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Rural Affairs and Transport Legislation Committee


In Attendance

Senator Ludwig, Minister for Agriculture, Fisheries and Forestry

Senator Farrell, Parliamentary Secretary for Sustainability and Urban Water

Department of Agriculture, Fisheries and Forestry


Dr Conall O’Connell, Secretary

Ms Rona Mellor, Deputy Secretary Biosecurity

Mr James Flintoft, Acting Deputy Secretary

Mr Phillip Glyde, Deputy Secretary and Executive Director, Australian Bureau of Agricultural and Resource Economics and Sciences

Mr Paul Morris, Acting Deputy Secretary, Live Animal Export Taskforce

Corporate Finance/Corporate Policy/Corporate Services

Ms Fran Freeman, Executive Manager

Ms Libby Bie, General Manager, Ministerial and Parliamentary Branch

Ms Jenny Barbour, General Manager, Communications Branch

Ms Cassandra Kennedy, Acting General Manager, Portfolio Strategy and Coordination Branch

Ms Heather Hemphill, Acting General Manager, Portfolio Strategy and Coordination Branch

Mr Bill Withers, Acting Chief Operating Officer, Corporate Services Division

Ms Kate McRae, Manager, Enterprise Agreement Team, Corporate Services Division

Ms Jacquie Walton, General Manager, Human Resources Branch, Corporate Services Division

Mr Darren Schaeffer, Chief Finance Officer

Mr Aaron Hughes, General Manager, Commercial Business Branch

Ms Nicole McLay, Acting Deputy Chief Finance Officer

Mr Matthew Ryan, Deputy Chief Finance Officer

Ms Vanessa Berry, Deputy Chief Finance Officer

Ms Lisa Hind, Acting General Manager, Levies Revenue Services

Mr Graham Gathercole, Chief Information Officer

Climate Change

Mr Tom Aldred, Executive Manager

Mr John Talbot, General Manager, Forestry Branch

Mr Andrew McDonald, General Manager, Farm Support and Adaptability Branch

Ms Julie Gaglia, Acting General Manager, Climate Change Policy Branch

Australian Bureau of Agricultural and Resource Economics and Sciences

Dr Terry Sheales, Acting Deputy Executive Director

Dr Kim Ritman, Chief Scientist

Mr Bruce Bowen, General Manager, Biosecurity and Farm Analysis Branch

Dr Gavin Begg, General Manager, Fisheries and Quantitative Sciences Branch

Dr David Cunningham, General Manager, Land and Forests Branch

Sustainable Resource Management

Mr Ian Thompson, Executive Manager

Ms Michelle Lauder, General Manager, Landcare and Regional Delivery Improvement Branch

Ms Kimberly Green, Acting General Manager, Grants and Sustainable Agriculture Branch

Mr Gordon Neil, General Manager, Fisheries Branch

Ms Anna Willock, Director, International Fisheries

Australian Fisheries Management Authority

Dr James Findlay, Chief Executive Officer

Mr John Bridge, General Manager Corporate Governance

Mr Peter Venslovas, General Manager Operations

Mr Malcolm Southwell, Acting General Manager Fisheries

Mrs Tanya Howitt, Chief Finance Officer

Mr Steve Bolton, Senior Manager Research and Co-Management

Australian Pesticides and Veterinary Medicines Authority

Dr Eva Bennet-Jenkins, Chief Executive Officer

Mr Tony de la Fosse, Program Manager Corporate Services

Dr Raj Bhula, Program Manager Pesticides

Mr Allen Bryce, Program Manager Veterinary Medicines

Trade and Market Access

Ms Jo Evans, Executive Manager, Trade and Market Access Division

Mr Simon Smalley, General Manager, Multilateral Trade Branch

Ms Paula Svarcas, Acting General Manager, Bilateral Trade (North Asia, Europe and the Middle East)

Mr Paul Ross, General Manager, Bilateral Trade (Americas, South East Asia, Subcontinent, New Zealand and The Pacific)

Biosecurity (includes Australian Quarantine and Inspection Service; Biosecurity Australia; Product Integrity, Animal and Plant Health; and the Australian Plague Locust Commission

Mr Russell Phillips, Acting Executive Manager, Biosecurity Strategic Projects

Dr Robyn Martin, General Manager, Partnerships Branch

Mr Robert Murphy, General Manager, Risk Branch

Ms Louise Clarke, General Manager, Sustainable Biosecurity Funding Branch

Mrs Barbara Cooper, Acting General Manager, Food Exports

Mr Stuart Grant, Acting Program Manager, Imported Food Program

Ms Nora Galway, Acting General Manager, Residues and Food Safety

Dr Ann McDonald, General Manager, Export Reform

Mrs Slava Zeman, Acting General Manager, Export Standards

Mr Jonathan Benyei, Acting Executive Manager, Biosecurity Quarantine Operations Division

Dr Colin Grant, Executive Manager, Plant Division   

Dr Vanessa Findlay, General Manager, Plant Biosecurity (Horticulture) Branch

Mr Bill Magee, General Manager, Plant Biosecurity (Grains and Forestry) Branch

Mr Rob Schwartz, Acting General Manager, Plant Biosecurity (Grains and Forestry) Branch

Dr Mikael Hirsch, Principal Scientist

Ms Lois Ransom, Chief Plant Protection Officer

Ms Louise van Meurs, General Manager, Plant Quarantine Operations Branch

Ms Kylie Calhoun, Acting General Manager, Plant Export Operations Branch

Mr Darryl Barbour, Senior Manager Plant Biosecurity (Grains and Forestry) Branch

Dr Mark Schipp, Australian Chief Veterinary Officer, Office of the Chief Veterinary Officer

Dr Bob Biddle, General Manager, Animal Health Programs

Ms Lee Cale, General Manager, Live Animal Exports Reform Taskforce

Dr Jenny Cupit, Acting Executive Manager, Animal Division

Mr Dean Merrilees, Acting General Manager, Animal Export Operations

Ms Jackie South, Acting General Manager, Animal Quarantine Operations

Dr Andrew Cupit, Acting General Manager, Animal Biosecurity

Mr Chris Adriaansen, Director, Australian Plague Locust Commission

Dr Kevin Dunn, Interim Inspector-General of Biosecurity

Ms Lynne O'Brien, Executive Manager, Biosecurity Regional and Business Services

Live Animal Exports

Mr Paul Morris, Acting Deputy Secretary, Live Animal Export Taskforce

Mr Matthew Dadswell, General Manager, Live Animal Export Taskforce

Dr Mark Schipp, Australian Chief Veterinary Officer, Office of the Chief Veterinary Officer

Ms Lee Cale, General Manager, Live Animal Exports Reform Taskforce

Mr Tom Aldred, Executive Manager, Climate Change Division

Mr Andrew McDonald, General Manager, Farm Support and Adaptability Branch

Mr Simon Murnane, General Manager, Livestock Industries and Animal Welfare Branch

Ms Jo Evans, Executive Manager, Trade and Market Access Division

Ms Paula Svarcas, Acting General Manager, Bilateral Trade (North Asia, Europe and the Middle East)

Agricultural Productivity

Mr Greg Williamson, General Manager, Agricultural and Veterinary Chemicals and Farm Leadership Programs Branch

Mr Mike Ryan, Acting General Manager, Research and Development and Food Security Branch

Mr Richard Souness, General Manager, Food Branch

Mr Peter Ottesen, General Manager, Crops, Horticulture and Wine Branch

Mr Simon Murnane, General Manager, Livestock Industries and Animal Welfare Branch

Mr Matthew Worrell, General Manager, National Food Plan Taskforce

Wheat Exports Australia

Mr Ted Woodley, Chair

Mr Peter Woods, Chief Executive Officer

Grains Research and Development Corporation

Mr John Harvey, Managing Director

Mr Keith Perrett, Chairman

Committee met at 09:00

CHAIR ( Senator Sterle ): I declare open this public hearing of the Senate Rural Affairs and Transport Legislation Committee. Today the committee will commence its examination of supplementary budget estimates with the Department of Agriculture, Fisheries and Forestry. The committee has fixed Tuesday, 29 November 2011 as the date for the return of answers to questions taken notice. Senators are reminded that any written questions on notice should be provided to the committee secretariat by close of business on Friday, 21 October 2011. Under standing order 26, the committee must take all evidence in public session. This includes answers to questions on notice. Officers and senators are familiar with the rules of the Senate governing estimates hearings. If you need assistance, the secretariat has a copy of the rules. I particularly draw the attention of witnesses to an order of the Senate of 13 May 2009 specifying the process by which a claim of public interest immunity should be raised and which I now incorporate in Hansard.

The extract read as follows—

Public interest immunity claims

That the Senate—

(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly raising claims of public interest immunity as required by past resolutions of the Senate;

(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;

(c) orders that the following operate as an order of continuing effect:

(1) If:

(a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and

(b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which the officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify the harm to the public interest that could result from the disclosure of the information or document.

(2) If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the minister.

(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or document.

(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from the disclosure of the information or document to the committee could result only from the publication of the information or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the committee as in camera evidence.

(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement does not sufficiently justify the withholding of the information or document from the committee, the committee shall report the matter to the Senate.

(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising the matter in the Senate in accordance with other procedures of the Senate.

(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal deliberations of, government, in the absence of specification of the harm to the public interest that could result from the disclosure of the information or document, is not a statement that meets the requirements of paragraph (I) or (4).

(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be required to provide a statement in accordance with paragraph (3).

(Extract, Senate Standing Orders, pp 124-125)

CHAIR: As agreed, I propose to call on the estimates in the order shown on the printed program. I welcome Senator the Hon. Joe Ludwig, Minister for Agriculture, Fisheries and Forestry, Dr Conall O'Connell, Secretary of the Department of Agriculture, Fisheries and Forestry, and officers of the department. Minister, do you or Dr O'Connell wish to make a brief opening statement before we go to questions?

Senator Ludwig: No, thank you, Chair.

CHAIR: Then we will move to questions. Senator Colbeck.

Senator COLBECK: I would like to start off with the efficiency dividend. We had a lot of discussion about the department's plan about how it might be going to meet that. Could you give us an update on where you are at with achieving the efficiency dividend?

Dr O'Connell : I will pass over to the chief finance officer, Darren Schaeffer.

Mr Schaeffer : We announced in the budget a savings measure of $32.8 million over four years and an increase in the efficiency dividend of quarter of a per cent over four years, totalling $11 million over four years. The department has underway a program of work which includes prioritising activities across the department, including in our corporate space, and reducing our discretionary spending where possible. Through that, we will be realigning certain elements of the department throughout the course of the year. We are still in the design of that program at the moment, so we are not able to explicitly detail the activities that we will be looking at and then rationalising throughout the course of the year. We hope to bring that back at the February estimates.

Senator COLBECK: You speak of discretionary spending. What have you identified as discretionary?

Mr Schaeffer : Staff and contractors make up 75 per cent of the department's spending. We consider 20 per cent fixed, which entails basically our IT, rent, depreciation, travel and some analytical testing. The other five per cent is what we consider discretionary. However, some of that is also put to our cost-recovered activities such as travel in our cost-recovered areas such as the sea cargo container inspections. We covered this last estimates.

Dr O'Connell : In the budget papers, it was made clear that we would be looking at corporate areas for some of the savings in terms of the management of the staffing levels, and we are going through a process of realigning our business to manage that. That will be finalised in the next month or so. That then should position us over the forward estimates to manage the targets we have got to deal with and would include the efficiency dividend. So we should be in a position in the next month or so to have finalised that process.

Senator COLBECK: So you have effectively got five per cent to play with out of your total budget, plus potential alterations in your staffing levels?

Mr Schaeffer : That is right. We need to look at all activities.

Dr O'Connell : Our target essentially, coming out of the budget, was $32.8 million over four years. At the time, we indicated that the corporate realignment process would manage a significant proportion of that. We will look at the overall approach coming out of that corporate realignment and make an assessment after that about what else, if anything, needs to be done. But I am reasonably confident that we will be on target after that process.

Senator COLBECK: We have been through this a number of times now over a couple of years, because the efficiency dividend is not an issue that is necessarily new.

Dr O'Connell : We had factored into our business the efficiency dividend that was the continuing efficiency dividend. That already had been factored into our business. The one that we are talking about now is just that additional 0.25 per cent efficiency dividend that was added in the last budget. Apart from that, the previously existing efficiency dividend was already factored into our budgetary process. There was 0.25 per cent for 2011-12 and 2012-13.

Mr Schaeffer : Yes, out to 2014-15.

Senator COLBECK: I understand that but, given the responses that you gave to the committee at the last estimates and the answers to questions on notice that we received post the last estimates hearings, I have a serious lack of confidence in whether the department really knows where it is heading on this. We get this answer on four occasions, in answers to questions on notice Nos 181, 183, 184 and 186:

The efficiency dividend will focus the department in consolidating and streamlining our organisation, in an effort to eliminate red tape and duplicate functions across our corporate functions.

What does that mean? That is just gobbledegook.

Dr O'Connell : Just to give an example, I might ask the chief finance officer to explain the work we have been doing on the chief executive instructions—this is the red tape—and managing FMA Act responsibilities.

Senator COLBECK: But how are you going to get any efficiency if you are duplicating functions across your corporate functions?

Mr Schaeffer : No. We are removing the duplication.

Senator COLBECK: That is not what the answer says.

Mr Schaeffer : Which number are you referring to?

Senator COLBECK: There are five of them if you want to look at it. You have done a cut-and-paste job on us on 181, 183, 184 and 186, and there is a very similar response in 174.

Mr Schaeffer : The answer is that duplicated functions across the department will be removed.

Senator COLBECK: That is not what the answer says. Let us move off that for a second. What is the process for sorting out questions on notice?

Dr O'Connell : I think there is a difference—I hate to say this—between a noun and a verb here.

Senator COLBECK: I can only go on what I read.

Dr O'Connell : I will read it out:

The efficiency dividend will focus the department in consolidating and streamlining our organisation, in an effort to eliminate red tape and duplicate functions across our corporate functions.

So we are aiming to eliminate duplicate functions, not aiming to duplicate functions.

Senator COLBECK: Well, I have been through this a number of times and it is a bloody hopeless answer, quite frankly.

Dr O'Connell : Senator—

Senator Ludwig: Is there is a question there? I am happy for you to make as many statements as you like—

Senator COLBECK: There is a question there. I have asked it and I have had a diversionary answer. I want to know what the process is for preparing and clearing of answers to questions on notice. A portion of that goes on in the department and a portion of that goes on in your office. I want to clear up that first.

Dr O'Connell : Can I be clear about the question you are asking? Is it what are the clearance processes?

Senator COLBECK: Yes. Who signs off on the questions in the department before they come to the minister's office?

Dr O'Connell : They are signed off through the relevant line paths and through myself and then they go to the minister.

Senator COLBECK: Who signs off on them when they come to the minister's office?

Senator Ludwig: I eventually do.

Senator COLBECK: You eventually do. Okay.

Senator HEFFERNAN: In the case of transport out of this estimates. Why does it sit on the minister's desk for such a long time? Is it simply because the minister does not get to it or because there are political considerations to the answers? Anthony Albanese as of Friday had not returned answers.

CHAIR: Give the minister a chance to answer, should he choose to do so.

Senator Ludwig: I need to understand the context of the question. Are you referring to ours and have you said what the timeline is or are you simply making a broad statement that you think to be true?

Senator HEFFERNAN: I am asking you why is there always an unexplained delay.

Senator Ludwig: It is not actually a question. First of all, is there a delay? We can then get the timeline for you as to between the questions here—

Senator HEFFERNAN: I will put it this way: is it a fair thing on the Friday afternoon before estimates to have not received answers to questions for those estimates? Do you think that is a fair thing for any political party to have to deal with?

Senator Ludwig: Are you referring to questions here?

Senator HEFFERNAN: I am.

Senator Ludwig: We will check whether that is accurate.

Senator HEFFERNAN: Do you think that is a fair thing?

Senator Ludwig: It is not a question of whether it is fair or not. Let us get the facts right. Let us find out what questions have been put on notice, when they were answered, whether they were answered within the required time—

Senator HEFFERNAN: They never are.

Senator Ludwig: no—in relation to these estimates, for this portfolio and then how many were answered outside of the time?

Ms Freeman : The QONs that were received regarding the additional budget estimates were all tabled on the due date; all answers were tabled on the due date for this portfolio.

Senator Ludwig: So perhaps you would like to ask your question again without making a slur on the portfolio by indicating—

Senator HEFFERNAN: I am not making a slur on anyone, Joe. You're a big boy.

Senator Ludwig: And so are you! And you did!

CHAIR: Senator Heffernan, you might want to raise your questions with a different department. You are way off the mark because they have all come in.

Senator COLBECK: Now that we have established the process, and let us accept that there is a capacity for a couple of interpretations of the answer—

Senator Ludwig: I do not agree. It is very plain to me—

Senator COLBECK: Of course, you do not agree, Minister, you are defending your position. Let us go to another question.

Senator Ludwig: Let me read it out for the record so nobody gets into any difficulty.

Senator COLBECK: I have read it twice.

Senator Ludwig: It says:

The efficiency dividend will focus the department in consolidating and streamlining our organisation, in an effort to eliminate red tape and duplicate functions across our corporate functions.

Senator HEFFERNAN: So if you claim it on a credit card you would probably be able to do a lot—

Senator COLBECK: In other words, it does not say anything; it does not really answer the question. It is a nonsensical statement.

