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Foreign Affairs, Defence and Trade Legislation Committee
05/06/2014
Estimates
FOREIGN AFFAIRS AND TRADE PORTFOLIO

FOREIGN AFFAIRS AND TRADE PORTFOLIO

In Attendance

Senator Brandis, Attorney-General, Minister for the Arts

Senator Mason, Parliamentary Secretary to the Minister for Foreign Affairs

Department of Foreign Affairs and Trade

Portfolio and Budget Overview

Mr Peter Varghese, Secretary

Ms Jan Adams, Deputy Secretary

Mr Ewen McDonald, Deputy Secretary

Mr John Fisher, First Assistant Secretary, Corporate Management Division

Mr Paul Wood, Chief Finance Officer

Mr Jeff Roach, Assistant Secretary, Executive, Planning and Evaluation Branch

Dr Angela Macdonald, Assistant Secretary, Parliamentary and Media Branch

Ms Jennifer Rawson, First Assistant Secretary, Integration Taskforce

Outcome and Program Structure

Outcome 1—The advancement of Australia's international strategic, security and economic interests including through bilateral, regional and multilateral engagement on Australian Government foreign, trade and international development policy priorities

Program 1.1—Foreign Affairs and Trade Operations

North Asia:

Mr Peter Rowe, First Assistant Secretary, North Asia Division

South-East Asia:

Mr Allaster Cox, First Assistant Secretary, South-East Asia Maritime Division

Americas and Africa:

Americas:

Dr Brendon Hammer, First Assistant Secretary, Americas Division

Africa:

Mr Marc Innes-Brown, Acting First Assistant Secretary, Middle East and Africa Division

Mr Adam McCarthy, Assistant Secretary, Africa Branch

Europe:

Mr Jeremy Newman, First Assistant Secretary, Europe Division

South and West Asia and Middle East

South and West Asia:

Mr Paul Robilliard, First Assistant Secretary, South and West Asia Division

Central Asia:

Mr Paul Robilliard, First Assistant Secretary, South and West Asia Division

 

Middle East and North Africa:

Mr Marc Innes-Brown, Acting First Assistant Secretary, Middle East and Africa Division

Mr Adam McCarthy, Assistant Secretary, Africa Branch

Pacific:

Ms Kathy Klugman, First Assistant Secretary, Pacific Division

International organisations, legal and environment :

Ms Harinder Sidhu, First Assistant Secretary, Multilateral Policy Division

Ms Katrina Cooper, First Assistant Secretary, Legal Division

Mr Craig Chittick, Ambassador for People Smuggling, Multilateral Policy Division

Mr Jon Merrill, Head, UN Security Council Taskforce

Security, nuclear dis armament and non-proliferation:

Dr Robert Floyd, Director General, Australian Safeguards and Non-Proliferation Office

Mr Peter Tesch, First Assistant Secretary, International Security Division

Mr Miles Armitage, Ambassador for Counter-Terrorism, Assistant Secretary, Counter-Terrorism Branch

Services to other agencies:

Mr Rob Tranter, First Assistant Secretary, Public Diplomacy and Communications Division

Mr John Fisher, First Assistant Secretary, Corporate Management Division

Mr Tuan Dao, Chief Information Officer, Information Management and Technology Division

Mr Scott Dawson, First Assistant Secretary, Contracting and Aid Management Division

Mr Jeff Roach, Assistant Secretary, Executive Branch

Services to diplo matic/consular representatives:

Ms Sally Mansfield, Assistant Secretary, Protocol Branch

Public information services and public diplomacy:

Mr Rob Tranter, First Assistant Secretary, Public Diplomacy and Communications Division

Program 1.2—Payments to Internationa l Organisations (Administered):

Ms Harinder Sidhu, First Assistant Secretary, Multilateral Policy Division

Ms Clare Walsh, First Assistant Secretary, Multilateral Development Partnerships Division

Program 1.3—Public Information Services and P ublic Diplomacy (Administered):

Mr Rob Tranter, First Assistant Secretary, Public Diplomacy and Communications Division

Program 1.4—International Climate Change Engagement (Administered)

Ms Harinder Sidhu, First Assistant Secretary, Multilateral Policy Division

Mr Justin Lee, Ambassador for Climate Change, Multilateral Policy Division

Program 1.5—New Colombo Plan - Transforming Regional Relationships

Ms Kate Duff, Assistant Secretary, New Colombo Plan Secretariat Branch

Aid Overview/Budget:

Mr Ewen McDonald, Deputy Secretary

Mr Paul Wood, Chief Finance Officer

Program 1.6—Official Development Assistance - PNG and Pacific

Ms Kathy Klugman, First Assistant Secretary, Pacific Division

Mr Mat Kimberley, Assistant Secretary PNG Development and Solomon Islands Branch

Program 1.7—Official Development Assistance - East Asi a:

Mr Allaster Cox, First Assistant Secretary, South-East Asia Maritime Division

Ms Angela Corcoran, Assistant Secretary, Indonesia Program Delivery and Timor-Leste Branch

Program 1.8—Official Development Assistance - East Asia AIPRD (Australia-Indonesia Partnership for Reconstruction and Development)

Mr Allaster Cox, First Assistant Secretary, South-East Asia Maritime Division

Ms Angela Corcoran, Assistant Secretary, Indonesia Program Delivery and Timor-Leste Branch

Program 1.9—Official Development Assistance - Africa, South and Centr al Asia, Middle East and Other:

Mr Marc Innes-Brown, Acting First Assistant Secretary, Middle East and Africa Division

Mr Adam McCarthy, Assistant Secretary, Africa Branch

Program 1.10—Official Development Assistance - Emergency, Humanitarian and Refugee Program

Mr Laurie Dunn, First Assistant Secretary, Humanitarian Division

Mr Blair Exell, First Assistant Secretary, Development Policy Division

Program 1.11—Official Development Assistance - Multilateral Replenishments

Ms Clare Walsh, First Assistant Secretary, Multilateral Development Partnerships Division

Program 1.12—Official Development Assistance - UN, Commonwealth and Oth er International Organisations:

Ms Clare Walsh, First Assistant Secretary, Multilateral Development Partnerships Division

Program 1.13—Official Development Assistance - NGO, Volunteer and Community Programs

Ms Clare Walsh, First Assistant Secretary, Multilateral Development Partnerships Division

Departmental Program Support Outcome 1

Outcome 2—The protection and welfare of Australian abroad and access to secure international travel documentation through timely and responsive travel advice and consular and passport services in Australia and overseas

 

Program 2.1—Consular Services:

Mr Justin Brown, First Assistant Secretary, Consular and Crisis Management Division

Program 2.2—Passport Services:

Mr Bob Nash, Executive Director, Australian Passport Office

Mr Tuan Dao, Chief Information Officer, Information Management and Technology Division

Outcome 3—A secure Australian Government presence overseas through the provision of security services and information and communications technology infrastructure, and the management of the Commonwealth's overseas owned estate

Program 3.1—Foreig n Affairs and Trade Operations:

Mr John Fisher, First Assistant Secretary, Corporate Management Division

Mr Tuan Dao, Chief Information Officer, Information Management and Technology Division

Program 3.2—Overseas Property:

Mr Kevin Nixon, Executive Director, Overseas Property Office and Services

Trade Portfolio

Department of Foreign Affairs and Trade—Trade Programs

Bilateral, regional and m ultilateral trade negotiations:

Mr Chris De Cure, First Assistant Secretary, Office of Trade Negotiations

Mr Sam Gerovich, First Assistant Secretary, Trade and Economic Diplomacy Division

Mr Graham Fletcher, First Assistant Secretary, Free Trade Agreement Division

Mr Michael Mugliston, Special Negotiator, Free Trade Agreement Division

Trade d evelopment/policy coordination:

Mr Chris De Cure, First Assistant Secretary, Office of Trade Negotiations

Mr Sam Gerovich, First Assistant Secretary, Trade and Economic Diplomacy Division

Mr Graham Fletcher, First Assistant Secretary, Free Trade Agreement Division

Mr Michael Mugliston, Special Negotiator, Free Trade Agreement Division

Mr Daniel Sloper, First Assistant Secretary, G20

Export Finance and Insurance Corporation (EFIC)

Mr Andrew Hunter, Managing Director and CEO

Mr John Pacey, Chief Credit Officer

Mr John Hopkins, General Counsel

Mr Jan Parsons, Director Environmental and Technical Review

Mr Dougal Crawford, Senior Adviser, Government and External Relations

Australian Trade Commission (Austrade)

Outcome 1: Contribute to Australia's economic prosperity by promoting Australia's export and other international economic interests through the provision of information, advice and services to business, associations, institutions and government.

Programme 1.1 Promotion of Australia's export and other international economic interests.

Programme 1.2 Programmes to promote Australia's export and other international economic interests.

Mr Bruce Gosper, Chief Executive Officer

Mr Peter Yuile, Executive Director, Tourism, Education and Corporate Operations

Mr Tim Beresford, Executive Director, Australian Operations

Mr Laurie Smith, Executive Director, International Operations

Ms Marcia Kimball, Chief Human Resources and Change Management Officer

Mr John Angley, General Manager, Government, Ministerial and International Education

Ms Deborah Lewis, General Manager, Tourism

Mr Ian Chesterfield, General Manager, Programmes, Consular and Business Services

Mr Robert O'Meara, Chief Finance Officer

Mr Brendan Jacomb, Group Manager, Legal, Security and Procurement

Outcome 2: The protection and welfare of Australians abroad through timely and responsive consular and passport services in specific locations overseas.

Programme 2.1 Consular and Passport Services

Mr Bruce Gosper, Chief Executive Officer

Mr Peter Yuile, Executive Director, Tourism, Education and Corporate Operations

Mr Ian Chesterfield, General Manager Programmes, Consular and Business Services

Department of Foreign Affairs and Trade (tourism program)

Program 1.14: Programs to Promote Australia's International Tourism Interests

Mr Sam Gerovich, First Assistant Secretary, Trade and Economic Diplomacy Division

Tourism Australia

Outcome 1—Grow demand and foster a competitive and sustainable Australian tourism industry through partnership marketing to targeted global consumers in key markets.

Mr John O’Sullivan, Managing Director

Ms Karen Halbert, General Manager Corporate Affairs

Mr Mark Craig, General Manager, Corporate Services

Program 1.1—Supporting Outcome 1

Component 1.1—Grow demand

Component 1.2—Industry Development

Committee met at 09:04

CHAIR ( Senator Eggleston ): I formally open this hearing and call the meeting to order. I understand that the Attorney-General wishes to make a statement.

Senator Brandis: Yes, Mr Chairman. You will recall that, when the committee adjourned last night, there had been a number of questions and exchanges, in particular between Senator Rhiannon and me, concerning the description of East Jerusalem. I have had a conversation with the foreign minister and I want to make a short statement to the committee with her authority.

Australia supports a peaceful solution to the dispute between Israel and the Palestinian people which recognises the right of Israel to exist peacefully within secure borders and also recognises the aspiration to statehood of the Palestinian people. The description of areas which are the subject of negotiations in the course of the peace process by reference to historical events is unhelpful. The description of East Jerusalem as 'occupied' East Jerusalem is a term freighted with pejorative implications, which is neither appropriate nor useful. It should not and will not be the practice of the Australian government to describe areas of negotiation in such judgemental language.

CHAIR: Thank you very much, Attorney-General.

Senator Brandis: I will table that statement.

CHAIR: If you would table it, it will be incorporated in Hansard.

Senator XENOPHON: Chair, I have some questions following on from the Attorney's statement.

CHAIR: I am going to open the meeting, so perhaps you would like to wait.

Senator XENOPHON: Aren't we open yet?

Senator DASTYARI: How can we table a document if the meeting has not been opened?

Senator FAULKNER: Chair, there is certainly no need to incorporate—

CHAIR: I did open the meeting and I now have an opening statement to read, following the Attorney-General's statement.

Senator FAULKNER: Before you do, can I raise a procedural point?

CHAIR: Yes, of course.

Senator FAULKNER: There is no need to incorporate the statement that the Attorney has actually ensured is on the Hansard record. You requested the statement be incorporated; I am just making the point that there is no need to do so, as the Attorney has read it into the record.

CHAIR: That is technically correct and I thank you for that point.

Senator Brandis: Senator Faulkner, although I have read the statement into the record—so it will appear in Hansard—if it is also tabled in this committee, it becomes a parliamentary paper, does it not?

Senator FAULKNER: Yes, of course; and you, as a courtesy, which I thought was appropriate, offered to table the statement. But the Chair said, 'We will incorporate the statement in Hansard,' which does not assist you in that regard. It is a very minor point and—

Senator Brandis: It is a very minor point.

Senator FAULKNER: Let us table it and move on.

CHAIR: Yes, I think that is true, Senator Faulkner; it is time to move on and it was a minor point. Today the committee will examine the budget estimates for the Foreign Affairs and Trade portfolios in the following order: the Department of Foreign Affairs and Trade non-trade programs until 6:30 pm today; then the Trade portfolio from 7:30 to 11:00 pm, beginning with the Department of Foreign Affairs and Trade trade programs, followed by the Export Finance Insurance Corporation, or EFIC, as it is otherwise known, Austrade, the Department of Foreign Affairs and Trade tourism programs and Tourism Australia.

Topics will be considered in the order set out on the agenda. However, the committee hopes to reach sections of the program dealing with aid by the morning tea break, although this may not be possible. The committee has agreed that it will move to aid sections, commencing with aid overview/budget after the lunch break if the committee has not reached that point in the program. A full opening statement was read into the record yesterday morning. Copies are available from the secretariat.

[09:09]

CHAIR: We will now begin with outcome 1, program 1.1, West Asia and the Middle East. Senator Xenophon has the call.

Senator XENOPHON: Thank you, Chair; and thank you, Attorney, for the statement of the foreign minister that has been tabled and read into the Hansard this morning. I put this to both you and the secretary: in a media release of 15 December 1981 headed 'Golan Heights', the Hon. Tony Street, the Minister for Foreign Affairs at the time, stated:

The Minister recalled that last year the Australian Government had also expressed its opposition to the declaration by the Israeli Knesset that all Jerusalem, including occupied East Jerusalem, is the united capital of Israel.

That was the position of the coalition government back then. Is there now a different position of this government in relation to occupied East Jerusalem?

Senator Brandis: The reason the foreign minister agreed with me that it was appropriate to read the statement I have just read—which, as I say, she has authorised—is that, for obvious reasons, it is not desirable that expressions of the foreign policy of Australia should be made, as it were, in the course of backwards and forwards between a senator and a minister at the table during the course of estimates. The debate that I had—if you could call it a debate—with Senator Rhiannon and, indeed, you and Senator Dastyari last night was not an ideal vehicle for the expression of the Australian government's position on an important diplomatic question.

For that reason, overnight, the foreign minister, the secretary of the department and I have had a conversation and have developed the statement that I have just read as a clear and considered expression of the Australian government's position, so that there can be no dispute about what the position is and no misinterpretation of what was said last night. The statement that I have read is obviously a statement which has been put together after careful consideration and it represents the Australian government's position on this issue. For the reasons I have just expressed, I think it would be unhelpful for me, the secretary or anyone to be a commentator on the statement or to gloss the statement; the statement speaks for itself.

Senator XENOPHON: Attorney, thank you for that response. I am just trying to put this in context. The Hansard record shows that, on 8 June 1978, in response to a question on notice by EG Whitlam to Minister Ian Sinclair, reference was made by the minister to 'the occupied territories' and reference was made 'to support Israel's right to live within secure and recognised boundaries', which is very similar to the government's current position. He also stated:

The Australian Government has also made known, in international forums, its view that the territories occupied by Israel in 1967 are 'occupied territories' in the international legal sense of that expression and the convention relative to the protection of civilian persons in a time of war.

Also, in terms of historical context, on 20 May 1990, the Hon. Paul Keating, as Acting Prime Minister, made this reference in an address to the Zionist Federation of Australia on 20 May 1990:

Australia, together with most other countries, has expressed the view that Israeli settlements in the Occupied Territories, and in East Jerusalem, are contrary to international law and are a significant obstacle to peace.

Is there or is there not now a change in that bipartisan position of previous Australian governments, in that you do not consider these territories to be occupied?

Senator Brandis: You have read some extracts from Hansard of some decades ago. I have read a statement authorised by the foreign minister, which—unlike, inevitably, the exchange last night which, in the way of these things, was a spontaneous exchange—is the considered position of the Australian government. The statement speaks for itself and I will not be commenting on it, glossing it or departing from it. It is a considered expression of the position on this issue—it is an issue about the use of language—of the Australian government.

Senator XENOPHON: Respectfully, Attorney, isn't your statement a non-statement, in that there is no position expressed as to the term 'occupied'?

Senator Brandis: The statement is a considered statement, which speaks for itself, and I will not be commenting on it further.

Senator XENOPHON: Can I ask the secretary, Mr Varghese: does the minister's statement, or the foreign minister's statement, represent a change in the policy of Australian governments?

Senator Brandis: I am not going to have officials asked that question. The statement was developed in consultation with Mr Varghese, Ms Bishop, me and the foreign minister's office and it is the position of the Australian government.

Senator XENOPHON: Perhaps I could ask a more neutral question and maybe this will assist me, or the committee. I ask this to Mr Varghese and to you, Attorney: has the government of Israel asked Australia, at any time since 1967, to move our embassy from Tel Aviv to Jerusalem? Mr Varghese?

Mr Varghese : I would have to take that on notice. You are asking me a question going back to 1967, so I will take that—

Senator XENOPHON: No; since 1967.

Mr Varghese : Yes; it is a long period of time.

Senator DASTYARI: Are you aware of any times on your watch?

Mr Varghese : I will take it on notice.

Senator XENOPHON: Supplementary to that: if we have been asked, why haven't we?

Mr Varghese : Why haven't we been asked?

Senator XENOPHON: No. If we have been asked to move our embassy from Tel Aviv to Jerusalem, what has the response been and why have we not done so, if we have been asked?

Mr Varghese : I had better take that on notice.

Senator XENOPHON: I have further questions on this, but I understand that Senator Dastyari was—

CHAIR: No; we do not want to proceed down this line. We have agreed to a program for this morning.

Senator XENOPHON: Can I just ask one point of clarification?

CHAIR: I do not think so. I would prefer you not to.

Senator XENOPHON: Chair, can I just put one question on notice and then you can be done with me on this issue?

CHAIR: By all means, yes.

Senator XENOPHON: You can be done with me.

CHAIR: Good.

Senator XENOPHON: Mr Varghese, in respect of Palestinian children in custody, I refer to the Four Corners story by the Australian's correspondent in the Middle East, John Lyons, earlier this year. I think you are familiar with the story, or familiar with the program?

Mr Varghese : I did not see the program.

Senator XENOPHON: Could you please take this on notice: in respect of Palestinian children in custody, have any representations—and, if so, what was the nature of those representations—been made to the Israeli government?

Mr Varghese : I am happy to take that on notice.

Senator XENOPHON: Thank you. Thank you, Chair.

Senator FAWCETT: Mr Varghese, could we have somebody at the table to talk about India, please?

Mr Varghese : Yes.

Senator FAWCETT: I will start off with questions to you and I guess the officials can follow up as required. Obviously, with Narendra Modi having just been elected as the Prime Minister of India, it is a whole new chapter there. I just wonder whether you could outline what steps Australia is taking to engage with the new administration in India.

Mr Varghese : The relationship with India is a very important one for Australia. It engages first-order economic trade and investment interests; our strategic interests are converging. We have a very strong people-to-people connection. India is our largest source of permanent migrants and our second largest source of international students; a large Indian diaspora in Australia.

The election of Mr Modi was a stunning political victory for him and for the BJP. The emphasis that he has given, during his election campaign and in the short time that he has been in office, to economic growth and to lifting India's growth rate is potentially very significant, not just for the Indian economy but also obviously for India's standing internationally and its engagement in the region.

The government is keen to work very closely with the new Modi administration. The Prime Minister was, I think, one of the first leaders to congratulate Mr Modi on his election. We look forward to Mr Modi attending the G20 summit in Brisbane, and we are keen to take maximum advantage of this new dispensation in India to advance the very significant interests that we have with India.

Senator FAWCETT: I understand; that is about $16 billion of two-way trade, so it is significant. I am just interested to know whether this election process and the new administration will have any impact on the deal around exports of uranium, which I understand is close to closure.

Mr Varghese : We have been negotiating a nuclear cooperation agreement with India, which is a prerequisite before the export of Australian uranium can proceed. We are making very substantial progress on that arrangement. I think we are close to finalising it and, when we do, it will be an important step in the relationship.

Senator FAWCETT: Going to some of the recent events in India where there has been the issue of both foreigners and local women being raped and quite a significant community outcry in India, what additional information are we putting out in travel advisories and things for Australians who are travelling? That is the first part of the question. The second is: as we look at some structural issues, like the way the Dalit people are treated in India under the caste system, is there any dialogue from Australia to encourage perhaps a new approach to some of those sorts of issues, just as we engage with human rights in countries like China, Vietnam or others?

Mr Varghese : I will see whether there is someone who can update you on the travel advisory. That is certainly an issue which has featured in our travel advisories, and I hope that someone might be able to give you an up-to-date report on that.

On the question of Dalits and the caste system, this of course is an issue of intense discussion within India. It is not as though we are dealing with a country or a government which is blind to this issue and, of course, India itself is a robust democracy, with well-established institutions in relation to the rule of law and human rights and minority rights. So I do not think it necessarily needs an Australian intervention, if I could put it that way.

Senator FAWCETT: 'Encouragement' would be the word that I would use, rather than 'intervention'.

Mr Varghese : I think the Indian system is, itself, very focused on this issue. But obviously, in the course of our diplomatic exchanges with India, it would from time to time come up.

Mr Robilliard : Secretary, if you might allow me, I would just add to that. On the issue of violence against women and girls in India, I just note that we very much welcome the strong statements that have been made by the government of India, both the current government and its predecessor, to take action in this area. We engage with India on this issue, as we do on a broad range of human rights issues. We are looking at opportunities for a visit to India by Australia's Ambassador for Women and Girls, Natasha Stott Despoja. Also, women are a particular focus of the projects that our high commission in New Delhi funds through its aid program, the DAP scheme—the direct assistance program—which it is a relatively small program, I acknowledge.

Senator FAWCETT: Have there been any indications from the Indian government as to areas where they see cooperation with Australia, in terms of capacity building or education, in this space would be valuable?

Mr Robilliard : We have not had that specific discussion with the new government, but that is obviously an area which we would like to follow up. Particularly, if the Ambassador for Women and Girls is able to visit, that clearly would be an area which she would focus on.

Senator FAWCETT: Thank you. Mr Brown.

Mr Brown : Senator, you asked about the extent to which we had reflected the recent attacks on women in India in our travel advice. We reissued the India travel advice most recently in April. Under the safety and security tab, there is a lengthy reference to various risks of criminal activities and attacks in India. I will not read it out in detail, but there is a specific reference there to the risks of sexual assault against women. Also, in addition to our India bulletin, we have a specific Smartraveller bulletin on travelling women, which targets particular advice for women travelling overseas. We also have a sexual assault bulletin as part of our Smartraveller suite of publications.

Senator FAWCETT: Secretary, could I go to Egypt and the case of Mr Greste. Can we have an update on where that situation is at and on Australia's representations on his behalf?

Mr Varghese : Sure. I will ask Mr Brown to address that.

Mr Brown : Senator, as you are no doubt aware, Mr Greste remains in detention and his trial is continuing. His next court hearing is scheduled for Friday, which will be his 11th court hearing. While the trial has been underway, the government has made a significant number of representations to the Egyptian government. Let me just mention some of the highlights. The Prime Minister, as has been mentioned in the media, has discussed the case with the then interim Egyptian President, Mr Mansour. The foreign minister, Ms Bishop, has raised the case three times with her Egyptian counterpart, Mr Fahmy, most recently on 20 May. Senator Brandis has also had a discussion with his Egyptian counterpart, the justice minister. In addition to that, our ambassador in Cairo has, of course, made numerous representations to a number of senior figures in the Egyptian government and other authorities.

In addition to those Egypt-specific representations, the government has also made a number of approaches to governments in the region and to other close political partners to seek their assistance in conveying our concerns about the trajectory of the case to the Egyptian government; in particular, we have been discussing the case quite intensively with the governments in the Gulf. We have made it very clear in all of these representations that we believe that an early resolution to Mr Greste's case is imperative. We have also made it clear that we do not accept that Mr Greste's ongoing detention is justified. At each of his trial hearings to date, his bail application has been declined—which, from our point of view, is highly regrettable. We will continue to use all possible opportunities to press our case, particularly in light of the recent election of Mr el-Sisi to the presidency.

In addition to the political level representations regarding the case, the government has, of course, maintained a very frequent degree of consular contact with Mr Greste himself and with his family in Queensland. I think it is fair to say that he is doing as well as can be expected; and the family are, to this point anyway, appreciative of the consular assistance that we have extended to him.

Senator FAWCETT: Can you tell me whether the representations that have been made are predominantly on the technical cases—such as the quality of evidence, the fact that defendants are required to pay to see the evidence that is being presented against them or the denial of bail—or is it on the principle side of things around freedom of the press and freedom of expression, or a combination of both?

Mr Brown : Neither of those.

Senator Brandis: Frankly, I do not think it is really all that helpful to canvass publicly what was said during those conversations. As the official has said, I spoke to Mr Nayer Othman, the justice minister, and I was present with the foreign minister when she had one of her conversations with her counterpart minister. We are working to encourage the Egyptian authorities to see Australia's point of view in relation to Mr Greste, with a view to securing his release and also—and the Egyptians have been helpful in this regard—in some interim matters, such as access to him by his family. But I do not think it is going to help these discussions or Mr Greste if we canvass those conversations in a public forum. So if you do not mind, I think we will not do so.

Senator FAWCETT: I accept that. Thank you for the efforts that you are making on his behalf. Could I go to the issue of the minorities in Egypt? I am talking particularly about reports of attacks, at a fairly unprecedented level, against the Coptic Christians. After the 14 August intervention by the government into a number of the protests, quite a few attacks were made on the Coptic Christian community and there appears to have been very little protection. Has any representation been made to Egypt around protection of minorities?

Mr Innes-Brown : We have over time made a number of representations on this issue, including late last year in response to those developments, both in Canberra and in Cairo. So yes, we have taken these matters up and our embassy in Cairo is closely monitoring the situation.

Senator FAWCETT: Are we receiving any—I was going to use the word 'complaints' but that is not the right word—communication from the Egyptian diaspora in Australia about specific concerns with the situation there?

Mr Innes-Brown : I, personally, have not received any in recent times. It certainly was an issue around the period last year, which you have mentioned. As I have said, we did receive correspondence and there was contact from the government with various parties on it. But I would say that, in the last couple of months, at least I have not received any particular representations on the issue.

Senator FAWCETT: Could I now move to Syria? Mr Varghese, could you talk to the committee about the steps that the Australian government has taken, either via the UN Security Council or otherwise, to try to secure humanitarian assistance or access to assist displaced people within Syria or to support them in the camps surrounding Syria?

Mr Varghese : I will ask Mr Merrill to address the very considerable amount of action that we have been taking in New York.

Mr Merrill : I think we have discussed Syria previously in past estimates sessions.

Senator FAWCETT: Three months is a long time for the people on the ground.

Mr Merrill : Absolutely.

Senator FAWCETT: So I am keen to know what has happened.

Mr Merrill : It is certainly a priority for Australia. In our council term, I think we are recognised as taking on a bit of a leadership role, in terms of efforts to address the humanitarian situation there on the ground. In the broader context, obviously it is very disappointing. We are not seeing any prospects for progress on a political track there. In fact, in most respects, the conflict has actually worsened in the three months since our last estimates session. Around that time, working with Luxembourg, Jordan and our P3 partners on the council, we were able to secure unanimous support for a resolution, resolution 2139. That did a number of things. Importantly, I think it made some serious demands of all parties but particularly focused on the Syrian government around end-of-siege activity, demands for discontinuation of the use of indiscriminate force—we are talking about things like barrel bombs—and then, importantly, a set of provisions there around strengthening access for humanitarian agencies and delivery mechanisms.

As a result of 2139, we have seen a very detailed reporting requirement there. The council has been receiving 30-day reports since then and is due to have another session later this month. But we have reached the conclusion—and the Secretary-General, himself, through his 30-day reporting has concluded—that we have serious noncompliance there. Australia, again with partners, is working on a follow-up resolution there. I am sure that you are aware of some of the political difficulties in securing support there. But the focus of this resolution is going to be very much on issues around cross-border access and, to the extent possible, what the council can do to strengthen their hand in terms of the cross-conflict line, obviously with the intention of improving access to occupied areas and the most heavily conflict affected areas within Syria.

We do not have a timetable for action on that, but that is a priority for our mission there and we are working overtime. Gary Quinlan, our PR, will be chairing meetings on that initiative this week. Our view is that we do not need to wait around for a further report from the Secretary-General in 30 days time, but building consensus support for that will be difficult, for a range of issues that you are very well aware of. So for us, that is a key priority. I would say—and I will defer to my colleague here—that we have been doing an awful lot on the humanitarian side outside of the council. Humanitarian assistance is a focus through our aid program. Mark, do you want to comment?

Mr Innes-Brown : You might be aware that, in April, Foreign Minister Bishop, when she was visiting Jordan and Lebanon, announced another $20 million in humanitarian assistance, which will support children and provide protection for Syrian children and education as well. It will encompass the host communities that are housing or looking after the large number of Syrian refugees. So that will be split into $10 million for Jordan and also $10  million for Lebanon. Earlier in January, at the forum of the Kuwait pledging conference, we pledged another $10 million in humanitarian assistance.

Senator FAWCETT: There are two groups, I guess, that I am particularly interested in, and obviously these are the most difficult groups for you to deal with because they are internal as opposed to people who have crossed the border. But NGOs are reporting large concentrations of minorities, particularly Christians, who have been persecuted at times when they have gone to the camps because of the large majorities there. So I am interested in knowing what information you can provide—I am happy to take it on notice—about the concentrations of those people within Syria and their access to food, water and healthcare and where the priorities are. The other group is Palestinians. I have not seen it for a little while but certainly, initially, there were a number of NGO reports of Palestinian people, people of Palestinian descent, not being allowed to cross the border out of Syria into other camps. I am just interested in knowing whether that is still the case and, if it is, how widespread it is and what support is possible for that population group as well.

Mr Innes-Brown : I can make some general comments, including following on from some inquiries that were made in the last estimates. Obviously, the Syrian conflict has impacted on all communities in Syria. It is fair to say that different groups have been targeted because of their perceived loyalties, as the civil war has rumbled on. As part of our representations on these issues, including in the UN, we have called for an inclusive political process in which all of Syria's communities are represented. In terms of whether Christians are being affected worse than other communities—because, as you are aware, the conflict is impacting on all of the Syrian population—we have considered this issue, including making inquiries, and we are not able to make a judgment as to whether one community is suffering more or less than another, but certainly it is impacting on all communities. The camps you are referring to—do you mean camps inside or outside of Syria?

Senator FAWCETT: Outside.

Mr Innes-Brown : Yes. As I have said, we did follow this up. I requested that our post make some inquiries and provide some judgments on this, since our last estimates hearing. Based on the information that we have and their understanding of it, we have not reached the judgment or do not assess that Syrians have been systematically denied access to refugee camps or services in neighbouring countries. What our posts have highlighted is that, actually, only a small proportion of Syrian refugees are in refugee camps in neighbouring countries. There are no camps in Lebanon, although there are tented settlements in different places. The camps only accommodate a minority of refugees in Turkey and in Jordan. I guess that the majority of people who have fled Syria are living amongst the community.

In Turkey, the camps are administered by the Turkish government and, in Jordan, two camps are administered by the UNHCR and one is administered by the UAE. What they have reported is that refugees in camps have tended to remain with members of their own community. It is possible, as you are suggesting, that members of communities who are perceived to be on different sides of the conflict make each other unwelcome or unsafe. That is entirely possible. But our mission in Turkey noted that, in one camp in Turkey, the Turkish authorities had set aside an area for Christians, but most of the Syrian Christians prefer to live with the local Christian community. As we understand the situation in Lebanon, Christians are less likely to register with the UNHCR as refugees and are more integrated with the Christian community there. In relation to the Palestinians, I will have to take that on notice and get a more definitive answer for you on that particular situation.

Senator FAWCETT: That would be good.

Mr Merrill : Perhaps I could just add that we are seeking and continue to request regular briefings on the situation and use opportunities in the council to focus attention on the impacts on neighbouring countries as well. I am sure that there will be opportunity to make further inquiries of UN agencies, to the extent that they have access and visibility of some of these issues, and gain their views on the treatment of particular minority groups there. Mark is absolutely right. I think the scale and the intensity of the conflict and the rather indiscriminate nature and impact on civilian populations mean that all minority groups are being seriously affected at the moment.

Senator FAWCETT: Thank you.

CHAIR: Senator Dastyari.

Senator DASTYARI: Are we happy to move on?

CHAIR: Have you any questions?

Senator EDWARDS: I have, on the Middle East.

Senator DASTYARI: No. We are sticking to the program. So we are not at that point yet where we are moving to—

CHAIR: I thought you were interested in asking some questions.

Senator EDWARDS: I have questions on the Middle East.

CHAIR: I would like to ask one question, if I may, beforehand about the Indian Ocean Rim Association. I gather that we have become the chair of that now, have we not?

Mr Varghese : Yes, we have. We will be occupying the chair for two years, and we assumed it last year.

CHAIR: That will be followed by India, will it, or Indonesia?

Mr Varghese : I think Indonesia is the next chair. India was the previous chair.

CHAIR: Do we have any goals, if you like, and objectives? What do you see as the outcome of our period of chairmanship?

Mr Varghese : I will ask Mr Robilliard to take you through the Australian agenda for IORA.

Mr Robilliard : We look to use our position as chair to provide some fresh momentum to the organisation, and that is very much building on the work that India did during its two years as chair. As the incoming chair, we are working very closely with India and Indonesia—as a troika, as it were—to build IORA's capacity, impact and influence. We have to recognise that IORA's membership is a very disparate and diverse group of countries, and we have to understand that in terms of what we can achieve. But we are setting our sights as high as possible.

We are encouraging collaborative work to ensure there are well-targeted, high-quality projects that will be of real benefit to the people of the member states. We are looking, in particular, to mainstream gender empowerment and youth education across all of IORA's priority areas. We are very much looking to streamline practices and arrangements for meetings and administration to ensure that it is more strategically focused. One of our key goals is to ensure that IORA's relationship with its dialogue partners is used as effectively as possible. The dialogue partners include, for example, the United States, the United Kingdom, China, Japan and France. We are looking to ensure that those dialogue partners are as actively engaged as possible in the work of IORA. So, in a very broad sense, they are our particular objectives.

CHAIR: Are any academic institutions taking an interest in this?

Mr Robilliard : As part of the IORA structure, there is an academic group that draws its membership from all the member states. It meets over the course of the year and then comes together also at the time of the ministerial meeting of IORA. Obviously, it brings an academic focus to the work of the group and we are encouraging them to be a more substantive player with a more substantive role.

CHAIR: I think there is a group, both at the UWA and at the University of Adelaide, is there not?

Mr Robilliard : Certainly, both of those institutions have a very strong focus. Also, for example, there are the universities which have a strong engagement on maritime issues in Australia.

CHAIR: Which ones are you referring to?

Mr Robilliard : The University of Wollongong, for instance, and Newcastle.

CHAIR: That is quite interesting. The headquarters are in Mauritius; is that right?

Mr Robilliard : That is right. The secretariat is based in Mauritius.

CHAIR: How often do they have IORA meetings? Are they held in Mauritius or do they hold them—

Mr Robilliard : No. Meetings are held in a number of member states. Member states offer to host meetings, so we have had meetings recently in some of the east African member states and in India. All the member states host meetings on the basis of their offers.

CHAIR: It is still in its early days, because it is not really a natural association, I suppose; it is a bit contrived. But do you see the potential for economic and educational growth and stronger relationships building up over time?

Mr Robilliard : I would take some issue with your characterisation of it as being a contrived organisation. It is obviously a natural organisation, in terms of the Indian Ocean, bringing the member states together. It is, though, as I said earlier, a membership that is very disparate.

CHAIR: That is true.

Mr Robilliard : You have countries ranging from the Comoros Islands to India and to Indonesia and so forth. So I think we have to acknowledge all of that, in terms of our ambition, but that does not necessarily mean that we have to lessen or lower our ambition for the organisation. As I indicated before, particularly the education field and the empowerment of women and girls are areas where we think there are common issues amongst many of the member states and are areas that focus on.

CHAIR: 'Contrived' in the sense that it is a long way across the Indian Ocean from Perth, for example, to Mauritius or East Africa.

Mr Varghese : Ultimately, we would like to see across the Indian Ocean—it is a long-term project—a level of economic integration which matches what we have seen across the Pacific in the post-war period. The IORA region is still a region of subregions rather than an integrated trade and investment region. But, in the long term, I think that is the direction in which we would like to see the region head, and we think IORA can play a role in getting to that point.

CHAIR: Yes, I agree; but I think it is going to take a little while to progress and develop. Are there any particularly military or political dimensions to consider in this association?

Mr Robilliard : Obviously, the member states have their own strategic interests and strategic perceptions of the region, but IORA itself does not involve military considerations. You have the Indian Ocean Naval Symposium—IONS—which met just recently in Perth, which looks more at the military dimensions of issues relating to the Indian Ocean.

CHAIR: Which countries came to that symposium?

Mr Robilliard : I would have to take that on notice. It is run by the Department of Defence here. Its membership is broadly similar, I suppose, to that of IORA, but I would want to confirm that for you.

CHAIR: Does it include associated parties, shall we say, like China?

Mr Robilliard : I would really hesitate to get into the detail because, as I say, it is not something for which we have responsibility. I will check that for you.

CHAIR: Given that the US has a very big base at—

Mr Robilliard : Diego Garcia.

CHAIR: Diego Garcia; that is right. You do not know whether they were involved in that discussion?

Mr Robilliard : The United States?

CHAIR: Yes.

Mr Robilliard : Yes, they certainly were involved in it.

CHAIR: We see it as a long-term project which may bear good fruit in due course, I suppose.

Mr Robilliard : Yes.

CHAIR: Is there any other comment that you would like to make about the association, Mr Varghese?

Mr Varghese : No, thank you.

Senator EDWARDS: Chair, before we move on from the Middle East, perhaps I could go to the Israeli-Palestinian conflict. The reference that I am making is to a peace plan that former Foreign Minister Kevin Rudd put to Israel. Former Foreign Minister Carr asserted of Mr Rudd:

As foreign minister, Kevin had kept going to Israel, driving Netanyahu mad promoting a batty peace plan and promising to commit Australian troops to patrolling borders.

I quickly agree this was nuts.

Are you aware of the peace plan that Mr Rudd put to the Israel government?

Mr Innes-Brown : I am not aware of the details of that peace plan, no.

Senator EDWARDS: You are aware of the peace plan; there was a peace plan?

Mr Innes-Brown : I am aware of media references to it.

Senator EDWARDS: So there was never a plan drafted by the department or Mr Rudd's office?

Mr Innes-Brown : I would have to check for you the involvement, if any, of the department in that.

Senator EDWARDS: But you do not rule out there having been a role?

Mr Innes-Brown : I am not aware of any role, but I would like to check in order to be definitive about it.

Senator EDWARDS: Could it have been a task that was hived off and given to a section of the department to work on in their spare time or as a special project?

Mr Innes-Brown : I do not know; I do not think so.

