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Economics Legislation Committee
Department of the Treasury

Department of the Treasury


CHAIR: We now call the Treasury Fiscal Group and we welcome the officers. Is there anything you would like to open with? You haven't just had a press release about the bank or anything that we did not know about, like the last witnesses? No? Then we will go straight to questions with Senator Peris.

Senator PERIS: I want to ask questions around asset recycling. Is it correct that both New South Wales and the ACT have been allocated funding under the Asset Recycling Initiative?

Mr White : Yes, we have signed agreements with the ACT and with New South Wales. Our Treasurer and their treasurers have both signed agreements.

Senator PERIS: Is it correct that the New South Wales asset, which the government were potentially looking at selling, has not been sold yet but that Commonwealth funding has been committed?

Mr White : We have signed an agreement that is conditional so there are still conditions that need to be met before they can get any money. Part of that is selling the assets, but you can sign an agreement before assets are sold.

Senator PERIS: Has the Northern Territory government formally applied for consideration for funding under the asset recycling scheme?

Mr White : We have been talking with the Northern Territory government about applying. I understand that maybe their Treasurer has spoken to our Treasure as well, but there is no agreement with them as yet.

Senator PERIS: So you have only been in discussion with them, and there is no agreement?

Mr White : No agreement has been signed yet.

Senator PERIS: The Northern Territory governments sold the Territory Insurance Office for $424 million to Allianz Insurance and People's Choice Credit Union. Is that sale eligible for funding under the asset recycling scheme?

Mr White : There are eligibility criteria for assets being sold. The criteria are: the assets have to be significantly influenced by the initiative; and a significant interest has been sold. Basically, as long as it meets those criteria, it is eligible.

Senator PERIS: Is TIO eligible for that? Does it fit within the criteria?

Mr White : That is one of the questions that we are talking about. But if you look at that compared to other asset sales, it does not look very different.

Senator PERIS: So it could be eligible?

Mr White : It is most likely eligible.

Senator PERIS: With the TIO, which was sold almost a year ago, there has been no indication yet as to whether—well, you have just said today that it is eligible. Is there any reason why it was sold over 12 months ago and now we are still in discussions with it?

Mr White : The first part of the process is for state governments and territory governments to bring proposals forward. They put schedules to us and to the Treasurer for the Treasurer to agree. The process is really driven by the states.

Senator PERIS: You said the 'schedules'. Has the NT government put any schedules to you for the sale of TIO?

Mr White : We have talked to them about a schedule that does not necessarily include one thing, but they have been in discussions about the schedule, including asset sales and potential infrastructure that the money would be recycled into.

Senator PERIS: Is that one of the reasons why it has not been furthered down—because they cannot come up with infrastructure—

Mr White : No. That is not the reason at all. We have had longish discussions with ACT and New South Wales. Those ones both took a little while to come to fruition. States can choose whether they want to have one or more asset sales and one or more infrastructure projects that they want to put into them. We do not have to do it right at the time. In many ways, it is easier for you if you are going to have multiple things to be one agreement than if you are doing multiple agreements.

Senator PERIS: So there is no specific time lapse?

Mr White : No.

Senator PERIS: So that is still potentially on the table?

Mr White : Yes.

Senator PERIS: And it is only just in discussions?

Mr White : Yes.

Senator PERIS: My understanding is: from that $420 million, if they fit the criteria, and the scheduling is adhered to, the Northern Territory would be eligible for $63 million—15 per cent of the sale. Is that correct?

Mr White : That is broadly correct. The asset sale proceeds then have to be put back into new infrastructure. Provided they put all of the money back into new infrastructure, that 15 per cent would be roughly what you said. If they do not put it all back in, it is the amount that they put back into infrastructure that gets the 15 per cent bonus. For example, if they only put in $200 million, they would only get $30 million.

Senator PERIS: Some time ago, I asked Mr Mrdak in regard to the Darwin Port. It was a lease. The Darwin Port was sold or leased—whichever way you look at it—for $506 million. Is that eligible for asset recycling?

Mr White : At face value, it looks like it would be eligible. We would have to check, but there does not appear to be any reasons why it would not be.

Senator PERIS: Have you had any discussions with the NT government about the port?

Mr White : As I have said, we have discussed with them a number of things. That asset sale has been included in those discussions.

Senator PERIS: The Northern Territory is under resourced at the moment with infrastructure funding. Is there anything that we could take back to them to hurry things up, I suppose?

Mr White : It is not obvious to me in the discussions that have been had. We provide states and territories with, effectively, a pro forma piece of paper about the sorts of things that we need from them.

Senator PERIS: Have you provided that pro forma?

Mr White : Yes, we have. I think we have provided it to them. I think they have provided information back. We have had discussions about whether it meets our needs or not. We have had a bit of to-ing and fro-ing about these sorts of things. But we would expect that, at some point reasonably soonish, there is probably a good chance that they would provide us with an approach that we can then take to the Treasurer.

Senator PERIS: The Northern Territory government have established a Northern Territory Infrastructure Development Fund. They are putting $200 million from the sale of the TIO into this fund. Would such a fund be eligible for Commonwealth contribution under the recycling scheme for the sale of TIO and the port?

Mr White : What matters to us is that: (1) they sold an asset, and (2) they are going to build a new asset. So the fund itself, I think in that case, probably not. It will depend on what they want to build using that money, not the fund itself.

Senator PERIS: At the moment the Northern Territory government—from my understanding—have not given you any indication of what they would potentially be looking at building. Is that what you are saying?

Mr White : If I said that, I did not mean to. We have talked to them about asset sales and about potential projects.

Senator PERIS: The fact is that the New South Wales and the ACT governments have received asset sales and were eligible for the Asset Recycling Fund, and they took that to an election mandate. Is that anything to do with the Northern Territory?

Mr White : No, Senator.

Senator KETTER: In relation to an issue of spending, would you agree with me that spending has increased by about 1.3 percentage points as a proportion of GDP since the Pre-Election Economic and Fiscal Outlook, from 24.6 per cent up to 25.9 per cent?

Mr Flavel : If the figures you are quoting are just the percentages of payments to GDP from the PEEFO document and the 2015-16 budget figures, that is correct. I am assuming, of course, that we are talking about the same year.

Senator KETTER: Would you also agree with me that 1.3 per cent equates to something like about $20 billion as a proportion of GDP, if you assume a GDP of $1.6 trillion?

Mr Flavel : Again, if that is just the arithmetic, it is correct.

Senator KETTER: I will just ask for your advice as to how this has contributed to the worsening budget outlook?

Mr Flavel : I am not sure I can quite answer that question.

Senator KETTER: Would you agree that spending is higher than what was originally expected?

Mr Flavel : Spending can change for a whole variety of reasons: the state of the economy, which can impact on the denominator—if you like—when talking about spending as a proportion of GDP, and other parameter and program-specific variations can impact on spending and policy decisions. There is a whole variety of things that can move around.

Senator KETTER: Would you agree with me that there has been a budget deterioration?

Mr Flavel : I think the concept of the state of the budget is a bit broader, necessarily, than just the change in spending as a proportion of GDP. Obviously, it takes into account both the spending and revenue sides and the broader macro factors that might actually have an impact on the state of the budget.

Senator KETTER: I am interested in your reaction to a quote from Ken Henry, who said:

… a bit more than half of it—

when he was talking about the budget deterioration—

is explained by a deterioration in revenue performance; by the tax system not delivering in the way that the tax system has delivered in the past.

He said that in September of this year. He also said:

… we have a tax system which apparently is generating a smaller proportion of gross domestic product as government revenue, as the years go by.

Would you agree that this is a fair assessment of what is driving the deficit?

Mr Flavel : I would simply point to the comments I know Senator Cormann made this morning and, indeed, the Treasurer has made in the last couple of weeks, about the level of spending at 25.9 or 26 per cent of GDP being near record highs.

Senator KETTER: Which, as we have already indicated, is higher than the PEEFO figure.

Mr Flavel : Again, if we are talking about a particular year—the year 2015-16, for instance—as I said at budget this year, the level of spending or payments to GDP was 25.9 per cent. I do not have the PEFO document in front of me, but I take at face value that it was the figure that you mentioned, which was lower than that.

Senator KETTER: Would you agree with me that revenue as a proportion of GDP is not growing as we would have expected it to in years gone by?

Mr Flavel : That is a bit more complex than at face value, I guess. There have been a number of things happening on the global economic outlook: well-documented changes in the price of iron ore, and other changes insofar as they impact on revenue. So to say something was expected or not, I think, is actually a bit difficult.

Senator KETTER: Okay, but revenue as a proportion of GDP is a fairly straightforward proposition. It is a fairly straightforward question to ask: whether it is growing as it has been in years gone by.

Senator Ryan: With respect, I think that is subtly different from what you asked a minute ago. You asked about an expectation, which I think Mr Flavel answered, whereas now you are asking for an observation of fact, which I think is easier for him to observe. But, if you are asking him to agree, I think 'observe' would be more correct. Agreement implies agreeing with the conclusion you make. Observing a fact is another matter.

Senator KETTER: Perhaps, Mr Flavel, you would agree with my second proposition.

Mr Flavel : Could you restate that for me, please.

Senator KETTER: I will have to remember what it was. I seemed to do better the second time around. It is basically the straightforward proposition that revenue as a proportion of GDP is not growing as we would have expected it to in previous years.

Senator Ryan: That is the first question you asked, which he already answered, about expectations. Your second question—actually, I cannot remember it; I will check the Hansard. But it did not have the word 'expectation' in it.

Senator KETTER: So it is not growing as it has in previous years. Perhaps I will rephrase it that way.

Mr Flavel : Without wanting to overcomplicate it, I think that that relies on what period you are talking about. If you look back through historical records, tax receipts to GDP ratios move in line with general economic developments and for other policy related reasons. It is hard to say something is expected without actually stating what period you are in fact talking about. As you know, we had a pretty unusual period in history with a quite significant terms of trade boom. That had particular impacts on tax collections. Depending on what period you are talking about, what is expected or not expected can be a quite difficult concept.

Senator KETTER: Would it follow that the budget deficit is being driven by both higher spending and lower than anticipated revenue collections?

