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Foreign Affairs, Defence and Trade Legislation Committee
06/05/2016
Estimates
FOREIGN AFFAIRS PORTFOLIO
Department of Foreign Affairs and Trade

Department of Foreign Affairs and Trade

Senator WONG: Can I go to the notarial fees, Budget Paper No. 2, page 12?

Mr Varghese : I might check if our Chief Financial Officer is here.

Senator WONG: You should keep your CFO here.

Mr Varghese : Okay.

Senator WONG: He has walked out the door. Do you want me to go to something else?

Mr Varghese : Normally when we move to trade it does not require the CFO.

Senator WONG: I do have some budget questions for trade.

Mr Varghese : In which case we will make sure the CFO is here. Did you want to ask your notarial question?

Senator WONG: I am sorry, Mr Wood—you thought you were away. I should have said that I have some budget questions. In what circumstances do Austrade and DFAT provide such services, and to whom? That is BP 2, page 12.

Mr Wood : I do not know too much about the specifics of how the notarial—

Mr Varghese : I think Jon Philp can answer the question, because he is head of the consular area.

Senator WONG: I am trying to get a sense of current fee levels, current demand et cetera.

Mr Philp : I am just going through my notes. I know that notarial fees have not risen for many years—I think 15 or 16 years.

Senator WONG: What are they currently? Do you have an existing fee structure? I am trying to get a sense of what sort of rise this is.

Mr Philp : I do not have that information to hand, I am sorry. I will have to take that on notice.

Senator WONG: Can you help, Mr Wood?

Mr Wood : If you could give it a few minutes, I will go through the details. I recall that there is a revised fee structure. If we can identify that, I can provide you with some details.

Senator WONG: I want to know a sense of the breakdown between DFAT and Austrade. I want to know whether there is a change in the assumption around demand for the service embedded in the costing, or is it simply an arithmetical assumption around this much additional in fees and the same assumption about demand?

Mr Wood : I think it is more the latter. It was around the change in the prices and the fees at the time.

Senator WONG: If you could confirm that, that would be useful.

Mr Philp : There are two things there. It is not simply a rise in fees; it is also a simplification of the fee structure. Because we are going to more electronic payments, the payment systems become simpler if we have a flatter structure with fewer fees. So it was an increase, but it is also a simplification.

Senator WONG: Is that part of the same measure, or is that part of the other measure—supporting consular services? I am only asking about the notarial fee increase budget measure.

Mr Philp : Yes. I am only talking about notarial fees.

Senator WONG: I think Senator McEwen has done a fair bit on the measure as to efficiencies—correct?

Mr Wood : Yes.

Mr Varghese : I am not sure if she was any the wiser after it, but we have certainly spent a lot of time on it.

Senator WONG: Could you tell me whether, in that budget measure, there is any assumption as to staffing reduction? It is $74.5 million, isn't it?

Mr Wood : It is $74.5 million for DFAT and Austrade. For the DFAT component it is $50.5 million over the forward estimates.

Senator WONG: Is Austrade here? Are we doing this together?

Mr Varghese : They are after us.

Senator WONG: Can we do them together? I want to ask them. This is a joint measure.

Senator Brandis: I do not have any objection to that.

CHAIR: Can Australian Trade Commission personnel come to the table?

Senator WONG: While that is happening and people are talking to each other, can I just ask: the $50.47 million—was that the number you gave me for the DFAT component?

Mr Wood : Correct, Senator.

Senator WONG: Does that involve any staffing reduction?

Mr Wood : It does involve some reduction in average staffing levels.

Senator WONG: What was the number?

Mr Wood : I only have the dollar figures.

Senator WONG: You have the dollar figure for what exactly?

Mr Wood : For the profile of the total save.

Senator WONG: But you do not have the dollar figure attributable—that is a pity, isn't it? Have you made a decision about whether those staff come from the trade or foreign affairs side?

Mr Wood : No decision has been made on how it would be implemented. It is primarily focused on corporate back-office type activities.

Senator WONG: What about Austrade? I am talking about the budget measure involving efficiencies in BP2 at page 97.

Mr O'Meara : The $24 million.

Senator WONG: Any staffing on that?

Mr O'Meara : The $24 million is broken up into some savings—in fact a large portion of it is savings in our corporate areas—with some of it delivered through corporate efficiencies and some of it through a small staff reduction.

Senator WONG: How many?

Mr O'Meara : A total in the corporate area of nine and a total ASL reduction of 12.5 with vacancy management of about 20 in the first year, which is 2016-17.

Senator WONG: I am having a little bit of difficulty, Mr Wood, in reconciling how this measure is reported in the PBS, as opposed to how it is reported in the Budget Paper No. 2. Are you able to assist me with that?

Mr Wood : I do not blame you for having that difficulty.

Senator WONG: I am glad. I was feeling a little not bright.

Mr Wood : In the PBS, we reflect the profile of the save. In BP2 it notes, in the second last paragraph of the measure, that provisions for this funding have already been included in the forward estimates. It says:

The expenditure impact identified against DFAT reflects changes in the timing and nature of the efficiencies since the original saving was provisioned.

There was originally a provision and then the actual final measure was agreed.

Senator WONG: Which is correct?

Mr Wood : The correct value is in our Portfolio Budget Statement, in terms of the impact across the years.

Senator WONG: Does that, in aggregate, equal the cost of the calculation of the savings of the measure on page 97 in BP2?

Mr Wood : The measure table on page 23 of the portfolio budget statements is the profile of the $5.5 million save over the forward estimates. The numbers in the table in Budget Paper No. 2 reflect the fact that there was originally a provision.

