, I think, from my home state of Victoria, might get credited for long-service leave for time served, for example, working as an electorate officer for a state parliamentarian. Presumably that would mean that you would have data on that, because you would have to know when they got an entitlement to long-service leave.
Ms Mason —I think they would have to ask for the other service to be credited. It would not necessarily be automatic that we would be aware of it. But I think Ms Clarke was about to say something.
Senator RYAN —If I put some questions on notice—I will not delay the committee now—about any APS or Commonwealth agency employees who were on secondment to ministers’ offices under the MoPS Act, you would be in a position to answer those with the data you have?
Ms Clarke —That is APS, Australian Public Service rather than Victoria or—
Senator RYAN —Yes. You would be in a position to—
Ms Mason —We should know that. Dates can be a problem. As I mentioned earlier, we normally look at our staff establishments as at the first of each month. Basically, yes, I think we could assist you.
Senator RYAN —What date did the Prime Minister’s new Chief of Staff, Mr Hubbard, start work?
Ms Clarke —I would have to take that on notice.
Senator RYAN —Thank you; that is all. I appreciate the committee’s indulgence.
Senator LUDLAM —I am trying to assemble an idea of the air-travel budget of this building. I am effectively trying to work out how many different people control different parts of that budget, and I was referred to you folk yesterday. I understand you cover the travel entitlements of all MPs and supporting staff with entitlements. Is that correct?
Ms Clarke —Yes, that is correct.
Senator LUDLAM —I am not expecting you to have the information right in front of you, but perhaps we could ask you to table that for us—not down to individual MPs, because I know that is covered in monthly management reports and so on. I am looking for aggregate figures for different classes of parliamentary travel—committee related travel and travel of MPs, ministerial staff, other support staff and so on. Of the total parliamentary travel budget, who do you not cover?
Ms Clarke —Sorry?
Senator LUDLAM —I am just wondering if you cover air travel for the entire parliament—
Ms Mason —No is the short answer. We should have a list similar to the list that you ran through for MPs for those other than ministers. Ministers’ air travel may be paid for by their home department. For support staff for committees, that would be a question best directed to the relevant parliamentary department.
Senator LUDLAM —So DPS, and the House?
Ms Mason —Yes. We can assist with MoPS Act employees.
Senator LUDLAM —So you would cover travel for senators and members, for MoPS Act employees and staff of senators and members. For committee travel you are referring me to the Department of the House and of the Senate?
Ms Clarke —That is for their staff.
Senator LUDLAM —Yes, that is correct; that is for their staff. For ministers will I need to chase down every single department individually or does somebody keep aggregates of what that costs us?
Ms Clarke —We can provide the data of what we pay for ministers and what Finance pay.
Senator LUDLAM —Okay.
Senator Wong —Most of this is tabled in the parliament.
Senator LUDLAM —I am just trying to work out where.
Senator Wong —It is tabled in the parliament. The big books are tabled with your, my—everybody’s—travel allowance, travel expenditure and a range of other data. It is all tabled.
Senator LUDLAM —Do you mean as part of the budget—
Senator Wong —No.
Senator LUDLAM —I am hoping not to read 3,000 management reports; that is all. I am looking for the aggregates.
Senator Wong —No, it is compiled.
Ms Mason —On a six-monthly basis there is a report tabled in the parliament that sets out the travel expenditure for senators and members for the previous six months. For instance, the report that covers the period, say, 1 July to 31st December 2010 will be tabled in about June of this year.
Senator LUDLAM —Tabled by the finance minister?
Ms Mason —Yes.
Senator LUDLAM —This is why I need to ask. If you do not know, that is fine.
Senator Wong —No, I was not sure if I was tabling as me or as me representing Minister Gray.
Senator LUDLAM —Okay.
Ms Mason —That information is also published on the Finance internet site. It is fairly readily available.
Senator LUDLAM —Rather than asking you to chase that and table it, if you can just provide us pointers on notice, I will go and do the homework. Will that leave anybody else out or does that effectively cover everybody who works here?
Ms Mason —It will not cover everybody. It will not cover the staff of the parliamentary departments—nor will it cover in detail MoPS Act employees. There are a couple of documents complementary to the one I referred to. One is the MoPS Act annual report, which does have aggregate travel costs for MoPS Act employees and for the personal staff of ministers. That information is included in a press release, which is released at roughly the same time that the six-monthly report is tabled in the parliament.
