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Rural and Regional Affairs and Transport Legislation Committee
08/04/2019
Estimates
INFRASTRUCTURE, REGIONAL DEVELOPMENT AND CITIES PORTFOLIO
Infrastructure Australia

Infrastructure Australia

[15:17]

Senator PATRICK: I'm just really following up from my conversation last time in relation to the Iron Road project. You supplied some answers to questions on notice. I wonder whether or not you've gone back at all and talked to anyone about it. Whilst I recognise that this Iron Road priority project is not funded by the Commonwealth, that doesn't prohibit Infrastructure Australia from, in some way, assisting, guiding and connecting this project up to other government agencies. We talked about Efic last time. We talked about ARTC. Have you gone back and maybe considered whether or not there's something you can do that doesn't involve funding that could assist the proponents of that particular project?

Ms Chau : Thank you for that question. Our remit really is to advise on the national significance of the project and the merit of the project, which includes social, environmental and economic merit. Beyond that, we would normally be approached for assistance as opposed to us seeking a further role in a project. To date, we haven't been approached by either the proponent for further assistance or other agencies who might be able to assist. But it's been on our priority list for some time. One of the things we would be looking at with the audit we're currently undertaking is whether that would be refreshed in the next priority list, whether that would still be a priority. That's where the opportunity would come for us to go back to the proponent and say: 'This has been on the list for a few years now. Have there been some changes? And how would see this listing being updated?'

Senator PATRICK: So if you get to a point where something on the priority list is funded—and some of these other projects are funded, such as Gawler and Inland Rail, for example—you have no role in that particular project anymore?

Ms Chau : Our work, really, is identifying what is beneficial for the country to invest in, in the infrastructure sector. The funding, financing and delivery of that is—the advice is provided elsewhere in the organisation, in the government. A lot of that is also undertaken by other agencies, like IPFA. Our role, very much, is a natural kind of clean break at where we publish our evaluation summary, where the board has considered the submission and makes a decision whether or not to list that as a priority project.

Dr Kennedy : If I could assist, Senator?

Senator PATRICK: Sure.

Dr Kennedy : It's a government policy but if the government's contributing $100 million or more to a project then the business case must go to IA for assessment. I don't know if that's helpful to you. If the Commonwealth commitment is $100 million or more, then an obligation as part of that Commonwealth commitment is IA must assess the business case.

Senator PATRICK: Okay. I'll maybe direct these to you, Dr Kennedy. Where I'm struggling is, Infrastructure Australia has done some work to identify that this project would have benefit to Australia, so much so that it's made it onto this list. But then it stops. I understand that an element of this relates back to the proponent. They said they would get finances. They said that they would, in effect, organise this thing. But there are many things governments can do to assist in these areas. That doesn't necessarily involve funding. It can be a connection into Efic. It can be a connection into other organisations, as I mentioned. ARTC, for example, might be one of them.

I just wonder, if you've got to the point where everyone agrees it's a priority project and then you sit and do nothing at all—I don't think that's a good thing. I accept that the proponent's undertaken to do the arrangements themselves. But, for example, after a year of nothing happening, surely there might be a dialogue somewhere, even if it's not Infrastructure Australia, to say, 'Right, what's the hold-up? What can we do to help? How do we kick this along a bit?' because everyone recognises this would be a good thing?

Mr Yeaman : Yes, I take your point, Senator. Just as a first point, I wouldn't underestimate that. By having the project on the Infrastructure Australia list it does certainly elevate the awareness across the system, under that project, and we do regularly provide advice to government. Government's always interested in what's on the IA list and what we're currently funding and not currently funding. Those conversations do happen, in the broad, across the system. It does provide a role in elevating the status of projects. But I take your point about the coordination across the system.

Senator PATRICK: Even talking to FIRB—my understanding is they've reduced the scope of the project now to make sure they can attract, perhaps, a different range of investor. I just think there's got to be something you do once you've recognised that this is going to be really helpful for Australia, notwithstanding—you don't have to say, 'Well, we will fund it now,' or if they run into a bit of, from my conversations with them, seed funding, which might not be an Infrastructure Australia problem; it might be a development grant. Right now I see, and I will ask questions later of the regional growth people, you've got a $10-million project funded to look at Port Spencer, which is 12 kilometres down the road. Maybe that $10 million could have been used to fund the kick-off of Cape Hardy, because all the due diligence and all the good work has been done on that already. That's my frustration.

CHAIR: This is all wonderful—we should have an inquiry into this—but I don't know that it's particularly relevant.

Senator PATRICK: Sure. Mr Yeaman has indicated—maybe you'd better come back and help.

CHAIR: I think we all agree with you.

Mr Yeaman : I'm happy to commit to going away and having a look at what else we can do across the system to raise awareness—obviously, without making any commitments around the project. That's a matter for government and the agencies involved. But having raised it, I'm happy to commit to seeing what we can do to join the dots.

Senator PATRICK: And to link it back, so I don't get ruled out of order, could you write down what it is you might be able to help them or any other project that might not be funded—the sort of help that you can see from your perspective, inside government, knowing what you do, that would help Iron Road and, indeed, any other proponent to a major project like this?

Dr Kennedy : If it helps, we'll write back to you—copied to the committee of course—and outline the avenues. You've mentioned a couple of course—financing arrangements. Because you're part of conversations, we'll attach relevant contact points to that, and possibly have a follow-up conversation if you find that information useful.

Senator PATRICK: That's very helpful.

CHAIR: As there are no further questions, we thank you. I know it is a long way, a long day and a big preparation for just a few minutes, but, trust me, it's a blessing. Thank you for your preparation and attendance. We wish you all the best and safe travel back to your intended destination.

[15:25]

CHAIR: We now call inland rail and rail policy division.

Senator PATRICK: It really is the same line of questioning that I had with ARTC, noting that they are a GDE versus, I presume, the government that looks at this from a purely governmental perspective. I just want to know whether or not the federal government has looked at, at any stage over the last five years, extending the rail line from Whyalla down to Cape Hardy, noting it is a priority project. Maybe we can just look at it from the fact that that project was approved only a couple of years ago. Has the government looked at that in any way, shape or form?

Mr Yeaman : Not to our knowledge. I'm just consulting with my colleague here as well. Not to our knowledge at this time but we do provide a lot of advice to projects and there are some other areas of the department that were here on Thursday that cross over into the infrastructure space. So we'd just like to consult with them to provide you with a definitive answer, but, at this stage, to our knowledge, no.

Senator PATRICK: I'll go to the rail line that's closed down up through the centre of the Eyre Peninsula that we were referring to before. It is colloquially known as the Eyre Peninsula railway. I'm presuming you are aware that it is going to shut down?

Mr Yeaman : Yes.

Senator PATRICK: Is government looking at the Eyre Peninsula from a rail perspective, noting that that commercial entity is going to shutdown its operation?

Mr Yeaman : We haven't provided advice on that issue. Traditionally, what we would do is wait for the state government—in that case—or a private proponent to come to the Commonwealth and seek a funding contribution if it was considered a state priority. We haven't to my knowledge received any representations yet from either the state government or from a private party to pursue that. So, at this stage, no, we haven't provide advice.

Senator PATRICK: There was a report commissioned by the transport minister, I think, in South Australia that looked at that project. I know the report has been completed. It hasn't been made public. It might be in the next day or so because my FOI is due in the next day or so. But you're stating that, even in the context of that particular report, the federal government hasn't been contacted?

Dr Kennedy : We've had a lot of engagement with the South Australian government and all states and territories in the lead-up to the $100 million infrastructure announcement that we spoke about earlier. We spoke to all out state counterparts as we developed that advice.

Mr Yeaman : And also in the context of the national freight and supply chain strategy, which has recently been agreed again. Different areas of the department have worked on a number of aspect of this. So, to give it a 100 per cent definitive answer—I would like to take it on notice and check with the different areas of the department that have been talking with the South Australians on this.

Dr Kennedy : But we don't recall it being on the list that South Australia has talked to us about in the past—of their priorities.

Senator PATRICK: I'm not only referring to Whyalla to Cape Hardy. It's about how do you deal with the grain transport problem around the Eyre Peninsula. That is now switching back to roads. I know there is more road funding, but it seems to me to be a little bit strange to try to encourage road transport where rail is probably much safer and much more efficient.

Mr Yeaman : As with Inland Rail and other rail investments that are being made, we've certainly had a keen eye on trying to ensure we get the right shift between modes—between road and rail—partly for the safety benefits and also to take traffic off the roads. That has been a focus. Following on from Dr Kennedy, we just need to do a final check—

Senator PATRICK: To finish it off, if you would take on notice, which I think you're doing, any conversations you've had internally or with the state government in respect of rail within the Eyre Peninsula?

Mr Yeaman : I understand. I'm happy to do so.

CHAIR: As there are no other questions, we want to thank you again for your preparation and for your attendance. We wish you safe travel back to your ports and families. We'll now break for a short private meeting.

Proceedings suspended from 15:30 to 15:47

CHAIR: We will now resume this Senate Rural and Regional Affairs and Transport Legislation Committee budget estimates 2019-20 with the Portfolio Coordination and Research Division.

Dr Kennedy : Chair, can I provide an update on the additional information sought this morning?

CHAIR: Yes.

Dr Kennedy : Just to provide an update on the additional information sought by Senator Sterle this morning around the media campaign: we're working with the advertising company that delivers the media aspects of the campaign over 13 weeks. I noted earlier that our estimated full value of that part of the contract is $13.4 million over 13 weeks—

Senator Sterle interjecting

Dr Kennedy : That's it; an average of a million a week. Because we don't invoice on that basis we are working with the company to break down what gets delivered in each week, and give the committee an estimated value and get everything to add back up to $13.4 million, but we have to go back in with the company. That is taking a little longer than anticipated, so I suggest that what I do is provide a written answer on that question to the committee tomorrow that outlines that estimate and the estimate for each of the 13 weeks. We're struggling to get it done this evening, so, if the committee is comfortable, I'd be happy to undertake to provide a written answer tomorrow.

Senator STERLE: I'm more than relaxed with that. Dr Kennedy has proven in the last few years that his bond is his word—is that it?

CHAIR: His word is his bond.

Senator STERLE: I have no problem with that. Thank you.

Dr Kennedy : I appreciate your patience.

CHAIR: Senator Moore, this is the first time we have ever waited for anybody in the history of the committee.

Senator MOORE: I really appreciate it.

CHAIR: It's in recognition of your sterling service to the Senate over the last 30 or 40 years, or however long you've been here!

Senator MOORE: The last century!

CHAIR: You have the call, Senator Moore.

Senator MOORE: Dr Kennedy, there are two areas I want to follow up on; I raised them with you this morning. One is the Office for Women. Last week in estimates the Office for Women told us in evidence that, whilst they could not provide any particular input into the gender impact of budget decisions or policies, they were doing encouragement, support and training for departments in this space. I just wanted to follow up with your department to see what interaction you'd had with the office and whether in fact there'd be any people within your department, which is such very wide and diverse department, on the issues of gender analysis and gender budgeting.

Ms Spence : Sorry, we haven't had any engagement with the Office for Women to date. But, having heard what they've told you, we'll follow up with them to see what training might be available and what we should be doing in this space.

Senator MOORE: That would be great. The other thing is the Sustainable Development Goals agenda. About 18 months ago at estimates, I came in and asked some general questions. Since that time we've had the first voluntary response and what I've been told by departments is a heightened awareness and understanding of the SDG agenda, particularly domestically. In your, again, extraordinarily diverse department, I would think that you would touch on a number of the key SDGs. From your perspective, what's the interaction for the department in terms of the SDG agenda?

Ms Milnes : The department's got a role particularly with respect to: SDG 3, which is around good health and wellbeing; SDG 9, which is around resilient infrastructure—

Senator MOORE: There would be a very large one in that one, I'd imagine.

Ms Milnes : Yes—SDG 11, on cities and human settlements being safe, resilient and sustainable; SDG 13, which goes to taking action on climate change; and SDG 14, on conserving and sustainably using ocean, seas and marine resources for sustainable development.

Senator MOORE: On the last one, in terms of partnerships: I would have thought your department would have had a role there. In those other goals, have you got primary responsibility for any of them or just supportive responsibility?

Ms Milnes : I have identified the ones where we're playing more of a role, if you like. Those where we've been a lead are SDG 9 and SDG 11, around resilient infrastructure and cities. We have a number of deliverables around those.