Senator Ryan: With all due respect to the officials, I think that is a genuine political debate, and you and I could probably debate that. The budget deficit is driven by the simple fact of the government spending more in payments than it receives in revenue.

CHAIR: And we had an outline of that from the finance minister this morning.

Senator Ryan: What you are putting, Senator Ketter, is actually contestable because it has various assumptions.

Senator KETTER: All right. I might hand over to Senator McAllister.

Senator McALLISTER: This morning a number of government ministers, with the Treasurer, announced quite a significant change to the arrangements for family tax benefit and reversed measures that had been in last year's budget. I really just want to talk with you to get a clearer understanding of the financial impacts of the announcements this morning. I just wondered if we could walk through some of those elements in the package.

Ms Croke : Those questions are really best answered by the Department of Social Services. They have policy responsibility for family payments—or the Department of Finance.

Senator McALLISTER: Right, but the Treasurer was announcing them.

Senator DASTYARI: You did not provide advice to the Treasurer about it and the cost implications?

Ms Croke : In the process of ERC considerations, we provide advice on a whole range of matters. I do not have anything in front of me at the moment.

Senator DASTYARI: But the Treasurer announced it.

Ms Croke : With Minister Porter, the minister responsible for social services.

Senator DASTYARI: But it was the treasurer's announcement.

Senator Ryan: I saw part of the press conference. I think it was Minister Porter's announcement. I think, to be fair—

Senator DASTYARI: He was just there for moral support.

Senator Ryan: He made some comments. He was there as well. It was joint, I think. But I think to be fair, the officials are saying that if you have got detail questions around that particular policy—

Senator DASTYARI: Why don't we ask the questions and see if you can answer them?

Senator Ryan: With the proviso that they have already said that Community Affairs and DSS is the—

Senator DASTYARI: Sure, but you would assume there would be budget implications, and the head of the budget group being here would make you think 'budget implications'. You would think that talking to budget group at budget estimates would be an appropriate place to ask questions.

CHAIR: Senator Dastyari, it is my experience that this department does not shirk any questions, and it would be your experience as well. So you would be wise to be guided.

Senator McALLISTER: Which measures from the 2014-15 budget were abandoned?

Ms Croke : I will do the best I can without any notes in front of me. I know that the FTB measure changed eligibility for FTB B from the youngest child being six and moved it to the youngest child being 13. That was one of the main ones. In the 2014-15 budget there were a range of measures where the government made decisions to pause the indexation of FTB thresholds. I do not have the list in front of me, but some of those are not proceeding any further. The detail, though, as I said, would be better answered by the Department of Social Services.

Senator McALLISTER: We might put them on notice. I am sure that they are being positioned very clearly by the Treasurer as part of a budget strategy. I appreciate that you have come today unprepared to answer them, but we might put some specific questions on notice about that. If we were able to get those reasonably quickly, it would be helpful.

Ms Croke : Department of Social Services is on tomorrow with the Community Affairs Committee.

Senator KETTER: I have some questions on the final budget outcome for 2014-15. I just want to establish a couple of things first. I want to confirm that the underlying cash balance for 2014-15 was a deficit of $37.9 billion.

Mr Flavel : That is correct.

Senator KETTER: So the deficit since the government took office has increased by $13.9 billion.

Mr Flavel : What is your starting point? The way that governments would tend to do this is that they would put an estimate in the budget in May for the expected outcome for the year, which I think was something like $41.1 billion, and the actual deficit came in at $37.9 billion.

Senator KETTER: My starting point was the 2013 PEFO.

Mr Flavel : I do not have PEFO in front of me, unfortunately. So I will have to rely on your statistics.

Senator KETTER: Which was a $24 billion deficit.

Senator Ryan: Given that the officials do not have PEFO in front of them, I think it is, with respect, unfair to ask them to comment on a document that they do not have.

Mr Flavel : But if all you are doing is saying that PEFO said this number and we have got the FBO number and you are just taking it away, then that is fine. I just do not have PEFO in front of me to verify your arithmetic. But I am sure that it will be read into Hansard and corrected if it needs to be.

Senator KETTER: Are you familiar with figures for the Australian government general government sector budget aggregates?

Mr Flavel : By 'aggregates', if you mean underlying cash balance and fiscal balance, we can answer questions on those.

Senator KETTER: We know that from the 2015-16 budget receipts are up $1 billion, payments are $2.9 billion down from the 2015-16 budget, net future fund earnings are down $0.7 billion.

Mr Flavel : That is correct.

Senator KETTER: Are you able to provide some detail behind and the reason for the movement in receipts?

Mr Flavel : If you have a copy of the final budget outcome document there, it actually does lay it out. For instance, page 4 of the document lays out the reasons why, for instance, receipts were different from estimated, and page 6 of the document outlines the main reasons that payments came in differently from that which was expected at the time of the 2015-16 budget.

Senator DASTYARI: I just want to be sure that we are saying this right. So the Treasurer was part of an announcement this morning and was taking questions regarding the budget implications of the announcement, but no advice was either sought or provided by Treasury as to the budget implications of what he was announcing?

Senator Ryan: Hang on, Senator—

Senator DASTYARI: That is my question.

CHAIR: Are you framing it that way?

Senator DASTYARI: I am asking the question.

Senator Ryan: Advice goes to ministers for decision making that is not necessarily made public.

Senator DASTYARI: I am not asking what the advice was. You know the rules. I am allowed to ask whether advice was given.

Senator Ryan: I will let the officials answer that, but the point I am making is that there is advice to ministers and to cabinet and cabinet committees that is not necessarily published and that is not subject to FOI and estimates.

Senator DASTYARI: Of course.

Senator Ryan: So, with that proviso—

Senator DASTYARI: But, Senator Ryan, as I understand it, the tradition with this committee, especially with Treasury, has been that it is entirely appropriate for us to ask if advice has been sought and provided. The nature of what that advice is, is deemed advice to government, and we do not ask questions about what the advice is. My question is: was advice sought or provided?

Ms Croke : I am happy to be corrected but I thought what I said was: yes, we did provide advice through the regular ERC process.

Senator DASTYARI: So when was advice provided?

Ms Croke : It was in the last couple of weeks, from recollection.

Senator DASTYARI: Is that—

Mr Flavel : I do not want to put words in my colleague's mouth, but she is simply making the point that advice was provided, but, in terms of the specific details, we just do not have them here, in terms of the individual measures and the costing.

Senator DASTYARI: So: advice specifically as to the budget implications of the measures?

Ms Croke : It was through the ERC process; that is the nature of that advice that would be provided to ministers.

CHAIR: I hope so; otherwise, they would be asking you.

Senator DASTYARI: Could you say that again, Ms Croke?

Ms Croke : In the nature of providing advice to ministers through the estimates Expenditure Review Committee, that would be the type of advice that would be provided, yes.

Senator DASTYARI: Sorry—it is unfathomable to me that you had the Treasurer doing an announcement today about the budget implications of measures; you are budget group, you come to Senate estimates, and you do not bring with you information about that.

Senator Ryan: What the official just said was that advice was provided through——

CHAIR: You asked the question—

Senator DASTYARI: Yes, but, Senator Ryan, the second we start asking any questions as to the budget implications, we are told, 'No, we don't have this information.' I just find it unfathomable that we have a department here—

CHAIR: Whoa, whoa, whoa! Senator Dastyari!

Senator Ryan: The officials made clear they provided advice—

CHAIR: Which was your question.

Senator Ryan: which is exactly as you would expect through a MYEFO, budget, ERC, cabinet process.

Senator DASTYARI: Sure, but, Senator Ryan, my issue is this. I am saying: we are here for another day; I think we have to find an opportunity to get this information, but when asking questions like, 'What is the financial impact, in both the underlying cash and fiscal balance terms, of each of the measures that were announced this morning?' we are being told that you do not have that information with you.

Ms Croke : I do not have it with me.

Senator DASTYARI: When can we get it?

Senator Ryan: The officials have said they will take the question—

CHAIR: On notice, which is—

Senator DASTYARI: But this is unbelievable! I am sorry. No. I am not copping it. No, this is ridiculous. It is ridiculous.

Senator Ryan: You have another department with policy responsibility appearing before estimates tomorrow in another committee. The officials have said here today that they will take any questions they do not have the information for on notice, which is standard practice.

Senator DASTYARI: We have a Treasurer who stood up this morning—this is not like—

CHAIR: We also had an ASIC that just put out a press release about a bank that we did not know about. Come on; it is not unusual.

Senator DASTYARI: This is what the Treasurer was asked this morning—

CHAIR: If it had happened two weeks ago, you might have a point.

Senator DASTYARI: The Treasurer was asked this morning: 'Can I clarify: so the revamp of all these measures remain budget neutral insofar as it is going to achieve the same saving? Is that correct? Could you tell us what the saving is? What is the new forward estimate?'

We want to be able to ask the department questions on that. We are being told that, yes, work was done; yes, advice was provided to government. We want to understand what was announced this morning and what the budget implications are. We have the head of the budget policy group and we have the senior policy division head here, and we are being told that the budget group is not in a position to answer questions on the budget implications of an announcement made today. It is ridiculous.

Senator Ryan: What you are being told, Senator Dastyari, is that, if you have questions for the Treasurer, there is a forum in which to ask questions of the Treasurer.

Senator DASTYARI: I am saying I have questions for the budget implications of what the Treasurer said. Wasn't the Treasurer saying that this morning?

Senator Ryan: Can I finish? I did not see all the press conference this morning, Senator Dastyari, but you have not just been told that. You have also been informed that the department with policy responsibility are appearing before estimates tomorrow, and they may have an answer to your question. They will have details around that answer as well.

Senator DASTYARI: My question is: when can we get that information? This is information that must exist somewhere. Surely someone can bring it. We are here all night. We are here tomorrow. Surely someone can bring it.

Mr Flavel : I actually think it is a matter for the Treasurer. You read his statement this morning. He simply referred to the fact that the package of measures was budget neutral. In terms of the release of details of individual measures, there is nothing unusual about the fact that he would—

Senator DASTYARI: Hang on. No, no, no, Mr Flavel! You do not get to do that!

CHAIR: Senator Dastyari, keep the theatre down.

Senator DASTYARI: No, this is ridiculous. This is ridiculous! This is Treasury!