Let us go to question 181, which is part of that package I have just read out. In 181 I ask:

1. Will Biosecurity Services Group be impacted in any way by the Departmental Efficiencies measure in BP2, p86?

2. If so, please provide details.

The answer is 'Yes' and then we go on to:

The efficiency dividend will focus the department in consolidating and streamlining—

It does not give you any detail. It is basically management speak; it does not respond to the question. We have exactly the same answer to 184: will ag productivity be impacted by the departmental efficiency measures? It says, 'Yes, the efficiency dividend will focus the department,' but it does not actually detail anything.

Mr Schaeffer : The details are still being worked through. We can give you some examples that we expect to—

Senator COLBECK: Why can't you say that?

Mr Schaeffer : They were not clear at the time.

Senator COLBECK: What do you mean by, 'They were not clear at the time?'

Mr Schaeffer : We are still working through a program which is identifying the types of functions and processes throughout the department, including the Biosecurity Services Group, so that we can come up with a better and more efficient way of delivering these support services to the business generally. That takes some time to work through. It is a complex department with complex processes. We would not want to table anything that takes us down a path which is not right.

Senator COLBECK: But you could say that you were working up a program that you might have finished by a certain time frame, which is effectively what you said to me when I asked the question this morning. Had I had that information, perhaps my first question this morning could have been, 'How is the time frame going and when are you likely to have it finished?'

Mr Schaeffer : Sure, I will take that on.

Senator COLBECK: So you are hoping to have that sorted out by the next round of estimates in February?

Mr Schaeffer : Yes, we have a formal program of work going on.

Senator COLBECK: Is that program meeting its goals? Have you got a timeline for that process?

Mr Schaeffer : Yes.

Senator COLBECK: Are you on your timeline?

Mr Schaeffer : We are broadly on time, yes.

Senator COLBECK: What does that mean?

Ms Mellor : Since the completion of those questions on notice the department has established a change management committee which is focusing on a number of change agendas. One of them is the delivery of the savings out of the last budget. A significant piece of work is to develop a program, as others have said, which will enable us to integrate our corporate services a lot better. We have probably duplicated services through AQIS over time. We are looking at having centres of excellence in corporate service delivery, including IT. We are certainly spending a lot of time looking at the best delivery of IT services for the department. As you would appreciate, a significant part of that is the delivery of biosecurity services. We have also run separate finance areas. We are integrating finance areas. We are fully integrating our human resources management areas. As you would appreciate with a large network around the country we want to make sure we have good HR and financial service delivery right through the business nationally. We are looking at better property management services. We have a large portfolio of properties, including quarantine stations, regional offices and a range of quarantine sheds and quarantine approved premises, for example. We are looking at integrating the management of those a lot better.

A lot of the work at the moment is in the planning stage. It does involve some restructuring in the organisation, which will need the attendant consultation with staff et cetera. We are looking to have all of that in place early in the new calendar year and to start better service delivery within the agency but at a more effective price.

Senator COLBECK: You say you are looking to have it in place early in the next calendar year.

Ms Mellor : That is right.

Senator COLBECK: I suppose you have given us some indication of where you are going through that process now with those AQIS duplications and IT duplications, human resources and financial services.

Ms Mellor : I think the key thing is to actually aggregate the staffing first and aggregate the functions and then have a look at what duplication can be cut out quickly and to start measuring that. For example, we have, as I say, a large portfolio of properties. We obviously have buildings in Canberra but we have buildings right around the country. We have properties at airports. We manage that at the moment out of two separate areas. We want to bring those two areas together, working with our property managers a lot better to see if we can reduce the cost of delivering property services. That is just a small example, although we do have a large portfolio. Step one is to identify the tasks and functions, then to bring people together and then each of the executive managers involved in this will start working through where the savings can be delivered.

Senator HEFFERNAN: Could you provide on notice a list of those properties which are rented, who they are rented to and what the rent is?

Ms Mellor : There are over 120 properties.

Senator HEFFERNAN: Thank you. Can you provide that on notice?

Ms Mellor : We will see how we go.

Senator COLBECK: I think I might already have a question on notice floating around on that.

Senator HEFFERNAN: Because there is some dodgy—

CHAIR: That may be an opinion of yours, Senator Heffernan. Senator Colbeck, do you have any more questions because you are—

Senator HEFFERNAN: I cannot hear you, mate; you're mumbling!

CHAIR: Sorry, Senator Heffernan. It is just that I watched the grand final replay. I am still cheering for Geelong—they won again. I must admit that I was still arguing with the television about the umpire's decisions in the first two quarters. Senator Colbeck, we are tight for time—

Senator COLBECK: Did you get a better price? Yes, I do have more questions.

CHAIR: There are colleagues of yours that do have questions as well. Your call, Senator Colbeck.

Senator COLBECK: At additional estimates we talked about the draft social media policy and whether that had been finalised or not. In answer to a question on notice—No. 234—you said the policy had not been finalised. Where are we up to with that?

Ms Freeman : It remains in draft form.

Senator COLBECK: Going back to the additional estimates in February, there has been no progress on that at all? You said in answer to question 234 that additional staff members at ABARES's Corporate Communications Branch have been given access to support the outlook conference in March. Have there been any further changes to that protocol?

Ms Freeman : I beg your pardon, Senator. I did not quite understand your question.

Senator COLBECK: I am going to the question on notice No. 234, which deals with access to social online media. Question 2 of that question asks, 'Have there been any changes to the staff who are permitted access to social media?' Your answer to that, at that stage, was, 'Yes'. That related to some people from ABARES and Corporate Communications Branch to support the outlook conference. I am just asking: have there been any further changes to access?

Ms Freeman : I would have to refer to my IT colleagues on the specifics of access for individual staff members, but, as was answered in question 234, the use of social media for those specific things—for example, the ABARES outlook conference and the Plague Locust Commission—was there and active. But I will hand over to my colleague Mr Gathercole.

Mr Gathercole : Access to social media is permitted within the department upon request. When an executive manager requests access for their staff it is given.

Senator COLBECK: How does that comply with the draft social media policy?

Mr Gathercole : I believe it complies with it.

Senator COLBECK: What is the time line for finalising that? It is obviously not an urgent issue.

Ms Freeman : I would have to take that on notice.

Ms Mellor : It is fair to say that we are involved in different ways with social media. We have certainly used it at the ABARES outlook conference. We used it quite heavily during the locust season to engage with people in communities affected by locusts. We have a number of elements in place, as that answer points to, in the use policy, the IT security policy et cetera. But we need to balance that with its best use for people. For example, our chief vet is currently contemplating where he might use social media to engage with the veterinary community. So not just having the policy but also understanding how to best use it as a communication tool is part of the progress that we are making.

Ms Freeman : The fact that it is not finalised is not prohibiting us from exploring alternative uses, as Ms Mellor said, and it is also feeding into the work as we develop its use.

Senator COLBECK: I want to move on now to the allegations of fraud in the department. Minister, can you advise us what scrutiny and security processes were in place prior to September and what actions have been taken to redress or prevent a recurrence of that situation?

Senator Ludwig: That question should be directed to the department, clearly. The period was before my time as minister.

Senator COLBECK: My understanding was that you requested—

Senator Ludwig: When the allegations were made—

Senator COLBECK: You requested a full report, as I understand it.

Senator Ludwig: That I can confirm. That is a different question.

Senator COLBECK: I just wanted to clarify that—that is all.

Dr O'Connell : I might ask the Chief Finance Officer to go through the control measures we have now and had prior to that Sydney Morning Herald allegation.

Mr Schaeffer : The department has in place a quite extensive controls framework, particularly stemming from the FMA Act. Basically, there are a whole bunch of chief executive instructions, policies, guidance material, staff training and audits governed by a committee structure that includes an executive management team and an audit committee. There are various governance arrangements such as the whole-of-government certificate of compliance. We have a financial statements subcommittee. There is an internal audit process. We report monthly on our budget and our performance against the budget. We do random spot checks throughout the accounts. There are various reconciliations that go on through the accounts. We apply the Commonwealth cost recovery guidelines and the Commonwealth procurement and grant guidelines. We have a delegations framework in place, and that is governed by the Financial Management and Accountability Act—FMA Act—regulations. We have finance circulars, finance minister's orders and internal controls assessments. We do process mapping and risk and control mapping and we have management of our quality assurance processes.

Senator COLBECK: Were there any changes made to the process post this investigation?

Dr O'Connell : No, those processes were in place beforehand. I might take the opportunity to make it clear that, contrary to both the impression and specifics of that article, there have been no findings of fraud against the departmental officer, either during 2008-09, when it was mentioned, or since. Importantly, the Australian National Audit Office has reported no significant findings or control weaknesses for the portfolio in the 2010-11 financial statements interim audit report. I would go so far as to say that our control measures are effective—

Senator HEFFERNAN: So the $7,000 allegation was a lie?

Senator Ludwig: You should allow the secretary to finish his evidence, and then I am sure you can ask a follow-up question.

Senator HEFFERNAN: We have limited time.

Dr O'Connell : I would say that our control measures are effective and that the article in the Sydney Morning Herald gives a misleading sense of the controls and the effectiveness of the controls and in some cases is just plain false.

Senator HEFFERNAN: The allegations in the Herald about the $7,000 that was misappropriated are false?

Dr O'Connell : I think the $7,000 was a different department.

Senator HEFFERNAN: Let's get this clear. There was an allegation in the Herald that someone took $7,000. In the Herald it said they were not entitled to it—

Dr O'Connell : Senator, you are talking about a different department.

Senator HEFFERNAN: Just hang on. They were not entitled to it and that person no longer works for the department. That is what it said. Is that right or wrong?

Dr O'Connell : That is wrong.

Senator HEFFERNAN: So what is the truth about that matter?

Dr O'Connell : The truth is that you are talking about a different department. The Sydney Morning Herald ran a series of articles and that allegation refers to a different department, not this department.

Senator HEFFERNAN: What department does it refer to?

Dr O'Connell : I am not quite sure. I think it is the department of transport, but I—

Senator Ludwig: We should manage this one at a time, if you don't mind.

Dr O'Connell : I think it is the department of transport.

Senator HEFFERNAN: So someone in the department of transport allegedly took $7,000, did not go to jail—

CHAIR: Senator Heffernan, you will have your chance to raise that under the correct department.

Senator HEFFERNAN: In your department, is it right or wrong that 63 per cent of the respondents—the people interviewed—as per the Herald report, in some way misused their credit card? That was one of the allegations.

Dr O'Connell : Of my department? I do not think that was one of the allegations of my department.

CHAIR: Senator Heffernan, you may wish to revisit your notes and you might want to raise that tomorrow. We are short of time and other senators also have questions. I will go to Senator Colbeck.

Senator COLBECK: Let us deal with some of the other elements of this report that we have talked about. One of the things mentioned in the report is that there were allegations—let us put them in that context—of staff being confused and poorly trained. How do you respond to that?

Ms Mellor : I think those comments were in relation to findings in an audit report. We took recommendations from that audit report and implemented them all. We have certainly made a very large investment in training in the quarantine staff, with a set of staff instructions electronically referenced now for all staff and a very rigorous training program. In the particulars of that audit report we took the action straightaway that the audit recommended, but we have grown that process more systematically across the operational staff.

Dr O'Connell : If I could add to that: we run these internal audit reports in order exactly to improve our business. So all these reports that have been mentioned are about our internal controls working to look for areas we can strengthen, and then we take the action to strengthen them. They are part of our business model, which allows us to ensure we are continually improving. So in the area of the staff training referred to, that is the process of working to discover where we need to strengthen our game, and then strengthen it. This is an internal process.

Senator COLBECK: But surely staff having a good understanding of their responsibilities around use of corporate credit cards and things of that nature would be fairly fundamental.

Mr Schaeffer : It is fundamental, and there is training available for all staff.

Senator COLBECK: And the fact that staff are confused and poorly trained would have to be something that—

Dr O'Connell : That was not referring to credit card use.

Senator COLBECK: We are talking about their general awareness and if they are—

Dr O'Connell : There is a series of separate internal audit reports. These are separate reports dealing with different issues.

Senator HEFFERNAN: Can I help clarify this, Senator Colbeck. Dr O'Connell, you may care to deny this. According to the report:

Almost 10 per cent of the senior officials running the federal Department of Agriculture, Fisheries and Forestry—

I presume some of them are in the room—

were investigated last year for fraud, internal documents show.

What would trigger that sort of an investigation? Would there be an event or just a general audit? Ten per cent of senior employees were investigated for fraud.

Dr O'Connell : The claim made in the Sydney Morning Herald is inaccurate. It is not 10 per cent.

Senator HEFFERNAN: But not wrong?

Dr O'Connell : No, it is wrong.

Senator HEFFERNAN: You say that there were eight and your spokesperson, Jodi Gatfield, says, 'No, sorry, there were only three.' The report continues:

This is contradicted by a fraud report filled out by Edward Stanmore, the head of audit. Released under freedom of information, the document states eight ''senior executives/managers'', each with more than nine years' tenure, had been the target of internal fraud investigations.

Would that be going to Melbourne on departmental business, getting a taxi to the meeting but then going off to a party that night and putting that on your Cabcharge as well? What sort of fraud initiates that sort of an investigation?

Dr O'Connell : If I could just go to the basics of the claims, the claim that 10 per cent of the executives had been investigated for fraud is inaccurate.

Senator HEFFERNAN: So what is the accurate figure?

Dr O'Connell : The department reported nine allegations of fraud at executive level and senior executive level of service. At that level we have roughly 900 to 1,000 people. It is important to note that—

Senator HEFFERNAN: So what was the outcome?

Dr O'Connell : If I could just finish. It is important to note that these were allegations only—they were not findings of fraudulent activity—and none of the nine allegations were substantiated. Three of the allegations were against Senior Executive Service officers. Two of those investigations related to credit card usages. Those two were self-reported by the people involved and were rectified. One was an allegation related to corruption, which was subsequently dismissed, after initial inquiries had been made, as baseless.

Senator HEFFERNAN: Once again, what actually triggers a fraud investigation for a particular person?

Mr Schaeffer : We have a standard process that is governed by our policy on credit cards. Basically no personal expenditure is allowed on your corporate credit card unless with the express agreement of the chief executive or his delegate. For example—and I am not saying this is the case—if someone went down to Bunnings and used the wrong credit card, then that would be a reportable instance.

Senator HEFFERNAN: Fair enough. Do you have Cabcharge?

Mr Schaeffer : Yes, we do.

Senator HEFFERNAN: I am not entitled to Cabcharge in Sydney, but every member of parliament fills out a monthly report on what they do with their Cabcharge and what it was spent on. Do you do that?

Mr Schaeffer : All travel is acquitted.

Senator HEFFERNAN: No, that was not the question. Do you mandatorily get sent a form to fill out saying, 'This is what your credit card reports; would you like to comment on this to verify it?' And is it monthly, or six-monthly?

Mr Schaeffer : Each expense is acquitted by the officer themselves and then it goes to their supervisor to be checked, verified and approved on our IT systems.

Senator HEFFERNAN: We fill out a monthly report. We actually have to sign off on it. Do you sign off on a monthly report?

Mr Schaeffer : We use our computer system. It is all done automatically through a reconciliation system online.

Dr O'Connell : The result is equivalent.

CHAIR: Before we go to Senator Colbeck, I am mindful of the time and, although I know this committee is very flexible with its times. With your agreement, and depending on time, I will come back to you, Senator Colbeck.

Senator MILNE: I just want to follow up on the issue of the fraud investigations. The allegation is that hundreds of fraud investigations were conducted inside the department during the past two years. Can you tell me how many fraud investigations were conducted in the department in the past two years?

Mr Withers : In 2010-11 the department received 23 allegations of fraud against departmental employees. In the 2011-12 year to date there have been three allegations of fraud against departmental employees.

Senator MILNE: And what about 2009-10?

Mr Withers : I do not have those figures, I am sorry.

Senator MILNE: Then I will put that on notice, please. Going to the 23 allegations in 2010-11 and the three in 2011-12, can you break those up in terms of departments, as opposed to generic things like travel and credit cards? What about issues like procurement? Among the areas of agriculture, forestry and fisheries, how many relate to each of those departments?

Mr Withers : In 2010-11, six of those 23 matters proceeded to investigation., and all six matters were dismissed. There was no finding of fraud.

Senator MILNE: But which departments were they?

Mr Withers : They were all in this department.

Dr O'Connell : Perhaps Mr Withers has misunderstood. Senator Milne, you are asking for a split by parts of the department. Is that correct?

Senator MILNE: Yes, that is right. I am trying to understand the allegations in relation to forestry, agriculture or fisheries—within the department—pertaining to those fraud inquiries.

Dr O'Connell : We would have to take that on notice. I doubt that we have that break-up. Naturally we are a department, not three departments.

Senator MILNE: I understand there are generic issues like credit card use or whatever. When you come to procurement surely it would come down to specific departments.

Dr O'Connell : It would come down to specific areas, but we could take that on notice for you. I do not think that we would have that there, because it does not naturally break up like that. We would have to look at it.

Senator MILNE: Okay. Going to the issue of procurement, media reports suggest that there are systemic issues and that the audit report said that there needed to be a substantial change in the behaviour of those executing and approving procurement processes. The 2009 audit file noted a high level of non-compliance in procurement and that it might not be able to be shown that tenderers were treated fairly and consistently. There was also widespread evidence of inadequate procurement processes. It went on to allege that in relation to a particular conference event the tender was split into two parts to avoid an open tender. So my question is particularly in relation to a problem that seems to be ongoing and systemic in terms of procurement processes and the allegation about a tender being split so that it would not have to go to open tender.

Senator HEFFERNAN: Bear in mind that this has become systemic, as evidenced in the ICAC inquiry in New South Wales.

