Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
ECONOMICS LEGISLATION COMMITTEE
12/04/2011
Foreign Acquisitions Amendment (Agricultural Land) Bill 2010

CHAIR —Welcome. Do you have an opening statement you would like to make?

Mr Bugg —Very briefly. Thank you for the invitation. As you and the committee members would be aware, we have provided a submission. Essentially, that submission reflects a view that the maintenance of an online register that provides information on individual ownership of agricultural land is not consistent with the ABS’s role as Australia’s national statistical organisation and is actually inconsistent with our legislation. I am happy to answer any further questions about that.

CHAIR —In your submission you say:

The ABS is undertaking a new survey, the Agricultural Land and Water Ownership Survey (ALWOS) which will be collected under the Census and Statistics Act 1905, to address the current lack of information available on foreign ownership of agricultural businesses, including land and water entitlements.

We have already heard this morning that there is clearly a deficiency in the amount of information available. Would you elaborate a bit more on what you are doing there and how you expect that survey to be used.

Mr Bugg —Certainly. The survey is in the field at the moment, so the form has been developed and tested. We have undertaken our sample design and our normal preparation processes for that. We expect that the results of that survey will be available in September this year. As you have already alluded to, that survey is going to provide some information on ownership, particularly foreign ownership, of agricultural land, agricultural businesses and also water entitlements used for agricultural purposes.

CHAIR —That is going to be a snapshot of the situation now. Are you aware of any plans for that to be updated from time to time or is it just a one-off?

Mr Bugg —That will collect information for December 2010. That is essentially the reference period that we will be asking providers to complete the survey for. At this stage we do not have any plans to collect that or similar information again in the future. We have a large and important agricultural statistical survey program that includes a five-yearly agricultural census. That is the largest business based collection that the ABS undertakes. We also undertake an intercensal agricultural survey.

CHAIR —What does the agricultural census you do every five years measure?

Mr Bugg —That measures a range of things. One of the important things it measures is production of agricultural commodities—wheat, barley, cattle numbers et cetera—which is essentially core information used by government departments around policy but also by the industry itself. It also collects information on water use. For example, we have a time series of water use by agricultural businesses including for irrigation. It also collects information on, for example, the area of agricultural land, the area of crop land et cetera. So it really is the foundation of our agricultural statistics program nationally.

CHAIR —Is that in particular agricultural areas or would it be possible to get some ownership questions in there? Is it an incomplete survey that would not allow a view of ownership in Australia?

Mr Bugg —The census is exactly that. It does actually go to all agricultural businesses on our register. There are about 170,000 agricultural businesses that it does go to. Small operations, those with an estimated value of agricultural operations below $5,000, are not included in the scope of the census, but with that exception essentially it does actually go to all agricultural businesses that are on the register.

CHAIR —Would you see it as a great difficulty to include some information about ownership of the enterprise?

Mr Bugg —I think that for future census that is a possibility. It is not possible for the current census, which is going to be dispatched in June. That reflects the time that is needed to prepare for and undertake an agricultural census. I guess it is similar to the population census, which is quite a considerable operation. We do need to make sure that when we are asking farmers questions we are doing so in such a way that they can provide the information and that the information and the outputs from that will be of high quality and will therefore be useful. It is a possibility. I would say that for future censuses there is significant demand for space. Every five years we do go to all agricultural businesses so there is a lot interest in getting questions on the census, including from the horticultural industry and other players as well as government agencies. So it is something that would be considered as part of the mix in terms of future requirements for the census.

CHAIR —Who considers that? Who makes the decision about what is included?

Mr Bugg —The Australian Statistician determines the ABS work program and there is legislation and regulations around that.

CHAIR —Thank you.

Senator XENOPHON —In relation to the survey that the Assistant Treasurer commissioned last year, what is the status of it and what is the scope of it?

Mr Bugg —Very briefly, that is proceeding as planned. It was dispatched at the end of March, literally only several days ago.

