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Rural and Regional Affairs and Transport Legislation Committee - 21/05/2012 - Estimates - AGRICULTURE, FISHERIES AND FORESTRY PORTFOLIO

AGRICULTURE, FISHERIES AND FORESTRY PORTFOLIO

In Attendance

Senator Joe Ludwig, Minister for Agriculture, Fisheries and Forestry; Minister Assisting on Queensland Floods Recovery

Department of Agriculture, Fisheries and Forestry

Executive

Dr Conall O’Connell, Secretary

Ms Rona Mellor, Deputy Secretary

Mr Phillip Glyde, Deputy Secretary

Mr Mark Tucker, Deputy Secretary

Finance and Business Support, Government, Information Services and People and Service Delivery Divisions

Mr Darren Schaeffer, Chief Finance Officer, Finance and Business Support Division

Ms Amy Fox, Assistant Secretary, Policy and Accounting Branch

Ms Vanessa Berry, Assistant Secretary, External Budget Branch

Mr Aaron Hughes, Assistant Secretary, Commercial Business Operations Branch

Mr Matt Ryan, Assistant Secretary, Internal Budget and Cost Recovery Branch

Mr Peter Moore, Assistant Secretary, Post Entry Quarantine Project Team

Ms Fran Freeman, First Assistant Secretary, Government Division

Ms Cathrine Stephenson, Assistant Secretary, Parliamentary Business Branch

Ms Cassandra Kennedy, Actin g Assistant Secretary, Portfolio Strategy and Coordination Branch

Ms Jenny Barbour, Assistant Secretary, Communication Branch

Dr Mark Cloney, Assistant Secretary, Business Assurance and Risk Branch

Mr Graham Gathercole, Chief Information Officer, Information Services Division

Ms Lynne O’Brien, First Assistant Secretary, People and Service Delivery Division

Interim Inspector - General of Biosecurity

Dr Kevin Dunn, Interim Inspector General of Biosecurity

Biosecurity—Animal

Ms Karen Schneider, First Assistant Secretary

Ms Jackie South, Actin g Assistant Secretary, Animal Import Operations Branch

Mr Dean Merrilees, Assistant Secretary, Animal Export Operations Branch

Ms Lee Cale, Assistant Secretary, Animal Export Reform Branch

Dr Andrew Cupit, Actin g Assistant Secretary, Animal Biosecurity Branch

Dr Jenny Cupit, Assistant Secretary, Biological Import Operations and Marine Pests Branch

Ms Paula Svarcas, Acting Assistant Secretary, Animal Welfare Branch

Mr Reg Butler, Actin g Assistant Secretary, Animal Health Policy Branch

Mr Simon Smalley, Assistant Secretary, Multilateral Trade Branch

Dr Peter Hewitt, Director, Ruminants, Animal Biosecurity Branch

Dr Peter Black, Director, Emergency Animal Disease Preparedness, Animal Biosecurity Branch

Biosecurity—Quarantine

Mr Tim Chapman, First Assistant Secretary

Mr Wayne Terpstra, Assistant Secretary, Industry Arrangements and Performance Branch

Mr Jonathan Benyei, Assistant Secretary, Cargo and Shipping Branch

Ms Tina Hutchison, Assistant Secretary, Passengers and Mail Branch

Biosecurity—Plant

Dr Colin Grant, First Assistant Secretary, Biosecurity Plant Division

Mr Darryl Barbour, A ctin g Assistant Secretary, Biosecurity (Horticulture) Branch

Mr Rob Schwartz, Actin g Assistant Secretary, Biosecurity (Grains and Forestry) Branch

Ms Lois Ransom, Chief Plant Protection Officer

Ms Louise van Meurs, Assistant Secretary, Plant Quarantine Operations Branch

Ms Kylie Calhoun, Acting Assistant Secretary, Plant Export Operations Branch

Biosecurity—Food

Mr Greg Read, First Assistant Secretary

Ms Barbara Cooper, Acting Assistant Secretary, Food Exports Branch

Ms Ann Backhouse, Acting Assistant Secretary, Export Standards Branch

Dr Narelle Clegg, Assistant Secretary, Residues and Food Safety Branch

Dr Ann McDonald, Assistant Secretary, Export Reform Branch

Mr Mark Phythian, Director, National Manager, Imported Food Program

Biosecurity—Policy

Mr Greg Williamson, Acting First Assistant Secretary

Dr Vanessa Findlay, Assistant Secretary, Risk Branch

Dr Robyn Martin, Assistant Secretary, Partnerships Branch

Ms Louise Clarke, Assistant Secretary, Biosecurity Strategy Branch

Ms Deb Langford, Assistant Secretary , Legislation Branch

Australian Bureau of Agricultural and Resource Economics and Sciences

Mr Paul Morris, Executive Director

Dr Kim Ritman, Chief Scientist

Mr Peter Gooday, Acting Chief Economist

Dr Jammie Penm, Assistant Secretary

Mr Bruce Bowen, Assistant Secretary, Biosecurity and Farm Analysis

Dr David Cunningham, Assistant Secretary, Land and Forests

Dr Helal Ahammad, Assistant Secretary, Climate Change and Variability

Ms Leanne Solomou, Director, Strategic Projects Implementation

Mr Robert Curtotti, Acting Assistant Secretary, Fisheries and Quantitative Sciences

Dr John Gray, Acting Assistant Secretary, Productivity, Water and Social Sciences

Dr Stuart Davey, Senior Scientist, Land and Forests

Australian Fisheries Management Authority

Dr James Findlay, Chief Executive Officer

Mr John Bridge, General Manager Corporate Services

Dr Nick Rayns, Executive Manager , Fisheries

Mr Peter Venslovas, General Manager Operations

Ms Tanya Howitt, Chief Finance Officer

Sustainable Resource Management

Mr Ian Thompson, First Assistant Secretary

Ms Michelle Lauder, Assistant Secretary, Landcare and Regional Delivery Improvement Branch

Mr Paul McNamara, Assistant Secretary, Grants and Sustainable Agriculture Branch

Mr Gordon Neil, Assistant Secretary, Fisheries Branch

Climate Change

Mr Tom Aldred, First Assistant Secretary

Mr Ian Ruscoe, Acting Assistant Secretary, Forestry Branch

Mr Andrew McDonald, Assistant Secretary, Farm Support and Adaptability Branch

Ms Julie Gaglia, Acting Assistant Secretary, Climate Change Policy Branch

Ms Victoria Anderson, Assistant Secretary, Drought Policy Review Branch

Agricultural Productivity

Mr Allen Grant, First Assistant Secretary

Mr Matthew Koval, Assistant Secretary, Livestock Industries and Ag Vet Chemicals Branch

Mr Michael Ryan, Acting Assistant Secretary, Research and Development and Food Security Branch

Mr Richard Souness, Assistant Secretary, Food Branch

Mr Peter Ottesen, Assistant Secretary, Crops, Horticulture and Wine Branch

Ms Trysh Stone, Acting Assistant Secretary, National Food Plan Taskforce

Forest and Wood Products Australia

Dr Chris Lafferty, Research and Development Manager

Australian Pork Limited

Mr Andrew Spencer, Chief Executive Officer

Ms Kathleen Plowman, General Manager of Policy

Australian Egg Corporation Limited

Mr James Kellaway, Managing Director

Meat and Livestock Australia

Mr Scott Hansen, Managing Director

Australian Livestock Export Corporation Limited

Mr Sam Brown, Acting Chief Executive Officer

Dr Roly Nieper, Chairman

Trade and Market Access

Ms Jo Evans, First Assistant Secretary

Mr Simon Murnane, Assistant Secretary, Bilateral Trade Branch (North Asia, Middle East and Africa)

Mr Bill Withers, Assistant Secretary, Bilateral Trade Branch (Americas, Europe, South and South-East Asia and the Pacific)

Mr Simon Smalley, Assistant Secretary, Multilateral Trade Branch

Australian Pesticides and Veterinary Medicines Authority

Dr Eva Bennet-Jenkins, Chief Executive Officer

Mr Raj Bhula, Program Manager Pesticides

Dr Allen Bryce, Program Manager Veterinary Medicines

Mr Tony de la Fosse, Program Manager Corporate Services

Mr Dan Webb, Finance Manager

Committee met at 08:59

CHAIR ( Senator Sterle ): I declare open this public hearing of the Senate Rural and Regional Affairs and Transport Legislation Committee. The Senate has referred to the committee the particulars of proposed expenditure for 2012-13 and related documents for the Agriculture, Fisheries and Forestry portfolio. The committee is due to report to the Senate on 26 June 2012 and has fixed Friday, 20 July 2012 as the date for the return of answers to questions taken on notice. This deadline is longer than the usual time frame that the committee sets for the return of answers to questions taken on notice to account for the time agreed by the committee that senators should provide written questions to the committee secretariat. Senators are reminded that any written questions on notice should be provided to the committee secretariat by close of business on Friday, 8 June 2012.

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 secretary 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. Senators, in front of you you have a running sheet, and we will be running to it for the duration of the next couple of days.

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?

Senator Ludwig: I do not, Chair, thank you.

Dr O’Connell : No, thank you.

CHAIR: Questions. Senator Colbeck.

Senator COLBECK: I just want to go to your portfolio ministerial statement. Perhaps, Dr O’Connell, you could give us a sense of what your key priorities for the next calendar year might be.

Dr O’Connell : I take it you are referring to page 11 of the DAFF Portfolio Budget Statements 2012-13, which sets the strategic direction statement—

Senator COLBECK: I want to know what your key priorities for the department are for the next 12 months.

Dr O’Connell : Our key priorities are obviously delivering on the government’s policy agenda and the government’s budget initiatives.

Senator COLBECK: So what do you see those as being? Let us work our way through the key priorities.

Dr O’Connell : Key priorities include delivery of the biosecurity initiatives that the government has put in place. We have funding for biosecurity and post-entry quarantine. We have additional funding in terms of reform work, and we can probably go through the numbers, if you want or—

Senator COLBECK: Yes, please.

Dr O’Connell : I will just ask Mr Schaeffer to assist.

Mr Schaeffer : Reforming Australia’s biosecurity system is a new measure in the budget, maintaining core biosecurity operations. The government has provided $144.3 million over four years to maintain funding for core biosecurity operations and to continue progress on reforming Australia’s biosecurity system.

Senator COLBECK: What are the key elements of reform in the biosecurity system that you will be undertaking this year?

Ms Mellor : The key reforms include forward work on the development of the new post-entry quarantine station, which will be located in Victoria. We continue to do work on implementing risk return policy. We are working on legislation, the reform of the Quarantine Act, with a view to some exposure of that during this calendar year.

Senator NASH: Are you expecting that to be this year?

Ms Mellor : Subject to all of the normal clearance processes, we are working on a mid-year release for an exposure draft.

Senator COLBECK: I am sorry; I did not quite catch the timing on that.

Ms Mellor : We expect a mid-year release for an exposure draft, subject to clearance processes and referral processes.

Senator COLBECK: So a mid-year release of the legislation.

Ms Mellor : Subject to clearances. In the budget we were also funded $19.8 million over three years to do some remediation work of IT to keep things stable and to give us a platform to build on for further reform in future. That package is $524.4 million in total.

Senator COLBECK: So that is the total biosecurity budget?

Ms Mellor : No, that is not the total budget. That is the total additional funding.

Dr O’Connell : That is the new funding announced in the budget.

Senator COLBECK: So how much are you going to allocate to the work around the new station in the next 12 months?

Ms Mellor : There is $379.9 million over seven years. Obviously it takes a long time to get design work, building work et cetera, and it needs to fit in with the coming off of the leases of the five other stations. So there is quite a large design process and, as you would know, it is mostly led within the government processes by the Department of Finance and Deregulation.

Senator COLBECK: So how much this year?

Ms Mellor : We are just getting the figure. It will be money allocated to the Department of Finance and Deregulation.

Senator COLBECK: So it is not allocated into this—

Ms Mellor : There will be some allocated to us for the project work. We will just get you the number.

Mr Schaeffer : There is a capital component of $22.1 million.

Senator COLBECK: Capital?

Mr Schaeffer : Yes. And an operating component of $5.6 million.

Senator COLBECK: What does the capital component go to?

Mr Schaeffer : The design and building of the facility. So it is an asset.

Senator COLBECK: We were just talking about a seven-year process to design and pull five other places together and $22.1 million for capital this year. So what are we going to spend this year? We are not going to start building this year?

Mr Schaeffer : There will be design works and consultants to do the preplanning before the design.

Senator COLBECK: And that is all allocated under the accounting systems as capital?

Mr Schaeffer : That is correct. It is also in the Department of Finance and Deregulation’s accounts.

Senator COLBECK: The same amount?

Mr Schaeffer : They have that money. We just jointly manage the project.

Senator COLBECK: So it is listed in both budgets?

Mr Schaeffer : No, it is listed in the Department of Finance and Deregulation’s budget—the capital component.

Senator COLBECK: The $22.1 million and the $5.6 million operational is in whose budget?

Mr Schaeffer : $5.6 million is in DAFF’s budget and the rest is in the Department of Finance and Deregulation—

Senator COLBECK: And the $22.1 million is in the department of finance’s budget?

Mr Schaeffer : Correct.

Senator COLBECK: What about the risk return policy? Can you take us through where you are at with that?

Ms Mellor : Yes. We have been doing, as we have reported to you before, quite a bit of work in assessing how to approach matters of higher risk versus other risk. We have made changes in our processing at airports using, for example, processed food, which does not pose a high biosecurity risk, and putting out a list of material that our colleagues at Customs will triage for us, if you like, at the primary line. We have put in place different channels within the airport for people who are compliant. People who declare move through a lot more smoothly. Now we target people with higher risk material or who have a pattern in our profiling that suggests we need to target them. Through that work we have been doing policy reviews and a number of reviews in other areas to assess whether or not we are applying our resources to the things that matter most.

Senator COLBECK: Remediation of IT—what is the focus of that to be?

Ms Mellor : The key issue we have is critical outage time. This can affect our officers and businesses that rely on us to process imports and exports. So we are looking to build quite a bit more stabilisation into the system and a bit more speed. Given that we operate in some parts of our business almost 24/7, we are trying to get the system much more robust to support business operations both within the department and within business.

Senator COLBECK: How does this fit in with the Beale recommendations that major upgrade work or new work be done on the IT system? Is this progress towards that or are we talking something more significant in the context of implementing what Beale was recommending?

Ms Mellor : No, this is definitely a measured step towards that. In order to make a proper investment over time we actually need the system stable and robust to build on now. The system is quite old. In fact, I would not call it a system; I would call it a variety of systems that need to speak to each other. Their interoperability is low and their pace is low. You would appreciate the diversity of our locations. So for officers all over the country to get the speed and performance that they need—and for the businesses that we relate to to get that—that needs to be upgraded before we can continue to make further investment.

Senator COLBECK: So are we still trying to work out exactly where we are at before we can start designing where the next stage of the system might be or are we actually starting to build something?

Ms Mellor : We are starting to build. We are certainly looking at a process in IT terms—they would call it virtualisation—which enables the system to operate in a much more virtual world. It will create better storage, better access, better speed and better security. I like to think that it is like a foundation piece. It is like the slab that you build under a new house. Rather than building onto some old pillars and pylons and seeing whether it will be stable, we are actually building the slab at the moment.

Senator COLBECK: How long are we looking at before we start to get to that? Beale said that something like over $100 million was going to be required.

Ms Mellor : There were some very large amounts of money in there that were based on the sorts of investments that other departments had made in IT reform around that time. We are looking at spending money over the next two years from within the allocation of budget and we will also therefore come back to government with where we think the next step should be once we have that foundation right.

Senator COLBECK: So we are still, in effect, working out exactly where we are with the overall system?

Ms Mellor : No, I think we—

Senator COLBECK: In the context of building it in the direction that Beale said we should go?

Ms Mellor : We have obviously got a conceptual design in that we would like to see a lot more electronic interaction. We are one of the last paper based operational systems within the Commonwealth government. We have a conceptual design that we would like to go to so that we can deal electronically with the range of people that we deal with, such as exporters and importers. We just do not have the foundation in place to enable the building on that to happen in the near term. So the measured approach is to do that work first.

Senator COLBECK: At what stage are we looking to be able to move to that next constructive stage, once we get the foundation sorted?

Ms Mellor : Over the next two years, while we are doing that work, we will actually be developing, if you like, a business case approach to what should happen next. We will go back to government with a view then.

Senator COLBECK: So it is $19.8 million this year?

Ms Mellor : It is $19.8 million over three years.

Senator COLBECK: Over three years. Okay.

Ms Mellor : The bulk of it is in the first two years, and during the third year it will be tying up that business case with the investment plan for the future.

Mr Schaeffer : The exact figures are $9 million in 2012-13, $9 million in 2013-14 and $1.8 million in 2014-15.

Senator COLBECK: When are you looking to come back to government with a major plan for the significant improvement?

Ms Mellor : I would have thought, if all goes well, we will be back to government in 2015.

Senator COLBECK: In 2015?

Ms Mellor : Yes, subject to us getting the work done and getting the evidence that we need to actually have the go forward. That go-forward will include how we can work better with border agencies and not duplicate what others have, build on what others have and look to fill gaps in border agencies as well.

Senator COLBECK: The use of paper based systems, though, is a significant frustration for industry—

Ms Mellor : Indeed.

Senator COLBECK: We have had the Prime Minister making statements in the last couple of weeks about being a food bowl for the region and feeding the world. I was at a dinner on Saturday night where people were complaining about having to go every couple of days to get a paper based document to export their product.

Ms Mellor : Yes.

Senator COLBECK: Although I have to say that the response they are getting from the agency is, ‘Well, you need a paper based product because people can forge electronic ones.’

Senator IAN MACDONALD: They can’t with paper!

Senator COLBECK: Senator Macdonald says they cannot with paper, perhaps. But it is a huge frustration for industry that we are told that we are going to play this significant role in export and making a contribution to the region, yet we still have until 2015 before we start looking at changing the process.

Ms Mellor : There are things that we are doing along the way. Certainly, I agree with you that there is a lot of paper in this system and achieving the right balance between customer experience or client experience and the veracity or integrity of documents is a challenge. We have introduced a number of electronic tools, some of which—for example, self-assessed clearances of vessels—we get material electronically now. We have obviously rolled out a number of system components on the export side which are exchanging data more efficiently. In the meat industry at the moment we are working on one in the plant export side. So I do not think we are sitting here waiting until we have everything in place. Where we can, we are making enhancements and we are doing that in a co-design mode with industry. But getting the balance right between the integrity of documents and the client experience will remain a key focus for us.

Dr O’Connell : Everything we have been doing is consistent with delivering on the intent of Roger Beale’s report. You will recall that it was saying that there had been long-running underinvestment in this area, so this is taking, obviously, an extensive program to work through the export certification issues. I think you are probably familiar with the degree of difficulty that there has been to try to reform the export certification process. That has been a key deliverable over the last while.

Senator COLBECK: Do you actually have a published program or some sort of sense of communicating with industry as to how this is going to be rolled out and in what time frames they are going to start to see some of the efficiencies that might be available to them through the system from these initiatives? The indication that I get from talking to them is that they do not have any sense of when these efficiencies might be starting to come through.

Ms Mellor : We do not have one that covers the whole. Perhaps that is something that we could explore further. For example, we have an industry cargo consultative committee that knows what is happening in the IT world in their space. I am happy to look at a much more comprehensive picture of that and share that with stakeholders.

Dr O’Connell : I think that for each of the commodity groups that we deal with in export certification, they do have a very clear picture of the changes that are being developed. We can certainly talk those through when we come to the export certification area, which is the key set of export access reforms that we have been looking at in the biosecurity area. But I think they have a pretty clear sense of the program of reforms, and that has been laid out for all of those areas.

The one that is probably a little bit behind the others would be live animals. That is obviously because of the other issues in developing the live animal export for slaughter arrangements. But in the case of the other commodities we deal with, their export certification reform process, I think, is a very transparent and very clear process to the industry players, involving extremely close consultation with them. So I do not think there is any sense in which we would think that that should not be understood by them. I think it should be understood by them and if there are any problems with that then we are more than happy to follow that up.

Senator COLBECK: Is that the groups that you are negotiating with or the people who are actually doing the work? This is a conversation I had as late as last Saturday night. Is it a peak body that understands what is going on or is it the people at the grassroots that understand what is going on?

Ms Mellor : As you know—and I am sure we will get into more of this later—there have been the ministerial task forces operating that have peak body representation and then there has been a quite a lot of communication back, by both the department and the peak bodies. Certainly, as Dr O’Connell says, there are a series of IT investments in each commodity group. They have been worked through. We have done one in live animals—a system called TRACE—which enables electronic interchange of documentation, which has sped up preparation time for both businesses and officers.

Senator COLBECK: But that was a feature of what they brought to government when we were looking at the live export reform process at the outset. That was their plan going back to 2009.

Ms Mellor : That is right. Those were programmed in and there have been a number of releases of some of those systems. You know we have a new audit management system for meat. We are working on a new plant exports management system at the moment which has some of those features of the audit management system. Those industry groups know about it and they are used in the design of and consultation on those systems.

Senator COLBECK: I just want to go back to the broader agency priorities, Dr O’Connell.

Dr O’Connell : I could step through the strategic statement or I could just pull those obvious cases. We have the biosecurity reforms, which we will be working through over the year, but that is a long-running program as well. We have drought policy reform, which will be a priority for the year. We have the live animal export process, which we now need to develop to the end of this calendar year to get all animals that are exported for slaughter under the Exporter Supply Chain Assurance System process.

Senator COLBECK: Yes, we will do some stuff on that when we get to the next stage.

Dr O’Connell : We have the National Food Plan, on which we will be releasing a white paper over the coming year. We have continuation of the agvet chemicals reform and we have the illegal logging legislation to, hopefully, see through parliament and begin to implement. We have reviews of fisheries policies to develop. I do not know how many you want me to go through. I can continue. We have the carbon programs to assist the government in delivering on carbon farming initiatives and others. We have the research and development review process to deliver on.

Senator NASH: Sorry, what was that one?

Dr O’Connell : Research and development. If you recall, the Productivity Commission had an inquiry into rural research and development and there is a response to that with the expectation of a government response. The eradication and management of―

Senator COLBECK: Is the R&D one effectively developing a response to the Productivity Commission report or are you actually looking to implement some changes?

Dr O’Connell : The government will make a policy announcement in due course, a full response to the Productivity Commission. As you might recall, there was a partial response some time ago, but we expect the government will respond shortly to that report.

Senator COLBECK: ‘Shortly’ means?

Dr O’Connell : In the government’s good time, I expect.

Senator COLBECK: Yes, but I can recall Prime Minister—

Dr O’Connell : You are asking me about priorities and I would say it is a priority for this coming year.

Senator COLBECK: I recall Prime Minister Rudd—and I know he is not there anymore—saying, ‘We’re going to start building houses immediately,’ and it took two years to get them going. I am not trying to impose his language on you, Minister Ludwig, because I know that you are different. So by ‘shortly’ we are talking about―

Senator Ludwig: I saw an urgency in two parts to it. If you recall, we did a partial response, which was to ensure that we would continue to maintain the 0.5—in other words, the funding for RDCs. One of the Productivity Commission report recommendations was in fact to change the formula and set up a new body. I saw the need to assure industry that we would continue to fund it in the way we have always funded it and continue to match that funding. That was the very early response. I then indicated that time that I would come back with a more considered response to the range of recommendations coming out of the Productivity Commission report. I also indicated to industry that I would consult on those as well. I do not want to put a time line on it, but it is certainly not far away.

Senator COLBECK: You have made a bit of a feature of the R&D spend in your ministerial statement from the budget. In fact, both you and Minister Crean made a feature of it in your ministerial statements.

Senator Ludwig: Precisely. We see it as an important way of driving innovation and efficiency in industry. As you know, we have 15 RDCs within this portfolio. They all contribute significantly to productivity and efficiency within the industries. The industries do, I think, look towards those organisations for the lead in both blue sky research and a range of other public good research undertakings.

Senator COLBECK: I agree with you, Minister. I think that is true. You have made a big deal of the total spend, but do you think it is reasonable that you focus on the total amount of money that is being expended on R&D, which is $793.7 million, when over $400 million of that is actually growers’ money? Wouldn’t it be better to acknowledge in your ministerial statements the fact that the growers’ money is a large component of that? Both you and Minister Crean take credit for that amount of money in your ministerial statements. Wouldn’t it be better to acknowledge that the industry is in fact contributing over 50 per cent of that?

Senator Ludwig: I will leave you to do that. What I am putting out is that—

Senator COLBECK: Well, you—

Senator Ludwig: Let me answer the question. What I am indicating is how much money in total is being spent on a range of research and development. I think it is reasonable to put down what the total amount of spend is. It is a government that has matching funding. We also have a range of other organisations which fund research and development, right through from universities to CRCs. Of course, acknowledging all of the spend means, from all perspectives, both industry and government, how much we think research and development and extension is important.

Senator COLBECK: I do not disagree with the importance of it, Minister. In fact, I recall a time that I had in the portfolio looking after a lot of those RDCs. But, by the same token, you are giving the impression that the government is spending nearly $800 million on R&D for agriculture when over half of that is in fact growers’ money. Surely there should be a recognition of the growers’ contribution? If you do not mention it, you are giving the impression that it is all government spend when it is not.

Senator Ludwig: I assume that they are value statements you are making. I do not agree.

Senator COLBECK: Anyone who does not understand would quite rightly acknowledge that it is a significant spend, but surely the acknowledgment of the fact that the growers are putting in themselves a significant amount of money is an important part of your representation of the amount of money that is being spent.

Senator Ludwig: I think you have just acknowledged that.

Senator COLBECK: But I am saying you should acknowledge it, Minister. Why would you not want to acknowledge it? Why would you want to give the broader community—

Senator Ludwig: I have not said that I have not acknowledged it.

Senator COLBECK: It is not acknowledged in your statement and it is not acknowledged in Mr Crean’s statement. All I am saying is that I would have thought that that would have been a reasonable thing to do as part of your statement to the community after the budget.

Senator Ludwig: I think you will find that that is the government’s contribution.

Senator COLBECK: Well, not on my analysis of the figures—and it is not. Over $400 million of this is actually grower money. You just need to add the numbers up. It is quite easy to do.

CHAIR: Senator Colbeck, there are—

Senator Ludwig: As I said, I think you will find that that is government spending and we can contest your figures. I will certainly get a written response on that.

Senator COLBECK: I am sure you will. But the point is that it is not coming out of this budget. If it is R&D spend through the CRCs, for example, or something of that nature, then that again should be acknowledged; but it is being listed both by you and by Minister Crean as regional initiatives. In fact your ministerial statements are almost identical word for word in claiming all of those things.

Senator Ludwig: That is the amount of government spend. I am not sure what you are complaining about. Would you prefer—

Senator COLBECK: I am complaining if it is not government spend.

Senator Ludwig: It is government spend. That is what I have said it is.

CHAIR: Senator Colbeck, I am very keen for questions. You have time to ask the questions and for the minister or officers to be given time to answer, but I do not want to get into a shouting-over-each-other episode as we witnessed last time. Senator Colbeck, you ask the questions and then allow the minister time to answer.

Senator COLBECK: My contention is quite clearly, having looked through the figures, that what you are claiming as government spend is not government spend; $400 million of it is actually grower money and it is quite clear in the budget papers that that is the case.

Senator Ludwig: Can I, for the record, say that it is our spend over four years. Senator Colbeck is wrong. He either cannot add up or cannot read a budget paper—one or the other.

Senator COLBECK: I differ with you, Minister, because it is quite clear from the budget papers.

Senator Ludwig: I have said all I can say and you are just hanging yourself, Senator Colbeck.

Senator COLBECK: All right. We will see.

Senator Ludwig: The CFO can clarify it if he wants.

Senator COLBECK: My office will be doing the same thing.

Senator Ludwig: If you do not believe me then I will get the CFO to clarify it.

Dr O’Connell : I am happy enough to leave it as it is rather than engage too closely in this. I think the papers are very clear.

Senator IAN MACDONALD: With the efficiency dividends—the cutback in your overall expenditure—what are you doing staff-wise, Dr O’Connell?

Dr O’Connell : I will ask Mr Schaeffer to go through the staffing numbers. The additional efficiency dividend that we were asked to deliver on, which was 2.5 per cent in the last MYEFO—at that stage we were asked by the government to try to manage that without hitting staff numbers. We think we have managed to account for all of that on supplier expenses—in other words, not on direct staffing numbers.

Senator IAN MACDONALD: This always amazes me. Without any offence—if you can save 2.5 per cent without staff rearrangements then you must have been an awfully inefficient department prior to that.

Dr O’Connell : I would dispute that, of course. But we have looked at—

Senator IAN MACDONALD: Explain to me how you can save 2.5 per cent.

Dr O’Connell : I was just about to do that, Senator. I was going to ask the chief finance officer to explain. What we were looking at in particular was consultancy levels and others, but I will let Mr Schaeffer explain.

Mr Schaeffer : We have a total savings package of about $131.2 million over four years. That is made up of a number of things, including staff pay rises, efficiency dividends and some savings measures. We have already been working through a program of staff reductions. Those staff reductions have led to less duplication, less effort and less travel, which has allowed us to reduce the supplier costs.

Senator IAN MACDONALD: Thanks for that. But can you explain to me why you were wasting that money previously if you are able to save it now?

Dr O’Connell : Senator, you can always find efficiencies in organisations, as you know. As new technology emerges or as you change your delivery arrangements you can look for efficiencies. This is a constant process. We have been going through this consistently, looking at managing down as far as possible our corporate overheads. For example, by looking to centralise and align all of our corporate functions we have managed to reduce considerable corporate expenses with no losses to delivery. That is the job we have been asked to do and that is the job we are doing. It is a normal part of good management in an organisation to carry on pressing down on costs. I do not see any problem with that.

Senator IAN MACDONALD: One of the new governments in Australia has indicated that the Public Service will be set savings targets, and bonuses to senior public servants will depend on meeting those targets. Does the same apply in your department?

Dr O’Connell : No. The government has a policy of not having any performance payments or bonuses, so we do not operate any.

Senator IAN MACDONALD: So all of your staff just get their exact salary—no additions, no bonuses, no special trips or—

Dr O’Connell : There are no performance bonuses.

Senator IAN MACDONALD: Do all of your staff just get their straight salary or whatever—

Mr Schaeffer : Whatever is in their package but no performance bonus. For example, it might include a car allowance.

Senator IAN MACDONALD: Yes, but that is part of their original package.

Mr Schaeffer : Yes, that is the normal package.

Senator IAN MACDONALD: Okay. Will staffing in the department—perhaps you can give me some figures—be the same at the end of this financial year?

Mr Schaeffer : We are projecting an end-of-year position of 4,546 ASL and a 2012-13 budget position of 4,435. That is a reduction of 111 ASL.

Senator IAN MACDONALD: How does that compare with last financial year?

Mr Schaeffer : That is the 111—on the previous year.

Dr O’Connell : That is between the two portfolio budget statements.

Mr Schaeffer : In our portfolio budget statements—they are split by outcomes: outcome 1 and outcome 2—the total ASL figure for 2011-12 is estimated to be 4,546. I reiterate that it is an estimate at this stage. And for 2012-13 it is 4,435.

Senator IAN MACDONALD: And what was it for 2010-11?

Mr Schaeffer : It was 4,524.

Senator IAN MACDONALD: So it went up in 2011-12 and down in 2012-13?

Mr Schaeffer : Yes.

Senator IAN MACDONALD: Your answer to a question on notice showed me that the FTEs to January 2012 would be 4,593, which is bigger than any of the figures you have just given us.

Mr Schaeffer : That is the January position.

Senator IAN MACDONALD: So it goes up in January and down in July?

Mr Schaeffer : Yes.

Senator IAN MACDONALD: Can you explain that to me? What makes the first half of the financial year more staff demanding than the second half of the financial year?

Mr Schaeffer : It is just the timing around the year—there are cycles. There are all sorts of things that happen at different times through the year. Some casuals are brought on and off the books for different purposes at different times throughout the year. In January it just happened to be that figure.

Senator IAN MACDONALD: I guess we should ask for detail—which I will do on notice now—on how many you have in each branch, section or whatever the nomenclature at the moment is for the—

Mr Schaeffer : Division, Senator.

Dr O’Connell : Mr Schaeffer can go through the division—

Senator IAN MACDONALD: I do not think we have time, so could we get them on notice if they are available. Perhaps you can even distribute them at lunchtime.

Dr O’Connell : Can I make a slight correction to what I just said about performance bonuses. There are a handful of old AWAs that are working their way through. Some of those people still, as in the old AWA process, have performance bonuses. I will get you the numbers on how many but it is only a handful.

Senator IAN MACDONALD: Can you also provide on notice, if you do not have it, how many people are still on AWAs?

Dr O’Connell : Yes.

Senator IAN MACDONALD: And everyone is happy about going off AWAs? That is a leading question. I will not go there. On notice, can you give the committee in writing the divisions—

Dr O’Connell : On the AWAs, at the moment, out of the 5,000-odd employees, 30 have AWAs. They are just washing through as the agreements lapse.

Senator IAN MACDONALD: Are they all SES people?

Dr O’Connell : They are non-SES.

Senator IAN MACDONALD: Okay. I will have to talk to them about that one day. But I do not want to be confrontationist. Where are the areas of saving? Which divisions across the board are going to participate in the savings that you are making?

Mr Schaeffer : All divisions are asked to participate in the savings exercises.

Senator IAN MACDONALD: So should we expect less service, for example, from Biosecurity Australia?

Mr Schaeffer : No.

Dr O’Connell : It may be useful to go through some of those numbers to give you a sense of where—

Senator IAN MACDONALD: All right, we will do that quickly. Thank you.

Mr Schaeffer : From 2011-12 estimated actuals to 2012-13 budget figures, we have reductions in the Finance and Business Support Division of 22, the people and support services division of 34 and the Government Division of 11. ABARES will reduce by two.

Senator COLBECK: We are talking staff?

Mr Schaeffer : These are ASLs—average staffing levels, which are slightly different to FTEs. The Agricultural Productivity Division will reduce by eight. The Climate Change Division will not have a reduction at this stage.

Senator COLBECK: It went up pretty significantly between July and February, didn’t it?

Dr O’Connell : They had the other measure.

Mr Schaeffer : Yes, the Carbon Farming Initiative—the clean energy package—came through. The Sustainable Resource Management Division will reduce by 14. The Trade and Market Access Division will reduce by two. The animal division will go up by 10. The food division will reduce by about 28. There are no other changes to any other division at this stage.

Dr O’Connell : I stress that those are—

Senator COLBECK: Is that in a table you can table?

Mr Schaeffer : Yes, we will be able to provide that.

Dr O’Connell : Those are our estimates. Of course, how that plays out over the year may vary but that is our current estimate of how that 111 is accounted for on the changes. We will go through our planning processes now. Obviously we now have the budget outcomes, and as we play that into our planning processes there may be some adjustment, but that is the plan we are working on at the moment and about half of those numbers have already been delivered anyway on the way in.

Senator IAN MACDONALD: I will just focus on two of those aspects before I pass on the questioning. The Government Division is reduced by 11. Is that media people?

Ms Freeman : We have reduced our staffing by a number of things but the media numbers have not reduced.

Senator IAN MACDONALD: How many media people do you have?

Ms Freeman : The number is currently 51—off the top of my head. I can confirm that.

Senator IAN MACDONALD: Fifty-one?

Ms Freeman : I beg your pardon. That is in the communication branch. There are eight in the media team.

Senator IAN MACDONALD: So 51 is the whole division?

Ms Freeman : No, there are 51 in the communication branch.

Senator IAN MACDONALD: There are 51 in the communication branch and eight of those are media people?

Ms Freeman : Correct.

Senator IAN MACDONALD: Can you tell me now what the media people do—and perhaps in more detail on notice?

Ms Freeman : I can certainly provide that on notice for you, Senator.

Senator IAN MACDONALD: Can you? I am interested in their roles, what they do, job descriptions and perhaps even some details of how many media releases they have been responsible for. That would be helpful. Your Government Division goes down by 11. How many media people are in that 11?

Ms Freeman : None. There is no reduction in the media team out of that reduction.

Senator IAN MACDONALD: Okay. I am not surprised. Where did the 11 come from?

Ms Freeman : There were a range of positions across the division. As part of the corporate realignment process there was an amalgamation of a number of functions across the department. For example, in our investigation and enforcement area, we had a reduction in staff. AISO, we have secretariats both within the department and to service the jurisdictional committees. We did a rationalisation and looked at how we could arrange those functions—with more use of telepresence, for example—by just trying to do things smarter. In our editing teams we had a reduction through the use of contractors and we had a net reduction in staff by changing the staffing arrangements, for example.

Senator IAN MACDONALD: Thank you. I have been around for a long time now and I can hear all the buzzwords and—I am not being offensive—I know you are trained to do that. But where exactly did the 11 come from? You will give us that on notice, will you?

Ms Freeman : I am certainly happy to, yes.

Senator IAN MACDONALD: Thanks very much. Really, I am not being—it is just that we have all been around for a long time and we know how these things work. Sustainable resources has been reduced by 14. Can someone explain to me—14 out of how many in the sustainable resources area?