Senator LUDLAM —Brilliant; that is extremely helpful. Do you have any figures on the number or percentage of meetings held by video link-up? Is it possible to identify whether we are offsetting any of our travel expenses—
Senator Wong —I am doing a lot.
Senator LUDLAM —Are you?
Senator Wong —Ask Mr Tune.
Senator LUDLAM —We can start with this portfolio, but I am trying to get a whole-of-government idea.
Mr Tune —I can give you some information, Senator. A couple of years ago the government financed and we set up what is called a Telepresence network, which is a superior form of videoconferencing. They are set up in Commonwealth government offices around the country, here in Parliament House—there is a suite here—and in some in departments. We actually manage that process, that system—both the installation and ongoing operation of them. There is a booking system that is used, and that records the savings in dollars from flights to meetings avoided and also does a calculation of CO2 emissions that have been avoided. We can provide that to you. That is collected on a regular basis.
Senator LUDLAM —Yes, I would appreciate that. I have used that system in the Perth CPO. I am very happy to record my gratitude for its installation.
Senator Wong —It is a very good system.
Senator LUDLAM —It is great.
Mr Tune —Beyond that, I cannot help you, I am afraid. This is going to be happening all over the place with all sorts of agencies, either using telephone hook-ups or videoconferences of some kind. We can provide you with the Telepresence information we have pulled together.
Senator Wong —Anecdotally, there has been—I do not know what the figures show—an increase in use. In my previous portfolio we commenced using this. The usage, from what I can observe within the ministry, has increased—
Mr Tune —I think that is correct.
Senator Wong —as people have got more used to it. Of course, we do not track it if we use other facilities. I have had Telepresences utilising NBN’s facilities, for example. We would not track that.
Senator LUDLAM —I know we are not going to be able to run it down to every last one. I am trying to get an order of magnitude. Does the government, in any portfolio that you are aware of, have a target for introducing more of these things? I gather there is not the ability to connect the Telepresence network around the country with the parliamentary committee videoconferencing system. I gather they are incompatible with each other.
Mr Sheridan —The Telepresence system is set at the ‘secret’ level. It runs on the Ministerial Communications Network, which is a secret high network. In order to connect it to other video or Telepresence systems we actually have to sever that connection, manually connect another arrangement and then reconnect it afterwards. While that is connected to another arrangement, that Telepresence room is off the system, not taking bookings. It is generally not a very efficient process. We are exploring a way of doing that that will be more automatic, but it will take some development costs to do that.
Senator LUDLAM —What is the timetable on that?
Mr Sheridan —We are exploring it this financial year. I am not yet sure, because of the detailed software configurations that will be required to make it work, how long it will take to do that or whether it will be cost-effective. We will need to explore that.
Senator LUDLAM —I guess you would be balancing cost-effectiveness against the number of airfares that you reckon you can offset and it will come from other people’s budgets. Can you maybe just take on notice for us to provide some kind of written estimate of when a decision will be made as to whether that will happen or not.
Mr Sheridan —We can.
Senator LUDLAM —I think this parliament could use that technology a great deal more. I was a bit surprised to learn yesterday that the two systems are completely incompatible with each other.
Senator Wong —But it is not dissimilar to the computer networks, obviously, for ministerial or cabinet discussions. You have to have a higher level of security than you would for a Senate committee meeting.
Senator LUDLAM —Yes.
Senator Wong —Mr Sheridan has just outlined the technical reasons why.
Senator LUDLAM —We have to have a guy physically go next door and stick a different plug into the system. So it is not so much a technology issue; it is a security issue?
Mr Sheridan —It is because we do not have multilevel security that would allow us to run those across the different carriers. We would actually have to change the carrier arrangement.
Senator LUDLAM —And that is what you are exploring?
Mr Sheridan —That is a manual arrangement at the moment and that is what we are exploring.
Senator LUDLAM —That is helpful. Thank you very much.
CHAIR —We are now moving on to program 3.1. There are a number of senators who have questions. Senator Ronaldson.
Senator RONALDSON —I am sure this could not possibly be right, but I read somewhere that after all the hullabaloo about Frequent Flyer points and renegotiating airline agreements that there were actually no savings. Can you clarify that for me.
Mr Tune —No savings from what?
