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Environment and Communications Legislation Committee
Department of the Environment and Energy

Department of the Environment and Energy


CHAIR: I welcome the minister, Senator Simon Birmingham, to the table, the Minister for Education and Training, representing the Minister for the Environment and Energy, and all portfolio officers. Minister, do you have an opening statement that you wish to make?

Senator Birmingham: No, thank you.

CHAIR: Welcome back, Mr Pratt. Do you have an opening statement that you would like to make?

Mr Pratt : I don't have an opening statement but I do have a suggestion for the committee.

CHAIR: We welcome suggestions.

Mr Pratt : It is just a simple suggestion. It goes to how we label this first session of the committee's hearings. We call it general questions of the department. We are happy to answer any questions, of course, to assist the committee at this stage. But I wonder whether in future it might be sensible to rename it something like 'corporate and enabling services' because typically we use this session to bring up all our enabling services SES to handle general questions around the budget, departmental staffing and so forth. That is just a suggestion.

CHAIR: It is one that we will take on board; thank you very much. I think the convention is that we do try to limit our questions in this section to those, as you've described them, enabling or corporate and support functions. With that in mind, we will proceed to questions. Senator Moore.

Senator MOORE: Thank you, Mr Pratt. I don't know whether I'm going to go straight against that or not but I have some general questions about international and SDGs and then more general ones, and this is where we've handled them in the past.

Mr Pratt : This is the appropriate session in which to do that.

Senator MOORE: I have found my right spot; thank you very much. Thank you also for the department's answers to questions that I put on notice around this issue in this past. As we're getting very close to our first report, I want to get an update from the department about the activities in which your department is engaged because you are central in terms of the process with the SDGs and also to follow up a little about what the focus is going to be after that, because you've got longstanding international interactions that have been operating over many years that now have kind of fitted into the SDG agenda. I'm not quite sure with whom I should be speaking; I'm generally looking around the table.

Mr Pratt : Dr Bacon will be delighted to help you.

Senator MOORE: Thank you very much. In terms of the departmental engagement now, I want to know what the interaction with other departments is in terms of the general interaction about where we're moving to and then an update on what the current activities are with us in the world around the SDG.

Dr Bacon : Thanks for your question.

Senator MOORE: You expected it, Dr Bacon.

Dr Bacon : Yes. I do have some information here for you. Would you like me to just outline a very general update first of all in terms of the state of play?

Senator MOORE: Yes, please.

Dr Bacon : As you know, a lot of effort has gone in over recent months to developing Australia's first voluntary national review, which is a report on our progress in implementing the SDGs. The voluntary national review is due to be launched on line on the United Nations sustainable development knowledge platform in mid-June. That will be followed by a presentation to the UN high-level political forum in mid July where an Australian minister will present the voluntary national review for Australia.

One thing to note about the voluntary national review is that it has not been written solely as a report from the government; it has actually been done in collaboration across different sectors of the Australian community. So the information presented there is not just government information but also information from civil society, the business sector and so on. It's genuinely a cross-sector approach to how we're doing the voluntary national review. There has been a lot of activity, as you can imagine, invested in preparing the voluntary national review. So from our portfolio's perspective, and you did ask how we work in with other departments

Senator MOORE: Absolutely, yes.

Dr Bacon : I think we might have taken you through previously that there are a range of interdepartmental committees in operation.

Senator MOORE: Yes, I've got that data.

Dr Bacon : You've got that information?

Senator MOORE: I am interested to see, between the last estimates and now, the operations of those committees, how often have they met and your involvement from environment

Dr Bacon : Yes.

Senator MOORE: Because you have been taking a genuine lead, as a department, in this area. I would also like to find out whether at this stage there's any indication that there will be people from your department at the UN meeting in July because it does have a twofold focus: it has got the general SDG but it has also got a very serious environmental focusthis particular meeting. Is there an expectation that people from your department will be there?

Dr Bacon : Maybe to start at the top with your question, of the groups that currently convene across the whole of government in relation to the SDGs generally and particularly in relation to preparation of the voluntary national review, there have been regular meetings of all of those groups at different levels over the last several months as we have been working on compiling that report. The deputy secretaries group has met on a number of occasions, the first assistant secretaries group, whole-of-government group, has been meeting and there have been regular meetings between the officer-level groups, particularly the group that is looking at data and how we actually generate that baseline data and present that as part of our first voluntary national review. I can take on notice, if it's helpful

Senator MOORE: Please do, yes.

Dr Bacon : How many times those groups have met.

Senator MOORE: That would be very useful, and if any particular themes have come out of those meetings. As you know, there are no minutes out of those things; so that would be very useful. I will be following up with other departments about that data one, which is central.

Dr Bacon : I will take that on notice.

Senator MOORE: That would be great.

Dr Bacon : Back to your other question in terms of participation in the high-level political forum, my understanding again is that it is the Department of Foreign Affairs and Trade alongside the Department of the Prime Minister and Cabinet who will be leading effort across government on the SDGs. Probably questions about the logistics and organisation of attendance at the high-level political forum in mid-July are best directed to the Department of Foreign Affairs and Trade.

Senator MOORE: They will be.

Dr Bacon : At this stage our department doesn't have plans to send any official in mid July to that. You quite rightly point out that we do have an active role to play in the sustainable development goals. Our portfolio oversees progress on five of the SDGs, as you know, related to both environment and energy.

Senator MOORE: And to water? You are involved in water as well, are you not?

Dr Bacon : Water is now a function for the Department of Agriculture and

Senator MOORE: Do you not have any further crossover engagement in water?

Dr Bacon : Absolutely there are crossovers. For example, when we ran the stakeholder forum last year in Sydney there was certainly a broader range of goals that we were looking at exactly for that reason: the crossovers between environment and water and terrestrial and marine and so on. So we are certainly very cognisant of those crossovers and we do have a lot of interaction and discussion with our colleagues in counterpart agencies on those areas where there are crossovers between those goals. But we are directly responsible for providing material on five of the SDGs; so we've been working hard to contribute content for five of the chapters in the voluntary national review and, in doing that, we've drawn very heavily on the case studies that we've collected. You may have seen those on the website.

Senator MOORE: On the website, yes.

Dr Bacon : That's an example of where it's genuinely a cross-sector approach to doing our voluntary national review, drawing on those case studies from right across different sectors. In terms of the interaction that we've been having, as I said before, we've had a lot of interaction, as we've prepared material on our chapters, as we've worked to prepare our data baselines against the indicators that we're able to report on.

Senator MOORE: And basically, from what we've done in the past, using existing work that the department is doing and moulding it around the SDG model. That was the kind of discussion that we've had, that it's not so much new work as work that was in place and now fitting it to the SDG model.

Dr Bacon : We're embedding and integrating the SDGs and so, in a sense, shaping how we do things to reflect the SDGs. So it's very much an approach of implementing the SDGs by really incorporating and embedding those goals into programs and policies. Even our fundamental corporate documentsyou would have heard me talk before about our corporate plan.

Senator MOORE: Yes.

Dr Bacon : We've incorporated the SDGs into our corporate plan. We're actually going to be reporting on progress under the SDGs as we report on our acquittal of the corporate plan in our 2017-18 annual report performance statements.

Senator MOORE: That's the first time, isn't it?

Dr Bacon : That'll be the first time; that is right. Then we've also started work developing our corporate plan for the following financial year. Our plan there is to further embed the SDGs in our corporate planning documents and then you'll see those successively being reported against in our annual report. But we're also going further than that and looking at where there are a number of examples across the department of how we're actually embedding and incorporating the SDGs into our work. A further example of those, particularly the data issues, is our plans to look at how we can incorporate SDGs into a state of the environment digital platform.

Senator MOORE: Absolutely. It is not there now; that work is being done.

Dr Bacon : Yes, that work is at an early stage. At this stage we have focused our efforts on collecting that baseline data against indicators that we're able to report on for our voluntary national review. That has actually been a very extensive exercise. As you're aware, I think there are around 55 indicators that relate to environment and energy but only 24 of those have agreed methodologies in place and I think we've provided some detail to you, on notice, about the international working group and the different tiers of indicators

Senator MOORE: Yes, you have; and that is continuing as we speak?