Dr O’Connell : We might need Mr Thompson to explain that.

Senator IAN MACDONALD: Thank you for the sheet you have just handed us. That is great.

Mr Thompson : The 14 reduction is largely out of the program planning area of the division, and implementation. In the last year of Caring for our Country it was basically a scheduled reduction in staff numbers. We front-end loaded the staff numbers as the program developed and then tapered them off towards the end when the program was mature.

Senator IAN MACDONALD: The program finishes next financial year—is that correct?

Mr Thompson : The program finishes at the end of 2012-13. The government has announced an extension from then.

Senator IAN MACDONALD: An extension of the Caring for our Country program?

Mr Thompson : Another five years continuation.

Senator IAN MACDONALD: But you will not need those 14 positions to continue the program—is that what you are telling me?

Mr Thompson : We believe we will be able to run the program in a different way which will enable us to use fewer resources.

Senator IAN MACDONALD: Again, Mr Thompson, we have both been around a fair while. Are we satisfied that the Caring for our Country program—the old NHT—has now again reached its optimum operability? It is right and it is just monitoring, encouraging, checking and auditing from now on—is that right?

Mr Thompson : In this last year of the program, following the last round of project calls which are currently being finalised, there will be no more new contracts for the remainder of the current program, so it will be acquittals, auditing and monitoring. Then the program will recommence next year. As I said earlier, we have done a review of Caring for our Country and a continuation has been announced. We will spend some time over the next six months consulting the stakeholders on the detailed implementation of the program but we certainly hope to be able to implement the program in a more streamlined way. There are a whole range of ways one can streamline program management.

Senator IAN MACDONALD: I do not want to get into details on something we will come back to later but, as far as staffing is concerned, what I understand is the wind-back of Reef Rescue—I think that was your terminology, not the state government’s—

Senator Ludwig: That is not right.

Senator IAN MACDONALD: Well, whatever your part of the surge of funding—

Senator Ludwig: We can come to that question but I just want to make the point that that is not a correct statement that you were making.

Senator IAN MACDONALD: So I am wrong in saying—what was your program called?

Senator Ludwig: You said there was a cut in Reef Rescue. I said you were wrong.

Senator IAN MACDONALD: Reef Rescue is yours? Let us get that first.

Senator Ludwig: Yes.

Senator IAN MACDONALD: You are saying there is no cut to Reef Rescue?

Senator Ludwig: To the extent that we are going to develop Reef Rescue over the ensuing 12 months, there is no change to the program. The program will run out as usual for this year, so there is no cut to that program. Then, as the person said, we will consult over the next period to determine what program we will have and how much we will spend on Reef Rescue. So the question has not come up.

Senator IAN MACDONALD: Thanks, Minister. People are telling me that you have put a bit of money into other areas of Caring for our Country but that it has come off the Great Barrier Reef focus that has been very prominent, and rightly so, in the last few years. You are telling me that that is not correct?

Senator Ludwig: That is correct.

Senator IAN MACDONALD: I am correct that what I said was not correct—you are correct in saying that what I said was not correct?

Senator Ludwig: Yes.

Senator IAN MACDONALD: Okay, so it is full steam ahead with the reef program. That is good to hear.

Senator Ludwig: This year it will continue, so there has been no diminution in the Reef Rescue program for this year. Let us be clear about that. That has already been committed. Those funds will run through. That is Caring for our Country. For the next iteration of Caring for our Country we will consult with all of the stakeholders of Caring for our Country as to how the program will run. No decision has been made.

Senator IAN MACDONALD: So there was no comment in the budget papers that someone obviously misread when they said to me—

Senator Ludwig: They misread what was an $8 million budget line for Reef Rescue but that went to GBRMPA as part of what we ordinarily do all the time. So my conjecture is that someone has misread what that figure is for—that related to the Reef Rescue program that is run out of Caring for our Country—and then has come to the conclusion that there was a cut in Reef Rescue. If I am wrong about this description, please tell me, but my understanding is that that was a wrong assumption. Clearly that was a wrong assumption to make.

Senator IAN MACDONALD: So the cutback has been to GBRMPA?

Senator Ludwig: No, that is what they ordinarily get out of—well, Mr Thompson can take us through it.

Mr Thompson : The detail of that is probably a question for SEWPaC but the budget did provide $8 million for GBRMPA to undertake reef management activities. That is not related to the government’s consideration of how much it will spend in the outyears on Reef Rescue.

Senator IAN MACDONALD: Okay, but are you telling me that that is new money for GBRMPA?

Mr Thompson : It is money for GBRMPA that has been provided in the budget.

Senator Ludwig: Yes, the government will provide $8 million over two years to supplement the base funding of the Great Barrier Reef Marine Park Authority. To ensure that it can continue to deliver on its objectives, this measure includes funding the continuation of the community based Reef Guardian initiative and support systems for research and on-ground management.

Senator IAN MACDONALD: Is that out of your department?

Senator Ludwig: No.

Senator IAN MACDONALD: No, I did not think so.

Senator Ludwig: I am just trying to tell you how the confusion might have come about.

Senator IAN MACDONALD: Thank you—you have confused me even more. I will follow that through in Environment.

CHAIR: Dr O’Connell, you tabled document No. 1 to the committee when a question was asked on manning numbers. We accept the tabling of document No. 1.

Senator SIEWERT: I want to follow up on the Reef Rescue issue, going back to your comment that there will be no funding under Caring for our Country this year—or new projects, I should say.

Senator Ludwig: There is still funding under it this year.

Mr Thompson : There will be some new projects this year, Senator. We have just completed a community action grant round and an open call. The applications are in their final stages of consideration. The outcomes of those programs are expected in the next few weeks. Then there will be no further calls under Caring for our Country until the new program kicks in. We have been telling people that we hope to do some calls later this year so that we can have a continuation. But under the old program effectively we made the last call for projects early this year. Reef Rescue is virtually fully committed as a result of contracts signed last year.

Senator SIEWERT: Okay, that goes to the essence of my question. There will be no new calls for Reef Rescue anymore until next year?

Mr Thompson : We do not expect any calls for Reef Rescue from the first phase of Caring for our Country. Depending on the outcome of consultations, for programs like Reef Rescue, programs for regions or maybe other elements of the program we may be able to make some calls for projects towards the end of this calendar year, which would enable them to commence in a continuous wave from 1 July 2013.

Dr O’Connell : Senator, it is probably useful to be quite clear that that is not a change. The contracting arrangements go over into this coming financial year for Reef Rescue and those are continuing on. So there will be delivery of Reef Rescue right through to 2012-13—

Senator SIEWERT: But that is under existing programs that are already ongoing?

Dr O’Connell : That is under the existing program.

Senator SIEWERT: There will be no new calls?

Senator Ludwig: The five years for Caring for our Country do not conclude this budget; they conclude in—

Senator SIEWERT: 2013—

Senator Ludwig: Yes. Therefore, so that we would not have a gap, we have announced the next five-year round that commences from 2013-14 so that we can spend this period consulting with people and taking the necessary administrative decisions and actions and getting it set for the five-year period.

Senator SIEWERT: I realise that we have a whole section on this but perhaps I can ask on notice, so that the figures will be available when we get to it tomorrow, what level of funding for the outyears of the projects that are currently funded remains to be funded in this financial year. Does that make sense?

Mr Thompson : We will be able to provide those figures.

Senator SIEWERT: For all the projects for Reef Rescue and for all the other projects added up, how much have you potentially got left to spend at the end of this calendar year?

Mr Thompson : We can give you an estimate of how much money we expect to spend from the first phase of Caring for our Country in the 2012-13 financial year. I will have that tomorrow.

Senator SIEWERT: Okay. I will follow that up tomorrow. Thank you.

Senator IAN MACDONALD: That is a program you run jointly with Environment, is it?

Mr Thompson : Yes.

Senator IAN MACDONALD: And the reduction by 14 in the Sustainable Resources Management Division is entirely from agriculture?

Mr Thompson : Yes.

Senator NASH: I do not think this has been canvassed directly. There was some media reporting around the budget—and I just want to clarify that it is right, because sometimes it is not—from the ABC that there were, across the board, 111 jobs to be cut from the department. Is that correct?

Dr O’Connell : We have just gone through all that.

Senator NASH: All right. I do not think you and Senator Macdonald talked about corporate realignment—did you?

Dr O’Connell : Yes, we went through the corporate realignment component. We can do it again if you wish. Essentially the numbers are, for all intents—

Senator NASH: No, I do not want the numbers. I just want to know specifically what it means. I think you might have given the numbers for corporate realignment but I am interested in knowing in detail.

Mr Schaeffer : I can explain in terms of my division, the Finance and Business Support Division. We have centralised a number of functions and by doing that we were able to rationalise a bunch of processes underneath, which meant that we did not need as many people to run those processes both in the line area and in the centre. Basically by virtue of fixing up those processes and removing the red-tape burden and through some different ways of looking at going about our business we have been able to realise efficiencies.

Senator NASH: What sorts of functions were centralised?

Mr Schaeffer : There was finance reporting—management accounting functions. The preparation of financial statements was centralised at a point in time. Cost recovery arrangements were centralised—those sorts of activities.

Senator NASH: Centralised to where?

Mr Schaeffer : To the centre—my division. I am not the centre.

Dr O’Connell : To the CFO.

Senator NASH: They were centralised to the centre.

Dr O’Connell : Directly under the CFO.

Senator NASH: I am just trying to get a sense, not being in the department, of what is out of the centre and what is the centre.

Dr O’Connell : This goes beyond finance issues to others. Ms Mellor will be able to talk you through areas that are engaged in the biosecurity business. What we had before was a set-up where we had some central management in terms of, say, the finance area or the HR area, and we had quite a lot of dispersed activity in divisions, particularly in regional offices. Of course, that is one way of organising yourself, but when you have that you have certain transaction costs involved in it. At one stage we were looking at developing the potential for a separate statutory agency in the biosecurity business. We were actually underway in thinking through and preparing for a separate set of functions, but there was a decision a while ago not to do that. We have now made a decision to integrate all of our key corporate functions into the central part of the department rather than have this federated process. That is allowing our spend to drive quite a bit of savings and efficiencies out of it. It involves, at least in part, a change from looking to separate out that function. But Ms Mellor can probably add quite a bit there.

Ms Mellor : The only point I would add beyond that is that we also did not have a central IT capability. We had a very dispersed IT capability. Across a number of the divisions there were staff trying to manage systems, so one of the key decisions that we took in the corporate realignment was to create a division that was focused on IT and that would enable us to look at the whole organisation’s IT as one piece of enterprise architecture rather than a number of sets. That brought with it some efficiency as well, so in the corporate alignment process we were really focused on what you would call the key corporate activities: finance, HR, IT and the Government Division as well. That provides, as Ms Freeman was indicating, secretariat support services for governance within the department but also in our relationships under COAG committees. So we looked at how we could do it differently, instead of having those functions dispersed right across the organisation, including in the regions. We were not providing consistent service either. It was basically fairly patchy depending on where you were. We looked at how we could bring it together to achieve efficiency and effectiveness and create some space to create the IT Division.

Senator NASH: Thank you. Would you mind taking on notice a question on the dispersal you talk about—specifically, where these functions that now have been brought back to centre of the universe were being performed before.

Ms Mellor : I think that is only in our CFO’s mind.

Senator NASH: Thank you. I think there have been some discussions around voluntary redundancies. Is that correct? What of the total of 111 would you expect to come from voluntary redundancies?

Mr Schaeffer : Not too many more.

Dr O’Connell : I might pass over to Ms O'Brien to go through this. Predominantly that has already been worked through, so we are not talking about a new program so much as history.

Ms O’Brien : The reductions have been achieved through redeployment and some number of voluntary redundancies. The redundancies were between July 2011 and March 2012. There were 93 redundancies. That excludes the meat reform program, which was subject to separate processes.

Senator NASH: Were those 93 all voluntary redundancies?

Ms O’Brien : Yes, they were.

Senator NASH: On redeployment, can you explain for me how you get a number cut from redeploying in terms of staffing levels?

Ms O’Brien : What we have been able to do is to redeploy people into areas of the business that are cost recovered and have been subject to growth. For example, in our cargo programs we have had an increase in the required resourcing. So what we have been able to do, if we needed a reduction of so many people within a particular program and not all of them were putting up their hands for voluntary redundancies, is redeploy some of those people into areas of growth within the department.

Senator NASH: So it is sort of like an offsetting mechanism. If another part of the department is actually over and above the targets you are trying to meet, you put the staff in there so that it does not count against the previous area where the staff were?

Ms O’Brien : The 111 is the net reduction.

Senator SIEWERT: Is this the right area to ask about the Australian Year of the Farmer contribution? Tell me if I should be asking it somewhere else. I did not know where else to ask it.

Senator NASH: And what a fine area it is!

Senator SIEWERT: Yes, exactly. Is it okay to ask it here?

Dr O’Connell : Yes, I think it is. We might need to get Mr Glyde up to explain it.

Senator SIEWERT: It says that the government will provide $1.3 million this year for projects. Are we able to get a breakdown of what those projects are?

Mr Glyde : The relevant part of the department that can go to the exact nature of your question is the Agricultural Productivity Division, which is on tomorrow morning, I understand. You are looking for a break-up of what the money will be spent on in terms of the year?

Senator SIEWERT: Yes, and the time line for it flowing et cetera. Maybe you can take it on notice for tomorrow and I will ask tomorrow. I am fine with doing that.

Mr Glyde : I think that is best.

Senator SIEWERT: And is it all allocated?

Mr Glyde : I will take that on notice and be ready tomorrow morning.

Senator COLBECK: I want to go back to the efficiency dividend and some questions on notice that you answered as part of that. In respect of the labour figures that you have given us and the reductions in numbers in the department, you are talking about an overall reduction of 111. What was the number of meat reform people that came out of that? Has the base number been adjusted to account for that or are they included in the 111?

Mr Schaeffer : That is probably best answered by Mr Read in our Food Division. But in the 111 there are a further 28 to come out of that program.

Senator COLBECK: Over and above the 111?

Mr Schaeffer : That is in the base. That is in that 111.

Senator COLBECK: So it is 28 of that 111. That is in the biosecurity food area, is it?

Mr Schaeffer : That is correct.

Senator COLBECK: So those 28 are inspectors who have moved out of the system?

Mr Schaeffer : Or will be.

Ms Mellor : Mr Read can explain the 28. Some of it may be inspection staff, but some of it may also be staff who used to be involved in the analysis of information that comes in from the various inspection activities. So it will be a mixture of central office and regional staff.

Senator COLBECK: My point in asking is that that is not necessarily part of the efficiency dividend process; that is part of a separate process. I understand—

Ms Mellor : This is not efficiency dividend at all.

Dr O’Connell : Perhaps I could just remind you that what the CFO, Mr Schaeffer, was talking about was the full savings requirement that we have over the period, which is the $132 million.

Mr Schaeffer : That is right.

Dr O’Connell : And this is the staffing impact of that. So that includes everything that we have to deal with. With regard to the efficiency dividend, if you are talking about the extra $2.5 million, that is not the $132 million. That is involved in it.

Senator COLBECK: The 132—

Mr Schaeffer : That is the total savings package that we have to deal with.

Senator COLBECK: Yes, and I think you have 28.3 for this financial year. Is that correct?

Mr Schaeffer : That is right, yes. Plus the 2.5 per cent. The previous question on notice was about the 28.3. That took account of all of those previous savings measures. Then there is the extra 2.5 per cent efficiency dividend, which is $26 million over four years and is incorporated within that $131 million savings package.

Senator COLBECK: So the base efficiency dividend was 28.3?

Mr Schaeffer : No, they are a combination of—

Senator COLBECK: For this year? I am going to question on notice No. 153, which was:

How has the efficiency dividend been implemented? Please list where and what spending has been reduced to meet the efficiency dividend.

You have given me some budget targets for the year. So ABARES is 0.96 of $1 million. Productivity is 0.57 et cetera, down through that question.

Mr Schaeffer : If you have a look at the answer on paper No. 2, in the last sentence it says:

The effect of the 2.5 per cent increase to the efficiency is yet to be factored into internal budgets.

So they are not in those numbers. That 28.3 took account of pay rises under the collective agreement. It took account of the previous savings measures and the efficiency dividend prior to this last one.

Dr O’Connell : The 1.5 per cent.

Senator COLBECK: Given that our conversation last time was how you were going to meet the efficiency dividend, including the additional efficiency dividend, you then send me an answer that does not include it?

Mr Schaeffer : No, because we had not settled that.

Dr O’Connell : We had not settled it.

Senator COLBECK: I have asked you at every estimates how you are going to meet—

Dr O’Connell : We have just explained how we are meeting it. Regarding the extra 2.5, we have settled now how we are meeting it. I have mentioned before how we are meeting it and we can provide the detail.

Senator COLBECK: Let us go through it piece by piece, because you say, for example, that you are going to focus on further areas for savings in consultants and contractors. What savings are you—

Mr Schaeffer : We have reduced our consultancy services, temporary and contract staff, our travel budget, our official hospitality and our media and advertising by 20 per cent. We have reduced all other budget funded costs by 10 per cent, excluding rent and our training budget.

Senator COLBECK: So what was the reduction in consultancy contractors?

Mr Schaeffer : Just over $2 million.

Senator COLBECK: Air travel?

Mr Schaeffer : I do not have air travel, but travel overall was $1.3 million for domestic and $0.97 million for international.

Senator COLBECK: How much of that would have been made up by conducting virtual meetings?

Mr Schaeffer : I do not have that detail with me.

Senator COLBECK: Any of it?

Mr Schaeffer : Yes, of course.

Senator COLBECK: Okay. Could you take that on notice for me, please? What about hospitality and entertainment?

Mr Schaeffer : $42,000.

Senator COLBECK: Media and advertising?

Mr Schaeffer : $46,000.

Senator COLBECK: Printing and publications?

Mr Schaeffer : That is 10 per cent. I do not have the split between all of the other cost centres.

Senator COLBECK: Ten per cent of what, though?

Mr Schaeffer : All other supplier costs—so not staff but all other supplier costs, like printing, were reduced by 10 per cent.

Senator COLBECK: Training?

Mr Schaeffer : Training was not reduced.

Dr O’Connell : We are quarantining training from that.

Mr Schaeffer : And the rent has been left the same.

Dr O’Connell : The rent we cannot change in the time frame.

Senator COLBECK: You talked in your answer about the basic efficiency dividend. We have been through redeployment of vacant positions and natural attrition and particularly the administrative processes. You also talk about transferring processing loads from X-ray machines to detector dogs and reducing supply costs. Tell me how that works. How is it more efficient to use detector dogs than X-ray screening machines?

Dr O’Connell : Mr Chapman will be able to help you on this.

Mr Chapman : There are a couple of advantages in using detector dogs, particularly in airports and occasionally in mail centres, for detecting items of biosecurity concern. One is that they are able to identify particularly high-risk materials better than X-rays can. Secondly, we are able to get much faster throughput of passengers using detector dogs rather than X-rays. So there is a passenger flow benefit as well as a biosecurity benefit.

Senator COLBECK: What changes are you needing to implement to your systems and processes to achieve that?

Mr Chapman : They are not fundamental changes that are required. One of the things you will notice if you go through an airport now is that, rather than the dogs working around the baggage carousels randomly, there is a detector dog channel. Our risk assessment officers in the airport, in assessing passengers, will determine which is the best channel for the passengers to go through, depending on the risk that that profile has associated with it. In some cases they will send them down an X-ray channel. In other cases they will send them down a dog channel and for others they will make an assessment and release them without further intervention.

Senator COLBECK: What about in mail centres?

Mr Chapman : In mail centres we use dogs particularly for the high-volume areas such as letters and some of the smaller mail articles because they can find biosecurity risk items which are quite literally the one in 10,000 in those items. We also work with Customs in mail centres in X-raying a very large volume of international mail each year.

Senator COLBECK: What is your capacity with the dogs? Are you having to increase your capacity? A number of us have been through the Sydney mail centre and had a look through there. Previously the two had been used together. You would cycle dogs through the mail process, not continuously, but they would be cycled in and out. What are your capacity issues in relation to that?

Mr Chapman : There are several things we are doing to improve the capacity or efficiency of how we use dogs. We are using more labradors now, rather than just the beagles, picking up from the special breeding programs Customs has. The labradors can be trained better to be multipurpose dogs, so they can be both active and passive dogs. The active dogs are the ones that get all excited and perhaps scrabble at mail or baggage when passengers are not around. The passive dogs are the ones which sit next to you when they identify something of biosecurity concern. They are the ones that we use in the passenger hall in airports. Having multipurpose dogs means that it is easier for dogs to be used in multiple areas.

Senator COLBECK: So how many more detector dogs are you going to need?

Mr Chapman : We are not adding to the number. I think we have 92 detector dogs at the moment. I can check on that for you.

Senator COLBECK: Can we get that on notice?

Mr Chapman : It is 92. If I am wrong on that I will correct it.

Senator COLBECK: How are you changing dog species but not having any more? Is it a cycle as you go through the training process?

Ms Mellor : As they retire.

Mr Chapman : That is right.

Senator COLBECK: What is the life span of a working dog?

Ms Mellor : Do you mean the life span of its working life?

Senator COLBECK: Yes.

Ms Mellor : That will depend on the dog. We have had dogs of 10 years plus, and some of them retire earlier.

Senator COLBECK: Senator Sterle wants to know what their redundancy payment is! Once a union delegate, always a union delegate!

Mr Chapman : Dogs are a bit like humans, really. Some will go for a long, long time and others do not go for quite so long.

Ms Mellor : I think the key issue here is that we are able to use these dogs as we are training them differently to use them across channels. Before it was as it is with any staff: if you just did that, you did not necessarily get efficiency. With the dogs we can move them between the active and passive work because we are training them differently.

Senator COLBECK: So there is going to be more use of dogs but you are not having any more dogs. One of the things I have noticed from the interaction I have had with the process—and I admit it is not extensive—is that there are rest periods, physically managing the animals—

Ms Mellor : Toilet breaks.

Senator COLBECK: We might need a collective bargaining agreement for them if we keep going! So what sort of cost benefit are we talking about getting out of this change in process?

Mr Chapman : It is not so much a cost benefit as an efficiency and effectiveness benefit. One of the things we are doing—and this is picking up on the question you were alluding to before—is making a point of targeting the dogs in the areas where they are going to be most effective. In airports that will mean that certain cohorts of passengers who are more likely than other cohorts to carry certain foodstuffs will be put down a dog channel. Those who are going to be more likely to have, say, wooden souvenirs might go down an X-ray channel. So we make choices about where we deploy the dogs. As I said, it provides us with efficiency benefits because we can screen more passengers more effectively in a shorter period of time, and that is important as passenger numbers are increasing.

Senator COLBECK: I get that, but this has been put to us in the context of about 54 per cent of the department’s savings dividend coming out of quarantine. That is a big chunk. One of the things that you are saying to us is:

The activities to be undertaken to achieve the dividend include redeployment of vacant positions—

We have dealt with that—

natural attrition, a reduction of admin programs—

We have dealt with that—

eliminating duplicated effort, business process re-engineering, using more detector dogs.

Now you are saying to me it is not necessarily a savings measure; it is an efficiency and effectiveness measure.

Mr Chapman : One of the savings that does come from that is that with more passengers being screened by dogs in place of X-rays we have been able to reduce the number of baggage handlers we have. You might remember that in the past we had contractors employed to lift passengers’ bags onto the X-ray. That will no longer be required. That is a saving that we are making in that area which is partly contributed to by using dogs.

Senator COLBECK: There are no extra dogs. Are they working more or are they just working differently?

Mr Chapman : They are just working differently.

Senator COLBECK: Okay. So you do not need any more dogs. What is the cost to prepare each one of these dogs?

Mr Chapman : I would have to take that on notice, but there is quite intensive training of both the dog and the handler.

Ms Mellor : We will have biosecurity staff here shortly, if you want to ask that question when the dog people get here.

Senator COLBECK: Does each individual dog have an individual handler?

Mr Chapman : Yes.

Senator COLBECK: Okay. We will come back to that later. I just want to go back to the chart that you have tabled here today with the full-time equivalent staffing levels. Are the numbers in here averages across the year?

Dr O’Connell : The FTE actual is a point in time. Ms O’Brien might be able to go through the explanation of the difference between ASL and FTE.

Senator COLBECK: I get that. I am just trying to match up the different charts you have given me. You have given me a chart. It is a question you answered from Senator Macdonald, and the answer was that the July actual was 4,570. That is question on notice No. 4. You then give us the January 2012 number. Senator Macdonald asked you about that before. That was 4,593.4. That is why I was asking you the question before about whether or not the base had to be reset. This is all in the context that I am just trying to get to the bottom of how you are actually meeting the efficiency dividends. That is my frustration. I get different bases all the time. All I am trying to do is get some information that I can compare, and nothing stacks up. Nothing matches up.

Mr Schaeffer : We answered the question you asked at the time. They are different time frames. That question on notice was in July 2011, whereas this is the end of June. So the numbers change from month to month. As volumes change, demand changes and all sorts of things happen across the department.

Senator COLBECK: I understand that those things do change based on points in time. How do we get a handle on the broader numbers when everything is based on a point in time and it is almost impossible for us to match it up?

Mr Schaeffer : We have given you answers on notice on how we are going to reduce the appropriations funded parts of the business. We have given you ASL reductions this year. All of that goes into the mix of managing the department’s budget.

Dr O’Connell : But just to be clear: FTEs are a point in time assessment. If you want compare apples with apples, compare FTEs to FTEs, ASLs to ASLs—

CHAIR: Can you use a different analogy, Dr O’Connell? We just got over that.

Dr O’Connell : Oranges with oranges?

Senator COLBECK: They are more worried about our fruit fly.

CHAIR: They were not going to mention it and now I have opened my big mouth.

Senator COLBECK: They have our fruit flies now.

CHAIR: That is a fair trade.

Dr O’Connell : An ASL is an average over the year, so it is a full-year average you are looking at. They are obviously different, but the useful point of comparison, if there is any, is what task we currently face. If you are interested in what task we currently face to meet our average numbers over 2012-13 then a useful starting point is to look at what our actual numbers are now. The nearest we have there is the March numbers. The difference between the March FTE and our average level that is required over the coming financial year is about 64, which says that our actual task, if you are faced with it now as a management function, is to manage down 64 staff. So year on year it is 111. The point in time to the average for next year is 64.

Senator COLBECK: And they fit within that final column in that table that you have presented to us this morning?

Dr O’Connell : Yes. Average staffing levels always create difficulties in communication and understanding because, of course, you have peaks and troughs during a year and it moves all over the place during a year, but your target is an average over that year.

Senator COLBECK: Yes, I know. I understand.

Dr O’Connell : And in the end the target is really driven by the departmental appropriation dollars you have, which is the actual critical requirement in the end. So these estimates are just what we will estimate now that we expect, but an actual later may well be quite different, and an actual at a point of time during the year will depend on demand. For example, if Mr Chapman has a large increase in cargo coming through or passengers coming through, we may have to take on staff to manage that. If they reduce radically—

Senator COLBECK: Which is what affects the point in time number.

Dr O’Connell : For example, when the GFC happened we had a serious diminution in cargo and passengers and we had to shift numbers. So we will be managing those all through the year and they will go up and down all through the year. Our current estimate, which of course is relatively coarse, is our estimate of what we will need to have as an average over the year and we will work to that. But this is not an exact science.

Senator COLBECK: Just to finalise the one-off 2.5 per cent efficiency dividend increase, I might get you to provide the figures to me on notice, because I presume you do not have the numbers here now—

Dr O’Connell : There are the other elements of the cut which we can give you a breakdown of as well.

Senator COLBECK: So can you provide us, on notice, with the detail of measures that you put into place to deal with the 2.5 per cent dividend?

Dr O’Connell : We should be able to get that to you before estimates is over. It is quite straightforward.

Senator COLBECK: I just want to go to mobile phones again. I sure hope we are talking the same widgets and gadgets this time.

Ms Mellor : We will be.

Senator COLBECK: If we go back to March 2011, we had 1,612 mobile phones. At September 2011 we had 1,666. In January 2012, we had 1,695. With BlackBerries, which is obviously something different, we have gone from 263 in March 2011 to 442 in September 2011 and 514 in January 2012. iPads have gone from four in March 2011, four in June 2011 to 51 in January 2012. Where are those numbers now?

Mr Gathercole : iPads are now at 60. BlackBerries are at 529 and mobile phones are at 1,709.

Senator COLBECK: So they are obviously not part of the efficiency dividend process?

Mr Schaeffer : Those costs will be included in the 10 per cent reduction across all other supplier expenses.

Dr O’Connell : What you are seeing there is a shift. We have essentially got an element of a technology shift. For example, I am sitting here without any folders of paper, which I would have had once upon a time. I have an iPad instead with everything on it. So while there has been an increase in provision of those, it is at a significant decrease in a lot of other support.

Ms Mellor : BlackBerries in some of our staffing actually create other efficiencies where our inspectors can take photographs of findings in cargo and move them into the operational science program for quick diagnosis.

Dr O’Connell : Essentially it is just a shift in technology over time in the organisation. Quite a lot more, I think, of our remote staff will have access to BlackBerries, which is improving their efficiencies.

Mr Gathercole : That is right. BlackBerries in the remote regions are going up and BlackBerries in central office are going down.

Senator COLBECK: So there is a shift on who is using what. What is happening with people in central office? What are they being shifted to—mobile phones?

Mr Gathercole : iPads, as a general rule, and mobile phones. The iPad gives you email.

Senator COLBECK: Are we projecting a continued increase in those numbers, given that you are talking about reductions in staff?

Mr Gathercole : I expect that iPads will continue to increase significantly and BlackBerries will remain stable as the volume shifts from central office to regions.

Senator COLBECK: Is it meaning any changes in other technologies? Are you using iPads instead of laptops, for example? Is it creating any channel shift as far as that is concerned to other technologies?

Mr Gathercole : I expect that iPads will channel shift at a later stage but right now iPads are useful as a device to carry around to do email and access the network remotely without actually being attached, as distinct from a laptop, which is far less mobile in terms of having to carry it around—and it is far easier to use an iPad than a laptop.

Senator COLBECK: Minister, you made a statement in the chamber last year that you had been to 70 locations across the country. I just want to line that up with the response to question on notice No. 170, which identifies 41. There is an opportunity to clarify some of that because you have only indicated that you have been to Victoria and Tasmania, so I have only counted that as two places. You might want to detail that—and also drought pilot regions. How do we align the two numbers?

Ms Freeman : I can run through the travel that the minister has done since the last estimates period, if that helps as an introduction. His travels have included going to Port Lincoln and Adelaide, Kununurra and Darwin; Wagga, Newport and Bilgola in New South Wales; Melbourne, Bendigo, Corryong, Mooroopna and Kyabram in Victoria; Hobart, Dunalley, Westbury, Scottsdale and Smithton in Tasmania; and Indonesia. That is between the February estimates period and earlier this month.

Senator COLBECK: That perhaps does provide a little clarification. I think he went to five places in Tasmania, which I have counted as one, so that gives a few numbers. I am just trying to line the two numbers up—that is all. I think I got all of them—it was Hobart, Dunalley, Westbury, Scottsdale and Smithton?

Ms Freeman : Yes.

Senator COLBECK: Okay, I have the ears painted on—that is good. I am happy to do that on notice but—

Ms Freeman : We can take it on notice.

Senator COLBECK: I just wanted to align the two. The minister obviously has an idea of what he has done—from his statement that he made to the chamber and also more publicly—but I want to align that with the travel costs.

Senator Ludwig: Some of it would be self-drive as well, if I have gone out from Brisbane to Toowoomba or Lockyer or one of those locations. And I think the travel in Tasmania was self-drive as well. There was a range of circumstances but I have been to many places across Australia. I am happy to get you a full list of all of the locations where I have been and spoken to many producers and farmers across the region.

Senator COLBECK: Let us go to one of them. The answer to that question on notice says you went to Crocodylus Park in the Northern Territory. The activities available at Crocodylus Park are jumping crocodiles, opportunity to hold a photogenic baby crocodile, buffet breakfast with the big cats and sunset drinks with the crocs.

Senator NASH: Do they get the drinks too?

Senator COLBECK: I am not sure.

Senator Ludwig: You are not suggesting that I did that, are you?

Senator COLBECK: I am going to ask you—

Senator Ludwig: Ask your question, then.

Senator SIEWERT: Did you hold one of the baby crocs?

Senator COLBECK: Did you hold a baby croc?

Senator NASH: My son has been there. He said it was fabulous.

Senator SIEWERT: My nephew went there two weeks ago.

Senator Ludwig: This is actually a very—

Senator COLBECK: The expenses incurred in travel included $70 for two AQIS officers. What was the role of the AQIS officers as part of your visit to Crocodylus Park?

Ms O’Brien : I understand that it was the entrance fees that were paid for the AQIS officers who accompanied the minister to the park for discussions with the staff.

Senator COLBECK: The AQIS officers were accompanying him. That is obvious. But what was the role of the AQIS officers in accompanying you to the park?

Ms Freeman : I would have to take that on notice, Senator. I am certainly aware of that—

Senator COLBECK: I am not disputing that they were there. I just want to know what—

Ms Freeman : I am certainly aware of that visit by the minister but I would have to go back and check the specifics of his itineraries, to be honest.

Dr O’Connell : I think that when it is termed 'AQIS officers' that is probably misleading. I think it is just the regional office staff who were accompanying the minister—from the Darwin office. So—

Senator COLBECK: I can only go by what is—

Dr O’Connell : They were the northern regional officers who were just accompanying the minister on the trip. A range of things were looked at on that trip, as I recall. Some of them involved our staff showing—I think there were things like inspections being demonstrated and others. But we will get you the details.

Ms Freeman : We can certainly do that. But they were—

Senator Ludwig: It is also important to recognise that the work that is going on at that crocodile park includes the export of hides, high-quality agriculture, to foreign markets in overseas areas. They also farm crocodiles. I am not sure whether you have had an opportunity to visit it, or got out of Tasmania, but the opportunities are there for increasing our export of hide, particularly crocodile skins—and also the farming techniques are second to none across Australia. That is why I visited—because they have been innovative in developing opportunities and markets for both crocodile meat and hides and they have been innovative in developing ways to grow crocodiles to the appropriate size and quality. As an adjunct they do have a tourist park, but the part that I wanted to see was around the growth and opportunities, particularly unique markets such as are being developed in the Northern Territory with crocodile hides and meat.

Senator COLBECK: So you will get back to us on notice the role of the officers who were part of that process?

Ms Freeman : Sure, Senator.

Senator COLBECK: Did you get to hold a crocodile, Minister?

Senator Ludwig: What I saw when I visited the crocodiles was a range of processing of skins, hides and meat. I can go through the detail but I think that would be inappropriate. There are a range of opportunities I had at that park, including looking at the pens and things like that. But, no, I did not go into a pen—I can assure you of that.

Senator COLBECK: That was not the question, but okay. I want to go to the table that you provided us in response to question on notice No. 172 on education services. I am having some difficulty reconciling the table that is given in response to part 1 of the question. You have, for example, FRDC training as 42 people at a cost per person of $2,820. It should be $111,440. I just want you to run me through how I should be reading that table, because it does not seem to provide me with the right detail of the figures.

Ms O’Brien : The table represents the expenditure on general management and technical training within the department and within each of the portfolio agencies. The row that you have pointed to is the Fisheries Research and Development Corporation.

Senator COLBECK: FRDC, yes.

Ms O’Brien : That information has been provided to us for inclusion in this table by that organisation.

Senator COLBECK: So they have provided you with the data and you have just loaded it into the table?

Ms O’Brien : That is correct.

Senator COLBECK: And it is the same with the AFMA numbers as well? So all of those numbers are basically direct loads of information. You do not check them; you just put them into the table?

Ms O’Brien : We do not check the data that has been provided by the agency, no.

Senator COLBECK: So how do we go about reconciling what the numbers should be?

Dr O’Connell : We can take that on notice. The FRDC are not appearing, but we can get the FRDC to provide us with an explanation.

Senator COLBECK: In respect of the general levels of training within the different agencies, do you do any comparisons on the amount of training? If you look at AFMA, for example, you will see that more than 50 per cent of that was spent on general management training.

Dr O’Connell : I think AFMA are appearing, if you want to—

Senator COLBECK: I am just wondering whether there is any broader benchmarking across the agency of who is doing what and how they line up—whether there is more happening in certain areas than others. That is the question I was coming to.

Dr O’Connell : I think each agency here sets its own management targets.

Senator COLBECK: I acknowledge that not all of them—they are all the statutory ones. So you do not do any benchmarking at all of training levels within the department?

Dr O’Connell : Across the portfolio?

Senator COLBECK: Within the agencies.

Dr O’Connell : No, we do not.

Senator COLBECK: I will move on to your legal costs, just quickly. In 2010-11 your legal services were predominantly sourced from private firms. You have changed that pretty much. I think it was 81 per cent in 2010-11. In 2011-12 it has gone 82 per cent to the Australian Government Solicitor as the corporate legal unit service provider. What factors influenced that? What are the drivers for that major change, and how do the cost differentials work?

Mr Hughes : The changes largely reflect the move from the private firm Blake Dawson as the corporate legal unit to AGS as the corporate legal unit.