Senator WONG: How much was the provision?

Mr Wood : I would have to add those two numbers together. As you know, this is prepared by the central agencies.

Senator WONG: You should not blame them. They get grumpy when you blame them. I just want to understand what the balancing item is. What is the provision that was already there? You are not able to tell me that now?

Mr Wood : It would have been the sum of those two numbers.

Senator WONG: Okay. How much funding will be reduced from Match Australia?

Mr O'Meara : Over the forward estimates it is $1 million. That is $250,000 per year of the forward estimates.

Senator WONG: And that is included in the $74.5 million?

Mr O'Meara : It is including in the $24 million for Austrade.

Senator WONG: But for the portfolio?

Mr O'Meara : Yes, across the portfolio.

Senator WONG: What else is out of Austrade?

Mr O'Meara : We are reducing our presence in Mongolia, and that would be $1.4 million.

Senator WONG: These are forward estimates figures?

Mr O'Meara : Yes. That is because DFAT is establishing an office there, so we have less requirement for the number of staff that we previously had to cover consular work.

Senator WONG: You were giving me the elements of the $20.4 million, I think. So it was $1 million for Match Australia and $1.4 million for the presence in Mongolia.

Mr O'Meara : Yes, we have taken out $1 million across the forward estimates from our discretionary expenditure in our offshore posts.

Senator WONG: What does that leave remaining in that?

Mr O'Meara : It leaves about $23 million out of a total of $24 million.

Senator WONG: What is the remaining funding in Match Australia across the forwards after the $250,000 reduction?

Mr O'Meara : It is $4.5 million.

Senator WONG: Across the forwards?

Mr O'Meara : Across the forwards, yes.

Senator WONG: Can you give me the profile on that?

Mr O'Meara : It is pretty evenly split. So it is—

Senator WONG: One and a bit?

Mr O'Meara : It will be $1.05 million next year, $1.05 million the year after and then it rises to $1.25 million in the—

Senator WONG: In the out year?

Mr O'Meara : Yes.

Senator WONG: Thank you. We are not at $23 million yet. Do you have this in a table?

Mr O'Meara : Yes, I do.

Senator WONG: Do you just want to table it?

Mr O'Meara : Yes, sure.

Senator WONG: That would be great. I do not have to go through it; I just want to disaggregate it. Do you have something like that for the $54 million?

Mr Wood : For the $50.5 million? No.

Senator WONG: We have had that conversation, haven't we? Life would have been much easier. Have you been asked about the FTA Portal enhancement in Budget Paper No. 2, on page 98?

Mr Wood : Not yet.

Senator WONG: Can you tell me what that is going to be spent on? It says it is being met from existing resources, so tell me what areas of planned activity are going to be altered to cover the cost.

Mr Brown : The allocation for the expansion of the portal is $1.8 million over the forward estimates. The intention is to expand the content of the portal to include data for all of our existing FTAs. At the moment, it is purely for the North Asian FTAs, so we intend to ensure that all of our free trade data is included in the portal. Perhaps the CFO can help me here, but the intention is that those funds would be from the IT area of the department.

Senator WONG: Is that right?

Mr Wood : Yes, it is primarily capital funding, so it is the reallocation of our departmental capital budget, or our use of our departmental capital budget.

Senator WONG: Have you covered the Austrade office in Tehran in Budget Paper No. 2 on page 100?

Mr O'Meara : The Tehran office is, over the forward estimates, $5.4 million, and we have offset that through other reductions in our international operations. Some of those have not been announced, and they have staff impacts, so I am reluctant to say where—

Senator WONG: That is fine. How long has it been since we had an Austrade office in Tehran? Have we ever had one before?

Mr O'Meara : We have in the past. I will have to defer to someone else.

Senator WONG: Is it intended that it be opened—

CHAIR: This year.

Senator WONG: this year? Sorry, did you ask these questions?

CHAIR: No, I understand that from a committee meeting about it.

Mr O'Meara : It will be this year. Not this financial year—

Senator WONG: This coming financial year or this calendar year?

Mr O'Meara : It depends a little bit. We are moving into the DFAT premises there, so it will depend on when we are ready to do that.

Senator WONG: Sorry, I just want to know what you meant by 'this year'.

Mr O'Meara : It will be next financial year. I think it will probably be before December, but I would have to take the exact date on notice.

Senator WONG: I am just trying to get a sense. So it is not in 2017-18. You are looking at 2016-17?

Mr O'Meara : Yes.

Senator WONG: You are moving into the DFAT embassy?

Mr Varghese : Embassy, yes.

Mr O'Meara : Yes, that is correct.

Senator WONG: How many staff do you intend to post there?

Mr O'Meara : We intend to have five staff there.

Senator WONG: Plus local staff?

Mr O'Meara : Sorry, a correction—four.

Senator WONG: Plus local?

Mr O'Meara : One will be A-based—that is, one Australian posted—and three will be locally engaged.

Senator WONG: I think you said the cost of this measure was from the international discretionary—

Mr O'Meara : Yes, I said it was from the international operations and some of the changes would impact staff. They have not been announced yet, so I do not want to disclose exactly where those changes would come from.

Senator WONG: I am trying to be reasonable thinking about that. What I am interested in is where we are going to be reducing our presence, that is all. So those decisions have been made, but staff have not been told?

Mr O'Meara : Yes, they have been made internally—correct—but staff have not been advised.

Senator WONG: When do you intend to advise them?

