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Legal and Constitutional Affairs Legislation Committee
Australian Customs and Border Protection Service

Australian Customs and Border Protection Service


CHAIR: I welcome Mr Carmody and officers from Customs and Border Protection. Do you have an opening statement, Mr Carmody?

Mr Carmody : No, Chair.

CHAIR: All right. We will go straight to questions. Senator Brandis.

Senator BRANDIS: Mr Carmody, do you have the portfolio budget statement there?

Mr Carmody : Yes, I do.

Senator BRANDIS: I take you to page 110—to the foot of table 2.1. You will see that the table indicates that there will be a reduction in the staff of Customs from 5,225 to 5,035. Can you tell me, please, from which areas of your agency's operation the staff are being cut?

Mr Carmody : I need to explain the context of that figure. That figure is based on a macro-analysis of the impact of the various funding issues which impact on the organisation. That figure is based on the impact of the 2.5 per cent efficiency dividend and the 1.5 per cent—

Senator BRANDIS: We have a limited amount of time and I do become impatient with witnesses who feel the need to give us instruction on the context of figures that speak for themselves. The figure is in the table. I merely want to know from what areas these staff will be cut.

Mr Carmody : I will start again in trying to assist you. That figure is based on a macro-analysis of the ons and offs. We are currently in the process of finalising our budgeting decisions. I have promised staff that those decisions will be available in June. We are not at the stage of giving the final figures, so I cannot give them to you. I can talk to you about what we have been through—the areas we are looking at—but I cannot give you a definitive breakdown of where those—

Senator BRANDIS: I understand that. No final decisions have been made. That is understandable. But it would help me if you could give the committee an indication of the areas you are looking at making cuts in.

Mr Carmody : The process we have been through involved a determination of our priorities and an assessment of the border risks we are facing. That is detailed in our strategic statement. That process has given us the framework under which to make decisions. I will help you by saying that there are some areas where we have made the decision not to make any cuts as a result of the 2.5 per cent efficiency dividend—these are the parameters we are putting around our decisions. One of those areas is passenger clearance, where there is a specific budget initiative. We are taking that as the end of changes to passenger clearance. We have also made the decision that the 2.5 per cent efficiency dividend will not apply to our major border security areas—the waterfront and the like. As you know, we face many risks at the waterfront. We also will not be making cuts for the 2.5 per cent to our people-smuggling disruption and post-interdiction areas because of the high intensity of those operations. Similarly, there will be no cuts to our offshore maritime response and control areas.

We have done a number of things to examine where the cuts might be made. As I said, they are coming to fruition next month. We have a general approach of looking for non-frontline activities as much as possible. Other decisions are taken on risk. We have had a quick review done of our IT area. We are just receiving the report on that and we expect to make savings there. You would be aware that I have reduced the number of ongoing SES positions and that is contributing to the savings we have to make. Across our organisation, within the various areas, there are a number of staff who work on what you might call management and planning. To achieve savings, we are looking at those activities to see if we can consolidate to a more national approach. We are looking to see if, through better coordination of activity in the area, we can make savings in the number of people involved in our legal area. We are looking at the levels of management below the SES level to see if savings can be made there. That is the broad approach. There is one other area where we are commissioning a review, and that is in our intelligence and targeting areas, where we have seen an increase in staffing reflecting the importance of that. But we believe there is opportunity, again, to look across the nation to see how that could be better managed. It is those sorts of areas where we have work going that will come to fruition next month.

Senator BRANDIS: On that last point, the intelligence and targeting areas are a part of your agency's functions where there may be staff cuts?

Mr Carmody : There may be some rationalisation due to overlap or better nationalisation. We do not have the answer to that yet. We are commissioning a review.

Senator BRANDIS: All right. It sounds like staff cuts. You have not in your answer said that all front-line services will be quarantined from staff cuts.

Mr Carmody : I am not at the point of final decisions. In my answers, though, I have said that—at least with respect to the 2.5 per cent efficiency dividend—those areas of passenger clearance, border security, air and waterfront control, waterfront and so on, people smuggling, vessel clearance and offshore maritime response are not going to be subject to any cuts from the 2.5 per cent efficiency dividend. That does not mean that behind those there are not some management and backroom areas that we can look at for the other areas of savings, but we are doing all that we can to quarantine front line. We will have to wait until we get the final situation and if it does go to front-line—and our objective is not to—then it will be on a risk-base area as to what those impacts might be.

Senator BRANDIS: The efficiency dividend is not meant merely to be achieved through staff cuts, is it? It is meant to be achieved through efficiencies.

Mr Carmody : That is right.

Senator BRANDIS: And staff cuts are one of a number of ways in which those efficiencies can be achieved. Have you looked at areas other than staff cuts to achieve the efficiency dividend?

Mr Carmody : Yes. In fact we are premising on a large part of these impacts of the efficiency dividend going to what we call supplier—non-staff expenses. Some of the things we are looking at in terms of the IT review have to deal with licensing arrangements and whether we can achieve efficiencies there. I have mentioned that we are looking at our legal area to see whether we can achieve efficiencies there. Indeed, with the areas that I talked about when you asked me questions about intelligence and targeting, that is primarily a look at efficiency. Of course, over the years we have achieved significant efficiencies and savings in corporate support areas and travel expenses. We have seen the efficiency of processing of passengers raised significantly. This has been an ongoing exercise for some years.

Senator BRANDIS: All right. In the last six months, which staff have been moved from one area of the agency to another? You might want to take that on notice.

Mr Carmody : I think I will have to take that on notice. There have been many moves.

Senator BRANDIS: Yes, that is fine. I would like details of staff movements within the agency, please, over the last six months.

Mr Carmody : To the extent that we can provide those we will.

Senator BRANDIS: Have any Customs offices closed over the past 12 months?

Mr Carmody : No.

Senator BRANDIS: Have any Customs offices had staff cutbacks in the last 12 months, and if so which are they?

Mr Carmody : I would have to take that on notice, because you have seen in the figures that we have had reductions of staffing over this year. I will take that on notice as to which offices they impacted.

Senator BRANDIS: Has a decision been made, or is it in contemplation, that the Bundaberg and Coffs Harbour offices will be closed?

Mr Carmody : We had a look as part of the exercise I just outlined to you in terms of where the current need to reduce staffing will apply. We have no intention to close any of our offices.

Senator BRANDIS: So you are not going to be closing the Bundaberg or the Coffs Harbour offices?

Mr Carmody : They are part of our offices. There is no intention to close those offices.

Senator BRANDIS: Should I understand that to be an indication to the committee that they will not be closing?

Mr Carmody : I do not know how much clearer I can make it. We have no intention to close any of our offices.

Senator BRANDIS: It is a bit like when we hear a politician say, 'I have no present intention to challenge another politician for the leadership of the Labor Party.' The word 'intention' has a very bad name in this building because intentions change in the twinkling of an eye.

Mr Carmody : Well, fortunately, you can take—

CHAIR: Mr Carmody, can I just say, as chair, sometimes you do have to say things three times for Senator Brandis, and we have heard you answer the questions three times now, so I think we have got it.

Mr Carmody : You should take it that I am not a politician, so any implications or imputations you put to words based on your experience as a politician, free them from me.

Senator BRANDIS: I am sometimes accused of pedantry, but I am a stickler for meaning. So I am going to take you to be telling us—and contradict me if I am wrong—that you are giving the committee an assurance that the Bundaberg and the Coffs Harbour offices will not be closing?

Mr Carmody : I am giving you assurance that we have looked at them as part of this and we are not closing those offices.

Senator BRANDIS: That is fine—clear as a bell. Thank you. Are there any other offices of Customs which are being looked at at the moment with a view to being closed? If so, which are they?

Mr Carmody : No.

Senator BRANDIS: To give a bit of context to the next bracket of questions, as of yesterday—and I do not know if these figures have changed overnight—since the government changed Australia's border protection regime by a new suite of policies in August 2008, there have been 314 illegal boat arrivals carrying 18,002 people. In calendar 2012, as of yesterday, there had been 42 illegal boat arrivals carrying 3,348 people. In view of that obvious and very sharp increase in the number of illegal boat arrivals, can you tell us what movements there have been in the budget for Border Protection Command over the last three years? You can do it by reference to your annual report or any other convenient table.

Mr Carmody : Firstly, I have a slightly different figure for the year 2012, but not greatly.

Senator BRANDIS: In fairness to you, you had better give us that figure.

Mr Carmody : We have had this discussion before. The figures that I have are for PIIs not including crew. It was 42 and 3,261.

Senator BRANDIS: Perhaps the difference of about 80-odd is the crew.

Mr Carmody : There is 95 crew that I need to add to that. So we are in the same territory. I am not sure whether I have the split with border protection immediately available.

CHAIR: Your annual report?

Mr Carmody : I am not sure that it goes down to the level of Border Protection Command. My sense is that we have been—

Senator BRANDIS: Rather than have you speculate, what I will ask you to do is to arrange for those figure to be brought to you in the next hour or so, so that, by the time you finish your evidence, we can have those figures.

Mr Carmody : We will see if we can do that.

Senator BRANDIS: How many staff are currently allocated to Border Protection Command?

Mr Carmody : We might be able to give that to you now.

CHAIR: Mr Carmody, are you after a copy of your annual report?

Mr Carmody : No. Rear Admiral Johnston is Commander for Border Protection Command.

Rear Adm. Johnston : In Border Protection Command I have staff located in two headquarters and total staff available to me, in my headquarters in Darwin and here in Canberra, is 211.

Senator BRANDIS: How has that changed over the last three years?

Rear Adm. Johnston : There have been some minor adjustments between the staff located in Darwin and Canberra. We have moved some of the functions from Darwin into Canberra, but there have been no significant changes—except with some of the defence staff in Darwin—

Senator BRANDIS: Why does that always happen in this federation—the gravitational power of Canberra? So there has been a proportionate increase in the number of people in Canberra and a proportionate reduction in the number of people in Darwin?

Rear Adm. Johnston : We have brought some of our enabling functions here. The intelligence team, in particular, have centralised with me at the headquarters in Canberra to support the eight operational focus areas I have. It enables me to have a greater synergy around my intelligence community.

Senator BRANDIS: How are the 211 broken up between Darwin and Canberra?

Rear Adm. Johnston : I have got them broken up by Customs and then ADF staff. The Customs and Border Protection staff with me in Canberra total 112, and there are 12 ADF, so that is 124, and in the Darwin headquarters it is predominantly military, so 72 ADF and three Customs and Border Protection—so another 75.

Senator BRANDIS: So there are only three Customs and Border Protection staff in Darwin at the moment?

Rear Adm. Johnston : In my headquarters; of course there are others within the broader Customs and Border Protection Service.

Senator BRANDIS: You are the frontline, aren't you—Border Protection Command?

Rear Adm. Johnston : For on-water issues, yes.

Senator BRANDIS: Give me the equivalent figures, please, for each of the last three years.

Rear Adm. Johnston : I only have the current year figures—I do not have them for the previous three years. I would need to take that on notice.

Senator BRANDIS: Can they be fetched?

Mr Carmody : We will do the best we can to get those figures.

Senator BRANDIS: I want the equivalent figures for Border Protection Command—the breakup between Darwin and Canberra and the aggregate of the two for 2010, 2009 and 2008. We will come back to you, Admiral—I cannot imagine those figures would be too difficult to locate and communicate to the hearing. Over the last three years has the number of Border Protection Command personnel increased or decreased?

Rear Adm. Johnston : To my knowledge it has not moved significantly in any sense. I do not have the data available to me.

Senator BRANDIS: But you will get it?

Rear Adm. Johnston : Yes.

Senator BRANDIS: How many vessels are used by Border Protection Command?

Rear Adm. Johnston : The number varies on a day-to-day basis, so perhaps rather than draw what today's number is, which indicates our capacity, typically I draw from 10 Customs and Border Protection vessels and seven to eight ADF vessels to contribute to my on-water capability.

Senator BRANDIS: So you have got up to 18 vessels effectively under Border Protection Command?

Rear Adm. Johnston : Yes.

Senator BRANDIS: Have any of them been out of action for maintenance or other reasons over the past six months, and if so how many?

Rear Adm. Johnston : Certainly because of the nature of the environment vessels work in they do come in and out of maintenance issues. I do not have the data on exactly how many and how long. We would have to procure that for you. We manage that by adjusting our operational posture around our priority bases when they occur.

Senator BRANDIS: I assume that you are responsible for the maintenance of the border protection vessels and the military are responsible for the military assets?

Mr Carmody : Customs and Border Protection, as an agency, is responsible for the maintenance and crewing and provision of crew of our vessels, and Navy do theirs.

Senator BRANDIS: That is what I meant.

Mr Carmody : I thought you were talking to the commander. It is not Border Protection Command, as such, that is responsible for the maintenance—it is Customs and Border Protection.

