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Rural and Regional Affairs and Transport Legislation Committee
25/02/2014
Estimates
AGRICULTURE PORTFOLIO
Australian Bureau of Agricultural and Resource Economics and Sciences

Australian Bureau of Agricultural and Resource Economics and Sciences

ACTING CHAIR: I welcome officers from ABARES.

Senator O'SULLIVAN: Would you advise the committee on the response to the National Agricultural Statistics Review. I understand the request for submissions closed on 14 February.

Dr Grimes : I do not have those details with me, but no doubt we have an officer here who can answer that question. So I might turn to Ms Schneider.

Dr Ritman : This is the review that ABARES is undertaking with the Australian Bureau of Statistics. We have had a joint consultation period open. We have received about 37 submissions to date. That closed last week, I understand.

Senator O'SULLIVAN: That was where my question was going: to how many submissions had been lodged. I am just going to freelance on a couple of questions for a moment, if I might. In the course of researching some other questions unrelated to this question, I found some ABARES figures. When your data is treated, can you determine trends in economic performance of a sector, region by region?

To give some background to the question, if I might, Chair, the figures that I am specifically after are performance at the farm gate for beef production, for gross receipts on farm and then the net performance. The figures that I saw were for northern Australian cattle producers. These figures—and I think it was this committee that I quoted them to this morning—indicate an almost 50 per cent reduction over the last decade. That is the premise of my question. You are able to gather data, interpret it and treat it, but can you break it down by region, sectors within a region or an industry within a region?

Mr Glyde : We might ask Mr Gooday to explain the basis of that and the nature of our statistical collections and what we actually do and do not do in terms of our coverage.

Mr Gooday : Through our farm survey, we collect data on the broadacre industries—so including the beef industry, the dairy industry and vegetable growers. We have also done surveys on the irrigators in the Murray-Darling Basin in the recent past. For some of those industries, we can report at a regional level. We will be publishing some numbers next week at the Outlook conference, which will go into some detail at a regional level on variables like farm cash income, farm business profit, rate of return to full equity and some information on debt. So there is a range of information. It can be broken down to a regional level. But some of those regions are quite large, because we use a sampling methodology. There is a certain distance we go and then we do not like to go beyond that, because the statistical veracity of the numbers is not valid beyond a certain point.

Senator O'SULLIVAN: I understand the sampling. How does that physically happen? How do you gather the data in the first instance?

Mr Gooday : They are done via face-to-face interviews with farmers. For example, in the broadacre survey, we survey about 1,600 farmers every year. It is quite an intensive survey so it takes between a one-and-a-half and a three-hour face-to-face interview. We collect basically all of the financial information relevant to the farm and the production information—so what they produced, what they laid out in costs and what they got in in receipts. We take a full capital inventory of the sort of equipment they have got on hand, the value of their land and the value of their machinery.

Senator O'SULLIVAN: In the case of the figures that I have seen that referred to North Queensland cattle production, you gather that data, interpret it, publish it and circulate it. Do you do anything else? For example, if you have seen a catastrophic trend like this collapse, do you run out in the hallway and call 'Fire'? Do you notify anyone and say you had better have a bo-peep at this?

Mr Gooday : We publish it. The surveys are co-funded by the R&D corporations so, in the case of the beef work for example, we would normally run the preliminary results of the survey past some of the experts in MLA to see whether that lines up with their thinking and then, as you say, we would publish the numbers.

Senator O'SULLIVAN: Would you fiercely defend the independence of your process, notwithstanding that you have got people like the MLA who might be commissioning the work or participating in it?

Mr Gooday : Absolutely.

Senator O'SULLIVAN: In my state of Queensland we are still dealing with the wash-through of the live cattle export ban of 2011 and—without buying into the politics of any of this—it has clearly washed through our exporters and into our domestic market. If I were to sit with your agency, or anybody were to sit with your agency, would your agency be able to track that and tie one thing to the other?

Mr Gooday : There have been a lot of things happening all at once.

Senator O'SULLIVAN: I understand—force majeure; dry dams and high dollars. I understand all of that.

Mr Gooday : Certainly, we would explain the trends in what has been happening in the beef industry in Queensland and some of the factors that have been behind that. It would be very difficult to quantitatively pick out the impact of disruption to the live adult cattle export trade, for example, from a range of other factors that have been influencing farm incomes.

Senator O'SULLIVAN: As a closing question, were you commissioned or did ABARES undertake any specific work relating to the impacts of the cessation of the live cattle trade? Did you have a look at it, in particular?

Ms Schneider : In 2011, immediately after the suspension, ABARES did a piece of work internally that looked at the initial impact of the ban—the suspension of trade—but since that time no, we have not done anything. That is available on our website.

Senator O'SULLIVAN: So it is available; it is published on your website?

Ms Schneider : Yes, it was done from June to July, so it is a very early look at what was happening.

Senator FARRELL: I wonder if in a general way you could update the committee on the current funding arrangements for ABARES and the breakdown of funding.

Mr Glyde : Essentially, ABARES receives funds from two sources. One is the departmental appropriation which in very broad terms provides the base capability for ABARES to have scientists, economists, statisticians and analysts on hand. It also earns money, which is called section 31 revenue, from other primarily Commonwealth agencies who are after access to that expertise or use the particular data.

Senator FARRELL: Is that on a fee-for-service basis?

Mr Glyde : Yes. For example, Mr Gooday mentioned that Dairy Australia and the GRDC contribute to the survey collection work. That is also in part for the appropriation work. That is the general principle of how ABARES works. There is an amount for an appropriation and an amount that is revenue that is earned.

Senator FARRELL: What proportions are they?

Ms Schneider : This year they will be approximately 70 per cent appropriation and 30 per cent section 31 revenue. Our appropriation revenue from government is about $19.7 million. It is difficult to forecast section 31 revenue, but we are expecting it to be in the order of $8 million this year.

Senator FARRELL: Is that figure going up or going down?

Ms Schneider : It is going down.

Senator FARRELL: Because?

Ms Schneider : I think because of budget issues in other agencies that typically commission us to do work. There are constraints there, so we are seeing a reduction in external funding from a range of sources.

Senator FARRELL: Can you tell us whether ABARES has undertaken any research related to drought issues—for instance, the effectiveness of drought assistance?

Ms Schneider : We have not done anything of that nature, as far as I am aware.

Senator FARRELL: Anything on weather projections and forecasting?

Ms Schneider : We use the Bureau of Meteorology's forecasts.

Senator FARRELL: Do you?

Ms Schneider : Yes.

Senator FARRELL: Do they charge you for that?

Ms Schneider : No, what we use is freely available on their website.

Senator FARRELL: So they are not providing you any special services?

Dr Ritman : We have access to a database of information from the Bureau of Meteorology so that we can do analysis comparing rainfalls in the last two months to a 100-year series or any proportion of that. That is accessible to the public; it is just that we know how to use it.

Senator FARRELL: I see. So if I wanted that information I could go the bureau's website and access it myself?

Dr Ritman : Yes. They have tools that you can use to dial up different periods. If you wanted, for example, to look at the rainfall over the last two months compared to the January-February period for the last 100 years you can do that on the Bureau of Meteorology website.

Senator FARRELL: It would be pretty significantly higher in states like South Australia, wouldn't it, if you have done that exercise?

Dr Ritman : I cannot recall the exact figures.

Senator FARRELL: It just sounded like you had done the exercise.

Dr Ritman : I am just familiar with the technique.

Ms Schneider : We produce a weekly climate update that is available on our own website which reports on the bureau's latest information.

Senator FARRELL: Is that prospective?

Ms Schneider : No, it is retrospective.

Mr Glyde : We would certainly be happy to send you the link to that, because it provides climatic information but also information on prices and the like. It is a standard update that we provide so that people have access to that information.

Senator FARRELL: I see. So If you can get the answer to that question I asked Dr Ritman about the rainfall over the last 10 months, I would appreciate it if someone could write that down for me.

[19:45]

ACTING CHAIR: We now move to the Agricultural Adaptation and Forestry Division, which includes the division formerly known as Climate Change. I know there will be a host of questions that this morning, Dr Grimes, you directed to this area.

Senator EDWARDS: By way of background, Joel Fitzgibbon MP, shadow minister for agriculture, was interviewed on Sky News Lunchtime agenda on Friday 14 November 2013 about drought assistance. Mr Fitzgibbon stated: 'The problem, David, is we were halfway through a reform process when Labor lost office and our first task after the election if we had won was to bring COAG back in to complete the process so that those EC schemes which were abolished were replaced with something new and our focus was to be on some form of natural disaster relief payment.' He also claimed that 'Barnaby Joyce, for some bizarre reason, has taken $40 million out of the farm financing package.'

The Natural Disaster Relief and Recovery Arrangements were investigated by the Commonwealth, state and territory agriculture ministers, and indeed during Minister Ludwig's time, as an option for the delivery of future in drought business support. Ultimately this was dismissed in favour of a new intergovernmental agreement on drought. Under this agreement, the Commonwealth is committed to providing household income support through the soon to be legislated farm household allowance. What arrangements had DAFF been engaged in to 'bring COAG back in', as articulated by Mr Fitzgibbon.

Mr Tucker : That is a very lengthy question. I am not quite sure exactly where you want to start.

Senator EDWARDS: Mr Fitzgibbon said there was something going on. What work were you doing to bring COAG back in to work with these natural disaster arrangements? Mr Fitzgibbon said they were half way through a reform process when Labor lost office.

Mr Tucker : We were doing a number of analyses and were providing advice and that would go into the context of policy advice to the then government, which we would not comment on, but in terms of where the formal arrangements had got to, I think you were saying in your introductory remarks there was an intergovernmental agreement on drought, which I think was signed in about April last year, so that was the formal process culminating after many years of work. In terms of further activities which the government at that time may or may not have put in, I think we would probably say that is speculation and we would not comment on speculation.

Senator EDWARDS: What is required to complete the process, and is this under way?

Mr Tucker : This government has said that it is doing a number of things, including drought reform, as a part of the agricultural competitiveness white paper, but they would like further comment and advice in that process in terms of the future of drought arrangements. You will have seen, just as we have seen, comments by the government about further matters that they may be considering in the short term that they may do in the current circumstances.

Senator EDWARDS: I will just take you back to what Mr Fitzgibbon referred to—and this is post-election as the shadow agriculture minister—as 'some form of natural disaster relief payment'. What work had the department undertaken to progress the natural disaster relief payment prior to the 7 September election?

Ms Freeman : The natural disaster relief payment is actually a matter for Attorney-General's Department. The work we were working on was to give effect to the intergovernmental agreement on drought, so we were working on the Farm Household Allowance and the other measures that are part of the IGA. Anything to do with NDRRA is the responsibility of the Attorney-General's Department.

Senator EDWARDS: So the only action the former minister took was to liaise with the Attorney-General's Department over a possible natural disaster payment. There was no form of natural disaster relief payment from him or this department. It was all being formulated in the Attorney-General's Department.

Ms Freeman : I cannot speak for what the Attorney-General's might have been doing. I am just talking about the work that this department was doing, which was with regard to giving effect to the Farm Household Allowance.