Dr Bacon : That work is continuing. So very much the intention and the plan is that, when we do our baseline data reporting, we're at this stage anticipating that we'll be able to include data on up to 12 of the indicators. That's comparable to the United Kingdom that reported on 12 indicators in the environment and energy space. Also the United States reported on nine indicators. So we're in the same ballpark as like countries.

Senator MOORE: It's about mid-range, is it not? Are there some countries that have reported on more?

Dr Bacon : I would have to take on notice other countries.

Senator MOORE: That's fine; take it on notice. We talked before about it being comparable with other nations with which we operate.

Dr Bacon : Yes, it is comparable; that's correct.

Senator MOORE: I have just one last question. We will talk in between and look at the questions on notice. On the issues around the green climate fund, which I know is a DFAT program, I know that your department also works in that space. Is that your area as well, Dr Bacon, in terms of research and interaction?

Dr Bacon : No. I probably need to take questions about that on notice.

Senator MOORE: Okay, I will put them on notice. It is just to see in terms of the current status and the interaction between the green climate fund and the SDGs and making sure that link is actually put into our system. From your answers to the previous questions, in terms of that type of work, you would be moving towards having an SDG basis for the way you operate across the board? I'm asking questions about the green climate fund and how it operates. Already the department would be looking at doing work around the SDG components there?

Dr Bacon : We will, across the range of our policies and programs, be looking at the SDGs and how they're relevant in the design and the delivery of those policies and programs. There are a number of examples that we could provide of how we're doing that in practice.

Senator MOORE: I'll put that on notice. The last question is a follow-up about the resources in your unit.

Dr Bacon : Yes. I can run through that quickly.

Senator MOORE: That will be my last question, Chair, in terms of the resources.

Dr Bacon : We have an officer who is dedicated to work around the sustainable development goals. She's been dedicated over the last few months to preparing for the voluntary national review and all the material and data there. That takes up all of that officer's time. We also have the director, the section head of the international team in my division, who will dedicate a proportion of their time to the SDG work. At the moment that is an increased proportion. While we're working on the voluntary national review, in particular, it's quite an intensive period of work. It takes up a proportion of the time of the assistant secretary who manages that branch. It takes up a proportion of my time. It takes up a proportion of my deputy secretary's time, and so on. There's also work around the department, as I mentioned.

Senator MOORE: Yes. It's very hard just to pick out; I understand that.

Dr Bacon : That's right. It's very difficult to give you a resourcing figure in terms of person hours. What I would mention is that, while we've been working on the data around that baseline for the voluntary national review, we have been working closely with colleagues in the knowledge and technology division as well, who have also been working with us on the data and preparing the data for presentation.

Senator MOORE: I lied; I've got one last question and it can go on notice. It is for the departmental secretary and also the minister: can I get, on notice, whether you've had any public request to speak and participate on behalf of the department and the government around anything to do with the SDGs? That would be very useful.

Senator RICE: I want to start off with some questions about the department's implementation of the Australian Government Guidelines on the Recognition of Sex and Gender. I've been asking questions of the Attorney-General's Department over the last couple of estimates about how various departments are going with implementing the sex and gender guidelines, which acknowledge that not everybody wants to identify as male or female and that their gender may not be congruent with the sex that they were born with. Can you tell me what steps the department has taken to implement these guidelines, which were meant to be implemented by July 2016?

Ms Goodwin : We have updated two of our systems or two of our primary forms of collecting personnel dataour eRecruit application form and personal particulars on onboarding, which is in our SAP system. They are both compliant with the guidelines by providing the option to select an 'X' for gender. There are currently two employees who have chosen 'indeterminate' as their gender.

Senator RICE: Before doing that, did you undertake a full review of all of the legislative, regulatory or policy requirements that may be required to comply with the guidelines?

Ms Goodwin : In terms of a full review, I would have to take that on notice.

Senator RICE: Okay. Do you know whether you have undertaken any review of what was required in relation to the collection of sex and/or gender information?

Ms Goodwin : We'd be relying on the Attorney-General's Department for their advice.

Senator RICE: They would have provided advice. It's whether the department has then undertaken a review of your own operations.

Ms Goodwin : Yes. In terms of a review, I actually can't answer that now, so I'll take that one on notice.

Senator RICE: Are the forms that you have reviewed internal forms?

Ms Goodwin : That's correct, yes.

Senator RICE: Have you got outward-facing forms?

Ms Goodwin : In terms of the forms, they're internal for our SAP system. Our SAP system has eRecruit, which is externally focused. Anyone applying for a position in the department has an opportunity to indicate 'X' for an alternative gender. Internally, when you commence in the department, likewise you can have that option as well.

Senator RICE: Have you provided clear and accessible information to departmental staff on how sex and gender information can be changed on personal recordspublic records that the department is responsible for compiling?

Ms Goodwin : I'd have to take that on notice.

Senator RICE: Has the department developed any policies to assist staff in managing relationships between the department and members of the intersex, transgender and gender diverse community?

Ms Goodwin : We have a range of diversity policies within the department and we also have a gender equity network within the department. The gender equity network deals with issues of transgender and other relationships. They're promoted within the department. They also run information sessions for other staff. It's something that's promoted and talked about within the department.

Senator RICE: Is that a formal training program?

Ms Goodwin : Not a formal training program, no. It's a gender equity network, so it's developed or run by staff but supported more broadly across the department.

Senator RICE: Have you got any particular policies across the department?

Ms Goodwin : Not that I'm aware of.

Senator RICE: The department has a lot of state and territory partners. Have you worked with those state and territory partners on implementing the guidelines?

Ms Goodwin : Not at this stage. I'd suggest that would be for Attorney-General's.

Senator RICE: Although there'd be state and territory partners that you particularly, as a department, would work with.

Ms Goodwin : That's correct. No, not that I'm aware of.

Senator RICE: Have you worked with agencies that the department is responsible for to implement the guidelines and help them with ways to implement the guidelines?

Ms Goodwin : With our portfolio agencies, not that I'm aware of, but they would equally have access to the guidelines from the Attorney-General's Department and they would normally be responsible for implementing their HR functions.

Senator RICE: Do you track whether they are implementing the guidelines?

Ms Goodwin : No, we don't.

Senator RICE: This is the issue. In terms of asking Attorney-General's, they didn't have good records and good tracking at a department level, which is why I've decided that I need to ask every department how they're going with it.

Ms Goodwin : Yes.

Mr Pratt : At a general level, of course, we work quite closely with our portfolio agencies on a range of corporate policies that we have and which we assist them with, including where there are changes to APS guidelines. We are often the source of information on those changes for them, and that includes diversity. What we're not able to identify at the moment are the very specific transgender guidelines that you're asking about, which we're happy to do on notice.

Senator RICE: Yes. It's in regard to the implementation of these sex and gender guidelines, which were meant to be implemented two years ago, in July 2016. How many agencies come under the auspices of the department?

Mr Pratt : That's an interesting one because they've all got different physical structures covered by different acts, but probably six to eight.

Senator RICE: In terms of other guidelines, do you track how those general government guidelines are being implemented by the agencies?

Mr Pratt : They are independent agencies, so we don't track them. We work closely with them to ensure that they have the best information about their responsibilities and obligations, so we assist them. But, as to actually scrutinising their performance, that is a matter for the relevant agency head.

Senator RICE: In terms of what assistance you've provided to those agencies with regard to the sex and gender guidelines, is that what you said you were going to take on notice, Ms Goodwin?

Ms Goodwin : Yes, that is correct; I'll take that on notice.

Senator LEYONHJELM: I will be fairly brief. In Budget Paper No. 2 there's an allocation of spending of $444 million before 30 June on the Great Barrier Reef 2050 partner program. Is that allocation to the department? How closely tied is it to general departmental spending?

Mr Pratt : If I can take you to page 98 of Budget Paper No. 2, you will see that $443.8 million against 2017-18; it is allocated to the department.

Senator LEYONHJELM: It is allocated to the department?

Mr Pratt : Yes.

Senator LEYONHJELM: How much of it will be spent by 30 June, do you anticipate?

Mr Pratt : That is subject to negotiations which are underway at this time. On the assumption that those negotiations are successful, all $443.8 million will be spent this financial year.

Senator LEYONHJELM: When did you know that you were going to receive it?

Mr Pratt : It was during the budget process.

Senator LEYONHJELM: Between the budget process, which was a matter of a few weeks back, and 30 June, you

Mr Pratt : No, I wouldn't define the budget process as that narrow window.