Mr O'Meara : We are hoping to do that before June. When I say 'June', I mean the end of June rather than the beginning.

Senator WONG: There was a movement of funds: the PBS, page 95—$6 million shifted. It says:

movement of funds for the Free Trade Agreement from 2016-17 to 2015-16 - a decrease of $6.0 million …

Can you explain what that means?

Mr O'Meara : Yes. We have discussed it at previous Senate estimates.

Senator WONG: This is the bring forward?

Mr O'Meara : Yes. Exactly.

Senator WONG: For all of the advertising?

Mr O'Meara : It is the money that was brought forward in December-January for FTA activity.

Senator WONG: Advertising?

Mr O'Meara : Some of it was spent on advertising, yes.

Senator WONG: The Australia Week in China has been terminated.

Mr O'Meara : The Australia Week in China funding came through as a single piece of funding to continue a program. Subsequent to that, in last year's budget we received new funding for Australia Week events that ran over the period of the forward estimates. It has terminated, as it is shown there, but there is a new program for Australia Week events.

Senator WONG: Which was in this budget or in the MYEFO?

Mr O'Meara : It was in the previous budget, the 2015-16 budget.

Senator WONG: I asked the Department of the Senate about this, as I noticed that there were TPP measures in the PBS of a range of other departments—I think it was some $15.6 million. Can someone tell me about why that is?

Mr J Brown : I think the principle one would be in relation to government procurement, where the Department of Finance is making changes to reflect the fact that the TPP includes a domestic review provision. There is also, as I understand it, a range of IT enhancements which are necessary to put into effect the commitments in the TPP on government procurement.

Senator WONG: Why do the government procurement reforms in the TPP require capex on upgrading IT?

Mr J Brown : It is not really an area I am an expert in; it is really a Department of Finance area. I think it requires new software investments so that there can be greater connectivity between the various systems at the state and federal levels.

Senator WONG: I am not asking a boffin question, because I am very bad IT as well; I am actually asking a policy question: what is the policy proposition in the TPP in relation to government procurement that the IT system will now have to be able to undertake?

Mr J Brown : The advice I have is that there are 42 entities that are receiving funding to upgrade their IT systems to support the greater transparency in the reporting procurements that are required under the TPP chapter.

Senator WONG: Could you repeat that?

Mr J Brown : All of it?

Senator WONG: Yes, I did not understand it.

Mr J Brown : I will try and be clearer: the funding is for 42 entities which are receiving this funding for the purpose of upgrading their IT systems to support the greater transparency and reporting of procurements that are required under the TPP. DFAT, for its part, is receiving funds to upgrade two of its systems: one for the former DFAT, and one for the former AusAID. I am told that the Department of Finance has comprehensive information on this.

Senator WONG: I am actually interested in the policy proposition that lies behind it, which is supporting greater transparency and reporting of procurement. Can someone explain to me, without getting into an incredibly long conversation about the TPP, what it is that the TPP requires us to be able to do that we do not currently do?

Mr J Brown : I am going to have to take that on notice to give you a comprehensive answer on that.

Senator WONG: I doubt that will happen because there will be an election. We will have to see, depending on which side of the table we are on, I suppose, whether I will get a comprehensive answer. Can anyone tell me what the role of the Federal Court is? Attorney, I am not asking as an existential proposition. In the budget measure, there is additional funding to the Federal Court to provide a mechanism to deal with disputes about procurement decisions as a result of the TPP. Can someone tell me why?

Senator Brandis: I think there is some jurisdiction conferred on the court to deal with any disputes. That is a trade question, not an Attorney question. I think you will find that is the answer.

Senator WONG: Yes, I am sure there is. I just want to understand: in the TPP, what have we agreed that means the Federal Court needs more funding for disputes?

Mr J Brown : On the Federal Court question I will ask Tegan Brink to respond.

Ms Brink : In relation to your question on the Federal Court, my understanding is that the government has decided that, in order to implement the domestic review commitments in the TPP federally, we will vest jurisdiction in the Federal Court to hear those cases and, in order to do that, the Federal Court will need additional funding.

Senator WONG: Tell me: who are the punitive parties to such disputes?

Ms Brink : For example, parties who may have lost out in a tendering process.

Senator WONG: Meaning foreign companies, foreign firms who might have bid and believe that one of the reasons they did not win was that the procurement process was not conducted in accordance with the TPP requirements?

Ms Brink : Yes, except domestic firms would obviously also be able to take advantage of that opportunity.

Senator WONG: Why would they be more benefited under the TPP in relation to domestic procurement? Any benefit to the Australian firm is in the context of other markets, presumably. They are not getting a better market position from the TPP in domestic market.

Ms Brink : There are commitments in the TPP around tendering and the process that all companies participating in a tender could take advantage of. There is no reason why they could not be an applicant in—

Senator WONG: No—I assumed there is no legal bar to them, but as a matter of commercial reality what do they get that they do not already have in terms of the domestic market from the TPP?

Ms Brink : They get a domestic review. We will have to implement a review process that does not currently exist.

Senator WONG: Does the TPP require, then, changes to the current Commonwealth procurement guidelines or rules?

Ms Brink : It does in relation to thresholds, but I should say that questions about those guidelines are best directed to the Department of Finance.

Senator WONG: I knew you would say that. You probably practiced that! I was not going to progress exactly what it is, but it will require review or changes to them?

Ms Brink : That is correct.

Senator WONG: Have you provided advice to Finance about changes to the CPRs required?

Ms Brink : We have worked very closely with Finance, including in negotiations.