Senator RONALDSON —From the deal done in relation to the abolition of Frequent Flyer points, which I understand was the rationale for it being done. I might be totally wrong, but I am sure I read somewhere that was the situation.
Mr Tune —I will double-check for you. I am pretty confident there are savings there that we took account of.
Senator RONALDSON —If you want to check that would be terrific.
CHAIR —So you will come back to us?
Mr Tune —I will take it on notice, yes.
CHAIR —Senator Ronaldson, do you have anything else in 3.1? I have a few questions in relation to the integration of the computer system that is taking place between the Senate and Finance. Is someone able to give us an update on how that is progressing, why it is taking 18 months, where it is at and what the benefits will be?
Mr Sheridan —We are in discussions with DPS to transfer the system with a target date of 30 June of this year. The arrangements that we have to put in place cover the various procurements that support the arrangements that Finance currently provides for electorate office IT. There are a couple of procurements that need to be finalised before we can do that. We need to agree the amount of money to be transferred and the method of transferring it. We need to take into account the savings that were delayed from the Gershon budget reductions that were not recovered at the time because this work was going on. We anticipate having those financial arrangements in place in the next couple of months and having the changeover ready to go at the end of the financial year. It is administratively easier for us to change it at the end of the financial year, because of the ease of changing budgets and transferring the responsibilities then.
CHAIR —What benefits or disadvantages will there be to senators and members? Will we actually notice anything different?
Mr Sheridan —Firstly, the entitlements do not change as a consequence of this transfer. What changes is the agency through which they are provided. I do not anticipate that there will be changes in the amount of hardware delivered or those sorts of things. By having the one department provide the service there should be efficiencies in that regard. Those through DPS should manage the system in a way that no longer means that senators and members have to contact different organisations to have different things done.
CHAIR —There was some discussion yesterday—and so I was asked to raise it here with you today—in relation to some questions relating to the computer system. We assumed that that includes our printers. Does that include photocopiers now that are in electorate offices that act as printers as well? Will that change under the new arrangements?
Mr Sheridan —The arrangements for multifunction devices—printers and photocopiers—will need to be worked through in our detailed implementation discussions with DPS. But we would intend to work those through.
CHAIR —Will it come under your responsibility, the access to the internet on a home basis for senators and members?
Mr Sheridan —That responsibility, I do not think, is under EOIT at the moment.
Senator RONALDSON —That is a residential entitlement. It goes to your home through the Remuneration Tribunal determination. That is actually a phone line that can be used as a data line. Those arrangements will continue. They will not go to the electorate office IT area.
CHAIR —It was explained to us yesterday that a trial was being undertaken at the moment in relation to iPads, and that there is a recognition that with new technology senators and members may want to use that sort of technology. We had some discussion about senators and members who personally own iPads and other such tablet equipment—that they cannot have access while they are in Parliament House through the normal processes. Do you have any plans to allow that to happen?
Mr Sheridan —I might answer the technical part of this. There is also a question of entitlements, which is managed by another part of the department. Technically that is a decision to be made by DPS as it relates to access to their network. Currently the Defence Signals Directorate, which is responsible for these things, has not accredited devices with the Apple or the i operating system to be used for national security classification purposes. Until that accreditation happens they cannot be used directly connected to government networks essentially. It will be up to DPS once that accreditation occurs to decide how it would be connected.
CHAIR —If an iPad is given to a minister or a parliamentary secretary the access that they have comes under their department rather than through Finance?
Mr Sheridan —I believe so. It depends on who has it and how they have done it.
Senator Wong —Except for me. I have no iPad.
CHAIR —Can I move on to BlackBerries. There has been over time, since we have been allocated the BlackBerry, discussion in relation to the security password and the length of time and how frequently we have to put that password in. There was going to be an undertaking to investigate whether or not that period could be extended. Can you give the committee an update?
Mr Sheridan —The Defence Signals Directorate sets the security requirements for the use of the BlackBerry. It sets the character length for the password, the time that it takes for the password to change, and the time that the password or the device is active for before it locks if you’re not using it. At the moment the maximum time allowable is 15 minutes. It is my understanding that that is what is set on the devices that senators and members use.
CHAIR —There was some discussion also yesterday in relation to the use of our computers when we are travelling to committees. The access that we have available through Optus is unsatisfactory and most of the time you cannot access the internet and it is unreliable. Is there any undertaking to investigate the use of an iPad and the 3G network, which is proving to be far more effective and efficient?