Senator COLBECK: What was the driver for that?

Mr Hughes : The contract with Blake Dawson had run out, or come to its termination point, so the department went out to tender.

Senator COLBECK: So you have conducted a new tender process and as a result of that tender process the Australian Government Solicitor has proven to be more cost-effective?

Mr Hughes : The tender process would have evaluated the tenders that were received, and the Australian Government Solicitor was selected as a result of that process, yes.

Senator COLBECK: How much have we saved in respect of legal fees as a part of that process? Is that part of the overall consideration of our total costs and the efficiency dividend, or is that something you just have to look at as part of—if we have more activity in respect of legal issues then we have to deal with it on a case-by-case basis?

Mr Schaeffer : It is considered as part of the overall budget for the department. Obviously it is set by the contract conditions for now but that will change as the different contracts come and go. We are looking at the processes underneath legal services—so when an officer might go and obtain legal advice or not. We are trying to manage that process carefully so we do not duplicate processes.

Senator COLBECK: AGS was significantly more cost-effective than—

Mr Schaeffer : I think the key criterion is value for money.

Senator COLBECK: Which means what?

Mr Schaeffer : A number of criteria sit underneath that. Mr Hughes can take you through them.

Mr Hughes : The value-for-money principle is the core principle of the Commonwealth Procurement Guidelines. The tender process would have included a request-for-tender document outlining evaluation criteria. I do not have the information in front of me but presumably one of those criteria would have been cost. Others would have been the effectiveness and experience of the people being proposed for the particular contract. On the basis of an evaluation, AGS would have been selected.

Senator COLBECK: How do the rates compare with the private firms?

Mr Hughes : The rates and the tender submitted would be commercial-in-confidence, as per most tender processes, so I am not sure that I can answer that question for you. I think the raising of the principle of value for money would indicate that while costs would have been one of the considerations it would not have been the entire consideration.

Senator COLBECK: I thought that was the answer you were going to give me but I thought I would have a try anyway. In question on notice No. 166 you have given me a list of reports that are being undertaken. One of those is the discussion paper on ecosystem services. We might have to talk about this somewhere else later on because it is a bit specific to something. The report was handed to the government in January, as I understand it, and is under review for finalisation.

Dr O’Connell : That is correct according to, as you say, the question on notice. I might need to get some—

Senator COLBECK: How is the review of the report progressing, and what is its potential release date?

Mr Thompson : I am able to provide a bit more information on that question. The department received a draft of that report earlier this year and it is still under development. We hope to hold a workshop later this year on ecosystem services, and the discussion paper is a document that would feed into that workshop. As such we are trying to make a document that both encompasses the information in the field and is useful for a workshop.

Dr O’Connell : The short answer is that I think it is not complete.

Mr Thompson : It is not complete.

Senator COLBECK: The report is not complete?

Dr O’Connell : It is still being finalised by the committee and others.

Senator COLBECK: What are the key themes that you are looking at as part of the development of that?

Mr Thompson : There is a wide literature on ecosystem services, and there are a number of applications of it being used overseas and a couple in Australia. One of the things that we wanted to do is to clarify in the current context—there was some work done on it about three or four years ago—what the state of play is with the use of ecosystem services and to spend a bit of time trying to identify in a relatively simple way what services might be provided on Australian land, such as improved water, beneficial insect supply and those sorts of things so that the broad value of land being used for biodiversity purposes, such as reserves, but also farmland that might be managed in different ways—whether there are different services in addition to the production of food and fibre that that land is providing. So it is really, in a sense, a semiresearch exercise. We also are aware that the Bureau of Statistics are now reporting on environmental performance and that the government is doing work on national environmental indicators. Some of this work would help provide a common language or perhaps some extra data to feed into those sorts of processes.

Senator COLBECK: You talk about production of food and fibre. What are some of the other services that you are looking at as part of that process?

Mr Thompson : Some of the really simple ones are just different forms of land use providing different volumes of water, and different forms of land use and different health of soils providing different quality of water. There is also the capacity of soils of different characteristics to break down chemicals that might be being used in agricultural production systems. Carbon is another environmental service which is not subject to this sort of work. It is a whole separate area of work. There is carbon storage and those sorts of things.

Senator COLBECK: How broadly does the provision of fibre extend? Are we talking about from food right through to timber?

Mr Thompson : In the literature on environmental services or agricultural services it is an extremely broad field. For our purposes we are trying to exclude those ones that are already subject to existing markets or existing areas of work, because they are being accounted already and we do not think we can add much value to timber production or agricultural production—we already have values and volumes for that. Similarly the carbon market covers the storage of carbon and we are leaving that with the climate change department. And, while we can refer to water quantity, that is also well and truly covered by existing areas. So we are looking at what else might be around that feeds into that equation that different land uses or land practices might affect.

Senator COLBECK: How does it pull everything together? How do you intend to pull everything together at the end of the day?

Mr Thompson : That is the purpose of the workshop. At the present time it is very difficult to pull it together. We have a working market for timber, fibre and food production. We have a developing market for water production. We have a developing market for carbon. People are talking about biodiversity services, and we play with and work in the area of stewardship payments and the like for retaining native vegetation. It is how you might measure some of these other things that are about. While I do not think they are necessarily ready for markets, perhaps if we can count them in some sort of way people might be able to use those sorts of figures in land use planning exercises feeding into strategic plans for how land might be used or how practices might be adopted. It is really about trying to come up with a methodology for describing these things and some common language so that they can be taken into account. It is early days. If you look at the literature on the issue, potentially for a landowner, land manager or planner there could be quite a degree of confusion. We are hoping to have a workshop with most of the players there to help get some common language around this concept.

CHAIR: Senator Colbeck, I will have to ask you to put further questions on notice. I am sorry to cut you off, Mr Thompson. We will revert to that great Australian institution the morning smoko.

Proceedings suspended from 11 : 00 to 11 : 15

CHAIR: I welcome the Interim Inspector-General of Biosecurity.

Senator COLBECK: Welcome. Can you just give us a bit of a run-down on your activities over the last 12 months. I suppose the other question is: when do you stop being interim and become—I will not say ‘real’ because you are quite tangible—not interim?

Dr O’Connell : We plan to have a piece of legislation passed, along with the Biosecurity Act, which would establish the position as a statutory office. So it will be the same time frame, essentially, as the introduction of the Biosecurity Act.

Senator COLBECK: So he cannot be real until we legislate him to be real.

Dr O’Connell : He is pretty real all right, but he is not statutory.

Senator COLBECK: Let us say formal rather than real.

Senator Ludwig: It is a statutory role. We want to include that in the biosecurity legislation. You will get an opportunity to look at the legislation and the statutory role.

Dr Dunn : To further answer your question, yes, I am engaged by a contractual arrangement at this stage, as I advised the committee last October. That contractual arrangement is a part-time arrangement through administrative arrangements until, as we just heard the director-general discuss, the passage of legislation and its movement to become a statutory position.

Senator COLBECK: So what have been the key areas of activity over the last 12 months?

Dr Dunn : Over the last 12 months I have continued to work to a prepared work program, which is an undertaking done each year with forward scheduling as well. That program did include an audit of the importation of ornamental finfish to Australia. Most of the audit fieldwork for that has been undertaken and we are in the process, at this stage, of working towards the finalisation of that report, which will go to the minister. In addition, in the last 12-month period the minister has referred to me three matters for independent review by the interim inspector-general. Those matters were, firstly, the importation of consignments of fertiliser from China that were found subsequently to contain soil that had been substituted for fertiliser. The second was the export consignments of abalone exported to China and Hong Kong. They were suspected of having been affected by paralytic shellfish toxin. The third one is that, in more recent times, the minister has referred to me an independent review of the importation of undeclared meat products from the Republic of Korea. In addition to those, as part of the ordinary planned program of activity, some preliminary planning work had been undertaken with regard to the importation of animal breeding material.

Senator COLBECK: You say you have a prepared work plan. Is that published?

Dr Dunn : The plan itself is not published but the contents of the plan, in terms of what the topics are for review, is available through the inspector-general website.

Senator COLBECK: Are they published subsequent to the referrals? You have talked about three important issues. This committee has done a bit of work around fertiliser from China. What are you specifically doing in relation to that? Are you working back through the supply chain to analyse how and why?

Dr Dunn : I am guided very closely by the scope in the minister’s letter of referral and what it asks me to look at. Mostly they not involved with the commercial aspects of it, but—

Senator COLBECK: But you are looking at the biosecurity issues of it.

Dr Dunn : The focus is mainly on the biosecurity risks, the risk management of biosecurity, issues to do with import permits, certification, the management of biosecurity risks and any recommendations of improvements to the system with regard to that risk management of biosecurity.

Senator COLBECK: So the work that you are doing in relation to those specific references then works back into the general risk management profiling and the overall management of our biosecurity effort?

Dr Dunn : I will use the examples that you have just referred to. Take, for example, the fertiliser report. That is an incident, so what I would do is ensure that I am aware of the control requirements that did pertain at the time to importations regarding the product that was involved with that incident. I would look at that system to make some assessment in relation to the effectiveness of the import controls. I would then look at the incident itself, to go into that and perhaps look at the details of what was involved, the time lines, so that I am sure I am able to provide back to the minister an effective report that has a critical look at the system that applied to that particular incident. I will look at where there may have been any areas for improvement, and make recommendations that will pertain to that improvement, and in doing so make some form of assessment about the biosecurity risk management effectiveness that was applied during that incident once it was detected.

Senator COLBECK: Okay. So a similar situation applies to paralytic shellfish toxin in abalone being exported. Again, you look at the systems, the identification processes and the potential disease risk?

Dr Dunn : Correct. As you say, Senator, that was an export related matter. I am not at liberty to discuss findings or recommendations at this stage because the report is coming together, but in terms of the way in which the process was undertaken, certainly it did require my making contact with a large number of stakeholders, particularly stakeholder agencies involved with that. It is quite a complex matter which involves inputs of state agencies, inputs of the industry association itself and inputs from researchers in that area. They all in some way or another feed towards the knowledge and information base that the Department of Agriculture, Fisheries and Forestry has to use to determine then whether it can issue certification for those export products.

Senator COLBECK: Have you done anything at all, or had a reference from the minister, in relation to myrtle rust?

Dr Dunn : Not at this stage, Senator. I have considered myrtle rust and nominated it as something, maybe in the years going forward, for the inspector-general to look at.

Senator COLBECK: So you have the capacity to include items on your own work plan?

Dr Dunn : Yes, correct.

Senator COLBECK: Sort of self-referral if you like?

Dr Dunn : That is correct. That is my interpretation of the independent aspect of this role: to look at issues that pertain particularly to the biosecurity risk management systems that are exercised through the Agriculture, Fisheries and Forestry portfolio at this stage.

Senator COLBECK: Is your capacity to deal with the things you might self-refer impacted by any references that you might get, or the volume of references that you might get, from the minister?

Dr Dunn : This position reports to the minister, so obviously the minister does have that prerogative to refer or suggest to the inspector-general to undertake certain reviews, such as the incidents we have just given examples for. But, by and large, the position does exist as an independent position that is able to look at and make strategic choices about areas for audit or review of the entirety of the DAFF biosecurity management system.

Senator COLBECK: So, effectively, the role is a reflective one rather than a prospective one? What sort of international engagement do you have, in respect of future access, with trading partners—looking at their systems and how they might work and how they might align with Australia’s systems and how the coordination of those things might work to the benefit of both countries?

Dr Dunn : To use your words, Senator, it is more of a reflective role. Certainly it does not have a role in the development of importation policy. The majority of the role as it is described is based around the audit and review of risk management systems that are in place at this stage.

Senator COLBECK: Let us go to the other element, the international engagement. Do you get a chance to look at systems that are being used in other places and align them with what we are using here? Do you give comparative advice to the minister in relation to how we might improve or how we might engage with our trading partners on facilitating effective biosecurity management?

Dr Dunn : To date that has not been the direct and prime focus of this role. There has been some overseas work that I have undertaken in this role. In the doing of that there has at times been some opportunity reflect back upon the effectiveness of a system. Singapore was one country, for example, where that was possible. That was assessed during a time of audit of the importation of horses, the preparation of horses for export to Australia from that country. So that was the prime focus for the inspector-general’s visit to the country. But in the doing of that and the assessing of the assurances that a country’s competent authority can provide Australia, the interim inspector-general role is allowed to become more aware of the effectiveness of their systems and indirectly to feed back some comments at times.

Senator COLBECK: In the context of the meat products out of Korea, that would focus on our systems rather than on anything that might be an export requirement out of Korea―I mean as far as their certification processes go? If you are looking at a particular circumstance, we have a fairly stringent outgoing requirements as well as incoming. That is demonstrated by the shellfish example. We are looking to see where our systems might or might not work. Do we look at what might or might not be happening in another country, in the context of whether their systems are ensuring that products coming out of those countries would meet our incoming requirements?

Dr Dunn : On that particular review I have to say that it is very early days. But, to answer your question in general, the main focus initially is to start to look at what the Australian requirements are and the way in which a sample of a number of the consignments in question did attempt to meet those requirements with regard to certification or assurances based on inspection in the exporting country. The primary focus is not to do a forensic review of the export assurance system overseas but to use the products and the evidence that have been involved with shipments that have come there to make a general assessment of whether there do look to be deficiencies in that overseas certification system. I do not take it, from the scope of what I have been asked to do at the moment, that an on-ground close inspection of the export certification process overseas is involved at this stage.

Senator COLBECK: So you would have a general look at whether their systems were lining up to meet and comply with our import requirements and then your recommendations with respect to how we might risk-manage what was coming in from that particular destination, wherever it might be, might be ramped up or down or whatever to meet how you saw the efforts being made at the other end in meeting our import requirements?

Dr Dunn : Yes, correct. That focus initially is on the Australian system—what it requires, what it sets down as it requires and what it undertakes and implements in relation to inspection and verification measures on arrival and during the clearance process here in Australia. Obviously there may well be issues that come out of that which do cast some reflective light back in relation to some need for improvements or need for further investigation at the exporting country end. Again, my focus is principally on the biosecurity risks here. Other processes that the department may be undertaking with regard to investigation, compliance or possible prosecution action et cetera are separate to any of the processes that the interim inspector-general is doing.

Senator COLBECK: So your work would feed into the creation of the centre for excellence for biosecurity risk assessment?

Dr Dunn : Not directly. I am certainly aware of that centre for excellence and we are cognisant of the work that it does but at this stage we have not made any particular arrangement to work in some conjoint manner in relation to this particular issue of the importation of food from Korea—undeclared meat.

Senator COLBECK: But surely if you are looking retrospectively at the efficiency and the operations of our system the work you are doing would have to have some value in our risk assessment processes.

Dr Dunn : I certainly would hope so and that is certainly the intention of the endeavours on which I embark on this role. But my recommendations go first and foremost back to the minister, and mostly those recommendations pertain to the area within the portfolio of the minister, most notably the department and its system.

Senator BACK: The budget for 2011-12 and 2012-13: have you been asked and have you addressed that question relating to your section’s budget allocation?

Dr Dunn : I am independent of the department and I do not have a budgetary control. I will refer that to the relevant division of the department that does support my independent role.

Ms Freeman : The budget for the IIGB activities in 2011-12 is $0.62 million. From 1 July 2011 to 31 March the expenditure for this function to date was around $0.43 million.

Senator BACK: And the budget for 2012-13 announced—

Ms Freeman : I would have to check but it would be roughly of the same magnitude. I can give you the specifics on notice if you like.

Senator BACK: And the staffing? I recall that you are part time, Dr Dunn, but are there others supporting you on a full-time basis from the department?

Ms Freeman : There are a number of full-time staff, both technical and administrative, who assist Dr Dunn. We can certainly give you a breakdown of those if you like.

Senator BACK: And could you also give us any changes for 2012-13, thank you. Dr Dunn, is your role only reactive to the requests or directive of the secretary, or do you have the capacity to propose areas where you would be looking to undertake audit reviews?

Dr Dunn : I will refer back to the comments I just made to Senator Colbeck. I report to the minister; this position reports to the minister. Hence the minister has the right to direct—and has on occasion directed—the interim inspector-general to undertake a particular review of a particular matter. But for the most part the work program that the interim inspector-general does is developed through my own process. I take soundings through industry bodies like Plant Health Australia, Animal Health Australia et cetera in relation to issues that may be of concern to industry more broadly. I also look across the spectrum of the DAFF suite of biosecurity services. I look at those services that perhaps have not been the subject of review or an audit from an internal or other process for some time, and try to strategically choose matters that will get value from an audit such as this. It is not simply hot-issue type issues that I consider the importance of why the government put this role in place. I also look at issues or systems that have been in place for a long time with importation and are ticking over that perhaps people can become complacent with because they are everyday matters and have not been looked at for some time. I find that there is some value in looking at that. An example is that if in 2006 the position had been in place and had chosen to look at the importation of horses—which had been going on for decades without a problem and was not seen as a hot issue or a major risk—it perhaps could have been useful.

Senator BACK: From an administrative point of view, Ms Freeman, if the inspector-general reports to the minister, what is the line of relationship professionally of these full-time staff about whom you will give us more advice?

Ms Freeman : My role is as head of the relevant division. The secretariat sits within the business assurance and risk branch within my division. Dr Cloney is the branch head of that area.

Senator BACK: So they would report to you but their day-to-day activities are directed by the inspector-general?

Ms Freeman : Working to assist Dr Dunn, yes.

Senator BACK: Dr Dunn, further to the question I just asked, are you proposing on the basis of that to do a review of the facility at Geelong—the AAHL facility? Has that one been the subject of any sort of review in recent years? Is it one that you would consider valuable to address?

Dr Dunn : At this stage, no, I have not looked at that as a possibility. I would be mindful of the fact that, while this role is in the administrative interim inspector-general role, its prime focus is on the areas that are primarily the portfolio responsibility of the minister. In that particular example there is also the CSIRO component. It is largely a CSIRO facility. At this stage the inspector-general has not moved to pick up reviews of facilities that have their main management process through another organisation such as CSIRO.

Senator BACK: Can you tell us what involvement, if any, you have had with the newly introduced exporter supply chain assurance guarantee scheme?

Dr Dunn : At this stage I have had no involvement with that.

Senator COLBECK: I asked about the publication of your work plan. You are working very much in a role looking at systems and processes in a similar way to what the Auditor-General does in looking back at how things have worked. Do you see any value in publishing your work plan so that people have a sense of what is coming up?

Dr Dunn : There is a site located on and attached to the DAFF website specific to the interim inspector-general. On that site are published all of the reports and findings of the interim inspector-general. I believe that, as well, there is some indication of future work; however, I could stand corrected on that in relation to that issue currently on that website.

Senator COLBECK: It is very much a process thing. The Auditor-General’s office, for example, has an interaction with the parliament through the Joint Committee on Public Accounts and Audit. That committee then goes out to other committees, requesting suggestions or requests for issues or things that might be referred to the Auditor-General for them to look at. So there is a process around which the interactions occur. I am thinking of it in that context. That is one point. In the context of the load that you might get from the minister for looking at specifics like those we have mentioned here today, what are the parameters around your budget, for example? If there is a whole heap of things that really need looking at, how do you manage that and prioritise those things within your budget?

Dr Dunn : I think the suggestion is worthy of consideration. I will look at that. In principle I see no particular issue with having the work program for the year of the inspector-general on that website—if it is not currently there just at this point in time. Perhaps I can undertake to work with the department to work that through.

[11:42]

CHAIR: I now call Biosecurity Animal. I take it that that is not a nickname for someone.

Senator Ludwig: I think it is best that we do not respond.

Senator ABETZ: Can I take you to the live animal export ban. Can it be confirmed that cabinet made its decision on 7 June 2011?

Dr O’Connell : Cabinet consideration of issues, as you know, remains confidential.

Senator ABETZ: Did cabinet make a decision in relation to live animal exports? Did the Prime Minister tell the Australian nation that such a decision had been made, Dr O’Connell?

Senator Ludwig: Again, cabinet deliberations are, as you know, a matter for cabinet. I announced the suspension on 7 June.

Senator ABETZ: Thank you. That is all I need to know. Minister, you announced it on 7 June. One assumes that when a cabinet minister does that he may have done so on behalf of cabinet, and I think last time around we were actually told that the issue was discussed at cabinet. But I do not want to traverse that. Can you confirm that you got legal advice on 4 June, three days before your announcement, Minister?

Senator Ludwig: I will take that on notice.

Senator ABETZ: I have done an FOI. You have told us on the FOI document that there was legal advice on 4 June. Surely this is no longer a state secret and you can actually cooperate even with this most basic of questioning?

Dr O’Connell : If we replied on the FOI then I would say that that is right. But you are asking us on the moment and I would not want to take a stab at a date without being clear.

CHAIR: In all fairness the secretary took it on notice, I assume, to get you the exact information so he did not mislead you, Senator Abetz.

Senator ABETZ: Can we be agreed that a document titled ‘Prohibiting the export of cattle to Indonesia—Legal advice 4 June 2011’ was received by the department?

Ms Evans : I am just reacquainting myself with your freedom of information request to confirm that that was the case.

Senator ABETZ: Minister, can you advise whether you saw that legal advice, whilst the officer is dealing with the date, prior to your announcement on 7 June?

Senator Ludwig: I would have to go and check. I received a number of pieces of advice about the suspension in the lead-up to that 7 June. I would not want to say yes or no without refamiliarising myself with it.

Senator ABETZ: Who asked for this legal advice to be prepared?

Senator Ludwig: I saw a range of pieces of advice.

Senator ABETZ: Take the one that is disclosed on the freedom of information: ‘Prohibiting the export of cattle to Indonesia—Legal advice 4 June 2011’. We know what document we are talking about. Who initiated that legal advice? Who asked for it?

Ms Evans : Would you mind repeating the number of the document? There were quite a number released that day—I beg your pardon; there were only three.

Senator ABETZ: Only three, in fact, and this one was fully exempted. It was FOI/2011/1240.

Ms Evans : It was fully exempted.

Senator ABETZ: It was fully exempted but we do know it is seven pages. We are entitled to know who sought that legal advice. I do want to know but I will not ask what was in it. But we are entitled to know—

Dr O’Connell : We would have to take that on notice, I think.

Ms Evans : I can say that during that time we were seeking legal advice off our own bat as the department and also in response to specific questions that the minister had raised with us over a series of conversations leading to that time.

Senator ABETZ: If there are a number of legal advices, why is it that I was told that there was only one legal advice?

Dr O’Connell : I repeat that I would have to take it on notice. You asked a specific request about a specific piece of advice, and we would have to take on notice who asked for that advice.

Senator ABETZ: Minister, do you recall asking for it?

Senator Ludwig: If you recall that period—I had asked the department to look at a range of regulatory options that were available to them. I was also in close contact with the department on a range of questions—

Senator ABETZ: You either recall it or you do not.

Senator Ludwig: I think the setting is also required in relation to a range of information that was coming to me. I was requesting of the department their view on a range of matters. I do not recall specifically whether I asked for that document. The record will show and we will be able to get that on notice.

Senator ABETZ: Can you recall reading that advice, Minister?

Senator Ludwig: I would have at the time.

Senator ABETZ: Can you take on notice who prepared the advice, who requested the advice, to whom the advice was sent and whether this advice was provided to cabinet prior to your announcement of 7 June. Has the government now received a claim for compensation as a result of its decision to impose a full ban on live export cattle to Indonesia?

Dr O’Connell : We will take those pieces on notice—

Senator ABETZ: Surely somebody here must know whether the government has received such a claim.

Senator Ludwig: I was talking about the earlier part that you were referring to. We will get Mr Glyde to deal with the claims.

Mr Glyde : Yes, the Commonwealth has received a potential claim for compensation arising from the temporary suspension of livestock exports.

Senator ABETZ: And we are told from the budget papers that it is a contingent liability and unquantifiable. Is that correct?

Mr Glyde : That is correct. It is standard practice that when we receive notice of any potential claim—

Senator ABETZ: Is the government intending to defend the claim?

Mr Glyde : We are still considering it, Senator.

Senator ABETZ: Can you take on notice as well whether the legal advice that I have been asking questions about came via the department to you, Minister; and, if so, why that legal advice was not identified in the first FOI request from my office?

Senator Ludwig: I will also check—you asked the question as to whether I had read it. Part of my response to that was that I would go and look at the record to see whether it was provided to me, because the department—

Senator ABETZ: You made the decision, ostensibly—

CHAIR: Senator Abetz, I do not mind how you want to conduct the questioning and how the answers come across but I do urge in this committee that we do not shout across each other. I encourage ministers answering, officers answering and senators asking questions. If you ask a question you allow the answer to be given before the next question.

Senator Ludwig: Thank you. I was just going to make sure that we have provided you with an accurate response to the question that you asked, so that if there are follow-up questions we do not get into a position of assuming a positive response or a negative response to an earlier question. That was all. I thought I would just clarify that.

Senator ABETZ: This was a very recent FOI request. I must state on the record that I cannot believe that you were unable to answer those fairly basic questions. You would not have to be Einstein to work out that there may have been follow-up questions. I will move on to a completely separate topic: the disease E. canis—dog related. Is somebody able to assist with that and the protocols. Time is very short, so I will try to make my questions as short as possible and ask that the answers be as short as possible. As I understand it, Australia does not have the disease E. canis. Is that correct?

Ms South : Yes, that is correct.

Senator ABETZ: Do our protocols reflect those of other countries that are also E. canis free?

Ms South : Our import protocol requires—and this is a disease of dogs—dogs to be tested to confirm that they are free of the disease, using a particular test.

Senator ABETZ: Is that the same test that other countries apply? If you do not know, can you take it on notice?

Ms South : I do not know the answer but I think my colleague would be able to respond to that.

Dr A Cupit : Yes, it is the same test. These tests are basically defined within the OIE manual for diagnostics. We use those accepted tests.

Senator ABETZ: What does OIE stand for?

Dr A Cupit : It is the international animal health organisation.

Senator Ludwig: It is the international body in French.

Senator ABETZ: Thank you. What about the PCR test which is undertaken in the United States for this particular disease?

Dr A Cupit : I would have to take on notice the specific test but there would be a range of tests. PCR would be one. There might be an ELISA test as well. Usually the manual allows for a number of tests. We sometimes give all that but we generally examine each test and its sensitivity and specificity to work out whether it is a good test.

Ms South : Operationally the PCR test that you are referring to, which is a polymerase chain reaction test, is a DNA based test—it is identifying and amplifying the organism’s DNA. The particular disease we are talking about, Ehrlichia canis, moves out of the bloodstream quite quickly and sequesters in the internal organs. So the reason why we do not allow a PCR test is that it is actually unreliable for this particular organism.

Senator ABETZ: That is fine. Can you take on notice whether anybody advised a Ms Armstrong that that would be a test that she could undertake for her canine—which is currently residing in Singapore, as I understand it—and whether, when that suggestion was made to her, she had the test done, it came back negative and she thought it was all good, only to be told, ‘Sorry, we don’t recognise that test.’ Can you see whether that occurred and, if so, what the department might do about that in the future; because to give people false hope about an alternative test—and I accept there may be another view that the department might express as to whether they made that suggestion but I will leave that with you.

Senator RHIANNON: I would like to ask some biosecurity questions to do with the importing of fresh shell eggs. I am interested in what diseases are found or what diseases could be imported if fresh shell eggs were allowed to be imported into Australia. Why are there restrictions on the import of such products?

Dr A Cupit : Do you mean hatching eggs?

Senator RHIANNON: I mean all of them.

Dr A Cupit : Eggs in general?

Senator RHIANNON: Yes.

Dr A Cupit : There is a range of diseases that we cover off on, including things like IBDV—infectious bursa disease. There are a few other things—avian influenza, Newcastle disease. Those sorts of diseases that can affect the live animal can also affect the shell and can be on the outside of that shell. So we would address all of those.

Senator RHIANNON: So to allow fresh shell eggs to be imported would require a change to the current law by AQIS? Is that the case?

Dr A Cupit : Obviously it requires a risk assessment to do that. We allow egg products—spray dried egg products and that sort of thing.

Senator RHIANNON: I am aware of that.

Dr A Cupit : But the whole egg, no.

Senator RHIANNON: That would require a change of law?

Dr A Cupit : It requires a risk assessment.

Senator RHIANNON: So when you say ‘risk assessment’ you are saying that it does not require a change of law; it would just require some assessment by the people who work in the department, would it?

Dr A Cupit : Like any imported goods, it requires a risk assessment to address whether the risks are slightly different as to the whole egg as opposed to, say, egg products where you remove the shell. There are slightly different risks. Potentially the disease can be on the outside of the shell.

Senator RHIANNON: This is what I am just trying to clarify. There was recently a statement from the Australian Egg Corporation that there could be a flood of egg imports from countries like the Philippines, Cambodia and Vietnam. I understood that under the present regime or laws or regulations that is impossible.

Dr A Cupit : It is impossible. Even for spray dried egg products we only have a select group of approved countries and there are only about five or six on that list.

Senator RHIANNON: What countries are those, please?

Dr A Cupit : Canada, the United States, Denmark, Belgium and France—although I would have to take that on notice to make sure that that is correct.

Senator RHIANNON: If you could take that on notice—but at the moment you understand that they are European countries?

Dr A Cupit : European and North American, Senator.

Senator RHIANNON: The Australian Egg Corporation made this statement recently. Is that something that the department monitors—such statements from a significant national body that is obviously relevant biosecurity? Was that statement noted and was any advice prepared on that?

Dr A Cupit : We generally monitor all media statements or statements from industry organisations but I am unaware of that statement.

Senator RHIANNON: Is there anybody else here who would have been aware of it and may have prepared advice for others in the department or for the minister?

Dr A Cupit : Another part of the department—which is appearing tomorrow—the Agricultural Productivity Division, also provides advice on egg industry arrangements, so they may have; but I am not aware of it.

Senator RHIANNON: Minister, did you receive any advice that the Australian Egg Corporation was making statements that, on the information that has just been supplied now, were highly inaccurate?

Senator Ludwig: I do not recall but the Egg Corporation is on tomorrow, so you can ask the question again about whether they forwarded anything either to the department or to me personally. I do not recall it but that does not mean it may not have happened. I will check the record as well.

Senator RHIANNON: I would just like to ask, while you are all here, whether you think there is any possibility that Australia would change the laws that currently prohibit fresh shell eggs entering the country.

Dr A Cupit : There would have to be a request and it would have to be put on our work program. It would then have to be prioritised accordingly.

Senator RHIANNON: Minister, I would like to go back to some of the developments last week with regard to live exports and the announcement that was made. My recollection is that you gave this as an example that the regulations that have been put in place were working. But considering that two abattoirs were found to have allowed the cruel practices to be perpetrated against animals that may have come from Australia, on what basis do you say that the regulations are working?

Senator Ludwig: Clearly they do work, because we have a compliance system in place. Where a mistake, issue or problem arises there is—as we now have released—an investigation, an examination of that individual supply chain, and appropriate action taken against the individual supply chain itself; whereas prior to the introduction of ESCAS there was no way of knowing which animals were going to which feedlot on which boat and into which abattoir from which exporter, and no way of knowing precisely what the animal welfare outcomes of any of those were. So self-regulation clearly failed. In this instance we were able to identify that, of the four that were reported, two were not part of the ESCAS system and therefore allegations about their operations could not be sustained, and two could be sustained. The regulator could then look at individual exporters all the way down to the two in question, identify that they did form part of ESCAS and take the appropriate regulatory action against them. And I think the way the system now operates it also provides a wake-up call to industry that the regulator is on the beat. The regulator is there to ensure that ESCAS works. Rather than head down the track of simply suspending the trade on the basis that you cannot identify which supply chain, you can now hold the exporter to account. I can take you through longer than that but I suspect you only wanted the short answer.

Senator RHIANNON: Considering that we are aware of these cruel practices because of the footage taken by Animals Australia, doesn’t that again highlight the problems with the regime that you have put in place—that what we are now aware of and what you are talking about is because of the courageous actions of those people, not because of the regime you put in place?

Senator Ludwig: The system works. It works because there is a compliance system in place. There is a regulator who investigates all noncompliance, whether it be through complaint, auditing or an own-motion examination. All of these mean that, wherever the information comes from, it is individually investigated. And in this instance it demonstrated that two exporters failed to meet the appropriate requirements and were held to account. Again, the way the investigation proceeds also provides feedback to the regulator to work through with all of the other exporters to ensure that issues identified through that investigation can be applied more broadly to all of the exporters as well in terms of learning from those particular investigations—because the majority, or nearly all, of the producers do take the welfare of their livestock very seriously. But, more importantly, for the first time, producers now have visibility along that supply chain individually through the exporter, through the ship, through to the feedlot, through to the slaughter yard and to the ultimate auditing process. So producers can also take this opportunity to both minimise and understand their risks associated with this trade.

Senator RHIANNON: Minister, you said that wherever the information comes from it will be investigated. Again, the only examples we have seen so far are because, at considerable personal risk, people from animal welfare organisations have gone in and collected that information. Could you outline how the department is collecting information, seeking information, about animal cruelty practices?

Senator Ludwig: I will ask Mr Glyde to answer on how the regulator deals with that.

Mr Glyde : Senator, I would like to correct what you said there. We actually have information from other sources, as the minister mentioned earlier, in relation to the performance of all of the supply chains. There are three types of information we look at. One is the one that we have been discussing, which is third-party information. The second is the independent audit reports. The first five consignments through a supply chain have to be independently audited and then there is auditing that follows on after that. The final part is exporters themselves reporting to us any noncompliances they observe. They are under an obligation, if they discover a noncompliance, to report that to us within five days. To date we have had five instances of self-reported noncompliance. We have investigated three of those and found that they were minor breaches, and we are currently investigating another two. We have not yet come to a conclusion about the extent or the nature of those breaches but we are investigating those as well. So from the regulator’s perspective we have three sources of information that enable us to monitor how the system is performing.

Senator RHIANNON: So you have those three sources of information. Are there any other third parties that you take information from, or can it be anybody at all?

Mr Glyde : It can really be anybody at all. Obviously we discuss and talk with our Indonesian colleagues in this particular instance but, in essence, if you are asking whether it is possible for other third parties to provide information—yes.

Senator RHIANNON: Have there been any examples of that?

Mr Glyde : Not that I am aware of to date. The only thing we have received so far has been the footage that you have referred to that was supplied to us by Animals Australia.

Senator RHIANNON: Thank you. Considering that this has been something that I think we are all aware of that has distressed large numbers of Australians, what efforts has the department made to inform people that third parties can in fact supply information that would be considered in this way?

Mr Glyde : On the departmental website we have our compliance and enforcement information, the processes we follow, the procedures we follow and our expectations. So that is there. As far as I am aware we have not undertaken any communication campaign in relation to that. This system has been in place for less than 12 months, and I think it is important to understand that it is a new system. It has not been tried anywhere else in the world by any other country that exports live animals. The system is bedding down and we would expect mistakes to be made from time to time. I think it is reflective of the fact that this is a new system. But I guess we think that the successful investigation, the taking of action and the demonstration that we can take compliance action against individual exporters demonstrates that the system is working. In relation to your specific question—unless others might be able to confirm otherwise—we have not undertaken any advertising or media campaign stating that third parties can contribute. But of course they can, and I think that is reflected on our website.

Senator RHIANNON: Thank you. I would like to explore some more information about the ESCAS system. Under the new ESCAS system, how many notifications of changes in circumstances has DAFF received?

Mr Glyde : All I can say is a lot.

Dr O’Connell : Can you clarify what you mean by a change in circumstances, Senator, just so we know what we are referring to?

Senator RHIANNON: Maybe I am just talking specifically about the notifications. I am trying to ascertain the nature of the notifications.

Dr O’Connell : How many notifications about incidents?

Senator RHIANNON: Yes—how many and then some information about those notifications, please.

Mr Glyde : I will start and see if anyone else can help. As I said earlier, in terms of notifications from our audit reports I think to date we have received a vast number of initial audit reports and are beginning to receive our performance audit reports, which I can go into in more detail if you like. I do not think any incidences have been uncovered in relation to those audit reports as yet in terms of the information we have published. But we have also, as I said earlier, received from the exporters themselves five notifications of noncompliances.

Senator RHIANNON: I understand that they are to be reported in five working days. That is correct, isn’t it?

Mr Glyde : That is my understanding.

Senator RHIANNON: Has that happened in all those cases?

Mr Glyde : I might ask some of my colleagues whether those reports have come in in that time frame.

Mr Merrilees : At least one report of an incident that was self-reported by an exporter did not occur within the five days required. That matter is currently under investigation.

Senator RHIANNON: When you say it is under investigation do you mean that the issue is under investigation, or why they did not report within five days?

Mr Merrilees : The issue itself is under investigation.

Senator RHIANNON: Not the fact that they did not report within five days?

Mr Merrilees : What will likely happen when we conclude that investigation is that we will record, because of the late notification, a minor noncompliance due to a failure to meet the reporting timeline. But that would be a small part of the broader investigation.

Senator RHIANNON: How many days were they overdue, please?

Mr Merrilees : I would have to take that on notice, Senator.