Senator MOORE: From your perspective, in that area, have you looked at integrating the SDG agenda into your corporate plan and your annual reports?

Ms Milnes : Yes. Some of that goes on as we go about our normal business or our usual programs; they're taken into account. Some of those are built into our performance indicators, if you like.

Senator MOORE: Who attends the various interdepartmental meetings? There's a series of those meetings that take place. My understanding is that there's a secretaries meeting, there's a deputy secretaries meeting and then there are project-specific meetings. Do you have people who regularly attend those meetings?

Ms Milnes : Yes. I was just checking in with my colleague there. Shona Rosengren is the branch head within my division, and she participates regularly in those meetings.

Senator MOORE: And the dep sec?

Ms Spence : I attend the band 3 SDG meeting.

Senator MOORE: I have one last question, and thank you for the update. In terms of interaction with your state counterparts, one of our committees did an inquiry into the SDGs, and one of the areas we thought needed some more work was the interaction with state governments. Certainly the federal government has had more awareness and training in this space, but the state governments and local governments have a large role to play. And in your department I would have thought that you have quite a lot of interaction with other levels of government. At this stage—and it's relatively early—has the SDG agenda been part of the discussions with other states and local governments? I know you have a lot of working parties—and not just the overall department but all the agencies within the department have a lot of interaction with other levels of government. Do you know—and you may not know—whether the SDG agenda is something that comes up in any of those meetings?

Ms Spence : I know that early on we have shared information with our state and territory counterparts on the areas that we're focused on in the SDGs, but it hasn't been in any level of detail.

Dr Kennedy : I know it comes up in the cities agenda.

Senator MOORE: Yes, very much.

Dr Kennedy : In the various city deals—I can't give you a precise, formal answer, but I do recall SDGs being discussed in the Western Sydney City Deal and those types of arrangements. But I don't have in front of me where it fits in.

Senator MOORE: Sure. That's understandable. And also in the planning area, I've been involved with a group of the South-East Asian planners, which is a very well-established organisation and very highly developed, particularly in Malaysia, and they're all over this agenda. It dominates their discussions. They'e actually asked what we're doing. So, I'm just following up on that process. Thank you very much.

CHAIR: There being no other questions in this section, we thank the officials for your preparation and attendance, and you're very patient for us. We wish we had more to ask you, but we have a program to get through. Thank you, and we wish you safe travels back to your intended port.

We have no questions for Territories Division. We thank Territories and apologise for making you wait as we did, and I know we mobilised you all this morning, but they were different circumstances then. You can mutter terrible words about us under your breath as you go, but safe travels back to your intended destination.

Dr Kennedy : I'd note for the committee that we have some officials on Cocos Island at the moment. It's the 35th anniversary of the Act of Self Determination of Cocos Island this week, and there are various events on, on the Cocos Islands.

CHAIR: We should be over there doing this!

Dr Kennedy : We've sent the first assistant secretary of our Territories Division to go over there. The administrator will be on island, and then there's a series of events across the course of the week. I recommend it to all senators. It's a fabulous place.

[15:59]

CHAIR: I welcome the Regional Development and Local Government Division officers to the table.

Senator CAROL BROWN: I have some questions around the community development grants. In the portfolio budget paper you have an allocation for 2019-20 for $643,070. Has that money been allocated to projects?

Dr Bacon : We provided some information last Thursday, but we're also in the process of providing a list of projects where we have had projects contracted, so I might just ask Mr Faris—

Dr Kennedy : Just before we do, to clear that up, did you say $643,000?

Senator CAROL BROWN: Yes, the 2019-20 year.

Dr Kennedy : That's $643 million.

Senator CAROL BROWN: My apologies.

Dr Kennedy : Sorry, just to be clear. That is the existing allocation or appropriation for community development grants.

Senator CAROL BROWN: So my question was: has it been allocated for the 2019-20 financial year?

Mr Faris : What we can provide information is on projects that have been announced. By 'announced' we say we've written to the project proponent. I'm actually in the process of getting that number clarified—it's going to be probably in the hundreds—and that will allow you to see the number of projects that have been announced and therefore have had money attached to them. It won't be the full $643 million at this stage.

Senator CAROL BROWN: But you must know how much of that $643 million has been already allocated.

Mr Faris : It's a slightly tricky question. What we do know is the projects that have been announced and that information provided to the project proponent. What is still subject to government decision is the announcements of the gap, so the difference between the projects where we've written out to people and the projects which haven't been announced, and I think you're interested in that gap. Those are difficult for us to talk about because they're decisions for government about when they'll be announced.

Dr Kennedy : In many cases we will not have them, because the government has not yet announced them. This grant runs—we talked about this last time.

Senator CAROL BROWN: Sorry to interrupt you, Dr Kennedy. I'm trying to get an understanding of the amount of money that has already been allocated against what is still left that's been allocated to the 2019-20 budget year.

Dr Kennedy : What we will tell you, Senator, is projects the government has informed us they have announced, and we have written to the proponents, and we will add that up and that will be some value of money, which we haven't quite got yet, which is less than $643 million, and the balance is what you seek, I think—the amount of money that we have not written out to allocators at this point.

CHAIR: But do you know that it's allocated?

Dr Kennedy : No.

CHAIR: The government hasn't said, 'Listen, we're going to give Fred and Betty $20, but don't say anything, because we haven't announced it yet'?

Dr Bacon : What we do know, and the way that the CDG Program works is that government makes an announcement around a decision that it's made around funding a particular project. Our process is then commenced and we write to the applicant—

CHAIR: I understand that, but—

Dr Kennedy : The short answer is yes, Senator.

CHAIR: It's like in the insurance industry—you get a reserve that says, 'Don't give that away again, because we may have a plan for it.' Senator Brown, there are three cohorts, three classes, of money. One is it's done and dusted and the world knows.

Senator CAROL BROWN: It's been announced.

CHAIR: Then there's a balance of money left, some of which the department has been given advance knowledge that it's probably going to be announced; it just hasn't been announced. Then there's a bit left over. Is that how it works?

Dr Bacon : That's correct, Senator. Well summarised.

Senator CAROL BROWN: What is your advance knowledge of the amount? We have got the amount that has been announced, and now you have an understanding of how much has been allocated but not announced—how much is that?

Dr Bacon : Those decision-making processes are really matters for government.

Senator CAROL BROWN: I'm not asking you for the projects. I'm just asking you what the amount of money is.

CHAIR: Headline figures. She'd like the total amount broken into three baskets, if that's possible.

Senator CAROL BROWN: Yes.

Dr Bacon : I don't have those on me right now, so we'd need to take that on notice.

Senator CAROL BROWN: When can I get the answers to that?

Dr Bacon : We are working right now to provide you with further details, and we should be—

Dr Kennedy : We'll do it in the normal way that we answer questions on notice. We'll go and do the calculation and then provide it as an answer to questions on notice.

Senator CAROL BROWN: You really must have these figures here. You must know—

CHAIR: Senator Brown, that's probably true of nearly every question we ask of every officer in every department, but they just don't—

Dr Kennedy : This is a program with a very large number of small projects. So it takes a little bit of work to be able to calculate it precisely, particularly as of today. So we will do that and then provide the answer on notice.

Senator CAROL BROWN: On the question that we asked, I think on Thursday, around updating the lists that you did put together for the community development grants on any projects for which, since 31 March, a funding agreement has been undertaken, are you going to update that?

Dr Bacon : Yes, and I can actually update you on that today. I didn't have the correct information about that on Thursday to clarify the record. There are an additional 32 projects.

Senator CAROL BROWN: Can you table those for us?

Dr Bacon : We'd be happy to table those, yes. We've got a list of those projects.

Senator CAROL BROWN: That might stop some of the questions that I was going to ask.

Dr Bacon : That's as at last Friday's date. So we've done that additional calculation.

Senator CAROL BROWN: Okay. Has any of the allocation for the forward years been applied to projects so far?

Dr Bacon : Sorry, Senator, when you say 'applied to projects', do you mean projects for which there is a contract in place?

Senator CAROL BROWN: Or an announcement. Under the community development grants and the amount of funding that has been allocated in the forward estimates, has any project been allocated from the forward estimates—not from the $643 million but the forward estimates?

Dr Kennedy : Yes, there will be projects that will have moneys and, because of their nature, the milestones will see them paid out over time. That will go across the forwards.

Senator CAROL BROWN: For the committee's information, the budget measure extends the MYEFO measure, as I understand it. How much was provided to this program in MYEFO and how much is the additional funding in the budget?

Dr Bacon : There's information in the portfolio additional estimates statement about the Community Development Grants Program. If you add up the amounts listed in that statement on page 38, it comes to a total of around $800 million.

CHAIR: There's a document being tabled listing project name and location. Is there any objection to that being tendered? There being no objection, it is so tendered.

Senator CAROL BROWN: If the government makes funding promises from this program now, are those promises already funded in the budget?

Dr Kennedy : The government has an appropriational provision for this program in the budget, and I can tell you it has not been fully allocated. So if it makes a project announcement, commitment, then it would be funded from that program, from those moneys. Government can take decisions to fund. They can provide further moneys—

Senator CAROL BROWN: Over and above.

Dr Kennedy : It's up to government.

Senator CAROL BROWN: So you're going to give me the unallocated amount, hopefully, soon.

Dr Kennedy : For the 2019-20, I think—is that right?

Senator CAROL BROWN: Yes, 2019-20.

Dr Kennedy : We've taken that on notice.

Senator CAROL BROWN: Thank you for the update. I just want to talk about the Tasmanian projects. There were 16 projects listed from the Thursday document as announced but with no funding allocated in the 2018-19 year. I'm just trying to get an outline of the budgeted year for which these projects are allocated funding. I notice there are three Tasmanian ones in this updated document. So you've got the Phoenix community complex?

Dr Kennedy : Yes, Senator.

Senator CAROL BROWN: What year have you allocated funding for that project?

Dr Kennedy : Senator, we're going to have to take these on notice. Can I just make a quick comment. We have provided—and I hope the committee feels this way—an extraordinary amount of detail across all these projects, perhaps more than I've ever seen provided. We're more than happy to go away and find the funding profiles for existing projects, but these are projects announced which we've written to a proponent proposing to settle exactly what the profile would look like for each of those projects. There is money provisioned, as I've explained, but it might even, to be honest, be presumptuous to give you a profile for a project which they have not yet written back and agreed to. In fact I think I'd have to call that—

Senator CAROL BROWN: I was only asking whether the money's been allocated and in what year.

CHAIR: Well, the money won't be allocated until an agreement's reached, will it?

Senator CAROL BROWN: It's been announced, hasn't it?

CHAIR: Can I ask this question as devil's advocate: if the proponent fails to meet part of the requirements, they'll get no Commonwealth money and that money will remain as consolidated revenue at that point in time—correct?

Dr Kennedy : Correct.

Senator CAROL BROWN: I understand that, but if you're running around the country and announcing projects and you've already said that you make an allocation against the budgeted amounts—

CHAIR: You should change your question, I think, to ask the officers: what reserves, using the appropriate commercial terms, have been made in the anticipation that a contractor arrangement can be reached with a proponent?

Dr Kennedy : We could answer that question in what moneys are provisioned for these announcements across the forward estimates.

CHAIR: Correct.

Dr Kennedy : But I just don't want to mislead senators that that's actually what the profile will look like because we haven't got anything back.

CHAIR: No, I understand that.

Dr Kennedy : I think the easiest thing to do would be—because we're not going to have any of them. If you give us a list that you want, we'll go away and do the work.

Senator CAROL BROWN: You can take that on notice. I just want to know: is it at all possible for you to tell me whether the department has started assessing the projects I'm asking you about—and I'm starting with the Phoenix community complex?

Dr Bacon : Senator, because of the sheer number of projects that we manage in the Community Development Grants Program, it's very hard for us to come to estimates prepared with detailed information project by project because we're not sure what information you'll be seeking. We're very happy to take that on notice and look at what we can provide on individual projects.

Dr Kennedy : But I'm quite confident, Senator, that any project that we've just written out for we will not have begun the assessment because we'll be awaiting the response from the proponent.

Mr Faris : Further to that, if you take the Phoenix community complex project that you're interested in, it was announced on 23 August last year. By that we mean that's when we would have written out to the project proponent. Without knowing the specifics of the project, just to take Dr Kennedy's point further, you could make a fairly safe assumption that there will have been correspondence back and forth and the assessment process will have commenced.

Senator CAROL BROWN: All right. I'm satisfied with your explanation. Has a funding agreement been signed for the $6 million for the Brighton Council for the regional sports centre? I haven't got the list.