Senator WONG: Is there a set of draft CPRs or revised CPRs?

Ms Brink : I am not aware of whether they have been developed at this time.

Senator WONG: Mr Wood, are you able to give me whatever we were asking for before the break, which I have currently forgotten?

Mr Wood : I think it was the notarial fee structure.

Senator WONG: That was it.

Mr Wood : No, I do not have that.

Senator WONG: Okay. And we are not likely to get it. Is that right? That was not a trick question. You are not able to get this—

Mr Wood : I have just checked my emails. No.

Senator WONG: I quickly ask about the third review of the 2003 Singapore-Australia Free Trade Agreement. There was a statement issued today announcing that the recent review was substantially concluded. When and where did those negotiations take place? Can someone tell me whether Mr Robb or Mr Ciobo led the negotiations?

Mr Varghese : I will ask Mr Brown to go into more details, but the negotiations have been effectively conducted over the last 11 months. June last year was when both governments agreed that they would seek to reach agreement across the full range of issues. So there have been negotiations held in Singapore and there have been negotiations held in Australia. Mr Robb has been the lead negotiator and the lead coordinator on the Australian side.

Senator WONG: What does 'substantially concluded' mean?

Mr Varghese : Both countries have agreed to the outlines of agreements across trade, defence and other issues, which have been endorsed by both governments. Some of that will now need to take more detailed legal form. Some of it will be reflected in a treaty. I think the main points have all been agreed, but there will be further work required on the form in which it is legally binding. I think that is the answer, but Mr Brown may want to add to or subtract from that.

Mr J Brown : It really means that the outcomes will now need to be made legally precise. The text will have to be formalised and the legal scrub will have to be undertaken.

Senator WONG: When were these outlines of agreements across trade, defence and other issues substantially concluded?

Mr J Brown : I might ask Ms Brink to give the precise dates, but it was substantially concluded in Mr Robb's most recent visit to Singapore.

Ms Brink : That is correct. That was on 29 April.

Senator WONG: I think the press release about this was from the department. Is that right? Did the department issue a statement?

Mr J Brown : The Prime Minister's statement I believe has been posted. On the DFAT website there is a fact sheet and a range of other information and material.

Senator WONG: When was DFAT aware that the substantial conclusion of this review was going to be released publicly to the papers today?

Mr Varghese : We were aware of the intention of the government to make an announcement on Friday earlier this week when the matter was considered by relevant cabinet ministers.

Senator WONG: Which matter? There was no decision-making required of government—

Mr Varghese : The details of the deal.

Senator WONG: That is what I am asking. Was there any decision of government this week in relation to the substantial conclusion?

Mr Varghese : Yes.

Senator WONG: So we have to agree the outline of agreements?

Mr Varghese : That is right.

Senator WONG: When did cabinet consider that?

Mr Varghese : It went to the National Security Committee of cabinet on Tuesday, I think.

Senator WONG: Was Mr Robb present?

Mr Varghese : Yes.

Senator WONG: Mr Robb was—what is the word?—co-opted?

Senator Brandis: Seconded.

Senator WONG: Did that meeting include a consideration of substance as well as timing of announcement?

Mr Varghese : Yes.

Senator WONG: So they had to decide, 'We agree to these outlines of agreements'?

Mr Varghese : Yes.

Senator WONG: And you were aware from that meeting—what was the date of that? Tuesday?

Mr Varghese : Tuesday, whatever the date was.

Senator WONG: The 3rd. I have a few more questions, but I am happy to interrupt this to go to Senator Xenophon, Chair, if that is helpful.

Senator XENOPHON: Thank you, Senator Wong. In relation to the World Trade Organization's Agreement on Government Procurement, what is the status of Australian government negotiations?

Mr J Brown : The negotiations are ongoing. As you would be aware, we are seeking to accede to that agreement. Those negotiations are continuing. At the present time there is no end date for those negotiations.

Senator XENOPHON: If an election is called, as is likely this weekend, will those negotiations be suspended until after the election? What is the protocol?

Mr J Brown : We would comply with the normal caretaker provisions.

Senator XENOPHON: Would the caretaker provisions mean that the negotiations for this treaty would be suspended pending the outcome of the election?

Mr J Brown : Correct.

Senator XENOPHON: If the negotiations proceed as they have, are we looking at an imminent signing of that agreement within weeks or months of the election?

Mr J Brown : I guess it depends on what you mean by imminent, but it is certainly not going to be within weeks. You will appreciate it is a negotiation so it very much depends on the attitude of our partners.

Senator XENOPHON: Has consideration been given to whether current state government procurement agreements, particularly those of the Victorian and South Australian governments, and any potential future changes to procurement rules with the Commonwealth, could in fact be affected by Australia acceding to the WTO's Agreement on Government Procurement?

Mr J Brown : All of the offers we make in these negotiations and our ongoing engagement in the negotiations are things we do in very close consultation with the states and territories. Obviously they are an important part of the national effort. Our initial offer that was made in these negotiations was explicitly cleared by all state and territory jurisdictions. Any changes to that offer, or indeed any changes to our negotiating approach, have to be agreed between the Commonwealth and the states and territories.

Senator XENOPHON: I have put some questions on notice. Thank you.

Mr Varghese : Chair, can I correct one thing I said to Senator Wong. The NSC meeting was on Monday, not Tuesday.

Senator WONG: As a result of that meeting, were you aware that the government would be making the announcement on Friday?

Mr Varghese : I was.

Senator WONG: Was anyone from DFAT aware that the story would be given to the papers the night before?