Senator XENOPHON —So it only commenced at the end of March?

Mr Bugg —No, there was preparation that needed to occur before that. The survey is actually out in the field now. It has been dispatched to agricultural businesses and therefore we expect that we will be receiving returns and responses to that survey now.

Senator XENOPHON —To what extent can you be satisfied that the information received will be accurate? In other words, what penalties are there if someone gives you misleading information?

Mr Bugg —I will take that question in two parts. The first part is around the accuracy or the quality of the information that will be provided. Essentially, as with all of our surveys, the development of the survey and the development of the form has undergone a rigorous testing and quality assurance process, including the initial design, to ensure that the information can be provided. We expect that the information that will be provided through the survey will therefore be of a high quality.

The other part of your question was around what measures there are to ensure that we actually get sufficient responses and returns from providers. It is important to point out that the farmers and the agricultural industry historically are cooperative. We do have a good relationship with agricultural providers. They willingly provide their information because they recognise the importance of it for their industry.

Senator XENOPHON —I just wanted to ask what happens in circumstances where it is a trust arrangement and they have got managers who are running a property? The managers may not even know who is behind that trust if it is a foreign private investor. To what extent can you look behind a transaction and to what extent are the land titles offices in various states of use to you in determining whether to look behind the ownership of a particular farming enterprise?

Mr Bugg —I think I understand your question.

Senator XENOPHON —I did not articulate it very well; sorry about that.

Mr Bugg —To finish my previous answer: the Australian Statistician can compel providers to provide information if they are not cooperative. It is used very rarely, but we have the ability to do that. In relation to the survey, it is collecting information on direct ownership so that is for direct ownership of the agricultural businesses, the water entitlements et cetera. One of the reasons for that is that we have a limited ability to track responses through that chain of ownership. There will be some follow-up that I will provide as to ensure the quality of the information they are providing in relation to direct ownership. The outputs that are being produced from the survey will be on that immediate ownership of the business and the water rights.

Senator XENOPHON —It will include water rights because that is a real concern.

Mr Bugg —Yes, it will: ownership of the agricultural businesses, ownership of the agricultural land and ownership of the water entitlements used for agricultural purposes.

Senator XENOPHON —Senator Heffernan, before Treasury, our previous witnesses, raised an issue about sovereign wealth funds having to go to FIRB for approval. There is no threshold for any amount. You may want to take this on notice: with respect to a company that is guaranteed by a foreign government or foreign wealth fund, to what extent can you as statisticians look behind transactions? If there are complex trust arrangements—and I think there was a bit of a scandal in New Zealand a number of years ago with the Crafar farm where there was some fraud involved and the like—to what extent can you look behind that in the context of sovereign wealth funds and if they are guaranteed by a foreign government?

Mr Bugg —I would like to take that question on notice in relation to the survey that will provide information on direct ownership. It may be possible to explore chains of ownership further with information on business registers et cetera. In relation to the survey outputs, that would be for direct ownership.

Senator XENOPHON —You can see that if somebody has the will to do so they could find ways to obviate the efficacy of the survey. They could find ways to obfuscate, to hide the true ownership, through a complex trust or other arrangements.

Mr Bugg —In relation to that question, we will be providing information on whether the direct owner is a foreign entity or organisation. Beyond that, if there is an additional change of ownership, then the survey will not provide that information along the lines that you are asking.

Senator XENOPHON —Finally, how close are we to having this survey published?

Mr Bugg —The results should be available in September this year.

Senator XENOPHON —Will they be tabled or just published on the web? What is the mechanism? Will it go to the minister first?

Mr Bugg —We will release those publicly, so they will be available on the ABS website. There is some provision to have lock-ups on the morning of release for Treasury’s officials et cetera. That requires approval of the Australian Statistician, but I understand there is desire to do so.