Senator BRANDIS: Fair enough. Can I take you, please, Mr Carmody, to page 123 of the PBS, which indicates a $7.2 million cut from civil maritime surveillance and response. Where are those cuts coming from and what effect will the cuts have on Customs' ability to detect illegal maritime arrivals?

Mr Carmody : I think we have been through this before. There have been reductions in surveillance flights in the southern areas—that is, in the low-risk areas. That was announced previously.

Senator BRANDIS: Let us put some figures on that. For reductions in surveillance flights: it is a reduction from how many hours to how many hours? The measure is the number of hours, isn't it?

Mr Carmody : Yes. I don't know that I have that here. That has been announced previously and I don't believe I have the figures here, although someone might.

Senator BRANDIS: Somebody seems to be rushing forward with a helpful piece of paper.

Mr Carmody : It is good to have helpful people. I have total flying hours that have reduced over the years.

Senator BRANDIS: Why don't you read those onto the record?

Mr Carmody : Okay. My chief finance officer can specifically answer on the $7 million, if that helps you, Senator.

Senator BRANDIS: Yes, but I do not want to interrupt you. Why don't you read those figures onto the record and we will come back to your chief finance officer.

Mr Carmody : In 2010-11 it was 19,728.

Senator BRANDIS: Sorry—19,728 hours of aerial surveillance; is that right?

Mr Carmody : Hours funded, yes. I am not sure whether it includes the transit out, but that is total hours. In each of the next couple of years, the funded hours are: 18,778—

Senator BRANDIS: That is 2010-11, is it? The first figure you gave was 2010-11.

Mr Carmody : Yes. So for 2011-12 and 2012-13 the funded hours are 18,778. The measure I referred to was the previous measure when we stopped using the Dornier aircraft. At the time we announced that, we explained that those aircraft were not used in the high-risk northern areas; they were principally used for southern area.

Senator BRANDIS: And for 1012-13?

Mr Carmody : The funded hours were 18,778.

Senator BRANDIS: Sorry?

Mr Carmody : The same funded hours: 18,778.

Senator BRANDIS: And that is for 30 June?

Mr Carmody : Yes.

Senator BRANDIS: And the $7 million?

Mr Groves : The drop between the two years is made up of two components. Our funding from government, which is the departmental item line, is staying relatively the same, and that is probably a reflection of movements in efficiency dividends and funding we receive for inflationary impacts as part of our appropriation, but it is roughly the same. Most of the drop is reflected in the line called 'expenses not requiring appropriation in the budget year', which is depreciation expense—that is probably partly due to a change in the depreciation expense for some of our on-water assets—

Senator BRANDIS: That is a big change in depreciation.

Mr Groves : But there is also a second component. This is impacting a lot of agencies in the 2011-12 financial year, in that the organisation will be running at a loss in 2011-12. It is a non-cash loss. It is to do with the downward movement in the bond rate, and agencies use that to calculate their long service leave and annual leave provisions within their financial statements. So over the last twelve months there has been a sizable drop in our bond rate. We then use that to discount our employee provisions; so we expect there will be a loss of about $18 million in 2011-12 due to the end of year adjustment that we will need to do. You will find that across all Commonwealth agencies for 2011-12. A component of that has been attributed to this particular program.

Senator BRANDIS: Coming back to you Mr Carmody—I want to return to the issue of the cuts to the number of aerial surveillance hours. What effect will this have on your ability to detect illegal maritime arrivals?

Mr Carmody : None.

Senator BRANDIS: Were we wasting all that money in the previous years?

Mr Carmody : No. Those aircraft were utilised to undertake some patrols mainly in the southern areas. At the time the decision was taken, it was seen that they were relatively low risk and we were maintaining our coverage in the north.

Senator BRANDIS: So the southern area is now unpatrolled?

Mr Carmody : It is not completely unpatrolled; we still are able to conduct flights on a risk basis.

Senator BRANDIS: In other words, on an ad hoc basis—if you have a reason to believe there is an enhanced risk.

Mr Carmody : We need to check the full details but we undertake more limited patrols and have the capacity to respond to risk.

Senator BRANDIS: This is all budget driven, isn't it?

Mr Carmody : It is a question of: what is the appropriate response to risk given a budgetary situation?

Senator BRANDIS: Indeed. My point is that when you decided that there would be a particular coverage and profile for these surveillance flights, including in the southern region, in 2010 you made a judgment that 19,728 hours was appropriate. You have reduced that by about five per cent to 18,778 hours not because you reassessed the risk but because you had less money to spend, so you reallocated your priorities. That is my point.

Mr Carmody : We are continually reallocating our priorities based on risk.

Senator BRANDIS: And based on resources.

Mr Carmody : That has always been the case. As you would know, over the years we always get particular budget allocations. The way we look to address those is on a risk basis—that is the fundamentals of our planning.

Senator BRANDIS: Can you tell me how many patrol days are currently allocated to border protection command? Admiral, do you know?

Rear Adm. Johnston : As I mentioned previously, I draw my assets from defence and from customs and border protection; my split then is across those two. From defence, my days are not measured in patrol days but in asset availability. Typically, with the defence assets it is up to seven plus extras as I require them for operational purposes. I do not have an 'at sea days' or a 'patrol day' figure that I manage from the defence contribution.

Senator BRANDIS: What is your metric?

Rear Adm. Johnston : The metric that I typically work off is up to seven Armidale class patrol boats, which are available to me. We can surge beyond that if there is the necessity to do so and then I draw on Navy as required to supplement some of my larger ship capability, particularly for long-haul transport.

Senator BRANDIS: I do not mean to be disrespectful but that sounds to me to be a very strange standard of measurement, given that the whole point of these assets is to patrol the seas. To tell us the number of vessels available to you at a given time seems to me much less informative than to tell us how many of those vessels are actually on patrol at a given time as opposed to in dock. So when you talk about the number of vessels available to you at a given time, are you speaking only of the number of vessels that are on patrol or the number of vessels that are also in dock but could be deployed on patrol?

Rear Adm. Johnston : No, I am only referring to the ones that are operationally available to me for the conduct of operations.

Senator BRANDIS: What does that mean?

Rear Adm. Johnston : It means the other elements of the Navy fleet that are either in maintenance or conducting what is called raise, train, sustain activities, so preparing for operations and training their crew. That element that I get is used for operations so I deploy around my operational requirements. In part, as the CEO answered the question to you earlier, my role is as the employer of both the Defence and Customs and Border Protection assets. I do not need to maintain them nor train them. Those assets available to me are used specifically for operational purposes.

Senator BRANDIS: It seems to me that of the assets, both the Customs vessels and the naval vessels, that are available to you at any given time, could be in one of a number of different situations: they could be on patrol, they could be in dock, they could be under maintenance or they could be engaged in activities that are related to their border protection activities but do not actually constitute a border protection operation, for example, a training cruise. It really does not tell us very much about the amount of actual maritime surveillance that you are undertaking merely to tell us the number of assets that are available to you. What I am interested to know is which of those assets, which of those vessels are actually engaged in the work of surveillance or on patrol at a given time. Are you not able to tell me that?

Rear Adm. Johnston : No, that is what I am trying to say. All the assets that are given to me are used for patrol purposes.

Senator BRANDIS: But they are not used all the time?

Rear Adm. Johnston : What occurs at the end of a patrol period if that vessel then needs to go into maintenance it is handed back either to Defence or other elements of Customs and Border Protection, and I will get another vessel that will replace it for operational employment. The units available to me are assigned to operations. They are not conducting maintenance; they are not conducting training activities; they are performing on-water surveillance and patrol functions.

Senator BRANDIS: Okay, that helps. When you use the term 'the assets available to you' we are to understand that to mean that these assets are actually deployed on patrol?

Rear Adm. Johnston : That is correct. Some, I would say, could be conducting a logistic visit to top up on fuel and food. They tend to be short-term in nature so they would return to harbour, reprovision and repatrol.

Senator BRANDIS: How many of them are there at the moment?

Rear Adm. Johnston : The assets available to me at the moment include seven Armidale class working under my force assignment and I have up to eight Customs vessels. There are six at sea at the moment.

Senator BRANDIS: There are seven Armidale class naval vessels and six Customs vessels, so there are 13 at the moment on patrol?

Rear Adm. Johnston : Yes. I was referring with the Customs vessels to the Bay class patrol vessels. I also have the ACV Triton, which is a further Customs class vessel.

Senator BRANDIS: Is that currently on patrol as well?

Rear Adm. Johnston : Yes.

Senator BRANDIS: Is that in addition to the six Bay class?

Rear Adm. Johnston : Yes.

Senator BRANDIS: So there are seven naval vessels plus six Bay class vessels plus the ACV Triton deployed as we speak on maritime surveillance?

Rear Adm. Johnston : Yes.

Senator BRANDIS: So there are 14? You will need to take this on notice, I suspect, but I would like to track the fluctuations in that number over time. Would you tell us for each of the months—I think months would be a convenient time—over the last three years how many vessels have been on patrol, both naval assets available to you and Customs vessels.

Rear Adm. Johnston : Just so that I am clear, can I confirm: would an average number be sufficient? It changes some time by day, as vessels—

Senator BRANDIS: I can imagine. That is why I have not asked you to do it on a daily basis, because I do not want ask you to do a ridiculously burdensome exercise, but I think a monthly average for each month over the last three years would be sufficient for my purposes. Is the current number you have given me—14; seven naval and seven Customs vessels—about the usual number of vessels being deployed on patrol?

Rear Adm. Johnston : Yes, it is.

Senator BRANDIS: Given the increase in the number of illegal maritime arrivals, is it your view that the number of vessels deployed in surveillance will need to be increased over the next year?

Rear Adm. Johnston : We continue to work around our intelligence information and the operational priorities that we have. At the rate that we are seeing it at the moment, I have sufficient assets to manage what we are experiencing on the water, but I monitor that on a daily basis and, where I form a view that I may need additional support, I would go to both of my force providers—defence and customs and border protection—to ask for that extra capacity, which may be in the form of aerial surveillance or on-water capability.

Senator BRANDIS: Let me take you back four years to May 2008, three months before the government changed the border protection policies. How many vessels were on patrol then?

Rear Adm. Johnston : Sorry, I do not have that advice; I would have to obtain it.

Senator BRANDIS: It would not have been anything like 14, though, would it?

Rear Adm. Johnston : We have been pretty close to the same number for a number of years. I can answer that question in the context that our on-water response is not just around illegal maritime arrivals; we are also on patrol for fishing and other activities. So, across the range of operational areas, we have maintained a fairly consistent at-sea response capability.

Senator BRANDIS: Thank you. Mr Carmody, in the current year, how many hours are allocated to aerial surveillance? Is that the 18,778 figure you gave me?

Mr Carmody : Yes, I think it is the number that I gave you before.

Senator BRANDIS: How many aircraft are involved?

Mr Carmody : We have 10 Dash 8s that are under contract through customs and border protection. They are the primary surveillance. We have two helicopters for particular issues and we have on contract two Reims aircraft. In addition, there is the defence contribution.

Senator BRANDIS: The Orions?

Rear Adm. Johnston : The three P3C Orions, yes. If I could summarise those, we have 10 Dash 8 aircraft, two Reims aircraft, two helicopters and the three Orion P3Cs.

Senator BRANDIS: Are they under your command, Admiral?

Rear Adm. Johnston : They are under my force assignment, yes.

Senator BRANDIS: How does that compare with each of the last three years? Is that an increase, a constant or a reduction?

Mr Carmody : I think it is pretty much the same except when you go back to when the Dornier were taken off, as we explained before.

Senator BRANDIS: In which year were the Dorniers taken out of service?

Mr Carmody : I gave that to you before. It was when the figure went down.

Senator BRANDIS: That was between 2010-11 and 2011-12.

Mr Carmody : It is a matter of detail. There was a net reduction from the Dornier, but we also got the Reims or the 406s. It was a net loss that I was referring to before.

Senator BRANDIS: What is the cost of fuel for Border Protection Command's patrol vessels in each of 2011-12 and 2012-13?

Mr Carmody : I do not know whether we have the cost of fuel. We have someone beavering away to look for it.

Senator BRANDIS: It just seems to me that the amount of money you spend on fuel, discounted by movements in the price, would be a very clear indicator of the amount of movement in the level of activity. Can you get those figures for me, please.

Mr Carmody : We will attempt to get them as soon as we can and, if we cannot, we will provide them on notice.

Senator BRANDIS: Thank you. Was customs' fuel budget for Border Protection Command patrol vessels exhausted at any point during the 2011-12 financial year?

Mr N Perry : I manage the Customs fleet on behalf of the CEO. To answer your question, no, but we are very mindful of our fuel usage. I do have daily fuel consumption figures for you.

Senator BRANDIS: Good.