Senator EDWARDS: Regarding the plan—which you are going to check for me—was there any reference in what you heard to sending any Australian troops to the Gaza Strip or the Golan Heights?

Mr Innes-Brown : I said that I was not aware of the detail, so I cannot answer that question.

Senator EDWARDS: So you would not be aware of how many soldiers Mr Rudd was promising to commit?

Mr Innes-Brown : No.

Senator EDWARDS: But you are going to check that?

Mr Innes-Brown : We will check our Middle East branch records about what, if anything, we know about it.

Senator EDWARDS: If Mr Rudd's peace plan did exist, could you also check what the estimated cost of it was?

Mr Innes-Brown : Okay.

Senator EDWARDS: While you are there, you might also check whether Mr Rudd submitted his proposal to the National Security Committee before approaching the Israeli government; and, if that happened, when did it happen?

Mr Innes-Brown : I will take that on notice.

Senator EDWARDS: At that point, if you do find that that did occur, could you tell us whether the proposal did go through the secretary's committee on national security; and, if so, when? Also, if you do find that there was a peace plan, it would be interesting to know what consultations took place with the Department of Defence before Mr Rudd approached the Israeli government with this peace plan, and any other consultations that took place.

Mr Innes-Brown : Okay.

Senator EDWARDS: That will identify also—you could look for this also—when Mr Rudd's peace plan was first put to the Israeli government and, if there was, indeed, any reaction from the Israeli government to that peace plan.

Mr Innes-Brown : I will take that on notice.

Senator EDWARDS: I would also be interested in knowing how many times Mr Rudd raised the peace plan with the Israeli authorities. Also, if the peace plan was in existence when Mr Rudd was the foreign minister, was it ever raised by then Prime Minister Julia Gillard in her discussions with the Israeli government? If so, when?

Did Mr Rudd advise the US government on any of the details of his peace plan? If he did, when, who did he advise and what was the reaction of the US government? It follows then: did Mr Rudd raise his proposal with authorities in the Palestine territories? If he did, when, whom did he advise and what was the reaction of the Palestine authorities? Did Mr Carr ever raise Mr Rudd's peace plan in discussions with Israeli authorities? If so, when? My final question is: do you think this is all part of Mr Rudd's cunning plan to identify himself as the heir apparent for the role of Secretary-General of the UN?

Senator STEPHENS: On a point of order, Chair, that is not an appropriate question to be asking of the officials.

CHAIR: Yes, I think it is very hard for anybody to read the mind of Kevin Rudd and it is probably very difficult for the—

Senator EDWARDS: It is an appropriate question. You would wonder why he was frolicking around—

Senator STEPHENS: It is certainly not a question for the officials.

Senator EDWARDS: They are—

Senator STEPHENS: Chair, there is a point of order; can you rule on that, please?

Senator EDWARDS: I have asked the question and it is up to them as to how they deal with it.

Senator Brandis: As Tony Jones might have said, we will take that as a comment.

Senator STEPHENS: Chair, we have an agreement about how we are trying to manage the program.

Senator EDWARDS: I have finished.

Senator STEPHENS: So can we move on now to Pacific and international organisations?

CHAIR: Yes, indeed, we can.

Senator STEPHENS: I think Senator Fawcett has some questions.

Senator FAWCETT: Yesterday, I mentioned briefly the changes in our relationship with Fiji. I am just after a bit more detail on what resources we are committing to support Fiji and their election, which is coming up.

Mr Varghese : Others may be able to add some points of detail. As you are aware, the government is resetting its relationship with Fiji in the context of a commitment to hold elections in September, the stepping down from his military position of Commodore Bainimarama and the setting up of a process for holding elections. We want to do whatever we can to ensure that Fiji has a credible and fair and free election. We are providing assistance to the Supervisor of Elections to help achieve that objective. We have indicated that we are ready to provide further assistance, if that were to be required. We have been invited to co-lead an international monitoring group which would observe the election. We are in the process of discussing with the government of Fiji the terms of reference and conditions that would apply to that international monitoring group. We have encouraged the government of Fiji to cast the net wide in terms of invitations to observe the elections.

We are seeking to work constructively with the government in Fiji to ensure all the preparations are in place for a credible election in September. We look forward to working closely with whomever the people of Fiji choose as their government in the post-election period to return the relationship to the level that we all want it to be, reflective of Fiji's position as an important country in the region, playing an important role across the region and with strong historical ties to Australia and substantial economic and people-to-people links as well.

Senator FAWCETT: Two questions arising out of that. You mentioned potentially additional support. What kind of additional resources beyond the monitoring group and the preparation with the officials would you be envisaging?

Mr Varghese : It is more a question of: if the Fiji authorities need any additional support I am sure we would consider it very positively. We currently have four Australian experts assisting the Supervisor of Elections. Ms  Klugman will be able to take you through more details about other assistance that we are providing.

Ms Klugman : As the secretary pointed out, in the context of us expanding the bilateral relationship and bilateral links with Fiji in the lead-up to elections that now have a date, 17 September, and in the context of the architecture having been put in place by the interim government in Fiji for those elections, our focus at the moment is very much on supporting the electoral process, as well as rebuilding those government-to-government links that have deteriorated in some ways over the last period since the coup there.

When it comes to the election on 17 September, as the secretary said, we have spent some considerable time in discussions over the last months with Fiji on issues surrounding proper international observation of those elections. Momentum is really building into that process. We have been willing to put real resources forward to assist that.

Senator FAWCETT: Could you tell me which other countries have indicated they are likely to contribute to that?

Ms Klugman : There are a range of countries. We know that Papua New Guinea, for example, is interested, as are other members of the Melanesian Spearhead Group, which is the Melanesian subregional grouping. We know that Japan has flagged some interest. We know that that Fiji has reached out informally and now formally to a number of other countries. Fiji, as I said, now has in place the architecture for the election to go forward and has made it clear that it does see an important role for international observation in that election, and that is a very good thing.

We have two Australian officials funded under the Australian aid program who are working very closely inside the Fiji election commission and the Fiji electoral office, including at the 2IC level as the director of operations. As you can imagine, particularly when it comes to a country where we have had a gap of about seven years between elections, there is a lot of re-building to do—electoral rolls, electoral processes and a new constitution with new electoral processes enshrined in it. There is a lot of work to do. We have been quite gratified with the progress that has been made just over the last month or so since the announcement of the election date.

Senator FAWCETT: You mentioned two officials funded by AusAID; the secretary mentioned four officials previously.

Ms Klugman : There are two in each of those organisations. There are two that are playing those key roles. I think the ones that we would focus on are the two playing the key roles in the Fiji election commission, which now has a chair, a commissioner of elections and a range of independent commissioners as well.

Senator FAWCETT: Who is funding the other two?

Ms Klugman : Sorry, they are also funded by Australia. We are deploying them through the Australian Civilian Corps, which I think is an excellent use of that particular resource, which we are trying to develop to be slightly more front-footed when it comes to engagement, including in the Pacific region.

Mr McDonald : Just on that, Senator, the Australian Civilian Corps was used in the elections in PNG last year and was very effective. It is a good use of that mechanism as a supporting option within the country for elections.

Senator FAWCETT: Thanks, Mr McDonald. That is a good segue to my last question on the Pacific, which is PNG. I would just like a little bit more information about the Economic Cooperation Treaty in terms of the prime motivators for signing that and particularly what obligations or costs it imposes on Australia and, I guess, conversely, what are the opportunities that it opens up for Australia.

Mr Varghese : I think Ms Klugman will take that.

Ms Klugman : I would be happy to take the Economic Cooperation Treaty. A bilateral treaty called the Economic Cooperation Treaty was signed by Prime Minister Abbott and Prime Minister O'Neill on 21 March this year in the course of Prime Minister Abbott's visit to Papua New Guinea. Of course, there are domestic legal processes to undertake on both sides. We expect that to occur before the end of this calendar year so both sides of the treaty will be in effect.

It brings trade and economic cooperation, along with development assistance, under a single treaty. So in some senses it is sort of a parallel. It speaks to the integrated approach to our relationship with Papua New Guinea that will also be manifest through the integration of the ex-AusAID work in Papua New Guinea, the ex-DFAT work and other whole-of-government work.

Symbolically, and you would have seen this in the statements made by both prime ministers at the time of signing—the symbolic purpose of this treaty is to draw a line under the phase in the Australia-Papua New Guinea relationship since Papua New Guinea's independence, which has focused perhaps a little too much on development cooperation, that donor-recipient relationship.

Papua New Guinea itself has changed a great deal since the 1970s. Particularly over the last few years we have seen a spur and a deepening of growth in Papua New Guinea, mainly on the back of some very large projects in the natural resources area. We are expecting those developments, the maturing of the Papua New Guinea economy, to continue. There will be ups and there will be downs but the trajectory is quite clear. Clearly, there is a lot of Australian economic interest tied up in Papua New Guinea and certainly that applies in the other direction. We are far and away Papua New Guinea's most important trade and investment partner.

The Economic Cooperation Treaty enshrines, I guess, a forward-looking agenda for that bilateral relationship which is based on commitment on both sides to make more of the economic investment trade relationship and to make more of the partnership in terms of what we do in the region as regional partners and also some new language on development cooperation, which signals a direction of travel which is more inclusive of private sector led development encouraged through our aid program in Papua New Guinea.

Mr McDonald : I think that has been articulated by the foreign minister in a number of her speeches around the importance of economic growth. Around 90 per cent of the jobs in these countries are provided through the private sector, and also around 60 per cent of the investment comes from the private sector. So the focus on economic growth is about creating jobs and lifting people from poverty on a sustainable basis and, of course, increasing living standards as a result of that.

Senator FAWCETT: I am taking it that the foreign minister, given the number of trips she has done—I think she has done four trips or something to PNG—has largely driven this process as opposed to the trade side of DFAT?

Ms Klugman : Certainly, when it comes to the reorientation of that very large Australian aid program in Papua New Guinea that has been a particular focus for the foreign minister since she took up her portfolio.

Senator FAWCETT: How many trips has she done?

Ms Klugman : She has pursued that through multiple visits, as you know, and there are more to come.

Senator FAWCETT: Has many has she done to date?

Ms Klugman : Since she became minister there have been three. I should know because I have been on them. She is always planning the next one. We are undertaking a review of our $500 million-plus per annum development cooperation program with Papua New Guinea. Ms Bishop has been driving that forward. That was a particular focus of her last visit, which was about three weeks ago, where she had extensive discussions from the top through relevant ministers about the reorientation of Australia's large program there in the direction that Mr McDonald was just describing.

Senator FAWCETT: Thanks very much. Chair, Senator Rhiannon has asked if she can ask some questions on the Pacific. I am happy to accede to her for the moment.

CHAIR: Senator Rhiannon?

Senator RHIANNON: Thank you, Chair. In 2013, USAID issued its Bougainville stability desk study and issued warnings about instability with regard to Bougainville. In 2008, there was an AusAID report called Market chain development in peace building: Australia's roads, wharves and agriculture projects in post-conflict Bougainville that also warned that re-opening the Panguna mine on Bougainville was a high risk operation that could generate significant instability. Does the department accept this view? What is the current position with regard to reopening the mine?

Ms Klugman : I will just get to the right notes. Your question mentioned agriculture and a few other things and stability, but your question was about the future of the Panguna mine. You should rest assured, Senator, that both sides of the debate on the future of Bougainville—that is, the sovereign government of Papua New Guinea as well as the autonomous province of Bougainville—are fully aware of the role that both land and other issues around the Panguna mine played in the troubles. They are very focused on the future of that mine.

The future of the Panguna mine is quite clearly a matter for the government of Papua New Guinea through its arrangements with the autonomous Bougainville government, the resource sector being one of the areas of autonomous power being drawn by the autonomous Bougainville government under the Bougainville peace agreements.

Senator RHIANNON: So do I take from that that the Australian government does not have a position if it should be re-opened or do you have a position if it would be beneficial to Bougainville and PNG if the mine re-opened?

Ms Klugman : That is a matter for PNG and Bougainville.

Senator RHIANNON: Is the department aware of allegations in the British Journal of Criminology, volume 52, issue No 4, page 705: 'Testimony from senior Australian Government officials is presented which strongly suggests the Australian Government supported PNG defence force operations on Bougainville during 1989 to 1992 and to that end provided direct military assistance, including ADF officers who helped plan the counter insurgency campaign.' Is the department aware of these allegations and has any follow-up occurred since that article was printed?

Ms Klugman : I am not aware of that article. I am happy to take that question on notice.

Senator RHIANNON: Thank you.

Senator Brandis: I am not aware that the department of foreign affairs regularly subscribes to the British Journal of Criminology.

Senator RHIANNON: Senator, you are aware that was my question. But as it involves Australian government officials who were named as being quite senior, I thought it may have come to their attention. I am happy for it to go on notice.

Senator Brandis: Who was the author of the article?

Senator RHIANNON: You will be able to find all that out. I have not got much time; so I would like to move on.

Senator Brandis: You just cannot come in here and without—

Senator RHIANNON: Last night you told me I could not ask questions. Now you are saying I cannot come in here.

Senator Brandis: If I may finish, please, without being interrupted. You cannot just come in here and quote from an article that nobody has ever heard of and which has no bearing upon the work of DFAT and when you are asked to identify the author, decline to do so. These are serious allegations made against Australian personnel in the area and you will not cite your source.

Senator RHIANNON: This is the opportunity to clear the air.

Senator Brandis: You are the person who has raised the scandalous allegation.

Senator RHIANNON: Surely that is what estimates is about.

Senator Brandis: You will not even identify your source.

Senator RHIANNON: I have identified the source and I gave it to you right down to the page number.

Senator Brandis: Who was the author of the article?

Senator RHIANNON: I am happy to put it on notice later, the whole article.

Senator Brandis: So you have made a scandalous allegation against members of the ADF.

Senator RHIANNON: No, I have not made a scandalous allegation. I have repeated something. So you are saying—

Senator Brandis: You won't even tell us who was making the allegation.

Senator RHIANNON: That it is not a reputable source?

Senator Brandis: It may not be a reputable source. It may not be a reputable person.

Senator RHIANNON: Again it is your time-wasting exercises.

Senator Brandis: Until we know who was the author of the article, how can we make a judgment about its reputability?

Senator RHIANNON: A freedom of information request was lodged by the Corporate Responsibility Coalition in Britain. It appears that the Australian government, from the information that was released, joined with their British counterparts to lodge an amicus curiae brief in support of Rio Tinto after it was sued under the alien tort statute for human rights abuses on Bougainville. Given this helped to block victims of war crimes from obtaining a potential remedy in the US courts, can the department explain why the Australian government decided to oppose the legal action?

Senator Brandis: Again, this question is even more foolish because your question is based on an assertion. It appears—from whom?

Senator RHIANNON: No, it is from a freedom of information—

Senator Brandis: From?

Senator RHIANNON: The Corporate Responsibility Coalition in Britain put it in. It is there on notice.

Senator Brandis: So someone—

Senator RHIANNON: Again, it is an opportunity to clear the air. What is wrong with that?

Senator Brandis: So some lobby group in a foreign country of whom nobody has ever heard has put in a freedom of information request. On that extremely slender basis, you are making allegations against the Australian government. What is your source?

Senator RHIANNON: Ms Klugman, will you take that on notice, please?

Senator Brandis: No, we will not take that on notice.

Senator RHIANNON: You will not even take it on notice?

Senator Brandis: We will not even take it on notice. We will not dignify it with a response because it is absurd.

Senator RHIANNON: Thank you, Chair. It says it all, coming from the minister.

Senator FAWCETT: Can I just follow up on Bougainville since we are on that topic. Ms Klugman, I am assuming you are probably the one to ask. You are obviously aware of that peace agreement which led to the understanding that there could be a referendum on independence between 2015 at the earliest and 2020 at the latest.

Ms Klugman : That is correct.

Senator FAWCETT: Could you update the committee on where we believe that sentiment is at in terms of desire for it and particularly a couple of the requirements that are being discussed? One is weapons disposal, particularly from the BRA, and also requirements for better governance before we move down that path.

Ms Klugman : Yes, you are quite correct. Under the Bougainville peace agreement, to which Australia was a witness, the signatory is the central government in Papua New Guinea and the established Autonomous Bougainville Government. They agreed to a referendum window of 2015 to 2020 for there to be a question or questions put to the people of Bougainville about the future status of that province. One of those questions has to address the issue of possible independence for Bougainville. The Bougainville authorities, the Autonomous Bougainville Government and the authorities in Port Moresby, the Papua New Guinea National Government led by Prime Minister O'Neill, have been in discussions with each other. Those discussions have waxed and waned. I think we have noticed recently, as we get closer to the opening of that referendum window, that there has been some new positive and very welcome, from our point of view, momentum behind those consultations.

Those consultations, obviously, involve a range of players both from Bougainville and the central government, including the three Bougainville representatives who sit in the National Parliament in Port Moresby. The leader from the Bougainville side is the leader of the Autonomous Bougainville Government, Mr Momis. There are in the Bougainville peace agreement references to a number of things that should happen as we approach the referendum window. I emphasise there is no certainty on dates within that quite wide five-year window.

The question of timing for a referendum is one under the agreement that needs to be settled between the National Government of Papua New Guinea and the Autonomous Bougainville Government. Similarly, the conditions and arrangements for that referendum have to be settled in that way.

I referred to some new momentum. I think I had focused in particular on a visit that was made two months ago to Bougainville by Prime Minister O'Neill himself. That was the first visit by Prime Minister O'Neill to that province. Indeed it was the first time a Papua New Guinea Prime Minister had been to Bougainville for many years. There were some reconciliation ceremonies and events that preceded that visit, which are important in the context of the history of the conflict in that place.

For our part, Australia, as a neighbour, as a close friend of Papua New Guinea and, by the way, as a witness to that peace agreement, have been stepping up, through Ms Bishop our dialogue with the leadership in Papua New Guinea on those questions, the questions of referendum, the questions of Australian assistance with economic development activities in Bougainville as part of our broader aid program in Papua New Guinea.

I think we are in a phase, I would say, of stepped-up interaction and dialogue with the two principal players in this matter, which are the government of Papua New Guinea and the government of that autonomous province.

Senator FAWCETT: I guess my question goes to the issues that were the pre-enabling conditions, which were the governance and the weapons cell. Given the consequences for Australia of instability in Bougainville should things not go well, I am just interested: are we committing resources in terms of people or funding to assist with those two particular elements around increasing governance or monitoring or facilitating weapons control?

Ms Klugman : Yes, we are doing both of those things. You mentioned two issues which are prominent in the agreement itself. In the letter of the agreement, they are not conditions for a referendum but they are very much pre-conditions for a referendum but they are important conditions for a successful and peaceful act of successful and peaceful referendum in that country.

There is still a lot of ordnance left over. You mentioned the weapons disposal but there is also a lot of UXO disposal which we have been involved in, in particular through the role of the Australian Defence Force in Operation Render Safe, which is an operation that goes beyond Papua New Guinea but there is a particular focus on Papua New Guinea. Its purpose is to clean up damaging ordnance left over from the Second World War.

Our aid program in Bougainville is increasing as well as part of our broader aid program to Papua New Guinea. Minister Bishop is determined, as we approach 2015-2020, to use the aid program further in support of creating the conditions for future stability in that province and future prosperity for the people of Bougainville.

Senator FAWCETT: Thank you very much. I am done on the Pacific.

CHAIR: Do you have questions, Senator Edwards?

Senator EDWARDS: I do. I will just go to Papua New Guinea, if I can. I just ask: what is the reason for the Economic Cooperation Treaty recently signed by Australia and Papua New Guinea?

Ms Klugman : We will provide that.

Senator EDWARDS: I am done.

CHAIR: In that case, we will break for morning tea.

Ms Klugman : Can I correct one thing that I said?

CHAIR: Of course.

Ms Klugman : I ascribed to Ms Bishop as the foreign minister three separate trips so far, in the months that she has been foreign minister, to Papua New Guinea. So far she has made two trips, One in February 2014 and one in May 2014. She has met as well formally and informally here and in third countries very frequently with ministerial counterparts from Papua New Guinea including, in particular, her opposite number, Foreign Minister Pato.

CHAIR: Thank you for that. We are scheduled for a morning tea break for 15 minutes.

Proceedings suspended from 10 : 28 to 10 : 52

CHAIR: We will now go to security.

Senator FAWCETT: Mr Varghese, did you want to make a statement?

Mr Varghese : Senator, with your permission I wonder if I may just make a brief statement in relation to an issue that we covered yesterday?

CHAIR: You can.

Mr Varghese : In the light of continuing misleading media reports about the issue we discussed yesterday on ministerial websites, I just wanted to provide to the committee some additional information beyond that which was contained in question on notice 212. As is standard practice for portfolio departments, DFAT is responsible for the maintenance of websites for the foreign minister, the trade and investment minister and the Parliamentary Secretary for Foreign Affairs. The redevelopment of the three websites we discussed yesterday was a decision taken by the department as far back as December 2012—in other words, well before the current ministers took office. It was not a decision taken at the request of any ministers at the time. It was part of a broader scheduled redevelopment of the portfolios' websites.

This broader modernisation program involves moving all websites managed by the department—and the department manages close to 100 websites—including those at our overseas missions, those of our portfolio ministers, the DFAT Smartraveller and the Australian Passport Office sites. All of those sites needed to be migrated to a new technology platform.

The project commenced in March 2013 and will be completed by the end of 2014. If I could add a final comment: the figure of $113,000 that is contained in our response is not an excessive amount to cover the costs of the creation of three sites using new technologies as well as, of course, the costs of managing the sites over the period that the response covers. Thank you.

CHAIR: Thank you, Mr Varghese, Senator Fawcett?

Senator FAWCETT: Can I start off with some questions about the Australian Safeguards and Non-Proliferation Office?

Senator DASTYARI: Is that a rhetorical question or are you speaking to the minister about it?

Senator FAWCETT: That was rhetorical; thank you, Senator. I am interested if you could outline the Australian government's contribution to nuclear security, particularly the Nuclear Security Summit?

Dr Floyd : Thank you, Senator. Part of my role is also as the Australian Sherpa for the Nuclear Security Summit process. The last summit was held in March this year, 24 and 25 March, in The Hague. At that meeting Australia presented what it had achieved in the last two years in the nuclear security area as part of a national report. Our national report was very strong across the different areas, in that we have got in place all of the international agreements that support nuclear security globally.

In November last year we had hosted a peer review mission from the International Atomic Energy Agency to look at how we implement and do nuclear security in Australia, so the operation of my office as the regulatory body, as well as security measures at ANSTO. That was a very useful review so that we could see where we match with world best practice and some helpful suggestions came out of that.

Australia has also made a significant contribution of $1 million to the Nuclear Security Fund that the International Atomic Energy Agency uses for funding nuclear security activities around the world with a focus on the Asia-Pacific, Indian Ocean region. These funds were certainly appreciated.

We also mentioned in The Hague that Australia has been leading in terms of changing the fuel for research reactors from using high-enriched uranium, which is a proliferation concern, to low-enriched uranium, as well as using low enriched uranium targets for the production of radiopharmaceuticals. In this work, ANSTO has done a superb job of demonstrating to others how radiopharmaceuticals can be produced with low-enriched uranium only. Other countries are certainly looking at that technology. That is of global value from a non-proliferation point of view.

Broadly, Senator, it is a good report card for Australia—so much so that the Nuclear Threat Initiative in the US, which is a non-government body that watches these sorts of issues very closely, does an index of nuclear security for the countries of the world. For the second time Australia has been ranked number one in the world in terms of its implementation of nuclear security. Of that we are proud, but we think it is appropriate that we should take these issues very seriously.

Senator FAWCETT: Thank you, Dr Floyd. Reviewing the annual report for ASNO, I notice that you have got a fairly broad remit: safeguards in Australia, bilateral safeguards, your input to the IAEA, as well as the international nuclear non-proliferation regime. Tying that up with Geoscience Australia, who have recently highlighted the fact that Australia has about 34 per cent of the world's proven uranium resources and that the exports of our uranium are likely to increase, particularly as we sign more treaties in that space, do you anticipate a significant increase in your workload in terms of that framework, those four areas that you look at, or is it going to be work as normal but with more subject matter?

Dr Floyd : Our role with regard to implementing, say, particularly the nuclear safeguard measures—our safeguard measures are the measures you put in place to ensure that material and technology do not get into weapons activities and programs—and our responsibility on nuclear security is to make sure that nuclear material or technologies do not get into the wrong hands. Those responsibilities continue to increase with the amount of material that Australia would mine, in the case of uranium, then export overseas, as my office is responsible for tracking and making sure that the obligations that Australia puts on our uranium as it moves around the world are upheld by other countries.

In an environment where we continue to mine and sell more uranium, we continue to establish more mines potentially and then there is increased work. We have to seek efficiencies. We have to look at ways that we can do things smarter and better. But there is a limit as to how far we can go. These objectives that are set out in legislation are very clear and important for us to meet.

Senator FAWCETT: Has there been any modelling done by your own agency or others that looks at the improvement in terms of non-proliferation outcomes, if processing were done here, to achieve the kinds of outcomes you are talking about, before using the right level of fuel material for power, as opposed to just exporting the uranium in its natural state?

Dr Floyd : You have probably seen commentary in the media and other literature about whether Australia should have a nuclear power industry. That is not an issue that is the responsibility of my office. That is something that the Department of Industry would look at. They currently have a white paper on that. The government's policy is clear on that issue at this point in time.

Your point, though, more specifically, is: would there be safeguards advantages or non-proliferation advantages if we were to have more processing or nuclear activities here in Australia? I think that the technologies and the material can be well safeguarded in Australia and also in other states. We seek to achieve those commitments through our bilateral commitments and treaties with other states on nuclear cooperation.

That should be able to be managed equally well here or in states that we are dealing with. I do not think there is a strong argument to improve the non-proliferation outcome as a reason why we should do conversion of uranium or enrichment of uranium or nuclear power use at home. I think the arguments around those considerations are different than the non-proliferation outcome in the case of Australia's uranium, because we have these agreements with countries which then set certain standards.

Senator FAWCETT: My last question to you, coming back to the annual report, is this: it is not clear, when it comes to the Chemical Weapons Convention and work that the international community has been doing in Syria, whether you are just observing and reporting on that or whether Australia has actually played an active role in that international response to Syria's chemical weapons. Would you be able to expand on that?

Dr Floyd : Australia's engagement with the chemical weapons aspect of Syria has come through two different points of action. One is the United Nations New York as the Security Council has had consideration of this issue. Mr Merrill can certainly speak in more detail about what has gone on there, and has done so a little earlier today. The second focus of activity is through the Organisation for the Prohibition of Chemical Weapons, the OPCW, based in The Hague. It is the international organisation which works on the implementation of the Chemical Weapons Convention.

Clearly with Syria agreeing to sign onto the Chemical Weapons Convention and also agreeing to get rid of its stocks of chemical weapons, there has been a major role in activity for the OPCW. Australia is involved in the governing processes in the OPCW as they have considered various decisions as well as teams from the OPCW that have been involved in Syria. So we have been involved through those points of influence but not in a physical, on-the-ground way. It has been important to be providing appropriate technical understanding and advice from my office through our diplomatic channels et cetera, particularly to the OPCW decision-making processes and supporting the UN Security Council considerations.

Senator FAWCETT: From that governance perspective, do you also get feedback about the efficacy of the implementation of Syria's accession to that convention, noting the obvious security difficulties of locating and transporting chemical weapons to a port where they can be exported for destruction? Do you have an update on whether the view of the organisation is that it is largely being effective or is it being hampered to the point where it is not an effective reduction of their weapons?

Dr Floyd : The main focus in The Hague at the OPCW at the moment is the progress towards the commitment of destruction of chemical weapons and the chemical precursors by a deadline in June. The destruction process is about 93 per cent complete. That is all of the declared materials and facilities that Syria has declared to the OPCW. That last seven per cent is proving somewhat difficult, due to the problematic security situation on the ground. To be able to get people in there who can break up, package up and transport out those materials has proved difficult in a particular area. So there is seven per cent that still remains to be extracted. That may or may not happen by the deadline later this month. That is the main focus of the OPCW and the member states involved there.

In your questions about Syria, I think it is probably also important to acknowledge that Australia has made various contributions financially also to the Syrian activity. In particular, we have made a $2 million contribution to the Organisation for the Prohibition of Chemical Weapons. Whereas we have not put actual people on the ground to do these things or put technical capabilities in place, we have joined the international team in supporting funding activities for the enhanced role of the OPCW. That is quite in addition to the other contributions that Australia has made on the humanitarian side and the significant monetary contributions that we have made there to deal with this tragedy.

Senator FAWCETT: Mr Merrill, do you have anything you wish to add to that?

Mr Merrill : I just add that we were very active in the negotiations on resolution 2118 last year. In fact, it was adopted and was one of the first acts the minister participated in when she was in New York last year. That had obligations, biennial obligations, on the Syrian government. We have seen some welcome cooperation. Dr Floyd is correct. We are looking at a 30 June deadline for the completion of the tasks around removal and destruction. At this stage the Syrian government is claiming, for security reasons, that there are areas, certainly in the north, around secure removal. We have taken them at face value at this stage. Nonetheless, our message and that of the council itself is: pressure to reach completion in a timely fashion.

From our point of view, we have been using the monthly updates by Sigrid Kaag and the joint UN OPCW mission there to hold the Syrian government to account on that. We are also very mindful of the fact that while the stockpiles themselves may well be removed, and hopefully by 30 June, there are a range of other tasks. There are a range of other issues there. From our point of view, we would see work of the mission continuing after that. In recent months you have seen reports of use of chlorine filled bombs. We need to have that capability remain in place. That is what we will be arguing for.

Also just very briefly, Dr Floyd is correct—the financial contribution was made but we also made offers of other forms of assistance. There was no shortage of those sorts of offers being made. I would say, if you are looking at a high point in terms of council consensus on action in the last 18 months, 2118 would probably be it.

Senator FAWCETT: Just while we are on the Security Council, could you give us a quick update in terms of the Arms Trade Treaty—obviously that is a significant step forward—in terms of ratification?

Mr Merrill : I would certainly invite my colleague from ISD to talk on ATT. We have talked previously from Australia's point of view, welcoming the signature completion of the trade treaty. For us, an important priority on the council was continuing focus on illicit trade in small arms, and we had a signature resolution adopted last year. We are approaching the anniversary of that and we will be looking forward to further attention on that aspect of it, which is really around how sanctions regimes address that issue but also the role of peacekeeping operations in working with national governments. But I would invite a colleague from ISD to talk about ATT.

Mr Tesch : In fact, as Mr Merrill just alluded to, 3 June, two days ago, was the first anniversary of the opening of this treaty for signature. Australia, along with Austria, Belgium, Burkina Faso, Jamaica, Luxembourg, Saint Vincent and the Grenadines, and Samoa deposited the instruments of ratification on 3 June. So we were the 33rd state to deposit our instrument. There are now, as of 3 June, a total of 40 states that have deposited. We are well on our way to achieving the 50 deposits that will trigger entry into force 90 days after the 50th state deposits.

Senator FAWCETT: Which other countries do you anticipate in the near future will also make their deposits?

Mr Tesch : It is a little hard to predict because, as you would appreciate, they are all subject to their own domestic ratification processes. The key point is the momentum that was evident in the overwhelming support for the treaty with the, by UN standards, very rapid process which has brought us to this point. I think that indicates that there is a very clear sense of commitment on the part of the global community to get this treaty into force as soon as possible. We know there are a number of states around the world in various stages. There had been a hope that more would be able to deposit on 3 June and possibly even trigger entry into force, but that was not the case. But we are fairly confident that we will get there in the coming months. By the end of this year—I would not stake everything on it—I am pretty confident that we will get that 50th deposit.

Senator FAWCETT: The important question in terms of the effective implementation is: has there been any movement on behalf of those states that have indicated that they would not support it, but are significant arms exporters, towards engagement in the process?

Mr Tesch : It is important that we continue to work with those major players to ensure that that commitment to abiding to the principles, if not actually having yet committed to the treaty proper, is maintained, that we try to encourage many more signatories and ratifications. It is something that has got broad acknowledgment and commitment around the world. But as you have rightly identified, a number of key players are not yet on board. That is true of a number of global arms control and disarmament initiatives, unfortunately. That is where Australia will continue to apply its effort with like mindeds.

[11:14]

CHAIR: We are going now to public information and services.

Senator DASTYARI: Chair, I want it to be noted that it is 11:15 and we have very nicely not asked questions, to allow us to get to this point. Mr McDonald, I see you are holding the PBS for Foreign Affairs. Can we talk about this? Let us go to section 1.13, which is on page 37. That shows the public information services and public diplomacy breakdown in the PBS. Mr Varghese, can you explain to me how the department or how you define what is 'public diplomacy'?

Mr Varghese : I will ask Mr Tranter, who will probably give you a more scientific definition.

Senator DASTYARI: But you are so good with words.

Mr Varghese : But let me give you my view. Public diplomacy is the diplomacy you engage in beyond government-to-government relationships, which seek to project a series of core messages about Australia, its society, its economy, its geopolitical positioning, in order to advance various interests and to influence decision makers outside government on issues that affect Australia.

Senator DASTYARI: Mr Tranter, is it fair to say—this is a matter of fact—that prior to this budget the bulk of our public diplomacy money had, for a long period of time, been spent on the Australia Network? Roughly there was about $5 million in grants and small things that we were doing and then $20 million was being spent on the Australia Network. Is that a fair assessment of where we have broadly been at?

Mr Tranter : That is correct. Prior to this budget the broad break-up of our global public diplomacy budget was around $4.8 million for what we term 'public diplomacy grants'. That comprises about $2 million in grants for public diplomacy activities through our 90-plus diplomatic missions overseas as well as support for the work of the Australia International Cultural Council and other cultural diplomacy activities. The remaining $22 million was an appropriation for the Australia Network.

Senator DASTYARI: If you take out the Australia Network, the Australia Network aside, we are spending roughly $5 million; is that correct?

Mr Tranter : That is correct.

Senator DASTYARI: By international standards where would that sit without the Australia Network?

Mr Tranter : By international standards that is very low.

Senator DASTYARI: Without the Australia Network we would be spending less on public diplomacy than Chad and Luxembourg?

Mr Tranter : I am not familiar with the budgets of those countries. It is a modest amount. I should highlight that in the broader operations of the department we also have portfolio responsibilities for a range of other programs which emphasise people-to-people and institutional connections.

Senator DASTYARI: Sure, but if they are public diplomacy they are required to be listed as public diplomacy, aren't they? That is a budget rule.

Mr Tranter : In the portfolio budget statements the references there are for administered funding for public diplomacy programs.

Senator DASTYARI: With the Australia Network, there was a government decision to cease funding. That is a matter of fact. We are not disputing that, Mr Varghese; there was a budget decision that the funding be cut?

Mr Varghese : That is correct.

Senator DASTYARI: The department had historically been very supportive of the role of the Australia Network; is that a fair assessment?

Mr Varghese : It is fair to say there was probably a range of views within the department about the effectiveness of the Australia Network. I have personally been a sceptic about the Australia Network for a considerable period of time. There would be others in the department who might have a different view.

Senator DASTYARI: Explain that to me. Where does your scepticism come from?

Mr Varghese : In my experience it was very rare to meet someone in the countries that we were targeting who actually watched Australia Network.

Senator DASTYARI: Do you dispute the claim—obviously, prior to the termination, you were in contact with the ABC; is that correct?

Mr Varghese : We have a regular dialogue, essentially through Mr Tranter's area, with Australia Network because it is part of our contract that we retain such a dialogue.

Senator DASTYARI: Did they have KPIs? How does it work? Does Australia Network have KPIs that they have to meet?

Mr Tranter : There is a funding agreement which was signed in August 2012. Part of the—

Senator DASTYARI: Is the funding agreement public or is it commercial-in-confidence?

Mr Tranter : It is a commercial-in-confidence agreement. As part of the funding agreement there is a requirement to agree an annual business plan and a strategic plan over three years.

Senator DASTYARI: Is the strategic plan that is on an annual basis commercial-in-confidence as well?

Mr Tranter : Both of those documents are commercial-in-confidence. The funding agreement outlines the broad objectives for the service, which include the public diplomacy objectives of the service and the expectations of the ABC with respect to a range of matters, including content.

Senator DASTYARI: Was the ABC meeting the KPIs?

Mr Tranter : The KPIs are outlined in the annual business plan which is associated with the funding agreement that was struck in August last year. We have not completed a formal assessment of the KPIs under the business plan. We stay in touch with the ABC about their progress towards the KPIs. The KPIs are not quantified in terms of percentages or quantities towards audience targets or revenue targets. They are set in broad terms, in terms of an increase, a trajectory.

Senator DASTYARI: Were they reaching that trajectory?

Mr Tranter : They were making ongoing progress against many of the elements of those KPIs.

Senator DASTYARI: So they were meeting their KPIs. You are saying the KPIs were broad and flexible but you are not saying they were not meeting the KPIs. You are saying they were not rigid KPIs, but with the KPIs that were there they were meeting them?

Mr Tranter : They were making ongoing progress towards those KPIs. We have not done a formal review of the business plan in this year.

Senator DASTYARI: Mr Varghese, prior to their termination, at some point since the election did you receive a report from the ABC where they outlined in detail the role of the Australia Network, the fact that they were meeting their KPIs and the value-for-money service they thought they were providing?

Mr Varghese : We receive regular reports from Australia Network about what they are doing, how they are tracking, what progress they are making, what new arrangements they have entered into. It is part and parcel of our contractual arrangements with them. It is part and parcel of the way in which we consult with them. Senator, I should say that the government's decision to terminate the Australia Network contract was not made because we thought they were in breach of their contract.

Senator DASTYARI: Senator Mason, why was Australia Network terminated?

Senator Mason: Because we thought there were better ways of doing it, Senator.

Senator DASTYARI: You thought there were better ways of spending the $20 million?

Senator Mason: Yes.

Senator DASTYARI: Let us talk about the better ways. With respect to public diplomacy, let us look at the years 2014-15 and 2015-16, on page 37 of the Foreign Affairs PBS. Senator Mason, I know you are just filling in for the minister, so I apologise for dropping this on you. I am sure you will be a lot more accommodating than the minister was.

Mr Varghese, obviously the Australia Network funding is $20 million. Is the $10 million just the time lag regarding the termination? Is that why there is half a year's allocation?

Mr Varghese : That is the amount of money that the government has provided to fulfil our obligations in terminating the contract.

Senator DASTYARI: This may be a matter of fact and it may be on the public record: on what date does the Australia Network stop? Has that been determined yet?

Mr Varghese : We have given formal notice. It is a 90-day notice period. I think it would be mid-September.

Mr Tranter : The service will terminate on or before 18 September.

Senator DASTYARI: 18 September will be the last broadcast of the Australia Network—or before?

Mr Tranter : Or before.

Senator DASTYARI: We have brought in a new measure which no-one has ever done before—we can talk about this—from Tourism Australia; is that correct?

Mr Wood : I am happy to assist on that one. It is essentially a funding mechanism. It is a way of providing funding to Tourism Australia. As you know, under the machinery of government change, Tourism Australia became part of a portfolio. The corresponding entry—

Senator DASTYARI: Mr Varghese is a tourism expert. He is now responsible for tourism as well.

Mr Wood : The corresponding entry to that is on page 177 of the portfolio budget statements.

Senator DASTYARI: Let us talk through it.

Mr Varghese : It is in the portfolio, not the department.

Senator DASTYARI: You are still responsible for it, broadly?

Mr Varghese : Well, Tourism—

Senator DASTYARI: You are certainly responsible for this money.

