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Environment and Communications Legislation Committee
28/02/2017
Estimates
COMMUNICATIONS AND THE ARTS PORTFOLIO
Department of Communications and the Arts

Department of Communications and the Arts

[09:05]

CHAIR: On that note, I welcome the Senator the Hon. Mitch Fifield, Minister for Communications and for the Arts, and also the secretary. Welcome back. It is good to be back here chairing this committee again. I invite the minister to make an opening statement.

Senator Fifield: I accept your invitation to make an opening statement, given the level of interest in particular in an item that will follow. At the outset on behalf of the Australian government I would like to thank Mr Ahmed Fahour for his service to Australia Post following the recent announcement of his resignation as managing director and group CEO. Mr Fahour commenced in the role of Managing Director and Group CEO of Australia Post in early 2010. Under his leadership Australia Post has experienced strong growth in its parcels and eCommerce business and took on full ownership of the StarTrack business. The company has also introduced digital platforms such as MyPost to provide greater convenience to customers. Australia Post has delivered on its community service obligations and continues to provide a sustainable letters service for all Australians despite the fact that Australians are now sending 1.8 billion fewer letters per year than when letter volumes peaked in 2008. Mr Fahour played an integral role in the Australia Post reform process throughout 2015 which allowed the company to stem the financial losses experienced in its letters business and return to overall profitability in 2015-16. This has allowed Post to continue to be self-funding even after the company's first ever annual financial loss in 2014-15. Earlier this year Mr Fahour was appointed as an Officer of the Order of Australia for services to business, particularly in the area of postal communications, and to the banking and investment sectors, and as a supporter of good multicultural relations.

Secondly, I would like to give a brief summary of matters related to Australia Post remuneration. As members of the committee would know, earlier this month the committee published correspondence between the committee chair and Australia Post regarding the managing director's remuneration. This followed committee questions at the last estimates hearing on October 2016. Subsequently, along with the joint shareholder minister, the Minister for Finance, I wrote to the chairman of Australia Post on 8 February requesting that the board be conscious of community expectations with regard to the setting of executive remuneration and also provide greater transparency in its annual reports in this regard. On February 16 the Minister for Finance wrote an additional letter to GBEs, including Australia Post, asking them to publish disaggregated executive remuneration in annual reports. On February 23 the finance minister and I wrote to the Australia Post chairman to notify him that we had asked the Remuneration Tribunal to determine the terms and conditions of the managing director's position as a principal executive officer. On 24 February the Minister Assisting the Prime Minister for the Public Service, Minister Cash, confirmed these arrangements. While the Australia Post board will continue to determine the managing director's remuneration under section 86 of the Australian Postal Corporation Act 1989, the board will now be required to ensure that the terms and conditions are consistent with the determinations of the Remuneration Tribunal.

I thought that might be helpful at the start of proceedings today, and I formally acknowledge the service of Mr Fahour.

CHAIR: We appreciate the comments on that issue, so thank you very much. Dr Smith, would you like to make an opening statement?

Dr Smith : No, thank you.

Senator DASTYARI: Thank you for that, Minister. There is one date I want to check I have correct here. You said the date, but I did not jot it down in time. The finance minister wrote to the GBEs on 16 February. Was that when you wrote to the Remuneration Tribunal?

Senator Fifield: I will just check the source documents. It was 23 February.

Senator DASTYARI: I know you have issued media releases relating to this. In those—I cannot recall, and it is not in my documents—did you release the letter?

Senator Fifield: The letter to the Remuneration Tribunal?

Senator DASTYARI: Yes.

Senator Fifield: I do not believe we did; I think we issued a statement indicating the action that we took.

Senator DASTYARI: Is there any reason you cannot release it?

Senator Fifield: I do not think there would be, but we will take that on notice and endeavour to do that quickly.

Senator DASTYARI: Dr Smith, can you explain at a headline level how both the formal remuneration process under section 86 of the act and the informal processes between the department and the GBEs work? In particular, I think there are two large ones that fall under your portfolio: NBN and Australia Post.

Dr Smith : I will ask Mr Robinson to go through those in more detail. Both NBN and Australia Post, as you would be aware, are required to report under the PGPA Act as well as their respective acts—NBN through its act and Australia Post through the Australian Postal Corporation Act.

Mr Robinson : Senator, are you referring to section 86 of the Australian Postal Corporation Act?

Senator DASTYARI: Under the PGPA (Financial Reporting) Rule 2015 we as a committee ended up seeing a situation where there was a noted change in how Australia Post was reporting its executive remuneration in its annual statements—which NBN had chosen not to do. That change was brought about in 2015, but aside from what was publicly published, what is the formal process of notifying the department or the minister of their remuneration structures?

Mr Robinson : Apart from the recent decision about the Remuneration Tribunal last week, I do not think there is any formal process, because they are GBEs who publicly disclose, as they have.

Senator DASTYARI: Is there an informal process?

Mr Robinson : On remuneration, no, I do not believe there is.

Senator DASTYARI: Dr Smith, were you aware of the executive pay levels at Australia Post?

Dr Smith : No, just what is in the public domain.

Senator DASTYARI: So you became aware when the committee made the decision to release the letter from Australia Post?

Dr Smith : Yes.

Mr Robinson : The material sent to the committee in December was copied into the department at that time, so we were aware in December.

Senator DASTYARI: I want to confirm this, Minister, because these are just my notes: you have said that you were not aware until it became publicly available. Is that correct?

Senator Fifield: No, I do not think I have said that.

Senator DASTYARI: When did you become aware?

Senator Fifield: I think it was very shortly before Mr Fahour advised the committee. Mr Fahour told me what information he was going to provide to the committee.

Senator DASTYARI: I should probably be clearer here. When we last met at estimates, at that point in time you were not aware of the pay levels of Mr Fahour?

Senator Fifield: I did not have a detailed knowledge of his remuneration; that is correct.

Senator DASTYARI: Dr Smith, you were not aware?

Dr Smith : That is correct.

Senator DASTYARI: Mr Robinson, you were not aware?

Mr Robinson : That is correct.

Senator DASTYARI: I know you have a big department and there are lots of people there, and I know you cannot speak for everyone at every level of the department at all times, but are you aware of anyone in the department being aware of the pay levels?

Dr Smith : I would have to take that on notice.

Senator DASTYARI: I am not asking if anyone in the department was aware; I am asking if you were aware of anyone being aware. Is it someone else's responsibility? Whose responsibility is it?

Mr Robinson : Of course, given the attention to this issue in the last week or so, we have asked some questions. We are not aware of anyone in the department having access to the material other than was in the public domain. So we are not aware of that.

Senator DASTYARI: Minister, you said a moment ago that you did not have a detailed knowledge. Can you expand on that?

Senator Fifield: I had a general understanding that Mr Fahour was well remunerated, from things which had been in the public domain and in previous annual reports. But I did not know the specific breakdown of elements of his remuneration package as it stood.

Senator DASTYARI: I understand after Senate estimates there was a lot of activity and movement because there were lots of questions. Prior to that point in time, had you had a discussion with either the chairman, Mr Stanhope, or Mr Fahour about his remuneration levels?

Senator Fifield: I had mentioned on several occasions, I think early in my time as minister in this portfolio, to the chair that the issue of the chief executive's remuneration was something that came up from time to time in the community. I thought it was appropriate that I conveyed that to the chair.

Senator DASTYARI: You have written to the Remuneration Tribunal specifically regarding Australia Post. I am just wondering: why Australia Post and why not NBN as well?

Senator Fifield: I think for Australia Post as an organisation with regard to the CEO remuneration, Australia Post is not subject to the same market pressures for competition for senior executives as is NBN. I think there is also the issue that Australia Post has not been disclosing its senior executive remuneration in the way that NBN has. Therefore it has not been subject to the same level of ongoing public scrutiny. I also think, in terms of the two organisations, in terms of the life cycles of the businesses, NBN is a growing business. It is one of the most complex infrastructure projects in Australia's history. There is strong competition for senior telco executives, so to get appropriate executives the organisation needs to make sure that it can be competitive. Australia Post, in contrast, is a mature organisation. In terms of the level of complexity of task, I think, if you are looking at things relatively, NBN is relatively more complex and Australia Post is relatively less complex.

Senator DASTYARI: I think that could be disputed, as to the complexity of what is going on in the postal system, but we will put that aside. With regard to the factors you have outlined as to why there would be a higher level of remuneration for senior executives of NBN as compared with Australia Post, wouldn't they all be factors that the Remuneration Tribunal would be taking into account when it is setting those types of figures, or if it is part of the process? It strikes me that it is setting one set of rules for Australia Post—which, by the way, is the right thing to have done—and then not applying that same set of rules to the other large GBE that falls under the portfolio. Is that solely your decision or is it a cabinet decision? What is the process around that?

Senator Fifield: I will take the decision in relation to Australia Post.

Senator DASTYARI: Which I think was the right decision, by the way, for what it is worth.

Senator Fifield: It was a decision that I and Senator Cormann, as the shareholder ministers, took together.

Senator DASTYARI: I know you do not want to go into detail about government processes, and I accept that. In terms of how the process works, as a shareholder minister is this one of those decisions that you have? Is it your decision or is it a cabinet decision?

Senator Fifield: It is a decision of government.

Senator DASTYARI: But it is made by the ministers.

Senator Fifield: We executed the request to Minister Cash to declare Australia Post.

Senator DASTYARI: So the same thing occurred with the NBN. The point you seemed to make in your opening statement was that—and I will paraphrase—you were using the Remuneration Tribunal as effectively an overseer of the process of what the board would be doing. The board's independence would be challenged but there would be a kind of process involving the Remuneration Tribunal to have a look at it as well and give guidance. Is that a fair assessment?

Senator Fifield: The process that will be undertaken is that the board of Australia Post will put a proposition to the Remuneration Tribunal, who will make an assessment, then it will put forward a reference salary for approval, and there is a range above and below that within which Australia Post could negotiate.

Senator DASTYARI: I know this, but to put it on the record, the Remuneration Tribunal remains an independent body, correct?

Senator Fifield: It does.

Senator DASTYARI: At the moment, the only thing stopping the same process to apply to NBN would require a letter or correspondence from the two shareholding ministers to the Remuneration Tribunal. Is that correct?

Senator Fifield: I have not examined that as an option, so I cannot tell you whether there is anything procedurally different that would be required.

Senator DASTYARI: Dr Smith, I am just looking at the structures and I thought they were structured quite similarly, but Mr Robinson is the expert on this, would the same process apply?

Dr Smith : As the minister said, Senator, it would require a decision to place NBN on the same terms and that would be a decision for the minister.

Senator DASTYARI: Yes, but the question I am asking, Dr Smith, is: from a process perspective would the same steps as were used for Australia Post be able to be followed, as you are aware, for NBN, meaning a letter from the two shareholder ministers, or instruction or however you want to call it, whatever the technical term is, and would that be sufficient?

Dr Smith : I might would ask Mr Robinson whether there was any differences in the two acts in relation to that question.

Mr Robinson : My understanding is the managing director's position of Australia Post is listed in the Remuneration Tribunal Act specifically. NBN Co is not but it potentially could be brought into that if there were a decision to do so.

Senator DASTYARI: Putting aside that we would have to get advice, can you take on notice what the detailed process required would be? I am just checking that you can take that on notice. Minister, is it fair to say then that a decision of government could do that directly or, obviously, a decision of the parliament?

Senator Fifield: I think that probably covers the field in terms of mechanics.

Senator DASTYARI: The government can unilaterally do it or the parliament can do it. Obviously you see what I am getting at. The chief executive of the NBN Co will be here, maybe, this evening but we do not know how long it will go for. He was on a remuneration package last year, I believe, of about $3.6 million. Is that your understanding?

Senator Fifield: Yes, thereabouts.

Senator DASTYARI: Is that your understanding, Dr Smith?

Dr Smith : Yes, Senator.

Senator DASTYARI: Minister, could you take on notice undergoing the same steps and placing that through the Remuneration Tribunal as well to create parity between how it is being treated and how Australia Post is being treated? If you take on notice the decision and if you decide to do that, fantastic, I think that is the right thing to do and if not why not. You can take that on notice for proper consideration. I understand you are not going to make policy sitting here now.

Senator Fifield: I can tell you that we have taken the decision in relation to Australia Post and we have made no such decision in relation to NBN.

Senator DASTYARI: I am asking if you can take on notice reconsideration of it.