Mr N Perry : We can get back to you very quickly on what the overall fuel cost was for each financial year. You are correct to assume that yes, there is an impact as fuel costs go up down, but we manage that within the global budget.

Senator BRANDIS: Do you hedge?

Mr N Perry : We are not allowed to hedge and we do not do that.

Senator BRANDIS: You said you have daily figures, going back how far?

Mr N Perry : This is just based on our daily usage costs.

Senator BRANDIS: Are those volumetric as well as cost figures?

Mr N Perry : It is in litres per day—that is how we have calculated it—and we work on what the broad fuel cost rate is for diesel fuel.

Senator BRANDIS: You have got a document in front of you that tells us how many litres per day have been used by the Border Protection Command fleet?

Mr N Perry : No, I do not; I have what we consume on a daily basis.

Senator BRANDIS: Sorry, I meant consumed by the Border Protection Command fleet.

Mr N Perry : That document is in-confidence because it has a lot of operational data in it.

Senator BRANDIS: Can you please extract from that document merely the litres per day figure and provide that to me?

Mr N Perry : In the context of overall annual usage?

Senator BRANDIS: If it is disaggregated by day so that the work of establishing the daily usage has already been done and I am not asking you to perform an absurdly burdensome task. Why don't you just give me the daily figures, please.

Mr N Perry : These are how much it cost to run rather than how much we have actually consumed. I can give you those costs.

Senator BRANDIS: Obviously what the opposition and the parliament are interested to know is the extent to which there has been a fluctuation in the amount of border surveillance activity undertaken by your agency and the extent to which there has been any reduction in that level of activity as a function of budget cuts.

Mr N Perry : I can answer that question very clearly. There has been no reduction as a result of fuel cost increases.

Senator BRANDIS: That is not quite what I was getting at. I am merely pointing out that fuel consumption is going to be a very reliable indicium of the level of activity, which is why I am interested.

Mr Carmody : As to the level of activity, we have maintained the intensity of our activity.

Senator BRANDIS: I am sure that is the policy objective, and I am sure, subject to the budget the government gives you and your officers—

Mr Carmody : I have not applied discrete cuts to our surveillance and response activity. Indeed, when we were facing the monsoon season again after the tragedy of SIEV 221, I authorised if needed extra expenditure so as to allow the basing of one of our Dash 8 aircraft at Christmas Island to provide on the spot, subject to weather and fuel, surveillance capability. So I have not sought to reduce the budget. Indeed I have given a clear signal that if necessary we will complement the budget to meet the risk.

Senator BRANDIS: I hear what you are saying, Mr Carmody, and I accept what you say. But I would be interested in seeing those figures.

Mr Carmody : We will attempt to get them extracted and provide them on notice.

Senator BRANDIS: So could you extract from that table—leaving out operational matters detail, obviously—the daily fuel cost. How far does that go back, please?

Mr N Perry : We will have to go back to historical records to extract the type of data that you are asking for. So I would prefer—

Senator BRANDIS: Why don't we go back to 1 July 2008?

Mr Carmody : We will take that on notice and get it to you.

Senator BRANDIS: Thank you. Mr Carmody, did you have a meeting with the Minister for Home Affairs at the end of last year, or perhaps in January this year, expressing concerns over the fuel budget and expressing concerns that funds allocated for fuel were being depleted?

Mr Carmody : I do not have any recollection of any such—

Senator BRANDIS: Did any of your officers?

Mr Carmody : I do not know. I am not conscious of that at all.

Senator BRANDIS: Would you take that on notice, please?

Mr Carmody : Yes.

Senator BRANDIS: Have there been concerns about the fuel budget communicated to the minister in any other way?

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

Senator BRANDIS: And if there were could you tell us, please, what the minister's response is?

Mr Carmody : I will provide you what I can notice.

Senator BRANDIS: Is it true that Customs was informed by the minister that it should use existing funds within the Customs budget to cover the shortfall in the fuel budget for Border Protection Command's patrol vessel?

Mr Carmody : I have no knowledge of that and I would again say to you, in concert with what I said before, that it has been my decision—let us make this clear that I am not saying that Border Protection Command and our vessel operations and maritime operations support do not have to be as efficient and to continue to look for efficiencies like anybody else—so it has been my decision, if ever the matter is raised—and I gave you one instance of that—that, given the intensity of the operations and the risk in that area, we will do what we need to do including for the safety of our own officers.

Senator BRANDIS: Of course and, Mr Carmody, you mentioned before that after the SIEV 221 event you actually made a decision to augment the surveillance and—

Mr Carmody : the budget, because of the funding implications of shifting the base of one of our Dash 8s to Christmas Island over the monsoon season.

Senator BRANDIS: And that of course meant that those funds were taken from elsewhere within your agency's budget.

Mr Carmody : We operate within a total budget based on risk. I think in the end event they are probably going to come in on budget anyway but I gave them authority, if they needed it, to do that.

Senator BRANDIS: Sure, but given that there is a finite amount of resources made available to you by the government, if you have authorised augmented expenditure in one area of your activities that has got to come out of another area of your activities.

Mr Carmody : The decision did not come with the decision to reduce anything else. It was taken early in the year. We know that our budget through the year fluctuates and, as it turns out, it appears we will come in pretty much on budget without me having made any conscious cuts to other areas.

Senator BRANDIS: What is the fuel budget for 2012-13?

Mr Carmody : I think we will have to take that on notice.

Senator BRANDIS: Do you have any contingency plans in place for what will happen if the fuel budget is exceeded in 2012-1213?

Mr Carmody : We would address it. The contingency would be to find funding to address it. I indicated before, in any event, that we are going through our final planning for 2012-13. That has not been settled.

Senator BRANDIS: I want to turn to another topic and that is the reduction of $10.4 million from the budget in respect of passenger facilitation. On page 103 of the PBS you will see in the second sentence of the second paragraph:

International passengers are projected to increase from around 32 million this budget year to some 38 million by the final year of the forward estimates, while incoming air cargo is projected to increase by almost 45% over the same period.

This budget cuts $10.4 million from passenger facilitation on top of a $34 million cut in last year's budget. So in the space of two years we have had a shade under $45 million cut from passenger facilitation at a time at which passenger movements are projected to increase at a very rapid rate and air cargo is projected to increase over four years by almost half. How we are going to manage the task with the greater volume of both passengers and cargo when this amount of money has been taken out of your budget?

Mr Carmody : The budget measure also involves investment in new smart gates which is our automated passenger processing arrangement. The net effect of that investment in SmartGate, which is a more efficient way of managing passenger flows, is what generates the saving. We project there will be no net effect on passenger facilitation. In other words, the current broad parameter for incoming passengers is, I think, 92 per cent within 30 minutes. We will maintain that because of the investment in SmartGate technology which provides a more efficient way of processing passengers.

Senator BRANDIS: How many staff are currently tasked to passenger facilitation?

Mr Buckpitt : The statistics in the passenger division at the end of 2011 were full-time equivalent 1,535 staff.

Senator BRANDIS: That is the moment?

Mr Buckpitt : Yes, at the end of December last year.

Senator BRANDIS: Yes, 1,535.

Mr Buckpitt : Correct.

Senator BRANDIS: What was the equivalent figure 12 months before that?

Mr Buckpitt : I can give you the figures for financial years, if that is acceptable.

Senator BRANDIS: Yes, that will do. Please take me back to the end of the 2007-08 financial year.

Mr Buckpitt : In 2010-11 it was 1,553; 2009-10 it was 1,589; 2008-09 it was 1,634; and 2007-08 it was 1,579.

Senator BRANDIS: Do you have any idea of movements in the FTE figure since December?

Mr Buckpitt : Yes, since December there has been an organisational rearrangement within Customs such that the passenger analysis unit is no longer part of the division—that is, about 43 staff. It is just a movement from one part of the organisation to another.

Senator BRANDIS: They are still Customs staff but they are not designated for passenger facilitation work?

Mr Buckpitt : Correct. The other part of the change is natural attrition in the order of 10 to 20 staff in the 4½ months.

Senator BRANDIS: That brings the number to below 1,500, doesn't it?

Mr Buckpitt : That is correct.

Senator BRANDIS: In fact it brings it to 1,492.

Mr Buckpitt : Our projection for staffing at the end of this financial year is 1,490 FTE.

Senator BRANDIS: In the 2008-09 year it was 1,634 staff which will have gone to 1,490 staff at the end of 2011-12. That is a fairly substantial reduction in three years.

Mr Buckpitt : That is correct. However, you need to recall that about 43 of the difference relate to the passenger analysis unit which is now in a different part of the organisation.

Senator BRANDIS: Even leaving off the 43, it is still a fairly substantial reduction at a time when, as the PBS says, the number of passenger movements is increasing at a very rapid rate.

Mr Buckpitt : That is correct. However, we now have 37 SmartGates that are assisting with the processing of passengers. SmartGate continues to account for an increasing proportion of the total workload processed.

Senator BRANDIS: Mr Carmody, presumably it is your intention to roll out these SmartGates at every point of entry in the fullness of time?

Mr Carmody : We have SmartGates at entry points already. I think the investment in the additional 20 SmartGates will initially be in Melbourne and Sydney. Then we will look to expand from there. As Mr Buckpitt has indicated, SmartGate is proving very popular and efficient. We presently get about 50 per cent of eligible travellers—that is, Australian and New Zealand e-passport holders—fronting up to the SmartGates. Our objective with this investment is to make SmartGate the passage of choice for eligible passengers. We are projecting that in the coming year we will get over 60 per cent through them and in the second year around 80 per cent.

Senator BRANDIS: The SmartGate is for Australian and New Zealand passport holders only?

Mr Carmody : Yes, e-passport holders.

Senator BRANDIS: What percentage of arrivals are Australian and New Zealand passport holders?

CHAIR: I used SmartGate in Darwin last Thursday. It is really efficient. I think 50 per cent of people used it. It is very quick and efficient.

Mr Carmody : Thank you. It is nice to get instant feedback.

Mr Buckpitt : I would need a few minutes to find the relevant statistic. But in approximate terms, it is about half.

Senator BRANDIS: About half. So at the moment the SmartGates are dealing with about half of that half of arrivals, comprising Australian and New Zealand passport holders—so about a quarter of all incoming or returning passengers. Is that right?

Mr Buckpitt : Correct. I can just provide some statistics. In 2009-10, of eligible travellers for SmartGate purposes—so Australians and New Zealanders with ePassport—36.5 per cent were using SmartGate. Of the total volume of travellers, that was 10.5 per cent. In 2010-11, the figure grew to 42.24 per cent of all eligible travellers—so Australians and New Zealanders with ePassport—using it. Of total travellers, that was 14.72 per cent. I need a bit more time, but I can advise that, as Mr Carmody has indicated, we have now surpassed the 50 per cent mark, and I think it is getting up around the 20 to 25 per cent figure for which you were doing the back-of-the-envelope calculation a moment ago. Mr Carmody also mentioned that, as part of this additional funding for SmartGate, our objective is to get the figure up to 65 per cent in the first year and up to 80 per cent by the end of the second year. We also have plans to extend the availability of SmartGate to other nationalities, but that is a longer term objective.

Senator BRANDIS: All right. As is pointed out on page 112 of the PBS, passenger facilitation also deals with 'pre-arrival and pre-departure risk assessment based on advance passenger data, information and intelligence to identify potential persons of interest'. It also regulates '   secondary interventions on arrival and pre-departure for the assessment of persons of interest', including questioning, baggage examination and searches, and 'related follow-on activities', including referral to agencies such as the AFP, and 'the collection of border-related revenue' as well. So, apart from the routine uninterrupted arrival of a passenger, at the sharp end of your border protection work at airports and ports there are also these activities where there is a person of interest identified and an intervention is required. Has the reduction of nearly $45 million over two years of the passenger facilitation budget impinged on those activities?

Mr Buckpitt : The vast proportion of the reductions have been at the primary line. I would need to take on notice what proportion, if any, of it falls on secondary examinations. But it has not been our intention to impact the secondary examination or the risk-assessment work that you have referred to.

Mr Carmody : We will confirm this, but in both the specific initiatives that led to the reduction in staffing—that is, the reduction a year or so ago that acknowledged a reduction in facilitation rates of 95 to 92 and this latest reduction, which involves the use of SmartGate. Those specific reductions did not apply to what we call the 'back of the hall' activities.

Senator BRANDIS: Does that mean that there has been no reduction in 'back of the hall activities'?

Mr Carmody : For those initiatives, no.

Senator BRANDIS: What about overall?

Mr Carmody : We just need to check the exact figures, but what I can say is that, in relation to the specific reduction initiatives, they were excluded.

Senator BRANDIS: Which airports have the longest processing time for incoming passengers?

Mr Buckpitt : It varies, but as a general remark I would say Perth and Melbourne.

Senator BRANDIS: What are the average clearance times there, please?

Mr Buckpitt : I would need a moment or two to obtain that figure for you.