Dr Kennedy : Which list are you on now, Senator?

Senator CAROL BROWN: It might have been your original list for Thursday. Unless it's on this new list which is up-to-date as of Friday COB? Are you expecting to execute any funding agreements for the Community Development Grants this week?

Mr Faris : Work is continuing on that front. As you see, in the space of last week there were 32 funding agreements progressed. You can probably draw a conclusion from that about what we will hope to be achieving this week. I know the team is working very hard on this.

Senator CAROL BROWN: How do you actually track election announcements?

Dr Kennedy : We talked about this the other night. We don't have a system set up to track. The government informs us they have announced and committed to a project. It is at that point that we kick into gear. We're mindful, of course—we see announcements made et cetera—but if governments are making, for example, election commitments under the CDG program, the first step is a matter for them. They then inform us and then our side of it kicks into gear. That's why whenever we provide you with information the best and most accurate information we can give you is when we have been given notice of a project's announcement and we are now writing to the proponent to seek information.

Senator PATRICK: I have a question concerning a Regional Growth Fund grant in relation to Port Spencer. My understanding is that $10 million was committed to that particular project. Can I ask what the status of that is and how much money has been paid?

Mr Faris : We did pick up your interest in this topic in the earlier session, so I've just triple-checked the status with my team. If you don't mind my reading from my phone I can give you a real-time update. This is the FREE Eyre Limited proposal for construction of a deepwater wharf in Port Spencer?

Senator PATRICK: Yes.

Mr Faris : The status of the proposal, as I understand it, is that it was one of 16 projects that were to proceed to the full business case, which was announced on 21 October 2018. They had until 25 January to submit their full business case, which they did. However, one of the requirements of the full business case submission was to have all co-funding confirmed and evidence of local, state or territory government support for the project. The proponents, FREE Eyre, were unable to demonstrate this in their business case. I understand that was communicated back to them by letter on 6 March 2019. I further understand that they wrote back to government on 19 March requesting reconsideration of that decision. To that extent, I think it is still a live issue between the proponent of the project and the government as to whether or not they—

Senator PATRICK: To be clear, from the point at which you said they haven't met the threshold—the requirements—to when in March they've come back to you, they have now met those requirements?

Dr Kennedy : No, they have written back asking—

Senator PATRICK: Sorry, I didn't hear that.

Mr Faris : There have been letters in both directions. The first letter was from government to FREE Eyre on 6 March, saying, 'In our view you haven't meet the requirements of the full business case, for the reasons stated, around the evidence of co-funding.' They wrote back on 19 March. My understanding is that they were requesting that that be reconsidered. I'd have to triple-check. It doesn't sound from this email that they've provided evidence. They just asked if their submission could be reconsider, based on taking a different view around the business case requirements.

Senator PATRICK: It seems a bit odd that they haven't changed anything, which is partly why I thought I didn't hear it properly.

Mr Faris : As I said, I would like to take that on notice, because I don't have that level of detail and I don't have a copy of that correspondence with me. It maybe that they have but I can't be definitive on that based on the information I have with me.

Senator PATRICK: Maybe on notice, can you provide me with the status of that project, which would include more details as to what evidence they may have come back with and what the department is doing in respect of reconsidering that, if that's possible?

Mr Faris : Yes.

Senator PATRICK: Can you tell me how much money has been spent by the Commonwealth to date? Nothing I presume.

Dr Kennedy : No money on that. These projects need to go through two phases. They are first announced and then they must pass through the business case phase. The government has always made it clear that, if they did not pass through the business case phrase, the money would be put back into the program and consideration would be given to subsequent projects. So they have to pass through the second phase, and it has to be agreed by government that they have passed through the second phase.

Senator PATRICK: Presuming there is an election called in the next week or so, we'll go into a caretaker provision. Is that the sort of thing that can't be decided upon if we go into an election?

Dr Kennedy : I don't want to get too much into caretaker provisions, because we don't own that as a policy; it is really PM&C. But, from our perspective, certainly the broad guidance is that major contractual arrangements stop in caretaker. So that's a fair assessment.

Senator PATRICK: We don't know where major and minor cross over.

Dr Kennedy : As a rule, we sign very few contracts unless the government of the day would choose to consult et cetera. They have to be of a nature that it's urgent or that type of thing.

Senator PATRICK: Sure.

Dr Kennedy : If you want to get something more precise, you might talk to Finance on the caretaker aspects of contractual arrangements.

Senator PATRICK: Okay; thank you. I'll move to a slightly different topic. This references committee has been examining the cost of rural airfares. As part of that examination, we've been looking at security costs. I know this is not your area, but I had a detailed conversation with Mr Pezzullo on Thursday last week where he said that a particular analysis has not been carried out. I'll just give you the background to that so you can tell me what you've done on your side.

Dr Kennedy : Okay.

Senator PATRICK: So $51 million has been allocated to a number of regional airports to upgrade their security equipment, their screening equipment, as a result of a security analysis that has been conducted by Home Affairs. In questioning last Monday, at one of the hearings, the department made it very clear that they had done no analysis on the effect that that decision would have on regional growth. For example, Qantas has given evidence publicly that if a security charge were imposed at Whyalla, Port Lincoln and Kangaroo Island that would potentially go to the tipping point and those services would no longer with viable. They indicated that that is a concern for them. There are a number of other airports around the country that probably fall within those categories but, in their public evidence to the committee, they named those three. It probably stemmed from a question from me, as a South Australian senator.

We've also heard evidence from Rex Airlines on the security charges, which are basically, by Home Affairs' submission, somewhere between $530,000 and $760,000 per annum. So, while the equipment comes along and there is a grant for that, this is for the operating costs, which of course are ongoing. Of course, for a small airport, you have to spread that across a small number of flights and it makes it unviable. Then the effect is that there'll be fewer flights, there might be fewer locums and there might be more difficulty getting to education services and medical services—and that has another effect on regional communities.

Pressed quite firmly by Senator O'Sullivan at the hearing last Monday, it was evident that the people who are doing the groundwork for Home Affairs had done no analysis as to the economic cost and the viability of certain routes in respect of that security charge. Mr Pezzullo confirmed to me and said it's not within his purview. He suggested that I come and talk to you guys. So has your department, has regional growth, looked at the effect of this security change—this proposed security change, it's not regulated yet. They've managed to get the funds through the parliament but not the regulation that would permit the security requirement to come into play. Has your department been involved in any analysis as to the effect that that security change will have on (a) the viability after airlines flying to regional areas and (b) the economic activity within those regional areas?

Dr Kennedy : I'm going to get Ms Spence to answer. I'll note for the chair that these are actually issues—but we'll do it here—that're done under airports and aviation, that's where the regional airports programs are run, not in regional but in airports. But that's fine, we can do our best here now with the senator.

CHAIR: Don't punish us for our generosity in allowing officials to go home early!

Dr Kennedy : I'll ask Ms Spence to provide some background for you, Senator.

Ms Spence : We haven't done any economic analysis of the impact of those security charges, but we are working very closely with both the airports and the airlines to see how the new cost will actually be implemented. We're conscious of the fact there is the $51 million program to subsidise the actual capital equipment. At this stage, while we're hearing airlines talk about what the implications might be, what we haven't got is any practical evidence of what they're suggesting might play out. I guess what I'm saying is that we're watching it very closely. We clearly see the importance of regional aviation in terms of the way in which regional communities can engage and connect with the rest of Australia, but at this stage we don't have any reason to intervene. But we are watching it very closely.

Senator PATRICK: I don't understand how we get to a point where we've made a decision to spend this $51 million and there's been no analysis as to its effect?

Ms Spence : I think the step towards it was the security analysis, which is you don't—at the end of the day security decisions are taken because of the impact, making sure that our airports are safe. There is an awareness of what the capital costs will be to install the new arrangements, but you—

CHAIR: Well, not all of them.

Ms Spence : No, that's true. I understand—

CHAIR: You need to recognise not all of them.

Ms Spence : But the operating costs are still being worked through and there is a tried formula that has worked to date in terms of how operating costs are recovered. I recognise it's different when it gets to regional aviation. But at the end of the day security decisions are taken to protect people in regional Australia who are getting on planes as well, and we're just making sure—

Senator PATRICK: The ultimate security option here is to have no flights. Then there'll be no security problems.

Ms Spence : I'm explaining how we've got to the situation we have where a decision was taken on the basis of a security analysis. We're now working through to make sure that we maintain those services—

Senator PATRICK: Let me try and summarise—

CHAIR: Just before we leave that point, do you think that the three policemen at Yaraka make a profit in law enforcement or do you think it might cost the state, in that case, a lot of money to put them there to provide a service to secure them? We have situations here where you have one flight a day into some of these small communities and you're going to have seven or eight personnel there for an hour and a quarter. Unless you're going retrain our mate off the ride-on mower down the main street or the bloke who does the rubbish dump—'Come in early and have a tub up and put on a uniform to double duty as a security officer,' then these will leave massive imposts on our small communities out there—

Ms Spence : Yes—

CHAIR: No. Let me finish, Ms Spence, because it is one of my bloody—what's that horse you ride?

Senator PATRICK: Hobby horses.

CHAIR: hobby horses. They're going to have to recover off the travelling public, because we know how the cost recovery occurs. It will lead to an absolutely inevitable outcome, as Senator Patrick has indicated and the airlines have indicated, which is that some services will just stop. These are not luxuries for our people out there. It's not as if they can go and get on a bus, because there ain't no bus. It's not as if they can get on the train, because there ain't no train. It has really got me riled up about the fact that our government is going out and understanding about the security and all the stuff that goes with it but we have not paid attention to the knock-on effect, which is measurable. You don't have to wait to see what it is; you can go and measure it now. There are ways it can be measured. All of us in this committee are interested as to why there hasn't been a serious—there's been a lot of effort put into the other part of it except this part.

Ms Spence : I can't say more than that we are watching it very closely.

CHAIR: But what does that mean, Ms Spence?

Ms Spence : It means we're working closely through the Airports Association. We talk regularly with the airlines. We deal closely with Home Affairs.

CHAIR: Home Affairs aren't doing anything. I promise you, they were laid bare at a hearing about it. They're not doing anything, so it's no good that you're monitoring with them. They're asleep at the wheel when it comes to this particular issue. I don't know what resources the Airports Association would have to do this. This is a very serious matter. We've got airports—one of them in Senator Patrick's state—that say they're going to be out of pocket by $1.2 million or something with the operating costs, which they've got to try and amortise over one flight a day over a 12-month period. Do the math. When a government goes about to make decisions that affect the people, their communities and their economies, we have a responsibility to understand, first of all, what the unusual impacts are going to be—this doesn't happen at the bigger airports, because they've got a lot of travelling public to amortise this over—and, in the event that the impacts are unfair, to socialise the resolution of them, like we do with policemen, school teachers and doctors who go to those communities. Someone has to have a look-see. If not you, just bat it away now—get the bat close to your pads—and tell us which agency or department should be the ones who ask and then answer the question in some detail about the economic and social impacts.

Dr Kennedy : We are a department with responsibilities for viability of regional aviation costs and economic impacts in the same way Senator Patrick outlined earlier, so you are right to hold us responsible for how these impacts unfold. Of course, the security impacts of it are held, as you know, by Home Affairs. So you're in the right place in terms of—

CHAIR: We're not submitting on the security. We know that's a fight we can't win. If they want to set security perimeters around these airports, that's a fight we can't win. Who in their right mind is going to fight that and stop security at some airport and then have an event? We're not going to do that. We're just talking about the head-on effect of these communities and these shires that own these airports and so on. Someone needs to have look at them.

Senator PATRICK: Chair, I'll try and paraphrase what Mr Pezzullo said to me. He said his responsibility is very clear. He looks at the security aspects. When I talked about the government—how did the government get to a decision-making process where they hadn't considered the effect this would have on the communities?—we went down to what government meant and he described the situation to me. He said, "You'll be sitting round the cabinet table and Home Affairs will put forward their proposition that there needs to be security and the chair of cabinet will then say, 'Is there anyone who has a dissenting view?'" That's the point at which there should have been a hand stuck up and someone should have said, 'There is a problem.' That clearly hasn't happened in this circumstance, because we now know that your department, who is responsible for it, hasn't done the analysis. And yet, they are about to start funding airports with taxpayer money to pay for this security equipment. They haven't even bothered to put the regulation before the parliament. I have foreshadowed that I will move a disallowance on it, because, as we're quite rightly seeing, the other side of the story is not being told. Ms Spence, in terms of evidence—

CHAIR: Let's not let things linger, because I left something in the air that Dr Kennedy was touching on. There was a lot in that. You're interested in how we got here. I'm interested in where we're going. I'm interested in what activities may occur over the next three to six months so that we can go back and report to whoever what the impacts of this are likely to be. Is there some plan? If there's not, now that we've really brought it strongly to your attention, are you contemplating at the next executive meeting to raise it and put someone on it?