Mr Varghese : Tourism Australia is a statutory—

Senator DASTYARI: Sure, but you are certainly responsible for the $13½ million. If they are running it, why is this in your list? We are saying that this is your money for public diplomacy. If it is not your money for public diplomacy, whose money is it?

Mr Varghese : This is a portfolio budget statement. In my experience, I always need our chief financial officer to be the interpreter of the portfolio budget statements.

Senator DASTYARI: Mr Varghese, what I am hearing you say is that there is actually only—

Senator FAULKNER: It is normally called a hospital pass, in rugby league parlance.

Senator DASTYARI: There is $4½ million there, $4.594 million, which does not appear to be indexed, which is an international relations grants program. From what Mr Tranter said before, that is a pool of money—correct me if I am wrong—that people in embassies can apply for when there are local programs or an opportunity arises that they feel would be a good way to spend it. I am sure they go through some aboveboard process and they apply for grants to be able to participate.

Mr Tranter : The grants which are provided to posts for public diplomacy purposes are funded through departmental funding. I do not have the PBS in front of me, Senator. I understand that the budget line for the international relations grants program is used to fund the work of the 10 foundations, councils and institutes of the department, such as the Australia Indonesia Institute and others, including the work of the Australia International Cultural Council. So that is in addition to the $4.8 million that I was describing before.

Senator DASTYARI: The Tourism Australia $14 million: that is administered by you. You spend that money?

Mr Wood : No. It is transferred to the Tourism Australia organisation. It is a mechanism of appropriating funding to Tourism Australia. There are references in—

Senator DASTYARI: Mr Wood, that is just book-keeping. You have tourism money that you have cited as being diplomacy money, but the public diplomacy does not actually spend the money.

Mr Varghese : It is not managed by the Department of Foreign Affairs and Trade. It is managed by Tourism Australia. It has to be appropriated—

Senator DASTYARI: If it is being managed by Tourism Australia, effectively you are saying your department, the Department of Foreign Affairs and Trade, which is responsible for public diplomacy, which you, by your own words, say is of significance and importance, is responsible for only $4½ million?

Mr Varghese : That is correct, excluding Australia Network.

Senator DASTYARI: Which is less than what Luxembourg and Chad spend on public diplomacy.

Mr Varghese : I would have to take your word on Luxembourg and Chad, not having studied their public diplomacy budget.

Senator DASTYARI: I do not understand, Mr Wood; if this is just $14 million of tourism money. I will tell what you it looks like: it looks like you have canned the Australia Network, it is embarrassing that you are only spending $4½ million on public diplomacy, you have moved $14 million of tourism money and claimed it is for public diplomacy, but you in fact have no control over or direction as to how that is being spent. Is that correct?

Mr Varghese : Senator, with respect, I think it is a bit outrageous for you to suggest that these portfolio budget statement numbers are being cooked up to send a misleading message. The chief financial—

Senator DASTYARI: Who administers this money? You are responsible for it but you do not administer it?

Mr Varghese : Senator, may I please finish my comment?

CHAIR: Senator, please let the secretary finish his answer.

Mr Varghese : The chief financial officer has explained that the reason the Tourism Australia budget appears in the PBS is because, as a result of the machinery of government changes, that office is now part of the broader Foreign Affairs and Trade portfolio. It sits within the portfolio. It sits within the portfolio but it still requires its own budget. This portfolio budget statement outlines what Tourism Australia's budget is. It is nothing more or less than that. And it ain't no conspiracy.

Senator DASTYARI: Mr Wood, has Tourism money ever been used or cited before for being used for public diplomacy?

Mr Wood : I will—

Mr Varghese : This is the first portfolio budget statement since the machinery of government changes.

Senator DASTYARI: No, I am saying in the previous portfolio. All of a sudden there is a new $14 million from Tourism. You are saying that this is what they were doing anyway; you are not saying that anything that Tourism is doing is different. I am wondering, if you go through the Tourism PBS—

Mr Varghese : What is new is that it has joined the portfolio. It sat in a different—

Senator DASTYARI: Yes, and I am saying that, in the previous PBSs where Tourism was cited—which I accept was not within the Department of Foreign Affairs and Trade—at no point before was any of that money ever previously allocated for this purpose or even within. So you have taken money that is already there and you are citing and claiming that it is being used for public diplomacy.

Mr Varghese : I would guess—but it is no more than a guess—that, if you went back and looked at the portfolio budget statement for the Department of Resources, Energy and Tourism, you would find a matching amount that you do in this PBS statement covering the costs of Tourism Australia's promotional activity.

Senator DASTYARI: So that is what it is; it is promotional activity?

Mr Varghese : It is what Tourism Australia does. It promotes Australian tourism.

Senator DASTYARI: But Tourism Australia does a lot of things. Tourism Australia, which now falls within this portfolio budget statement and falls broadly within your gamut, is also now responsible for giving grants to chocolate companies. Tourism Australia does a lot of things that many of us claim are not actually tourism.

Mr Varghese : Later today you will have an opportunity to ask questions of Tourism Australia about what they do.

CHAIR: Varghese is right; they will be appearing.

Senator DASTYARI: No, we have been very patient—

CHAIR: They are a long-established organisation—

Senator DASTYARI: No. This is where I am at the moment. You are saying now, after having axed the Australia Network, that the decision has been made to count, and we are counting for the first time—and you are saying that it is because of the change in machinery of government—$14 million of Tourism money as being used for the purpose of public diplomacy. But you are also saying that you, the Department of Foreign Affairs and Trade and Mr Tranter over there, do not have any actual control over how that money gets spent. Is that correct?

Mr Varghese : Senator—

Senator DASTYARI: You only have responsibility for $4½ million.

Mr Varghese : I only have responsibility for $4½ million—that is right—and Tourism Australia has the responsibility for the $14 million. It is listed here under program 1.3, public information services and public diplomacy, because, if you were trying to find a category under which to put the work of Tourism Australia, which is essentially promoting Australia as a tourism destination, that is probably as good a category as you would find.

Senator DASTYARI: Really? You would not put it in 1.14, which is called programs to promote Australia's tourism interests, which is the actual category it is meant to be in and which it used to be in?

Mr Wood : They relate to funding to Austrade. The advice we had, in terms of preparing the statements, was that it should go under that program. I have a couple of references for you: page 177 and page 185 of the Tourism Australia—

Senator FAULKNER: Who provided that advice?

Mr Wood : We liaise with the Department of Finance on the allocation of funding against programs.

Senator FAULKNER: So the placement within the program of the PBS was as a result of a recommendation of the Department of Finance, was it?

Mr Wood : We would have taken advice from the Department of Finance on those two. As Senator Dastyari said—

Senator FAULKNER: Yes, but did you seek advice from the Department of Finance or was it offered at the time of the machinery of government changes being proposed by government?

Mr Wood : We receive advice from the Department of Finance regarding the presentation and preparation of the—

Senator FAULKNER: Yes, that is right: the presentation and preparation of the PBS.

Mr Wood : That is correct, yes. But if I could just say this to assist: page 177 is the line 'funds from portfolio agencies', so that is the kind of corresponding side of that transfer. Then, on page 185, they refer to the 'Asian marketing fund from government' and that is the revenue of $13.5 million.

Senator FAULKNER: When the secretary answered an earlier question from Senator Dastyari, he thought that this was the logical place for this to find itself in the PBS. But is there any engagement with Finance on this? Is it a Finance initiative; is it a DFAT initiative? Is there effectively discussion between the two portfolios about where the placement will occur? I am just trying to understand the process.

Mr Wood : Sure. There would be discussion—

Senator FAULKNER: It is not entirely clear to me at this stage.

Mr Wood : There would be discussion between the agencies. I could take on notice—

Senator FAULKNER: There would be?

Mr Wood : further details on that. The task that we had with the machinery of government change was finding appropriate programs or areas in our existing outcome structure to manage this funding and these appropriations.

Senator FAULKNER: But it just did not fit very well; because it was a surprise, wasn't it, when Tourism was lobbed into DFAT?

Senator DASTYARI: Were you expecting that, Mr Varghese?

Mr Varghese : I think it was foreshadowed that Tourism may come into the Foreign Affairs and Trade portfolio.

Senator FAULKNER: Who foreshadowed it?

Mr Varghese : I think it was foreshadowed by the coalition in the lead-up to the election, but I would have to check that.

Senator FAULKNER: Anyway, it was a Department of Finance decision where to plonk it into the PBS, was it?

Mr Wood : We liaise with Finance on the program structure in a similar way that we liaise and work with them on incorporating—

Senator FAULKNER: I am only asking this because it just does not seem as logical as might have first been suggested, given other elements of the PBS. But, anyway, it is very interesting to hear that.

Senator DASTYARI: Going back to public diplomacy, there is $4½ million that is obviously administered by you. The money that is being administered by Tourism Australia is being done separately from you.

Mr Varghese : That is right.

Senator DASTYARI: Tourism Australia is an independent statutory body. Does it report up to you? How does it work? What control do you have over the public diplomacy it is doing; or are you not running public diplomacy any more and Tourism Australia is?

Mr Varghese : We run $4½ million worth of public diplomacy. Tourism Australia is responsible for its own budget and it does not report to me. It is an agency within the portfolio and, to that extent, I have a relationship with it. I meet regularly with the heads of all of the agencies within the DFAT portfolio. But, as secretary as DFAT, I do not have any direct involvement in the expenditure of Tourism Australia funding.

Senator DASTYARI: Yet clearly, according to the portfolio statement, they now play the lead role financially in Australia's public diplomacy.

Mr Varghese : A juxtaposition of numbers does not necessarily mean that. When I think about what we are doing in public diplomacy as the Department of Foreign Affairs and Trade, I do not take into account substantially what Tourism Australia is doing. We do sit down and talk about the need for greater cooperation and consultation in terms of the work that we do abroad on image projection, but my public diplomacy program is run for the most part quite separate from what Tourism Australia does.

Senator DASTYARI: That would make complete sense because, even though we find it in the portfolio budget statement for Foreign Affairs and Trade, the idea that Tourism Australia, which is now playing a key role—how about we use that language?—in public diplomacy, is actually spending its budgets on things like chocolate grants in Tasmania, and we will cover that later tonight. I do not understand. There are so many different types of diplomacy. There is shuttle diplomacy, there is cheque book diplomacy and now it appears that we are about to create a whole new category called 'chocolate diplomacy', which is where we take our money that has been used for public diplomacy and start spending it on chocolate grants in Tasmania.

Mr Varghese : I do not think any money has been taken out of DFAT's public diplomacy budget and given to Tourism Australia, whether they deal with chocolates or not.

Senator DASTYARI: Mr Varghese, you have lost $7.2 billion in aid funding, you have lost $400 million in agency funding, you have lost the Australia Network, and now we are being told that your public diplomacy is being run by a bunch of people who go around giving out chocolate grants.

Mr Varghese : I have not told you that our public diplomacy is being run by people that you have characterised in that way.

Senator DASTYARI: What you have told me is that you are only responsible for our entire public diplomacy budget of $4½ million.

Mr Varghese : That is correct.

Senator DASTYARI: And you feel that is enough?

Mr Varghese : I do not think that is enough, no. I would like much, much more for public diplomacy.

Senator DASTYARI: Did you make that case to government?

Mr Varghese : I am not going to go into what case we make to government within the context of the budget. But, if you ask me would I like more money for public diplomacy, you bet.

Senator FAWCETT: Order, Chair. Can I just make a point that might help Senator Dastyari?

Senator DASTYARI: I am sure that it will not, but you can make it anyway.

Senator FAWCETT: Mr Robb, the Minister for Trade, has spoken at a number of events—in fact, one in South Australia just recently—highlighting the very strong links between trade and tourism. To use South Australia as a classic example, there are a many industries—for example, prawns from South Australia—where there is not sufficient volume to justify dedicated freight aircraft. But where you can get the volume of tourism up, such that you start getting daily flights into a port, it actually enables quite significant niche trade areas. In South Australia's case, we now have exports direct through Hong Kong into China of fresh seafood, and that is built on the back of tourism links. So the whole reason for that merger is that there are actually very strong connections between the level of tourism and the subsequent air transport and the cargo capacity that comes with that. So it is not actually all that surprising that it has come into the DFAT area, if you look at the coalition's agenda of providing the enablers to grow our trade.

Senator DASTYARI: I am not quite sure where the question was there, but—just to quote the minister earlier—I will take that as a comment.

Senator FAWCETT: No, it was a comment to help you understand why—

Senator DASTYARI: Mr Varghese, the question I want to ask you is this. The question here is not whether or not there should have been a merger of Tourism within the DFAT broader portfolio area under machinery of government. We will have Tourism Australia here later today and that is an issue that we can obviously explore with them. The issue is that the once great and proud Department of Foreign Affairs has now been reduced to this point where, numerically, you have had the second largest cuts that have happened since 1996 and, proportionately, roughly five per cent of your budget, if you include aid in the previous years, has also been cut. Now we are being told that, with something as significant as public diplomacy—where, before, you had an entire Australia Network, with which you yourself may have had concerns at different points—the solution here was not fixing it or redirecting the money; the solution here was cutting it.

Mr Varghese : The government took a decision to terminate the contract with Australia Network and the savings achieved from that did not return to the department. I hope that there will be an opportunity for the department to increase its public diplomacy budget through the budget processes. I would like to see at least a proportion of the savings from Australia Network reinvested in public diplomacy; but, ultimately, they are questions for the government.

Senator DASTYARI: If you had the money, what would you do with it? We talked earlier and Mr Tranter seemed to say that the bulk of the funding—is it fair to say this, Mr Tranter?—is reoccurring funding. It is not year-by-year projects; it is programs we sign up to multi-year; or is it not? Where is the $4½ million spent?

Mr Tranter : In terms of the breakdown for the budget of that $4½ million, we have currently allocated $500,000 this year for international media visits—this is senior journalists and editors—to come to this country and be exposed to some of the things that are happening here, particularly around the G20 and also the anniversary of ASEAN. We also have an international cultural visitors program, where we bring producers and festival directors to Australia and expose them to our cultural and arts capabilities. We invest around $240,000 a year in an Indigenous cultural visits program, where we send professionals from our cultural industries, who are working in Indigenous arts industries, overseas; as well as $400,000 for the Australia International Cultural Council program, which is a program of about 25 small grants each year for Australian cultural and arts organisations to be able to travel overseas and present their work and showcase our cultural excellence in the region; as well as $2 million for public diplomacy grants through the posted network.

Senator FAULKNER: Could I ask you, Parliamentary Secretary Mason, a question? As always, I have found what Mr Varghese said to the committee erudite and persuasive. I wonder whether you, as parliamentary secretary at the table, agree with what the secretary has told the committee about his view about the importance of and his support for a reinvestment in funds for public diplomacy. What is your view? What is the government view about this?

Senator Mason: Is public diplomacy important? Yes, of course, it is. But, as you are well aware, it is a time of budget difficulties. So there was this squeeze throughout DFAT and elsewhere in government. That is one area where we had to economise. But I mentioned to the secretary before that public diplomacy also includes, by implication, other areas. As you would be aware, I have a lot to do with the new Colombo Plan and that has an aspect—

Senator FAULKNER: I am aware of that.

Senator Mason: It has an aspect of public diplomacy or 'image projection', to use the secretary's words. So you cannot quite corral each—

Senator DASTYARI: You have corralled tourism money into it.

Senator Mason: Sure. But when you are using a term such as—what did you say—shuttle diplomacy, cheque book diplomacy or whatever—

Senator DASTYARI: I call it chocolate diplomacy.

Senator Mason: Indeed. But the point is that these labels are sometimes a bit difficult to categorise and sequester. I think it is fair to say that the new Colombo Plan—which, as you are aware, is a considerable amount of money—also has an aspect of public diplomacy in it.

Senator FAULKNER: Thank you for that. I think that is a useful contribution, although I would say, with respect to you, that it was not remotely close to an answer to the question I asked you. So let me try again. What I asked you was whether you agreed with the sentiments expressed by Secretary Varghese about the importance of reinvesting in public diplomacy programs. So while, yes, I found what you said very interesting, I would now ask you to focus on the question that was asked.

Senator Mason: What I was trying to say perhaps, if I did not make myself clear, was that—

Senator FAULKNER: No, you did not, I do not think.

Senator Mason: investment in the new Colombo Plan actually is an aspect of public diplomacy. So there has been some investment, by the way. But if you are asking more generally, of course public diplomacy is important and, when conditions allow, I am sure that the government will invest. But you are aware of the difficulties that the government had with the budget.

Senator FAULKNER: So do I correctly interpret that response—

Senator FAWCETT: I have a question.

Senator FAULKNER: I beg your pardon?

CHAIR: Senator Fawcett just wanted the floor.

Senator FAULKNER: I am in the middle of a follow-on question.

Senator Mason: No-one is saying it is not important. It is a matter of competing priorities.

Senator FAULKNER: No-one has said that it is not important. I have been listening carefully to what everyone has said. So I interpret your comments as support for the sentiments that Mr Varghese has expressed.

Senator Mason: The importance of public diplomacy, yes, as I say, within competing priorities.

Senator FAULKNER: We can talk about the importance and we are talking here about the importance of funding public diplomacy programs.

Senator Mason: And, as I have also mentioned—

Senator FAULKNER: So that is what I am asking you about. You are, very cleverly perhaps, not being as direct in your answer as I had hoped, although what you are saying is very interesting. So I am just asking you about the importance of funding public diplomacy programs. I listened carefully to what the secretary said and I am just interested in hearing your view of whether you support those sentiments. We will have a third go at seeing whether you are ready to say whether you do agree or do not agree.

Senator Mason: I think I have answered it, or at least I have done my best.

Senator FAULKNER: If that is your best, I can only say this to you: you need to try harder.

Senator Mason: Thank you.

CHAIR: Senator Mason, I express my full support for you. I think you are doing very well.

Senator Mason: It is all right. I am used to it.

CHAIR: Senator Fawcett.

Senator FAWCETT: Senator Mason, can I just ask you this? I understand that it is important within budget priorities, but is it not also important that we fund effective programs? Are you aware of an article by Greg Sheridan, where he referred to a report that had been prepared by the previous government into the effectiveness of the Australia Network?

Senator Mason: I am aware of the general debate about the effectiveness but not Mr Sheridan's particular article.

Senator FAWCETT: Secretary, are you aware of the report that Mr Sheridan refers to?

Mr Varghese : I am not, but it might have been done at a time when I—

Senator FAWCETT: Could you take on notice to get the name of that report? I notice that Mr Sheridan refers to the fact that the ABC failed to meet its audience targets under the program and it failed to meet any of the financial targets under the program. So not only are we in a situation where the government is trying to deal with the debt we have inherited, there are also ineffective programs that we have inherited. The question that Senator Faulkner is asking ignores the fact that we have to deal with the effectiveness as well as the fact that, yes, it is nice to have, but it has to be an effective program.

Senator FAULKNER: My question does not ignore anything. My question is a question and I hope, given that it has not yet been answered by Senator Mason—very cleverly, of course—that he might even consider taking it on notice.

Senator Mason: Let me look at the transcript. We will look at the transcript.

Senator FAULKNER: Please do.

Senator DASTYARI: I just want to ask Mr Varghese some questions.

Senator Mason: Can we move on to—

Senator DASTYARI: No, I have not finished yet.

CHAIR: Yes, Senator Dastyari.

Senator DASTYARI: I still have the call. It is just that everyone cut in. Let us take a step back. Senator Mason made the point earlier that there are other things 'that are public diplomacy and that are not public diplomacy but somehow relate to public diplomacy', as part of any nation the size of Australia interacting with other nations. That is a very—

Senator Mason: 'Image projection' I think was the secretary's phrase. I think that is the phrase that the secretary used. I think that is right.

Senator DASTYARI: But in the PBS, it is only tourism money that has been identified for that purpose; is that correct?

Senator Mason: Are you asking me?

Senator DASTYARI: I will ask Mr Wood.

Mr Wood : I assure you that, in this case, it is items that fit under the category and the program objective that is set out for—

Senator DASTYARI: Do you want to read the program objective? Can you read the program objective into the Hansard?

Mr Wood : The program objective on page 27?

Senator DASTYARI: Yes.

Mr Wood : 'To project a positive and contemporary image of Australia and promote a clear understanding of government policies, objectives and engagement with the Indian Ocean Asia Pacific Region through the Department's public diplomacy cultural and media activities.'

Senator DASTYARI: Mr Varghese, I just want to get your testimony right. You hold the view that $4½ million is not enough for public diplomacy.

Mr Varghese : I would like a lot more.

Senator DASTYARI: I just want to get your thoughts on this.

Mr Varghese : But there are many things that I would like a lot more of that I do not get.

Senator FAULKNER: Could you name them all for us?

Mr Varghese : No.

Senator DASTYARI: Do you want to take that on notice? Australia is spending less than Luxembourg on public diplomacy and now, in this budget, we are using chocolate money as diplomacy money. How is that a good position for the Department of Foreign Affairs and Trade to be in?

Mr Varghese : Is that a rhetorical question?

Senator DASTYARI: I would like an answer.

Mr Varghese : Let me say this: the decision on terminating the Australia Network contract was made because the government came to the view that it was not the best way to spend that money. So in terms of value for money, in terms of public diplomacy, the government's view was that—

Senator DASTYARI: Yes, and you accept, on that point—from what Mr Tranter said—there is a report from the ABC that you have not made public and that was sent to you prior to the termination where it outlined clearly that it was meeting its KPIs.

Mr Varghese : It could well be the case that—

Senator DASTYARI: Could you take on notice making that report public? It may be commercial-in-confidence. There seem to be things that are commercial-in-confidence that you cannot release, but can you take on notice whether that is something that you can release?

Mr Varghese : I will take that on notice. So they are the reasons behind the decision to terminate the Australia Network. But if you are asking me as secretary—I think we have covered this ground before—whether I would like a larger budget for public diplomacy, I think clearly the answer is yes.

Senator DASTYARI: I am happy to move on.

CHAIR: Can I just make a comment? The Australia Network is out there, competing with CNN, BBC and various other services, and I suppose we are saying that it has not been a great success, presumably on the basis of audience reach. But is that perhaps a reality check for Australia? People are more interested in the other great international broadcasters than they are perhaps in Australian domestic news and so on. So we might be misinterpreting the outcome for the Australia network, in terms of audience reach.

Mr Varghese : I think you would get a variety of views about whether a satellite channel is the most effective way of conducting your public diplomacy or whether there are other, better ways to conduct your public diplomacy. But the point I would make is that those countries that have satellite channels with strong reach invest enormous amounts of money in it. We spend $22 million, $23 million a year on the Australia Network. If you look at the budgets of the BBC, of Deutsche Welle, of Chinese television and of NHK, you are looking at budgets which are in the high hundreds of millions annually. They are in a very different league.

CHAIR: Thank you. That is a good point.

Senator DASTYARI: Can I ask a follow-on question from that?

CHAIR: Yes.

Senator DASTYARI: Just to follow on from what you are saying, is not that all the more reason to stay in the market and to actually continue competing with BBC, CCTV and CNN et cetera? Does not pulling out ruin any chance that Australia has of reaching an international audience? The figures, as I understand it, are these: 22 million in 44 countries for about $20 million; is that right? Is that roughly your understanding?

Mr Varghese : The contract is for $230 million over 10 years; so let us say $23 million.

Senator DASTYARI: So that is $23 million to reach 44 countries. That is a better investment than having nothing, is it not?

Mr Varghese : It depends on whom you are reaching and what they are watching.

Senator DASTYARI: And once you make the report public and we have had a chance to review it, I guess we will be able to answer that.

Mr Varghese : We will take that on notice.

[11:58]

CHAIR: Moving on, the New Colombo Plan, program 1.5. Senator Fawcett has the floor.

Senator FAWCETT: Mr Varghese, I went last night to the 25th Australia-Indonesia Institute celebration downstairs and they were making the point very strongly that the people-to-people links that are established through that kind of program are actually the best public diplomacy that you can have, particularly with all the subprograms like the bridge program et cetera. I note the investment of $100 million over five years for the New Colombo Plan, which is all about people-to-people links. Could you talk to the committee a little about the reception to that plan, both by countries in our region and by Australians who are looking to participate in it?

Mr Varghese : I have to say that the reception in the region to the New Colombo Plan initiative has been extraordinary. The level of interest in it, the level of support for it and the willingness of governments to do what they can to partner with us have, in my experience, been quite extraordinary. We are now well advanced in our pilot project. The pilot project was designed to introduce the plan across four locations: Singapore, Japan, Indonesia and Hong Kong. I am sure Ms Duff will be able to take you through the numbers in the pilot project. But we have made, in my view, very good progress from a standing start.

Next year we will be opening up the new Colombo Plan to other countries. It was always the intention, once the pilot was done, to go to a full-scale program. We are going to do that on the basis of inviting countries to opt in. Those invitations, I think, have already been sent out, and I would anticipate quite a good response rate for opting into the New Colombo Plan.

I think you would have heard the foreign minister speak about this on many occasions. She sees it as becoming a rite of passage for young Australian undergraduates to spend a period of their study in the region, to broaden their horizons, to improve their understanding of the part of the world where we need to make our living and, in the process, to project, I hope, an image of a country whose youth are interested in, engaged with and want to learn about the countries of the region. I think it will have, as Senator Mason has just indicated, a supplementary public diplomacy benefit which should not be underestimated at all.

Senator Mason: Can I add something to the secretary's comments? Often in politics, particularly if you have been in it for a while, some projects, some policies, are difficult to sell. This has not been. To give credit where it is due, this is a bipartisan project. The Governor-General is the patron. It expresses an outward-looking Australia. When I studied overseas, it was in Britain, like so many of my contemporaries did—or the United States, English-speaking countries. But I think young Australians today see their future as being much more tied up in the Asia-Pacific. It is a changing Australia. I think our Asia-Pacific neighbours respect and are enjoying that change of focus from young Australians. To be very frank, some of the more enjoyable moments of my political life have been talking to foreign ministers of other countries, and education secretaries and so forth, about the New Colombo Plan. It has been universally well received.

Senator FAWCETT: Would you say it has actually been oversubscribed by Australians students wanting to go to one of the four pilot programs?

Senator Mason: Ms Duff could give you the numbers, but not oversubscribed, no.

Ms Duff : In terms of the numbers, I am happy to go through where we are up to. As the secretary mentioned, we have had some projects already funded in the pilot phase for the four locations. When we met last time at estimates, we talked about the 24 projects that have been funded under the first tranche, which is really the first go we had at getting some students into the region. We were delighted with the response to that—24 projects, 24 universities and around 300 undergraduates studying in the region through that particular process. We have published a range of information around that.

In conjunction with that tranche 1, we made an effort to reach out, in a state based set of events, to gather together the students who were heading out, make contact with them and talk through the program, as you would be aware. We have done that successfully in Victoria, New South Wales, WA, South Australia and Queensland, and we have still got NT to go. Through that, we were able to promote the plan to universities and their students and help build demand for participation. A number of those tranche 1 projects have already proceeded. There are a number still to go in the middle of this year, but some of the examples include James Cook University medical students undertaking a practicum in Singapore; University of Wollongong teaching students in Hong Kong undertaking some research skills programs; Charles Darwin University law students undertaking programs in Indonesia; and some Adelaide university students undertaking programs in Japan. In Japan also we had a very high level of subscription for semester study in the first tranche, which was very pleasing, and a range of those projects are still underway, including a long-term internships project.

In terms of tranche 2, certainly there was a very high level of interest from universities, and so we were not able to meet that very high level of demand, but that is a good sign, I think, for the future and we were certainly very pleased to offer as much as we could in that second tranche.

Senator FAWCETT: How much have you offered in the second tranche?

Ms Duff : In the second tranche, we were able to find an additional 1,000 students or so across 38 universities and two consortia. We are very pleased that two consortia, particularly in relation to Indonesia, were successful in getting funding, which is a good way for universities to club together and use their resources together to undertake a range of programs. There were 1,000 students or so funded through that second tranche—38 universities, two consortia and 48 projects across the pilot locations. As I said, there was a high level of demand. We look forward to that demand rolling out into the wider rollout for next year.

Senator Mason: It is a competitive process, is it not?

Ms Duff : It is, yes. It is competitive.

Senator FAWCETT: So is that 1,000 places more than you originally planned for tranche 2?

Ms Duff : We originally estimated around 700 and that estimate is always based on a mix of grants. So you have to think about whether or not there are some shorter term and perhaps some longer term semesters. So you really make a general judgment about how many students you think you will fund in that pilot phase. As it turned out, the mix of the grants and our capacity to offer a little bit of additional funding meant that we now have a larger number that we were able to offer through the pilot when tranche 1 and tranche 2 are combined.

Senator FAWCETT: In terms of rebuilding our links with Indonesia, can you confirm that Minister Natalegawa has offered internships within his ministry, within the foreign ministry?

Ms Duff : Indeed. I know, Senator Mason, you may want to reflect on that, but that is in fact what he did offer.

Senator Mason: It is fair to say, to be frank, that there are often tensions between nations but irrespective of other tensions at times, every country I have spoken to about the New Colombo Plan has been impressed by it and wants to participate. The Indonesian foreign minister was particularly enthusiastic and has been since the inception of the program. He is a great enthusiast for it because he was educated here in Australia—he finished 20 years or so ago. He knows us quite well and he is certainly very enthusiastic for young Australians to study in Indonesia.

Senator FAWCETT: What has the response of the private sector been both here in Australia and in the pilot countries?

Ms Duff : Very good indeed and it continues to build. We obviously came to this process with there having been a range of outreach in relation to the business community and we have been taking that forward. The secretariat has been engaging with quite a number of Australian corporates across the spectrum in terms of the finance sector, services, resources and other companies with a presence in the region in particular but not only to talk to them about their interest in supporting internships, mentorships and other aspects of the program. There continues to be a strong interest there. We are building on that in delivering opportunities for universities to take up for their students in detail in the locations but also I was very pleased recently again, with Senator Mason, to have some engagements with business in the region. Again, there is a strong level of interest there in the program—the logic of it from their perspective in terms of the value proposition of having more Australian graduates with experience in the region to bring to the table while building the skills and capacities domestically as well. So there was a strong level of interest and demand.

Senator Mason: The foreign minister sees it as a different and very important part—the mentorships and internships and involvement with the local private sector. The minister sees that as critical and different.

Senator FAWCETT: I am glad you used the words 'value proposition' in terms of public diplomacy, the value proposition of $100 million spent on this far exceeds Bananas in pyjamas.

Senator FAULKNER: I think there is no question, when you look at the original Colombo Plan that at the time it was both a significant foreign policy achievement and public policy achievement historically. I wonder what level of understanding of the role and contribution of the original Colombo Plan there was among our neighbours and participating nations and whether this had an impact on the use of the nomenclature the 'New Colombo Plan'? If that were not the case, perhaps that terminology might be a little perplexing to some.

Senator Mason: That is a good question. You are right. The public diplomacy outcomes of the New Colombo Plan between the 50s and the mid-80s for Australia were extraordinary. You would have seen when you were travelling throughout the Asia-Pacific that so many foreign businessmen, foreign academics and senior politicians from other countries were educated here in Australia under the Colombo Plan. Because they are today's decision makers in the Asia-Pacific then the nomenclature 'Colombo Plan' still means a lot and that is why we did stick with the New Colombo Plan. There are other iterations such as the reverse Colombo Plan where, rather than bringing Asia-Pacific students into Australia, we are now sending Australian students into the Asia-Pacific. When the Foreign Minister conceived this idea, I think, she was the Minister for Education in the Howard government. It was that nomenclature she thought would be valuable.

Mr Varghese : If I could just add, in South-East Asia of course the old Colombo Plan is very well known and therefore I think there is an immediate recognition. In North-East Asia, where it less well known, the label has not been an issue because the enthusiasm in Japan and China and Korea for this initiative has been very high. That was reiterated at the highest levels during the Prime Minister's visit to North-East Asia.

CHAIR: We now move to aid overview.

[12:12]

Senator McEWEN: Can you explain why this year there was no separate ministerial statement on the aid program as part of the budget papers.

Mr Varghese : The decision was taken that there would be no ministerial statements issued as budget papers. That was the advice we received from Treasury. But we are obviously making arrangements and have made arrangements to ensure that the type of information that would previously have gone into the budget paper on aid is provided on our departmental website. The policy framework for the aid program will be set out shortly by the Minister for Foreign Affairs in a speech to the National Press Club on 18 June. That will also be placed on the website. The information that has in the past been a part of the budget papers will still be available in a different form on our website.

Senator McEWEN: When did Treasury advise you that there would not be any ministerial statements?

Mr Wood : It was during the budget process. I do not have a specific date.

Senator McEWEN: You had a communication that went to all departmental secretaries?

Mr Wood : There is advice put out by Department of Treasury around budget documentation and communication as part of the budget process.

Senator McEWEN: Would you be able to provide a copy of that or take it on notice to provide a copy of the advice that you got from Treasury.

Mr Wood : I will check to see what we can do for that request.

Senator McEWEN: Had any preparation on a ministerial statement for aid been undertaken before you received the advice from Treasury that there would be no ministerial statement?

Mr Wood : I will take it notice. We have areas in the department that work on the communications and work on information for our website, but I will take those specifics on notice.

Mr McDonald : The reason Mr Wood referred to the internet and the information we are putting on there is that primarily the descriptions around the aid program for country programs, for example, which was contained in the blue book, will be contained on the internet. So, yes, there was preparation work done in relation to those pages for the internet, and if you look at those pages now they are up on the internet.

Senator McEWEN: There was an expectation, until you had advice from Treasury, from at least some people in your department, that the usual ministerial statement, the blue book, with regard to aid would have been produced—and work had been undertaken? I just want to clarify that.

Mr McDonald : I think the work is undertaken anyway in relation to what is placed on the internet. We will want to put the same information that was contained in that blue book onto the internet so people have access to that information. Yes, we would have done the work and it would have gone on the internet and into that blue book should it have been produced.

Senator McEWEN: The information that did go on the internet—when was that ready by?

Mr McDonald : It went on on the night of the budget. There was a briefing undertaken with key stakeholders on that night in relation to the budget, and then there was information placed on the internet following that.

Senator FAULKNER: What Senator McEwan is asking is: was a ministerial statement under preparation in the integrated department? I appreciate that a decision was made—or I have heard the evidence about the approach of Treasury—but, prior to that, was a statement being developed, and at what stage of this development process or budget process did the department receive that advice? I am trying to understand where in the process it becomes clear to the department that there is no statement on the aid program? In other words, was it underway and stopped and then it is placed on the department's website? What stage did you get up to?

Mr McDonald : As you would imagine, there is quite a deal of work that goes into the preparation of those statements, and therefore that preparation was being undertaken twofold—for the statement itself and for the internet. The content needs to go on both. During that process—and Mr Wood could elaborate—I am not sure what date we were advised, but my understanding is there were no ministerial statements issued. But we can take it on notice. I do not know what that date was.

Senator McEWEN: I have not had a chance to have a look on the internet but are you talking about something more comprehensive than is in Budget Paper No. 2 with regard to the aid project?

Mr Wood : Correct. On the country pages, there is quite a lot of detail on the aid program: the priorities of the aid program for each country in 2014-15, and we also identify some of the results that will be achieved. There is also a section on budget highlights, but I would direct you to the country pages that are on the aid section of the website.

Mr McDonald : In addition to that, post the foreign minister's release of the policy on 18 June, the internet will be updated with further information following that speech.

Senator McEWEN: Has all of the preparatory work that was done by the department in anticipation of a ministerial statement accompanying the budget papers been used on the website and/or will it be used in the release of 18 June, or is some of that work not now going to be used?

Mr Wood : I expect it would all be used. The work that was done in preparation was around the text. Obviously, the numbers do not get agreed until very close to budget night but there had been a lot of work on the text, particularly focused on the country areas and some of the thematic priorities.

Senator FAULKNER: We have been told that previously—I think you would have to confirm it—since at least the year 2000—that is 13 budgets as I count it—we have had a ministerial statement that has been presented in the parliament on these matters. Now, apparently, the status of this documentation has been reduced to some sort of slapdash placement on what is described as 'the internet'. Are you concerned about that? I thought you would be.

Senator Mason: I understand that the government made a decision not to publish any ministerial statements with the budget. That is my understanding. All of the details of DFAT for country, regional and global programs, as well as the total ODA figures, have been published, as was mentioned before, on the DFAT website. That publication has a commensurate level of detail, as the blue book historically did. In other words, the level of detail is the same as the blue book initially had.

Senator FAULKNER: I do not know whether that is true or not. My colleague just tells me—and she has been looking at the webpage—there is virtually no detail at all. But she can follow that up if that is the case. I am talking about the status of the documentation. It is not a ministerial statement. It is not a budget paper. It is not tabled in the parliament. Someone plonks it, or may plonk it, on the internet—that is the terminology that is used. This is a very significant diminution in its standing and status, is it not? Of course, it makes it far more difficult to be subject to consideration, analysis and questioning to witnesses, such as you, at this estimates committee. My interpretation—and I want to be clear about this—is that it is a very significant reduction in the usual capacity for parliamentary accountability and transparency. Is this a concern to you?

Senator Mason: My understanding is that the level of detail that is available to senators is the same as it has been in the past. That is my understanding. So the capacity for Senator McEwen, or your good self, to ask questions about it is the same.

Senator FAULKNER: Why is it not a ministerial statement? Why is it not a budget paper? Why this reduction in its status? It is probably not as dramatic as the reduction in the aid program, of $7.2 billion, but it is a pretty clear indication that it is not much of a priority. The practice for at least the last 13 or 14 years is out the door: 'Oh no, we will put it on the internet.'

Senator Mason: As I said, my understanding is that, in terms of accountability and detail for examination by honourable senators, it is the same—

Senator FAULKNER: Senator Stephens is far more of an expert at looking at these things than I. This is why I am always very careful not to delve into these matters relating to this sort of technology, because I am no expert, and everyone knows it. I am sitting beside an absolute expert in Senator Stephens, and she is struggling to find it.

Senator STEPHENS: I am.

Senator IAN MACDONALD: I could perhaps help you. I am just looking at it myself.

Senator FAULKNER: Well, you have never helped in the past on anything, so that would be a first!

Senator IAN MACDONALD: I see, looking at the Solomons, for example, that the budget has gone up by $4 million this year over the previous year.

Senator FAULKNER: I am pleased to hear that, because the whole aid budget has gone down by $7.2 billion.

Senator IAN MACDONALD: But I think we are now concentrating—are we not, Minister—on areas closest to us, like Papua New Guinea, the Pacific and South East Asia.

Senator McEWEN: I am also looking, and I am sure Senator Stephens can assist in this regard. I just went to the aid section on the DFAT website. I typed in 'budget' and what comes up? The latest budget statement 2013-14.

Senator FAULKNER: That is what I was told by Senator Stephens. It is not very impressive.

Senator IAN MACDONALD: I can show you where the Solomons and each country is with the current budget.

Senator McEWEN: I am still looking for the budget statement on the website for 2014-15.

Senator FAULKNER: Are you taking personal responsibility for this, Senator Mason?

Senator Mason: I will have a look at the website and at the level of detail—

Senator FAULKNER: This is a serious point. I am just not sure that the evidence that is being presented is accurate. Either it is on the internet—to use Mr McDonald's terminology, fair enough—or it is not. Two senators are trying to access it on the internet—

Senator IAN MACDONALD: Three senators, and one of them has access—

Senator FAULKNER: We do not know what information you have. What is the date of the information—

Senator IAN MACDONALD: Well, it is talking about the 2014 budget and I think that is pretty up-to-date.

Senator McEWEN: The 1213-14 budget—

Senator IAN MACDONALD: No, have a look at the ones the minister suggested.