Senator XENOPHON —So it will be open; it will not be held up beyond September at this stage.

Mr Bugg —That is correct: it will be released in September.

Senator CAMERON —Mr Bugg, why has there been no attempt in the past to analyse the amount of foreign ownership in the rural industries of this country by ABS?

Mr Bugg —The indirect answer to your question would be that, as I said at the outset, the work program is considered and developed to meet what is determined to be the highest priority information requirements across the work program. Therefore my answer would be that this has not been considered to be sufficient priority to require that attention.

Senator CAMERON —So one of our biggest industries has not been considered a priority by the ABS?

Dr Charker —I think what we are talking about is that we have to deal pragmatically with relative priorities in our work program, and we are fundamentally not resourced to do everything which would be considered a priority. So we are in a situation where the Australian Statistician has to make a decision about which priorities simply are more important than other priorities. That is not a question of something not being a priority or being a priority.

Senator CAMERON —And who determines the priority?

Dr Charker —The Australian Statistician, as Mr Bugg has mentioned, ultimately determines the work program of the Bureau of Statistics. But, in doing that, he takes into consideration a range of inputs from entities like the Australian Statistics Advisory Council, which has representation from state and territory governments, from the non-profit sector and so forth. That—combined with a range of other user groups which exist in the bureau, all of which we report on in our annual report—gives us that information that the Statistician needs to determine the work program.

Senator CAMERON —So, in relation to what we have been discussing and the impact of free trade agreements on our capacity to determine ownership of agricultural industry, the ABS does not understand or know what has been happening—is that correct?

Dr Charker —No, I could not agree with the premise of that question. I think the issue at hand for the bureau is that we operate within a fixed pool of resources. We have to make priorities and take decisions about our work program.

Senator CAMERON —No—the premise of my question is that you do not know. It is either a yes or a no.

Mr Bugg —I think we would acknowledge that there is actually limited information available on the extent of foreign ownership of agricultural land and water entitlements.

Senator CAMERON —I have been trying to find out about the statistics of a number of the so-called free trade agreements that we have entered into. I do not suppose the ABS has done any analysis of the benefits or otherwise of free trade agreements in terms of the statistical analysis of the outcomes, has it?

Mr Bugg —I am not sure that is a statistical question and therefore I do not believe that I am in a position to answer it.

Dr Charker —We certainly do not do analysis of the policy benefits of or disadvantages arising from particular forms of agreement such as those which you are referring to. So that is something that is not within our scope.

Senator CAMERON —Okay. Thanks.

Senator HEFFERNAN —You provide the advice on these purchases—the foreign acquisition of agricultural land. Senator Xenophon has raised the difference between a sovereign acquisition and a sovereign guaranteed acquisition. Will you define that? ‘No,’ is the answer, I think.

Mr Bugg —I think I need to take that question on notice because I want to make sure that I fully understand the question, and I am not sure that I do at this stage.

Senator HEFFERNAN —Well, just to make sure you do understand it: with a lot of these companies you are dealing with corrupt governments—for instance, in a lot of Asia; you can acquire a signature over there, if you have enough money, for almost anything. I will not name any of the countries that this involves, but say I am a former government person and have gone off and started a company and have managed to get a sovereign guarantee for my funding of my company—as opposed to David Murray’s sovereign funds, which are direct government money—to acquire land in Australia. Do you make a distinction between the actual sovereign wealth fund acquiring it and a company guaranteed by a sovereign fund acquiring it?

Dr Charker —My understanding is that we are only assessing direct ownership, as reported by the provider, in this collection. But I would very much like to take that notice if I could, please.

Senator HEFFERNAN —If the government is providing the guarantee of finance, you do not define that, you think?

CHAIR —No, they are taking that on notice.

Dr Charker —We would like to take that on notice, to give you a considered response.

Senator HEFFERNAN —All right. So, in your audit report, will you have been to the land titles office for all acquisitions? How are you getting the information?

