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ECONOMICS LEGISLATION COMMITTEE
DEPARTMENT OF INDUSTRY, SCIENCE AND TECHNOLOGY
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ECONOMICS LEGISLATION COMMITTEE
DEPARTMENT OF INDUSTRY, SCIENCE AND TECHNOLOGY
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ECONOMICS LEGISLATION COMMITTEE
(SENATE-Wednesday, 15 February 1995)
- Start of Business
DEPARTMENT OF THE TREASURY
- Program 1--Economic policy
- Program 5--Australian Bureau of Statistics
- Senator Cook
DEPARTMENT OF INDUSTRIAL RELATIONS
- Program 1--Industrial relations policy development, workplace reform and best practice
- Program 3--Corporate direction and support
- Mr Hoy
- DEPARTMENT OF INDUSTRY, SCIENCE AND TECHNOLOGY
Content WindowECONOMICS LEGISLATION COMMITTEE - 15/02/1995 - DEPARTMENT OF INDUSTRY, SCIENCE AND TECHNOLOGY
CHAIR --Welcome. Minister, do you have any opening statement to make?
Senator Cook --Mr Chairman, I have no opening statement. Let me, however, take this opportunity to introduce Dr John Bell, Deputy Secretary of the Department of Industry, Science and Technology and Chief Science Adviser to the department.
CHAIR --We will now start questions.
Senator O'CHEE --I would like to start by asking some questions in relation to consultancies, as I think you have probably guessed. The consultancy to Woolcott Research Pty Ltd for evaluation of the first-stop shop pilot program--and I said it slowly, because it is a mouthful--what did that entail?
Mr Samarcq --Simply to compare three models of first-stop shops. There has been a lot of debate as to the best way to interact with the small and medium sized enterprises, and the three models that were tested were essentially a telephonic model; a multiple entry model in the sense that if a particular person came along to a shopfront that would be the entry point for a whole range of government services; and the third one was an integrated shopfront.
What we were looking for there was to get an idea of the best way to interact with small and medium size enterprises. We did that with an existing shopfront in Parramatta, a particular arrangement with the telephonic model with Queensland through their Gobiz information directory and another one in South Australia. It was really to test those three.
Senator O'CHEE --Can you explain the multiple entry which was the second of the three models? Can you explain that to me again, please? I did not quite follow what the difference is between that and the one you tested in Parramatta.
Mr Samarcq --The multiple entry model is the Parramatta model. We used Parramatta as the test bed, so that was the Parramatta model. We did not create those. In Queensland, for example, through Go-getters, that was the telephonic model. That was the approach they wanted to test. We had New South Wales which had the Parramatta model, and there was another one in South Australia, which, in effect, did not proceed to completion. We used these as evaluations in terms of how best to deal with small and medium size enterprises and, as a result of that, one of the outcomes has been the computer based information directory call Bizhelp that was released in November 1994.
Senator O'CHEE --How far did the Adelaide program go? You say it did not get to completion. Why was that?
Mr Samarcq --Two things reflected the fact that we wanted not to create models out of the air, but to use models that were actually being tested somewhat in the states. As I say, the New South Wales and Queensland ones were well positioned. In South Australia, despite the fact that the South Australians were keen to pursue it, it was not one that we felt met the precise nature of the model that we wanted to test.
Senator O'CHEE --The South Australian government, or the South Australian--
Mr Samarcq --The South Australian government. All of these are essentially joint exercises through Commonwealth-state cooperation, and through the National Industry Extension Service.
Senator O'CHEE --I was not too sure whether you were referring to Commonwealth officers in South Australia, or the South Australian government.
Mr Samarcq --They were done at a Commonwealth-state level. It was a cooperative effort between the two governments.
Senator O'CHEE --What is the status now of that centre at Parramatta? Has that continued?