Dr Kennedy : This has actually been strongly on our radar. We haven't got formal economic modelling, so we might be getting caught in a bit of language here, which is what Ms Spence was referring to earlier. We are aware of the reports of these costs that you're talking about, Senator Patrick. Why I can't go into it, of course, is because of cabinet processes and all of that. Sorry, I can; but I'd have to take it on notice.

Senator PATRICK: I'm not after what went on in cabinet.

Dr Kennedy : What I can say is that we provide our advice along the way, which includes the potential impact of the types of things that you're talking about. The government does then come to a view on the policy. All I would say to you, Chair and Senator Patrick, is that we are very aware of this potential impact. We're watching it very closely.

CHAIR: Dr Kennedy, I'm saying to you that we are at a stage where this can be physically measured. It can be physically measured economically. Forget about the social impacts; they're an extension of the economic measurement. It wouldn't take a Rhodes scholar to go, 'If that's what happens at Charleville or two or three of the ones that the good senator has, this will have to be passed on to the travelling public. They're already struggling. It will mean that less people will travel by air, and the route will stop.' That's all doable now.

That's a very powerful message to take back to whoever you have to take it back to, to say, 'Listen, here's a problem. We've measured it. This is what it looks like. These are the whites of its eyes. You need to put your hand a bit deeper into your pocket and—I don't know—subsidise a class of airports that have no prospect whatsoever of amortising, recovering these costs and retaining their services.' That's what I want to hear. I'm not asking you to tie your leg to that today, because you're not going to. But I'd just like to hear you say that you'll go away and contemplate that sort of lift in activity from the department. You only have to look at two or three. If they're not turning up and if our fares are not realised, just fold the tent.

Dr Kennedy : We will—it's a good—

CHAIR: Charleville's one. There's Whyalla.

Senator PATRICK: I'll just read Qantas' evidence. This is not me saying this; this is Qantas. They gave us testimony.

CHAIR: Careful, they're backing away from it, after they've given the evidence.

Senator PATRICK: No, that was Rex.

CHAIR: That was Rex, was it?

Senator PATRICK: That was Rex. I'm giving Qantas' undisputed position on this:

In the South Australian market, where we operate two Dash 8 Q300 50-seaters to Port Lincoln, Whyalla and Kangaroo Island, the impost of additional security charges to the level that you have described we think would be critical, in that it would move us beyond the tipping point of viability and put those services at risk.

I don't think you can hear any clearer message from Qantas that, if you impose this, it will stop flights into Whyalla, Port Lincoln and Kangaroo Island, and that must be of concern to every government. We heard evidence from Ms Langford—or it might have been her offsider, actually—who said that she's been around and talked to a whole bunch of these airports. Have you actually picked up the phone and talked to some of these airport operators? Have you talked to Qantas? Have you talked to Rex? Have you talked to Virgin?

Ms Spence : I have certainly spoken to the airport association who represents those operators. I have spoken to Rex. I have spoken to Qantas. I don't think I have spoken to Virgin specifically on the security issues.

Senator PATRICK: Are they telling you something different to what they're telling this committee?

Ms Spence : They have certainly raised their concerns about the impact.

Senator PATRICK: The question then flows: when a concern like that is raised, what do you then go and do? Please don't say, 'We're listening.' What's the action you actually have been undertaking in response to these concerns as they're being raised? Who have you talked to in your department? Have you gone to the secretary and said, 'We have a significant problem.' Have you written to the minister and said, 'There's a real problem here.' Or is it just 'listening'?

Dr Kennedy : No, we hear these concerns. We do our own analysis and provide advice to the government.

Senator PATRICK: What analysis have you done in respect of this particular problem?

Ms Spence : Sorry, we haven't—

Senator PATRICK: I'm going to ask you to table it, if you've done some.

Ms Spence : We haven't done any economic analysis. I'd have to take on notice whether we've actually done anything more specific than having listened to—

Dr Kennedy : To be clear, because sometimes we are crossing ourselves: we have not got a formal economic model and have not gone and looked at the economic viability of all of these airports, but we do listen to the concerns and Ms Spence's group has a sense of which airports are most likely to be impacted by these changes. Ms Spence is absolutely right: we have not engaged in any formal economic modelling to say, 'Is it true that this airport is no longer economically viable at this point?' We have not done that.

Senator PATRICK: You now know that there are some airports where their viability is questionable. Having known that, what have you done in respect of taking that to government?

Ms Spence : I'd have to take on notice whether we've provided any detailed briefing to the minister on this. I will follow-up with Qantas on the specific examples that they raised last week, just to break down a little bit more detail about how they've got to the conclusions that they've reached, to see what further we can extrapolate from the information that they've—

CHAIR: How hard would it be for you to ask these airports? Whatever number there are, how hard would it be for you to write them a letter and say, 'What do you think are going to be economic impacts on you post the installation of this security?' Because I'm certain they've started to do some work about the cost to their wages and blah, blah, blah. How hard would that be? They might have that work done. I'm happy to draft this for you and pop it over to the office, and I'm not trying to be funny. The second one is: how are you going to meet that cost? Is it going to be met by rate payers or are you going to advertise it over the flights and so on? Rex have also issued concerns. I can give you some more airports that aren't on that list. How hard is it for us to do that, to try and get a sense of the depth and breadth of this problem? It's real out there. I'm telling you, it's real.

Dr Kennedy : As Ms Spence said earlier, we have tended to engage predominantly through the association; but you're correct—

CHAIR: Abandon them. We haven't heard from them. Abandon them. They're not doing their job, and I'm not sure what resources they've got to do the job or what their will is.

Senator PATRICK: You could just read the submissions to our inquiry.

Dr Kennedy : Yes, we have.

Senator PATRICK: There's plenty of evidence in there that suggests it's problematic. For me, I expect government to look at things from a whole-of-government perspective. I get what Mr Pezzullo is saying; he's looked at it from a security perspective. He's done his job.

CHAIR: You're always pretty good at shutting us down, Dr Kennedy. I'm waiting for you to shut us down on this. You can shut us down by telling us that you're going to have a serious think about it through the weekend. You'll make a decision, and we'll examine you on that decision the next time you're back here. We're not driving you into a corner. We want this done for these people.

Dr Kennedy : I don't think it's correct to say we have not done any work on this. I can take on notice when we have provided advice, but we have provided advice on a number of occasions around this issue to government. The subsequent decision are then of government. We have not done formal economic modelling, but we have been aware of an economic impost that this will obviously impose on regional airports. We have included that in our advice through a whole-of-government process. We have drawn on the type of submissions that you've heard from. Subsequently, the government makes its decision to proceed in whichever way it proceeds. Ms Spence did bring to my attention your hearing the other day and the submissions around it. Having seen the elevated concerns—to be frank, they've been around for some time now—of particular airports, I think it's quite a reasonable ask for you to say to me, 'Is there a small number of airports where this is of real, immediate concern and could you look at those in detail?' I will be happy to do that.

Senator PATRICK: I'll point out to you that the evidence this committee has clearly taken is that, even if it doesn't push a particular service over the line, there are a number of regional air routes that are now subject to serious doubt. Even in circumstances where they're not subject to doubt, the fare gets passed on to the consumers within these townships. As we saw in Mount Gambier, that reduces air travel. Air travel is the lifeblood of these communities. The analysis has to not just be limited to stopping particular airlines from ceasing services but be looking more broadly at, even for the ones that survive, what is the impact that the government imposition on this has had on those communities?

CHAIR: Home Affairs left me with the impression that, as a convention, it's one thing to fund hardware and assets to put them in and so on. But the impression I got—and my colleagues will comment, as they were both there—was that, beyond that, it really wasn't a space for government to be thinking about socialising the additional costs because somewhere happens to be a small airport and it is going to impact on them greater than on another. They even admitted that they hadn't contemplated if an airport which started out as a tin shed and was built on over the years didn't have the space and they had to do a physical extension. There is one airport that's got to do that for $1.2 million.

Senator PATRICK: Whyalla.

CHAIR: There is no money from the government for that. They come and drop the baby and don't leave any bottles or anything. They just say, 'Take care of yourselves from here.' The further out you are, the more vulnerable you are. The higher your need and reliance on this, the bigger the impact of it.

I will tell you what I'm interested in. I am not even going to burden Ms Spence with the question of whether you have said to whoever it is you're giving advice to in the government, 'Hey, Fred, there are airports likely to close and services likely to stop.' I'd love for you to have given that advice and I'd love to know what the response was. But we know what the response is—and that's absolutely nothing. This needs to be elevated and, if government doesn't do it, we'll do it.

Senator Scullion: I agree that there appears to be some information that would be very useful. I just go back to Dr Kennedy's offer to Senator Patrick. I'll just repeat it without verballing Dr Kennedy. I think it was, in the context of what the Chair said, 'Can you provide some airports of a different size from a very small airport as we go up.' I can tell you that when Senator McCarthy and I moved later to hardening Nhulunbuy, it had an impact. There is no doubt about it. But it will have an impact in different ways on different sizes of airports. So perhaps you can provide for Dr Kennedy an actual place or perhaps half a dozen that are representative of smaller and larger sizes and they will look at them. If it's already been done, they'll provide that into those particular places and provide it to the committee in the context of what they believe the impact will be on the ongoing running of that airport. So they'll have to actually speak to the manager of the airport and have a look at their pricing of the airport. It's a bit of a Pantene answer: it won't happen overnight. But it's an important question that deserves an answer.

CHAIR: We appreciate it.

Senator PATRICK: Minister, to help you out in that regard, the department has provided to this committee on a confidential basis every airport that will be affected by this. I'm sure your department could get access to that.

Senator Scullion: Just for the basis of rounding this out, rather than us going through and guessing the ones, if you can provide some of those on that list that can be of a slightly different size that would be very useful. I'll say to the committee that we'll have a look at that half dozen or so—or whatever the number is—to ascertain specifically the financial impact on those airports.

Senator PATRICK: There are two aspects to it. There's the impact it has on the airline in its decision-making to continue operating the route, but there's also another economic impact on the community. So I think there are two—

Senator Scullion: We've heard that. They're two separate matters that can be investigated with each example and an answer can be provided with each example. The example will be a place that is an airport.

CHAIR: We appreciate that.

Senator STERLE: The frustrating part is that this is not the first time we've talked about the impact. This is not the first government department we've talked about this with. We've spoken about this for probably the third, fourth or fifth time in an inquiry we're doing. Can someone just put an alarm clock in the minister's office and wake him up?

CHAIR: We've got two people I trust who have now undertaken it—Minister Scullion and Dr Kennedy. So I'm going to go with them. I'll have a bob each way on them—enough for a cab and a Chinese feed on the way home!

Dr Kennedy : You didn't look too confident there, Senator.

Senator STERLE: I've got no problem—

CHAIR: Don't worry about him.

Senator STERLE: I'm having great frustration with the minister. The office listens to all this all the time and they're just hoping it goes away. I wish their staff would wake him up and say: 'Minister, we have some serious problems here, and it ain't just Labor trying to start a fight. Wake up, will you, Minister, for God's sake!' That's not you, Minister Scullion; I'm talking about the Deputy Prime Minister.

CHAIR: I think that's it for Regional Development Local Government. I want to thank the officials. Thank you for your effort and preparation for estimates. You've had a double hit today, Dr Bacon, so thank you twice. We wish you all the best and safe travel back to your intended ports.

Now we need ATSB to walk briskly to the table. Welcome. You've had a pretty good run in front of this committee in the time I've been chair, you know. No-one's really given heavy stick. They stand up pretty well.

Senator STERLE: Oh, they copped a bit about eight years ago.

CHAIR: Did they?

Senator STERLE: Absolutely they did—not under Mr Hood's leadership.

Mr Hood : Thank you, Senator.

CHAIR: Money changing hands here!

Senator STERLE: All to do with a missing aeroplane.

CHAIR: Do you want to take point?

Senator STERLE: Yes, just a quick one. Mr Hood, did you want to say something?