CHAIR: Just relax, take a pill and address the officials appropriately.

Senator DASTYARI: Mr Flavel, how is it inappropriate—not wrong—for us to be able to ask you questions?

Senator Ryan: Senator Dastyari, a lot of work is done in the department, as you would appreciate. There is an update coming. MYEFO is set to a legislative timetable, and that is when revised numbers on the budget and on changes to policies and parameters are all published. That is the time when they become available: in that regular publication.

Senator DASTYARI: Senator Ryan, we have Treasury officials three times a year where we have the opportunity to ask them questions within the scope. There are many things that go on in this committee that perhaps can be argued and questions that get asked that, because of the very liberal interpretation of the words 'Senate estimates', perhaps sometimes sit outside the scope. We will put them on notice, but I believe—

CHAIR: In the interests of goodwill—

Senator Ryan: I will take the questions on notice, as I can, as the minister at the table.

Senator DASTYARI: Senator Ryan, my question is—

CHAIR: Is this another question? They have already taken the one about how much it costs.

Senator DASTYARI: We will do this with every single one of these. That is fine. I have all night. It is not going to bother me.

CHAIR: Well, I have until Sunday. It is fine; my tent is bigger than your tent.

Senator DASTYARI: I have two young kids that are two and four, so I have to go home.

Senator Ryan: We can shortcut this, but I am happy to answer them on a regular basis, if you want to go through one by one. I will take them on notice. I have made clear that the MYEFO is coming out within the next few months according to the timetable. That is the place where details of this nature are usually published, and they will be published as they always are, and that is when this information becomes available.

Senator DASTYARI: Ms Croke, was advice provided to government? I just want to check this. Was advice provided to government looking at the financial impact in both underlying cash and fiscal balance terms of each of the measures individually? Was that part of the advice?

Ms Croke : That would have been part of the advice, yes.

Senator Ryan: We have to be careful that we do not go to the content of advice that might be going to a cabinet committee.

Senator DASTYARI: No, no. I am asking whether there was advice.

Senator Ryan: You asked about content there, the content of what was in advice, and not about a fact. I do not know the previous standing practices in this committee, but you said before that the practice of this committee was to ask whether advice has been given. You were asking about—

Senator DASTYARI: And I asked whether advice—

Senator Ryan: whether the content of advice included different measures.

Senator DASTYARI: No, I did not ask what the advice—no, no. Senator Ryan, you are not going to bully me.

CHAIR: Please, one at a time! I chair this. Just hang on. One at a time!

Senator Ryan: You asked about the content of advice and whether it included particular measures, not whether advice had been given.

Senator DASTYARI: I said—

CHAIR: No, stop!

Senator Ryan: That is the point I am making. I am just saying you are dancing on the issue of content.

Senator KETTER: Could I have a little time?

Senator DASTYARI: I am getting nowhere, so you may as well jump in.

CHAIR: Senator Ketter, with forbearance.

Senator KETTER: With respect, Senator Ryan, we have had the Treasurer make an announcement that the previous package of measures would have had a value of $3.7 billion. The new measures, as I understand, are $2.4 billion. There are obviously figures and costings, simple arithmetical procedures, that should be a phone call or an email away. We should not have to put that on notice. That should be something that is available to us.

Senator Ryan: Guess what? As I am not the Treasurer, I do actually have to take it on notice. I have probably seen similar material to what you have, Senator Ketter, and I will take that on notice, but, as I have said previously, you have the capacity to also interrogate the Department of Social Services.

Senator DASTYARI: You said budget measures around budget implications. I know what is going to happen. We will go to them tomorrow, and they will say, 'Some of the specific questions you're asking relate to Treasury.' We both know how that goes. By the way, can I say how reasonable Senator Ryan has been, and I note very clearly that Senator Ryan is not the minister; he is acting for the minister, and I understand that. But the bit I am in shock about is that Treasury would not come with this information. It is a phone call away. I do not understand why you do not just bring the information. How many thousand people work at Treasury?

Mr Flavel : It is well under 1,000.

Senator DASTYARI: That is because of cuts by this government.

CHAIR: Senator Dastyari, we need to go to another question because the assistant minister has taken it on notice.

Senator DASTYARI: Okay, we will do this one by one then.

Senator Ryan: Can I be technical just for a minute here? Technically, after these come out in MYEFO and then there are additional appropriation bills that are dealt with next year, this would be something that we would deal with at the next estimates committee hearings, okay? If we want to get technical, that is—

Senator DASTYARI: If you want to get technical, the mere fact that information consists of advice to government itself, as you know, as with legal advice—I am reading the standing orders here—is not a ground for refusing to disclose it.

Senator Ryan: You are the only person to have used that phrase today, Senator Dastyari. It has not come from me.

Senator DASTYARI: If you want to get technical in here—Senator Wong has now joined us, which will make it all much more interesting.

Senator KETTER: Aren't we entitled to know what precise measures from the 2014-2015 budget have been abandoned?

Senator Ryan: I am not the minister, but I will take it on notice.

Senator DASTYARI: When can you get this information to us? Surely you can bring someone here who actually knows about what the Treasurer announced.

Senator Ryan: I have already taken it on notice.

CHAIR: Yes, you have already taken it on notice.

Senator DASTYARI: This is Treasury!

CHAIR: Sam, it is getting a bit late for the prime-time news.

Senator DASTYARI: This is ridiculous.

Senator WONG: I apologise, but I had to do an interview. Mr Flavel, what is your position?

CHAIR: He is the division head.

Senator WONG: I can read that, but who is acting for Nigel Ray?

Mr Flavel : Michael Brennan commenced as deputy secretary of the group yesterday.

Senator WONG: And he is not here?

Mr Flavel : He is not appearing as a witness.

Senator WONG: Why is that?

Mr Flavel : Because he started yesterday and the period that we are talking about was, I thought, supplementary budget estimates. I have been acting as the deputy secretary up until Monday—from when Nigel Ray finished, up until Monday.

Senator WONG: Sorry—Mr Brennan, was it?

Mr Flavel : Yes.

Senator WONG: Is he from Treasury or is he external?

Mr Flavel : Sorry?

Senator WONG: Was he a Treasury officer previously?

Mr Flavel : He was formerly deputy secretary in the Victorian Department of Treasury and Finance.

Senator WONG: At some point, there will be a woman appointed to a deputy secretary position, I assume.

Mr Flavel : Sorry?

Senator WONG: I said that, at some point, we might have a woman appointed to a deputy secretary position, I assume?

CHAIR: Any other questions?

Senator WONG: I have some. I apologise that I had to go and quickly do a media interview. I did come in at the end to hear of some difficulty in providing some of the costings around the FTB measures which were announced today. I have to say I find that a little bit bemusing. I would hope we could at least get the elements that grounded the costings which were released today.

CHAIR: We have been there at quite some length.

Senator WONG: Perhaps if you would just humour me—

CHAIR: I am a humorous guy, but the minister has taken two of those questions on notice.

Senator WONG: I want to understand what has been taken on notice, and I want to explore the process of the costings.

CHAIR: No worries.

Senator WONG: Thank you. I have not been here at all today, so you have had a very lovely run without me.

CHAIR: I have missed you!

Senator WONG: I bet that is not true.

CHAIR: It is true!

Senator WONG: What has been taken on notice, first? Can someone tell me what has been taken on notice? The Treasury should tell me what they have taken on notice.

Senator Ryan: I have taken a number of questions on notice.

Senator WONG: What does the department understand has been taken on notice?

Senator Ryan: I normally make it a habit to check the Hansard pretty religiously to check what has been taken on notice.

Senator WONG: You are the minister, with respect—

Senator Ryan: Yes, exactly.

Senator WONG: The department will prepare the answer. What does the department understand has been taken on notice?

Mr Flavel : The information that was taken on notice was the breakdown of the individual measures that form part of the announcement that the Treasurer and the Minister for Social Services made this morning.

Senator WONG: You cannot tell us about the financial impact that is set out in the EM?

Mr Flavel : I think Ms Croke has said that there are some things that she can provide, but we do not have the full details with us, that is all.

Senator WONG: The full?

Mr Flavel : Details.

Senator WONG: You do not have the full details of a financial impact—

Senator CANAVAN: He said 'with us'.

Mr Flavel : With us.

Senator WONG: Well, it is a fairly interesting standard that the explanatory memorandum has been introduced into the House of Representatives and that Treasury cannot unpack the financial impact statement.

Ms Croke : I said that I would take it on notice and, if I can, I will try to answer in detail. I did say that the Department of Social Services is appearing tomorrow, but I have taken on notice if I can get something to the committee.

Senator WONG: Can we come back tonight? Can you do that later tonight? We are not asking for costings which are theoretical; this is what the parliament has been provided. Do you have the EM?

Ms Croke : I do not have it with me, sorry; no.

Senator WONG: Maybe we can come back after the dinner break and come to this, because it is not an unreasonable proposition to ask the Treasury's fiscal group to unpack a financial impact statement in the EM. I am also interested in the process by which this was developed. I assumed Treasury had some involvement in it?

Ms Croke : I answered previously: in the process of ERC committees, the Treasury does provide advice to the Treasurer.

Senator WONG: Sure. That is ERC. I am familiar with that, but, as to the preparation of the EM, did Treasury sight these costings before they were published and tabled in the parliament?

Ms Croke : I do not have the EM, so I cannot comment, but I could take that on notice.

Senator WONG: I would like you to find out and come back after dinner time and tell us whether or not Treasury sighted the financial impact statement prior to it being tabled in the parliament. I would like to understand what is included and what are the underpinning components of the financial impact statement, and I would also like to understand—maybe someone could explain to me: it is done in fiscal balance?

Mr Flavel : That is the way that the numbers are presented in the budget papers: on an accrual measure—a fiscal balance basis.

Senator WONG: There is usually a UCB as well. But thank you for the lecture; I appreciate that.

CHAIR: Okay. Have we got it?

Senator WONG: Can we come back after dinner with that information?

Ms Croke : Yes.

Senator WONG: Thank you.

CHAIR: I am sure the officers will use every endeavour to satisfy you. So you are all done here?

Senator WONG: Oh no, I have others. I have just finished that bit. I want them to come back on that issue after dinner.