Mr Bugg —I would say two things. The first one partially addresses your first question. We will not be collecting information on acquisitions as part of the survey. The survey is actually of agricultural businesses and will be collecting information on ownership of the businesses, land and water entitlements, and that will be as of December last year—that is the reference period for the survey. So that will be the information that is produced.

Senator HEFFERNAN —But surely that includes the land titles? Do you go to the land titles office to get that?

Mr Bugg —The ABS can collect information by direct collection, and that is the methodology that underpins the outputs that we will be producing in September.

Senator HEFFERNAN —So you do not back it up with having a look at the title?

Mr Bugg —We do have information that we attain from various sources, including from the tax office, that we use to maintain the register. In this case I am not aware that we will actually be going to—

Senator HEFFERNAN —But the proof of the pudding in who owns the land is in the title to the land—you do not look at that?

Mr Bugg —Not for this collection.

Senator HEFFERNAN —Oh, my God. So this is ticking the box like an ABS return—you do not audit the return. What we are dealing with here, and what I would like the Australian public to be aware of, is the distortion in the market that can occur. For instance, Shenhua up in the Gunnedah valley have acquired several farms as part of their mining operation and they are 68 per cent owned by a province in China. That is who owns it: the coal mine. They paid $310 million for the exploration rights for a lease similar to one that BHP paid $100 million for, and that is because they have a non-market currency to do this which has the backing of sovereign guarantee. That then distorts the local land market because they have paid two and three times—

CHAIR —Senator Heffernan, really—

Senator HEFFERNAN —I am coming to a question. Tony Windsor sold his family farm recently for several times its market worth to a coalminer. As ABARE, do you take into consideration those sorts of propositions as to where agriculture is heading, the distortion in the market? For instance, Great Southern Plantations, the local farmers—

CHAIR —Senator Heffernan—

Senator HEFFERNAN —This goes to the methodology of the collection of their data.

CHAIR —Well, they can answer that question but I emphasise that they have said they will take on notice the method of their collection as well.

Mr Bugg —Senator, I think we do need to take your question around sovereign ownership on notice. I would like to get back to you—

Senator HEFFERNAN —So can we come down and visit you blokes to make sure you have all this in your head?

Mr Bugg —I can certainly pass on that request to our—

Senator HEFFERNAN —Can I also say that with Great Southern—

0Senator Cameron interjecting

Senator HEFFERNAN —Yeah, but this is all about where we are going with sovereignty. This is not about where we are going to be tomorrow. It is bloody serious.

CHAIR —Senator Heffernan, do you have any more questions?

Senator HEFFERNAN —I do. Great Southern Plantations would have gone to, I presume, the Foreign Investment Review Board. I am putting on notice to the committee that we want the board here, not the bureaucratic advice to the board. McGrathNicol sold off Great Southern Plantations, 252,000 hectares in the Green Triangle in Victoria. Do you take that into consideration? There were 700-odd titles. The local farmers actually wanted to disaggregate the plantation into one lump because they would have paid approximately double what the foreign acquirer paid for it if they could have got it back to farm it, which would have meant a lot more employment. In ABARE do you take that into consideration when you are looking at these things?

Mr Bugg —Senator, you have mentioned ABARE twice. I understand they will be appearing after us, and I believe they have actually produced some information on foreign ownership of agricultural land in the past, and—

Senator HEFFERNAN —Yes, I meant to say ‘Bureau of Statistics’. The question is to you, not to the next witness.

CHAIR —What is the question, Senator Heffernan, I think they are bit—

Senator HEFFERNAN —For the purposes of acquiring the knowledge, does the Bureau of Statistics break down to the actual land title who owns the land or do they just go off a form?

Mr Bugg —It is a business based collection.

Senator HEFFERNAN —But that relies on the business owning up.

Dr Charker —Senator, we can undertake to provide you on notice with an explanation of the methodology that we undertake for the collection.