Mr Hood : Just a very small statement if I may.

CHAIR: Of course; my apologies.

Mr Hood : This is really just to pay tribute to our staff that deployed to Indonesia at short notice following the loss of Lion Air flight 610 on 29 October with the loss of 189 lives. Basically, four of our staff went at the request of the government of Indonesia to assist the Indonesian investigating body—that's the NTSC—with the download and analysis of the cockpit voice recorder and flight data recorders. So we're very proud of our staff selflessly deployed at very short notice with no time off for some considerable time.

CHAIR: On behalf of this committee and, to the extent we're able on the behalf of the government, would you pass on our thanks to them too for their effort. Senator Sterle.

Senator STERLE: Mine's out of left field, Mr Hood. With the Transport Safety Bureau we know the work in rail, maritime and aviation. Why don't you inquire into truck accidents when there are deaths? I don't have a loaded question; I don't know.

Mr Hood : It's obviously a policy discussion. I don't know if Dr Kennedy would care to comment.

Dr Kennedy : You're correct: the ATSB doesn't do—how shall I describe it, Mr Hood?—no-fault investigations of trucking accidents. We are aware of the ATA and others—

Senator STERLE: It was raised with me last week. That's why I've raised it.

Dr Kennedy : calling for the ATSB to have a role. The government's made no decision around that call or made any announcements, but we are certainly aware of the interest in trucking and in the ATSB having a role in trucking—and it does. I'll just ask Mr Hood: I understand similar bodies have a role in other countries.

Mr Hood : Certainly. In the United States the National Transportation Safety Board investigates aviation, rail, maritime, road and gas pipeline accidents and incidents.

Senator STERLE: Of course, with that goes staffing and funding. Thank you.

CHAIR: If we accidentally have a change of government here, Mr Hood, under the new minister for road safety your staff will be doubled and your budget will be trebled.

Mr Hood : Thank you, Senator. I appreciate that!

Senator STERLE: Your work will be quadrupled!

Mr Hood : If I may, I do believe that the ATSB is well placed with the skill set to investigate any transport accident.

Senator STERLE: Thank you.

CHAIR: All right. I remember my early days as a detective. Detectives used to have to do them, and we were completely ill equipped to investigate them with any skill, I can tell you. Senator Patrick.

Senator PATRICK: My line of questioning is going to go to the issue of Angel Flight and the instrument that has been tabled in the parliament. I have moved a disallowance which will be decided in the next parliament, but I do want to talk to you about some details because you are in the processes of investigating an Angel Flight that occurred. So that's the context, and I'll put on the record that I have spoken to a number of people involved who have talked to me about various different matters. I'll just also put on the record that, because they're connected to these proceedings and the questions I'm about to ask, I view them as being protected by parliamentary privilege. Some people may have talked to me about—

CHAIR: Hold on. Let's be clear. What are you endeavouring to establish here? You mentioned them.

Senator PATRICK: No, I'm saying I might ask some questions that go to some of the investigations that have been carried out—that they're currently carrying out.

CHAIR: Yes, but why would you need to put them on record? It just sounded like you were bestowing parliamentary privilege—and it may be the case.

Senator PATRICK: I'm just saying I've had conversations with people who have perhaps told me things that they might not otherwise have been able to tell me but for the fact that I'm about to engage in some questions—

CHAIR: Yes, but I'm not sure you should give them the confidence that the parliament—

Senator PATRICK: Okay.

CHAIR: No, Rex; I just don't want to leave it hanging. The words 'parliamentary privilege' were used. I'm not sure it's up to us to bestow that on a whistleblower who's shared information or documents with you. I don't know that it works like that. You might remember we had some in camera whistleblowers recently, and we advise we had was that information at their disposal in a documentary form probably shouldn't have been.

Senator PATRICK: I've taken advice from the Clerk.

CHAIR: Oh, all right. If you want to cite the Clerk into the Hansard, you go ahead.

Mr Hood : Would it help if I outlined where we're at in terms of the investigation?

Senator PATRICK: Yes, you can do that.

Mr Hood : On 28 June 2017, a Tobago aircraft impacted terrain near Mount Gambier, killing all three on board. The ATSB sent an investigation team, and obviously we followed due process since then to investigate the accident and then, of course, to provide the natural justice opportunity to those directly involved in that accident, that being primarily the regulators, the Civil Aviation Safety Authority and Angel Flight to respond to us. We provided an extension to those parties until last Friday. We have received a substantial submission from both parties and, from my perspective, in terms of due process, natural justice, public interest and, of course, the sensitivities of next of kin, the ATSB hasn't traditionally talked about investigations that are currently underway. We think we're about a month to a month and a half away from the final publication of that investigation report.

Senator PATRICK: Sure. My questions are not going to go to the accident itself. I respect that there are good reasons for us not speculating on things. What I want to do, however, is match the instrument that's been tabled against facts that are involved in that particular accident. You'd be aware that an instrument has been tabled that requires 250 hours of in-command time. That is just a simple question of fact. We were told that this instrument was in some sense in response to the previous Angel Flight crash and, indeed, this crash. My understanding is that the pilot in both of those crashes had more than 250 hours. I'm asking you to confirm that. I can actually go through each one of the requirements in here and ask you whether or not it would have had an effect on the previous flight and, indeed, this flight. I'm not actually trying to get to the cause of the accident. I'm trying to focus on whether, if this instrument were in play, it would have made a difference in either Mount Gambier or the previous flight.

Mr Hood : Thank you. The difficulty for us is that, being in the natural justice process, we've done our analysis. We've come up with our draft findings. We're obviously aware of the CASA instrument. We weren't consulted in relation to the CASA instrument, but we're aware of it. And, of course, commenting on the merits of CASA's instrument in a draft report sense in our findings is not complete. As I said, we received substantial input from both Angel Flight and CASA in relation to our draft report. So I think it would be premature for us to comment in relation to CASA's instrument.

Senator PATRICK: But, for example, in the case of the Mount Gambier flight, my understanding is the pilot had something like 350 hours of in-command time?

Mr Hood : It's my understanding—

Senator PATRICK: That's just a question of fact. That's not revealing anything.

Mr Hood : My understanding is that it was below 500 hours, yes.

Senator PATRICK: It wasn't in a helicopter, although I note that 'helicopter' has now been removed from the new instrument. I can go to maintenance requirements. There's a requirement in the new instrument that the pilot must check whether the airplane has undergone a periodic inspection within the last 100 hours of service of the airplane. My understanding is—and you would have knowledge of this—that in both of those cases that requirement would not have changed the outcome of either the Mount Gambier or the previous flight.

CHAIR: Just before you answer, Mr Hood—Senator Patrick, you're doing a bit of the butler in the library with the candlestick. You're going slowly, dismantling it. Mr Hood indicated he didn't want to contribute to your comparative, and now you're going through it line by line.

Senator PATRICK: No. In fact, what I offered at the start was for him to simply tell me—I'm not trying to get to what the cause of the accident was or what happened; I'm trying to get to the instrument and whether or not that instrument would have had—

CHAIR: But if you rule out that the pilot was under 500 and the aircraft had two wings and one wheel you're eventually going to rule out things that don't impact on the instrument and therefore would be—

Senator PATRICK: I'm not trying to get to the cause of the accident, Chair; I'm simply trying to examine whether or not—

CHAIR: Were you at the CASA briefing in this room? I put to CASA whether the two events they cited had any bearing on the development of the instrument, and they told me they did not. They told me that's not why they developed the instrument and that neither of those accidents would have been prevented, if you like, had the instrument been in place. That wasn't in evidence, but it was in a briefing.

Senator PATRICK: Mr Hood, I'm trying to get to an understanding of why they've changed. In your report—once again, without going into the details of your report—you spend a lot of time looking at the operations of Angel Flight as opposed to the accident as it occurred?

Mr Hood : In our draft report we've looked at both what happened and why, in terms of the Angel Flight accident at Mount Gambier. Consistent with looking at the why we've obviously looked at the operator, as we have the regulator as well. The other point to make is we're completely independent of CASA in this matter. Our report has been developed in complete isolation of any action that CASA may have chosen to take in relation to that instrument.

Senator PATRICK: Sure. But if you're intending to make some adverse finding in relation to Angel Flight and perhaps suggesting that their pilots are under pressure, for example—because Mr Carmody indicated to us that their pilots are under a particular pressure because of the nature of these flights. My understanding is your draft report effectively says that, but it's not grounded by evidence. You haven't gone to a whole range of different Angel Flight pilots and talked to them about any pressures they might have.

Mr Hood : Our methodology requires us to be evidence based, and our final report will be evidence based.

Senator PATRICK: Sure.

Mr Hood : We'll make a statement in our final report about maintenance procedures, for example.

Senator PATRICK: But that's in relation to a particular flight, isn't it?

Mr Hood : It'll be in relation to our observations as to whether maintenance was a contributing factor in any of the accidents or incidents that we've looked at. But I really don't think that I should be put in a position to prejudice the final report, given that we've got substantial feedback from the involved parties. We're in the process of examining it to incorporate it into the final report.

Senator PATRICK: Have you gone out and talked to a whole range of Angel Flight pilots?

Mr Hood : Part of our methodology is obviously to speak to witnesses and involved persons.

Senator PATRICK: So witnesses to the flight?

Mr Hood : Certainly witnesses to the accident.

Senator PATRICK: Yes, I understand that. And?

Mr Hood : Involved persons.

Senator PATRICK: 'Involved persons' I presume would be Angel Flight—

Mr Hood : We talked to a number of people in this investigation.

Senator PATRICK: My question does not go to the outcome of your investigation, but in the process of your investigation have you talked to a number of Angel Flight pilots to try to establish whether or not they are under pressure to commence a flight or to—

Mr Hood : Certainly in pursuance of the reasons why the accident happened we've talked to a number of people who are well-informed in this space.

Senator PATRICK: I'm being really specific. I really would like an answer to this. Have you talked to a number of Angel Flight pilots—if so, how many—in respect of pressures that might be put on them relating to community service flights?

Mr Hood : We have talked to Angel Flight pilots. I'd have to take on notice how many.

Senator PATRICK: Thank you. You understand that these community service flights provide a public service in that people are not required to pay for the service that gets them to their chemotherapy, for example?

Mr Hood : I think everybody lauds the concept of community service flights, specifically for regional Australia. We recognise the value in that. At a meeting recently with the Angel Flight principals we reiterated that there is certainly nobody in the ATSB trying to shut Angel Flight down. What we are tasked to do is find out what happened in an accident and why, to prevent a recurrence. That is what the act tells me we're supposed to do.

Senator PATRICK: So you won't make any recommendations as bold as saying we should shift these flights across to RPT, where people have to pay?

Mr Hood : Once again, it's premature to speculate on the outcome because we're still working through the submissions of those people.

Senator PATRICK: I've read a number of your reports. They're all on the website.

Mr Hood : They're all first class.

Senator PATRICK: Well, there was one that wasn't, but it's been redone now.

Mr Hood : It was eight years ago. I've got the second one here if you need it.

Senator PATRICK: When this comes out I'll be very keen to look at the focus that you've put on the flight, which is exactly what I think you should do, versus the operations of Angel Flight.

Mr Hood : Understood. Let me say that any recommendation we make will usually be couched in outcome based phraseology, like, 'The controls should be strengthened.' Those recommendations can go to operators or to regulators. Once again, until we work through the submissions we won't come to a final position in relation to what a recommendation may or may not be.

Senator PATRICK: Mr Carmody has provided some data to this committee about statistics associated with Angel Flight. He also said that your report would go to some statistics on Angel Flight. A concern has been raised with me that the statistical approach that you've taken may be flawed in that, for example, you might be comparing private flights across a particular period with CSFs over a different period. That's not something you would do?

Mr Hood : In relation to not only statistics but the analysis of statistics, we have about eight PhDs in the organisation. They are very well versed at the methodology in terms of data analysis, as is the manager. So we have manager review, director review and, of course, commission review of that analysis. In addition, we have offered Angel Flight the opportunity to view and criticise that analysis if they think that it is incorrect. We'll certainly look at that in their submission, which I can't comment on, because it arrived I think only on Friday.

Senator PATRICK: In relation to the number of flights, Mr Carmody in his analysis was using only the sector that involved the actual passenger as opposed to positioning flights. That seems flawed to me. If one of the issues is pressure on pilots, there's also pressure associated with the positioning. In your analysis, are you including all of the—

Mr Hood : We've certainly made mention of that in our analysis. Once again, that's subject to feedback from both parties.