Dr O'Connell : I first make the point that I do not see that there is a systemic problem in terms of procurement. We found that one issue. The department has continued to make improvements in procurement practices as a consequence of those internal audits. I remind the committee that the internal audits were our own control process to strengthen our efforts. We have revised and strengthened the procurement guidelines and instructions. We have standard procurement and contracting templates. We have put in place mandatory protocols regarding legal sign-off on high-value procurement and probity and we have mandatory training for officials involved in procurement activity. So regarding the question as to whether there is anything systemic, I would be suggesting that we have that controlled. Regarding the specific case of the conference, we can probably provide some further information.

Senator HEFFERNAN: But that was a clear breach of the law.

CHAIR: Senator Heffernan, Senator Milne has the call.

Senator MILNE: I particularly wanted to ask about the allegation that a conference event was split so that it did not go to open tender. Was that found to be the case?

Mr Withers : The situation in relation to that was that it was for the procurement of interpretation services and translation services for a conference, the joint meeting of the Food and Agriculture Organisation and the World Health Organisation Food Standards Program, the Codex Committee on Food Import and Export Inspection and Certification Systems. That was held in March 2010. The auditors queried whether the process of obtaining separate quotes for the interpretations and translation services had the effect of circumventing the Commonwealth procurement guidelines for contracts valued at $80,000 or more. The circumstances were that the contracts for the interpretation services and the translation services were in fact awarded to the same provider and the value of each component was less than $80,000 but together exceeded $80,000. The auditor suggested that that looked as though it had been deliberately to circumvent the guidelines.

In response to that finding, the department revised its procurement guidelines. It has prepared new procurement templates, introduced additional requirements for approval of material contracts and implemented the training activities that the secretary has referred to to build awareness of and compliance with our procurement obligations. In addition, the department's internal audit team is periodically reviewing our procurement activities to ensure compliance with the requirements. The program area involved in that particular procurement has changed its processes to comply with the requirements to go to open tender for those services for subsequent meetings.

Senator MILNE: That is fine for subsequent meetings and this is the problem here. In future, you say, 'We've put in place these things,' but just going back, who made the decision to split the tender?

Mr Withers : The decision was made by the line area at the time. Procurement in our department is decentralised, but there is advice from a procurement advisory unit within the department that is available to people in relation to procurements.

Senator MILNE: So in fact interpretation and translations are determined to be separate and therefore by splitting them in that way it avoided having to go to an open tender, didn't it?

Dr O'Connell : It had the effect—

Senator MILNE: Yes, it did have the effect.

Dr O'Connell : Again, I want to emphasise that there is no question here of fraudulent behaviour. This was a weakness in the procurement process, which we identified ourselves through our audit process. We put in place strong processes to ensure that it does not happen again.

Senator HEFFERNAN: So you would never have entered (Indistinct) along these contracts?

Dr O'Connell : No. This was an isolated incident, as the report makes clear.

Senator MILNE: What about the other one that is reported in relation to the legal advice contract where the department requires legal advice for variations worth more than half a million dollars to be looked at? This policy was not complied with and there were no documents to show that the variation represented value for money. What is your response to that?

Senator HEFFERNAN: A 42 per cent increase in the value of the contract just by a stroke of a pen and a glass of wine.

CHAIR: That is maybe how you do business most of the time, but that is your opinion. Will you answer Senator Milne's question, Dr O'Connell.

Mr Withers : The variation to that contract with Blake Dawson and the increase in the cost of legal services was a consequence of an increase in demand, as a consequence of the outbreak of equine influenza, as well as an increase in the agreed blended hourly rate. The variation to the contract was based on a cost assessment of Blake Dawson's fees, compared to the fees charged by our panel of legal services providers. It represented value for money. Importantly, the department, in 2010-11, reapproached the market for legal services for an ongoing period and has subsequently appointed the Australian Government Solicitor as our legal services provider.

Senator MILNE: Finally, Dr O'Connell, every year we get told following the Auditor-General's reports and so on, and I am referring here to the Community Forest Agreement, 'We've learnt from that, we've improved our practices.' And every year we get this sort of response, 'We've fixed that and we've improved our practices.' At what point can the parliament have confidence that DAFF actually has good practices in place?

Dr O'Connell : You can now be confident. As I pointed out, we have an extremely good record. The processes we have in train are self-controlling processes. There are very few exceptions here to exceptionally good performance. You can now have confidence.

Senator MILNE: So you can assure me that there is no variation to deeds of agreement away from what is set down in the department's guidelines for any agreements or contracts that the Commonwealth enters into in relation to, for example, the intergovernmental agreement on forestry?

Dr O'Connell : You can have confidence in the overall systems and the ability of this department to run according to the FMA Act. In a large organisation, with many, many thousands of transactions, there will always be issues that need management and correction. That is why we have internal control processes. As Mr Schaeffer says, we have a very comprehensive and complex set of control processes and every one of these things that has been raised has been discovered by our control processes and we have then corrected them.

Senator HEFFERNAN: What was the blended rate?

CHAIR: Senator Colbeck.

Senator COLBECK: I just want to finish on this particular topic that Senator Milne is talking about. Mr Withers, you said you had done an assessment of fees across the panel of lawyers who were providing services and there was a circumstance, the equine influenza, that caused an increase in demand and that that internal process had demonstrated value for money. Why is it then that the report itself said there were no documents to show that variation represented value for money? You are telling us that an assessment was done. Wouldn't there be some record of that process, if that were the case?

Mr Withers : I will have to take that question on notice in terms of what the record shows.

Senator COLBECK: But you told Senator Milne that there was a process that was undertaken. Yet, the information we have is that there are no documents to show that that occurred. That is where the noncompliance arises, isn't it? You say that you have been through a process and the auditors go back and check that process to find out whether there are documents that support the assertion that a process has been undertaken.

Mr Withers : There is quite a difference in the hourly rates that were provided by our three other service providers under the panel arrangement and the blended hourly rate that was provided by Blake Dawson. So there was quite a significant cost in moving from the corporate legal unit provided by Blake Dawson at the time to the fees charged under the panel providers. There is clearly a value-for-money element associated with—

Senator COLBECK: That is what you said to Senator Milne. I understand that you have said that. That would indicate some process or assessment has occurred, but the quotation is that this policy was not complied with and there are no documents to show the variation represented value for money. So you are going to take that particular point on notice for us.

I want to go back to the question that I asked in relation to staff being confused and poorly trained. Dr O'Connell, you said that did not relate to financial matters and credit card use.

Dr O’Connell : Are you referring to AQIS?

Senator COLBECK: Yes.

Dr O’Connell : That is right.

Senator COLBECK: So you are talking about how in that circumstance:

AQIS staff are poorly trained and confused about their role, as one confidential document says.

I am quoting from the article again.

Dr O’Connell : That was about the quarantine approved premises.

Senator COLBECK: So effectively what we are talking about is the base role of AQIS officers that they are confused about and poorly trained on.

Ms O'Brien : The particular audit in question was of the management of quarantine approved premises by AQIS. These are premises where imported goods are held, subject to import conditions. The audit looked at a range of management controls around the quarantine approved premises. Importantly, it found that there was consistency in documentation of the import permit conditions and also that the treatment directions issued by staff were appropriate. So the substance of the audit was very solid. It did, however, raise issues in relation to the training of our audit staff—the staff who go out and conduct audits of the premises—and the way some of those audits were conducted. As Ms Mellor indicated earlier, as a result of that audit immediate action was taken to improve the training. We also invested significantly in the documentation and support that is provided to the staff on the ground who complete these audits. It was quite a specific focus.

Senator COLBECK: For example, there are not warnings issued now when unannounced audits are to be carried out?

Mr Benyei : There were three sets of concerns raised in that report, as my colleague mentioned. In terms of the announcement of the audits, I can assure you that unannounced audits are just that. Since the audit report was released there has been quite a bit of effort put into training staff on the job more formally and there has also been a great deal of rigour around the implementation of those unannounced audits.

Senator COLBECK: So they are now unannounced, as they are titled?

Mr Benyei : There are unannounced audits and there are announced audits, and the unannounced audits are unannounced.

Senator COLBECK: The other item was the training, and we had a discussion about that earlier. The third item—is that the inconsistency in instigation of sanctions?

Mr Benyei : Yes.

Senator COLBECK: What has happened with that?

Mr Benyei : I think we accepted that that could be improved. Now we have, if you like, a categorisation of the findings into minor, major or critical, depending on the materiality of the findings. We also have a more consistent way of recording the behaviour and the outcomes of those audits and, as a result, those that are of critical noncompliance, they are referred immediately to the national office for attention and are dealt with at that higher level.

Senator COLBECK: In relation to the categorisation of those noncompliances, if you want to call it that, are there guidance notes around that?

Mr Benyei : There most certainly are.

Senator COLBECK: They are available to everybody who is subject to them?

Mr Benyei : By and large they are training and guidance materials for staff to undertake that. They go to the heart of our compliance regime. Certainly the framework for compliance is known to those who are subject to its requirements. The actual details of how we go about that—some of that may remain confidential. Certainly the conditions under which people operate are widely known by those who are subject to them.

Senator COLBECK: So the premises subject to the audit would be aware of the classifications and the parameters around which those minor, major and critical indiscretions, if you like, or breaches might be classified?

Mr Benyei : Certainly. They are aware of what the requirements are that they must meet. They are also aware of what they must meet in terms of the investigations. When there is a finding, a report back from the audit, that is also made clear to the parties involved.

Senator COLBECK: Has there been any assessment level work about satisfaction in relation these changes, how they might be working, and consideration of, say, a broad range of indicators relating to that—say, absenteeism, reporting of bullying and harassment, and staff turnover?

Ms Mellor : Sorry, in relation to this audit report's implementation or more generally?

Senator COLBECK: In relation to this, but I suppose more generally would perhaps come out of that, if that is an issue.

Mr Benyei : I am not aware of the staffing issues or bullying and harassment, but I can certainly confirm that there is ongoing review of the efficacy of the audit regime. We have also engaged the services of the Australian Centre of Excellence for Risk Assessment to help verify the effectiveness of these measures.

Senator COLBECK: What about the management reporting functions that also formed a part of that recommendation? What has happened as far as that is concerned?

Mr Benyei : If we are still talking about the audit of the—

Senator COLBECK: Quarantine-approved premises, yes.

Mr Benyei : quarantine-approved premises, all of the recommendations have been implemented.

Senator COLBECK: Including changes to the management reporting functions?

Mr Benyei : Yes.

Senator COLBECK: Could you characterise those for me?

Mr Benyei : I think I have mentioned to you that the classification of all noncompliances now is transparent and consistent and they are reported back to those who operate quarantine-approved premises and that all non-compliance incidents of a critical nature are now reported to a national level. In terms of the documentation now, we have pass/fail criteria, and those who have consistent noncompliance, if you like, are put on certain warnings. We adjust the rate of audit and inspections commensurate with their performance against those audits.

Senator IAN MACDONALD: I am conscious these are just further estimates, so I do not want to go into things too quickly. Could you define the 'blended hourly rate'? I take it that as a result of the blended hourly rate from Blake Dawson being too high you have now switched to the AGS. Is that correct?

Mr Withers : No, the blended hourly rate is an agreed rate that the legal provider charges us. It reflects the fact that we will need senior partners to address some matters, counsel—

Senator IAN MACDONALD: So it is blended across Blake Dawson?

Mr Withers : Across the various services.

Senator IAN MACDONALD: From the most expensive to the—

Mr Withers : The move earlier this year to AGS as our legal services provider was on the basis of an open approach to the market, in which the fee structure was just one element of the procurement decision.

Senator IAN MACDONALD: Could you tell me the blended hourly rate for Blake Dawson compared to the AGS? You might need that on notice.

Mr Withers : I will take it on notice.

Senator IAN MACDONALD: Minister, in relation to the fraud thing, you called for a report. Have you got the report?

Senator Ludwig: Yes, I have.

Senator IAN MACDONALD: And is it a public document.

Senator Ludwig: As I understand it, it is. I am happy to table it.

Senator IAN MACDONALD: When did you get it, Minister? Perhaps on notice.

Senator Ludwig: On 30 September.

Senator IAN MACDONALD: Did it require you to take any action, or have you taken any action as a result of the report?

Senator Ludwig: My recollection is that it did not provide any recommendations to take particular action. I could say that, as you have heard this morning, the fraud and internal controls of the department are quite robust. What I was specifically looking at was the reports. I asked the department—I spoke to Dr O'Connell that morning—from the reports in the Sydney Morning Herald to have a look at what those allegations were. I am satisfied with the report and how the department deals with those internal audit and control mechanisms. I can say that there is always room for improvement, but I am satisfied that since that time the department has made significant improvements in their internal fraud control processes.

Senator IAN MACDONALD: Getting back to the efficiency dividend, Dr O'Connell, has the efficiency dividend in any way curtailed your negotiations on the next workplace agreements? Has it impacted them? I think you told us last time that it had had an impact on your graduate intake.

Dr O'Connell : That was the previous year. It has had no specific and particular impact this year on the negotiations. It is part of the budget framework—the budget that we have to manage.

Senator IAN MACDONALD: Will you end up with fewer staff as a result of it?

Dr O'Connell : As an overall part of the budget target we have, and that is $32.8 million savings plus the dividends—$11 million—we will obviously have to have some reductions in staffing levels over the forward estimates. That is an inevitable feature of managing that level of savings in appropriation. That is on the appropriation side, assuming there is no other new policy, which very often occurs during the period of the estimates. Of course, 60 per cent of our staff are cost recovered based, coming particularly out of the biosecurity area, and that comes from a different revenue stream and not from the appropriations. So, the overall numbers of staff will depend very much on the mix of appropriation and cost recovery staff.

Senator IAN MACDONALD: Because time is short can you on notice tell me over the forward estimates—and I appreciate the qualification, as you say—where you would anticipate the staff cuts would come from?

Dr O'Connell : Yes.

Senator IAN MACDONALD: Again on notice, can I get an update on the hospitality spend of the minister's and parliamentary secretary's offices and any departmental hospitality related to the minister or the parliamentary secretary.

Dr O'Connell : I think we can do that now, if you like.

Senator IAN MACDONALD: Perhaps you can answer all of these questions at once. Was there a hospitality spend in relation to the New Zealand apple import protocols and the impact risk analysis? I understand that you hosted New Zealanders or spent some time in New Zealand. I am particularly interested in what hospitality went into the decisions in relation to that.

Ms Freeman : I can comment in relation to hospitality spend for the minister and parliamentary secretary. In relation to that specific event, I might have to take that on notice.

Dr O'Connell : Our understanding, and we can confirm it, is that there was not any hospitality spend on that.

Senator IAN MACDONALD: Because time is short and my colleagues want to ask questions, could I get all the answers on notice. Finally, question No. 5 taken on notice at the last estimates was about whether the department had done any specific work on the impact of a carbon price on portfolio industries. That is something I can raise the appropriate time in this estimates. But, as a corporate question, has the department done any assessments of its carbon imprint or how you could reduce carbon, such as shutting off lights, reducing travel, reducing overseas visits?

That is one part of the question, but the final part of my final question is this. I note that you say ABARES was doing some work on sequestration and the potential for reafforestation activities, but doesn't the department feel some obligation to do some sort of assessment of the impact of carbon pricing on all of the industries for which the department does indirect advocacy? There are several questions there.

Dr O'Connell : Yes. In terms of the footprint of the department, I think it would probably be best to take that on notice. We do record that according to the government's environmental and sustainability requirements, so we will get that on notice.

Mr Withers : I can make a couple of comments in relation to that. In terms of our electricity provision, we have an arrangement with ERM Power through the whole-of-government procurement arrangements for the supply of electricity, and that provider sources 10 per cent of the electricity from renewable green power sources. In addition to that, in terms of the way that our Canberra central office buildings are run, there are a range of environmental measures including movement sensor lights, energy efficient lighting, stormwater fed toilets throughout the building and other water-saving features like waterless urinals and hand activated taps in the bathrooms. We recycle our organic and other waste, including paper, glass and plastic, as well as our printer and toner cartridges.

Senator IAN MACDONALD: Do you have a measure of what that is reducing your carbon output by?

Mr Withers : No.

Senator IAN MACDONALD: How are you going to know if any of that works? But, more importantly, from 1 July next year, according to all reports, increases in the price of electricity are going to be anywhere from 10 to 20 per cent. Have you budgeted for that? How are you going to pay for that increase? Perhaps I should ask: what is your total electricity spend per financial year and, secondly, how are you going to budget for any increase in the cost of electricity?

Mr Withers : I will have to take that on notice.

Senator IAN MACDONALD: I will come back to you, Dr O'Connell, on the other part of the question, on the industry.

Dr O'Connell : We can deal with this in a little more detail when we get to the area that manages the carbon issues, but the way that the government overall has been working on the assessment of the impact of a carbon price on industries has been through the Treasury's carbon price modelling approach, to make sure that this is consistent and coherent. We have participated in the interdepartmental processes for that. In addition to that, where Treasury have asked us, through ABARES, to do some work on carbon price paths for sequestration and potential for reafforestation we have done that as well. So the short answer is that this is a whole-of-government approach and Treasury has managed the modelling of the impact of carbon prices. We do not do any specific modelling outside of the whole-of-government approach.

Senator IAN MACDONALD: That is probably the answer to my question. Does Treasury assess with its modelling what the impact on each industry is going to be and then refer it to you and you get your people to have a look at it and say, 'Hey, Treasury, your model may not have taken into account the cost of imported fertiliser,' for example?

Dr O'Connell : I think it would probably be best to ask that when we get the people who engage directly with Treasury on the issue, but of course Treasury can also provide that.

Senator IAN MACDONALD: I am more interested in how you look after your industries.