Senator Fifield: I believe that the circumstances of NBN are different, but I am always happy to take your questions on notice.

Senator DASTYARI: Minister, as one of the two shareholding ministers, what do you see as your role when it comes to executive remuneration for GBEs. In hindsight, are there lessons in dealing with this that we should learn?

Senator Fifield: I will start by describing the overall framework for determining executive remuneration in the Australian government in its broadest sense. Successive parliaments and successive governments have taken the view, and expressed that through legislation and regulation, that politicians should not determine the pay of senior people in the public sector. That has manifested itself in a couple of ways. One, obviously, is the Remuneration Tribunal having jurisdiction for senior public servants such as those sitting to my right, for the judiciary and for a range of other people in the public sector. Where the Remuneration Tribunal has not had that role, it has been given to boards of particular organisations. It has been a conscious approach by the parliament and successive governments that there not be a role for ministers or for the parliament in setting that pay.

Senator DASTYARI: The decision you made with Australia Post, then, Minister was effectively saying: how do we create better transparency and more accountability while doing it in an independent manner? I think it was the right call. I think it was the right thing to do. I think you should do it with NBN as well.

Senator Fifield: I think there are two issues here. One is that of transparency. It is important that there is transparency—and there will be transparency. We have made that clear. That is appropriate. The other issue, I think, is ensuring that there is community confidence in these processes. I think, given the lack of transparency there has been with Australia Post, that it is appropriate that that organisation be required to submit the proposition to the Remuneration Tribunal.

Senator KAKOSCHKE-MOORE: My questions are on an entirely different subject. They follow on from some changes made by the government to vocational education and training last year, in particular the removal of some—not all, but some—courses in the arts, in particular the performing arts. Was there any formal consultation between the education department and the arts department in the development of the bill that went through last year?

Dr Smith : I believe there was. Our arts colleagues are not here for this session this morning, but we can certainly take that on notice. I know we were talking with the department at that time.

Senator KAKOSCHKE-MOORE: I would appreciate it if you could provide some comments in relation to the nature of the consultation and the type of feedback the department provided.

Dr Smith : Certainly.

Senator KAKOSCHKE-MOORE: How does the department characterise its role in the intersection between the arts and our education sector in Australia.

Mr Eccles : I can talk about that only at a very general level. Arts is listed for, I think, 4:30 today, so the real experts on that are not here. Given I have only been in my role for about eight weeks, I can only discuss the issue at a very high level. We are acutely aware of the importance of working with the education department in relation to the role of the arts, creativity and innovation throughout the education system. We do support and work closely with a number of educational institutes that are focused on arts and creativity. For example, we have a very strong relationship with the film and television school. But I can get a little bit more detail on notice if that suits the senator.

Senator KAKOSCHKE-MOORE: That would be great. Thank you. Just following on from that, has the department undertaken any research to determine whether any skills gaps will emerge in our arts sector, particularly following on from the changes that were made to vocational education and training?

Mr Eccles : I am not aware of any research, but I will take that on notice.

Senator KAKOSCHKE-MOORE: If no research has been conducted I would also like to know whether the department plans to conduct that research.

Mr Eccles : Understood.

Senator KAKOSCHKE-MOORE: Has any research been conducted recently into the economic contribution of the arts to Australia? Just in my home state of South Australia, I know that the Adelaide Fringe Festival a couple of years ago contributed nearly $70 million to our economy, so it is a big boost.

Dr Smith : Yes. The Bureau of Communications Research has been undertaking some work trying to establish the economic contribution the sector makes to the broader economy. We can provide you with details on that.

Senator KAKOSCHKE-MOORE: Great. Thank you. Do you mean on notice, or now?

Dr Smith : Now, if you like.

Senator KAKOSCHKE-MOORE: Sure. Thank you.

Ms Holloway : As the secretary mentioned, we have, since the arts has been brought into the department, sort of turned our attention to the role of the arts within the economy. We have been working on a background statistical paper, which we are hoping will be released in the coming months, which updates some work the Australian Bureau of Statistics has done in terms of quantifying the value of the creative and cultural industries to the economy within Australia

Senator KAKOSCHKE-MOORE: And that will be available in the next few months?

Ms Holloway : That is our expectation, yes, and it will be publicly available.

Senator KAKOSCHKE-MOORE: A couple of years ago there was a Senate inquiry into the impact of the 2014-15 budget cuts or budget changes to the arts. The government's response noted that the government does not believe in a top-down approach to arts policy, and they believe that the sector has an important role in the development of a comprehensive strategy for the arts. Is the department working with the sector at all to develop this strategy? Or is it purely an issue for the sector to come together on?

Mr Eccles : I think it is fair to say that we are working very closely with the sector around a whole lot of issues around the strategic placement of the arts in the broader national discussion—the link between arts and creativity, the link between creativity and innovation. We have started discussions with the sector around those matters. I think it is also fair to say that we in the Office for the Arts enjoy a very close working relationship with the sector and we will continue to work with them on these matters.

Senator KAKOSCHKE-MOORE: Can you tell me whether or not the department has or is developing a long-term plan for arts and culture in Australia—the development of strategies or—

Senator Fifield: There is a long-term plan already in place in the form of the Australia Council, our national collecting institutions and a range of programs that are funded through my department, and also Creative Partnerships Australia, which is there to help business work out ways it can support the arts and benefit from supporting the arts and also works at the other end to help artists connect with business and philanthropy. So, I guess that architecture that is there really is a long-term plan, but—

Senator KAKOSCHKE-MOORE: But it is not in a concise document?

Senator Fifield: I am not averse to documents. People in various sectors are very fond of documents. But in terms of a concrete plan, it is what we have in place through that architecture at the moment. But we are always looking to see whether we can refine and improve our support for the arts. That is an ongoing process. I am not ruling out that there will be documents, of a variety of natures that focus on future paths for the arts by way of strategy.

Senator KAKOSCHKE-MOORE: Certainly it is a useful base point to draw from in terms of ensuring that we are meeting the plan and addressing any barriers that are in place to meeting the plan.

Senator Fifield: But in all seriousness, I do appreciate that there is a desire in parts of the sector to have what you might call a road map that the sector as a whole can look to, and that is something I am continuing to talk to the sector about.

Dr Smith : And perhaps I can just add to that. I think one of the most important things the department can be doing at this point in time is in relation to what you mentioned before: highlighting, apart from the obvious cultural and social contribution to Australia society of the arts, the economic contribution, and trying to link the skill sets that so many creative artists and others have and of which there are quite a lot of spillovers now into the broader economy. And I think the report by Screen Australia was very effective in highlighting that. So, widening the conversation to the broader economy I think is where the department's focus is right now.

Senator Fifield: And further to that, I think it is important, as we talk about innovation in the economy more broadly, to recognise that to be a truly innovative society, a truly innovative economy, you have to ensure that the creative industries and the arts more broadly are one of the fundamental underpinnings. So, we are very keen as a portfolio to do more work on that.

Senator KAKOSCHKE-MOORE: I agree entirely.

Senator Fifield: And I should declare that I was at the Adelaide Fringe last week!

Senator KAKOSCHKE-MOORE: Great; good to know!

Senator WHISH-WILSON: Minister, I gathered from your opening statement that you think CEO Fahour has done a good job. Do you have any regrets that he has resigned?

Senator Fifield: Well, ultimately when a CEO decides to conclude their service is a matter for them. Mr Fahour has been in the role for the best part of seven years. As I indicated in my opening statement, he has done a good job. But his decision is a matter for him.

Senator WHISH-WILSON: Do you personally have any regrets, given the job he has done?

Senator Fifield: Well, everyone has to move on at some point, and he has decided that the middle of the year is the right time for him and for the organisation, to allow an orderly transition to a successor and the opportunity for the organisation to refresh its leadership.

Senator WHISH-WILSON: In relation to the media reports of comments from the Prime Minister about his pay, and from Liberal senators, such as Senator Paterson, do you have a view on what he should be paid? I know you just mentioned that you think his pay should have been set by a tribunal. But your government has also been very publicly commenting that he is paid too much—which, by the way, I totally agree on, and I have said so publicly previously. But what do you think he should be paid?

Senator Fifield: I think when we have a process that is in place where we have asked the Remuneration Tribunal to take responsibility, where we will have a new CEO coming in and where the board will be making a submission to the Remuneration Tribunal, it would be good practice for me to not name a particular figure.

Senator WHISH-WILSON: Okay. But it is pretty potent when the Prime Minister comes out and makes statements that this guy is paid too much. He becomes a national punching bag for two weeks on a very important issue. Do you think you should have been a little bit more specific about this before it was raised in such a political, emotive context?

Senator Fifield: Well, the issue was a matter of public discussion as a function of this committee doing its work in ensuring transparency of executive remuneration. When something becomes a matter of public comment then prime ministers and ministers are asked their views and they respond.

Senator WHISH-WILSON: It is a very important public debate. As you know, my party would like to see these things legislated—executive caps—not just the public sector but also the private sector. But I am still fascinated as to why Ahmed Fahour seems to have been thrown under a bus on this issue, and other organisations, such as NBN, and other CEOs in the Public Service were not brought into this debate. Was there any other issue that motivated your government politically to go after Mr Fahour?

Senator Fifield: Well, I do not accept your characterisation. The Prime Minister made comments. I made comments. We contacted the chair individually to put our views. And this committee, I think appropriately, invited the chair of Australia Post to come to its meeting to detail what the Australia Post board's response was to community concern as expressed and government concern as expressed. Now, during that time, as is a matter of record, Mr Fahour has announced his intention to resign, and the government has determined that the Australia Post board will need to put its remuneration proposition for the chief executive to the Remuneration Tribunal.

Senator WHISH-WILSON: Were you aware that the week the Prime Minister waded into this debate, several weeks ago, Senator Pauline Hanson had posted a YouTube clip on her Facebook page that had nearly a million views and several thousand likes? That was not a political motivation for the government to raise this issue?

Senator Fifield: We march to the beat of our own drum.

Senator WHISH-WILSON: I certainly hope so. It would be a sad day if policy in this country were being motivated by One Nation. In relation to legislative instruments for capping pay and for demanding transparency, I understand that it is still optional at the moment. Is this something the government has considered at all? Or are you sticking to your position of a tribunal to set pay?

Senator Fifield: My area of interest here really is within my portfolio. Issues that go to the matters you raise are really ones best posed in the economics estimates committee.

Senator DI NATALE: Just following on from that, the Prime Minister has indicated that he thinks that the CEO of Australia Post is paid too much. Australia Post obviously is competing with a number of private businesses. Is that an argument to cap CEO pays of its competitors?

Senator Fifield: As I said, I have the area of responsibility in the communications portfolio. Issues that go to matters of executive remuneration more broadly in the community and corporations law are matters that are best directed in the economics estimates committee.

Senator DI NATALE: With respect, the issue with Australia Post here is that it is competing in a marketplace with a number of other private enterprises. If you are going to make a decision around the remuneration of the CEO of Australia Post, that will have impacts in terms of its ability to compete with some of its competitors. Surely you are mindful of that. So, let me ask you the same question but perhaps phrased differently. What impact do you think it will have given that the CEOs of the competitors of Australia Post are paid significantly more than the current CEO of Australia Post? And indeed you are looking at further restricting the pay of the CEO, which I think is legitimate, but what impact do you think it will have on the business?

Senator Fifield: On other businesses?

Senator DI NATALE: No, on Australia Post.

Senator Fifield: Well, Australia Post will operate within the bounds of the determination of the Remuneration Tribunal.

Senator DI NATALE: But the Prime Minister's assessment, and you have agreed with his assessment, is that the CEO of Australia Post is paid too much—would further reduce the pay of the whether Saddam must BAE our chocolate bar lover CEO of Australia Post. The argument I keep hearing from the government is that this is a very competitive marketplace and to attract the best people they need to be remunerated along similar lines of their competitors. Your proposition will further increase that gap. As far as I can tell the only sensible proposition, by your own logic, is that you need to restrict the remuneration of some of its competitors.

Senator Fifield: That is your proposition. I am aware of the Greens' policy. But if you want to debate Corporations Law more broadly and whether it should set limits on CEOs in the private sector, then that is a debate you are best to have in the Economics Committee.

Senator DI NATALE: But this impacts on the way of Australia Post does its business. It is competing in a marketplace, or it is competing against other private enterprises, and your argument has been consistently that there has to be a level playing field. Now you are looking at actually reducing the pay of the CEO of Australia Post. What impact will that have on Australia Post in terms of its ability to compete?