Senator LEYONHJELM: How would you define the time when you thought you would be receiving an additional $444 million?

Mr Pratt : I won't go into the budget processes. Can I say that, in terms of Great Barrier Reef policy and expenditure matters, we had a substantial budget process over quite an extended period.

Senator LEYONHJELM: How does spending $444 million by the department by 30 June provide superior outcomes for the Commonwealth than spending it after 30 June?

Mr Pratt : The expenditure here will be by way of a grant which we are attempting to negotiate at the moment with the Great Barrier Reef Foundation. The resources will be provided to the foundation, assuming that our negotiations are successful. All signs are very positive. The foundation will then use those resources over a number of years to protect the Great Barrier Reef through a variety of measures.

Senator LEYONHJELM: The money will actually be allocated as spent by the department but it will be spent by the foundation—is that correct?

Mr Pratt : It will be spent over a number of years.

Senator LEYONHJELM: By the foundation, though?

Mr Pratt : That's right.

Senator LEYONHJELM: In terms of expenditure by the department, it will be out the door, in the hands of the foundation, subject to these current negotiations?

Mr Pratt : And subject to the current guidelines and the conditions of the agreement.

Senator LEYONHJELM: Over what period would the foundation be likely to spend it?

Mr Pratt : We're anticipating seven years?

Mr Knudson : Six.

Mr Pratt : Six years.

Senator LEYONHJELM: Did this proposal for the foundation to receive this money originate from the department?

Mr Pratt : I'm not going to go into the budget process, other than to say, as I said before, we had an extensive budget process around the Great Barrier Reef over an extended period of time.

Senator WHISH-WILSON: Were you consulted about it by the minister?

Mr Pratt : Absolutely, of course. We advise the minister on these issues.

Senator LEYONHJELM: Was the Finance portfolio or the Treasury portfolio involved?

Mr Pratt : They are always involved in the budget process, so, yes, they had visibility of the work that we were doing.

Senator LEYONHJELM: Did they initiate the idea that this additional expenditure on the Great Barrier Reef Foundation might be a good policy?

Mr Pratt : We're the department with policy responsibility for the Great Barrier Reef.

Senator LEYONHJELM: So the idea didn't come from them?

Mr Pratt : I'm not going to go into the budget process. The budget process, as always, is a process where you have many perspectives focused on different problems, solutions and proposals, and it is a joint effort across portfolios; but we are the policy adviser.

Senator WHISH-WILSON: This is more than a budget process, Mr Pratt. This is the future of the Barrier Reef and $500 million of taxpayers' money. It's more than just a budget process.

Mr Pratt : Certainly, but the senator is asking me questions about the budget process. As is well known, we do not talk about cabinet-in-confidence issues in these hearings. I agree with you: I think the Barrier Reef is much bigger than a budget proposal, and I think it is an extremely good news story that we've been allocated $500 million of new money to put towards protecting the Great Barrier Reef.

Senator LEYONHJELM: Is it likely to lead to better outcomes for the Commonwealth or for the Great Barrier Reefthe fact that the foundation is receiving this money all up-front rather than coming from the department on an annual basis over the next seven years, which is when I think you said the spending would occur?

Mr Pratt : Yes, we believe so. The advantage of granting this money to the foundation is that they are able to use those funds to leverage contributions from other sectors, which we are not able to do.

Senator LEYONHJELM: In what way would that be any different from if the department were funding the foundation on an annual basis one-seventh or something like that per year of that $444 million?

Mr Knudson : In a number of different areas where we have tried to set up partnerships and, in particular, focused on trying to increase leveraging from other sources, whether it is states and territories or private sector, the department's experience has been that one of the key things external funders will look for is solid and firm commitment by the Commonwealth government behind that. With the scale of this investment being the largest investment ever in the history of any Australian government in the reef, that is a pretty strong signal to the market. For the Great Barrier Reef Foundation, which over the last more than a decade has managed to raise $80 million, that will take them into a very different space in terms of their ability to raise additional funding. For that reason, we think this is significant, and potentially a game changer in terms of bringing not only governments to bear to deal with the challenges around the reef but also other entities around the country and globally to make significant efforts to secure the reef for future generations.

Senator WHISH-WILSON: In relation to that, are you also including large corporations which are part of that existing organisation co-financing funding for the Great Barrier Reef?

Mr Knudson : We can certainly talk about this more in outcome 1.1 later this afternoon. On Raine Island, with Lendlease and some money from the Commonwealth, et cetera, we leveraged the money two to one to do some important restorative work on that island. That's just one small example of where absolutely you would have the potential to have government funding combine with private sector funding to achieve outcomes for the reef.

Senator CHISHOLM: I will continue on this theme, but we have some more questions in 1.1 about it later. I am interested in the money that has gone to the department. Is it somewhat unusual that, even though it has gone to the department, it has already been identified who is likely to receive the money at the end of the day?

Mr Pratt : It ranges. Sometimes it is obvious where the resourcing will go to; other times it is not. It is subject to a procurement process. In this example we had a very good idea about the foundation's capabilities and what it could do through a grant of this sort. So, it was clearly the best destination.

Senator CHISHOLM: Okay. Is it common for grants over $100 million to go to an organisation in one year? I have been doing this committee for two years and I am not aware of a similar example. It seems unusual to me.

Mr Pratt : I would have to check back to see what examples there are. I am sure there are other examples. It is a substantial grant payment, but it is positive from my point of view.

Mr Knudson : Australian governments, going back 30-odd years, have been using grant agreements with local entitiesI think of the natural resource management entities around the countryto deliver environmental outcomes through other bodies. So, the concept of providing grant money to achieve environmental outcomes externally is not at all unusual.

Senator CHISHOLM: What would be the average of those credits? I guess it would be substantially less than $450 million.

Mr Knudson : Absolutely. This is the single largest investment in the reef in Australian government history, so it is very significant.

Mr Pratt : It does depend on the sector, though. In the social policy world, grants tend to be small, and often in the environment space. But in the industry and other sectors grants can be significant.

Senator CHISHOLM: But we are not in the other sectors; we are here. I am asking about your department. Are there any other examples where you have given over $100 million

Mr Pratt : You asked if there was an average. It is going to be difficult to calculate an average.

Senator Birmingham: You are not suggesting it is too much money for the reef, are you, Senator?

Senator CHISHOLM: No, I am just trying to add some accountability. You have forked out 450 million bucks to this group that had 10 staff.

Senator Birmingham: Senator, if you would like we can take you through further detail. As Mr Knudson said, we can go through more of it later today. But in terms of the planning and intentions of the funding, I am happy to advise that my understanding is that $201 million is targeted towards addressing water quality by enabling more sustainable land management practices; $100 million to harness the best science of reef restoration and adaptation; $58 million to expand efforts to control crown-of-thorns starfish; $40 million to improve reef health monitoring and reporting; $45 million to support other work; $22 million to engage communities and traditional owners in reef protection; and $23 million to administration, implementation and related costs. Underpinning the overall sum is a comprehensive plan addressing a number of issues that I am sure you would agree are important in terms of reef management issues.

Senator KENEALLY: Thank you, Senator Birmingham, for reading the media release to us. If I could ask the department: was there a tender process or a grant application process for this money?

Mr Pratt : No.

Senator KENEALLY: Were other groups given the opportunity to know that this money was available?

Mr Pratt : The government's decision was to make a grant to the Great Barrier Reef Foundation for this purpose.

Senator KENEALLY: Had the Great Barrier Reef Foundation approached the government seeking such a grant?

Mr Knudson : I would have to take that on notice; I do not know.

Mr Pratt : As a general answer, I suspect the answer is yes; the Great Barrier Reef Foundation has sought contributions from the federal government in the past. But this was part of the budget process.

Senator KENEALLY: So, in a sense this was like an unsolicited tender by the Great Barrier Reef Foundation?

Mr Pratt : I would not characterise it that way.

Senator KENEALLY: I am trying to understand howas Mr Knudson described itthe greatest single contribution from the government to the Great Barrier Reef in Australian history went to one foundation without a tender process, without advertising, without a competitive process and, it would seem, without an invitation from the government to the foundation to apply. I am trying to understand the process that led to this massive amount of taxpayer dollars going to one foundation. Was there any competitive tension? Was there any testing of capacity? Was there any open invitation? Was there any opportunity for any other organisation to put forward a plan? Was there any contest between the foundation and between the authority's capacity to deliver this outcome? How was this decided?