Dr O'Connell : I have suggested there that when the area in the department which is—

Senator IAN MACDONALD: I accept that.

Senator ADAMS: There was a question on notice which I would like you to add to. What is the extra cost to the department of using 10 per cent green power? Could you put that in with Senator Macdonald's list, please?

Senator HEFFERNAN: I have a question further to Senator Macdonald's question on the blended rate. He has asked for the blended rate. Could you give me the formula for the blended rate included in the question? In other words, how many at $30 an hour and how many at $1,000 an hour are there to get the blend? What is the percentage of the various officers in the blended rate? You would have to know that as the chief operating officer.

Senator IAN MACDONALD: Can I answer that for you? The answer would be that they asked Blake Dawson to give them a figure. It does not matter who they send—

Senator HEFFERNAN: But I want to know what Blake Dawson's thinking is. We are entitled to know that. I also confirm that I have put on notice that you will provide us with all details of all leases—including the rate per square metre, the title details, the owners and their ACNs—for all the properties you lease. The last thing I want to put on notice is: how many people have been disciplined or sacked in the last three years due to fraud, misappropriation or misinterpretation of procurement issues? How many have been investigated?

Dr O'Connell : I can answer the first part of that now: none.

Senator HEFFERNAN: How many have been investigated? You can take that on notice.

Senator SIEWERT: As per usual, I may be asking this of the wrong area, but I ask it here specifically. Has the department responded to Greenpeace's report on the wheat scandal, which looks at the development of GM crops?

Dr O'Connell : I think you are in the wrong area. When the Sustainable Resource Management people—SRM—come along, perhaps we can remind them. It was the GM—

Senator SIEWERT: The Greenpeace report on the wheat scandal, which is about GM wheat varieties. The reason I am asking about it here is that it makes comments about vested interests such as biotech companies being involved in research. I am wondering, therefore, how the department ensures that vested interests do not have an untoward influence on research. That is not just about GM; it can be about a variety of issues.

Dr O'Connell : This is through the RDCs—is that correct?

Senator SIEWERT: Yes, and any other work that the department does.

Dr O'Connell : When the Agricultural Productivity people come along, they should be able to manage that issue.

Senator SIEWERT: At a corporate level, you do not take an overview of that to ensure that no interest is having an undue influence on research?

Dr O'Connell : Our Agricultural Productivity division looks after the research and development corporations in terms of their statutory funding agreements and other related issues, and that is the area you would be interested, I think, in looking at GRDC issues.

Senator SIEWERT: How do you keep an eye on that?

Dr O'Connell : Through them, really.

Senator SIEWERT: How does that process work? Have you had any reports about concerns around undue influence on research? Let's use GM as an example.

Dr O'Connell : Not to my knowledge, but I might want to talk with my Agricultural Productivity people.

Senator SIEWERT: Can you take that on notice?

Dr O'Connell : We can do that, yes.

Senator SIEWERT: I appreciate that they are the ones who specifically do it, but what I want to know is how the department keeps an eye on that overall to ensure that does not happen?

Dr O'Connell : As I say, the overwhelming amount of resources going to research is channelled through the research and development corporations and APD looks after that area in governance terms.

Senator SIEWERT: Can you take on notice how many reports you have had?

Dr O'Connell : We will do.

CHAIR: Dr O'Connell, the committee acknowledges that there were some 297 questions taken on notice. Well done to the department for getting them all back on time. They may not be the answers that some would want, but well done to your department.

Dr O'Connell : Thank you, Chair.

CHAIR: I also take this opportunity to welcome our new senators who are full members of the committee: Senator Gallacher, Senator Urqhart and Senator Edwards, three very fine replacements for our longstanding senators who have departed. I welcome them to their first round of Senate estimates.

Senator IAN MACDONALD: Chair, I endorse your comments about questions on notice. It is a rare occasion when any department—

CHAIR: You might not be happy with them all.

Senator IAN MACDONALD: We certainly will not be happy, but at least you have got them and that is a great step forward.

CHAIR: I thank the officers from Corporate Finance, Policy and Corporate Services.


CHAIR: I welcome officers involved in live animal exports. Senator Heffernan will commence questions.

Senator HEFFERNAN: Minister, there is a report which also talks about the decision-making by the government to ban the live exports and FOI documents that indicate that the advice to the government was indeed not to ban live exports. Obviously this was a perfect political ambush, well executed by people who want to end the trade. Can you confirm that the advice, as per the FOI documents, was indeed not to ban the trade?

Senator Ludwig: On that, given that it is departmental advice, maybe it is worth while for the department to go through the advice that they provided me at the time.

Senator HEFFERNAN: I have deliberately gone away from the stuff that is in the paper, where cabinet was not provided with papers and the decision was taken with pressure from caucus. We will just go to the department.

CHAIR: You got that statement in, Senator Heffernan, but I believe Ms Evans is going to respond to your first question.

Ms Evans : Just to confirm what Senator Heffernan was saying, the documents that were released under the FOI request do not reflect the full range of advice that the department provided to the minister on the matter. Two relevant documents in particular that the senator referred to have been exempted in their entirety because they are subject to legal privilege and cabinet exemptions. Just to set the context there—that the FOI request really only has a subset of the information that we provided to the minister—I believe the senator may be referring specifically to the brief entitled 'Live trade: options for regulating exports', where there was a recommendation about continuing to work collaboratively with industry and then to revisit the question of regulation if and when the voluntary efforts from industry failed to deliver improvements in animal welfare. That brief was provided in advance of the department seeing the evidence of what was shown on the Four Corners report and also in advance of a series of discussions that were held with industry about the plan they had put forward. Certainly, as is on the public record, at the time that we provided that brief our advice was to continue to work collaboratively with industry and then to revisit the question of further regulation if those voluntary efforts failed to deliver improvements in animal welfare.

Senator HEFFERNAN: My interpretation of that answer is that the advice was, 'Don't ban the trade.'

Ms Evans : Our advice was to continue to work collaboratively with industry.

Senator HEFFERNAN: Fair enough. That is nice bureaucratic language, thanks.

Senator BACK: As a result now of the new arrangements being in place, can you tell me what the added costs are to an exporter of fees associated with the department in terms of reviewing the audit processes that must now be undertaken? Can you give me in either hours or dollars the added costs to the exporter for that purpose?

Ms Cale : The costs to the exporter are the same. They have not increased under the new regulatory framework. The costs to the exporter for cattle going to Indonesia remain $1.55 per head for the first 11 hours of assessment. If they go over the 11 hours, there is a fee of $8.50 per quarter-hour thereafter. Those fees are the same as have been in place for some time.

Senator BACK: My question then is: based on your experience to date, can you give us an estimate of the added hours that have been taken into account as a result of the new arrangements being in place? How many more hours are having to be applied to satisfy the department and therefore the minister of compliance with the new requirements?

Ms Cale : It varies from exporter to exporter, depending on the complexity of the supply chain that they are putting in place, the information that they are pulling together and the time taken to get that information. Some exporters can pull it together relatively quickly. An exporter may be using a supply chain for the first time, which takes a little bit longer. If they use the supply chain subsequent to that where the arrangements are in place it takes considerably less time.

Senator BACK: Can you tell me how many instances there have been since the new arrangements have been put into place?

Ms Cale : Sorry—how many supply chains?

Senator BACK: Yes.

Ms Cale : There are about 14 supply chains across five exporters.

Senator BACK: So there are 14 occasions on which the new arrangements have been activated?

Ms Cale : There are 14 supply chains, but there have been more applications to export. Thirty-two notices of intention to export have been submitted. To date, the department has approved 26 of those.

Senator BACK: Perhaps you could take on notice then to give us the range over those 26 of just what has been the added time and what have been the added costs. Is it possible to do that?

Ms Cale : Certainly.

Senator BACK: Thank you. That then leads me to the question: has there been an allocation of more staff time to execute these compliance arrangements within the department?

Ms Cale : There have been staff taken offline to work on the implementation of the new regulatory framework. Those staff are also assessing the notices of intention to export. So there is extra effort.

Senator BACK: Again, could you take on notice to give us an indication of what that extra staff allocation has been.

Ms Cale : Sure.

Senator BACK: Could you also advise us: is the process of application by exporters in terms of communicating with the department a 24/7 process or are there limited hours during a working week in which exporters can communicate with the department?

Ms Cale : We have core hours. However, we tend to be contactable at any time. So we regularly have contact with exporters over the weekend, if necessary. We are contactable. In relation to the regulatory framework, yes, we have been working across weekends to assess and analyse where the information is made available by the exporters.

Senator BACK: Is that emergency-type communication or is that just standard-activity communication? When you talk about the core hours, is it the core hours of a working week in which the normal processing takes place, and any weekend or out of hours time is just for an emergency, or is it in fact a continuing process?

Ms Cale : Generally exporters do provide the information during the week, during the core hours. We do not have staff sitting in the office on the weekends or after hours. However, they will come in and make themselves available where required.

Senator BACK: I do not know who the appropriate person to ask here is, but, as a result of the new arrangements, what, if any, communications have there been with other live-animal-exporting nations in terms of their acceptance or otherwise of the new guidelines? My question goes to: is Australia now on its own in terms of the new guidelines or are the communications between the department, the minister's office and our target markets such that other countries are also now moving into compliance with the new guidelines, either as they are or their equivalents?

Mr Morris : At this stage, the new regulatory framework only applies to Indonesia. There has been no decision made as yet as to whether it will actually be applied to other countries. However, the government has flagged, through the establishment of two industry-government working groups, that there was an intent to look at whether the regulatory framework might be able to be applied to other countries. Those working groups have reported, and a decision is pending on that. Given that a signal has been flagged that there may be a move in this direction, certainly there have been discussions with other countries about the directions that the government may be heading in. We have had quite an extensive process of consultation with other countries who have been very interested in what has been happening with Indonesia but also in the context of this potential to move to a new framework for them as well.

Senator BACK: When you say other countries, are you talking about other countries which import or other countries which compete with us to export live animals, or both?

Mr Morris : I think it has been almost exclusively with the countries that are importing our animals, but there may have been some peripheral contact with other countries. But most of the contact that I am referring to has been with the countries that we are actually exporting animals to.

Senator BACK: You mentioned Indonesia. Are there not other target countries to which our new guidelines are also being applied in relation to exports of cattle?

Mr Morris : Through the establishment of those industry-government working groups, the government flagged that it may wish to extend the arrangements to all countries and all livestock, but, as I said, there has been no announcement made on any decision that has been made around that.

Senator BACK: Are you aware of any instances in which Australian exporters have been disadvantaged as a result of the new guidelines being in place and other exporting companies from other countries taking advantage of this to take market share away?

Mr Morris : As I mentioned, Indonesia is the only country where the framework applies at the moment.

Senator BACK: I am aware of that.

Mr Morris : I believe that Australia is if not the only then certainly the predominant supplier of cattle to that market. I am certainly not aware of any other countries that have come in and taken market share from us in that market. As the regulations do not apply to other markets as yet, it is not really relevant to those countries as yet.

Senator BACK: So you are not aware that in countries other than Indonesia other suppliers have taken advantage of new conditions applying to Australian exporters that do not apply to other exporters into those markets?

Mr Morris : Not as a result of those conditions, but—

Senator BACK: Exactly as result of those conditions?

Mr Morris : Yes, not as a result of those conditions. There have been other market factors which have been influencing the trade, obviously, and will continue to influence the trade over time. I should just add that I should have also mentioned, of course, that there was the Bill Farmer review into the industry as well, and that is being considered as part of the consideration as to how the government goes forward as well.

Senator HEFFERNAN: When will that become a public document?

Mr Morris : That will be a decision for the government and—

Senator HEFFERNAN: They seem to have had it for a long time.

Mr Morris : The report from Mr Farmer was presented on 31 August, so it has been around for about six weeks. But, as I mentioned, the government is considering that as part of its specific—

Senator HEFFERNAN: So I ask the minister: when do you anticipate that that will become a public document?

Senator Ludwig: It is a matter for government—

Senator HEFFERNAN: I know it is an uninteresting document because I have part read it.

Senator Ludwig: Let me answer the question. It is a matter for government. It will be released, and it will be released shortly. The date will be, of course, a matter for government to determine.

Senator HEFFERNAN: Does 'shortly' mean—I do not want to put words into your mouth—this side of the end of the parliamentary sitting sessions?

Senator Ludwig: I have said 'shortly'. I am not going to suggest a time frame.

Senator HEFFERNAN: So you are not prepared to cooperate with the inquiry which I am chairing to put it on the public record so that we can have some critique of it through that process before the end of this year's—

Senator Ludwig: I have answered your question.

Senator HEFFERNAN: Can you give me an undertaking to do that?

Senator Ludwig: I have answered your question.

Senator HEFFERNAN: It would be helpful to the people of Australia if you could release that document, because you have had it since the end of August. You are giving, no doubt, serious consideration to the implications of it. I realise the political difficulties you have had with this issue and I appreciate that—it is real life. But you are unaware of when you are going to release it?

Senator Ludwig: As I have indicated, the release of that report is a matter for the government. I will release it, and I have indicated 'shortly', but I am not going to announce it in advance and I am not going to give you a date in advance.

Senator HEFFERNAN: Can I just ask one further question?

CHAIR: No, we will come back to you, Senator Heffernan, after the break.

Ms Evans : If I may, before the break, I would just like to clarify, because I am concerned that the answer I gave earlier may have left the impression that the advice that is in the public domain on this matter was the end of the department's advice. I just want to reiterate that the particular advice that I was talking about was provided to the minister before the airing of the Four Corners report and before a sequence of discussions with industry, all of which provided us with more information about the context and the situation that we were dealing with and amended the nature of the advice over time that the department was giving to the minister.

Senator HEFFERNAN: But at no stage did you—

CHAIR: Thank you, Ms Evans. I am sure you will have an opportunity to reiterate that. We will now go to a break, thank you.

Proceedings suspended from 10:32 to 10:46

CHAIR: We will now reconvene. Senator Back, did you finish?

Senator BACK: I will defer to others and come back if time permits after they have had their goes.

Senator COLBECK: I want to go through some of the issues relating to the FOI release of last week. I want to clarify a couple of things in relation to that process.

Dr O'Connell : The process of the FOI requests?

Senator COLBECK: The process of FOI. I want to quickly deal with a couple of issues around that and the decision. In the letter that came with the FOI document, under 'authority' it says, 'The secretary of this department has authorised me to make decisions on access to the information requested and any associated charges.' Is there any requirement to consult further up the chain in relation to that decision-making process or do you effectively have delegated responsibility for the FOI document? Is there any approval process that fits around that document?

Mr Withers : Once I was appointed as the decision maker in relation to that—and all SES officers are delegated to become decision makers—it was my decision as to what documents were released. But, as a non-expert on the subject matter, I consulted with my colleagues in terms of what documents came within the scope of the request and how they should be treated.

Senator COLBECK: So there is not a final sign off further up the tree, if you like, as far as the release of documents goes—you are the decision maker.

Mr Withers : That is right.

Senator COLBECK: I want to get some clarification in respect of the term 'irrelevant to the scope of the request'. How is that defined?

Mr Withers : The applicant determines the scope of the request in terms of their initial request. But the decision maker has to be satisfied that he or she understands exactly what is being asked for. In some cases, that requires consultation with the applicant to exactly define what they are trying to discover and therefore what documents come into the scope of the request.

Senator ABETZ: I have a question on that, if I may. So the matters which are deemed to be irrelevant are not as of necessity not allowed to be divulged. It may be that they are just not relevant to the scope of the inquiry.

Mr Withers : Yes. Only documents that are relevant to the scope of the inquiry, the request, are considered for release.

Senator ABETZ: And when you talk about documents, we are also talking about parts of documents.

Mr Withers : In most cases, that is right. There are some areas of the documents that were released last week that were redacted because they fell outside the scope of the request.

Senator COLBECK: Let's go to something specific within the documents. We are talking about document 05806, minister's comments. That is a document whose critical date was 6 June. It was signed by the minister on 10 June. The minister's comments are redacted and, according to the documents here, are not relevant. How are the minister's comments in relation to this matter not relevant?

Senator HEFFERNAN: He didn't want to get the sack.

Mr Withers : They were not relevant as in they were not relevant to the scope of the request.

Senator ABETZ: Minister, are you able to tell us what was part of that which was obliterated, given that there is no legal reason why it cannot be made available?

Senator Ludwig: I will take that on notice and have a look at what I said.

Senator COLBECK: So, because the request asked for advice to the minister, the minister's responses to that advice are not relevant?

Mr Withers : No, the minister's comments may not have been directly relevant to the revised scope, which was 'representations from animal welfare and live cattle industry groups and briefing minutes provided to the minister by the department relating to the live cattle export trade with Indonesia in the lead-up to and imposition of the (a) suspension and (b) extension of the ban on this trade'.

Senator COLBECK: I think my question still stands. Because the question relates to representations from industry and cattle groups and briefing notes—

Mr Withers : Sorry—the title of that minute is 'Animal welfare and the cattle export trade'.

Senator COLBECK: I understand that.

Mr Withers : The request was about the temporary suspension and the extension of the temporary suspension on the export of cattle to Indonesia. So there are elements of this minute that are not within the scope of the request.

Senator ABETZ: On the minute dated 13 May, marked urgent, which the minister finally got around to signing 14 days later as being noted—but we will go there later—underneath the minister's signature we have, I assume in the minister's handwriting, 'Please add to reading pack.' Why was it deemed that that was relevant but that which has been obliterated was deemed not to be relevant?