Senator Fifield: Australia Post will have to negotiate within the bounds that are set by the Remuneration Tribunal.

Senator DI NATALE: Do you think it will be able to attract a CEO who brings the qualities that are needed to that position?

Senator Fifield: The Remuneration Tribunal, I think, has demonstrated that they are well aware of the circumstances of the organisations for which they determine remuneration.

Senator DI NATALE: I am asking you, because you said you think they need to be paid less. Do you think that is a reasonable proposition? Do you think they will be able to attract a CEO who is able to compete with others—given that that is your position?

Senator Fifield: I am confident that the submission of Australia Post and the determination of the Remuneration Tribunal will see a salary arrangement that can attract a good person.

Senator DI NATALE: Given that, why can't we restrict the pay of the CEO's of some of its competitors, if you are saying that a reduction in pay will still allow them to attract a decent person to do the job? Your argument is that you are competing in the global marketplace and we need to make sure we level the playing field and so on, and here you are saying, 'We are prepared to intervene in this area.' But I think Senator Whish-Wilson has indicated that—

Senator Fifield: It is a publicly owned entity.

Senator DI NATALE: Competing against private entities.

Senator Fifield: But it is a publicly owned entity and there are particular mechanisms for setting the remuneration of publicly owned entities and their principal officers.

Senator DI NATALE: It is a publicly owned entity, yes. It is competing against privately owned entities that will remunerate their CEOs under an entirely different arrangement. You continue to argue that it is necessary to have a level playing field—

Senator Fifield: As the Minister for Communications I am not about to be setting wider policy in relation to private sector remuneration. That is not my role.

Senator DI NATALE: Following on from Senator Whish-Wilson's commentary around some of the comments made by Senator Hanson with regard to Mr Fahour's salary. Do you agree with Senator Hanson, who said that Mr Fahour did not deserve to be remunerated, because he gave over $2 million to charity?

Senator Fifield: I am not aware of the specifics of what Senator Hanson said. I always find it best to look at source documents—

Senator DI NATALE: I will give you the quote. It is from an MPI. Incidentally, the charity was the Islamic Museum of Victoria. I think it was a donation of over $2.8 million—I will just clarify that. The specific quote from Senator Hanson is:

He did not need it, because he gave over $2 million to charity.

Do you agree with those comments?

Senator Fifield: The government has already made clear its views in relation to Mr Fahour's remuneration.

Senator DI NATALE: There are a number of other government owned entities whose CEOs are paid in the same order as Mr Fahour. Were Senator Hanson's attack, and particularly Mr Fahour's ethnicity and faith, factors in this decision?

Senator Fifield: No.

Senator DI NATALE: Do you think it was a factor in the decision around Pauline Hanson's attack on Mr Fahour?

Senator Fifield: I cannot speak—

CHAIR: Sorry, Minister, Senator Duniam on a point of order.

Senator DUNIAM: I am just wondering what Senator Hanson's motives have to do with the portfolio.

Senator DI NATALE: I think they have a lot to do with it.

Senator DUNIAM: I don't think they do.

CHAIR: Senator Di Natale, I was going to mention this at the end of your time—you still have a few more minutes: given that we are now going into great depth on this particular issue, which arguably is an issue for Australia Post and the chair of Australia Post as well, what I don't want to do is then have all of these questions on this issue repeated verbatim in the Australia Post section. I am very happy to keep this line of questioning going, because it does cross over between general questions of policy and Australia Post, but I would note that some of these questions are obviously for the board of Australia Post.

Senator WHISH-WILSON: I have a specific question for Senator Fifield that relates to the government directly.

CHAIR: I am not saying that you cannot ask these questions—

Senator WHISH-WILSON: I know what you mean.

CHAIR: But either we exhaust this topic now and then when Australia Post appears we move on, or we hold these questions now until Australia Post gets here—when Mr Stanhope is here and can answer some more questions on behalf of the board.

Senator WHISH-WILSON: Technically, we could ask Senator Fifield the same questions when they are here, but I think it is perhaps better to do it now.

CHAIR: You could, but, again, we have a large number of senators with a lot of issues and I do not want to cut off any senator at all. I have to manage the day to the best outcome of all senators.

Senator WHISH-WILSON: In the direct relevance to this particular hearing, or stage of the proceedings, Senator Fifield is it true that the Prime Minister, when he was communications minister, signed off on Mr Fahour's salary?

Senator Fifield: The remuneration of the CEO is a matter that has been determined by the board.

Senator WHISH-WILSON: So when the Prime Minister was communications minister he would not have known what Mr Fahour's salary was?

Senator Fifield: The remuneration is set by the board. I cannot speak to things that I do not have first-hand knowledge of.

Senator WHISH-WILSON: Could you take that on notice, because it seems very odd to me that the Prime Minister did not make any comments about that at the time he signed off on it, when he was communications minister.

Senator Fifield: I am not accepting the premise of your question. Mr Fahour was engaged in 2010. So in terms of the various stages of Mr Fahour's contract, and whether there were or were not variations during his tenure as CEO, they are really questions best directed to the chair.

Senator WHISH-WILSON: It seems odd to me, Senator Fifield, that the Prime Minister is able to come out and say that he has paid too much, yet we are hearing today that no-one actually knows what he is paid. So I find it very hard to believe that the Prime Minister did not actually know what he was paid all those years ago, and seems to be conveniently raising the issue now, when it was politically suitable for him.

Senator Fifield: Australia Post previously did have remuneration details in its annual report. So there was greater transparency previously.

Senator WHISH-WILSON: You are saying today, in relation to Senator Dastyari, that you did not know the exact amount, and nor did any of the other senior public servants know the exact amount he was paid?

Senator Fifield: Not until shortly before Mr Fahour responded to the committee—when Mr Fahour told me how he was going to respond to the committee.

Senator WHISH-WILSON: Then how did you guys know that he was paid too much? Why were you making public comments?

Senator Fifield: We made our public comments after that was a matter of public record.

Senator WHISH-WILSON: I would have to check that, but I am pretty sure the Prime Minister made comments before the committee released the salary. I will take that on notice!

Senator DI NATALE: Can you also take on notice what the Prime Minister knew about his salary when he was communications minister?

Senator Fifield: I am happy to take questions on notice from colleagues, but—sorry, someone has helpfully just looked at the dates. The PM's comments were the day after—I think—the public release of the information.

Senator DASTYARI: Minister, I will put this on notice and someone from your team may want to get an answer to this before Mr Fahour is here. In the Neil Mitchell interview that Mr Fahour did a few days ago, there is what I interpreted as a direct assertion that people in government knew what his pay levels were. Again, I will be asking him that. But your team is behind you and I wanted to give them an opportunity to check that, so that when we get to that point they can just check that there was not correspondence that you may not necessarily have been personally aware of. But the assertion was that the government was aware. We will confirm that when we speak to Mr Fahour a bit later.

For clarification, is it fair to say that there are people who are able to have a particular view on a remuneration package that is perhaps viewed in the community interest as politically high, without having other motives ascribed to why they have concerns about those payments? Is that correct?

Senator Fifield: Sure.

Senator DASTYARI: I hold the personal view that there are people who have those concerns, but that does not mean that every concern is an illegitimate one. The pay levels of Australia Post executives have clearly been quite significantly larger than the two per cent pay rises that have been given to the public service—or as the government's public service workplace bargaining policy. Is that correct?

Senator Fifield: I cannot quote the government's workplace bargaining policy to you off the top of my head.

Senator DASTYARI: Dr Smith, would the figures of Australia Post's executive remuneration be significantly higher than the increases outlined in the Workplace Bargaining Policy 2015, which is two per cent?

Dr Smith : Across the Public Service?

Senator DASTYARI: Yes.

Dr Smith : Yes, I believe it would be.

Senator DASTYARI: I understand that at the moment there is a pay negotiation between the 36,000 employees of Australia Post and Australia Post. I think it is called EBA 9. Are you aware of that?

Dr Smith : Yes.

Senator DASTYARI: In your opinion, does the workplace bargaining policy apply to that, or is it separate in the same way the ABC is separate?

Dr Smith : I will just ask Jo Talbot, our head of corporate, who is involved in that. Parts of Australia Post would be applicable to the workplace bargaining framework, yes.

Ms Talbot : Yes, what is being negotiated at the moment by Australia Post does come under the Australian workplace bargaining policy.

Senator DASTYARI: Item 28 of that policy states:

Remuneration increases for Senior Executive Service and equivalent employees covered by individual arrangements are to be consistent with this policy.

Are you aware of point 28 of the workplace bargaining document?

Ms Talbot : Yes, I am.

Senator DASTYARI: Are these pay levels that seem to be highly in excess of two per cent consistent with that policy?

Ms Talbot : I think that is a matter to raise with Australia Post. I really cannot comment on the—

Senator DASTYARI: Have you or the department given advice to Australia Post that they are obliged to meet the pay negotiations, and that they fall under the Workplace Bargaining Policy 2015?

Ms Talbot : Yes, we have had discussions with Australia Post, as we have with all of our portfolio agencies.

Senator DASTYARI: As you know, we traversed this with the ABC. Are you of the view that the workplace policy is applicable?

Ms Talbot : Yes.

Senator DASTYARI: Are you aware that if it were to be applicable—I will read item 28 again:

Remuneration increases for Senior Executive Service and equivalent employees covered by individual arrangements are to be consistent with this policy.

Are you aware of that term?

Ms Talbot : I am aware of that term.

Senator DASTYARI: So your advice to them is that they have to be applicable when it comes to this policy, when it comes to the 36,000 staff that they have, but they do not have to be applicable to it when it comes to their senior executives?

Ms Talbot : I think it is important to note that it is the responsibility of agency heads—

CHAIR: Senator Dastyari, that is becoming dangerously close to a bit of a prop.

Senator DASTYARI: I can table it.

CHAIR: If you would like to table it. We had an issue yesterday with props. If you would like to refer to it, that is fine. If you would like to give the witness a copy, that is also fine.

Senator DASTYARI: Sure. If you guys are happy for me to table it as a public document, I can table it. I have circled item—

CHAIR: As Chair, I am a little sensitive to stunts and props today, so if you would like to refer to it that is fine.

Senator DASTYARI: I was going to bring a giant postbox in, but that is okay!

CHAIR: I am glad you did not, Senator Dastyari.

Ms Talbot : As I was saying, it is important to note that it is the responsibility of the agency head to adhere to the guidelines.

Senator DASTYARI: But Senator Fifield and Senator Cormann are the shareholding ministers, correct? At the end of the day, the buck stops with the shareholding ministers. I understand you are saying that at one level below the agency is responsible for its own pay negotiations, but, Minister Fifield, at the end of the day, you and Minister Cormann, as the shareholding ministers, own the company. I mean, you do not; the Australian public do. But you are the shareholding ministers, correct?

Senator Fifield: On behalf of the public, correct.

Senator DASTYARI: Where does the buck stop?

Ms Talbot : It is the responsibility of the agency head.

Senator DASTYARI: Has the agency met its responsibility?

Ms Talbot : I cannot answer that question. That is a matter for Australia Post.

Senator DASTYARI: It seems like there is a ridiculous double standard when we turn around and say the workers—and there are 36,000 of them right now who are in the middle of a negotiation regarding their pay levels —are being told by your department, by your own evidence, that they have to meet the Workplace Bargaining Policy 2015, which has a two per cent cap—maybe the word 'cap' is wrong—and by its own definition of your own document, by the evidence that Dr Smith gave a moment ago, the remuneration of senior executives has been far beyond that two per cent, and your defence is, 'Well, that's a matter for them.' If that is a matter for them, then is the applying of the two per cent government workplace bargaining policy solely a matter for them and are they under no obligation to do it?

Mr Robinson : If I could intervene, we are aware that we have advised Australia Post about their obligations in respect of that policy. In regard to their enterprise bargaining agreement that is currently under discussion, we are also aware that Australia Post has had discussions with the Australian Public Service Commission who has responsibility for that policy. We are not trying to deflect this, other than that that policy—

Senator DASTYARI: But that is deflecting it.

Mr Robinson : That policy you point to is not the responsibility of this agency.

Senator DASTYARI: Unless the evidence was incorrect—which is fine, you can correct your evidence—you have been giving advice to Australia Post that in their pay negotiations they are bound by the Workplace Bargaining Policy 2015, correct?