Senator EDWARDS: Was there any suggestion at any stage of how much money Mr Fitzgibbon was proposing to give farmers?

Ms Freeman : In the budget statement—the PBS—there was an amount that was allocated for the payment to take effect from 1 July this year, and from memory it is about $99.4 million. That was for the income support payment, so that included moneys for this financial year, including getting the Department of Human Services and their systems in place. We have obviously been doing work as part of preparing the legislative aspect to the payment, and the department has been working on that steadily for quite some time.

Senator EDWARDS: Did any of the former ministers—Ludwig or Fitzgibbon—ask for any advice about the appropriateness of making drought part of the Natural Disaster Relief and Recovery Arrangements?

Mr Tucker : I can say to you that we did some analysis on those matters, but I will not go into the detail of the advice we were providing to the government at the time.

Senator EDWARDS: I am not going to move you on that, am I?

Mr Tucker : No.

Senator EDWARDS: Was former minister Fitzgibbon alerted to the advice given to his predecessor?

Mr Tucker : Could you perhaps be a bit more specific? Advice in what sense?

Senator EDWARDS: The advice that you will not give me.

Mr Tucker : I do not recall specifically, but there would be no reason for us not to have provided the full suite of advice to minister Fitzgibbon.

Senator EDWARDS: Did former ministers Ludwig or Fitzgibbon consider providing additional funding for mental health support to farmers?

Mr Tucker : It is one of the elements of the intergovernmental agreement on drought—that there are circumstances for increased mental health services and services that are provided in difficult circumstances—and we have been working for some months now on arrangements with the relevant agencies in the Commonwealth who provide those services to examine ways that, when drought or other difficult times come along and people find themselves in difficulties, they can respond to that additional need that happens at those times. We have been working on that for a number of months.

Senator EDWARDS: You are still working on that. My next question was around what has happened. So it is a continuous process?

Mr Tucker : We are working on that, and we will continue to work on it, because drought and other needs move around the landscape as the weather changes, so it needs to be a flexible response mechanism.

Senator EDWARDS: So there has been no falter in your endeavour, elections coming and going? You have continued on to plough through—

Ms Freeman : As part of our arrangements under the intergovernmental agreement, we formed a high-level group on rural social support. That includes all the relevant social service delivery agencies across the Commonwealth, and we meet to discuss, amongst a number of other things, making sure that people are aware of what services are being called on particularly at any given time and what the demand might be for certain services in different geographic parts of Australia. The purpose of this is so that we are actually able to respond and to move people around if there are areas in trouble. From the department's perspective, our Rural Financial Counselling Service is pivotal—that is one of this department's programs—and we certainly have, with the resources there, looked to make people mobile to move to where there are people in need.

Senator EDWARDS: In addition, did former ministers Ludwig or Fitzgibbon consider providing funds for farmers to control pests during the drought?

Mr Tucker : I think we would have to take that on notice. Certainly respective governments over many years have provided grants for pest activity, but I cannot remember the exact timing.

Senator EDWARDS: So you will let me know?

Mr Tucker : We can take that on notice.

Senator EDWARDS: Thank you. Did former minister Fitzgibbon meet with his Queensland and New South Wales counterparts, ministers McVeigh and Hodgkinson, to discuss the drought outside the SCoPI meetings?

Ms Freeman : One I can comment on is that, when the Queensland farm finance scheme commenced, they did a joint announcement in Emerald. I can speak of that with certainty.

Senator EDWARDS: Are there any others that you know of?

Ms Freeman : Not that I am aware of.

Senator EDWARDS: The former minister, as I stated, claimed that Minister Joyce has taken $40 million out of the Farm Finance package. Is that true?

Mr Tucker : As we answered at last estimates, the money has been reallocated within the money available for Farm Finance. There is been no reduction.

Senator EDWARDS: So it is gone; it has been reallocated. So we are on the record—

Ms Freeman : For 2014-15 a $40 million reserve is held. So it has not been reduced; it is just that, in terms of certain states' allocations, the idea is that it be there to be allocated on a needs basis at the time.

Senator EDWARDS: So that interview on Sky News was a misrepresentation?

Ms Freeman : I did not—

Senator EDWARDS: I am just saying that the money has not gone—

Ms Freeman : There is no reduction in funding for Farm Finance.

Senator EDWARDS: That is right. So that assertion, I am saying, was not correct.

Ms Freeman : Yes.

ACTING CHAIR: So there is still $420 million available under the two schemes.

Ms Freeman : That is correct. Under Farm Finance for 2013-14 and 2014-15, there is $420 million available.

ACTING CHAIR: Does the confusion lie in the shifting of funds from other states?

Ms Freeman : That may be, Senator.

ACTING CHAIR: So the whole package of $420 million is there, but the states and the territories did not get what was originally promised to them or negotiated with the state counterparts?

Ms Freeman : There has been a reallocation of the moneys as announced. But I should also say that for some of the states who have reduced funding for 2014-15 there is $40 million held in reserve. So they may, pending circumstances, potentially gain some of that money.

ACTING CHAIR: So it has not all been spent or taken; there is $40 million sitting somewhere.

Ms Freeman : That is correct.

Senator SIEWERT: Does that mean that the money which came out of Western Australia, for example, is in that reserve?

Ms Freeman : The money came out of Western Australia for 2013-14 and 2014-15. The money for 2013-14 has been reallocated and gone to jurisdictions that have had high uptake of the program, and on the 2014-15 money no decision has been made.

Senator SIEWERT: Can you remind me how much that was for Western Australia?

Ms Willock : I can answer that question for you, Senator. For 2013-14, Western Australia has $25 million in funding available. For 2014-15, Western Australia again has $25 million in funding available.

Senator SIEWERT: But the 2013-14 money is gone? That has been reallocated.

Ms Willock : No, that is what they currently have. Their round is currently open and receiving applications against that $25 million allocation for 2013-14.

Senator SIEWERT: I was after the amount of money that has held in reserve—that portion of money. But thank you for that information.

Mr Tucker : I want to make sure we have this clear. The numbers that Ms Willock read out are the amounts still available to Western Australian post the reallocation.

Senator SIEWERT: Yes, that what I was after.

Mr Tucker : Originally they would have had $30 million and $30 million. It is now $25 million and $25 million.

Senator SIEWERT: I was after the money that was then in reserve, but you have answered it effectively that way. There is actually $5 million now in reserve, because the $5 million that was reallocated is gone.

Mr Tucker : The total reserve is $40 million for 2014-15. That money can be reallocated to any jurisdiction in part or in total, depending on need.

Senator SIEWERT: If something happens, WA could get more than the original amount taken away.

Mr Tucker : That is correct.

Senator GALLACHER: To be very clear on the $40 million in reserve: in the absence of a pressing case from those who have had lesser funding and with a greater case from, say, Queensland, Queensland could actually get $120 million—theoretically?

Mr Tucker : Theoretically. It is a decision for government as to where the need is.

Senator BACK: If there is $40 million in reserve, how can they get $120 million?

Senator GALLACHER: They are already getting $80 million. They have had their allocation improved. Others have had it decreased. There is $40 million in reserve which, I have just heard, can go to any jurisdiction with a case. On the minister's say-so, it can be allocated to Queensland.

Senator Colbeck: Based on a reflection of need from the agricultural community, as you would reasonably expect. That is the whole basis of it—to help the farmers in particular need. If there is a high demand—

ACTING CHAIR: In all fairness, Minister, the Western Australian farmers reckon they are in need.

Senator Colbeck: We did go through this fairly extensively last time.

ACTING CHAIR: You raised it and I am happy to show our support for Western Australian farmers.

Senator Colbeck: It is about assisting farmers in need, quite reasonably. I think you would understand that we would take very seriously the demand that comes through the program in reflecting that need.

ACTING CHAIR: I think some Western Australians probably would not agree with that. But I am only saying what I read in the paper. They are on the warpath. I am happy for Mr Joyce to visit certain parts of WA around—where is it, Senator Back?

Senator BACK: The north-eastern wheat belt is where yields are particularly down.

ACTING CHAIR: They are in dire straits.

Senator FARRELL: Senator Edwards, unfortunately, has left, but I think the import of his questioning of you was that the $420 million is still there on the table in the same way it originally was. I will put it to you that the original proposal was seven lots of $60 million. That was how you came to $420 million. All of the states and territories were treated equally in that regard. That figure was then rejigged. Had the original Labor Party proposal continued, the states would have got that $60 million each. Is that your understanding, Mr Tucker?

Mr Tucker : I see no reason why that would not be.

Senator FARRELL: The rejigging changed the amount of money that went to states—smaller states had their quantum reduced; the larger states had their quantum increased. That is correct, is it not?

Ms Freeman : It was a function of both the number of eligible farm businesses and—

Senator FARRELL: I am not asking for a justification of it. I am simply saying there was a reduction for a number of states and an increase for the other states.

Ms Freeman : That is correct.

Senator Colbeck: You did say in the question 'based on size'. It was not necessarily based on size, which was where Ms Freeman was going.

Senator FARRELL: No, I said the larger states. Please, do not misquote me.

Senator Colbeck: Larger states is what I heard.

Senator FARRELL: Yes, that is what I said. I said larger states.

Senator Colbeck: It depends on what your definition of larger states might be. There was also, as we discussed at the last estimates, some issues around need and the reality of the drought in Queensland and New South Wales.

Senator FARRELL: I am not seeking to debate the merit of the change. I am simply trying to establish the facts. Have I correctly expressed the change: the larger states—and I will name them—of Queensland, New South Wales and Victoria, obviously by population, got an increase; and the smaller states of South Australia, Western Australia and Tasmania got a reduction.

Senator Colbeck: I would not call that an accurate characterisation. That is your characterisation; it is not the way that I would put it.

Senator FARRELL: What is incorrect in what I have just said?

Senator Colbeck: You are talking about allocation of population bases.

Senator FARRELL: Correct. The largest states by population.

Senator Colbeck: That is not as I would characterise it.

Senator FARRELL: The three largest states in the country in my understanding are Queensland, New South Wales and Victoria. Is that correct?

Senator Colbeck: That is not a rationale for the reallocation. That is as I take your question.

Senator FARRELL: I am simply trying to establish the facts in terms of the way in which the new government changed the allocation. My proposition is that the original proposal was to treat all states and territories equally, so everybody got $60 million. The new government came in. They then changed the arrangements, gave more money to the states with the larger populations and took money away from the states with the smaller populations.

Senator Colbeck: That is where I differ with you, because I see your characterisation based on population as a rationale and I do not agree with the rationale. We can agree to disagree, if you like.

ACTING CHAIR: I am going to rule here.

Senator Colbeck: I am taking an inference from your question which I reject.

ACTING CHAIR: I do not think it is unfair question that Senator Farrell put to you.

Senator Colbeck: No, it is not an unfair question. I am rejecting the inference.

ACTING CHAIR: You are the one that is leading to all of this. You only have to answer yes or no if you agree that the three bigger states got greater funding than the smaller states.

Senator FARRELL: That is all you need to do.

Senator Colbeck: I am taking an inference from the question, which I rejecting. It is as simple as that. He can make all the inferences he likes. I am rejecting the inference.