Mr Withers : The comment is also not relevant, but not all material that falls outside the scope has been redacted. In some cases there is just no requirement, or some things were overlooked in terms of—

Senator ABETZ: Overlooked—so there are varying degrees of relevance and irrelevance, are there?

Mr Withers : It is about what falls within the scope of the request.

Senator ABETZ: The scope of the request—we got there before. Can you tell us how 'Please add to reading pack' was part of the request.

Dr O'Connell : Can I just suggest that maybe an annotation such as 'Please add to reading pack' is not an issue of materiality. It is not materially relevant either way. It does not go to any other issue, whereas it is potentially the case that some comments would be about something else altogether.

Senator COLBECK: So the minister is going to write in a minute relating to the likely animal welfare consequences associated with prohibiting export of live feeder cattle to Indonesia something completely unrelated to that issue?

Dr O'Connell : Something completely unrelated to the scope of the request, which is different.

Senator ABETZ: But 'Please add to reading pack' clearly was directly relevant, so it was left in.

Senator COLBECK: I am just trying to get a sense of how literal we are being here, and obviously it is quite literal. So anything that goes from the agency to the minister is relevant to this request, but anything that the minister might respond with is not?

Mr Withers : No.

Senator COLBECK: I am trying to understand why it is not relevant.

Mr Withers : Not all things that go from the department to the minister—

Senator COLBECK: But I did not see anything in here—

Mr Withers : Only those documents that related to the suspension of the live animal trade with Indonesia. Only the documents that were provided to the minister in the lead-up to the suspension of the trade and the extension of the suspension of the trade with Indonesia were considered to be within the scope of this request.

Senator COLBECK: I understand that, but the minister's responses to those documents are not relevant.

Mr Withers : No, they are relevant.

Senator COLBECK: That is what I am trying to understand. In this circumstance—on this document, which is, critically, dated 6 June but not signed until 10 June—the minister's response is not relevant.

Mr Withers : The minister's response to that minute did not relate to the suspension or the extension of the suspension of the trade with Indonesia.

Senator COLBECK: That is what the minute was about.

Mr Withers : No, it was not. The minute was about animal welfare and the cattle export trade.

Senator COLBECK: But that is what the request is about. The request is relating to the live cattle export trade with Indonesia.

Mr Withers : But the minute is broader than the trade with Indonesia.

Senator COLBECK: 'You have requested advice on the likely animal welfare consequences associated with prohibiting the export of live feeder cattle to Indonesia.'

Dr O'Connell : Senator, obviously I was not the decision maker but I can perhaps try and help.

Senator COLBECK: That is why we should deal with the decision maker.

Dr O'Connell : I normally try to help the committee.

CHAIR: Dr O'Connell, I ask you to ignore the comments from the side. If you could answer Senator Colbeck's question that would help.

Dr O'Connell : The agreed revised scope went to representations from animal welfare and live cattle industry groups and briefing minutes provided to the minister by the department. It did not actually go to comments by the minister on those briefs.

Senator COLBECK: That is what I was getting to. Had the request included responses by the minister then the issue of relevance may have been different.

Dr O'Connell : You may have had a different response.

Senator COLBECK: So the minister is taking on notice a question from Senator Abetz about whether or not he is prepared to provide those responses?

Dr O'Connell : That is right.

Senator COLBECK: Okay, fine.

Senator ABETZ: Perhaps the decision maker can assist us with a minute of 13 May. Why did we leave in 'as relevant, please add to reading pack'?

Mr Withers : I thought the Secretary has answered that, in the sense that whether it should be left in or redacted out was not material in one way or the other.

Senator COLBECK: So there was no sensitivity in adding it to the reading pack, whereas there may have been something that was sensitive to this and in that circumstance the request dealt with stuff going up but not stuff coming back; it was redacted. Is that right?

Mr Withers : That minute with the critical date of 6 June was, as you said, about animal welfare considerations. The request was about documents that were related to the suspension of the trade and the extension of the suspension.

Senator HEFFERNAN: They are clearly animal welfare related.

Mr Withers : I do not disagree, but that was not what the request was about.

Senator ABETZ: Was the department given prior notice that some coalition senators might be seeking to ask questions about this FOI request today?

Dr O'Connell : I think we saw it in the press clippings,. I am not sure. I presume we got notice.

Senator HEFFERNAN: They were given notice.

Mr Withers : My understanding was that there was some advice that live animal export issues may be wished to be raised, but nothing specific.

Senator ABETZ: There was nothing specific about the FOI?

Mr Withers : About this particular request?

Senator ABETZ: Yes, about this particular FOI.

Mr Withers : Not as I understand it.

Senator IAN MACDONALD: The document I have here from 6 June says: 'You may wish to draw on this advice to inform you response to the forthcoming Four Corners report in relation to cattle exports to Indonesia.' Then it recommends 'that you note'—but then it is blanked out—and 'that you agree', which is then left in. So your advice on what to agree is left in, but the advice after 'that you note' is left out.

Mr Withers : Could you clarify the minute number, please? It is in the top right-hand corner.

Senator COLBECK: It is 5518.

Senator IAN MACDONALD: It is dated 30 May. It is marked as urgent and was signed by Senator Ludwig on 6 June. On what basis was the advice of what to 'note' removed but the advice of what to 'agree' left in? I am curious about what you asked the minister to note.

Mr Withers : That minute, 5518, had a critical date of 30 May, which is still visible. It has not been redacted, but the recommendations have been redacted.

Senator IAN MACDONALD: Sorry, but what do you mean by 'redacted'?

Mr Withers : I mean that it was blacked out.

Senator ABETZ: The recommendation of what to 'note' is blacked out. The recommendation of what to 'agree' is left in. Why? That which the minister is being asked to agree to has in fact been left in. That which he is being asked to note has been redacted. So one would assume that the matters that the minister is being asked to note are in the category of 'If you note this, then you would agree to a certain course of action'.

Mr Withers : The items that were listed as A, B and C under the recommendation 'that you note' were redacted under section 42(1), which relates to the document being exempt if it is of such a nature that it would be privileged from production in legal proceedings. So legal professional privilege is the reason.

Senator IAN MACDONALD: So there is legal privilege on your asking him to note something.

Mr Withers : It relates to legal advice.

Senator IAN MACDONALD: Do you mean advice to the minister, or someone else's advice?

Mr Withers : Legal advice to the minister, yes.

Senator COLBECK: The A, B and C on that document have been taken out. There are three reasons for redacting information on that document: legal privilege, personal information and also relevance. How do we identify which is which?

Mr Withers : Within the redacted area there is a marking that shows what the reason is.

Dr O'Connell : The top left corner of each of the redacted areas has just got the section of the act, the exemptions.

Senator COLBECK: I could be accused of having a blokes' look at this, but I cannot see any—

CHAIR: Senator Colbeck, can I just interrupt for a second. For some strange reason, we have a newspaper photographer in the room. He probably took the wrong turn left and has appeared! I am just checking with my full-time members on the committee whether there is any drama about the newspaper taking photos. Do not surprise me and say yes, there is. There is no objection.

Senator COLBECK: I am back to my blokes' look on the front page of 5518. You are saying on each redacted section there is—I certainly cannot see it. I want to go back to Senator Abetz's question about whether or not the department had notice—

Dr O'Connell : I apologise. We did have notice that FOI would be raised today. We had notice that live animal exports issues would be brought forward to this morning and also that you would want to discuss the FOI issues.

Senator COLBECK: It is good to clarify that. An individual gave the notices, sending fervent emails to remind you that you cannot get away with that. My documents do not show that those numbers for detailed redaction—

Dr O'Connell : Those must be copies then, because we certainly have it in our originals.

Senator COLBECK: Let us go to some specific questions around the documents more broadly. What is the date of the legal advice which has been exempted from the FOI request and on what date was it seen by the minister?

Ms Evans : I will try to answer that question. Are you still referring to brief 5518?

Senator COLBECK: Yes.

Ms Evans : The legal advice obtained for this brief was obtained just prior to 30 May. I would have to take on notice to check exactly which date. This brief was provided to the minister's office on 27 May. We worked with legal advisers to procure that legal advice to that deadline. Again, I will double-check that we did not have it any earlier than that, but I think we received the advice and finalised the brief very shortly. I cannot say exactly when the minister received the brief after it was received by his office, but you can see from the annotations on the public version that it was signed by the minister on 6 June.

Senator COLBECK: That is another point. It is dated 30 May, it is marked urgent, yet the minister does not sign it until 6 June.

Senator ABETZ: One week later.

Senator COLBECK: I do not know whether it is a procedural thing, but there is no date of preparation on the brief. I think only one of those has a preparation date on it, which makes it very difficult for us to give a time line on it.

Senator ABETZ: And the date received by the minister's office.

Senator COLBECK: Yes.

Ms Evans : We operate an electronic filing and procedural system for briefs in the department. While the date of signature is recorded on a hard copy, often it is the electronic transmittal of the minute through the system which is used. That is the case with a number of documents that you have here. The date the documents are passed to the office and the date they are signed are recorded fully in the departmental system, so we are able to answer these questions if you have them.

Senator ABETZ: Why wasn't that provided to us in the FOI? I would have thought that the date on which minutes went from the department to the minister's office would be highly relevant.

Ms Evans : I am happy for the decision maker to correct me on this, but the way we handle FOI is to identify the specific documents and then go through a process of removing duplication and so on. These particular documents did not happen to have that date on them, and we are not in the practice of adding that information to the documents before they would be considered for FOI.

Senator ABETZ: Can I suggest you change your practice for the future, because these time lines are vital?

Senator COLBECK: Let's clear this up now. Can we go through these documents and get those dates? Let's start with 5051, which had a critical date of 13 May. It was not signed by the minister until two weeks after that. Can we get the date of preparation and the date of transmission?

Ms Evans : Yes. That was completed and provided to the minister's office on 13 May.

Senator COLBECK: Completed and provided?

Ms Evans : Correct.

Senator IAN MACDONALD: The important thing about that document, Minister, is that it says:

Industry wishes to publicly launch its program for in-market animal welfare improvement on ABC's Landline program prior to the ABC Four Corners report on the live cattle trade with Indonesia going to air later this month.

The minute was sent on 13 May, marked urgent, and you actually get round to reading it a fortnight later—14 days later—on the 27th, which is the end of the month that you are advised that the Four Corners program was actually going to air. Then you say, 'Please add to reading pack,' which suggests you didn't do more than skim it. Minister, industry clearly wanted to pre-empt the ABC Four Corners program, but your delay in even dealing with that meant that the Four Corners program, which I understand was in early June, was in play and industry had no opportunity to put its case prior to that very damaging and many allege unreal report on the Four Corners program. How do you explain your actions in relation to an industry that has suffered millions of dollars loss and to individuals who have suffered millions of dollars loss.

Senator Ludwig: Dealing with a couple of things first, I reject the assumptions that you make in your question. One, the date of signing is not consonant necessarily with the date of reading. The information flow between the department and me through that period of time had been quite significant, I think you would say, and the date of signing does not mean that the document was only read at that time. Administratively, you can sign off on a brief subsequent to dealing with it.

Senator IAN MACDONALD: Of course you can, but you usually sign it when you have read it.

CHAIR: Senator Macdonald, I would urge you to listen to the minister's answer.

Senator Ludwig: Let me finish answering the question. So, in relation to that document, the date of signing was not the date that it was first read or first actioned within my office and by me. Secondly, on the issue that you raised in relation to them, industry did announce, as you should recall, and they launched on 22 May, as you may be aware, prior to the Four Corners program. So that assumption is also incorrect.

Senator IAN MACDONALD: But why did you add, 'Please add to reading pack,' if you had read it?

Senator Ludwig: No. It is an administrative instruction. Many of the documents throughout that period I added to the reading pack so that I had them electronically and so that I could then go back and recall them and reread them. I look at the flow of documents that come to me to see what the advice is and go back and recall earlier documents, particularly where a later brief might refer to an earlier brief. It is so I have the time series before me. That is not unusual, I would suspect. Maybe others might take different approaches, but I am happy to reread documents and reflect upon them again if there is a later brief that refers to them so that I can consider them again.

Senator IAN MACDONALD: So you say that prior to 27 May you had fully read this brief?

Senator Ludwig: Yes.

Senator IAN MACDONALD: When?

Senator Ludwig: I will take that on notice.

Senator ABETZ: You were advised that we would be pursuing this, I understand from the secretariat, and that the FOI documentation would be pursued at these estimates. So we have that clear. Minister, are you unable to tell us, despite that warning, when you actually read this brief? If you cannot tell us, why shouldn't we read it as per the face of the document, because one assumes your signature of 27 May 2011 was put on the document on 27 May at the same time as you wrote, 'Please add to reading pack.'

Senator Ludwig: There are two things. Firstly, there were a range of documents coming to me from the department at the time. They are communicated electronically and then they are delivered subsequently in some instances. I will just check the records as to when it was read by me. I do not want guess when I read it, but all of these matters were dealt with urgently. It certainly was not first read on 27 May.

Senator COLBECK: Let us go to the next document, which is 4741.

Senator IAN MACDONALD: Can I just ask something before that. Minister, so all of your briefs with your signature on them would have a notation, 'Please add to reading pack'?

Senator Ludwig: Many, not all.

Senator IAN MACDONALD: So you wanted to reread some briefs but not others?

Senator Ludwig: There are many different types of briefs, as you would appreciate—

Senator IAN MACDONALD: The ones we have been given—

Senator Ludwig: That is a different question. You mentioned briefs more generally.

Senator IAN MACDONALD: No. I said if we could see your signature, meaning that in many instances your signature appears to have been redacted for some reason. Perhaps they would show that not all of these important briefs were put in the reading pile.

Senator Ludwig: It depends on the nature of the brief whether I want to reread it or reflect on it. If I think there is going to be further advice in relation to a brief I might want to put it on the iPad and read it.

Senator IAN MACDONALD: You are not seriously expecting us to believe you on this, are you?

Senator Ludwig: That is a matter for you.

Senator COLBECK: Let us go to 4741. Its critical date is 13 May. It is marked urgent. What was the date of preparation of the document and the date it was transmitted to the minister's office?

Ms Evans : This brief was prepared, finalised and transmitted to the minister's office on 29 April. I should clarify. We prepared the brief over a number of days, concluded it on 29 April and provided it to the minister's office that day.

Senator COLBECK: Minister, your signature does not appear on that document. Given it is part of the same process and there is also no note such as 'Add to reading pack,' can you tell us when you read that document.

Senator Ludwig: As I recollect—but I am happy to check to confirm it—it was a document that was specifically requested by me but then was subsequently overtaken by events.

Senator COLBECK: It is a bit hard for us to tell, because we cannot see most of it. It talks about potential consultation with colleagues, including cabinet, in a time to allow you to respond to the program. There is not too much there, because we have blacked out pages.

Dr O'Connell : That looks to be on the basis of section 47C(1), which is deliberative material.

Senator COLBECK: So this is the type of material that could be regarded as preparatory for a cabinet submission?

Dr O'Connell : Deliberative material under section 47C(1).

Senator IAN MACDONALD: Can you help us by telling us what 'deliberative material' is?

Mr Withers : Section 47C(1) concerns deliberative material. Under section 47C(1): 'A document is conditionally exempt if its disclosure under the FOI Act would disclose deliberative matter of the kind described in the section.' The document for which exemption is claimed is a minute to the minister concerning options for improvements in the live animal exports trade. It is clear from the document that it is a document which contains deliberative matter. There is material in the document in the nature of advice and recommendation to the minister for consideration of what actions the minister and the government might wish to take.

In making my decision I considered, in identifying material to which 47C applies, whether the material is operational information or purely factual information within the meaning of section 47C(2). In my view, it is not. I weighed the public interest as required under section 11A(5) of the FOI Act. There is clearly a public interest in the disclosure of the information relating to the live animal trade and the considerations of the minister and the government relevant to the decision to impose a temporary suspension. However, I believe that the options canvassed in the minute would, if disclosed, have a tendency to reveal matters considered by cabinet. I considered that the public interest in the maintenance of cabinet confidentiality outweighs the public interest in disclosure of the text of this document for which a section 47C exemption claim is maintained. I therefore considered the information exempt from release.

Senator COLBECK: But the minister told us that this document was overtaken by events and therefore as part of his rationale for not having signed it, even though he did finally get to the previous document which has the same urgent date on it on the 27th—that is, 13 May—so if it is overtaken by events, how is it then something that is deliberative?

Dr O'Connell : There is no inconsistency between those two things.

Senator HEFFERNAN: The inconsistency was the (indistinct) put on the Prime Minister's office to kill off the politics of not being in the trade. He was told (indistinct).

CHAIR: That may be an opinion. The next document we have is 5518. It is again marked 'urgent', critical date 30 May. Can you give us the date of preparation and transmission of that?

Ms Evans : Minute No. 5518 was completed on 27 May and transmitted to the minister's office on that date. That date was at the request of the minister's office.

Senator COLBECK: It was prepared and transmitted on the 27th?

Ms Evans : That is correct.

Senator COLBECK: For urgent consideration by the 30th, at the minister's request, and yet the minister did not get around to signing it off until the 6th of the following month? Can you explain that to us, Minister?

Senator Ludwig: It is the same issue as I said before. The signing does not necessarily mean that I have not read it or actioned it or spoken to the department. During that whole period I was in close discussion with the department on this issue.

Senator COLBECK: But the minute is signed, is noted, 'For decision, urgent, by 30 May,' and on 6 June you sign, 'Please discuss'—

Senator Ludwig: Well, it is relevant—

Senator COLBECK: and it says, 'For decision.'