Mr Robinson : Yes. But I am putting out that they are in discussions, as part of the enterprise agreement bargaining discussion, not only with their staff but also with the Australian Public Service Commission about how they are applied in Australia Post's circumstances.

Senator DASTYARI: At the end of the day, the shareholding minister is here and your department has responsibility for Australia Post. If Australia Post—

Senator Fifield: There is a whole-of-government policy, which I think is the document that you have there, and it is the expectation that relevant bodies within the government operate within the framework.

Senator DASTYARI: It appears, Minister—and again, you might want to take some of this on notice because I am conscious of the time—that we have turned around and said that it does not apply, or has not applied, for senior executive remuneration but that there is an expectation that it will apply for the 36,000 employees of Australian Post. I am highlighting what appears to be an inconsistency. The evidence that I am being given is that, 'Well, that is really just a matter for Australia Post, as they are the ones responsible.' The question is: if it is a matter for Australia Post whether or not their executives meet the Workplace Bargaining Policy 2015, is it simply a matter for Australia Post whether or not that is the same thing that is bound upon their employees? Is there any obligation upon them to meet this document?

Senator Fifield: The EBA negotiations are separate to the arrangements that are there for senior executives.

Senator DASTYARI: No, they are not. It is actually very clear here. It is item 28:

Remuneration increases for Senior Executive Service and equivalent employees—

and I believe the way it has been structured or determined is that those senior contract levels at Australia Post are equivalent employees—

covered by individual arrangements—

which we know they are, set by the board—

are to be consistent with this policy.

There is no distinction. The document itself says it is the same policy, and the same policy is to be applied to executives and staff. We are being told in the middle of these EBA negotiations that the message coming from government is that employees are only allowed to have two per cent increase but the senior executives have given themselves far in excess of a two per cent increase, and we are being told, 'Well, that's not a problem, that's a matter for Australia Post.'

CHAIR: Senator Dastyari, the minister is trying to answer your question.

Senator DASTYARI: I have not asked the question yet.

CHAIR: Senator Dastyari, I would encourage you, as I said at the very beginning of this session, short questions—

Senator Whish-Wilson interjecting

CHAIR: Yes, but not here. We have a very long day and I want to keep this respectful. Senator Dastyari, you have one minute, so you might want to get to your question so that it can be answered before I move on.

Senator DASTYARI: Minister, is Australia Post under an obligation with these EBA negotiations to meet this workplace bargaining policy 2015 document or is that simply meaning or not meaning a matter for their executive?

Senator Fifield: The point I was going to make is that there would be some contracts which are in place. The EBA relates to a different set of arrangements, so I think the best thing to do, when we have the benefit of the chair and the CEO at the table, is to ask what are the contracts which are already in place and ongoing, which is my reference before, and what is the group of employees that are subject to and party to the current EBA negotiation.

Senator DASTYARI: Fair enough, I think that is a good suggestion.

CHAIR: Before I proceed to handover to Senator Whish-Wilson, I would like to clarify for the committee members and other senators here, if you could, at this stage, confine questions to the minister and the department on things that are germane to them at Australia Post in terms of government policy and other procedures. Then we will exhaust that topic and I will move onto other senators who have other general questions of the department, then you can resume questioning on Australia Post for questions that are germane to the board of Australia Post and to the CEO. We will break as scheduled at 10.15, and I will now go to Senator Whish-Wilson.

Senator WHISH-WILSON: Senator Fifield, there has been strong criticism across the board—and certainly I have received stakeholder communications about this for some time—about how much the senior management at Australia Post and other executives are paid. There have been comments that across the senior management that pay has soaked up nearly half their profits in some years. This issue has been raised in relation to Ahmed Fahour. Will you be taking other measures to reduce executive pay in other senior positions at Australia Post?

Senator Fifield: I and my fellow shareholder minister, Senator Cormann, have written to the chair of Australia Post asking that Australia Post be cognisant of community expectations in relation to senior executive salary, also saying that it is our view that, in an environment where Australia Post is looking to cut costs, executive remuneration should be in scope.

Senator WHISH-WILSON: In relation to those community expectations can you put a little bit more flesh on those bones? What do you think community expects the senior executives of Australia Post to be paid? Eight times the lowest paid worker, four times their multiple of salary? Do you have any idea?

Senator Fifield: I do not have the power of direction in relation to the salaries of senior executives at Australia Post. The board determines those salaries and we, as shareholder ministers, have said to the chair that the board needs to be mindful of community expectations.

Senator WHISH-WILSON: But we could legislate that. We could legislate what those expectations should be with a bit of research and compel them.

Senator Fifield: The parliament is in charge of its own destiny.

Senator WHISH-WILSON: As minister, have you spoken to Ahmed Fahour since his resignation?

Senator Fifield: Not since his announcement.

Senator WHISH-WILSON: Had you spoken to him prior to his announcement when this issue was in the public domain?

Senator Fifield: Yes.

Senator WHISH-WILSON: Is it unusual that he is staying until July? When an executive resigns is it unusual for them to be hanging around for three or four months?

Senator Fifield: I do not think there is any particular template, but it is not uncommon for executives to give a period of notice to allow for their successor to be appointed before they leave. That timeframe is a matter between the CEO and the board.

Senator WHISH-WILSON: He gets to determine that? The board do not have a say in it, like they cannot say, 'Well, actually, no, we want you to clear out your desk and go.'

Senator Fifield: No, I said that is a matter between the CEO and the board. There is no doubt a notice period, but whether something is beyond that notice period is a matter between the CEO and the board.

Senator WHISH-WILSON: Is it your understanding that he wants to stay? We can ask him this when he comes in. This is important because I want to know if the minister has been in communication on this issue. He wants to stay, in relation to Senator Dastyari's question, to finish that EBA because he has been personally involved in trying to get this done, and he wants to see the existing senior management duties and those kinds of things handed over. Is he trying to do the right thing by Australia Post?

Senator Fifield: That is my understanding that he wants to do the right thing. He wants to conclude a few items of business to allow for an orderly transition to a new CEO.

Senator WHISH-WILSON: Thank you.

CHAIR: Thank you. Senator Bilyk.

Senator BILYK: Chair, do you want to go to the break now and start with me when we come back rather than giving me a couple of minutes and then come back.

CHAIR: I am happy to extend but it depends on how many minutes you need.

Senator BILYK: It depends on the length of the answers. I know I have 20 minutes allocated.

CHAIR: But that does not mean you have to take them.

Senator BILYK: I might need to and I have the right to.

CHAIR: Do you think you are going to be more than five minutes?

Senator BILYK: Yes, I think I will.

CHAIR: The committee will now suspend for morning tea until 10.30.

Proceedings suspended from 10:12 to 10:30

Senator BILYK: Minister, I am wanting to speak about something else. I just want to refer to the increased cuts resulting from efficiency dividends and parameter changes that have applied to a group of agencies in the art portfolio. In the 2016-17 portfolio additional estimates statements we saw that there are funding cuts resulting from, as I said, increased efficiency dividends and parameter changes that total in excess of $24 million in areas such as the Australia Council for the Arts, the National Film and Sound Archive, the National Gallery of Australia, the National Library of Australia, the National Museum of Australia, the National Portrait Gallery and Old Parliament House. Why have these extra cuts been imposed in relation to the Australia Council for the Arts and the other agencies I mentioned and why have they been made part way through the year?

Senator Fifield: They were further efficiency dividends. To my understanding, they were whole of government.

Senator BILYK: I just have to remind people at the table that I actually have a hearing disability, so if people could just speak up a bit clearer for me.

Senator Fifield: They were further efficiency dividends that were whole of government.

Senator BILYK: To the whole of government?

Senator Fifield: Yes, it was a whole-of-government decision.

Senator BILYK: Did whole of government have the extra rate of 1.5 per cent for this year?

Senator Fifield: That is my understanding, yes.

Mr Eccles : Yes.

Senator BILYK: We are halfway through some of the funding cycles. These have a retrospective effect, as I understand it. Is that correct?

Mr Eccles : I just want to go back and understand the premise of the questions. There was an efficiency dividend that was reflected in the budget of 2016, and that is the last efficiency dividend that has been levied.

Senator BILYK: And that is of 1.5 per cent?

Mr Eccles : I think that is right.

Senator BILYK: On top of the other efficiency dividends that have been done? They were mentioned in the budget. I do not disagree with you—

Mr Eccles : No, they were reflected in the budget.

Senator BILYK: But they have just come into being?

Mr Eccles : No.

Senator BILYK: They were just announced on 9 February.

Mr Eccles : No, that is not correct.

Senator BILYK: Well, what was it that was in the portfolio additional estimates statements?

CHAIR: Senator Bilyk, I think the officials are trying to answer your question.

Mr Eccles : We are aware of some media reports on this issue that were not accurate. There has been no increased efficiency dividend. There has been the application of parameter changes that reflect low interest rates and low wages growth that was applied across all portfolios and everywhere, but there has been no additional efficiency dividend levied on any of the institutions since the 2016 budget in May.

Senator BILYK: Why would people such as Ben Eltham quote them as, 'A sneaky summer efficiency divided'? There have been further slashes to the Australia Council for the Arts' discretionary arts program and grants to artists is down 72 per cent from 2013 levels.

Mr Eccles : I cannot comment on Mr Eltham's motivation or the information that he may have been provided, but it is not accurate. Senator, I might refer you to page 54 of the additional estimates statement, which actually goes through the Australia Council funding. Page 54 takes you through the changes in parameters. There has been in actual fact an increase of $5 million. If you look on page 57 of the same document, it actually demonstrates that there has been a steady increase to the Australia Council, but there is no efficiency dividend that has been levied on any institution since the budget. So I am not sure where this notion of an additional or a sneaky efficiency dividend comes from.

Senator BILYK: Okay. We will go back to the budget. Were there consultations and discussions that took place with each agency prior to the budget announcement?

Ms Basser : The efficiency dividend that was announced in the 2016 budget was a measure across the whole of government. Any consultation would be a matter for the Department of Finance.

Senator BILYK: So you do not have any responsibility to talk to people within the arts area about any increase in increase in efficiency dividends?

Ms Basser : It is a whole-of-government policy that is delivered and the policy responsibility is through the Department of Finance.

Senator BILYK: I will ask again: do you not have any responsibility to the National Archives, Old Parliament House and the National Library to explain to them what is going on and to discuss with them and to see what effect it might have on them?

Mr Eccles : We certainly have discussions with them around the work program. But in terms of having a consultation before a government decision, under successive governments that is quite unusual before the application of an efficiency dividend.

Senator BILYK: Okay. You mentioned page 54 of additional estimates for parameter changes. I actually went through a whole lot of documents and I could not find anywhere what parameter changes actually mean.

Mr Eccles : Okay. I might ask someone who is a little more financially literate, maybe from our corporate area, to explain exactly what it is. From time to time, the forward estimates are amended that take into account changing parameters to do with wage growth and a whole lot of technical Treasury matters—and I am getting in way over my head already. But the parameter changes in this instance reflect broadly across the economy the level of wage growth and interest rates. That occurs across all appropriations.

Senator BILYK: Sure, but what I want to know is—and I am possibly at the same level of financial literacy as you; I never state that I know everything about everything—what are actual 'parameter changes'? What does it mean to these institutions? How are they determined? Are they made on the hop? Who makes the decisions about them?

Mr Eccles : These are carefully structured and crafted decisions that come through a standard budget process. I will take on notice and we will get some information from the Treasury about how parameter changes are determined and what is in scope.

Senator BILYK: Can you also take on notice whether there was any consultation with these agencies in regard to parameter changes and what it means for them? I know there are a lot of people with other questions. I will be coming back later on today to speak about some of these more specifically. But if you could take that on notice if there was any consultation with agencies on what it means for the agencies to implement—whatever parameter changes might be. I would like to know specifically what parameter changes mean. As I say, I did look through 200-odd pages of documents. I saw parameter changes mentioned, but I could not find out what they actually are.

Mr Eccles : We will get that information.

Senator BILYK: Thank you. Also, when asking about the impact, if we could find out somehow what it means in terms of job losses across these agencies not just what it means for the agencies.

Mr Eccles : I think that information was provided to you in response to a question on notice about the impact the changes have had on the institutions' work programs.

Senator BILYK: Was that question 45? I did end up with quite a few questions on notice, because I think that at the last estimates people went home or something like that. I cannot quite remember what happened.

Mr Eccles : No, it was not 45. I will find that out and let you know—maybe when you come back for the next round.