ACTING CHAIR: I think that is childish, because that is a fair question for Senator Farrell to put to you.

Senator Colbeck: I am not saying that it is not a fair question.

ACTING CHAIR: If your evil mind is trying to defend the indefensible, than that is fine. But you can answer yes or no.

Senator Colbeck: It is not about that.

ACTING CHAIR: You cannot answer no to this, actually, because it is the truth that the three bigger states attracted the greater funding than the other states.

Senator Colbeck: I am rejecting any inference that that was a rationale for changing the funding.

ACTING CHAIR: Unless you know a deal that was done with the Nationals and Barnaby Joyce that you do not want to tell us, that is fine. You can keep that to yourself.

Senator FARRELL: I am not asking you to pass judgement on the rationale. I am simply trying to establish the facts.

Senator Colbeck: All I am trying to do is to establish that there is no correlation between the inferences that you are putting in the question. That is all I am saying.

Senator FARRELL: I am simply trying to establish the facts. I think I have correctly, despite what you have said, characterised the changes. Now, when you total up the amounts of money that the states were then given, you do not get to $420 million. You get to $380 million. Is that correct, Ms Freeman?

Ms Freeman : Just to be clear, there is an allocation for seven jurisdictions for 2013-14 and 2014-15.

Senator FARRELL: Yes.

Ms Freeman : Within the $420, there is $40 million that is yet to be allocated to jurisdictions in 2014-15.

Senator FARRELL: Can we be clear about this. The amount of money that the states are now are guaranteed is not $420 million, as was first proposed by the Labor party. In fact, it is $380 million guaranteed.

Ms Freeman : There is $420 million for the concessional loans in 2013-14 and 2014-15.

Senator FARRELL: My understanding, from the answers you gave to Senator Edwards before, was that $40 million was now kept in reserve. Is that still your answer?

Ms Freeman : Of the funds for the loans in 2014-15, the amount where it is allocated—which jurisdiction receives those funds—will be on the basis of the need at the time.

Senator FARRELL: Let me go through the amounts if we total all that money up. Queensland is $80 million; is that correct?

Ms Willock : Yes.

Senator FARRELL: Is $70 million for Victoria correct?

Ms Willock : Yes.

Senator FARRELL: Is $50 million to South Australia correct?

Ms Willock : Yes.

Senator FARRELL: Is $50 million to Western Australia correct?

Ms Willock : Yes.

Senator FARRELL: Is $30 million to the Northern Territory correct?

Ms Willock : Yes.

Senator FARRELL: And is it $30 million to Tasmania?

Ms Willock : Yes.

Senator FARRELL: How much does that total?

Ms Willock : The total allocation is $380 million, with the $40 million reserve remaining unallocated to an individual state.

Senator FARRELL: So we have established that the original amount of money was going to be $420 million to the seven states and territories. The figures that we have just gone through come to $380 million. So originally under the Labor Party proposal the states and territories were going to get a guaranteed $420 million. We now know from those figures I have just read out that under the new proposal of Minister Joyce it is $380 million and there is now a reserve fund. Let's have a look at that reserve fund. Will that money necessarily be spent?

Senator Colbeck: You cannot say that any of the money will necessarily be spent, because it is based on demand from farmers in various jurisdictions. I cannot guarantee, nor can you, that all of the money will be spent, but the states and territories combined are guaranteed $420 million.

Senator FARRELL: That is a fair point. It may not be fully subscribed.

Senator Colbeck: In fact, it would be good, quite frankly, if it were not fully subscribed because that would mean that there are not too many farmers out there in real trouble.

Senator FARRELL: Yes.

Senator Colbeck: That would be a good result for everybody.

Senator FARRELL: That is quite true also. But we know that the states and territories under the new proposal are only guaranteed $380 million.

Senator Colbeck: No, they are guaranteed $420 million.

Senator FARRELL: So you will allocate that $40 million to—

Senator Colbeck: It depends on demand. They are guaranteed $420 million. Individually, they are allocated $380 million, as you have listed, but combined they are guaranteed $420 million. It is not necessarily a difficult concept.

ACTING CHAIR: They are guaranteed it should they need it.

Senator Colbeck: That applies to the entire program.

Senator FARRELL: I think this is where we are disagreeing.

Senator Colbeck: It may be that you are trying to make an issue where there is not one.

Senator FARRELL: It was your senator who raised the issue. We did not raise it.

Senator Colbeck: He raised the allegation that Mr Fitzgibbon had made that there had been $40 million removed from the scheme. There has not. That is the point that Senator Edwards was making. I know you are trying to defend your shadow minister, and that is your right, but the reality is that the states and territories are guaranteed $420 million. The assertion that Mr Fitzgibbon made is incorrect.

Senator FARRELL: I think that is where we disagree, because $40 million that had previously been guaranteed to the states is now not allocated to those states. It may subsequently be used, but there is a significant difference between the Labor Party proposal and the proposal that the new government has introduced. I think I have made my point.

Senator Colbeck: You may think you have made a point, but I am not sure that you have. We can allocate based on need in areas if the drought continues. The whole point of the reallocation exercise was to look after farmers in need. That was the point of the exercise.

Senator FARRELL: There are plenty of needy farmers in my home state of South Australia.

Senator Colbeck: Your state has a program. I would urge them to contact their rural counselling service or other agency—

Senator FARRELL: I am sure there are plenty of needy farmers in your own state.

Senator Colbeck: and make an application.

ACTING CHAIR: Come over to WA and say that, I invite you.

Senator Colbeck: I will be over there soon.

ACTING CHAIR: Good. You and I can stand next to Senator Back, Mr Joyce and Senator Siewert. Let us know when you are coming over, Minister, because I think you are going to get a rude shock in certain areas of the west.

Senator GALLACHER: Is it true that New South Wales has spent all its farm finance allocation? On your analysis about the needs basis, if they have spent it and there is still a queue then will they get more of the 40 than other states?

Ms Freeman : If you like we can give you a rundown on the allocation of funding by state.

Senator GALLACHER: Specifically, is it true that New South Wales has spent its allocation?

Ms Freeman : New South Wales, as at the end of January, had received 131 applications and paid out at that time nearly $21 million of its funds. New South Wales still has an application round that is about to open for round 2. They anticipate a high level of demand for that but the round has not actually commenced yet. The funds have not been fully allocated at this time.

Senator GALLACHER: How do we fare in Queensland?

Ms Freeman : Over $19 million has gone out as at the end of January.

Senator GALLACHER: Do they have a subsequent build-up of applications like New South Wales?

Ms Freeman : They have their second round open now. I think they have received quite a few applications that they will go through and progressively assess.

Senator GALLACHER: What about that other small state, Victoria?

Ms Freeman : I do not know if it is to round 1 but I do know the applications received to date number 104, as at 31 January.

Senator GALLACHER: We might just finish off with the other states like Victoria, Western Australia.

Ms Freeman : Victoria has received 174 applications and $16.7 million has gone out the door.

Senator GALLACHER: Is that 174 the $16 million? Is there another list?

Ms Freeman : I beg your pardon?

Senator GALLACHER: Is the 174 the value of $16 million?

Ms Freeman : No, 174 applications have been received. They have had 42 loan recipients and they have allocated $16.69 million in approved loans.

Senator GALLACHER: So 42 equates to $16 million?

Ms Freeman : So the average value of a loan is just under $400,000.

Senator GALLACHER: So 42 is $16 million and you have 174 on the books?

Ms Freeman : No, 174 applications were received. They declined 76 of those applications.

Senator GALLACHER: I am not a doctor or accountant but that seems pretty close to the $70 million spent.

Ms Freeman : No, in terms of the loan funds approved, it is $16.69 million.

Senator GALLACHER: And if the $400,000 average is continued through the 174, we would be very close to $70 million, wouldn't we? Four sixteens are 64.

Ms Freeman : I cannot speak for what might happen.

Senator GALLACHER: I used to play darts.

ACTING CHAIR: He has done me in darts. I was still counting.

Mr Tucker : I think you have not quite got the way the process is working. The Victorians have received 174 applications for the funds. They have assessed those 174 and have determined that 42 are eligible to receive funding and another 76 are not eligible. So out of 174 they said 76 did not meet the criteria and will not be able to qualify for a loan.

ACTING CHAIR: So there is still another 60-odd?

Mr Tucker : There are still another 60 they are working through to see whether or not they qualify. It may not be all those 60 who qualify; it may be a lower number but they are still working through those.

Senator GALLACHER: And that is the first round of applications in Victoria?

Mr Tucker : The eligibility guidelines were agreed by respective Commonwealth government at the time so in the case of New South Wales and Queensland it was under the previous government. The guidelines for the states have since been agreed under the current government.

Senator SIEWERT: Are they, therefore, different?

Mr Tucker : There are some differences in that some of the loans, for example, in Western Australia and Tasmania are productivity enhancement loans, which was a—

Senator SIEWERT: So that is the only difference?

Mr Tucker : From memory.

Ms Freeman : The Western Australian government have their loan amount that is available, between $50,000 and $200,000. Again, that was at the request of the Western Australian government.

Mr Tucker : But that flexibility in terms of loan amount and/or productivity or debt reduction was always a facility of the scheme.

Senator SIEWERT: Yes, I appreciate that. So the only difference between the states and the guidelines is those that are productivity ones and those that are debt reduction?

Mr Tucker : Yes.

Senator SIEWERT: Thank you.

Senator O'SULLIVAN: I think the national picture is interesting and if we could get that on the record—

Ms Freeman : Certainly, Senator.

Senator O'SULLIVAN: Can we look at the stats in relation to Queensland and New South Wales. We do not have the secondary statistics. So that would be the number of approved applications—

ACTING CHAIR: Before we go any further, Senator Gallacher, have you finished on your calculation?

Senator GALLACHER: No. If we could just get the initial stats applications around the country, then if there are questions about who is coming next.

Ms Freeman : Would you like me to read through the rest of this?

Senator GALLACHER: I think we are at Victoria, so just follow on.

Ms Freeman : South Australia, as at the end of January, had received five applications, none of which have been approved. As I understand it, as at the end of January, Tasmania had yet to receive an application. Likewise in Western Australia, and the Northern Territory have only just commenced their process. They have just opened this week.

Mr Tucker : Mr Chairman, we could provide the secretariat with the actual table rather than having to read it all out.

Senator O'SULLIVAN: If you want to give me two more figures, I will not need the table.

Senator Colbeck: Can I just add for the assistance of the committee, there are time differences when the program started in various states and that may well impact on the application process and the approval process that flows from that.

Senator SIEWERT: Did they note on the table when they started?

Ms Freeman : We can certainly provide you with the dates of the programs.

Senator SIEWERT: I appreciate that but, looking at the table there, it is not there.

Ms Freeman : No, you will not find that. Just to be clear, a number of jurisdictions have just started this calendar year.

Senator SIEWERT: Thank you.

Senator Colbeck: So Western Australia would be—

Ms Freeman : The same—South Australia and Tasmania.

Senator Colbeck: So they were all started this calendar year and signed off this calendar year, so they are fairly early in their processes?

Senator GALLACHER: And the Northern Territory opened yesterday.

Senator SIEWERT: I saw the media release on that one.