Mr Sheridan —My understanding, as it relates to the electorate office IT, for which we are responsible, is that it is about senators and members using external USB modems through Optus, and that has not proved satisfactory. They have been able to request the swapping of that for a Telstra modem, and that has provided appropriate connectivity for them.
CHAIR —I do not think many people are aware of that. That is of great interest.
Mr Sheridan —Several senators and members have requested the ability to change that and that has been permitted.
CHAIR —Thank you. That is very useful. I will now move on to management reports. In relation to the management reports and the way they are presented, can you give us an update on whether there are any changes in the way we as senators and members are responsible for signing off on those management reports and the number of errors relating to those reports, and also whether there are still a number of senators or members who have not signed off on the management reports on an ongoing basis?
Ms Clarke —We are always looking for ways to improve our monthly management reports to senators and members with a view to making them more simple and providing more information to enable you actually to look at your budget and how that is progressing. We are looking at those now to see what is possible and introduce those. As to the accuracy of the data, we always maintain it to get it as accurate as possible. However, there are times when information comes in late and cannot be included and has to be included down the track or where credits have not been taken account of and they have come in late. It is never real-time data.
CHAIR —In relation to the management reports, for instance, and the budget that we have for stationery, for instance, can you step us through the procedure for what checks and balances are put in place to ensure that senators and members do not go over budget and how the invoices are processed, and whether any changes have been made and looked at to ensure that we have access to all of that information to ensure the budget is correct?
Ms Clarke —I would like to call on my colleague Greg Miles, who can step you through that. We have a number of checks and balances to help senators and members manage their budgets. While Mr Miles is coming to the table, I might comment on the monthly management reports. We are looking at the moment at ways to try to make the structure of those reports more user friendly for senators and members and easier for members and senators to see which portions they directly need to sign off on and which portions might best be dealt with by, say, an office manager or another delegated/authorised person within the office.
CHAIR —There are instances where senators and members run over budget because the management reports are quite different to the records in the office. The experience that I am talking about is that you are not able to get copies of invoices at the time of the purchase and there does not seem any cross-referencing to ensure the accuracy of those management reports.
Ms Mason —Mr Miles will be able to talk with you in detail about the steps taken to make sure that senators and members get information about major purchases. But certainly there can from time to time be time lags between the timing of an order being placed by a senator or member or their office on their behalf and the time that that information may flow into a monthly management report. The department is only aware of charges that are made to us. We are not necessarily aware of every expense that is incurred in real time when it is incurred within the office, because we are not there.
Mr Miles —I think your question was specifically relating to the budget involving office requisites and stationery?
CHAIR —That is right. It relates to all expenditures, including fuel costs for cars.
Mr Miles —If I deal first with the office requisites one, there are a number of arrangements that we have in place to assist senators and members in managing their budget usage. At the time that an order is placed online the cost of the order is provided to whoever in your office it was that actually placed the order. The details of what was ordered and then provided are provided on a delivery docket that arrives with the order in your office. It is expected that your staff would check to make sure that the stuff that is ordered, and therefore the cost involved, equates to what has arrived. That is the first step.
It has been pointed out that the cost of that will be reported in a subsequent monthly management report. I guess to some extent it depends on the timing within the month when the order is received as to whether it will be the next monthly management report you receive or the one after that, because they are just done on the 15th of each month. In addition to that, at any point in time you or your staff are able to contact us and receive an up-to-date as of today type detail of your expenditure against the budget. As a precaution, whilst we have introduced an online ordering service to make ordering a more enjoyable and quicker experience for you and your staff, we do intervene in the large orders. We will always double-check, and our state people will contact your office to check on any order that is abnormally large for your office or any order that might take you over your budget. That is in relation to the office—
CHAIR —And that happens on a regular basis? So, if a senator or member is going over their budget they will get a phone call?
Mr Miles —That is correct. Even for a large order that might not take you over the budget, a phone call will be made. A phone call, email or both.
Senator MOORE —How long has this system been in place?
Mr Miles —The online ordering system?
Senator MOORE —No, the personal call follow-up system.
Mr Miles —It was introduced when the online system came in, at about the same time. We have tweaked it a bit, but it became essential because of the online system. We did not have visibility of every order going through. We wanted to make sure that, without slowing things down too much, a flag went up when something out of the ordinary came through.