Senator McEWEN: We are supposed to be looking at the 2014-15 budget.

Senator FAULKNER: There is now a major debate here amongst senators as to whether the information—

Senator IAN MACDONALD: There is not a major debate.

Senator FAULKNER: It is not a debate I can even engage in. I have got no idea whether it is there or not. I am talking about the status—which I think you understand, Senator Mason—and that is a very different issue. I am talking about them not being budget papers, not ministerial statements, not provided to the parliament, not tabled in the parliament as part of the budget. That is the information we have heard and I am asking, first of all, if that is right. I am asking, first of all, whether there is a change in status and, secondly, if there is, why? The implications of that are concerning in terms of parliamentary accountability and transparency. So over to you, Senator Mason.

Mr Varghese : Chair, could I ask Mr McDonald to take the committee through the level of detail which is actually on the website? I hope that when he has done that, Senator Faulkner might recognise that it is not a slapdash approach.

Senator FAULKNER: By all means, Mr Varghese, that can be done, but as I have indicated, I cannot comment on what is on the internet. I acknowledge that, and you have heard me acknowledge that two or three times. My point goes to the status of the documents—I repeat, the status of the documents. They are not budget papers. They are not tabled in the parliament. They are no longer ministerial statements, which they have been in what has been described, as you will know, in the blue book for years. That is my concern, and I have acknowledged and I do acknowledge, that I do not know what is on the internet or what is not. My question to Senator Mason in the first instance goes to the status of the documents and what the implication of that is. Sure, it would be helpful, after dealing with that issue, for you to be able to assure us that there is a great deal of information on the internet. There may be a great deal of information on the internet but there is not the same level of information and documents before the parliament with the status of ministerial statements or budget papers as there has previously been. Over to you, Senator Mason.

Senator Mason: I do follow your question, Senator—status as opposed, in effect, to content, and that we can discuss in a minute.

Senator FAULKNER: I have indicated—

Senator Mason: I accept that and I follow that. The issue is: for what is the government accountable, and whether that information is available? As I understand it, that is the critical point. I think that there is plenty of information for which the government is accountable in estimates and in parliament.

Senator FAULKNER: So will you tell me then, Senator Mason, why in this budget did we have papers produced by the government—obviously contrary to the Treasury direction, we have now heard—on health, higher education, infrastructure and social services? You tell me that.

Senator Mason: I suspect that the decision was made not to produce one but that the government is happy to be accountable for its performance and that that information is available on the website.

Senator FAULKNER: But if there is a broad Treasury directive that the Department of Foreign Affairs and Trade is following, you would then expect all other agencies and departments of government to follow—or there is not. It is as clear as mud. Is there or isn't there? If there is, how is it that other agencies apparently have not followed the directive? If there is such a directive, what does this mean in terms of parliamentary accountability and the capacity of the parliament to treat such documents as budget papers and ministerial statements?

Senator Mason: That last question I cannot answer here and now, clearly. It is a little bit beyond my ken, but I think Mr McDonald—

Senator FAULKNER: I am disappointed to say you have not been able to answer any of my questions so far.

Senator IAN MACDONALD: You haven't given him a chance! You keep talking.

Senator Mason: Mr McDonald can answer that.

CHAIR: We have now reached the lunchbreak.

Proceedings suspended from 12:30 to 13:32

CHAIR: We reconvene this committee on Foreign Affairs, Defence and Trade.

Mr Varghese : If I can get back to the committee on a question that Senator Faulkner asked us yesterday in relation to the visit to Western Australia by the diplomatic corps. He asked for a breakdown of costs and also a comparison with the 2011 visit. If I can start with the 2011 visit, which was the visit to Queensland when Mr Rudd was foreign minister, the total cost was $96,323.78, of which travel was $56,200.01 and meals was $24,168.31. The total cost for the 2014 visit by the diplomatic corps to Western Australia, hosted by Foreign Minister Julie Bishop, was $146,589.80, of which the travel component was $76,751.62 and the meals component was $24,458.

Senator McEWEN: Continuing on from our questions before the lunchbreak with regard to the lack of a ministerial statement accompanying the budget papers, Mr Wood I think referred to the advice from Treasury that there would be no ministerial statements at all. Did that advice from Treasury explain why there would be no ministerial statements?

Mr Wood : No.

Senator McEWEN: Is it correct that there were no ministerial statements for any portfolio areas accompanying the 2014-15 budget?

Mr Wood : As part of the budget packaged, there were no ministerial statements. There were some booklets and information overviews, but there were no ministerial statements as had been provided previously.

Senator McEWEN: Were the booklets or information overviews the equivalent of what we used to call the Blue Book?

Mr Wood : No. Generally those are what are termed glossies. They are kind of 20-page booklets. As part of the budget package there were some provided for health and education in the budget overview.

Senator McEWEN: Infrastructure?

Mr Wood : Yes.

Senator McEWEN: You mentioned the minister would be launching the government's new aid policy on 18 June at the National Press Club. Is that going to be a policy document? What is going to be launched?

Mr McDonald : In relation to what is launched, it is a matter for the minister, but she will do a speech on the aid policy, which will outline the components of the new aid policy. There will be a speech at least and material to support that.

Senator McEWEN: How long has the department been working on that?

Mr McDonald : In terms of the policy development, it has been worked up over time since the change of government. I think the minister has given a number of speeches that have indicated the sort of direction that the program will take, for example, with a greater emphasis on economic growth and increasing living standards in order to get people out of poverty.

Senator McEWEN: So, will the scope of it be similar to what was in the glossy previously or is it more of a typical ministerial statement?

Mr McDonald : The content of the speech is a matter for the minister, but I think probably the best indication of the policy direction of the government is the Magna Carta speech that the minister provided. It has indicated some of the emphasis that the program will have going forward on economic growth, aid for trade, infrastructure, gender, empowerment of women, health and education.

Senator RHIANNON: I noted in the speech the Foreign Minister gave about the direction of foreign aid she said that the government would be moving towards 50 per cent of ODA on infrastructure in the future. She actually gave the speech in PNG, but it was quite a far-reaching speech. I just wanted to clarify whether she was only referring to PNG or did it refer to the entire aid program?

Mr McDonald : I need to see that. I do not have a copy of that in front of me. You said 50 per cent of the program on infrastructure. I am not sure that the minister said that.

Senator RHIANNON: Where is the aid program at? Has it been determined if 50 per cent of the aid program will be on infrastructure or is that just a decision for PNG? I will then leave my questions to PNG.

Mr McDonald : The policy direction around the program, as I said, would be announced on 18 June by the foreign minister.

Senator RHIANNON: So, there is nothing further to add? Can you give us any clarification on the foreign minister's statement?

Senator Brandis: I think the word 'clarification' is the wrong word. The minister gave a speech to which you have referred and that speech speaks for itself.

Senator RHIANNON: It is quite a straightforward question. All I am seeking is clarification.

Senator Brandis: You have referred to the speech—

Senator RHIANNON: Yes.

Senator Brandis: What is it that you want clarified?

Senator RHIANNON: What was said is that the government would be moving to spending 50 per cent of ODA on infrastructure. The question is, is that for the whole aid budget or is it for the aid budget for PNG?

Senator Brandis: We will take the question on notice and look at the speech to make sure that the characterisation you have placed upon the minister's remarks is accurate and we will get back to you.

Senator RHIANNON: Thank you for taking that on notice.

Senator Brandis: It is a pleasure.

Senator RHIANNON: I note that comment, thank you. What percentage of the aid program is currently spent on infrastructure?

Mr McDonald : I think I will need to take that on notice. Unless I have someone here that can answer it, I would have to take that on notice.

Senator Brandis: When you say 'currently', do you mean in the current financial year?

Senator RHIANNON: Yes, in the current financial year. The statement the foreign minister obviously created a lot of interest. In the 2012-13 aid budget it came out at about six per cent. Anything getting up to 50 per cent, even in PNG, would be a big shift. I am just trying to understand what is happening.

Mr Varghese : In relation to PNG, Ms Klugman may be able to help you.

Ms Klugman : In relation to Papua New Guinea and the speech you referred to, I think you would be aware that Minister Bishop has initiated a major review of our aid spend in Papua New Guinea. That is reaching its conclusion and she went to Papua New Guinea a few weeks ago for some high-level discussions about the outcomes of that review.

The government of Papua New Guinea, and in particular Prime Minister Peter O'Neill, has been quite keen, as a matter of consistency with his own economic reform program, to see more of the Australian aid program spent in areas of infrastructure. Ms Bishop has made it clear, including through the speech that you referred to, that she agrees that there is an important role for Australian aid spending in infrastructure which is economically compelling and productive. She sees that as one of the means to using the aid program to unlock real economic growth in some of our partner countries, including in Papua New Guinea. At the moment we spend just over 30 per cent of our bilateral aid in Papua New Guinea in areas that you could describe as infrastructure.

Senator RHIANNON: Just to clarify, is that 30 per cent of the total aid budget or 30 per cent of the PNG aid budget?

Ms Klugman : Sorry, it is the latter.

Senator RHIANNON: Thank you.

Ms Klugman : I am speaking of just the PNG budget at the moment. That is all I have the basis on which to speak about.

Senator RHIANNON: You are obviously aware of the minister's speech. When she spoke about 50 per cent of ODA on infrastructure was she speaking about the whole aid budget or about PNG?

Ms Klugman : My understanding is that she was speaking in the PNG context.

Senator RHIANNON: So, that would be lifting the 30 per cent to 50 per cent?

Ms Klugman : It is a bit over 30. I think it is important to let those final processes of consultation continue with the government of Papua New Guinea on the outcomes of that aid review, but Ms Bishop has made it very clear, as has the Prime Minister of Papua New Guinea, that she wants to see more of the Australian aid investment in Papua New Guinea going into economically productive infrastructure that can leverage real private sector growth in that country.

Senator RHIANNON: Thank you, Ms Klugman. Mr Varghese, what steps does DFAT currently take, and what steps are you planning to take, to ensure any infrastructure projects funded by Australian aid do not have a negative impact on poverty and equality? For example, often poor people have lost their land and their livelihood when the natural environment, maybe the waterways or even the land that they are able to farm, is destroyed in the construction of infrastructure projects. How do you manage these challenges?

Mr Varghese : I think it is impossible to have economic growth without decent infrastructure, at least not sustainable economic growth without decent infrastructure. Our starting assumption is that contributing to infrastructure in the broad contributes to the economic capability of a country and increases the prospect of strong economic growth. Obviously any projects that we are involved in would pay appropriate attention to environmental, social and other factors. I think that is wired into the way in which we approach these issues. I would not want to lose sight of the basic link between infrastructure and economic growth and the desirability of achieving that in order to reduce poverty.

Senator RHIANNON: It is a big challenge and it has been probably forever for aid programs in low income countries. How do you ensure and how do you plan to ensure in the future that affected communities, including the rural poor, women, people with disabilities and other marginalised groups are consulted in the design, the planning and the implementation of infrastructure projects? If there is consultation, often the immediate impact on the surrounding communities can be managed. Maybe the infrastructure project is done in a different way or a different place. How is that consultation carried forward?

Mr Varghese : I will ask my colleague to comment on the details of consultations. Can I say the best thing you can do for rural poor is to actually have decent infrastructure. Infrastructure that gets produce to market quickly, infrastructure that helps with the provision of information, infrastructure that contributes to—

Senator RHIANNON: I am not questioning that, Mr Varghese.

Mr Varghese : With respect, I think part of your question was, how do we ensure infrastructure occurs 'elsewhere'.

Senator RHIANNON: The key part of the question was about consulting, about working with communities. That is where we are trying to get an answer.

Mr Varghese : I understand that and I will ask my colleague to comment on it.

Mr Exell : Essentially, the questions you are asking are covered by our quality assurance processes within the department. For every activity, whether it is in a space that touches directly on the environment or other areas, there are actually steps that we have to go through within the department to assure that it is an activity that is designed to meet the requirements and the challenges. That includes, in particular, aspects around the environment, safeguards around resettlement and the things that you are talking about. As part of that design processes, it includes consultation and working with the communities.

Senator RHIANNON: Mr Varghese, I have noted that in a lot of the comment about the budget the figure that is used with regard to the total savings from changes to the aid budget is quoted as $7.9 billion. That is in a lot of the commentary. Is that the actual figure? When I looked in the budget papers it was a different figure?

Mr Wood : If I could assist, there was a figure of $7.6 billion, which is the saving to the administered aid program. That was disclosed in Budget Paper No. 2 as a saving. There was also a further reduction in the administrative costs of departmental funding to the department.

Senator RHIANNON: I was trying to understand what the difference is. What is that $255 million discrepancy, or difference, between the $7.9 billion that has been stated publically and what you read in the budget papers as $7.645 billion?

Mr Wood : I have not seen that $7.9 billion figure. If I could just refer you to the information that is in Budget Paper No. 2.

Senator RHIANNON: Thank you. When you look at previous presentations, details had been provided in various thematic areas around health, water, et cetera, and that detail is not provided at this stage. Will that be provided after the minister gives her policy statement on the aid program?

Mr McDonald : Yes.

Senator RHIANNON: So, will we be getting actual figures about these different areas? Will we get to that level of detail?

Mr McDonald : In terms of thematic and sectoral spends, yes, after the policy speech on 18 June.

Senator RHIANNON: Is this the section where I can ask about onshore refugee costs or does that come up later?

CHAIR: I could seek advice on that. Are refugees and costs of refugees a matter for this department or the Department of Immigration?

Senator RHIANNON: It is an aid related question. I just wanted to check if I am doing it in this section, Chair.

CHAIR: I am seeking advice.

Senator McEWEN: Despite the fact that the Treasurer said there will be no Blue Books this year, some departments did prepare additional booklets that were tabled with the budget. There was one for education, one for infrastructure that we know about. Mr Truss and Mr Pyne got some documents tabled with the budget. Why didn't Minister Bishop's department not table something with the budget? Was there nothing to table? Did she have nothing to say? I am just curious.

Mr Wood : Documentation in the budget process is governed by the Treasury.

Senator McEWEN: But the departments must have prepared the material at the instruction of their ministers, I presume. For example, Minister Pyne must have said to his department, 'I want to table something to go with the budget papers', and it was. Apparently Minister Bishop did not ask her department to prepare something to be tabled with the budget papers.

Mr Wood : The official budget documentation is governed by the Treasury. So, they would provide authority. It is probably a question best asked of the Treasury. The Treasury provide that instruction.

Senator McEWEN: So, in your understanding, did Treasury say, 'We will still have something from education, something from infrastructure but nothing from DFAT'?

Mr Wood : That would be a question to the Treasury.

Mr McDonald : Can I also add to your question? You said that the foreign minister did not have anything to say. If you go on and look at the release on that night, her media release and the material with that, it did provide detail on the night.

Senator RHIANNON: Mr Varghese, you have outlined the benefits that the government sees coming from infrastructure and economic growth. Could you outline how you will work to ensure that it improves the life of the poorest people and, specifically, what I was trying to understand is how you ensure that the benefits of these investments will in fact not go disproportionately to the middle and wealthiest classes? How do you ensure that the poor are not left behind in this form of aid?

Mr Varghese : I do not think our aid program can ensure a particular distribution of wealth across different groups. If your objective here is to reduce poverty—and all the empirical evidence suggests that the best way of reducing poverty is off the back of economic growth—then I think it flows from that that aid policies which can contribute to sustainable economic growth, including through infrastructure, are going to have a positive impact on reducing the number of poor. After all, the most impressive poverty reduction program in history has been in China, where literally hundreds of millions of people have been lifted from poverty off the back of strong economic growth.

There are a whole lot of legitimate questions relating to the distribution of wealth, the distribution of benefits from economic growth—and I am not dismissive of that—but I think those discussions have to also acknowledge the fundamental importance of achieving growth before you can address questions of distribution inequality.

Senator RHIANNON: But it is a return to the 1990s trickle-down analysis that economic growth in itself is the way to deliver benefits to people in low income countries. There are often communities who lose out in that. I was interested in a submission that your department had earlier where you acknowledged that many countries with growing economies, many of them in our own region, also have growing inequality and growing numbers of extremely poor people, which you would be aware of. Is this something that you are giving attention to? How do you ensure that the very poorest people do not get left behind and do not often end up in a worse situation when they lose their land and their livelihood because of some of these large-scale projects? Surely they are issues you are giving attention to.

Mr McDonald : They are certainly issues we are giving attention to. As you know, 90 per cent of jobs in developing countries come through the private sector and 60 per cent of investment comes through the private sector. The ODA amounts that we provide are dwarfed by other forms of finance. The more economic growth within the country the more opportunity there is to spend that funding on education and health and those areas that are important for people to be removed from poverty and to have the opportunity to benefit from the economic growth within the country.

Senator RHIANNON: Thank you.

Senator McEWEN: Mr Varghese, has the department made any assessment on the likely impact of the $7.6 billion reduction in funding to the aid program on development targets, for example, against the MDGs or the national interest aid priorities referred to by the minister?

Mr Varghese : I will just see if anyone can answer in relation to the specific points you raised, the MDGs in particular.

Mr McDonald : In terms of funding for the MDGs, as you know, Australia has committed to the ODA components. There will still be $5 billion contributing to the MDGs over the next year and a half until the completion of the existing MDGs. In terms of individual impacts, there is a whole range of circumstances around whether particular countries are achieving MDGs and how many of those are being achieved. If you look within our own region, that varies quite a deal across-the-board.

Senator McEWEN: What about the national interest aid priorities referred to by the minister? What actual assessment have you done about the reduction in the aid budget versus achieving those national interest priorities?

Mr McDonald : I think, as I have said earlier, the policy will be announced in detail in a couple of weeks. In terms of national interest, I think the government has been clear around that applying to our region, in particular, and the focus of the program more on this region, in terms of our expenditure on our aid program. Of course, that has benefits not only in terms of stability and economic growth within the countries that surround us, but it also has benefit here in Australia in terms of our national interest within the region.

Senator McEWEN: Has it diminished the opportunity to achieve our national interests to reduce the aid budget? If the national interest is of such importance to the minister and then the budget to the aid budget, which is supposed to promote that national interest, is reduced then surely the ability to achieve the national interest priorities is diminished.

Senator Brandis: That is really a political question.

Senator McEWEN: Gosh!

Senator Brandis: It is barely a question. It is more of observation. Let me just make the point to you that what the government has decided to do is to focus the aid budget more directly on those parts of the world that are most important to Australia, particularly in our region. That is one thing that we have decided to do. There have been some savings in the aid budget. That is true. There is a reason for that. The reason is that between 2007 and the election of the new government in 2013 Australia fell into a budget crisis when our public debt rose from zero per cent of GDP to 26 per cent of GDP in less than six years—the fastest rate of growth of debt of any country in the OECD. Unfortunately, when you have a government that drives up the level of public debt to an unprecedentedly high level, those who are elected to repair the mess have to find economies. It is not this government that drove the country into debt; it is the previous government. We have had to find the savings to repair the budget.

Senator McEWEN: Chair, I have heard this speech many times.

Senator Brandis: You are asking about government spending.

Senator McEWEN: I do not want to hear it again.

Senator Brandis: You may not want to hear it again, but every time anybody asks about government spending—

Senator McEWEN: I could enter a debate with you about how the nation managed to retain its triple-A credit rating throughout the period of the Labor government.

Senator Brandis: You cannot ask a question about why the government is not spending as much as you would wish it to spend in a particular portfolio in a vacuum without understanding why it is that the government does not have as much money to spend as you would like to see it spend.

Senator McEWEN: My question was about how you intended to achieve these so-called national interest priorities referred to by the minister when the budget to do so has been reduced. I would like to move on, Chair, if I could go to some more specific examples.

Senator Brandis: I have not finished answering your question.

Senator McEWEN: Yes, you have.

Senator Brandis: You interrupted me.

CHAIR: Senator McEwen, please let the minister finish his answer. He wants to make a statement so let him do so.

Senator Brandis: You decided to ask a very political question and a very vague question so you cannot complain if you get an answer. The reason we have to make these savings in this portfolio and in other portfolios is because of the need to repair the budget. Senator McEwen, you used the expression 'national interest'. The national interest is a very protean concept. We have various national interests, but there is no greater national interest, as it seems to this government, than the national interest in repairing the budget so that, for example, we are not spending a billion dollars every month in paying interest on public debt. If we did not have to spend a billion every month paying interest on public debt, there would perhaps be more money for the aid budget.

I cannot do any better than the words of the former foreign minister, former Senator Bob Carr, who in his infamous diaries, in speaking of the aid budget, said this, 'The truth is you can't run aid on borrowings.'

Senator McEWEN: Another promotion of former Senator Bob Carr's book.

Senator Brandis: 'The truth is you can't run aid on borrowings.' That was the view of your government's last foreign minister. It actually happens to be the view of this government as well. You cannot run aid on borrowings. If we did not have to borrow so much money to pay the interest on the debt we inherited from the Labor government then we probably would not be having this discussion.

Senator FAWCETT: Senator McEwen, just before we move on I just want to follow up on your line of questioning if I can. This is a question of fact and not a political opinion and it is not related to the book. Mr Varghese, there was a question about the impact on national interest priorities, about this government's budget decisions. Can you tell the committee: was any analysis done on the impact on national interest priorities by the former government before they cut the $5.7 billion from the aid project in their last 15 months of government?

Mr Varghese : I do not know the answer to that question and I think it would not be appropriate for me to go into the internal workings of the previous government.

Senator McEWEN: I am happy to move on. Has the department assessed or quantified the reduced outcomes associated with lower funding for the aid program? I will give you some practical examples. Has the department assessed or quantified how many fewer girls will be educated in schools funded by Australia's aid programs? Has the department assessed how many fewer children will be immunised following the reduction in Australia's aid program? How many fewer scholars from the Pacific nations will be able to attend Australian universities and educational institutions as a reduction of the aid program? How many mines will not be removed from otherwise arable land because of reductions in the aid program? I have asked whether there have been any assessments done.

Mr McDonald : In relation to this budget, most of the allocations to countries in our region have increased consistent with the government's policy. There have been reductions in other parts outside our region. It is not that there have been reductions across-the-board, because there has not. Part of that has been caused by the changes in maintaining the budget at $5 billion and also funding that was previously used elsewhere in another portfolio that is returned in the ODA budget and can be used in countries that we provide support to. There is no reduction as such other than in those areas that are outside our region.

Senator FAWCETT: Was that the $700 million used for onshore processing that you are referring to?

Mr McDonald : I will ask Mr Wood to confirm this, but the onshore costs for this year in the budget are around $4.6 million and for last year it was—

Mr Wood : It was $375 million. We are forecasting that there will be a significant reduction in official development assistance spending by the Department of Immigration and Border Protection, which relates to those changes regarding the immigration arrangements.

Senator FAWCETT: So, in plain English, the money that Labor took out of the aid budget to spend on onshore processing this government is returning to the aid budget?

Mr Wood : There is less ODA being spent by that agency, correct.

Senator FAWCETT: Thank you.

Senator McEWEN: When the department was made aware of the announced budget cut, the $7.6 billion less in funding to deliver Australia's aid program, what adjustments did the department make to its forward planning and can you tell us about how you advised the minister about what the revised forward planning would entail?

Mr McDonald : In terms of the budget process for the government to decide the allocation—that is obviously in the form of advice to the government, which I would not like to go into here—I think there were some principles applied to the allocation of funding for 2014-15 that are reflected in the budget. As I said earlier, one was our region; now 92 per cent of the budget is within the Indo-Pacific region. There was also a principle around multilateral effectiveness. You will note from the budget allocations that those multilaterals that were effective have had an increase in their funding.

There was also an increase to the Australian NGO program as part of the budget. There was also an increase in the humanitarian budget. It increased from $264 million to $338 million as part of this budget. There was particular emphasis in the budget in terms of the allocations. There were reductions in the budget, for example, in Sub-Saharan in Africa and in Latin America and the Caribbean. What I am saying is that the budget outcome reflects some of the priorities of the government.

Senator McEWEN: Were you asked to provide any information to the minister about the likely impact on what we would call life-saving measures as a result of the reductions in the budget that you talked about?

Mr McDonald : As I said, I would prefer not to go into the specific advice that is provided to government. I suppose one of the areas of emphasis in the program is our global responsibilities around humanitarian, in particular. You will know that we have had discussions around that. That is one part of the budget that has increased and particularly around that was to do with our emergency fund. As we get disasters in our region like we have had with the flooding, et cetera. The answer is, yes, we did provide advice, but the allocations are a matter for government to decide as part of the budget process.

Senator McEWEN: Could you explain exactly what the government's commitment is to aid funding over the forward estimates in terms of percentage of GNI, because there seems to be some conflicting information about that? I draw your attention to a statement that Ms Bishop made in the federal parliament in answer to a question on notice in March 2014 where she said that the aid budget would stabilise at $5 billion a year and thereafter it would increase by CPI, but that has not happened.

Mr McDonald : It has not happened for next financial year and the financial year following. It has happened for the final two years of the forward estimates. I will ask Mr Wood to answer.

Mr Wood : Correct. That is disclosed in the budget papers, on page 6-14 of Budget Paper No. 1, Official Development Assistance, 'The government will maintain official development assistance spending at its nominal 2012-13 and 2013-14 levels of $5 billion and 2014-15 and 2015-16, and from 2016-17 ODA will grow in line with the Consumer Price Index.' The forward estimates and projections for official development assistance are $5.032 billion in 2014-15; $5.034 billion in 2015-16; $5.16 billion in 2016-17, and $5.289 billion in 2017-18.

Senator McEWEN: What are those monetary figures in terms of percentage of GNI for each of those forward years?

Mr Wood : Our estimates for the ODA GNI ratio are: 0.33 in 2013-14; 0.32 in 2014-15; 0.30 in 2015-16; 0.30 in 2016-17, and 0.29 in 2017-18.

Senator McEWEN: So, reducing every year to 0.29 in, what was that, in 2018-19?

Mr Wood : It is 2017-18 when the aid budget increases to $5.289 billion from $5.160 billion.

Senator McEWEN: So, the election commitment from the government was to increase the foreign aid program towards 0.5 per cent of GNI. That was the statement by the government pre-election and you have just told me that in this budget we are not increasing the foreign aid program towards 0.5 per cent of GNI, in fact we are decreasing the foreign aid program and taking it backwards.

Senator Brandis: That being a political—

Senator McEWEN: Can I just—

Senator Brandis: All of your questions are directed to me and they are taken by officials, as is the custom of the committee. They are taken by officials at the minister's invitation, but if I choose to answer your question then I will provide you with the answer. The commitment to which you have referred was not a commitment in relation to the financial year immediately following the election. It was a statement of a policy objective, which as the official has pointed out has been fulfilled in the forward estimates. It will be fulfilled as indicated by the forward estimates published with this budget.

Senator McEWEN: With respect, Minister, that statement is not correct.

Senator Brandis: If I may finish, please.

Senator McEWEN: That statement is not correct.

Senator Brandis: If I may finish, please.

CHAIR: Let the minister make his comments and then you can respond.

Senator Brandis: Thank you, Mr Chairman. What the then opposition, now the government, also promised to do in the election campaign was to get the budget under control and to begin paying off the debt. When we were elected on 7 September last year we learned that the debt, which we knew was enormous, was in fact much larger than even we had been told.

Senator DASTYARI: That is not true. That is just a lie.

CHAIR: Senator Dastyari, please do not interrupt.

Senator Brandis: Would you direct the senator to withdraw that remark, please, Mr Chairman?

CHAIR: Please withdraw that remark, Senator Dastyari.

Senator DASTYARI: I withdraw the remark.

Senator Brandis: When the MYEFO was published after the election what it disclosed was that unless economies were made the public debt of this country would peak at $667 billion. That is $667 billion. That figure was never published prior to the election. There was no debate prior to the election about a figure of that vast magnitude. We promised to get the budget under control and, as a result, across the whole range of the government we have had to achieve savings. We have achieved savings in this portfolio of the kind that the officials have indicated, but we have also maintained faith with the objective set by the minister during the election campaign that when the budget emergency is over, as we hope it will be some years into the future, we will achieve the proportion of aid spending that we promised.

Senator McEWEN: Your statement that the government's commitment to CPI increases in the aid budget after the 2014-15 financial year stands—

Senator Brandis: Those are not the words I used.

Senator McEWEN: —cannot be correct.

Senator Brandis: Those are not the words I used. I did not use the word 'CPI'.

Senator McEWEN: I have not got the words written down exactly, but that is what you said.

Senator Brandis: Please do not put words in my mouth. I have explained to you what our policy was.

Senator McEWEN: I understand that.

Senator Brandis: I have explained to you the context of it. I have explained to you why the budget across the forward estimates in this program has been constructed in the way in which the official has explained.

Senator McEWEN: How can you say that the government is going to honour its pre-election commitment to increase the aid budget by CPI after 2016-17 when in fact the information provided by the department just then was that the actual dollar value of the aid budget is going to decrease every year?

Senator Brandis: I do not think that is what the official said at all.

Mr Wood : The dollar value increases I was referring to were in Budget Paper No. 1, which notes that from 2016-17 ODA will grow in line with the Consumer Price Index. The ODA budget will increase next year as follows: $5.032 billion in 2014-15; $5.034 billion in 2015-16; $5.160 billion in 2016-17, and $5.289 billion in 2017-18.

Senator McEWEN: Are you confident that that will be at least equivalent to or above the increase in the CPI over those years as well?

Mr Wood : This is the budget statement. I am referring to Budget Paper No. 1. It states that the ODA will grow in line with the Consumer Price Index.

Senator STEPHENS: I do not want to sound too pedantic about this, because the difference, of course, is that the international measurement of overseas development is as a percentage of GNI. It seems fraught with difficulty that we would be trying to muddle the argument today by discussing that the increases are by CPI as opposed to the international measurement standard of GNI. Can anyone explain to me why we have shifted from one measure, from the international standard, to a domestic standard?

Mr Varghese : I do not think that we have shifted. The question was asked in the context of the statements that were made by the government about adjusting the aid budget to reflect CPI after it had stabilised at $5 billion. I think that is what kicked off this discussion.

Senator STEPHENS: Just to finish that part of the conversation, given that we have just heard the figures about the comparison, Senator McEwen asked: what do those figures actually represent in terms of GNI? Is it not the case that in terms of our international benchmarks the way in which Australia's economic performance is going to be measured by the OECD will reflect the GNI figures and not CPI increases, and that that is not likely to reflect well on Australia's international economic performance?

Mr Varghese : The GNI figures are certainly an international measure of performance on the aid program. The context of this, as the Attorney-General had said, was that the government was seeking to stabilise the budget situation and in that context provided only for increases in CPI in the two out years of the forward estimates. I should add that it still leaves us as a substantial aid donor by international standards. We are still in the top 10 aid donors. I think in terms of our rankings in economy we are probably around 13 or 14. The size of our economy is around 13 or 14 and our position as an aid donor is about 10. It is not a weak international comparison.

Senator FAWCETT: Can you also confirm that increasing by CPI provides the aid sector with certainty, which is something that they have been asking for, as opposed to the previous government's last position which was to promise 0.5 of GNI but then put no time frame on it and say, 'When the budget is under control'? Which provides more certainty?

Mr Varghese : Certainly in terms of managing the implementation of a large aid program the certainty of budget numbers is unquestionably a plus. I think it is fair to say that one of the challenges of managing the aid budget over the last several years has been the volatility in the numbers. So, there is a case to be made for certainty. It is not my job to say what level that certainty should be at. That is a decision for government, but there is no question that from a planning and implementation point of view having four years of certainty about the budget is a plus.

Senator Brandis: Senator Fawcett, I know that there is a variety of views in the community about the foreign aid budget. There are some, like the Institute of Public Affairs, for example, who recommend that we should have no foreign aid budget. There are others, including the churches and some of the secular organisations in civil society, who would like to see us spend more. I feel very close to this debate. I was for 10 years on the board of UNICEF Australia. This is a matter that I have been interested in for a quarter of a century. My view is that it would be good to be able to have more money to spend but we do not, for the reasons I explained to Senator McEwen, so we must do the best with what we have.

Senator McEWEN: Are there any specific plans or commitments to increase or to match the coalition's pre-election commitment to increase overseas development aid spending to 0.5 per cent of GNI? Are there any actual plans at the moment?

Mr Wood : I do not have those statements with me.

Senator McEWEN: Do those statements say that it is an ambition to achieve 0.5 per cent of GNI?

Mr Wood : I do not have those previous statements with me.

Senator McEWEN: Is the minister, in her aid statement, likely to make any statement about commitment to 0.5 per cent of GNI?

Senator Brandis: You cannot ask what a minister might say in a statement that she has not yet made.

Senator McEWEN: I can and I did. You can say that you are not going to tell me.

Senator Brandis: I am not going to tell you. You are asking an official to speculate on what a minister might or might not say in a speech she is yet to deliver.

Senator McEWEN: I thought she might take the opportunity to reaffirm the pre-election commitment to 0.5 of GNI of the development aid budget, otherwise she is going to be in conflict with the promise she made before the election.

Senator Brandis: I am not going to take the opportunity to speculate about what a ministerial colleague of mine might say in a speech which she is yet to deliver.

Senator McEWEN: Can you advise how Australia has informed country partners, NGOs, government agencies and funded organisations about the cuts to the ODA that were announced in the budget?

Mr McDonald : As I said in relation to the budget for this year the budget has not reduced in a number of cases, it has increased. I referred to the NGOs earlier, about the increase in funding this year. On budget night there was a briefing with stakeholders that I held here in Canberra to let people know the outcome of the budget ahead of the announcement. We also write out to partners to inform them of the outcome of the budget and have discussions with them around the implementation. This budget is, of course, for next financial year so that has occurred.

In relation to the reductions in 2013-14, reprioritisation—we had information sent out to our posts to have discussions with our partners. There were a number of discussions that I had here with our partners in Canberra and overseas. We had discussions with NGOs here. We are very conscious of the need to communicate with our partners and certainly in the discussions that I have had with partners they have been understanding of the position and have emphasised the point that Mr Varghese made not long ago around their desire for predictability in the budget going forward so that they can plan accordingly. That is a common request from the partners. That is more about certainty for them in terms of their planning rather than necessarily the scale. They would appreciate more funding as well, but one of the most difficult parts of the aid budget around effectiveness is where the budget is not predictable for those partners.

Senator FAULKNER: Financial year 2014-15 is the critical year as you would acknowledge, this budget that has been brought down. Just for a moment, can we speak about the financial year 2014-15. Is there a decrease in overseas aid in financial year 2014-15?

Mr McDonald : No.

Mr Wood : No. As I just noted from the budget papers, the ODA budget remains at the same level, $5.032 billion. That is its total funding envelope. Within some of the breakdowns, the country and regional programs for our official development assistance is forecast to increase.

Senator FAULKNER: Is there a decrease in the budgeted figures from the 2013-14 budget, the estimates for 2014-15?

Mr Wood : No. As per the budget papers, our estimated outcome is $5.032 billion in 2013-14 and $5.032 billion in 2014-15.

Senator FAULKNER: So, for the organisations, the bodies, NGOs and so on that Senator McEwen was addressing, in terms of their planning over the past couple of years are you suggesting to us that those organisations have no need for any reassessment of their planning strategies and their operations as a result of the 2014-15 budget? Is that what you are saying to us?

Mr Wood : I could not speak for the NGOs. I was just referring to the overall funding envelope. On our website we note that global NGO program funding is forecast to increase. We note an increase in 2014-15 from 2013-14.

Senator FAULKNER: Can you say that again.

Mr Wood : As per the details on our website, funding to the global NGO programs is forecast to increase in 2014-15 from 2013-14 levels.

Senator FAULKNER: Let us move to financial year 2015-16.

Senator DASTYARI: Are you saying 2014-15 in Budget Paper No. 2? What are you referring to? You said it is going to increase? Are you saying the overall budget is going to increase? You said, no, the international component is going to increase.

Mr Wood : The overall ODA budget remains the same, as stated in Budget Paper No. 1.

Senator DASTYARI: Exactly. That is what I thought. I thought you just said it increased.

Mr Wood : Within that, as Mr McDonald mentioned earlier, there are lots of ups and downs. One of the areas of ups, of increases, is the global NGO program.

Senator DASTYARI: I thought you meant the overall ODA.

Mr Wood : No.

Senator DASTYARI: That did not match with my understanding of the budget papers.

Senator FAULKNER: What is the Department of Foreign Affairs and Trade saving that is represented for 2014-15 in Budget Paper No. 2? I think—and I am just going on memory here—it was $601 million or $602 million in the first year. This was dealt with, yes. $601 million; is that right?

Senator McEWEN: Yes—

Senator FAULKNER: Unfortunately, Senator McEwen, although it is sad you are not at this stage the Minister for Foreign Affairs—and I appreciate your acknowledging that those figures are correct—but let us hear it from you, Mr Wood.

Mr Wood : On page 121 of Budget Paper No. 2 under the measure Official Development Assistance Reprioritised Funding there is a saving of $601.3 million.

Senator FAULKNER: Is that in 2013-14?

Mr Wood : This is in the 2014-15 year. This is the total saving in 2014-15.

Senator FAULKNER: Is it? I thought that was 2013-14. Anyway, what is it for the next financial year? Is it about the same figure?

Mr Wood : On page 121 of that same measure, in 2015-16—

Senator FAULKNER: Is that $1.2 billion?

Mr Wood : Correct, it is $1.222.6 billion.

Senator FAULKNER: Is 2016-17 around $1.6 billion?

Mr Wood : It is $1.689.2 billion.

Senator FAULKNER: Once we are out at 2017-18, is it somewhere between $3 billion and $4 billion? Give us the figure.

Mr Wood : It is $3.520.6 billion.

Senator FAULKNER: What is that in total over the forward estimates period?

Mr Wood : The Budget Paper No. 2 measure total is $7.6 billion over the five years. There is also the saving in the 2013-14 year.

Senator FAULKNER: So, it is $7.6 billion—

Senator DASTYARI: Plus the $650 million on 18 January that they have already cut.

Senator FAULKNER: But Budget Paper No. 2 says $7.6 billion over the forward estimates. Is that a fair reflection or do you want to add another year into it?

Mr Wood : No—

Senator DASTYARI: Should add the $650 million.

Mr Wood : The $7.6 billion is over the five years.

Senator FAULKNER: So, it is not the forward estimates period, it is effectively a forward estimates plus one year period?

Mr Wood : It is 2013-14 to 2017-18. For the period 2014-15 to 2017-18 it is about $7 billion.

Senator FAULKNER: Yes. About?

Mr Wood : Correct.

Senator FAULKNER: Before you said it is about $7.6 billion. When you are losing $7 billion what is another 0.6 down the drain, I suppose.

Mr Wood : The total saving over five years is $7.6 billion.

Senator Brandis: Senator Faulkner, when you were in charge of the nation's finances we lost $667 billion.

Senator FAULKNER: Having established that, let us go back to where Senator McEwan was—and I am sorry to interrupt. Having established that, Senator McEwen was asking what impacts there were on the ground. It stretches credulity light-years beyond breaking point for anyone to suggest—and I am not saying that this suggestion has been made—that there are no impacts in terms of programs, impacts on communities, receiving aid, impacts on NGOs and other organisations delivering aid, and the like. That is where Senator McEwen's questioning was at. I just wanted to apply a little context to the picture as Senator McEwen's question is answered.

Senator Brandis: Senator Faulkner, regardless of your gallant attempts to ride to the aid of Senator McEwen, the evidence from the official is the evidence from the official. The answer he has given as to the annual spend on the ODA budget is as he has said.

Senator FAULKNER: Thank you for your editorialising.