Senator BILYK: That is fine. I will be back later, whenever we eventually get to Screen Australia and so on.

Senator URQUHART: Minister, you went through a number of dates earlier, but from January 2015 onwards, has the department or have the shareholder ministers ever sought information from Australia Post about executive pay? I just want to clarify that. I think you said no, but I do not want to—

Senator Fifield: I will take that on notice.

Senator URQUHART: What do you mean you are taking it on notice?

Senator Fifield: There are many elements to the department, so in order to ensure we give you a comprehensive and accurate answer, I will take it on notice. I am not aware of any such request for information, but—

Senator URQUHART: You are not aware of any, but you will get some clarification?

Senator Fifield: Yes.

Senator URQUHART: Will you be able to do that today?

Senator Fifield: We will do our best.

Senator URQUHART: I am talking about since January 2015—a couple of years ago. I would have thought that, as a shareholder minister, you would be able to remember whether or not you had sought information from Australia Post about their executive pay.

Senator Fifield: We will take that on notice because I want to give you a comprehensive answer.

Senator URQUHART: Did you ever, prior to October 2016, seek information specifically about Mr Fahour's pay?

Senator Fifield: As I have indicated in answer to earlier questions from Senator Dastyari, I had a general awareness of Mr Fahour's pay from things that were previously on the public record and that had previously been publicly disclosed, but I only became aware of specific elements of Mr Fahour's pay when—

Senator URQUHART: Did you seek it prior to October 2016?

Senator Fifield: I became aware of specific details of Mr Fahour's pay only shortly before Mr Fahour provided answers to the committee—when Mr Fahour advised me what he was going to advise the committee.

Senator URQUHART: Are you saying that, prior to October 2016, you and the other shareholder minister had no idea whatsoever what the salary of the Australia Post CEO was?

Senator Fifield: As I have indicated, I played no role in the setting of Mr Fahour's salary. That was a matter for the board of the organisation.

Senator URQUHART: I am not asking about the setting of his remuneration. I understand that is the role of the board. I am not questioning that. I am questioning your knowledge and whether or not you inquired.

Senator Fifield: I did not have a detailed knowledge of the various elements of his package. I did not have a copy of his contract. So, no, I did not have that level of detail.

Senator URQUHART: Were you instructed by the Prime Minister or his office to adopt a don't-ask-don't-tell approach to his remuneration?

Senator Fifield: No.

Senator URQUHART: Did you ever ask what his salary was? As a shareholder minister, did you ever ask what the salary of the CEO of Australia Post was? When you took over as Minister for Communications and Australia Post became part of your responsibility as a shareholder minister, did you ever ask what the salary of the CEO of Australia Post was?

Senator Fifield: I had an awareness of the general level of salary from previous public disclosures.

Senator URQUHART: Did your awareness have a number? If it had been $7 million, $8 million or $9 million, would you have had a general awareness of that? At what point does the general awareness come in? What were you aware of?

Senator Fifield: I was aware that Mr Fahour was well remunerated.

Senator URQUHART: Just well remunerated—that is it?

Senator Fifield: And at the higher end of those who were in the broader Australian government service.

Senator URQUHART: But you had no idea and you did not ask, prior to 16 October?

Senator Fifield: Let me be clear. I do not have a role in the setting of the pay of the secretary of my department. I do not have a role in the setting of the pay of chief executives.

Senator URQUHART: I am not asking about the setting.

Senator Fifield: Just let me—

Senator URQUHART: I just want to clarify that it is not about the setting.

CHAIR: Senator Urquhart, I have let it go, but quite often we are now getting—I think it is going to be hard for Hansard, because both of you are talking at once.

Senator URQUHART: I understand that. I just want to make it very clear that I do not expect the minister to set the pay. I understand that completely.

CHAIR: I am just asking if we could have one speaking at a time—and the same to the minister.

Senator URQUHART: But the minister keeps referring to the setting of pay. I am asking about his knowledge and awareness.

CHAIR: I understand that. I am not asking about the question. It is just that you are talking over each other now.

Senator Fifield: I have answered the question.

Senator URQUHART: You say he was well remunerated. I would say someone on $100,000 was well remunerated. But you still did not have any idea as to what the amount was, and you did not ask.

Senator Fifield: I knew that the chief executive of Australia Post had a package that was several million dollars.

Senator URQUHART: Several million.

Senator Fifield: That is right. Because that was a matter of public—

Senator URQUHART: So it could have been three?

Senator Fifield: That was a matter of public record. It is a matter that had previously been in reports. It is a matter that had previously been the subject of public discussion.

Senator URQUHART: I just think it is outrageous that someone who is a shareholder minister had no idea of the quantum of the executive of Australia Post—when you are a shareholder minister. It is completely outrageous. It is unfathomable to think that you did not know or even inquire as to what that was, as a shareholder minister. Did you not ask? That is the question I am asking. Did you not ask what the actual salary was?

Senator Fifield: I do not have a role in the setting of salaries. I tend to focus on those things that I have a role in determining.

Senator URQUHART: Why won't you just answer the question? Did you ask or did you not ask?

CHAIR: I have been very tolerant. This question has been asked and answered by several—

Senator URQUHART: Well, it has not been answered.

CHAIR: Senator Urquhart, the same question has been asked and answered in many different ways. The minister has answered that question now many times. If you do not like the answer, that is one thing. But I think he clearly has answered the question. You can keep asking these same questions. I have no problem with that. But I think it is coming close to badgering.

Senator URQUHART: The question was very simple. It was: did the minister ask what the salary of the CEO was? It is a yes or no. It is that simple.

Senator Fifield: There are many senior executives in my portfolio. I do not have a role in setting any of their remuneration. What I focus on are those things that I have control over—those decisions that I have a direct say in. Yes, I was aware that Ahmed Fahour, the CEO, was well remunerated. That is something that has been publicly and well known for some time. Yes, I knew that his remuneration was in the millions of dollars. Yes, I was aware that that was a matter that had been commented on publicly. That is something that I conveyed to the chair of Australia Post. Did I go through his contract? Did I break down the individual elements of his remuneration? No, I did not.

Senator URQUHART: So you did not know.

Senator Fifield: I have answered.

Senator URQUHART: You did not ask.

Senator Fifield: I have answered your question. I knew he was well remunerated. I knew it was in the millions of dollars. Did I seek to break down the individual elements of his remuneration package over which I have no control and over which I had no role in determining? I did not.

Senator URQUHART: So can you point to any example in the general economy where the sole shareholder of a billion-dollar business does not know what the person tasked with running the company is paid?

Senator Fifield: I do not and did not have a role in determining the salary of the chief executive.

Senator URQUHART: I understand that, Minister.

CHAIR: Your time has just expired. I would like to go to Senator Hanson-Young.

Senator URQUHART: I have a couple more questions on this particular issue that I would like to finish, so I will keep going.

CHAIR: Just a couple of minutes, but I will come back to you.

Senator URQUHART: I have two more in this section that I need to finish.

CHAIR: Finish those two and then we will come back to you later.

Senator URQUHART: I just want to make it clear that I am not asking you about setting the salary, Minister. I am asking you about your knowledge as a shareholder minister. Did you ask? That is what I am asking about. You keep saying it is not your role. I understand that it is not your role. I get that. I believe that Australian taxpayers are entitled to know what you, as shareholder minister, understand to be your responsibility with respect to CEO and executive remuneration. You have said you do not set it. I get that. So, what is your responsibility?

Senator Fifield: Let me explain. My role in relation to CEO remuneration was exactly the same as the role of ministers in the previous government—exactly the same. The only change that has been made to the arrangements for the setting of salaries of CEOs of Australia Post have been made not by the previous, Labor, government but by this government—by me and Minister Cormann writing to Senator Cash indicating that Australia Post should be declared so that it falls within the ambit of the Remuneration Tribunal.

Senator URQUHART: I understand that and I note that you have done that.

Senator Fifield: That is what we have done. But, prior to that, under successive ministers, as determined by the Australian parliament in the Australia Post act, the board had responsibility for determining the remuneration of the chief executive. Mr Fahour was engaged in 2010 under the previous government. Mr Fahour's contractual arrangements were entered into under the previous government.

Senator URQUHART: I am not asking you that. I am asking you, as shareholder minister—

Senator Fifield: When we came into government—

Senator URQUHART: I am asking you, as a shareholder minister—

CHAIR: Senator Urquhart, please stop speaking over the minister.

Senator URQUHART: The minister is chewing up my time.

Senator Fifield: No, I am answering the question.

CHAIR: Actually, Senator Urquhart, you are now chewing up Senator Hanson-Young's time.

Senator O'NEILL: A point of order, Chair: what we are seeing here consistently from the minister with this line of questioning is a refusal to answer the question he is asked.

Senator URQUHART: Exactly.

Senator O'NEILL: He is inventing a question he wants to answer.

Senator Fifield: When I try to answer I am cut off.

CHAIR: Senator O'Neill—

Senator URQUHART: I have one further question.

Senator Fifield: I have not finished my answer.

CHAIR: I will bring you back to my guidance and my request at the beginning of these hearings that you not only be respectful to all the senators here present today but also be respectful to those who are here giving evidence and testimony. We are now starting to get into the realm of disrespect—speaking over witnesses—and it is getting very repetitious. I understand your right to do that, but I would ask that we take the temperature down just a degree or two and let the minister and anybody else finish answering their questions. Now, Senator Urquhart, you have now gone over time, and I have allowed you to do that—

Senator Fifield: And I have not finished my answer to the previous question.

CHAIR: I have been listening very carefully. The minister is directly answering the question. So Minister, please finish answering the question, and Senator Urquhart, perhaps you could ask you last question and then we will move on.

Senator Fifield: Mr Fahour was engaged under the previous, Labor, government. Mr Fahour's contractual arrangements were entered into under the previous, Labor, government. Mr Fahour's most significant increases in remuneration occurred under the previous, Labor, government.

Senator DASTYARI: That is not true.

CHAIR: Senator Dastyari! If you want to make a point of order, you can do so, but you are not on the other side of the table there. As I have said to your colleague, please let the minister finish answering, with respect. If you want to ask him questions later, that is fine, or if you want to take a point of order you can do so. But I would ask for interjections to cease, to let Senator Urquhart finish asking her questions.

Senator URQUHART: No, I am waiting for the minister to finish answering.

CHAIR: Well, he was, but Senator Dastyari unhelpfully interjected.

Senator O'NEILL: Point of order, Chair.

CHAIR: Yes?

Senator O'NEILL: The minister, who has not been able to indicate that he had any knowledge of any of the moneys that were paid, is suddenly starting to spout information—

CHAIR: Senator O'Neill, you know as well as I do, that is not a point of order; that is a debating point.

Senator O'NEILL: He needs to tell the truth to us.

CHAIR: Senator O'Neill and Senator Dastyari, please show your colleague Senator Urquhart respect so she can finish her questions without interjections and so the minister can be heard in silence.

Senator Fifield: I am giving a chronology of facts, and the facts are that Mr Fahour was engaged by the previous Labor government. That is a fact. The board of Australia Post engaged him under the previous Labor government, and the contractual arrangements were entered into by the board with him under the previous Labor government. His pay did increase year by year under the previous Labor government. My role in determining remuneration for the CEO is the same as it was under the previous Labor government—that is, it is the board that determined those matters. Now, there is one difference and that is that this government, unlike the previous Labor government, has put Australia Post within the ambit of the Remuneration Tribunal.

Senator URQUHART: Am I right to go on with my last question? Have you finished, Minister?

CHAIR: Yes; I said you had one more.

Senator URQUHART: I just want to summarise what I understand you are telling us: as a shareholder minister representing the government, the sole shareholder of a billion dollar entity, which employs over 30,000 Australians and which is underwritten by the taxpayer, you did not inquire once as to what the person running this important company was being paid. You just closed your eyes and blocked you ears.

Senator Fifield: No, that is not what I have said. You can monologue all you like, as Labor senators are want to do in Senate estimates, but the facts are that my role and responsibility in relation to the remuneration of the CEO of Australia Post are identical to what they were under the previous Labor government—that is, the board determines his remuneration. That is a fact.

CHAIR: Is it right for me to then take out from what you have said that Mr Fahour's contract initially was done by Labor, the previous government?

Senator Fifield: It was entered into under the previous Labor administration—that is correct.

