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Finance and Public Administration Legislation Committee
Department of the Prime Minister and Cabinet

Department of the Prime Minister and Cabinet

I welcome back the Minister for Broadband, Communications and the Digital Economy, and Leader of the Government in the Senate, Senator the Hon. Stephen Conroy, representing the Prime Minister, and officers of the department. We will be commencing with outcome 1 followed by the listed agencies. Minister, do you have any opening comments this morning?

Senator Conroy: No.

CHAIR: Ms Leon, do you have any opening comments?

Ms Leon : No, Chair.

CHAIR: Welcome back. Senator Ryan.

Senator RYAN: Are security clearances in the Prime Minister's office for her personal staff a matter for the department?

Ms Leon : The staff of the ministerial offices are employed by the Department of Finance and Deregulation, so they would formally be responsible for their employment.

Senator RYAN: I appreciate that. Are security clearances for staff in the Prime Minister's office dealt with at all by the department? I understand the employment relationship is with the department of finance; we have outcome 3 later this week. But does the department have any role in advising, facilitating or otherwise managing security clearances for staff in the Prime Minister's office?

Ms Leon : We do not have a formal role because security clearances are now all done centrally through the Australian Government Security Vetting Agency, not by individual agencies, but, because people do need to have a security clearance to access our system, we need to ensure that people have undertaken a security clearance process so that we can give them access to the PM&C network.

Senator RYAN: Where does the security vetting agency reside?

Ms Leon : Defence.

Senator RYAN: And all departments now utilise that process through that single agency for ministerial staff? Do all ministers' offices use that with the employment arrangements—

Ms Leon : I believe so. I think some of the security and intelligence agencies have their own arrangements for security vetting, but, so far as I am aware, all other departments and agencies, including those coming through the M&PS area of Finance, use the AGSVA.

Senator RYAN: So you would be advised that staff have or have not been cleared, or their level of security clearance, in order for them to access your system?

Ms Leon : AGSVA does not have to advise us, but we make inquiries of the Prime Minister's office about being kept up to date with security clearances as necessary. We make sure people have lodged their security pack before we give them access to the system.

Senator RYAN: So you have to get advice from someone that a person is entitled to access?

Ms Leon : That is right.

Senator RYAN: That advice comes from the office of the Prime Minister, does it?

Ms Leon : That is right.

Senator RYAN: Who in the Prime Minister's office does it come from?

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

Senator RYAN: Is there someone next door?

Ms Leon : I imagine my security people have a liaison arrangement with someone in the office, but I am sure I could find out during the course of the morning who the person is.

Senator RYAN: Sure.

Ms Leon : I am told that we check with the individual concerned that they have started their security clearance process, and AGSVA can confirm that with us as we need to check as we go along.

Senator RYAN: Does someone get given access to your system upon submitting the required information and subjecting themselves to the process, before the clearance is granted, for lack of a better—

Ms Leon : People in the PMO, or anyone utilising our network, ordinarily will undertake a kind of baseline process initially to ensure that it is appropriate to give the person a waiver while their security clearance is processed. Depending on the level, it can take some months or longer for a clearance to come through. So for our own staff as well, who will not necessarily have a security clearance when they are first recruited, we usually undertake a kind of baseline checking process that enables us to give the person a waiver until their security clearance comes through.

Senator RYAN: So the granting of a waiver is done at the department's discretion?

Ms Leon : That is correct.

Senator RYAN: And the waiver is granted only while assessments are being made? Take me through the process. You do a baseline assessment because the Prime Minister's office has employed a new staff member. They obviously want to start work because these things take a while to process. You do a baseline assessment to grant them a waiver, which, presumably, is for a specified period of time. Or is it open-ended pending the conclusion of the assessment?

Ms Leon : They are for specified periods, but they can be extended.

Senator RYAN: Who in the department makes such a decision?

Ms Leon : The secretary.

Senator RYAN: Do you rely upon advice from the Prime Minister's office as to people who have started work there to undertake your baseline assessment and then for Dr Watt to grant a waiver?

Ms Leon : That is correct.

Senator RYAN: How long is the standard period that a waiver is granted for?

Ms Leon : Three months, usually, when it starts.

Senator RYAN: So I assume that everyone at some point gets a waiver.

Ms Leon : Except where people transfer from another agency and already have a clearance.

Senator RYAN: And they are at the required level of clearance?

Ms Leon : Yes.

Senator RYAN: How often are you required to grant extra waivers or extend waivers—whatever the correct terminology—pending the conclusion of a process? Does it often take more than three months?

Ms Leon : It can often take more than three months. I would not know exactly how often we do that. We process more than 1,000 recruitment or staffing movements, I think, per year or so, where many people would be getting clearances, so I would probably have to take notice how often a security clearance needs a waiver and how often the waiver needs to be extended.

Senator RYAN: Particularly when it comes to staff in the Prime Minister's office. On 5 March, the Australian reported that, while top-secret security clearances are normally granted only to Australian citizens, the requirement for a top-secret security clearance was waived in the case of Mr McTernan, who is a British citizen, in the Prime Minister's office.

Senator Conroy: He is a Chelsea fan. Some credibility comes with that.

Senator RYAN: Does it? I am not a soccer fan, Stephen, I am afraid.

Senator Conroy: It certainly does.

Senator RYAN: Are they playing better than Collingwood?

Ms Leon : The requirement to get a security clearance has not been waived except in the sense that I already spoke—that there is a necessity to grant an interim waiver while a security clearance is processed. But I think what must be being referred to is that we can waive the citizenship requirement for people are undertaking a security clearance process. And we have done that for other people coming to the department from the UK, New Zealand or whatever.

Senator RYAN: Have you done it before for someone in the Prime Minister's office?

Ms Leon : I would have to take that on notice. We would have to go back through our records for that.

Senator RYAN: I am not as familiar with the classification system—

Ms Leon : Usually we try not to reveal a great deal about the individual security processes of particular people, so I am just conscious that we might soon start getting into an individual's personal situation.

Senator RYAN: The issue is that there is a fairly common knowledge that to access cabinet papers, for example, you have a security clearance. I do not think it would surprise anyone that people working in the Prime Minister's office have a security clearance—I do not think we are getting into any danger there.

Ms Leon : I am relaxed about that.

Senator RYAN: I am not going to go to the details of any one particular claim. Mr McTernan has been in the Prime Minister's office for more than three months; in fact, I think substantially so. There seem to be two waivers that he would be considered for, one of which being the one that everyone would get upon starting in the office after their baseline assessment in order to work while the classification is considered. Secondly, there is the issue of a non-Australian citizen or a foreign national. Have I described that accurately?

Ms Leon : Yes.

Senator RYAN: You mentioned that there is a process for the waiver of a foreign national. Are there written rules around that? Or is it again down to the secretary's wish or the Prime Minister's wish?

Ms Leon : I do not know what the rules are off the top of my head. I would have to take that on notice.

Senator RYAN: I would understand it if they were not for publication in this area, but I am wondering if there are a set of written protocols. I got the impression from your earlier answer, Ms Leon, that this was not an uncommon occurrence in the Department of the Prime Minister and Cabinet.

Ms Leon : Yes, I just do not recall the specific protocols that apply.

Senator Conroy: I often wondered how you got through that particular process, Senator Sinodinos; but all is becoming clear.

Senator RYAN: Arthur, you are not giving enough attention to Stephen and he is getting a bit upset.

Senator SINODINOS: Okay.

Ms Leon : We can probably find out the arrangements for you quite quickly. I just do not have those rules to hand.

Senator RYAN: What I am interested in now is: is Mr McTernan currently the beneficiary of a waiver granted because he is a foreign national? Or is he also currently benefiting from a waiver on the basis that consideration is still being given to his application? The reason I ask that is that the latter means that he would have been granted more than one three-month extension, probably up to three or four or maybe five.

Ms Leon : I have tried to answer the question by referring to the practice that we use for people starting in the office generally or starting in the department generally, by which you can infer I am also speaking about the person that you are asking about. But, if we are now going to start talking about the particulars of an individual's security clearance process, I will probably need to try and answer that more generally, for the reasons I outlined. I can say that in relation—

Senator RYAN: I am not sure what those reasons are though. I am happy for you to explain why you do not want to answer the question, but I have not got a handle on that yet.

Ms Leon : Because the individual security clearance process is not something we usually discuss the details of publicly. That is a matter between them, their employer and the security vetting agency. So I do not want to start a precedent for examining the inner aspects of a person's security clearance process, but I can say that the security clearance for the person you are asking about has been handled in accordance with the procedures that apply.