Mr Samarcq --I am not sure, because that was a pilot. My understanding is that it is a shopfront that continues largely promoting export related activity with the New South Wales government. Austrade is involved in that. Our involvement is through the state government, through our contribution to the National Industry Extension Service. In terms of where we have put our efforts and concentrated our efforts since then, it has been in relation to the Bizhelp information directory.
Senator O'CHEE --The Commonwealth, I assume, is continuing to fund the cost of the Parramatta operation. What portion of the cost does it fund?
Mr Samarcq --I cannot answer that. We do not fund through the department and through Ausindustry direct. We provide funds to the state government through the National Industry Extension Service, and a field office of the National Industry Extension Service would be either positioned there, or at least a regular visitor to that centre. This department does not continue to fund that in a direct way.
Senator O'CHEE --Okay, I follow that. Woolcott Research Pty Ltd. did the evaluation. How long did the evaluation take?
Mr Samarcq --It took a fairly short time frame. It was about three months, from December 1993 through to February. My recollection is February 1994.
Senator O'CHEE --Why was Woolcott Research Pty Ltd. selected?
Mr Samarcq --It was a tender situation. They were one of six that were asked to provide submissions. I think four submitted in the end. There was a process that went through the Office of Government Information--OGIA--and they were selected on the basis of being able to do the best job.
Senator O'CHEE --You say here that they provided specialised skills that you needed and you needed an independent study?
Mr Samarcq --Yes.
Senator O'CHEE --Who in particular provided the specialised skills and what were they?
Mr Samarcq --I cannot answer, I was not directly involved with that particular consultancy. But I think Woolcott Research is recognised as one of a number of companies that deal in this area. In terms of personnel, I do not know, because I was not directly involved in the--
Senator O'CHEE --What were the specialised skills that were required? Do you know?
Mr Samarcq --They had experience in evaluating government programs. They had knowledge of industry assistance. I think they were particularly well placed in their understanding of what we wanted in terms of first-stop shop concepts. Also they had quite good relationships with existing service providers. So those were the principal criteria.
Senator O'CHEE --Can we move on to Bizhelp itself? What is going to be the cost in this financial year of the Bizhelp database and package? What is the cost to the Commonwealth?
Mr Samarcq --Putting it together, there are various components. There is a development cost, which you have obviously some idea of, in terms of the advice we have particularly got from Human Solutions. There is a cost in regard to maintaining the database, and that is both a Commonwealth and state cost in collecting the information.
In terms of what it would mean in dollar terms, it is difficult for me to say right now. That is a bit of information that I could obviously get for you later on. There is also a cost in relation to the maintenance of the Bizhelp database in terms of its collection, the circulation of the quarterly updates and the integration of the information that is collected both at the Commonwealth and state level that goes into Bizhelp. It is not a figure that I have in my mind but it is quite an elaborate data gathering, data dissemination and maintenance program.
Senator O'CHEE --It is one of the problems with these databases that sometimes the cost of maintaining them can substantially exceed the cost of setting them up, can't it?
Mr Samarcq --Yes, although my judgment on this particular case is that a lot of the information is gathered as a matter of course. If we set up processes, once that initial cost of setting up the process enables us to gather that information, it is very much an initial cost that one has to bear. But the maintenance cost and the collection cost would not be that significant. As I say, most or all of the states gather that information, have it on hand, put it into the system once and that can be utilised by them as well as utilised by us through Bizhelp. The same applies at the Commonwealth level, both in terms off the department, as well as other Commonwealth agencies that are contributors to Bizhelp.
Senator O'CHEE --So I assume that what Human Solutions is doing in the consultancy which was described as `collection of data on Commonwealth and state industry programs' means collating it and preparing it for data entry in a consistent fashion?
Mr Samarcq --That is right, yes.
Senator O'CHEE --What is the term of that contract, because it says the contract value is $347,000 and $42,330 was paid in the 1993-94 financial year. What is the term of the contract?
Mr Samarcq --The term of the contract is until June 1996. So last year the cost was some $42,000. This year we have spent somewhere in the order of $60,000. It is over a two-year period.