Mr Knudson : The Great Barrier Reef Foundation has been around since 2000. They have been very active, obviously, in the space of the reef and in delivering programs on the ground. This will be a significant scaling up of that organisation.

Senator KENEALLY: With the greatest of respect, it seems you cannot answer these questions here todayor you are unwilling to do so. I would like to put all those questions on notice because it appears that the department cannot answer basic questions as to how this massive allocation of money came to go to one foundation.

Senator Birmingham: We are happy to take the questions on notice. The government obviously did due diligence in relation to the foundation. It has a history of engagement with the foundation and believes the foundation is well-placed to lead effort in this regard, which is why this injection, with a detailed plan, is being made. We are happy to take the questions on notice.

Senator CHISHOLM: Will any of the funds that are given to the foundation be used for communications and, if so, how much?

Mr Knudson : The funding that is going to the foundation does not include communications work. It does include some community outreach; the minister mentioned $22 million earmarked for engaging communities and traditional owners. So that element will have an outward-facing element to it.

Senator CHISHOLM: Will any of the funds be used for advertising?

Mr Knudson : Not of the $443 million, no.

Senator CHISHOLM: Just coming back to some general questions around the budget, there was other money for the Great Barrier Reef. The minister's media release said that $56 million is provided to the Great Barrier Reef Marine Park Authority and the department; is that correct?

Mr Knudson : That is correct. It is an additional $56 million, and that is primarily about the Joint Field Management Program that is delivered with the Queensland government and GBRMPA.

Senator CHISHOLM: What will the breakdown be between the department and GBRMPA on that?

Mr Knudson : We have the Joint Field Management Program boosted by $22.3 million from GBRMPA over the forward estimates and then $10.2 million each year beyond that. The department will receive approximately $14 million over seven years to support the delivery of the reef package, including the administration and communications.

Senator CHISHOLM: Does that get to 56?

Mr Pratt : Yes, it does in its totality. The $500 million figure is over at least five years; so yes.

Senator CHISHOLM: How was that determined, and by whom?

Mr Knudson : That was part of the budget process.

Mr Pratt : It was determined in the budget process. It is ultimately a government decision to allocate resources for the different agencies within the portfolio.

Senator CHISHOLM: How was the decision made on how the funding would be allocated?

Mr Knudson : Again, that was through that cabinet process.

Mr Pratt : We provide advice into the process on who is best positioned to do what, and decisions ultimately are taken. It is a pretty standard budget process.

Senator CHISHOLM: I imagine as part of that a decision was made that neither of these organisationsGBRMPA or the departmentwere best placed to handle the $450 million that you gave to the foundation?

Mr Pratt : That was the outcome of the process, yes.

Senator CHISHOLM: Is that, therefore, a vote of no confidence in the department that has traditionally been responsible for handling this?

Mr Knudson : Far from it. This is why earlier, in response to the question from Senator Leyonhjelm, I spent time talking about what the leveraging capacity of the Great Barrier Reef Foundation is and why this is a unique opportunity to bring together industry and government scientists and communities to yield much stronger results than would have been possible previously; it is because of that leveraging opportunity.

Senator CHISHOLM: So the funding for the department will basically be provided over the forward estimates? It will be money per year over the forward estimates; is that correct?

Mr Pratt : That is right.

Senator CHISHOLM: Will it be the same amount each financial year? Is that the way it will work?

Mr Pratt : No; it moves up and down across the years. If you look at the $443.8 million: in 17-18 and 18-19, there is expenditure of 10.1 for the department; in 19-20, the expenditure between GBRMPA and the department is 4.7; in 20-21, expenditure between GBRMPA and the department is 8.3; in 21-22, it is 11.1. So it goes up and down depending on the profile of the spends we are expecting. We are happy to keep going here, but the people who are expert on the details of this will be available during outcome 1. They can go into it in more detail at that stage.

Senator CHISHOLM: What was it for this year?

Mr Pratt : So in the Treasury paper here, $443.8 million is to go to the Great Barrier Reef Foundationin 2017-18, this financial year.

Senator CHISHOLM: So there was no money for other areas in that?

Senator Birmingham: There are existing initiatives as part of the Reef 2050 Plan that both GBRMPA and the department are already delivering; they were already previously budgeted for. These are new budget decisions as against ongoing.

Mr Pratt : Yes, so it is not identified there, but half a million dollars of that $443.8 million goes to the department in this financial year.

Senator CHISHOLM: Half a million dollars?

Mr Pratt : Yes, $500,000.

Senator CHISHOLM: And will any of these funds be used for communications activities or advertising?

Mr Pratt : No. Mr Knudson has answered that question. None of these funds are for advertising.

Senator CHISHOLM: And that includes the $56 million as well?

Mr Pratt : That's right.

Mr Knudson : No, actually. What I was talking about, Senator, was the 443. You were asking about the money going to the foundation and whether that would be used for communication. What I said was explicitly that would be used for community engagement and traditional owner engagement. However, there is funding in this year, and I am just turning to Dr Bacon on this issue with respect to the communications.

Dr Bacon : Budget Paper No. 2 identifies reef funding to engage the community, including traditional owners, in reef protection and sea country management, including through a reef communications campaign. So there is in Budget Paper No. 2 a reference to communications activities and the scope and precise nature of those are being scoped.

Senator CHISHOLM: Are what, sorry?

Dr Bacon : Are being scoped or developed.

Senator CHISHOLM: When will that money be available to be spent? Is that this financial year or next financial year?

Dr Bacon : Senator, campaign spending is governed by the Department of Finance guidelines for information and advertising campaigns. There are quite stringent guidelines that we need to follow and a clear process that we follow in relation to developing communications activities, specifically campaigns. At this stage we are at a reasonably early stage of looking at what kinds of activities might be involved.

Senator CHISHOLM: Okay. When is it likely that that campaign money will be spent? Is it next financial year or the one after? Surely that would be identified?

Dr Bacon : Senator, given where we are in the current financial year, it is probably more likely that funds would be spent next financial year, and that would also coincide with this being the International Year of the Reef.

Senator CHISHOLM: How much has been identified to be spent on the campaign?

Dr Bacon : As I mentioned before, the guidelines for information and advertising campaigns have quite a strict and stringent process to be followed, and we are at a reasonably early stage of that process. So we do need to be following those guidelines and those processes to determine exactly what kinds of communication activities are going to be best value for money and best meet the needs of the community and the outcomes that are intended.

Senator CHISHOLM: Sure; I understand that. But you start with a dollar figure, and surely you have that dollar figure that you are starting with.

Dr Bacon : It is probably best for me to take on notice, Senator, kind of precisely what the allocations of funding might look like over subsequent years. As I said, we are quite early in the process in terms of scoping out exactly what would be the best use of public money in terms of communication activities on the reef.

Senator CHISHOLM: I am just after what the next financial year's is, to start with. Surely you would have that, given the work you've been doing?

Dr Bacon : I might need to take that on notice, Senator.

Senator CHISHOLM: In terms of the funding for the Great Barrier Reef Marine Park Authority, is that funding that can be used for communications or advertising as well?

Mr Knudson : No, Senator. As I talked about, the intention of that money is for the joint field management program, which is administered with the Queensland government and GBRMPA.

Senator CHISHOLM: Okay. So it is just the department that has the money that could be used for communications or campaigning or advertising?

Mr Knudson : That is correct.

Senator CHISHOLM: I am happy to stop there.

CHAIR: Yes, we can come back. I might go to Senator Whish-Wilson and come back to you, Senator.

Senator WHISH-WILSON: Thanks, Chair. This government set up the Reef Trust in 2013 and has committed over 700 million to 'provide innovative, targeted investment focusing on improving water quality, restoring coastal ecosystem health, enhancing species protection in the Great Barrier Reef region'. The ANAO has just recently undertaken an audit of the Reef Trust and found it to be effectively meeting its aims. Why have we abandoned the Reef Trust? If this new foundation is going to be the vehicle for the future of the Barrier Reef, what is going to happen to the Reef Trust?