Senator RYAN: I appreciate that, and I am not going to the issue of foreign nationals; you have answered that question in an explanation that makes sense to me. But I think the performance of these reviews—not the content of why they were granted, which I think is legitimately an issue of privacy and also probably of some non-public interest—but if your answer there would basically say that I cannot ask whether someone is continually getting three-month waivers. The impact of your answer is that I cannot examine the performance of the waiver process with respect to any individual. Now that I think is an assertion that goes a bit beyond what would be the legitimate private interest of someone. So I am not asking for the grounds upon which waivers are considered nor about why it is taking so long. I am merely asking how long is this person being given waivers for because the process has not concluded?

Ms Leon : And I think—

Senator RYAN: I am not even asking for the classification.

Ms Leon : I think if I was to start embarking upon a discussion about the steps in a person's individual security clearance process—

Senator RYAN: I am not asking for the steps.

Ms Leon : it would risk opening up to speculation or further inquiry—

Senator RYAN: Speculation is not a reason to not answer a question.

Ms Leon : about the person's security clearance process and about the aspects of that process and what people might think were the reasons for things occurring in the process. That is why I have said that I do not think it is appropriate to answer questions about an individual's security clearance process in any detail. But I can say that the clearance process for the person you are asking about has been handled in accordance with the procedures that apply to security clearances.

Senator RYAN: Okay. Ms Leon, first of all, the possibility that something may lead to speculation does not mean you have a right to not answer a question. Secondly, this has been a matter of public discussion; it has been in newspapers. Thirdly, I am not asking about anything to do with the process for this person's application, the content, or what this central agency is up to or how it operates. I am merely asking: has the department, has Dr Watt in whose authority it resides, granted more than one waiver? Is this person still awaiting a conclusion of a process? I would accept that going beyond that is actually an issue. But, otherwise, if you are asserting that an estimates committee cannot examine that, then you are saying that no committee in this place can actually examine whether or not the department can circumvent the processes by constantly granting waivers.

Ms Leon : You could certainly ask us general questions about how many security clearances have been the subject to waivers, how long waivers go on—

Senator RYAN: Which I have.

Ms Leon : and questions like that. This would enable you to examine the performance of the department and, perhaps by implication, of the security vetting agency, as to how long it takes to get a clearance through. But that is a different question to asking about the status of an individual's security clearance.

Senator RYAN: I am not asking about the status of their clearance. That is a matter to go to this central vetting agency that I am not aware of. You are asserting that the department can circumvent the examination of its performance with respect to any one person merely because you are inventing a new ground upon which you can refuse to answer a question.

Ms Leon : I am happy to take the question on notice and refer it to the individual whose security clearance—

Senator RYAN: Quite frankly, this is nothing—

CHAIR: Senator Ryan, just let her finish.

Ms Leon : we are discussing, so that I can see what further information I can give you.

Senator RYAN: This is nothing but pure obstruction. You are asserting that we can never examine the performance of your department about any one employee, because somehow there is a new ground—which is 'speculation'.

Ms Leon : I did not assert that speculation is a ground—

Senator RYAN: You did.

Ms Leon : for not answering questions.

Senator RYAN: I think we could reread the answer.

Ms Leon : I think I indicated the difficulty of starting to speak about individual's security clearances. I think we have all agreed that there are reasons why we ought to tread carefully when talking about the employment and clearance of a particular individual. In relation to particular individuals, I think that the committee, desirably, will avoid putting an individual in the position of having their employment situation be the subject of scrutiny and speculation. That is the reason I have said that I think we should handle carefully the situation where the questions you are asking go to the employment arrangements of a particular individual.

Senator Conroy: Do you think somebody who gets drunk at meetings and threatens members of the public could get a security clearance?

Senator RYAN: I am not asking about whether this person is going—

Senator Conroy: How is that person going to get a security clearance?

Senator RYAN: to get a clearance. I am asking whether the department—

Senator Conroy: By getting drunk and making threats?

Senator RYAN: is actually going to tell us how many waivers were granted.

Senator Conroy: Seriously, how are they going to get a clearance?

Senator RYAN: Stephen, just settle.

Senator Conroy: How are they going to get a clearance?

Senator RYAN: Go back out on the phone.

Senator Conroy: How are they going to get a clearance?

Senator RYAN: Have some interesting conversation.

CHAIR: Senator Ryan, you are not being helpful. It is a longstanding practice of this committee not to discuss the personal circumstances of an individual's staff.

Senator RYAN: I have been very careful not to, Chair. Very careful.

CHAIR: Now, Ms Leon has offered—

Senator RYAN: This is a question to the department.

CHAIR: Ms Leon has offered to take on notice and come back to the committee with additional information. You have the call for any further questions.

Senator RYAN: I would like to turn to another matter now. Who is responsible—I am assuming it is the department, but I am happy to be corrected—for advising the spouse or partner of a deceased member, minister or senator about whom a condolence motion is being moved? Who is responsible for advising a spouse or partner that that is happening? Is that the Department of Prime Minister and Cabinet or would it potentially be done by one of the parliamentary departments? The Prime Minister, or someone on behalf of the Prime Minister, does move motions occasionally of condolence, so I am starting here.

Ms Leon : I do not have any knowledge of it. I think it may be handled in the office but I will just check with my people to see if we have had any involvement. I am not aware of the department being involved—

Senator RYAN: I thought it might come to the coordination officials that work with both parliamentary departments about the legislative program. The reason I raise it is that on 12 March the Prime Minister made a statement of condolence in relation to the death in February of the the Hon. William 'Bill' Morrison AO, a former Whitlam minister. His widow only became aware of this after the event and apparently was rather upset. Probably more so for the event than the motion, but it was just a courtesy, I think. I am just trying to chase down where it was—

Ms Leon : I will see what I can find out.

Senator RYAN: It could be the parliamentary departments but I thought, if the Prime Minister—in Victoria I know it is done by Premier and cabinet—protocol departments. Can I turn now to the issue of the expenses and staffing levels of the department. In the current financial year the average staffing level number outlined in the budget statement is 698, and it is forecast to grow to 771 next year. Is there an explanation for that?

Ms Leon : That is the result of G20 staffing. There is a—

Senator RYAN: So there are 73 G20 staffers?

Ms Leon : The G20 staff that will come on in 2013-14 will be a 166. So the core department will reduce slightly and the G20 department will grow significantly.

Senator RYAN: So are those 166 seconded staff from inside PM&C, or is that literally 166 new heads? Because it wouldn't surprise me—

Ms Leon : They are all going through a recruitment process but some people from within PM&C are applying for or transferring into those positions. But they are mostly non-ongoing staff, because they have specialist skills in the kinds of activities that will need to be undertaken for the G20: functions, security, catering, transport and so on. So they are mostly being recruited externally and are mostly non-ongoing staff.

Senator RYAN: And when is G20 again?

Ms Leon : 2014.

Senator RYAN: The first half or second?

Senator Conroy: It is 15 and 16 November.

Senator RYAN: —the growth in staff the following year to accommodate the actual event?

Ms Leon : Yes, the staff will continue to grow. In fact, in the last month or so there will be a peak of 300-odd staff, because that will then include seconded liaison officers from other agencies. I will just get you the total figures for G20, which I think I have here somewhere. I have the forecast headcount as at 30 June each year. So there will be 166 at June 2014, and 111 at June 2015.

CHAIR: Senator Abetz.

Senator ABETZ: Thank you, Chair. I want to talk about some areas in relation to our cybersecurity. Are there any existing government networks being hardened by excluding components from particular suppliers or countries?

Dr McCarthy : The security of individual agency networks is a matter for the individual agencies. I can take your question on notice.

Senator ABETZ: That is what concerns me a bit, because, as I understand it, our departments do no have universal encryption. Is that correct?

Dr McCarthy : I will take your question on notice.

Senator Conroy: Could you just clarify the question?

Senator ABETZ: We were just told by our security advisor that individual organisations and departments—

Senator Conroy: I am asking for a classification of 'encryption'. There are different levels of encryption so I was just wondering if you—

Senator ABETZ: I am not going to go through all the different levels of encryption chapter and verse. What we have confirmed is that there is no universal encryption across departments that that is coordinated by, let's say, you, Dr McCarthy, or by ASIO, or DSD, or whoever else the relevant department might be; each individual unit of government is responsible for its own security, which would include whether or not they have encryption.

Dr McCarthy : I can confirm that it is not part of my role to coordinate standards of encryption across government networks. The Defence Signals Directorate, of course, provides information, security and guidance to government networks, and the Attorney-General's Department overall is responsible for protective security policy.