Senator O'CHEE --Is that a set price contract or is it subject to variation?
Mr Samarcq --Set price contract.
Senator O'CHEE --So if they encounter difficulties, the financial risk is with them, not with the Commonwealth?
Mr Samarcq --Yes, as a general rule. Usually with contracts, if there is an overrun for a reason that they have not foreseen, or we are the cause of it in terms of wanting different information collected, then obviously there may be a situation where we would renegotiate an element of the contract. But under the terms of the contract it is a fixed price contract.
Senator O'CHEE --I ask because $347,000 is a lot of money, and I think you--
Mr Samarcq --Yes, but it is quite a novel approach. Hopefully, you would have seen BizHelp, which has been circulated to all members of parliament. It has a fairly wide circulation now and has been very well received by business and by the business intermediaries that we are using as the main conduits to get to small and medium sized enterprises.
Senator O'CHEE --I am just concerned that for $347,000 Human Solutions are willing to absorb a reasonable amount of financial risk, that is all, rather than the Commonwealth absorbing the financial risk.
Mr Samarcq --We believe that the work that they have done so far--they are a small- medium sized enterprise themselves, working out of Hobart--has been first class.
Senator O'CHEE --I proceed to ask about some market research into live music, a consultancy for which was let to OWL Research and Marketing Pty Ltd. What was the nature of that?
Dr Bell --I wonder if you can help us by identifying which program that is in.
Senator O'CHEE --Yes, sorry. It is in the Information, Technology, Communications and Environment Industries Division, and it is a consultancy to OWL Research in the amount of $69,000.
Mr Edwards --During 1993-94, $44,634 was paid to OWL Research and Marketing to fill a substantial gap on consumer attitudes to live music in Australia. OWL Research surveyed 1,200 Australians on musical tastes, the ways in which they spend their leisure time and how the delivery of live music could be improved. The findings are proving useful to people in the industry.
Senator O'CHEE --How did people think that the delivery of live music could be improved, Mr Edwards?
Mr Edwards --I am afraid I do not have that information for you. The report, itself, is available from the department at a cost of $12 and is available to the industry. We could provide a copy of the report to you.
Senator O'CHEE --Thank you. I would be grateful if you could. I am just intrigued--I thought that people voted with their feet, if you will forgive the pun, when it came to live music.
Senator Cook --Live music is, of course, a major industry for Australia. Australia in the English speaking world is credited as being ranked No. 3 in the original production of music and song, and it is an export industry of sorts for Australia and an import replacement industry.
Senator O'CHEE --Live music is unlikely to be a substantial export industry as compared with recorded music, Minister. This survey is in relation to live music.
Senator Cook --It begins with live music. As I was saying, it is an import replacement industry too. Obviously, the greater the prominence of Australian musicians and singers, the less likelihood there is that we will give over market share to foreign visitors, either as support acts to major artists or as part of the industry in its own right.
Senator O'CHEE --Yes, but I would have thought that people like me who like raster music are going to like raster music, and people who like heavy metal are, principally, going to like heavy metal. They are not generally going to switch across from one to the other.
Dr Bell --Perhaps it is a question of where you actually go to hear this music, what your preferred venue is and things like that.
Senator O'CHEE --But is it not the function of a music promoter to know those things? A manager is supposed to know those things. That is why a manager gets paid by his band, is it not?
Senator Cook --Are you suggesting that we should not help the promotion of live music in Australia?
Senator O'CHEE --I am suggesting that a good manager knows what venues to use for his band, Minister.
Senator Cook --This survey will aid the production of even more good managers by providing an easy reference for aspiring or actual managers to look at the survey results and improve their managerial capability.
Senator O'CHEE --If it means that we do not end up with a Prime Minister like the one who failed to manage the Ramrods, I suppose it is probably a good idea.
Senator Cook --That is gratuitous.
Senator O'CHEE --Some of the comments from you were pretty gratuitous. Can I ask about the survey in relation to the music industry statistics?