Senator Brandis: You cannot improve the evidence by aggressive questioning. That is what I am saying to you.

Senator FAULKNER: No, my questioning is not what the evidence is, but we have established that there is a $7.6 billion—

Senator Brandis: The witness has established figures. You have not established that at all.

Senator FAULKNER: We have.

Senator Brandis: The witness has given you the figures.

Senator FAULKNER: Maybe you should reflect on the evidence provided by the officials.

Senator Brandis: The witness has given you the figures and that is the evidence.

Senator FAULKNER: They have indicated over a five-year period—

Senator Brandis: Your questions are not evidence. What the witness has said is evidence.

Senator FAULKNER: Correct.

Senator Brandis: What you make of it, what political point you want to make of it, how you want to spin it or represent it is a matter for you as an aspect of your political practice.

Senator FAULKNER: Of course.

Senator Brandis: The figures are the figures. The only relevant figures are the figures that have come from the official.

Senator FAULKNER: Precisely, and the officials have just told us that over a five-year period there is a reduction in overseas aid of $7.6 billion. They are not my words, they are from the officials.

Senator Brandis: The officials have told us that the aid spend will continue to increase and will be in line with CPI according to the budget projections and consistent with the coalition's election commitment within the forward estimates period.

Senator FAULKNER: The officials, as you just heard if you were listening—and I am sure you would, Senator Brandis, because you treat your responsibilities seriously at the estimates table—have said there is a $7.6 billion reduction over the five-year period for the four years forward estimates period plus the current financial year, as I understand it. Is that correct? Is it the current financial year or is it the year after the forward estimates period? That is the one thing that is not clear to me. I think 2013-17 is a $7.6 billion reduction. If you can confirm that, Mr Wood, that I have got the years right and the figures right, I would appreciate it.

Mr Wood : You are correct.

Senator FAULKNER: Thank you.

Mr Wood : The table in Budget Paper No. 2 covers the period 2013-14 to 2017-18.

Senator FAULKNER: I appreciate that. Thank you. My colleague is going to follow.

Senator FAWCETT: Can I confirm that the out year figure that you are comparing against was a projected spend, it was not actually money that the ALP had delivered? It was a projected spend.

Senator DASTYARI: It was called a savings in the budget.

Senator FAWCETT: Given the $5.7 billion cut, which occurred in the last 15 months of the previous government, were they on track to achieve their projected spend in any case?

Mr Wood : The reduction, particularly in 2017-18, was from the projections, as you will be aware, from the 2013-14 Mid-year Economic Fiscal Outlook, MYEFO. There was a projection made by the previous government that the 0.5 GNI target will be achieved and the aid budget would be at the $9 billion level.

Senator DASTYARI: Let us go through a few things. Let us go back to some of the conversations we had a little earlier about this. There was the $650 million cut. The $7 billion we have talked about has not been including the figure of $650 million that was cut on 18 January; is that correct, Mr Wood?

Mr Wood : No, unfortunately not. The $7.6 billion figure includes the 2013-14 year. I think the figure you are referring to is the 2013-14 cut. It is inclusive of it.

Senator DASTYARI: So, there was a $650 million cut that was on 18 January; is that correct?

Mr Wood : I will take on notice that specific date, because as you know—

Senator DASTYARI: Yes, I can give you the date. There was a release by the minister on 18 January. There is no point taking that on notice. We can argue whether it was the night before or in the morning, but on 18 January a revised table was provided of where funding was to be allocated for the remainder of this financial year. Is that correct, Mr Varghese?

Mr Varghese : I think that is correct, but I would have to ask—

Senator DASTYARI: It is only $650 million. We may have not noticed.

Mr Varghese : You are talking about a cut to projected 2013-14 spending, as opposed to actual—

Senator DASTYARI: No. We have been through this debate before, on 21 February. I know Mr Brandis is very keen for us to speak about the record. We decided at the time that we were not going to get into a semantic debate about whether or not it was going to be called a projected saving or a projected cut, because that was just a debate about words. What we both agreed at the time was that there was a projection of that money being spent, that organisations, countries and groups had been advised that was going to be spent, and seven months into that financial year that $650 million was cut.

Senator Brandis: Senator Dastyari, the problem you and Senator Faulkner have is that what you are doing is you are taking projections made by the previous government and treating them as if they were actual spends.

Senator DASTYARI: Not at all.

Senator Brandis: If I may finish—

Senator DASTYARI: No, Mr Brandis, you are wrong about this.

Senator Brandis: Please do not interrupt me. You are treating them as if they are actual spends and then, by your process of reasoning, you are saying that the aid budget has been reduced. The problem with the projections of the previous government is that they projected budget surplus after budget surplus and they delivered budget deficit after budget deficit. The only Australian government never to have delivered a surplus budget in its entire life, although it kept projecting a surplus. The process of reasoning that says because we projected that in years to come the aid budget spend would be thus—and in fact, on the figures that Mr Wood has given you, what it will be in an actual dollar amount is thus—tells us absolutely nothing. On the form of the previous government there was absolutely no basis to believe that the projections would be realised. What Mr Wood has been able to tell us is that in each successive year the amount spent on ODA will increase. It will increase and in the out years of the forward estimates it will increase to CPI.

Senator DASTYARI: Mr Varghese, as you are aware, on 18 January there was a revised list. I do not want to have the debate because we have already had this debate about what we want to call it. A revised list was provided and the revised list from the projected list that was provided at the budget had, in the final column as a total calculation, $650 million less projected expenditure on 18 January.

Firstly, I want to say at the outset that I completely respect and understand the incredible difficulty that must be at an administrative level while going through the process of a consolidation of a department with the DFAT department being moved into the Department of Foreign Affairs halfway through a financial year of a reallocation process. On 21 February, I asked you—and we had a long several-hour debate about this at a Senate committee meeting in Sydney—about all the information that had been provided at that point in time was the country by country list and you were unable to provide for the same financial year that we were halfway through what programs were going to be cut. When we last asked you about this, at the last round of Senate estimates, you advised us that that information was still not available.

Mr Wood, through questions on notice, has very kindly provided a table which showed what had been committed and what had not been committed. What we have been told so far is that some areas where the committed funds extend the allocation for that budget for that year we are looking at rolling things over, which is completely understandable and reasonable to meet that target. The question I want to ask you is: there is less than 30 days left in this financial year. Surely we now know where our $5 billion is being spent and what is the $650 million that is being cut. Can we have that tabled?

Mr Varghese : I will ask Mr McDonald to address the details, but if you are asking do we now have the details country by country of the cuts that were made in order to meet the savings target announced by the government in January, the answer is, yes. It was placed on the website of the Department of Foreign Affairs and Trade in early May, I think. We are very happy to share a copy of that with you, if you have not seen it.

Senator DASTYARI: So, that is now a program by program breakdown of what has been cut to reach the $650 million?

Mr Varghese : It is a country by country breakdown.

Senator DASTYARI: No, we know the country by country breakdown.

Mr Varghese : Not just the aggregate figure, it goes—

Senator DASTYARI: We had the country by country breakdown on 18 January.

Mr Varghese : I understand that. This is the information that you have sought from us at our last hearing that we were not in a position to provide, but which we subsequently put on the website in early May. If you have not seen it, we are very happy to table it.

Senator DASTYARI: Can you table a copy now?

Mr Varghese : We certainly can.

Senator DASTYARI: That provides a list at the moment of every program that has been cut. In the case of every program that has been cut on that list, have we obviously notified the country?

Mr McDonald : Yes.

Senator DASTYARI: Have we notified the organisations?

Mr McDonald : Yes.

Senator DASTYARI: Have we searched for replacements for where our cuts are going to be?

Mr McDonald : I just want to add something here. You will recall this, because we had this discussion at the inquiry, when the media release went out from the minister on 18 January, the reduction from the actual expenditure the year before was $107 million. We had that discussion around the point you just made, around the $650 million. What we have done since then—and we talked about at the time that we had notified our posts to have discussions with our partners. As I said earlier, I did a number of multi-lats and NGOs myself.

Senator DASTYARI: I can appreciate the difficulty of doing that halfway through a financial year. I assume it is not an easy process.

Mr McDonald : Yes. As you know, it is the second time this has happened. What we have done since—and this is the way we always do our budget; I think we have talked about this before as well—is that we have a discussion with our partners about the priorities within that budget envelope and where those priorities should be. And equally in relation to the reductions last year where we should make those reductions to minimise the impact. You will recall we also talked about some programs being deferred to the following year, some as you talked about—

Senator DASTYARI: That is outlined in this table—

Mr McDonald : In here you will see that within particular countries we have put the same information in relation to the content that we did in the previous reprioritisation, and we have our division heads here who can talk more about the detail if you wish.

Senator DASTYARI: We will be keen to talk about it when we get through to the next section, when we actually start going through this individually. If we are able to table it, that would be fantastic. For the next financial year, so for the year that is beginning on 1 July, so far there is the country by country breakdown. I just want to get my head around this, and I know there has already been half a discussion about this. There seems to be two separate things, or maybe I am misunderstanding this and there is going to be one event. I was of the opinion that in a few weeks the minister was going to outline the table that you are talking about for next year. Is that now what is happening on 18 June or is the speech separate to that? Or is that a decision that has not been made yet?

Mr McDonald : If I could just clarify, there are two things that are different here. In relation to the actual allocations of the budget for next year there is a table on our website that outlines, for example, in Vanuatu on 18 January—

Senator DASTYARI: I have this table. Are you talking about the table from budget night?

Mr McDonald : No, I am talking about on our website, so similar to what we did on 18 January, the table you—

Senator DASTYARI: Hang on, we are going to get to it.

Mr McDonald : Okay.

Senator DASTYARI: On that table—

Mr McDonald : So, there is a table that has two lines on it, one being the figure of 18 January in terms of the reprioritisation. If I take Vanuatu, for example, on 18 January that figure was $40.9 million and the estimated figure for next year is $41.9 million. It has increased by $1 million. When you look at the website, you might recall we had this discussion—

Senator DASTYARI: I am looking at my table. Are you saying that the 2013-14 for Vanuatu, as at the time of the budget, was $47.1 million? Did that get cut to $40.9 million?

Mr McDonald : No, sorry, I will just try and go slowly, because it is complex.

Senator DASTYARI: No, I know the figures are. You just seem to have taken out the 2013-14 budget figures.

Mr McDonald : No. There are two tables. One is DFAT expenditure on ODA and one is whole of ODA. Other government departments and what their contribution is. Sorry, I was referring to the DFAT specific Vanuatu—

Senator DASTYARI: Given the Vanuatu number. What is your Vanuatu number?

Mr McDonald : Whole of government; I will ask Mr Wood.

Mr Wood : The estimated outcome for the DFAT country, regional and global program for 2013-14, as per our website, is $40.9 million. The total ODA for 2013-14 is $60.1 million.

Senator DASTYARI: But when we are saying 'total ODA' the $20 million you are including does not come out of your $5 billion, does it?

Mr Wood : No, that does include it. The total figure of $60.1 million includes spending by other government departments or an allocation from areas outside the country program, for example, the scholarship scheme or the Australian NGO Cooperation Program. It is the total ODA per country.

Senator DASTYARI: It is the total Australian ODA by partner country region. That ends up totalling $5 billion. I see what you mean. Does that include the allocations that are provided through other agencies in the allocation process? Is that correct?

Mr Wood : Correct.

Senator DASTYARI: So, the amount that you are responsible for the administration of is $40.9 million in Vanuatu?

Mr McDonald : This year, yes.

Senator DASTYARI: Next year in Vanuatu is it somewhere around $41 million?

Mr McDonald : $41.9 million.

Senator DASTYARI: So, going back to the question that I had, are you saying that the information for this current financial year, which ends in 30 days, is provided in the table as the breakdown that would have been if that was the initial allocation at the time of the budget?

Mr McDonald : I am just getting that table copied for you. What I have done is provide you with the pages off the website. They go through each in terms of the actual expenditure last year versus the 18 January figure, as you and I would refer to it—the revised 2013-14 figure.

Senator DASTYARI: Are you saying this table gives us a breakdown by projects?

Mr McDonald : It is probably best if we go through one.

Senator DASTYARI: Okay.

Mr McDonald : As I said, if you require more detail in relation to the explanation—

Senator DASTYARI: You are saying that goes through this year; that does not yet go through next year. The question becomes, for next year—I am just getting my head around it; I know the Foreign Minister's speech is on 18 June—is that what she is doing for this information or is that separate from the announcement that this information would be released sometime in a few weeks?

Mr McDonald : With the country programs—that is probably the best example—the budget allocation has been set for next year. Within that—and if you look at the country page now on our website—you will see what is proposed to be delivered next year in relation to that country. What will change after the policy is announced is the emphasis in relation to that. If I give you an example.

Senator DASTYARI: Yes, please do.

Mr McDonald : Our thematic areas are education, health, women and gender, infrastructure, et cetera. Each year we do a breakup of where the expenditure is against each of those thematic areas. We do that across the program after we have added all of that up. That will be clear—

Senator DASTYARI: Why was that not available at the budget?

Mr McDonald : Because the government is yet to announce its policy and the policy will impact on the expenditure within the thematic areas.

Senator DASTYARI: Can you explain this to me. In terms of the decision-making processes—and I assume this is the case, but correct me if I am wrong—based on advice in conjunction with the department, which is completely understandable, when a global decision of, say, $5 billion, which is the figure we are using, gets set, at that point the government then goes through a process to make a decision about what the allocation is going to be to each of the line items. It starts off being countries, then it becomes multilaterals and group organisations. That is obviously done at a government level. I assume that is obviously a decision of government. Of course, Mr Varghese and others, when we are talking about a figure as large as $5 billion, there is a fair bit of input, policy development and prioritisation. All of that is completely understandable. Is the government then also involved in making the decisions at that one level below or is that when it is effectively handed over to the department or a different process? What I mean is this, we talked about the figure of $40.9 million for Vanuatu. Once the decision of the overall allocation is made, is it then a matter for the department to work out how you spend that or is that figure set in conjunction with what programs you want to do in Vanuatu?

Mr McDonald : This is where the policy is important. So, either under the previous government or this government, there is an overarching policy for the aid program that we need to align our expenditure within countries with. It is informed by the policy, if you like. There are then discussions with the partner governments, because the partner governments will have their own priorities as well, and we agree with those priorities, which are always going to be consistent with the government's overarching policy.

Senator DASTYARI: That all makes sense, but once you decide on a region is there a formula? Putting aside specific cases like Papua New Guinea and others where there were other arrangements in place. What I cannot quite understand is, how do you come to a decision of, say, Vanuatu for $40.9 million and Samoa for $23.1 million? Is there a formula that gets applied once you decide on a region? You cannot do it in the absence of the programs or do you do it in the absence of the programs?

Mr McDonald : As you alluded to earlier, there is a budget process we go through where the department provides advice to the government and then the government makes a decision on where it allocates that funding.

Senator DASTYARI: I am not asking for what the advice is. To be perfectly clear, I am not permitted to do that and you do not have to answer if I did. When you are saying that you provide the advice, that is obviously done in the context of what it is you want to do in that country. A lot of it is because you have done it in the past. You are not doing this for the first time. It is not the first time you are about to spend $40 million in Vanuatu. You have done other projects. Is the process then that before you develop the country by country list you go away and work out how you want to spend the $5 billion, which is both the country figure and the below figure, take that to the government budget process, and then they tick off on it? Or do they only tick off on the country part and then you are free to spend it within the country through whatever the departmental process is?

Mr McDonald : The decision on the allocations is made by the government, not the department.

Senator DASTYARI: Even down to that next level?

Mr McDonald : When you say the next level, I do not quite know what you mean.

Senator DASTYARI: What I mean is this. On budget night the decision gets made that Vanuatu will have—this is the revised budget, I am just using this figure as a random example—$40.9 million and next year it is $41 million. But let us say it is $40 million.

Mr McDonald : Yes.

Senator DASTYARI: When the $40 million gets signed off, at that point do you know what that $40 million is for?

Mr McDonald : We know it is for Vanuatu.

Senator DASTYARI: Yes, but you are not about to hand over $40 million to some bloke in Vanuatu.

Mr McDonald : No, so what happens—

Senator DASTYARI: It is a tax saving; you would probably do well on it.

Mr McDonald : This is my earlier comment about how important the policy is. We will do investment plans with each of our major countries and we go through and say, 'Okay. Let's just take it that the Australian government's policy is around women empowerment and gender.' In terms of our overall policy in that regard, how is that accounted for in Vanuatu? What are the priorities within Vanuatu? As you can imagine, the policy needs within countries will differ depending on their own circumstances. We will then have a partnership agreement with that country that would normally be provided at that point to, for example, the minister to sign off on. I am not sure if you were here earlier, but there was a discussion around PNG.

Senator DASTYARI: Mr McDonald, are you actually saying that you allocated $5 billion of funding to different countries without a policy?

Mr McDonald : No.

Senator DASTYARI: There is no policy. You said it yourself. Policy is so important, but the government has not decided its policy yet.

Mr Varghese : Can I just make one observation, and it may or may not be accurate. The fact that those numbers look very precise—40.9 and whatever point one—may lead you to believe that it is a ground-up process rather than a top-down process. We have a bucket of $5 billion. How you allocate that $5 billion has to follow the policy framework, which is why the minister's policy speech is going to be very important.

Senator DASTYARI: Shouldn't that have been done before you allocated $5 billion? You know where I am going with this.

Mr Varghese : Let me try to explain why it is top-down rather than ground-up. You have your $5 billion bucket. In deciding how to allocate it, you firstly start with your policy framework. So, what are your geographic priorities, multilateral priorities, sectoral priorities and so on. You then sit down and work out how those priorities are going to be reflected with numbers across bilateral and multilateral programs and then you sit down with your partner countries and work out what you can afford within that envelope.

Senator DASTYARI: You firstly start with a policy framework—they are your words—but Mr McDonald also said the importance of a policy framework, which sounds completely understandable, especially doing top-down, but we do not have a policy framework for another two weeks and we have allocated $5 billion. That is probably the biggest single expenditure in the budget, and you are saying we did it outside the context of a policy framework and the process starts with a policy framework.

Mr McDonald : It has not been done outside of the policy framework. The government has made a decision on the allocation of funding.

Senator DASTYARI: But you just said—

Mr McDonald : If I can finish.

Senator DASTYARI: I am sorry, go ahead.

Mr McDonald : If you look at the country programs, for example, that are on the website now—if you go to Vanuatu and have a look at that country page you will see that we have detailed the sorts of activities that will be done and undertaken within the country for that funding. The other thing is the actual policy framework will be out in the public domain before the budget takes effect.

Senator DASTYARI: But the allocations have already been made.

Mr McDonald : The allocations are always made through the budget process.

Senator DASTYARI: But normally we have a framework that you base the budget process around. You said, Mr Varghese, that you firstly start with a policy framework.

Mr Varghese : You are assuming that until the policy framework is announced there is no policy framework. The minister is planning to make a major policy speech which will explain the policy framework.

Senator DASTYARI: So she believes the current policy framework is wrong?

Mr Varghese : Sorry?

Senator DASTYARI: She must disagree with it. Why would she change it?

Senator FAULKNER: What is the existing policy framework? When was the existing policy framework established?

Mr Varghese : The 2013-14 budget reflects the policy framework that was in place when that budget was framed, revised by the policy framework of the incoming Abbott government.

Senator FAULKNER: That policy framework was in the ministerial statement, was it not, brought down and tabled as an official ministerial statement at the time of the 2013-14 budget? This is where we were before lunch. That was the policy framework, was it not? It was a ministerial statement. The then minister was Senator Bob Carr and that was the policy framework. Is that correct?

Mr McDonald : There was a policy put out by the previous government called Effective Aid. That came out during the financial year. I cannot remember exactly what time during the year, but there was a policy framework out and it was called Effective Aid.

Senator FAULKNER: Effective Aid: Helping the w orld's poor was the name of the ministerial statement that was brought down in the previous budget as a budget paper in 2013-14 by Senator Carr. That was its name, Effective Aid: Helping the world's poor.

Mr McDonald : That is the policy I was just referring to.

Senator FAULKNER: Is that the most recent policy statement?

Mr McDonald : No. I think in relation to the policy directions of the current government there has been a number of speeches by the minister, most recently the Magna Carta speech, talking about the importance of economic growth and the emphasis in the program around empowering women, education and health, infrastructure and aid for trade. The policy directions have been articulated in a number of speeches. The policy will be consolidated in one speech and released in two weeks.

Senator FAULKNER: So, the department scrambles around finding whatever statements that the Minister for Foreign Affairs might have happened to make who knows where in a speech or two, and that is the existing policy framework that the department is working on? That would fill anyone full of confidence. We have had massive cuts to the aid budget basically without any policy framework at all.

Senator DASTYARI: And that is where we should be starting.

CHAIR: I do not know that you can draw those sorts of conclusions.

Senator FAULKNER: I have drawn that conclusion on the basis of the evidence that has been presented.

CHAIR: You have been holding the floor for over an hour now.

Senator DASTYARI: You have been very fair with the time, Chair.

CHAIR: Yes. I know I have been very fair with the time, indeed, so it may be time for us to move on. I would be most grateful if you could wrap up.

Senator EDWARDS: I think he has wrapped up.

Senator FAULKNER: If I interrupted Senator McEwen, I apologise.

CHAIR: I will call Senator Edwards.

Senator EDWARDS: I have a couple of questions on the aid overview relating to health issues. What support does the aid program provide to product development partnerships?

Mr McDonald : I will ask one of my colleagues to come up and answer that.

Mr Exell : There is an existing program for product development partnerships underway at the moment. Ten million dollars was allocated for the aid program through 2013-14.

Senator EDWARDS: Was that $10 million?

Mr Exell : Correct.

Senator EDWARDS: So $10 million, but support is not just measured in dollars.

Mr Exell : Correct.

Senator EDWARDS: What other measures are there?

Mr Exell : The product development partnerships were targeting particular research around malaria and TB. They were to the organisations called Aeras, Foundation for Innovative New Diagnostics, Medicines for Malaria Venture and the Global Alliance for TB Drug Development.

Senator EDWARDS: Is there anything that the Australian government is doing in supporting polio eradication and with that, obviously, the routine immunisation for polio?

Mr Exell : There is quite a significant amount of work going on in the space of polio.

Senator EDWARDS: You did not mention it.

Mr Exell : I thought you were referring specifically to the product development partnerships work.

Senator EDWARDS: I am sorry. I am interested to find out about polio. It is a very big issue. Where does that fit in with regard to aid, and is it an area that we are ramping up our participation over and above what we have previously been involved in?

Mr Exell : Correct. The steps towards eradication of polio are something that has had quite a bit of interest recently. The Prime Minister recently spoke about this at a Rotary event and a Rotary meeting. There has been good progress over the last 10 years, or indeed a bit longer, towards the eradication of polio. More recently there has been some concern with some outbreaks in a number of countries. Australia has a long and strong history of support for polio eradication. To this end the government announced an additional $100 million over the next five years for polio eradication and to provide routine immunisations.

Our support has actually been considerable for a number of years. The Prime Minister announced specific support to the GPEI. That is a fund administered by the World Health Organisation of $20 million in the coming year. In addition, we have been providing support for some time to UNICEF and indeed the GAVI Alliance to look for some support and ongoing programs for immunisation in the countries affected.

Beyond that, Australia's support for health systems more broadly is a very important part of eradicating polio, because it is that ongoing support through routine immunisations delivered through functioning health systems that actually averts the deaths for a relatively low cost in order to treat it for the long term.

Senator EDWARDS: Is this an initiative of the Australian government or are we part of—

Mr Exell : We are part of a global effort on this.

Senator EDWARDS: What part are we playing in terms of the global effort? I am not looking for you to measure it down to the last percentage, but are we taking a leading role in this?

Mr Exell : I would have to take on notice the exact percentage, but I think for some time we have provided the leadership role, both in research domestically in Australia and indeed in our funding, but I cannot give you the exact percentage.

Senator EDWARDS: The point you have made and outlined is that we continue our product development partnership commitment, but in addition we are now supporting a polio eradication and the immunisation of people in other countries. In what regions is that being rolled out?

Mr Exell : Most recently it has been targeted around Afghanistan, Pakistan and Nigeria, where there has been concern about the outbreaks. More broadly it is in Africa. The South-East Asia region and the Western Pacific regions have been declared polio free—Western Pacific since 2000 and South-East Asia since 2014.

Senator EDWARDS: How are we delivering it on the ground? Are we involved in delivering it on the ground or are we contributing to different agencies?

Mr Exell : Correct. We are supporting a global effort. Through that trust fund of GPEI, which is administered by the World Health Organisation, some of that funding goes to organisations like UNICEF, which actually do the work on the ground.

Senator EDWARDS: So, they have enjoyed an increased allocation of funds from the Australian government in recent times?

Mr Exell : That is correct, particularly with the recent announcement from the Prime Minister.

Senator EDWARDS: Can you give me some idea as to what the cash commitment from the Australian taxpayer is in terms of what it used to be and what it is now?

Mr Exell : I can give you some of the specific contribution to GPEI. To date it is $30 million. The Prime Minister has specifically announced $20 million in 2014-15 years. More broadly, our contributions to WHO is for $20 million, to UNICEF it is $34.1 million and, indeed, the GAVI Alliance is $52.5 million. Those last three figures are not specifically for polio. They are core contributions but include polio work.

Senator EDWARDS: You have said earlier that it was up over $100 million now.

Mr Exell : Correct. The commitment from the Prime Minister was for $100 million over the next five years.

Senator EDWARDS: That is a good news story. I have a father that suffered from polio in his early childhood years, and it is obviously something that is of great concern to try to stamp it out around the world. I would like to move to gender issues around the world and our aid.

Mr McDonald : Ms Sidhu will be able to help you.

Senator EDWARDS: I have a couple of general questions, and obviously there are areas that we have heard about earlier this morning with different gender issues with regard to violence against women in different cultures and what have you. In that context and in our global responsibility to stamping out any kind of violence, sexual or otherwise, what are we doing?

Ms Sidhu : We are doing quite a lot both in distinct programs and mainstreamed across the world. Ms Klugman, who is here, will be able to fill you in on the specifics of what we are doing in the Pacific. More generally, we have mainstreamed gender through our aid program for quite some time now. The gender aid programming that we have is built around three pillars, which is, firstly, women's economic empowerment, supporting the economic empowerment of women, supporting women in leadership, both in the community and at the political level and, finally, eradicating and eliminating violence against women. Obviously those three are interlinked. Where women are more economically empowered, where they play more leadership roles in communities, the level of violence tends to also reduce. We have specific targeted programs on violence and we build those across our country programming across the aid program. We also contribute to a large number of UN programs, specifically through UN Women.

Senator EDWARDS: Is that the primary agency that you work through?

Ms Sidhu : Yes, that is the main agency. We contribute around $8.2 million a year in core funding, but we also contribute through specific programs that we run. The other multilateral programs, such as the World Bank, also have a very significant set of gender programs as well.

Senator EDWARDS: How do they make a commitment? Is it in cash contributions?

Ms Sidhu : It is a combination. A lot of those are projects that they carry out. The Australian government might work in coordination with a World Bank project and some other donors on a project on the ground. So, we contribute a combination of expertise and money to the project. Our flagship program is the Pacific Women Shaping Pacific Development run across 14 Pacific island countries. Some $320 million has been allocated over 10 years. I might hand over to Ms Klugman, who can tell you a bit more about that program.

Senator EDWARDS: Before you do, is that an equal allocation over 10 years, $32 million a year?

Ms Sidhu : I think it is phased separately.

Senator EDWARDS: Perhaps if you could flesh that out for me initially, and then I am very interested to know what we are actually doing to deliver the program.

Ms Klugman : I would start off with the observation that Foreign Minister Bishop has a particularly acute focus on the Pacific island countries and development in the Pacific. She has a very strong interest as well in women's issues and women's equality. If you add those two factors together you can imagine that Foreign Minister Bishop is determined to pursue a very forward leaning and front-footed series of aid activities in the Pacific aimed at women.

She has made it clear that she is interested in increasing women's participation in the formal economy. She is interested in reaching out and ensuring that Australia makes a difference to the larger number of women in the Pacific who are not engaged in the formal economy, including through initiatives that involve financial inclusion and other issues. She has made it very clear that Australian support for efforts to increase the numbers and percentages of women in decision-making positions in the Pacific is a particular concern for her.

Senator EDWARDS: Is there any particular area that we are targeting first?

Ms Klugman : I think you are aware of the background in the Pacific. Women and girls face very substantial challenges. Women comprise less than five per cent of parliamentarians compared with a global average of around 20 per cent, and women occupy only a third of formal sector jobs. The rates of violence against women and girls in the Pacific is particularly high and especially disturbing. The keynote Australian response to this, not the only response but the key Australian response, has been through this Pacific Woman Shaping Pacific Development program, affirmed by Minister Bishop. It was announced in 2012.

You asked about the sequencing of funding under that and the development of projects under that. At this stage only a small proportion of that $320 million over 10 years has already been programmed. It is approximately 18 per cent. The great bulk of that activity is still ahead of us. It gives a great opportunity for us to design the program and move it in the direction that fits the priorities of the government. One of those is increasing women's participation in the economies of the Pacific island countries. I would flag that as a particular focus. Law and order and violence against women is the other particular focus that I would flag.

There is a range of quite creative ways you can get at that issue. I recall when Ms Bishop visited Papua New Guinea earlier in the year she went along to a large fruit and vegetable market in Lae, which is effectively the commercial capital of Papua New Guinea. She toured that substantial market with some Australian Federal Police who had recently been deployed to support the Royal Papua New Guinea Constabulary in policing in Papua New Guinea, with a particular focus on improving safety in markets so women felt that they were able to engage through markets, which is an extremely important part of the informal and transitional economy in those countries. So, women are able to feel safe enough to be stall holders, that they have access to basic banking services, so they can protect their money, and that the transport arrangements that are available to get them to and from the market are acceptable and safe enough to allow them to engage in economic activity.

Senator EDWARDS: Do we roll out a law enforcement focus across those Pacific nations?

Ms Klugman : Ms Sidhu mentioned UN Women and the Pacific Women Shaping Pacific Development program. That activity, the market focus, is being managed by UN Women. It is something that they are starting in Papua New Guinea and a few other sites, and they are moving it through other parts of the Pacific.

Also on Papua New Guinea, can I mention another example of initiatives funded by Australia under our Pacific Women's initiative, and that was funding the PNG Family and Sexual Violence Case Management Centre, again in Lae. That was announced by Foreign Minister Bishop when she was there. That is to ensure that women and children experiencing violence in and around Lae receive critical services, including medical, shelter and legal support. That component was valued at $3 million. It is a program in development. UN Women is a key partner.

Senator EDWARDS: So, the UN Women are actually delivering this? Are they in charge of the programs in all the subregions of the region?

Ms Klugman : They are. We are by far and away the biggest donor.

Ms Sidhu : One more aspect is the role of the Ambassador for Women and Girls. Natasha Stott Despoja has also made visits to PNG and a number of countries in the Pacific and has drawn attention to the question of violence. She has personally visited a number of facilities not just in the markets but also units that have been established in local police stations to allow women safely to report sexual and other violent crimes. She has brought an additional focus to the program and the work that we have done in those countries.

Senator EDWARDS: I think the Chair wants the call for a moment.

CHAIR: I would like to just call attention to the presence in the gallery of a delegation from the Chinese National Audit Office to Parliament House. The delegation comprises 17 people, and the delegation has come to the Institute for Governance and Policy Analysis at the University of Canberra for a period of five months from the end of May until late October 2014. The object of the program has been to introduce staff from across China to the theory and practice of public sector audit in Australia. This process you are observing today is an accountability process of the government and the bureaucrats to the members of the Australian Federal Parliament. We welcome you here and trust that you find this experience interesting.

Senator EDWARDS: I reiterate the chair's welcome and thank you for taking the interest in coming along. Now, if I could return to the ambassador, Natasha Stott Despoja. Does she have an interaction with the United Nations? Is she involved in those meetings and the service delivery and ensuring that they are actually fulfilling the charter of the money, the $320 million, that we have allocated to this? She is a very capable woman and I strongly endorse her employment to that role.

Ms Sidhu : Thank you. I will pass that on. The purpose of the Ambassador for Women and Girls, as is the purpose of all the thematic ambassadors that we appoint, is to draw attention to a particular issue, to advocate for that issue on Australia's behalf and to promote Australian government policy and aid programming where relevant. That is essentially the terms of reference for the ambassador's appointment.

She engages bilaterally, regionally and also with the UN as needed, as a representative of the Australian government. She was part of the delegation for the Commission on the Status of Women in early March this year, along with the Minister Assisting the Prime Minister on the Status of Women, Senator Cash. She participated in quite a number of events in that one week in the UN, speaking at five events where she was either the chair or a speaker, conducting bilateral meetings with other ambassadors for women or ministers for women with 17 other countries—she had a very busy program—and promoting the Australian approach.

She also engaged with a number of senior UN staff and special rapporteurs on a whole range of issues from sexual violence and conflict to family and population issues and on development more generally. That is how she engages with the UN. In terms of how we manage programming, such as the Pacific Women program or other programs through the aid program, that is done through the department.

Ms Klugman : There is one more point that might be of interest to the representatives of the Senate, including the women representatives of the Senate, and that is that our Ambassador for Women and Girls, Ms Stott Despoja, will represent Australia at the next Pacific women policymakers dialogue, which is planned for 18 July in Samoa. This is funded by Australia under the Pacific Women Shaping Pacific Development. It is one of the early initiatives of that and it tries to bring together parliamentarians and possible future parliamentarians from Pacific island countries with members of Australian federal and state parliaments and other women policymakers in Australia. I think it is a network very well worth supporting.

Senator EDWARDS: I agree. I congratulate you on the traction that you have got in the short time that you have been there. The $320 million is a lot of money, but over 10 years I feel sure that the taxpayers will see value with people of the calibre of former Senator Natasha Stott Despoja. Thank you very much, Chair.

CHAIR: We have now reached 3.30pm.

Senator STEPHENS: I have a question.

CHAIR: A very quick one.

Senator STEPHENS: It is to Mr McDonald. Mr Varghese suggested that this document which was tabled was available on the website, but we cannot find it. Can you please direct us to where it is?

Mr McDonald : The reason I have tabled that document is because it is not on the website. The website has been updated with the new budget material that has just been put on it. That is the reason I have asked for it to be tabled here, so you have everything that was on the website. Each year when the new budget is released the website is updated on the budget night.

Senator STEPHENS: Was this information provided to the committee in response to the questions on notice from the additional estimates?

Mr McDonald : When the questions on notice were put in, this was on the website and the committee was referred to the website. But the reason I have asked for it to be tabled on the assumption that you may not have seen it.

Senator STEPHENS: When was it taken off the website?

Mr McDonald : That would have been budget night. Basically the site is always updated on budget night with the new budget information. That is why I wanted you to have that. It is actually a copy of every page. I can walk you through it, but it is every page. I asked for every page to be copied for the committee.

Senator FAULKNER: Is that going to the evidence that you gave a little earlier, Mr McDonald, when I asked some questions about the Blue Book not being provided as a budget paper, a ministerial statement with the budget paper. You referred us to the 'internet', and you have just said that some of the information on the internet was actually removed on budget night, but this might be a different set of information. I assume it is, but I just want to be doubly sure that we are talking about something different. I have not seen the tabled document yet. Is it different information?

Mr McDonald : Yes, it is. On the break, I spoke to Senator Stephens about the budget night information.

Senator FAULKNER: Yes. People who are much more competent in these things than I assured me that was the case. I just wanted to understand that this was—

Mr McDonald : This is the information that was on before budget night that talks about the effect of the earlier reprioritisation. I wanted you to have that information in front of you. I am happy to talk through it. I just wanted to be clear on that.

Senator STEPHENS: What would usually happen to that archived information?

Mr McDonald : That is a good question. I would need to check that for you.

Senator FAULKNER: I assume it will be reposted at some point.

Mr McDonald : Yes.

CHAIR: It would be updated?

Mr McDonald : Yes. We want to have a historical—

Senator STEPHENS: Reposted as opposed to updated.

CHAIR: No. I think they are going to update it for this budget.

Mr Varghese : We have done that.

Senator FAULKNER: This is one of the difficulties that I have with some of this type of information, quite seriously. If there is a hard copy budget paper that one can easily hold, collect and save it in your office, et cetera, if you wished to, but what about this document? Are you assuring us that there is a period of time when it is not available but that it will become available again at some point?

Mr Varghese : We will need to check whether it is a document that can be archived on our website, because it was there and then it was removed because updated 2014-15 budget information was posted. I just need to check whether we can find a way to have that—

Senator FAULKNER: This is not a major point, but there is a serious transparency issue here and not to mention the appropriate archiving of Commonwealth records. This is something that I would commend the department to look at very seriously. It is not a partisan political point in any way. These are critical records of the Commonwealth, and the department will need to treat these things seriously and ensure, effectively, that this information does not just end up in cyberspace.

Mr McDonald : I agree, and that is one reason why I asked for a copy of every page.

Senator FAULKNER: I appreciate that, Mr McDonald. I think the committee would appreciate you and the officers being proactive in that regard. But the substantive point remains an important one, and I commend it to the department for their consideration.

CHAIR: Thank you very much. We will now break for afternoon tea and will resume at 10 to 4.

Proceedings suspended from 15:35 to 15:51

CHAIR: We will resume. Mr McDonald.

Mr McDonald : Just referring back to the earlier discussion we had with Senator Stephens and Senator Faulkner around the importance of the archiving of material et cetera, I have asked that our website be updated and linked to each page, and we will try to do that by tomorrow for you. I think that was a very well made point by the committee, which we will take direct action on.

Senator DASTYARI: Just to get my understanding and bearings right, was that because this document was taken down on budget night?

Mr McDonald : Yes. As I said earlier, each year—

Senator DASTYARI: It goes out before the budget.

Mr McDonald : Yes. Each year on a budget night we have always taken it off, but because of the nature of this year with what has happened I think it is important—

Senator DASTYARI: When did it go up? Do you have a date?

Mr McDonald : Yes. I think it was 1 or 2 May. That was answered in a QON to the committee. We will link it at each page so that it is easy to find.

CHAIR: I will go to Senator Xenophon, because he was here earlier.

Senator XENOPHON: Forgive me if these questions have been asked. There is only one of me, which is probably a good thing, but I can only be at so many estimates. On your website it states, 'The 2014-15 development assistance budget reinforced the government's decision to refocus Australian aid on the Indo-Pacific region where 22 of 24 countries are still'—

CHAIR: You need to speak into the microphone.

Senator XENOPHON: That is an issue that I have not really had, but I will repeat my question. The DFAT website states, 'The 2014-15 development assistance budget reinforced the government's decision to refocus Australian aid on the Indo-Pacific region, where 22 of 24 countries are still developing and face significant poverty issues.' Assuming you have not been asked this question, could you provide a list, whether now or on notice, of the 24 countries that you say fall into the Indo-Pacific region for the purposes of the Australian aid program?

Mr Varghese : Yes. I am happy to take that on notice unless we can answer it now.

Senator XENOPHON: Further, could you provide a list of the countries that do not fall within the Indo-Pacific region but where the Australian government will continue to provide bilateral aid?

Mr McDonald : We can. There is a table on the website that lists those countries that we provide aid to. That is available on our website.

Senator XENOPHON: Also on the website is there a list of the countries that the Australian government has decided to end bilateral aid for; in other words, fulfil existing commitments but make no new commitments?

Mr McDonald : Yes. If you look at our allocations for this year, they have increased within our region and within particularly Sub-Saharan Africa, Latin America and the Caribbean they have either reduced or been phased out.