Senator ABETZ: But do you know?

Senator Conroy: I think she obviously took the question on notice.

Senator ABETZ: Does she know? She will not have to take that on notice. She either knows whether she does or does not, right here and now. Is she going to go away and consider and come back in three months time, as is the wont with some of these answers, and say: 'Yes, I did know at the time but, bad luck, the opportunity has now passed.' Surely she must know.

Dr McCarthy : As you will be aware, there are a range of classifications of systems. There are highly classified systems across government which obviously have a higher level of protection than systems at lower classifications. I do not have with me today the technical information on the levels of encryption for each of those systems.

Senator ABETZ: Right. I was not asking you about the levels of encryption. I was asking whether there was a universal application of security requirements across government or does each individual department makes its own decision as to how much security there is and whether or not they might or might now be able to afford encryption of whatever level.

Senator Conroy: That is why I said that it would be helpful if you were able to clarify what levels of encryption, because, as I think it has been explained—

Senator ABETZ: You just ignored my question—

Senator Conroy: Different departments have different information that they store.

Senator ABETZ: Of course they do. Do they advise themselves of the need for security and the level of encryption, or is there a body within government which says: 'Look, you are administering $100 grants. Chances are, that does not require as much security as'—just to pick a random example—'the design of ASIO headquarters'.

Dr McCarthy : The protective security policy framework administered by the Attorney-General's Department lays out the protective security requirements for government departments. In respect of information technology, the Defence Signals Directorate is responsible for advising agencies and laying down the standards for the security of information technology networks. It is the responsibility of each department to put those standards into operation.

Senator ABETZ: Yes. So we know whose responsibility it is. But I am wondering if, being the national security advisor in the Prime Minister's office, you actually know what goes on in relation to the various departments and the DSD?

Dr McCarthy : I do not keep on a daily basis a record of what each department in government is doing in respect of its information technology security requirements. I understand and have explained that there is a framework. There are protective security policies and standards that agencies are required to observe. It is up to those individual agencies to observe those standards.

Senator ABETZ: All right. Are you aware of any existing government networks being hardened by excluding components from particular suppliers or countries?

Dr McCarthy : I think when you first asked that question I said I would take it on notice. There are obviously many government departments—

Senator ABETZ: Because you do not know.

Dr McCarthy : I do not know the answer to that specific question.

Senator ABETZ: I am not asking you for a list of all of them. I am just asking: to your knowledge, are there any? Is there one that you are aware of? I am not asking for its name. I am just asking if you are aware whether or not this is a occurring within one or any of the multiplicity of departments and agencies under the control of this government.

Dr McCarthy : Agencies make their own decisions based on the protective security policy framework—

Senator ABETZ: Yes, but are you aware? I know they make their own decisions. All I want to know is the state of knowledge of the national security adviser in the Prime Minister's department.

Dr McCarthy : I have said that I will take that question on notice.

Senator ABETZ: So you are unable to tell this committee whether there is any one agency or one department that is currently hardening or excluding components from particular suppliers or countries for its network. You are unable to tell us.

Dr McCarthy : I have said that I will take that question on notice.

Senator ABETZ: Yes, but I am entitled to ask why you are taking it on notice. Is it because your state of knowledge is that you actually do not know whether or not any department is engaged in the activity to which I previously referred?

Senator Conroy: The officer has tried to be as helpful as possible. Whether or not this information is required in her role may or may not be the case. She has taken it on notice and she will give you an answer. Hectoring her in the way that you are is not helping the proceedings of the Senate.

Senator ABETZ: My goodness! If that is hectoring, I invite you to have a look at yourself at question time.

CHAIR: I remind the committee members that witnesses are entitled to take questions on notice. The witness has indicated that that is what she is going to do.

Senator ABETZ: And as an independent chair you would also acknowledge that committee members are entitled to ask why a certain question is being taken on notice. If it is because of a deficient state of knowledge, which often is the case—and by saying 'deficient state of knowledge' I do not mean that in a pejorative sense—or they want to be extremely careful in relation to the answer they are giving and as a result want to consider it and take the question on notice to give a considered answer, all those things happen on a regular basis at estimates. But, because it appears at this stage that no excuse, reason or rationale has been given for the taking of the question on notice, I am clearly entitled to pursue this line of questioning. I ask again, Dr McCarthy: why is it that you need to take this question on notice?

Dr McCarthy : I am comfortable in saying that, as you indicated, I would like to consider the issue carefully before providing you with an answer. There are any number of reasons why any agency might include or not include certain components as part of their overall security network So I would like to consider the answer carefully before responding.

Senator ABETZ: But I am not asking for any agency by name or description. All I have asked is: are you aware of such activity in the full range of government departments and agencies? I would have thought you could give an answer of yes or no—that you are or are not aware of it. Then I could ask: is it occurring? If you then said, 'I am not going to indicate which agencies or departments,' I could understand that as a response. But to simply say that you are not even going to answer whether or not this activity is going on quite frankly beggars belief. But, if you are saying that you have to consider an answer as to whether or not you know whether this activity is taking place in any department—unidentified—that leaves me scratching my head. We cannot then really pursue any further questions here as to whether or not the government have an overall approach on these matters, whether the government are concerned or whether they believe they are successful with the activities which are being undertaken. I think the Prime Minister did talk in a speech recently about her concerns and what the government was doing. I do not have that quote with me, regrettably, it seems. But you would be aware of the Prime Minister's speech on national security?

Dr McCarthy : Yes, I am.

Senator ABETZ: So we have the Prime Minister, as the head of government, talking about the government being engaged in some of these activities. But her National Security Adviser is unable to confirm. I find this to be quite an astounding turn of events.

Dr McCarthy : The issue of whether departments use or do not use certain components is one of numerous issues which go to the challenge of cybersecurity. In that same speech, as you will be aware, Senator, the Prime Minister announced—and I answered some questions about this last night—the establishment of the Australian Cyber Security Centre to increase the integration of the agencies which work on cybersecurity across government in order to better meet that difficult challenge.

Senator ABETZ: In her speech, the Prime Minister said:

For the public sector—

and I would have thought you might have had some interest in this—

we must ensure that our most important networks are some of the hardest to compromise in the world.

That is what the Prime Minister said in her speech. You are her National Security Adviser. I am assuming that is correct, is it not?

Dr McCarthy : That is correct and—

Senator ABETZ: So, in those circumstances, can I ask and pursue the question then: how are we going with this task? The Prime Minister has publicly said:

… we must ensure that our most important networks are some of the hardest to compromise in the world

Senator Sinodinos interjecting

Senator ABETZ: As Senator Sinodinos quite rightly says, that is an unconditional commitment. Yet, when I try asking a question here related to the Prime Minister's speech—which was made public—I am absolutely stonewalled. I think the reason is that you understand that there might be some questions in relation to what happened to the ASIO headquarter plans. But it is just quite astounding—

Senator Conroy: Do you have a question in amongst your stream of consciousness?

Senator ABETZ: Yes, why is it that this National Security Adviser cannot give us an update in relation to the Prime Minister's assertion that we must ensure that our most important networks are some of the hardest to compromise in the world? Can I ask this of you, Dr McCarthy: are we ensuring that our most important networks are some of the hardest to compromise in the world?

Dr McCarthy : I can assure you that agencies are working very hard to ensure that is the case and that government regularly receives advice on that issue. For example, it is now mandatory for agencies to put into place the Defence Signals Directorate's top four mitigation strategies in relation to information technology security. I can assure you, Senator, that agencies and their IT security areas in particular are working closely with the chief executives of those agencies on a daily basis to ensure that those networks are as secure as they can be.

Senator ABETZ: Good. It looks as though our state of knowledge has improved over the last few minutes, and I welcome that. The Prime Minister indicated:

… we must ensure that our most important networks are some of the hardest to compromise in the world.

As part of that promise and what you have just told us, can you now advise, without naming the departments, whether or not any existing government networks are being hardened by excluding components from particular suppliers or countries. Does that fit in with what you have just told us?

Dr McCarthy : I have said on a couple of occasions during our discussion that that particular question about components is one that I would like to take on notice.

Senator ABETZ: Are we satisfied that sufficient certification is taking place in relation to the various government departments and agencies when the private sector is involved in supplying these networks?

Dr McCarthy : Each agency, under the Protective Security Policy Framework, is responsible for making their own judgements in light of that network about the components that they use and do not use. I am satisfied that agencies are working hard to ensure that they meet those protective security policy requirements in respect of components and in respect of other aspects of information technology security.