Senator RHIANNON: Thank you. I will go back to the two examples that have been in the news recently. I understand that the independent auditing system did fail to detect and publicly report these breaches of standards, so I want to clarify—Minister, you have elaborated on this to some extent—that my understanding is correct that what was highlighted in that Animals Australia video was not picked up by the independent auditing system. Is that correct?

Senator Ludwig: I will get the department to run through what the sequence of events was.

Ms Cale : That is right, Senator. The breaches that were picked up in the footage—the audit reports indicate that the independent audits had not yet been conducted on those particular facilities.

Senator RHIANNON: Was there any reason for that? Was it just that it had not come to their turn yet? Could you just elaborate on how that is all working, please?

Dr O’Connell : Just to be very clear, it was not that the independent audit failed to pick that up; the independent audit had not happened at that stage. So it was not that it failed to pick it up; it simply had not happened at that stage. Audits obviously happen at a point in time. Ms Cale can perhaps talk about the point in time.

Ms Cale : That is right. There is a requirement for the exporter to provide an independent audit report to the department 190 days after the date of export. In this case the exporters had not yet had the audits conducted of those two facilities but they were within their 190 days at that stage.

Senator RHIANNON: When Animals Australia came forward with their investigation and that solid evidence, was any assessment then made of the Exporter Supply Chain Assurance System and how that is working—if it needed to change with regard to these independent audits, as there were obviously serious breaches that had not been picked up? Was any assessment made that there is something wrong here?

Mr Merrilees : As part of the investigation, as well as the material that was provided by Animals Australia we looked at the material that we had on file from the exporter’s original application, which included the initial audit of that system. We looked at the material that the exporter provided and we also looked at material that we received from Meat and Livestock Australia and the Indonesian government. We considered all of the material we had available to us, we reached the conclusions in that investigation that two exporters had breached their ESCAS requirements, and we recommended the appropriate regulatory actions.

Mr Glyde : In addition to the actions against the two particular exporters, there were also four observations made in the investigation report that go to broader elements within the system. I think that was the direction of your question—whether any implications have flowed out from the investigation report. I will ask Mr Merrilees to run through what they were.

Mr Merrilees : Three broad observations were made by the investigation. One focused on the operation of the mark 4 restraint box, particularly where that restraint box was operated without stunning. Some of the footage showed that the particular restraint box did not include a head or neck restraint. The report has recommended in relation to that issue that Australia’s Chief Veterinary Officer further examine whether that mark 4 box operated without an appropriate head and neck restraint meets the OIE guidelines on animal welfare. The chief vet put out a media release on Friday confirming that he will be reviewing the operation of that box. The other two observations were around issues in relation to the information that we receive as part of the application and also perhaps the risks associated where you have exporters using a facility that has both approved slaughter lines and non-approved slaughter lines—slaughter lines that we have assessed as meeting the ESCAS requirements and those that we have not assessed as meeting or otherwise the ESCAS requirements. What the report recommends there is that we further examine those issues with a view to improving the information that exporters provide at the time of application for their ESCAS approvals, including considering the exporter providing appropriate measures and explanations as to how they would control in that particular circumstance to ensure that there was not any leakage from an approved supply chain of exported cattle into a non-approved supply chain. Those issues the department will be taking through in consultation with industry under the industry government implementation group, which has a role in monitoring the implementation of the new regulatory framework.

Senator RHIANNON: Can you just expand on the non-approved supply chain? How much of the trade does this take up, and how does that interact with the approved supply chain? It sounds like you are worried about possible leakage.

Mr Merrilees : Australian cattle exported can only be exported to and slaughtered in an Exporter Supply Chain Assurance System approved abattoir which we have approved. What the investigation identified is that some of the abattoir facilities that have had certain slaughter lines approved also undertake slaughter for non-Australian cattle, predominantly local cattle. So they are using a different slaughter line and in some cases potentially a different slaughter process that we have not assessed. Obviously what we will be looking for from exporters is assurance that they have appropriate measures in place to ensure that the Australian cattle are processed through the approved slaughter line.

Senator RHIANNON: Minister, considering the severity of the cruelty that we saw in this latest lot of footage that we are discussing at the moment—and it happened within a year of the extraordinary exposé from Four Corners—why did the government not suspend the export of livestock to the region where the investigations were ongoing?

Senator Ludwig: I think it is clear if you go back and look at the Farmer review and the way the ESCAS works, there are two things. In this instance the regulator, in looking at and through the investigation—the short answer is that the exporter lost control of that supply chain. The regulator then looked at those circumstances, did the investigation and came up with outcomes, because you can individually look at each supply chain. You do not have to suspend cattle going into that area, because you can look at each individual supply chain as distinct from an area. Therefore the individual exporter along that supply chain can be investigated. That is why we have put in place ESCAS—so that individual exporters can have traceability, control and independent auditing of that supply chain, to avoid the issue of having to suspend or ban particular abattoirs or suspend the trade into regions or areas. That is why ESCAS looks at the individual supply chain: so you do not need to suspend the trade into an area for what purpose—it would penalise unfairly those supply chains that were meeting our requirements.

Senator RHIANNON: Thank you for explaining that. I want to go back into some of the details to understand how the system is working. If I have the right point, it is point 21 in the control order. Has that created any new conditions for an ESCAS approval and, if so, what are the details of those? I think it is in item 13—you inserted a new subsection.

Senator Ludwig: Sorry, which document are you referring to—just so that we are all on the same page?

Senator RHIANNON: It is about the new ESCAS system—the animals order.

Senator Ludwig: But can you identify the document?

Senator RHIANNON: It is subsection 2.44(5) of the animals order. It says:

Without limiting the discretion of the Secretary, this amendment sets out specific matters that the Secretary may create conditions with respect to when making a decision to approve or not approve an ESCAS. These conditions are not restricted to ones regulating the relevant OIE recommendations, but can relate to any other matter more generally that the Secretary considers appropriate.

I am trying to understand that aspect. Specifically, has that created any new conditions for an ESCAS approval?

Dr O’Connell : Are you referring to new conditions after the investigation report into these incidents?

Senator RHIANNON: I think so but that is what I am just trying to clarify from the animals order. I understand that it is point 21 in the control order.

Dr O’Connell : If it relates to the two supply chains and exporters that were the subject of the investigation and found to have breached their conditions, we can talk, I think, about the additional conditions that have been placed on their supply chains.

Mr Merrilees : The investigation recommended—and in fact the secretary, as the decision maker under the animals order, has taken the following actions against the two exporters that were found to have breached the ESCAS system. Firstly, the abattoir where those breaches occurred has been removed from each of the exporters’ approved supply chains. So until they satisfy us that they have conducted appropriate corrective and remedial action they will not be able to let those two particular facilities receive and slaughter cattle exported from Australia. In addition we have applied to all of their consignments that have been exported to date and are still being processed and to future consignments a requirement that, where they intend to use a facility that has a mark 4 restraint box used without stunning, they have to have an animal welfare officer present when cattle exported from Australia are slaughtered. In addition, those facilities will be subject to an increased audit frequency. Initially that will involve three audits monthly and, subject to satisfactory performance, a further two audits bimonthly—so in total five audits over a seven-month period to satisfy ourselves. That is for all those abattoirs that have a mark 4 box used without stunning in their particular supply chains.

Senator RHIANNON: Is that referring to what came in on 1 March?

Mr Merrilees : No.

Senator RHIANNON: When did that come in?

Mr Merrilees : Those particular actions we have taken in relation to the investigation report were determined by the secretary as the decision maker last week, so they came into effect last week.

Senator RHIANNON: Last week?

Mr Merrilees : That is right. I think the issue of 1 March you may be referring to is the date on which tranche 1 countries came under the operation of ESCAS.

Senator RHIANNON: So what you have just described came in as a response to the latest revelation?

Dr O’Connell : That was in response to the investigation of the apparent breaches, and that is the Lateline footage that Animals Australia—

Senator RHIANNON: The first lot of footage?

Dr O’Connell : No, the Lateline footage, which was the Animals Australia footage.

Senator RHIANNON: The latest?

Mr Glyde : The most recent footage.

Dr O’Connell : There was the investigation. The response to the investigation was to provide those new conditions on those exporters who were found to be in breach. Separately—and probably we do not have a clear understanding of what you are after—on 1 March the ESCAS regulations effectively came into play for a set of countries that are in what we call tranche 1. We can specify those countries but they are a large chunk of the export market.

Ms Cale : The tranche 1 countries are Kuwait, Bahrain, Qatar and Turkey. With those four tranche 1 countries and Indonesia and Egypt, which has existing post-arrival conditions, the new orders cover 75 per cent of the live trade.

Dr O’Connell : Then there is another tranche—tranche 2—that will come into play in September, and then by the end of the year all live animal exports for slaughter will be covered by the regulations. When tranche 2 is in, around 99 per cent will be covered. Then the rest will be afterwards.

Senator RHIANNON: Thank you.

Senator BACK: I want to go to the events surrounding the vessel Al Shuwaikh on 4 April 2012 when a number of people illegally gained access to the wharf and to the vessel. When did you first become aware of the trespass by these people onto the vessel and onto the wharf?

Ms Cale : Would it be useful for me to run through the activities as they unfolded?

Senator BACK: Perhaps reasonably quickly, if you could, because I have a lot of questions in this whole area.

Ms Cale : Sure. As you may be aware, the departure of the Al Shuwaikh was the first consignment to tranche 1 countries under the new order. It commenced loading on 3 April. On 4 April at 5.30 in the morning the exporter contacted our DAFF principal veterinary officer to advise that the animal activists had boarded the ship. At that time the DAFF veterinary officer advised that no more loading of livestock or fodder would occur until further notice. That was obviously to minimise any risk of protest interference with the animals or the fodder or water supplies. The DAFF principal veterinary officer immediately proceeded to the wharf at that time, following the call from the exporter, and discussed the situation with the WA police. The police advised that seven animal welfare activists had boarded the vessel. Four had been arrested, three remained locked to parts of the vessel and a further two had chained themselves to the port security gate. Our principal veterinary officer discussed the situation with the ship’s captain from 7 am. The captain confirmed the information from the WA police. The captain advised that the ship’s crew had inspected various areas of the ship for the presence of any other activists and none were found. The captain also advised our veterinary officer that video cameras and two-way radios had been confiscated from the activists. Following the discussions with the captain the DAFF principal veterinary officer, another DAFF veterinary officer, the exporter and the chief officer surveyed the ship, including observation of the activists. The DAFF principal veterinary officer provided approval to recommence loading of livestock and fodder at approximately 7.45 am.

Senator BACK: On that same day, 4 April—it is a shame Senator Rhiannon has gone—Senator Rhiannon put out a media release in which she congratulated these people for their activities—which will be tested in the courts on Wednesday as to whether, as they are charged, they were illegal. At what point did you become aware of that media release?

Ms Cale : That was Thursday, 5 April. Loading of the livestock had recommenced as per routine at 7 am. When I arrived at work not long after 8.00 or 8.30 I became aware of the media release, and our regional officers were aware at that time that there was a media release.

Senator BACK: The allegation is that they filmed ‘sheep heavily pregnant and with broken legs on the ship’. Did you or your officers seek to get a copy of the video? I think you mentioned in your advice to me that video material had been removed. Did you, your staff or anybody associated with DAFF examine any video material to ascertain the truth of the statement that they filmed sheep heavily pregnant and with broken legs?

Ms Cale : No, Senator. As you rightly mention, the video footage had been confiscated and was being held by the WA police.

Senator BACK: Your AQIS veterinary officer, a representative of the Western Australian department of agriculture livestock compliance unit and, I understand, the Royal Society for the Prevention of Cruelty to Animals and the AQIS accredited veterinarian were all in attendance. At least four of them—the owner’s representative, the AQIS veterinarian, the AQIS approved veterinarian and the Western Australian department of agriculture person—inspected the shipment. Would you confirm that?

Ms Cale : There was inspection. As I understand it the whole lot did not inspect together. I am aware that our principal veterinary officer had left the wharf and received a call from the exporter to state that the RSPCA were looking to inspect the vessel because of allegations of unhygienic conditions that the sheep were subjected to on the vessel.

Senator BACK: The overriding allegation, was it not, was the question of pregnant ewes being loaded with wethers and sheep with broken legs seen during the loading or on-board inspections? Are you satisfied that there were no instances of pregnant ewes amongst wethers being loaded and no instances of animals with broken legs?

Ms Cale : Yes. Our veterinary officer inspected animals following the allegations and the claims of footage of such incidents. There were no animals noted with broken legs; nor were any animals visibly pregnant.

Senator BACK: That is correct. The last time wethers got pregnant was a long time ago. At what point did the department or, indeed, the minister put out to the public a release to confirm that there was no evidence of cruelty to animals, no evidence of broken legs and no evidence of pregnant ewes. How did the public become aware of that fact and the error of the claims that were made?

Ms Cale : The department did not have any approach from the media with regard to the claims made by Senator Rhiannon. We obviously inspect animals and conduct investigations on any allegations made, regardless of whether they are made in the media or otherwise. The department acted on that information and confirmed that there were no issues related to welfare. We did not seek to put out a media release.

Senator BACK: So you do not think an event that created as much media attention as this did, certainly in Western Australia, warrants any comment from the federal department with responsibility for animal welfare and export of animals to correct what was an error in terms of those statements?

Dr O’Connell : I think we acquitted our responsibilities properly.

Senator BACK: I will go briefly, Dr O’Connell, to a document which, over your signature, went out in March of this year, ‘Reforms of Australia’s biosecurity’. I draw your attention to 6.3, ‘Partnerships with stakeholders’:

A central tenet of the Beale review was the need to strengthen the partnership approach to reflect the shared responsibility for biosecurity between the Australian Commonwealth, state and territory governments, industry ... trading partners and the broader community.

Ultimately, industry will be able to take a greater role in managing biosecurity risks ... with support and oversight from the department and have access to departmental business systems ...

The overriding principle will be greater flexibility for business operations, supported by the government.

The underlying principle will be to support those who do the right thing and intervene more with those who don’t.

Can I ask you on, the basis of those statements in terms of improving partnerships, why your department, following a public statement by a senator of the Australian parliament, would not have explained and clarified those statements which were found subsequently to be incorrect?

Dr O’Connell : Senator, you were talking about the partnership arrangements. We worked in close partnership with the exporters to deal with the incident that occurred—in consultation with the exporter. As Ms Cale has explained, we worked closely with the master of the ship and the exporter in order to handle the incident. That was the job that was in front of us and that was the job we did. There are a range of media around all these issues and I guess we do not engage with all of those.

Senator BACK: In an instance such as this one—for future advice, Dr O’Connell—who, then, should make the public statements to correct inaccuracies of that nature, as important as that? Should it be industry that says that says so, should be the minister, should it be the department? Who would you recommend to create the balance in an event like that? Clearly when there is a breakdown in animal welfare we are all vitally interested. These matters are widely canvassed, as we will in the next period of time. Are you suggesting that in an instance such as this one there is no role for government, or the department, or you as the secretary, or indeed the minister, to correct a statement of that type?

Dr O’Connell : I am saying that we were operating as a regulator and we were operating in partnership with the industry in order to manage the incident as it occurred. There are other people as well who have an interest in the industry. For example ALEC, the Livestock Exporters Council, would be an appropriate body to counter lobbying media releases about these issues. I would be reluctant to get into the position where we are countering media releases from senators on a regular basis about issues, as opposed to operating properly to manage our regulatory framework, which was what we were doing there, and ensuring that those people engaged in that regulation understood clearly the position—which they all did.

Mr Glyde : Clearly this issue of live animal exports is one that generates a lot of passion and extremes within the community. It would take a considerable amount of time to get to the point where you would be comfortable to put out a media release on every single claim that is made around live animal exports. Our job in terms of the regulatory framework here is to make sure that the animals are fit and healthy and are not subject to animal welfare abuses, and to get them loaded onto the ship. From the industry perspective their interest is getting their ships turned around—loaded, turned around and back to their export destination as quickly as possible, because it begins to cost them money if those things are held up. So our focus—I think rightly—has been on making sure that the animals are in a fit state and are able to leave on time.

Senator BACK: I do not argue with that at all.

Senator Ludwig: The department has reflected what I would expect it to do: to ensure animal welfare, to ensure the ESCAS system—in other words, use their best endeavours to make sure that the regulatory system works and that they examine issues to make sure that there is complete compliance. That is their role; that is what they do. I do not expect them to answer all of the claims and counterclaims that senators might make in this place, because they would then spend most of their time doing that, I suspect. I am not making light of it. There are comments that are made from positive to ludicrous. The department’s job in this instance was to examine the circumstances, particularly around animal welfare. It was found that there was no basis for it and therefore no further action is required. Because we do take complaints, it was regarded as a complaint and they investigated it appropriately. In terms of them responding to the media, I do not see it as particularly their role to counterclaim—

Senator BACK: Or yours?

Senator Ludwig: Again, I could spend a lot of time countering senators’ claims all day. They range from positive to ludicrous, again. Some I respond to—

CHAIR: And that is before you get to the House of Reps.

Senator Ludwig: and some I do not, because the facts speak for themselves.

Senator BACK: I will move to some more general questions regarding ESCAS. Minister, I understand from releases that you were in the Middle East recently talking to governments in the target markets to which we export, including, I think, Kuwait, Turkey and Saudi Arabia. Is that correct?

Senator Ludwig: Not Turkey—the Middle East more broadly.

Senator BACK: So you have not visited Turkey?

Senator Ludwig: No.

Senator BACK: Kuwait?

Senator Ludwig: Yes.

Senator BACK: And Saudi Arabia?

Senator Ludwig: Yes.

Senator BACK: Could you advise the committee of the response you received from the government of Kuwait? Did you sense an enthusiasm on the part of the government of Kuwait to engage in our ESCAS program?

Senator Ludwig: It is not my job to sense anything. What I determined was between government and government. They are positive.

Senator BACK: So you are able to determine it rather than sense it?

Senator Ludwig: They tell me, and that is the way it works. I was advised that they will support and consult with us in implementing the ESCAS system. To the extent that the government is not required to do anything, because—I will take you back through it again, because people sometimes miss this point—it is the requirement on the exporter, not the government. It is not requiring the government to do any particular thing. It is reasonable for me to consult with them and advise them, and the department has also undertaken that task prior to my visit, during my visit and post my visit. I am sure they can confirm that. The ESCAS system is a requirement of the exporter, so the exporter has to meet the conditions. It seems to me that after less than 12 months we are still in a position where the understanding of ESCAS is not at the level that it should be, but I will go through it again. The requirements are that the exporter, through ESCAS, has to meet the regulator’s requirements that they have control over the cattle that they export—control in the sense that they can identify them, they can move them through with traceability and they have an independent audit once they go through to slaughter to ensure animal welfare outcomes. All of that can be done in a commercial sense. Therefore government to government there is no direct requirement—although I will check on that with the department—for an overseas government to make or do anything. But it is very reasonable for me to consult with overseas governments—

Senator BACK: Absolutely.

Senator Ludwig: to ensure that they do understand what our requirements are.

Senator BACK: Any aspects associated with improving animal welfare outcomes in our target markets are to be applauded. Is the department aware that, after about 30 years of Australia being almost exclusively the supplier of choice for live sheep into Kuwait, Kuwait is now actively examining alternative suppliers for their sheepmeat through live exports from Mexico, Georgia, South America and South Africa? Is the department aware of that?

Mr Glyde : The department is aware that we compete with other countries in those markets.

Senator BACK: I will ask the question again. Given the fact that we have been a supplier of choice in Kuwait—and through Kuwait to many other areas in the Middle East, including the United Arab Emirates, for the last 30 years—are you aware that Kuwait is now actively looking to suppliers from those countries I just mentioned?

Dr O’Connell : I think the juxtaposition of whether they are looking at alternative markets with the animal welfare issues that we have been raising could leave the impression that you are suggesting that that is because of these. There are price issues which are very significant, as you would know. Exchange rates are quite difficult at the moment if you are exporting animals. There are types of animals—for example, there is a preference, if possible against price, for Awassi type of sheep, fat-tailed sheep.

Senator BACK: With deep respect, Dr O’Connell, I am very well aware across the industry, as you well know.

Dr O’Connell : What I wanted to make clear was that, where we are hearing that people are looking at cross-markets, as usual, for stock, that is for a complex set of reasons. For example, I think the Saudi Arabian numbers have come down over the years quite drastically because of market issues—totally unrelated to animal welfare issues.

Mr Glyde : There are a lot of things happening in those marketplaces. The claim industry is making that it has been the supplier of choice is a claim industry can make. We do not have any information in relation to that. But the system we are putting in place is also about the long-run sustainability of a live export operation. It is very clear that for Australia to be a long-run reliable supplier it has to make sure that the animal welfare measures are in place that will satisfy the Australian community.

Senator BACK: But would you not agree with me, Mr Glyde, that if the importing countries do not go with Australia in this process then we will end up losing our entire export trade because those countries will not accept the conditions that Australia is imposing? Do you agree with that?

Senator Ludwig: Again—I said it very carefully to you just three or four minutes ago—you confuse the countries and the requirement on the exporter. There is no requirement on foreign countries of any sort. The requirement is on the exporter to adhere to the ESCAS system. Therefore your question about what other countries may or may not do is interesting but not relevant to ESCAS, because it is a market operation.

Senator BACK: Minister, it is relevant to you as the minister for agriculture and to the secretary of your department in that the encouragement of trade and of live exports is indeed something which you are on record as stating you are committed to—which I applaud you for and I support. You say there is not a link between the two. The point I am making is that if the conditions that we impose on our exporters are such that an importing country is not prepared to accept, then by definition our exporters will not be exporting Australian sheep or cattle into those markets—will they?

Senator Ludwig: Again I think you have missed the point. But, if I just use your point, what you are saying is that we should export live animals regardless of animal welfare outcomes. That is the contention you are now making.

Senator BACK: I reject that totally.

Senator Ludwig: That is the contention you are making.

Senator BACK: As you well know, on the basis of the facts, as I say so often—

Senator Ludwig: You are proposing that. What we have is said is that the exporter is required to put in place ESCAS. That means animal welfare is dealt with at the point of slaughter. It is also so that they have individual control, traceability and independent auditing. That is on the exporter, not on the importing country. So again I say that the proposition you are putting is erroneous and can only lead to the conclusion that you are proposing we send animals to overseas markets without taking animal welfare into account.

Senator BACK: Minister, I make the point to you, as I have made in the past, that Australia has led and is the only country in the world that has ever invested time, money and people in improving animal welfare standards in those target markets. We are the only country to have done so. The concern that I have in this exercise is simple. It is that if we progress this too quickly and too harshly we will be eliminated from the market. The supply will come from the other countries I have mentioned—the Horn of Africa, Mexico and Hungary, which is now exporting cattle into Turkey. Those countries are not imposing the equivalent of ESCAS, and animal welfare standards in those target markets will deteriorate to the levels they were at when I first became involved in this trade in the 1980s. That is the point I am making to you. Australia is proceeding and progressing unilaterally. I am urging you as the minister and the department to ask what others are doing—other exporting countries. What are they doing equivalent to Australia to make sure that animal welfare standards are improved and we have the opportunity to remain in the market?

Senator Ludwig: Clearly I am committed—and I think that is quite clear to everyone at present—to the continuation of this trade whilst ensuring animal welfare outcomes and ensuring the exporter has control over the cattle or sheep that they send to overseas markets. The way you frame it—and I may be mistaken in this—is that you are suggesting that I should not require ESCAS and that I should delay ESCAS or water it down so that animal welfare outcomes are not met. I reject that. That is not what I am going to do. ESCAS ensures animal welfare outcomes. It ensures that they are dealt with appropriately and we can identify individual exporters along the supply chain who fail to meet their requirements. We have already had a regulator report in relation to that. It seems to me that your only argument is that I should not do it—that I should not implement ESCAS in various markets until whenever. If we do that then you will continue to have negative animal welfare outcomes for Australian sheep and cattle that go into those markets. I, unlike you—and I think the community are with me on this—are not prepared to see Four Corners footage like we saw again in those markets. That is where you will lead us.

Senator BACK: I reject the ‘unlike you’ bit, Minister. I actually have a track record in the Middle East of being involved in improving animal welfare standards. I support you very much in the general thrust. What I am saying to you is that there are conditions imposed on the exporters which they are not able, in my view, to meet. We will come to that in a few minutes.

Mr Glyde : Perhaps I can help out here in terms of describing what else we are doing outside the relationship between the exporter and the importer to try and improve animal welfare standards around the world. One thing is that we are active in the OIE, the World Organisation for Animal Health, to try and encourage the further development of animal welfare strategies along the lines that Australia has. We have been responsible for the creation of a regional animal welfare strategy for our part of the world. We are encouraging, through those OIE forums, greater use of stunning et cetera to try and get a general consensus around—

Senator BACK: Absolutely—led by Australia.

Mr Glyde : Exactly. The second thing is that we have two programs that go to providing funding to put in place for these other markets to help them adopt practices and processes that are more akin to the sorts of standards we have in Australia. I would not want to characterise what we are doing as just bilateral. We are trying to make sure that we are lifting animal welfare standards, measures and approaches in all countries.

Senator BACK: I am aware of that and it has my full support.

Mr Glyde : In relation to your point about the additional costs that this system must impose on exporters, because it is an additional burden—

Senator BACK: I have not got costs yet. Perhaps we can hold that.

Mr Glyde : with the benefit of decent animal welfare outcomes as a result. It is very early days but you might be encouraged to know—I am not sure if we have any more up-to-date statistics but as of the middle of April around 275,000 sheep and 8,000 cattle had been exported to Turkey, Bahrain, Kuwait and Qatar under the new regulatory framework. It is early days but to us that is quite an encouraging sign that the economics of the trade are holding up. That is a very good sign, and the fact that the exporters are very keen for us to approve those shipments is a good sign that we will remain competitive in the markets that we operate in.

Dr O’Connell : Senator, when you look at the year-on-year comparison between 2011 and 2012 you will see that they are quite comparable. You were suggesting that the exporters could not manage the requirements. They are managing the requirements and they are exporting at reasonably comparable levels. The only place where there is some downturn is Kuwait, and there is a specific shipping reason there. There were three ships that were able to move backwards and forwards to Kuwait and now there is only a single ship which is able to do it with the exporter that deals with Kuwait. So the actual reason tends to be more logistics there than other things. Across the board there is a capacity for exporters to manage the ESCAS requirements into Qatar, Bahrain, Kuwait and Turkey quite successfully so far.

Senator BACK: I will conclude on this trade loss issue. There is an example of 32,000 cattle required in Turkey recently. Australia looks like supplying 3,000. The balance of them are coming from other markets— and in fact, Mr Glyde, a new market, as I mentioned earlier: Hungary, at 1,500 a week. Is the department able to monitor the changing pattern consequent upon ESCAS? Is that something your trade and market access area has the capacity to monitor?

Dr O’Connell : We monitor the numbers. The number of cattle in the period since 1 March is 19,349.

Senator BACK: From where?

Dr O’Connell : That is to Turkey. I am not sure what your number referred to but that is our number at the moment.

Senator Ludwig: Again—and I think the department made this point—you have to be very careful about ascribing numbers to ESCAS, because there are complex trade circumstances which impact upon trade more broadly, right through from our exchange rate to us as a reliable supplier, on the positive side, because we are foot-and-mouth disease free—right through to other positives that we have, because we are a reliable supplier. And, again, there are other competitive pressures. In Saudi Arabia over the last three or four years they have gone from a large intake to a very small intake— nothing to do with ESCAS. It was their own commercial decisions. So trying to separate out individual commercial decisions, preferences for consumers, shipping requirements such as Kuwait going from one ship to three, commercial decisions around price and quality, and the biosecurity issues is very complex, and I suggest that you try not to or refrain from trying to then use broad numbers and subscribe those to ESCAS only.

CHAIR: We will take a one-hour break.

Proceedings suspended from 13 : 01 to 13 : 59

CHAIR: Welcome back. We are in continuation with Biosecurity—Animal.

Senator BACK: I will leave ESCAS and go on to the audit which was brought down on Friday. Can I ask you at what point were the two companies informed that the abattoirs 3 and 4 were likely to be removed from their availability for cattle slaughter? Was that something given to them originally as part of your draft considerations with them or was it something that they became aware of only when you made the advice on Thursday-Friday?

Mr Merrilees : As part of our administrative practice we provided a draft of the investigation report to the exporters that were potentially named in that with adverse findings. Included in that draft were also draft regulatory actions. They would have first been advised in relation to having the opportunity to comment on that draft investigation report.

Senator BACK: As part of that draft was advice given to them that they were likely to have those two abattoirs withdrawn from service?

Mr Merrilees : Yes.

Senator BACK: Following the advice that has been given by the department to those companies, what remedial action have they taken and what information was provided to the department regarding any action they may have taken?

Mr Merrilees : In the material that both companies provided to the department as part of their response during the investigation, they listed a range of remedial actions that both companies have taken and those actions are recorded respectively in annexes 3 and 4 of the report.

Senator BACK: Have you audited those responses from the companies?

Mr Merrilees : No, we have not at this stage.

Senator BACK: You have not undertaken those audits?

Mr Merrilees : We have not assessed that.

Senator BACK: With respect to the advices or the information they gave back to you, were those advices of remedial and corrective action satisfactory to the department?

Mr Merrilees : We noted those remedial actions but we have not at this stage formed a view as to whether they have been satisfactorily completed.

Senator BACK: But have they conducted the independent audits which you would have required on those remedial actions?

Mr Merrilees : They provided an audit report as part of their response but again my recollection is that that audit report was done with propensity to have some of the actions work-respective rather than actually having occurred. As I said, we will be following up with the responses from each company and confirming that they have taken those actions and are comfortable with those actions. But we have not taken that step at this time.

Senator BACK: Can you tell me when it is likely that you will be taking that next step, Mr Merrilees, to satisfy yourself in regard to the advice they have given you?

Mr Merrilees : We have basically commenced that process already.

Senator BACK: With regard to the first one, which I think is abattoir 3, being the company ILE, based on what you have been told by them, subject to you confirming that, will that information be adequate for you to recommend to the secretary that that abattoir recommence operations?

Mr Merrilees : We have not formed a view on that yet. We have not formed a view as to whether the information they have provided will be sufficient to determine whether they have done sufficient corrective and preventative actions.

Senator BACK: With regard to the other abattoir, which is the one operated by NAC, North Australian Cattle, is it the same situation or have you had further opportunity to investigate the advices they have given you?

Mr Merrilees : No, we have not yet formed a view as to whether those actions collectively are satisfactory.

Senator BACK: Again, you cannot give this committee a time frame in which that might be likely to be conducted?

Mr Merrilees : No, but we have commenced work on it and we have started to look in detail at the material they have provided.

Senator BACK: If I can remain with that particular abattoir, North Australian Cattle, that is an abattoir which was the subject of your appraisal, your assessment, of four animals, and I believe six or seven noncompliances. Each of those noncompliances you would regard as minor; is that correct?

Mr Merrilees : For NACC there were actually 14 noncompliances with the OIE animal welfare requirements at that particular abattoir. Our animal welfare experts assessed the footage against the OIE checklist. We determined there were 14 noncompliances and then collectively we took those noncompliances and made a determination that that constituted a major breach of the ESCAS requirements. So we did not actually individually assess each of the breaches to say whether they were major or minor; we took the breaches collectively to reach that assessment of a major noncompliance.

Senator BACK: Did your animal welfare officers draw the conclusion as to whether any of the noncompliances constituted animal cruelty in the case of NACC?

Mr Merrilees : Our assessment was against the ESCAS guidelines, so we were not trying to reach a conclusion as to whether it constituted animal cruelty. What we were trying to reach was an assessment of whether the Australian animals depicted there had been handled appropriately, in accordance with—

Senator BACK: There were claims made at that particular abattoir that the events seen were of animal cruelty. As I look through your compliant or non-compliant list at table 2, obviously anything at all that is non-compliant is unsatisfactory, but I do not see anything in there that constitutes animal cruelty. I am just asking whether your animal welfare officers concur with that or do not concur with it.

Mr Merrilees : We did not actually access that. What we did was assess the individual criteria for the OIE checklist.

Senator BACK: That particular company operates how many abattoirs in Indonesia?

Mr Merrilees : I cannot tell you how many abattoirs they operate. I can tell you they have approximately 25 facilities that are in approved supply chains.

Senator BACK: That use their services. Am I correct in saying that I read there are around 130 criteria against which ESCAS comparisons are made?

Mr Merrilees : I think you are referring to the number of points in the checklist.

Senator BACK: That is correct.

Mr Merrilees : That checklist operationalises the OIE guidelines. I cannot confirm off the top of my head—

Senator BACK: Take it on notice. My understanding is that there are five criteria that have been assessed here. This particular abattoir, as I understand it, Mr Merrilees, has already moved, with this particular chain, to stunning; is that correct—or they are in a position to move to stunning immediately?

Mr Merrilees : As part of the material they have provided to us, they have proposed to install a modified mark 1 box with stunning. That is part of the material that I have mentioned that we have commenced assessing.

Senator BACK: In addition to them saying that they are going to propose stunning, would you require an independent audit by another party to assess that aspect of the supply chain?

Mr Merrilees : It would be effectively a new facility, a new slaughter line, so we would require an audit before it would be able to be fully assessed and approved.

Senator BACK: Given that now I understand that abattoir has ceased to operate under the ESCAS program, can you give us some indication as to the time frame that would be required to assess the stunning capacity for that abattoir to actually resume operations?

Mr Merrilees : I cannot give you a precise time. As I said, we have commenced assessment of it. It depends in part on whether the application that we have received has all the information we require. We typically assess these in priority order across exporters, and each exporter will typically nominate their relative priority. We will be assessing it according to those priorities.

Senator BACK: They have the opportunity to put before you that this, from their point of view, would be a high priority?

Mr Merrilees : That is right, and to my knowledge I do not think they have done that yet.

Senator BACK: I will move to the other company, ILE. The footage that was supplied to you in February was taken in January. How were you able to substantiate which abattoirs, when the footage was taken et cetera?

Mr Merrilees : As part of our investigation we wrote to all of the four exporters that we had initially identified as potentially being linked to that footage. Each of them provided us with a response. In the case that you are referring to, abattoir 4 by exporter ILE, they confirmed that they did use that facility. I understand that they in fact made that announcement publicly not long after the footage was actually aired.

Senator BACK: I ask again: how did you establish the validity of the footage? Were you able to do that independently?

Mr Merrilees : In terms of the validity of the footage, we have no doubt that the footage was valid. The material that was on there has not been disputed by any of the exporters. It was confirmed also in that actual locations of that footage were confirmed in a separate report that was made available to us by Indonesian authorities.

Senator BACK: Part of the evidence there, as I understand it, was the presence of green ear tags. Were those green ear tags Australian ear tags put in there for Australian cattle?

Mr Merrilees : Yes. We received from the complainant, Animals Australia, one ear tag number, a green ear tag number. We did not actually receive the ear tag. We followed that up with the exporter, who was able to provide us with information as to when that animal was slaughtered. That animal was actually slaughtered in mid-February, which was not at the same time that the footage was shot.

Senator BACK: The ear tag that they identified to you of an animal in an abattoir that was not in the abattoir—it was killed how long after?

Mr Merrilees : It was not in the footage. It was killed in mid-February.

Senator BACK: On 24 February, in your evidence to us, the information was supplied to you. Then, as I understand it, it was on 28 February that this information appeared on ABC Lateline, in which there was a quotation that 'my Indonesian contact said that the animal had an Australian ear tag'. Was that something that you took up with the ABC to highlight the inaccuracy of that statement?

Mr Merrilees : No.

Senator BACK: On the basis of it possibly being incorrect, can you tell me what other animals might have had green ear tags if the exporter themselves had not put this green ear tag into the animal?

Mr Merrilees : The green ear tags are commonly used by the Indonesian importer that works with that particular exporter. They put those tags, as we understand it, into both animals that are exported from Australia and animals that they source through their feedlots in Indonesia. So they go into local animals sometimes as well.

Senator BACK: Is that the basis? I could not see where you had identified in your report the inaccuracy of this ear tag number that turned out not to be an animal that was in the abattoir on that particular day or night. Does that appear in your report?

Mr Merrilees : It does appear in the report. It is in the main body of the report. It is in section 2.2. It is in the third paragraph, where we explain both the receipt and confirmation that that ear tag was not slaughtered during the period that the footage was allegedly shot.

Senator BACK: Can you tell me the basis on which in that particular case of that exporter you made the observation that it was highly likely that they were Australian cattle? Was that on the basis of this ear tag anomaly?

Mr Merrilees : It was on the basis of a range of factors. During the period that the footage was shot, on the particular evening there was a mix of cattle that were exported from Australia and also local cattle that were slaughtered in that facility. The majority of the cattle that were slaughtered were exported from Australia. We also had confirmation from the information we got from Meat and Livestock Australia where they gave us a range of characteristics of Australian and Indonesian animals so that, from our own examination of the footage, we were confident that a number of those animals were highly likely to be Australian animals. I also point out that the exporter themselves did not necessarily dispute that they were quite likely Australian animals.

Senator BACK: You have mentioned in your advice to these companies or in the material that has been publicised that you will be requiring an animal welfare officer in the abattoirs. Have they responded to that requirement and have they actually taken that action?