Mr Knudson : Senator, the Reef Trust absolutely remains in place. We continue to roll out programs through the Reef Trust. The money that is going through to the foundation would go through the Reef Trust as well. The Reef Trust still remains the vehicle to receive, for example, offset funds from companies that have had an approval where they have had an impact on the reef. So it remains absolutely an integral part of our approach or role on the reef.

Senator WHISH-WILSON: How do you prevent an overlap in terms of research projects, priorities, objectives?

Mr Knudson : It is a great question in the sense that it is one of the things that we are absolutely focused on in terms of that negotiation with the foundation to set up the grant agreement. Laying out all the governance is going to be absolutely critical in this space. One of the things that we expect will continue on is that, in developing the Reef 2050 Plan, critical to that is having the Independent Expert Panel of scientists provide their advice, as well as the Reef Advisory Committee. We expect both those entities will have a role going forward so that we can deal with exactly the type of question that you are talking about, so that we do not have duplication. We have been able to do that successfully with the Queensland government to date and we plan to carry that on using very much a number of those mechanisms that we have put in place for the last few years.

Senator WHISH-WILSON: I am glad you mentioned governance because I do have some questions about that. Would it be fair to say that the reason you didn't provide this funding to the Reef Trust as it exists now is the foundation is a better vehicle for leveraging private sector investment, or commercial?

Mr Knudson : Absolutely. As I mentioned earlier on, one of the critical advantages of the foundation is that ability to leverage additional funding from external sources. Absolutely it is one of the key elements.

Senator WHISH-WILSON: Including corporations, and companies?

Mr Knudson : That is correct.

Senator WHISH-WILSON: Senator Di Natale will ask you about that in a minute. In terms of AIMS, the Australian Institute of Marine Science, what is their role going to be in this, and why were they not a key part of this process with the foundation?

Mr Knudson : As the minister talked about, there is $100 million notionally allocated for reef restoration and adaptation. That has been an area where the Australian Institute of Marine Science has been intricately focused on developing different options going forward. This, in effect, is a down payment on the type of work that AIMS has been thinking about that we would need to bring to bear on the reef. So it will absolutely be critical in this going forward.

Senator WHISH-WILSON: Critical in the sense that they are conducting research projects, but not necessarily managing them? How is it actually going to work in terms of priorities, for example? Are you going to be leaving that to the foundation to make those decisions, or will someone like AIMS, who has got this background and experience, be actually providing advice? How do you govern that side of things?

Mr Pratt : The AIMS executive are already providing advice to the foundation, Senator.

Senator WHISH-WILSON: But advice is one thing. Whether it's accepted or not is an entirely different thing. How do you decide? Who makes the final decision?

Mr Pratt : Mr Knudson has already talked about how all this will be underpinning the implementation of the 2050 planthat and associated governance, the grant guidelines, the grant agreement. All of those things will set out how these issues are dealt with.

Senator WHISH-WILSON: Okay. You have said that you are negotiating the grant at the moment and it has not been finalised. So are you putting up the governance arrangements in black and white: 'Accept this or there's no arrangement'? Is that how it's working?

Mr Knudson : There will be a process where we have to issue grant guidelines. Those will reflect the various requirements of the Commonwealth in terms of establishing grants and other legislative requirements, such as the PGPA Act. All of that will be laid out absolutely in black and white. And then there will be a decision for the government over whether the proposal that comes back meets sufficiently its requirements.

Senator WHISH-WILSON: So they will then respond to your negotiation; they will respond to you giving them the governance arrangements and they will provide advice to the department on whether

Mr Knudson : We expect absolutely that governance elements will have to be laid out in the proposal coming back in response to the grant guidelines.

Mr Pratt : The foundation has been very responsive to our proposals around governance. I would hate to characterise the negotiations as a take it or leave it approach. We have worked very cooperatively with the foundation on this, and we have shared intereststhat is, that this resource is used in the best possible way to assist the reef, to protect the reef.

Senator WHISH-WILSON: Mr Pratt, I have asked this question for years and I have been on notice with my concerns and my party's concerns about an erosion in public good science over the years. I am very concerned that you are essentially outsourcing this record investment, to use your words, in the Great Barrier Reef to a private entity when we have other entities set up, whether it is AIMS, the Reef Trust or GBRMPA. There are plenty of other places we could be allocating this money that we would have effective control over if it is government. I do not understand how a private entity is going to have responsibility for $500 million and we can ensure that we maintain the public good component of this.

Mr Knudson : I would just highlight a couple of things that I think are fairly important in this space. The government has committed 124 million over five years for the National Environmental Science Program. As to the idea that there isn't an ongoing investment in the core science that then underpins the type of work that the reef foundation would do, I think there is very much a strong counterpoint. The other thing that I would mention is thatand I do not have the figures herea couple of years ago, I think, the government took the decision to stabilise GBRMPA's funding over the long term. So that is another piece of the jigsaw puzzle that is absolutely in place.

If you think about, though, what we are trying to do, in effect, if you settle the Reef 2050 Plan, you have the five-yearly outlook reports by GBRMPA on how the reef is travelling. That identifies where the priorities from a science standpoint are. Then you turn to the foundation and figure out how do you then deliver on those outcomes on the ground. But there is that very clear guidance by government about where you can have the most impact from a science standpoint on the reef, and then you turn it to a delivery agency, in effect, to deliver.

Senator WHISH-WILSON: And that is great, Mr Knudson; I respect that. But when you are bringing other entities into co-investing in this science and this research, including corporationsand some of them are coal companieshow do we have any assurance at all that the public good component of this is going to be prioritised, or it is not going to be influenced by vested interests?

Mr Knudson : Again, there are going to be specifics laid out with respect to the governance overall that will have an absolute lens which will be very clear in terms of what sort of science will be brought to bear. All of that will be very explicit.

Senator WHISH-WILSON: Will these governance arrangements be made public?

Mr Knudson : They will be part of the grant process.

Senator WHISH-WILSON: So they will be made public. When will we have access to them, to look at them?

Mr Knudson : I think that I would need to come back to you on notice. Actually, sorry, not even that. When the officers are here at 1.1, they will have that level of detail. I just do not have it at hand, Senator.

Mr Pratt : This financial year, we expect.

Senator WHISH-WILSON: Just before I hand over to Senator Di Natale to finish my time slot, Chair: in terms of the budget process, how much funding going, for example, towards the reef partnership program is being redirected from other departments out of the 443 million? Are you able to provide that breakdown?

Mr Pratt : Are you asking is that new money?

Senator WHISH-WILSON: Is it all new money?

Mr Pratt : It is all new money.

Senator WHISH-WILSON: It is all new money?

Mr Pratt : That is right.

Senator WHISH-WILSON: There are no offsets?

Mr Pratt : Well

Senator WHISH-WILSON: That is the policy, right?

Mr Pratt : Certainly we have not offset it.

Senator WHISH-WILSON: Okay, so

Senator Birmingham: Across the budget process obviously all these things are netted out to produce the budget bottom line, Senator. But in terms of this commitment, this is a commitment additional and is not taking from the other areas of significant investment and contribution.

Senator WHISH-WILSON: Okay. We will wait for when we can get some information about the oversight that the government is going to have on this. Could I just ask theoretically, though, who can join the Great Barrier Reef partnership program? Can I join it, for example, as an individual? Can any company or any person join it?

Mr Pratt : I am certain you can contribute to it, Senator. In terms of membership, we would have to take that on notice and ask the foundation.

Senator WHISH-WILSON: There are existing partners there at the moment, which Senator Di Natale is going to talk to you about, but I am interested in, going forward, can anybody join in terms of

Mr Pratt : I do not know, Senator, the exact arrangements there. But there are quite a substantial number of partners, as I understand it.

Senator WHISH-WILSON: Yes. Can you tell us, on notice, if you can, why the people there at the momentyou have said that you have been working with them for over 10 years and you have had some experience with themhave the particular expertise to not only manage half a billion dollars of taxpayers' money but also leverage it to actually get an outcome for the reef? Who are these people and what are their backgrounds?

Mr Pratt : We can explore these issues further in outcome 1.1 when we have the rest of the team here.

Senator WHISH-WILSON: Okay. I might go to Senator Di Natale now.

CHAIR: There is about four minutes before we have to go on to the next one.

Senator DI NATALE: I will be quick but I might follow it up later. Can you confirm that the following companies are represented on the chairman's panel for the foundation: Peabody Coal, Origin Energy, BHP, AGL, Shell, ConocoPhillips and Rio Tinto?