Senator Dastyari interjecting

CHAIR: Senator Dastyari, I allowed and afforded you the courtesy of asking questions in silence, and I would ask you to do the same thing for your colleagues, including the chair. Are you, Minister, or the department able to provide information on Mr Fahour's contractual arrangements? Were they the same under Labor as they are today? And do you have the amounts of his remuneration? Listening to my colleagues here today it seems like he is, all of a sudden, being paid an extraordinary amount of money under different conditions than when he was initially employed on his contract under Labor. Are you able to shed a little bit of light on that for us here, Minister or Secretary?

Senator Fifield: To get the most authoritative answer on that it is best posed to the chair of Australia Post when he is here because it is the chair and the board who have responsibility and have had responsibility under this government and the previous government for determining remuneration and contractual arrangements.

CHAIR: To summarise your evidence here today: Mr Fahour is on the same contract that he was on when he was engaged by Labor in this position, and the only tangible difference is that the government has now put that position under the remit of the Remuneration Tribunal?

Senator Fifield: In terms of responsibility of shareholder ministers, the only change is that Minister Cormann and I have written to Senator Cash asking that the Remuneration Tribunal declare the organisation so that the Remuneration Tribunal has coverage of those remuneration issues. That is something that this government did; it is not something that the previous government did. Contractual arrangements with Mr Fahour were entered into in 2010 under the previous Labor government.

CHAIR: Thank you—and, as you have said, I will take these questions up further with the chair of the board of Australia Post.

Senator HANSON-YOUNG: I have some questions in relation to the content review. I am hoping we can get a bit more information about that. It has been reported that you will be launching a review in a number of weeks. I would like to get some light shed on the time frame around that and on the scope of the review.

Senator Fifield: I think there are two things. The first is that the House of Representatives communications and arts committee has asked for and been given a reference in relation to content issues and screen issues more broadly. There has been media speculation that there will be a content review. We have not announced anything as yet.

Senator HANSON-YOUNG: Are you planning to?

Senator Fifield: It is fair to say that it is an issue that is in our contemplation.

Senator HANSON-YOUNG: So there are no plans for the department to run their own content review?

Senator Fifield: I cannot make an announcement before I have made an announcement.

Senator HANSON-YOUNG: Okay. Do you believe that the current quotas are sufficient, in particular in relation to Australian drama and children's television?

Senator Fifield: We have policy in place at the moment.

Senator HANSON-YOUNG: But from the government's perspective—and that is why I am asking you, as the minister—do you believe that the current quotas are fit for purpose in today's world?

Senator Fifield: There are a range of views in the sector, obviously. We have a policy in place, and I am not going to announce a change in policy here today.

Senator HANSON-YOUNG: Obviously there has been some media speculation around a review to be launched or announced by your department in coming weeks. With that speculation has come the concern of many parents and kids around this country that that will mean the axing of TV shows like Hi-5 and Totally Wild. Should parents be worried?

Senator Fifield: I think the thing that should most worry parents is the ever-changing ensemble that makes up Hi-5!I am still very committed to the original line-up and was a little unnerved at Carols by Candlelight on Christmas Eve that there was yet another incarnation of Hi-5.

Senator HANSON-YOUNG: I am glad that you pay a lot of close attention to the ensemble. The question actually goes to the heart of the concern of many Australian parents. When they turn the television on, they are worried increasingly about the amount of Australian made children's content that the kids are consuming. I think parents are always worried about the type of content that their kids view but, more and more, it seems that there is less representation of Australian children's content on our TVs. I am appealing to you not just as a member of this parliament but as a parent. We want our kids to have television shows that represent our world to them. Have you got sympathy for that concern?

Senator Fifield: I do, and I think your point is well made, Senator.

Senator HANSON-YOUNG: What is the role of the parliament, if indeed there were recommendations to change the quotas of Australian made drama or children's content on television? Would that require legislative change?

Senator Fifield: I will seek advice as to whether it would be regulation or legislation.

Mr Eccles : The current content arrangements are provided under regulation.

Senator HANSON-YOUNG: So the parliament would not be able to amend that but would have to either agree or disagree to the regulation?

Mr Eccles : That is right.

Senator HANSON-YOUNG: Is it a disallowable instrument?

Mr Eccles : I believe so. I will take that on notice. If I am not right I will let you know if that is the case.

Senator HANSON-YOUNG: Yes, that would be helpful.

Mr Eccles : But I do believe that is the case.

Senator HANSON-YOUNG: What is the government's view when it comes to the amount of mandated Australian content on our televisions? Can you explain to us, Minister, what the government's view is.

Senator Fifield: You want to have a balance between what is commercially reasonable for the broadcasting entities themselves and ensuring that we do have Australian programs telling Australian stories representing Australia to itself. That is the balance. No-one argues about the need for quotas. Indeed, if you look at what a number of the commercials do, they frequently are above their quotas because Australian content rates. Australians want to watch it.

Senator HANSON-YOUNG: So, you talk about balance. Do you think there is too little Australian content being produced at the moment?

Senator Fifield: I could give a subjective answer, which goes to my tastes in relation to particular Australian programming, but I know that is not where you are going.

Senator HANSON-YOUNG: We do not need to know that you watch Married at First Sight.

Senator Fifield: No, I do not. Do you, Senator?

Senator HANSON-YOUNG: I have watched it, but it is definitely not my favourite show of all time.

Senator Fifield: Is there enough Australian content? I would always like to see more. But in terms of what is appropriate, if we do have a review, that will be something that submissions will be received on.

Senator HANSON-YOUNG: What would happen to local production if the need to meet Australian content dropped? Is that something that your department looks at—the connection between these quotas and the drive of production locally?

Senator Fifield: That is absolutely something that the department and I are very mindful of—the connection between that and the Australian production industry.

Senator HANSON-YOUNG: Can I go to one other topic while I still have some time for my questions. I want to ask you about the safe harbour rules. We know that previously drafted legislation has been kicking about in relation to that. Can you give us an update as to where that is currently up to.

Senator Fifield: Sure. There are, I guess, two issues. The first is the issue of safe harbour, and the other is the issue of freeing things up and making things easier for disability access. I think there is no disagreement amongst anyone about the second issue. On the issue of safe harbour, there is obviously a debate in the sector. Again, this is a matter of balance. We have indicated that it is our intention to legislate in that area, and that remains the case. But I have no doubt that such legislation would go to a Senate committee for good scrutiny.

Senator HANSON-YOUNG: Has your department run any type of consultation with the broader sector in relation to the proposed safe harbour provisions?

Senator Fifield: Yes, it has, and I will ask officers to speak to that.

Mr Eccles : We are certainly in very regular contact with a whole range of stakeholders, and I think it is fair to say that the views on safe harbour are well understood by us, depending on where the sector is. But, certainly, we do have a constant flow of discussion between us and the key stakeholders.

Senator HANSON-YOUNG: It has been put to me that you have consulted with some but not all, and I guess this is an opportunity for you to either refute that or accept that that is the case. Perhaps you will need to take this on notice. I understand the idea that you are in constant conversation. I guess that is different to running a specific consultation around the impact of safe harbour, particularly on artists here in Australia.

Dr Patteson : In relation to consultation, obviously the recent Productivity Commission report into intellectual property arrangements ran a broad range of consultations. The government response to the report will be tabled in due course, but there has been a further round of specific consultation on the draft report, and safe harbour provisions are absolutely one of the recommendations within that report. So there has been specific consultation in response to that report that the government has undertaken, and at the moment it is looking at the results of those.

Mr Eccles : And I believe the exposure draft of the legislation has been circulated widely, and people have been able to comment on that.

Senator HANSON-YOUNG: Yes—although it was released quite late in the year, just before the Christmas holidays, was it not?

Dr Patteson : The Productivity Commission report came out on 20 December last year; you are quite correct; it was quite close to Christmas. But the consultation period was open until St Valentine's Day—so, 14 February.

Senator HANSON-YOUNG: What was the time frame for the release of and consultation on the draft exposure legislation?

Mr Eccles : I would need to take that on notice.

Senator HANSON-YOUNG: Can you take that on notice.

Mr Eccles : I will.

Senator HANSON-YOUNG: Can you take on notice the time frame. I would like to know when the consultations were held and who was consulted with. If you could give us a list of the various bodies and organisations you consulted with, that would be appreciated—just so that we can put to bed any suggestion that some people have not had consultation, if that is your view.

I would just like to jump back quickly to the question around content. I want to know the government's view on using New Zealand content as a way of boosting Australian quotas. What is the government's view on that?

Senator Fifield: New Zealand content is counted in some circumstances for quotas, and I am hazarding a guess that it might be a function of the CER arrangements with New Zealand—the closer economic relationship.

Senator HANSON-YOUNG: Could perhaps somebody from the department flesh out to us why we count New Zealand content as Australian, when it clearly is not.

Mr Eccles : Clearly it is a policy position of the government. But we can provide you with information about how material it is.

Senator HANSON-YOUNG: Minister, it seems to me that, regardless of what the current rules say or do not say, in light of discussion and debate about a content review, at some stage the government is going to have to make a decision about whether you count New Zealand content as Australian content. Surely the government has a view on that? I know we like to steal their actors when they do well, but, aside from that, really, New Zealand content is New Zealand.

Senator Fifield: You do not like Go Girls, I think it is? It is a New Zealand program. One thing we will have to take back and have a look at is whether this is related to our free trade agreements with New Zealand such as the CER.

Senator HANSON-YOUNG: How do you think Australian parents would feel about being told that what their children watch in New Zealand-made television shows—

CHAIR: Is that asking for an opinion?

Senator HANSON-YOUNG: This is for the minister. How do you think a parent would feel about their kids watching New Zealand television shows and being told that that is Australia? What is your view on that, Minister?

Senator Fifield: That is where you would hope that parental guidance would come in, and they would say, 'That is not Australia, and you do not need to talk in that way.'

Senator O'NEILL: I know that there have been a few new desks coming into the parliament here, Minister, but it seems, from that Australian article, that you have one shaped like the Bermuda Triangle. Do you have any special furniture in your office where things disappear?

Senator Fifield: You can monologue, Senator. You will eventually have a question, I am sure.

Senator O'NEILL: I am assuming that is 'no'. Could you then explain the delay in key reform processes that were kicked off by your predecessor, the now Prime Minister, Malcolm Turnbull—and I am referring to the copyright bill, the ACMA review and spectrum reform. They were all commenced. You acquired them in 2015. Where are they now?

Senator Fifield: In terms of copyright, I think we canvassed some of that territory just then. Are you referring to safe harbour access issues?

Senator O'NEILL: It was a broader brief than that.

Senator Fifield: There are a few things happening in the space of copyright. We have the issue of safe harbour, and that legislation was subject to an exposure draft at the end of last year. We will be introducing legislation in relation to that. I am sure you appreciate, Senator, copyright is a complex area. It is an area where decisions can have a significant effect on the economics of particular businesses; you want to make sure that you get them right. You would also be aware, Senator, that the Productivity Commission—

Senator O'NEILL: Can I just ask a question before you go on, Minister, about what you have said there. You have indicated that there will be an exposure draft—

Senator Fifield: No; that there has been. There was an exposure draft last year, which consultation was undertaken on.

Senator O'NEILL: Where is the process at now?

Senator Fifield: We have taken on board some of the consultation that has occurred, and there will be legislation introduced.

Senator O'NEILL: That is the question: when do you expect that to happen? As you said, the signals that you give are very significant for the sector. When do you expect that legislation to be introduced?

Senator Fifield: In the near future, Senator.

Senator O'NEILL: No dates?

Senator Fifield: It is not the practice of government, generally, to give particular dates for the introduction of particular pieces of legislation.

Senator O'NEILL: I will go to the Spectrum review report.

Senator Fifield: Just on copyright, you would be aware that the Productivity Commission has just concluded a report—into intellectual property more broadly, but a subsection of that looks at copyright. It is a very detailed report. We will have a government response to it, but—

Senator O'NEILL: Do you have a date for that, Minister?

Senator Fifield: It is only relatively recently that the Productivity Commission have completed their report. We could just write any old thing on a bit of paper and say that is a response but, if you look at the Productivity Commission report, I think you will see that there will be a need to talk to the relevant parties as part of framing the government's response.