ACTING CHAIR: I am just going to bring this to some form of order. I will just come back to Senator Gallacher, who had the call, and then we will move around the table. If there are questions to be asked on the same issue, put up your hand up and let us try and do it together. Then we can move on, because I am sure there is a lot more to get through.

Senator GALLACHER: I appreciate the information you have given us, but, Senator Colbeck, the parl sec, has just said that there are time differences with the opening of the scheme. So, I suppose, my question is: in respect of the reserve funds, which will be distributed on a needs basis, and given that some jurisdictions are moving quicker than others and may have had the scheme open longer than others, will they be in a beneficial position to get those reserve funds in front of other states. Or do you have a caveat?

Ms Freeman : The reserve funds are for the next financial year, 2014-2015, so I think we will have a clearer idea in a number of months of the demand in those other jurisdictions that started later.

Senator O'SULLIVAN: I better get parochial for Queensland or I will not get a lift home. Would it be fair to assume, Ms Freeman, that the first round would soak up the largest number of applications subject only to circumstances deteriorating or applicants becoming ineligible through progression of drought or something to that effect? So in the case of Queensland there were 104 applications in round 1. Would you anticipate round 2, 3 or 4—however this rolls out—that there ought to be a diminishing number, that anyone who can has made an application?

Ms Freeman : I would have to check with my colleague Ms Willock, but I do not think the 104 just applies to round 1. We may have to take that on notice, Senator.

Senator O'SULLIVAN: Well, whatever the figure; but, as we move forward, would you anticipate that there would be fewer applications?

Ms Willock : Senator, I can let you know that since the last formal reporting, which was 31 January, which was the 104 applications received, as Ms Freeman said, there have since been 18 new applications to the current date in Queensland.

Senator O'SULLIVAN: I do not want to make a complex question too simple, but one would anticipate that these applications will start to fall way by number unless circumstances such as the eligibility of an applicant who had not applied change for drought. One would assume that we are on a diminishing trajectory.

Mr Tucker : I think we would be testing our arm if we said that for a number of reasons. One is that we know from our information about the circumstances of the farmers in Queensland that there are many, many more whom we believe could be seriously considered for a loan who have not applied. We also know from anecdotal evidence that there has been some misunderstanding about the criteria of the loans. We have heard stories that some people think there is an asset test. We believe there is misinformation or misunderstanding about that. As you have also just alluded to, circumstances have declined for a number of producers in Queensland since the first loan period was opened. We are not sure exactly where the numbers will go in the future and we will have to wait to see how it pans out.

Senator O'SULLIVAN: To pick up on the thrust of the questions before: with states of higher populations, do you have any data that would suggest that there would be a higher number of applicants in the category because more people live in the geographic state, for example? Is that data known to you?

Ms Freeman : With average debt levels, if you like, and debt equity levels—I would have to check that—we would have a sense of what is happening across each jurisdiction. But I would agree with my colleague Mr Tucker that you would be chancing your arm to predict what the demand would be. I think a number of factors are driving the demand in each jurisdiction at any given time. Obviously, people think of the seasonal conditions as one, but I think that would not be the only reason why people would be interested in the loans.

Senator O'SULLIVAN: A final shot at the prize: 66 per cent of the national beef herders are in Queensland. They reside in that area that takes up about 70 per cent of the state, which has all been in drought. All other figures aside, would one anticipate that there is going to be a run on the bank out of Queensland by beef producers in terms of the number of applications?

Ms Freeman : We certainly know that the beef industry represents 56 per cent of the applicants received in Queensland to date. So, yes, they are the biggest category of industry applying for loans.

Senator O'SULLIVAN: Are you able to translate that figure for the applications across the nation? Are they beef?

Ms Freeman : Beef is certainly reflecting your stats. Beef is 56 per cent in Queensland and cattle and sheep are the major category in Victoria but a much lesser per cent; they are 22 per cent. Broadacre cropping and livestock—so mixed farming in New South Wales—is 42 per cent. There is nothing of note to report in the other jurisdictions. It is certainly reflecting the fact that where the interest in the loans has been so far has been the considerable interest by the beef industry in Queensland, to be sure.

Senator O'SULLIVAN: My only comment, Mr Chair, is that I think Queensland has been poorly done by here—but maybe that is a debate for another day.

ACTING CHAIR: And I think as a Queenslander you should run that line but you have also got an agriculture minister who used to live in Queensland, so you have done better than some of the others.

Senator BACK: On that topic, can you give us some indication as to what constitutes eligibility or ineligibility in this productivity enhancement requirement.

Mr Tucker : While Ms Freeman is finding the details, each of the loan guidelines and each of the material that is put out for applicants contains descriptions of eligible and ineligible activities.

Senator BACK: Rather than take the time now, could somebody source it. I understood you to say that Tasmania and Western Australia have got those criteria but the other states and the Territory do not?

Ms Freeman : Correct; at the decision of those state jurisdictions.

Senator BACK: So they are sort of open slather? Anyone can apply?

Ms Freeman : The Tasmanian government wish to have loans for debt restructuring and productivity enhancement. They are the only jurisdiction that has made that call to have both of those.

Senator BACK: Debt restructuring and productivity enhancement?

Ms Freeman : Debt restructuring and productivity enhancement. Western Australia wanted their loans to be purely for productivity enhancement. And the list of eligible and ineligible activities are in the program guidelines which we can provide you with.

Senator BACK: Would fertiliser constitute productivity enhancement?

Ms Freeman : I would have to double-check but, under the guidelines for the existing program, I would say no.

Senator BACK: But fuel would not.

Ms Freeman : No.

Senator BACK: Okay. I will wait to see those things.

Senator SIEWERT: You said fertiliser wouldn't—

Ms Freeman : Neither would.

Mr Tucker : Can I just make sure, Senator, that we have not left the wrong impression with you. There are two elements of the scheme. There are the productivity enhancement loans and the debt restructuring loans. The debt restructuring loans also have criteria and things which are eligible and ineligible. So they have their own criteria for those purposes.

Senator BACK: WA has both of those elements? You said that Tasmania did.

Mr Tucker : Tasmania does but not Western Australia. They have only productivity enhancement.

Senator BACK: Tasmania is the only state that has both debt restructuring and productivity enhancement.

Mr Tucker : Correct.

Senator BACK: Queensland has neither of those.

Mr Tucker : They have debt restructuring. Queensland, New South Wales, Victoria, South Australia and Northern Territory have debt restructuring only.

Senator BACK: Only?

ACTING CHAIR: On that same topic, Senator Gallacher?

Senator GALLACHER: The media reports the minister is seeking further funding for farmers due to the current drought crisis. Doesn't that sort of call into question why you have had $40 million in reserve—if we had to take your paperwork at face value—when that money can be used now and urgently to assist farmers?

Mr Tucker : The original farm finance scheme was not a drought scheme; it was based on the debt levels that were being experienced around the country. That is what the agreements are with the states. Obviously the government has the capacity to reallocate that $40 million depending on need, and there is no doubt with the deteriorating circumstances that some people's debt circumstances will also be deteriorating, so the government does have that capacity.

Senator GALLACHER: I understand your position. It was set up under the finance situation. But the minister is able to allocate that $40 million tomorrow, isn't he?

Mr Tucker : It is for 2014-15, so it is not for this budget year.

Senator GALLACHER: He could put that up as part of the drought relief. He could take it away from this process and spend it to assist farmers.

Mr Tucker : That is a matter for the government.

Senator GALLACHER: I think that is a 'yes'.

Senator Colbeck: No, it is a speculation on your part.

Senator GALLACHER: The minister wants some more money for farmers. There is $40 million in reserve here. It is his call to spend it. That is what I heard.

Senator Colbeck: It would be the government's call. It is a speculation on your part at this point in time, because there are at this point no further decisions on drought. You can speculate. That is your prerogative. If and when there are some decisions on drought we will be able to deal with it then

ACTING CHAIR: Colin Beddles has already tweeted that they are in there, locked down in the bunker talking about it now, so you never know. This is the last question in this area on this figure.

Senator GALLACHER: Is it the case that one of the imperatives of an applicant is to prove viability?

Ms Freeman : Correct.

Senator GALLACHER: I just have two simple questions that may be taken on notice. The first is: have you been asked to do any modelling in relation to these farm finance packages in the event that there is a change or a relaxation in some of the conditions in terms of eligibility or ineligibility?

Ms Freeman : There are three fundamental elements at a high level: that you can demonstrate long-term viability; that you can demonstrate a need for a loan—that is, you are not running at full equity and you can walk into a bank and get the money; and that you can pay it back. In a nutshell they are the core elements of the loan. They are the agreed conditions on which loans are provided.

Senator GALLACHER: Sure. But there are other exclusions, such as all farm assets and income from other streams that might prevent you. My question to you was: have you been asked to do any modelling in the event that there is more flexibility in terms of the eligibility of applicants—some of the prevailing exclusions removed, for example?

Ms Freeman : Just to be clear, it is not a matter of the income and asset tests we would have for our income support payments. It is basically: you are an eligible farm business; you meet the criteria that there is for a farm business—which I am happy to run through—but you can also demonstrate those three core criteria. We have focused on that. We have not done modelling—you are asking to see what would happen if—

Senator O'SULLIVAN: One of the eligibility criteria was soft, said somebody. You have answered my question. Thank you.

Senator FARRELL: I would like to now turn to the issue of the farm household allowance. It has been indicated by the Department of Prime Minister and Cabinet that there will be a farm household support bill in the autumn sitting. Is that your understanding?

Ms Anderson : Yes, that is correct.

Senator FARRELL: Okay. The purpose will be to establish new farm household allowance legislation?

Ms Anderson : That is correct.

Senator FARRELL: Do we know when the bill will be brought before the parliament?

Ms Anderson : At this stage, I am not sure what is on the public list. We would expect it in the coming week or two.

Senator FARRELL: Presumably it will come to the House of Representatives, will it?

Ms Anderson : That is correct.

Senator FARRELL: Can you tell us, if you can, how will the allowance and any changes to the assets test be made possible without that bill?

Mr Tucker : Can you just repeat the question please?

Senator FARRELL: How will the allowance and any changes to the assets test be made possible without this bill?

Mr Tucker : I think I have got your question right here. What we are talking about with the first part of your question which is: is the farm house allowance to be a legislative scheme?

Senator FARRELL: Correct.

Mr Tucker : Ms Anderson said that the government is developing and keeping its commitment in terms of introduction. Are you referring possibly to the current assistance scheme, the transitional farm family payment—

Senator FARRELL: Correct.

Mr Tucker : which has arrangements to it, and saying: how can those be adjusted before the legislation comes in for the new scheme?

Senator FARRELL: Yes, that is the question.

Mr Tucker : I just wanted to be very clear. Ms Anderson will probably do a better job in answering this than me, and I will pass to her in a minute, but the current transitional farm family payment scheme is an executive scheme, not a legislative scheme. The executive can change the settings. But Ms Anderson may want to say some more.

Ms Anderson : Yes, I think that is correct. Essentially, the legislative scheme obviously has to contain those things in legislation. The government could take a decision to change those things through the existing executive scheme as well.