Senator XENOPHON: Does the geographical focus on the Indo-Pacific extend to the humanitarian program or will the humanitarian program be exempt from geographical priorities consistent with good humanitarian donorship principles?

Mr McDonald : In relation to humanitarian—

Senator XENOPHON: Has this been asked this afternoon?

Mr McDonald : No. The budget for our humanitarian has increased from $264.2 million to $338 million, so it is about a 28 per cent increase. As part of that, our emergency fund, which we use for disasters not only within our region but across the world—Syria will be a good example where we have contributed in relation to our global efforts—will continue. The emergency fund has increased from $90 million to $120 million for that purpose.

Senator XENOPHON: I know this is unusual coming from me, but at this stage I congratulate the department and the Australian government for maintaining and I believe increasing their commitment to the Palestinian Territories. I have visited some of the aid programs there in terms of agricultural programs. These have lifted the living standards and reliance of tens of thousands of Palestinians. That is something that ought to be acknowledged and congratulated. It seems to have been a tremendously effective use of Australian aid money.

Mr McDonald : Yes, I have seen the agricultural NGO program as well.

Senator XENOPHON: If you can get access to some of that produce, it is worth tasting.

Mr McDonald : I did eat some of their cucumbers when I was over there, and they are really good.

Senator XENOPHON: Could you provide a breakdown of the aid provided in 2012-13 and 2013-14 by direct bilateral assistance provided through DFAT for all countries receiving Australian aid? Secondly, can you provide an estimate of the amount provided through DFAT regional and global expenditure? Thirdly, can you provide the estimated ODA eligible expenditure by other Australian government departments other than DFAT? I am very happy for that to be on notice.

Mr McDonald : We can answer some of that now. The other government departments this year, in terms of the budget, is about $392 million. On our website, although Mr Wood can confirm this, you would have the whole-of-government ODA expenditure as well as the DFAT expenditure by country, multilateral and global program.

Senator XENOPHON: You can provide the further details of notice. Thank you, Chair, for your indulgence. Finally, on 26 May this year the Minister for Foreign Affairs said in question time, 'We are no longer raiding the aid budget to the tune of $740 million to plug a hole in the border protection budget.' My question in respect of that remark from the Foreign Minister is: does this mean the Australian government has taken a policy decision to end the practice of classifying domestic asylum seeker costs as official development assistance, ODA, and has returned the money which was earmarked for this to the Australian aid budget?

Mr McDonald : The answer is that all the money has returned to DFAT under the ODA budget except for $4.6 million of expenditure that still needs to be finalised in July of this year. After July there will be no further expenditure on those onshore costs.

Senator XENOPHON: That is it for me. You may be lucky and not see me again tonight.

Senator RHIANNON: I wanted to get some clarification about the budget for PNG. I noted that the item was listed as $577.1 million for PNG in 2014-15. I am interested in how this money will be spent and what the breakdown is. I noted that the DFAT PNG website outlines that Australia will support private sector led growth, including through aid for trade. It talks about business innovation funds, access to education, health and women's economic empowerment. Could you give a breakdown of that $577.1 million or take it on notice?

Mr McDonald : I will ask Mr Wood to give some breakdown of the $577 million. I think it is a whole-of-government figure.

Mr Wood : Correct. The $577 million is a whole-of-government figure. It includes $35 million from other government departments and $39.7 million from the regional and global programs. The bilateral country program is $502.1 million, and that is the figure that is shown on our website. Ms Klugman would have some useful detail in terms of the individual components of that expenditure.

Ms Klugman : I think you were in the chamber when I said in relation to an earlier question that the minister has commissioned and we are close to completing a review of that very large aid program that we run in Papua New Guinea. The minister was there three or four weeks ago to discuss with her counterparts in Port Moresby the future direction of the aid program, bearing in mind—

Senator RHIANNON: You do not need to repeat that. I did hear that and I appreciate the answer. I was trying to understand the current status. $35 million was just mentioned from other government departments. What can you tell us about the $577.1 million that has been determined in terms of a breakdown?

Ms Klugman : As you can imagine, some of what we do in a program of that size represents multiyear commitments. There is inevitably continuity even as there is change. I can give you one example. The undertakings made by Australia under the joint understanding agreed with Papua New Guinea last year have been detailed. They include the deployment of 50 Australian Federal Police officers. They were deployed to Lae and Port Moresby. The 50 were all deployed by the end of last year. That is an ongoing commitment.

There is further work under the joint understanding that we will be doing over the coming year in the development of the new hospital in Lae. We are at the stage of releasing a tender for a master plan for that very substantial health infrastructure redevelopment. There is a substantial program of work we are doing and will continue to do in the health sector, although the nature of some of that expenditure is likely to change as a result of the review commissioned by Ms Bishop. She has, for example, made it clear that looking ahead she sees the delivery of basic services to the population as being a matter for sovereign government of the country concerned, in this case Papua New Guinea. In that sense she would like to see us transitioning away from funding some of the more basic service delivery, which is the core responsibility of the recipient government. The government of Papua New Guinea supports that move.

Senator RHIANNON: When you are talking about basic service delivery going back to the government, why does that not include policing? Why are we sending 50 police officers there? There has been a long tradition that I am aware of within the aid budget of Australian police working closely with the PNG police, but why is that an exception at a time when we are withdrawing from basic service delivery?

Ms Klugman : It is not an exception. The focus on law and order, which is one of the clear lines that runs through the future Australian aid program in Papua New Guinea, reflects a priority both of the government of Papua New Guinea and our own understanding as a donor country here that law and order needs to be addressed in a country like Papua New Guinea in order to enable other aspects of development. On your specific question about service delivery, the Australian Federal Police who are working in Papua New Guinea, including the 50 additional police in Lae and Port Moresby, are not delivering basic policing services. They are working to support the Papua New Guinean police themselves to deliver those services. In many cases it is quite similar to where we want to end up when it comes to basic service delivery in health, schoolbooks to schools and so on, where we work to help strengthen the Papua New Guinean system so that it can deliver these basic services.

Senator RHIANNON: What is the total number of Australian police now working in PNG?

Ms Klugman : At the moment we have the 50 that I mentioned and in addition to that there are 75 Australian Federal Police.

Senator RHIANNON: Is that the total number?

Ms Klugman : Yes, but they are doing different things. There is that group of 50 that I mentioned, which is split between Lae and Port Moresby. There are doing frontline mentoring and advising. They are actually alongside Papua New Guinean police in police stations in Lae and in Port Moresby. The remaining 25 do a number of different things in support of a separate PNG police strengthening program that we have in Papua New Guinea. For example, they work in the police training college. They work on police human resources systems and development. They are meant to help improve the capability of the PNG police.

Senator RHIANNON: Have they been working with the PNG mobile police squads?

Ms Klugman : No.

Senator RHIANNON: Have they been working in the Hela province, where there have been some law and order issues?

Ms Klugman : The only two outposted and close to frontline sites for us in Papua New Guinea are in Port Moresby and Lae.

Senator RHIANNON: Would they be training PNG police who could be working in that area? Does that sound like it could be a possibility?

Ms Klugman : My understanding—and I must say that this sort of detail is most appropriately addressed to the Australian Federal Police—is that the focus of the training work that they do, for example, at the Bomana Police Training College, is at the basic training level.

Senator RHIANNON: Could you take on notice whether they have been assisting in any way PNG's mobile police squads and assisting any of the PNG police operations in Hela province?

Ms Klugman : Certainly.

Mr Varghese : Could I suggest that that be addressed to the Australian Federal Police since it is their program and that they are funded separately to do it?

Senator RHIANNON: I understand this is ODA money and that is why I was asking about it here. Is that correct?

Ms Klugman : It is classified as ODA, Australian overseas development assistance, but in this case there is a separate budget appropriation that goes to the Australian Federal Police and it is managed by the Australian Federal Police.

Senator RHIANNON: If you could take it on notice and I will take up Mr Varghese's suggestion to ask them as well. Thank you.

CHAIR: Senator Dastyari.

Senator DASTYARI: I would like to thank you again for making this table available. I appreciate the incredible difficulty in mid-government mid-year changes and in addition to that the merger of two quite large organisations. I imagine all of those things add a really large administrative burden. I would like to get my head around this. If we use PNG as an example. It says that the proposed expenditure is $527.7 million. The revised expenditure that I was given was $448.5 million. I assume that is saying that is ODA as a whole?

Mr McDonald : Yes. It is whole-of-government.

Senator DASTYARI: To develop this program there is obviously a table that sits one step behind it that is able to break it down. I am reading this, and I think there is quite a bit of information here. There is an explanation, which is fantastic, and I think it serves a really good purpose on the web page, but it does not give us a dollar-for-dollar breakdown and the pages do not give dollar-for-dollar breakdowns on where the money is being spent. Is it correct that it is like a back end table?

Mr McDonald : I will ask Ms Klugman to answer that.

Ms Klugman : I have with me Mr Kimberley, who is more across the details of the PNG program. I think the document that you had referred to the current year.

Senator DASTYARI: Yes. This is the one that ends obviously at 30 June. My understanding is that there will be a new table before 1 July.

Ms Klugman : We have as much detail as you need on what that money has been spent on in Papua New Guinea, if that is what you want.

Senator DASTYARI: Can you give us a breakdown or is there a table that perhaps tabling would make quite a bit easier? Can you explain to me how this page is developed?

Ms Klugman : I think you are referring to the page from the website.

Senator DASTYARI: Yes.

Ms Klugman : For a program of this size, you are quite right, there is always a lot of documentation that sits behind the expenditure. We are now two weeks before the end of the financial year. Some of the nickels and the dimes are being finalised to get the end-of-year expenditure and what that was spent on. If you have any area of particular interest, we would be happy to talk you through that.

Senator DASTYARI: It is $5 billion, so we are interested in all of it. I was wondering if there was the opportunity—and there are some specific things that I want to ask for—if we are saying that there is $527 million, of that $527 million we obviously know $448 million comes from your department.

Ms Klugman : Correct.

Senator DASTYARI: There is $80-odd million which is apportioned from other agencies that are doing things, which is obviously incredibly sensible. Is there a way to work this out? There must be a spreadsheet that adds up to $527.7 million. Mr Wood, is there a table for each country or each page which is effectively the one step further breakdown that adds up to that amount?

Mr Wood : Yes. Starting from the very bottom, we have an aid management system that includes details on various initiatives and activities of the aid program, and then slightly above that level are spreadsheets, if we could use that term, which would summarise the main activities under the country programs that could be broken down into categories such as health, education, infrastructure and so on.

Mr McDonald : You can imagine the complexity of a large program of that size. We have an aid management system within the department to keep track of those programs and projects. They are broken down into program level and project level to keep track of the expenditure in order to spend that sort of money.

Senator DASTYARI: Then what happens? Is there a reconciliation process at the end of the financial year? Is that how it works? Right now I assume that on your system you can print off PNG and that is how you were able to tell us before, when you gave us that fantastic table from question 59 on notice, which said what was committed. You know the table that I am talking about, which was the table you supplied on notice?

Mr Wood : Yes.

Senator DASTYARI: Is that because right now on your system you can go back and print off PNG and it says, 'We have spent so many million on this many things and there is this much left in the kitty'?

Mr Wood : Pretty much, yes.

Senator DASTYARI: Does that mean at the end of June, when you do your reconciliation, you are able to outline exactly everything that was spent that adds up to $527 million?

Mr Wood : We report at the end of the financial year our expenditure and that goes into the annual report. In the DFAT annual report there will be an end-of-year figure and there will be details on the program.

Mr McDonald : The reason for the lag is that there is a lag in some of the payments that are associated, which is why the reconciliation does not happen right on 30 June.

Senator DASTYARI: That is understandable. Obviously this is all new, because you have never done this before, which I assume adds another level of complication to it. Mr Wood, were you CFO of DFAT before the merger?

Mr Wood : No, of AusAID.

Senator DASTYARI: So you came across from AusAID?

Mr Wood : Correct.

Mr Wood : Many of the people involved in putting this together in fact had done it before many times.

Senator DASTYARI: So last year, if I wanted to see the breakdown of what we spent on PNG—so I am talking about the financial year that ended 30 June 2013—which annual report would I be looking at?

Mr Wood : The AusAID annual report.

Senator DASTYARI: Do we have a copy of the AusAID annual report from last year?

Mr Wood : It is the last one.

Senator DASTYARI: Can you sign it for us?

Mr Wood : I think I—

Senator DASTYARI: I think you might have. You have signed it.

Mr Wood : Correct. I just did not want to say that.

Senator DASTYARI: Where would I be looking in this annual report? I am sorry, I have a copy and you do not.

Mr Wood : It is program 1.1, which is probably near the front.

Senator DASTYARI: If I go to Cambodia, as an example, that does not have a breakdown of where the money has been spent. Where would it be?

Mr Wood : It does not have it in the form of a table. We would have a total as to what was spent.

Senator DASTYARI: I am not worried about the total amount. The information that we are interested in is that one step lower. PNG is probably not the best example because of its sheer size. We are in Asia so I am happy to go back to the example we were using of Vanuatu, which is probably a bit simpler. Ms Klugman, to spend $40 million that we spent in Vanuatu we have some projects that we participated in. I do not care what the number is; it could be four or it could be 10. That information is not quite broken down in this format. It is not really for that purpose. It is to inform someone broadly of what we are doing. This is not for accountants, this is for public consumption, which I think is completely understandable. I understand the reconciled breakdown is not going to be available until the process of the annual report, and I imagine this would come out at the end of the year.

Mr Wood : I think the deadline is October.

Senator DASTYARI: October for submission or going to publication?

Mr Wood : It is probably around the end of October or the middle of October.

Mr McDonald : There is a deadline of 31 October for tabling of annual reports in parliament.

Senator DASTYARI: I did not know that. So, that gets tabled in October. Right now, because of where we are at—and this is the process that Mr Varghese went through from 18 January to May, which I have to admit is a short period to reprioritise such a large amount of money and I think you should be congratulated for that, you know how the whole $40 million is being spent. If we asked on notice for Mr Wood to provide—and tell me how much of a burden we are placing on you to do this—just a rough table breakdown, effectively what we are looking for is the line items under the title. If I could ask for that on notice, that may save an incredible amount of time this evening. Without being too brash—and it may be that this is not a question that I am entitled to ask—how long would something like that take to put together?

Mr McDonald : We can provide that sort of information. It will be a lot of information. Vanuatu is probably a different category if you think about our large programs. Under the program level there are a number of projects. I will ask Mr Wood, but there 1,000 or more projects.

Senator DASTYARI: Can you explain to me how it works? How is that the case?

Mr McDonald : Say you have an education program. Within the education program there could be a project on teacher quality. There could be one on learning material. There could be one on the curriculum. There is a whole set of projects that go under that, and depending on the size of the program the more projects you would have. One of the things we are doing through the focus of the program is reducing fragmentation, because that obviously creates a whole set of projects under programs. All I wanted to say is that if you want everything then we can do that, but it will take a while. If you could be a little bit more narrow.

Senator DASTYARI: No. I do not want to put that burden on you. Is there a way to give us a breakdown? The other thing that I am very wary of with these things—and this is all new and I think something that Senator Brandis would be conscious of as well—is setting precedent. If there is a way to get the one level lower of information without placing an unreasonable burden. Perhaps, Mr McDonald, you can actually take the whole thing on notice and go back and work out what would be a process through which you could give that to us. We are talking about a fair amount of money here. We are talking about $40 million in Vanuatu. How do we break that down effectively in a similar way that is on the budget where the line items are, but without getting to the point of you having to track down, say, $4,000. Perhaps the way to do it at a simple level is with those that go across countries to just list them separately. I do not know the answer. Perhaps if there is a way to do that that would provide us with an incredible amount of information.

Mr McDonald : Just on that, one way of doing that might be to take it at program level initially and see whether that meets some of the needs. That is one level down. We could see what sort of burden that provides in doing that. I agree that it is a large expenditure of money.

Senator DASTYARI: Once the policy directions have been set, do you break down by outcome based on the policy direction or is that not quite how it fits?

Mr McDonald : There are a couple of ways that we do it.

Senator DASTYARI: I guess there is overlap, too.

Mr McDonald : Yes. Within the program as a whole you would want to know what proportion of the expenditure is spent on education. So, the thematic areas within the policy you would want to ensure that you knew how much was being spent across the board. Within particular countries you would want to know what areas you are spending the program. You have it at two levels. You have it at the program level and you have it at the thematic or sectoral level as well. You also obviously have it at the regional level in terms of expenditure. If it is not in the annual report it is certainly in the information we provided last year around that break-up. We will do that again.

Senator DASTYARI: We can ask questions based on that. At the moment obviously the natural question that we want to ask—and I imagine you will need to take some of it on notice—is going to be in that $650 million of cuts what programs were actually cut. I imagine what would probably save us going through going through country by country is if you actually have a list of how you got to $650 million and everything that was cut to get to the $650 million rather than us having to go through country by country.

Mr McDonald : In terms of the actual figures—and you will remember with the website we went through the table that we put on and how that compared with the budget figure last year et cetera—within some of our material that we are going to put back on to the site on the basis of the discussion we had earlier, there is detail against some of the countries around some of the adjustments that have been made. Vanuatu might be a good example. We can talk in more detail if you have any questions about it.

Senator DASTYARI: I would rather work out one rather than asking for them all. So with Vanuatu we spent $61 million including everything?

Mr McDonald : All of government. If you go to the bottom of that page or towards the bottom—I have not got it in front of me—it will have the 18 January reprioritisation towards the bottom.

Senator DASTYARI: It stated:

Following the government's announcement on 18 January to revise the aid budget, the Vanuatu foreign aid program will receive $40.9 million in 2013-14. This will result in Australia withdrawing from the World Bank Justice program, $0.5 million, and deferring payments and reducing contributions to infrastructure programs. This decision was made in consultation with the government of Vanuatu and partner organisations.

So you are saying that for each of the countries where there was a reduction—I am just using the non-political language here—in the budgeted expenditure and the 18 January revised expenditure, every country where an adjustment was made in a negative fashion, and I am doing everything I can to avoid using the word 'cuts' because I have kept Senator Brandis quiet for a while and I do not want to awaken the crocodile.

Mr McDonald : What that reflects is the outcome of the consultations and discussions that we have had with partner governments in relation to the adjustments made to the government's budget of 2013-14 and the actual expenditure in 2012-13. That is what that reflects.

Senator DASTYARI: But in a place like Bangladesh—

CHAIR: That is not the Pacific.

Senator DASTYARI: I am trying to get it right for one so I do not have to ask for all. Do you mind if I use that as an example? I would like to use it as a comparison to Vanuatu. This is all about Vanuatu. Bangladesh, as an example, is a country where the revised adjustment went from $82 million to $61 million, and the proposed expenditure of $87 million obviously includes $21 million of other things. There you are saying, 'This will result in deferral of payments to primary education development program …'

Mr McDonald : In that particular program there has been a deferral of payments to the next year, and there has also been some reductions as well. They are the outcomes of the discussions that we have had. I think that provides some context to why it takes a little bit of time to get this information up. We need to have proper discussions with our partners in relation to where those changes occur.

Senator DASTYARI: I think you have answered this already. In a different circumstance—and I appreciate there is a huge merger going on, a once in a generation change going on inside your department, merging two organisations, and naturally that creates a whole series of logistical, cultural and other issues which have already been explored—this would be provided with the budget. This used to be in the Blue Book, didn't it?

Mr McDonald : The information that you have there is information that was on our website. In addition, there was information provided in the Blue Book.

Senator DASTYARI: So the Blue Book was not effectively this information?

Mr McDonald : I would have to do an accurate comparison. The idea is that if somebody did not have access to a printed copy of the Blue Book they can go to our website and they can see what is being undertaken in Bangladesh. That is the purpose of the website. What we have done here, by adding 18 January at the bottom, is to add to that page that during this particular budget year we have had to make an adjustment, and that this reflects the outcome of the consultation. We are trying to give people that information.

Senator DASTYARI: I think it is incredible. I think you should be congratulated on it. Chair, what I would propose doing is if we are able to go to a non-Labor person with this information, they would be able to revise some of the questions that we have in a very positive way for the committee.

Senator IAN MACDONALD: I agree with going to the non-Labor person, and I am happy to oblige.

CHAIR: I do not know whether we can do that within the context of an estimates hearing.

Senator DASTYARI: I am saying that I am happy to give up the call.

CHAIR: We will pass over to Senator Macdonald.

Senator IAN MACDONALD: I have been able to follow your website, and I congratulate you on it. I must say that I am not terribly technologically advanced, but it is a very good website and very clear. I have a couple of questions in the broad and then a couple of more specific questions. Do I read correctly on the website that the aid for the Pacific region has gone up from $1,052 million to $1,062 million?

Mr Wood : That is correct. That is the total Australia ODA to the Pacific region.

Senator IAN MACDONALD: Has the aid to PNG, which is on another page on the website, gone up quite substantially as well?

Mr Wood : That is correct. The total ODA to PNG has increased from $519.4 million to $577.1 million.

Senator IAN MACDONALD: That has been achieved in a budget where the overall aid spending has been reduced?

Mr Wood : The total ODA budget has been maintained at $5.032 billion. As we mentioned earlier, some areas have reduced or some funding is not required, which has enabled spending in other areas to increase. The best example of that is what I referred to earlier on with the onshore costs that were ODA eligible but administered by the Department of Immigration that were previously $375 million; there is only $4 million of that being used this year and the rest of the funding has gone back to the DFAT ODA.

Senator IAN MACDONALD: Has there been a change in focus towards PNG, the Pacific and our immediate South East Asian neighbours in this budget?

Mr McDonald : Yes, there has. At the start of the last financial year the percentage of expenditure in our Indo-Pacific region was 86 per cent. That increased to 89 per cent in January as part of the reprioritisation and for this budget it has now increased to 92 per cent.

Senator IAN MACDONALD: Is that in line with the government's approach that Australia should be more involved in our immediate neighbours whom we have a historical, diplomatic and perhaps even a moral obligation to assist? Is that the reason for that?

Mr McDonald : It is certainly one of the principles that the government has applied in relation to any reallocation of the budget and in fact for this year's budget, yes.

Senator IAN MACDONALD: In the Pacific and PNG do you have statistics on how big a donor Australia is compared to everyone else in the world?

Mr McDonald : I will ask Ms Klugman. I am fairly sure we are the biggest in PNG. I would need to clarify for the Pacific.

Ms Klugman : We are the biggest bilateral donor in all our Pacific partnerships with all the Pacific island countries.

CHAIR: Does that include the French countries?

Ms Klugman : No. There is a special relationship between Metropolitan France and a special fiscal relationship between Metropolitan France and its territories.

CHAIR: Yes, I know.

Ms Klugman : And also New Zealand is ahead of us in what they call the realm countries that are associated closely to New Zealand.

Senator IAN MACDONALD: Apart from New Zealand do we have any handle on who else is donating substantial amounts to the Pacific island countries? I think it was in Vanuatu that the Japanese built a very nice hospital on one of the western islands, entirely enclosed with air conditioning, which was great. I think there was no power on the island which seemed to me, as an amateur observer, to be a bit of waste of an aid dollar, but I think it might have had something to do with whales. Do we know others who have contributed to the Pacific?

Ms Klugman : We do. We undertake a lot of activity to ensure that we are coordinating well with the others. We have some mechanisms for doing that. There is something called the Forum Compact, which used to be called the Cairns Compact, which has come out of the Pacific island forum leaders. That is a set of standards for donors which we encourage all donors to the Pacific to sign up to. It puts a premium on engagement with a recipient government. It puts a premium on coordination amongst donors and it puts a premium on transparency. Not all donors in the Pacific have signed up to that but most have.

You mentioned New Zealand. I think in terms of quantum the biggest bilateral donors after Australia would be Japan and the European Union is a very good donor. It is a strong donor in the South Pacific.

Senator IAN MACDONALD: Have you noticed any other country in the last five years that has substantially increased its aid to the Pacific islands? I am not even sure that I want to ask you who it is, if there is, but has there been any noticeable increase in aid from other countries to the Pacific in say the last five years.

Ms Klugman : The number of players on the field has probably increased. You have some flows usually in the form of loans coming in from some players. UAE for example, comes to mind. In the case of some of the donors, there are relatively new donors like China. China, in particular, has not signed up to the compact I referred to earlier in my response to you that we are making every effort to work to understand better what China is doing through its aid in the Pacific.

Senator IAN MACDONALD: Do you notice a lot of other countries—and my question as well is whether Australia does this—giving what they call soft loans, which means that they will lend you the money providing you spend it back in the country of the donor thereby increasing the economic activity in the donor country. Do you notice a lot of that and does Australia do that?

Ms Klugman : Through our aid program we do not run soft loans, certainly not into the Pacific. We are a grant donor through our whole program.

Senator IAN MACDONALD: Have you noticed others doing it?

Ms Klugman : Yes.

Senator IAN MACDONALD: We do not necessarily need the country to be known.

Ms Klugman : There is a bit more of that activity out there. Soft loans often means that they are offered on relatively concessional interest rates compared to what they might get on the market, or there might be a deferral of the interest payment period for say five years before the recipient—

Senator IAN MACDONALD: Can you be more specific in PNG? Is there a lot of that happening in PNG?

Ms Klugman : By far the more significant financing is the private financing that is coming into those large resource projects that are happening in Papua New Guinea.

Senator IAN MACDONALD: I have raised in this committee over the years, from the limited local experience that I have, that where other countries give aid they have huge signs up saying, 'This is an aid project of X-country' whereas Australia seems to do some magnificent aid, like we can well remember the helping deaf children aid, in a back street with a tiny little plaque on the front door where those involved know Australia is involved but nobody else does. Are we trying to promote a bit more to the local population the extent of the work that they are doing in these places?

Mr McDonald : The Foreign Minister has been very clear on this and your description of the signage et cetera when you go into these countries has been emphasised to us. We are having a complete look at the branding and so on. You would know that on a lot of our food products it will show Australian aid. That is quite clear. It is more the structural things.

The other is that a lot of our work previously had been done in say education or health and sometimes that is more difficult to brand openly unless it is a building. If you are building a school you can, but if you are doing work in curriculum then no. We are emphasising that with our discussions with each of those partnered governments to emphasise the sort of effort that we are putting in.

Senator IAN MACDONALD: Mr Chairman, I am conscious others have questions to ask but if I can just finish on three more specific aid projects. I noticed on the rugby league to PNG on your website although I did not read much about it. Can anyone tell me specifically about that? The trick question is, of course, are they aligned with the North Queensland Cowboys?

Ms Klugman : They are certainly keen on the Queensland teams.

Senator IAN MACDONALD: Everybody is; that is a given.

Ms Klugman : As a girl from Parramatta I do not know that I agree with you. I will ask Mr Kimberley.

Mr Kimberley : Just for the record, I am from Victoria so that makes it even—

Senator IAN MACDONALD: You would not know what we are talking about, except for the Storm which is actually a Queensland team.

Mr Kimberley : We have quite an extensive program of development for sport that is situated around rugby league in Papua New Guinea. The minister recently signed a new partnership when there most recently.

Senator IAN MACDONALD: What is the agreement that we have made recently?

Mr Kimberley : It promotes healthy living and social responsibilities using sporting personalities around rugby league with children in at-risk communities within Papua New Guinea.

Senator IAN MACDONALD: Do you have a dollar figure on that?

Mr Kimberley : I do not have that with me. I am happy to take that on notice.

Senator IAN MACDONALD: Can you give me that on the rugby league program, in particular, and any other details that you can give me about the program, because it was emphasised to me on a recent trip I made there how very important it was. Anecdotally, I waste two seconds of your time by telling you that on State of Origin night they tell me you can fly over the jungle that is absolutely black with no electricity anywhere, yet you will see these television screens coming out of the jungle where people gather to cheer Queensland along.

Ms Klugman : The colour of maroon is just glowing.

Senator IAN MACDONALD: It is a very important aid program.

Senator STEPHENS: Just on that point, as well as rugby what other sporting codes or activities are being undertaken? Can you provide that, particularly with those who might actually target girls as well?

Mr Kimberley : Yes, we can. There is netball, table tennis, cricket and a number of others. I can take that on notice and provide a fuller account of our Sport for Development program in PNG.

Senator IAN MACDONALD: Senator Stephens, there is a very nice photo of a netball team on this wonderful website that I was telling you about. Perhaps if you extend the question that Senator Stephens has asked to all sport, because it is very important.

I notice, again on your website, that in Vanuatu the Australian government is partnering with Carnival Cruises Australia to help locals—this is my interpretation; the website says it a bit differently—to help locals participate in the considerable money that the Carnival Cruise Line in all of its forms brings to several parts of Vanuatu. Can you tell me a little more about that. I suspect that the cost is not great with that one but can you give me some costings of what exactly is involved and whereabouts it actually occurs?

Ms Klugman : Certainly. I can do that. We can take it on notice. Just on the Carnival Cruises, that is activity that is borne from a memorandum of understanding between the Australian government and Carnival. Under that MOU Carnival and the Australian government undertook to cooperate together, including through the aid program in the Pacific, with a particular focus on the economic benefits to be derived for Pacific island countries and for Pacific island country economic development from the cruising industry and from tourism more broadly.

If you look across the Pacific in some cases you have economies that are deeply based like in Papua New Guinea. In other countries you have very narrow bases. Through the aid we have to make sure that our aid spend matches up with the actual economic and resource potential in those countries, so a focus on tourism and on cruising made a lot of sense. The MOU with Carnival draws us into a closer dialogue with that key actor in the private sector across the region so that we can understand how their activities, with perhaps a little bit of leverage through the aid program or just cooperation and consultation, can deliver development benefits in the countries where they are operating.

Senator IAN MACDONALD: Is that partnership agreement a public document? Is it possible to get a copy of it?

Ms Klugman : I think it is a public document. I will take that on notice.

Senator IAN MACDONALD: I seem to recall an island—let me say it was Mystery Island, which is a popular destination for Carnival Cruises—where it is a deserted island but all the neighbouring people go out for two days before, catch all of these wonderful lobsters, take them onto Mystery Island when the cruise ships come in and they sell them for $10 for a whole lobster. I have never seen so many Victorians and Sydney-siders go ape over lobsters. They tell me that the adjoining island school is run by the profits they make on the sale of lobsters to the people off the cruise ship.

Ms Klugman : It is about maximising those sorts of benefits, the benefits that come from local purchasing through the tourism represented by the cruising. It is about use by Carnival and private sector actors of local employment in the course of cruise related activities.

Senator IAN MACDONALD: It is clearly one of the biggest industries for places like Vanuatu.

Ms Klugman : It is about us making sure that if we undertake an aid program that involves the development of a port or some port infrastructure facilities, we understand what the needs of a private sector company, such as Carnival which is contributing to the development of a country like Vanuatu, are so that we can adjust our planning, our design and concepts to ensure that we are able to take advantage of that.

Senator IAN MACDONALD: Does Australia have a bigger aid project to places like Vanuatu which has a much closer involvement with Australia because a lot of the Kanakas who were black birded from Pacific islands to come to Mackay and the Burdekin region back in the bad old days, in the days of the White Australia policy, a lot of them came from there and there are still very close family links from those who stayed in those regions? Does that figure anywhere in the aid that goes to places like Vanuatu where a lot of the black birding was done?

Ms Klugman : That particular issue does not figure in a mechanical way in budget allocations, for example for Vanuatu, but you have put your finger on one of the important categories of people-to-people link which sustain the Australian aid program and the other activities that we do in the Pacific through the Department of Foreign Affairs and Trade.

Senator IAN MACDONALD: With the health issue in Daru, southern PNG, I know my colleague, Mr Entsch, the member for the adjoining electorate almost—his electorate finishes two or three kilometres from Daru—can you just tell what is happening there with the delivery of health aid to the southern—

Ms Klugman : The treaty villages. I will ask Mr Kimberley to speak to that.

Mr Kimberley : We are continuing our support to specifically support the Western Province governments to manage tuberculosis and other health related matters. The primary focus is on the Daru region, which is the border of—

Senator IAN MACDONALD: Has there been any change in the way we deliver the aid, because as you know and we have raised it in these estimates, over the last four or five years there has been a lot of concern on the value for money in Australian aid going into those treaty villages?

Mr Kimberley : I understand. There has been significant progress in recent times. I can read out a couple of statistics. The caseload notification has increased by 262 per 100,000 up from 222 per 100,000. The deaths to a drug resistant TB patient has declined from 45 per cent in 2011 to three percent in 2013. The rate of new infection cases that have successfully completed their treatment in the South Fly Districts, specifically in Western Province, is now averaging 72.5 per cent. That is up from 60 per cent in 2012 and they are well on target to meet their 85 per cent target of treatment by 2015.

Senator IAN MACDONALD: Is the delivery of those services still the same as it always has been?

Mr Kimberley : Our support continues to be delivered through the PNG government's program to target tuberculosis in that region, and we are doing that now in close consultation with the World Health Organisation and other partners.

Senator IAN MACDONALD: Perhaps I will ask a little more about that.

CHAIR: Can I ask a question there?

Senator IAN MACDONALD: Yes.

CHAIR: I gather there is this problem of multidrug resistant tuberculosis in PNG. How are you dealing with that?

Mr Kimberley : The support is targeted through the PNG government's program, which has been supported by the World Health reviews of PNG. They most recently completed that review late last year and the 2012 report that they commissioned found that PNG's approach to treating the people with TB in their own communities is appropriate, but more is needed to expand the TB control through Western Province through that government's program to which we are supportive. I would say that there have been further discussions with Mr Entsch in the last few months and I will be going to Cairns to talk to some of the partners up there about how we might strengthen our engagement with the treaty villages through PNG with that program.

Senator IAN MACDONALD: I will be blunt—and this is all anecdotal of course—the suggestion is often made by many that the amount of Australian aid that goes in there, and then if you go to those communities and see the standard of the hospitals and the medical facilities, you just cannot see where the huge amounts of money has been spent. As is popular in those sort of things there are always suggestions that a lot of other people benefit from Australian aid rather than those to which the aid is directly targeted. Has that been looked at recently by the department?

Mr Kimberley : I will say that our funding has not gone through the PNG government's system to deliver. Our funding supports partners that are lined up and supporting their program of works. No Australian aid money is going through PNG government partner systems.

Senator IAN MACDONALD: Where is it going then? Who is it going to?

Ms Klugman : I can give you some examples. When we are talking about TB in Western Province, our support has included the construction of the TB ward at Daru General Hospital and recently refurbished the general ward and outpatients block at Daru Hospital, which is very important for the Torres Strait area and those issues and concerns of Queensland.

Senator IAN MACDONALD: Yes, I know that.

Ms Klugman : Daru Hospital now has the best TB facilities in PNG as a result of Australia's funding.

Senator IAN MACDONALD: You are missing the point. I do not want to name people—and I am not talking particularly about Daru, so do not get me wrong—but there are suggestions that the money that goes there and you see what results from that money, the result is a tiny part of the money that has been allocated by Australia. Now, you are saying that it does not go through the PNG government, so who does it go through? Not by name but does it go through international aid agencies or does it go through Australian NGOs?

Ms Klugman : For example, with the construction that I just mentioned of the TB ward at Daru Hospital, we would have contracted that directly to contractors.

Senator IAN MACDONALD: So the Australian government contracts directly to build the hospital in PNG?

Ms Klugman : Correct, but we do that as part of an overall aid partnership with the government of Papua New Guinea. Your broader point, because it does not just relate to TB funding—

Senator IAN MACDONALD: I am talking about health generally in the Western Province.

Ms Klugman : Indeed. It goes to a bigger point, and that is the depth of the development challenge that is represented in Papua New Guinea, the complexity of the communities there, the complexity of the terrain and the complexity of the social and economic development challenges.

Senator IAN MACDONALD: Can you give me a list on notice for the last 12 months or 24 months, if possible, to whom Australian aid money has gone? I do not say to the Daru community. I want to know which company it went to to build X.

Ms Klugman : Would you like a few examples of that?

Senator IAN MACDONALD: No. I would like a list of all of the aid that has gone to the Western Province in the last 24 months that has not gone through the PNG government. Does a lot of it go through Australian and World NGOs?

Mr Kimberley : Yes.

Senator IAN MACDONALD: I am looking for the list of those. Try to confine it to the Western Province in the last 24 months. There is no need to put amounts in. I would like to know if it is the International Red Cross and so on.

Ms Klugman : We will focus it on the last 24 months for Western Province health sector.

Senator IAN MACDONALD: Would that be relatively easy to get?

Ms Klugman : Just doing TB would be easier, so we might start with that. We will see if we can give you something that covers the whole health sector in Western Province.

Senator IAN MACDONALD: Finally, there is a ship that goes around PNG which seems to do a wonderful job called YWAM. Do we fund that at all?

Mr Kimberley : We provide funding for operational support for that activity by that entity.

Senator IAN MACDONALD: They seem to do a great job.

Ms Klugman : Yes. I am aware of them.

Mr McDonald : I can add a couple of things. You talked about the money, which is very important, and earlier in the hearing we talked about our zero tolerance to fraud and some of the things that we have in place, both internally in terms of training and the like but also in terms of our systems to track that money, and including recovery where we have identified particular fraud within the program.

The second thing, just to be technically correct, Ms Klugman talked about us being a grant organisation, which is true, but there are two loans that the organisation has had from 2005. Under the Australian government in 2005, there was a post-tsunami loan, one for schools which ended at the end of last year and a current one for roads or infrastructure that ends in 2015, which is for $300 million.

Senator IAN MACDONALD: Which country is that?

Mr McDonald : It is in Indonesia. After the tsunami there was $1 billion provided by the Australian government. It had a 40-year zero interest on those loans and no repayments until 10 years into the loan, obviously to support Indonesia in terms of the recovery from that tsunami. I wanted to be technically correct just for the record.

Senator IAN MACDONALD: Do not get me wrong on this. I am not being in any way judgmental, but are the loans ever repaid?

Mr McDonald : We have only got those two—that is what I am saying—and they do not start to be repaid until 10 years into the loan period, which would be 2015.

Senator IAN MACDONALD: We have never had any other loans?

Mr McDonald : Not to my knowledge. We are a grant based organisation. That is certainly in the recent past anyway.

Senator IAN MACDONALD: Thank you.

Senator KROGER: Just before we leave Daru, in past estimates there have been photos exhibited in relation to the hospital there. I appreciate that the hospital upgrade and provision of medical equipment such as x-ray equipment and so on is through the PNG government through their health care, but I am wondering if you can give me an update as to whether there have been any improvements or upgrades to the hospital that is there. I think a number of us actually visited it. Are you aware of any upgrades to it?

Mr Kimberley : Ms Klugman just referred to the construction of the TB ward at Daru General Hospital. Is that what you are referring to?

Senator KROGER: Yes.

Ms Klugman : We have also refurbished the general ward and outpatients block. I do not know if that was before or after you visited.

Senator KROGER: That is actually through the health provision in the country and not us directly—

Ms Klugman : No, that is us directly.

Senator KROGER: Our direct support?

Ms Klugman : Of course in collaboration and in cooperation—

Senator KROGER: I understand, but I thought we had to do it through the provision of health services in the country.

Ms Klugman : This is a program that is fully agreed by the government in Port Moresby. It matches the priorities of their health care reform programs about the contracting. The payments and all the rest of it is done by us through the contractors.

Senator KROGER: Is that complete?

Ms Klugman : Yes, that is completed.

Senator KROGER: Thank you.

Senator McEWEN: Does DFAT have a specific gender adviser working to assist the PNG Pacific division?

Mr McDonald : We have a specialist gender adviser in the organisation, yes.