Senator O'NEILL: So it will be a while. Can I go to the Spectrum review report, which is dated March 2015. At page 38, it stated that a consolidated legislative reform package would be released—and it did give a date at that point actually; it said that it would be released in September 2015, to enable the passage of legislation by early to mid-2016. But that did not happen. More recently, I believe in an interview with CommsDay magazine in October of last year, you said: 'the exposure draft will be available later this year'—that was at the end of 2016. You said that was the game plan. But here we are in February 2017, two years after the report was finalised, and there is still no sign of the exposure draft of the legislation. Minister Fifield, what is the hold-up?

Senator Fifield: Again, this is an area where the sector wanted further discussion. I could have ignored the sector's desire for further discussion, ignored the input that they wanted to make, and unilaterally put something out there, but we wanted to ensure that those industries, those businesses, had the opportunity to make sure that their views were taken on board.

Senator O'NEILL: Timeliness in this particular area is significant, because it has a financial impact. I refer to a letter from Mr Robinson dated 28 July 2015 certifying that:

the independent review of Australia's spectrum management framework (the review) has undertaken a process and analysis equivalent to a Regulatory Impact Statement (RIS).

Mr Robinson is nodding; I think he is recalling there. The letter states:

The Centre for International Economics has estimated that making it easier for spectrum to move to more valuable uses could unlock productivity benefits for the economy of up to $3.9 billion over 10 years.

That was the call in July 2015. Further:

It is estimated that over the 15 year horizon of the spectrum lifecycle the proposed reforms will generate an additional $96 million in benefits to the Australian economy by enabling faster access to spectrum that has been sitting unallocated and unused.

So timeliness is actually quite significant.

Minister, are you cognisant of the substantial benefits of spectrum reform on the one hand and of the significant costs of delay in progressing that spectrum reform on the other hand?

Senator Fifield: There would be greater costs if you sought to do something and got it wrong and if you did not take fully into account the views of the various sectors. These are proposed to be the most significant changes in 25 years in terms of spectrum management. I can indicate to you that the exposure draft of new legislation will soon be released for a two month period of consultation. It is important that you consult prior to the drafting of an exposure draft. It is then important that you provide the opportunity for comment on the exposure draft, because how things—

Senator O'NEILL: But the sector has been expecting this since 2015.

Senator Fifield: And we are aiming to introduce the legislation in the spring 2017 sittings.

Senator O'NEILL: Not in this setting period, before we get up?

Senator Fifield: In spring.

Senator O'NEILL: We only have two weeks left, so in the week of 20 or 27 March, you will be putting that legislation forward—is that right?

Senator Fifield: No. What I just said is that we will be releasing an exposure draft. There will be a two month period of consultation with the intention of introducing it in the spring session.

Senator O'NEILL: Should we believe your dates this time?

Senator Fifield: I think it is important that we talk more if the sector says they want to talk more.

Senator O'NEILL: What if they say that now? Will you delay that further? Or are you all talked out now?

Senator Fifield: I have indicated that we will be releasing an exposure draft, and there will be a two month period of consultation on that.

Senator O'NEILL: One of the oft stated benefits of spectrum reform is the streamlining of regulatory processes, particularly for allocating licences. Do you regard it as a failing that the auction process for the 700 megahertz spectrum, which is now in train, is being conducted under what was described as a current, burdensome regulatory regime rather than a new streamlined framework?

Senator Fifield: The streamlining of the spectrum management also has to do with the licensing arrangements, but I think it is good that we are having an auction for the 700 megahertz.

Senator O'NEILL: Under the old rules?

Senator Fifield: I think it is good that we are having an auction for 700 megahertz. It will mean that is available for telcos and it will also mean that the Commonwealth gets revenue.

Senator O'NEILL: Given your answers so far, consulting with the sector seems to be a priority, but the reform itself is not a priority for you, it would seem, because there have been significant delays.

Senator Fifield: No, I do not agree.

Senator O'NEILL: Does the department have a view about the long time frame in the delivery of this?

Mr Robinson : In March and April last year we released a legislative proposals paper, which was part of the consultation the minister mentioned. Industry got a good indication then of what some of the thinking was. As was announced by the government at the time, we are looking to rewrite the whole legislation rather than to amend. The current act is in the order of 462 pages, so that has been a really substantial piece of work. And as the minister indicated, we are hoping to go out to exposure draft quite soon.

Senator O'NEILL: Will there be provision for spectrum review implementation by the department and/or the ACMA in the 2017-18 budget?

Senator Fifield: Obviously, we are not going to comment on what may or may not be in the budget.

Senator O'NEILL: Can it be implemented without the budget application?

Senator Fifield: We are not going to talk about what may or may not be in the budget.

Senator O'NEILL: But it is not indicated to the sector about your commitment to doing this or not. Can it be done without a budget? Have you asked the question of if it can be done without a budget?

Senator Fifield: We will do what is required to achieve the policy objectives.

Senator O'NEILL: Mr Robinson?

Mr Robinson : We and the ACMA are allocating resources to go through the consultation processes and drafting processes we are doing.

Senator O'NEILL: What is the quantum of that request?

Mr Robinson : I would have to take that on notice.

Senator O'NEILL: Is there any chance you could provide that to us today? You must have done preparatory figures.

Mr Robinson : No; I doubt that we could do it today. It is within our existing appropriations. As the minister said, we cannot comment on what may be in the upcoming budget.

Senator Fifield: Relevant agencies such as ACMA either do or do not make budget bids in the lead up to each budget cycle, but I cannot comment to you about individual agencies and their budget bids.

Senator O'NEILL: In terms of spectrum reform, are you adequately provisioned, Mr Robinson?

Mr Robinson : Yes, Senator.

Senator O'NEILL: Are the department's project management arrangements effective for managing deliverables for spectrum review implementation?

Mr Robinson : Yes, Senator.

Senator O'NEILL: I might have one more question for you on notice, but I will go to a different line of questioning that is related. Can the department please provide an update on the status of the Copyright Amendment (Disability Access and Other Measures) Bill 2016 and Australia's implementation of the Marrakesh treaty?

Senator Fifield: I will ask officers to contribute as well, but we touched on this in response to questions from Senator Hanson-Young before when we were talking about safe harbour, because that particular bill has the disability elements and also has safe harbour elements. That is the bill we were talking about before that was the subject of an exposure draft consultation at the end of last year. My understanding is—and officers will correct me if I am wrong—that we nevertheless are meeting our Marrakesh obligations. The legislation is not required to ensure that happens, but obviously it would be a good thing for it to be passed, and it will be.

Senator O'NEILL: Mr Robinson, do you have anything to add to the implementation of the Marrakesh treaty?

Mr Eccles : It is in my domain, and, no, nothing to add.

Senator O'NEILL: Mr Robinson, a question for you: will the implementation of the spectrum review affect the prioritisation of the work within the department?

Mr Robinson : I think the implementation of the spectrum reform is a priority of the department. To that extent, it is one of our prioritised work streams, so, yes.

Senator O'NEILL: Do you have a forward schedule with staff allocated to the work that you see coming?

Mr Robinson : Yes, Senator.

Senator O'NEILL: And you have some time frame around that?

Mr Robinson : There will be more information on that when the exposure draft is released. There will be various elements to it, and one of the elements that has taken time in preparing is the transitional arrangements. I think in our legislative consultation paper we gave some information on that. It will vary, I think, but there will be elements, including some of the transitional arrangements, that will quite likely be of some years—not for all of it, but for some of it. So, I expect it will be part of the work program for the department and the ACMA for all of that.

Senator O'NEILL: Do you have adequate staffing arrangements for the skill set that is required for that work?

Mr Robinson : Yes, I believe we do.

Senator O'NEILL: Thank you. I have more questions on another matter, Chair.

CHAIR: It might be an opportune time to suspend the hearing for a couple of minutes to have a private meeting with the committee members. We have just had some discussions about the program for the rest of the day and we are very keen to provide some additional guidance because we will be releasing some people from appearing here today. We will suspend the meeting and we will be back shortly.

Proceedings suspended from 11:29 to 11:34

CHAIR: This hearing is now resumed. The committee has just met and agreed to changes to the program for today, given the intense interest that senators have in the first three items. The committee will go through on general questions until 12 o'clock. We will then call forward SBS at 12 o'clock, or maybe just before, to give evidence until the lunch break at 12.35. At 1.35 we will then call Australia Post, which we expect will take us through to the afternoon tea break at 3.55, and around about then we will call the ABC to give evidence through until the dinner break at 6.30. NBN will remain on the schedule as programmed.

The agencies and officials that we can now release are: Screen Australia, Australia Council, National Film and Sound Archive of Australia, National Library of Australia, the Children's eSafety Commissioner, Australian Communications and Media Authority, and programs 2.1 and 1.1. The committee has also agreed that we will endeavour to provide on notice the questions that we had for all of those agencies and officials, and will do that in the normal process. At the end of today we will determine whether we need to have any spillovers before the next round of budget estimates.

On behalf of the committee could you please pass on our thanks to the officials for coming to Canberra and being prepared to appear today. As a committee, we thought it would be better to release them now rather than have them waiting all day and not appearing.

Before we commence again I understand, Mr Eccles, you have some clarifying points.

Mr Eccles : Just some clarification of questions that Senator Hanson-Young asked: content requirements are enshrined in both legislation and regulation.

Senator HANSON-YOUNG: Which means, then, that any review recommendations would have to come to the parliament.

Mr Eccles : That is right—for the legislated elements; that is in the Broadcasting Services Act.

Senator HANSON-YOUNG: Yes, thank you.

Senator CHISHOLM: Dr Smith, at IPAA in October last year you stated:

… instead of incremental, sectoral-based approaches we need to think of reform in the context of an ecosystem.

You also mentioned that the minister had asked the department to begin work on a 'communications policy roadmap centred on a principles based framework for communications policy.' When did the minister ask you to undertake that work?

Dr Smith : In the speech that I made to IPAA last year I did, as you say, talk about the communications sector, and also the arts sector, as really being an ecosystem where creativity is particularly important. In relation to your second question, as a department we have been talking and thinking for a fair amount of time about just how interlinked the communications sector is, particularly with the role of digital technology—we can no longer think of the components of the communications sector in a vertical way; we really need to think about them in a horizontal way. So much of the communications sector is enabling infrastructure, and the policies and regulation that underpin that are increasingly outdated, in the sense that technological change is really running ahead of where policy and regulatory frameworks can keep up. So it has been a general discussion that the department has been having for a few years, obviously in consultation with the minister. When we think about the direction of work in the department, instead of taking a black-letter-law approach to issues, when so much of the sector is so dynamic and moving at a rapid speed, we need to think of it more as a principles based approach which has the role of the consumer front and centre and also the role of competition front and centre. So it is a discussion that we have been having internally in the department and also with parts of the sector. In our consultations with the minister we are doing some work around how we might think of the sector going forward.

Senator CHISHOLM: How does what you spoke about in that speech relate to the department's deregulatory road map that was spoken about in 2014? I am just trying to understand the relationship between those two issues.

Dr Smith : Well, I was not in the department in 2014, but it goes to some of the issues that we have been discussing today, whether it is the review around ACMA, how we think about spectrum reform, how we think about changes in the media and broadcasting sector or around local content. So, as I mentioned, there is a lot of regulation sitting within this sector. I know a couple of years ago the department looked quite comprehensively at where there are legislative issues and regulatory structures that are redundant or becoming an impost on business, and there was a process that started to examine that. I do not have the details of that process, unless Mr Robinson was around at that time, but we can certainly give you more information on that on notice.

Senator CHISHOLM: Thanks. Minister, was the speech that Dr Smith gave where she talked about the communications policy road map based off instructions that you had given the department as minister?

Senator Fifield: The secretary of the department chooses the invitations that she accepts and the forums that she speaks in and drafts her own speeches.

Senator CHISHOLM: But I imagine, when Dr Smith went there and spoke about a communications policy road map, that would be based on some sort of correspondence from yourself?

Senator Fifield: Obviously Dr Smith, as secretary of the department, reflects the government policy and my thinking.

Senator Chisholm: Was there an instruction from you to develop a communications policy road map?

Senator Fifield: Yes.

Senator CHISHOLM: At what time and how was that instruction given?

Senator Fifield: It was probably not on a particular day or at a particular time. Discussions between me and the department are iterative, ongoing—daily. I am happy to take on notice, if you like, when something may have become formalised, in a sense.

Senator CHISHOLM: That would be great. Dr Smith, I am interested in the two-day content conversation conference which will be hosted by ACMA. I am interested in how this is seen as the appropriate next step forward in developing the content policy.