Senator ABETZ: So do you value-add anything into the Prime Minister's department, or are you just the conduit that reports to the Prime Minister as to what every other department is doing?

Dr McCarthy : Part of my role is coordination across the national security community. Mr McKinnon, the Deputy National Security Adviser, has a particular coordination role in relation to cybersecurity policy, and I advise the Prime Minister on a range of national security matters, including on cybersecurity policy and its implementation.

Senator ABETZ: So, in advising the Prime Minister on cybersecurity policy, do you from time to time make suggestions that it might be appropriate for a particular agency or department to have its existing networks hardened by excluding components from particular suppliers or countries?

Dr McCarthy : As I have indicated, the security of individual networks is a responsibility of the chief executives of those networks. In my coordination role and my role as adviser to the Prime Minister, I provide advice on, if you like, the system as a whole. I do not advise the Prime Minister on individual agency networks.

Senator ABETZ: But I thought we had just discovered that there is no system as a whole, because each individual department and agency does its own thing.

Dr McCarthy : I do not think that is an accurate characterisation of the way in which individual agencies work to meet their requirements under the Protective Security Policy Framework. As a matter of policy, agencies do not just do their own thing.

Senator ABETZ: But you said before, in effect, that it is the full responsibility of the head of agency or department. Whilst I accept that, I am just wondering whether from time to time you give the Prime Minister the benefit of your assessment as to whether the decision of a particular department or agency might be the best and the highest standard to ensure, to quote the Prime Minister again, 'that our most important networks are some of the hardest to compromise in the world'.

Dr McCarthy : It would not be my role to advise the Prime Minister on what an individual agency ought to do; although, it might be that I provide advice to the Prime Minister on the way in which individual agencies are responding to particular challenges in light of the protective security policy framework. But it is not my job to, if you like, audit individual agencies and provide the Prime Minister with a judgement.

Senator ABETZ: So whose role is that? The individual head of each agency and department?

Dr McCarthy : As I have said, it is the role of the head of each department, the head of each agency to ensure that their protective security arrangements—physical, personnel, information, technology, information technology—are meeting the protective security policy framework. Mr McKinnon may be able to add some more information on some of the work we do in advising the Prime Minister and coordinating in relation to the system as a whole.

Mr McKinnon : Senator, one of my roles is security community's chief information officer. In that context I chair a meeting which brings together the whole national security community, CIOs, and that agenda is basically about improving the connectivity between all of the agencies. That goes to issues about identity of users and metadata tagging, all of those sorts of things that directly relate to the security of the systems. The Attorney-General's Department looks after the protective security policy framework is very much a part of that discussion, as we together seek to improve the connectivity within our system and to improve and maintain our security settings.

Beyond that, there are our obligations in intelligence sharing arrangements, which I cannot go into detail about. Essentially they play into our protective security policy framework settings, and there are very strict standards about security. So, as the national security advisor has indicated, there is a constant ongoing process of making sure that we understand what the requirements for protection of information are.

Beyond that, it gets down to the individual agency to allocate its resources and makes sure that it meets the standards that are required of it. They have certain minimum standards. Dr McCarthy mentioned the DSD's top four risk-mitigation strategies just as a starting benchmark, but that is only a part of it. All of those efforts are reported up through coordinated agencies, responses to cabinet.

So overall the system is very tightly tied together. But it does not come down to us looking to try and design the network for any particular agency or to say: you can use these switches or these routers or not.

Senator ABETZ: So we have got a great understanding of the issue. We have got all of these great procedures in place, and yet the plans for the ASIO headquarters can be hacked. Does that ring any alarm bells with the national security advisor? Are we doing the job well? What went wrong?

Dr McCarthy : Senator, as I think you may be aware, that allegation was made, as I understand it, in the Four Corners program last night. The Attorney has indicated that he does not comment on intelligence matters, and it is government policy not to comment on intelligence matters.

Senator SINODINOS: This goes back to this issue of the Prime Minister's statement. Where I think Senator Abetz is going with this is: who audits departments and agencies to make sure they are meeting commitments to the standards specified by the Prime Minister in her national security statement?

Senator ABETZ: Very good question.

Mr McKinnon : Senator, essentially the agencies themselves are responsible for their IT security. DSD plays a very important role in—you may call it an audit, but in essence it is vulnerability testing, which is testing the internet-facing gateways and doing a technical assessment.

Agencies can ask for this sort of assistance at any time that they may want to. The cybersecurity operations board that we talked about yesterday is now very actively involved in setting the direction of where these activities may go—in other words, making their own policy as well as technical-related assessments of which agencies may be at the most risk. This may be either because of the material that they might hold or because of the nature of their networks. That plays into a prioritisation of what may be a focus for the resources that the government brings to bear on externally, if you like, auditing this. So it is a combination of the agencies themselves having to guarantee their IT security against the protective security policy framework standards and then reporting on their own performance in that regard, and DSD helping them with an assessment of their network vulnerabilities.

Senator SINODINOS: Do you have a capacity to judge whether they are meeting their commitments outlined by the Prime Minister?

Mr McKinnon : We are not involved in judging that ourselves. But they are required to report on any major intrusions, and of course DSD is keeping its own records of intrusions.

Senator SINODINOS: And who do they report the major intrusions to?

Dr McCarthy : National Security Committee of Cabinetreceives advice on cybersecurity.

Senator ABETZ: How does that occur? I assume you do not call the committee together for a report. If there has been a breach, one would presume it is urgent to advise the relevant people. Does that advice get emailed to them? Are they telephoned? Are they given a handwritten letter? How do we communicate that to the members of the National Security Committee? Or do they just find out at the regular monthly meeting?

Mr McKinnon : With the new cybersecurity operations board in place there is a regular report to that board of trends in cyberattacks. Of course, some intrusions into some networks are less important than others. The cybersecurity operations board would immediately report to ministers. Obviously the Attorney-General has overall responsibility for what would be a cybercrisis. Also you can assume that, if there were a major breach, it would be reported to the government immediately. In addition, there is a regular reporting update on all of these developments.

Senator ABETZ: Yes, but, if there is a major security breach, is the Prime Minister not notified immediately, personally? And it does not go through the National Security Committee of Cabinet?

Dr McCarthy : We would normally be advised if there were a major breach and, as in the past, we would be able to advise the Prime Minister of that having occurred.

Senator ABETZ: Individually?

Dr McCarthy : Sorry, individually?

Senator ABETZ: As in not in the committee context but individually, directly—

Dr McCarthy : Yes. If I were advised of a major breach, I would not wait until there was a meeting of the National Security Committee of Cabinet.

Senator SINODINOS: This is abstracted from Four Corners; I am talking more generally here. In the context of a major breach which is believed to have compromised the efficiency or effectiveness of, say, a building, would the government contemplate gutting the building and starting again?

Dr McCarthy: You are asking me a hypothetical question. I do not think it is helpful for me to answer that.

Senator SINODINOS: It is hypothetical, but it is along of spectrum of potential responses. If the government, or you as advisers to the government, believed a building had been sufficiently compromised, would we have to start from scratch again? Is that something the government would contemplate, if that was the advice from security agencies?

Dr McCarthy : As I said, it is a hypothetical question and the actions that agencies might need to take or that government might need to consider would depend on the individual case.

Senator ABETZ: Let us start from scratch, Dr McCarthy. Have you seen the Four Corners program?

Dr McCarthy : No, I was here in estimates last night.

Senator ABETZ: Have you read a transcript of the Four Corners program?

Dr McCarthy : I have not read a full transcript of the program. I am aware of some of the comments made in the program.

Senator ABETZ: Do you have no comment to make at all as to whether any elements of that report are true and correct?

Dr McCarthy : I have already indicated that in relation to one of the allegations made on the program about the ASIO building the Attorney has already made it clear that the government will not be commenting on that.

Senator ABETZ: But we were given these wonderfully warm assurances by the Prime Minister in a public speech that we will ensure that our most important networks are some of the hardest to compromise in the world. So the government is more than happy to say what a great job they are doing and what they are going to do. But when we have a fairly fundamental breach, such as that which was alleged on the Four Corners program, all of a sudden the government has absolutely nothing to say.

Dr McCarthy : I do not think it is the case that nothing has been said about the issue—

Senator ABETZ: I withdraw that. 'No comment,' was said. I agree that something was said; it was, 'No comment.'