Mr Knudson : We will be absolutely able to do so at 1.1, but the chairman's panel that you are talking about does bring together CEOs from across the country, the largest organisations in the country, absolutely.

Senator DI NATALE: But these are some of the country's biggest emitters and exporters of greenhouse gases, that's right, isn't it?

Mr Knudson : I cannot comment on that. I am not sure. I suspect you are probably right, but I do not have the specific figures to hand.

Senator DI NATALE: What is the biggest threat to the Great Barrier Reef at the moment?

Mr Knudson : The largest threat to the reef is climate change.

Senator DI NATALE: The largest threat is climate change, and yet on the chairman's panel of the foundation you have the CEOs of the biggest polluters in Australia?

Mr Knudson : Under the Australian approach on climate changeand I turn to my colleagues who are more than happy to expand on this furtherthe approach on climate change has large corporations doing their share to address climate change as well, including being part of the foundation's chairman's panel to take a look at what they can do with respect to the reef.

Senator DI NATALE: The chairman of the foundation is John Schubert; is that correct?

Mr Knudson : That is correct.

Senator DI NATALE: And he was formerly chairman and CEO of Esso in Australia, is that correct?

Mr Knudson : That is correct.

Senator DI NATALE: Is this the same Esso that is now owned by Exxon and is being sued in the US for lying about what it knew around climate change for decades and is now currently the subject of, as I said, legal action?

Senator Birmingham: You are asking officials about corporate structures. They are not in a position to be

Senator DI NATALE: Who is the chair of the foundation?

Senator Birmingham: able to answer a question about international corporate structures.

Senator WHISH-WILSON: This goes to the reputation of the foundation.

Senator DI NATALE: The chair of the foundation is somebody who was employed by Esso and we now know they are the subject of significant legal action in the US for lying about what they knew about climate change. You do not think that is a matter for public interrogation?

Senator Birmingham: I think you are engaging in a terrible smear of an individual at this time.

Senator DI NATALE: I have just pointed out some facts which the officials have just confirmed. These are facts.

Senator Birmingham: You seem to be trying to join some dots in relation to the individual who is the chair.

Senator DI NATALE: I am not joining any dots; I am just putting points of fact forward and asking for those to be confirmed. I am asking why you would give nearly half a billion dollars of public money to a foundation chaired by somebody who was the CEO of an organisation that is now being sued for lying about what it knew about climate change.

Senator Birmingham: You are happy to completely discard the $80 million that the foundation has managed to raise through various private and philanthropic sources to actually invest in the reef, to work on reef health.

Senator DI NATALE: But you have handed half a billion dollars to an organisation chaired by an individual who worked for a fossil fuel company that is now being sued.

Senator Birmingham: You see, this is the problem that the Greens have: only some people are entitled to care about the environment; only some people are entitled to care about the Great Barrier Reef.

Senator DI NATALE: No.

Senator Birmingham: The fact that this foundation has already delivered significant investment and works in relation to support for the reef

Senator WHISH-WILSON: Minister, do you acknowledge that

Senator Birmingham: You are really seeking to besmirch the work of the Great Barrier Reef Foundation as an unworthy entity. That is what you are doing.

Senator WHISH-WILSON: Do you acknowledge that this is a reputational risk for this foundation, this new vehicle, this new organisation? Do you acknowledge that that fact is a reputational risk? That is a very clear question and a very legitimate question.

Senator Birmingham: I do not accept all of Senator Di Natale's statements to be facts to start with.

Senator DI NATALE: Your officials have just confirmed them as facts.

Senator Birmingham: No, I am not sure the officials have actually responded to any of the questions since you started trying to impugn different individuals. What we have done is work through, in terms of due diligence around the foundation as an appropriate entity, ongoing discussions about the terms of any grants that are occurring, as you have heard. There is a period of questioning later today when you can go through further detail about some of those discussions about how the grant will be awarded. But this is a foundation that has been in operation for a good period of time and that has invested tens of millions of dollars in reef health activities already. The government believes it is well placed to not only use that Australian government contribution but use it to leverage further private and philanthropic contributions towards reef health in the future.

Senator DI NATALE: Minister, can you confirm that any of these organisations who are represented on the chairman's panel for the foundation are donors to the Liberal Party: Peabody Coal, Origin Energy, BHP, AGL, Shell, ConocoPhillips or Rio Tinto?

Senator Birmingham: No, I cannot.

Senator DI NATALE: Will you take that on notice?

Senator Birmingham: No. You are welcome to look at the disclosures.

Senator DI NATALE: I am asking you a direct question and you are refusing to take that on notice.

Senator Birmingham: It is not the responsibility of the department of environment to look at political donations.

Senator DI NATALE: I am asking you as a minister and a member of the coalition government whether any of those entities are donors to the Liberal Party.

Senator Birmingham: Questions taken on notice here are questions for the department of environment. If you would like to ask the government that question, you can put it through the appropriate

Senator DI NATALE: I am asking you directly: will you take that on notice?

Senator Birmingham: Questions taken on notice here are taken on notice by the department, not by me personally.

Senator DI NATALE: Will you

Senator Birmingham: I don't answer the questions personally.

Senator DI NATALE: Will you confirm that any of those entities are donors to the Liberal Party?

Senator Birmingham: You are welcome to pose those questions in the appropriate for a or, of course, to look at all the public disclosures that

Senator DI NATALE: I will take that as a yes, given your refusal to answer that.

Senator Birmingham: No, you cannot take it as a yes. I don't know.

CHAIR: As discussed earlier, we will have to go back to the opposition now.

Senator DI NATALE: I think the opposition had indicated they would give me a couple more minutes.

Senator KENEALLY: We are happy to give you a few more minutes.

Senator DI NATALE: Thank you. I will not be much longer.

CHAIR: We will just take it off yours, then.

Senator DI NATALE: Can I just ask why you would choose to give nearly half a billion dollars of public money to a foundation whose chairman's panel is represented by a number of fossil fuel interests, some of whom are donors to the Liberal Party, and not give money to the authority that has legal responsibility for protection of the Great Barrier Reef, not give the half a billion dollars to them and indeed only give a fraction of those funds to the Great Barrier Reef Authority?

Mr Pratt : We have already answered that.

Senator DI NATALE: I am asking that again.

Mr Pratt : I refer you back to the transcript.

Senator DI NATALE: I am asking that question of you now, and I would ask you to answer that again, if that is okay.

Senator Birmingham: We can repeat it and take up the committee's time, if you like.

Mr Knudson : As I have stated already, there is a significant amount of money going into the Great Barrier Reef Marine Park Authority. This builds upon funding decisions taken by the government a number of years ago to stabilise the funding.

Senator DI NATALE: So, rather than repeating that, why have you chosen to give preference to the foundation and not give the half a billion dollars to the authority?

Mr Knudson : The authority has a very specific role. The funding decision that was made respects that role and backs that in in terms of that joint field management plan which is fundamental about on-the-ground activities on the reef by the marine park authority with the Queensland government. That is the fundamental focus of the government's investment in the authority in this budget.

Senator DI NATALE: What are the staffing numbers on the foundation?

Mr Knudson : I do not have that at hand but am happy to take that on notice.

Senator DI NATALE: I had information that it was in the order of six full-time equivalents.

Mr Knudson : Again

Senator DI NATALE: If we assume it is in that ball parkbut I will let you take that on noticedo you have concerns that an organisation with those numbers of staff members is charged with distributing half a billion dollars of public funds?

Mr Knudson : What we have talked about is that we will be putting in place the grant agreement which will spell out all the governance that needs to come into place. Obviously we are talking with the foundation about how they will ramp up. This is a significant influx of money; there is no question about that.

Senator DI NATALE: Some of that money will go to employing more staff?

Mr Knudson : What we have already started to talk to the foundation about is: are there opportunities where it makes sense to work collaboratively with the foundation? That could include potentially seconding staff that have experience in this area in GBRMPA, with us or with the Queensland government to the foundation. It is a unique opportunity.

Senator DI NATALE: So you are saying you will be moving staff across from the authority to the foundation

Mr Knudson : What I am saying is

Senator DI NATALE: Why wouldn't you just give the money to the authority?

Mr Knudson : I have already answered the question.

Senator DI NATALE: They clearly do not have the expertise or the capacity to expend those funds. You are talking about moving staff across from the authority to the foundation.