Senator McEWEN: Were all the gender advisers, including this one, previously within AusAID?

Mr McDonald : Certainly, the gender specialist was in AusAID, yes.

Senator McEWEN: How many were there in AusAID prior to the amalgamation?

Mr McDonald : I might need to take that on notice. There was certainly one principal gender specialist who is still employed by the organisation. There would have been specific gender advisers within the organisation as well. I just do not have that information.

Senator McEWEN: Was there one for each regional grouping?

Mr McDonald : Ms Klugman might be able to answer in relation to PNG.

Ms Klugman : Pacific is a relevant example, I think. Our key gender adviser has just been posted to Papua New Guinea, which is a good transfer because it will ensure that we can continue that focus on gender in the program.

Senator McEWEN: Transfer from where, Ms Klugman?

Ms Klugman : She has gone on a posting, so she will be working at the Australian High Commission with other colleagues working on the aid program in Papua New Guinea.

Senator McEWEN: To get back to my other question, is there a gender adviser for each regional grouping?

Mr McDonald : I will have to take that on notice. I am not sure if it is each regional grouping. Ms Sidhu might know.

Ms Sidhu : We currently have three gender specialists. A principal sector specialist on gender, and two sector specialists on gender that traverse the entire program. At the time of integration, we had specific gender specialists, one in the Pacific area and one in South East Asia that I was aware of and we may have had a couple of others, which I can confirm for you, elsewhere. As Ms Klugman had mentioned, the Pacific specialist has just been posted. We are reviewing those arrangements at the moment but they are not the entire basis of the gender specialists as well. The central gender specialists who traverse the aid program who work in my division also manage a gender network across the entire agency. They work with officers across the agency, across all the sectors, irrespective of whether they are specially designated as sector specialists or not. They have a role in educating and engaging across the aid program.

Mr Exell : If I can also add, not only just in gender but in other areas where we have specialty expertise, we do not have an exact ratio of one person for an area. It depends on the size of the program. They may cover more than one region. They may be overseas or they may be in Canberra.

Senator McEWEN: Okay. Obviously, the point of my question is to ascertain whether or not there are still designated gender advisers or gender specialists who previously worked for AusAID that are now working in DFAT doing the same kind of work. That is what I would like you to take on notice and let me know, because when you travel around to these places you often come across the gender adviser who worked for AusAID. I am just curious how many there are now and what their regional areas or areas of expertise are.

Mr McDonald : Certainly, with the current government and with the previous government the emphasis around gender and empowerment of women is very important and we would want to retain as many of those people as we possibly can.

Senator McEWEN: I am sure you would want to, but I would like to know whether they have been retained. Have any gender advisers or staff who were designated gender advisers accepted redundancy in the round of redundancies that you have been discussing at these Senate estimates?

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

Senator McEWEN: I understand that.

Mr McDonald : Certainly, none of the principal specialists have. So, the head of the specialists for gender, if you like, has not, no.

Senator McEWEN: Thanks for that. Just following on quickly from a question that Senator MacDonald asked about badging of Australian aid, is it still intended that either people who were working for AusAID and wearing the Australian aid t-shirts or badges that you see when you are overseas, will still be wearing those t-shirts even though they may be working for DFAT now?

Mr McDonald : The branding of Australian aid is very important and that will still be prevalent. You will particularly see it a lot with humanitarian responses, so yes.

Senator McEWEN: So, will that remain the same? Is there a new logo coming out or any new badging?

Mr McDonald : The branding of Australian aid has been retained, but obviously the branding of AusAID has not.

Senator McEWEN: Are you aware, Mr Varghese or Mr McDonald, that when you do travel overseas as I have done since the announcement of the budget, that some DFAT staff refer to AusAID now as WasAid?

Mr McDonald : I have heard that across the department. When I say the department, I mean across Canberra. I have heard it from others outside the department a lot. This is not unusual in terms of people making up slogans, et cetera. Certainly, from the department's point of view, aid is not 'was', it is important. It is a key component of the department, it is a key component of our program and it is very important to us. That is just a slogan that people are using.

Senator McEWEN: I did find it a little bit challenging to hear that being talked about in a jocular way at diplomatic functions and stuff when we were recently overseas.

Mr McDonald : I would agree it is disappointing as well.

Senator McEWEN: Thank you.

CHAIR: Senator Fawcett.

Senator FAWCETT: Having been at the same diplomatic functions, they also talked about how well the two groups were working together and achieving good outcomes for Australia. So, that was very pleasing.

Senator McEWEN: You must have talked to different people.

Senator FAWCETT: No, they were people there who had come from the aid background, so it was very good. Can I continue with some questions about Papua New Guinea? I am interested about the deployment of Federal Police; is that under the aid budget?

Mr McDonald : Yes, it is. When I say 'under the aid budget', it is appropriated to the Australian Federal Police, but is under the ODA budget.

Senator FAWCETT: Could I ask specifically whether they or other elements of our program are going to address violence against women in PNG? I have seen a lot of reports in the media recently saying that is almost at endemic proportions.

Ms Klugman : Yes, indeed, they are and they do. I mentioned some of the indirect ways in which they do that by strengthening the Papua New Guinea police presence, for example, in markets. In many of these markets violence against women has been a real issue and it has deterred women from engaging in the market. More directly, through the government's funding and through the deployment of those 50 police some gender violence units have been established within police stations. I would be happy to take on notice and get you a little more detail about that. I am aware that it has happened in Port Moresby, but I would like to look into it a little further so I can tell you whether it has also happened in Lae.

Senator FAWCETT: Sure. I am conscious that Senator McEwen has asked a lot of questions about gender advisers, but what I would specifically like to know is what is our program doing in terms of equipping and empowering women to take positions of leadership and also positions within the economic community in terms of business leadership or ownership there?

Ms Klugman : Thank you, I am happy to provide that. We are doing that directly. As Senator McEwen was saying, we are doing that directly through Pacific Women Shaping Pacific Development, the $320 million over 10 years, which stretches across the region, but of course, Papua New Guinea is one area of activity. Through our police deployment, we are addressing gender issues. Through just about everything we do in a cross-cutting way in a country like Papua New Guinea we tried to build gender components into that activity and to be aware of access issues. For example, Senator Stephens was interested in girls' sports. In fact the NRL, the Rugby League in Schools Program that the minister signed when she was in Papua New Guinea recently and went to a primary school, that was a coeducational primary school and there were girls also undertaking the sport. There were even girls coaching the sport.

Senator FAWCETT: Thanks.

CHAIR: Any further questions on PNG?

Senator McEWEN: I just had one. Under the current forward estimates is it proposed to maintain or extend the current levels of investment in family planning and sexual and reproductive health services in Papua New Guinea and the Pacific?

Ms Klugman : I will take that one on notice. As I said, we are finalising a review commissioned by the minister of our aid spend in Papua New Guinea. It would be better to take that on notice.

Senator McEWEN: Thank you, I would appreciate that. I have got one more, sorry. With regard to the Pacific Seasonal Workers Scheme, is funding to that scheme going to continue into the forward estimates?

Ms Klugman : Yes, the seasonal worker program is an important part of Australia's approach to labour mobility when it comes to the Pacific. The plan is to continue with that activity and, through the aid program, to build uptake in various Pacific island countries of the opportunities represented by that program.

Senator McEWEN: Has that been extended to PNG? Is that right?

Ms Klugman : It includes PNG. A few countries take up most of the spots because for various reasons they have been more proactive and more engaged with industry here, because this is a program that is driven by demand in Australian industry, Australian horticulture, for example. Tonga seems to have taken real advantage of the program.

Senator McEWEN: I am aware of the history. I am just curious as to whether it is still going to be funded. Is it going to be expanded to other countries?

Mr Varghese : Sorry, were you asking whether these programs are going to be extended to other countries?

Senator McEWEN: Yes, in the Pacific.

Mr Varghese : I think that is the subject currently of a review and I do not think a decision has been made about extending—

Senator McEWEN: A separate review of—

Mr Varghese : A separate review.

Senator McEWEN: Okay. When is that review likely to report?

Mr Varghese : I am not sure of the timing because it is a review outside of the portfolio. The portfolio has an interest in it but the policy carriage of this issue is outside of the portfolio.

Senator McEWEN: What does that mean?

Ms Klugman : The Department of Employment—

Mr Varghese : It is handled by the Minister for Employment, not the Foreign Minister.

Senator McEWEN: Okay, so were there any AusAID staff working on that scheme?

Mr Varghese : On the review?

Senator McEWEN: No, on the actual scheme, on the implementation of the scheme.

Mr Varghese : Through the aid program in the scheme, we facilitate participation from Pacific island countries. That would obviously involve departmental officials involved in that program.

Senator McEWEN: Yes, departmental officials, but what I asked was were AusAID staff working directly on that scheme?

Mr Varghese : Well, AusAID staff are now departmental officials.

Senator McEWEN: Yes, I know that, Mr Varghese, but before the integration were there AusAID staff working directly on that scheme?

Mr Varghese : Yes, because it was a scheme funded by the aid program.

Senator McEWEN: Okay, and have they all gone over to DFAT or did some of those staff also accept a voluntary redundancy?

Mr Varghese : I would have to check whether any of the individuals involved in the scheme took a voluntary redundancy, but even if they did the function continues.

Senator McEWEN: Okay. When did you say the review was going to report?

Mr Varghese : I said I did not know when it was going to finish.

Senator McEWEN: I understand the scheme is continuing, but there is always discussion about whether it can be expanded either to additional countries or to increase the numbers of people from the Pacific islands participating in the scheme. Is any expansion in either of those facets on hold until this review is completed?

Mr Varghese : The expansion would be on hold because the review itself will be looking at the question of whether to expand numbers or geographic scope.

Senator McEWEN: Okay, but at the moment it will continue as it had done prior to the budget?

Mr Varghese : Exactly.

Senator McEWEN: Thank you.

CHAIR: Thank you. Senator Fawcett.

Senator FAWCETT: One last question if I can. Ms Klugman, having been to Vanuatu earlier this year and seen the program there, can you tell me is our aid budget for Vanuatu going to increase in 2014-15?

Mr McDonald : I can answer that and the answer is yes.

Senator FAWCETT: Okay, so same question for Fiji?

Mr McDonald : Fiji is also increasing, yes.

Senator FAWCETT: Solomon Islands?

Mr McDonald : Yes, Solomon Islands is increasing.

Senator FAWCETT: Kiribati?

Mr McDonald : Yes, Kiribati is increasing.

Senator FAWCETT: Tonga?

Mr McDonald : Tonga is increasing.

Senator FAWCETT: So, the aid is increasing in pretty much all our regional countries?

Mr McDonald : Yes, in our region, as I said earlier, compared with the last budget in this time last year the percentage in our region has increased from 86 per cent to 92 per cent of expenditure.

Senator RHIANNON: Could I just clarify, is that in real terms or is it taking into account inflation and things?

Mr McDonald : It is the percentage of the budget, being $5 billion as it was last year.

Senator RHIANNON: So, the percentage of the budget.

Mr McDonald : It is comparing the percentages.

Senator RHIANNON: Thank you for clarifying that.

CHAIR: Is it a percentage of the total budget?

Mr McDonald : Yes, it is a percentage of the total ODA budget.

Ms Klugman : Nauru is the only Pacific country that is expected to receive less in 2014-15 than it did in 2013-14 in the Pacific. That is owing to a particular quirk. We have been making regular payments to Nauru as a result of the settlement of previous court cases. The final settlement was paid in the current financial year, so that reduces the overall aid budget.

Senator IAN MACDONALD: Are you talking about the money for Nauru that the previous government negotiated with Nauru for the problems the people smugglers created, that is not in the ODA budget is it; is that done out of immigration?

Ms Klugman : There was no aid package associated with that memorandum of understanding with the government of the Republic of Nauru.

Senator IAN MACDONALD: No aid project, yes.

Ms Klugman : There is expenditure on the offshore processing centre and that is under the Department of Immigration and Border Protection.

Senator IAN MACDONALD: Thank you.

Senator McEWEN: I am just a little confused because in an answer to question on notice No. 102, where Senator Wong asked, 'Have the cuts to aid been discussed with the governments and heads of states of each of these countries,' and she lists them all, Cook Islands, Fiji, Kiribati, Nauru, New Zealand, Palau, Pacific Islands, PNG, Marshall Islands, Samoa, Solomon Islands, Tonga, Tuvalu, Vanuatu. Your answer says, 'Reductions to the aid budget have been discussed with the governments and all heads of states of each of those countries.' So, what reduction to the aid budget was discussed if you are saying there was no reduction to the aid budget?

Mr McDonald : That is in relation to the 2013-14 reprioritisation on 18 January and the discussion that we just had was around the 2014-15 budget.

Senator McEWEN: Okay. So, has there been another round of discussions with those countries subsequently?

Mr McDonald : They will occur now, leading into the budget for next year, yes. We go through the same process.

Senator McEWEN: Thank you.

CHAIR: Well now we will move on to 1.7. I would just like to remind the committee that after the dinner break at 7.30 we go to the Department of Trade, so we have got from now until half past six to do the rest of the aid budget. Senator Rhiannon.

Senator RHIANNON: Thank you. Doctors working with Doctors Without Borders have been expelled from Rakhine state after caring for victims of a violent assault on a Rohingyan village that the Burmese government denied ever happened. Have any of your staff talked with Doctors Without Borders to gain a briefing about these developments and to identify ways to assist them to carry out their important work and to carry out that work without threats to their safety?

Mr Cox : I am not aware whether our embassy, ambassador or staff in Rangoon have been in discussion with them, but I can take that on notice and we will get a response for you on that.

Senator RHIANNON: Thank you, if you could take it on notice. Could you outline what programs we are currently funding, either directly through bilateral aid or through NGOs, for Rohingyan communities, both in Burma and on the border?

Mr Cox : As I said in my evidence yesterday, we have provided over $9 million worth of humanitarian assistance for the Rohingya, including for Rohingya in various IDP camps. So, yes, we have been providing significant assistance for humanitarian relief for Rohingya over the years.

Senator RHIANNON: So, is it only in the camps on the borders? Did I understand correctly that there are some programs within Burma?

Mr Cox : I am talking about the camps in Rakhine state. Are you talking about camps on the Thai-Burma border?

Senator RHIANNON: Yes.

Mr Cox : We have also been providing humanitarian assistance through international NGOs, and I think some of that does go to the Thai border camps, yes.

Senator RHIANNON: Could you take it on notice to provide details about the amount of money and what programs are provided?

Mr Cox : Yes, we can provide more detail on notice, unless Ms Corcoran can add a bit more.

Ms Corcoran : Yes, I can provide a bit more detail about the assistance that we are providing. Would you like a summary of our humanitarian assistance to Rakhine state in 2012-13?

Senator RHIANNON: Thank you.

Ms Corcoran : Okay, so we have provided $2.34 million worth of assistance through CARE Australia in the form of shelter and non-food items, such as blankets; through the UN High Commissioner for Refugees we have provided $2.5 million worth of support for hygiene, shelter, protection and with a focus there on preventing sexual and gender based violence; through UNICEF we have provided $1.5 million for water sanitation and hygiene programs; through the World Food Program we have provided $1.4 million worth of support for emergency food assistance; and then through Save the Children, $1.25 million worth of child protection, water and sanitation assistance. That is a total of $8.99 million in 2012-13.

Senator RHIANNON: Do you expect that same level of—

Mr Cox : Just further on that, with respect to the Thai-Burma border area, between 2013 and 2015 we are in the course of providing $8 million to support refugees living in border camps, providing food, assistance, shelter, access to health and sanitation, basic education and training, as well as providing access to information for refugees able to participate in the peace process in Burma.

Senator RHIANNON: Thank you. With regard to the programs on the border and also the programs within Burma, are you anticipating that they will continue at least at the level of current funding?

Ms Corcoran : I would have to take that on notice. I do not have the details of what we are providing into the future.

Senator RHIANNON: Thank you.

CHAIR: Senator MacDonald.

Senator IAN MACDONALD: Could I just ask a question? I am sorry about this but it might just go back to the previous PNG thing, although perhaps it is relevant here, too. I am just wondering, have there been instances of aid workers having to be removed from some parts of our aid countries because AusAID could not actually guarantee the safety of those people? It relates really to PNG, I think.

Mr Cox : That did happen in a case not necessarily of Australian aid workers alone, but international aid workers did have to be evacuated from Rakhine state recently and, in fact, Minister Bishop issued a statement on that matter—I will just confirm the date of that—in April expressing concern at the fact that UN and other workers did have to be evacuated from Rakhine during a period of violence there.

Senator IAN MACDONALD: Whereabouts was that?

Mr Cox : Rakhine is the western most state of Burma. It is the state where the Rohingya inhabit and it was subject of various up shoots in ethnic violence over periods since 2012. In that case, there were aid staff who had to be evacuated. As I said, I think they were not necessarily Australian staff but certainly international staff did have to be removed, and that could have possibly included some Australians.

Senator IAN MACDONALD: This one might have to be on notice unless someone can indicate it to me, but I am told that recently AusAID put an English female doctor into a hospital in the Western Province. She was doing TB treatments but was also speaking up about corruption and was gang-raped. She was removed because she could not be protected. Is that an accurate description? How do we address the safety of our people doing Australian aid work?

Ms Klugman : I am happy to take that one on notice. I think there might have been an incident involving a contractor, somebody contracted indirectly through the Australian aid program. I do not know the details but I am happy to provide them to you as privacy allows us to on notice.

Senator IAN MACDONALD: Yes, of course I do not want any names, but had you heard that? Surely it is something that you would be aware of if someone was, according to my information, gang-raped because she spoke about corruption.

Ms Klugman : We are aware of it. I am not aware of the detail. We were speaking earlier about sexual violence against women, the rates in Papua New Guinea being very high. I am happy to provide what further detail we can to you on notice.

Senator IAN MACDONALD: I would be interested as well on what we can do to ensure the safety of people that we put in there to distribute foreign aid. Thanks.

CHAIR: Any others?

Senator McEWEN: Are we still in East Asia?

CHAIR: Yes, we are just going through the programs.

Senator McEWEN: Alright, thanks.

CHAIR: Senator Stephens.

Senator STEPHENS: Indonesia?

CHAIR: It is 1.7, yes. Go on.

Senator STEPHENS: Just on the issue of Indonesia, could I ask about the future of the Indonesia-Australia Forest Carbon Partnership? I had the opportunity to go and visit some of that work and could see that it was something that needed a long-term investment. I understand that it was due to finish at the end of last year but the government continued a rollout for another 12 months. What is the future of the program?

Mr Cox : I will hand over to Ms Corcoran.

Ms Corcoran : As you stated, the Indonesia-Australia Forest Carbon Partnership came to a natural end on 30 June last year. We extended an element of it by 12 months to 30 June this year to allow us to have a managed exit from the project. It will not be continuing past that point, although I understand that key government of Indonesia agencies are having discussions on taking over some elements of the program.

Senator STEPHENS: Have we continued to fund the project around the Peat Isles?

Ms Corcoran : I would have to take on notice the exact activities that we are continuing during the one-year extension, but they were largely around completing work to support livelihoods for communities in the KFCP areas and to document some lessons learned because, as you know, it was a pilot program and so part of the point of that was to actually get some lessons around these sorts of programs and how they operate.

Mr Cox : The program was being run in Kalimantan rather than in Sumatra. I think some of the Peat forests were the subject of the partnership, yes.

Mr McDonald : I think when this has been discussed previously, part of the learnings from the pilot looking for application were not just within that region but more broadly across other regions in terms of any learnings that were coming out of that pilot.

Senator STEPHENS: Thank you. That is all I needed to know.

CHAIR: Any other questions there on 1.7?

Senator FAWCETT: I have the same question about the budget, has that increased for Burma in the year 2014-15?

Mr McDonald : Yes.

Senator FAWCETT: Thank you.

CHAIR: What form does aid to Burma take in a broad sense?

Mr McDonald : In terms of what?

CHAIR: Is it largely medical or is it—

Mr McDonald : I will ask Mr Cox to respond to that.

Mr Cox : I will ask Ms Corcoran to give you a detailed brief on what content is in the current Burma program.

Ms Corcoran : I will answer the question. I am happy to tell you more about the Burma program.

CHAIR: Please give it in detail; we want everything.

Ms Corcoran : So, Burma has, as you are probably aware, some of the worst development indicators in the region and about 25 per cent of the population live on less than $1.25 a day. We do have quite a substantial program to Burma. There are five main areas that we work on in Burma.

Education; we have committed $80 million over four years focused on basic education and funding scholarships in Burma. We are a lead bilateral donor in the education sector there. We are working very closely with the government to implement some major reforms there. We are helping improve access to quality basic education and we will also offer 50 scholarships to students for tertiary study in Australia in 2015, which is an increase from 40 this year, 2014, intake.

A second area of focus for us is health. We have a $100 million commitment to the Three Millennium Development Goals Fund, which goes from 2012 to 2016, improving maternal, new-born and child-health services and supporting HIV, tuberculosis and malaria. We work closely through the Myanmar-Australia partnership for reform with the government on democratic and economic reforms. That partnership helps the government of Myanmar to work on things like investment climate, modernised public, financial management systems and the like.

We have provided $3 million to support the peace process in Burma and as, Mr Cox said earlier, we continue to provide humanitarian assistance. We are providing $5 million in 2013-14 and also another $8 million over three years to 2015 to support refugees in the border camps. That is the broad sweep of things. If you want further details I am happy to provide them.

Senator FAWCETT: My main interest in terms of the border camps would be from the people you have on the ground do you see a reduction in the kind of punitive actions that have been taken against ethnic minorities that have led to the need for the border camps, or is that flow of people continuing?

Mr Cox : Unfortunately, we have seen a continuation of problems involving ethnic minorities in Rakhine state, as we discussed yesterday. So, some of the problems that lead to people seeking to flee and to go to border camps or to seek shelter in internally displaced persons camps continue.

Senator FAWCETT: Is that true in the northeast as well? The Karen and other people.

Mr Cox : In the north-east of the country, we are now seeing peace processes nearly coming to finalisation. Some of the causes there for people to be internally displaced are reducing. Certainly, that is not the case in Rakhine unfortunately. Around the other border areas, Kachin state, the Shan states and so forth we have now seen through the peace process that the government is finally trying to piece together with the last of the ethnic minority armies and then trying to knit that all together into a national peace process. I think we are seeing some of the root causes of evacuations of ethnic minority groups being reduced.

Senator FAWCETT: Thank you.

CHAIR: Are there no other questions there?

Mr McDonald : Just before you move onto the next program, Senator Edwards had a question on polio, around where Australia was in terms of donors and Mr Exell will be able to give you that answer now.

Senator EDWARDS: That is terrific, thank you.

Mr Exell : When you asked where Australia ranks in the list of donors to the Global Polio Eradication Initiative, the answer is that we rank 10.

Senator EDWARDS: By far? I mean we are only 23 million people in the context of many other countries with bigger populations.

Mr Exell : By a little bit. So, number 9 was support through the World Bank at around 50 million. We are around 34.55, so a bit under that.

Senator EDWARDS: That is still quite impressive. It is not that far between highest and lowest. Thank you.

CHAIR: Any other 1.7 questions? Cambodia, Laos, Mongolia, North Korea, Regional East Asia, the Philippines, Timor-Leste, Vietnam and Indonesia, including the Indonesia-Australia Forest Carbon Partnership. I would be quite interested to hear what that is, in fact.

Mr McDonald : We just touched on that.

Mr Cox : You need to ask a question about it.

CHAIR: Well, if there is no more questions then we will go onto 1.8.

[17:36]

Senator STEPHENS: Can I just ask about the status of the Australia-Indonesia Partnership for Reconstruction and Development? Is it correct that the funding finishes in 2014-15?

Ms Corcoran : The partnership was announced in 2005 following the tsunami. It had two elements, it had a $500 million grant and $500 million worth of loans. As Mr McDonald noted before, the loan component for schools is completed but it is still in the repayment period. The infrastructure loan finishes at the end of next year and then the grant component, to be honest with you, I would have to find out the details. It has morphed into other programs now, so I would have to find out more detail on when specific activities finished and what has continued and what has not.

Senator STEPHENS: So, who will have responsibility for administering any residual loans arrangements?

Ms Corcoran : The AIPRD was oversighted by a joint commission. It was governed by a joint commission, which was overseen by the President of Indonesia and the Australian Prime Minister, but it had a joint management board of government officials. The actual activities within that were managed through either partnerships between the governments or in the same way a lot of our aid programs were implemented through different partnerships.

Senator STEPHENS: Again, on a visit to Indonesia, I had the opportunity with several other members and senators to visit some of the projects that have been part of this. I have to say, I think there are people who made a huge commitment to that program, stayed quite a long time involved in that program and certainly made a very significant contribution to its success. I think it is a great example of a bilateral successful aid program. Is there going to be an opportunity for an evaluation?

Ms Corcoran : It would be on individual activities, I suspect, and there will have been some already, but you are right. There has been a lot of commitment to that. A lot of our staff have moved from working on that onto other development cooperation activities in Indonesia and different parts of Indonesia, so it has been a very successful partnership.

Senator STEPHENS: Thank you.

CHAIR: Any other questions there? If not, we go to 1.9. Senator Rhiannon's name is down but she seems to have disappeared.

[17:39]

Senator STEPHENS: I am just looking to talk about Nigeria for a little while we wait for her, is that okay?

CHAIR: Of course you can do that; that is fine.

Senator STEPHENS: We are all concerned about what has happened in Nigeria. I would just be interested in knowing whether there is any investment through our aid program in gender related programs?

Mr McDonald : Mr McCarthy will be best to answer that.

Mr McCarthy : In terms of gender specific issues in Nigeria, we are not a major donor in Nigeria. The program is relatively new and quite small in size and it is really focused more on capacity building, particularly in public policy. We have provided a number of Australia awards over the last couple of years and 51 per cent of those have been awarded to women. It is not a large program and, as I said, it is specifically focused on the public policy and capacity building areas.

Senator STEPHENS: Is that the program that has had some deferred payments to it? I am just looking at this document that was tabled earlier, the Australian Awards Short Course Fellowships Program; $3.3 million has been reduced from that program.

Mr McCarthy : Because of a reduction in size of the Africa program in general, we have had to revisit the awards in terms of reducing numbers overall. I could not talk in particular. Each year the awards numbers will jump around country by country depending on the quality of the applications and so forth, but the award numbers reached a high in 2011-12 of 1,018 and they have been slimmed down progressively each year after that.

Senator STEPHENS: Could you just take on notice for us to provide information about the country breakdown of these Australia awards, the fellowship programs, where they have been awarded?

Mr McCarthy : Certainly. We would routinely, after the end of each financial year as part of our regular reporting on outcomes, but we can certainly do that.

Mr McDonald : With this $3.3 million that you referred to, I will check, but I doubt they would have been allocated at that point.

Senator STEPHENS: Okay.

Mr McCarthy : I can confirm that.

Senator STEPHENS: You said that the list started small with some capacity building initiatives in Nigeria. Are any of those funding civil society programs?

Mr McCarthy : It is possible that some of the Australian awardee recipients would be civil society related. I would have to take that on notice and check, but that would be the prime mechanism by which we support civil society in Nigeria, through the awards program.

Senator STEPHENS: Thanks.

CHAIR: Senator Fawcett.

Senator FAWCETT: Same line of questioning again, just in terms of understanding the movement in our ODA budget. Can you just confirm whether the ODA budget to Pakistan has increased in the 2014-15 budget?

Mr McDonald : It has certainly increased in terms of DFAT. I will just check with Mr Wood.

Mr Wood : The bilateral country regional program to Pakistan has increased from $64 million to $65.6 million.

Senator FAWCETT: What about Bangladesh?

Mr Wood : The Bangladesh program has increased from $61.6 million to $70.1 million.

Senator FAWCETT: What about Sri Lanka?

Mr Wood : Sri Lanka has increased from $32.4 million to $33.2 million.

Senator FAWCETT: It is not geographically in the same region but it is in the same group, but what about the Palestinian territories?

Mr Wood : Funding to the Palestinian territories has increased from $33.4 million to $34.2 million.

Senator FAWCETT: Thank you.

CHAIR: That was 1.9. What programs do we have in Middle East other than supporting Palestinian issues?

Mr McDonald : Mr Innes-Brown will be able to help. We do have some NGO programs. I will leave it to Mr Innes-Brown to answer that.

Mr Innes-Brown : Sorry, Senator, can you repeat the question? I did not quite catch it when I was coming.

CHAIR: It was just a broad general question about programs in the Middle East. What are we doing there?

Mr Innes-Brown : The flagship program is to the Palestinian territories. There are three main sort of emphases there. The first is helping build the institutional capacity of the Palestinian authorities and also to promote economic growth. The second one is to help ensure Palestinian refugees and other vulnerable Palestinians receive basic services, that is things like provision of health and education services. The third general area is responding to the needs of civil society, including to help Palestinian communities increase their livelihoods. They are the three general areas.

CHAIR: What sort of economic activities are we promoting there?

Mr Innes-Brown : We heard a bit earlier when Senator Xenophon was here, the key thrust of that is helping communities increase their agricultural production.

CHAIR: Okay.

Mr McDonald : If I can add to that, having visited some of those programs. The support that is being provided through the NGO program is to facilitate, for example, better irrigation or better fertilisation, so better production. I gave an example of cucumbers, but equally with lemons where the numbers that were being produced had increased significantly. I also saw part of a program where a woman head of a household who had eight children set up her own agricultural garden and then, over time, had produced additional food that she then sold off to the local market. It was good to see at a very local level how the program was being used to help with livelihoods for people.

CHAIR: Very good. Senator Stephens.

Senator STEPHENS: Mr McDonald, in the document that you tabled for us, just a clarification here please. In relation to the Palestinian territories, the document suggests that Australia is providing humanitarian and development assistance to improve the governance capacity of the Palestinian authority. The next paragraph says the revision of the aid budget will result in reduced funding to the Palestinian authority. Am I to understand that is reduced funding directly to the Palestinian authority or is it, in fact, across the programs that you have described? I am sorry, that is probably very clumsy, but is it reduced funding to the Palestinian authority, which was targeted at improving the governance capacity, so the authority itself, or is it reduced funding across programs managed by the Palestinian authority?

Mr McDonald : I will have this confirmed, but my understanding is that it is the former; so, the Palestinian authority, and it was 18 January.

Senator STEPHENS: Just a clarification, thank you.

CHAIR: Could I take us back to Africa for a minute. Given the current issues in the Democratic Republic of Congo and the Central African Republic, what are our aid programs there?

Mr McCarthy : Predominately humanitarian assistance, given the situation in both countries. For instance, we have not had historically a program in the Central African Republic, but earlier this year, consistent with the level 3 humanitarian crisis in the Central African Republic and also the important role that we have played on the Security Council in terms of bringing this particular crisis to world attention, we did make a contribution of $4 million in humanitarian funding. Last month, we did make a contribution of $2 million in humanitarian funding specifically for the eastern Democratic Republic of Congo where, as you know, there has been an ongoing conflict for 25 years really, in one form or another. There are ongoing tensions and difficulties, although they have subsided a little bit over the last year. Again, the eastern DRC is an issue where we have also been active on the council in trying to further a solution to that rather intractable problem and so a humanitarian contribution, I suppose, is consistent with that activity.

Senator FAWCETT: So, has funding been through multilateral groups?

Mr McCarthy : That is absolutely correct.

Mr McDonald : The funding was through the Red Cross, I think. So, yes, it has been through NGOs or multilateral organisations.

Senator FAWCETT: What about Somalia? Obviously we have naval operations off the coast dealing with piracy issues, et cetera, and the issues there are their neighbouring regions with Al-Shabaab, do we have any programs active in Somalia?

Mr McCarthy : Absolutely. In March, the government announced a contribution of $10 million to Somalia; $2 million of that was in the form of a direct contribution to AMISOM, which is the African Union led Stabilisation Force that is, in effect, trying to hold southern Somalia in particular from falling into Al-Shabaab hands; and $8 million of that was in the form of humanitarian assistance; $5.5 million to a major humanitarian multilateral organisation and $2.5 to a program called Somrep, which is an NGO consortium that is doing a lot of important work at the village level in various places of Somalia that had been prone to conflict in recent years.

Mr McDonald : That major multilateral was the Red Cross, I have got a table here that is helping me.

Senator FAWCETT: That is alright, at least the hand ball is getting picked up well at the other end. Lastly, I am aware that we have Defence personnel in South Sudan. From DFAT's perspective, what is our aid program doing in South Sudan?

Mr McCarthy : We have made a series of contributions to South Sudan. You are correct, we have an ADF contribution of on average between about 20 and 22 members of the ADF that are deployed with UNMISS. We have made a number of contributions to South Sudan recently. When the crisis broke out in December the minister announced a contribution of $3 million in humanitarian assistance. There was then a contribution to the World Food Program of $7.8 million and then a further contribution of $2.8 million, all to address what is a very pressing and very real humanitarian crisis. The world currently has three level 3 humanitarian crises, and South Sudan is one of them. The Central African Republic is another one, and there are concerns about a major famine that may be coming in South Sudan.

Senator STEPHENS: Can I just ask, Mr McCarthy, when was that last $2.8 million commitment?

Mr McCarthy : I would need to check. I can find that out for you right now if you are prepared to wait. From memory it was April; yes, 12 April.

Senator STEPHENS: Where do those funds come from? Did they come from an emergency humanitarian program or is there a special fund like the UN Central Emergency Response Fund?

Mr McCarthy : There is a separate humanitarian—perhaps, I might throw to Mr McDonald at this stage—fund within the department that is separate from, if you like, the line funding for various parts of the world.

Mr McDonald : Mr McCarthy is doing very well, there is a separate fund, the Emergency Fund, and that is what we draw out. We try and time that throughout the year not knowing what major disaster we might have. We also have some allocations specifically to Africa because of the special needs that are associated with that. That is why as you get towards the end of the year, and I think we have had discussion before about what happens if there is excess funding—the humanitarian needs are large, they are never met, so towards the end of the year we are always able to allocate that funding.

Senator STEPHENS: We are in June, so are we likely to see some more announcements?

Mr McDonald : I do not know about announcements but we will certainly see some allocations. There is about $9 million left in the Emergency Fund this year, so we are now going across the department to look at how we best allocate that against priorities and then, if there are particular parts of the program that are underspending, for example, we also look at those in terms of our humanitarian needs. We are doing that now.

Senator STEPHENS: Was that the fund that provided the support money after the floods in Croatia and Bosnia?

Mr McDonald : No, that was the CERF Fund, the UN CERF Fund. We contribute money to that. I think we contributed $11 million or $12 million this year and then it is allocated out by that organisation.

Senator FAWCETT: I need to clarify that fund. Is that the one that we also had additional funding put into to respond to Syria at one stage?

Mr McDonald : Yes, so the Emergency Fund has been used quite actively on Syria over the last three years or so and the recent allocation of $20 million to the Lost Generation Initiative came from the Emergency Fund, predominately.

Senator FAWCETT: Okay. Is that the same fund that had the $375 million taken out of it previously?

Mr McDonald : No, the $375 million came out of the overall budget. The Emergency Fund was reduced from $120 million to $90 million at the start of the 2013-14 budget year. It was maintained in the January reprioritisation and it has been increased for next year to $120 million, which is traditionally what the amount has been. We work on the basis of around $10 million a month.

Senator FAWCETT: Thank you.

Senator STEPHENS: Are they based on the CERF fund? You said we contributed $11 million or $12 million to that.

Mr Wood : The estimated budget for 2013-14 for the UN Central Emergency Response Fund is $11 million. That is what Mr McDonald referred to. Next year it is forecast to be $11.3 million. Overall, our total funding for humanitarian emergencies and refugees, our program, is forecast to increase from $264.2 million to $338.6 million.

Mr McDonald : Just on the UN CERF Fund, Australia is quite active in relation to—I think we have got a senior role on that board around allocation of that funding. We work quite closely with OCHA and Valerie Amos around that. In terms of our humanitarian efforts across the world, Australia is highly regarded for what we do.

Senator STEPHENS: Just one more question, which comes back to the issues that Senator Edwards was talking about, polio. When we were having the Senate inquiry earlier in the year we had some really compelling evidence about quite distressful and distressed witnesses presenting to us evidence around the emergence of polio in the refugee camps in Syria and in the Middle East. I would be interested in knowing whether or not this budget represents a commitment to actually addressing that quite specifically? Can someone help me?

Mr McDonald : I think Mr Innes-Brown might be able to help me, but my recollection—and I will check this—is that we did provide support specifically around the outbreak of polio in Syria during this year.

Mr Innes-Brown : That is correct.

Mr McDonald : Yes, I just do not know the figure.

Mr Innes-Brown : I think it was around $1 million, but I will just check on that. That is correct as of several months ago.

Senator STEPHENS: Thank you.

CHAIR: Anything else on 1.9? If there is nothing else there we will go to 1.10, which is Official Development Assistance - Emergency, Humanitarian and Refugee Programs. Senator McEwen.

Senator McEWEN: On notice, could you advise what the actual estimated ODA allocations are for each of the components of this program annually from 2010-11 through to 2016-17?

Mr Wood : Yes.

Senator McEWEN: You may be able to answer this one now. Can you advise the total Australian aid funds provided since September 2013 to support humanitarian and emergency measures in South Sudan?

Mr McDonald : That is the discussion we have just—

Senator McEWEN: Have you just had that one?

Mr McDonald : Yes, but Mr Wood or Mr McCarthy might have it.

Mr Wood : I think we did cover that.

Mr McDonald : I will get my table out again.

Senator McEWEN: No, that is fine. If it has already been answered, Mr McDonald, please do not—

Senator FAWCETT: I will reprimand the good senator for not paying attention to my questions.

Senator McEWEN: That is right.

Mr McDonald : Obviously, my answers are not very interesting!

Senator McEWEN: I am not sure if you have answered this question about that, though. Were those funds made available from within the Emergency Humanitarian and Refugee Program or from another program or via Australia's contribution to a separate funding arrangement, for example, the CERF Fund?

Mr McDonald : I will check that, but I think it has the potential to have come out of all of those—certainly, two of those. We do allocate some money to Africa specifically out of our Emergency Fund and we do have the central bucket I talked about earlier. We can check for you, but I would say it would have been, yes.

Mr Wood : Just in relation to your earlier question about the historical profile, I cannot give you the breakdown but at the summary level I can give you the totals for 2014-15 to 2017-18 as per the budget statements.

Senator McEWEN: I think we were more interested in going back to 2010-11 up to it. If you can just take that on notice, that would be fine. Thanks anyway, Mr Wood. Can you please advise the total aid funds provided to support humanitarian and emergency measures, and I do not think this has been asked, in Serbia, Bosnia, Herzegovina and Croatia following the recent floods?

Mr McDonald : Yes, we just—

Senator McEWEN: You have done that one?

Mr McDonald : Yes, I just spoke in relation to that with Senator Stephens. As I said, obviously I am having an impact on the committee.

Senator McEWEN: I think I will just shut up for now. Thank you.

Senator FAWCETT: Anyone got 1.11?

Senator STEPHENS: Yes, I do. Just in terms of each of the multilateral facilities or programs, could you provide details on notice of the funds annually from 2010-11 through to 2016-17 and whether the information is base funding or voluntary contributions? That would be helpful.

Mr McDonald : We would be able to do that at a whole of multilateral—

Senator STEPHENS: It would be helpful. Thank you.

Mr McDonald : Yes.

Senator STEPHENS: Mr Varghese, in terms of the minister's commitment to new performance benchmarks for the aid program, will performance benchmarks actually be set for Australia's participation in those multilateral agreements and organisations?