Mr Varghese : I was not aware of that.

Senator WONG: Was the government of Singapore advised as to the announcement date?

Mr Varghese : Yes.

Senator WONG: Who advised them?

Mr Varghese : It was agreed that an announcement would be made on Friday.

Senator WONG: By whom?

Mr Varghese : Who in the Singapore system agreed to it?

Senator WONG: You did one of those things where no person is involved, just a statement of fact. It was agreed—between whom? Ministers, departments; was the ambassador advised?

Mr Varghese : The understanding when the agreement was initialled, if you like, by Mr Robb last week was that each government had to take it to ministers—it was an ad referendum agreement—which meant that Singapore also had to take the agreement to its cabinet. Following that there would be a public announcement. That choreography was discussed and agreed to.

Senator WONG: Was the date of the public announcement agreed when that choreography was agreed to, or was it subsequently formalised and if so how was that communicated and by whom?

Mr Varghese : The date of the announcement was agreed after the Australian side had confirmed its agreement to the substance.

Senator WONG: That was on Monday?

Mr Varghese : That was on Monday.

Senator WONG: And who communicated that with the Singapore government?

Mr Varghese : I do not know who exactly communicated it.

Senator WONG: I am just trying to get a sense of it—is that at ministerial level or department level?

Mr Varghese : I would have to check. We might have done it through our High Commissioner in Singapore. There may have been some ministerial contact—I am not aware of exactly who communicated the decision. The sequence of events was obviously something that was discussed at the time that the agreement was initialled last week.

Senator WONG: You describe it as a choreography and I have accepted that. At the point of initialling was the Friday announcement actually agreed?

Mr Varghese : It was not, no. The actual day was not agreed but it was agreed that there would be an announcement this week.

Senator WONG: Did the Singapore side raise any issues or concerns with that?

Mr Varghese : No, I think both sides were very comfortable with a Friday announcement.

Senator Brandis: Chair, since I will not be here after dinner can I also put on the public record my thanks to and appreciation for Mr Varghese. These are his last Senate estimates before he retires from his current role and takes up an illustrious appointment as the Chancellor of the University of Queensland—our alma mater, Mr Chairman. Thank you very much, Mr Varghese, for your very conspicuous service to the Australian people.

Mr Varghese : Thank you.

Proceedings suspended from 18:31 to 19:29

CHAIR: I would like to welcome Senator James McGrath. Thank you very much for your attendance this evening, Minister.

Senator WONG: Before the break, I was asking about the Singapore-Australia FTA. Mr Varghese, I think you were telling me how the Singapore government was advised of the Friday media stories, or the Friday announcement.

Mr Varghese : Yes. Following the NSC meeting at the beginning of the week, the outcome of that was conveyed to the Singaporeans, I understand, over the dinner break at officials level and—

Senator WONG: Sorry; what was concluded at officials level?

Mr Varghese : It was conveyed at officials level.

Senator WONG: Conveyed at officials level; I am sorry, I did not hear that.

Mr Varghese : The Singapore government had their own internal processes, which obviously they had to conclude, with the expectation there would be an announcement on the Friday.

Senator WONG: Okay. Did Mr Ciobo attend any of the discussions with the Singaporean government in relation to this matter? Did he participate in the review discussions at all?

Mr J Brown : The answer is yes.

Senator WONG: Where?

Mr J Brown : There was a bilateral meeting earlier this year with the Singaporean foreign minister which included both Mr Robb and Mr Ciobo, and after that there was a meeting of the Singapore-Australia Joint Ministerial Committee at which Mr Ciobo participated along with the foreign minister and Mr Robb.

Senator WONG: So that was earlier this year.

Mr J Brown : Correct.

Senator WONG: And in relation to the negotiations which concluded on the 29th, only Mr Robb attended. Is that correct?

Mr J Brown : That is right.

Senator WONG: Okay. The statement published today says the outcomes include higher thresholds for acquisitions under the FIRB process, in accordance with Australia's commitment under the TPP. Can someone just take me through what the new thresholds are? For agricultural land, the existing threshold is 50; is there any change to that?

Mr J Brown : I will get Ms Brink to elaborate but, essentially, the foreign investment outcomes as part of the SAFTA review are identical to those that we have agreed to in the TPP.

Senator WONG: Okay. I do not remember all of them. For agricultural land, the current threshold is 50. And under SAFTA?

Ms Brink : Yes, under SAFTA it will be the same as the TPP and North Asia FTAs, which is 15 million for agricultural land.

Senator WONG: So they have got a reduction.

Ms Brink : It is about the same. It is very hard to compare the two actually—

Senator WONG: The SAFTA currently has a 50 million threshold.

Ms Brink : Under the current SAFTA, the threshold is for interests in assets worth $50 million, where an interest is, I think, 20 per cent under our foreign investment regulations. It is a comparable outcome. But I think the key point is Australia and Singapore have agreed to, I guess, harmonise the thresholds that had been agreed in the TPP.

Senator WONG: Thank you for giving me the rationale; I was actually just asking for the number though. So you are saying the current 50 for ag land is 20 per cent of interest in ag land, which you say equates broadly to a commensurate figure, as you have currently agreed, which is a $15 million figure.

Ms Brink : For agricultural land, and $55 million for agribusiness.

Senator WONG: In relation to the $15 million for agricultural land that has been agreed, is that also non-indexed?

Ms Brink : That is right.

Senator WONG: And the $50 million, was that indexed?

Ms Brink : Yes, it is indexed.