Senator Ludwig: And many of these events were overtaken as well. But the decisions were made at the appropriate time, as you can see, and the actions that I took were—

Senator COLBECK: The evidence before us does not indicate that decisions were made in appropriate time, because the first minute was signed two weeks after it was set; the second minute was not signed at all; and the third minute is signed a week after the critical date. Let us go to 5806.

Senator ABETZ: Before you do: you say that events overtook. If you were the minister in full control, how can you overtake yourself?

Senator Ludwig: The type of information you asked for in relation to the earlier document—events in that instance overtook the type of information that I asked for, and then subsequent briefings. You can action things and then, of course, a course of action follows. That is why it was 'Please discuss', because that is what was happening during that entire period. I was in close consultation with the department and the secretary about the events as they were unfolding and the action that I was taking. It is entirely consistent.

Senator ABETZ: This is the department has given us evidence that it can prepare and deliver a brief to you on the same day. You are saying that it just gave you the odd brief, but the vast amount of your briefing was verbal?

Senator Ludwig: I am sorry; I was just distracted. Could you ask that again please?

Senator ABETZ: Yes. The department have given evidence that they are able to prepare and provide a brief to you on the same day, as most departments I think are quite capable of doing. Why do we have these briefs being overtaken without any written confirmation that that is exactly what has occurred?

Senator Ludwig: I said that in relation to that one that I requested, which is before you, redacted. Others were simply for information or for noting. In this instance, particularly the one that says it is noted and then, 'Please discuss,' that is actually what happened.

Senator ABETZ: A week later—when it was marked urgent?

Senator Ludwig: No. At the time it was noted, and of course it reflects that we discussed it.

Senator ABETZ: No, it says, 'Please discuss.' It does not say, 'Discussed'; it says, 'Please discuss.' And you signed that on 6 June, one week later. Are you now saying that we can no longer read your minutes on face value—that there is some secret meaning behind 'Please discuss' and that 'Please discuss' really means that it is past tense rather than future tense?

Senator Ludwig: There are three choices: 'Agree', 'Disagree' or 'Please discuss'.

Senator ABETZ: And you used 'Please discuss'.

Senator Ludwig: 'Please discuss' is relevantly close to the conversation that unfolded between and through this period.

Senator ABETZ: Yes, but before or after you signed the minute on 6 June? This was one week after you were given an urgent minute. You signed it off, 'Please discuss,' which would suggest that it had not been discussed as of 6 June.

Senator Ludwig: It was not following 6 June that these matters were discussed. They would have been discussed at the time.

Senator ABETZ: So this minute is in error and you are suggesting that your notation of the minute—

Senator Ludwig: No, it is not in error; it just reflects what occurred.

Senator ABETZ: It says 'please discuss'. That suggests a future action. If it said 'as discussed' that would suggest a past action. But you signed this, Minister, on 6 June, having been told that it was urgent. One week later, it has the lame notion 'please discuss', which suggests that it had not been discussed as of 6 June.

Senator Ludwig: And what I am clearly saying to you is that there was a range of discussions between me, my office and the department during this period. The time of signing and that notation was subsequent to those discussions. There would have been discussion, obviously, on 6 June when I signed off the brief. But there would have been discussions throughout that entire period.

Senator ABETZ: So why didn't you delete 'please discuss' and put an extra notation 'as discussed' so that we could read the documents and make sense of them? With great respect, Minister, this sounds like a reconstruction of events. You signed a document and circled 'please discuss'. Now you say, 'No, just because I circled please discuss does not mean that's what I meant, because I'd actually discussed the matter previously.' On what dates did you discuss the matter previously?

Senator Ludwig: Throughout that entire period from 30 May. There would have been discussion on 1 June and the following day.

Senator ABETZ: There would have been? You do not know. This is just plucking things out of the way, isn't it?

Senator Ludwig: No. There would have been discussions.

Senator ABETZ: Are there any minutes of those?

Senator Ludwig: I am sure that there are. I will take it on notice.

Senator ABETZ: Why weren't they disclosed to us in the FOI? Does anybody have an answer to that, or is it once again part of this notion that we cannot take these minutes at face value?

Dr O'Connell : The scope of the request by the looks of it was representations from animal welfare and live cattle industry groups and briefing minutes provided to the minister. Notes of meetings subsequent to that would not have been in the scope at all.

Senator ABETZ: But we were told that events overtook this. So are you saying that events took place without any—

Senator Ludwig: I said in relation to that—

Senator ABETZ: additional briefing material being provided to the minister? That sounds highly unlikely. Give that one a crack, Minister.

Senator Ludwig: If you recall, what I said was that, in relation to that one brief that I requested, events overtook that, which is why it went unsigned. Other briefs were brought forward as urgent. They were discussed with the department at the relevant time. They were either noted or the record will show what action was subsequently taken.

Senator COLBECK: So any information that was provided to you by the department during those discussions was outside the scope of this request?

Senator LUDWIG: I do not know. You would have to ask the department about the FOI request.

Senator COLBECK: I am asking Mr Withers. If advice was given to the minister as a part of that overtaking process, would they fall outside the scope of the FOI request as well? It is advice to the minister in relation to the animal welfare issues. It may have been verbal but it might have been minuted. Would that also fall outside—

Mr Withers : Oral advice is outside the scope of the request, obviously, yes.

Senator COLBECK: How is that advice recorded then? If the events are developing, how is that advice to the minister recorded?

Mr Withers : In an FOI context, oral advice is not covered by the act.

Senator COLBECK: I get that. But how is it recorded in the context of the minister making a decision? We have a minute here, 5518, that says, 'The recommendation is that the minister agree to continue working collaboratively with industry to encourage it to voluntarily improve their efforts on animal welfare, including voluntary restricting supply of Australian animals to abattoirs that ...' And so on. You can read it—it is point (d). Then (e) recommends revisiting the question of regulation. They are the recommendations. The minister on 6 June said, 'Please discuss this.' This is a week after the Four Corners program. You were still not able to make a decision at this point in time. Your advice to him, as we have it, at that stage was that the government continue to collaboratively work with industry, which I assume would reflect the legal advice that you received. How is the process of decision making by the minister recorded? What document is there that gives an indication of how the minister made his decision in relation to this? There is nothing here that shows that. There is reference to potential—

Dr O'Connell : The scope of the request was representations from animal welfare and live cattle industry groups and briefing minutes provided to the minister. That is all. There was nothing about decisions that had been made, notes of meetings or other things. So we have provided a response to the scope as agreed for the FOI. We did not go beyond that. We did not go outside of that to provide extraneous material.

Senator COLBECK: But we have documents that talk about the decisions. That is part of this process. You provided minutes to the minister on this issue to provide advice to him in relation to a decision.

Dr O'Connell : I think it is important to be clear about the scope of the request. The scope was very clear, and the response was in response to the scope of the request, which was representations and briefing minutes provided to the minister by the department relating to the live cattle export trade with Indonesia in the lead-up to the imposition of the suspension and extension of the ban.

Senator ABETZ: Let us cut through it. That is the technical thing—so be it. Why can't that information be provided now to the committee without hiding behind the limitations of the FOI request?

Dr O'Connell : Which information is that? Could you reframe the question more clearly?

Senator COLBECK: Basically the minutes of the discussions between the minister and the department as things 'evolved'.

Senator ABETZ: Or were overtook.

Dr O'Connell : I think the minister took that on notice.

Senator ABETZ: But surely the minister and his office must have that available for us, given that they were given notice that we would be pursuing this issue.

Senator Ludwig: As indicated, I will take it on notice. I will have a look at what is available. Some of it will obviously be, as earlier indicated, legal advice. As you know, there is a longstanding convention not to release legal advice. I take it that you are not asking me for that.

Senator ABETZ: Except on the Malaysian solution.

Senator COLBECK: We have not asked for it.

Senator Ludwig: There may be other issues which may be cabinet in confidence.

CHAIR: Minister, you have made that very clear. You will take it on notice.

Senator COLBECK: I just want to clarify time lines in the last two minutes. 5806 was dated by Mr Murnane on 6 June. Is that correct?

Ms Evans : That is correct.

Senator COLBECK: That was transmitted in a different manner. Was that the date of preparation and the date of transmission?

Ms Evans : Yes, that is correct.

Senator COLBECK: So those two dates are the same?

Ms Evans :Yes.

Senator COLBECK: Again, that was for urgent consideration by the minister by 6 June. So that was obviously something that was requested pretty quickly, but it was not signed off until 10 June.

Senator Ludwig: It is for the same reason, that we would have been in discussion with the department during the entire period. The date of signing does not indicate the date when it was read or, depending on the type of information provided within it, there was any action or it was dealt with in some way.

Senator COLBECK: Can we go to 5793. What were the dates on that?

Ms Evans : Brief 5793 was finalised on 6 June and provided to the minister's office on 6 June.

Senator ABETZ: And the minister signed off on it on 6 June.

Senator COLBECK: Sounds like 6 June was a busy day, because we have two or three documents signed off—

Ms Evans : If I may add some context to that. As the minister has been saying there had been a number of discussions over the days preceding this window of time, particularly around 6 June. A number of the briefs—which I have clarified—were provided to the office on 6 June, which did in fact document the nature of discussions we had already been having with the minister over the preceding period of time.

Senator ABETZ: For my purposes, on brief 5518—I think it is only because of photocopying—we are told 'critical date 30 May 2011'. What does 'critical date' tell me? Was that the date you transmitted it to the minister's office?

Ms Evans : No, the date we transmitted this particular brief to the minister's office was 27 May. Because we were flagging that it was advice that related to the forthcoming Four Corners report we flagged that the critical date, perhaps, for consideration might be 30 May.

Senator COLBECK: You have talked about events moving and overtaking the advice you had received. Does that also relate to the legal advice you had received? Did events actually overtake that as well? So, was there any requirement for further legal advice as this process had continued?

Ms Evans : In relation to his particular brief, this was a particular set of options, and further advice that was different to the advice in this particular minute was obtained at other points in time as events proceeded.

Senator COLBECK: Can you give us the dates of those pieces of legal advice.

Ms Evans : I would have to take that on notice.

Dr O'Connell : To clarify Ms Evans's comments, we are talking about legal advice to the department—

Ms Evans : That is correct—

Dr O'Connell : and not directed legal advice to the minister. Some, as we have discussed, would have been transmitted to the minister in a context briefing. Others would have been for our own purposes.

Senator COLBECK: I can understand that it would be legal advice to the minister, but would it not be reasonable to presume—and I know that is always dangerous—that that legal advice would in some way be reflected in the advice the minister was receiving from the department?

Ms Evans : That is correct. That is why there are redactions in this document. It is because it did go to the question of legal privilege. So, in this particular case the redactions reflect the removal of the legal advice itself.

Senator COLBECK: That also relates to the items that are noted in (a), (b) and (c) in 5518?

Ms Evans : Yes, that is correct. Although I should be clear that the recommendations were of course that of the department summarising or paraphrasing the legal advice.

Senator COLBECK: But at that stage, which is 30 May, the day before the airing of the Four Corners program, the department's advice was that the government continue to work collaboratively with industry?

Ms Evans : It is worth focusing. If you look at the second page of that brief, I think it makes it clear that it was an on balance recommendation from the department. We were weighing up a lot of considerations about the options available for regulatory action and the nature of the plan, or draft plan, we had in front of us at the time. At that stage, based on the information we had, we thought there continued to be merit at that point in continuing to work collaboratively with industry. We are very clear—I point you to the third page of the same brief, 5518, to the sentence directly above the final redactions on the page. The brief clearly states, even then:

In the event that industry is unwilling to provide this level of clarity—

and that is explained in the paragraph above, about what we were looking for. We were after plans to be publicly available, to include detailed implementation plans, that they would be publicly reporting on progress towards achieving their goals and so on. We had quite a long list of things that we saw as needing to be improved in the plan that we had in front of us at that point in time, and we very clearly said in the brief that if the industry were not able to provide that level of clarity or deliver on the plans then there were a number of regulatory options that the minister could consider. So I just have to stress again that it was a point in time and the department's advice was on balance, based on what we had in front of us on 27 May that, at that point, continuing to work collaboratively with industry seemed to be the right way to go.

Senator COLBECK: But by the same token 'unwilling' and 'unable' are two different things. Are you saying the industry was unwilling to do those things that we are not allowed to see?

Ms Evans : We proceeded over the next few days, and subsequent to a series of changes in the landscape, to meet with industry and to review their plan and what they intended to do. In particular, when they brought forward a revised picture of what they wanted to do, which my recollection was on 3 June, we revisited that proposal from the industry and identified a whole series of continuing gaps and concerns. At that point, when we had become aware of the nature of the footage and the nature of the concerns in Indonesia, in our view, as the department, there were still really substantial gaps in the type of proposal that the industry was putting forward, and we advised the minister accordingly.

Senator COLBECK: So when did you actually become aware of the footage and have available the footage?

Ms Evans : I have answered this question once before but, so that you are aware, the footage was not provided to the department in advance of its showing on the Four Corners program. I attended a meeting with the minister and representatives from RSPCA and Animals Australia on 30 May, so on the day that the footage was shown on Four Corners. That day a DVD was provided to the office, not to the department, and a member of my staff was able to view the DVD with—

Senator COLBECK: So that is on the day of—

Ms Evans : On the day of the Four Corners report, and my understanding is that the footage on the DVD did not match the footage that was actually shown on Four Corners. So we did not see the material that was on the Four Corners report until it was shown on ABC.

Senator COLBECK: Minister, when were you offered the footage? When did you have the opportunity to see the footage?

Senator Ludwig: At the same time.

Senator COLBECK: So you were not offered the opportunity to view the footage prior to the showing of Four Corners?

Senator Ludwig: We had requested that. We were aware that there was video footage around. We had requested it and it was not made available. The earliest it was made available was on the 30th.

Senator ABETZ: At what time?

Ms Evans : My recollection is the meeting was around 11.30 in the morning and I think the footage was seen by the office perhaps later that day, in the afternoon.

Senator COLBECK: So Four Corners did not offer you, Minister, the opportunity to view the footage?

Senator Ludwig: They offered me, as I recollect, an opportunity to look at the footage not much earlier than that. I cannot quite recall the date but I can get it for you, but predicated on the basis that I then provide an interview as well. So it was conditional.

Senator COLBECK: How many days before the airing of the show were you provided that opportunity?

Senator Ludwig: I will check the records on that. It was not a long period.

Senator COLBECK: Was it a week?

Senator Ludwig: I will check the records.

Senator HEFFERNAN: Can that be considered to be an inducement?

Senator Ludwig: Well, I was not—

Senator HEFFERNAN: You did not take up the inducement, but—

Senator Ludwig: I asked for the footage. The footage should have been made available to the department for investigation. That is what the footage should have been made available for.

Senator COLBECK: I agree with that. I also asked for the footage, so you are not on your own. But I am interested to know at what point in time you were offered the opportunity of having a look at it.

Senator Ludwig: It is my recollection that was not from Animals Australia, that was from the Four Corners program. We had requested the footage from Animals Australia, but it was not made available to the department. I had asked for it for the purposes of having it investigated to verify the issues that it raised because, of course, the allegations were very serious and we take all of those allegations very seriously. There was no evidence upon which to act until after the information was made available—that is, the video footage and the Four Corners program, which as you have indicated was also additional footage.

Senator ABETZ: Who provided the DVD that was delivered to your office at 11.30 on 30 May?

Ms Evans : Yes, the DVD was handed over by Heather Neil of the RSPCA.

Senator ABETZ: What were the material differences between that DVD and that which the ABC aired later that night?

Ms Evans : I am not able to give you a detailed comparison—

Senator ABETZ: But was it similar in nature?

Ms Evans : It was similar in nature, but the actual footage that was shown on Four Corners was not necessarily on the DVD that was provided.

Senator HEFFERNAN: You are aware that this was shopped around before it got to you? Some members of the Senate had seen the footage a month or so before.

Senator Ludwig: I understand former senator Helen Coonan—I am not sure whether she had or had not, but I understand a range of senators had been offered it.

CHAIR: As we all understood there to—

Senator HEFFERNAN: It was a perfectly prepared ambush of the industry. My question is: can you confirm that animal cruelty in Australia is a criminal offence?

Senator Ludwig: It would be state regulation.

Senator HEFFERNAN: Is that a yes? A near neighbour of mine was put in jail—

Senator Ludwig: I am not hesitating to answer your question; I do not deal with state regulations dealing with animal welfare, but I think you could presume it would be.

Senator ABETZ: Let us take it as given.

Senator HEFFERNAN: If I have information that I decide could be a criminal offence and I do not go to the correct reporting authorities for that information when I receive it, I then prospect myself as a felon under the Crimes Act. Couldn't those thoughts be brought to this case? If it was shopped around for months—the whole prospect of this for the perfect ambush—doesn't felony come into play?

CHAIR: Senator Heffernan, your question is grounded and I know it very emotive out there; I have travelled with you. I suggest that is probably a different department you may want to take it up with.

Senator HEFFERNAN: The department has legal advice.

CHAIR: I am not going to get caught down on that.

Senator ABETZ: A lot of cruelty occurred overseas.

CHAIR: We do have a lot of questions, Senator Abetz—

Senator HEFFERNAN: Okay, I surrender.

CHAIR: and after Senator Colbeck finishes his questions I am going to Senator Rhiannon.

Senator COLBECK: Going back to the minute we were just discussing and you got to page 3:

In the event that industry is unwilling to provide this level of clarity, or to deliver on these plans, a number of regulatory options are available.

Can you tell us what the industry was prepared to do?

Senator Ludwig: One of them was to meet OIE standards by 2015.

Senator COLBECK: That is early in the piece, Minister. That is in a document that was well ahead of this stuff. It goes back to one of the initial—

Senator Ludwig: I will check on that, but I am not sure that is correct. The department can respond.