Senator HEFFERNAN —I think your methodology is seriously flawed.

Dr Charker —We will certainly provide you with some information.

CHAIR —I think maybe you should wait and see, Senator Heffernan.

Senator COLBECK —My questions follow on from Senator Heffernan’s as to how you actually identify a farm business. How often is that information refreshed and how is it classified? That is a similar question to what Senator Heffernan was asking.

Dr Charker —The ABS maintains a register of businesses, and that is refreshed regularly. Essentially that register is drawn from our own activities that we undertake with businesses to update information about some of the basic, if you like, business demographics of businesses, such as their size, number of employees, industry and so forth. We also use Australian Taxation Office data to build and to refresh our business register. So the frame, if you like, or the group of businesses we have used to form the basis of this collection, comes directly from the business register that we maintain through our own activity as well as through input from the ATO. We specifically have identified those businesses which are characterised as being in the agricultural industry.

Senator COLBECK —So to a certain extent it depends on them characterising themselves through whatever reporting processes they have with government, whether it be through the tax office or through their interactions with you?

Dr Charker —Essentially. I would have to take on notice the exact detail we use to classify a business in an industry on the register but that is certainly the basis for the collection.

Senator COLBECK —So how would a water trading company, whose business is water—and that is one of the key issues that we are talking about here—come into that process? It might be a GBE, for example, a government business selling water into the water market. How do you make sure that you capture all of the water trading companies as part of this process? They might show up as a water trading business, not necessarily as an agricultural business. How do you make sure that you capture them as part of this process?

Mr Bugg —We will not capture them unless they are involved in agricultural production. In this case, the collection will provide information on the use of the land and the use of the water entitlements. So it will provide information on use by agricultural businesses for agricultural purposes. It will not provide information on trading of water.

Senator COLBECK —So unless somebody actually reports to you through their agricultural business that they are purchasing a water entitlement for use in agriculture, unless you track through an agricultural business to find out who is using the water and where it might be coming from, the ownership of that water does not show up in the process.

Mr Bugg —Yes. The response to how the register is maintained is correct, and we do actually undertake maintenance of the register of agricultural businesses to ensure that we have good coverage of those businesses who are involved in agricultural activities. That is significantly around making sure that we have the ability to provide quality information. In this case the survey will provide information for water use for agricultural purposes—not necessarily how it might have been traded before it was used for that purpose.

Senator COLBECK —In that context, how do you determine the ownership of the water? If all you are doing is collecting data on who is using it and who might be buying an entitlement for a period of time, how do you then gather good or complete information on who owns water? It might be a sovereign wealth fund, a GBE or anybody else who owns that water right. How do you, as part of survey that the government has put in place, gather the data on who owns it, if all you are doing is collecting information on who is using it? That might be through the use of an entitlement for a 12-month period that a farmer has purchased for a particular year but it does not give you the trail back to who actually owns it. Is that information being gathered as part of the question?

Senator HEFFERNAN —They do not have the resources.

Dr Charker —Essentially, we have given an undertaking that we will provide a more detailed explanation of the methodology to this committee on notice. That will explain the scope and the limitations to our collection. I expect there will be pragmatic considerations which will impact on just how far back in a trail we can accurately collect some information. But I would prefer not to pre-empt our response. We would rather take it on notice and give you a considered explanation of exactly what we are and are not collecting.

Senator HEFFERNAN —But you do not go to the title of the land or the water.

CHAIR —Senator Colbeck, have you finished?

Senator COLBECK —No, I have not. This process, this special investigation, is being sold in the context of providing the base information as to who owns the land, who owns the agricultural assets, and yet it appears that we are not going to get the information as to who owns the water. We find out who is using it—okay, that is valuable information. But we do not find out who actually holds ownership.

Mr Bugg —I do not think I agree. I may not have answered the question clearly enough. We certainly will not be providing, through this survey, any information on urban water use, for instance, but if water is being used for agricultural purposes we will be collecting and producing information on that.