Senator WONG: So what is it currently?

Ms Brink : 55.

Senator WONG: Agribusiness?

Ms Brink : The agribusiness threshold agreed in SAFTA is $55 million, which is the same as in the TPP.

Senator WONG: I am currently comparing SAFTA previous with SAFTA current. I understand the proposition that that is the same as the TPP. Was there an agribusiness threshold?

Ms Brink : Under SAFTA, the original threshold was $50 million.

Senator WONG: And for agribusiness?

Ms Brink : If your question is whether the threshold under the original SAFTA is indexed, I would have to take that on notice.

Senator WONG: No, I did not ask that. I will ask that. I asked: did the SAFTA prereview have a separate threshold for agribusiness and was it $55 million?

Ms Brink : No.

Senator WONG: Okay. Tell me what it was.

Ms Brink : It was $50 million.

Senator WONG: And it is now $55 million.

Ms Brink : Correct.

Senator WONG: Sensitive sectors?

Ms Brink : The same as they currently are: no change.

Senator WONG: So 252.

Ms Brink : Correct.

Senator WONG: And non-sensitive?

Ms Brink : That is 1,094 million.

Senator WONG: They were at 252 and they have now gone to the US—the highest threshold.

Ms Brink : Correct, which is what we offered them in the TPP.

Senator WONG: I want to go to labour movement. Can you take me through the current arrangements for these three categories: first, investors/independent executives; second, contractual service suppliers and families; and third, installers and services of machinery and equipment?

Ms Brink : What is your specific question?

Senator WONG: The statement published today says that mobility and length of stay will be improved for business people, including investors/independent executives, contractual service suppliers and their families, and installers and services of machinery and equipment. Can you take me through the current and new arrangements for these categories?

Ms Brink : Is that in terms of Australia's commitments or in terms of what we are getting from Singapore?

Senator WONG: No, this is Australia's commitments.

Ms Brink : We have provided and agreed to reciprocal outcomes on the temporary entry of businesspersons, which will include waiving labour-market testing for Singaporean contractual service suppliers and independent executives, which will be implemented through the 457 visa program. In terms of the definitions of those categories, that is something that will be defined in the 'Movement of natural persons' chapter, which is being finalised. Technical matters are being finalised. But we will implement it through our existing system, so the outcomes are broadly consistent with our approach on the TPP.

Senator WONG: First, you gave me the arrangement under the revised agreement—what would you like me to call it, the revised agreement or the renewed agreement?

Ms Brink : Revised agreement.

Senator WONG: I do not think you indicated to me what the revised arrangements were, in respect of installers and services of machinery and equipment.

Ms Brink : Singapore has agreed to 90 days for installers and services, and we will also provide that to Singapore.

Senator WONG: What I am keen on, is trying to understand the change. Please tell me, in respect of each of those three categories, what applied and how the new arrangements change that.

Ms Brink : Your question is: what, exactly, will be different under the revised SAFTA, in relation to those categories.

Senator WONG: Let us do this bit by bit. What are the current arrangements—I was trying to cut this short but if you want me to be very precise and take more time, I will do so. What were the pre-existing arrangements, in respect of labour movement, for investors and independent executives under the SAFTA?

Ms Brink : My understanding is we had very few commitments under the existing 'Movement of natural persons' chapter under SAFTA. That is why we have sought to increase them in this review. If you want to go category by category, I am likely to have to take that on notice.

Senator WONG: Let us do what we can, shall we? It is not unusual for me to ask questions about labour movement at estimates. I have been doing so for a couple of years now. Were there labour-movement provisions, under the SAFTA, in relation to investors and independent executives, prior to this review?

Ms Brink : No.

Senator WONG: Thank you. Were there labour-movement provisions, in relation to contractual service suppliers and their families, under SAFTA prior to this review?

Ms Brink : No.

Senator WONG: Same question, in respect of installers and services of machinery and equipment.

Ms Brink : That is correct; no.

Senator WONG: There is no labour-movement provision, so this is a new set of obligations—or however you want to describe it—on Australia. You told me, in answer to a previous question, in respect of investors and independent executives and also, I think, in relation to contractual services suppliers and their families, that Australia had agreed to waive labour-market testing. Correct?

Ms Brink : That is correct.

Senator WONG: Is there any labour-market testing in relation to installers and servicers of machinery and equipment?

Ms Brink : My understanding is that, under our system, we do not apply labour-market testing to that category of visa.

Senator WONG: But under SAFTA there is no LMT requirement for that category?

Ms Brink : We will not be able to apply LMT to that category after that review.

Senator WONG: Sorry, yes, that is a better way to express it. Under SAFTA we would not be able to apply labour-market testing to installers and servicers of machinery and equipment?

Ms Brink : That is correct—because article 12 of SAFTA, which is on labour-market testing, is a horizontal provision which applies to all the categories.

Senator WONG: So we have basically agreed to remove labour-market testing in relation to all categories?

Ms Brink : Correct.

Senator WONG: When you say 'all categories'—and I think you said that will be the subject of discussion in further detail—all categories under what?

Ms Brink : Contractual service suppliers and installers, intra-corporate transferees and independent executives.

Senator WONG: The statement also makes reference to updated trade rules. What are these new rules?

Ms Brink : As part of the review, Singapore and Australia have agreed to update a number of the chapters in SAFTA—in particular, to reflect the work that was undertaken in the context of the TPP negotiations. There will be updates to 10 chapters and approximately six annexes, largely reflecting the TPP outcome.