Dr McCarthy : There was no comment, as I understand it, by the Attorney on that particular matter. But I have not read the full transcript or comments made more broadly by government ministers and senior officials about these matters. Government and senior officials provide information into the public domain on a regular basis about the government's protective security policy framework and the way in which certain organisations can assist the private sector in hardening their networks. I answered questions last night and at the previous estimates about the establishment of a cybersecurity centre and the governance arrangements that will be in place. There is no shortage of information in the public domain about the importance of cybersecurity, the measures that have been put in place and the organisational arrangements being put in place to meet this very significant challenge. But there will always be individual issues that, as the Attorney said, for reasons having to do with intelligence operations it is simply not appropriate for comments to be made on.

Senator ABETZ: Dr McCarthy, did you think that this issue of the hacking of the plans for the ASIO headquarters might be raised at estimates this morning? Did that possibility even enter your head?

Dr McCarthy : Yes.

Senator ABETZ: If it did enter your head, why didn't you avail yourself of the full transcript so that you could be properly briefed and prepared to answer questions this morning?

Dr McCarthy : As I have indicated, the Attorney has made it clear that the government is not going to comment on the allegation about ASIO.

Senator ABETZ: That is easy then: you do not have to avail yourself of viewing the Four Corners program, reading the transcript or finding anything out about it. I would have thought that as a matter of some urgency you as a national security adviser would have been keenly interested in finding out what was on the Four Corners program last night. Even if you were not going to say anything to us about it, you in your role had a duty and an obligation to ensure that you were certainly acquainted with that report and thus able to advise the Prime Minister. You saw no need to acquaint yourself with the transcript or that report?

Dr McCarthy : I am aware of the report. I am aware of various allegations and observations that were made in the report. In relation to at least one of those allegations the Attorney has made it is clear that the government is not going to comment. In relation to other allegations that were made, I very much doubt that I would have been in a position to personally check their veracity overnight. The Four Corners program and the allegations made on it will certainly be the subject of briefing, but it is important before providing any information to this committee that I am able to satisfy myself not only as to the veracity of those allegations but also whether it is appropriate for me to make comment on the allegations.

Senator ABETZ: But how can you make a decision on the veracity of the allegations or the appropriateness of commenting on them unless you have actually read them or seen them and informed yourself about them? Have you provided any advice to the Prime Minister on the Four Corners program?

Dr McCarthy : Not as yet.

Senator ABETZ: We can make a decision on live exports on the basis of a Four Corners program overnight, but we get the ASIO headquarters' plans hacked—which is not denied—and we are fiddling around as though nothing much has happened. I must say that I find that quite disturbing. Given what you have indicated, Dr McCarthy, can you advise whether or not—and you do not need to name any country—we have a suspect country of origin from where the hacking may have emanated?

Dr McCarthy : The government does not comment publicly on the source of cyberintrusions, whether state or nonstate.

Senator ABETZ: That answers my next question, which was: was it a state actor or other actor? You are not going to comment on that either, I assume?

Dr McCarthy : I am not.

Senator ABETZ: Are you able to tell us whether or not the ASIO headquarters' plans have, in fact, been hacked and stolen?

Dr McCarthy : The Attorney has already declined to comment on the allegation on the grounds that it goes to intelligence matters. I am not going to comment on the allegation.

Senator McLucas: It has been a longstanding process of this parliament that we do not comment on issues that may be related to national security or intelligence. You know that.

Senator ABETZ: But the Prime Minister—

Senator McLucas: I really do find your line of questioning of this particular witness somewhat offensive.

Senator ABETZ: Oh, really?

Senator McLucas: I do.

Senator ABETZ: You have that on the record. Are you happy about that now, Minister? You have made your contribution to this discussion. It is very unhelpful. Given that the National Security Adviser has not availed herself of the Four Corners program or read the transcript of it, can we be at least assured that someone somewhere in the national security space of this government has in fact availed themselves of the Four Corners program or at least read a transcript or have people followed your lead, Dr McCarthy, and not availed themselves of the full information on the Four Corners program so long after its airing? This is a major and serious allegation that ASIO headquarters' plans have been hacked and stolen. You have not availed yourself of the report asserting that. Has anybody in government acquainted themselves with the full ABC story?

Dr McCarthy : Yes. I can assure you of that.

Senator ABETZ: Who was that?

Dr McCarthy : I know the Attorney-General's Department has done that and I think officers in our own department have availed themselves of the transcript.

Senator ABETZ: So officers have, but the head of the department has not?

Dr McCarthy : Senator, I am not the head of the Department of the Prime Minister and Cabinet.

Senator ABETZ: I accept that, but the National Security Adviser in the Prime Minister's office has not availed herself of what I consider to be an absolute obligation in the circumstances of these very, very serious allegations and breach of security. That the plans of our own future ASIO headquarters can be hacked and stolen I would have thought would be sending alarm bells ringing everywhere around the national security space in this government, including with you, Dr McCarthy.

Dr McCarthy : Senator, I said that I had not read the transcript. I have received a briefing about the range of allegations that were made in the program.

CHAIR: I take this opportunity to welcome Senator McLucas, the Minister for Human Services, to the table. Welcome to your first estimates here with us as a minister.

Senator KROGER: Dr McCarthy, could you give us an update on the responses to those questions I put on notice last night?

Dr McCarthy : Yes. You asked a number of questions last night and we have worked to get answers to as many of those as possible. For completeness—before Ms Klugman provides the information that we have gathered in response to your questions—you might find it helpful to know that, from the beginning of 2012, the Prime Minister's office sought regular factual updates, which were provided by the department, on the cases of Mr Joyce and Mr Lee. The Prime Minister's international adviser, in the Prime Minister's office, passed to the Prime Minister on a regular basis the diplomatic cable reporting on these cases. Our ambassador in the UAE took several opportunities, when the Prime Minister was transiting in the UAE on official travel, to update the Prime Minister on these matters. Ms Klugman can now go into more detail about the specific questions that you asked.

Ms Klugman : You asked about the dates of formal briefings given to the Prime Minister on the cases of Mr Joyce and Mr Lee. I can tell you that PM&C provided the Prime Minister with five formal written briefs on this. There was a policy advice brief dated 17 July 2012, a policy advice brief dated 30 November 2012, a policy advice brief dated 1 February 2013, a meeting brief—as we call them—dated 4 February 2013, and a policy advice brief dated 21 May 2013. You are aware that the Prime Minister wrote a letter on 15 June to the UAE Prime Minister and Ruler of Dubai. You will be conscious that that was six days after she received Mrs Joyce's letter, which you referred to yesterday. I can tell you that between February 2009 and May 2013 the cases were raised at Foreign Minister level on at least 14 occasions. In that period, in addition to those 14 occasions on which the Foreign Minister of Australia raised these cases with the UAE senior authorities, the Governor-General did so once, the Prime Minister did so twice, the parliamentary secretary did so twice and the defence minister did so twice.

You were interested as well to know about the efforts expended to confirm that the Ruler received the Prime Minister's correspondence of 15 June. I was looking last night and this morning at what records I have concerning this. The records will be much more extensive in the Department of Foreign Affairs and Trade as the lead on consular matters, but I can confirm to you that Pablo Kang, our ambassador in the UAE, confirmed directly to me that the Prime Minister's letter was received four ways into the UAE system, including by formal diplomatic note to the Ruler himself. In addition to that, copies were passed to the Director-General of the Dubai Ruler's Court; the UAE Minister of State, who has primary carriage for the Ruler's correspondence; and the senior official, the Under-Secretary of the Ministry of Foreign Affairs. As I said, a copy went to the Ruler directly, under the cover of a third-person note. It would be highly unusual, on that basis, if the Ruler had not seen the letter, but I cannot give you any more certain information than that.

Senator KROGER: Thank you very much; I do appreciate the time you have put into this. We did not rise until very late so you clearly were up very late ascertaining all of this. I do really appreciate that, Ms Klugman. As you have pointed out, much of this resides in the Department of Foreign Affairs and Trade and so I will follow up through the appropriate avenues next week in relation to Foreign Minister contact and so on. Given what was said last night I am not sure that you would choose to answer this. I have been advised of the content of the Prime Minister's conversation to her counterpart in the UAE, Sheik Maktoum. Did the four policy advices and one meeting advice, I think is how you termed it, following the Supreme Court judgement and 21 May, cover advice to the Prime Minister? Was the judgement discussed in those meetings and ways in which the government perhaps could be assisting the Joyce and Lee family in that regard?

Ms Klugman : Senator, those go to the substance of advice. You could ask when advices were given but it is very unusual to go to the substance of the advice.

Senator KROGER: We did discuss this at length yesterday, and I am choosing not to table a document today, which basically provides that advice. I am not going there and that is why I am asking, I guess in a fairly open, fairly generic way, if you like, whether in fact the judgement was part of the considerations and briefings of the Prime Minister's office.