Mr Merrilees : They have not yet formally responded to our formal regulatory instrument on those variations. Certainly, both companies had indicated their intent to put animal welfare officers into their facilities. We have recorded their actions in the body of the report, in that they either are intending or have commenced that particular action.

Senator BACK: Dr O'Connell, following the advice that Mr Merrilees has given us about the information back from those companies and the need for your department to be satisfied as to the validity, could you tell us what the likely time delay might be before those abattoirs could come back on line, subject to you being satisfied with their compliance?

Dr O'Connell : Mr Merrilees has made it clear that we will go through the assessment process in the first place before we can do that. That would just fall, as he said, into the sequence of priorities. We have not heard from the importers as to whether or not they are priorities for them. We will follow that through. That depends very much on them.

Senator BACK: Can we get some idea, Mr Merrilees or Mr Glyde, of how many cattle in Indonesia have actually gone through the meat chain under the ESCAS program? I notice one of your reports indicates 305,347 cattle between August and April. Are they the numbers that have been exported or are they the numbers that have gone through the meat chain?

Mr Merrilees : We can provide you with the numbers that have been exported. In terms of the numbers that have actually been slaughtered, we get those numbers progressively through the end-of-processing reports. Those reports are due to us 190 days after the date of export and in many cases those reports are only just starting to come through, given that exports resumed progressively from August.

Senator BACK: Basically, we have reports on eight animals but we would have probably in excess of 150,000, roughly, having been slaughtered under the program?

Mr Merrilees : I cannot give you the number of those that were slaughtered. Since the resumption of the trade in August, for the balance between August and December last year, there are approximately 186,000 cattle exported, and this year, from January to 21 May, nearly a further 125,000. In round numbers, a crude mass of about 311,000 cattle have been exported to Indonesia since the resumption of the trade. Again, I cannot give you a specific figure in terms of how many of those have been actually processed. Until we get to the end-of-processing reports, we will not be able to determine that for a given period.

Senator BACK: As I say, that it was eight animals is regrettable. One animal is regrettable. But it would appear there is a vast improvement, Minister, based on the experiences of the past.

Senator Ludwig: It is not my assessment. It is not for me to make the assessment. The compliance is there. The system is there. I would expect people to meet the ESCAS requirements.

Senator BACK: Could I go back to the ESCAS support package, which was an introductory fund of $15 million, Dr O'Connell; is that correct?

Dr O'Connell : We might need to get a different set of people. Do you want to go through those issues—the program components?

Senator BACK: I would like to commence on that, if I can. I have a couple of questions and I will put the rest on notice. I would like to conclude my time with the compliance costs. Can we have a couple of minutes on the support package and then I will conclude with costs.

Ms Svarcas : There are two assistance packages available. The first one is a $5 million program that was designed and developed with industry to provide assistance where they needed to invest in improving supply chains to meet the ESCAS requirements.

Senator BACK: Is that $5 million or $15 million?

Ms Svarcas : That one is a $5 million program.

Senator BACK: Is that to be expended in this financial year or is it to carry over?

Ms Svarcas : That is over two financial years, concluding on 30 June next year.

Senator BACK: Is there any funding in addition to that $5 million?

Ms Svarcas : There is a $10 million program that comes from our official development assistance program. That program is designed to improve animal welfare outcomes in ODA eligible countries that we export animals to.

Senator BACK: Perhaps you could take this on notice for me: in both instances, the $5 million and the $10 million, how many applications have been received to date and what they represent. In the case of the $5 million is there a set amount of money per exporter or per supply chain?

Ms Svarcas : I am happy to take that on notice.

Senator BACK: Is it based on a contribution by both—one to one, two to one, three to one?

Ms Svarcas : For the $5 million program, it is a three-to-one program. So, for every $4 spent by exporters, the government will contribute 25 per cent.

Senator BACK: In terms of the importers, what sort of activities—

Dr O'Connell : To correct that, it is three to one. So, for every $3 spent by the exporter, $1 will be spent by the government.

Senator BACK: There is presumably a ceiling per exporter or per supply chain?

Ms Svarcas : Per supply chain for exporters.

Senator BACK: Could you let me know what that is? In terms of the importing countries, or importers now, could you also take on notice advice on just where they can spend those funds. Can they actually spend the money on upgrading their own supply chain?

Ms Svarcas : With the $5 million program, it is for anything that exporters spend on improving supply chains for approved supply chains in any exporting country.

Senator BACK: I want to finish on the question of costs and also the question of compliance. Behind me in the files is the document required by any one exporter for any one market. I imagine that within the department, Dr O'Connell, you probably have a similar amount of documentation opposite to the exporter. Minister, this is just unsustainable in terms of the requirements on exporters to be able to prepare that level of documentation and for your department to be preparing that level of documentation, particularly when you have exporters exporting the same livestock or similar livestock from the same farms by the same shipping methods to the same feedlots into the same markets. Surely, we must see some rationalisation of this documentation. This is not relating now to tranche 2 or tranche 3. This is all tranche 1. Mr Glyde, you must have some sympathy for your officers who are also engaged in that process. The question I want to ask you is—

Senator Ludwig: I was hoping you would get to a question.

Senator BACK: I am getting to the question. The question I am asking is—

Senator Ludwig: Because, if the answer is that you want to not deal with ESCAS, the only result from that is that you do not support animal welfare outcomes in overseas markets or export—

Senator BACK: Minister, we have gone through this. I support animal welfare outcomes. I have done all of my professional life.

Senator Ludwig: Then you would understand what I am saying—

Senator BACK: What I am saying to you is that there are more—

CHAIR: Minister, for the purpose of timing, I will allow Senator Back to finish his question so that we can move on.

Senator BACK: With respect to the costing associated with this $70 per quarter hour, $280 an hour, for the department to undertake this work, who audits the department, who regulates the regulator, and where will the end be in terms of the cost to exporters of this process?

Mr Merrilees : Perhaps I can make some comments on the costs basis. Consistent with our charging guidelines—and I will talk about Indonesia—Indonesia under our guidelines is what we refer to as a tier 1 market, which means it has relatively straightforward importing country requirements. What we do to standardise and provide some certainty to exporters on the cost is that the first 10 hours of assessment of a notice of intention to export and the ESCAS application are included in a standard per head charge. For cattle to Indonesia, for a tier 1 market, that is $1.55. We assess both the NOI and the ESCAS, and for up to 10 hours the exporter, whether it takes us one hour or 10 hours, pays $1.55 per head. We also provide another 10 per cent leeway. So after 11 hours we then commence charging the rate that you mentioned, which is $70.50 per quarter hour.

To give you a little bit of context, certainly when the process started there was considerable time and effort, both from the exporter and from the department, in the preparation and assessment of these applications, as you might expect from a new process. I look at the last five consignments that we have processed for Indonesia over the last couple of weeks. For the NOI and ESCAS assessment it has taken us, on average, 4½ hours to process, which would mean that they would be coming within the standard 10 hours and be subject to the same costs that they would otherwise have been charged as a tier 1, so $1.55 per head.

Senator BACK: And for sheep? When you are going into other markets, can you extrapolate to other markets?

Mr Merrilees : Sheep are not going to Indonesia.

Senator BACK: No, I am saying to other markets.

Mr Merrilees : With sheep to Kuwait, Kuwait is a tier 1 market, so they will be paying 20c per head. The first 28 hours are included in the initial assessment cost.

Senator BACK: The first 28 hours?

Mr Merrilees : Correct.

Senator NASH: I have a few questions around foot and mouth. I notice on your website that one focus of reforms is increasing and improving emergency response capacity to the threat of foot and mouth through the national action plan. Did the department receive additional funding to implement the national action plan?

Ms Mellor : No, there was no additional funding. We have shifted priorities within the animal division to set up a task force. We are doing two sets of work. One is a set of work that is DAFF's responsibility and then through the National Biosecurity Committee there is a set of work with the states and territories. That is funded internally as well.

Senator NASH: How much funding is being allocated to it and where is the funding coming from? I assume if it has gone from something else, something else has been cut to accommodate it?

Ms Schneider : We have established an FMD task force in animal division. There are approximately six FTEs in that task force at the moment and they have been reallocated from other tasks.

Senator NASH: Would you mind taking on notice the exact cost of the plan. I am sure I have read somewhere on your website that there has not been an outbreak of foot and mouth since 1872; is that correct?

Ms Schneider : In Australia, that is correct.

Senator NASH: What has been the trigger to move to the national action plan? Obviously currently what you have been doing has been working, if you have not had an outbreak since 1872, so why now the necessity to move to the national action plan?

Dr O'Connell : A while ago we started to have a concern about whether across the Federation there were adequate resources still being placed into managing the foot-and-mouth disease risk.

Ms Mellor : In October last year we received a report that there had been a number of outbreaks in South-East Asia and elsewhere in the world that made us concerned.

Dr O'Connell : We commissioned a report from Ken Matthews, who used to be the secretary of the department—consultancy work to make a broad assessment of readiness. That was because we had essentially the sense that resources had dropped away across the Federation. He confirmed 11 areas in which we should focus. We took that report and our own analysis and have really assessed that there needs to be a re-emphasis on foot-and-mouth disease as being the key animal disease that we need to be managing as a risk not just across the Commonwealth government but across the state governments. While we have taken the action within the Commonwealth to upgrade the risk management, we have also taken the action across the states to start the process through the National Biosecurity Committee of looking at significantly ramping up the preparedness effort for foot-and-mouth disease. So it is really about focusing on it, because in the end it is the disease that we are most concerned about.

Senator NASH: Absolutely. So, rather than any imminent danger, it is just about a focus on the occurrences in some of our near neighbours and making sure that the process is as watertight and perhaps more cohesive than it has been across the states?

Dr O'Connell : It is self-generated. We generated this because we thought this was starting to not be the focus of all governments across the Federation.

Senator NASH: If you would not mind, when you provide the costings, could you say exactly where those staff were redeployed from.

Senator IAN MACDONALD: Following on from Senator Back's questions about the Indonesian prosecutions, if I can call them that, that were reported in the press on Friday, which of these shown on your website as being assessments of video footage were the ones prosecuted?

Dr O'Connell : Senator, 'prosecuted' is probably the wrong terminology. I might get Mr Merrilees to—

Senator IAN MACDONALD: I am going on a press report on Friday morning which was a paragraph which said that the department was about to take action against NACC.

Dr O'Connell : Two exporters—

Mr Glyde : North Australian Cattle Company and International Livestock Exports.

Senator IAN MACDONALD: Yes, that was the report. I thought it said there were three breaches.

Dr O'Connell : There were multiple breaches of the ESCAS in each of those cases. That is the NACC and ILE. There were two other exporters who were found to have nothing to do with the footage at all. They were separate issues.

Senator IAN MACDONALD: Is it true that there were three charges pending, or was the newspaper report wrong?

Mr Merrilees : That is incorrect. I did see that report. There were breaches of the ESCAS requirements on those exports. There are no prosecutions arising from the investigation report.

Mr Glyde : I wonder if what has emerged is that we have described three regulatory actions in relation to those two exporters. The three actions were removing the two abattoirs that were featured in the system where there were some animal welfare breaches, placing additional conditions on the licence of those two exporters in relation to the use of the mark four box, and increasing the frequency of auditing of the two exporters in their other supply chains. They were the three things that were being referred to in the media.

Senator IAN MACDONALD: There were no prosecutions introduced so far?

Mr Glyde : No. These were additional conditions, in essence.

Senator IAN MACDONALD: No prosecutions?

Mr Glyde : No actual prosecutions.

Senator IAN MACDONALD: The reporting was wrong. The radio interviewer said, 'So it proves that the regulations are not working?' My comment was, 'On the contrary; it proves they are working.' Would you agree with that?

Mr Glyde : Yes.

Senator IAN MACDONALD: That is why these things came to a point. As for one of the problems, I see that you mention in 6.6 that the head is restrained for as short a time as possible prior to sticking and in no case for longer than 10 seconds. Can you tell me how long the 10 seconds was exceeded by?

Mr Merrilees : There are several examples on the footage where it was exceeded and, from memory, it ranged from 20 seconds to over 50 seconds between proper restraint and the actual sticking of the animal.

Senator IAN MACDONALD: So suggestions to me that it was three seconds would not be correct?

Mr Merrilees : No.

Dr O'Connell : There is a range and I think it went from 14 to 50, or something like that.

Senator IAN MACDONALD: That has clarified that; thank you very much for that. The other thing I want to raise is this: it has been reported—actually it was in the budget papers—that there was a class action being taken against the government in relation to the banning of live export, if I can loosely call it that. Can someone explain to me what that is all about?

Dr O'Connell : I think we covered that ground earlier.

CHAIR: We have. We have been doing this. It has been covered today by Senator Abetz.

Senator IAN MACDONALD: I am sorry; I have asked two of my colleagues and neither of them has heard of it.

CHAIR: Senator Abetz asked a series of questions that were put on notice.

Senator Ludwig: You are welcome to ask the question and we are willing to try to help you.

CHAIR: Just to let you know, it has been covered.

Senator IAN MACDONALD: Thank you. I will ask it. I have some constituents in the north who raised it with me on the weekend.

Mr Glyde : The Commonwealth has received a potential claim for compensation arising from the temporary suspension of the livestock exports to Indonesia. It is standard practice that when the Commonwealth receives such a claim we notify Comcover. It is also standard practice, under the Charter of Budget Honesty, to put forward these contingent liabilities, even if we do not really know what they might be. Certainly no litigation or class action has commenced, nor has any decision been made about compensation. So it is really just flagging that there has been a claim.

Senator Ludwig: This is standard practice for the budget. Between 2001 and 2006 there would have been, I think, 10 types of litigation that would have been reported in the budget.

Senator IAN MACDONALD: Is there a figure put against them for budget purposes?

Senator Ludwig: I would have to go back and have a look. Some of them may have figures put against them. Some others—

Senator IAN MACDONALD: I mean in this particular instance.

Senator Ludwig: No.

Mr Glyde : I do not think we have a figure, because it is very early days.

Senator IAN MACDONALD: When you say that a claim has been made, how does that materialise? Have solicitors written to you and said, 'We're going to sue you for your pants,' or something?

Mr Glyde : Generally, yes. I will have to take some advice and get back to you in terms of the specifics of it.

Senator Ludwig: We have to be careful about the specifics which we go into. I am advised that I am not at liberty to discuss the details of the claim. So the difficulty is that by asking how it arises you go into the detail. You can ask your questions; we will see what the legal advice will allow us to say or not say in answer to your questions. I am not trying to be unhelpful; I am just trying to be, in fact, helpful to the extent that I can.

Senator IAN MACDONALD: And I appreciate that. But I take it from what everyone has said that no writ has been issued, for example.

Mr Glyde : The advice I have is that certainly no litigation or action has commenced. That is as far as I can take it. If you want the actual specifics, we will have to take that on notice.

Senator IAN MACDONALD: It is, as you know, a major issue. We have asked the minister both, I think, in last estimates and in the chamber about the possibility of the government considering compensation for people who are entirely innocent down the chain and who had nothing to do with it but whose livelihoods and, indeed, whose properties and houses could well be lost as a result of it. I am interested to know. In all fairness, it is something I think the government should be talking about discussing. That is why I was interested when I read in the budget that there was a class action. I do not have the words in front of me but I think the budget papers said—

Mr Glyde : 'Potential claim of litigation'.

Senator IAN MACDONALD: A potential class action has been received from a law firm on behalf of 21 clients. I am interested in where that is going and perhaps what you can give me on notice. I am, of course, not critical of that. I encourage the department and the government to enter into any discussions in a very positive way, bearing in mind that, whilst there were difficulties somewhere along the line, some of the people who are really suffering are people who are entirely innocent of it all. If there is anything that you can tell me on notice, I would appreciate it; otherwise, good luck.

Finally—and I do not think it is in this section of biosecurity—do the arrangements for export of cattle come under this section, or would they be under quarantine?

Mr Glyde : Under this section. This is Biosecurity—Animal Division.

Senator IAN MACDONALD: You would be aware of a proposal from a group of cattlemen in North Queensland to export live cattle through the port of Mourilyan to the Solomons. I have written to someone else about that. I have recently written to the minister. Through my own office's indiscretions, that letter only just went, I think, to the minister on Monday. Are you aware of that proposal?

Senator Ludwig: I do recall it. I have forwarded it to my chief of staff to then forward it to the department to have a look at. I am not sure whether it has got to in the department.

Senator IAN MACDONALD: No. It was only recently. I am not—

Senator Ludwig: Dr Cupit can help you, I think.

Dr A Cupit : We are aware of that. We have been working with the commercial parties, with the Australian livestock exporters and also the Solomon Islands government. It is an issue that, with all of these negotiations, we have to assess the country's status as well. You will be aware that some of the Pacific islands do not have cattle tick, for example. We have to make sure that the arrangements for the export meet both our reputation as providing cattle in the region and also make sure that we do not give them a disease that we may have. The chief issue here is in relation to cattle tick, and the Solomon Islands reportedly are free of cattle tick. So we are working to make sure that the arrangements for the export protocol protect their status as well.

Senator IAN MACDONALD: That is good to hear. But as I understand it the proponents have a certificate, a protocol, from the Solomon Islands government, who came out and had a look at the way things work. And, as I understood it, the Solomon Islands government was happy enough to issue an import approval for the proposal. Is that your understanding?

Dr A Cupit : It is fairly well advanced and we have actually been working on this for a period. There are still a couple of clauses in there that need to be refined further, in particular in relation to cattle tick. So it is getting closer. But there are a few things. We have to make sure that we can confidently provide those clauses. Bear in mind that a few years ago we did have an issue with providing cattle to New Caledonia; we did cause a disease outbreak there. So we have to keep that in consideration. But we are working through with the commercial parties. We met with them last week again, at the beef week in Rockhampton, to work through those issues. So there is ongoing dialogue to try to refine those clauses.

Senator IAN MACDONALD: Let me try to understand the system though. The Solomon Islands government, as I understand it, is quite happy, having looked at all the possibilities and the risks, and having looked at the operation in North Queensland. What then does the Australian government have to do that the Solomon Islands government needs to be happy with?

Dr A Cupit : It is not quite correct that the Solomon Islands government are completely happy with our protocol. They have employed a consultant who is working with the commercial parties, and that person is happy with the protocol. So we still have to make sure that their agricultural minister is also fully aware of all those issues. In particular, we are aware that the Solomon Islands government recently imported breeder cattle from Vanuatu et cetera. They have a breeding industry there as well. So if we export slaughter cattle there we have to make sure that those slaughter cattle do not affect their breeder cattle. So there are a few issues there that we have to work through and make sure that the final protocol maintains their disease status as well as we can meet those conditions.

Senator IAN MACDONALD: Let me understand. What do you need from the Australian government as opposed to the Solomon Islands government to allow this venture to work?

Dr A Cupit : We have to make sure the tick treatment that is finally agreed to actually provides those assurances for them.

Senator IAN MACDONALD: So it is all about—

Dr A Cupit : So it is about protecting our reputation as well.

Dr O'Connell : So it is a permit requirement within the permit conditions and then providing the permit. The health certification will also have to have an ESCAS. These are for slaughter and it is a new market. So we will need to have the ESCAS requirements in place too.

Senator IAN MACDONALD: Of course, yes. I do not think that is a problem. You have met with the proponents recently. It is just that with the difficulties—if I can put it that way—with Indonesia, there are a lot of cattle that are good for export but are not prime for the Australian market. Here is an underutilised port, a lot of cattle available and Solomon Islanders desperately needing fresh meat; so it seems to be a win-win. But I am pleased that you are on to it and perhaps some time in the future we can pursue this a bit further. I understand that your inspectors have been up to look at the arrangements already in place to make sure that tick-free cattle come from the north across the tick-free line into the south, and that has been operating for some time.

Dr A Cupit : They have looked there, but we have not looked in the Solomon Islands to actually see the arrangements there on arrival.

Senator IAN MACDONALD: If the processing allows them to move from North Queensland over the tick line into the south, free of ticks, does it not follow that they would use the same process to send them to wherever? Not necessarily?

Dr A Cupit : The proposal initially was to take them from the tick area directly over to the Solomons.

Senator IAN MACDONALD: Through the tick-free processing that already operates for north and south Australia—that sort of thing.

Dr A Cupit : Yes.

Senator IAN MACDONALD: Anyhow, I will not waste further time. I am pleased to hear that you are on to it and are working constructively with the proponents, because it is very important.

CHAIR: That is good news. Thank you, Senator Macdonald. Just for clarification, Senator Boswell has one very quick question. I think he might be in the wrong area, but we will let the officers judge that.

Senator BOSWELL: My question is on the kangaroo industry and how the Russian access is going, or whether the Russians are still interested in purchasing our roo meat.

CHAIR: Just while we are doing this, we have from a quarter to nine tomorrow night until nine o'clock for this area. Without being too rude—we are over time—I will flip, if it is all right with my colleagues, to biosecurity for five or 10 minutes at the most.

Senator BOSWELL: What is the position in the kangaroo industry with regard to access to the Russian market?

Mr Read : The present situation with Russia is that there is still a suspension in place on the import of kangaroo meat from Australia.

Senator BOSWELL: Have we made any moves to invite them out? What process are we going through? What process is your department going through to regain that access?

Mr Read : At every opportunity, the department—and I think it has been raised at senior government level as well—has put the case regarding the current suspension in relation to the kangaroo industry. The kangaroo industry, as you are aware, has implemented a number of reforms here over the last couple years that are aimed at mitigating the concerns expressed by Russia at that time. I met with Rosselkhoznadzor in January, again taking them through the reforms as they have been responded to and certainly issuing invitations for a Russian technical visit to view those reforms in the context of the concerns they had. Russia has recently come back indicating that at this time they are not prepared to come and undertake a technical visit, but they require further information. We have been providing them with further information. There will be another meeting with officials in Russia in a couple of weeks and at that meeting these issues will again be canvassed.

Senator BOSWELL: Who is going to that meeting with the Russians?

Mr Read : The department will be—

Dr O'Connell : The Chief Veterinary Officer.

Mr Read : Yes, the CVO and the head of our trade market access division—two senior people are going.

Senator BOSWELL: Senator Ludwig, at a previous meeting I did ask you whether you had made representation to the Russian embassy about this and I think you were going to do it or you were writing to them. You were going to take some action.

Senator Ludwig: What we have done is take it one step higher. At the APEC meeting in November 2011 the Prime Minister and the trade minister both separately discussed the kangaroo meat market access with their respective Russian counterparts.

Senator BOSWELL: What date was that?

Senator Ludwig: November 2011. I know from discussing this issue with the Minister for Trade that he remains committed to trying to open the market. I cannot recall each individual representation he has made, but my recollection is that he has certainly made substantive representations to reopen the trade.

Senator BOSWELL: Who was at that meeting in November 2011?

Senator Ludwig: That was an APEC meeting.

Senator BOSWELL: And it was the Prime Minister?

Senator Ludwig: That was the Prime Minister and the Minister for Trade.

Senator BOSWELL: You cannot go much higher. Is there just no joy there at all at the moment?

Senator Ludwig: They have not reopened trade, no.

Senator BOSWELL: Thank you very much. I will probably have some more questions tomorrow night.

CHAIR: No worries. By agreement with my colleagues, we are going to have a couple of quick questions from Senator Rhiannon. I do not want to get into a blue. I should not use that word, 'blue'; I will retract that. The last time I did that, people told fibs about me! I do not want to get into an argument. Senator Rhiannon, just a couple of quick ones and then we will move on.

Senator RHIANNON: Thank you. I understand that in evidence just before lunch you said that you did not find any proof that sheep on board a ship berthed at Fremantle port in early April had suffered broken limbs or were pregnant. Is that an accurate summary?

Mr Glyde : Yes.

Senator RHIANNON: These reports that I have commented on were from Forest Rescue Australia. Forest Rescue Australia is one of a number of animal rights groups that are exposing cruelty associated with live exports. Considering that there were tens of thousands of sheep on that ship, are you seriously asserting that every sheep was viewed by your officers and none was found to have broken bones or was pregnant?

Ms Cale : When the PVO of DAFF, the principal veterinary officer, and a veterinary officer inspected the animals post the media release, they found no evidence of animals that were pregnant or animals with broken legs.

Senator RHIANNON: They checked the tens of thousands of sheep that were on the ship? Did they check all of them or did they just do spot checks?

Ms Cale : No. Clearly they went through the vessel and checked the animals, but it is impossible to say that they were able to identify every single animal as they went through.

Senator RHIANNON: Thank you; you are saying that they did not check every animal. So they could not be 100 per cent confident that no sheep had a broken bone or that no sheep was pregnant.

Dr O'Connell : They undertook a comprehensive examination sufficient to meet our certification requirements and found no evidence.

Senator RHIANNON: But I understand that did not involve looking at all the animals; so you cannot be 100 per cent confident that no sheep had a broken bone or that no sheep was pregnant.

Dr O'Connell : I think that they looked at all decks, as I understand it.

Senator RHIANNON: But still, 'all decks' is not 'all sheep'.

Dr O'Connell : I am not quite sure what the point is.

Senator Ludwig: There is no evidence. The regulator has gone to the document and that is their evidence to the committee. Bear in mind that if anybody does have any evidence of animal cruelty or mistreatment of animals, then what I say always in these instances is that they should bring it to the attention of the regulator. They are the appropriate people to deal with it. So if you are aware of any abuse or cruelty to animals, I would expect you to then contact the regulator, write to the regulator and advise them of the circumstances. Have you done that?

Senator RHIANNON: Thank you. What we can take from this is that not every animal was checked.

CHAIR: There was intense questioning. There was no shortage of answers. Senator Rhiannon, I urge you to read the Hansard when it comes out in a couple of weeks. In that case, we will thank Biosecurity Animals. I feel as though I am calling you names! I am sorry about that. Perhaps I should say 'the animal division'.

CHAIR: I now call Biosecurity Quarantine. Senator Colbeck, you have the lead.

[14:52]

Senator COLBECK: I want to quickly run through a couple of questions about the new post-entry quarantine facility. We discussed earlier the $22.1 million in the budget—some in DAFF, some in finance—for 2012-13. What is the reason for the big hole in 2015-16? It goes from $22 million to $95 million, drops to $59 million—almost $60 million—then drops to $7 million and then goes to $54 million in 2017.

Ms Mellor : Hopefully my CFO is in the room next door and is ready to come in. The bulk of the transition between the current stations and the new stations has to be in 2015, when Eastern Creek comes off commission. Fifty per cent of the capacity for our quarantine stations is in Eastern Creek. So we need to be in a position in 2015 to transition out of Eastern Creek and into the new facility. So the bulk of the building will need to be ready for that. As you know, Eastern Creek has horses, it has plants and it has dogs and cats, and the bulk of that capacity. That is pretty much the sort of build-up and then tail-off.

Senator Ludwig: You might repeat the question for Mr Schaeffer, now that he is back.

Senator COLBECK: I am going to do that. Going through the annual figures for the new facility in Victoria—and we talked about the $22 million earlier—you have $95.4 million in 2013-14, $59.8 million in 2014-15, $7 million in 2015-16, $54.3 million in 2016-17, $54.3 million in 2017-18 and $17.9 million in 2018-19. What happened? Why the big fall-off in 2015-16?

Mr Schaeffer : The works will be staged. In that year it just happens that we will have completed a number of works and then, as the other quarantine stations close, those works will come in line with those closures.

Senator COLBECK: There will be other projects that occur during that period. What work have you done in relation to access costs, or what assessments have you done in relation to access costs? I think you have five facilities around the country at the moment. Is that correct?

Mr Schaeffer : That is right. That is, government owned facilities.

Senator COLBECK: What will we end up with once we go to this particular new configuration? Who bears the costs of getting to and from the new facilities?

Ms Mellor : We are moving from five government operated facilities to one. The importation cost is borne by the importer.

Senator COLBECK: It is a commercial arrangement between the importer and whoever is sending it, I suppose.

Ms Mellor : That is right. Also, I would just say that there are other quarantine facilities that are privately run and approved and managed by us, and we remain open to people putting up a case to do that.

Senator COLBECK: How many private facilities are there that supplement the major one?

Ms Mellor : There are several thousand quarantine approved premises. But we run birds and eggs pretty much exclusively, bar one, and we run dogs and cats, and we run horses other than racehorses. So there is a mixture of quarantine facilities that are privately run as well.

Senator COLBECK: In respect of an incident occurring—let us call it an incident; you will correct me, I am sure—in a major facility that renders that facility unusable for a period of time, there is redundancy in the system—

Ms Mellor : Yes.

Senator COLBECK: In the circumstance in which that might occur—for example, when Eastern Creek was down—there were other sites around the country.

Ms Mellor : Yes. Also, it is our intention in design to have redundancy within the station itself as well—multiple compounds servicing different species—so that we have that redundancy in the event of an incident.

Senator COLBECK: I am sure we will talk about that more as the facility develops and the system comes through.

Senator NASH: Perhaps I can raise something on that. Apologies if this has been raised earlier, but was there any discussion around the funding that has been allocated to the work that has been undertaken for the current sites for maintenance and repair?

Ms Mellor : We currently have $11 million worth of capital works going on around those sites, which are basically—

Senator NASH: But this has not been canvassed yet?

Ms Mellor : No. We are basically maintaining those sites because the leases come off over the next five years.

Senator NASH: Correct me if I am wrong, but I think the budget papers say that it is $19.1 million to maintain and repair the five sites. Is that correct?

Mr Schaeffer : That is right. It includes a rent component as well.

Senator NASH: Do you have a breakdown of the work that is going to be required at each of the sites? I am happy for you to take that on notice.

Ms Mellor : We can provide that.

Senator NASH: It would be useful if you could do that. Are there any arrangements under the terms of the current leases in relation to the refurbishment of these premises? Is there anything in any existing lease that requires refurbishment or maintenance?

Mr Schaeffer : I might ask Mr Moore, the project manager for the post-entry quarantine facility, to answer that.

Mr Moore : There is no requirement under the existing leases, but we have sought the landlord's permission to undertake some of those works that are subject to that funding in the last budget.

Senator NASH: Is all of the funding that is allocated to this site specific? Or is any of it going to be spent on upgrade or repair and maintenance so it can then be transferred to the new site? Or is it all just the existing facilities?

Mr Moore : It would be all for the existing facilities through to the end of the current lease periods.

Senator NASH: Thank you. Perhaps you could take that on notice for me for each of the sites and the funding allocation to each of those pieces of work. That would be useful.

Senator COLBECK: In the budget statement under 'Maintaining Core Biosecurity System' there is a funding drop of $6 million for 2013-14. Does that line up with the discussion we had this morning around meeting your budgetary requirements?

Mr Schaeffer : Can you point to the page?

Senator COLBECK: Page 19.

Mr Schaeffer : Sorry, Senator; where in particular?

Dr O'Connell : Is it the line beginning with '$38.13 million on 2012-13'—is that where you are?

Senator COLBECK: It is table 1.2 on page 19, 'Reforming Australia's Biosecurity System—maintaining core biosecurity operations'. Then you have 'departmental expenses'. It is not 2013-14—

Mr Schaeffer : It incorporates the ICT component, and most of that is over the first two years; then it drops off. We spoke about that this morning.

Senator COLBECK: That is that initial ICT spend. It goes: 2012-13, $34.5 million; $34.9 million in 2013-14; then drops back to $28.9 million in 2014-15, and $27.4 million in 2015-16?

Mr Schaeffer : That is right.

Senator COLBECK: That is as that expenditure is rolled out. We had a discussion during the last estimates hearings around product coming in from Korea. The discussion was whether or not chicken meat was one of the products that were coming in. We have confirmed that as part of our discussions: question 24 confirmed that raw chicken product was part of what came in. At this point in time the cost is just under $300,000. Is that the final figure of $298,000 in question 25?

Mr Chapman : Yes. Those costs excluded staffing costs but it was the cost of the recovery of the operation, holding the goods, destruction and so forth.

Senator COLBECK: Have any action and activities been taken since February, when we were informed that everything had been retrieved?

Mr Chapman : With the actions that have continued in relation to that operation, the ongoing investigation with a view to prosecution, there is one matter on which I believe the individual has been committed for trial. There is another matter being considered by the Director of Public Prosecutions and we have taken administrative action in regard to a number of the quarantine approved premises which were involved in the illegal importation. That means revoking the approval for a couple of premises, not renewing the approval for another and increasing the level of surveillance and scrutiny which we have over other QAPs.

Senator COLBECK: Who bears the costs for those particular actions?

Mr Chapman : If we have greater scrutiny over the QAPs, greater levels of audit, the QAPs have to pay for that activity.

Senator COLBECK: They pay for the audits?

Mr Chapman : It is cost-recovered. The additional consequence for them of less than satisfactory compliance is greater costs.

Senator COLBECK: There has been no cost recovered in respect of the $300,000 that was the cost of rounding it up. Is that a consideration as part of the prosecution process?

Mr Terpstra : We have taken some action in relation to this particular operation to account for all of the costs associated with the recovery of non-compliant goods and the destruction of non-compliant goods. We have obtained some preliminary legal advice as to the chargeability under the act of a number of those items. The advice we have obtained to date is that, because of the nature of the way we have had to seize some of those goods they then become the property of the Commonwealth, and this makes the recovery of the charges for those actions somewhat more difficult but not necessarily impossible. But, as the matters are being prosecuted, we are pursuing the opportunity to try and recover those funds. But it remains to be seen as to whether they will in fact be successful.

Senator COLBECK: How are those costs allocated through the departmental budget?

Mr Terpstra : We have standing resources in relation to these recovery actions against a cost centre which we call 'post quarantine detections. We account for that activity on an annual basis and have done so for a number of years already.

Senator COLBECK: That process, that cost silo, is outside of the cost-recovered—

Mr Terpstra : They are actually cost-recovered resources that manage that process.

Ms Mellor : The reality is if we can hold an activity to a payer, we will. When we get into these kinds of operations some of it will be public good. One of our challenges is to get that distinction clear.

Senator COLBECK: That is the point of the question.

Ms Mellor : I think it is not clear at the end of the chain that there might be a person who you can charge fees to, but they may well be out of business as a result of our actions as well. We have to get the balance right between what is public good and the pursuit of the beneficiary, so to speak, in this case.

Senator COLBECK: Where does it sit at the moment? Where is the balance at the moment? Is it all cost-recovered? How is the allocation made as to how much the rest of the industry pays under the cost recovery process for the actions of someone who is effectively in breach of the process?

Ms Mellor : The individual quarantine approved premise operators are charged for the activities relating to them in the normal course of our administration of them.

Senator COLBECK: I understand that.

Ms Mellor : Separately, we have investigation staff who are not cost-recovered who will be involved in the development of the operation, in this case the one involving Korean imported food. That is government funded work. The key thing here is that there has been a range of activity undertaken in the recall of goods and the seizing and management of goods. At the moment we are not settled on how we can recover those costs from the individual QAP operators.

Senator COLBECK: What is the process of determining where they do end up going? What happens to them? Are they set aside in the department's budget for a period of time, or do they just go into the pool that needs to be cost-recovered? How is it managed?

Mr Chapman : We cost-recover across the cargo business for a whole range of activities, inspections, cargo clearance, treatments, QAPs and so forth. As far as possible we have a very direct linkage between the activities and the charges in accordance with the cost recovery guidelines. There is an industry liability account, that is, if you like, what we have got in the bank, and while we are sorting out these issues, those costs associated with the activities around the prosecution and the recovery of the Korean imported foods will come out of that cost-recovered industry liability account.

Senator COLBECK: Would you not maintain that account at a certain level to give yourself a buffer or something like that?

Mr Chapman : That is right.

Senator COLBECK: So funds come through from the cost recovery process that are allocated into that fund, so in the case that you get an expensive event, that then gets spread back out through the broader cost recovery system?

Mr Chapman : That is right. The ILA performs a number of functions—one as you have just described. Also it means that we can keep our fees pretty stable so we are not changing them on a very regular basis as trade volumes and costs change as well. That provides a benefit to industry because they have some certainty as to what fees they will be charging and can set up these systems accordingly.

Senator COLBECK: It is in direct compliance with the cost recovery guidelines that you determine which goes where? It is almost coming down to a value judgment, isn't it, at the end of the day as to how much of this broader industry will pay for?

Mr Chapman : That is right.

Senator COLBECK: How do you make that judgment?

Mr Chapman : That is what Ms Mellor was referring to. With most of the things we do it is quite clear. We know how long it takes to inspect them. We can charge accordingly. We know what it costs us to administer quarantine premise approvals, so the fees we link to that are very clear. These are the areas where it is a bit difficult. In the broad scheme, these activities have come about because of the activities of importers. That is why they are paid for at the moment out of the industry liability account.

Senator COLBECK: Can you give me a rough idea of what sort of annual load would be going into the broader cost recovery process through the liability process?

Mr Chapman : It varies considerably depending on what the volumes of trade are. In the last couple of years trade has rebounded significantly from the global financial crisis. So the revenue we have been collecting has been greater than what we have been expending. The aim is generally to keep the ILA at about 10 to15 per cent. It is a bit more than that at the moment.

Senator COLBECK: Ten to 15 per cent of what?

Mr Chapman : Ten to 15 per cent of total annual expenditure.

Ms Mellor : It is like a reserve. That buffer is there, as you earlier described, in the event that there is an incident or a change in circumstances in that fee line.