CHAIR: Did you want a go?

Senator CANAVAN: I have questions.

CHAIR: No, no.

Senator WONG: I have finished that component. I think my colleagues will take off on the next bit.

CHAIR: I do not think they are game.

Senator WONG: They are game. I am going to sit back and I am going to be very quiet for a while.

Senator KETTER: Senator Peris has some questions.

CHAIR: No worries; you crank through it, you lot.

Senator PERIS: Just to go back to a conversation we had: did you say you have or you have not had proposed projects put forward by the NT government?

Mr White : In an important conversation with the NT government we have talked about both asset sales and possible projects that the money would be recycled into.

Senator PERIS: Sorry, I did not hear.

Mr White : Both. We have talked about asset sales and we have talked about the projects that the money would then be provided to.

Senator PERIS: Can you identify what projects have been—

Mr White : I do not have that with me, Senator. There has been a number of projects that they are thinking of recycling money back into, though.

Senator PERIS: So they have put that proposal to you?

Mr White : We have had discussions around what would be on both sides of a proposal that they will put to us, yes.

Senator PERIS: But it has not been formally submitted to you?

Mr White : I do not think so.

Senator PERIS: When did you first have these discussions with the NT government?

Mr White : I do not know the answer to that. I suspect we have been talking to the NT government for quite a long time. I have been in this job a year; I suspect we have talked to them even before that. I suspect those discussions started not long after it was announced in the 2014 budget.

Senator PERIS: You have been having discussions for well over 12 months?

Mr White : To be clear, some of them at the beginning might have been general about how the thing works, for a reasonable amount of time about things that would be more specific—at least a number of months, probably longer.

Senator PERIS: New South Wales and the ACT have received asset recycling money?

Mr White : No. The ACT and New South Wales have signed agreements. Only the ACT has received any money.

Senator PERIS: How long did that procedure take in New South Wales and the ACT? Was it a quick process for them?

Mr White : No. The process takes a number of months, at least. Normally there is informal engagement between officials in the treasuries, and that can take as long as it takes—it could be at least a few months. Those discussions normally go to what we need as information, what they are trying to do, and then normally a state treasurer will write to the Commonwealth treasurer with a proposal.

Senator PERIS: Has the state treasurer for the Northern Territory written to the—

Mr White : I do not think so, not with a formal proposal. After that, there is an assessment process. We need to seek input from the Deputy Prime Minister on his views, as the infrastructure minister. On the projects, as part of it, we do an assessment of whether it meets our criteria around both the asset sale side and the new projects that the money is being put to. We put all that information together. We send up some information to the Treasurer. The Treasurer makes a decision after he decides he will write to his state colleague and say, 'We can get together and make an agreement.' It takes some time. It is the assessment and informal engagement processes that get us all the information that take most of that time. New South Wales and the ACT were both signed earlier in the year, February and March, and they would have been at least six month-type processes.

Senator PERIS: Where would you say the Northern Territory is? Is it still in the informal stage?

Mr White : Yes, but it is quite a way along. We have been having a few discussions with them; we have had a bit of back and forth. They have provided us information, we have asked for other information and we have got information back. It is a reasonable way down the track.

Senator PERIS: They are in the early stages—infancy?

Mr White : It is not in its infancy. We have talked to them for a number of months, at least since the middle of the year, in terms of them telling us the sorts of things they are envisaging selling, and the sorts of things they would like to spend the money on.

Senator PERIS: With the lease or sale of the Darwin port, 15 per cent of $506 million is $76 million, so the combined sales of TIO and the Darwin port would put the NT government in the vicinity of $139 million?

Mr White : I will trust you on that. It sounds about right.

Senator PERIS: But again, you are still having those to-and-fro discussions?

Mr White : That is right. It depends on the amount of money you get from the asset sales, and the amount that you then recycle back into new infrastructure. It is whatever the lowest one of those numbers is, times 15 per cent, that gives you the amount you will get.

Senator PERIS: Thank you.

CHAIR: Senator Ketter.

Senator KETTER: I would like to turn to the Northern Australia Infrastructure Facility. I am just wondering if somebody could talk me through how the $5 billion Northern Australia concessional loan facility would work?

Mr Flavel : I might ask Jenny Wilkinson from Fiscal Group to answer questions to do with the NAIF.

Ms J Wilkinson : As you might be aware, the responsibility for the Northern Australia Infrastructure Facility has moved across to Minister Frydenberg as part of the machinery of government changes that occurred when there was the change of Prime Minister.

Senator KETTER: Just take me through how the concessional loan facility will operate?

Ms J Wilkinson : The government has not announced any details of how the loan facility will work. I was leading the work in Treasury on the loan facility, and we have engaged with a large number of participants of financial markets and investors, and state and local governments in order to help develop the parameters around the policy. As Minister Frydenberg has said recently, he expects to release a paper which will outline the eligibility criteria for the loan facility shortly.

Senator KETTER: I understood there was a promise that the loan facility would be open for proposals from 1 July this year?

Ms J Wilkinson : I think the commitment was that the loan facility was open for expressions of interest from 1 July this year. We have had a website, and we have had a number of inquiries that have come through on the website, and it has been very useful in the policy development process to get a sense of the sorts of projects that proponents or other people consider the loan facility could be used for. The government's commitment has always been that loans would not be able to be drawn down until 1 July 2016, and that, as I understand it, remains their commitment.

Senator KETTER: How do you get proposals in when we do not really have eligibility criteria defining what types of infrastructure will be supported?

Ms J Wilkinson : There have been no formal proposals which have been assessed. What people have been doing is they have been bringing to our attention proposals about the sort of infrastructure that they think is needed in Northern Australia and have had discussions about the different ways in which a facility like this could be used to actually enable that investment to take place.

Senator KETTER: So no proposals have been received?

Ms J Wilkinson : We have not got a process in place in order to actually enable proposals to be formally provided or received. We have had discussions with a range of different stakeholders about different sorts of projects. That has been very useful through this policy development phase.

Senator KETTER: You said Minister Frydenberg's release of the eligibility criteria is coming up in the near future—we hope.

Ms J Wilkinson : He has publicly stated that he intends to release eligibility criteria shortly. Responsibility for the further development and then the implementation of the facility is the responsibility of the department of industry, infrastructure and science. I believe they might be appearing tomorrow. So, in terms of the process going forward, that is the appropriate Department to put these questions to.

Senator KETTER: When you said 'shortly', are we talking about a matter of a couple of months?

Ms J Wilkinson : I have not been involved in those discussions. We handed responsibility for the facility across to the department of industry three or four weeks ago now. I have not been involved in any briefing of Minister Frydenberg in relation to the facility.

Senator KETTER: The minister for resources recently said that he supported the use of funds from the facility to support rail projects for coal, including the recently approved Adani coalmine. Has any work been done in preparation for that project?

Ms J Wilkinson : There has been no specific work done in relation to any projects. My recollection was that his most recent statement was it was not a priority for the Northern Australia Infrastructure Facility, but I stand to be corrected if that is not the case. I thought that was the latest statement that I read.

Senator KETTER: Sorry, could you repeat what you just said?

Ms J Wilkinson : My recollection was the most recent statement that Minister Frydenberg made was that funding for the rail line was not a priority for the Northern Australia Infrastructure Facility.

Mr White : That is right. Last Friday morning, he said:

This is a commercial operation, it needs to stand on its own two feet. It (funding) won't be a priority for the Commonwealth.

CHAIR: Senator Waters.

Senator WATERS: I have some questions on this same issue, too; so that makes sense. Ms Wilkinson, is it?

Ms J Wilkinson : Correct.

Senator WATERS: I understand that you have had responsibility transferred now to that different department, and I will be asking them about it tomorrow as well, but I am interested in the work that you and your section did on the Northern Australia Infrastructure Facility while you had responsibility for it. Firstly, what was the policy rationale for the transfer of responsibility from your department to the new one?

Ms J Wilkinson : That is a matter for government—

Senator Ryan: We will have to take that on notice, Senator Waters. I cannot speak to that.

Senator WATERS: Because I do not know it either.

Senator Ryan: That would be a decision of the Prime Minister and his minister. The officials cannot answer that. I will take it on notice, if we are in a position to provide you with a response.

Senator WATERS: Okay. I was not aware that anything had been said publicly, and I figured you guys would know. But if you do not have it to hand, that is okay. I will wait for the response on notice. I am interested in how much work—both in quantum and in nature—you had done on the facility while you had responsibility for it in terms of hours dedicated, full-time equivalents and also how far the eligibility criteria and any of the other work you had done had progressed. I have jotted down the answers you provided to Senator Ketter. Can you just elaborate on the quantum of work and anything else about the nature of the work that you had undertaken while you still had responsibility for it?

Ms J Wilkinson : Sure. We have had a team of about eight staff who have been working on the development of the facility and working through a range of different policy, legal, implementation and delivery issues. That number of staff have been working on it since late July, and before that period there were a couple of staff who were predominantly working on it.

Senator WATERS: Since it had been first announced—which was when? I cannot remember the month it was first announced.

Ms J Wilkinson : It was announced in the budget.

Senator WATERS: That is right. I should know, of course.

Ms J Wilkinson : I cannot count up the hours, but it is roughly that size that has been working on it.

Senator WATERS: Thank you. In terms of the policy and implementation work that you had been undertaking, how far progressed were those? Clearly we do not have the draft eligibility guidelines yet. We are all very much looking forward to seeing those shortly—whatever 'shortly' means. Is there anything else you can tell me about the shape and the nature of the work that you were undertaking in that time?

Ms J Wilkinson : I think the main thing to say about the work that we conducted over that time is that we spent a fair bit of time consulting with a wide range of participants, including participants in the financial markets, equity investors themselves and a range of different potential project proponents, to get a sense of a number of different things—to get a sense of the current state of infrastructure financing, of where the market gaps could be and of the types of projects which would lend themselves to this sort of financing. The government has always been committed to a facility that would provide loans to these sorts of projects—for example, projects which would generate both broader public benefits and a revenue stream so that they would be in a position to actually service the loans that would be provided.

Senator WATERS: Is that generation of public benefit, as well as the revenue stream, some kind of formal test? That is the first time I have heard mention of that. Perhaps I have just missed it. Is that a parameter that is going to be set in stone for accessing the facility?