Senator FARRELL: Thank you for explaining that. You will be aware that the Prime Minister has made a couple of announcements—I think, on 6 February 2014 and on 17 February 2014—that he was going to bring forward the household allowance legislation from the original proposal, which was 1 July this year, to the 1 March this year. Are you aware of those statements by the Prime Minister?

Mr Tucker : Yes.

Senator FARRELL: Have you provided a brief to the Prime Minister in respect of this issue?

Mr Tucker : We do not brief the Prime Minister. We certainly provide a briefing to our minister and we have worked with our colleagues in the Department of Prime Minister and Cabinet.

Senator FARRELL: So you have given a brief to Prime Minister and Cabinet in respect to this issue, have you?

Ms Anderson : We have provided information but not a brief.

Mr Tucker : It is not normal practice for us to provide a brief to another department.

Senator FARRELL: Did you do that via Minister Joyce, or did you do it directly?

ACTING CHAIR: Isn't a white paper being developed in the Prime Minister's office?

Senator FARRELL: I think there is. I think we heard something about that earlier today. They are doing a lot of work in that department.

ACTING CHAIR: Isn't PM&C developing a white paper? What was it?

Mr Tucker : The Department of the Prime Minister and Cabinet is running the agricultural competitiveness white paper process. That is correct.

ACTING CHAIR: But you do not brief the Prime Minister?

Mr Tucker : We do not brief the Prime Minister. We brief our minister. This is just our terminology. We do not brief another department. When we say that, we mean a formal briefing document. Of course we will provide information to another department, which in lay language may be considered a briefing, but we are talking about a formal briefing document.

ACTING CHAIR: Then it is up to them what they want to do with it? So they can take your advice or scrap it?

Mr Tucker : Yes, that is correct.

Senator FARRELL: You have provided information to Prime Minister and Cabinet about bringing forward the date of the assistance. Is that correct?

Ms Anderson : Yes—about how we may give effect to the comments you alluded to that the Prime Minister has made.

Senator FARRELL: Was that done before or after the Prime Minister made his statements?

Ms Anderson : It was done at various times. I would have to check the exact dates of when it went through, but it has been under discussion for a little while. I can provide that on notice.

Senator FARRELL: So the first comment by the Prime Minister was on 6 February. Do you think it was before or after that date that you provided your information?

Mr Tucker : We would have to check.

Senator FARRELL: How easy is that to check?

Mr Tucker : I do not know. It is probably the officers here who will have to check and while they are here they cannot check their own records in the office.

Senator FARRELL: Fair enough, but you will provide us with that information. If the information was not provided in a brief, how was the information brought forward to PM&C?

Ms Anderson : In a number of ways. There were phone conversations and meetings, as well as information prepared by our department that was shared with colleagues at the Department of the Prime Minister and Cabinet.

Senator GALLACHER: What is the difference between information provided to your colleagues there and a formal brief? Is there a stamp or something?

Ms Anderson : A formal brief is what you provide to your own minister. They may well have prepared formal briefs for their minister. What we would provide them is information to support that process, should they need it.

Senator FARRELL: So at this stage you cannot be sure whether you provided the information to PM&C before the Prime Minister made his statement or after the Prime Minister made his statement?

Ms Anderson : I would have to check.

Senator FARRELL: Normally, a brief would either be for action or for noting. There was no such formal information provided to the Prime Minister's office?

Mr Tucker : Not by this department. If the Prime Minister's department did that, you would have to ask that department.

Senator FARRELL: I am not asking them, I am just interested in what you have done. Do you know on which date the Prime Minister made his decision to bring forward the payments?

Ms Anderson : No. I should add that these matters are under ongoing consideration as well.

Senator FARRELL: But the decision has already been made, hasn't it?

Ms Anderson : The announcement has been made. In his 6 February statement the Prime Minister made the announcement that he will look at bringing forward the income support arrangements that were to apply from 1 July.

Senator FARRELL: I see. You are saying that he is only looking at it.

Ms Anderson : I am going from memory there, but those words are what is familiar to me—that the government would look at bring forward—

Senator FARRELL: So there is no definite decision to bring forward the date.

Ms Anderson : I think that the intention is obviously on the public record. I think that the details of how to give effect to that intention are still under consideration.

Senator FARRELL: But there is a question mark as to whether the allowance will be brought forward. Is that what you are saying?

Ms Anderson : I am saying it is under consideration.

Senator FARRELL: Obviously, one of the considerations that the government would want to bring into that final decision would be the cost of bringing it forward. Can you tell us how much that is?

Ms Anderson : No. Again, given it is a matter under consideration, it would depend on a number of factors.

Senator FARRELL: Like what?

Ms Anderson : What the settings were when they were being brought forward, when the settings would apply and to whom they would apply—all of those would affect the cost.

Senator FARRELL: You cannot do a simple translation and calculate what bringing the decision forward by that number of months would do to the calculations?

Ms Anderson : No.

Senator FARRELL: Somebody must be working on that as we speak, are they?

Ms Anderson : We are all at the table, Senator.

Senator FARRELL: There is nobody left to do any work on it?

Ms Anderson : Not for these few hours, no.

Senator FARRELL: Really, this is a very high-powered decision-making process, then. We are very privileged. I want to go on to a slightly different topic now. I started this morning by referring to an article by Sue Neales in The Australian entitled 'Farming feeds people: Barnaby Joyce plays the ‘moral’ card to swing cabinet'. The minister is using the moral card to swing Cabinet, according to Sue Neales. In that article, Mr Joyce wanted the government to offer an extra $380 million of cheap loans at highly discounted interest rates to farmers having trouble paying off commercial bank debt or making a profit, and that was intended to be on top of the $420 million Farm Finance loan package made available late last year. He said:

(Mr Abbott) has got the message first-hand from real people that this drought is causing real hardship; how well (that has impacted on the Prime Minister's views) we will see over the next week.

That is what he told The Australian. Yesterday, Mr Abbott refused to confirm that $700 million of cheap farm loans were under consideration. He said:

I am not going to comment on specific details of what might be decided ... There are two (drought) needs here: an immediate need for income for people to live on now, and a slightly more longer term (policy need) of money for businesses to restructure after the drought.

I have a number of questions in relation to those comments, if you can respond to them. Do we know how the minister determined that an extra $280 million was needed on top of the $420 million?

Mr Tucker : I think you are asking me to comment on things which the Prime Minister said that he was not prepared to comment on.

Senator FARRELL: No, but you have obviously had some discussions with the minister. Did you see the article where the minister referred to an extra $280 million?

Mr Tucker : Yes.

Senator FARRELL: Has he made it clear to you how he determined that that was the amount that was needed?

Dr Grimes : As Mr Tucker indicated, I have not discussed the article with the minister. Consistent with the position that was put by the Prime Minister, we are not able to comment on details here.

Senator FARRELL: I can understand why the Prime Minister cannot understand what the minister was saying, but I thought you might have some insight into that figure of $280 million. I mean, it is not $300 million; it is not a round figure. Do we have any clue as to how the minister came up with $280 million?

Dr Grimes : It is certainly not a matter that we can comment on.

Senator FARRELL: He has not indicated to anybody at the table how he has come up with that figure?

Dr Grimes : It is not a matter that we can comment on.

Senator GALLACHER: So you never got a brief from your department on it?

Dr Grimes : No. As the officers have indicated, we have been briefing our minister over recent weeks. There is no doubt about that. There are matters under consideration by the government. We are not able to make any comment on matters that are under consideration by the government at this stage.

Senator FARRELL: You cannot tell us whether or not the department recommended a figure of $280 million?

Dr Grimes : I can confirm that the department has been providing advice to the government. In fact we have heard quite a bit of evidence to that effect this evening. I cannot comment on any particulars at all.

Senator FARRELL: Have you have been providing him with information about extra relief for farmers?

Dr Grimes : We have been providing advice to the government, consistent with the statements that have been made by the Prime Minister. We do not have anything that we can add to that, this evening.

Senator FARRELL: Has there been any indication from the minister as to how he might divvy up that $280 million between the states?

Dr Grimes : Again, we are not in a position to comment on those matters.

Senator FARRELL: Do we know when the government intends to release its farm package?

Dr Grimes : Again, I am not in a position to be able to advise on that, this evening.

Senator SIEWERT: I would like to pick up on the household allowance. We were talking about income support. It will be a completely separate provision under income support, won't it? It is not Newstart that we are talking about?

Ms Anderson : Separate from the discussion about bringing forward or not income support arrangements, the legislated allowance is a separate stand-alone act. It will have its own criteria. It will sit within that legislation. It will pick up many of the social security provisions and so we would expect the rate of payment to be linked to the Newstart rate of payment, the income test and things like that, but there will be differences as well—some of which are still under consideration by government.

Senator SIEWERT: I will take the warning that is politely implied there. In terms of the rates, are we talking about the same as the Newstart rate?

Ms Anderson : In terms of the rate of payment, yes.

Mr Tucker : I think what Ms Anderson is saying is that there is still fine tuning going on and obviously once the bill comes into the parliament, then all the detail will be there. But you can sense our reluctance to be so definitive, because there is still fine tuning going on in terms of the finalisation of the bill.

Senator SIEWERT: I am try to establish if we are talking about a similar sort of payment. Obviously, the assets test is going to be different?

Ms Anderson : Again, that is under consideration by the government.

Senator SIEWERT: We are talking about a payment with the same rate as Newstart?

Ms Anderson : Yes, that is correct.

Senator SIEWERT: Presumably, the mutual obligations requirements will be different?

Ms Anderson : It is probably best that I do not confirm that until we finalise things.

Mr Tucker : What I can say is that in our consultations around this, in the very early days, with farming organisations, they had a very strong view that it was important to have some of those mutual obligation arrangements in there. Obviously, there are different circumstances for farmers, which we have been providing advice on.

Senator SIEWERT: In terms of the allocation of funding for this, which portfolio will it sit in?

Ms Anderson : It will be in the agriculture portfolio budget statement in terms of the payments to farmers. It is a line item in our PBS. As for the administration costs, the Department of Human Services will also receive some money through their portfolio budget statement as well, for the administration of payments.

Senator SIEWERT: There will be a separate line item allocated. Is this new money we are talking about?

Ms Anderson : What I can talk about is what was announced in the last budget, which was the $99.4 million figure that Ms Freeman mentioned earlier this evening. That contained a portion that was through the agriculture portfolio budget statement and a portion that was through the Department of Human Services. This financial year, there is an allocation of money for an information technology build this year so that the system can be built in order to deliver the allowance. Then there are obviously ongoing costs from 1 July as well.

Senator SIEWERT: For next year will it be the carryover from the previous budget or will there be a new allocation of money?

Ms Anderson : That is again a matter under consideration by the government. We would have to leave it there. I would add that it is a demand driven uncapped program, so estimates variations will occur from time to time that take account of changes in the conditions that may lead to an increased uptake. For example, we have always anticipated that a drought would lead to a higher uptake and therefore a higher expenditure under the program. That is something that will change from time to time.

Senator SIEWERT: Is it likely to be time limited or is this now a permanent provision?

Mr Tucker : I want to be clear on what your question is. When you say time limited, what do you mean?