Senator COLBECK: So that number is about how much? Total annual expenditure is what?

Mr Chapman : It is sitting around $50 million.

Senator COLBECK: The reserve?

Mr Terpstra : The last reported amount was $37 million.

Senator COLBECK: What would the annual expenditure against the reserve be?

Mr Terpstra : It is $37 million in the current industry liability account at present. The cost of running the cargo import clearance business is in the order of $180 million per year. That varies, as Mr Chapman, has indicated according to trade volumes.

Senator COLBECK: What would the annual call be on the liability account? In the context of it, the $300,000 for this incident is not a huge sum. I understand the reason for having a buffer there. I am trying to get a sense of what the annual call might be.

Mr Terpstra : The annual call on this type of work as we go on to the coming financial year is in the order of 50 full-time equivalent staff, with an allocation for destruction and testing of product that is seized.

Senator COLBECK: You would turn over something like $37 million on an annual basis then?

Mr Chapman : No, Senator. Perhaps it is a bit more complex than that. The primary purpose of the reserve is so that we can maintain stability in fees. In a normal cycle of fee reviews we would essentially—this is in very, very rough terms—overrecover in the first year, break even in the second year, and lose in the third year, and get that industry reserve down close to even. Then we put in a new fee review to give us the right amount of funding for the next three years with the expected activity we have got.

Senator COLBECK: By 'even' you mean about the target percentage within that 10 to 15 per cent range?

Mr Chapman : That is right. Whatever the range is set at.

Senator COLBECK: I understand what you are talking about. I am trying to get a sense of what the annual call on that might be.

Mr Chapman : It is very difficult to predict, because the activities that came out of Hayride at the time were not normal activities. Most years we would be able to have a pretty close correlation between the activities and the fees which are generated by those activities. The slightly grey areas that came out of this operation where there is a whole lot of enforcement activity which we undertake which we cannot directly cost-recover for is an unusual event. It is a bit difficult to say each year we are going to expect to spend half a million dollars on extra activity which we have not factored into our fee structures.

Senator COLBECK: You must have a sense over a period of time of the sorts of events that crop up. I understand that it is not something you can predict out the front because it is the sort of thing you try to avoid by setting up your risk profiles.

Mr Chapman : In very rough terms, a couple of hundred thousand dollars a year, because there are often post-quarantine detections which we need to respond to.

Dr O'Connell : It is probably true to say that the underlying role of the account is not to deal with these issues; it is actually to deal with—

Senator COLBECK: The smoothing of the trade generally.

Dr O'Connell : So over a three-year period you can set fees which will be accurate for that period of time with the ups and downs of trade and the economy and you make your best effort to do that and your camp will manage that. If everything goes well you will end up with close to zero at the back end of that. But, for example, over the GFC period everything went all over the show.

Senator COLBECK: Then you have to do a rebalancing exercise once trade returns to normal.

Dr O'Connell : It is less to do with dealing with the unusual—although it will manage those unusual things as well. The fundamental role is to act as, essentially, an account for the fee structure against demand.

Senator COLBECK: You have commenced some action at this point in time but it is still too early in the piece to go through the process.

Dr O'Connell : It is probably just worth saying if we reach the point where the activity which we have undertaken in terms of the investigation and compliance function cannot be cost-recovered then it has to come out of that account and go into appropriation. Somewhere along the line we have to make that judgment. At the moment what Mr Terpstra is saying is that we are still trying to work through being very clear about how much, if any, can be handled through the cost recovery and how much will have to fall to appropriation. But it sits for the moment in the account, essentially.

Senator COLBECK: You say in answer to question 25 that the costs associated with detection, storage and analysis of the Korean products is $298,427 excluding staff salary costs. How much would we have expended in staffing?

Mr Chapman: I would have to take that on notice, work it out and come back to you.

Senator COLBECK: Can you give us any sense of the actual effort that was put into that process?

Mr Terpstra : As we spoke last time at the February estimates, this recovery action involved our staff attending in the order of 300 premises to recover goods. We recovered in the order of 100 tonnes of product—that includes packages and so forth. So it was a fairly resource-intensive—in terms of people—exercise. I would suggest at the outset that we would be able to provide you with an estimate of the exact dollars and cents for the operation in terms of salary, but certainly we would not be able to give you an exact figure for those staff involved, as staff on a daily basis get involved in a whole range of activities and are not necessarily dedicated to one activity per day. Certainly our data systems do not allow us to actually record that data in that specific way.

Senator COLBECK: My question last time was: how much did it cost to find it all, to round it all up? Why wouldn't you give us those numbers in the first place? You have just given us the detection story, but excluding staff salary costs—an interpretation, I think. But why not answer the question?

Mr Terpstra : Essentially it is an incredibly difficult question to try and answer, as I have outlined, because our systems do not allow us to record individual staff members' hours against specific activities.

Dr O'Connell : What Mr Terpstra is saying is that we probably cannot account minute by minute for it. We can provide you with a broad estimate, which will give you a sense of scale, if you like, and close enough to say how many staff have been involved in this for how long. It will not be to the plus or minus five per cent, but it will be close.

Senator COLBECK: I am happy with that. I ask a question expecting to get an answer and get half an hour.

Dr O'Connell : I think probably people did not give an answer clearly enough because they were concerned about the finer details. We can give you a close enough answer.

Senator COLBECK: Just say that.

CHAIR: I do not think politicians mind getting their boofheads photographed, but is it all right for the officers if photographs are taken of the Senate estimates hearings?

Ms Mellor : As long as we look younger and slimmer.

CHAIR: I hate to excite you, but I do not think it will go any further than Farm Weekly. You will note that is a very important publication.

Senator NASH: Thank you for that qualification, Chair.

CHAIR: You have nothing to fear, until I start taking photos.

Senator COLBECK: When we talked about this issue earlier we had some discussion around the timing of the press release, which we started off saying was in April, and then went back to March. I have a copy of it now, so we can establish it was 4 April. The other thing we talked about was when the product was all rounded up, when we had all the product contained. Your contention to me at that point in time was that it was all rounded up before we made the announcement.

Mr Chapman : Yes, the vast majority of it.

Senator COLBECK: That is not the evidence that you gave us last time. We had quite a conversation about this—that the material was rounded up prior to the issue of the press release.

Mr Chapman : There was quite a deal of questioning on that. What we were saying is that we wanted to make sure that we had done as much of the recovery action as we could before we went out broadly, to minimise the likelihood of people diverting imported goods that they had.

Senator COLBECK: Our conversation was that you wanted to make sure that you had it before you went out.

Mr Chapman : That is right.

Senator COLBECK: You are concerned about the diversion. I am more than content with that as a discussion. My understanding was that there was still product being seized in New South Wales in June, in May and perhaps even, in Victoria, in September.

Mr Terpstra : That is in relation to question 26 you are referring to, Senator?

Senator COLBECK: This is effectively out of the conversation we had from Hansard. You have responded in question 26. You talked about follow-up action taking place in September in that answer. The discussion we had here last time was very, very categorical around the fact that you had it all rounded up prior to the—

Mr Terpstra : The vast majority of goods that were seized were seized prior to the press release. A number of follow-up actions took place as per response to question on notice 26 whereby we learned of some subsequent goods that had been diverted deliberately by a number of the entities involved in those actions contrary to previous advice they had provided us with. There were a number of additional actions that were undertaken, including the execution of a number of search warrants to actually recover some final goods. The quantity of those goods in the wash-up and in the context of the earlier seizures was very, very small.

Mr Chapman: If I can add to that, it may provide some clarity. At the time of the press release we believed we got pretty much all of the material that we had been able to ascertain had been imported illegally. As is the nature of investigations and this deliberate unlawful activity, as you keep digging you find more stuff. That was some of the follow-up action. We also had other people come out and advise us of people who deliberately tried to hide some of the goods so they wouldn't be recovered. That is the sort of follow-up action that Mr Terpstra was talking about.

Senator COLBECK: 'I understand that was the case'—it was a very categorical answer. On page 79 of Hansard from February the question was: 'You have recovered that approximate 100 tonnes of product before your major release on 4 March.' We are now accepting it is 4 April because we have the press release here and we are all cool with that. Mr Terpstra says yes. That is pretty categorical to me and that is what I was looking for. I understand the context that you gave that to me in. My question is: when did you discover these other things? Was that before estimates or was it after estimates that you found these other seizures which occurred in June and May 2011 in New South Wales and the follow-up action that you had to take in Victoria in September?

Mr Terpstra : I was not aware of those other follow-up actions at the time that I answered the questions to you in Senate estimates, which is the reason why we did actually provide that extra information in relation to question 26.

Senator COLBECK: Actually, what question 26 asked was the exact dates of all the seizures. The only thing you have answered in response to the question is that seizures of Korean risk material occurred over a period of time. When the question asked for the exact dates commencing on the 20th, you said, 'Over a time period commencing 20 December 2010 to 16 February 2011 in Queensland, 22 February 2011 to 22 June in New South Wales, 11 February 2011 to 13 May in Victoria.' The question was a question not from me but from Senator Heffernan, who asked for the exact dates. We have a range of dates. You were very confident when you said to me that you had it all rounded up by the dates you put the press release out—let us not argue about that date—back in estimates in February.

Dr O'Connell : I obviously have to check Hansard. My recollection—you have Hansard there and I do not—was not that Mr Terpstra said he was confident everything had been picked up. I think in answer to the question he said that 100 tonnes had been picked up. I do not think he was being definitive. I grant you that the issue clearly is what got picked up after that—so after the media release and onwards.

Senator COLBECK: Dr O'Connell, I have to say that we were talking about an approximate 100 tonnes. I am not arguing with that. I have to say that what I came away with, from the discussion we had at estimates in February, was that everything had been rounded up. In fact, I had a subsequent meeting with this committee, a private meeting, and I think I had a conversation with you—

Dr O'Connell : You had a conversation with me.

Senator COLBECK: privately that I did not believe the evidence was right.

Dr O'Connell : Yes.

Senator COLBECK: I also had a conversation in this committee at a subsequent private meeting saying I had some concerns about this. I do not know whether we actually contacted you about it.

Dr O'Connell : No, you did not. But the understanding—

Senator COLBECK: My very clear understanding, and I thought—

Dr O'Connell : My only concern is not to leave an impression, which I think probably was not there, that Mr Terpstra misled the committee, because I do not think that is right. Your questions are obviously quite legitimate and the answers are legitimate—

Senator COLBECK: My concern about what my understanding was is clearly demonstrated by the fact that I did come and have a private conversation with you.

Dr O'Connell : Yes. That goes to the issue of: had it all been picked up and had we got everything picked up?

Senator COLBECK: That is correct. That was the clear understanding that I had at the end of the discussion.

Dr O'Connell : And at that stage I think we had everything picked up. After February everything had been picked up.

Senator COLBECK: At the time we had the discussion, yes, everything had been picked up.

Dr O'Connell : Yes, that was my understanding.

Senator COLBECK: My understanding was that everything had been picked up before the press release went out, because of the concern about moving it out through the supply networks and alerting people who might have product that they should not have. I understand that. I think that is a reasonable strategy. That was part of our discussion at the time.

Dr O'Connell : Yes.

Senator COLBECK: That is why I came to you saying—perhaps I should have done something else on the record.

Dr O'Connell : My understanding, following that up—and perhaps I misunderstood the issue—was that your concern was that there was still product around. That subsequently was not the case.

Senator COLBECK: That is a misinterpretation. I think colleagues will attest to the fact that I actually raised that—

Dr O'Connell : I accept that. We would not dispute that.

Senator COLBECK: in a private meeting subsequent to the hearings last time. Anyway, having made the point, let us move on. Take the Sydney Morning Herald article on 28 March regarding investigations into Customs and Border Protection officials—are any of those involved in this agency?

Ms Mellor : No. That report referred to an investigation in Customs and border control.

Senator COLBECK: So this agency has no involvement in that process at all?

Ms Mellor : Not in that investigation.

Senator COLBECK: I do not have anything more. Does anyone else want to have a crack at this?

Senator NASH: Can I briefly return to the new quarantine centre. Please stop me if this was canvassed this morning. I tried to listen to every word that Senator Colbeck said, but I did not get everything. So pull me up if we have been here.

Senator COLBECK: You never listen!

Senator NASH: I constantly listen to you, Senator Colbeck! Was there a discussion around the number of staff to be employed at the new centre?

Ms Mellor : No. That is a matter for transition planning because the staff will vary over the build. There will be staff involved in the project and then there will be staff involved in managing the station. The planning for that will happen as we get through what pieces of the station open and when.

Senator NASH: In terms of the current staffing level across the five centres, do you expect there will be much of a shift? I am talking about the management, obviously, not the lead-up. Once we get to the point of management, would you expect that there will be a similar quotient of staff required in the one centre or is there going to be a significant increase or decrease?

Ms Mellor : I cannot speculate right now, Senator.

Senator NASH: So it just depends on what the requirements are going to be.

Ms Mellor : It also depends on the different technology that is used in there and how much work is done by our staff versus other staff. At the moment there are questions about whether we clean things or whether we have contract cleaners et cetera. There is a lot of planning to do in that space.

Senator NASH: Okay. Do I take it that, regarding the current levels of employment—the jobs that are actually within those five centres now—the employment ceases at the termination date of the current operation of the centre? What happens to the staff that are there now?

Ms Mellor : Employment in those locations will naturally cease. Again, transition planning will be that those staff have skills that we can use elsewhere.

Senator NASH: So they might be utilised elsewhere. So, by and large, are they under the impression that that will be the case and they are not worried about jobs being—

Ms Mellor : I am sure individuals are worried because they would be very passionate about their location.

Senator NASH: I will rephrase it. Have there been discussions with staff that, to best endeavours, there will be redeployment rather than cessation?

Ms Mellor : Yes, absolutely.

Senator NASH: Just in terms of the $379 million—again, if this was canvassed this morning, please stop me—how was that costing arrived at, given that you have just said that the centre has not been finalised, there is a long way to go and we do not actually know how many staff are going to be employed? How is the figure of $379 million determined, given the fluidity and the lack of a concrete understanding of how it is all going to work?

Ms Mellor : That 379.9 is largely capital. It is about building the asset. That process, just like other processes in which departments are involved, is a very extensive, second-pass, business-case process, in partnership with the Department of Finance and Deregulation. What we are doing, as a department, is specifying the business requirements and they are assisting with the costings, based on their experience as the Commonwealth property holder.

Senator NASH: So it is capital expenditure—

Ms Mellor : Largely.

Senator NASH: And in relation to what you were saying before about the potential staff redeployment, staff will come out of—

Ms Mellor : Staffing costs are out of our normal departmental—

Senator NASH: So existing. Okay. How was it determined that Melbourne was the most appropriate place for the centre?

Ms Mellor : Obviously we had business requirements based on biosecurity risk and potential business and then the Department of Finance and Deregulation started looking at parcels of land that met those requirements. Certainly, the Victorian location has some benefits in terms of the variety of product that goes into the centres—greenhouses and whatnot.

Senator NASH: Could you take it on notice and provide those benefits for Victoria, without going into it now?

Ms Mellor : Sure. I think it is largely just a match between our business requirements and the Commonwealth's ability to source land that meets those requirements.

Senator NASH: Was there stakeholder consultation with industries right across the board?

Ms Mellor : Yes.

Senator NASH: Was there any concern from any of the stakeholder groups about locating it in Melbourne?

Ms Mellor : The reality is that this is a change. There are no horses going into Spotswood in Victoria at the moment. Some in the horse industry are concerned about the change that they will have to go through; and beekeepers likewise. We are doing bees in Victoria rather than in Sydney. These are change processes. We will keep engaging with the stakeholders and help them through that change.

Senator NASH: As to the logistics of actually getting horses to Melbourne, if that is not a current destination, is that an issue—

Ms Mellor : Horses do go into Melbourne. There is a Werribee QAP that manages the spring racing carnival. Obviously, as that was being built, we had extensive consultation with Melbourne airport to ensure that there was good management of the horses at the airport. The international racing transportation companies are quite used to moving horses out of Melbourne airport to Werribee. This is just another location closer to the airport.

Senator NASH: It has been raised that most of the horses actually go to Sydney and north of Sydney. Have you got any quantum break-up—again, I am happy for you to take this on notice—of how many horses that arrive, on average, either go to Sydney or north of Sydney rather than south?

Ms Mellor : What we will have is who is importing it and how long it is staying at Eastern Creek and where the shuttle stallions, for example, go or the pets go—maybe not. But we will see what we can get.

Senator NASH: That would be very useful. Is there data available on the arrivals of animals currently into each of the states, apart from horses? Could you provide that for us as well? Lastly, Sydney was not considered? Melbourne was obviously considered as the better option?

Ms Mellor : No. In terms of meeting business requirements and the parcel of land requirements there were sites looked at in Sydney throughout the course of the development of the business case. At the end of the day, this one, having met all the requirements.

Senator NASH: If you could provide for the committee as well—I am not sure if I have asked this already—the criteria that were applied and why Melbourne came out ahead of any of the other considerations that would be great.

CHAIR: Senator Williams tells me he has about two minutes of questions. Senator Williams.

Senator WILLIAMS: In relation to AQIS inspectors, who is in control of that?

Ms Mellor : It depends on which ones you want to know about.

Senator WILLIAMS: Basically, those at the abattoirs. Are meat inspectors at abattoirs these days?

Ms Mellor : I have got Mr Read here somewhere to ask.

Senator WILLIAMS: Mr Read, abattoirs provide 100 per cent now of the cost of the AQIS inspector. That is correct, is it not?

Mr Read : That is correct. Having said that, there was a package announced of $25.8 million several months ago; $20 million of that is there to assist the transition to full cost by the end of 2013. The fees currently in place are at full cost and there is the implementation package that sits over the charges at present.

Senator WILLIAMS: Do those abattoirs have to provide facilities for the AQIS inspectors—a dining room and that sort of thing?

Mr Read : They utilise the canteen on plant. They are required to have a separate room and access to IT facilities and so forth.

Senator WILLIAMS: The abattoir must provide a separate room for the AQIS inspectors with IT facilities et cetera. Is that what you are saying?

Mr Read : That is my understanding. If it is not precisely correct, I will correct it.

Senator WILLIAMS: Do they have to provide heating and microwaves, fridges and things like that as well?

Mr Read : Not separate amenities, as I understand it. They would utilise the eating facilities that would be at those plants where they can.

Senator WILLIAMS: So you are saying an abattoir would not have to provide a separate fridge, for example, for the AQIS inspectors?

Mr Read : It does not have to be a self-contained suite for the AQIS people on those plants. As I understand it, it has to be a lockable room to maintain the AQIS records on that facility. Some plants may go as far as having, depending on where the location is, a separate bar fridge to put milk in and so forth.

Senator WILLIAMS: If it were the case that the abattoir had to provide a fridge for the AQIS workers and they did not provide that fridge, what action would AQIS or the department take?

Mr Read : You would have to give me the details precisely of what the issue is and I would need to then go and investigate it.

Senator WILLIAMS: Would it lead to a threat of strike action, do you think?

Mr Read : No.

Senator WILLIAMS: It would not?

Mr Read : Again, I would need the specifics of the question.

Senator WILLIAMS: I am just concerned when I see a letter here from the Australian government's Department of Agriculture, Fisheries and Forestry saying, in relation to a fridge: 'I advise that if provisions are not in place in seven days from the date of this letter, the department will remove AQIS on-plant staff.'

CHAIR: Do you want to table that, Senator?

Senator WILLIAMS: I do not actually, Chair. I do not want to table it because I do not want the particular business to be involved.

CHAIR: It is very difficult for the witness to respond.

Senator WILLIAMS: I am happy to show it to the officer.

Senator Ludwig: If you show it to him—

Senator WILLIAMS: The point I make is: is it not a bit heavy-handed—

CHAIR: You might have written that yourself.

Senator WILLIAMS: What an insulting thing from the Chair.

CHAIR: The question is: did they write it?

Senator WILLIAMS: No. The point is this: here is a department—

Senator Ludwig: There is no point. You can ask a question. You can probably take your lead from Senator Macdonald and ask him that way.

CHAIR: You did say a couple of minutes, Senator Williams.

Senator WILLIAMS: The point I make—

CHAIR: Do you want to ask the question?

Senator WILLIAMS: I am glad to show you the letter.

CHAIR: Why don't we knock off the nonsense and just move on?

Senator WILLIAMS: That is the point I want to get to.

CHAIR: If you do not want to table it—

Senator WILLIAMS: Do you think it is heavy-handed when we have a threat to withdraw AQIS staff because there is not a fridge?

Mr Read : What I do not understand, Senator, is the context of that letter, the issue with the fridge—whether the fridge relates to the holding of sampling material from the plant. I need to actually get behind—

Senator WILLIAMS: No. It is a fridge for the staff to put their milk in et cetera.

Mr Read : I do not know. I do not know the detail of what you are talking about.

Senator WILLIAMS: I will show you the letter if you like.

Dr O'Connell : Without seeing the letter I do not think it is reasonable for Mr Read to be asked to respond to it. You are asking him to respond to something with no context. He would need to know the context in which the letter occurs in order to sensibly respond to it.

Mr Read : I seek more information.

Senator Ludwig: If the broad question is about a particular issue in relation to a fridge in a particular abattoir, there will be a report somewhere which details it. We can take it on notice and provide a response. I think now it does require clarification. I cannot imagine it; I will not make any comment.

CHAIR: Senator Williams, if you have you finished we will go to Senator Xenophon.

Senator XENOPHON: I have a few questions. I am not sure who in your department can assist. This is about international flights being checked for biosecurity risk or contamination. My question is: are all international flights checked for biosecurity risk or contamination at the first domestic point where they land?

Mr Chapman : Yes. All arriving passengers and aircraft are biosecurity cleared at the first point of arrival in Australia.

Senator XENOPHON: So what process is followed?

Mr Chapman : For the aircraft itself?

Senator XENOPHON: And for the passengers.

Mr Chapman : They are slightly different processes. I will go to passengers first. Passengers get off the aircraft. They go through the immigration screening point. That is often referred to as the primary line. They may be questioned by biosecurity risk assessment officers as they are queuing for the primary line or they may be questioned afterwards. The passengers provide a declaration. There are a number of biosecurity related questions on that declaration. In rough terms, about 45 per cent of passengers have something to declare to us. Many of those items are pretty well zero risk. We have processes in place, both with our officers and with Customs, which mean they can be directed to leave the hall without any further intervention. An example of that might be somebody who has declared they have got food, but it is a bar of chocolate or a packet of chewing gum. We do not need to look at those things. If we believe that the passenger is telling the truth and we do not have any other reason to look at them, they can leave directly.

Senator XENOPHON: Thank you. Perhaps I can go to the issue of tagged flights. When a flight comes in in one port, say Darwin, and then it goes on to Sydney or Melbourne, are passengers checked at subsequent domestic landings?

Mr Chapman : If the passengers are just in the transit lounge, say, at Darwin airport and they go through to Sydney, they will clear the biosecurity processes in Darwin.

Ms Hutchison : If international travellers are changing to a domestic flight and then moving domestically, they will clear at the first point of entry. If they are moving on an international flight—if the aircraft remains international and flies from Darwin to Sydney or Cairns as an international flight—passengers may remain on board and then clear internationally through the second port. But if they then move into the domestic air stream, they will clear biosecurity at the international airport.

Senator XENOPHON: At the first port?

Ms Hutchison : Or at a subsequent port. If I am departing the aircraft in Cairns as an international passenger but I happen to arrive in Darwin, I may remain on the aircraft and subsequently—

Senator XENOPHON: Can you just tell us what is defined as an international flight? When I had discussions with the Qantas group, with Jetstar, in relation to that, there was an issue as to what it is. Do you have criteria as to what is defined as an international flight?

Ms Hutchison : Yes.

Senator XENOPHON: Can you tell us what those criteria are?

CHAIR: Senator Xenophon, you might want to talk into the microphone because it is very hard to hear. It is a very important line of questioning.

Senator XENOPHON: I have never been accused of having a soft voice!

CHAIR: I did not. I just accused you of talking out of the other side of your mouth. Oh, I didn't mean that!

Senator XENOPHON: Yes, you did, Chair! Is there a definition for international flights? There is this whole issue of tagged international flights that have a domestic component. I am trying to work out the biosecurity. I will not bore you with that. It is just that there are flights—for instance, Jetstar flights—which take on a number of domestic passengers even though they are still tagged as international flights. I am just trying to work out, from a biosecurity point of view, where that fits in.

Mr Chapman : Those passengers we colloquially refer to, as does Customs, as 'D stickers', because they have a sticker on their—

Senator XENOPHON: I am sorry, 'D stickers'?

Mr Chapman : 'D'—domestic. It is probably best to go through the various scenarios. A flight arrives in Darwin and terminates its international status there. Everyone gets off. They get cleared through biosecurity processes. If the passengers then get on another domestic flight, we have nothing to do with it. It may be that the flight lands in Darwin and some passengers get off. They will be cleared by us and by Customs at that point. Some passengers stay on the aircraft and fly on to Cairns. Those passengers will be cleared by us at Cairns. The other thing—

Senator XENOPHON: How do you know who stays on?

Ms Mellor : There is marshalling in the airport that identifies who is travelling on a domestic boarding pass and who is travelling on an international boarding pass.

Mr Chapman : Some passengers get on the same aircraft in Darwin and fly as domestic passengers to Cairns. They will land at the Cairns international airport, but they will be marked as domestic passengers. We have minimal involvement with them because they are domestic; they have not come from overseas. We will do the biosecurity clearance of the passengers who have arrived from overseas, stopped in Darwin, stayed on the aircraft and gone through to Cairns. We can segregate the passengers.

Ms Hutchison : In addition, we reserve the right to screen those domestic travellers who have been on board an international aircraft. So if travellers pick up food or get on an aircraft in Darwin or Cairns and bring things to Sydney, for example, and we are unable to determine that the goods they purchased were purchased in Australia, we reserve the right to take them from them.

Senator XENOPHON: How often does that happen, though? How often do you screen domestic passengers on those international flights?

Ms Hutchison : I can get some details.

Senator XENOPHON: Please take it on notice. Finally, if I may—you can hear me, Chair?

CHAIR: I can hear you, Senator Xenophon.

Senator XENOPHON: Good. In terms of outgoing international flights, when do AQIS or biosecurity checks take place?

Mr Chapman : They don't.

Ms Hutchison : They don't.

Senator XENOPHON: So there is no—

Mr Chapman : We are worried about stuff that is coming in.

Senator XENOPHON: Sure. There is no checking point for outgoing international flights?

Mr Chapman : Not by us—

Ms Hutchison : for the flight itself.

Senator XENOPHON: Finally, do you liaise with airlines? There is an issue where some flights are tagged as an international flight—for instance, by Jetstar—but they arrive at a domestic terminal. That does not make any difference, from your point of view?

Ms Hutchison : If they are international flights they land at the international terminal.

Senator XENOPHON: My information is that Jetstar has flights that are tagged as international flights for the purpose of having foreign based cabin crew, but they land at a domestic terminal. Would that be something that would be of concern?

Ms Hutchison : I would be interested in having a look at that information.

Ms Mellor : Generally, the flight has to land at an approved first point of entry for an international flight. Customs declares which airports they are and, according to their declaration and our own declarations about the quarantine requirements at a first point of entry, that is how we determine staffing. So the manifest of the plane needs to be provided to Customs to ensure it has come into a declared first point of entry.

Senator XENOPHON: Ms Hutchison, does that sound right you? If it is tagged as an international flight, say from Darwin to Melbourne, it should be landing at the international terminal?

Ms Hutchison : It should be.

Ms Mellor : If it was carrying international passengers and it was not cleared.

Senator XENOPHON: But if it is carrying international passengers and domestic passengers picked up in Darwin—

Ms Mellor : I guess what we are questioning, Senator Xenophon, is what your definition of 'tagging' is.

Senator XENOPHON: That is what I have been questioning Jetstar about.

Ms Mellor : I think we would both like the answer to it.

Mr Chapman : If it has got the original international passengers on board and it has not turned into a domestic flight, it will land at another international airport. The only exception to that is when special permission is given for an aircraft to land at another airport.

Senator XENOPHON: On notice, can you tell me in which circumstances that permission would be given?

Mr Chapman : An example we have had is flights that have gone into Uluru from Japan. Qantas did those a few years ago. They got special permission and basically paid for the provision of staff to do the international—

Senator XENOPHON: No, I am talking about regular airports—

Mr Chapman : It does not happen, Senator.

Dr O'Connell : Obviously we will follow up on your line of questioning. We will go and have a natter with Jetstar and just confirm that with you.

Senator XENOPHON: Send them my love when you speak to them!

CHAIR: We might add a bit of flavour to this conversation. Why do we not ask the ex-Ansett baggage handler from the Northern Territory? Have you got some questions, mate?

Senator GALLACHER: I just want to clarify one point. An international aircraft arriving in Australia goes through customs, quarantine and all the protocol at the first point in Australia?

Ms Hutchison : The aircraft or the passenger?

Senator GALLACHER: The aircraft. It has got cargo on it. It could have animals; it could have anything.

Ms Hutchison : With an aircraft landing at a first port, if the passengers are disembarking at that port, we have a series of arrangements. If the intention of the aircraft is to arrive at a port and leave again, they can either be fully quarantine cleared at that first point of arrival—

Senator GALLACHER: Where do we guard our borders? Do we guard our borders at the point of entry?

Ms Hutchison : That is right. But if an aircraft arrived—

Senator GALLACHER: So, if it has cleared customs and quarantine, it then becomes a domestic flight?

Ms Hutchison : If it clears. But there are arrangements whereby, if an aircraft has two international arrivals—say Darwin and Cairns—the aircraft itself might do its final clearance on arrival at Cairns rather than the clearance at Darwin. For example, waste might be taken off that aircraft in Cairns rather than Darwin as a first port.

Senator GALLACHER: Thank you.

Ms Hutchison : But anything that came off that aircraft in Darwin would be treated as quarantine waste. It may not be fully cleared.

Senator GALLACHER: So are you saying they just contain the waste or potentially the threat in the aircraft to the next port?

Ms Hutchison : They may hold stuff on board that aircraft and ultimately take it off in Cairns if they have an arrangement to do so.

Senator GALLACHER: Why do we do that?

Ms Hutchison : Commercial arrangements for aircraft and that the risk is—

Senator GALLACHER: Taking the rubbish off is a commercial arrangement?

Ms Hutchison : It is.

Dr O'Connell : There is no increase in biosecurity risk. It is either managed at one port or the other or both, basically.

Mr Chapman : An example might be, Senator, if the flight is going from South-East Asia to Darwin and then to Cairns. Any rubbish that is taken off the aircraft in Darwin will be treated as quarantine waste. But the aircraft will have put all of its food stores, all of its meals, on board the aircraft at its original port in Asia. It continues as an international flight until it arrives in Cairns. It is at the conclusion of its international flight that it gets fully quarantine cleared.

Senator GALLACHER: I understood it the first time.

CHAIR: We will take about a 15-minute break and recommence at 4.15 pm, when I know Senator Nash will have some questions, Senator Edwards will have some questions and Senator Colbeck will have some questions.

Proceedings suspended from 15:59 to 16:15

Senator NASH: I meant to ask before about the quarantine station. With transportation, if animals are being transported from Melbourne to other destinations, who actually bears the cost of that? I am happy for you to take that on notice.

Dr O'Connell : It is the same as currently. So once you are leaving the station, it is your business.

Senator NASH: I think that a tender process is or has been underway for the refurbishment of Eastern Creek; is that correct?

Dr O'Connell : I am not sure about the tender process but there are definitely works being undertaken for—

Senator NASH: Perhaps you could take it as part of the question on notice that you took before—the costs for each, whether that tender process did happen through Eastern Creek. Just by way of clarification: does ginger fit in as a biosecurity plant?

Dr O'Connell : Yes.

Senator EDWARDS: I have a question with regard to snails. It comes under the plant issue of wheat and barley, and particularly in South Australia. Are the department aware of the snail issue and the fact that it is looming to be one of the worst snail infection years this year, from what my industry people tell me? Are they aware of it and know that it is coming at them?

Ms Calhoun : Yes, we are aware of the snail issue and we have been working closely with industry to get them to put a number of strategies in play so that it can be managed by industry before it gets to the receival points.

Senator EDWARDS: Have you done any threat assessments of grain leaving South Australia as yet?

Ms Calhoun : We have had a number of instances of detection in some overseas markets and we have been working with those individual facilities where those detections have occurred. We have now handed the broader industry issue to the Grains Industry Market Access Forum that has been established so that they can work across the South Australian and Victorian areas where the snails are more of a threat.

Senator EDWARDS: What are you recommending to try to avert this impending crisis?

Ms Calhoun : It depends on the grain that we are specifically talking about and the purpose for which it is being exported. At the moment we have been recommending screening of the product at the receival point to actually take the snails out of the product.

Senator EDWARDS: Are you aware that there has been an increased tendency for farmers to burn?

Ms Calhoun : Yes.

Senator EDWARDS: Is that a recommendation?

Ms Calhoun : There are a number of recommendations. There is a report that the South Australian government was looking at because a lot of the successful measures for controlling the snails are actually infield control measures. So they are looking at potentially getting a lot of those in place prior to the next harvest.

Dr Grant : Burning is, of course, after the event of harvesting, so it will only deal with next harvest’s infection rate, if you want to call it that. Essentially we have had a very wet summer, so the snails have been a bigger problem than they normally are. We have had some interceptions overseas, as Ms Calhoun says; we are dealing with those. But in terms of the next season, in order to cut down the load of snails that are in the environment, some farmers are burning the stubble, in other words.

Senator EDWARDS: Which is in itself creating other issues—modern farming practices. I will move now to branched broomrape. Has Biosecurity finalised the new management program for branched broomrape, and can it be tabled?

Ms Ransom : A working group has been putting together a proposal for a transition to management plan for branched broomrape. That plan has been, I believe, submitted to the national management group and proposals for costings have also been attached to that plan. The focus of the plan is very much around establishing and maintaining property freedom and mitigating the risk of spreading the branched broomrape from the properties that are known to be infected.

Senator EDWARDS: As part of that plan is there an outbreak management plan? When do you intend to table the branched broomrape management plan, ongoing, as this working group has finished its work?

Ms Ransom : I will have to take that on notice; I am not quite sure what the process will be around that. But there will be a number of actions that have to take place to implement the plan and they will be coordinated through some of the existing national committees that we have through the oversight of the same mechanisms we have for myrtle rust, and that is a transitional management group.

Senator EDWARDS: So there is no committee handing down a management plan for branched broomrape; it is just an ongoing containment—

Ms Ransom : No, there is a plan and it is based around the biosecurity outcomes that the transition to ongoing management will deliver. That will have funding associated with it and there will be some management of the outcomes to ensure that they are actually doing it.

Senator EDWARDS: So when will that plan be finalised?

Ms Ransom : I will have to take that on notice.

Dr Martin : My understanding is that South Australia is going to publish that plan, similar to what we have done for Asian honey bees and myrtle rust. So we can certainly see whether we can get you a copy of the plan.

Senator EDWARDS: But is it imminent?

Dr Martin : Yes; my understanding is that it is.

Dr O'Connell : There has been an agreement that we will contribute $625,000 to that plan. That was agreed by the minister.

Senator EDWARDS: That is DAFF's contribution to it? That was my next question. Which are the industries that you have worked with in finalising the regulations to mitigate the further spread of broomrape?

Dr Grant : Essentially it is the South Australian government, the Grains R&D Corporation and the federal government. But most of the negotiations and discussions have been between the South Australian government and the grains corporation because the eradication exercise over the last 12 years has been managed wholly by the South Australian government.

Dr O'Connell : The South Australians are essentially taking the lead and managing the regulatory framework for it and we are contributing to it. The South Australians will continue to do the management of this pest and it is going to be a continuing exercise effectively for the foreseeable future.

Senator EDWARDS: I look forward to the plan.

Senator BACK: I want to ask a couple of questions about the inspection of containers portside. There was some contact from an importer. First of all, I understand that in Fremantle AQIS outsources the inspection of containers to an outsourced third-party company; is that correct? The name given to me is Luckens.

Mr Chapman : No, that is not quite correct. It may be that some consignments go to a quarantine approved premise where they are unpacked. But if there is an actual inspection of the container for external contamination, for instance, with giant African snails or other contamination of biosecurity concern, that would be done by a DAFF biosecurity officer.

Senator BACK: What about internal to the container and not external?

Mr Chapman : A number of consignments do go to a quarantine approved premises. I think they are class 1.1. They are the ones that operate generally in the port area and they are approved to unpack containers and deal with the goods in a certain way. We audit them to make sure that they are carrying out those functions properly.

Senator BACK: How often would you audit those?

Mr Chapman : There is a regime that is based on the compliance, so generally it is two audits a year. But if there is non-compliance identified, we increase the audit rate.

Senator BACK: If the third party opens a container and finds contaminants or whatever, would you expect the importer to be notified of the contamination before any costs are incurred associated with cleaning the container?

Mr Chapman : It might depend on the particular circumstances, but I would normally expect the importer to be notified, yes.