Mr Carmody : The difficulty with that is that it does vary significantly according to if there is compaction of flights and so on.

Senator BRANDIS: While you are looking for that, let me go on. What is the average passenger referral rate where there has been a biometric failure rate for SmartGate?

Mr Buckpitt : In general terms, the referral rate is of the order of eight to 18 percent.

Senator BRANDIS: That is pretty high.

Mr Buckpitt : It varies, depending upon the mix of the passengers coming in to a particular airport. Some of that number is intended to be referred. Some of it reflects issues that might arise around the data that has been provided by the airline not being a perfect match with the individual then presenting. It is not necessarily that there is a problem with the technology; it is more commonly an issue around the data that we have.

Senator BRANDIS: Regardless of the source of the problem, what that means is that between one in 10 and one in five of the attempted transits through the SmartGate fails and has to be referred to an officer, doesn't it?

Mr Buckpitt : That is correct.

Senator BRANDIS: That is quite a lot; up to one in five is a very high failure rate

Mr Carmody : It is not necessarily a failure rate; it may be because we want an officer to see them.

Senator BRANDIS: What is the forecast passenger referral rate for SmartGate at all Australian international airports following the expansion of Smartgates by 2014-15—is there a forecast?

Mr Carmody : I do not think we would have a specific forecast. We would have taken into account the through-put rates when we did the work on how many Smartgates would have what impact.

Senator BRANDIS: What is your criteria? What is the standard?

Mr Buckpitt : When you say referrals, are you referring to referral to an officer at the primary line?

Senator BRANDIS: Yes.

Mr Buckpitt : We have not established a target however, as I have indicated, it ranges from about eight or nine percent up to about 18-19 percent.

Senator BRANDIS: That is not your target though, is it?

Mr Buckpitt : No. We would like to see it reduced.

Senator BRANDIS: What is your target?

Mr Buckpitt : We have not established a target.

Senator BRANDIS: You have not established a target?

Mr Buckpitt : Not for referrals, no.

Senator BRANDIS: What is the average cost associated with individual passenger facilitation?

Mr Buckpitt : When you ask for an average cost, if you were to simply divide the cost of our operations by the number of passengers, it is a figure of the order of $5 per passenger. Clearly, it depends upon what on-costs are included and whether we are counting both inwards and outwards.

Senator BRANDIS: Dealing with inbound passengers, is the $5 per passenger figure about right?

Mr Buckpitt : It would probably be a little more than that. The $5 figure that I have mentioned would apply to both inwards and outwards. Inwards processing is more costly to us than outwards. I have not done the calculation but I would expect that inwards would be a little more and outwards would be a little less than that number.

Senator BRANDIS: Has not your agency developed a workload growth funding figure of $3.95 per passenger?

Mr Buckpitt : There is a workflow growth funding arrangement in place between Customs and Border Protection and the department of finance, and it is a number of that magnitude.

Senator BRANDIS: $3.95 per passenger. The actual cost you say is $5 per passenger. The funding arrangements with the Department of Finance assumed $3.95 per passenger. On what basis was the $3.95 per passenger figure arrived at, and isn't that discrepant with the approximate cost per passenger you have just given me?

Mr Buckpitt : The figure was determined a few years ago and, as I understand it, it was produced on a marginal-cost basis. So the difference is that we are talking about the $5 figure being an average cost and the $3.95 being a marginal cost.

Senator BRANDIS: What individual capital works programs will be cancelled as a result of the $19.5 million to capital works for your agency revealed by the forward estimates?

Mr Carmody : This is part of our planning process and we are still going through all that. We have had what we called an Investment Review Committee reviewing the capital expenditure and that will be coming for final decision in June along with our other funding decisions.

Senator BRANDIS: So you do not know yet?

Mr Carmody : We do not know the final detail.

Senator BRANDIS: Let us not worry about the final detail—

Mr Carmody : It has not come to me for decision and people have still been working through it. Until that occurs, I cannot give you an answer to your question.

Senator BRANDIS: Have you made any preliminary assessments?

Mr Carmody : We have made an assessment in terms of the number of dollars that we have available to do it. There is a group working on the investment proposals. I have seen some preliminary work but I have not been involved in any decisions. It will come to us in June for that. I would say though, that there are always more projects that people aspire to than won the budget, but more importantly from my perspective, that an organisation has the capacity to deliver, and I think that we will be operating within our capacity to deliver within that budget we are talking about.

Senator BRANDIS: That is all very fine, Mr Carmody, but that does not really tell us very much. All that amounts to is saying that you have got a finite amount of money and you will do the best you can with it.

Mr Carmody : That might be one way of viewing it, but as an organisation we are humans. I have seen in too many organisations the belief that you can do more than you can, and what I have been careful to ensure this time and one of the tasks that I gave the people who were doing the quick review of our IT, was to assist me in making the final decisions I have talked about by looking at the sheer capability of the organisation and the humans in it to deliver. That is why I am saying to you that decisions have not been taken and once they are taken, we will release to the organisation those decisions and make them freely available.

Senator BRANDIS: That is fine, Mr Carmody, but it seems to me that an agency such as yours can be judged by a reasonably clear objective standard given that your ultimate mission is to keep Australia's borders safe from the illegal movement of people and goods. To the extent to which there is illegal movement of people and goods, you have not achieved that objective. There must be an optimal amount of resources that could be deployed to achieve that objective to give you a good level of satisfaction that for all practical purposes you have secured the borders. So my point is that it is not merely a function of the budget, you have a particular mission and to the extent to which reductions in the budget compromise your ability to achieve that mission and force upon you resource allocation decisions that are suboptimal, then it prejudices your agency's capacity.

Mr Carmody : I go to the capital expenditure and say to you that the most important capital and other investment we can make is in improving our intelligence led, risk based capability. Given the figures you spoke about, Senator, it is absolutely impossible to examine every person and good coming into the country. The only way that we can provide the level of comfort that you have talked about, that we are doing the best possible, is by having a very strong capability that area. And when it comes to the investment budget, the clear direction that has been given is that that takes absolute priority and there will be no cuts in developing that capability. The only issue we face there is just the complexity of it and our ability to deliver as much as quickly as we can.

Senator BRANDIS: All right. In the 2009-10 budget $58.1 million was cut from the customs cargo screening program. In the 2012-13 budget, as revealed on page 103 of the PBS, incoming air cargo—and I have already read this to you—is projected to increase by almost 45 per cent over the forward estimates. Can you tell us: over the past 12 months how many sea, air and postal consignments have been inspected and examined? And in each category—sea, air and postal—can you express that as a percentage of the total number of consignments arriving?

Mr Carmody : The inspections in 2010-11 for air were 1,528,590. The import volume for air was 13,972,886. I do not have the percentage, and I do not have a calculator, I am sorry.

Senator BRANDIS: That looks to me like between 10 and 15 per cent.

Mr Carmody : In sea, the inspections in 2010-11 were 101,889. Sea manifest lines, as it is referred to, was 2,519,341.

Senator BRANDIS: So with sea it is less than five per cent. And postal?

Mr Carmody : We do, of course, need to have a discussion in this context about the risk and how we target these, but I will give you the figures you are looking for.

Senator BRANDIS: It is your core business to make risk assessments.

Mr Carmody : That is right.

Senator BRANDIS: But here is a risk curve, isn't there?

Mr Carmody : There is parcels: we did 21,090,379 of 55,820,865.

Senator BRANDIS: That is a bit under 40 per cent. It might be more useful if we had a calculator in the room, so I will come back to that after the morning tea adjournment. I want to pursue this but I will put that, as it were, on hold for a moment and turn to another topic.

I want to ask you about the proposal to ban duty-free tobacco announced in the budget as a health measure. When is that going to take effect?

Mr Carmody : From 1 September this year.

Senator BRANDIS: Has there been any research or assessment as to what effect the ban would mean for passenger flows after international flights?

Mr Carmody : We cannot do exact modelling but we are conscious that, absent necessary advertising and promotion, obviously it would cause difficulties. Our task over the period between now and then is to work with industry and others to make sure that passengers understand the changes.

Senator BRANDIS: Was there any prior consultation with Customs before this decision was made?

Mr Carmody : We provided the information about the need, which was essentially about the need to advertise this fully and have a period to do that.

Senator BRANDIS: I do not think that is responsive to my question. Was there any prior consultation with you before the decision was made?

Mr Carmody : Sorry. Again, Senator, I was explaining to you the nature of the consultation that occurred.

Senator BRANDIS: That does not sound like very extensive consultation to me if you were merely asked to provide certain data.

Mr Carmody : We are the administrators and operators in this sense, and the operational issue on which we provided advice was the need for, obviously, good advance information to passengers.

Senator BRANDIS: Okay, and that was the extent of the advice you provided to government.

Mr Carmody : That is all I am conscious of.

Senator BRANDIS: All right.

Mr Buckpitt : There was a little more detail around things such as how we would go about the implementation—so the need to amend the incoming passenger card, the sorts of changes that we would need to make in terms of signage, how we might go about advertising it and that sort of implementation detail.

Senator BRANDIS: How is Customs going to police the new duty-free ban, given that in fact you have fewer officers?

Mr Buckpitt : In the first instance, the incoming passenger card will ask passengers to declare, so hopefully people will self-declare in most cases. However, beyond that, we have our normal processes for managing any risk in terms of both targeted and non-targeted examination activity.

Senator BRANDIS: But tobacco is a widely used consumable which it is very commonly the custom of international passengers to acquire and bring into the country. We are not talking about an illicit substance here; we are talking about a substance that 15 per cent or more of the population use. So policing this ban is going to, it seems to me, involve a much greater level of surveillance over incoming passengers than, for example, your surveillance in respect of illegal substances.

Mr Buckpitt : Awareness-raising does become much more important for something like this because, as you say, there will be travellers entering Australia unaware of this change.

Senator BRANDIS: Yes.

Mr Buckpitt : And therefore we do anticipate a period of time when there will be far more detection of tobacco that people are trying to bring in to the country and have not declared.

Senator PRATT: People know on alcohol and everything. There is no difference in the long term once the message settles in, surely.

Mr Carmody : We believe it is an implementation issue and there may be some extra level of intensity in the initial implementation, but then it will go, as you say, to a similar basis.

Senator BRANDIS: Have you developed a strategy to deal with the increased demand on your resources during this implementation period?

Mr Carmody : That is in the course of development now.

Mr Buckpitt : We are currently talking to Finance and Treasury officials about the options that might be available for us. For example, we are discussing having the ability for passengers to abandon excess tobacco, which would then reduce the administrative overhead for us. That is the sort of detail that we are currently working through.

Senator BRANDIS: And when did you begin to develop this implementation strategy?

Mr Buckpitt : Post budget.

Senator BRANDIS: After the budget? So this was effectively dumped on you in the budget and -

Mr Carmody : It is a decision taken by government. We administer a whole range of issues at the border.

Senator BRANDIS: I understand that, but it does seem to me that at least nobody can know for sure how long it will take before there is a satisfactory level of compliance, and that is in part a function of the extent to which this change is publicised to incoming passengers. But we can all agree that there will be a period during which the implementation of this policy will impose great additional strains on your resources. I am bound to say it strikes me as alarming that you first learned about this in the budget and you are expected to make the allocations of resources to deal with it at a time when your resources are already being reduced by 1 September.

CHAIR: It is 10:30—

Senator BRANDIS: Can I have an answer to my question before you adjourn?

CHAIR: Sorry; I thought that was a statement.

Senator BRANDIS: I do not make statements; I ask questions.

Mr Carmody : I am not going to use the adjectives you used. This is a task that we take on in a wide range of areas when new goods are prohibited and so on, and we are working on achieving the best possible implementation.

Senator BRANDIS: Have you made an assessment of the number of additional staff that will be required during this initial implementation period?

Mr Carmody : We do not have an assessment as far as I know.

Mr Buckpitt : We have made an assessment as to additional staff that we would like to have available doing work such as calculating duty payable and taking the work associated with detaining the tobacco. That has been estimated, and we have shared that with the department of finance and are in discussions with them about that.

Senator BRANDIS: How many do you estimate?

Mr Buckpitt : It is not a large number. I do not have the figure in front of me.

Senator BRANDIS: Approximately.

Mr Buckpitt : Of the order of 10, I think.

Senator BRANDIS: Ten additional staff?

Mr Buckpitt : I think it is five to cope with the additional workload around the duty.

Senator BRANDIS: As well as the additional staff, have you made an assessment of the additional costs to customs of supervising this new policy?

Mr Buckpitt : We have costed certain elements such as the destruction of the tobacco, the storage and the awareness-raising work that we would like to be doing.

Senator BRANDIS: What is the figure you put on that?

Mr Buckpitt : I need to take that question on notice.

Senator BRANDIS: Why? Do you not know what the figure is?