Ms Klugman : Sorry, Senator, are you talking about the Victorian court judgements?

Senator KROGER: Yes.

Ms Klugman : Yes.

Senator KROGER: You said that the first policy advice was on the seventeenth of the seventh, and there were subsequent ones after that, although I note that one, two, three were this year, and only two after the Victorian Supreme Court determination. What avenues have been explored to advocate for the case of the Joyce family? There is a very public perception that the innocence that has been proven here in Australia was not properly pursued and supported in the UAE. I hear you saying that there were five policy advice briefings, but I know following this that there was one letter last year and a phone call.

Ms Klugman : Yes, a letter last year in June.

Senator KROGER: One letter last year and a telephone call.

Ms Klugman : And a telephone call in February this year.

Senator KROGER: And a telephone call.

Ms Klugman : That is correct.

Senator KROGER: Has the Prime Minister sought to contact the UAE authorities directly since the sentence was handed down last week?

Ms Klugman : Not that I am aware of, no.

Senator KROGER: Have there been any briefings to the Prime Minister since the sentence was handed down last week?

Ms Klugman : Yes, that last briefing in the list that I read out to you was a post-sentencing update for the Prime Minister.

Senator KROGER: That was 21May 2013.

Ms Klugman : That was pretty much straight after it.

Senator KROGER: So was that a factual brief about the determinations of the court in Dubai?

Ms Klugman : That was providing a substantive update to the Prime Minister on what had happened.

Senator KROGER: I would not be wrong to suggest it was a factual account of what happened?

Ms Klugman : Correct.

Senator KROGER: In relation to the sentencing. So there has been no consideration given to what the Prime Minister can do from here?

Ms Klugman : First of all there are questions of appeals which are being worked through by the individuals concerned. There is a period within which those appeals should be lodged, whether they are appeals against the conviction, its severity, or indeed appeals in the other case.

Senator KROGER: Acquittal.

Ms Klugman : The sensible approach, of course, is to allow the principals in this case to make their decisions about both appeals and legal tactics. At this stage the briefing that we have given to the Prime Minister has provided her with an update. I will not go into further detail about its contents. I will just repeat that the two representations from the Prime Minister were in addition to14 at foreign minister level, one at Governor-General level, one at parliamentary secretary level and two by the defence minister. So it is a very substantial—

Senator KROGER: I appreciate that. I will take up the detail of those next week. I have asked these questions so many times in estimates. That degree of interaction must be very latent because it certainly has not been divulged in previous estimates. I am happy to pursue that next week because they will have the details, and I am mindful of moving things along today. Just a couple of points, if I may. Firstly, I think I asked some 22 questions last night that were taken on notice. I do not know whether you have taken all those into consideration. One was in relation to the ASIC investigation into corporate governance of Sunland Group—whether the Prime Minister was aware of it, and if so, whether there had been any engagement encouraging ASIC to expedite that. Do you have any information on that?

Ms Klugman : Again, it is unusual for us to go into the detail of the substance of briefs we put to the Prime Minister. I can, though, assure you that our briefing to the Prime Minister covered all material facts and issues in the cases.

Senator KROGER: That being the case, that briefing would have included the fact that the key witness has admitted under oath here last year that the evidence he gave in Dubai which led to Matthew Joyce's charge was false, was incorrect.

Ms Klugman : Sorry, what is the question?

Senator KROGER: The question is: given it was in the factual account, it would have presented the determinations of the Victorian Supreme Court that the key witness, who resides in Australia, gave a false account of what took place in Dubai, and it was on the basis of that false account that Matt Joyce has been sentenced.

Ms Klugman : Again, I won't go further into the details of the content of the brief.

Senator KROGER: I appreciate that. Do you feel like you still have questions on notice from last night?

Ms Klugman : Not really, honestly, but I am happy to—

Senator KROGER: That is fine. I will review and see if I need more. Thank you.

CHAIR: We will take out morning tea break now.

Proceedings suspended from 10:26 to 10:45

Senator RYAN: I would like to turn to the re-appointment of the Australian Electoral Commissioner. What is the role of the Department of the Prime Minister and Cabinet in appointments that go to the Governor-General?

Ms Leon : It varies depending on the appointment.

Senator RYAN: For this appointment, then?

Ms Leon : In relation to any significant appointments, of which this would be one, the relevant portfolio minister is required to write to the Prime Minister, and the Prime Minister decides whether the appointment should be decided by her or go to cabinet. And the department briefs the Prime Minister in relation to cabinet consideration of appointments.

Senator RYAN: So, how do we ascertain, given that there is a degree of cabinet confidentiality, whether or not a particular appointment went to cabinet?

Ms Leon : As you know, we do not usually disclose what goes to cabinet. But I think it is fair to say that—

Senator RYAN: This is a high-level appointment.

Ms Leon : Significant appointments do usually go to cabinet.

Senator RYAN: This was an appointment that was announced by the Special Minister of State in a press release on 12 April this year. But the term of the commissioner did not expire until 4 January next year. Is that correct?

Ms Leon : The announcement by the Special Minister of State said that it takes effect from 4 January 2014, yes.

Senator RYAN: As far as you know, was that the date of the expiry of his existing term?

Ms Leon : I think that is right, but I do not have the exact date with me.

Senator RYAN: I have an answer from the finance portfolio in front of me—F66—which says that he was appointed from 5 January 2009, expiring on 4 January 2014. So we will take that as a given.

Ms Leon : And as you are aware from that, the electoral commissioner is in the finance portfolio.

Senator RYAN: I am particularly interested here in the involvement of the Prime Minister, given that—I think you used the words 'significant appointment'—I think we would all concede that the electoral commissioner is a significant appointment. Was this particular appointment process initiated by the Prime Minister, or by the relevant minister?

Ms Leon : The normal practice is that the relevant minister would write to the Prime Minister proposing a re-appointment, and I do not have any information to suggest that that was departed from.

Senator RYAN: But this is a bit outside normal practice, isn't it? This is eight months before the expiry of a term over an election period. That is not what I would call normal practice. I am happy to be corrected if making appointments eight months out is considered normal practice.

Ms Leon : In relation to all appointments, the usual practice is that they are initiated by the relevant minister writing to the Prime Minister proposing an appointment or a re-appointment, and it is then for the Prime Minister to determine the path that will follow. I believe that was the situation in relation to this appointment. If that is not the case I will advise you during the course of the hearings or on notice.

Senator RYAN: Unless advised otherwise—and I take it you do not have everything handy—this would have been the minister, who at that point would probably have been Mr Gray, but I am happy to be corrected if it was Mr Dreyfus, if you get further information—

Ms Leon : I am sure we can check that for you.

Senator RYAN: It would have been the minister writing to the Prime Minister initiating the appointment process. Can you take on notice the provision of a copy of that letter?

Ms Leon : I can take on notice whether we can provide that, yes.

Senator RYAN: There was an extensive period of time between this process being initiated, which I assume was at least a week before the announcement was made—so at the start of April—and the announcement. A week before the announcement was made is a day short of eight months from the expiry of the term. What is your knowledge, Ms Leon, of the normal period, or the most common—or regular, to use a less pejorative term—length of time for such a process? You would see a few of them, I imagine.

Ms Leon : Statutory appointment processes do usually take quite a while.

Senator RYAN: In that case, it would have started more than eight months beforehand—potentially nine or 10.

Ms Leon : I do not know if I can accurately speak about a 'normal' period. It can take some months. But to give you a more accurate date, we would have to go back and assess the database of appointments over a period of time. But it can take some months in the processing.

Senator RYAN: Are there protocols around the consideration of significant statutory appointments relating to the length of time prior to their expiry that they are made—or considered? I assume a re-appointment would take slightly less time than an initial appointment. But let us assume a couple of months, which is what you implied. That would mean that this process was commenced 10 months before the expiry of the term.

Ms Leon : Without checking the date of the correspondence, I could not say exactly when it was commenced. But I think I have already undertaken to find out for you the correspondence route that it took. I can include in that the date that it was commenced.

Senator RYAN: Presumably the department provides advice to the Prime Minister both with respect to the initial—

Ms Leon : There is a formal process for appointments in the Cabinet Handbook, which is a public document. I can provide a copy to the committee. That says:

In preparing appointment proposals for the Prime Minister’s consideration, ministers must ensure that proposals reach the Prime Minister’s office at least 15 working days before the Cabinet meeting at which the appointment may be raised for consideration. As a general rule, proposals should be submitted for consideration well in advance of the time the position is to be filled, but usually no more than three months in advance. For appointments that require Federal Executive Council consideration, calculation of the lead time must take into account the cut-off dates for submission of Federal Executive Council agenda items.