Senator BACK: The reason I ask the question is that, in the instances that I am describing, the first comment by the importer is that the standard operation of this third party is an absolute disgrace. Quoting from his words: 'The site is dirty and messy. Any container that is opened to the elements and to the air with the Fremantle doctor would end up going most over the port area.' He also makes the point that 'at no stage were we advised of contamination in these containers or given the opportunity to see the contamination'. All they got was the bill for clean-up. He has provided to me endless photographs. The actual containers are sourced in Germany. He has documentation from the German supplier of these particular products as well as photographic evidence. Where should he direct all of this evidence in support of the concern that he is raising—to you?

Mr Chapman : If he sends it to me or to Mr Terpstra, we will look into it.

Senator BACK: That is good. That is all I want to ask in that particular context.

Mr Chapman : Those things are important too because people who are operating in an industry arrangement do have an important role to play and obviously we have an interest to ensure that they are doing it properly.

Senator BACK: He has obviously been to the German supplier and has made the point that this German supplier's operation makes the local third-party operation here—to use his words—'look like a rubbish tip and any contaminant or pest leaving the container at that location with the Fremantle doctor would end up kilometres away in an instant'. Thank you for that.

The next question is totally unrelated. Can I ask where we are with the import risk analysis for beef products to come into Australia following the seemingly endless inquiries we had in 2009-10? The decision of the then minister was to require an import risk analysis. We recently had the regrettable circumstance of the diagnosis of bovine spongiform encephalopathy in one case in California. Can you advise me where you are now with the progress of the import risk analysis?

Dr Grant : Whilst this is not my responsibility, I can handle that question. There were three risk assessments for beef commenced back in 2010, I believe.

Senator BACK: March 2010, I think.

Dr Grant : Or just a bit after that—Japan, the United States and Canada. In all three cases the clock has been stopped with the understanding of each of those governments. In the case of Japan, it was because of an outbreak of foot and mouth disease. In the case of the United States, the United States spoke to us and asked us to substitute an alternative risk assessment for beef, which we have commenced or we will commence this year, and we have put that one on hold. In the case of Canada, we sought information from Canada and Canada has not yet responded with sufficient information for us to go ahead. So, again, with the agreement of Canada, or the understanding at least of Canada, we have stopped the clock on those. So they are all in abeyance. No action is taking place on any of the three of them.

Senator BACK: Would you be able to outline in more detail what it was that the American side requested that you do by way of variation prior to this last event—prior to the clock stopping with the United States?

Dr Grant : Yes. We have an arrangement with the United States with a four-by-four preference for each country. Australia specifies its four and the United States specifies its four. Originally beef was one of those four from the United States. Subsequently, they have asked us to substitute turkey meat. We have undertaken to do turkey meat commencing in 2012. We have not commenced yet, but we will during the course of probably this year.

Senator BACK: When you say 'do turkey meat', do you mean you do a risk analysis?

Dr Grant : Yes. I mean do a risk analysis. We will commence the risk—

Senator BACK: I was wondering how you might do it.

Dr Grant : We will commence a risk analysis some time in 2012. We have been very clear to the United States that we would not specify precisely when, because it is all resource based in terms of taking people off work as they finish another work program and moving them across to this sort of undertaking.

Senator BACK: It is a good thing you are here. Here is my final question. Armed with all the work done with ESCAS, it occurs to me to ask you, Minister and Dr O'Connell: are you going to impose any equivalent ISCAS—an importer supply chain assurance scheme? I am thinking particularly, Dr Grant, of those wanting to import apples into Australia. Is it likely we are going to see a requirement for criminal liability to be imposed on New Zealand suppliers of apples should they in fact end up not being able to guarantee the security of their supply chain through to the end consumer, whereby Australia will go back and impose those penalties? Is that something that has yet been considered by the department?

Dr Grant : The answer to that is no, it is not part of the system under international law.

Senator BACK: Neither is ESCAS, I can assure you.

Dr Grant : There are provisions under international law that allow risk assessments to be done and measures to be put in place to protect biosecurity of relevant countries. The objective of those measures is to in fact prevent any incursion happening. It is a risk based process. Under that premise there is no case for suing another country for a failure of biosecurity in this country, for example. It is our responsibility to ensure that we are comfortable with the measures.

Senator BACK: We presumably will be talking more in the next session, under plants, on imports of apples et cetera?

CHAIR: We could be.

Senator BACK: Thank you, Dr Grant. Those are my questions.

Senator COLBECK: I just want to go back to the Korean imports that we talked about before smoko. Minister, you were in Korea in December last year. Did you raise the issue of the breaches as part of your discussions while you were in Korea?

Senator Ludwig: I cannot recall specifically. We had a wide-ranging discussion predominantly across many issues. There were a range of industry people on the trip. I am not sure what they may have directly or indirectly raised issues more broadly around biosecurity, but the emphasis was on the trade as well. I will check the record as to whether or not it was specifically raised.

Mr Chapman : We had a number of meetings both with officials from the Korean embassy and with consular officials, as well as with the Korean Trade Investment Promotion Agency, around this. I think we had four or five meetings all up to look at these issues. Obviously there was concern there and they did provide assistance to us on that. We have sought to maintain that dialogue to minimise the likelihood of this sort of thing happening again.

Senator COLBECK: I am presuming they would not want to put at risk their capacity to bring products in by deliberate breaches of our biosecurity processes.

Mr Chapman : That is right. There is a reputational issue for them. Obviously it has the potential to impact on the traders who are compliant, as we have more scrutiny over what is happening.

Senator COLBECK: Any elevation in risk ranking would potentially increase cost and therefore competitiveness in the market. Is that correct?

Mr Chapman : That is right.

Senator COLBECK: Perhaps you could provide us with some details, if possible, around that. If the minister could let us know what he raised, that would be fine. You might not be able to provide super-specific detail—I understand that—but perhaps you could provide dates in general and context.

Mr Chapman : I can provide you with those dates now, if you like. We met with Korean diplomatic officials on 23 March 2011 to advise them of what we were doing. On 13 April 2011 we presented at a forum in Sydney which was organised by the Korean Trade Investment Promotion Agency. That was attended by many members of the Korean food importing community. On 21 April 2011 we met with representatives from the Korean Trade Investment Promotion Agency in Sydney again to discuss the concerns we had with what had been happening with a number of Korean food importers. On 31 January this year we again presented at a forum in Sydney which was organised by the Korean consulate and which was attended by members of the Korean food importing community. I am just advised that we met again last week—

Mr Terpstra : On 16 May we had another meeting with KOTRA and consulate officials in Sydney in relation to specific compliance issues concerning some entities. We were trying to work collectively together to ensure better performance and a resolution to some issues which we tried to identify.

Senator COLBECK: I am presuming that is an ongoing process, by the sound of it.

Mr Terpstra : That is an ongoing process, and a number of the outstanding compliance follow-up actions we referred to earlier today relate to that particular meeting last week.

Senator COLBECK: Thank you.

CHAIR: Thank you, Senator Colbeck. In that case I thank the officers from quarantine.

CHAIR: Let us move to Biosecurity Plants. Senator Colbeck, I will flick to you.

[16:37]

Senator COLBECK: Since I gave you notice the Friday before last, Dr Grant, we might go to that single male fruit fly.

Dr Grant : A single fruit fly was found in Mount Roskill in the North Island of New Zealand, near Auckland. It was first caught on 8 May and identified on 9 May. We were informed on the 8th. Since then we have been in touch with New Zealand a number of times. The information is that no other fly has been found. That one was dead and it was a single male. He may have had a family but he was on his own at the time.

Senator COLBECK: He was dead?

Dr Grant : He was.

Senator COLBECK: When he was found?

Dr Grant : In the trap. He was in a trap.

Senator COLBECK: Do we have any sense of the vector?

Dr Grant : No, it is not clear. Queensland fruit flies are obviously found in Australia. They occupy a number of the islands in the Pacific as well. It is just not clear where this single fly came from. I might add that it was found in a suburb 12 kilometres away from any nearest port of entry in terms of a location of entry—from the airport and from the port.

Senator COLBECK: Are there any implications from the discovery?

Dr Grant : No. New Zealand has informed all its trading partners, as it is required to do. It does not intend stopping its export trade, and it is not putting any prohibitions on imports from Australia.

Senator COLBECK: Even though its family is a Queensland family it could have come from other places?

Dr Grant : It may have done. Queensland fruit fly is an Australian fly. We find them occasionally as far down as the Victorian border.

Senator COLBECK: We have had a couple of incidents in the northern suburbs of Hobart.

CHAIR: They are travellers.

Senator COLBECK: That was why I was not so agitated when you talked about one not being an outbreak, because we have been through the process at home.

Dr Grant : There is very careful monitoring taking place in and around Auckland. Extra traps are being put in place. There are in fact 4,500 traps in and around the Auckland region. Extra traps are being put around the Mount Roskill area and so far no extra flies have been found.

Senator COLBECK: Perhaps I can go on to fresh ginger from Fiji and the import risk assessment process for fresh ginger from Fiji.

Dr Grant : We commenced a risk assessment for ginger last year. On 16 April we put that risk assessment finding in draft out for public comment. The public comment period closes on 15 June. So we are awaiting the response to the draft risk assessment for ginger from Fiji.

Senator COLBECK: What are the particular pests in relation to ginger, and how strong is the science around it? Obviously since it is a root crop there would be some issues around soils, I would have thought. What are the other issues?

Dr Grant : There are three potential risks. In fact, there are two pathogens and a nematode. Maybe Mr Schwartz could be a bit more technical than I can.

Mr Schwartz : The risk analysis has considered a number of pests. We received some information from the ginger industry during the risk analysis which we were able to take into account. Of course we have done our own risk analysis. We have identified one particular scale as a pest requiring quarantine measures.

Senator COLBECK: A scale?

Mr Schwartz : Yes, a scale—a yam scale. A number of other pests were considered, and they were detailed in the document. There have been some questions concerning some pathogens and, as Dr Grant was about to allude to, we were asked to consider two pythiums. We looked at those. Our conclusions at the moment are that they are the same pathogens as are present in Australia. Therefore they do not qualify as quarantine pests. There is also a nematode which was raised. Once again, it is a nematode that occurs in Australia and in our view it does not constitute a quarantine pest. That has been detailed in the risk analysis which is out for comment.

Senator COLBECK: Are those two—the nematode and the epithelium—regionally based, or are they more broadly occurring?

Mr Schwartz : Those pests occur in a number of locations around Australia.

Senator COLBECK: Do they occur in locations where the ginger industry is in operation?

Mr Schwartz : I am not sure to what extent they might occur there.

Senator COLBECK: What consideration has been given to the fact that the fresh ginger being imported could also be used as planting material?

Mr Schwartz : We have taken that into account in the risk analysis, even though the end use is designated for human consumption. Nevertheless, we have recognised that some may be diverted for planting. Therefore, we have looked for potential pests such as the pythiums I mentioned and a range of other potential pathogens and insect pests which might be associated with ginger, on the basis that any which is diverted for propagating might be able to carry those pests and establish.

Senator COLBECK: What are the mitigating measures you have put in place?

Mr Schwartz : Mitigating measures for scale would be an inspection arrangement and remedial action, if found. The inspection would also look at things such as soil and trash.

Senator COLBECK: What are the issues around soil and trash?

Mr Schwartz : Trash might contain a number of other pathogens or arthropod pests. It is a general prohibition on trash for basically any commodity coming into the country. Soil could carry a number of pests of concern. Some of them might be arthropod pests, nematodes or pathogens, not necessarily associated with ginger. They might be associated with other commodities. Hence soil is generally prohibited entry.

Senator COLBECK: Are there any issues with soil removal because of the general nature of ginger as a root crop?

Mr Schwartz : We would expect that the ginger which is imported would be free of soil. It is our understanding that what is proposed to be imported will be treated in such a way that all soil will be removed.

Senator COLBECK: What are the proposed treatments that are being considered as part of dealing with the potential risks?

Mr Schwartz : We have identified the yam scale. That is the pest against which we have put measures in place. We recognise that the commodity has to be free of soil and free of trash. It is up to the exporters and the Fijian government to ensure that that occurs.

Senator COLBECK: We have not yet got to the stage of identifying the actual procedures to ensure that those things occur?

Dr Grant : They are laid out in the draft. We require the ginger to be washed, brushed and cleaned so that it comes in as a clean product. That is what we mean by 'free of soil'.

Senator COLBECK: Is there any intention to have approved premises in Fiji for preparation of the product coming across? What will be our inspection regime?

Dr Grant : Do you mean on arrival? We are dealing with the Fijian government. The requirement is that they will have to meet the requirements that we are specifying and certify that that is being achieved. On its arrival in the country we have the right, of course, to inspect and make sure that the product meets our requirements.

Senator COLBECK: There is no pre-inspection proposed as part of the process? They will certify as we certify—on the way out—and then we will do our inspections at a determined rate on the way in?

Dr Grant : We have been to Fiji and have had discussions with the authorities over there. My understanding is that it is not our intention to pre-clear and inspect before the product leaves Fiji, no.

Senator SIEWERT: Can we go back to the scale? The scale is not in Australia. Is that the point—that the nematodes and the pathogens are in Australia?

Mr Schwartz : That is correct.

Senator SIEWERT: Do you think that having it washed, brushed and cleaned will eliminate the risk of the scale?

Mr Schwartz : We are not sure whether that will be totally sufficient. We do require a sanitary inspection by the Fijian government, as Dr Grant has indicated, and we will do our own quarantine inspection on arrival in Australia to verify that the scales are not present.

Senator SIEWERT: Will that be a visual inspection of the five per cent or whatever the usual percentage is? At what rate? Is that the usual five per cent? At what rate will it be inspected? And can you pick it up?

Mr Schwartz : It is usually a 600-unit inspection on a consignment.

Senator SIEWERT: Each consignment?

Mr Schwartz : Each consignment. That is an on-arrival inspection by the operations group. We would expect to pick up the scale.

Senator SIEWERT: Can you pick it up visually?

Mr Schwartz : We can pick it up visually. I believe our operations people also use visual enhancement, if necessary.

Dr Grant : This is very standard. It is also an international standard. We have discussed this at various estimates and inquiries in the past. With a 600-unit inspection of a consignment, if a consignment is 1,000 boxes then 600 boxes would be a 600-unit inspection. We would go through that. The statistics tell us that we will have 95 per cent confidence of finding the problem we are looking for, if it exists in half a per cent of the consignment. Actually, we have done some work in this regard with the Australian Centre of Excellence for Risk Analysis. We have taken just such consignments. We have actually doctored them with marks and things and in fact we have seeded them with various pests and put them through our normal inspection process. The inspectors found every single one, including pests that we seeded the samples with and marks that we marked on the samples—this is not ginger, this is another product—to make it look as if there were some blemishes and things. They found everything.

Senator SIEWERT: So it does pick up this particular scale. Is there international experience picking up this particular scale?

Dr Grant : We will look at these under an enhanced—it is not microscopy—lens. You look for these things on each piece of the commodity as it goes through a 600-unit sample. If it is there, there is 95 per cent confidence that you will find it.

Senator SIEWERT: I understand you just referred to the fact that officers went to Fiji in 2007 and produced a report based on that visit. Is that correct?

Dr Grant : I would have to check my dates. I can take that on notice. If you have that information in front of you, you are probably correct.

Senator SIEWERT: The point I am getting to is this. Whenever it was, was there a report produced and has that been made publicly available?

Dr Grant : There is a risk assessment out now.

Senator SIEWERT: I appreciate that there is a risk assessment. I am talking about the documentation from the trip that officers took to Fiji.

Dr Grant : I would have to take that on notice. I am not sure that we produced a public report on that occasion.

Mr Schwartz : A trip report was produced. It is an internal report. We have not released that to the public.

Senator SIEWERT: I understand that requests have been made for copies of that report. Is that true?

Mr Schwartz : We did receive a request from a consultant who, I believe, is preparing a response. We declined the request on the basis that it was an internal working document. In declining that request, we made the offer to respond to any particular questions that that person had. We have recently received via email a series of questions and we intend to respond to those as soon as possible. We will also offer to discuss any of the issues raised with the particular person who made the request.

Senator SIEWERT: Why can't you release—

Dr Grant : Perhaps I could just add that the important point to make here is that an internal report on a visit to Fiji to gain information is information that goes into the process of the development of a risk analysis. The content of the risk analysis takes into account the information we sourced and the findings we had in New Zealand. That has all been placed into the public record through the risk analysis, and the content and the findings in terms of the scientific findings that we investigated are in the risk analysis.

Senator SIEWERT: Why not then release a copy of the original report?

Dr Grant : Simply because it is in the risk analysis.

Senator SIEWERT: So the whole thing is in a risk analysis?

Dr Grant : Correct.

Mr Schwartz : We have not reproduced the report in the risk analysis. However, Dr Grant is correct. All the relevant information to the risk has been included in the IRA draft report.

Senator SIEWERT: The point the growers will make is that it is things that you think are relevant rather than things that they may think are relevant; hence they want access to the report.

Dr Grant : The whole process of the public release is the transparency—putting into the public arena the information on which we will make our assessment for consideration by the public, by consultants and by anybody else. Therefore, the information on which the decision will be taken for input or otherwise is in the public report. No other information will be taken into account other than that which is in the public report.

Senator SIEWERT: I take your point there. But there may be other things in the report that growers want you to take into account which you have not taken into account.

Dr Grant : Then they are at liberty to raise them of their own volition.

Senator SIEWERT: How do they know if they have not seen it?

Dr Grant : If there are concerns about the processing of ginger and so forth, they are more than welcome to raise concerns, and we will take them on board. What we have done, and we do this all the time, is go overseas and look at a system and a process. We look at the pest categorisation of the country. We do it over and over again for all commodities, and that information goes into the risk analysis or the risk review, whichever level of assessment we are doing, and it is made available. Based on that information, the decision is taken as to the conditions under which import would take place. It is just an internal working document that has now been taken in terms of its content and translated into the risk analysis.

Senator NASH: If it is just an internal working document, then why not release it and we can stop having this discussion. Why not just release it?

Dr Grant : I am prepared to take that on notice and look at it. I cannot see that it will actually—

Dr O'Connell : I do not think there is any particular difficulty.

Dr Grant : It is just not a normal process.

Dr O'Connell : At times there may be government issues in a report like that, but other than that we can have a look at it. There is nothing particularly secret about this. It is just process.

Senator COLBECK: We all went through months and months of research on a very similar thing in respect of New Zealand apples and the standard orchard practice for New Zealand.

Dr Grant : That was a different issue.

Senator COLBECK: It has parallels.

Senator Ludwig: We will take that on notice. My view is that if it can be released it should be released. The only caveat we place on that is whether or not it is government to government. On that basis they generally are protected. I am more predisposed to putting it into the public domain than not.

Senator SIEWERT: Bear in mind that there are four weeks left for the public consultation process.

Senator Ludwig: I understand the urgency.

Senator SIEWERT: One of the other points I want to ask about is the impact on native species. We have been through the risk of pathogens particularly as they relate to ginger. I understand that there is no information available on any potential impacts on native species.

Dr Grant : Do you mean within the same family?

Senator SIEWERT: Yes.

Dr Grant : The pests that exist in Fiji that we are aware of—that our investigations have demonstrated—are already in Australia, other than scale. On the scale, we will make sure that within the tolerances of the appropriate level of protection there will be measures in place to deal with that.

Senator SIEWERT: My question still is: does that scale have an impact on native species? Have any tests been done or is there any information?

Dr Grant : We would not necessarily be able to do tests, because it is not here. We cannot test something that is not here.

Senator SIEWERT: Point made.

Mr Schwartz : We have made the determination that it is a significant quarantine pest. That is usually as far as we go. We have identified it is a pest and we have identified that we need to keep it out of Australia. We have identified it as a quarantine pest that needs to be addressed in the import conditions.

Dr Grant : It is a pest because it will affect ginger. Many other plants within that family are very, very similar; in fact, they are corms, and they are exactly the same to all intents and purposes. So it is a quarantine pest from that perspective.

Senator NASH: Are there any pests or diseases in Fiji that we are concerned might affect industries other than ginger and that the ginger itself could be a carrier for?

Mr Schwartz : When we did the risk analysis, we looked at the potential pathway—that is, we looked at pests that have an association with the commodity coming in. We also have a general policy for pests whereby if what we call 'contaminating pests', which do not have a clear biological association, are detected, we will take action against those pests as well. That is one of the reasons we also insist that soil is not carried in. Soil may carry pests that are not necessarily associated with ginger but might be quarantine pests for Australia.

Senator NASH: Yes; that is why I asked the question. That being the case, obviously given the nature of ginger—and the crevices and cracks—how certain can you be that the soil eradication of what might be a carrier for some of these other pests and diseases will actually be removed? Is that not a concern?

Dr Grant : According to our appropriate level of protection, it is very, very low but not zero. In other words, we will look to reduce the risk to a level of tolerance that we accept in Australia as being the appropriate level of protection.

Senator NASH: Just looking at the ring nematodes as an example—and correct me if I am reading this incorrectly—you are saying the probability of entry is very low, thereby negating the fact that the probability of establishment and the probability of spread are actually high. To me, that looks like once it got in here it would spread and would establish, but you suspect that it will not get in, in the first place.

Dr Grant : Correct, because when you do a risk analysis you do it through the whole pathway and the whole chain. You are trying at every step to reduce the risk to a level that, combined, brings it below ALOP. So we are trying to reduce it so that it does not get in, on the basis that if it did get in—and, if I can be blunt, it is analogous to almost everything else we do, apples being one of them—there is the risk that it could establish and spread. But even then the risks are low, because certain events would have to take place to have that occur.

Senator NASH: Sorry; I thought you said that the probability of establishment and spread is high. Are you saying the risks are low, even though you are saying in the report they are high?

Dr Grant : Under certain conditions.

Mr Schwartz : I understand that you are looking at the ring nematodes.

Senator NASH: Yes.

Mr Schwartz : That is correct. The establishment and spread have both been rated high. The overall risk has been rated as negligible, bearing in mind the entry and distribution potentials and the consequence estimates.

Senator NASH: So again—as with the New Zealand apples—you think the chance is very low that they are going to come in, but once they get in—

Mr Schwartz : Should they come in and establish, and they have to establish as well—

Senator NASH: They are going to whiz around—

Mr Schwartz : They have to come in first. The likelihood then of their establishing and spreading would be high, should they come in; that is correct. But you also need to look at the consequence.

Senator NASH: You say that the nematodes are already in here. So which other industries does that particular pest affect, and what are the current practices in place within those industries to not be affected by it, if you like?

Mr Schwartz : The nematodes in this table are not the nematodes that we are saying are already here. The nematode we are saying is already here is Radopholus similis, and that was not considered.

Senator NASH: Which one is not already here?

Mr Schwartz : Radopholus similis. It is in Australia. It is dealt with in the appendices, so it is not part of this table.

Senator NASH: Forgive me for not having gone through the appendices yet. Just so I am clear, this ring nematode one is not here; is that what you are saying?

Mr Schwartz : That is correct.

Senator NASH: So is this yam scale?

Mr Schwartz : No.

Senator NASH: I thought we heard that yam scale was the only one that had not been identified here.

Mr Schwartz : Yam scale is not present in Australia.

Senator NASH: What about the ring nematodes?

Mr Schwartz : Ring nematodes are not present in Australia.

Senator NASH: Now I am confused. I thought you said before that the only 'thing'—sorry not to use the technical term—that was not identified here in Australia was yam scale. But now you are saying that this one is as well.

Mr Schwartz : Just to clarify: the yam scale is the only quarantine pest that we have identified that requires measures, and which is above our ALOP according to the draft risk analysis. So we require measures for the yam scale; we do not require measures for the other pests that are listed here, because our analysis says that they are below our ALOP.

Senator NASH: Why would you not put measures in place even if it is a very, very low risk?

Dr Grant : Because if the product is cleaned as we expect it to be there is no medium for the introduction of the nematode. It is a soil nematode.

Senator COLBECK: So the remedial action to deal with the scale deals with the other issues at the same time?

Dr Grant : They are two different things, Senator—one is a nematode, and one is a scale.

Senator COLBECK: I am just trying to get a sense of why there are no risks to the ring nematode thing.

Mr Schwartz : The ring nematode has been assessed as being below ALOP. Therefore, we are not putting in specific measures against that particular pest.

Senator NASH: What other industries does this little groover particularly affect, if any?

Mr Schwartz : Which particular thing?

Senator NASH: The ring nematode. Taking into account the fact that you have said it is below the ALOP so it does not need to be dealt with, then, if it were to come in, are there industries apart from the ginger industry that this little thing will affect, this ring nematode?

Mr Schwartz : There may very well be. I would have to take that on notice. I do not have that information at the moment.

Senator COLBECK: So why is it below the ALOP? Does it have a short life span? What puts it below the ALOP?

Mr Schwartz : It is a combination of our risk analysis based on the probability of the likelihood of importation, distribution, establishment, spread and consequences. Once we analyse all of that we end up with an unrestricted risk estimate. If that risk estimate is very low or below, then no mitigation measures would be required. That is simply the way we do our risk analyses for all commodities.

Senator NASH: Okay. I think you said you would take on notice any other industries that it might affect, if it did come in.

Mr Schwartz : Yes; we are happy to provide that information on ring nematodes.

Senator NASH: But as I read this, you say there is no need to deal with it because you do not believe that the risk is high enough to deal with. Obviously, though, you are basing most of that, if not all, on the fact that you do not think it is going to get in, given that you say the probability of establishment and probability of spread is high. So if it did get in, once it gets across the border—for which we are not going to put up any protections—it is off like a rocket.

Mr Schwartz : If we detect quarantine pests at the border, we might take action against them.

Senator NASH: But you are not going to detect this one because you are not looking for it.

Mr Schwartz : We look for any pests that come across the border. If we detect pests that are going to be objects of quarantine, we would take action against them.

Senator NASH: Okay. So given the fact that there will be nothing in place to deal with it as a risk—because in your view it comes underneath the ALOP—what will you be doing to keep an eye on this little groover to see that it does not get across the border? Clearly, once it does, it is off like a rocket.

Mr Schwartz : The inspection requirement that we have for yam scale, and as a general requirement, would also look for any objects of quarantine—any quarantine pests. So, were we to detect this, then we would look to take some action.

Senator NASH: And what would that be?

Mr Schwartz : Normally it would be a fumigation treatment. There may be other action that we could consider.

Senator NASH: I suspect we will be doing more on this. Thank you.

Senator COLBECK: What would we fumigate with?

Dr Grant : The nematode and the scale. The scale is possibly smaller than the nematode; it depends on the particular life age you have with the nematode. But essentially they are very small and we are looking for scale and anything else that is there at the same time. If we were to find it, we would treat it. But the processes that we are going to go through and the requirements for cleaning and so forth offshore before material gets here would lead us to have a view that it is not going to arrive in Australia. But, if it did, we would be picking it up at inspection. The other thing I would make a comment on is that this is out for public comment. We are very happy to take these sorts of comments on board and deal with them. But we have had discussions with the industry sector here. We are aware of their concerns and we have dealt with them, we think, in the risk analysis. But if not, if there is still concern, we obviously need to take that on board and deal with it and explain it perhaps a bit more clearly.

Senator NASH: Thank you. Given the timely nature of the response for this and the somewhat lengthy response occasioned for questions on notice, could the answer to the question about other industries that the ring nematode might affect come back reasonably quickly? I suspect that will be easy information for you to find at the time. Thank you.

Dr Grant : We can do that very quickly. We will try to get that this week.

Senator NASH: Thank you; that would be helpful.

Senator MILNE: We are all working together on this because I think we all share fairly similar concerns.

CHAIR: That scares me!

Senator MILNE: I want to follow up on a question that was asked earlier about the consequences for native species. I understand that the IRA assesses the consequences as not discernible on the basis that there is no information available. Given what has happened with myrtle rust, in particular, we were told in this committee that there was a strategy in place—that if it came here it would be dealt with, that there was an emergency response and so on. You and I both know that myrtle rust is now a disaster across the natural environment in Australia. So I come back to this: why is it acceptable to say that the risk is not discernible because there is no information? Surely there is some way of speaking to botanists and agronomists and so on about the likely impacts on the natural biodiversity in Australia of incursion of disease such as the risks here.

Dr Grant : Are you speaking specifically about the pests that are potential risks on the pathway of ginger, or is this a more generic question?

Senator MILNE: No; it is the pathway particularly on ginger, because the native ginger is going to be in close proximity to ginger production areas in Queensland. Why would I have any confidence that disease would not get into native ginger?

Dr Grant : Native ginger would potentially be a host because it is in the same family. But what we are saying is that the risk analysis has assessed that if we follow through the procedures and Fiji follows through the procedures and we do our inspections, the risk of the diseases and the pests entering Australia is very, very low.

Senator MILNE: So what was the risk for myrtle rust?

Dr O'Connell : I might just clarify that this is not ginger for planting. This is ginger for going into the market for eating—for processing.

Senator MILNE: Yes, I am aware of that, but I am also aware that people throw out the ginger that they have not used and put it into their compost and some people will actually plant it. Having bought it as a food stock, they take it home and plant it. That is not unusual behaviour.

Dr Grant : Certainly that has been taken into consideration in the risk analysis, and we are aware of that. It is a low risk but it is not a zero risk.

Senator MILNE: So what was the risk for Myrtle rust?

Dr Grant : Myrtle rust was a very different situation.

Senator MILNE: Yes, but what was the risk? What was the risk assessment?

Dr Grant : There was never a risk assessment done as such on the introduction of Myrtle rust because it was not a controlled or a commercial pathway. It has happened for inadvertent reasons.

Senator MILNE: I understand that, and of course it was not deliberately introduced. But the issue here is that we hear time and time again about hardly discernible risk and so on. We are seeing very little attention paid to the impacts on natural biodiversity of the import of materials that are coming in for flower production or for food production and crop production of various kinds. I am dissatisfied with the idea that you have made a determination that there is not a discernible risk on the basis that there is no information available. That is hardly an informed precautionary principle approach.

Dr Grant : We have not made a determination and it is not a precautionary approach; it is a risk analysis exercise. That is one of the criteria we have to be very conscious of.

Ms Ransom : When we became increasingly concerned about Myrtle rust, eucalyptus rust or whatever, when it moved into Hawaii, it prompted us to review the risk assessments that we had in place for a number of commodities, including cut flowers and timber. It would be fair to say that we understood very clearly what the potential implications were of the Puccinia species on our natural environment, and that was certainly taken into account in the preparedness arrangements that we had in place. The ability to manage contaminating spores on the outside of containers and on people's clothes that are moving around the world in air currents is very different to a deliberate managed import of a commodity where, in this case, the organisms are not spread through airborne movement; they would have to be introduced with the discarded material into a growing situation. Then, from there, these organisms do not spread through the natural environment unassisted. They would have to be moved with the plant. Scales have very limited ability to move. So the entry pathways are very different. We did still have measures in place for a number of risk materials in relation to Myrtle rust, but it is accepted and acknowledged that it is very, very difficult to effectively mitigate the risk of spores carried on the outside of items.

Dr O'Connell : The scale is visible and is susceptible to the inspection regimes and can be picked up, which is different from the nature of rusts, which are microscopic.

Senator MILNE: Yes; but several of the pests and diseases of concern are soil borne, including a range of pathogenic fungi. I would like to know whether you think it is possible to remove all soil from a ginger rhizome. As we all know, they are irregular, are angular in shape and have very tight crevices. So how am I going to be satisfied that there is not soil on those that are brought in and that people are not going to plant them?

Dr Grant : It is a requirement that they be clean of soil. A few grains of soil will not be a medium sufficient to maintain nematodes. You would have to have clumps of soil—fairly small clumps, admittedly. These are required to be free of soil, and we will be inspecting for that.

Senator MILNE: Well, you were inspecting apples from New Zealand and there was not going to be any rubbish in those, either.

Dr Grant : They were inspected in New Zealand and they never left New Zealand. So they never entered Australia.

Dr O'Connell : So that was successfully—

Dr Grant : It was a successful find.

Senator MILNE: For those, yes.

Senator NASH: Perhaps you could take on notice as well any of the other pests or diseases that are contained or have been considered that are not in Australia but that you have determined are below the ALOP so therefore do not need to be addressed, in the same way that you have alerted us to this one.

Mr Schwartz : Just to be clear: you are asking for all the pests that we have considered which we do not believe are above ALOP.

Senator NASH: Yes, please—those that are not currently in Australia. Perhaps you could do both lists for me: any that are currently in Australia—

Mr Schwartz : I think that is set out in the report in the appendix, but I am happy to provide that to you separately.

Senator NASH: That would be great. Thank you.

CHAIR: Are we gingered out?

Senator NASH: For the moment.

Senator COLBECK: Perhaps I could just get clarification regarding the horticultural NTF—and the heads came up at the back of the room then; we got their attention anyway! Do we deal with that under biosecurity policy or do we deal with it under plant?

Ms Mellor : You can do it under plant.

Senator COLBECK: I was not going to do it right now, because I was going to do something else first, but okay; we will get there. I want to go on to the exporting of tomatoes, particularly to New Zealand. I am going to come back to this again tomorrow, because it has implications with respect to APVMA, so we will have to deal with that then; but I suppose they are on notice. The removal of dimethoate as a treatment for tomatoes is an inhibitor to a number of markets that still are happy for us to use that. What work are we doing around alternatives or to maintain access to those markets that are still happy to accept that product treated that way?

Ms Ransom : The acceptance of dimethoate in other countries is something that you should take up with the APVMA. They are the organisation that would issue permits for that use if the current use in Australia is suspended.

Senator COLBECK: Okay. So are we having any conversations with, say, New Zealand on alternative treatments for tomatoes so that we can maintain it if the product is not available here in Australia? What are those conversations?

Mr Barbour : We have been in discussions with New Zealand and have provided data since as early as 2010 on a range of alternative treatments. Unfortunately, many of these have been held up by the requirements for data demonstrating those treatments' efficacies. At the moment we are progressing though with options for methyl bromide fumigation as an emergency fumigation as well as, into the future, lower doses of methyl bromide, which will be less damaging to the commodity, as well as systems' approaches that look at infield management for fruit flies, which is of course the main concern here, and possibly irradiation. We are looking at these treatments across all commodities. Of course, tomatoes and capsicums are first and foremost in our mind but would also be applicable to other commodities that have been affected or could be affected by this reduction in usage patterns of dimethoate and fenthion.

Senator COLBECK: You have talked about data collection. What are the issues around data collection?

Mr Barbour : To demonstrate the efficacy of a quarantine treatment, any importing country—and New Zealand is no different here—requests quite a substantial amount of data that demonstrates that the pest either would not be present in the consignment or would be effectively dealt a death blow, if you will, by the treatment. So, when we look here at the methyl bromide alternative that we are discussing at the moment, they have been seeking confidence that it is effective.

Senator COLBECK: So it is not currently on their list of approved treatments?

Mr Barbour : Not for tomatoes and capsicums.

Senator COLBECK: Apart from methyl bromide and irradiation, what other treatments are we discussing with them?

Mr Barbour : We are looking at the systems approaches, which is a range of infield controls—

Senator COLBECK: Integrated with pest management?

Mr Barbour : Essentially pest management.

Senator COLBECK: You say 'data collection issues around methyl bromide'. We would have a fair bit of information on that, I would have thought, given that it is a treatment we use fairly extensively ourselves for outgoing product and actually demand for incoming product on some commodities.

Mr Barbour : We do. Generally, methyl bromide is used for external pests that have capacity to intake that pesticide quite effectively. There are different opinions about its effect on internal feeders, such as fruit flies. Particularly given the recent detection of a single Queensland fruit fly in New Zealand, they are naturally somewhat concerned. The data that we do have and we have presented to them relates especially to our use of it in domestic trade. We have been sending fumigated tomatoes from Queensland to Tasmania and other states for a number of years and we have been able to present inspection data showing no live fruit flies through that treatment pathway.

Senator COLBECK: But my understanding is that even that trade is under suspension at this point in time.

Mr Barbour : That is correct.

Senator COLBECK: So you have issues for Queensland tomato growers in particular whereby they cannot send product to southern states, Tasmania or Victoria, and neither can they send it to New Zealand.

Ms Ransom : Quite a lot of work has been done domestically to look at alternative arrangements for affected commodities.

Senator COLBECK: I am aware of that.

Ms Ransom : Just recently there was a visit to the Guyra greenhouse tomato facility in New South Wales to look at generating interstate trade arrangements around a pest-free place of production. I am happy to say that that has been accepted, I believe, by all states and territories, and that would also be a platform for equivalent measures to other countries.

Senator COLBECK: A pest-free place of production?

Ms Ransom : A pest-free place of production. So basically it is a protected environment. There are arrangements around the facility. It is in an isolated area. There are not a lot of fruit fly hosts around. There are traps in place to detect any fruit flies that may be active. But the facility itself is secure. There are a number of facilities in Queensland as well as in other states that, if the protocol were accepted, could be adopted for domestic trade. We have looked at systems approaches. We are aware that the Bowen tomato and capsicum growers are putting together a systems approach that will be put to our domestic regulators as the first systems approach for that. We have spoken to New Zealand about a systems approach for tomatoes, in particular, based on the ability that our growers have in endemic areas to actually harvest tomatoes from the fields that do not have fruit fly in them, which were previously treated post-harvest with dimethoate; but New Zealand has not detected any dead fruit fly in any of the stuff that we have sent over. So we have the ability to produce fruit fly free. We have alternatives that are being looked at and approved by the APVMA under permit as alternatives to dimethoate in the production system. So, through the activities domestically we have created alternatives. With practice and collection of data and verification, we are very confident that in the future we will be able to put them to international trading partners as well.