Senator COLBECK —I will give you an example that I know of very well in Tasmania. There is a lot of water in Tassie that is owned and managed by government business enterprises. There were three regional enterprises created a couple of years ago. A proportion of that is being used and developed for use in agriculture by those GBEs. So you will find out through the process who is using the water. In some cases there are entitlements that are purchased as part of that process, so the farmers do have a right to the water, but the actual ownership of it is a totally different ballgame.

It works very differently in mainland states but the ownership of water has been separated from the title to the land. That is where the nexus is provided, and if you have a large amount of water aggregated in one entity—a water trading company—then water goes to different purposes and places. Unless the users are identified, through some process, as being agricultural businesses, they slip through the cracks of this process.

Mr Bugg —We will try to provide some more information about this in our response. I think there are different concepts: the water supplier and the water user. So in this case we are going to the user of the water for agricultural purposes to ask for that information on the ownership of it.

Senator COLBECK —Yes, I understand that. To go back to Senator Cameron’s questions on priorities, your priorities would change based on circumstances that might apply at different times in a particular timeline. So if there is a change in regulation responding to ownership of water then that becomes a different priority. So you would not necessarily have had to worry about collecting data on those things in the past. Obviously the circumstances that exist surrounding concern about ownership of foreign land have created a changed circumstance where the government have said, ‘We need to collect this data.’ So the priorities are effectively determined by individual circumstances over time. That would be a fair assessment, would it?

Dr Charker —They are determined, I suppose, by a range of circumstances, such as those you have alluded to, which could include particular policy imperatives and particular social phenomena. There are a range of activities, priorities or policies in the environment which, collectively, influence what we collect in our work program.

Senator COLBECK —Disaggregating ownership of water from ownership of land actually changes that game a little bit. So it is a different dataset that has been collected in a different form than the dataset collected before that disaggregation.

Dr Charker —Could you clarify your question, Senator.

Senator COLBECK —I think we are on the same page. Senator Cameron was talking about the priorities and effectively who sets the priorities for collection of data.

Dr Charker —Yes.

Senator COLBECK —When the ownership of the water went with the land it was not so much of an issue. Who owns the land owns the water, so you are not having to worry about something separate, but now that that has been disaggregated and it is tradable—it is part of the overall economics of agriculture and trade—it becomes a different issue in the overall scheme of things because the ownership of the land does not necessarily give you an indication of ownership of water. That is what I was trying to get at. So priorities will change based on different settings at different times and also circumstances and policy.

Dr Charker —Yes, I think that is a fair comment, but it is not just the priorities. In that example the measurement of those two separate concepts would therefore change, noting that the link which perhaps previously existed between them has changed.

Senator HEFFERNAN —So you are not interested in who owns the water as much as who uses the water. Do you know who holds the biggest water licence in Australia?

Mr Bugg —Do we collect that information directly?

Senator HEFFERNAN —Do you know who the biggest irrigation water licence holder is?

Mr Bugg —I believe I do.

Senator HEFFERNAN —Who?

Mr Bugg —I believe that would be Cubbie station.

Senator HEFFERNAN —It is Murray Irrigation Limited. Cubbie does not actually have licences, by the way. To this point, they have only used authorisations.

CHAIR —Senator Heffernan, Senator Xenophon has questions after this so could you move it along please.

Senator HEFFERNAN —You are not tracking who owns the water; you are tracking who uses the water?

Mr Bugg —Yes, I think that is a clear point.

Senator HEFFERNAN —So you will not know if a big lump of Australia’s water is owned by foreign companies? You will only know who is using it.

Mr Bugg —Sorry, Senator, I will just clarify the previous response. We have collected information for a decade now on water use by agricultural businesses, and that information is produced on an annual basis. This survey, the agricultural land and water ownership survey, will collect information on direct ownership of Australian agricultural businesses, land and water entitlements.