Senator SIEWERT: Are we going to have an act that is for a certain period of time, or are we now putting this in place permanently?

Ms Anderson : The act envisages a permanent scheme—the payment itself.

Mr Tucker : In one to two weeks time this will all become clear. We are doing our best to assist, but some things we cannot be definitive on. Even if we took them on notice, we could not answer those questions until the bill was finalised and introduced to the parliament.

Senator SIEWERT: I take your point. I will try my luck. I have another couple of questions in this area that do not relate to these issues. We are putting in place now a permanent scheme that is not linked to what in the old days we would call 'exceptional circumstances' alone. I will note that the minister is now using those words again. It is not related to that. This is permanent, and once you meet a certain minimum income—

Mr Tucker : That is correct. There will be criteria. You are correct that it is not based on exceptional circumstances or any geographic indicator. It is based on the individual need of the particular family and their circumstances. And the circumstances for those needs go beyond drought. It could be whatever hardship has caused the family to be in that circumstance. This is a social security measure to assist farm families when they find themselves in those circumstances.

Senator SIEWERT: This question relates to the money that we previously discussed, the $7 million that came out of the Landcare money and went into the water program in Queensland. Is it here in adaptation or is it in NRM?

Mr Tucker : SRM would be the best place to ask the question.

Senator SIEWERT: In NRM even though it is still drought?

Mr Tucker : Perhaps try the question and we can confirm that that is the right place.

Senator SIEWERT: What I am trying to do is find out if the money has been spent and what it is being spent on?

Mr Tucker : The next division is the most appropriate place.

ACTING CHAIR: In that case, we will take our break.

Proceedings suspended from 20:59 to 21 : 14

ACTING CHAIR: In continuation, we have Senator Siewert.

Senator SIEWERT: Can I go back to this table on the debt reduction and productivity grant process. What is your time line for the finalisation of the applications you have already got in?

Mr Tucker : Are you speaking in general terms? Each loan delivery is delivered by a state delivery agency. They put out the applications, they put out the length of the round that it is for and they receive back applications.

Senator SIEWERT: You are not setting any deadlines on that?

Mr Tucker : We are not setting any deadlines. In our agreements with those state delivery agencies we have specified certain times that we think it needs to be open for and in some cases we have agreed to an opening date of those application rounds, but it is up to the delivery agency to work through the details of how they handle the applications and then assess them against the criteria.

Senator SIEWERT: The announcement that was made in the NT, I think yesterday, is part of this process. Is that correct?

Ms Freeman : That is correct.

Senator SIEWERT: Do they have debt reduction or productivity grants?

Ms Freeman : Debt. The maximum loan amount is $1 million.

Senator SIEWERT: Is that different because they are pastoral properties?

Ms Freeman : Yes.

Senator SIEWERT: Do they have different criteria, given that they are pastoral properties?

Ms Freeman : Fundamentally the elements are the same.

Senator SIEWERT: Sorry, I did not write down what the amount of money the NT government has. I apologise.

Ms Freeman : For the NT it is $15 million in 2013-14 and $15 million in 2014-15.

Senator BACK: I have questions regarding Regional Forest Agreements. The coalition's policy was for a strong and sustainable forest industry. In the context of Regional Forest Agreements, can you advise the committee as to what action is being taken to give effect to that policy statement with regard to long-term regional forestry survival?

Mr Tucker : There was an election commitment—I think that was what you were referring to in your question—for the continuation of the Regional Forest Agreements. We are currently preparing advice for the government to consider the means by which it will do that.

Senator BACK: What will be the length of those Regional Forestry Agreements?

Mr Tucker : The election commitment specified that they would be 20 year renewals on a rolling five-year renewal basis.

Senator BACK: Can you detail for us what your own findings are in where the priorities lie?

Mr Tucker : That will be a matter for the government to consider with that advice we are providing to the government.

Senator BACK: I understand that the forest industry advisory council was also a policy statement. Can you tell us where we are in progressing towards the establishment of a forest industry advisory council? Has that happened?

Mr Tucker : I am just considering advice at the moment on the structure and the membership of that and I will sign off on that shortly.

Senator BACK: Very good. Can I go to forest residues as a source of renewable energy. It was an area where we previously did not seem to be in concert with the rest of the world. What is the government policy regarding allowing forest residues to receive renewable energy credits?

Mr Tucker : There was a specific election commitment that is being undertaken by another department, but Mr McNamara may be able to give us the details of that particular department.

Ms Gaglia : There is a review that is going to be undertaken to the renewable energy target. The terms of reference have recently been released. That review will be undertaken by the Department of the Environment.

Senator BACK: So forest residues will be considered under that review process?

Ms Gaglia : It is part of the terms of reference, yes.

Senator BACK: When did it open for review? Do you know?

Ms Gaglia : The terms of reference have just been released.

Senator BACK: Would you happen to know what the consultation period is?

Ms Gaglia : No, I do not.

Senator BACK: But we can find out from the Department of Environment?

Mr Tucker : We can find that out for you and provide you with an answer on notice to that detail.

Senator BACK: My next questions are on sustainable resource management, Chairman, so there might be others who have other questions.

Senator GALLACHER: Dr Grimes, could you advise if your department has been talking to the Department of Human Services about the decision to bring forward the farm household allowance?

Dr Grimes : Yes, we have been talking to the Department of Human Services about matters under consideration by the government.

Senator GALLACHER: Specifically, in relation to the farm household allowance?

Dr Grimes : Specifically, the arrangements for the implementation of the farm household allowance, yes.

Senator GALLACHER: Can you advise the committee when you undertook those discussions?

Dr Grimes : They have been ongoing for quite some time. There have been discussions with the Department of Human Services on the implementation of those arrangements for some time.

Senator GALLACHER: Was it prior to 6 February?

Dr Grimes : If you are talking about the specific timing, I think the officers this evening have already indicated that in relation to the timing of provision of advice we would have to take that on notice to find the specific times in which we had discussions. We have certainly been undertaking discussions with the Department of Human Services.

Senator GALLACHER: Can you take that on notice?

Dr Grimes : We can take timing on notice, yes.

[21:22]

CHAIR: Dr Grimes, if we can now call sustainable resource management.

Senator FARRELL: Can you update the committee on the key work currently being undertaken, which will enhance the natural resource base on which the department's portfolio industries rely on?

Mr Thompson : We are undertaking a range of activities. We are finalising the previous Caring for our Country program and preparing for the implementation of the new National Landcare Program. In the agricultural space, it is aimed at assisting farmers and land managers and fisheries to improve their practices for sustainable management.

In a policy space, we provide a range of advice across government on agricultural implications of other programs which may impact on agriculture so we can ensure agriculture's perspectives are taken into account in mineral developments. We have just completed, with the R&D corporations and the states, a soil RD&E strategy, which will help prioritise research in the soil space right across the country, and then that can help inform our program delivery. In weeds and pests, we are working closely with the states on a consistent approach to management of weeds and pests in Australia across state borders, as well as supporting a review of the vertebrate pest plan and the Australian Weeds Strategy. They are some of the main things we are engaged in.

Senator SIEWERT: I wanted to go first to the issue I referred to before—the $7 million diverted to wells in Queensland. Is it correct that that money was sent straight to the Queensland government to administer, as part of their emergency water rebate for drought affected areas?

Mr Thompson : The money is being administered by Queensland under a national partnership agreement between the Commonwealth and Queensland, so it is being used in Queensland to augment an equivalent state program for improving water supply management on farms.

Senator SIEWERT: Which farms in particular?

Mr Thompson : Farms that are affected by drought.

Senator SIEWERT: Has that money already been sent?

Mr Thompson : No, it has not been sent. We quite recently finalised the national partnership agreement with Queensland and that has been signed. The formal process by which we sign off the money to Queensland, that all the requirements have been met, was completed very recently. We expect the money to go to Queensland on 7 March. It is a Treasury to Treasury transfer.

Mr Tucker : Mr Thompson could just correct me if I have not got this quite right, but Queensland, on the basis that they know the money is coming, is able to manage the cash flow with their own state money, knowing that our funds will be arriving at that time.

Senator SIEWERT: So what are the types of things that the money can be spent on as part of that partnership agreement?

Mr Thompson : The sorts of things they can spend it on are wells and bores, reticulating water from water supplies, they keep stock out of creeks and streams, purchase and delivery of pipes to reticulate water to parts of properties, troughs, pumps and those sorts of things. They must provide water that is useful for emergency animal welfare requirements.

Senator SIEWERT: Did you put any restrictions on the use of that money?

Mr Thompson : Not any particular restrictions, but—this is not covered by the guidelines; there were guidelines for the program that were approved—it does not cover things like expanding or building new dams, maintenance of existing infrastructure, or fodder costs, because they are separate activities, and it does not cover wages.

Senator SIEWERT: Over a period of time there has been a lot of money spent capping bores in the GAB. Is this money being spent putting new bores down in that area and are there any restrictions on the use of that money where that previous funding has been spent?

Mr Thompson : My understanding is the amount of money that is available for these activities would not be sufficient to put new bores into the Great Artesian Basin. It is being administered by Queensland; we have looked over it. My understanding is it is intended to be complementary to some of those activities which were about cleaning up old water supply schemes and capping those bores. It is not meant to be duplicative and nor is it intended to put a greater drain on the Great Artesian Basin.

Senator SIEWERT: But you do not have a condition in place to ensure that requirement?

Mr Thompson : I would have to take that on notice. I have not checked the guidelines, personally, for that.

Senator SIEWERT: If you could take that on notice that would be appreciated. I have some questions around Landcare and NRM in general. Last time we had a conversation you were still—and I understand from asking questions in environment last night—in the process of developing up the program, and I presume that I am not going to get any further here than I got yesterday in terms of understanding what that is going to be. However, if you remember last time we had this discussion about the name of the two programs, the overall Landcare program and then the Landcare program. Has that issue been resolved?

Mr Thompson : I am not familiar with that perspective on it but the overall program is to be known as the National Landcare Program and it will draw on a number of different appropriations. I think environment said the same thing yesterday: it will draw on work of NHT money—

Senator SIEWERT: I understand that.

Mr Thompson : and the Natural Resources Management (Financial Assistance) Act money. In the past, the money from that source had been called Landcare, but the advice we have been receiving from the community is that they saw all of this as Landcare and they were quite happy to call the whole thing Landcare.

Senator SIEWERT: That is one section of the community that is; there are other sections of the community that in fact are not. You are now rolling in all of those programs into Landcare, and it is in fact a misnomer. NHT in the past has not been Landcare.

Mr Thompson : In the past there was often a separate component called Landcare and some loose names of Landcare had been given to some appropriations. But the sorts of activities undertaken by Landcare groups and Landcare groups across the country had been supported not only by money from this portfolio's Natural Resources Management (Financial Assistance) Act but also from the NHT; for example, a lot of those community Landcare grants were funded from both portfolios.

Senator SIEWERT: Yes, I understand that. But you cannot say that all NRM groups and regional groups did was Landcare.

Dr Grimes : I think what Mr Thompson is indicating is the government's election commitment was to create an overarching National Landcare Program—that is, the program that we are currently in the process of working through implementation arrangements with the Department of the Environment.

