Office of National Assessments

[21:57]

CHAIR: I would invite the officers of the Office of National Assessments to join the Minister at the table. I welcome Mr Richard Maude, the Director-General of the Office of National Assessments, and the officers. Mr Maude, do you wish to make an opening statement?

Mr Maude : No, thank you.

Senator JACINTA COLLINS: Mr Maude, could you remind me of the key outcomes of the ONA?

Mr Maude : If you look at the performance indicators that we set out in the portfolio budget statements, they are qualitative indicators, not quantitative indicators. So we judge ourselves by, for example, the uniqueness, timeliness, responsiveness, relevance and accuracy of what we do, and we do three things. One is, we seek to explain the world to government—that is, we provide classified assessments to government on economic, strategic and political developments, and international developments. We also help evaluate and coordinate Australia's foreign intelligence effort, and we also house the Open Source Centre. So in making those judgements that I said, which are qualitative, we rely very heavily on the feedback we get on the service that we are providing to government. We are also formally evaluated every year by the Department of Prime Minister and Cabinet.

Senator JACINTA COLLINS: And are you able to inform the committee of the outcome of the most recent evaluation?

Mr Maude : The outcome of the most recent evaluation was that ONA was meeting the expectations of its key customers. Our key customers are the Prime Minister, members of the National Security Committee of cabinet and senior officials, particularly in the national security community.

Senator JACINTA COLLINS: Are you subject to the efficiency dividend?

Mr Maude : Yes, we are.

Senator JACINTA COLLINS: Before I get to that, what savings has the ONA taken to date ahead of the dividend?

Mr Maude : When you say 'ahead of the dividend' which dividend are you referring to?

Senator JACINTA COLLINS: The current one.

Mr Maude : We add up—

Senator JACINTA COLLINS: I am trying to understand the nature of the savings that you have gained to date.

Mr Maude : In relation to the nature of the savings in this financial year and out over the forward estimates, we will have to find $12.3 million. That sum comes from the full range of efficiency dividends that have been applied over time and a number of one-off saving measures that have also been applied over time.

Senator JACINTA COLLINS: Can you disaggregate those?

Mr Maude : I can to some degree.

Senator JACINTA COLLINS: I suppose the distinction there is the efficiency dividends that have been applied across most areas as opposed to additional savings that have been made and applied to ONA.

Mr Maude : All the efficiency dividends that have been applied over the forward estimates apply to ONA. There have been a range, as I said, of targeting measures—

Senator JACINTA COLLINS: No, I am sorry. My question was a different one. I thought you were suggesting that, apart from efficiency dividends, there had been other savings that had been taken from ONA.

Mr Maude : Other savings that applied across the Public Service.

Senator JACINTA COLLINS: Okay. Fine.

Mr Maude : There has been no savings measure which has individually targeted ONA.

Senator JACINTA COLLINS: Sorry, I interrupted you.

Mr Maude : In 2013-14 the one per cent, the 1.5 per cent and the 1.25 per cent efficiency dividends were $483,000; targeted savings were $187,000 and contributions through other budget measures were $300,000. The 2.5 per cent efficiency dividend was $745,000. Increased efficiency savings were $124,000. The 0.25 per cent does not come into effect in 2013-14; it hits us later.

Senator JACINTA COLLINS: Let us start with non-staff related savings. What measures have been applied that have yielded savings to date?

Mr Maude : There have been a range of saving measures that have applied across the government.

Senator JACINTA COLLINS: I mean the measures within the ONA to yield—

Mr Maude : You mean how we are finding the money?

Senator JACINTA COLLINS: That is right, yes.

Mr Maude : We are doing it in a number of ways. We have trimmed wherever we can our administrative budget and we have reduced our travel expenditure. They are the two main non-staff measures.

Senator TILLEM: So of the $12.5 million how much does that account for?

Mr Maude : The $12.3 million is over this financial year and the forward estimates. I could not disaggregate it for you. I would have to take that on notice.

Senator TILLEM: That is an awful lot of administration.

Mr Maude : I have not said that that is the only way we are finding the money.

Senator TILLEM: No, it is just an opinion I put forward. Could you provide that to the committee on notice?

Mr Maude : Sure.

Senator JACINTA COLLINS: What remaining scope is there for non-staff related efficiency savings in your view?

Mr Maude : There is a bit, but not much more I think. We have probably found the easy money in our administrative budget and in our travel budget, but we are always looking to be more efficient in the way we do things in the office and to squeeze every dollar we can out of our administrative budget.

Senator JACINTA COLLINS: If there is some small scope, will the savings you have highlighted—this $12.3 million—end up limiting the capacity of the ONA to deliver on its key outcomes?

Mr Maude : I am confident that we are going to be able to meet our statutory obligations and maintain the quality of what we do. We are going to have to get better at prioritising. There are some lower priority things that we will do less of in order to support our higher priority functions.

Senator JACINTA COLLINS: Are you able to give me an example of a lower priority function?

Mr Maude : As an example, we might report less on Europe to protect our reporting on Asia. We might do less on transnational crime to support our reporting on terrorism.

Senator JACINTA COLLINS: What about in relation to the Open Source Centre?

Mr Maude : There would be no significant impact, at the moment, on the Open Source Centre's output.

Senator JACINTA COLLINS: You do not envisage these further savings impacting on that?

Mr Maude : We have not yet talked about staffing effects. I expect that the Open Source Centre will get a bit smaller.

Senator JACINTA COLLINS: Let us go, then, to staffing. What is the planned reduction in staff over the course of 2014-15?

Mr Maude : Our average staffing level—that is not a headcount; that is a paid FTE figure averaged out over the year—will probably end this financial year around 135. Then, in 2014-15, we expect to drop to around 130.