Dr Smith : I am aware of the conference and I am aware that the department has been invited to participate in the conference because of the clear interest we have in content. Beyond that, I have not had much engagement with that issue—unless my colleagues know? No.

Senator CHISHOLM: In terms of whose idea it was to hold the content conversation, do you have any idea where that came from?

Dr Smith : I believe it was from ACMA.

Senator CHISHOLM: In terms of time frames around the content review, when are we likely to see some outcomes around this?

Dr Smith : We were traversing this before. We have given thought to the review, but it is really a matter for government to determine the time line.

Senator CHISHOLM: Do you have anything to add to that, Minister?

Senator Fifield: We have not made a determination about that as yet.

Senator CHISHOLM: There just seems to be a trend within your portfolio that things are constantly on the never-never. There are no actual time frames around them, there are no dates and there is just an ongoing conversation without actually landing anywhere in terms of reform, when it was first outlined in 2014 that this is the direction that the department is going.

Senator Fifield: Content issues are something that have always been a discussion and a focus in the industry more broadly. As I have indicated, we will have more to say about them.

Senator CHISHOLM: More conversations?

Senator Fifield: I can make a unilateral decision, but I do not think the sector would appreciate that.

Senator CHISHOLM: The sector might appreciate some decisions though.

Senator Fifield: It is a very interesting sector. You should study it more closely. Each element of the sector is very happy for you to make a decision as long as it is the decision they want. Other elements of the sector would prefer that you would not if it is not the decision that they want. Also, of course, we do have the parliament where agreement needs to be secured. Ideally I would love, for instance, to have media reforms secured through the parliament, so, if you are indicating that the Australian Labor Party will support media reform, that is terrific news and we can get on and transact that piece of business.

Senator CHISHOLM: Do you think the scope of the conference is—this is probably one for Dr Smith—too limited or is the department happy? I am just coming back to your speech about the ecosystem. It would seem that the scope of the two-day conference is quite limited. Are you concerned that they are not actually covering off enough subject area, given your wide-ranging speech and the direction of the department? The conference does not really seem to be covering that.

Dr Smith : I have not looked in detail at the substance of the two-day conference on content. It is just one component of the sector. Certainly I can take a look at that and get back to you. I would assume that parts of the department have been in consultation with the ACMA on the scope but I have not.

Senator CHISHOLM: Will the department commission any research or provide any discussion papers that will inform the discussion around this issue in the lead-up to the conference?

Dr Smith : I am not aware, again, that we would, but, as I said, I have not looked at the agenda in great detail. I would imagine that there would be participation by the department, but I am not aware of whether we are dedicating resources to that—apart from what the normal business is that we would be doing.

Senator CHISHOLM: In terms of characterising the relationship with the department and the conference that ACMA are running, would it be fair to say that this is being held in conjunction with the department or do you see it as being separate?

Dr Smith : Again, I have not looked at it in detail, apart from reading the initial letter and consulting my colleagues on who would go. We would have had a discussion about, 'Is there crossover? Is it relevant? Are we making sure that it is value-adding from both areas?' I think that conversation has been had.

Senator CHISHOLM: The ACMA media release says that the content conservation is being held in conjunction with the department. Do you think that is fair?

Dr Smith : Yes, that is entirely appropriate.

Senator CHISHOLM: This is probably one for the minister. My knowledge of this area, which I am sure you will appreciate, also extends to me participating in some of the inquiries that the Senate committee has done. One thing that really struck me, particularly when I was talking to some of the media companies that represented themselves at the Senate hearing, was that they wanted more holistic reform in the area rather than a piecemeal approach. What would you say in response to that, given that it seems to be, from the evidence today, that the department, with you as minister, has increasingly just been going down the piecemeal approach to reform?

Senator Fifield: Each grouping in the sector means something quite different when they talk about wholesale reform. If you ask free-to-airs what they mean by 'wholesale reform', they will probably say they mean to take their licence fees away! If you ask other sectors, you will get a different answer. But what is curious is that the Labor Party's reason for not supporting the abolition of the two-out-of-three rule in the parliament is that they think reform should be more wholesale. Labor's response to our media reform legislation is to support less rather than more. So Labor say we need to do more, but then Labor's response is to do less, to propose less, by supporting only the abolition of the 75 per cent audience reach rule rather than two out of three. I think abolishing two out of three and 75 per cent of audience reach is more comprehensive than just abolishing the 75 per cent audience reach.

Senator CHISHOLM: But what would you say about the delays around some of the other reform issues which are equally important? There does not seem to be progress at all on legislation.

Senator Fifield: Things are progressing in terms of spectrum management. Things are progressing in terms of the regional broadband scheme. Things are progressing in terms of copyright. In these areas there have been exposure drafts or, in the case of spectrum, an exposure draft is to come. There have been consultations and we will be legislating.

Senator O'NEILL: In your comments about the media reform bill, the secretary talks about the need for principles based regulation in future. What does your media reform bill do for the principle of diversity in the online media environment?

Senator Fifield: What it does, and this goes to the point of diversity more generally, is it seeks to ensure that Australian media organisations can configure themselves in ways that best support their viability. Having viable Australian media organisations is an important underpinning of diversity more broadly. I do not want to see Australian media organisations slowly wither. That does not do much to support diversity.

Senator O'NEILL: Can I take you through a series of questions to clarify for myself where your thinking is at with regard to that reform. There is consensus among the stakeholders, between the government and the opposition, that the 75 per cent reach rule should be repealed, right?

Senator Fifield: Yes.

Senator O'NEILL: That is not disputed. Why is the government refusing to split the media reform bill by removing the schedule that would repeal the two-out-of-three rule?

Senator Fifield: This goes to your very point. You and your colleagues are saying media reform should be comprehensive, and yet when we put something comprehensive forward Labor says, 'We said you should do something comprehensive, but do less.' So we take you at your word that more needs to be done, and we want to do more. We think it is important that both those pieces of the legislation are passed, and that is why, given the Labor Party have said that they are not going to engage on two out of three, we are now talking to our crossbench colleagues.

Senator O'NEILL: So, Minister, you could actually be going ahead with the 75 per cent reach rule right now. What is your reason for not proceeding with that? You have talked about the urgency.

Senator Fifield: The Australian Labor Party says we should be more comprehensive on media reform, so we are trying to be more comprehensive.

Senator O'NEILL: You are listening to us! I know you take a lot of our policies—the good ones.

Senator DASTYARI: They are all good policies.

Senator O'NEILL: Our policies are good.

CHAIR: Senators, we only have a limited amount of time for Senator O'Neill to finish her questions.

Senator Fifield: We think both 75 per cent and two out of three are important to abolish. That is what we want to do. The parliament is made up of more elements than the Australian Labor Party, so we are working with our crossbench colleagues.

Senator O'NEILL: With regard to the two-out-of-three rule, are you seeing that as the silver bullet that will support Australian media companies, regional and local content and jobs? Is that important to you? Is that what you think it is going to do?

Senator Fifield: There is no silver bullet in this area. We are doing a series of things to help the Australian media industry. I think both these things are important.

Senator O'NEILL: Are you familiar with the recent expansion into regional news by the Nine Network and the Sky News network?

Senator Fifield: Yes.

Senator O'NEILL: Doesn't that mean the proposal to remove the two-out-of-three rule is unnecessary?

Senator Fifield: No, it does not. It does not mean that. I am very pleased that Nine have increased their resources in the regions and I was happy to launch that a few weekends back. I am always loath to speak on behalf of individual media organisations and I will not do that. But, if you talk to the different players in the sector, you will find that a majority—and I say 'a majority' because it is not all of them—of TV players, both metro and regional free-to-air, plus Fairfax and News Limited, think that the abolition of the two-out-of-three rule and the 75-per-cent-audience-reach rule is something that should happen. There is near unanimity in the sector on that.

Senator O'NEILL: Do you accept that Australia's level of media ownership concentration is already one of the highest in the world?

Senator Fifield: There has been an ongoing concern, going back decades, about concentration of media ownership in Australia. The five rules were put in place to prevent excessive concentration. We are now in an era with a lot more competition—from the over-the-tops, from the internet. The five media laws were designed in an era when the internet did not exist. We think it is appropriate to remove some of them but not all of them. We are not proposing to abolish the one-to-a-market rule for TV licences. We are not proposing to abolish the two-to-a-market rule for radio licences. We are not proposing to abolish the 5/4 rule, as it is known, which is the voices rule—that you have to have five independent voices in metro areas and four independent voices in regional areas. We are not proposing the abolition of those, because we recognise that you still want to make sure that there are a number of voices and that you do not have excessive concentration. But we think that getting rid of the 75-per-cent-audience-reach rule and the two-out-of-three rule will enable Australian media organisations to more easily configure in ways that support their viability—without compromising diversity and without leading to excessive concentration. Australian media organisations do need to get some scale to be in a competitive position against online and overseas media.

Senator O'NEILL: Do you concede, though, that the two-out-of-three rule is an important diversity safeguard and that it is a critical thing to preserve diversity of ownership of the media—not just diversity of platforms?

Senator Fifield: When we talk about getting rid of the two-out-of-three rule, you should not look at it in isolation. You need to look at the fact that the 5/4 rule will still be there, the two-to-a-market rule for radio will still be there, the one-to-a-market rule for TV will still be there, and that you will still have the ACCC running their ruler over things. There are still important protections.

Senator O'NEILL: You have indicated twice now that you do not intend to abolish those rules—but what do they do to support diversity in the online media environment now and in the future?

Senator Fifield: Diversity in the online media environment is a given. Diversity is there online. It is one of the chief competitors for the traditional media platforms. The question really is: how do we better support Australian media organisations on the traditional platforms of print, radio and TV to be in a position where they can compete with the new entrants? I think that part of the answer to that is getting rid of the 75-per-cent-audience-reach rule and the two-out-of-three rule.

Senator O'NEILL: Last year, Minister, at your request, the ACCC released a draft media merger guideline. Can you explain how competition law will provide an adequate safeguard for media diversity in the event the two-out-of-three rule is repealed? How will that work?

Senator Fifield: The ACCC have responsibility for preventing things that are detrimental to competition from occurring.

Senator O'NEILL: Do they have the power to block a merger?

Senator Fifield: Yes, in some circumstances they can.

Senator O'NEILL: Are you certain about that?

Senator Fifield: The ACCC?

Senator O'NEILL: Do they have the capacity to block a merger in this space, in your communications area? Are you confident they have that capacity?

Senator Fifield: The ACCC, if there is an investment proposal which they think would substantially lessen competition, can intervene. One of the things we have asked the ACCC to do is to update their guidelines in anticipation of the passage of the abolition of the 75-per-cent-audience-reach rule and the two-out-of-three rule.

Senator O'NEILL: I want to give you the opportunity to double-check that, because I do not know if that is correct, but with regard to the issues and the objectives of—

Senator Fifield: I am not saying the ACCC has the capacity to oppose all mergers. There are a whole series of tests which the ACCC applies when it comes to particular propositions.

Senator O'NEILL: But it would be unfortunate if you were relying on their capacity and they could not actually do it. Really, that would be a bit of a problem for you.

Senator Fifield: I am not relying solely on the ACCC. As I said, we have the five-four rule, which is still in place. We have the one-to-a-market rule and the two-to-a-market rule. We are proposing that those still be in place.

Senator O'NEILL: Would the ACCC consider social policy objectives, such as pluralism, democracy or diversity of ownership in making its assessment? Does it have the capacity—

Senator Fifield: Sorry, just say that again.

Senator O'NEILL: Your mandate is to consider issues such as pluralism, democracy and diversity. These underpin decision-making with regard to the 75-per-cent rule and the two-out-of-three rule. Does the ACCC have the capacity to take those important social factors into account in its assessment of whether to block the merger?

Senator Fifield: The ACCC focuses on competition and what is good for competition.

Senator O'NEILL: I know that, but how does that intersect with the responsibilities that you are just hiving off to it in the hope that it is going to able be to do that job in the future.

Senator Fifield: No. I am not investing all power, authority and wisdom in the ACCC.

Senator O'NEILL: Well, you have done the same thing with the remuneration tribunal this morning, so you could do it with anything.

CHAIR: Senator O'Neill, I have given you some indulgences and some extra time, but we do not need any last-minute editorialising.

Senator Fifield: I am saying there are a range of elements that need to be taken into account. There is the ACCC, there is the five-four rule, there is the two-to-a-market rule and there is the one-to-a-market rule. They are all elements that will remain in place.

CHAIR: Thank you very much, Minister.