Ms J Wilkinson : The sorts of issues that we were trying to grapple with were: what is the public infrastructure which would benefit from this sort of financing? Again, I think Minister Frydenberg has already mentioned that the sort of infrastructure which does generate additional economic activity is the sort of infrastructure which, in the normal use of the word, has multiusers and there is some access that is enabled. It is the sort of infrastructure which typically has high construction costs but fairly low ongoing costs. Obviously it has got to be the sort of infrastructure that you can also charge for the use of. So there are a range of issues like that, and it has been really useful to talk to a wide range of different proponents or participants who are generally involved in this sort of market

Senator WATERS: That is helpful. You mentioned that you had met with a range of different project proponents. Are you able to share what industries those proponents are in, or even the names of the companies and the proposed proponents?

Ms J Wilkinson : We have met with, I think, over 100 individuals across 40 or so different companies over the course of the couple of months. The consultations have spanned people in the financial markets, funds managers, infrastructure owners, infrastructure operators and consultants. The sorts of projects have been in either the resources sector or the energy sector, or what you would generally call the infrastructure sector.

Senator WATERS: In relation to the resources and energy sector, have you met with representatives of traditional fossil fuel energy sources as well as those of cleaner renewable sources?

Ms J Wilkinson : We have.

Senator WATERS: Can you tell me a bit more about those folks that you met with?

Ms J Wilkinson : In all of these consultations we have been trying to reach out in particular to people who have contacted us through the website. If you like, we have been more responsive to people who have contacted us than in going out and consulting with a wide range of potential project proponents from across all industries. One of the expectations is that the public release of the consultation paper enables that, and it enables people to come forward who may or may not have thought that they were eligible. We have certainly met with one company that would be exclusively in the renewable energy space and one that would be exclusively in the mining space, and another that is in the resource-infrastructure space.

Senator WATERS: Are you able to tell me the names of the companies those people represented?

Ms J Wilkinson : I think we should probably take that on notice. The discussions we have had with all of these firms have been reasonably informal, and we have not advised them that we would be sharing that information more generally, but we are very happy to take that on notice.

Senator WATERS: Are you able to identify whether Adani was one of the companies you met with, or that you met with any of the representatives of that company?

Ms J Wilkinson : We will take that on notice.

Senator WATERS: You do not have that information to hand?

Senator Ryan: To be fair and to be accurate, for the officials to take it on notice is entirely reasonable. I would not expect them to have a list of everyone they had met with on hand.

Senator WATERS: I got the sense that Ms Wilkinson was perhaps very well prepared and may well have had the list before her.

Ms J Wilkinson : I have got the summary list of the different sorts of companies that we have met with.

Senator WATERS: Is Adani on that summary list?

Senator Ryan: To be fair, we do not normally go to what is prepared for people in folders. You are looking at the glance they gave each other, and I interpret it as a querying glance rather than anything else.

Senator WATERS: I was not actually looking at the glance, I was looking at the fact that Ms Wilkinson was flipping her papers before and seemed to be very well prepared, which I am impressed with.

Senator Ryan: Okay. That is how I interpreted it. In the past when I have asked people when they have mentioned someone, I have accepted that they might want to check their records because obviously they may be speaking on behalf of other people as well.

Senator WATERS: If Ms Wilkinson has the information to hand, I would appreciate it—

Senator Ryan: You can appreciate it.

Senator WATERS: and if not, I am happy to take that on notice. Have you got that to hand?

Senator WONG: While they are checking that issue, I want to make sure I am clear about what I will be going to when I have the opportunity after the break, subject to the committee. I want to go to the EM. I want to go to the process. You referenced ERC. I accept that you are not required to tell me what the content of the advice was, although the clerk would say you are. But I am going to go to process, so: when? I also am going to ask you questions about what your minister said today with Minister Porter and Minister Birmingham and the transcript. Regrettably, it is not paginated, but the question from a journalist is:

Could you tell us what that saving is, what the new forward estimate is?

There is a very lengthy answer. It might be useful to have a look at that, because I want to go to that point.

CHAIR: How are we going, team?

Mr Flavel : I think Ms Wilkinson wants to come back to the question that Senator Waters asked.

Ms J Wilkinson : We have had one meeting with representatives from Adani.

Senator WATERS: You said earlier that those were scoping meetings and discussions, so I imagine that no commitment was made from the government side.

Ms J Wilkinson : Absolutely no commitment. We have been clear in all of the discussions that we have had that we are seeking to engage, to understand the sort of context in which these companies are operating and to understand from their perspective both what the potential financing gaps are, and what sorts of projects they are involved in.

Senator WATERS: Is there anything further that you can tell me about the scope of the meeting with Adani?

Ms J Wilkinson : As I said, absolutely no undertakings were given and it was a general discussion—very similar to the discussions that we have had with over 100 different individuals over the course of the three months that we have been working on this.

Senator WATERS: I noticed in response to Senator Ketter's questions that you said expressions of interest had opened on 1 July. Have Adani popped in an expression of interest as yet?

Ms J Wilkinson : I think that they did place an inquiry. I think the way to put it is that the website allows you to express your interest in the facility. It has enabled us both to get a sense of who some of the people are that we might want to engage with, and also to put them on the mailing list, so that if there is any information, they would also be informed of that.

Senator WATERS: So they did that on the website, and then you realised they were interested and so subsequently had a meeting with them.

Ms J Wilkinson : That is correct.

Senator CANAVAN: So it is not an expression of interest as you would normally define it, like an extensive EOI document?

Ms J Wilkinson : No, absolutely not.

Senator CANAVAN: Contact details, is it?

Ms J Wilkinson : It is literally an email which enables you to register your interest in the facility.

Senator WATERS: How recently was that meeting held with them?

Ms J Wilkinson : It would have been in late September.

Senator WATERS: Have there been any meetings with the Queensland government? I understand they have expressed interest in a number of projects.

Ms J Wilkinson : Yes. We have had several meetings with the Queensland government.

Senator WATERS: Did you discuss just the Queensland government's own proposals, or did you discuss, for example, the Adani proposal with the Queensland government?

Ms J Wilkinson : With all the state governments, we have discussed the nature of the program, the sort of support that could be provided under the program, and we have discussed with them things which have been identified in the Northern Australia Infrastructure Audit and also used the opportunity to ask them to bring to our attention any projects which they think could potentially fall in the scope of being financed under the facility.

Senator WATERS: My understanding was that they had had that Galilee rail link on their own list. Is that correct?

Ms J Wilkinson : I think so, but I cannot confirm.

Senator WATERS: If you would not mind taking that on notice. I think that is the case too, but I do not want to be wrong.

Ms J Wilkinson : What list are you talking about?

Senator WATERS: They put forward a list of projects. I do not know whether it was through that EOI facility, or through some subsequent process, but it seems like that is the only process that has happened so far. Perhaps they have just done it through the press, but I have seen an announcement where they have said that these are the sorts of things they would like to ask the feds for financial support for.

Ms J Wilkinson : Just to be clear, we have not received any list from any of the state governments. We have not sought from them a formal list of, 'What is it that you would want financed?' It has genuinely been a discussion with them around what sorts of projects are in the northern parts of their states that they have been thinking could be candidates for the facility. There has been absolutely no formal process that we have undertaken with them.

Senator WATERS: Perhaps it was just a media statement and they have not done it through the formal channels. I am not sure; I will go back and check on that. Did you discuss that Adani rail project with the Queensland government in your meeting with them?

Ms J Wilkinson : My recollection is that we did discuss that amongst a range of different projects.

Senator WATERS: Were they supportive of that proposal?

Ms J Wilkinson : We did not talk about supporting or not supporting any individual projects. What we talked about was the nature of the projects and, again, the way in which you would think about that project from different sorts of perspectives—from an infrastructure financing perspective, for example. For some of the projects, we had discussions with them about the level of confidence they would have in the revenue stream that the project would generate.

Senator CANAVAN: Can I clarify who this was from the Queensland government? Was this officials to officials?

Ms J Wilkinson : This is officials to officials.

Senator CANAVAN: So there were no ministers in your meetings with the Queensland government?

Ms J Wilkinson : I have not been involved in any meetings with any ministers in relation to this.

Senator WATERS: Before I move onto some details about the eligibility criteria, to the extent that you can provide that information, has the Northern Territory gas pipeline proposal being floated through any form in this process? Was that discussed with the NT government?

Ms J Wilkinson : Again, not formally, but, in talking to the Northern Territory about the range of different projects of an infrastructure nature that are taking place within the Northern Territory, that is one that was brought to our attention, yes.

Senator WATERS: You mentioned a few of the parameters that might end up being possible outline criteria that the minister himself has recently mentioned—the multi-user, the predictable cash flow and a few others. What stage were you at in the work that you were doing on that eligibility criteria guideline? Are there any other parameters that were looking likely to form part of those guidelines? I do not want to ask you to predict the future, but did you have a long list or a short list of parameters that the new department is now responsible for carrying on?

Ms J Wilkinson : I think long list and short list is the sort of concept which is a bit in the eye of the beholder. We certainly had discussions. In all of these meetings we have had and in our internal discussions, we have talked about the sorts of things that you need to define. What are the sorts of things which define northern Australia? What are the sorts of things that define infrastructure? What are the sorts of things that you would take into account if you were trying to think about the sort of infrastructure which could have a transformative effect within northern Australia? Really, I guess, most of the work we were doing was trying to think about the different elements that you would want to think about if you are trying to give effect to the government's announcement and to have a successful program.

Senator WATERS: I suspect I do not have terribly much more time, so maybe I will put some of those more detailed questions on notice. Thank you. I will move now to the costings. We had some previous discussions about this—and just answer to the best of your ability, now that you no longer have responsibility for the program. While you did have responsibility, was there a calculation of the total long-term cost of the program, including the cost of the concessional loans? It did not all show up in the budget and over the forwards. Has anybody looked at what will be the total cost? If so, what will that cost be?

Ms J Wilkinson : Certainly what is in the budget is the material which the government has made publicly available around what the cost of the facility would be. Over the life of the loan, the cost of the facility depends on a range of different things, including the degree of concessionality of the loans that are provided and the nature of the other arrangements around the repayments of those loans—what the repayment profiles look like. I am not aware of there being a costing. These loans could be long-term loans which could go out for 20 years, and I am certainly not aware of a costing which incorporates all of that.