Senator Cook --Might I say, Senator, that none of the comments that I have made have been meant gratuitously.
Senator O'CHEE --Can I ask about the survey in relation to the Australian music industry statistics: what was that?
Mr Edwards --In 1992-93, the Music Industry Advisory Council--MIAC--published the Australian music industry: an economic profile. This profile was prepared by Price Waterhouse in 1993-94. Price Waterhouse was hired to update the statistics contained in the initial study using the same methodology and contacts as in the original report. Again, this is a piece of material which is available for sale at $12.
Senator O'CHEE --What does it actually go into?
Mr Edwards --Again, I cannot tell you that; I would have to provide you with the report.
Senator O'CHEE --Yes, if you could. I am just concerned that you are letting consultancies and you do not really know what the consultancies are about, or at least you are not in a position to explain it. I can understand how sometimes officers may consider examination of estimates to be a bit of a nuisance and sometimes I can understand how officers might consider it to be all very humorous but, at the end of the day, this program has consultancies totalling $710,000 and I would expect at least some reasonable explanation of what the consultancies were when officers appear before estimates. Maybe that might be noted.
Senator Cook --Thank you for your gratuitous advice, Senator.
Senator O'CHEE --It might be helpful advice, Minister.
Senator Cook --Thank you for your advice.
Dr Bell --I should explain that Mr Edwards was not in the chair that he is in now at the time this consultancy was let. I would also comment that, in order to understand a sector of the economy such as the music industry, statistics on that sector are very important. Very often these statistics are collected by the Bureau of Statistics but that is not always the case. If you want more detail in a particular sector, you often have to go out and get it yourself. I understand that is the case with the music industry and so in order to have a better understanding of its growth, its employment, the size of the businesses that are involved in this, we have commissioned this particular piece of work. It is a publicly available document but it is aimed at helping the industry to understand its growth and also at helping the government to have a better understanding of what is going on. The reason we have done it in this case is it is a difficult sector to understand. I think that we should supply a copy of the report and you will see the scope of the coverage.
Senator O'CHEE --Thank you, Dr Bell. I understand what you are saying but I am sure you understand my point of view as well. You have appeared over four or five years in estimates where I have been sitting and you know that it is expected that officers should be provided by their support officers with some sort of sufficient explanation as to what these consultancies are. I think if Mr Edwards has not been in that seat for long, he has obviously not been well supported. Next time, hopefully, Mr Edwards will be better supported. Can I just go to the--
Senator Cook --I thank you for your gratuitous advice, Senator.
Senator O'CHEE --Thank you, Minister. Can I just go the Australian Industrial Property Organisation and the consultancies that it has let.
Dr Bell --We do not have anybody here from that organisation today but I am happy to take the question and see whether I can answer it for you.
Senator O'CHEE --There is nobody here?
Dr Bell --No, but we may well be able to answer it anyway.
Senator O'CHEE --What is the mission statement of the AIPO?
Dr Bell --We could provide a copy of that for you, Senator. As you know, it is the office that looks after patents and trademarks and such intellectual property matters. Its mission is to ensure that that sort of intellectual property is adequately protected in Australia.
Senator O'CHEE --So why then were they unable themselves to analyse the system requirements for the introduction of a new trademarks act?
Dr Bell --I think I would have to take that question on notice. This new piece of legislation has some interesting technical features to it and I think that led to a need to look more widely at how to implement it. There are some significant differences from the previous legislation. I have their mission statement. This reads:
. . . to provide effective property rights in inventions, trade marks and designs in Australia in a timely and cost-effective manner, and to encourage our trading partners to provide similar rights, particularly to Australian inventors, innovators and traders.
Essentially this contract was to upgrade the processes that were used to process trademarks. That arose from having this new legislation.
Senator O'CHEE --So you brought in external management consultants to advise the AIPO on how to manage themselves?