Mr Buckpitt : The figure is still being discussed with the department of finance, so it does not necessarily—

Senator BRANDIS: What order of figure are we looking at? I am not going to tie you down to a decimal point, but what sort of order is it within a range of the closest $5 million?

Mr Buckpitt : Within a range we are talking a figure of the order of $5 million.

Senator BRANDIS: About $5 million. And that is in addition to the additional staff; is that right?

Mr Buckpitt : No, that is inclusive of the additional staff.

Senator BRANDIS: I see. All right, thank you.

Proceedings suspended from 10 : 33 to 10 : 57

Senator BRANDIS: Mr Carmody, I want to go back to cargo screening. You can check my figures if you like, but the figures for the number of items which were screened in 2010-11 were 10.93 per cent in relation to air consignments, 4.04 per cent in relation to seaborne consignments and 37.78 per cent in relation to postal articles. Can you tell us, please—leave postal to one side; I am more interested in air and sea cargoes—for each of the three financial years prior to the 2010-11 financial year, what percentage of airborne and seaborne cargoes were screened?

Mr Carmody : I do not have the percentages.

Senator BRANDIS: I have a calculator. You tell me the figures and I will do the mensuration.

Mr Carmody : One of my ever-efficient staff has passed me the percentages.

Senator BRANDIS: Good on you. You get the chocolate frog for the best witness this morning, Ms Vivian. Let us start with 2008-09. Just air and sea will do.

Ms Vivian : In 2008-09, the percentage of what was screened was about 63 per cent.

Senator BRANDIS: Of air or sea?

Ms Vivian : That was air.

Senator BRANDIS: And sea?

Ms Vivian : For 2008-09 for sea, it was about six per cent.

Senator BRANDIS: Six per cent. And in 2009-10?

Ms Vivian : In 2009-10, that was when we introduced the intervention strategy, so we went from screening around about 63 per cent air cargo to 13.3 per cent; and in sea cargo we went to about 4.3 per cent.

Senator BRANDIS: And we have got the figures from Mr Carmody for 2010-11. Thank you very much. It has gone over three years for air from 63 per cent to 13.3 per cent to 10.9 per cent; and sea has gone from six per cent to 4.3 per cent to four percent to the nearest decimal point. Have you got some projections for 2011-12, Mr Carmody?

Mr Carmody : We have, and these are rounded figures, so I am a bit suspicious of them, but—

Senator BRANDIS: Are these the figures that extrapolate to 30 June or are these the figures that are made up to 30 April?

Mr Carmody : I do not have the figures up to 30 April. We have full-year targets which we are looking at.

Senator BRANDIS: And what are those for air?

Mr Carmody : Air is 1.5 million, and sea is 101,500.

Senator BRANDIS: Of?

Mr Carmody : Projected, and again these are rounded so we need to be careful with them: 17.9 million, air; and 2.6 million, sea. But as I say, they are, by their nature, the rounded up figures.

Senator BRANDIS: On those projections, the air is 8.4 per cent.

Mr Carmody : That is true.

Senator BRANDIS: And what were the figures for sea again, please?

Mr Carmody : The target is 101,500 and the forecasting is 2.6 million.

Senator BRANDIS: So that is 3.9 per cent. Across each of the last four years, just to sum it up, the proportion of air cargoes inspected has gone from 63 per cent in 2008-09; to 13.3 per cent in 2009-10; to 10.9 per cent in 2010-11; and to 8.4 per cent projected in 2011-12. The percentage of sea cargoes inspected has gone from six per cent in 2008-09; to 4.3 per cent in 2009-10; to four per cent in 2010-11; and to 3.9 per cent in 2011-12. Thank you.

Mr Carmody : We have had this discussion over the years. That is only one side of the picture. You realise that conscious decisions were taken on the basis of the risk, as we have discussed previously, the only approach we can really use in this environment is intelligence led and risk based. You have only got one side of the picture there; the other side of the picture is of course the effectiveness of the screening.

Senator BRANDIS: That is fine but that is the only broad data we have.

Mr Carmody : For example, detections in air have gone up substantially over that period. The end result is what we are detecting at the border and the effectiveness of that.

Senator BRANDIS: But if, in the current financial year, we are inspecting one-eighth of the number of cargoes that we were inspecting four years ago, then I think the public would be worrying about what is getting through in the seven-eighths that we used to inspect but no longer do.

Mr Carmody : The reason we moved to those figures was on the basis of the risk involved that we had for the cargo and the fact that for much of what we were doing before, there was little or no detection and it was extra work. Just as one example, in the air scene in 2007-08 when we were doing the high numbers you talked about, there were 870 detections. In 2010-11, there were 1,741. The issue is the effectiveness of your targeting and intelligence base.

Senator BRANDIS: I understand entirely that the allocation of resources has to reflect a concentration on targeted areas and, the more specifically and accurately you can target particular areas, the more effective the operation will be. My point though is that risk and risk assessment should not be a function of resources. In fact, it should be the other way around. There is no empirical or logical reason to believe that the risk changes with resource allocation. The only fail-safe way to do this would be to inspect 100 per cent of cargoes. Nobody is saying you should do that. So you do have to target your resources. I accept that. But the targeting should be a function of a risk assessment, not a function of being deprived of resources.

Mr Carmody : But the decisions on the levels that we are doing now were based on an assessment of the risk.

Senator BRANDIS: Have there been cuts to cargo screening staff in each of those years, from 2008-09 to the current year? How many staff have been cut from the cargo screening staff and at which locality have those cuts been made at?

Mr Carmody : I do not know whether we have those precise figures, but basically we have had the staff needed allocated to that task. We have had the staff needed to meet the volumes that we set as the appropriate risk base intervention. I guess we would have to take that on notice.

Ms Vivian : In terms of staff cuts, there was a reduction of staff between 2008-09 to 2009-10 when we made that reduction in the air cargo screening and some small reduction in the screening of sea cargo. For instance, in 2008-09 we went from about 151 staff in air cargo down to about 109 and in sea cargo we went from around 177 staff down to 156. So that was a bit of a reduction between 2008-09 and 2009-10. Since then, give or take as you have people leaving, the staffing has been relatively consistent. Where we sit at the moment is that in sea cargo we have around 160 staff and particularly in the air cargo we have around 160 staff doing that work.

Mr Pez z ullo : In addition to Ms Vivian's staff, the engine room of the risk assessment room and targeting system is the intelligence function and the intelligence division. On top of the numbers of staff that have just been briefed to the committee we have 140 analysts. I can get you, if you are interested, the time series of that pool, but at the moment we have 142 analysts. They have not been reduced by the kinds of numbers that are implied in the reduction in air cargo screening. They undertake target development activity. They focus on types of commodities that are coming across the border. They focus as best they can on the networks that are attempting to get goods across the border in either the air stream or the cargo stream and indeed through airports, passengers or through the mail. In addition to those target development staff, we have another 70 targeting staff who do the 24/7 function—that is, working off the target development profiles, packages and intelligence leads that are produced by the target development staff. You then have people who are actively cueing the inspection and examination process which Ms Vivian's staff then undertake. It would give you a partial view if you focused only on the number of staff in the cargo division. You have to build in the capability—both the human capability and the automated machine capability—that we have in the intelligence and targeting function, which falls under my program.

Senator BRANDIS: Has there been any variation to the work hours of the cargo screening staff?

Ms Vivian : I am just musing over that question. We work our staff in shifts, which I can give you. There has been no major variation in those shifts. But, of course, with things like air cargo you are very responsive to what is coming into Australia, so it can vary a bit. Have we cut shifts or anything along those lines? No.

Senator BRANDIS: Has there been an increase or decrease in illegal tobacco smuggling over the past six months?

Ms Kelley : During the first nine months of 2011-12, Customs and Border Protection has made 35 seizures of smuggled tobacco products in sea cargo, consisting of 151 tonnes of tobacco and 95 million cigarettes. These importations represent a potential revenue evasion of $109 million plus GST.

Senator BRANDIS: How do those 35 seizures compare with the equivalent period in the previous financial year?

Ms Kelley : I have a full-year figure for the previous financial year. During 2010-11, we made 55 seizures of smuggled tobacco products in sea cargo, consisting of 258 tonnes of tobacco and 82 million cigarettes. This represented a potential revenue evasion of $135 million plus GST.

Senator BRANDIS: Well done. So it was 55 in 2010-11 and 35 so far in 2011-12?

Ms Kelley : That is correct.

Senator BRANDIS: Have any Customs officers been found to be involved in criminal or corrupt activity or any other activity that would be considered as breaching the integrity of Customs over the past 12 months?

Mr Carmody : In the last six months, which would go back to December 2011, no-one has been convicted.

Senator BRANDIS: How many have been charged?

Mr Carmody : In that period?

Senator BRANDIS: Yes.

Mr Carmody : On 25 December there was an officer issued with an arrest warrant for an incident outside of the workplace.

Senator BRANDIS: Can you provide the equivalent figure for 2007-08?

Mr Carmody : I do not have 2007-08.

Senator BRANDIS: Take it on notice, thanks. Have any cases been referred to the Australian Commission for Law Enforcement Integrity?

Mr Carmody : Yes.

Senator BRANDIS: How many?

Mr Carmody : When we came under the jurisdiction of ACLEI, we had—and this is noted in the Hamburger review—a number of investigations underway. All these figures are allegations, and whether they prove true or not there were certainly investigations, and some serious investigations, underway. I think there were about 10 that we referred at the time that we had been working on.

Senator BRANDIS: Sorry, at the time meaning when?

Mr Carmody : When we came under ACLEI—that was 1 January 2011. I think in total—

Senator BRANDIS: For 10 people when you came within ACLEI's purview. And have there been any referred since?

Mr Carmody : Yes, I am just trying to find the figure for you. There have been in total 48 allegations referred to ACLEI—and I stress that these are allegations.

Senator BRANDIS: When you say allegations, does that mean allegations against 48 individuals?

Mr Carmody : I think that some of them are not named. So, putting that aside, 48 allegations of some form of behaviour.

Senator BRANDIS: All I am getting at is are we talking about 48 different people or are some individuals the subject of multiple allegations?

Mr Carmody : I will just check. There could be some, but I do not have the detail of that.

Senator BRANDIS: You might take that on notice.

Mr Carmody : Yes. And let me be careful here: you know from actions that I have taken, and that the minister has taken on my advice recently, that I am very concerned to ensure that any evidence of corruption is dealt with firmly.

Senator BRANDIS: Sure.

Mr Carmody : That is an absolute commitment from me and the organisation. In this case I just do want to point out that as I understand it there have been 48 matters referred, but a number of those have been finalised—13 of these matters have been finalised. For example, there was insufficient evidence or unsubstantiated claims. A number have been referred back to us by ACLEI for us to investigate either individually or jointly.

Senator BRANDIS: All right. I want to move on to the subject of the Sylvania Waters post office. As you are aware, on 14 March this year a report by the New South Wales police on the investigation into weapons smuggling undertaken by a criminal syndicate through the Sylvania Waters post office revealed that 220 Glock pistols had been illegally imported into the country via air mail, and not detected by Customs. Can you confirm exactly at what point Customs was informed of the Sylvania Waters case by the New South Wales police?

Mr Carmody : Yes; but before I do that I just need to say that the figure of 200 and something has been revised, based on investigations. My understanding is that it is around 122 Glocks plus a number of triggers and magazines and so on that could have taken the total number to between 140 and 150 or so.

In relation to the investigation, we were approached on 8 February, my understanding is, and within two days of receiving that information we were actually able to target the package of magazines that became the subject of the joint investigation with New South Wales police. I should also point out that we were heavily involved in the investigation. We had 10 investigators in the joint operation: two operational commanders, four detector dog teams, three from forensics and one intelligence analysis.

Senator BRANDIS: How did this occur, Mr Carmody? Even if it was only 122 Glock pistols and a few dozen magazines and triggers, this is an important failure in the system.

Mr Carmody : It is important to recognise first of all that we have had a number of detections of firearms. If you look at the figures from July 2009 to March 2012, there are 4,161 detections. Currently, we have 17 active investigations going on with state police. There are nine cases currently before or scheduled to appear before the courts. I should also point out that in the few months prior to this particular investigation we detected in one case 96 Glock pistol frames, magazines and firearm parts. That involved on our allegation concerns about an import permit from New South Wales that was presented by the person, which we believe was not true, and we intercepted further Glock consignments. Search warrants were executed and there is a brief before CDPP. So the first point I want to make is that while, yes, that occurred, there are significant other interceptions and investigations we have been making.

Senator BRANDIS: The fact that you have been successful in intercepting one illicit importation of firearms does not explain the failure to detect another.

Mr Carmody : No. The second point I want to make is that this goes back in large measure to the importance of intelligence and targeting.

Senator BRANDIS: Sure, but you have not answered my question. How did this go undetected?