Senator WATERS: Thank you, that is helpful. So the cost that was in the budget was not intended to be the total cost of the package; it was merely the cost for the budget and the forward estimates. Is that accurate?

Ms J Wilkinson : It was the impact of the facility over the forward estimates.

Senator WATERS: In that first four years. It is not meant to be the full cost for the entire life of the project.

Mr White : I think I was answering your questions at the last estimates around these sorts of things.

Senator WATERS: That is right—I thought you looked familiar.

Mr White : I think where we got to was that Budget Paper No. 2 shows the measure and, on a fiscal balance basis, we had $388 million for three years. I think I said something to the effect of 'That wasn't where it ended.' There would be another $388 million, or thereabouts, for the next two years after that, reflecting the assumption we made about when we would be giving loans out and, as I said, that was the net present value of the concession that was being given. We also had some numbers around the interest cost to borrow to give out those loans, so that extra Commonwealth debt equals interest was $138 million over three years. That obviously continues while the loans are outstanding, but what was not put in here is the interest that you get back. I think I said to you that the idea was that this thing would be, effectively, budget neutral over time. So we would expect the long-term cost to be roughly zero, provided everything turns out as you would expect.

Senator WATERS: Thank you for clarifying. Senator Ketter referred earlier to the statement by the new minister that the Galilee rail projects were commercial projects that can stand on their own two feet and that funding would not be a priority. Did you do any assessment of that project, particularly about the commercial prospects of that Adani mine or the Galilee rail?

Ms J Wilkinson : No. We have done no assessments of any projects which have been brought to our attention.

Senator WATERS: I will ask this again tomorrow, but I am trying to ascertain where he sourced his information from—that the project was commercial. It is an interesting perspective, from my perspective, that he believes that it is commercial and does not need funding assistance, given that lots of banks have said they do not want to fund it. The Queensland Treasury says it is unbankable and there are a variety of other commentators who have said that it is, in fact, not commercial. Do you have any light to shed on where the minister might have formed the view that it was, in fact, commercial?

Ms J Wilkinson : No, I don't.

Senator CANAVAN: I think you are reading something into that quote that might not be there, Senator Waters.

Senator WATERS: No. I am quoting from the minister.

Senator CANAVAN: Yes, but 'commercial' has a number of different aspects. I do not think he was actually making a judgement on the profitability of the project, just that it was a commercial project. Commercial as in private.

Senator WATERS: I am just quoting from the minister. He says it can stand on its own two feet and therefore Commonwealth funding will not be a priority. I am just asking about the source of that understanding, if the officer has anything to help on that.

Mr White : The quote I have says it is a commercial operation and it needs to stand on its own two feet. I took that as saying, effectively, as Senator Canavan said—

CHAIR: As a business.

Mr White : it is a business; it is not making an assessment about whether it is profitable or not. But I do not have what the minister had in mind when he said it, but that is how I read it.

Senator WATERS: Clearly it is open to interpretation and there were two different media interviews too—one on the Friday and one on Insiders. I was referring to the Insiders one. I think you are quoting from the Friday one.

Mr White : Yes.

Senator WATERS: Anyway, the question remains: is there any information that the department was able to provide to the minister at the time, even though it was a different minister? Are you aware of any information that the new minister might have in front of him that would have caused him to form that view?

Ms J Wilkinson : No, I am not.

Senator WATERS: I will put the rest on notice. Thanks very much.

Senator CANAVAN: I just wanted to return to some questioning from Senator Ketter earlier around growth and expenditure. There was a discussion around the expenditure as a proportion of GDP. I would like to focus on just expenditure in the broad sense—payments or expenses. First of all, are you able to tell us what is the real growth in expenses over the forward estimates?

Mr Flavel : Do you mean the average?

Senator CANAVAN: Yes, the average over the forward estimates.

Mr Flavel : I should know it, but I can do the calculation.

Senator CANAVAN: Whatever you have got that is easily accessible.

Mr Flavel : Real growth in payments in 2015-16, 1.1 per cent; 2016-17, one per cent; 2017-18, 1.9 per cent; and 2018-19, 3.2 per cent.

Senator CANAVAN: So we are talking maybe around two per cent?

Mr Flavel : The number in my mind is around two per cent, but I stand to be corrected on it.

Senator CANAVAN: That seems a relatively moderate growth in spending. I am not asking you for an opinion there; I am more asking in comparison to historical growth in Commonwealth government spending.

Mr Flavel : That is a relative judgement, but I would just observe that if one looks at the history of real growth in payments, which is available in the budget documents, there have been periods where there has been higher and lower growth, including in the most recent past. For instance, we are talking about an average of two over the forward estimates, but real growth in payments in 2013-14 was 7.8 per cent. In 2008-09, at the time of the GFC and the stimulus package, it was 12.7. So, depending on the fluctuation, averages may well have been higher over previous—

Senator CANAVAN: I think I can recall the former government putting in place a cap on growth in expenditure at about two per cent real. Something around that level would be consolidating a budget, generally speaking, if you are able to keep growth below two per cent in real terms. Is that fair, given population growth and—

Mr Flavel : I think, in fairness, the previous government's commitment was actually linked to the return to normal conditions, so it was not just at two per cent; it was two per cent with a caveat attached to it as well.

Senator CANAVAN: But it is fair to say that, over the period of the former government, expenditure growth was higher than two per cent. I think it was around 3½ or so. Is that—

Mr Flavel : I am always a bit wary about that—firstly because I do not have the calculation, and the other thing is it is actually inherently difficult to assign particular financial years to a particular government. I have just quoted you the figures from history which show that in the most recent past there have been particular financial years where, in fact, real growth has been seven, eight, 12 per cent.

Senator CANAVAN: The figures I have in front of me are that, under the former government, in real terms growth was around 3.6 per cent and going forward it would have been around 3.7 per cent a year, in real terms, whereas the figures you have mentioned are that over the forward estimates expenditure growth is sitting well below two at the moment, but in the last year of the forward estimates it is going back up to what I suppose would be more a long-term average of around three.

Regarding comparisons of how things have turned out relative to expectations—and I do not expect you to have these figures—I have gone back and looked at them for expenses. In the 2013 MYEFO expenses in 2013-14 were expected to be $412 billion; they actually ended up at $413.8 billion. In 2014-15 in MYEFO they were meant to be $417.8 billion; they have ended up at $420.3 billion. In 2015-16 it is $436 billion; in the budget they are actually coming out lower at $435.5 billion. In 2016-17 in MYEFO the projection was for $457.1 billion, and in the last budget they estimated it well below that at $452.7 billion. They are the only years that are comparable between the first MYEFO of this government and the current budget. Does that accord with your general understanding—that expenditure growth is coming below expectations relative to MYEFO, at least in the last two years, and very close to expectations in those first two comparative years?

Mr Flavel : I think it is best if I take the analysis for that on notice. You mentioned the 2016-17 MYEFO—that has not, by definition—

Senator CANAVAN: Sorry, I might have misspoken then. What I was comparing was the 2013-14 MYEFO, which was the first budget document of this government, and the 2015-16 budget. They were the two figures I quoted. Over those four years, I have spending as $1.7 billion below—in a cumulative sense over those four years—what was expected in that MYEFO. But you have not done that analysis yourself?

Mr Flavel : I have not done the analysis.

Senator CANAVAN: I would not necessarily expect you to.

Mr Flavel : I now have a copy of PFO. What I do not have is the 2013-14 MYEFO, so I think it is best to take any analysis on notice, but I trust entirely that you have quoted correctly from the budget papers.

Senator CANAVAN: That would be a dangerous thing, but you are right to take it on notice and we will hear back from you. I have a couple of questions that may or may not be able to be answered. I know Fiscal Group cover a range of policy areas, as a central agency, so any information you can provide would be helpful. I want to ask about the Federation white paper and any input Fiscal Group have had to that. Ms Reinhardt, are you providing advice through that process?

Ms Reinhardt : The Federation white paper is run from Prime Minister and Cabinet, so essentially they will be the ones to answer questions. We, obviously, as a Commonwealth-state relations division in Treasury, provide input into that process, but it is generally a PM&C process. But I can—

Senator CANAVAN: As I say, I cannot get to FP&A, but—

Ms Reinhardt : To the extent I can, I will—

Senator CANAVAN: Do you have any understanding on timing for the issues paper—for the white paper?

Ms Reinhardt : No, certainly not for the white paper; I do not have clarity on that.

Senator CANAVAN: Sorry, not the white paper; I meant the issues paper.

Ms Reinhardt : The leaked green paper has been released on the Prime Minister and Cabinet website and—

Senator CANAVAN: Are you taking submissions yet?

Ms Reinhardt : Submissions have gone, or will be going to PM&C, so I really cannot offer you anything on that—

Senator CANAVAN: I do not believe you are taking submissions, or not the last time I checked. I remember there was a green paper leaked and there was some press around that—that is that one. But that is not an official document then; that was simply a release subsequent to the public—

Ms Reinhardt : It is not an official document, but it has been released, yes. While submissions may not have been called for officially, I know there are extensive consultations with individuals, organisations, and state and territory governments, so quite a lot of consultations have been undertaken already as part of that process.

Senator CANAVAN: Another topic—again, you might not be able to provide all the information I would like—is infrastructure. Certainly in my area, in the projects in Central and North Queensland, there have been substantial underspends on the budgeted figures. Do you have any particular figures for me on underspends in particular infrastructure? I presume you monitor this with the infrastructure department?

Mr White : I think the answer to your question is no. We might be generally aware of underspends, or overspends, or those sorts of things in the infrastructure program as a whole, but, on a project-by-project basis, not really.

Senator CANAVAN: I am particularly interested in the Bruce Highway, which is a bit in between those two definitions. It is not an individual project; it is a set of projects. But I know a number of them have come in well under budget and maybe, again, if you could take on notice for me how much, currently, it is tracking under budget. I think the commitment was originally around $10 billion for that program. If you could provide figures on how much it has underspent then that would be appreciated.

Mr White : The infrastructure department will have all those numbers, but we can check with them.