Ms Evans : The other brief that was released as part of the freedom of information pack, which is brief No. 5051, goes to the strategic vision for any market animal welfare. That was the original plan provided by the industry.

Senator COLBECK: That is correct; that is that is the original plan. We discussed that at budget estimates. We had a fairly significant discussion about that.

Ms Evans : There was a further plan provided on 3 June—

Senator COLBECK: 3 June?

Ms Evans : yes—which I presume there would be no issue in my tabling. I am happy to provide that for you. Unfortunately, the copy that I have—

Senator Ludwig: I think you can ask for it.

Ms Evans : has some hand annotations on it, so I might provide you with a clean one.

Senator Ludwig: I think, if you ask for it, there is no reason for the department not to provide it.

Senator COLBECK: No, I do not think there is an issue around that document.

Senator Ludwig: I am not going to intervene.

Ms Evans : Perhaps I can give you a flavour of some of the concerns that we had about the version of the plan that we saw on 3 June. That might give you a sense of where we were at.

Senator COLBECK: Yes. The point I would like to make, though, is that, given that that minute at the outset was saying, 'To continue to work collaboratively with industry,' and, by the minister's own admission, even if he had not signed off most of those minutes by their due dates, things were evolving fairly quickly, you get the sense in reading these documents that there was a sense of industry and the government working together and yet, all of a sudden, on 7 June, we ended up with a ban being imposed on the industry and we are now cleaning up the mess.

Senator Ludwig: It was a suspension; it was not a ban. There are entirely different issues.

Senator COLBECK: A rose by any other name, Minister.

Senator Ludwig: Well, no.

Senator Heffernan interjecting

Senator Ludwig: Because the trade was recommenced. Clearly it was not a ban; it was a suspension. A ban would denote something that was not going to be re-enlivened. In this instance, it was re-enlivened. But it would be worth—

Senator ABETZ: So you cannot have a temporary ban?

Senator Ludwig: That is a different name.

Senator ABETZ: You cannot have a temporary ban.

Senator COLBECK: I think I go back to my—

CHAIR: Senators, I advise that the time we have—

Senator HEFFERNAN: The state governments were not consulted.

CHAIR: With the greatest of respect, we have had a lengthy debate here.

Senator HEFFERNAN: The state government of Queensland was not consulted—

CHAIR: Senator Colbeck, do you have any further questions?

Senator Heffernan interjecting

Senator COLBECK: I do have some further questions. I am waiting for the answer to my question.

Senator Ludwig: The department were still waiting to respond to your original question, so it would be helpful if they were allowed to do so.

Senator HEFFERNAN: Before the ban was put in place, can you confirm that—

Senator Ludwig: We are just going to go to the evidence from the department, and then we will get to the next question.

Senator HEFFERNAN: Can you just confirm, before we get to the next question—

Senator Ludwig: No, we will deal with this question first.

Senator HEFFERNAN: that the Queensland government, the Northern Territory government and the Western Australian government were not consulted before the ban was put in place? When you are ready to answer that—whenever you are ready.

Senator Ludwig: We will get to that question.

CHAIR: Senator Colbeck?

Senator COLBECK: I think I have a question almost on notice!

Dr O'Connell : We were going to table the industry report?

Senator COLBECK: Yes, and I think there was also—I am asking about—

Senator Ludwig: The officer was going to give you, in her words, 'a flavour of the document' and then the concerns that they had with it.

Senator COLBECK: Yes.

Ms Evans : I can do that. When we saw the version of the plan provided to us on 3 June, which was not substantially different from the plan that had been provided earlier—

Senator COLBECK: By the way, is that dated May 2011?

Ms Evans : No, I think the plan that you are referring to dated May 2011 is the one that is the subject of the earlier brief. I have a version of the plan that is dated 3 June, which I will arrange to have—

Senator COLBECK: Obviously things were evolving. We had an initial plan, then we had a May version and then there was another iteration by 3 June, so things were moving.

Ms Evans : That is correct. On 3 June—you can appreciate that this is a plan that comes after the Four Corners report, so—

Senator COLBECK: Yes, I understand that.

Ms Evans : everyone is now in full knowledge of the nature of the issue that is at hand. Our concern, once we saw that version of the plan, was that we supported the notion that there would be OIE standards in place, but the plan did not give any idea or any indication of how that would be achieved or how the judgment would be made about how current practices met or did not meet OIE standards. The plan also seemed to entrench the use of mark I restraining boxes, which at that stage we had started to understand would not meet the OIE standards, and that is the subject of the brief also included in the freedom of information release—

Senator COLBECK: Yes, that is the final—

Ms Evans : the final one dated 6 June. So you can appreciate that we had started to be aware of the likely direction of that briefing. The plan at that stage relied on those mark I boxes being able to meet OIE standards. There was no precision in the time lines either for its commencement or for meeting any of the milestones. There was no specific commitment to raising what they were calling category B abattoirs up to a standard of what they were calling category A, to an acceptable standard. They didn't appear to have any publicly auditable reporting or monitoring of performance against their plan. And they had no discussion in their plan on the animal welfare practices up to the point of slaughter, which are required by the OIE guidelines. It wasn't clear to us how the compliance regime would be working and it appeared to be entirely based on industry's own approach.

Those were our concerns, but we did acknowledge that there were some positives in the plan as well. We thought that the concept of accreditation that they put forward had some merit and was worth looking at further. The idea of using verification, the idea of using independent assessment of the animal welfare practices, the idea of using OIE and the fact that industry was prepared to support or make a financial contribution to working on improvements were all useful. The plan also acknowledged that the mark 1 boxes were not the best available technology and that they were likely to use an NLIS-style approach to tracking cattle. So there were some positives but at that point our view as a department was that, overall, the plan really lacked the substance, detail and precision that would be necessary to be acceptable to the minister.

Senator COLBECK: Going to the minute you referred to, the one provided on 6 June in relation to mark 1 restraint boxes, were any external stakeholders consulted in the preparation of that?

Dr Schipp : There was no external consultation during the process of preparing these reports, beyond sourcing material for their preparation.

Senator COLBECK: So it was effectively a desktop process based on information you already had?

Dr Schipp : No, it was based on information that we could source from both industry and the animal welfare groups.

Senator COLBECK: So it was based on the footage from Animals Australia and the ABC and also on information that you had from industry.

Dr Schipp : Yes. We obtained further video footage from Meat and Livestock Australia, still footage and design specifications and reports.

Senator COLBECK: The note says that this is a preliminary analysis. Was a final analysis prepared for the minister?

Dr Schipp : There was, yes.

Senator COLBECK: When was that provided?

Dr Schipp : It was released on 26 August and is available on the DAFF web site.

Senator COLBECK: 26 August?

Dr Schipp : Yes.

Senator COLBECK: Was the preliminary advice something that was used as part of the cabinet decision to discontinue the trade?

Dr Schipp : I am not able to comment on the cabinet process. Just to correct my previous statement: it was released on 24 August.

Senator COLBECK: I noticed the minister being distracted by something else on that question. You don't have a response to that?

Senator Ludwig: I'm not going to the workings of cabinet or cabinet deliberations.

Senator COLBECK: The committee is interested—

Senator Ludwig: I understand your interest, but it is a long-standing convention. You respected it; so do I.

Senator COLBECK: I am respecting it, Minister, but these documents quite clearly can indicate whether or not there was a cabinet document, and there is no mention of a cabinet document in any of these documents.

Senator Ludwig: I'll take that on notice.

Senator COLBECK: I want to know whether there were documents that went to cabinet as part of the decision-making process, because this FOI process does not refer to any documents that went to cabinet. All it refers to is documents that may have formed part of preparations for briefing for a cabinet process. So I want to know whether anything went to cabinet or not.

Senator Ludwig: As I have indicated, it is a matter for cabinet. I will check as to what we can say.

Senator ABETZ: We do not know what went to cabinet.

Senator COLBECK: We want to know whether anything went to cabinet.

Senator ABETZ: We are entitled to know whether (1) anything was prepared for cabinet and (2) whether anything was prepared for cabinet, without knowing what it was, and whether it went to cabinet. Those are two specific technical questions, to which we are entitled to an answer. I have no doubt the secretary would be able to give us an answer to that.

Senator COLBECK: And, Minister—

CHAIR: We are running out of time, Senator Colbeck. I would urge you—

Senator Ludwig: I will take it on notice.

CHAIR: You have had the answer.

Senator ABETZ: Minister, please. You do not need to take that on notice. Can you give an explanation. I am entitled to ask—

CHAIR: You had an answer, whether or not you liked it.

Senator ABETZ: I am entitled to ask—

CHAIR: I have been more than fair here. I have been very patient. You have asked; you have got an answer. If you did not like the answer, stiff.

Senator ABETZ: I am entitled to ask why the question has to be taken on notice.

Senator COLBECK: Absolutely.

Senator ABETZ: Because the minister does not know. There is no official sitting beside him or behind him who knows the answer to the question. Why do you need to take it on notice, Minister?

Senator Ludwig: First of all, it is your consideration as to whether or not I can say whether a document has gone to cabinet. I do not accept that at face value. I will go away and check that myself.

CHAIR: Do you have any further questions? If not, I will go to Senator Rhiannon.

Senator COLBECK: I would like the minister to come back to us after the lunch break with that information.

CHAIR: You can put in your request. The minister has answered the question.

Senator Ludwig: I will see what I can do in the time available.

Senator RHIANNON: Minister, I am interested in your response on plans for the future of the livestock industry. Are you aware that the Queensland Minister for Agriculture, Food and Regional Economies, Tim Mulherin, has stated:

Over-dependence on a single export market and the lack of competition for meat processing capacity … are significant issues for the industry.

Do you agree with that?

Senator Ludwig: I have a broad recollection of Minister Mulherin making a similar statement to that. I cannot recollect when and in what document it appears. But I am sure you could tell me.

Senator RHIANNON: He was making those comments publicly in July and he was talking about the need for strategically—

Senator Ludwig: As I indicated, I am sure I have read it in the same public documents that you may have read it in.

Senator RHIANNON: He talks about the need for strategically located abattoirs and how it could give access to millions of cattle in North Queensland and, obviously, the possibility of generating jobs in the area. I am interested in your thoughts on the future of the livestock industry, particularly in Northern Australia.

Senator Ludwig: More broadly, I support the continuation of the export of live animals into various markets. The actions that I have taken have clearly ensured that we now have a regulatory framework in place that ensures animal welfare outcomes. They do have elements which the industry plan lacked, including traceability. It did not have a plan that included confidence that, when the cattle or animal left Australia, it went through a supply chain that was—

Senator RHIANNON: But, Minister, my question was specifically within—

Senator Ludwig: Let me answer the question. I think it is important to put it in that frame.

Senator RHIANNON: But my question was specifically about the future of the industry within Australia.

Senator Ludwig: That is a different question. I am happy to answer that one, but that was not your primary question, which I have not finished answering. I think it is important to recognise that it is about ensuring that there is accountability, reportability and also independent auditing of the supply chain throughout the system which we now have, plus a compliance model to ensure that the supply chain is transparent and does have transparency.

In relation to your second question, I do understand that there are a range of commercial interests who are looking at establishing abattoirs across the north. There is a northern beef strategy. It is in a different portfolio to mine, but a range of work are on foot about looking at all of these options, about broadening and deepening the industry right across and in the north of Australia. These have been going on for some time. The minister responsible is Minister Crean. He is the lead minister. The lead department is the RDA. Of course, it is supported by my department in many of these issues. I am not sure that we have the relevant people here at the table, but we can add to that answer at the relevant time.

Senator RHIANNON: Thank you, Minister. Dr O'Connell, I have a question about salmonella and the sheep. Is it the case that otherwise healthy sheep carrying salmonella can be loaded undetected on to a live export vessel? I am also interested in the context, because I understand that there is a vaccine for salmonella registered for cattle that could be used for sheep prior to loading for export. If it was used, that would clearly reduce the suffering of animals with that disease. I am interested in progress in that area.

Dr O'Connell : I will pass that over the Dr Mark Schipp.

Dr Schipp : To answer the first part of your question, yes, it is possible that sheep that are not yet expressing salmonellosis will express it once they are put on board and are under stress. It is also possible for there to be rapid spread of salmonellosis within a stressed group of sheep. Once it starts in a pen, it is ideal to move affected sheep out to prevent spread to other sheep. I am not able to answer your second question on the vaccine. I do not know whether a vaccine registered for cattle is efficacious in sheep. I will have to take that on notice.

Senator RHIANNON: From what I understand about how this works presently, sheep that look as though they are in good condition are selected. We cull the scouring sheep. We have one veterinarian on board. They are provided with some antibiotics. Then, basically, we hoped for the best. That seems to be the regime that is in place. As you have acknowledged in your answer to my first question, when sheep are under stress, which is clearly the situation, there can be an outbreak of the disease, terrible suffering and the loss of the livestock. Is that the regime that we are living with at the moment?

Dr Schipp : I can answer the disease questions. I cannot go into the issue of live export conditions. I would have to call on the general manager for that area in terms of the Australian standard for export of livestock and review of that standard. But I can address your previous question.

Senator HEFFERNAN: Can I add to that? Would that explanation include the new ban that we have out of the western division in certain months of the year on live sheep export and the impact that that has had on—

Dr Schipp : I did not hear the last part, I am sorry.

Senator HEFFERNAN: As you would be aware, we now have a ban on sheep coming out of the western division for some months of the year, which is a bit of a pain in the arse to those people.

Dr Schipp : Yes.

Senator HEFFERNAN: Has that had an impact on better animal welfare? Are we on the job, in other words?

Dr Schipp : It has had positive outcomes in terms of live animal export mortalities. I take your point that it is an inconvenience for those processors.

Senator HEFFERNAN: Which the industry has worn.

Senator RHIANNON: Going back to the secretary, I understand that you have to sign off on the approval necessary for the sheep to be sourced and eventually exported. When the risk of disease outbreak cannot be acceptably addressed, how can you do that reliably?

Ms Cale : To be clear, the secretary or the secretary's delegate signs off on the approved exports program, which outlines how the sheep or other animals are to be prepared for export. Could you repeat your question, please.

Senator RHIANNON: It is specifically on that issue of the sign off. On what grounds do you sign off the approval necessary for the sheep to be sourced and exported when the risk of disease outbreak cannot be acceptably addressed?

Ms Cale : The secretary or the delegate signs off on the measures that need to be taken or the conditions that need to be followed to prepare those animals for export. Those conditions and the Australian standards for the export of livestock are such that they strive to address the welfare and health aspects of the animals to be exported.

Senator RHIANNON: But in the case of salmonellosis, because it is unknown, if the ship is infected we can have a severe outbreak and nothing can be done about it. Nothing effectively is done about it. So we have this serious problem here that your sign-off method does not take into account.

Ms Cale : The sign-off identifies how those animals are to be prepared. The inspection is a fairly important part of the process. At the stage when the AQIS-accredited veterinarians and the AQIS veterinarians inspect animals at the registered premise they can identify to the best of their ability animals that may have some—

Senator RHIANNON: But I thought that was the whole issue with this disease—that at that point the sheep present healthy but can be loaded, and the export process starts, but the disease does not manifest itself until the animals are under the stress conditions.

Ms Cale : In cases in which we do hit the mortality rate, if you like—or exceed the acceptable mortality rate—then extra conditions are often placed on the subsequent consignments. There is also, as you alluded to, vaccines or additional measures that can be taken onboard when there are signs of outbreak. Animals can be fed extra chaff et cetera to try to manage the problem at the time. But subsequent to any mortality event there can be conditions placed on the subsequent NOIs.

Senator RHIANNON: Could you please take on notice and inform us of what those conditions are?

Ms Cale : Sure.

Senator RHIANNON: Minister, I understand that a letter was written to the government by Her Royal Highness Princess Alia of Jordan saying that the broader implementation of stunning throughout the Middle East would be assisted if Australia required stunning as part of our export agreements. Could you inform the committee of whether government officials or you yourself have communicated with Princess Alia with regard to the feasibility of expanding stunning to other Middle Eastern countries?

Senator Ludwig: I might just get Paul to run through where we are up to.

Mr Morris : There has been quite a bit of communication with Princess Alia over time. What was the date of that letter?

Senator RHIANNON: I do not have the date here, I am sorry.

Mr Morris : I know from my own experience in talking to Princess Alia and from communications with her that she has been a very good advocate for animal welfare and in particular for stunning in Jordan and more broadly in the Middle East. But, as you may be aware, a number of those countries in the Middle East have quite firm views about the consistency of stunning with halal slaughter practices. So while Jordan allows stunning, a number of those other countries do not currently allow stunning. Specifically on your question, there has been quite a bit of communication with Princess Alia over a number of years around these matters.

Senator RHIANNON: Could you take it on notice to provide the committee with an update on the nature of that communication—when it happened and what the essence of the communication was?

Mr Morris : We certainly can, yes.

Senator RHIANNON: Just to stay with this issue of stunning in the Middle East, I understand that the major importers of live animals in the Middle East are also the major importers of chilled Australian meat, which has been stunned. What discussions have government officials had with these importers? You mentioned that not all countries in the Middle East, because of their varying traditions, will accept it. But I understand that the Kuwait Livestock Transport and Trading Company, Al Mawashi in Qatar and the Bahrain Livestock Company are all involved in the import of meat that has been stunned.

Mr Morris : Australia certainly exports both meat and live animals to the Middle East. At the moment they are meeting differing market demands in the Middle East, so it is likely that there will be an active trade in both animals and meat for some time to come. I understand that some of the importers are involved in meat as well as the live animal trade.