Mr Carmody : If I could just continue that point, I would note that, as soon as we got the information on this, we were able to assist in that. In this case we had no particular intelligence or basis to target this. I believe there was one that went through a coverage-rate X-ray, but—either because of the packaging or whatever—it was not able to be detected. So we had no particular intelligence.

Senator RYAN: Let us pause there. One of these parcels was, in fact, X-rayed and the presence within the parcel of pistols or magazines or triggers was not detected?

Mr Carmody : In that case it was not. We need to also understand that one of the issues we confront is that you can package items—and I do not want to go into detail because I do not want to give information to those who are seeking to do this—but depending on density—

Senator BRANDIS: They are probably not listening to Senate estimates—

Mr Carmody : Well, you never know, Senator. You might have very high ratings.

Senator BRANDIS: I take your point.

Mr Carmody : We are seeing more and more that those that are in the more sophisticated end of the criminal market understand density or how things present on X-ray. I do not know the specifics of this one—I do not know if I could help you there—but, if you pull apart a gun into its various components and throw it in with a whole lot of metal machinery and so on, the X-rays are important but nothing beats the intelligence and targeting. That is the issue for us here.

Senator BRANDIS: You have told me two things. You have told me that, in relation to this particular importer, there was no specific intelligence. There was nothing to alert you to the fact that this source might be engaged in illegal activity.

Mr Carmody : There was nothing that led us to believe at that time that we could target those people.

Senator BRANDIS: One of the parcels was X-rayed, but it was packaged in such a way as to be impervious to X-ray detection.

Mr Carmody : We certainly did not detect it. That my understanding, or that is what we assume occurred in that case.

Senator BRANDIS: Is there any other or further explanation of the failure to detect?

Mr Carmody : The basic issue for us in all these cases, given the volume—this was air express, wasn't it?—we have been through the volumes involved. There were six, five—

Senator BRANDIS: There were 50-some individual parcels, were there?

Mr Carmody : Sorry?

Senator BRANDIS: Were you saying there were 50-some individual parcels?

Mr Carmody : No. I was talking about the volume of air cargo. I was thinking it is five million, but it is more than that. How many million is it? Air cargo—I have already given you the forecast for this year: 17,900,000. That is the issue we face. The critical issue for us to be successful is to increase our intelligence and targeting. As I pointed out, as soon as we were approached by New South Wales Police that enabled us to target the particular parcel that led to the arrest. In pursuing of this, and in pursuit of the importance of intelligence and targeting, we now have one of our analysts embedded in the New South Wales Police Force Firearms and Organised Crime Squad so that we are there at the start of investigations, at the start of intelligence, because it is that sort of feedback that, one, enables us to target particular attempts but also gives us the information about the methodologies and the people involved that enables us to develop other profiles.

Senator BRANDIS: This was nevertheless a failure of the system. Following the discovery of this failure, did you identify any weaknesses in the system which have since been addressed?

Mr Carmody : We have developed quite a comprehensive strategy for addressing this issue.

Senator BRANDIS: Without going into operational matters, what does that mean?

Mr Carmody : First of all, the first key element of it involves embedding an intelligence analyst within the New South Wales Police Force. That analyst gets all the information on an open basis—

Senator BRANDIS: That is just an enhancing communications sort of thing.

Mr Carmody : No, it is not enhancing—it means that we have someone there when there is source information or whatever coming. It enables us to be in at the start of that. We have also developed—I will get Mr Pezzullo, who has been working on the development of the strategy, to assist.

Mr Pezzullo : Senator, to answer the first part of your question, the key failure, to use your characterisation, has been rectified through a much deeper immersion with the relevant state police force. It is not just liaison but a deep immersion into all of their data holdings through the establishment of the Firearms Intelligence and Targeting Team. The key thing that state police forces need to do in this space is give us leads, in a more proactive sense, ahead of a shooting having occurred or a firearm having been acquired at the scene of crime, which is indeed what happened in this case. There was some sensitive information; I will not go into the particulars of how the relevant state jurisdiction source that. Within days, I think Mr Carmody said within two days, certain data matches were achieved and the New South Wales-led operation known as Operation Maxworthy resulted in the outcomes that you described earlier. Since that time, not only have we made available an individual analyst but she is backed up by a national team, the Firearms Intelligence and Targeting Team, as well as those target development analysts that I spelt out earlier who look at either networks, environments or criminal supply chains. The firearms team is specifically looking at all of the leads being generated not only through that immersion in the firearm squad—and I am grateful to Commissioner Scipione and his senior colleagues—but also because they have opened up, to a greater extent than we had access to before, the holdings of their Gangs Squad and their other organised crime squads. We are then able to run that data in conjunction with the Crime Commission and our colleagues in the Federal Police across a more expansive set of data holdings than are available to any one state jurisdiction.

In addition to that work, we are looking at and running those leads through our datasets. We are also looking at the availability through online purchasing through overt e-commerce sites, but also we are starting to look much more deeply—and partnering with relevant agencies that have relevant powers—at the so-called darknet sites, which require a certain degree of trusted entry or accreditation before you can get into these sites. We are also working with our international partners through our AFP liaison colleagues, who can assist us in making relevant contacts with international law enforcement. The Americans are particularly important here because they have a very strong practice in the area of firearms intelligence targeting, but there are other international agencies as well, not just in the United States. We are also working with the legitimate providers of firearms—those in the business such as Glock, Smith and Wesson and others. We are also working with our law enforcement partners to look at penetrating behind—and again I do not want to go into a lot of detail here—those in the international black market who provide goods illicitly outside of the established supply chains.

We are also looking to deal with our screening colleagues in the cargo division that you were briefed on earlier, to assist them in looking through X-ray and other screening process for the very hard-to-discern but still occasionally present and prevalent signatures of a firearm part. Mr Carmody is absolutely right that most slides, barrels, frames et cetera look like machinery parts, but there are occasionally elements that can be picked up through the screening process.

We are also working with the Australian Crime Commission on its strategic work. Mr Clare, the Minister for Home Affairs and Minister for Justice, has announced the commissioning of work to be undertaken by the Crime Commission on a strategic assessment into the prevalence of illicit firearms in Australia. The working hypothesis that most agencies have in undertaking that work, which has not been concluded and is principally the responsibility of the Crime Commission, is that the rather large stock of weapons that are circulating within Australia have probably been in circulation for a number of years—in some cases several decades—and they are sourced, distributed and recirculated through the so-called black and grey markets. But there are clearly episodes of importation. The matter that you have asked us about is one of those. Obviously, that Crime Commission work is still underway and we are collaborating very closely, as are the Federal Police and other colleagues.

Senator BRANDIS: Thank you, Mr Pezzullo. That is a very comprehensive response. Was there an internal investigation within Customs after this failure was discovered?

Mr Carmody : The answer is yes, and part of that answer is already in what is reflected in what Mr Pezzullo has told you. In other words, we looked at what had occurred here and we looked at what more we could do to enhance our operation. Wherever there is—

Senator BRANDIS: And what Mr Pezzullo just told me reflects, at least in part, the conclusions of that and the fruit of that investigation?

Mr Pezzullo : Yes.

Mr Carmody : That is right. In all cases where there is a missed detection, it is always the case that we review them.

Senator BRANDIS: I see. Is there any suggestion that the failure to detect these weapons on this occasion was due, in part, to a corrupt officer of Customs?

Mr Carmody : Not as far as I am aware

Senator BRANDIS: The investigation did not detect that?

Mr Carmody : That is certainly not my understanding. No.

Senator BRANDIS: Well, it—

Mr Carmody : I will say no. If there is any variation to that, I will notify you on notice, but my understanding is that there is no such suggestion.

Senator BRANDIS: Mr Pezzullo, can you elaborate?

Mr Pezzullo : I can confirm the CEO's answer. Indeed, in anticipation of this line of questioning I re-read the misdetection report only just yesterday, and I have checked with the people who prepared the report. There is no suggestion contained in that report of corrupt internal behaviour.

Senator BRANDIS: In this year's budget $6 million was cut from the illegal foreign fishing program. Has there been an increase or a decrease in illegal foreign fishing in Australian waters?

Mr Carmody : The $6 million cut is the product—we have discussed this previously—of the success of the operations against illegal foreign fishing. Apprehensions have continued to decline over the last numerous years—the number of vessels apprehended.

Senator BRANDIS: Does that mean that the activity has declined, or that you have been less successful in apprehending them?

Mr Carmody : You know what it is like when there is significant illegal fishing going on—it becomes a very high profile issue. We do not have that at the moment. The number of sightings has fluctuated over the years, and that is compounded by the fact that you might sight the same vessel more than once. The problem I have with the figures is that a lot of them are in the area where we have rights over seabed fishing but others are entitled to fish in the water column.

Rear Adm. Johnston : The number of apprehensions that we have achieved for this financial year is 12, and that compares to 14 in the year prior. The number of sightings has increased, but they are occurring outside of our exclusive economic zone or the area known as the provisional fisheries surveillance enforcement line, which helps us adjudicate an area between ourselves and Indonesia on the North West Shelf. The reason the sightings are largely up is because the nature of our aerial surveillance plan now is further north than it was in years past, and we have more capable aircraft that have a greater sensor detection range. We are seeing more sightings but we are not seeing more sightings inside our waters.

Senator BRANDIS: Are you confident that all of the sightings of illegal foreign fishing in Australian waters have been apprehended?

Rear Adm. Johnston : There are many sightings. Those sightings that are inside Australian waters may include vessels that are conducting innocent transit, which they are entitled to do, so our focus is on apprehending those that we believe may be breaking our laws, and we are responsive to those requirements.

Senator BRANDIS: Let me ask my question slightly more narrowly. In respect of the sightings within Australian waters where you have concluded that illegal fishing activity is being undertaken, are you satisfied that in all cases that activity has been apprehended?

Rear Adm. Johnston : I will just describe the process for responding to those requests. When we make a surveillance detection, we coordinate with AFMA officers who work alongside us in the Maritime Security Operations Centre. They make a judgment on whether or not we need to intervene, based on the evidence that we provide them. If they determine that a response is required, we look at adjusting our posture to achieve that. I would have to get the data to be precise, but our response rate is in the order of 60 to 70 per cent on the occasions when they ask us to conduct a law enforcement apprehension or investigation.

Senator BRANDIS: Why is it only 60 to 70 per cent?

Rear Adm. Johnston : It depends on where our vessels are and the operational priorities at the time. Because the aircraft surveillance is comprehensive across the northern waters, if we do not have surface assets in the proximity of the detection we may not be able to respond to it.

Senator BRANDIS: Coming back to my question, you are telling me that in 30 to 40 per cent of cases where illegal foreign fishing in Australian waters has been detected they have not been apprehended?

Rear Adm. Johnston : Not necessarily illegal foreign fishers—our surveillance may detect something that we believe may require further investigation, and that is the basis on which we provide that evidence to AFMA.

Senator BRANDIS: But surely the aerial surveillance would be able to distinguish between a fishing vessel merely enjoying a ride of innocent transit through Australian waters and a fishing vessel engaged in fishing.

Rear Adm. Johnston : In most cases, yes; that would be—

Senator BRANDIS: Confining yourself to the second category, where the surveillance has detected actual engagement in illegal fishing in Australian waters, in approximately what percentage of those cases are they apprehended?

Rear Adm. Johnston : I will just need to find those figures; I think I have that information available.

Senator BRANDIS: That is the figure I want.

Mr Carmody : While the admiral is looking, I need to reiterate that what we are dealing with here. The numbers outside of that area I talked about are very small and they are certainly nowhere near the numbers we experienced when we had a significant problem. The other point that I want to make that reinforces that is that we see all the time that the great bulk, a great mass, of fishing vessels are right on the line—almost exclusively. The point I am trying to make is that what we are doing in this area is deterrence to prevent the sort of illegal foreign fishing that we had before. I just want to put the numbers in context.

Senator BRANDIS: All right. Admiral?

Rear Adm. Johnston : The proportion of responses we have achieved to AFMA's requests for this financial year is 66 per cent.

Senator BRANDIS: And you said it was 12?

Rear Adm. Johnston : That was the number of apprehensions that we—

Senator BRANDIS: I see—so the number of apprehensions is lower than the number of responses?

Rear Adm. Johnston : Yes.

Senator BRANDIS: How many responses have there been?

Rear Adm. Johnston : We have had 216 requests to respond and we have responded on 143 occasions.

Senator BRANDIS: That is what I wanted to know; thank you. Mr Carmody, is it your understanding that there are some formerly involved with illegal foreign fishing who are now being recruited as crew by people smugglers for unauthorised boat arrivals?

Mr Carmody : Certainly fishing operators are being recruited for people-smuggling. Whether they are the particular individuals that were involved in illegal foreign fishing I am not aware.

Senator BRANDIS: Thank you, and thank you, Admiral.

Senator XENOPHON: I have some questions for Customs in relation to the whole issue of international flights and domestic flights. How do Customs distinguish between international and domestic flights?