Senator CANAVAN: What happens with that money, exactly, if there is an underspend? I will give you an exact project: the Yeppen South upgrade near where I live. It was originally budgeted at $294 million. I believe it has come back at around $170 million-odd. What happens to the $120 million?

Mr White : I think it needs another government decision, is the answer. In many ways it is a good thing that something has been built for far less than anticipated.

Senator CANAVAN: Absolutely.

Mr White : That is then another decision around what happens to infrastructure money, which is, again, in the infrastructure department's domain, really.

Senator CANAVAN: So the money does not just stay with the infrastructure department to spend it on something else? You would have to be involved as a central agency?

Mr White : The process of the infrastructure budget is basically agreeing projects. Some of those projects have conditions around what happens to money that is not needed for them if there are underspends; others do not. It comes back as a general amount of money that was an underspend, as you said, and then it is up to ministers to make decisions about what they do with those sorts of things—whether they come back to the budget or whether they are used for different projects. It is a process that has to be worked through.

Senator CANAVAN: If I could have that one question taken on notice, particularly about the Bruce Highway. I will add to that: are there any changes to the costings on the second range crossing as well? That has not started yet, but it has progressed.

Mr White : That is the Toowoomba one?

Senator CANAVAN: Yes, that is the Toowoomba one.

CHAIR: We will suspend until a quarter past seven when we will all be back. Thank you.

Proceedings suspended from 18:15 to 19:17

CHAIR: We welcome back the Department of Treasury fiscal group.

Senator WONG: I think I asked you about the EM and the announcement at the press conference today. Do you have the 2014-15 BP2 here?

Ms Croke : No, I have not.

Senator WONG: I just use that to get the measures that were referenced in the release. You probably will be clear about them already.

Ms Croke : Sorry, could you say that last bit again?

Senator WONG: I just use that to be clear about which measures were being reversed or changed, but you should—

Ms Croke : I have that detail now.

Senator WONG: You have that? Okay. Pardon me if I go through this slowly; it takes me a while to understand all this. As I understand it, the government is saying they will reverse the FTBB measure in relation to families with children under six, which was a $1.9 billion save over five years, correct?

Ms Croke : I have a different figure here as to the effect over the forward estimates.

Senator WONG: Let us do that. This is the FTBB change to six-year-olds measure.

Ms Croke : You are in BP2 so you are speaking in fiscal years?

Senator WONG: According to Mr Flavel I should be speaking in fiscal years.

Mr Flavel : Sorry, Senator, I did not make any comment on using fiscal.

Ms Croke : I have impact over the forwards in terms of—

Senator WONG: ECB

Ms Croke : underlying cash.

Senator WONG: Why don't you give me those, and can you just identify the measure.

Senator Sinodinos: We are only talking cash.

Ms Croke : Yes, cash.

Senator WONG: You should have a chat to him.

Senator Sinodinos: He just told me it is cash.

Senator WONG: I asked why the EM was in fiscal and I was told it is because we do not do UCV. But, anyway, it does not matter. Let's forget about all of that and go on.

Ms Croke : The first measure that is being reversed is the family payment reform: maintain family tax benefit payment rates for two years. Your ordering may be slightly different to mine. The impact on cash over the forward estimates is 1056.6.

Senator WONG: One, zero?

Ms Croke : 1056.6

Senator WONG: That cannot be right. This is the eligibility threshold.

Ms Croke : No—maintain family tax benefit payment rates for two years. I said to you our ordering—

Senator WONG: Oh sorry; let's go back.

Ms Croke : might be different.

Senator WONG: So it was originally a $2.6 billion save over four years in the 2014-15 budget.

Ms Croke : Yes.

Senator WONG: I am using the BP 2 figures.

Ms Croke : Which page are you on so that we are on the same page?

Senator WONG: Page 199 of BP 2 for 2014-15.

Ms Croke : To be clear that this is fiscal balance?

Senator WONG: Yes.

Ms Croke : And we are talking cash. So for some of the measures there will be slightly different numbers.

Senator WONG: Because the—

Ms Croke : You can accrue a payment—

Senator WONG: So a single year may differ. That is fine. The maintenance of the payment rates for two years—

Ms Croke : Yes.

Senator WONG: is one of the measures being reversed.

Ms Croke : That is right. So 1056.6—

Senator WONG: 1056.6. What is the equivalent cash figure to 2.6 in the 2014-15 BP 2 measure?

Ms Croke : In fiscal? I only have cash.

Senator WONG: Yes, give me the cash because I only have fiscal.

Ms Croke : Could you ask that question—

Senator WONG: Do you want to give them to me?

CHAIR: Keep going. We are going alright.

Senator Sinodinos: Is there are a series of questions that you can ask that the officials can take on notice—

Senator WONG: No, no; no don't! We had a big fight.

CHAIR: No, don't go there. We have been there.

Senator Sinodinos: Have you?

Senator WONG: Yes.

Senator Sinodinos: That was probably Senator Cameron's idea.

Senator CANAVAN: Otherwise, you can take everything on notice.

Senator WONG: That would look churlish.

Ms Croke : I think what you are asking me I would have to take on notice so that I can—

Senator WONG: Can you give me a ballpark? I am trying to get a sense of what proportion of the save, which was identified in the 2014-15 budget, is being foregone with this. Do you see what I am saying? Is it just the one year plus the fiscal versus cash difference?

Ms Croke : I think we would have to—

Senator WONG: Is this a full reversal of that budget paper no. 2 measure?

Ms Croke : Yes.

Senator WONG: Okay; that is a better way to express it.

Ms Croke : Yes.

Senator WONG: As at this point in time, this is a full reversal of that measure?

Ms Croke : That is right.

Senator WONG: The next one, thanks.

Ms Croke : Family payment reform: limit family tax benefit part B to families with children under six-years-of age—1510.3.

Senator WONG: 1510.3?

Senator Sinodinos: Reversed—gone!

Senator WONG: And the figure was 1.9 over 5 years. So this is a forward estimate figure?

Ms Croke : Yes, these are all forward estimates.

Senator WONG: This is under six. So that is a full reversal of the measure. You are not giving me the net figure with—

Ms Croke : No, that is the full reversal of that figure.

Senator WONG: It is not the net figure? Because you have come up with a different age, isn't it?

Ms Croke : The new limit is for the youngest child of 13.

Senator WONG: You are doing full reversals, and then we will do the new measures separately.

Ms Croke : Yes.

Senator WONG: Number three is?

Ms Croke : Family payment reform: new family tax benefit allowance. In the 2014-15 budget, there was a new payment made for sole parents. This reverses that as well.

Senator WONG: So that is 155 over four years?

Ms Croke : I have 150.

Senator WONG: In the BP 2 it is 155 over four years?

Ms Croke : Yes, but it is now 150.

Senator WONG: Are you starting them from the 2015-16 year? So if this is $155 million over four years and it had a commencement of 1 July 2015, what is the commencement date on each of these measures? For the purposes of reversing the save, are you assuming the start dates which were originally announced in the 2014-15 budget?

Ms Croke : The numbers I am giving you are from 2015-16. I am giving you the forward estimate numbers.

Senator WONG: Are you assuming—sorry; I will just tell you what I am talking about. For the two-year payment-rate freeze that we discussed, I think, as the first point, your starting date was 1 July 2014 in the 2014-15 budget. So you, in terms of the reversal, are assuming a 1 July 2015 start date. Can you see what I am saying?

Senator Sinodinos: Yes.

Ms Croke : Yes. I think the answer is—

Senator WONG: I know it is a reversal, but I am trying to understand the benefits to the budget. Is it just from the original budget measure being reversed? Or are you saying, 'Our save is that we are going to shift an assumed start date for the measure we are now reversing and that is the save,' or shift it to the 1 July 2015 year?

Ms Croke : I will be as helpful as I can be.

Senator WONG: You are being very helpful. This is much better.

Ms Croke : In MYEFO, because some of the measures were delayed—

Senator WONG: Ah! Sorry, I forgot that.

Ms Croke : there were already some adjustments made.

Senator WONG: I apologise. You were right.

Ms Croke : And I think that would be a level of detail that I really would have to ask either finance or—

Senator WONG: No, that is fine—I did not bring in the MYEFO, but that makes sense. I just could not understand the arithmetic, but that makes sense. You are reversing whatever the status is of these measures as amended in terms of start date by MYEFO—you are assuming full reversal?

Ms Croke : Correct.

Senator WONG: Thank you. No. 3—

Ms Croke : Next one?

Senator WONG: You are reversing this new FTB allowance for—

Ms Croke : That is it.

Senator WONG: Right, okay.

Ms Croke : Family payments reform: revised family tax benefit end-of-year supplements—798.7.

Senator WONG: Yes—798.7.

Ms Croke : Maintain eligibility thresholds for Australian government payments for three years: only the FTB-related costs—

Senator WONG: Which was not disaggregated from BP2, I don't think, because you have just done it by department—

Ms Croke : Right. So the reversal of this component is 511.7.

Senator WONG: So the eligibility thresholds for three years—

Ms Croke : For FTB-related—

Senator WONG: All FTB—right?

Ms Croke : Yes. FTBB.

Senator WONG: And the total was?

Ms Croke : It was 511.7.

Senator WONG: Right.

Ms Croke : Those numbers I have given you total 3,727.3.

Senator WONG: Right. So that is the UCB impact over the forward estimates?

Ms Croke : That is right.

Senator WONG: So that is what the Treasurer is referring to, unfortunately—hopefully, you can fix this.

Ms Croke : I think I am on page 5.

Senator WONG: Yes. Could you tell us what the saving is—what the new forward estimate is? That was the answer to which I referred you prior to the break. Sorry, I will clarify: the revamp of all these measures remains budget neutral et cetera, so could you tell us what that saving is—what the new forward estimate is? And then I am going to the answer, which says, 'The original package, when you update it, when it was introduced.'

Ms Croke : Yes.

Senator WONG: Right, so can we just go to that? The 3.7 is the figure you just gave me?

Ms Croke : That is right.

Senator WONG: Okay; which includes this additional payment—

Ms Croke : That is right.

Senator WONG: Was that referenced? And then there is another, the $930 million—

Ms Croke : That is right. That is a family day care measure.