Senator PATRICK: I don't want to get to the point where the report comes out and we have to go through some oversight committee as to—

Mr Hood : No, I'm more than happy, Senator, once we have analysed the submissions from the directly involved parties and have incorporated those into the final version that's been approved by the commission, to offer a briefing to the senators.

Senator PATRICK: Another concern I might have is that, when you compare a typical private pilot's flight with a CFS flight, there may be some more complication involved in those particular flights. I just wonder how that's drawn out in the statistics?

Mr Hood : Once again, we've made a statement in our analysis, in the draft report, which is obviously subject to comment by Angel Flight and by CASA.

CHAIR: Senator, your 15 minutes is now 35 minutes. Maybe the only thing that stands between us and working through dinner and going home tonight—

Senator PATRICK: Dinner versus oversight—

CHAIR: How about you take this up with Mr Hood tomorrow and have lunch together and continue this very interesting conversation?

Senator PATRICK: I will leave it at that. Can I ask Mr Hood to take a question on notice? Let's assume your report comes out in about a month.

Mr Hood : My understanding is that an extensive submission was received only late last week. Usually it would take us around a month to incorporate any changes that might need to be made in the final report. Then it goes to the commission for public approval to release. I would say that the second week of May would be the earliest. It would be around the 18th, I think—

Senator PATRICK: When are our questions on notice due back?

CHAIR: The date is 23 May or 22 May.

Senator PATRICK: Can I ask—and you'll have an option, if you haven't released the report at that stage, to advance any public interest immunity that you need to—

Mr Hood : Sorry, Senator, I've missed the question.

Senator PATRICK: I haven't come to the question. I'm just saying that you'll have the opportunity to advance a public interest immunity if your report hasn't been published and the answers need to come back before that. Go through the current regulation before the Senate and simply indicate whether any of the terms or provisions would have changed the outcome of the Mount Gambier accident?

Mr Hood : Senator, we'll take on notice to have a look at what we can do in that regard.

CHAIR: It sits on the record that CASA have admitted that it would not have.

Senator PATRICK: In a discussion with me and Ms Sharkie MP, they indicated that the motivation for this particular instrument was these flights going—

CHAIR: You get together with me and I'll write to Mr Carmody and have him confirm back to me in writing what he told me in the briefing while he sat in the chair beside where you are.

Senator PATRICK: The distinction is that maybe he wasn't saying that each one of these directly indicated. He said the motivation for looking at this flowed from these accidents.

CHAIR: I don't know how he can do that. That's a big stretch.

Senator McCARTHY: Mr Hood, I just wanted to get an update on an investigation—just where it's at, in the Northern Territory, with the Cessna 210 on 23 October 2017.

Mr Hood : Senator, thank you. Public release will be tomorrow.

Senator McCARTHY: So it's actually completed now?

Mr Hood : Yes. Sadly, once again for senators' information, a Cessna 210, at the beginning of the wet season, departed Darwin to repatriate an Indigenous person to a community. It only got less than 10 miles from Darwin on climb and encountered some weather. The wings failed on the Cessna 210, with the loss of the lives of two young pilots. That'll be published tomorrow.

Senator McCARTHY: In terms of the recommendations from that, obviously you can only talk about that post tomorrow, or are you able to—

Mr Hood : I can. I'm happy to send a copy of that report to your office tomorrow.

Senator McCARTHY: Thank you very much.

CHAIR: Thank you, senators. Thank you, Mr Hood, as always—and, through you, to your colleagues for their preparation and attendance. We wish you a safe journey back to your intended destination.

[17:15]

CHAIR: If Surface Transport Policy Division could rush to the table, I think the committee will resolve to work through so I don't interrupt anyone at six o'clock.

Senator STERLE: I'll just plough through. If the officers could be precise in their answers, we'll get straight to the end.

CHAIR: Do you wish to make an opening statement?

Dr Kennedy : No.

Senator STERLE: I'd like to go to the National Road Safety Strategy. Of the 12 recommendations, how many have been committed to by government?

Ms Spence : As I think the Deputy Prime Minister set out in the ministerial statement and also in the communique from the Transport and Infrastructure Council, he's confirmed that he is the cabinet minister with the responsibility for road safety. The governance review is underway. As part of the budget, we've announced funding for—

Senator STERLE: I'll stop you there, Ms Spence, only because I just want to get moving. If I remember rightly, that was item 6: undertake the national road safety governance review by March 2019. Since it was announced—let me get this right—the government has said that they would step in and they promised the March 2019 review. That was made in September 2018, if I'm correct. Is that right?

Ms Spence : It was announced they would do the review in September 2018. I think we announced the terms of reference in January of this year. We have a draft review, which is with the independent peer reviewers, which was sent to them, I think, at the end of last month—the end of March.

Senator STERLE: The end of last month, which was two weeks ago?

Ms Spence : Yes, something like that.

Senator STERLE: The end of March. Can you tell us why it has taken so long? I think we've lost about 600 people, and 13,000 have been seriously injured.

Ms Spence : We've been working as quickly as we can. We're working with the states and territories. As I said, the terms of reference were settled in January and we've got the draft out with the peer reviewers and we're working towards getting a final review to be considered Transport and Infrastructure Council ministers in June.

Senator STERLE: Not till June. So we've still got another two months to wait. Can you tell us how much funding has been committed around the recommendations?

Ms Spence : There was $2.2 billion included in the recent budget.

Senator STERLE: And that goes to all the recommendations?

Ms Spence : Yes.

Senator STERLE: Is there a projected rollout for the recommendations?

Ms Spence : Sorry, Senator, just to be clear, some of the funding is going towards programs which will improve road safety. Some of those are existing programs; some of those are new programs that go to specific recommendations.

Senator STERLE: I'll just come back to the 12 recommendations. How much money has been set aside for those 12, or for any of those 12? What I just want to get to, Ms Spence, is: if you do know, great; if you don't, let's move on.

Ms Spence : What I can say is that there are specific recommendations around the resource route key road safety enablers and road safety initiatives, so that's where there's been a $12 million Road Safety Innovation Fund established and $4 million—

Senator STERLE: $12 million?

Ms Spence : $12 million over the forwards and a $4 million Road Safety Awareness and Enablers Fund. That's recommendation 10. Of the $2.2 billion that has been announced, many of the elements of it will go to addressing road safety issues, but I can't line it up specifically, recommendation by recommendation.

Senator STERLE: If you can't, say you can't. That's fine. Is there a dedicated team within the department working on the recommendations?

Ms Spence : Yes.

Senator STERLE: How many are there?

Ms Spence : I think there are seven at the moment; although, I'll turn to my colleague, Ms Tucker.

Ms Tucker : We have four full-time staff, we have support from two contractors and we have independent expertise coming in through consultancy. Then we have the two independent reviewers as well.

Senator STERLE: How many are in the consultancy?

Ms Tucker : We're working with two secondees from the states and territories as well.

Senator STERLE: So you've got four full-time and two contractors who are working full-time on that.

Ms Tucker : Yes.

Senator STERLE: You've got some consultancy there. How many are there? What does that mean?

Ms Tucker : There are four full-time people.

Senator STERLE: Very good. And two secondees from states?

Ms Tucker : Yes.

Senator STERLE: So, since the Road Safety Strategy was presented and the minister said we're going to start work, these are all new positions?

Ms Tucker : The four staff are from within the department, and the others are new staff.

Senator STERLE: So this is a whole, brand-new—I don't mean brand-new people, but, this is: 'Right. We're moving in. We're dead-set serious, and this is what we're going to focus on.'

Ms Tucker : Yes.

Senator STERLE: That's great. I'm going to roll through, because I've seen Senator Rice come in and I don't intend being here until seven or eight o'clock tonight. Can I start with last year's budget regarding the targets for outcome 2. Could you tell us if all those targets were met, please?

Mr Foulds : Outcome 2—the performance criteria were number of road fatalities. The target was to reach the 30 per cent reduction as per the Road Safety Strategy, and we have not met that this year. That hasn't been met. For serious injuries due to road crashes is on track to have a source of data established and a baseline by 2019-20. That target has been met, and the baseline will be established in 2019-20. That's for casualty crashes.

Senator STERLE: When will that information be available for the public?

Mr Foulds : When the baseline has been agreed—

Senator STERLE: Sorry, Mr Foulds, when we say 2019-20—

Mr Foulds : The next time it'll be reported on formally in the portfolio budget statement will be this time next year.

Senator STERLE: Okay.

Mr Foulds : But the data itself may be before that. Then the number of rail fatalities to reduce relative to 2017-18 baseline—we don't have enough data yet to be able to report on that. This is a new way of reporting. That's expected to be available for the 2018-19 annual performance statements later. The last current performance one was the number of maritime transport fatalities, excluding fatalities on non-trading vessels—for example, fishing and recreational. The annual average from 2010 to 2017 is less than four, and, unfortunately, that target was not met. There were more than four fatalities.

Senator STERLE: Can I just ask why there weren't many met? Is there a resource problem? What is it?

Mr Foulds : In terms of road fatalities, for example, that's a 10-year strategy which has two-year action plans. We're about 18-odd per cent down from the baseline. The target is to get to a 30 per cent reduction, and we have not met that, but there are lots of reasons for that.

Senator STERLE: I understand that.

Mr Foulds : This is a way of measuring performance which is settling to understand the measures and the way we might meet them.

Senator STERLE: Let's go to this year's budget and go through the current performance information and targets for outcome 2. Do you have them handy?

Mr Foulds : For 2019-20?

Senator STERLE: You've just answered that for me—sorry, I'll get with it. Can you tell us what the department is actively doing to reduce the number of fatalities on our roads?

Mr Foulds : We are applying the National Road Safety Action Plan. That's been agreed by states and territories through COAG. That has, I think, nine key actions that are committed to. We're also doing the national road safety inquiry and that strategy, and we're working through that. As you know, the Commonwealth also has committed to enhancing technology improvements to vehicles. They're the things that are being progressed.

Ms Spence : I would also mention the work that Mr Foulds is doing around leading the National Drug Driving Working Group, which is working with the police, the road authorities and key policymakers. A report was published in November 2018 with strategies to help further improve the way in which we reduce drug driving. We also have some targeted infrastructure investments through the Black Spot Program, Roads to Recovery, the Heavy Vehicle Safety and Productivity Program, and the Bridges Renewal Program. Also, one of the things we were pleased to announce was providing $400,000 to the ATA to upgrade its safety truck. That was announced, I think, late last year.

Senator STERLE: I was in it the other day. Of course, these are questions that we'll probably revisit in 12 months time to see how they're progressing—I get that. Regarding serious injuries due to road crashes, the target set by the government is to establish a baseline in 2019-20. Would you explain to me what that means, please.

Ms Spence : We might ask Dr Dolman to come to the table.

Mr Foulds : He's done all the work, Senator.

Senator STERLE: Okay.

Dr Dolman : Regarding serious injury, this is a long-term project where we're looking to improve the quality of the data. As has already been mentioned, the National Road Safety Strategy has a target of a 30 per cent reduction by 2020. The available evidence from the police and hospitals was divergent in that the police data was going down and the hospital data was going up for serious injury. So, in the national road safety action plans for 2015-17 and also 2018-20, the current plan, there were actions to establish a system for reporting nationally matched data—matching the police and the hospital data. The project commenced in November 2015. Our bureau has been managing that as an Austroads project. It's being conducted in three stages. The first stage, which was a feasibility pilot project, is complete and has been published. An Austroads report was released on 14 March this year. It was shown to be feasible and valuable. Largely, the difference between the hospital data and the police data is motorcyclists and cyclists that don't report to the police but do go to hospital. Stage 2 is underway and it's looking to get the remaining approvals. Western Australia and Tasmania were unable to participate in the stage 1 process, so they're being added in stage 2. The second phase is looking at developing a historic series. Going back to the base years, 2008-10 is the base we use for the Road Safety Strategy.

Senator STERLE: So it's a collection of data?

Dr Dolman : It's collecting the data, which does involve quite a lot of approvals from all the hospitals et cetera. To finish, the final stage is to develop an ongoing mechanism for collecting the data.

Senator STERLE: Is that what the announcement of the office of road safety is?

Dr Dolman : No, it's separate.

Ms Spence : No. One of the things announced in the budget was that the Commonwealth would establish a new Office of Road Safety to manage some of the programs that were announced in the budget and, depending on the outcomes of the governance review, to take on other broader functions.