Senator Birmingham: The foundation has expertise to be able to handle large sums.

Senator DI NATALE: Sure, if you worked at Esso, you get lots of money.

Senator Birmingham: This is a record contribution, absolutely. And you would expect with a record contribution that there would be some expansion in their resourcing to handle that. That is not to say they do not have the existing skill set to handle the expansion that is underway.

Senator DI NATALE: We just heard that they are looking at ramping up.

Senator Birmingham: They will do so and, with an expansion ramping up, you would expect that they would seek to perhaps employ some staff with additional skill sets aligned to the investment they are making.

Senator DI NATALE: Right, and not give the money to the authority but move staff across and give it to a foundation dominated by

Senator Birmingham: The authority has particular legislative responsibilities. The work the foundation can do complements the authority, will absolutely in part no doubt be in partnership with the authority but will also go further than the work of the authority, who will receive an appropriation in the order of $133 million for 2018-19. So the authority in whom the government has invested significantly will continue its work and will be able to do so with an ongoing partner. They would already no doubt have worked with the foundation in the past. There is an opportunity for them to do more of that and to leverage what is a very significant investment in the reef that I would have thought the Greens and others would have welcomed. But apparently the Greens only welcome it if it is then all spent in government hands rather than in partnership with others.

Senator DI NATALE: I would like to thank members of the opposition for ceding some of their time.

CHAIR: Senator Keneally.

Senator KENEALLY: I would like to stay in this theme. Minister, a moment ago you used the phrase 'due diligence' in terms of the government having done due diligence on the foundation. What was that due diligence process?

Senator Birmingham: We're happy to take that on notice for you.

Senator KENEALLY: How can you say that the government did due diligence without knowing what the process is?

Mr Knudson : I think we have talked about the fact that we are in the process right now of doing some extensive consultation with the foundation which will then lead to a grant agreement that will have extensive detailing of the diligence that has been brought to bear prior to the final grant decision being made.

Senator KENEALLY: Usually one does do

Mr Pratt : Can I just add thatsorry to interrupt you thereas we have already pointed out, the foundation has been in operation for nearly 18 years, I think, now. We have been working with it for 10 years

Senator KENEALLY: Can I ask about that, because the earliest annual report on their website is 2011.

Mr Pratt : I understand the foundation was established in 2000.

Senator KENEALLY: Can we please get some confirmation on that, because their website only has annual reports going back to 2011.

Mr Pratt : The other point was: we have been working with them for 10 years; so we have quite close connections with the foundation. They are a known entity and a known quantity to us.

Senator KENEALLY: Their website says the foundation:

… started with a small group of businessmen chatting at the airport while waiting for their flight, wanting to do something to help the Great Barrier Reef.

Who is this small group of businessmen?

Mr Knudson : One of the things I would say is that many organisations began in rather different circumstances.

Senator KENEALLY: The point of this question is that Mr Pratt just said that the foundation is well known to the department. There is nothing on this website that identifies who this small group of businessmen is. There is nothing on their website that would indicate that they were in operation before 2011. So I am trying to understand what the department does understand about this foundation. I put to you again: who is this small group of businessmen?

Senator Birmingham: We can, indeed, go back to the foundations of the foundation. Clearly, the management of it, the oversight of it, the governance of it, if Senator Di Natale's facts are correct, is no great secret. He has cited people who may be on the board and are part of the governance structure of the foundation. Again, I cannot believe that somebody such as you would come in with the attitude of seemingly disparaging ideas

Senator KENEALLY: No, Minister, I am going to stop you right there.

Senator Birmingham: by a small group of business people who might like to get together

Senator KENEALLY: My attitude is about the expenditure of half a billion dollars of taxpayer money and whether there has been any due diligence whatsoever. So I put to you again, Minister: was there an open grant process for this money?

Senator Birmingham: We have already addressed those questions.

Senator KENEALLY: No. I put them to the department. You agreed that the department could take them on notice. I am asking you as a member of the government

Senator Birmingham: No, we addressed those questions earlier

Senator KENEALLY: whether there was an open grant process for half a billion dollars of taxpayer money

Senator Birmingham: in the budget process and went through a process of identifying that the government wanted to make a significant and record investment in terms of reef health and has gone down the pathway of doing so through the foundation.

Senator KENEALLY: And you cannot tell us if there was a grant process or an open invitation to organisations to tender for half a billion dollars of taxpayer money?

Senator Birmingham: We have already addressed that question.

Senator KENEALLY: And the answer is what?

Senator Birmingham: Senator, the process for identifying the foundation was not a grant process in the sense of a competitive grant process. The foundation is well placed, having raised tens of millions of dollars previously, to be able to administer investments in the reef and associated programs.

Senator KENEALLY: Did the foundation approach the government with a proposal?

Senator Birmingham: Again, Senator, I think we've been through those questions.

Senator KENEALLY: We haven't had answers, so I'm asking it again.

Senator Birmingham: We have addressed those questions.

Senator KENEALLY: What is the answer, Minister? Did the foundation approach the government with the proposal for this funding?

Senator Birmingham: The foundation and government have a history of engagement. The government has identified the foundation as an appropriate partner for this record investment.

Senator KENEALLY: How did the government do that?

Mr Knudson : Senator, you were asking about some of the original members involved with the establishment of the foundation and I am trying to bring one point to bear because it is relevant for one of the upcoming sessions. Dr Reichelt, the head of the Great Barrier Reef Marine Park Authority, was involved, as one of the longstanding members of the board, and he could probably give some insights into it, if that is helpful to the committee.

Senator KENEALLY: I do have some questions about Dr Reichelt's involvement in this money being given by the government to a non-government organisation where he sits on the board. Maybe the minister could answer my question: how did the government decide to give this foundation the money?

Senator Birmingham: The government has been aware over a period of time of the work of the foundation and has confidence in its ability to administer this record investment support for the Great Barrier Reef.

Senator KENEALLY: Senator Di Natale made a point of noting that there were a number of members of the chairman's panel who in fact head up organisations and businesses that are amongst the biggest contributors to climate change and damage to the reef. I would note that the chairman's panel also includes Shayne Elliott of ANZ, Ian Narev of the Commonwealth Bank, Andrew Thorburn of NAB and Grant King from the Business Council of Australia. Indeed Mr King is on the board. Were those the type of people that you were confident had the ability to administer half a billion dollars of government funding without any tender process, any open invitation or any competitive tension whatsoever?

Senator Birmingham: Based on the work of the foundation, and the tens of millions of dollars that it has raised and invested in the reef to date, the government has confidence that the foundation is a sound structure to support our record investment in the reef.

Senator KENEALLY: What would some of the KPIs for this funding be, Minister? Are they publicly available yet?

Senator Birmingham: Again, you have already asked questions about the grant terms which are being negotiated at present. We have indicated

Senator KENEALLY: So we've decided to give half a billion dollars without any terms yet?

Senator Birmingham: Senator, what would always happen in such processes is that the government makes a budget decision and then negotiates the contract and the terms around that to make sure they are suitable and satisfactory. You can't

Senator KENEALLY: Usually after there has either been a competitive process or a public service comparator type process to determine if it would have been better to give the money to the authority. In this case neither of those seem to have been done.

Senator Birmingham: No, Senator Keneally. The government in the budget process went through what the objectives of an investment such as this are and determined the foundation to be the appropriate place for such a record investment in reef programs.

Senator KENEALLY: Who will monitor the funding and whether or not the KPIs are being met?

Mr Knudson : That will be part of the role of the department. The grant agreement will require the foundation to implement, as I have said, a robust governance framework. That will need to cover financial management, fraud control, risk management, quality control, audit, and work health and safety, among other matters. That will include annual reporting on their progress against objectives.

Senator KENEALLY: You have already decided to give the foundation, again, about half a billion dollars, but you are not confident yet that they have the governance already in place?

Mr Knudson : As I said, this is a significant ramping up. We will be looking at making sure there are appropriate connections between things like the independent expert panel and the reef advisory committee. I expect that the foundation's governance will be adjusted to account for not only the size of the money that they will be administering but also, quite frankly, the deeper relationships that will need to be created with existing entities like the independent expert panel.

Senator WHISH-WILSON: I have a point of clarification. You mentioned there are others apart from what you have just outlined in governance. Does it also include a governance arrangement around conflicts of interest?