Senator SIEWERT: Back to the future. Is the intention to merge the National Heritage Trust Advisory Council and the Australian Landcare Council? Is that to proceed?

Mr Thompson : That is being considered by government. No final decisions on that have yet been made that I can report on.

Senator SIEWERT: Is it expected that will be announced when you announce the new package?

Mr Thompson : It could be but, as I said, the government is still looking at some of these things and I would not be in a position to say whether it will or will not at this point in time.

Senator SIEWERT: Is it your understanding that legislative amendments will have to be made in that process?

Mr Thompson : Both the NHT Advisory Council and the Australian Landcare Council were established in legislation. Were they to be abolished, legislative change would be needed. Were they to both exist but operate as one committee rather than two or have joint members or something of that sort, that would not require legislative change. There has been cross membership of the NHT Advisory Council and the Australian Landcare Council in the past. It depends on where the government comes out. You could do an operational merger of those without legislative change. But abolishing them does require legislative change.

Senator SIEWERT: Am I correct in understanding, after the discussion we had last estimates, that the grants that were outstanding have now subsequently been—

Mr Thompson : In this portfolio the only outstanding grants were the Innovation Grants and they have all been announced and are in the process of being contracted.

Senator SIEWERT: All the NRM groups been notified of their successful applications. Have they all now received their funds?

Mr Thompson : They have all been receiving funds. As you are aware, they receive funds on a milestone basis. All the NRM bodies have been notified. They were notified last year and funds have been flowing to them.

Senator SIEWERT: In terms of the 25th anniversary, has there been any progress with the funding for that?

Mr Thompson : Yes, the government certainly recognises it is the 25th year of Landcare and a contract has been signed with Landcare Australia Limited to organise a national conference in September in Melbourne this year. Landcare Australia Limited will also be seeking corporate sponsorship for a whole range of things associated with the 25 years of Landcare and my understanding is a whole lot of community groups are also doing things associated with that.

Senator SIEWERT: And are the community groups coordinating with Landcare Australia Limited or is that being done separately?

Mr Thompson : Landcare Australia Limited coordinates with community groups in a whole range of ways. In terms of our contract for Landcare Australia Limited to manage the conference on our behalf, they have formed a steering committee which comprises representatives from the Commonwealth, themselves and community landcare networks and groups so they can maintain that linkage in a formal way.

Senator SIEWERT: I understand that Landcare Australia Limited also had the broader funding issues. Have they been funded?

Mr Thompson : Yes, they have been funded. That contract with them was finalised in early January.

Senator SIEWERT: How much was that for?

Mr Thompson : They have had two contracts: one is a million dollars per year from July 2013 to 2017; the other is $561,000 to run the National Landcare Conference this year.

Senator SIEWERT: Thank you. In terms of the election commitment of a million dollars, I think it was, to the National Landcare Network, has that been allocated or funded?

Mr Thompson : It has been notionally allocated. It is a commitment, and the government has said that those commitments will be met, but the arrangements and details of how that is to be paid, to whom et cetera are still being worked through as part of the overall program design.

Senator SIEWERT: Have staff in your section been lost under the voluntary redundancy program, and, if they have, how many?

Mr Thompson : It is a little bit complicated in our case because the Sustainable Resource Management Division in aggregate has gone up slightly this year because we have transferred in a few functions into the division. At this stage, we have not lost any staff under the voluntary redundancy program. There have been staff coming and going.

Senator SIEWERT: Yes, but the total number of FTEs?

Mr Thompson : The total number of FTEs from the beginning of the year to the end of the year has decreased by two.

Dr Grimes : Senator, it is worth noting that the voluntary redundancy program is underway as we speak. It has not been completed yet.

Senator SIEWERT: So there may be people that—

Dr Grimes : Indeed, there may well be people who receive voluntary redundancies through that process. We are going through a process of determining the best allocation relative to our skills across the department as we speak.

Senator SIEWERT: I may obviously be asking again in—

Dr Grimes : Sure, and it was for that reason I wanted to ensure you realise that we are actually in the process as we speak.

Senator BACK: The coalition's fisheries policy made reference to recognising OceanWatch as a natural resource management group. Can you explain the rationale and what the benefits have been or should be in making that move?

Mr Thompson : The history of natural resource management in Australia, particularly from this portfolio, has focused on terrestrial management and some years ago there were established 56 regional bodies across the country with the states to look at terrestrial natural resource management—water quality, vegetation and the like. Those bodies that approach the coast in some states were given some responsibility to go within the state's territorial seas but if they did anything they tended to look at estuaries and the like.

At the same time, in the fisheries world, a whole lot of steps had been taken in a policy way to improve resource management in the oceans and in fisheries, and funding had been given to OceanWatch on and off on a project by project basis to improve fisheries management, work on bycatch, work on coastal fisheries and fisheries in Commonwealth waters. Essentially, that election commitment was about saying there is a strip of land around Australia, both coastal waters and the Commonwealth EEZ, that is hard for a terrestrial natural resource management body to deal with. You are dealing with a different client base and a different constituency. In a sense, OceanWatch has been established as the body to coordinate and work with people in that area that are related to productive use of that land in the same way that a natural resource management body would do in a terrestrial space.

We are in the process now of contracting with OceanWatch for what they do and how they do it to address the priority issues in the marine environment. The things they are talking about are bycatch management in fisheries which they have done a lot of work in before, the interaction between recreational fishers and commercial fishers, estuarine management, coastal management and those sorts of things.

Senator BACK: Can you give us any indication of the number of commercial fishers with whom OceanWatch would be interacting to try to make these improvements?

Mr Thompson : I would have to take on notice the numbers, but compared to agriculture fisheries is a much smaller space. There would not be quite the same number but there are an awful lot of recreational fishers, like five or six million, and OceanWatch have run some very successful campaigns in coastal areas. I think one of them is called Loaves and Fishes where, on Good Friday, they get together the coastal fishers and recreational fishers in the area to make peace. They do interact with quite a few people. My understanding, having looked at some of their previous reports, is that in the ports that they work at, like Ulladulla or Port Lincoln or Devonport or Hobart, they probably work with almost all the fishing boats coming in and out of that port. They have got very good links into the fishing industry. Because there are not thousands of people and they do tend to focus into a handful of ports, OceanWatch can have a very high penetration rate with a relatively low staff base.

Senator BACK: Do we expect this to be an ongoing policy decision?

Mr Thompson : It has been funded on the same sort of basis as the regional natural resource management bodies and will be looked at with consistent funding. They will move from annual funding to longer term funding.

Senator BACK: I will move on to marine bioregional planning. The coalition went to the election committed to halting and reviewing the finalisation of the marine reserves. Can you tell me what steps if any have been taken to give effect to that policy and to commence that review process?

Mr Thompson : The first step that the government took was the draft management plans had been suspended allowing time for the review to commence. The review is being done jointly between the environment and agriculture portfolios, and Agriculture is particularly interested in ensuring that all stakeholders are represented. The review is going to have two major components—a scientific panel to look at the science supporting marine reserves, then region-specific bioregional advisory panels to facilitate and improve consultation with stakeholders. As I said earlier, the management plans have been suspended and it is now an opportunity for further science assessment to be done and for commercial and recreational fishers to engage in that process. At the present time there is no on-water change to current users, but The Department of the Environment has taken the lead on this. We are working with them. If there is more detail about that, I am not placed to go too much further than that.

Senator BACK: Can you tell me has there yet been the establishment of a scientific review panel by the two agencies or by the ministers?

Mr Thompson : The panels have not been put in place. They are still being established and worked through.

Senator Colbeck : Discussions about potential appointments between our officers are in the departments at the moment.

Senator BACK: You made the comment there that it is your department's intention that all stakeholders are represented. Do you mean at the review panel level or do you mean represented by way of the opportunity to consult?

Mr Thompson : We would expect the review panel, if it were a science panel, to have good science on it. At the bio regional advisory panel, again we would want good science, but some of the issues we would want to take into account are that there are people who actually understand how good consultation can take place. But the real opportunity for both commercial and recreational fishers to engage is during the public consultation process. They cannot all be on the expert panel.

Senator BACK: Constituents of mine have been bitterly disappointed. And these are often commercial fishing people in remote areas, who have been severely affected and very concerned by either not receiving information, not having the opportunity to consult or learning about actions or decisions taken that impact on them after they have been. I am not talking about people in highly populated areas. I want to know what actions will be taken to ensure that commercial and recreational fishing people—away from the major centres and away from access to internet and mobile phones et cetera—are going to have the opportunity to know what is going on or to know when the opportunities for their consultation et cetera will take place. How will that happen differently?

Mr Thompson : The detail of how the consultation will take place is one of the things that is not settled as yet, but the government has said that they want full and effective consultation. We have certainly also heard from stakeholders that they wanted the opportunity to be engaged by one means or another—whether it is face-to-face meetings or something else. In the other areas of natural resource management, we have actually had some success with engaging them via the internet in web consultations by bringing them together in a rural centre that does have satellite communications. That means they would not have to go to Perth. They could do that somewhere in the north-west if there are good communications. Looking at all those opportunities are things that will be important, but that has not been settled yet.

Senator BACK: Is it premature or are you able to tell me whether the boundaries will be the subject of review as part of this scientific review process?

Mr Thompson : I cannot give you an absolute answer on that yet. It is still being worked through as we work through the details of the arrangements. The terms of reference are not out there.

Senator BACK: I will go on to illegal foreign fishing. Obviously, in the context of a competitive and sustainable fishery sector for Australia, can you tell me how many regional fisheries management organisations around the world have Australia as a member?

Mr Thompson : I can tell you that.

Senator BACK: If you cannot now, you can take it on notice.

Mr Thompson : I can actually tell you. We are a member of the Commission for the Conservation of Southern Bluefin Tuna, the Indian Ocean Tuna Commission, the Western and Central Pacific Fisheries Commission, the South Pacific Regional Fisheries Management Organisation, the Indian Ocean Tuna Commission, the Network of Aquaculture Centres in the Asia-Pacific and the Southern Indian Ocean Fisheries Agreement—when it is finalised, as we are in the process of forming that one. We are also, with Indonesia, foundation members of what is called the Regional Plan of Action on Illegal Fishing in and around South-East Asia.

Senator BACK: One that you did mention I am keen to learn some more about—that is, the Southern Indian Ocean Fisheries Agreement. That is actually being formulated at the moment, is it?

Mr Neil : We have acceded to the treaty and the Southern Indian Ocean Fisheries Agreement is in force now. We convened a meeting late last year of the signatories and we put forward draft protocols for the operation of an organisation. They are now being considered by the other signatories. The intention is to meet again at that stage. Each of the members has been tasked with different parts of an exercise to bring about an agreement, so that we can have a functioning organisation with a secretariat, and agreed rules of procedure and all the processes we need for compliance monitoring, including, of course, addressing IUU fishing.

Senator BACK: Did I hear you say that Australia convened it, in which case, is Australia taking a leadership role in it?

Mr Neil : The meeting would not have occurred without us, and it was our second attempt. We finally got the EU to agree to participate in a meeting in Australia. We were prepared to go elsewhere, but we had twice offered a venue in Australia to bring the meeting together. On the second occasion—I am not blaming anybody—we got agreement for everybody to participate in Australia. We are now optimistic there is a will to proceed.