Senator WONG: Yes.

Ms Croke : That is 930.6.

Senator WONG: When did you announce that? Did you announce that when the government announced it—just recently?

Ms Croke : Yes, just recently.

Senator WONG: So they are now hypothecating to a new spend—a measure they only announced—what?—last month?

Ms Croke : I do not have a date of when that was announced.

Senator WONG: Okay. So that is a 930.6 over the forward estimates?

Ms Croke : Yes.

Senator WONG: That is where the Treasurer gets 3.362. Is that right? Do you see his figure there?

… I would also note, that as a result of other measures that we introduced recently on the family day care child swapping measures, that is raising an additional $930 million over the Budget and forward estimates which takes this up to $3.362 billion over the forward estimates.

Well, he said it. We can make a political point later, but I am trying to understand where that figure comes from. Is that meant to be the 3.7 hit on the budget, less the 930?

Ms Croke : The 3.7 is the reversal. The two new measures are 2.4. Plus the 930 will get you to the 3.362.

Senator WONG: Okay. What are the $2.4 billion measures?

Ms Croke : The first one is the phase out of the family tax benefit end-of-year supplements: 1697.0.

Senator WONG: Can I just go back. That is a 2014-15 measure?

Ms Croke : No. These are not—

Senator WONG: These are the new ones.

Ms Croke : That is right. Reform family tax benefit part A fortnightly rates: 546.8. That is a spend or a cost to the bottom line.

Senator WONG: The phase-out is—

Ms Croke : The phase-out is a save. The reform of the family tax benefit part A fortnightly rates is a—

Senator WONG: So that is actually 1.1?

Ms Croke : There is one more. And then the restructure of family tax benefit part B rates. That is 1281.8. That is a save. So there are two saves and a—

Senator WONG: Yes, I got it. So what is the net?

Ms Croke : 2432.1. If you add the 2432.1—

Senator WONG: Plus the 930, and that is where it gets to 3.362. I want to go to the EM now. Sorry, what is the spend?

Ms Croke : The spend is the reform of family tax benefit part A fortnightly rates.

Senator WONG: And with the 2.4, is this what is being notionally hypothecated for the childcare package, which is not yet announced? Correct?

Ms Croke : I think that is right. Yes.

Senator WONG: Sorry, I have been in other things today. So is that right? This is notionally, or politically, hypothecated towards the childcare package. Is that right?

Senator Sinodinos: They are linked. Do you mean the $3.5 billion childcare package?

Senator WONG: Yes.

Senator Sinodinos: They are linked, yes.

Senator WONG: Or politically linked.

Senator Sinodinos: For political purposes in the sense—

Senator WONG: Well, thank you for at least acknowledging that, Arthur.

Senator Sinodinos: Well, we have to pay for these things.

Senator WONG: I know. But you are using saves which are pre-existing. That is fine. Others can have that point later. I just want to get the figures. I want understand the EM. Do you want to explain it to me?

Ms Croke : The difference between?

Senator WONG: Yes. Explain it.

Ms Croke : The explanatory memorandum is in fiscal balance—different, obviously, to the numbers that I have given you. The EM is only talking about those measures that relate to the legislation—so the family assistance act and the Social Security Act. The three measures that relate to the acts were the reform of family tax benefit part A and at-home—

Senator WONG: Which is 504 fiscal 546 UCB.

Ms Croke : Yes. Reforms to family tax benefit part B. And they are similar.

Senator WONG: Sorry?

Ms Croke : Reforms to family tax benefit part B. That is when I said reforms to family tax benefit part A fortnightly rate—

Senator WONG: Oh, that is the 1,281.8 figure.

Ms Croke : Yes. The phase-out of the supplements, in fiscal balance terms, is 4,063.9.

Senator WONG: What is the UCB effect of that?

Ms Croke : It was 1,697.0.

Senator WONG: Wow!

Ms Croke : The difference is because, in fiscal balance terms, I suppose the payment is counted in the year that it is accrued.

Senator WONG: Not when it is actually paid.

Ms Croke : So payments are made fortnightly but the supplements are—yes.

Senator WONG: Did Treasury sight or tick off on the financial impact statement?

Ms Croke : Not in the explanatory memorandum. I understand that is Department of Finance and Department of Social Services. We did not see this, and I think that is not unusual.

Senator WONG: The Treasurer went on to say:

… with the phasing of those arrangements some of these measures kick in earlier, some of them kick in later. When you get beyond the forwards, that's when you start to get complete parity.

Can you explain that.

Ms Croke : It is because during the course of the forward estimates the family tax benefit supplements are being phased out. I suppose beyond the forwards that supplement is no longer.

Senator CANAVAN: So there is no difference in the accrual and the cash beyond that.

Senator WONG: But that is not his point. He is not making an accounting differential. He is saying, isn't he, that the measures will essentially be paid for. I did not read that—

Senator CANAVAN: Oh, sorry. I read the other one.

Senator WONG: I am asking what he means.

Ms Croke : I think that is the intent.

Senator WONG: The intent is that the saves will fund the spending measures over the medium term.

Ms Croke : Yes.

Senator WONG: Is that how you understood that?

Ms Croke : That is how I would interpret that.

Senator WONG: Was Treasury asked to cost this beyond the forwards, over 10 years?

Ms Croke : We do not do costings. No, we were not.

Senator WONG: You were not asked?

Ms Croke : We were not asked. We do not do costings in that respect, and as far as I know—

Senator WONG: As I remember that—

Ms Croke : Finance do costings.

Senator WONG: Really?

CHAIR: Don't worry!

Senator WONG: Was the medium-term impact of this package provided to the government?

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

Senator WONG: I am trying to understand on what basis the Treasurer is saying that. If he is saying that, presumably Treasury must have provided advice. Did you provide advice about the medium-term budget impact of this package?

Ms Croke : Not to my knowledge.

Senator WONG: Could you just confirm that on notice.

Ms Croke : I will take that on notice.

Senator WONG: And, if you did, the dates on which you provided that advice.

Ms Croke : I will take that on notice.

Senator WONG: Did Finance consult you, or were you consulted by Finance, in relation to the medium-term budget impact of this package? Did Senator Canavan have some questions? I have to clarify a couple of things and then I will come back.

Senator CANAVAN: I did, but I thought we had finished the outcome.

CHAIR: I would like to finish if we can.

Senator CANAVAN: We are well behind time.

Senator WONG: I just need two minutes.

CHAIR: You can continue, I think.

Senator WONG: No, I need two minutes break.

CHAIR: We will suspend for two minutes.

Senator CANAVAN: No, I can fill in for two minutes.

Senator WONG: I am sure you can. Otherwise my colleague—

CHAIR: I am just testing the crowd.

Senator CANAVAN: We can just move on.

CHAIR: We are going to have to let some of these people go.

Senator WONG: I am asking for two minutes as a matter of courtesy.

CHAIR: Okay, we will do it that way.

Senator CANAVAN: I wanted to ask, before the break, some questions about the measures that are currently held up in the Senate. Obviously that will change given the announcements of today, but, in broad terms, have you seen the Parliamentary Budget Office report of 8 September 2015?

Mr Flavel : Yes, that is the regular one they put out containing the list of outstanding, unlegislated measures which have not passed.

Senator CANAVAN: How does this work? Do you provide these figures to them?

Mr Flavel : The Parliamentary Budget Office, as you know, is independent of government. My understanding, which I am happy to have corrected, is that they, essentially, use the numbers—so you can see in the right hand column the reference number to the measure.

Senator CANAVAN: Yes.

Mr Flavel : They use the published figures and then apply assumptions to generate those impacts beyond the forward estimates into the medium term.

Senator CANAVAN: That was where I was going to go. So all of those estimates beyond the forward estimates—they run their own calculation exercise for those measures?

Mr Flavel : I will take that on notice because in a number of areas—

Senator CANAVAN: I will put that another way—these numbers beyond the forward estimates are not Treasury numbers?

Mr Flavel : No, they are the PBO's numbers. They stand by them. I would make the point that both Treasury and Finance, and other agencies, work pretty closely with the PBO in relation to costings and other things. There are dialogues. I do not want to give the impression that they are completely doing it in isolation, but they are their numbers, so they are responsible for them.

Senator CANAVAN: If you add up their numbers over the next decade, I think it was in the order of $60-odd billion or so. I did that earlier, but I have lost my calculations. Is that out of the ballpark in terms of savings?

Mr Flavel : I am just eyeballing the numbers there. That probably looks about right.

Senator CANAVAN: A final question—do you have or can you provide the committee with a similar forecast over the period of a decade?

Mr Flavel : I would have to take that on notice. The Minister for Finance has made a speech recently, in the last few weeks, where he referred to the total outstanding measures which have not been legislated. I think that he refers to just the forward estimates period rather than over the medium term.

Senator CANAVAN: You use the forward estimates?

Mr Flavel : Yes.

Senator CANAVAN: If you could take on notice whether you have anything equivalent to this from Treasury that we can compare to the Parliamentary Budget Office that would be useful.

Mr Flavel : Sure.

Senator CANAVAN: Thank you.

Senator WONG: I have a couple of process questions. Did Treasury fact-check the release that went out today?

Ms Croke : The press release?

Senator WONG: Yes.

Ms Croke : No, I do not think we did.

Senator WONG: Did anyone from Treasury sight the release before it went out?

Ms Croke : Not as far as I know, but I would have to take that on notice to confirm that.

Senator WONG: Secondly, the reversal measures—can you tell me the dates on which they were considered by the ERC?

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

Senator WONG: Do you know the dates on which the cabinet considered it?

Ms Croke : I would have to take that on notice as well.

Senator Sinodinos: That is an internal matter.

Senator WONG: No, it is not. Arthur! I can ask about dates and times. Jokes aside, it is appropriate to ask the dates on which something was considered. I cannot go to the content of the deliberations, so I am asking—

Senator Sinodinos: I am sure the officials will do their best to help on notice.

Senator WONG: I am asking you. You are the Cabinet Secretary. What are the dates on which cabinet considered the reversal measures?

Senator Sinodinos: I will have to come back to you.

CHAIR: Therefore, it will be on notice. Thank you very much representatives from the Fiscal Group. We will call on the Markets Group now.