Mr Knudson : Conflicts of interest would have to be managed according to traditional governance. Yes, we can absolutely come back and talk about how that will be managed.

Senator WHISH-WILSON: Okay, I will ask you some more questions on that later.

Senator KENEALLY: What happens if this foundation collapses in the next seven years?

Mr Knudson : As is typical with grant agreements, if there is a failure, shall we say, or a financial difficulty for the entity, there are provisions that are put in place to deal with those sorts of circumstances, and we can talk through that at 1.1.

Senator KENEALLY: Since you have already given the money in this calendar year, is that money being held in trust? Is there any confidence that the taxpayer wouldn't just lose that moneythat that money is gone?

Mr Knudson : No, not at all. As I said we can walk through it in greater detail, but, in effect, there are provisions that will be put into the grant agreement that will allow for the collection of the funds if the entity is in financial difficulty.

Senator KENEALLY: We will come back to that in 1.1.

CHAIR: Are you still going, Senator Chisholm?

Senator CHISHOLM: Yes, I have some general department questions. What is the total staffing of the Department of the Environment and Energy?

Ms Goodwin : With the current staffing, I will give it to you in both headcount and full-time equivalent. For the department the headcount is 2,084, and that equates to a full-equivalent of 1,949.9. If you add the Director of National Parks, the headcount is 547, which equates to a full-time equivalent of 326.4. That is a total of 2,631 headcount or 2,276.3 FTE.

Senator CHISHOLM: What is the total reduction from last year?

Ms Goodwin : From the previous estimates, let me check.

Mr Pratt : In terms of essentially the ASL cap that the government provides for us, the 2016-17 actual was 1,952. In 2017-18 our estimated actual ASL cap is 1,980. Projecting forward there is a small increase for 2018-19 to 1,993. That is our ASL cap. Obviously, our staffing numbers within that will fluctuate up and down. There are a whole host of variables which affect that, including the extent of part-time staff, the extent of non-ongoings. For example, our Antarctic division makes considerable use of non-ongoing staff during the summer season when we have expeditioners in Antarctica. You can see that between 2016-17 and 2018-19 there is actually a slight trajectory upwards.

Senator CHISHOLM: It has been reported that the biodiversity and conservation division will lose 60 staff or has lost 60 staff.

Mr Pratt : Yes.

Senator CHISHOLM: It is the division that deals with threatened species and extinction?

Mr Pratt : That is correct. Over an approximately two-year period that division is reducing its staffing from about 223 to 163. Those staff will be reappointed or have been reappointed or redeployed in other parts of the department.

Senator CHISHOLM: How does that impact on the plan to maintain the biodiversity and welfare of Australia's vulnerable native wildlife when they cut staff and resources from these threatened species?

Mr Pratt : The staffing reductions are driven by some terminating programs, particularly the Green Army and also a biodiversity fund. We have officers available who can talk through the staffing numbers, but if we are going to get into detail on threatened species and so forth, we would like to do that under outcome 1.1.

Mr Knudson : It comes under 1.4, I think.

Mr Pratt : 1.4.

Senator CHISHOLM: Was a capability assessment done in regard to ensuring that the important functions would be able to be maintained?

Mr Pratt : There was extensive work done on the workforce strategy for that division to ensure that its ongoing business was able to be continued.

Senator CHISHOLM: I have more on that but I can come back to it under 1.4.

Mr Knudson : My apologies, I am wrong. It is 1.1. If you want to talk about threatened species, the commissioner, our strategy and how we are doing that, that is therealso National Landcare. 1.4 deals more with the listing process. So it actually is 1.1; the secretary was right.

Senator MOORE: I have one follow-up question. It is a direct follow-up on the numbers. Mr Pratt, you said about 80 staff were going to be reappointed elsewhere.

Mr Pratt : Sixty.

Senator MOORE: In terms of that process, there will be no redundancies being offered?

Mr Pratt : That is right.

Senator MOORE: In terms of total

Mr Pratt : Senator, if I can clarify, there will certainly be no involuntary redundancies. We do not have the budget this year for any voluntary redundancies. It is never possible to say there will not be one or two here for whatever reason, but it is not part of the workforce strategy.

Senator MOORE: The idea is that it will all be internal; there is no indication of cross-department?

Mr Pratt : The department, as a large department, has a natural attrition rate of about 10 per cent. Some people may choose to find work in other departments, but we are redeploying people internally.

Senator MOORE: There is no particular program around that particular number of people being redeployed? It is a large number, even within your department. I forget the figures but you put them on record earlier. Sixty in one particular process is a lot of people to relocate. Was there a particular HR process around that or is it just expected that natural processes will follow?

Mr Pratt : No, there is an actual strategy to redeploy people.

Senator MOORE: That is what I would have expected.

Mr Pratt : The relevant division is working very closely with other divisions to place people as their work is no longer needed in that division.

Senator MOORE: Is it possible to get any information about the levels of those people, the genders of those people and the ages of those people?

Ms Goodwin : Yes, we can take that on notice.

CHAIR: Senator Whish-Wilson, you have one question?

Senator WHISH-WILSON: Yes. Mr Knudson, you mentioned climate change as the biggest threat to the reef. I will frame it up for you very directly: we often have a discussion around mitigation and adaption. They are both important to the climate debate. With this money, this $500 million, and the way it has been put into this foundation, is it an admission that with the government's priorities, especially in relation to the reef and climate change, you are moving into the adaption space rather than the mitigation space, in terms of what is good for the reef and what we need to do?

Mr Knudson : No. Obviously, we have talked extensively, and my colleagues will have a good opportunity to expound on, what we are doing with respect to climate change. Climate change with respect to coralsand Dr Reichelt has talked about this beforeis particularly sensitive. The thresholds that they can handle in terms of temperature change are relatively limited. Because of that you need to look at what you can do locally and in the relatively short term while you are trying to make that long-term international progress on climate change. That is why it is not one or the other; you have to do both. That is why this package is focused on

Senator WHISH-WILSON: I understand that, but in terms of the balance and the public debate about taking action on reducing emissions, which I think we all recognise through whatever framework you choosewhether it is Paris or whateverdo you accept the public perception that this money is going into this foundation that is being essentially run privately, and that it includes on its board many of the large polluters? Do you at least accept that the public perception out there is that this could just be seen as greenwash by many of the biggest polluters on the planet in relation to the Great Barrier Reef and managing the future of the Great Barrier Reef?

Senator Birmingham: No, I do not accept that perception. I would make a few points. One is that we are all awarethose of us who have sat through some of these hearings over a period of timethat there are many environmental considerations that impact on the reef. Climate change is absolutely one of them and very significant, and potentially over the long term the most significant. Even, of course, within that, if we look at the various agreements struck in Paris and the ambition there, there is still a degree of climate change considered within that for which adaption of the reef therefore needs to be contemplated, even if all of those Paris targets are met. Additionally, of course, land use practices and other activities also have impacts on the reef as well as invasive species, such as crown-of-thorns.

Senator WHISH-WILSON: This committee has had a very good inquiry into that, so we understand that.

Senator Birmingham: These types of investment contribute to addressing the whole package of those impacts as well as building resilience to climate change.

Senator WHISH-WILSON: Minister, do you accept

CHAIR: Final question.

Senator WHISH-WILSON: Last question. Do you accept the evidence is out there that if we do not actually mitigate and reduce emissions sufficiently, these adaption measures are never going to save the Great Barrier Reef?

Senator Birmingham: Senator, your question is framed to some extent as: how long is a piece of string?

Senator WHISH-WILSON: If the oceans continue to warm

Senator Birmingham: If we do not reduce emissions sufficiently, do I accept that completely unrestrained climate change would have permanent altering effects on the reef? I would imagine that it would. Of course, what we are part of as a government and as a country is a global effort to restrict emissions, to restrain the level and rate of climate change and then, through investments such as this, to manage the reef, which is, frankly, probably the best managed reef in the world, to continue that high level of well-skilled management to ensure

Senator DI NATALE: It's dying, Minister. You're managing it to death.

CHAIR: Order!

Senator Birmingham: that the reef is given as much support in terms of adaption as is possible within the scientific parameters and within addressing all of those other impacts such as land use practices.

CHAIR: The committee will suspend until approximately 10.45.

Proceedings suspended from 10:32 to 10 : 47