Mr Buckpitt : The key determinant for Customs is whether or not the aircraft is departing or arriving at an international airport.

Senator XENOPHON: When an airline has a flight designated as an international flight so that they can employ foreign based cabin crew and that flight either departs or arrives at a domestic terminal, is that something that would trigger any action or scrutiny by Customs?

Mr Buckpitt : I am not sure that I understand your question, Senator—in that, if it has come to an international airport from overseas we would just regard it as an international flight—

Senator XENOPHON: To make it clearer: if it arrives, say, in Darwin from South-East Asia, goes from Darwin to Cairns or Melbourne or Sydney and arrives at a domestic terminal—

Mr Carmody : It does not arrive there.

Mr Buckpitt : No, it would arrive at an international terminal.

Senator XENOPHON: You are saying it is impossible for such a flight to arrive at a domestic terminal?

Mr Buckpitt : It would be required to arrive at an international terminal if it is an international flight. My colleague has just pointed out that there are provisions for an international aircraft to arrive at a domestic terminal, but it is normally in exceptional circumstances such as poor weather. But that is truly exceptional, and the norm would be that we would see international aircraft arriving only at international airports.

Senator XENOPHON: So, when I have foreign based cabin crew tell me that they have been required to be cabin crew on a flight that is part of an international tagged flight but it departs from or arrives at a domestic terminal, are they mistaken or does that seem to be an abuse of the designation of an international flight number?

Mr Buckpitt : I do not understand how such a situation could arise, because if it were an international flight Customs requirements are such that we would be screening the passengers as they got off the aircraft and, if it arrived at a domestic airport without preapproval or without the exceptional circumstances that I have mentioned, we would not be in a position to screen those international passengers. So, no, we would not have such a situation arise as a normal course of events.

Senator XENOPHON: Thank you for clarifying that. If a domestic passenger is on an international flight, what protocols or what systems are in place then?

Mr Buckpitt : That situation does arise and we do have additional requirements for domestic passengers who get on or off an international flight. Those requirements go to providing information concerning their proof of identity. We also put additional markings on their boarding passes so that we know they are domestic passengers, and our screening of them is based around ensuring the same passenger has gotten on and off as a domestic passenger, given that they would not have the normal identity in the form of passports and the like.

Senator XENOPHON: My understanding is that international passengers can remain on an aircraft while it stops at a domestic airport before disembarking at their final destination—in other words, if it is a flight from Darwin to Cairns or Melbourne or Sydney.

Mr Buckpitt : That is right.

Senator XENOPHON: Presumably these passengers would mix with passengers travelling between domestic ports?

Mr Buckpitt : That is possible, yes.

Senator XENOPHON: What measures are in place to ensure there is no inappropriate activity, such as the passing of prohibited goods between these passengers, given that the domestic passengers will not be subject to the same checks as international passengers?

Ms Grant : When we have a combined set of passengers—international passengers and some domestic passengers joining for the domestic leg of an international voyage—those domestic passengers on disembarkation at their final destination will also go through clearance processes, as they leave the airport, because we have had the mixing of domestic passengers and international passengers. So, domestic passengers will be subject to more scrutiny as they leave if we form a view that there is a risk basis to do so.

Senator XENOPHON: That normally does not happen though, does it? Normally with a D sticker, I think they call them, those passengers would not be subject to the same scrutiny as an international passenger, would they?

Mr Buckpitt : They are normally lower risk.

Senator XENOPHON: But there is nothing to stop D sticker passengers and international passengers mixing together and therefore there is a different standard for those domestic passengers and international passengers. Mr Buckpitt, you say they are of a lower risk, and I understand where you are coming from, but the fact is if there is that mixing on the aircraft and there is a different level of scrutiny, that can potentially pose a risk.

Mr Buckpitt : It is a vulnerability, but, as Ms Grant has indicated, we do have the ability to intervene with passengers, both as they get on and get off.

Senator XENOPHON: But as a general rule you do not normally intervene, though, do you?

Mr Buckpitt : As a general rule, we do not, because as a general rule they are seen as lower risk.

Senator XENOPHON: But isn't there a real risk, given that there is that mixing of domestic and international passengers on those flights?

Mr Buckpitt : There is always that possibility.

Mr Carmody : My understanding of this is that there are still identity checks, both in and out. And, secondly, part of the layered strategy we have at airports is officers observing behaviour and so on. They apply their skills equally to any passengers on board.

Senator XENOPHON: But there is nothing under the current way the rules are applied—there is nothing on that tagged flight, say Darwin to Sydney or Melbourne or Cairns after that flight arrives from South-East Asia—to stop a domestic passenger on that flight exchanging a prohibited good with an international passenger. In all likelihood the domestic passenger will be subject to much less scrutiny than the international passenger.

Mr Carmody : They would be subject to observance. We run detector dogs, for example, looking for drugs. They would be subject to those sorts of checks.

Senator XENOPHON: But there is a lesser level of scrutiny for domestic passengers as a general rule, though.

Mr Carmody : The major issue is that we get do not get advance passenger information. You know that we get advance passenger information for international passengers, which supports our targeting activity. I understand we do not naturally have the same capability with this.

Senator XENOPHON: But that increases vulnerability, though, doesn't it?

Mr Carmody : Yes, but my understanding is that the D sticker is one of those that if it is tampered with, it is evident. In addition, as I said, our normal detector dogs and normal observance officers and so on apply across the board.

Senator XENOPHON: So, you are quite relaxed—or not relaxed—comfortable with that?

Mr Carmody : I am never relaxed on these issues.—

Senator XENOPHON: I did say 'comfortable' as well.

Mr Carmody : There is always a balancing of the economic and others, but within the system we are operating we do apply the best controls we can.

CHAIR: Thank you, Senator Xenophon, for coming today. It has been a pleasure.

Senator XENOPHON: A pleasure.

CHAIR: Senator Hanson-Young, we will go to you.

Senator HANSON-YOUNG: Most of my questions, I think, will be for the AFP in relation to this, but I wanted to know what type of interaction Customs have with any extraditions to Australia from Indonesia that we may have in terms of people smuggling.

Mr Carmody : I am not aware of any in particular.

Senator HANSON-YOUNG: You are not involved in any discussions in relation to them?

Mr Carmody : Not as far as I am aware, no.

Senator HANSON-YOUNG: Okay. You have not been asked to collect information for any cases being put for extradition?

Mr Carmody : No, not as far as I am aware. If we are, we will let you know, but we do not believe we are involved at all.

Senator HANSON-YOUNG: Okay. Thank you. If you could just take that on notice and clarify that.

Mr Carmody : Certainly.

Senator HANSON-YOUNG: I wanted to chase up some questions I asked at the last estimates session about deterrents for people involved in crewing asylum-seeker boats and the communication campaigns around that. As you know, there are a number of young people who have been involved in crewing these boats and have got themselves into the awful circumstances of mandatory sentences, and who often come from fairly impoverished fishing villages. I have spoken before about the work that is done to try to encourage people not to take those opportunities as they are presented to them and give them the facts about what happens and what they have got themselves caught up in.

I refer to question on notice No. 115 from the last estimates session. My question was: what are these campaigns, what is being done and what is the money being spent on. There were some details given around a campaign worked on by the International Organisation for Migration, the IOM, from March to July 2010. There was also this—I will quote from the second page:

In 2010 we began to move away from broad public information campaigns to a direct messaging approach focusing on potential irregular immigrants in key source and transit countries.

What does a 'direct messaging approach' in tail?

Mr Pezzullo : Just so we are clear and other members of the committee are clear, the paragraph from which you are reading deals with the more general public communications campaign. That is principally focused, in terms of both weight of money and weight of effort, on sending very clear messages to the actual travellers—that is to say, potential irregular immigrants—in their source countries, in places like Pakistan, Afghanistan and Sri Lanka, as well as transit countries, which are principally in South-East Asia.

Senator HANSON-YOUNG: So that campaign is not about the crew on the boats?

Mr Pezzullo : Not specifically, and the clue to that, Senator, is the second sentence that you read, where a reference is made to focusing on 'potential' irregular immigrants. Those are persons who might ultimately, when they get here, seek asylum.

Senator HANSON-YOUNG: Their campaigns are those such as the billboards in Kabul that we have seen.

Mr Pezzullo : Some of those communities are fairly tech savvy, so increasingly we can use social media. We point them toward websites and other social media techniques.

Senator HANSON-YOUNG: Okay. Let's be clear: that campaign was in relation to asylum seekers. Is that the campaign that cost $810,000?

Mr Pezzullo : Yes, in the contact of that financial year that that question on notice response covers.

Senator HANSON-YOUNG: So that was in relation to messaging to discourage people from taking boats to Australia as asylum seekers.

Mr Pezzullo : If you are drawing attention to the next paragraph, which refers to the expenditure of $810,000, I will need to check the background details because I note that the next sentence then refers to the IOM campaign, which I am happy to come to and which is focused on the more direct point of your question. IOM, which is the internationally renowned International Organisation for Migration, assists us by the delivery through its community liaison officers—people who actually travel to coastal communities and villages in particular—messages like: 'Don't fall for this trick. When you get solicited to crew one of these vessels and are given a promise of a quick return, this is what will happen to you.' That program in Indonesia is delivered with the concurrence of the Indonesian government through the IOM. I will need to check how much of that $810,000 is targeted at the so-called CLO—community liaison officer—activity and how much of it, if any, is connected to the other matter which I described: the social media campaign targeting potential irregular immigrants.

Senator HANSON-YOUNG: Let me clarify. The $810,000 is the combination cost of those two separately targeted campaigns?

Mr Pezzullo : I think the answer is yes, but I will have to check.

Senator HANSON-YOUNG: Could you please. This IOM campaign ran from March to July 2010. What is happening in 2012?

Mr Pezzullo : We continued the campaign, sourced through a combination of new policy proposal—NPP—money afforded to us in two budget years, of which this is the first. In addition we spent some internal funds. So over the course of this current year—you asked about 2012, but we think in financial years, so if you do not mind me responding accordingly—2011-12, which only has a month or so to go, through the combination of NPP plus internal funds, we will spend $2.4 million in aggregate on counter-people-smuggling communications activities.

Senator HANSON-YOUNG: And what types of activities does that include? Give us a sense.

Mr Pezzullo : Sure. I will give you some samples from the list I have here. They include things like TV campaigns, poster campaigns and social media campaigns Persian speakers—I do not want to go into too much detail about how some of that is delivered given the nature of the regime there. We also extended through those two financial sources the IOM's work on a temporary basis up until the early part of this year whilst we were negotiating a more enduring agreement that will cover the next 18 months or so. We are just about to conclude that with the IOM. So we spent in the vicinity of one-quarter of a million dollars in that holding program that IOM has been delivering for us down in the villages. We will shortly conclude an ongoing agreement with them that will cover at least the next financial year if not beyond. We undertook market research surveys, in effect to see whether the message was actually getting through. That is an important adjunct of course, to any strategic communications campaign, to understand the perceptions people have about the dangers and risks involved in the travel, whether they are alert to the fact that they could lose not only their money but also their lives. We have worked collaboratively with DIAC, the Department of Immigration and Citizenship, and have contributed funding towards this endeavour: the development in various languages of the website known as Australia/, which is a source of material that goes to the risks involved. Some of the funding went to translation costs: we have standard material on our websites—announcements by the government, for instance—and we have to translate that across into different languages, and so on and so forth. I could go on. It is quite an extensive list.

Senator HANSON-YOUNG: Have you had the results from this market research campaign yet?

Mr Pezzullo : We get periodic reports from our researchers, yes, some of which, as you may be familiar with, we have summarised for this committee through questions on notice, and some of which has been released in various forms through the FOI process.

Senator HANSON-YOUNG: What have been the latest revelations from that market research campaign? Are these TV ads, social media ads and posters working?

Mr Pezzullo : I am not sure it is the latest revelation, but there is an enduring theme that comes through the data that we see, and it is supplemented through other sorts of information, which is that our messages are getting through and that there is an awareness of the risks and dangers involved on the one hand. People say to us, when they personalise it to their own circumstances, that it is a bit of a gamble. Our messages about the dangers, gratifyingly, are in most cases getting through. That is obviously heartening because of the extent to which that dissuades people from getting on those vessels and ending up in a foundered vessel. That is terrific.

Senator HANSON-YOUNG: Can I clarify that when we talk about the market research campaign you are testing the messaging that you are using in the TV ads, the social media communications and the posters. Is that what you are doing through the market research campaign?

Mr Pezzullo : In part, yes, but it is also substantially about getting to attitudes and views. That helps us design the campaign.

Senator HANSON-YOUNG: So it is about designing the campaign as opposed to assessing whether what is out there has actually deterred anybody?