Senator WONG: I do not want to have to laboriously ask all this, but can you just give me a little more information about what that means? What is the subject matter of the changes to the 10 chapters?

Ms Brink : One example would be updating the investment chapter to include some of the explicit safeguards included in the TPP in relation to ISDS.

Senator WONG: Including an ISDS in it?

Ms Brink : Correct.

Senator WONG: Okay. I was saying that with irony, not genuine enthusiasm.

Ms Brink : Another example is the rules of origin chapter. Singapore and Australia have agreed to include a full schedule of product specific rules of origin which do not exist under the current SAFTA.

Senator WONG: Are those consistent with the TPP rules of origin?

Ms Brink : Largely, yes.

Senator WONG: Are they consistent with other FTAs in the region—for example, Malaysia?

Ms Brink : Yes. ANZCERTA and TPP are I think the main models that were drawn from.

Senator WONG: I think a working holiday program was announced in today's statement. Was that part of the FTA review, or was it simply another additional announcement governments agreed on.

Ms Brink : It was not part of the review.

Mr Cox : No, Senator, that was a separate part of the package.

Senator WONG: Mr Brown, I asked a question of the Minister for Trade and Investment about some evidence that you gave in relation to the sugar marketing legislation which was put back on notice after the parliament was prorogued. I do not have an answer and I am just wondering whether it would be possible for the department to provide a response. It is question on notice No. 3502.

Mr J Brown : We have provided you with a response to question No. 191 from the last estimates. What was the number?

Senator WONG: 3502. This is a chamber question—one you lodge in the chamber.

With reference to evidence provided by Mr Justin Brown—

et cetera, et cetera—

relating to Queensland's sugar marketing legislation:

(1) Does the department maintain that prior to the hearing there was only one meeting involving the then Minister for Trade, Mr Robb, and a representative of Wilmar International, at which concerns about the state legislation were raised.

(2) Why was the committee advised that analysis and assessment of the state legislation was 'obviously' incomplete 'pending the final passage of the legislation' when the legislation passed the Queensland Parliament on 2 December 2015, and was assented to on 17 December 2015, and has analysis and assessment of issues arising in respect to the Singapore-Australia Free Trade Agreement been completed; if so, what issues arise.

(3) Noting evidence that there is a risk that the state legislation contravenes the Singapore-Australia Free Trade Agreement, what action has the Australian Government taken to deal with the risk.

You have not seen that?

Mr J Brown : I am sorry, I do have that question.

Senator WONG: That has been in the parliament since 18 April.

Mr J Brown : I cannot explain that, but let me try to answer as much of that as I can this evening. DFAT officers have been involved in—

Senator WONG: We are just seeing if we can get you a copy. It is 3502; notice given 18 April 2016. We are going to get a copy for you. Just excuse my notes, but there is nothing rude—well, I don't think there is! Can I just clarify: this my last topic, and then I will move to Efic, Mr Varghese.

Mr Varghese : Okay.

Senator WONG: Have you seen this, Mr Brown?

Mr J Brown : No. In my evidence at the last hearing I indicated that Mr Robb had an investor round table in Singapore—it was in the latter part of January of this year—at which a representative of Wilmar was present. And I think I spoke at the last hearing about the nature of the exchange that took place between Wilmar and Mr Robb on that occasion. In addition to that meeting DFAT officials have met with Wilmar on six occasions over the period between early 2016 back through to 2015 and I understand that at two of those meetings DFAT officials accompanied Mr Robb when he was minister. Two of the meetings were hosted by DFAT, one meeting was hosted by Treasury, and other departments were in attendance. In addition to that the Australian—

Senator WONG: Sorry: so, six occasions at officer level? Are we breaking down the six, or is it six plus plus?

Mr J Brown : I am just trying to make sense of the chronology here, because I do not recall in my evidence saying that there had been only one meeting involving the minister and Wilmar.

Senator WONG: My question, from the Hansard, of Thursday 11 February, page 140:

Is the only meeting, to your knowledge, which has occurred with Wilmar the meeting with the minister, to which you made reference, in Singapore?

And your answer was yes. Mr Brown, the evidence you gave is inconsistent with what has been communicated to me, so it is one of those situations where I think it would have been useful—which is why I gave you the opportunity again, through a chamber question on notice, rather than having to deal with it here—if you could have clarified that, because what was told to me in the estimates hearing was inconsistent with what I had understood. I understand—and I am sure that on notice you can clarify this—what you are now telling me is that there were a number of meetings involving the department and Wilmar. Correct?

Mr J Brown : Correct.

Senator WONG: At least six? Is that what your evidence was?

Mr J Brown : Officials met with the company on six occasions over the course of 2015 and 2016.

Senator WONG: Okay. And there was more than one ministerial meeting involving the minister?

Mr J Brown : My notes indicate that at two of those meetings officials accompanied Mr Robb when he was Minister for Trade and Investment.

Senator WONG: Right, so two of those meetings—is this in addition to the one you gave evidence about? So, there were three meetings with Wilmar involving Mr Robb. Is that right? More than one?

Mr J Brown : Well, there was the meeting on 26 January in Singapore. It is just that it is unclear from my notes whether that was one of the two meetings at which Mr Robb was accompanied by officials.

Senator WONG: I am sure you can clarify that on notice, but this is the more important thing: I think the committee was advised that the analysis and assessment of the state legislation was incomplete, pending final passage of the legislation, and the legislation was assented to in December 2015. So, I am asking: have you completed your analysis and assessment, and what issues arise?