That is really just going to—

Senator RYAN: What section was that from?

Ms Leon : That is annex J, paragraph 2 of the Cabinet Handbook.

Senator RYAN: I am just scrolling down to it.

Ms Leon : That aspect does go to making sure that things have time for consideration by the Prime Minister, by the cabinet and by the Executive Council, so that ministers do not come forward with an appointment that they intend to announce next week, or for an appointment which is expiring next week—not leaving enough time for everyone to consider.

Senator RYAN: I am just noticing a clause in that paragraph. There is also the opposite—which is that one would not seek to bind future governments by making appointments too far in advance. Just reading the second sentence in paragraph 2 of annex J, it says:

As a general rule, proposals should be submitted for consideration well in advance of the time the position is to be filled, but usually no more than three months in advance.

To apply the 15-day test to this puts it well beyond eight months.

Ms Leon : I think this paragraph is not directed to the matter you refer to about not binding future governments. It is really directed just to the mechanics of getting the matter through the Prime Minister, cabinet and the Executive Council. That is what those time frames are directed to and that is why it appears in an annex to the Cabinet Handbook—the annex being the one which deals with the mechanics of how to get these dealt with in a process of paperwork and meetings and consideration.

Senator RYAN: No, I appreciate that. But, similarly, the words are fairly clear that there is a general rule that proposals should be submitted for consideration well in advance of the time the position is to be filled—I do not think anyone disagrees with that—but usually no more than three months in advance, and it has an extra consideration of timing for federal executive council consideration, which this appointment is. Assuming that federal executive council consideration does not require five months, is the department aware—or did it provide advice on—anything related to the fact that this appointment was made significantly in advance of the time the position is to be filled, that the position was not vacant?

Ms Leon : Any advice that the department provided about it would have been in the context of briefing the Prime Minister for consideration by cabinet, so it would not be appropriate for me to go into that.

Senator RYAN: I appreciate if any advice was put forward for consideration by cabinet, but the process you outlined earlier is one initiated by the minister concerned. So, let's assume the Special Minister of State wrote to the Prime Minister attempting to initiate the appointment process. The department may well have provided advice to the Prime Minister at that point that was not subject to cabinet, and the Prime Minister could have accepted or rejected that advice. That advice could have been, 'It's a bit early', or, 'The other guys did it a year ahead, so you are running late'. And the Prime Minister could choose to accept or reject that advice. That advice would not be cabinet advice.

Ms Leon : No, although I think, as the minister has already indicated today, the content of advice that we provide to ministers is not normally shared.

Senator RYAN: Ministers say that a lot, but it actually has no basis in fact or the resolutions of the Senate.

Ms Leon : I think the relevant aspect of that is, as you would be aware, that there has been a longstanding practice by governments of all persuasions that in order to operate effectively governments need to be able to receive advice from their departments, to be able to receive that advice that is frank and fearless and to be able to have that advice kept confidential. So, that has been a convention that has been adopted by successive governments.

Senator RYAN: It has not been a convention that has been adopted by the Senate.

Ms Leon : It has been adopted by successive governments that they not seek to see or to reveal the advice that has been provided to ministers.

Senator RYAN: So, can I take it that you are refusing to indicate whether or not any advice was provided to the Prime Minister about the initiation of the appointment process? I am excluding the cabinet process from this, because I am not questioning that that is not subject to disclosure whatsoever. We can keep wasting everyone's time and going over this, but if you are saying that you are not going to indicate whether such advice was provided—

Ms Leon : I think I said that I would take on notice what the process had been by way of correspondence, and I am happy to also take on notice whether I can say anything more about the advice that was provided.

Senator RYAN: Then I will use other routes to actually chase this up, one which officials cannot stonewall.

Ms Leon : I can provide you some further information about a matter that you asked about the lead times. The electoral commissioner is governed by the merit and transparency guidelines, and those guidelines would have required the responsible minister of state—which was, as you said, at the time Minister Gray—to advise Mr Killesteyn in writing no later than 4 September whether he intended to re-appoint him to the position.

Senator RYAN: We are all a bit busy, then. Let's be blunt, Ms Leon: I will use other routes to access the information that you do not have the same opportunity to simply stonewall. I am not asking for cabinet advice. The fact that the minister, in a caretaker provision, would be required to provide some advice under guidelines during a caretaker period does not provide, without any further context, the excuse for an appointment being made eight months early and potentially being commenced 10 months or more early. The context of that advice is important. So we will head elsewhere for that.

I will turn now to a departmental administrative issue. I am looking at the answer to question 61, which was a question I asked about amenities to staff. The department answered: 'The following amenities are provided for PM&C staff' and amongst various bullet points it separately listed a carers' room and a reflection room. The Department of the Prime Minister and Cabinet annual report for 2011-12 refers, on page 80, to an onsite carers' and reflection room. I am just wondering: are they the same facility, or are they separate rooms?

Ms Leon : I have not ever availed myself of the carers' room or the reflection room, so I might need to seek some advice from the officers who are here.

Senator RYAN: I am just wondering if they are the same room or separate rooms. Different documents imply different things.

Ms Leon : My experience of being with small children is that there is little time for reflection!

Senator RYAN: I am learning that myself!

Ms Leon : So it may be that they are separate rooms, but I will find out from officers who are present and get back to you within the session.

Senator RYAN: Okay, we will come back to that. I have a quick question with respect to a budget measure, which Senator Mason briefly discussed last night, which was the Better Schools: A National Plan for School Improvement new school funding model. Under the budget measure, there is a paragraph that I would like to read. It is the third paragraph on the page, and it reads:

Under the former approach of growing these allocations in line with Average Government Schools Recurrent Costs (AGSRC), schools funding growth could have fallen below these levels. Had the AGSRC fallen to 3 per cent per annum (as suggested by current State estimates, on average), then the total additional investment in schools under the National Plan for School Improvement would equate to approximately $16.2 billion over six years (2014 to 2019).

Are you familiar with that section?

Ms Wilson : Yes.

Senator RYAN: My question goes to whether the Department of the Prime Minister and Cabinet had a role in drafting that section, or anything in that measure.

Ms Wilson : The measure descriptions are largely drafted between the portfolio—in this case, DEEWR—and Finance. Certainly I was party to seeing drafts of it, but the agreement happened between those two agencies.

Senator RYAN: Did you provide comments on drafts?

Ms Wilson : Certainly we provided some suggestions for wordsmithing on the measure.

Senator RYAN: So, would it be fair to say that the description of the measure is agreed upon between DEEWR and Finance but that you, representing the Department of the Prime Minister and Cabinet, had a role in its drafting in terms of making comments and wordsmithing, to use your terminology?

Ms Wilson : I think it is fair to say that we provided some suggestions.

Senator RYAN: Thank you. Sorry, but that is important for a couple of estimates hearings this week. It was following up from Senator Mason last night.

I will now turn to an issue of the appointment of the CEO of the Indigenous Land Corporation, which could be covering similar ground that we covered earlier with respect to appointments. As I understand it, Mr Bruce Gemmell has been re-appointed CEO of the Indigenous Land Corporation.

Ms Cross : I think these matters are handled by FaHCSIA, because that is a portfolio body within the FaHCSIA portfolio.

Senator RYAN: Again, what I want to get to here is the appointment process. I am not certain of how this particular organisation is classified. I am more familiar with what we discussed earlier, like the AEC. Is this an appointment on which the minister would consult with the Prime Minister? Is it an appointment made by the minister solely? By the cabinet? By the federal executive council?

Ms Cross : I would have to check that for you. Again, with most appointments they either consult with the Prime Minister or go to cabinet. But it varies, so we would have to confirm that for you.

Senator RYAN: And I appreciate that you cannot necessarily confirm what goes to cabinet. Perhaps I could ask you to take on notice the consultation with the Prime Minister outside the cabinet process with Mr Gemmell's second appointment as acting CEO of the Indigenous Land Corporation, because, as I understand it, the Indigenous Land Corporation limits a person's appointment to one six-month term. And this person, after serving less than six months, has resigned, and it has been confirmed that the person has been re-appointed to another six-month term. I have no idea whether that is against the technical definition in the act, but it strikes me as being against the spirit of the act.

Ms Cross : We will follow that up for you.