Senator JACINTA COLLINS: You expect that to be the result of natural attrition?

Mr Maude : Yes.

Senator JACINTA COLLINS: You expect to be able to achieve that reduction without a redundancy process?

Mr Maude : We may do the odd voluntary redundancy, but I am not expecting to have to do involuntary redundancies.

Senator JACINTA COLLINS: That reduction in staff, from what you have indicated, you do not see affecting your capacity to meet key outcomes?

Mr Maude : No.

Senator JACINTA COLLINS: What proportion of that staffing reduction will relate to the Open Source Centre?

Mr Maude : I cannot tell you. Because we are a pretty small agency, we take every individual staffing decision as it comes. Because we are confident that we will rely on natural attrition, there is no grand plan for that reduction. We will look at everybody that goes and make a decision about whether we replace them or not. It is possible there will be changes in the Open Source Centre, but we will see how our staff movements go.

Senator JACINTA COLLINS: It depends on where the attrition occurs?

Mr Maude : Yes.

Senator JACINTA COLLINS: And on what reallocations you make as a consequence?

Mr Maude : Yes, on the decisions we make. We will get more than that number of people going, but we will replace some of them.

Senator JACINTA COLLINS: What number of people do you usually have go in a financial year?

Mr Maude : Our separation rates are normally higher than the APS-wide separation rates. That is mainly a function of being a small specialised agency—there are limited career paths in it. So we often have people who come in from, for example, the Department of Foreign Affairs or the Department of Defence or another intelligence agency. They will spend some years with us and then go on and do the next thing. So our separation rates, on average, have been around 10 per cent or 11 per cent. They are starting to come down, not surprisingly, and I expect them to come down a bit more.

Senator JACINTA COLLINS: That concludes my questions. Thank you.

CHAIR: I have just a couple of questions. Senator Collins referred to the Open Source Centre, which is where anyone on your website can apply to for access to the information you have collected. Are you able to briefly take me through the processes you use to determine if someone qualifies for access to that information?

Mr Maude : I think you are confusing two separate things there. The open source centre is a part of the agency that looks at overseas vernacular media and social media and draws out of that material that is useful for our intelligence analysts. There is a separate scheme called the Open Access Scheme, which applies across government. We get applications for the release of ONA material. This is managed in conjunction with the National Archive. We will examine the requests that come in. There are grounds for us to make a case for not releasing documents in full or in part, and we make a judgment about the national security implications or our doing so. Where we need to we will consult with foreign partners, if there is material in the document that may affect our relationship with a foreign partner. The short answer is that the legislation allows us to make a case for exempting documents in their entirety or in part on broad national security grounds. Mr Harrison, did you want to add anything to that?

Mr Harrison : No.

CHAIR: Can you just confirm that the ONA material and research is available only to government?

Mr Maude : That is correct. We do not provide material to any non-government entity or individual. We are a government agency and we exist only to work to the government.

CHAIR: Does that include our strategic allies? If I am encroaching into space where I should not, I apologise for it, and please tell me if that is so.

Mr Maude : We do a range of very short-term and medium to longer term reporting. If there is a crisis breaking, for example in Thailand, we will do reports that are very contemporary and current and do not try to look too far out ahead. But we are also mandated to look at boarder strategic challenges that are unfolding more slowly. With the security dynamics in our region, for example, we will do pieces like that, which attempt to look out further into the future.

CHAIR: If I have any further questions I will place them on notice.

Senator TILLEM: The information you provide is to Australian and allied government agencies. To whom does 'allied government agencies' refer?

Mr Maude : We provide classified reporting essentially to the national security community in Australia, which is broadly defined, so it would include the intelligence community but also departments of state, like the Department of Foreign Affairs and Trade, Defence and the Department of Prime Minister and Cabinet, and agencies like the Department of Immigration and Border Protection and the like. We do share some of what we do with some of our foreign partners. There are guidelines and arrangements around the sharing of those assessments. In return we also get material from some of our foreign partners that helps us test our own judgments and understandings about developments in the world.

Senator TILLEM: Is the exchange of information between Australian agencies not centralised, in terms of exchange with foreign nations?

Mr Maude : We control the distribution of our products. So ONA has the final call about where our reports will go. That will depend on the level of the classification, in some instances, and on the nature and content of the report, in other instances. So the distribution of each report is considered individually and tailored appropriately within government and, where appropriate, for sharing with a foreign partner.

Senator TILLEM: So, again, you make your own call on what to share and whom to share it with?

Mr Maude : Yes.

Senator TILLEM: And I presume other intelligence agencies also operate on the same plane?

Mr Maude : Correct.

Senator TILLEM: Is there a coordinating role that the ONA plays in any of the intelligence gathering you do?

Mr Maude : We do. We are mandated by the ONA Act to play a role in the evaluation and coordination of Australia's foreign intelligence activities. That does not mean that we get involved in the day-to-day operations of other agencies. But to give you one example, ONA chairs the National Intelligence Collection Management Committee, which is a committee that works across the community and looks at collection requirements and tasking for the community. We also do evaluations of our collection effort against national intelligence priorities. We do evaluations of the Australian collectors in the community, as well.

Senator TILLEM: It is quite substantial role in the intelligence gathering of this nation.

Mr Maude : Yes, it is a substantial role and it is mandated by the act.

Senator TILLEM: Given the substantive role that you play within the community, and clearly it is an important role, I find it hard to imagine how the effects of an efficiency dividend would not manifest itself on some level, aside from administrative and logistical costs.

Mr Maude : It does have an impact on us. We have to find a significant amount of money. But I think the point I made is that we are prioritising, as the government would expect us to do, and the way we are managing that is to protect the things that are of the highset priority and to do less of the things that are of the lowest priority.

CHAIR: Thank you for your evidence.