Mr J Brown : We will complete our analysis when a fuller assessment has been completed of the effect of the measure on the investor concerned, and that information is not yet available.

Senator WONG: Why not? Unless you can tell me that this is something the review addresses or deals with, what has been put, as I understand it, by some stakeholders, is a question as to whether that state legislation in fact is inconsistent with our obligations under SAFTA. I asked you this in February. You said, 'We're considering it.' Legislation had already been passed at that stage, a couple of months prior. It is now May. What are you waiting for?

Mr J Brown : As I said, we are waiting for a fuller assessment of the impact of the measure on the investor.

Senator WONG: By whom?

Mr J Brown : That will involve us and others.

Senator WONG: Who are the others?

Mr J Brown : We would need to consider a range of information. I am not in a position to give you the—

Senator WONG: I am actually not trying to—if there are commercial issues you do not want to disclose, I am not going to press that. I just want to understand the process. Who is looking at this to work out whether or not the state legislation is inconsistent with our obligations under SAFTA?

Mr J Brown : Well, obviously we are looking at it, but we also need to make an assessment of the impact of the measure on the investors along with the straight legal analysis.

Senator WONG: And who is doing that?

Mr J Brown : We in DFAT are doing that.

Senator WONG: The impact on the investors? So, what is the process? Is there a task force, or is that just part of someone's job? Where have they got to? It is just that it has been some time, and this is obviously causing some commercial concern.

Mr J Brown : I cannot give you an end date as to when that assessment might be concluded, but—

Senator WONG: Can you tell me who is undertaking it?

Mr J Brown : Well, it is being done within the department.

Senator WONG: You? Who is working on it?

Mr J Brown : It is being done within the trade and investment law area of the department.

Senator WONG: Has Wilmar been advised?

Mr J Brown : No.

Senator WONG: Can you answer question 3 in the questions on notice?

Mr J Brown : The government's view is that the best way to resolve differences within the industry on these marketing arrangements is through negotiations between the relevant parties, and the government's position has been to encourage the parties to reach a commercial outcome.

Senator WONG: Well, that is a different issue, isn't it? I accept that may be part of any resolution, but I am asking a different question, which is the extent to which the state legislation contravenes the Singapore FTA. Have you come to a view about that?

Mr J Brown : That is a legal opinion, and that is the subject of professional privilege.

Senator WONG: Well, have you come to a view about it?

Mr J Brown : We have come to a view on it, yes.

Senator WONG: And the view is?

Mr J Brown : The legal opinion is the subject of professional privilege.

Senator McGrath: We have legal advice, and that is protected under legal privilege.

Senator WONG: Oh, come on. Do you think the state legislation contravenes the SAFTA, and are you going to do anything about it?

Senator McGrath: Well, we have legal advice, and it is privileged.

Senator WONG: Is that the answer?

Senator McGrath: Yes.

Senator WONG: So, this company and others just kind of hand around waiting, do they? When do you think something might be done?

Mr J Brown : The government is of the view that the current negotiations that are underway between the various parties in the sugar industry should be allowed time to see whether a resolution can be reached.

Senator WONG: Has the government communicated with the Singaporean government as to the consistency of this legislation with the SAFTA? Has that been a subject discussed?

Mr J Brown : As I think I might have indicated in my last evidence, there have been written representations from the Singaporean government.

Senator WONG: And what has the government's response been?

Mr J Brown : The government's response was very much along the lines of what I have just said to you, which is that the matter is the subject of law now in Queensland and that the government is of a view that the parties should be given the opportunity to reach a resolution.

Senator WONG: So, the government is saying: this is the law; you try to achieve a commercial resolution. Is that right?

Mr J Brown : Correct.

Senator WONG: Right. So, the government has not sought to engage with the Queensland government as to that legislation and the effect of that legislation?

Mr J Brown : I am not in a position to know comprehensively whether the government—

Senator WONG: I am only asking you—

Mr J Brown : I am not aware of that, no.

Senator McGrath: Perhaps we should take it on notice.

Senator WONG: Okay. Thank you. Mr Varghese, are you leaving before Efic?

Mr Varghese : Yes. I will leave when the department's hearings are over.

Senator WONG: I just wanted to say something. I just wanted to thank you.

Senator McGrath: That was unexpected, wasn't it, everybody?

Senator WONG: I have worked with you. You have worked with governments of both political persuasions and you have served governments of both persuasions well. But, more importantly, I think you have served the Australian people extraordinarily well. I wanted to thank you for your service.

Mr Varghese : Thank you very much, Senator. I very much appreciate those comments. I could say that I will miss estimates, but I am still under oath!

CHAIR: Mr Varghese, on behalf of the committee, I would also like to express my appreciation not just for this evening but for your long and distinguished career. I have a paper, which I seek the agreement of my colleagues to table, because, if I were to read out all of the elements of your stellar career and your rewards, we would be here till well after 11 pm. Suffice it to say that you have conducted yourself in the same way that all of the senior people within the agencies that report to us have—and that is with a high degree of distinction.

You are going to the chancellorship of Queensland university. You graduated with a university medal from Queensland university, Mr Varghese; I was very lucky to get out of there with a Bachelor of Veterinary Science degree! But I think it is important that we place on the record all of the highlights of your career and the awards that have been bestowed upon you, and I wish you and your family all the best for what I hope will be a very productive post-secretarial life. Do I have the concurrence of my colleagues to table the document?

Senator WONG: Hear, hear!

CHAIR: Thank you—and thank you, Mr Varghese.

Mr Varghese : Thank you very much, Chair. I much appreciate it.