Senator STERLE: I see. So the announcement of establishing the Office of Road Safety was not to collect data on crashes—

Ms Spence : No, it's to take a broader role.

Senator STERLE: I wasn't aware of that. Okay; that's interesting. You did touch on the number of maritime fatalities but you said the target wasn't met. Could you tell us—I'll probably come back to you, Mr Foulds—why we didn't meet the maritime—

Mr Foulds : I can only say that it wasn't—I don't have the detail; I'll have to take that on notice.

Senator STERLE: That's all right. There's an announcement in the budget that says funding will discontinue from this budget, up to 2022-23, for the interstate road transport account. What's that?

Mr Foulds : That's the federal interstate road transport scheme, which existed for a number of years. I think it started in 2002. It was for heavy vehicles, and there was a particular registration benefit accrued to operators who only did interstate trade, and they had a separate registration.

Senator STERLE: Oh, yes.

Mr Foulds : They had a separate registration. They received a benefit on registration, a discount—

Senator STERLE: I fully understand.

Mr Foulds : and that's now been withdrawn. In the budget there's, I think, $200,000, which is the last remnant of it.

Senator STERLE: This is the FIRS.

Mr Foulds : Yes, correct.

Senator STERLE: Unfortunately, it was set up with good intent but there were crooks in the transport industry that exploited it. You're not agreeing with me, so you couldn't possibly comment. I could! Thank you. It's good you've explained that. Regarding funding for roads of strategic importance, has the government committed to funding to this program after the budget?

Dr Kennedy : That's not for this division; that was for the infrastructure division the other night.

Senator STERLE: That's great; thanks, Dr Kennedy. Let's move on. I'll come back to the Office of Road Safety. We didn't see any dollars committed to road safety in the 2018-19 budget. In this year's budget we saw a commitment of $38½ million from this year for road safety measures. Can you tell us where that $38½ million came from?

Ms Spence : Sorry, Senator?

Dr Kennedy : Which $38½ million have you got in front of you, Senator?

Senator STERLE: I've got $38½ million that's been announced for road safety measures.

Mr Foulds : The measures that are new money are: the Road Safety Innovation Fund, which is $12 million over the forwards; the Road Safety Awareness and Enablers Fund, which is $4 million over forwards; the national Heavy Vehicle Safety Initiative is an additional $6 million over the forwards, over and above that which is appropriated from what was the RSRT, and that's an additional $1.5 million per year; and there is a grant to the Australian Road Research Board to assist local government in some of their technical assessments on pavement and pavement strengths and—

Senator STERLE: How much is that?

Mr Foulds : That's $2.6 million. The number you've mentioned is not familiar to me.

Senator STERLE: Okay, I'll chase it up.

Dr Kennedy : I should just add—

Mr Foulds : Sorry, I beg your pardon. Road safety, the establishment of the office, is $5.9 million over the forwards. The Road Safety Innovation Fund, which is $12 million, I mentioned. Keys2drive is an additional $8 million. That's to take it through to the new forwards. The Heavy Vehicle Safety Initiative project I mentioned. The Road Safety Awareness and Enablers Fund, I mentioned. The Australian Road Research Board, I mentioned. That should add up to $38.5 million.

Dr Kennedy : I was just going to add that there were very significant increases in the road safety programs—blackspots.

Senator STERLE: Yes, the Roads to Recovery Program.

Dr Kennedy : They all increased significantly. We discussed them the other—sorry, we didn't discuss them. They're done by the infrastructure division but they are—

Mr Foulds : The Black Spot Program was an extra $500 million. The Roads to Recovery Program, which has a road safety component, is $1.1 billion. And the bridges and heavy vehicle program is $275 million—

Senator STERLE: So it's just a step up from programs that are already there, and adding more funding.

Dr Kennedy : Yes.

Senator STERLE: I was just trying to find new money.

Dr Kennedy : I should just add that they were all ongoing funding, not just for the forwards. They were all ongoing.

Senator STERLE: With the announcement of the Office of Road Safety, where will that be situated?

Ms Spence : Within the department, within the Surface Transport Policy Division.

Senator STERLE: So Surface Transport will have responsibility for it. What will the staffing be on that?

Ms Spence : We're still working through the details. As I said, initially the focus, we're assuming, is going to be the management of the programs that were announced in the budget, but again we'll be informed by the governance review about what the appropriate functions for the office will be, and from that we'll be able to make a final decision on resourcing for it.

Dr Kennedy : In a practical sense, we'll take the task force across into the office, so the resources that were outlined earlier we will continue on through the office, and then of course we will revert back to government about future decisions on size et cetera.

Senator STERLE: So we don't have that. Do we know when we expect to have it up and running?

Mr Foulds : 1 July.

Senator STERLE: We don't know how many staff we'll have in there. Annual operating budget—do we know that?

Ms Spence : Again, that will be determined by the functions that it takes on, so I don't have an answer to that, no.

Senator STERLE: I'll confess: you've got me here. You've thrown a curve ball at me, because I thought it was going to reflect collection of data from road trauma and accidents, and it's not; it's just these three which Dr Dolman's been working on: feasibility, remaining approvals and development.

Mr Foulds : But one of the things that the Office of Road Safety could do as part of its remit is coordinate data and look at the sources of data and try and report at a national level, as a future activity.

Senator STERLE: No, I get that, and I remember when the Office of Road Safety was dismantled by the Howard government. I don't want to get too political, but the ALP made this a policy announcement. We will re-establish the Office of Road Safety, but we want to establish it to collect data, so this is a completely different thing. Once you meet these three projects you're working through, Dr Dolman, if I may ask, what's the role of the Office of Road Safety after that, if it's not collection of data for trauma and deaths?

Dr Dolman : We are working with the task force at the moment, and we'll continue to work with the Office of Road Safety once it's established. The inquiry suggested that we needed better key performance indicators, so we're helping to develop those, looking at best practice internationally—we're looking at what Sweden does, for instance, in terms of its key performance indicators—and working with the states to improve data collection. An example is the serious injuries that I've spoken about. We're also looking at a range of other places where—

Senator STERLE: Sure, but that's not on your menu now or your agenda now. What I've picked up—please correct me if I'm wrong—is that in the announcement there is no strategic office that is set to collect the data and put it all around the space between police, between hospitals, between providers of ongoing services for those who have lost legs and sight and all that. There's no view there in this announcement. You've just made it very clear that the Office of Road Safety is only to do those three issues that you—

Ms Spence : No, Senator. Just for clarity: what we have said is that, for the Office of Road Safety, the details of its functions are still to be finalised once the governance review has been completed. As Mr Foulds has already mentioned, the data role may well be a key focus for it, but there will also be programs to administer—

Senator STERLE: Sure.

Dr Kennedy : I should say that, as the secretary of the department, I'd be reluctant to establish data roles outside of BITRE because that is where most of my expertise lies in the collection and establishment and maintenance of databases.

Senator STERLE: Sorry, Dr Kennedy; I'm just going back. I remember what the Office of Road Safety used to do. I know there's been a call—this committee did an inquiry into road safety, and we were absolutely gobsmacked that we couldn't roll off the top of our tongues how many people are killed. Sorry, we can measure deaths pretty easily—

Dr Kennedy : But not injuries.

Senator STERLE: That's right. This is where I thought I had a glimmer of hope that this is what the Office of Road Safety was projecting itself to do.

Dr Kennedy : There's real hope here. We are well progressed on injury data now. We're right on our way to getting a national database for injuries.

Senator STERLE: Sure, but, just to cut it off so I can move on, that is not the intended role of the Office of Road Safety at this early announcement.

Dr Kennedy : No, it's being delivered through BITRE.

Senator STERLE: Yes, that's right. So who'll be responsible for ensuring that all the targets are met coming out of the Office of Road Safety, which Dr Dolman has put together? Who will that fall under? Who will be the boss to rant and rave if they're not met? We don't know? Too early yet?

Dr Kennedy : Ultimately, the accountability for effectiveness of the policies will lie with the department for the effectiveness of its advice and with governments for the implementation and decisions they've taken on policy. The key issue on this data—which I think is why we've put these numbers down, as Mr Foulds outlined—is that we want to be clear to the public when it's working and when it's not. Yes, we hold an accountability, but we did not want to put down numbers. For example, the states hold considerable responsibilities in road safety, but you're not interested in us trying to not focus on those key data on injuries and fatalities. We don't control all the levers, but we think it's reasonable that we report against them, so that's how it will work.

Senator STERLE: Yes. I'm just trying to tie in, because I'm a firm believer in the fine work of Professor Woolley and Dr Crozier, and their second point was:

Establish a national road safety entity reporting to the Cabinet minister with responsibility for road safety.

This means no disrespect; I just hate to see a little pocket in the corner of the department—I don't want to upset anyone—

Dr Kennedy : That's not my intent.

Senator STERLE: That's what I like to hear, but you know the frustration that we've had in this committee about where we're going.

Dr Kennedy : Even in the short time I've been coming, I think we can point to steps and improvements through the task force.

Senator STERLE: Yes, and I will say this: when I talk about what measures we are going to do to reduce road trauma, we're not even talking as a nation. There is no conversation from the government yet, and I don't expect you guys expect government to lead this. We're not even talking about ADRs and getting safer cars. That is a conversation for later. I have a couple of quick ones before I move into my last lot. Has there been any work done in the department on prevention of fires in vehicles? I believe this raised its head in a few forums. No?

Mr Foulds : Not specifically.

Senator STERLE: That's all right. These are my last ones. I just want to go into shipping very quickly. My question's in relation to certificates issued enabling entities to claim shipping taxation incentives. Mr Foulds, can you help me out here?

Mr Foulds : I'll try.

Senator STERLE: Okay. What is the Australian dollar value or cost of the following incentives for the calendar year 2018? I'll let you flick through to the appropriate section.

Mr Foulds : I won't be able to answer that here.

Senator STERLE: All right. I'll give you the question.

Mr Foulds : We'll have to take it on notice. I've got numbers, but they're not dollar numbers; they're just numbers of certificates.

Senator STERLE: Okay. That's going to help with one. Let's go for the 20 income tax exemption certificates issued.

Mr Foulds : In calendar year 2018, there were 22 certificates issued. Twenty were for income tax exemption. As to the number of notices issued and the types of tax concessions sought, there were two of those. The value of those we would not be aware of, because it's actually done by the ATO, so the Treasury would be able to provide you with the data on that.

Senator STERLE: All right. I'm in the wrong area, but let's get the numbers anyway. You said there were 20 income tax exemption certificates—is that right?

Mr Foulds : Yes, and one income tax exemption in the calendar year 2018. Each certificate or notice issued may relate to more than one type of tax concession. Out of the 22 certificates issued, four covered both income tax and refundable tax offset.

Senator STERLE: So there were four refundable tax offset certificates?

Mr Foulds : Yes.

Senator STERLE: And there were two accelerated depreciation certificates.

Mr Foulds : There were.

Senator STERLE: Okay, so we'll have to go to the ATO for that.

Mr Foulds : Yes.

Senator STERLE: You might be able to help me out here, then: in relation to accelerated depreciation, can you supply the committee with the names of the ships for which accelerated depreciation was claimed? I've got my pencil ready here. There were only two of them.

Mr Foulds : I'm afraid I'll have to take that on notice.

Senator STERLE: You don't have it there?

Mr Foulds : No.

Senator STERLE: Would anyone have it behind you? It's only two ships. Why don't I flag this, Mr Foulds? I'll make it easier for you? The department is working so collaboratively with the committee, which is great. Why don't I just put it on notice to be answered in the next 10 or 15 minutes, and then I'll finish my time while Senator Rice is asking her questions. Before we fold, if you could just give us two—only two—ships. Dr Kennedy? Could someone please get on and push a button. I just want to know the names of these ships. I don't want you coming back in two, three or six weeks. I'll ask one last question: can the department advise if any tax exemptions have been issued to passenger ships in each of the six calendar years from 2013 to 2018.

Ms Spence : We'll see what we can find out.

Senator STERLE: Okay. And, if so, which type of tax exemption and for how many entities, please.

Dr Kennedy : We'll just check. You will be more experienced in this than I, Senator, on the provision of this and the legal aspects of who should provide this to you. That's all. We'll check.

Senator STERLE: You know where it goes to. It's not a level playing field if Aussie ships are missing out and foreign ships are getting exemptions. I don't think it's an unfair question. You don't have to tell me. You're going to take on notice how much it was. And if you're going to take on notice how much it was then you shouldn't have any problem with telling us which ships they were. I'll rely on that information coming in the next few minutes while I hand over to you, Chair. That's me finished.