Senator RYAN: I might put some further questions on notice, but if you could find out if that was a process commenced by the minister and whether it went to the Prime Minister before going to cabinet, that would be much appreciated. I will now turn to the ministerial code of conduct. Can you clarify again—because I do occasionally get a little bit lost between the staff code of conduct and the ministerial code of conduct—the role of the department in supporting the Prime Minister's administration of the ministerial code of conduct?

Ms Leon : I am not sure quite what you mean.

Senator RYAN: The Prime Minister enforces a ministerial code of conduct.

Ms Leon : That is correct.

Senator RYAN: I am assuming that the Prime Minister's department provides assistance for the Prime Minister in doing that, as opposed to Finance, which I understand looks at the ministerial staff code of conduct.

Ms Leon : We do not have any formal role in relation to it. The Prime Minister is responsible for managing the enforcement of the code. From time to time we may be asked for input to decisions that the office or the Prime Minister are considering, but it is not something we have a formal briefing role in relation to. These are mostly matters of judgement for the Prime Minister.

Senator RYAN: I appreciate that. I am assuming that occasionally there are requests for either historical knowledge or research of the department.

Ms Leon : That is right.

Senator RYAN: Has the department been asked to provide any advice with respect to the allegations made against Assistant Treasurer David Bradbury regarding briefing business on market-sensitive information prior to the budget?

Ms Leon : Not that I am aware of. I would have to take on notice whether we have, but it certainly has not come to my attention.

Senator RYAN: If it was different, I would appreciate that. I now have a question that is more appropriate for the Prime Minister, so I will direct it to the minister. Minister, has the Prime Minister undertaken any investigation into the allegations against Assistant Treasurer Bradbury regarding his claims of briefing people about the budget before the budget was brought down?

Senator Conroy: My recollection is that the Prime Minister might have answered a question on this in parliament.

Senator RYAN: We were busy listening to your words of wisdom in the Senate!

Senator Conroy: I know, and I do appreciate and value that! I will take that on notice.

Senator SINODINOS: Senator Wong might also be able to answer this.

Senator Conroy: Yes, but I am just trying to remember. There was some discussion on this. But I will take it on notice.

Senator RYAN: You are not familiar with any particular investigation?

Senator Conroy: No.

Senator RYAN: I think I am down to my last issue now. Did the department write or did the Prime Minister's office write her speech on the Indigenous recognition bill that she spoke about in the House of Representatives when the bill was put through the House?

Ms Leon : Officers present do not have any direct knowledge of it, but we will just have to check. We do write speeches for the Prime Minister from time to time, but we do not write all of them.

Senator RYAN: I appreciate that.

Ms Leon : We will just have to go back and check whether we had written or contributed to a draft of that one.

Senator RYAN: Could you let me know whether the department actually prepared that speech, or whether it was done in the Prime Minister's office.

Ms Leon : Yes.

Senator RYAN: I think Senator Sinodinos had a couple of things on this.

CHAIR: Before I give you the call, Senator, Ms Leon has some matters that she wanted to report back to the committee on. It might be timely to do that now, if it is convenient.

Ms Leon : We were asked some questions last night about the size of the Prime Minister's delegation and other departments' delegations to an international meeting, and we undertook to find out what we could overnight. I now have an officer who can provide you with some more information about that.

Mr Leverett : Senator Kroger asked about the size and cost of the Prime Minister's delegation to the Rio+20 meeting. I can confirm that the Prime Minister's delegation was very much a standard delegation for any trip the Prime Minister makes, not just this Prime Minister but all previous prime ministers. Her delegation was 20 people: nine from her office, three from the Department of Prime Minister and Cabinet and others including a doctor, AFP, RAAF and other support staff. Her delegation did include the Secretary of the Department of Foreign Affairs and Trade and the Secretary of SEWPaC. So it was 20 in total. The cost is a bit more tricky because different departments pay for different people. But the three people from PM&C, the total cost for their attendance was $41,000, and the total cost for the Prime Minister and her office staff—the MOPS staff—was $101,000. The cost for other officials who attended, of course, we cannot reply for, but I do note that there was a series of questions back in November last year from Senator Birmingham to ministers whose officials attended the meeting, and those questions have all been answered. So it is on the record what other departments paid for their officials. The only other comment I would add is that, in drilling down to the costs, accommodation may seem high. There are two explanations for that. At major international conferences like Rio+20, APEC, G20 and so on, it is a fact that hotels who have a captive market double and triple their charges for those periods. The other thing they tend to do is require accommodation be taken for minimum blocks of time, usually four or five days. We might only be there for two or three, but you have to pay for four or five, and we have no choice with that. So that does account for some of the slightly higher costs. But PMO costs were $101,000 and PM&C costs, $41,000.

CHAIR: Thank you very much. Senator Ryan, you have one final question.

Senator RYAN: I note in your annual report, as part of the work health and safety outline on page 80, you provide various health programs such as exercise classes and yoga. Are they on a cost recovery basis for staff?

Ms Leon : No, they are provided by outsourced providers on a full cost recovery basis. The staff pay for them at commercial rates.

Senator RYAN: I just was not sure, with the language.

Senator SINODINOS: I have a couple of questions on Iran. During the last round of Senate estimates, on 11 February when we discussed Iran's nuclear program, the department—I think it was Ms Klugman—stated that Iran's nuclear program is a primary and constant concern. Is the department able to provide the committee with an update on Iran's nuclear program, in particular how far Iran might be from the 'red line' that was defined by the Israeli Prime Minister, Benjamin Netanyahu, in a speech to the UN General Assembly last September?

Ms Klugman : You are correct. We continue to provide updates to the Prime Minister and more broadly to senior ministers on our concerns about Iran and its nuclear program. I do not think I am best placed to talk you through an update on what is happening in Iran and with that nuclear program. I can repeat what I told you at the last estimates, which is that the issue of Iran is certainly still on our radar. It is a matter of briefings to the Prime Minister on regular occasions and other agencies of government. Other departments, probably DFAT in the first instance, would be best placed to talk to you about the state of—

Senator SINODINOS: We will be asking DFAT. Are you across what efforts we are making in the Security Council on this issue?

Ms Klugman : On Iran broadly, you are aware that we impose sanctions—both those mandated by the Security Council and additional autonomous sanctions as well. Those additional autonomous Australian sanctions have been stepped up over the last period. There is a process of review being finalised now for a further set of changes to those autonomous sanctions. On Iran more broadly and action at the moment on the Security Council, there is no current action underway on the Security Council beyond the work that we and other members of the council do through those sanction subcommittees, some of which we chair.

When it comes to Iran, I think the system is also conscious that we are looking towards elections in Iran and that the international processes—the P5+1 talks, for example, which have had another couple of rounds this year—that have been going on are coming up against the reality that Iran and the Iranian system are now entirely focused on those coming elections.

Senator SINODINOS: So as far as you are aware our policy position on Iran has not altered in any way since the February estimates?

Ms Klugman : No.

Senator SINODINOS: Part of the reason I ask that is that the Netanyahu government has said in the past that all of the options are on the table, which has been interpreted by some people as suggesting military action in order to halt Iran's nuclear research. We asked this of the foreign minister at the last estimates and will ask him again, but would Australia sanction any action outside the parameters of something approved by the UN Security Council?

Ms Klugman : I do not think I can answer such an open-ended and hypothetical question.

Senator Conroy: Senator Sinodinos, rather than a Senate estimates question I think it is a question that the foreign minister would be very eloquent on.

Senator SINODINOS: I am sure he would be. Just finally, I refer you to an article published in the UK Telegraph on 18 May 2013, titled 'Iran dispatches warship to shadow Gulf exercises'. According to the article, 35 ships are engaged in a current training exercise to search for sea mines in the Strait of Hormuz, including some Australian ships. Can the department provide an update on what role Australia is playing in such exercises?

Dr McCarthy : I would refer you to the Department of Defence for specific questions on operational deployments.

Senator SINODINOS: Okay. Thank you.

Ms Leon : I can now provide a response to the question on the speech that Senator Ryan asked about. We did provide a draft speech to the office but in the time since you asked your question I cannot say whether that was delivered as we provided it or rewritten or changed in the Prime Minister's office.

CHAIR: As there are no further questions in this area, we will move on to the Australian National Audit Office.

Ms Leon : Ms Cross has an update on the appointment question that was asked.

Ms Cross : I am just confirming that Minister Macklin did write to the Prime Minister about the appointment on 29 January, and it was agreed through an exchange of correspondence. We will get back to you on the other matters that you raised.

Senator RYAN: Would you also take on notice: did that exchange of correspondence in any way deal with what I understand is the term limit upon an appointment of the CEO of this organisation?

Ms Cross : We will check that for you and get back to you.