Mr Varghese : Mr McDonald may be able to add to this, but one of the benchmarks will be the effectiveness of multilateral organisations. In other words, we will do more with organisations that we rate as effective and, by implication, less with organisations that we rate as ineffective. The way in which we evaluate those organisations is something that others may be able to provide a bit more information on.

Mr McDonald : Just on that, the minister has mentioned that the performance benchmarks would have a closer relationship with funding. They would be at three levels; there will be a limited number of benchmarks or targets at the strategic level, so you can imagine a number of 10 or 12; there will be benchmarks at the program level, so what I talked about earlier; and then at the project level, so they will be at various levels. That will cover all of our program, so the multilaterals, the NGOs and the country programs. Just on that, the other emphasis is around our partnerships so that the Australian government will do things in relation to the funding that it provides and the expectations or agreements that we have on what we are going to do and equally we would be looking for our partners to do the same.

In relation to these, there has been quite a deal of consultation that has occurred, particularly with the NGO sector as well as the World Bank and the like who have been doing quite a lot of work on benchmarks as well in order to get an appreciation of what has worked and what has not worked and how we can try and implement this from 1 July on.

Senator STEPHENS: Thanks.

Ms Walsh : Can I just add, in addition to the work that we are doing through the aid program on the new benchmarks, we are also engaged with the Multilateral Organisation Performance Assessment Network. That is colloquially referred to as MOPAN and it is a group of 18 donors who are working together to improve and do detailed assessments of multilateral organisations. They are collectively working on those, and we are looking to improve the work of MOPAN there as well. So, not only is our work in the multilateral performance area directly through our bilateral aid program and our policy settings, but also working internationally with partners, with the way that they engage in those assessments as well.

Senator STEPHENS: Do those partners include philanthropic organisations like the Asia Foundation?

Ms Walsh : No, at the moment they just involve other donor government aid programs.

Senator STEPHENS: Thanks.

Senator FAWCETT: This is in group 1.13, or has anyone got anything on 1.12?

CHAIR: Has anyone got questions on 1.11 or 1.12?

Senator STEPHENS: Yes.

[18:06]

CHAIR: We will go to 1.12, UN, Commonwealth and Other International Organisations. Who is going first? Senator McEwen.

Senator McEWEN: I just had one question here, I am not even sure if this is quite the right spot, but did Australia have any representation at the Maternal, Newborn and Child Health Summit in Canada on 28 to 30 May?

Mr McDonald : I believe we did. I just need to check that.

Mr Exell : I think our ambassador covered that meeting.

Senator McEWEN: Not the Ambassador for Women and Girls, the Canadian Ambassador?

Mr Exell : Correct. Australia's High Commissioner to Canada represented us.

Senator McEWEN: So, you probably do not know then, can you confirm or otherwise whether Australia made any specific commitments at that summit?

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

Senator McEWEN: Thank you; that is all I had for that.

Senator STEPHENS: I think Senator McEwen has really covered off on what we need.

Senator FAWCETT: Can I go to Program 1.13?

[18:07]

CHAIR: Yes, we will go to program 1.13.

Senator FAWCETT: Senator MacDonald asked before in respect to Papua New Guinea about the NGO that operates the YWAM Medical Support Ships Australia. The comment was made that Australia helps fund some operational costs. I note that they are supported by the PNG Department of Health as well as a number of provisional governments, because they are the most effective way of actually getting health care in a consistent and reliable manner into the provinces. They have been operating a ship which is about 34 years old. I believe last month they signed a lease to buy contract for a new vessel that is going to cost about $6.5 million. I believe they are fundraising at the moment for about $5.5 million to cover the remaining cost of that. Has the government been approached at all in terms of partnering with them in terms of that acquisition and, if so, what is the outcome given that it appears to be a very important enabler in actually getting the aid we give for health care to the people that need to get it?

Mr McDonald : Ms Klugman might be able to help with that.

Ms Klugman : Yes, I am just being coached from my colleague. I am aware of the—

Senator FAWCETT: We can hear from Mr Kimberley if you like?

Ms Klugman : The minister was approached to see if Australia, through its aid program, might be able to help with the funding of that purchase of a vessel. From our point of view, it is a very good group and it is doing very good things. We had a look at the specific request and it is not ODA-able. It does not come within the guidelines to buy a hard asset for an Australian group like that. We have, though, suggested to the group that we can talk to them about putting a proposal together that might fall within what is ODA-able. Perhaps we can enter into a partnership with them on some of their related operational costs, but the purchase of the vessel itself is not ODA-able, so it cannot be funded under the Australian Aid Program.

Senator FAWCETT: Are donations from the Australian public tax deductable for that kind of an enterprise?

Ms Klugman : I am not sure.

Senator FAWCETT: Could you take that on notice?

Ms Klugman : Certainly. That would be a matter for the tax office I guess, but Mr Wood might—

Mr Wood : There is a scheme regarding deductible gift recipients, but I do not know the specifics on that. I think if we take that on notice, that would be the best.

Senator FAWCETT: Okay, thank you very much.

Senator STEPHENS: Just before we go to outcome 2, I had one question that I could not find where it fitted. It basically just goes to the status of the AusAID Research Strategy 2012 to 2016. Mr McDonald, can you tell me if that is under revision? What is its status?

Mr McDonald : I will ask Mr Exell to come up. Certainly, research was something that you actively raised as part of the inquiry and it is something that we are very conscious of, so we had some programs that were ending this year in 30 June. This is about our 2012 to 2016 research strategy.

Mr Exell : Could you ask the question again please?

Senator STEPHENS: I just asked if you could provide an update to the committee about the status of the AusAID Research Strategy 2012 to 2016 and whether or not it was undergoing revision.

Mr Exell : The strategy is not formally undergoing revision. That was a strategy from under the last government, but as the secretary and Mr McDonald have already said, the minister is making a new policy statement in a couple of weeks that will cover our approach to research.

Senator STEPHENS: Okay, thank you.

[18:11]

CHAIR: That is program 1.13 done. We now go to Departmental ODA Program Support, outcome 1. We would like all the staff to stay until 6.30, when this ends, just in case some other senators come in and wish to ask questions. The first program is 2.1, which is Consular Services, and I have some questions there myself. I might just ask those. First of all, what is the current number of our embassy staff in Bangkok?

Mr Varghese : Mr Fisher may be able to answer on the numbers of embassy staff in Bangkok and Mr Brown will handle anything in terms of consular issues.

Mr Fisher : It is not practice for the department to give specific numbers for any post overseas.

CHAIR: I will change the question then. Has the staff number changed in the past several weeks in light of the political tensions in Bangkok?

Mr Fisher : I do not believe so. There might have been some movement of dependents in and out of the mission, but in terms of overall staffing numbers I do not think so.

Mr Varghese : We have not moved to reduce our staff in Bangkok in the light of recent developments.

CHAIR: Thank you. I presume you have had an increased number of inquiries from Australian citizens or increased demand for services? Would that be the case?

Mr Brown : Yes, we have a significant spike in inquiries.

CHAIR: I beg your pardon?

Mr Brown : There has been a significant spike in inquiries, yes.

CHAIR: I want to ask you what inquiries they are making, because presumably they are about leaving or security and so on, are they?

Mr Brown : Well, they cover a range of different questions. Many people ask whether it is safe to go to a particular region of a country; others want to talk about their insurance policy.

CHAIR: Okay, thank you. Does the department have any idea as to the total number of Australian citizens that are currently in Bangkok?

Mr Brown : The number of registered Australians in Thailand, as at 3 June, is 9,651. That is registered in our Smartraveller database. Our estimate is that there is approximately 28,500 Australians in Thailand. Of that number, approximately 10,000 are estimated to be in Bangkok.

CHAIR: Thank you very much. That is quite a large figure, in fact. Just a general question on consular services; what is the current number of Australian missions abroad broken down by embassies, high commissions and consulates? That could be taken on notice.

Mr Brown : That is not a consular matter. I will have to ask my colleague from our Corporate Management Division to take that one.

Mr Fisher : Would you like it broken down by—

CHAIR: Embassies, high commissions and consulates.

Mr Fisher : The total number of staff? If you just give me a minute I can give you that.

CHAIR: The number of missions.

Mr Fisher : Just a moment.

CHAIR: If you wish to take it on notice you can because we are short of time.

Mr Fisher : I can take it on notice.

CHAIR: Do you think the number of missions will be changing over the next 12 months?

Mr Varghese : We have undertaken a global footprint review. This was one of the commitments the coalition took to the last election.

CHAIR: Yes.

Mr Varghese : That footprint review has yet to be considered by ministers. It has been an internal review conducted by the department. It looks at where we are and where we should be if we had some additional resources.

CHAIR: Have we made any progress in establishing a post in Phuket?

Mr Varghese : No, we have not, but it is certainly one of the issues covered in the footprint review.

Mr Fisher : I can give you those figures on the total number of overseas missions, if you like?

CHAIR: Yes.

Mr Fisher : So, embassies we have 48, high commissions we have—

CHAIR: Sorry, let me just write it down.

Mr Fisher : Forty-eight embassies, 26 high commissions, 14 consulates, five multilateral posts, two representative offices and, if you like, 59 honorary consuls.

CHAIR: Okay, that is interesting. I am surprised that there are only 14 departmental consulates. Can the secretary give a brief outline of the type of assistance the government is able to provide to Australian citizens who find themselves in trouble abroad?

Mr Varghese : I might have to ask Mr Brown to answer that.

Mr Brown : On the department's website there is a public document called the Consular Services Charter, which sets out in detail the kinds of assistance we can provide to Australians in difficulties overseas. It also sets out the kind of services that we do not provide as a consular service. Typically the kind of assistance we do provide is to assist Australians who have been arrested or detained. That can involve assisting them to find a lawyer, maintain contact with their family. We can also assist Australians who are sick or require hospitalisation overseas. There is really quite a wide range of activities and assistance that we can provide, but the services charter does set it out in quite a bit of detail.

CHAIR: Is it true in general terms to say the government does not intervene in legal matters in other sovereign states?

Mr Brown : Yes.

CHAIR: Would you assist in the provision of a lawyer for an Australian citizen?

Mr Brown : We can assist Australians to identify lawyers. We do not hire lawyers for Australians in difficulty, but typically we provide them with a list of local lawyers from which they can make a selection.

CHAIR: Thank you very much. In the light of that, I refer to comments made by the Foreign Minister in the media earlier in the week in relation to the Australian Guo Jian in which she said, 'As an Australian citizen, we can do what we can to have him released if the case is that he is detained.' The minister was also quoted as saying that she was meeting with Chinese officials. Are these not examples of us getting involved in the legal workings of another country in spite of what you said earlier?

Mr Brown : What I said earlier was that we do not interfere in the judicial processes of a foreign country in the sense that the Australian government does not make itself a party to a particular foreign legal proceeding. In some cases, of course, the Australian government will express a view publicly or, indeed, in government-to-government exchanges it will express a view on the particular situation confronting our national and will often make diplomatic level representations in a very small number of cases where we believe there are important issues at stake.

In my testimony yesterday we spoke about the situation confronting Mr Greste in Egypt. That is an example of one of those cases where what we have done has stopped well short of interfering in Egypt's judicial process, but has involved the Australian government making public and private statements to the Egyptian government about that particular case.

CHAIR: So, where do you draw the line? What would you say?

Mr Brown : Excuse me?

CHAIR: Where is the line drawn? It is obviously a matter of individual judgment on each particular situation.

Mr Brown : Every case is unique and in every case a judgment has to be made as to what disposition the government would take. I would say that in the vast majority of cases the government makes no comment whatsoever and takes no diplomatic or political action around the case and we allow the judicial process in that jurisdiction to run its course. As I said, in some cases there may be a need, if there are particular circumstances where we believe acute humanitarian concerns for the individual may be at stake, for example, for the Australian government to make a statement or to take other kinds of action. In all cases, that would stop short of intervention in the judicial processes of the country in question.

CHAIR: Thank you. I will hand over to Senator Whish-Wilson.

Senator WHISH-WILSON: If you do not mind Chair, I have a similar line of questioning. You mentioned the Australian artist Guo Jian. Has the department been able to confirm the arrest and detention of this individual in Beijing?

Mr Brown : We have been in regular contact with the Chinese authorities since Mr Guo was reported detained on 1 June. We have had advice that he has in fact been detained and this afternoon, approximately two hours ago, the Australian embassy officials in Beijing were going to have their first consular access to him.

Senator WHISH-WILSON: Can you confirm that he has been detained on a visa matter, or a matter relating to his visa?

Mr Brown : Yes, we have been advised by the relevant Chinese authority that Mr Guo has been detained as a result of a visa irregularity and that as a result of that he has been required to pay a fine and to serve a period in administrative detention.

Senator WHISH-WILSON: I understand he has been living in China for a long time and owns a business there. Did they say specifically what the visa matter was, or is it just the—

Mr Brown : I do not have any further detail, I am afraid.

Senator WHISH-WILSON: Is it a common matter for Australian citizens, or other citizens for that matter, to be detained in China on these types of—

Mr Brown : I would not say it is common but we have had cases in the past where particularly dual-nationals like Mr Guo are often detained because of visa issues.

Senator WHISH-WILSON: Okay, so that is because it is the dual-nationality. I was not aware of that. That is likely to be an issue. I am sorry, I was not aware that the Prime Minister had made comments, as Senator Eggleston said, but has he received a briefing from you on this issue?

Mr Brown : Excuse me?

Senator WHISH-WILSON: Has the Prime Minister received a briefing from DFAT concerning the detaining of Guo Jian?

Mr Brown : We have kept relevant agencies informed of the situation facing Mr Guo.

Senator WHISH-WILSON: Okay. Thank you.

Senator McEWEN: I understand there is a review of DFAT's consular services or the consular strategy underway at the moment, is that right?

Mr Varghese : That is correct.

Senator McEWEN: When is that likely to be completed?

Mr Varghese : Mr Brown is the author of the review.

Mr Brown : The strategy is being developed. We are at the point of being very close to being able to submit it to the minister. At that stage we will have more clarity on the public launch of the outcome.

Senator McEWEN: Okay. Clearly from the website I see you have done some consultation about it with coalition MPs. Is that right?

Mr Brown : That is right.

Senator McEWEN: There is a document on the website that says, 'Consular presentation to coalition MPs.'

Mr Brown : Yes, the minister organised a briefing for a number of coalition members, which we attended.

Senator McEWEN: Was a similar forum organised for non-coalition MPs?

Mr Brown : We have made a general invitation for any member of the public, indeed of the parliament, that wishes to discuss or be informed about the process of developing the strategy to approach the department. We have not organised—

Senator McEWEN: But this was a request from the minister to provide a briefing to coalition MPs.

Mr Brown : Yes.

Senator McEWEN: So, there was not a similar request from her to provide one for non-coalition MPs?

Mr Brown : Not that I am aware of.

Senator McEWEN: Alright, thank you. At that presentation to coalition MPs, was there any discussion about the suggestion or the proposal in the Commission of Audit report for a levy for consular services?

Mr Brown : The meeting with members of parliament preceded the release of the Commission of Audit. There was, from memory, a discussion on cost recovery issues around consular services, but it was certainly not a detailed exchange from my memory.

Senator McEWEN: I am sorry, I should have asked you at the beginning: when did you provide that briefing to coalition MPs?

Mr Brown : I will have to take that on notice.

Senator McEWEN: It was before the Commission of Audit, so was it early this year?

Mr Brown : Yes.

Senator McEWEN: You said there was some discussion about a levy for consular services.

Mr Brown : No, my recollection is that there was some discussion on the issue of cost recovery for consular services, which is not a levy.

Senator McEWEN: Was that discussion initiated by the coalition MPs at that briefing or by yourself?

Mr Brown : I gave a presentation at the meeting and there were a series of questions and I think there may have been a question on that issue. I would need to check my records and, if you do not mind, I can take that on notice and give you a more accurate answer.

Senator McEWEN: Alright. Is the proposal for cost recovery of consular services being considered or implemented by the department?

Mr Brown : It is certainly one of the issues that has been taken up in the context of developing the consular strategy. We have, as I mentioned earlier, invited public submissions and comment into the development of the strategy. As part of that, we have drawn attention to Minister Bishop's comments earlier in the year in which she indicated that she wanted the issue of cost recovery for consular services to be addressed in the development of the strategy.

Senator McEWEN: Was Minister Bishop at that presentation that you did for coalition MPs?

Mr Brown : Yes.

Senator McEWEN: Did she raise the issue of a levy or cost recovery of consular services?

Mr Brown : In that meeting?

Senator McEWEN: Yes.

Mr Brown : I would have to check my records. I do not recall her doing it, no.

Senator McEWEN: You do not recall her saying it?

Mr Brown : No.

Senator McEWEN: And it was after that meeting that the Commission of Audit report also came out with a similar proposal; is that right?

Mr Brown : The Commission of Audit actually makes a recommendation for the introduction of various consular fees for specific services. That is my recollection.

Senator McEWEN: I think you are right.

Senator FAWCETT: Can I just ask a question following on from this?

Senator McEWEN: Yes.

Senator FAWCETT: Mr Brown, are you aware that when the current Foreign Minister was the shadow Foreign Minister she had an ongoing program of engagement for coalition members with members of the diplomatic core here in Canberra to raise the level of awareness of diplomatic issues?

Mr Brown : Yes.

Senator FAWCETT: Are you aware that she has continued that since being in government?

Mr Brown : Yes, I understand that the consular strategy session that I attended was one of a series of such meetings that the minister holds on a regular basis to brief members of the back bench on issues of broader interest.

Senator FAWCETT: Was the issue of strategy only one small subset of a broader interaction and brief to understand consular affairs and issues? It was not the focus of the meeting was it? It was just one topic that was covered during a much broader meeting.

Mr Brown : You would have to ask the minister. That was the focus of that particular meeting.

Senator McEWEN: This particular meeting was called Consular Presentation to coalition Senators about Australia's consular services.

Senator FAWCETT: That was a presentation that was given. It was not the focus of the whole meeting.

Senator McEWEN: A little bit sensitive are we, Senator Fawcett?

Senator FAWCETT: No, just putting the facts and the context out there, Senator McEwen, to take away your conspiracy theories.

CHAIR: We have now reached 6.30, which is—

Senator WHISH-WILSON: Chair, just before we go could I please ask about a very quick point of clarification?

CHAIR: Alright.

Senator Brandis: Mr Chairman, the officials have been sitting here all day. There are agreed schedules. Senator Whish-Wilson has just arrived a few moments ago. Some of us actually have work to do.

Senator WHISH-WILSON: This will take less than three seconds. Could I just ask, Mr Brown, you said that this happens often with dual-citizenships. Is it possible to be a dual-citizen—

Mr Brown : I did not say 'often', Senator. I said that it has occurred.

Senator WHISH-WILSON: Is it possible to be a dual-citizen if you are Chinese?

Mr Brown : China does not recognise dual-citizenship; Australia does.

Senator WHISH-WILSON: Okay, sorry, I just wanted to clarify that.

CHAIR: Alright, that is what you wanted, you have got your answer. I thank the secretary of the department and all of your officials for being here over this rather arduous time.

Mr Varghese : I will be back for the—

Senator Brandis: It has been time wasted for a few hours.

CHAIR: I thank you all for being here and for all of the assistance you have given the committee. Thank you very much.

Proceedings suspended from 18:31 to 19:35

CHAIR: Welcome, officers for the Department of Foreign Affairs and Trade. This evening the committee will be examining the budget estimates for the trade portfolio. We do not have a minister there, so we cannot ask the minster for comments, but I wonder if you would like to make any comment?

Mr Varghese : No thanks, Chair.

Senator IAN MACDONALD: I just wanted to ask a couple of questions which I raised yesterday with the department about the sugar and the free trade agreement with Korea and Japan. I am just wondering if someone could indicate to me exactly how the agreement assists the Australian industry. Perhaps I should start with the bouquet first—this was great work getting these free trade agreements signed. They have been around for years. Nothing ever seemed to happen. I, for one, and I think most Australians were delighted when we had both Korea and Japan done in very quick time. I also appreciate, having lived through the Australia-United States Free Trade Agreement as well, that you cannot please everyone all of the time and there are lots of different complexities within the other country as well as with our own. But, as you know, I come from the sugar areas of Queensland. I am concerned that the canegrowers organisation in Queensland was not terribly happy about the deal initially. I have not spoken to them in recent weeks. I am just wondering if you could very briefly run me through how sugar works and how it is beneficial to the Australian industry.

Ms Adams : Thank you, Senator, for the opening comments. With respect to the treatment of raw sugar exports in the Japan free trade agreement, as you are well aware the current arrangement with Australian exports to Japan requires Australia to produce a particular grade of low polarity sugar to work its way through the very complex set of barriers that exist in Japan through the state trading import AILEC et cetera. We currently export that low polarity sugar to Japan. It is the only country that has that system that generates the price pressures for exporting particular grade. There is a particular processing stream for current raw sugar exports to Japan. What we have been able to achieve in the free trade agreement, or the EPA, with Japan is tariff reduction on the high polarity sugar, that is the standard international sugar, the same kind of raw sugar that we export to Korea and every other international market. We have been able to secure elimination of that ¥21.5 per kilogram tariff and also a reduction on the levy—there is a complex system of levies and tariffs—for the high polarity sugar, which means we will, once the agreement comes into force, be able to export international standard sugar to Japan. We will be the only country able to do that, which will clearly give efficiencies to our exporters of being able to, instead of having a dedicated stream of low polarity sugar for Japan, integrate the Japanese supply chain with all the other export processes.

Senator IAN MACDONALD: The tariff on the high polarity will be much the same as the current tariff on the low polarity?

Ms Adams : That is true. Well, the levy, to be precise.

Senator IAN MACDONALD: Japan does not have a tariff but a levy?

Ms Adams : It has both.

Senator IAN MACDONALD: Both.

Ms Adams : Japan will eliminate the tariff component of the protection on the high polarity sugar and also implement a small reduction on the levy, and the combination of those measures will mean that it will come down to a bit lower than the current protection that applies to the low polarity which means, for the first time, we will be able to export the high polarity as well as the low.

Senator IAN MACDONALD: Does the Australian sugar industry want to export high polarity sugar to Japan?

Ms Adams : Yes, at least some parts. It was made very clear to us through the course of the negotiations that some of the exporters were particularly keen. Yes.

Senator IAN MACDONALD: Some of the exporters you say?

Ms Adams : Some of the traders, including QSL, were very keen to secure this.

Senator IAN MACDONALD: They were very keen to see this?

Ms Adams : Yes.

Senator IAN MACDONALD: You have had discussions with QSL and the Queensland Cane Growers Organisation?

Ms Adams : Over many years and in great detail.

Senator IAN MACDONALD: Did they know what you were proposing?

Ms Adams : This was not the only outcome that we were seeking on sugar, of course. We wanted much fuller liberalisation but Japan refused to change the fundamentals of their sugar program. This move was certainly seen by many of the people we spoke to over the years, from the various parts of the growers and the QSL, as valuable. It was one of the things we were pursuing; it was not the only one.

Dr Macdonald : You would be aware that following the announcement—and I and most of us, I think, were delighted at the overall free trade agreement—the canegrowers issued media comments saying they were very disappointed, did not understand it and it did not do anything for them. Are you aware of that?

Ms Adams : Yes.

Senator IAN MACDONALD: Have you since spoken to canegrowers and advised them of the error of their ways?

Ms Adams : There have been a lot of discussions with all the parts of the industry to explain exactly how it is going to work. So, yes, there has been a lot of—

Senator IAN MACDONALD: Do you think the industry now knows and accepts that this is a good deal for it?

Ms Adams : Yes, I think so. I would just repeat that of course we had sought further reductions in the levies and the whole complex system. But this was the one area where we were able to get the Japanese to change their complex system. This is the first time they have changed it for anybody. There is value there, as recognised by at least parts of the industry, if not every single mill.

Senator IAN MACDONALD: Well, mills are not really relevant. That is not how the industry works. Was there someone in your department dedicated to dealing with that, or was it just that all your officers involved in this had to deal with hundreds of different items and sugar was just one of them?

Ms Adams : We do not have a dedicated sugar negotiator. We have people who are specialist agriculture negotiators who know, and work very closely with, the industry representatives across all of the trade agenda.

Senator IAN MACDONALD: The sugar industry in Australia really is, effectively, represented by the Queensland Cane Growers Organisation or the millers institute or whatever—there is a millers group as well. How much were they kept informed of the negotiations in relation to sugar?

Ms Adams : We have met from time to time. Certainly, we have very easy telephone relationships with the key people. QSL tends to work most closely with government, as I am sure you are aware.

Senator IAN MACDONALD: Yes.

Ms Adams : I guess I would say we would have had most—

Senator IAN MACDONALD: Interaction with QSL.

Ms Adams : Interaction with QSL.

Senator IAN MACDONALD: I do not want to put words in your mouth, and this is not a trick question. Would you think that QSL and the industry generally—but let's just stick to QSL—now appreciate that they are appreciably better off following the agreement on sugar than they were before the agreement?

Ms Adams : Yes, I think so. One argument was made to us by not just QSL but also cane growers and millers. I remember in one particular meeting on this in Brisbane, in fact, with all of the groups, they made a big explanation about the inefficiencies of having to produce the particular JA sugar for export and how that had to be all done separately and how there would be efficiencies.

Senator IAN MACDONALD: So when I send them the transcript of this hearing and say, 'I'm pleased to see that you now understand that you have got a good deal and that you are happy'?

Ms Adams : It is not for me to characterise how happy they are. But what I can say is, from our discussions with them, we understand that there is an appreciation for what the outcome will mean and that it does deliver a benefit. It is not all that anybody wanted but it does deliver a benefit.

Senator IAN MACDONALD: I would hate to be picking at, from my point of view, the one that was not as good as it could have been from the result of this, when there were, literally, hundreds of excellent results—and, as I say, all credit to you and your team on those. It is just that this one is a big part of the Queensland industry. My understanding is that they were not happy—and I have not spoken to them for a few weeks. The deal is now done. Is there any prospect that over the ensuing years these things can be revisited with the other country involved? Is that normal?

Ms Adams : There are provisions for reviewing the terms of the agreement. There are various reviews, including for the content of market access. I would not want to say that there was anywhere near a guarantee of reopening those, except in the circumstance where if Japan were to conclude any other agreement that was to give a competitive advantage to any other trading partner. We have quite strong review clauses in that kind of circumstance.

Senator IAN MACDONALD: You are aware that the industry thought it had been dudded in the US free trade agreement, and now they are a little bit disappointed in this one. But perhaps unreasonably so. There are a lot of other senators who want to ask questions, and I have been fortunate to get mine out of the way, but, just finally, in relation to Korea, which is a different arrangement, as I understand, can you, in a couple of sentences, tell me what the new arrangements are now in Korea and how much better the industry will be from the Korean arrangement?

Ms Adams : Certainly Korea is a much easier and perhaps happier story, explained largely by the fact that they do not grow domestically any sugar and so therefore were not seeking to protect a domestic industry, like Japan do. The three per cent tariff that Korea applied has been eliminated on entry into force of the Korea agreement, which, as it is our major sugar export destination, of course is fantastic.

Senator IAN MACDONALD: So you are saying sugar imports into Korea are now free of any tariff, levies, taxes? They used to have a special arrangement that was more related to pricing within Korea than to do with exports and imports. Is that still relevant?

Ms Adams : I am not sure. I know that refined sugar is a bit of a different story, but I am talking about raw sugar, as our major export.

Senator IAN MACDONALD: You are telling me that, for raw sugar, no—

Ms Adams : Raw sugar, on entry into force of the agreement, will be duty free.

Senator IAN MACDONALD: And you expect the agreement to enter into force when?

Ms Adams : We are working very hard for that to be this year.

Senator IAN MACDONALD: And it requires parliamentary approval?

Ms Adams : Yes. There is a JSCOT hearing on 14 July.

Senator IAN MACDONALD: Thanks very much, Ms Adams, and thanks, Chair and committee members, for allowing me to get in first. I will leave you in peace.

Senator WONG: Ms Adams, on the sugar issues, the comments by the cane growers were fairly strong. I have had some discussions with some representatives but I am asking for your view. It was asserted that there is no improvement in market access for sugar, no improvement in terms of trade and no commercial gains for Australia's export driven sugar industry. You disagree with that statement obviously.

Ms Adams : On the low-polarity sugar that we currently export to Japan, it is true that there is no change in the arrangements for that sugar. I am not saying that we achieved free trade in sugar. We tried very hard. We spent years trying to convince Japan that they would be better off doing away with the very complicated and very protectionist program that they have, but you do not always get what you argue for in trade agreements, and they continue to implement this very complex system that protects the cane sugar grown in Okinawa and the beet sugar that is grown up north in Hokkaido. What we did achieve, as I have just said, is adjustments to the high-polarity standard international sugar, and the result of that, once implemented, will be that we will have the flexibility of exporting to Japan the same kind of sugar that we export to everywhere else, and we did not have that opportunity before. And we have certainly been advised along the way, and recently, that that is of commercial value to Australia.

Senator WONG: I think Senator Macdonald already asked the questions about who put that position to you as being a gain to be sought through this. I have quite a lot of questions, so perhaps on notice you could indicate to us, from your engagement with the industry, which producers or who will potentially benefit from the high-polarity market access that you have described.

Ms Adams : Certainly.

Senator WONG: Can I go to the staff cuts. Mr Varghese, we had a long discussion we had about the range of budget measures which require DFAT to lose a number of positions, to have voluntary redundancies et cetera. I am just trying to get some sense of the various numbers we discussed. I think it was yesterday morning.

Mr Varghese : It seems longer than it was.

Senator WONG: I have been in a number of places since then; I know you have been here. So I am afraid I might have forgotten it. Was is some 500 positions?

Mr Varghese : Yes, 500 positions.

Senator WONG: Can you give me some sense of how many of those would be from the trade aspect of outcome 1?

Mr Varghese : We have sought, in managing these reductions, to minimise the impact on our capacity to enter into trade negotiations and to cover our trade policy interests because I am very conscious that the pressures on our trade negotiators as this time are exceptionally high. I cannot think of a period when we have been engaged in so many negotiations simultaneously, so it is important that we are aware of that as we manage our reduction. There will be no reduction in the staffing numbers of trade and economic divisions. Of the 65-odd positions that we are reducing from overseas posts, none of them will be trade related positions. So I am trying to make sure that we maintain a strong capability here.

Senator WONG: Are you excluding, therefore, anybody in DFAT who works primarily on trade matters? Who is left outside of the, I suppose, ring-fenced functions that you just described?

Mr Varghese : Because we are an integrated department we also have in our geographic divisions people who cover the trade relationships bilaterally with those countries. The geographic divisions are not—

Senator WONG: Are not ring fenced?

Mr Varghese : They are not ring fenced, no.

Senator WONG: Do you have some sense, in terms of your planning of the reduction, of what proportion of the 500 would come from those functions?

Mr Varghese : From the geographic divisions?

Senator WONG: Trade people in the geographic divisions.

Mr Varghese : We have given the divisions numbers, and they will have a measure of flexibility in terms of how they deploy those numbers across foreign policy, trade and development cooperation.

Senator WONG: And there has been no instruction about relative priority in any geographic area?

Mr Varghese : We have not, to our geographic divisions, given them an instruction, no.

Senator WONG: Maybe you can tell me the next time we appear, or take this on notice. There were a number of questions asked about how the 500 would be divvied up. What I am interested in is the effect on, I suppose, the trade capacity.

Mr Varghese : Sure.

Senator WONG: So if you are able to give me whatever metrics once this has been resolved, I would appreciate that.

Mr Varghese : Yes. But I think the bottom line is that in a declining budget for staff, trade is going to stay the same, essentially.

Senator WONG: As a proportion?

Mr Varghese : It will increase as a proportion because we are reducing the overall base by 500 and we are keeping the trade numbers the same.

Senator WONG: Assuming what happens in the geographic divisions?

Mr Varghese : Yes, but I would not expect much shift in the geographic divisions because the numbers are not very big in the geographic divisions.

Senator WONG: Okay, no, that is fine you are much more familiar with your department. I think Senator Macdonald asked some questions about the KAFTA. I am conscious that there is a Senate enquiry which has submissions, and I would hope that DFAT would give some evidence at that. There are a lot of senators, I think, with an interest. But the key thing I would like to get some sense of, Ms Adams, is the domestic political process in Korea for ratification. I assume you—you may be all knowing—or someone who works for you knows and can tell me what is required in the Korean domestic political process for ratification and give me some assessment of where that is. I will be clear: there has been some commentary, formal and otherwise, of some political concerns about some aspects of it, which probably mirror to some extent Australia's political debate. Maybe Mr Rowe can assist.

Mr Rowe : Basically, it goes before the National Assembly and is either passed or not passed. I cannot give you the timings on that, but at the moment we are in discussion with the Korean side about the timing on it. We want to see it passed before the end of the year. Yes, there is some debate on it, but nobody at the moment is assessing that there are insurmountable obstacles in getting it through.

Senator WONG: It is a straight up parliamentary vote, is it?

Mr Rowe : Yes.

Senator WONG: Without which the executive cannot ratify?

Mr Rowe : That is right. It cannot come into force.

Senator WONG: Pardon me, but I am not familiar with the ins and outs of the numbers in the National Assembly.

Mr Rowe : The ruling party—the president's party—has a slim majority.

Senator WONG: In coalition, though?

Mr Rowe : No, it is a majority in its own right. The National Assembly in Korea works much more by consensus than like the vote here. If it the opposition is particularly opposed to a bill going through, it will blockade the house and perhaps take to the streets to organise such opposition that a ruling party will be reluctant to push something through in those circumstances. That does not look to be on the cards with ours. The big deal was the US FTA and, with that having gone through, the Australian one does not present the same sorts of either sensitivities or threat to industries in Korea.

Senator WONG: Can I go back to timing. Presumably, you or some of your colleagues must have engaged with those in the Korean political process to get some sense of timing.

Mr Rowe : The embassy is working closely with us on it, because it is their biggest task at the moment.

Senator WONG: Can you tell me what is our best understanding of when it is likely to go before the National Assembly?

Mr Rowe : Within the next few months. I can take it on notice, if you like, and get those exact timings.

Senator WONG: That would be good.

Mr Rowe : I just do not have them at my fingertips.

Senator WONG: I am sure that we have some sense of it.

Ms Adams : Yes, we do. Although, it is not a guarantee in terms of the scheduling of their National Assembly business.

Senator WONG: I am actually not trying to say, 'Jan Adams said X, it's passed and it's the government's broken promise.' I am actually genuinely trying to get some sense of how long it will be and what we might expect.

Ms Adams : We are hoping that it will be introduced into the National Assembly around about September. At ministerial, as well as ambassadorial, level we are certainly working closely with them to try to have our processes aligned.

Senator WONG: Which is why you have commenced the JSCOT process for a similar timeframe.

Ms Adams : More or less, although we did institute our own procedures as soon as we were able to. We tabled the first sitting day after signature.

Senator WONG: Yes. At this stage, your best assessment is—as per Mr Rowe—that we would not anticipate that there would be a problem domestically?

Ms Adams : That is right.

Senator WONG: This is Korea, not us.

Ms Adams : That is right. We are very confident that it will enjoy a lot of support in the National Assembly. As you say, there is always some particular industry debate in a domestic context, but we have also been in contact with members of the National Assembly and the committee chairs and so on, and we are confident that our agreement does enjoy very broad support.

Senator WONG: Do they have an inquiry process, like something analogous to the Joint Standing Committee on Treaties or our Senate inquiry process?

Ms Adams : It is slightly different. They have the ministry of trade, or what is now called MOCIE—the Ministry of Commerce, Industry and Energy—which reports to the National Assembly. So they have reported perhaps more in a forum like this than a public submissions process.

Senator WONG: Are there any particular political concerns which have been publicly expressed within Korea around any particular provisions of the KAFTA?

Ms Adams : Agriculture market access is always the political issue. There has been some debate about that, but, as Mr Rowe said, certainly not to the level that was so controversial in the US-Korea FTA.

Senator WONG: Is that all? ISDS has not been an issue?

Ms Adams : No, ISDS is a standard part of all of the Korean agreements, so that is in line with their policy.

Senator WONG: There are no issues with any of the opposition or minor parties?

Ms Adams : Sorry, I should not say that. There may be.

Senator WONG: So you are talking government position.

Ms Adams : Yes.

Senator WONG: I was trying to glean the National Assembly position.

Mr Rowe : The ISDS clause was in there because the Koreans wanted it in there because the opposition was demanding it. We get the impression that the opposition are not vehemently opposed. They are not opposed to the extent that, as I was saying, they would try to mount almost physical opposition to it. But there are, of course, people who oppose it, and there are groups who disagree with free trade.

Senator WONG: Can I turn now to Japan. Did you lead those negotiations, Ms Adams?

Ms Adams : When I was head of the Free Trade Agreement Division, I led those negotiations for several years, and then, more recently, I was also involved in the negotiations at a chief negotiator level, which is at a deputy secretary level. But people in the Free Trade Agreement Division and, specifically, the head of the North Asia Goods Branch, Frances Lisson, headed the market access negotiations.

Senator WONG: On notice, can I get how many meetings there have been between representatives of both countries in the past three months and details of who attended those meetings on behalf of Australia, where the meetings were conducted and if there were particular key areas of discussion that can be disclosed in relation to those meetings? Can you tell me when the text is intended to be released?

Ms Adams : We expect the text to be released when the treaty is signed, which we hope will be in early July.

Senator WONG: The government released KAFTA prior to signature, did it not?

Ms Adams : That is correct.

Senator WONG: Is there a policy reason why Japan will not be released prior to signature?

Ms Adams : Normal treaty practice would be for the text to be released post signature. With Korea it was done slightly differently to fit in with Korean legislative requirements for the text to be made public before the signature. So Korea was the aberration, if you like.

Senator WONG: Could you give me a summary—if you want to take it on notice you can—of the Japanese domestic, legal and parliamentary process. What are the steps there.

Ms Adams : It is similar.

Senator WONG: So it is a straight-up vote?

Mr Fletcher : It needs to go through the Japanese Diet and be approved by the parliament.

Senator WONG: You said early July for a formal signature so it would be envisaged that those parliamentary processes would occur thereafter, presumably?

Mr Fletcher : Yes.

Senator WONG: Could you give me some more detail about their domestic processes.

Mr Fletcher : I can take that on notice.

Senator WONG: Does no-one know?

Mr Rowe : We have been focused on getting the thing negotiated, not on the ratification process.

Senator WONG: I am just asking what the steps are.

Mr Rowe : It is a similar process in the sense that it has to go through the Diet. Even more so than in Korea, the Prime Minister, Shinzo Abe, there has a very strong majority and we would not expect there to be a major problem in its being ratified.

Senator WONG: I did not ask if there was a problem; I just asked what the steps were.

Mr Rowe : As we said, we would have to take it on notice and make sure it was accurate.

Ms Adams : Let me add that we have of course been talking to the Japanese government about the ratification and implementation process. Both governments are working to implement as soon as we possibly can. There is a lot of work, as you know, to get to the signing stage. Once we get past that then it is a matter of getting through the legislative procedures in both sides. It turns out that the Australian side has more formal time lines because of our JSCOT process. In the Japanese Diet it will be a matter of more or less introducing the legislation that needs to be passed because the legislation that sets the tariff rates and any other legislative change. Those pieces of legislation need to be changed. What I can say is that on our discussions so far with the Japanese side, it seems that their processes would take no longer than ours would.

Senator WONG: Would the process be a straight-up vote on yay or nay and subsequently on any enabling legislation?

Ms Adams : That is right.

Senator WONG: As it is here?

Ms Adams : Yes.