CHAIR: We need to explore it. If I'm not satisfied that we can knock this over then we will go to an early tea break and come back and attack it after dinner.

Senator STERLE: Now you don't need to.

CHAIR: It's not up to you. We've got others.

Senator STERLE: It's only Senator Rice. She's only got five minutes, hasn't she?

CHAIR: It's not just Senator Rice. We've got Senator Storer.

Senator STERLE: Crikey!

CHAIR: I'm going to look for a fairly firm indication—and everything is up for grabs, of course; if you delve into something and it goes haywire—from the senators, while I make this decision, as to how long they think they may need.

Senator RICE: Ten to 15 minutes.

Senator STORER: Five minutes.

CHAIR: Twenty minutes all up. I'll remain the pleasant person that I'm known to be until about six minutes past the hour. Senator, you have the call.

Senator RICE: Electric vehicles: I want to ask a really basic question as to whether the department or, if the department hasn't a view, whether the minister thinks electric vehicles are a good thing.

Senator Scullion: Probably not so much in Yuendumu at the moment, particularly if you're towing a trailer or a boat. I guess it's different in the middle of Sydney, if you can afford the vehicles. They appear to be quite an expensive item at the moment. Where I come from, there is no capacity at all outside of Darwin, where you have a garage or even access to 240-volt power. I think that is a real issue. Entry access is extremely expensive. As a Territorian, I don't see that there are spots for it, and I'm sure it's the case in other parts of remote Australia. Plenty of people who service their gardens and those sorts of things will need a trailer or something like that. So it's about anything you have to tow with. A lot of people in the Territory have said to me that it's going to be very difficult to tow a boat to go fishing and those sorts of things.

What do we think about it? Of course, it's all going to be part of the mix of getting around the place. It's fantastic for those people who can afford one. Most people who use electric cars live in the bigger metropolitan areas. But there are issues for remote communities, and they're certainly very nervous about how this transition is going to occur. Is it going to be compulsory and by a particular date? Are they going to simply confiscate the cars? Are they going to be unregistrable? Nobody really knows. There is a bit of a concern, particularly in those remote areas, for the power co-efficient and the capacity of people to afford such a vehicle.

Senator RICE: You don't sound very positive—a bit lukewarm. The government as a whole seems to be—

Senator Scullion: If you're an Aboriginal person, let's say you live in Gunbalanya, and you currently own a Toyota that you bought second-hand. It cost you about $15,000. You're never going to end up with an electric car, because you don't have the $40,000 entry level. You don't have access at the moment between there or anywhere else. So it's not about me seeming lukewarm. I'm just saying that there are some evident gaps between what is practical and what they're hearing, which is that there'll be a point in the time when these will be the only cars available. I'm just saying that the concerns that have been expressed to me have principally been through recreational fishing—people who travel but also people who live in those areas. But I don't think you should characterise my process as lukewarm. It's just an evident commentary about the lack of infrastructure and the cost of getting into these vehicles at the moment, which people are concerned about.

Senator RICE: Absolutely, they are too expensive, which is why they need to be supported. So we've got the energy minister—it's sounds like he's pretty similar to you, Senator Scullion—distributing memes from Top Gear with EVs out at camp sites being plugged into diesel generators, and yet we've got multiple senior members of the government, including the current Treasurer, spruiking electric vehicles and the government's support for them in their electric communications material. I don't hear a consistent message from the government on electric vehicles at all.

Senator Scullion: Well, that's probably unsurprising. We all have different portfolios and we come from different places. The Treasurer comes from an inner metropolitan area where affordability and infrastructure already exist. I come from a place where there is no infrastructure and we have some real issues around affordability.

CHAIR: Senator, to keep within your promised 15 minutes, you should not engage in debate with someone you're not going to beat.

Senator RICE: Yes, I'm about to move on. The lack of clarity is very clear. To the department, then: can we please get some information about exactly what the $400,000 for a national strategy for electric vehicles is going to be going to?

Ms Spence : I'd have to take the detail on notice. I don't have that information with me.

Senator RICE: Oh, come on!

Ms Spence : I'm sorry.

Senator RICE: It's been spruiked! It's been one of the big things that everybody has seen in the budget. It's $400,000 for an electric vehicle strategy.

Dr Kennedy : Are you referring to the environment and energy department's role in this?

Senator RICE: Well, this is part of the confusion: who in government is responsible for rolling out an electric vehicle strategy? We've got lukewarm support; we've got the minuscule amount of $400,000 going towards EVs, and nobody even seems to know who's responsible for it.

Ms Spence : One of the reasons why there are some questions for us is that we're working with the COAG Transport and Infrastructure Council. We've got a low- and zero-emissions vehicle working group, which is to report back to the Transport and Infrastructure Council with a work program on activities to support the rollout of electric vehicles, looking at things like infrastructure and what the up-front costs are.

Senator RICE: So is that the strategy? Who is being tasked to develop the strategy?

Ms Spence : The work that's being done through the COAG Transport and Infrastructure Council will be an important input into the strategy, and we'll be working with our colleagues in the Department of the Environment and Energy.

Senator RICE: Who's going to lead the development of the strategy?

Ms Spence : The Department of the Environment and Energy have announced the strategy and they will be the lead agency.

Senator RICE: So you've got the strategy, which is going to inform or be informed by the COAG process.

Ms Spence : Yes.

Senator RICE: What's its relationship with the Ministerial Forum on Vehicle Emissions?

Ms Spence : Only that the Deputy Prime Minister is a member of the ministerial forum and he's the chair of the Transport and Infrastructure Council. That's the link between the two pieces of work.

Senator RICE: Who's responsible for the work that's occurring out of the Ministerial Forum on Vehicle Emissions? Who's the lead agency for that?

Dr Kennedy : We have different leads on the three components.

Ms Spence : We provide the secretariat for the ministerial forum. The Department of the Environment and Energy leads on fuel standards. We're responsible for the fuel-efficiency standards and noxious emissions.

Senator RICE: Okay, so you're responsible for whether or not there is going to be a light-vehicle efficiency standard?

Ms Spence : We're responsible for providing advice. Sorry, I'm not trying to be cute here, but we're responsible for providing advice on fuel-efficiency standards and noxious emissions.

Senator RICE: Providing advice to who?

Ms Spence : The ministerial forum.

Senator RICE: Who will end up making the decision as to whether we're going to have a standard?

Dr Kennedy : The Deputy Prime Minister is the lead minister on the issue. A government decision would be made in the usual way, through a cabinet process.

Senator RICE: Would you expect that a decision on a light-vehicle fuel-efficiency standard will be part of the electric vehicle strategy?

Dr Kennedy : That's a matter for government.

Senator RICE: Have you got any ideas of what components, at least from the department of transport's perspective, will be in the strategy?

Ms Spence : As I said, it'd be informed by the work we're doing through the low- and zero-emissions vehicle working group, so, as I said, matters like infrastructure, charging infrastructure, anything that we can do to increase model availability, work around education and awareness raising, the possibility of whether we needed to mandate an electric vehicle plug standard—they're the sorts of issues that we'd be looking at.

Senator RICE: And a light vehicle efficiency standard is potentially in the mix but not necessarily?

Ms Spence : Well, Senator, I've just run through the things that we'd be thinking of in terms of promoting electric vehicles.

Senator RICE: Okay, but you didn't include the light vehicle efficiency standard in that list that you ran through, so are you ruling it out?

Ms Spence : I'm not ruling it out. I'm just ruling out the things that I'm aware of that we will be focusing on. But I'm not ruling it out.

Senator RICE: Going back to the $400,000: you don't know what it's going to be spent on. Would it be correct that that $400,000 would only be to develop the strategy and wouldn't have resources in that to actually implement it?

Dr Kennedy : I think it would be safest to address questions on the $400,000 to the department that leads on it, which is the environment and energy department.

Senator RICE: So you've got no views as to what the $400,000 should be spent on?

CHAIR: It's not a question of views. The witnesses have indicated to you that they don't have the detail. You're in the wrong estimates.

Senator RICE: And I will be heading straight back there!

CHAIR: I tell you what: why don't you head off early? You'd get a five-minute start.

Senator RICE: In fact, you're in luck, Chair, because that's it—I have finished!

CHAIR: You are wonderful, Senator! I never thought I'd ever say that—

Senator RICE: That's my last question with you as the chair of RRAT, and I think we'll both be grateful for that!

CHAIR: And I'm going to miss you—

Senator RICE: Not!

CHAIR: not. Senator Storer.

Senator STORER: I wanted to ask questions related to electric vehicles—the small electric vehicles, three-wheelers, that are actually prominent now in Europe. I hope the department may be able to answer this question; I may have been late to put it to the Australian Transport Safety Bureau. So I will just ask only if work is underway to align Australia's vehicle safety regulations with Europe's with regard to small electric vehicles—these are three-wheelers. Are you aware of any?

Ms Spence : I am not aware of any. I'll look to my colleagues—

Senator STORER: Anyone?

Ms Spence : No.

Ms Nyakuengama : To align with European—

Senator STORER: European standards and safety regulations with regard to small electric vehicles—these are three-wheelers—

Ms Nyakuengama : Not at the moment, no.

Dr Kennedy : We will take it on notice, because I did note at the last estimates that we said no to a couple of these questions and found out that our colleagues had been working on them, because there's a lot going on. So, if you don't mind, we will say no but take it on notice.

Senator STORER: Okay. Has consideration been given to developing fit-for-purpose Australian design rules for non-traditional lightweight EVs—these are three-wheelers limited to operations around metropolitan areas at low speeds, like less than 50 kilometres. That would be my question.

CHAIR: Bring back the Vespa—an electrified Vespa!

Dr Kennedy : The answer is: not that we're aware of, but we will double-check for you.

Senator STORER: Yes, please, if you could. Then I wanted to ask about trackless trams. This is a technology that's showing great promise in Europe as well as China—

Dr Kennedy : China, I believe, has got it.

Senator STORER: Yes. It is delivering a similar service to traditional trams but at a fraction of the cost. The cost of laying normal trams in Sydney was $120 million per kilometre; on the Gold Coast, it was a similar figure; in Canberra and Newcastle, $80 million per kilometre. Trackless trams are said to be a fraction of this cost. Is the department aware of the development and use of trackless trams in Europe and China?

Dr Kennedy : Yes, we are aware, and there have been a number of interesting articles from, I think, Professor Peter Newman from Western Australia on this technology. We've been watching the research and the articles with interest. I don't know if I'm about to pre-empt the question, but I'm not aware of any proposals—

Senator STORER: But is there any work? Is the department doing any work on trackless trams?

Dr Kennedy : No, other than watching with interest the way the technology is evolving. I have to admit, it is an area of interest that I will be interested in raising with my state colleagues. As you know, most of the infrastructure projects delivered are state projects—

Senator STORER: Yes.

Dr Kennedy : with the Commonwealth. So, beyond a watching brief, the answer would be no.

Senator STORER: Okay.

Dr Kennedy : So we have no proposals, and I'm not aware of any proposals, but I can definitely say we are definitely aware of it and it is one that seems like a highly prospective technology.

Senator STORER: That's good to know. I hope that it will lead forward, because it is stated to be a fraction of the cost and those figures of $120 million and $80 million per kilometre are quite—

Dr Kennedy : As you know, in Adelaide there are very interesting forms of transport—the busways et cetera.

CHAIR: Are there any plans to retrofit Vespas and electrify them?

Dr Kennedy : Not that I am aware of!

CHAIR: Senator Sterle asked me to ask the question!

Dr Kennedy : Lots of electric bikes around!

CHAIR: Dr Kennedy, I want to thank you for the time I've been chair with you and your officers.

Senator STERLE: Did you get the names of the ships?

Dr Kennedy : Sorry, we haven't got them.

CHAIR: Thank you and all your officers for their efforts. Sometimes it gets a bit scratchy, but we do appreciate it. Thank you, Minister, for today and thank you to the secretariat and our good friends in broadcasting.

Dr Kennedy : Chair, we really appreciate the interest and passion this committee shows for these policy areas, including your own, Senator. You have led a lot of very important inquiries in aviation and other areas of safety, in shipping. Congratulations on your achievement.

CHAIR: Thank you.

Dr Kennedy : We know we don't always satisfy you, but we do our best and we very much appreciate the Senate's oversight—

CHAIR: Thank you, Dr Kennedy.

Committee adjourned at 18:01