Senator MOORE —And that is from your local branch. So, depending on where you live and where your office is, it will be the local state branch that will contact you?
Mr Miles —Your state office people, who tend to know you and how you work.
CHAIR —I suggest that that has not been the case. In relation to the management reports that are outstanding, that have not been signed off on, can you give us a number? Has that decreased? Is it about the same? What penalty, if anything, is there or an incentive for senators and members who sign off on their reports?
Ms Sims —I will just find that information for you. I have information as at yesterday’s date, being 21 February 2011, and I have a breakdown by month for the 2009-10 financial year and the 2010-11 financial year. If you want, I can read through—
CHAIR —You might table that for us. Is it a lengthy list?
Ms Sims —No, it is just one page.
CHAIR —If you perhaps could table that it would save us some time. Can we have the latest figures, the current update?
Ms Sims —That was my only copy.
CHAIR —In relation to the management reports and the regular errors being made in relation to flights, what processes are being put in place to alleviate that ongoing issue of mistakes being made?
Ms Mason —There is a mechanism. When people receive their monthly management reports and check them or have portions of them checked by staff in their office, if a transaction is identified that appears to be anomalous and not accord with the office records then there is a mechanism to draw that to attention. We can investigate it within the department and, if necessary, make a correction.
In relation to travel, it does get complicated from time to time, particularly with airfares, where flights are booked and may be charged to the department—and paid for by the department—but those sectors are not subsequently flown and there may be a credit that arrives in the account at some future time. Depending on the timing of production of the monthly management reports, there could be a disconnect between the time that the flight was booked, the charge is made of the department and the credit is later generated. That can lead to some apparent anomalies that are not necessarily errors but just timing differences that eventually get corrected in the system. So, there is a mechanism for drawing things to attention and having them investigated, and our clients do use that if they see something unusual.
CHAIR —Would it be a common occurrence for allocation of trips that are taken for a spouse or a dependant to take nine months to rectify an issue that has been ongoing in relation to the amount of trips. It seems to me to be an exorbitant amount of time.
Ms Mason —It can take some months. I will see if any of my colleagues have additional information for you. There is nothing additional for you, I am afraid.
Senator MOORE —If you have a system in place where you ring people if there is an issue around their orders, has there been any consideration of personal contact with senators or members who are three months behind in their management reports? I know we have talked about this on a number of occasions but it looks like there has been some good improvement from when we first started asking these questions but there are still a number that are significantly behind. You can take that on notice but if you have been able to tweak the system to have personal follow-up on things like expenditure I am just wondering what the personal follow-up is on people who are not responding to what I understood was an expectation of their employment.
Ms Clarke —There is certainly an expectation. We will take that on notice.
CHAIR —In terms of the budget for printing allocation and the approval process, has there been any consideration given to simplifying the notification back to senators and members which gives—I should have brought an example—an order number and then goes through at the bottom of the page and then finally at the last paragraph it tells you, after it has identified an order number, that it is not within your budget entitlements. Is there some simpler way of notifying us if something is outside of the budget entitlements for printing? Can we just get something straight back so that you can tell that it is not within your entitlements?
Ms Clarke —We are looking at changing the words and the advice we give out. The issue that we have uncovered is that sometimes advice back from the Parliamentary Entitlements Advisory Committee does not lend itself to a yes/no answer and that you actually have to work through the logic of whether something might be an entitlement but something else might not be an entitlement. For instance, what you want to say on a particular document is within entitlement but the document on which you want to print it is in fact outside of entitlement because it does not weigh a particular weight or it is not flat magnetised material. There are quite a few instances where you are required to step through what the logic is and what the legislation is and what supports the decision. We have just found that is a better way of explaining the complexities and making sure that people understand that the decision is because of the legislation and how it works. So we have looked but, depending again on the request that is put forward and the complexity, that is the way it is done.
CHAIR —It just seems to me to be illogical to give an order number but then ultimately be refused on the grounds that it does not meet your entitlement.
Ms Clarke —Can I just give Senator Ryan an answer to a question he asked earlier? You asked whether or not a non-ongoing person in the Prime Minister’s office had to be re-employed under MOP(S) Act employment. Our records show that they have not been re-employed since they left on 20 August.
CHAIR —Thank you very much for appearing before us today.