Senator RHIANNON: But the point here is about the stunning—that the processed meat is being sourced from animals for which stunning is part of the killing process.

Mr Morris : In Australia, we allow unstunned slaughter for sheep, and so—

Senator RHIANNON: But does that occur for export?

Mr Morris : We do export meat—

Senator RHIANNON: Is some of the meat that is exported sourced from unstunned animals?

Mr Morris : Yes, into the Middle East. I am talking about sheep here, because for cattle we do not have pre-slaughter stunning—but we have post-cut stunning in Australia for cattle.

Senator RHIANNON: Are you suggesting that the processed meat going into Kuwait, Qatar and Bahrain is sourced from unstunned animals?

Mr Morris : Unfortunately our data is not clear enough to indicate that for certain. We have looked at this question before. We certainly do export kosher slaughtered meat, which is unstunned meat, into Israel. At the moment, there is quite a bit of trade in unstunned slaughtered sheep, or meat, into that country. For the Middle East, we would have to see if we can double-check on exactly what the nature of the export is there, but it is possible some of it will be unstunned. Some of it may be stunned, but, as I understand it, we would have to take that on notice.

Senator HEFFERNAN: You are referring to sheep and not cattle, aren't you?

Mr Morris : Just to clarify it, we do allow unstunned slaughter of sheep in Australia. For cattle, we do allow, for ritual slaughter purposes, stunning to occur after the cut has been done, so it is a post-cut stunning. We require it in fact. So there is a slightly different situation for cattle than for sheep in Australia.

Senator RHIANNON: So you will take on notice the quantities of the chilled Australian meat that are stunned and unstunned?

Mr Morris : We will try and identify it. We have looked at that question before. If we can identify it, we will certainly advise you.

Senator RHIANNON: I understand that the DAFF budget statements provide that 100 per cent of funds have been allocated to deliver capacity building and technical assistance projects to improve animal welfare in the Middle East and south-east Asian countries through the Live Trade Animal Welfare Partnership program. Could you provide details on how these funds have been allocated between those countries?

Ms Evans : I can.

Senator RHIANNON: I am happy if you take that on notice.

Ms Evans : All of the information about the projects that have been allocated is publicly available on the web. I am happy to provide that for you in hard copy this afternoon.

Senator RHIANNON: Thank you very much. I understand that the Meat and Livestock Australia reports between 2004 and 2010 did consistently highlight significant welfare problems at the point of slaughter in Indonesia. You have explored some of these details in previous answers, but I am interested in considering the length of time that that material was being presented for. What action was taken by the department in response to such a lengthy period of information being presented to you?

Mr Morris : I think the policy over that period of time by a number of governments was to try and work with the countries we were exporting animals to to try and improve animal welfare, and so the industry and the government were closely involved in looking at how we could improve the animal welfare standards in those countries beyond where they were at the time. So there has been quite a lot of effort. But the policy at the time was towards an improvement in animal welfare.

Senator RHIANNON: If that was the policy, you would have to say that that has largely failed. Is that what you would conclude, considering the evidence that came out as a result of the Four Corners investigation?

CHAIR: I think you are asking for an opinion there, Senator Rhiannon.

Senator RHIANNON: Okay. I am happy to move on. I would just like to ask about the independent auditors. Are the newly prescribed independent auditors to be paid by the live exporters?

Mr Morris : The auditors are paid by industry. They could be paid by the exporters or they could be paid by the importers or anyone else, but not by the government.

Senator RHIANNON: Do you see there being a potential problem there? Would it have been wiser for the fee or levy to be imposed on exporters to fund the financing by government of truly independent auditors? Shouldn't that be the key thing we are aiming for here?

Senator Ludwig: They are truly independent auditors.

Senator RHIANNON: But considering their form of pay, Minister, doesn't this raise potential problems?

Senator Ludwig: These are internationally renowned organisations that do independent auditing. The underlying assumption is that you are suggesting that a payment by a particular body that is seeking the independent audit would influence their decision. I think they would reject that and I would reject that on their behalf. They do many audits outside of this industry across many industries. They are responsible for auditing, such as the AS 9000—all of those. Why would they put their independence and their auditing capability at risk. I will let the department answer it, but I find that the substance of the question throws in doubt what the independent auditor's role is. They are independent.

Senator RHIANNON: The whole era of such massive deregulation when government stepped back from having a more hands-on role certainly highlights the problem one has when such a close relationship comes when you have direct payments. Do you accept that?

Senator Ludwig: They are independent organisations. They are very large, sophisticated organisations that undertake a range of independent auditing across the globe. As a consequence of that I could not imagine where they would risk or jeopardise a small piece of a small contract for the sake of their international reputation. The substance of your question seems to suggest they would. I could not see where a large organisation that audits AS 9000 and AS 9001 across many manufacturers and all the other industries you could imagine, including the coal industry, would put that at risk for a very small slither of work in this area. It defies imagination. But that seems to be what you are suggesting. But forgive me for interceding as the department was going to provide a response.

Mr Morris : I think that is our answer!

Senator RHIANNON: What prosecutions, disciplinary proceedings or action of any substance have been undertaken by the federal department or its delegate, AQIS, in relation to breaches of live-export animal welfare standards prescribed by the department secretary?

Mr Morris : We would have to take that on notice, because it would be quite a list in terms of actions that are taken in the event of problems with compliance for exports of animals. I would note, though, that this is the first time we have had a framework that applies in another country, in terms of the Indonesian framework. The actions to date have been around the existing policy framework, which involves the preparation and export up to the point of arrival in the importing country.

CHAIR: We have run out of time, but I have agreed with Senator Colbeck that there are a couple of questions to be put on notice. Senator Abetz may have some.

Senator COLBECK: Just following on from Senator Rhiannon in relation to the data that has been collected in Indonesia as a result of this closed-loop process. Senator Rhiannon was talking about the auditors of that data. Has the department viewed any of that information, or, what plans does the department have to view any of that data?

Mr Morris : We certainly have plans to receive that data, and we have been receiving some information. As part of the notice of intention process for export, there are the independent audit reports that are done for the initial assessment of the supply chains. So we have independent audit reports pre export of animals. In Indonesia they have a rule where the animals have to remain in a feedlot for 60 days before they go to slaughter. The first animals were exported on 10 August, so we are just getting to that period now where animals are starting to go to slaughter. There will be independent audit reports received either after all the animals are slaughtered or after 180 days, whichever comes first. We will be receiving that sort of information. We will also be provided with an end-of-consignment report from the exporter, and that information will also be available. But, because, as I said, of the stage of the process we are at the moment, the information we mainly have is those initial audit reports.

Senator COLBECK: So it is a progressive process?

Mr Morris : Yes.

Senator COLBECK: I want to add to my question on notice to the minister in relation to the cabinet process. I wonder if the minister would be able to give us advice on the correctness or otherwise of the statement in the story in the Australian on 2 July which said:

Cabinet made the decision … without written submissions and without options other than a total ban.

Senator Ludwig: I am not going to discuss cabinet deliberations.

Senator COLBECK: Perhaps that is because one of the key suspects for advising of that information was not present that day, which is also indicated in the Australian. Further, it says in the Australian—and this is directed to you, Dr O'Connell:

An internal briefing dated June 21 demonstrated how ill-prepared Ludwig's office was for the impact of the decision. It shows the Australian Bureau of Agricultural and Resource Economics and Sciences—


began surveying farmers so they could 'determine the effects on farm businesses of the suspension of trade to Indonesia'—two weeks after the ban was enacted.

Is it correct that information was being gathered two weeks after the ban was enacted? Perhaps we might have to come back and talk to Mr Glyde later.

Mr Morris : You will see that in one of the documents released as part of the FOI there was information provided about the possible impacts on industry of various options. That was in one of the documents. I would have to find it for you, but it was in there.

Senator COLBECK: I will go back and have a look.

Mr Morris : The relevant document was 5806. There was some information available at the time. Subsequent to the decision on the suspension being made, it was decided there needed to be more on-the-ground information as to the actual impact that the suspension was having as opposed to speculating about it, reading about it in the media or gathering it from other sources. We actually decided to go out, do the survey and collect some real on-the-ground information, and that was the basis of the ABARES survey, which would supplement information we were getting from other sources such as state and territory governments, industry and directly from the individuals affected.

Senator COLBECK: On notice, could the minister consider the not relevant stuff in 5806 over the lunch break as well?

Senator NASH: I want to ask some questions around the financial hardship that was created from the ban. One of the impacts of that ban was on families either educating their children at home through the School of the Air or who, in these remote locations, have no choice but to send their secondary school children away to boarding school. Has the department looked at that issue specifically?

Mr Aldred : As we have provided to the select committee, there is a range of assistance measures—

Senator NASH: No. I am really conscious of time. What I want to know is: have you addressed the issue of the costs incurred by families in these remote areas that have been affected by the ban financially? Have you specifically addressed that issue? Did you consider it in any way, shape or form as needing separate assistance to the overall assistance bucket?

Mr Aldred : Not as specific separate assistance but as part of the overall assistance that is available.

Senator NASH: So within the department you said, 'This is an issue for families. These costs are being borne by families. Financial difficulty has been created by the ban to educate these children at home in School of the Air. Often spouses have had to go out and work on the farm and so that has created a real difficulty and so the financial difficulty from boarding costs have specifically been addressed by the department within the overall bucket.'

Mr Aldred : As I said, we were aware of a range of cost pressures.

Senator NASH: Were you aware of that one?

Mr Aldred : Yes.

Senator NASH: So within the current arrangements then what sort of figure or value are you saying may be borne out of the bigger bucket to address these issues of education costs?

Mr Aldred : We do not specify the use of either the $5,000 or the $20,000—

Senator NASH: Do you have any idea of the average costs for these families to either have a governess at home for School of the Air or have their children away at boarding school?

Mr Aldred : I am not sure that we have a specific figure.

Senator NASH: If you do not have a specific figure, how have you rolled it into the overall bucket?

Mr Aldred : As I said, we were aware of a range of cost pressures. We did not try to itemise every cost that may be borne by each individual family and then calculate our assistance payment.

Senator NASH: But these education costs will only relate to some families. So if you are giving an overall figure in general across all farming families who have been affected by the ban education costs are an extra cost for some of these families over and above those general costs that you have taken into account, so surely this should have been addressed specifically?

Mr Aldred : Not necessarily. Obviously some families will have those cost pressures; others will have other particular cost pressures. What we were seeking to do through the $5,000 and $20,000 assistance payments was provide an allocation and relatively few rules around the disposition of those funds.

Senator NASH: Just refresh my memory: how does that $20,000 payment work?

Mr Aldred : If someone has already accessed the $5,000 business assistance payment, the business hardship payment—

Senator NASH: Okay, but business assistance would not relate to school costs, would it?

Mr Aldred : I believe that within the overall funding available to a farm family that sort of thing would be able to wash out, yes.

Senator NASH: Back to the $20,000 again. You said if they have or have not accessed the $5,000—

Mr Aldred : To be eligible for the $20,000 payment you must have first accessed the $5,000. Beyond that, you need to demonstrate that you have accounts that cannot be paid or basically have pressure on your finances. That sort of information is provided to Centrelink and Centrelink assesses those claims.

Senator NASH: Could you take this on notice for me. You were mentioning before the range of financial burdens that you took into consideration—one of those being school costs. As you said, one lot of costs will affect one family and not necessarily another. Within that bucket of funding, can you provide for the committee a list of the costs that you took into consideration that needed to be considered by the department in formulating this.

Mr Aldred : I will take the question on notice.

Senator ADAMS: Minister, you went to Indonesia during the suspension. Did you have two visits to Indonesia during that time?

Senator Ludwig: I have had two visits, yes.

Senator ADAMS: At that time, were you invited to inspect abattoirs or feedlots?

Senator Ludwig: No, I was not invited to.

Senator ADAMS: Did you request to go and look at them?

Senator Ludwig: I was there for a specific purpose, to inform them of the OIE operationalised guidelines. I did not consider it added value to be a tourist at that point. My job was to—

Senator ADAMS: I would not have thought it would be a tourist visit; you were making guidelines for a specific thing and you did not go to the area.

Senator Ludwig: Let me make this plain. The department, in a very short space of time, undertook very good work to operationalise which were OIE principles into OIE guidelines. There were draft guidelines that were made available to me. I thought it was incumbent upon me to go to Indonesia and provide those draft guidelines to Indonesia. That was my job. I am not sure the value of me traipsing around abattoirs. What I did was put in place—which the industry failed to do—a regulatory model. Self-regulation had clearly failed, I think as the evidence earlier had said. So the efforts I directed myself towards were putting in place a regulated supply chain which included those elements I mentioned earlier to Senator Rhiannon.

Senator ADAMS: So you were not invited to go—

Senator Ludwig: I answered that first.

Senator ABETZ: Can I be advised who signs off on cabinet submissions. Is that you, Secretary?

Dr O'Connell : Cabinet submissions are submissions from the minister to cabinet. So ultimately cabinet submissions are ministers' documents.

Senator ABETZ: The cabinet understands that but when they emanate from the department to the minister's office, do they go across your desk?

Dr O'Connell : It depends on the nature of the cabinet submission, but ultimately, as I say—

Senator ABETZ: Can you think of a cabinet submission that you have not signed off on?

Dr O'Connell : Over time, yes.

CHAIR: Probably to you, Senator Abetz!

Senator ABETZ: Can you think of an example?

Dr O'Connell : I am not going to speculate on an example, Senator.

Senator ABETZ: But on something as important as live exports, a submission would have come across your desk, would it not?

Dr O'Connell : As I said, documents that go into cabinet from a minister are documents that a minister puts into cabinet. Whatever passes my desk in the end, I am not necessarily responsible for the final step.

Senator ABETZ: It is still the minister's call—

Dr O'Connell : It is the minister's call. I do not want to presuppose any ministerial action by saying I am responsible for the minister's—

Senator ABETZ: Was anything prepared, without going into the detail, in anticipation that the minister might want to bring a particular document before cabinet?

Dr O'Connell : I think the minister has already taken on notice the issue of documentation going to cabinet.

Senator ABETZ: The minister will be relying on your advice because the minister will not know what the department has done and what you have signed in anticipation until he has actually received it. You must be aware, Secretary.

Dr O'Connell : I think that is not necessarily correct, and I do not want to pre-empt the outcome of the minister's response to you.

Senator ABETZ: So it is not correct that you would be aware of documentation that the department may have prepared in anticipation of cabinet discussing the live exports issue?

Dr O'Connell : No, I am saying it is not the case that I necessarily would be fully aware of the documentation that a minister or ministers might take to cabinet.

Senator ABETZ: I was not asking about that, and you know that, Dr O'Connell. I was asking about that which your department, for which you are responsible, prepared to assist the minister. Whether he takes that to cabinet or not, I am in great agreement with you: that is up to the minister. What did the department do?

Dr O'Connell : I think it is clear from the documentation that we have worked through in terms of the FOI request that there is information that has been provided to the minister of a deliberative nature in the context of potential cabinet consideration. Beyond that, I think I would need to leave that to the—

Senator ABETZ: So whereabouts in the documentation would you draw our attention, Secretary, that suggests that this was destined for cabinet? You have got the documents in front of you. Just show me one.

Dr O'Connell : I think what we've discussed is the nature of the deliberative material. There is other—

Senator ABETZ: Deliberative material is completely different.

Dr O'Connell : If you would let me finish: there are also other documents which have not been provided—I can't recall the details—through the FOI process.

Senator ABETZ: But none of those were excluded because they were cabinet documents, because if they had been they would have been excluded on the basis that there were a cabinet document. All we want to know is whether the department prepared anything for cabinet consideration.

Dr O'Connell : I will go to minute no 05730, which was exempt in its entirety because disclosure of the minute would reveal a cabinet deliberation.

Senator ABETZ: Sorry, that it?

Dr O'Connell : Disclosure of the minute is exempt in entirety under section 34(1)(d) and section 34(3).

Senator ABETZ: On what date was that?

Dr O'Connell : I will have to pass over to Ms Evans on that.

Ms Evans : Let me check whether I have that one. It may be the one I don't have a date on because it wasn't actually released. Can I take that on notice and come back after lunch?

Senator ABETZ: If you could I would be much obliged.

CHAIR: On that, Senator Abetz, we have a bit of an arrangement at 12.45. Senator Heffernan has a three-second question, and then we are going straight to ABARES.

Senator HEFFERNAN: Recently there has been publicity of an event in 2009 when several hundred cattle starved to death at Mataranka on a government supervised station—the station was partly involved with research. Are you aware of that?

Dr O'Connell : That's the Northern-Territory-government station?

Senator HEFFERNAN: Yes.

Dr O'Connell : I'm aware of the allegations.

Senator HEFFERNAN: Okay, that's the answer. Have you, on behalf of Australia's taxpayers, the government and Australia's farmers, initiated any inquiry at all into the disgusting proposition that 600 to 800 cattle could starve to death under the supervision of a university? It was a good season and the cattle could have been agisted. It is a criminal offence, but no-one was charged, the RSPCA said, 'Oh, it's outside our jurisdiction, we didn't look at it,' and the government of the Northern Territory said, 'Oh, yeah, we were a bit late in bringing up the thing and the time expired.' Someone let 600 to 800 cattle starve to death and no-one has got into trouble. What sort of bloody disgrace is that?

Dr O'Connell : Shall I take on notice the issues surrounding it?

CHAIR: Whatever you do, can you do it quickly, Dr O'Connell?

Dr O'Connell : I'm happy enough to take the question on notice.

Senator HEFFERNAN: I'm asking whether you're doing anything about it.

CHAIR: With that, to the officers from Live Animal Exports: thank you, very much.