Senator HEFFERNAN —You were saying earlier that you were interested in who is using the water but you are also going to go to the register of water and tell us who actually owns the water?

Dr Charker —My understanding is that we are going to agricultural businesses, who are the providers of the responses for this collection, and asking them to report on the ownership of their water entitlements, of their land and of their business.

Senator HEFFERNAN —Under the present legal arrangements for water in Australia, you can be the biggest drug runner in Australia, who wants to launder money. You can acquire, if you want to, water licences, live on the Gold Coast and lease them out. You are not going to go to the person who owns the water entitlement?

CHAIR —I think we have been through this a number of times, Senator Heffernan.

Senator HEFFERNAN —I still have not got a clear answer. Are you going to the register to tell us who owns the water, whether they are foreigners, foreign governments or who they are? Are you going to be able to tell us out of this survey?

Dr Charker —We are contacting businesses who have been classified as being agricultural businesses and asking them to report on the ownership of their business, their agricultural land and their water entitlements.

Senator HEFFERNAN —This is a voluntary thing: ‘Tick this box.’

Dr Charker —No, as we have responded before, the ABS actually has compulsion powers under its legislation to require providers to respond to that collection.

Senator XENOPHON —Further to Senator Heffernan’s line of questioning, could you provide the committee, on notice, details of the methodology and the scope of the survey.

Dr Charker —Yes, we have undertaken to do that and we will do that.

Senator XENOPHON —Sure, but in addition to that, in the scope of the scope, can you tell us whether you will be looking at the LTOs, the land title offices, in various states?

Dr Charker —Yes.

Senator XENOPHON —Also, can you tell us—presumably by doing audits or spot checks—whether you will be looking behind the ownership, as to whether there are trusts or anything such as that. For water rights, which are pretty fundamental, will you be looking at the users or the owners of the water licences? Can you answer that now or is that something you need to take on notice?

Dr Charker —I think it would make more sense if we were to take that on notice and provide you with a consolidated response which explains our methodology and which includes those issues that you have raised.

Senator XENOPHON —I appreciate you will do that on notice but isn’t it a fundamental issue, who owns the water? Wouldn’t you know now whether you are looking at the user or the owner of water licences? Is that something you can tell us now?

Mr Bugg —I believe we have actually answered that question as best we are able, which is to say that we will be collecting from agricultural businesses information on direct ownership of the water entitlements.

Senator HEFFERNAN —Not all water is owned by agricultural businesses though.

Mr Bugg —I understand that.

Senator XENOPHON —I understand that you have answered that but will you, as part of this audit survey or whatever it is, actually look at the owners of the water rights—because if it is just agricultural businesses there is a disconnect between an agricultural business and the actual owner of water rights? The two are not necessarily inclusive; they could be mutually exclusive.

Senator HEFFERNAN —Macquarie Bank!

Senator XENOPHON —Is that something you will look at? There might be some of us who think that it would be a gap in any survey, if someone is an investor in water rights as distinct from an end-user.

Dr Charker —We have to make decisions about the scope and methodology with all of our collections. The scope, about which we will provide more information to you, is that we are contacting agricultural businesses only to ask them about who owns the water.

Senator HEFFERNAN —Is a coalminer—

CHAIR —Senator Xenophon has the call.

Senator XENOPHON —I was just going to ask that. If somebody acquires land for the purpose of coal seam gas and it happens to be an agricultural property—and we know about the controversy in the Liverpool Plains and in other parts of the country—is that something that you will be looking at? In the context of the acquisition of agricultural land, when that land will be used for something else we will lose that productive land. Is that something that is included in your survey?

Senator HEFFERNAN —Do they get a letter from you as an agricultural business? In other words, if they are a coalminer or a coal seam gas extractor who has bought a whole lot of agricultural land which they then sublet to someone to use, do they get a letter?