Senator COLBECK: But we have a pretty short window before the season opens, don't we?

Ms Ransom : This is the reason we have been pushing New Zealand pretty hard to accept the methyl bromide treatment as an emergency measure while we can put together the proposals around systems approaches and alternative equivalents for the long-term trade.

Senator COLBECK: What conversations have been had with, say, the APVMA in relation to what they are doing to facilitate the trade going ahead, given that it starts next month?

Ms Ransom : The APVMA regulates the safety of chemicals. The activities that we have undertaken domestically and with New Zealand have been focusing very much on re-establishing the trade. We have a domestic committee, the Dimethoate Fenthion Review Coordination Committee, that has met by teleconference monthly for the last 2½ years. Through that committee we have been engaging both with the APVMA and with industry and domestic governments and New Zealand to identify, analyse and put together proposals around trading arrangements that would mitigate the impact of any permanent changes to the dimethoate fenthion use patterns.

Senator COLBECK: What about discussions with FSANZ regarding irradiation and their processes?

Ms Ransom : There have been several protocols that have been put forward to FSANZ for assessment. The tomato and capsicum proposal was put forward last month or the month before. They are extremely comprehensive packages and we understand that, under the FSANZ process, it will take 12 months to assess those.

Senator COLBECK: Why 12 months?

Ms Ransom : That is their process. It is like the IRA process. They have an equivalent regulated process for assessment of irradiation as a treatment. There has been a significant amount of work undertaken by Queensland, with industry funding, to put together the proposals for FSANZ. In the wake of the cat food issues some years ago, there was a requirement for additional data around nutritional changes that may occur as a result of irradiation.

Senator COLBECK: But is there not an acceptance pretty much globally that anything under one kilogray is safe. The cat thing was 150 kilograys, from what I can recall, so there was a significant difference and it did materially change the characteristics of the product. The USFDA, as I understand it, has a blanket acceptance that anything under one kilogray is safe. We are talking about an industry that is worth between $7 million and $11 million a year. I understand the requirement for safety, but we have also talked a number of times about the cost to industry and business in getting approvals for these sorts of processes and using cross-jurisdictional information, where it is sound to do so, to make these decisions. Yet we are stuck with a statutory one-year process—I notice this is not your problem; this is FSANZ's process and I will talk to them next week—but one at a time instead of in a batch, when the data says anything under this level is okay.

Ms Ransom : It would be wise to take that up with them. Obviously, from our perspective, anything that fast- tracks the availability of irradiation as a treatment will definitely benefit industry and improve the biosecurity outcome. There are nine tropical fruits that have been approved by FSANZ previously. I understand the upper limit on the treatment was the 1,000 gray. The fruit fly treatment requires something like 125 gray to be effective. There is quite a large margin there. We understand that the substantial data package that has gone forward on tomatoes and capsicums will actually address some of the more generic issues around irradiation as a treatment, so the additional packages that are required for other commodities will be much less.

Senator COLBECK: But they still have to go through a 12-month process in a time line sense. We have got the Prime Minister talking to us about feeding the region. It seems to me that we are putting every single possible thing that we can in the way of our actually doing that. It is all right to talk about doing it, but are we having discussions with FSANZ about their processes?

Ms Ransom : Queensland certainly has had discussions. I understand that Horticulture Australia Ltd, which provided a lot of funding for the irradiation, also had discussions with FSANZ about options for batching or bulking together the information. It may be that, as they have more experience and comfort around the risk and the data that is provided, that might be possible. Certainly, as I said, industry and governments would appreciate having access to irradiation sooner rather than later.

Senator COLBECK: They have already done nine. You have said they have done nine. Minister, have you had any conversations with Minister Plibersek about this process? These are your farmers even. They are the same family—

Senator Ludwig: It is Minister King who has responsibility for FSANZ, and the answer is yes. You asked whether or not I have had conversations with them to try and expedite the process. My recollection is I have written to her with that end in mind. We are in the process of following that up. We are doing everything we possibly can within what is available to us.

Senator COLBECK: I understand the concern around the cat stuff. I asked some questions about that when it was occurring.

Senator Ludwig: I could probably go back and have a look at the transcript as to what people may have said about it back then. I am from Queensland, so I do recall much of the press around irradiation at the time.

Senator COLBECK: My understanding, having had some conversations over a period of time, is that there is an acceptance that the level of irradiation for cat food and the particular dietary requirements for cats and the changes that were made to the food, or that may not have been made to the food, because of the irradiation—I do not think I, like anyone, can actually put a direct finger on it at this stage—may have diminished the vitamin A, which was a specific dietary requirement.

Senator Ludwig: I think the short answer is that we are working with the industry across a range of alternatives to ensure that we can get it up and be exporting to states and other territories and international markets as quickly as we can—bearing in mind that a range of matters have been raised which have to be gone through, unfortunately, because we do have to tick all the boxes.

Senator COLBECK: What impact has the legal action against FSANZ over their previous approvals had on their propensity to move this project? You cannot answer that?

Senator Ludwig: You will have to ask FSANZ.

Ms Ransom : It certainly has slowed them down. It is something they had to take into account. Really, that is up to them. They have a regulated process. They have requirements to consult with the stakeholders around policy development. Obviously, we would like to get the treatment as soon as we can. The operational processes for implementing the treatment and applying the treatment for domestic and international trade are well established. There was a trial of irradiated mangos towards the end of last year into markets in Hobart and Melbourne and the product was very well received.

Senator COLBECK: I understand there have been irradiated mangos and fruit into New Zealand as well. Is that correct?

Ms Ransom : For quite a number of years.

Senator COLBECK: Without any concerns?

Ms Ransom : No.

Senator COLBECK: That is mangos as well, is it?

Mr Barbour : Mangos, lychees and papaya.

Senator COLBECK: So the New Zealanders have some experience with this?

Ms Ransom : Yes.

Senator COLBECK: Minister, can I take it that you are also having discussions—and we will talk to them tomorrow—with the APVMA about the minor use permit request that has been made in relation to—

Senator Ludwig: They are an independent organisation. They would make their decisions independent of me.

Senator COLBECK: Yes, but you can ask them a question.

Senator Ludwig: Are you suggesting that I should try to persuade them in a particular way?

Senator COLBECK: No. I could just say: have you asked them a question? I am not saying that you should tell them what to do, because I understand the processes and the requirements.

Senator Ludwig: It is a science based process. It is independent—

Senator COLBECK: I just asked: have you asked them a question?

Senator Ludwig: We had a range of discussions. I will have a look at the record. We covered off on a range of issues.

Senator COLBECK: I am not trying to push you somewhere where you do not want to go. I am just asking: have you asked them a question?

Senator Ludwig: They will be here tomorrow, so they will be open to be asked then.

Senator COLBECK: I can ask them a question and I will.

Senator MILNE: I just wanted to ask about the Eminent Scientists Group. There was an indication that you would be prepared to answer some questions on that. You will recall that I raised this matter previously and the committee has written to the department asking for more information in relation to this. The issue here is that the apple and pear producers—but not only them: primary producers around the country—are concerned that the Eminent Scientists Group makes judgments about the latest science but it does not ask for or take into account peer review science that the producers might have come across and want considered in that context and that there is no transparency around when the Eminent Scientists Group makes its report. There is no transparency around what extra or new science it may have considered or taken into account when it was making its decision. I think the primary producers have a right to understand why it is that the Eminent Scientists Group writes such brief reports. It does not actually outline what the science is that it is taking into account or any new science that it may have taken into account, and so it leaves the primary producers frustrated in not knowing what it has actually considered in the new science that the producers might be wanting the Eminent Scientists Group to consider.

Ms Mellor : Your question is whether or not the process is any different than it has always been?

Senator MILNE: I know the process is not different from how it has always been, and we saw your responses previously. What I am asking is: why would the Eminent Scientists Group not be asked to look at new science that has come forward, particularly that has been sourced by the producers in a particular area, and why would they not give some transparent response as to whether those matters in that science have been taken into account?

Ms Mellor : The Eminent Scientists Group is reviewing the IRA itself, and in doing that it is looking at the technical submissions that have come from stakeholders in response to the draft report and assessing that the conclusions of the revised draft IRA report are scientifically reasonable. It is not doing additional science than what is the role of department to do the science. Its role is limited to its terms of reference, which is to review the submissions that have come in on the expanded IRA process. It is looking at the management of the science. It is not doing the science.

Senator MILNE: Even in relation to the management of the science, are you saying that it restricts itself to the science cited in the submissions that come before it and, if so, why does it not comment on some of the science that is actually presented in those submissions from the producer groups?

Ms Mellor : It looks at those submissions and assesses what is in those submissions, but it does not do original scientific work itself.

Senator MILNE: But even in terms of assessing those submissions it does not actually comment on them or say that it rejects them or that it has taken them into account or it has not. There is just no response to them.

Ms Mellor : It is providing advice on the process of the science and it will provide advice back to the department. It is not doing the science itself. It is reviewing the process, including having a look at the submissions that have come from the various submitters. It will look at those and it will assess whether the process of the science has been thorough.

Dr O'Connell : To provide confidence that when the department has looked at the science and the submissions the department has taken that appropriately and managed that appropriately. It is, essentially, a quality assurance function to make sure we have properly managed any science issues that have been raised in submissions.

Ms Mellor : It does make a recommendation on the quality of the process within the department and it will include whether it believes there are any deficiencies in the scientific process, but it will not do research and provide advice itself.

Senator MILNE: So how does the Eminent Scientists Group satisfy itself that the department actually looked at any of the new science that the producer groups might have cited in their response to the draft IRA?

Dr Grant : All of the information that is received in public comment is made available to the Eminent Scientists Group, along with the draft IRA that went out. How we have dealt with the incoming comment and either rejected it or included it as additional advice and scientific input to the risk analysis is taken into account and presented to the Eminent Scientists Group. The group then assess whether we have dealt with that commentary provided by external parties in an appropriate way. If not, they ask us—and it is an iterative process—why we have not done this or why have we done it and whether we understand the interpretation which they, as a group, may have. They do take it into account and they do require us on occasions to change things—very, very limitedly, I have to say, is the experience we have had. But they do as a group look at the information that comes in from anybody who puts it in through public comment.

Senator MILNE: Since they have 60 days or something like that, so a reasonable amount of time, why would they not in their report say that, in assessing the department's analysis of X, Y and Z new science that has been put forward by producers, 'the Eminent Scientists Group have determined that it has been appropriately taken into account'?

Dr Grant : They do. That is precisely what they do.

CHAIR: I am sorry, Senator Milne, but there is a limitation on the time you have because Senator Colbeck has some questions, Senator McKenzie has some questions and Senator Nash has questions.

Senator MILNE: I will finish this; that is fine. Thank you, Chair. Basically, they do not cite the particular new science that people have put forward. That is the frustration of the producers. They never know whether the department ever looked at it or whether this group actually looked at whether the department looked at it. There is never any knowledge of that.

Dr O'Connell : That is precisely what they do. In essence, we have submissions from third parties who make submissions to the IRA process. We will provide a tabular response of our understanding of what that means and what we propose to do with it. The Eminent Scientists Group will look at the submissions of what we say and make an assessment of whether or not we are handling it properly. That is precisely what they do—that is, provide that assurance. That is their job.

Senator MILNE: I understand that is their job, but the reports do not reflect that.

Dr Grant : If the Eminent Scientists Group agree with a comment that has been made by the public that is not included in the draft that went out for public comment then they will require us to put it in, and we have on occasions done that. I have to say that most of the information that is ever provided is not different from what is in the IRA. It might be slightly interpretively different, but the content is the same. We may make a change in interpretation and the Eminent Scientists Group will guide us in that regard. That is exactly what happens.

Dr O'Connell : Could I just be clear that the Eminent Scientists Group reports are made available publicly. They are public documents.

Senator MILNE: Yes, I know, but they are always very brief and they do not go into any kind of detail.

Dr O'Connell : Their job is to make an assessment, as I said, of each of our responses to the submissions on the science and whether or not we have done that correctly. That is what they do.

Senator MILNE: Thank you, Chair.

CHAIR: Senator McKenzie has been waiting patiently. We have 10 minutes left.

Senator McKENZIE: Thank you, Chair. I will not take all of it, I am sure, because the answers will be on the tip of everybody's tongue. I am wondering if the department could outline the increase of fees and charges experienced by the typical small nursery exporting both seeds and plant material.

Ms Calhoun : Just to clarify, Senator, are you talking about the new fees and charges in the grain export program or the seeds?

Senator McKENZIE: Yes, the new fees and charges.

Ms Calhoun : The new fees and charges for the grain export industry were part of the Export Certification Reform program and there was an extensive consultation period prior to them being introduced on 1 January this year.

Senator McKENZIE: Presumably you know what they were charged prior to the new fees and charges?

Ms Calhoun : Correct.

Senator McKENZIE: I want to know what the increase is for a small nursery—not somebody who is putting tonnes out of a port—a kilogram of seeds to Italy.

Ms Calhoun : Nursery products are split across both the horticulture export program charging regime and also the grain export charging regime, which we are trying to align as much as possible.

Senator McKENZIE: Is there somebody within the department that could actually tell me what the total impact for the typical nursery operating within the nursery industry exporting both grains and plants will be, or will I have to deal with them separately?

Ms Calhoun : There are no new fees and charges being introduced yet for the horticulture sector. That is still under negotiation, but I can answer on the seed issues. It is $36 per quarter for an inspection fee. It would depend on where they are being exported to and the complexity of the phytosanitary inspection that we have to do as to how much time that would be.

Senator McKENZIE: My question goes to claims that I have heard directly from industry that there has been an 800 per cent increase in the last 12 months.

Ms Calhoun : I guess I would have to see that actual business case to determine how that comes about. As I said, depending on where the product is actually being exported to, there is a variance in fees and charges.

Senator McKENZIE: I presume the department consulted widely with industry about the implementation of new fees and charges.

Ms Calhoun : Correct.

Senator McKENZIE: I am wondering about the nursery industry.

Ms Calhoun : The nursery industry association was part of the Horticulture Ministerial Taskforce. However, the seed federation was part of the Grain Ministerial Taskforce. They represented their members across both sectors.

Senator McKENZIE: I refer now to a media article where a spokesperson for the department recognised the anomalies caused by the current classification of nursery products. Obviously it sounds like you have one body representing one half of an industry in one space and another one in another space. The anomalies exist and the department aims to resolve these anomalies with new fees and charges. I am wondering what process the department is going through now to address this anomaly.

Ms Calhoun : That might be a reference to the difference in the registration of the establishments where we have a different regime for seed exporters as opposed to horticulture or nursery stock product. We have stated that there will only be one registration fee charged for that entity, rather than two separate fees, if they are exporting both seed product and nursery plants or nursery stock. I have actually spoken to a number of individual businesses where that is the case and we have resolved that so that they are only being charged one registration fee.

Senator McKENZIE: Registration is around $5,000, is it?

Ms Calhoun : No, our registration fees for seed exports are $2,500 currently.

Senator McKENZIE: That is the new fee?

Ms Calhoun : That is the new fee.

Senator McKENZIE: What was the old fee for seed exporters?

Ms Calhoun : I would have to take that on notice. I have it somewhere here. I can probably provide that by the end of the day.

Senator McKENZIE: Great. Thank you.

Senator Ludwig: It would be the same. It is about a 40 per cent subsidy.

Ms Calhoun : We have actually changed the alignment of the fees and charges, but that was with the agreement of industry, so it actually reflected the true cost of the services they were getting at that point in time.

Senator McKENZIE: Finally, just what modelling has the department done that the $2,500 registration fee actually reflects the cost of registering that business?

Ms Calhoun : The Grain Ministerial Taskforce actually asked us to refer that to an independent consultant to review that and to work with industry. That consultancy was taken out by PricewaterhouseCoopers. They did a comprehensive study of the new fees and charges regime before it came in. They supported the model and said that it was representative of the costs of us providing that service. The grain industry then went one step further and got another independent consultant to undertake a benefit study of the total of the reforms rolled out under the Export Certification Reform Package. It pointed out where there were a number of benefits from the new fee regime that came in. That is publicly available on our website.

Senator Ludwig: Can I suggest two things? One is that, as I recall, Mr Cobb was briefed a couple of months ago on the particular issue around fees and charges for the grain industry and I think partly what you are going to now. Secondly, if you did want a briefing from the department in relation to those specific fees and charges, they would be happy to offer it to you. Thirdly, whilst a claim of an 800 per cent increase is on the table—perhaps because this is an open forum—could you provide some detail to the department or me so that we can have a look at the actual break-up; in other words, to see if we can work through the issue?

Senator McKENZIE: Absolutely. I am more than happy to table the document I refer to.

Senator Ludwig: You do not have to table it if you do not want to.

Senator McKENZIE: No, it is public.

Senator Ludwig: I was curious to make sure we could work through it with the particular exporter.

Senator McKENZIE: Absolutely. I am more than happy to, Minister. It is right here and I will table it.

CHAIR: We have three minutes. Senator Heffernan, a very quick one.

Senator HEFFERNAN: Minister, would that be by inadvertence or nondesign? What is the maximum increase in charges—800 per cent? Is that the top of the tree?

Senator Ludwig: Without having a look at the document and without looking at the individual's circumstance—

Senator HEFFERNAN: It would be very interesting to see that.

Senator Ludwig: I am not going to accept it at face value. It could be a change in export quality or a change in circumstance. A whole range of things might impact upon your fees and charges.

Senator NASH: Following the floods in south-eastern Australia there has been a bit of concern, I have just noticed, about biosecurity issues as a result of the flooding. I think the New South Wales and Victorian state grains biosecurity people have been alerting farmers that it may be an issue. Is that something that comes across your department's purview at all, or is it a separate state biosecurity issue that they have been flagging?

Ms Mellor : It is not something that we manage. We are aware from time to time that they are raising issues with particular industries to make sure people have not dropped the ball as a result of any impact of the floods on them.

Senator NASH: Is there any concern within the state borders about biosecurity risks from the bigger picture that you implement as a result of things like the floods, or not really?

Ms Ransom : Certainly, the impact of the floods has been reviewed as part of some of the eradication programs. There have been some concerns that the organisms targeted may have moved if, for instance, ant colonies have been affected by water movements. The review of the operational elements of the program will take that into account. There would be some extra surveillance to see whether there has been any movement. Obviously, with more moisture there are some pests and diseases that will increase in prevalence just because of the extra humidity or extra growth. But, generally, production pest issues are the domain of the states and territories.

CHAIR: Thanks, Senator Nash. We have got two minutes. Senator Colbeck, do you want the last question? You are not really worried?

Senator COLBECK: I am sure I can blend my questions into the next one. Don't go anywhere, anybody.

[17:59]

CHAIR: In that case, let us go to Biodiversity—Food. Senator Colbeck.

Senator COLBECK: Let us start with the Horticulture MTF. Can I just get a sense of where that whole process is at. I am aware of the correspondence from industry to the minister and the response from the minister back to industry. We are not in the situation of having, as I understand it, a final result in respect of fees and charges for horticulture at this stage; is that correct?

Mr Read : At this stage, just to recap some of the circumstances in regard to horticulture, the minister met with the horticulture MTF on 15 February 2012. There were discussions around their particular circumstances and their transition to full cost recovery arrangements. An offer was put to that sector to assist with those challenges and on 16 April the industry wrote back to the minister accepting that particular offer. That is now resulting in the development of the mechanism to give effect to those arrangements.

Senator COLBECK: That supersedes the correspondence that preceded that. The minister's letter of 20 March basically saying that they were not happy with the proposal was put in the previous correspondence; is that correct?

Mr Read : That is correct.

Senator COLBECK: Subsequent to the minister's letter of 9 March and the minister's response back, what occurred post that letter from Minister Ludwig to the industry on the 20th?

Mr Read : Certainly, between the February meeting and the acceptance by industry of the offer that was put forward by the minister, there was a range of interactions and discussions between industry, the department and the office around their particular circumstances—the need for transition support and the sort of initiatives that needed to be developed. I do not have a list of every contact point but I can take that on notice for you.

Senator COLBECK: Is there a package available to the industry as part of the—

Mr Read : The package available to the horticultural industry is a package of around $6½ million. It comprises transitional support as well as marketing development.

Senator COLBECK: How long does transitional support last for?

Mr Read : The conclusion of this financial year and the next two financial years.

Senator COLBECK: So until the end of 2013-14?

Mr Read : Correct.

Senator COLBECK: What proportion of the funding goes towards that?

Mr Read : The details, of course, have to be finalised exactly in terms of these splits, but $6 million, and the other half a million dollars was for the work in terms of market access support, particularly around the transitioning and acceptance of the AAO model with a range of our more sensitive markets, protocol markets.

Senator COLBECK: Where is the funding coming from for that? We had a look in the budget. We could not see anything for it, so is there an allocation in the budget for that? Where does that come from?

Mr Read : There was funding assistance in terms of the export certification reform implementation. It is the same allocation of funding that was provided to the meat industry, the $25.8 million; $2½ million has been provided to grain, $650,000 has been provided to dairy, $1½ million has been provided to the seafood sector and $6½ million has been provided to this sector. Equally, $1.9 million has been provided to the non-slaughter establishments to assist in their transition. It is all part of the same package of measures.

Senator COLBECK: Where would I look for it in the budget; that is what I am saying? I looked for it in the budget and I could not find anything. Where would I find it in the budget?

Senator Ludwig: I missed the question. I was just checking something.

Senator COLBECK: I am just looking for some money, Minister. Nothing serious!

Senator Ludwig: You will not find it in this budget going forward because it was in the previous budget, if that makes sense. It will not be identified, as I understand it, as new money in 2012-13. I am open to correction, though. Here is where I find out if I am right.

Senator COLBECK: We are still not agreed on that, Minister.

Senator Ludwig: I accept that. It was in the additional estimates statements but it was not settled at that point. It was not for publication because we had not finalised any of the—if you recall, there was grain, then meat and then horticulture.

Senator COLBECK: That is my problem. I have been looking for the money. Where do I find it?

Dr O'Connell : It is not helpful really because it is page 19 of the additional estimates statement. There it has 'reform of the export certification service - additional funding'. It does have 'NFP', which is normal because the matter is not yet settled.

Senator COLBECK: It says what?

Dr O'Connell : It says 'not for publication' because it has not—

Senator COLBECK: I was just wondering what the acronym meant.

Dr O'Connell : I am sorry. It is not for publication because it has not been settled.

Senator COLBECK: What has been settled?

Mr Read : $6.5 million dollars—$6 million over three years for transitional arrangements, as I understand it, and half a million dollars for market access support.

Senator COLBECK: That is over three years too? That half a million dollars is spread over three years or over what period?

Mr Read : No. That is the period of the application. It will depend on the circumstances around the development of that proposal in terms of market access.

Senator Ludwig: I do not think all of the detail has been finalised.

Senator COLBECK: How many countries have actually accepted AAOs to date?

Mr Read : The status of AAO acceptance was the same as was reported at the last Senate hearings. There are four or five countries that specifically have protocol arrangements in place with Australia. As I mentioned before, we—

Senator COLBECK: That is basically zero at this stage, isn't it? No-one has accepted AAOs as yet. We are working on it.

Mr Read : I am just giving you the background. The background is that we are working through a trial process of using the AAOs, collecting and validating the data in terms of the system. That will then be taken to those markets to present equivalency requests for the acceptance of that system by those markets.

Ms Calhoun : We do have acceptance for non-protocol markets for horticulture authorised officers and we actually do have a few in place already.

Senator COLBECK: Yes, but as we discussed last time, those non-protocol markets are disappearing as more countries come on with following protocols. The reality is that we are moving towards protocols, not away from protocols. We have been around that lap a couple of times. While industry is moving to that model, and that is where we are taking it to, we have provided transitional funding for those processes. What are the direct costs that industry are going to be impacted by while they are running an AAO model but are also having to have third-party external AQIS based inspections? You are effectively running two models. How are we dealing with that and what are the costs that are going to be applied under that process?

Mr Read : Essentially they are not running two models, I would argue, at the minute. There is a range of approved arrangements already across the industry. I think it is about 25 per cent for the horticulture sector. This is under the old arrangements. Embedded in those arrangements are supposed systems that actually meet the importing requirements of the importing country. What we have done is to enable those arrangements to utilise an AAO mechanism, which essentially means what they should already have, which is competent staff undertaking the assessments. We have developed the learning tools that those staff can access. They go through an online process. They are validated in the field and then are found competent in terms of that inspection process. This is actually bringing a lot more rigour and certainty to that inspection process than existed before. What I am describing now is being transitioned into those approved arrangements.

In terms of the protocol markets, yes, they need AQIS inspectors in the field to access those markets. At the present time we are trialling the AAO model into those markets. Some of the funding that was in ECRP has been used to assist in the capture of that data to develop that equivalency justification that will be provided to those markets for the arguments made around the acceptance of this model.

Senator COLBECK: Is some of the transitional funding being used for that process to mitigate the cost?

Mr Read : It is under the ECRP.

Senator COLBECK: ECRP?

Mr Read : It was the original package of $127 million.

Senator COLBECK: Okay. Some of that is still being utilised?

Mr Read : Correct.

Senator COLBECK: They have got that plus they have got the other packages that have been agreed as part of the individual group sign-off of the new fees and charges post the finalisation of the ECRP?

Mr Read : What I have said is that there has been exchange and acceptance. There are still mechanisms that need to be worked through in terms of the detail, all sitting behind that. We do not have that at this time.

Senator COLBECK: What exactly do we have at this time?

Mr Read : As I have outlined, there has been a series of meetings with the horticulture sector. There was an exchange of acceptance of the offer. The offer is broadly as I have described it. Now, what has to happen is that the mechanism to give effect to that needs to take place.

Senator COLBECK: Let us not just focus on horticulture. The same question: which countries have approved our AAOs in the other commodities? Let us look at meat, for example, because they are the ones with the biggest cost impact. What system are they running right now? Are they running a combination of the two and doing the data gathering that you have just described as well?

Mr Read : No. The meat model was developed in its genesis maybe five years ago. The data had already been collected through a range of trial plants probably five years ago. Those arguments had been made to a range of our trading partners through equivalency arguments, as we recall discussions around acceptance by the United States and so forth. We have taken that data to our trading partners and effectively now the meat sector is accessing those markets under the AEMIS inspection model. That is the new model. Within that model there is the flexibility that we provide, an inspectorate oversight that dovetails into the capability of the business and the type of business that is operating. It is a flexible set of options that those meat arrangements can utilise in accessing markets.

Senator COLBECK: So that we do not end up at cross-purposes next time, I just want to make sure that we are understanding each other properly. How many businesses are operating on a purely AEMIS model without AQIS inspection services?

Mr Read : I will argue that they are all on AEMIS at the moment. We only have AEMIS.

Senator COLBECK: Without AQIS inspectors?

Mr Read : We have an AQIS inspector on every establishment.

Senator COLBECK: That is part of the AEMIS system?

Mr Read : Yes. If you recall our discussion, we have an AQIS inspector at the end of every chain that provides the access to the United States. When you have a one-chain shed, and we have many different size establishments, the one-size sheds will be the AQIS inspector. The two-size sheds might be two AQIS inspectors or maybe two AAOs and an AQIS inspector. It depends on the sort of business and how they want to operate. Some prefer to have their own people utilised in that arrangement because they have the training and the capacity to do that; others elect to use AQIS personnel. At this stage, of roughly around 80 plants, there are probably 14 still using purely AQIS inspectors, and of those 14, there would be around seven to nine of those which are those one-inspector sheds which you cannot get away from using an AQIS inspector on, which means there are probably about half a dozen of those sheds that are currently using AQIS inspectors waiting for our arguments currently being made to the United States about relinquishing the need for—it was not so much relinquishing—the capacity to use the AQIS guy on the end of the chain in the carcass inspection position, which will give industry greater flexibility. If the United States agree to that proposition that we have recently put to them, that will then provide the flexibility that those half a dozen to eight abattoirs may utilise to use AAOs within their own systems.

Senator COLBECK: With the conversation we had earlier about the IT system and the issues with that, how does that work with the verification process of the AAO audit? Is that one of the areas where the system is broken, or not?

Ms Mellor : Senator, Mr Read might not have been here this morning.

Senator COLBECK: I knew you were still in the room.

Ms Mellor : I am not sure he was.

Senator COLBECK: I was expecting you to come in there, Ms Mellor.

Ms Mellor : I did. There were a number of questions this morning about the paper based nature of our systems. I did put on the table that we have made efforts in the automation system, and that we are working on TRACE et cetera. Senators had representations about the burden of the paper based nature.

Mr Read : It is not just the efficiencies derived from a paperless environment, which is what we are heading towards, with the use of electronic communications and certificates. Equally, we are trying to take every paper form out of the system that we can. As I have described in previous hearings, it is about the capacity not just for meat but for the other export sectors to capture truly the performance data so that we can not only identify within our own national system the outliers where there may need to be some regulatory attention to ensure we keep them within the safe bounds of certification acceptability but also so that we can provide a very good picture to those markets around the capability of our national system to be able to consistently meet their import requirements. That new system is being rolled out now. It is being rolled out across meat, horticulture and grain. The order management system will be on the seafood and dairy side as well.

One of the other comments to pick up is that with the TRACE system—again it was a question this morning—it will also provide live animal exporters with the capacity to reduce that backload of paper as with the illustration this morning, through having the capacity to have smart forms and so forth that will not only reduce the paper but certainly make the administrative dealing with those approvals significantly more streamlined in terms of the department.

Senator COLBECK: What are the targets that the horticulture sector has to meet in relation to the funding? How much of the funding is subject to targets?

Mr Read : I am not clear on what the question is.

Senator COLBECK: Are there benchmarks or targets that the sector has to meet to qualify for the funding? Is the funding dependent on meeting those benchmarks, time frames and targets? You can say no if you want to.

Senator Ludwig: Some of that detail we will work through. They were meeting for two years without coming to any position at all. That is when I tried to assist them in coming to some resolution. I think that there is a fair bit of work still to be done.

Senator COLBECK: We heard there was a fair bit of pressure from your office to get a deal done.

Senator Ludwig: Not pressure; a fair bit of work by me to explain to the industry the need and what they are faced with.

Senator COLBECK: No-one from your office told them that if they did not sign off they would not get anything?

Senator Ludwig: What would happen is that if you did not reach an agreement there would be no funds available.

Senator COLBECK: How many people in the industry actually know the deal is done? How broadly is that understood and known?

Senator Ludwig: As we work through the detail.

Senator COLBECK: I was at a major industry dinner on Saturday night and they did not know it was done.

Mr Read : Senator, there is still a lot of detail—

Senator COLBECK: I was surprised when you told me that it was signed off on 16 April because it did not match my question set, which I thought was relatively current.

Senator Ludwig: The industry is at liberty to change its mind.

Senator COLBECK: I did not say that is what it was doing, Minister. I am just trying to find out—

Senator Ludwig: In other words I am only trying to assist—

Senator COLBECK: It is nice—

Senator Ludwig: Let me finish. I am only trying to assist the industry by trying to find the range—the $6.5 million to assist in the transition. Whether the industry wants to accept that is a matter for industry. If they choose, even now, not to accept it, that is their call.

Senator COLBECK: We have already had evidence that the deal was accepted on 16 April.

Senator Ludwig: What you are now saying is that that might be in doubt.

Senator COLBECK: No, I did not.

Senator Ludwig: If it is in doubt then the industry can tell me that.

Senator COLBECK: What I actually said was that the industry did not know that there was a deal done. That is a very different thing.

Senator Ludwig: Let me rephrase this: it is not a deal in the sense—

CHAIR: Allow the minister to finish.

Senator Ludwig: It is not a deal in the sense; it is an offer of $6.5 million to assist in the transitional arrangements. Those arrangements will still have to be worked through as to how it applies and where it applies. If the industry does not want that $6.5 million transitional support package then it is at liberty not to accept that. I do not have any difficulty with that.

Senator COLBECK: Is there a deal done or not? The evidence we got at the outset of this process tonight was that it was signed off by the industry on 16 April.

Mr Read : I need to clarify. There is a broad industry in horticulture, as you are aware. It is one sector of that industry that supported that.

Senator COLBECK: If there was a deal, I would be happy.

Mr Read : As I said, this parallels previous evidence where we talked about the $2 million that was on the table with the non-slaughter establishments, as well, and the potential for their acceptance of that funding, which actually took time to get through the detail of precisely how that was to be given effect, and to assure that the full sector was across the detail of that package. It is very similar now with horticulture.

Senator Ludwig: The short way of looking at it is that the MTF, as it then was, was a representative body of the horticulture industry. But it is not everybody. It is not all of the members. As to how they communicate the results of the MTF with their industry is a matter for them, not a matter for government, because they are representing the horticultural industry as the MTF. So the offer was made for a $6.5 million transitional package to assist the industry through the MTF to facilitate the—how would you put it—ability for them to engage in the process. We still have to settle the details. The AHEA wrote back and said they would accept it. We all know they do not represent the industry as a whole but they were there as the MTF. It is still an open offer. The industry can still say they do not wish to participate in it. We will re-assess that if that is the case.

Senator COLBECK: That is not what I was trying to imply. I was just saying—

Senator Ludwig: I was just trying to make it as plain as I can.

CHAIR: You have five minutes, Senator Colbeck.

Senator COLBECK: The evidence was that we had a deal—

Senator Ludwig: It is not deal. It is an offer.

Senator COLBECK: Okay, so we are changing the status of where we are at. That is fine. So we understand where we are at, anyway.

Senator Ludwig: We are not changing the status of where we are at. We are where we are. It is a factual circumstance.

Senator COLBECK: It will be 'we are us' in a minute, to quote a phrase. That is fine. There is another offer on the table that has been accepted by the chair of the AHEA, which is one part of the MTF, on 16 April but there are still other discussions to be had in respect of detail and spending, although the indication from you, Mr Read, was that about half a million dollars was to be spent on market access issues, acceptance of AAOs effectively, and $6 million over three years for transitional arrangements.

Senator Ludwig: That is roughly the offer. We put to the industry, as I recall, a particular couple of different scenarios and said that this was how we could see our way forward to meet the transitional arrangements to move through to bring the two-year discussions to a conclusion. My understanding is that the AHEA wrote back to me and accepted the offer I put. So I am not about to withdraw it on that basis. As to how they discuss it with the rest of industry, one would hope that they are doing that now. We will also then engage with the remainder of industry as to the detail.

Senator COLBECK: I think your secret is out.

Senator Ludwig: This is a public hearing.

Senator COLBECK: That was my point.

Senator Ludwig: If industry then comes back and says 'We're uncomfortable' or 'We don't want to accept it', I will take that at face value as well.

Senator COLBECK: If there is going to be some funding expended before the end of this financial year—

Senator Ludwig: I am trying to get them to do that, yes.

Senator COLBECK: What or how is that going to be spent on?

Senator Ludwig: You can pick it up and put it to the particular purpose.

Senator COLBECK: But the purpose needs to be agreed?

Senator Ludwig: Yes.

Senator COLBECK: So it is not like a bucket of money in a state premier?

Senator Ludwig: Can I clearly refute that? No, these are very careful. The CFO has finance rules that have to be obeyed.

Senator COLBECK: No. I was not—

Senator Ludwig: That is why I was very careful—

CHAIR: He is not hiding down the back, Minister. He is right up—

Senator COLBECK: He has his head very low!

Senator Ludwig: That is why I was very careful to explain to the MTF at the time that it was really important that this was an offer; it was not going to remain there forever. At some point someone would want the money.

CHAIR: We will take a break. We will be back at 7.30 p.m.

Proceedings suspended from 18: 29 to 19: 30

Senator BOSWELL: Mr O’Connell, have you looked at the Katter policies on what he says about importing food? The statement goes something like this: ‘This product—’

Senator Ludwig: The difficulty is that this is a policy about which you are asking the department, and I would then intervene and say I do not think they can respond to a particular policy of another party during estimates. You are welcome to ask the department a question about the department and about its functions or duties or administration.

Senator BOSWELL: Let me see if I can do it another way. Is it a part of the department’s responsibility to keep a watching brief on any political parties?

Senator Ludwig: No.

Dr O'Connell : ‘No’ is the answer.

Senator Ludwig: It should be ‘no’.

Senator BOSWELL: All right.

Senator Ludwig: Just to help us all here, what is the policy that you are referring to?

Senator BOSWELL: The policy is, ‘This food that is coming into Australia is not prepared under Australian conditions and could be detrimental to your health.’ That tag will go on imported food that comes into Australia.

Senator Ludwig: We do have ‘grown in’, ‘made in’ and ‘country of origin’ labelling, so we currently do have a policy.

Senator BOSWELL: I understand that, but I am referring to this particular policy. If we were to put that label on products that came into Australia, would there be retaliation where someone else would put a condemnation on our products going to, say, America?

Dr O'Connell : I guess that presupposes that it would make sense to be saying that, but we do not have any evidence that imported food is unhealthy or unsafe.