Mr Pezzullo : No. Some of the substantive data we have goes to the issue of: 'Were you previously thinking of travelling? Are you currently thinking of travelling?' We notice, for instance—this might be a self-evident point but I am happy to confirm this for the Senate—that in the immediate aftermath of the terrible tragedy in December 2010, the crash of SIEV221 on the rocks at Christmas Island, there was both anecdotal evidence and, importantly, some data that suggested that people were apprehensive about that fate befalling them and their family members. So we have some data that goes to that substantive point.

Senator HANSON-YOUNG: Thank you. A lot of these places are pretty remote. In some of the case studies that I have read of individuals who are going through current court cases, and of people who have been convicted, in talking about where they have come from they say that they do not have television, let alone the internet. Some of the homes they live in do not have floors.

Mr Pezzullo : Indeed, and that is why we are partnering with the International Organisation for Migration, which does a terrific job as an organisation that is very much on the ground and in the field. They get that information as well, as do we. In terms of the crew, which I think is where you are going, we do not necessarily use those techniques. We use outreach by way of workshops in villages, attendance at various religious points in the calendar, meetings with elders and leaders, and going into the villages in various fora using translated calendars, stickers, photos and posters that are physically put up in these places. So we do cover off the fact that, as you say, in some of these more remote parts of Indonesia people do not have ready access to TV and the like—although I must say mobile phone technology is starting to change that a little bit; it is becoming quite ubiquitous. It is not universally the case but certainly some of the targets that the smugglers seek to solicit onto these ventures would have smart phones and similar devices. But, in terms of wired-up internet at home, and in some cases TV, you are absolutely right.

Senator HANSON-YOUNG: Just to confirm: that type of campaign to target those people in those remote villages is the work through the IOM?

Mr Pezzullo : Community based on-the-ground field activity.

Senator HANSON-YOUNG: How much are we spending in the next financial year on that?

Mr Pezzullo : I said earlier that we are looking to conclude an agreement for the next financial year with the IOM. That is in the very close stages of being finalised. It will be over $600,000. We will keep a contingency reserve to ensure that we have got an ability to focus on particular areas if we need to as the year unfolds. But it will be in the vicinity of $600,000 or more.

Senator HANSON-YOUNG: That is significantly more than what has been spent in previous years, if $810,000 was a combination of campaigns for asylum seekers and boat crew, including the IOM and the broader public communications, like TV, internet et cetera.

Mr Pezzullo : It would be, if you and I are comparing apples and apples. I just need to check that figure. I need to check whether the figure that we gave back to the committee under question on notice 115 is in fact that global figure or the community campaign figure.

Senator HANSON-YOUNG: Is the Indonesian government contributing any money to these campaigns?

Mr Pezzullo : Not funds. If I need to come back to you to correct that, I will, but the answer is: I do not think so. I am pretty sure that is right. But they certainly are aware of it. They work with us. We have a three-way relationship discussion with the IOM and the Indonesian government, and it is certainly all done with their concurrence. It is not done in anything approaching a clandestine or covert kind of way; it is done very openly, with the Indonesian government's concurrence.

Senator HANSON-YOUNG: Do the Indonesian government have their own campaign for their own citizens on this issue?

Mr Pezzullo : I do not know that I would describe it as a campaign as such. I am happy to check with my Federal Police colleagues. In terms of the liaison that we have with the Indonesian National Police, which on a day-to-day basis is effected through our colleagues in the Federal Police, there certainly would be a discussion at the local level—at the INP village, district and town level—making the point that you have got to reach out to the senior figures because this is what is going to happen when members of crew turn up in Australia. But I will take that on notice. I do have some colleagues that I can consult over lunch if I need to come back and correct that—unless these proceedings are disposed of in the next 16 minutes. Unless a Federal Police colleague wants to jump up and tell me that I am right in the next 16 minutes, take it as read. I will come back to you if I need to correct it.

Senator HANSON-YOUNG: I am a little confused. The question that I put—question No. 115 that we have been referring to—specifically spoke about the boat crew, and yet neither you nor I are clear whether the answer that I have got is actually answering the question I asked.

Mr Pezzullo : I am sure it would be doing that. We would not have cleared it otherwise, but—

Senator HANSON-YOUNG: It does not, though, does it, because it goes into all of this stuff in relation to a campaign for asylum seekers, and we then get down to a figure of $810,000, and I do not know and you do not know whether what this answer is giving me is actually in response to the question about what campaigns are being spent and conducted to deter boat crew. I did not ask about asylum seekers.

Mr Pezzullo : Indeed. I think the question perhaps ran the risk of trying to be overly comprehensive if that is the case.

Senator HANSON-YOUNG: My motto is always: simple is probably best.

Mr Pezzullo : On the basis that being simple is probably best, the difference being, Senator, I do not know but I can check. If I need to come back to you I will, but that $800,000 figure is commensurate with what I think we will end up spending after we expend our contingency funds next year.

Senator HANSON-YOUNG: What I want to know is: how much was spent on the boat crew campaigns, including getting out to those villages, and how much is going to be spent in the next budget? You have talked about the contract with the IOM. Do we get a schedule of what villages they visit and who these liaison officers are? Is it just for one person? Is there a team? Do we know what they do? Do we get a schedule of their work?

Mr Pezzullo : I will take the detail on notice. I do know through our staff in Jakarta there are extensive discussions. Indeed, just earlier this week I met the regional director, who happens to be in Australia. I do not know if the discussions go down to which village on which day, but certainly I know that they report to us in outcome terms what they have done.

Senator HANSON-YOUNG: I would like you to take on notice tabling to this committee an outline of the movements of the liaison officer or officers, which villages they have visited and how it has gone over the last two years since we have been engaged with them.

Mr Pezzullo : I am happy to take that on notice. I should warn you that there are quite a number of CLOs, as they are called, involved. I am sure you are not seeking that I table to the Senate committee a day diary for each officer.

Senator HANSON-YOUNG: No, I just want to know where they have been.

Mr Pezzullo : We will do a reasonable aggregation that I think will answer your question.

Senator HANSON-YOUNG: Do we have a current view of which islands these young men on boats are currently coming from?

Mr Pezzullo : We have a view based on the intelligence process that is commenced at Christmas Island and then the AFP and others would have the detailed view once these matters go through the investigative and prosecutorial process.

Senator HANSON-YOUNG: Which islands are most of these crew being recruited from at the moment?

Mr Pezzullo : At the province level, and that is the best detail I have: northern Sumatra, west Java and East Nusa Tenggara.

Senator HANSON-YOUNG: You don't have the detail?

Mr Pezzullo : I suspect someone would have that detail but I do not have it before me.

Senator HANSON-YOUNG: Could you take that on notice?

Mr Pezzullo : Yes.

Senator HANSON-YOUNG: Has there been a move away from boat crew being recruited from Roti to a more remote island? Do you have a sense of that?

Mr Pezzullo : I would have to take that on notice. To the extent we can put that on the public record by way of a response to this committee we will endeavour to do so. We will need to consult with a number of colleagues.

Senator HANSON-YOUNG: Do you think there would be a problem putting that on the public record?

Mr Pezzullo : No, I do not think there will be, but if there is I will have to consider that with other colleagues.

Senator HANSON-YOUNG: All right. There are a few things there as homework for you to do and I will wait for your answers. Thank you.

Mr Pezzullo : It has been many years since I have been given homework, Senator.

Senator FURNER: Mr Carmody, no doubt you would be aware of comments made at the last estimates by Vice-Admiral Griggs, Chief of Navy, on his view and, I understood at the time, the view of the department on evidence provided on the dangers of Navy personnel and asylum seekers with respect to the opposition's policy on dealing with asylum seekers by turning boats back.

Mr Carmody : I am conscious of the comments he made, yes.

Senator FURNER: Is that still the view of the department and also of Border Protection Command as being a risky area?

Mr Carmody : I do not want to get into policies, or alternative policies and whatever, but having seen the comments that he made about the risks, yes, they are very real risks.

Senator FURNER: Real risks, and that is still the view of the—

Mr Carmody : That those risks are there, yes.

Senator FURNER: Earlier, you were asked questions—from memory, by Senator Brandis—in respect to illegal fishing arrivals. I am familiar with some of the activities of Border Protection Command and the good work you have been doing in that area in eliminating those arrivals. A lot of the good work was put down to having a reasonable dialogue with the Indonesian government.

Mr Carmody : There were a lot of things that went to that, including strong enforcement, but equally in Indonesia there was significant community based education and understanding, which basically said, 'This is not good to get involved with' and 'If you do cross the border you are likely to be detected and lose your boat'. The combination of those with the strong enforcement action was the key success factor.

Senator FURNER: Equally, I understand that is a program that is also done in respect to IMAs.

Mr Carmody : We have just had a discussion about the sort of education and campaign—that was the basis of the discussion with Senator Hanson-Young.

Senator FURNER: During those discussions, did the Indonesian government or officials raise concerns about a process of turning boats back?

Mr Carmody : In that context, I am not conscious of that at all.

Senator FURNER: In regard to regional cooperation to determine whether the illegal fishing boats are IMAs, what other countries are involved in that process other than Indonesia?

Mr Carmody : In fishing, it is primarily Indonesia.

Senator FURNER: What other countries are involved in the IMAs dialogue?

Mr Carmody : Our colleagues from Foreign Affairs and Trade, which is the whole Bali process, which is almost the whole region that is engaged in discussions.

Senator FURNER: Have any of those countries expressed concerns about a policy of towing boats back?

Mr Carmody : That is not in my consciousness, senator. Given my role, and our role, I am not conscious of that.

Senator PRATT: Operation XYLEAN, which was in March 2010, concerned the existence of imported asbestos gaskets. I know there was a significant campaign to address that issue. I would like a report back on how confident we are that these items are no longer coming in.

Mr Carmody : I am sorry, that is not one that we prepared for, but I am happy to provide an answer on notice if that is okay.

Senator PRATT: Okay but I might ask my complete question—

Mr Carmody : So that we can give you a complete answer.

Senator PRATT: I note that there were about 1,300 items of contaminated equipment—gaskets for industrial machinery primarily for use in the natural resources sector. I have heard from workers at the time when such items were detected of their concerns at being exposed to asbestos. It was good to see that campaign happen in response to that. I would like to know what the current detection procedures look like and whether such items are still coming in at that high rate, or whether industry has significantly got the message that these items are no longer welcome.

Mr Carmody : I will give you the answer on notice. It has been pointed out to me that we have a wonderful case study. The last paragraph, I am sure, does not answer your question but does say that indications are that there has been a substantial reduction.

Senator PRATT: I am actually more interested in the substantive numbers attached to that.

Mr Carmody : We will get your a more definitive answer.

Senator PRATT: My other question is a similar question in relation to Operation SCARE, although you might well be in the same situation in relation to that. The operation was run with the Therapeutic Goods Administration. Is there evidence that the reductions which occur from a campaign like that are sustained? Or are such items beginning to creep back in? In contrast to asbestos, where you would hope that outcome is permanent and stable once the message gets through to industry, it strikes me that products like these are very diverse—they come from all sorts of different sources. So I am interested in the sustainability of Customs outcomes on an issue like that.

Mr Carmody : I will take that on notice.

Senator PRATT: I have a similar question about the low-value import threshold enhanced compliance campaign, I think it was terrific to see the capacity to quantify the underpayments from 1,942 cases and the revenue attached to that. The question is whether we expect the reduction in the number of people coming in who have not paid appropriately for low-value imports above the threshold—that is, they have not complied—to be sustained, whether we expect those numbers to be sustained at the level found in this case study.

Mr Carmody : We undertook a specific campaign which led to the government announcement about the examination which is presently going on. There is a task force looking at whether the current system should remain. I do not think we have continued to campaign. We did that campaign to inform the work being undertaken by the task force.

Senator PRATT: Okay. I had not caught up with the announcement. I think that a statistical answer on that is probably unnecessary—because I suppose it would indicate that it is an ongoing issue which requires a different response.

Mr Carmody : That is right. The task force is due to report shortly, I believe.

Senator Ludwig: I did want to note that Michael Carmody has spent his birthday here.

CHAIR: Today?

Senator Ludwig: Yes.

CHAIR: You have spent your birthday at estimates?

Senator Ludwig: I just wanted to wish him a happy birthday.

Mr Carmody : It is sad, is it not? It is a sad reflection on my life.

CHAIR: That is really sad. You deserve an Order of Australia medal for that alone. You can leave now and have a very long lunch and celebrate your birthday or you can go home knowing you will not be called back tonight. Either way, you have come out a winner.

Senator HUMPHRIES: I am sure that Senator Brandis went easy on you in deference to your birthday.

CHAIR: Are you trying to pretend you knew it was his birthday all along and you never said anything? I do not believe that for one minute. I will not embarrass you by getting the committee to sing Happy Birthday to You. Have a very nice day.

Proceedings suspended from 12:28 to 13:30