Dr Charker —The starting point is whether or not they are on the business register that I referred to before.

Senator HEFFERNAN —As an agriculturalist?

Dr Charker —As a business which is classified to the agricultural industry.

Senator HEFFERNAN —They are a coalminer, so they do not get the letter. So you have a flawed project.

Mr Bugg —If they are involved in agricultural activities, depending on the extent and nature of that—

Senator HEFFERNAN —But they generally sublet—

Senator XENOPHON —Can I continue? You may want to take this on notice, because I am aware that Senator Cameron wants to ask some questions. Perhaps on notice, given the time constraints, can you say whether, if agricultural land is acquired for another purpose such as coal seam gas extraction, that would of necessity be included in your survey, or might it fall outside your survey?

Dr Charker —We will happily take that on notice.

Senator XENOPHON —Secondly, and again I am happy for you to take this on notice, I am a bit confused as to whether the scope of this survey has already been determined or whether it is still evolving.

Dr Charker —The scope has been determined. As we have said, the scope is that a sample of businesses from our register who are classified as being in the agricultural industry will be contacted and asked to complete a form.

Senator XENOPHON —If you could provide that on notice, that would be terrific.

Dr Charker —We are happy to.

Senator CAMERON —Mr Bugg or Dr Charker, are you satisfied that the survey will provide information useful to the government in developing policy in this area?

Dr Charker —We are satisfied that we have designed a collection which will accurately measure direct foreign ownership in land and water and ownership of agricultural businesses. The extent to which it can be used by policy agencies is not something we can directly comment on.

Senator CAMERON —So you have used the same high standards you have been known for for years in the development of this survey. Is that correct?

Dr Charker —That is correct.

Senator COLBECK —I just want to clarify your answer to Senator Xenophon’s last question about the scope. We are talking in this context about the special survey that was sent out in the last week, are we not?

Dr Charker —That is correct.

Senator COLBECK —So the scope is effectively decided, set and in the field and we are now waiting for the data to come back.

Dr Charker —That is correct. The scope is not under consideration.

Senator COLBECK —The scope is no longer under consideration. It is set, dealt with, done. We are dealing with agricultural businesses. The issue about whether or not we pick up water is to be determined and we will assess your evidence when it comes back, but we are not talking about anything happening in the future. We are talking about something that is done, set, now in the field, and we are waiting for responses from agricultural businesses.

Dr Charker —That is correct.

Senator HEFFERNAN —Will you provide this committee the list of people—

Senator XENOPHON —Could you give us a list of who it was sent to, or the scope of people it was sent to?

Mr Bugg —Definitely not, no. It is against our legislation to identify individual businesses.

Senator XENOPHON —Not even the categories? Can you identify the categories?

CHAIR —They are agricultural businesses.

Dr Charker —That is essentially—

Senator HEFFERNAN —What we want to know is if coalminers have agricultural businesses, for God’s sake.

Senator XENOPHON —I have asked that. That is on notice, I think. Further to Senator Colbeck’s question, it is possible for the scope to be expanded if there is concern that there may be a gap in the methodology?

Dr Charker —Potentially an additional collection or an additional phase could be carried out, I suppose, at a later point. But there are no plans for that at the moment and there is no resourcing for that at the moment. So focus very much is on delivering the results of this existing collection in September.

Senator HEFFERNAN —So you are infallible.

Senator WILLIAMS —Once you supply this information, wouldn’t it be sensible to have a national register so that any transfers of land from then on can be put into the one lot of information that you have gathered together? Then it can be monitored by Treasury, the government or whoever at all times.

Dr Charker —That may be a sensible policy idea, but it is not something that the Bureau of Statistics is legislatively able to do.

Senator WILLIAMS —Fair enough.

CHAIR —Thank you, Mr Bugg and Dr Charker, for coming today.

Proceedings suspended from 11.19 am to 11.31 am