Dr Bell --No, I think it was to adapt the present system to cope with the requirements of the new legislation. It is only in relation to information technology; this is an area which is quite complicated. Let me just give you an example. With a trademark, you want to be able to display the trademark on the screen. But you need to do that in a cost-effective manner. Without being able to display the trademark on the screen, the information technology system is of rather limited usefulness. That is really quite a challenge, and it is a challenge that I understand they have mastered as a result of the help they got under this consultancy.
Senator O'CHEE --So this in relation to information technology. From reading the description it did not seem like that, that is all.
Dr Bell --The word `systems', I think, is meant to imply that.
Senator O'CHEE --The AIPO is currently located where?
Dr Bell --At Woden.
Senator O'CHEE --What was the $130,000 paid to Rawlinsons Management Pty Ltd supposed to cover?
Dr Bell --I should explain that AIPO is in the process of getting additional accommodation constructed at Woden. I believe it is in relation to that, but we will just check it. AIPO is currently located in Scarborough House, at Woden. Scarborough House is one of the older buildings at Woden and its floor layout is not ideally suited to a patents office operation. To deal with this problem, we are building another building alongside it. This is quite a complex process, which requires coordination between a number of different parties and dealing between architects, construction firms and so on. Rawlinsons are managing that process.
Senator O'CHEE --So when it says `client advocacy', exactly with whom are they arguing the case for the client and who is the client?
Dr Bell --I think that my previous comment is about as close to it as I can explain it, but I would be happy to provide further detail. Essentially, they are looking after our interests in a fairly complex situation between different parties.
Senator O'CHEE --What are Lester Firth Associates doing? They are preparing the fit-out design, are they not?
Dr Bell --That is a special design task, so it is more in the nature of an architectural task.
Senator O'CHEE --So Lester Firth Associates are not looking after the interests of the AIPO, yet you are employing them and you have got somebody else to argue the case with the people you employ. Is that what is going on?
Dr Bell --Lester Firth are just one of a number of contractors involved in this task. Rawlinsons are managing the overall task. Lester Firth are just one of quite a large number of contractors.
Senator O'CHEE --In other words, Rawlinsons Management are really project managers. Is that the case?
Dr Bell --Yes, that is my understanding. That is close to their role.
Senator O'CHEE --Would you take that on notice, please. The information that is given here makes it very difficult to ascertain exactly what people are doing.
Dr Bell --We would be happy to provide you with more detail.
Senator O'CHEE --You said that there are a number of contractors. Rawlinsons are shown here, Lester Firth are shown here. Presumably, from your answer, there are other contractors. They are not shown here. Why is that?
Dr Bell --In a construction project of this sort, it is my understanding that the only ones that will appear here are consultancies; people who are doing building operations go through a separate route altogether that involves public works operations and so on. This is a contract for services; I think that is the point. It is not a contract for building things.
Senator O'CHEE --What is the overall cost of the refurbishments and the additions at Woden? Can you take that on notice?
Dr Bell --I would have to take that on notice.
Senator O'CHEE --There was one other question in relation to this: when is this going to be completed?
Dr Bell --The short answer is: not soon enough. The space is needed urgently but I think it is going to be a year or so. It has not been started yet, I do not believe.
Senator O'CHEE --Why, exactly, is there nobody from AIPO here today?
Dr Bell --We have a major delegation here today from China and all the senior people involved in AIPO are dealing with this Chinese delegation. That relates, as you might guess, to the part of their mission statement that refers to assisting people in the region to achieve the same standards of protection of intellectual property that we would like to have ourselves. You might be aware that this is somewhat of a problem for China at the moment. We believe that we can give them some assistance.
Senator O'CHEE --Let us hope so, Dr Bell.
CHAIR --You have got no further questions on the consultancy so we will move to Senator Ferguson who has questions on scientific and industrial research. Those officers who have been concerned only with the previous programs are discharged.
Senator Cook --Are we continuing with the Department of Industry, Science and Technology or are we starting on the CSIRO?
CHAIR --We have really gone to CSIRO.