Senator BACK: If it is not a long exhaustive list are you able to tell us what countries are signatories to this fisheries agreement.

Mr Neil : The EU, France, Australia, Seychelles, Mauritius, and there may be one more.

Senator BACK: South American countries?

Mr Neil : No, because it is southern Indian Ocean. Japan and Korea are possible members. The Cook Islands is the other member.

Senator BACK: Cook Island is after the southern Indian Ocean?

Mr Neil : Yes, they have a boat that fishes down there. New Zealand has a very special interest, because they know the boat very well, but it is flagged to the Cook Islands.

Senator BACK: Very good! You were saying in fact that the roles for different countries have been divided up, but presumably the combatting of illegal fishing is the primary purpose of the bodies coming together under this agreement?

Mr Thompson : These bodies come together for a range of purposes. A lot of it is about managing the fishery stocks. But in doing that they make it easier for people to determine who is legal and who is illegal. By having a southern Indian Ocean one, for example, if you are a member of that and you are registering a catch and everything, as other organisations do, you are a legal fisherman. If you are outside of that you are an illegal fisherman. So it is the cooperative arrangements of the southern Indian Ocean, which includes France and the EU. But this morning, I think, AFMA outlined how we work with France on combatting illegal fishing in the southern Indian Ocean. So, around some of these meetings some of the informal discussions about illegal fishing can be had, which maintains our relationship with France.

I should also add that we are also a member of the Pacific Islands Forum Fisheries Agency, which operates in the islands of the South and Central Pacific.

Senator BACK: I have one other area to discuss in SRM, and that is pests and wild dogs. We had a brief discussion today with Mr Merriman from AWI. I am going to ask you who has primary responsibility in pests and wild dog management, except to preface, as I am sure Senator Siewert and Senator Sterle would know, that in our goldfields pastoral areas now sheep have been completely eaten out. A lot of people have had to go away from breeding cattle, because the calves are being eaten as they are being born. In a meeting in January last year I asked a group of pastoralists what is happening with native animals, which caused them all to look at each other and say that they could not recall the last time they saw any kangaroos on the station. On the wild dog issue, I know it is severe in eastern states as well, but they now are drifting in a south-easterly direction into our marginal agricultural areas. So it has really become an issue of major proportions. In fact if we do not get on top of it in the goldfields areas of Western Australia we will not have a livestock industry in the goldfields.

Mr Thompson : The primary responsibility for wild dog management, as with other established weeds and pests, is with the states. They have a range of programs to address wild dog management. The Commonwealth helps in a number of areas. You heard the efforts that Australian Wool Innovation have been putting into dog management—nearly $3 million a year. The Commonwealth helps in the area of coordination, research or facilitation. The Commonwealth—not this portfolio but the industry portfolio—has provided $19.7million over five years for the Invasive Animals Cooperative Research Centre, who have been developing new ways of addressing wild dogs, such as new baits—the sorts of baits that only affect a big dog and will not go off if taken by a small animal.

There are other bits of research. ABARES has been doing research from a range of funding sources on wild dogs. It has recently done the one on the social impact assessment of dogs. They are contributing in that area. The Commonwealth has been working with all participants in the wool industry on a national wild dog action plan to assist in a coordinated way to address wild dogs. Within our programs wild dog management has been eligible for assistance under the programs, where it has been strategic. The government's election commitment is to expand the guidelines for future Landcare programs to allow explicitly for projects to manage wild dogs. That commitment will be being taken into account in the design of new programs.

Senator BACK: Speaking of pests leads us to camels. I imagine the funding for the camel reduction program is probably now exhausted, is it? The corollary to that question is: are we back up to the number of camels we had before it started, or have they increased beyond that?

[Unidentified Speaker]: You missed the fun last time, Senator Back!

Senator SIEWERT: Let's not go there again!

Senator BACK: If I had have known I would have tuned in!

Senator EDWARDS: I can help the senator. We now have only 300,000 or 400,000 and not 1.1 million. We only found that out nearly four years into the project.

Senator BACK: We were counting the legs and multiplying by four!

Senator EDWARDS: I have not said a word, you will be happy to know!

Mr Thompson : The previous project, which comes under Caring for our Country, has concluded.

Senator BACK: Do we actually believe there has been any reduction in feral camel numbers, or not?

Mr Thompson : We believe there has been a reduction in feral camel numbers. We also believe there has been a reduction in the density of feral camels around the sensitive sites. The original number for camels, as Senator Edwards said, was around 900,000 to one million. That was done on some estimates on limited data at the time. As the program has been completed, the estimates have been revised downwards.

Senator BACK: Dramatically.

Mr Thompson : Yes, dramatically. After we have counted camels and killed something like 162,000, we now believe there are about 300,000 camels left in the wild.

Senator EDWARDS: Killed 160—apparently.

Senator BACK: It wasn't a desktop calculation? Thank you for that.

Senator O'SULLIVAN: What is the importance of Landcare in the delivery of natural resource management outcomes?

Mr Thompson : The role of Landcare in natural resource management outcomes has been the same since the program commenced in 1990, and that is about engaging local communities to address their own problems and empowering communities to look at problems and solutions. In agricultural areas all the evidence suggests that many farmers learn best from communities and other farmers in their district they can look at and copy from, and learn from each other. So it is about community led solutions, which are both efficient and enduring.

Senator O'SULLIVAN: Can you provide information—and this may be covered—in relation to the Landcare Innovation Grants? I was out of the room, and I came in on the tail end of something.

Mr Thompson : Yes, they were approved and announced on 17 December, and we are now in the process of finalising contracts with all recipients. Thirty-one Innovation Grants were approved, worth around $19.9 million.

Senator O'SULLIVAN: During the election the government announced—and, again, this may have been at the tail end of the question I came in on—that it was combining the Landcare and Caring for our Country programs. Can you please give the committee an update on the program and how it is going?

Mr Thompson : We did that a little bit earlier. But, in summary, funding programs out of appropriations for the Natural Resources Management (Financial Assistance) Act and Working on Country are being brought together under a common approach to be known as the National Landcare Program. The arrangements for that are still being worked through.

Senator O'SULLIVAN: Are you familiar with the World Wide Fund for Nature?

Mr Thompson : Yes.

Senator O'SULLIVAN: Are you up to date on a statement by the multinational restaurant McDonalds indicating that in concert with the World Wide Fund they intend to implement policy that by 2016 they will buy only verified sustainable beef?

Mr Thompson : Yes.

Senator O'SULLIVAN: Are you in any position to help me understand what 'verified sustainable beef' is?

Mr Thompson : In a simple sense, no. McDonalds have indicated that they want to have verified sustainable beef, and my understanding is that they say they want to work with WWF and industry over the next couple of years to define what that is. Across the world there have been a range of industries and a range of beef industries and agricultural industries that have looked at what constitutes sustainable production. There are a range of certification-type activities. Some of them go to things like emission of pollutants, impact off site, impacts on biodiversity, maintenance of ground cover or maintenance of good-quality soil, profitability, innovation in the industry—there are a whole range of different ones, depending on the purpose. McDonalds had one in Europe some years back, which was about greenhouse impacts, biodiversity impacts, profitability—because they included profitability as part of sustainability—and innovation. They wanted industries that were capable of changing to manage the problems at the time. We do not know which way McDonalds are going yet, but they have indicated that they will be engaging with industry and WWF and others, and they may speak to us as part of the process.

Senator O'SULLIVAN: Would you agree that most of those categories of consideration that you mentioned there have already been the subject of active and in some instances quite intense studies, to the point where they have been implemented, and best practice in those areas is already in existence for producers?

Mr Thompson : In quite a number of cases there are, if we use the beef industry in Queensland as an example, we have some practices as part of our reef management program relating to ground cover and the like which the beef industry is adopting in terms of protecting the reef. They are working on an improved best management practice in Queensland. The difference is, though, that they are the sorts of things for a particular purpose. McDonalds are talking about a commercial arrangement, and the government cannot control what they do for commercial purposes.

Senator O'SULLIVAN: I understand that, but in a sector that is almost regulated to its knees in some areas, would you share a concern? I know that the private sector, through marketing techniques, regulates certain engagement with producers in the supply chain. But would it be of concern? Perhaps it is not a question you can answer.

Mr Thompson : In terms of certification schemes, I have worked in the fisheries space as well, and there are certification schemes there. Woolworths and Coles have various procedures operating across their supply chains as well for environment and other things. But we would get concerned if these sorts of systems became particularly onerous on producers and if the industry is not taking into account the things that are already in place. In the fisheries space we are very keen that they actually draw on standard data that is available from ABARES's stock and status reports, for example, so industry does not have to do that twice. We would be concerned if they were picking up standards or certification that may apply in Europe that actually do not work here because of the different environment there, or different priorities. So, we are quite concerned that industry actually engages with these people on this and that the company is fully aware of it. But at the end of the day it is a market decision and they have to make their own choices, but we do engage with them to ensure that they are aware of whatever information we have that is available—that they are aware of the schemes and systems that farmers may have in place. And we would encourage them to be voluntary and for industry to get in there and try to make sure that they actually do make sense and work for them.

Senator O'SULLIVAN: Have you seen any material? Have you seen a draft along the lines of 'This is where we want to go' and 'This is what our thinking it' in relation to what they are planning?

Mr Thompson : Not in relation to the McDonalds one. There was in Queensland some discussion some years ago with WWF about a cattle environmental management system, and we had seem some material on that, but that was three or four years ago. We have seen nothing on the current proposals.

Senator O'SULLIVAN: I have one further question. With respect to water, following on from some questions earlier—and I have only very sketchy details of this—has there been some work done, or is there some work underway, that will help producers establish a behavioural pattern of livestock, in particular cattle and sheep, with respect to their movement behaviour during a typical day relative to where they water?

Mr Thompson : I am not familiar with any particular programs in that area, but animal behaviour on extensive pastoral properties and watering points has been the subject of research in the rangelands over many years, because in many of those places watering points are used to manage the stock, and the careful placement of watering points can make better use of country and avoid erosion or degradation of country if the watering point is—

Senator O'SULLIVAN: My question is probably a bit more specific. Do you know of any study that has established that livestock will not travel further than a particular distance from a watering point?

Mr Thompson : I am not familiar with the particular studies, but I am aware that significant studies have been done about different livestock on different sorts of feed and how far they will travel from water over a day. I believe there is work on that. I would have to take on notice that detail.

Senator O'SULLIVAN: Would you do that?

Mr Thompson : Yes.

Senator O'SULLIVAN: I just have a comment as I close. Some mapping data was shown to me that, if it is accurate—and I think one of the big pastoral houses has been involved in the trial—would change my view of the patterns of what cattle do in a 24-hour period, based on my experiences.

Mr Thompson : But we will have to take that on notice. I understand that there is some research around, but I am not familiar with the details of it.

Mr Tucker : I recall seeing something like that as well, Senator, but you could also check with bodies such as Meat and Livestock Australia, who may also have commissioned some work.

CHAIR: Before I close down the hearing officially, I want to take this opportunity to present a special award tonight for the most painfully drawn-out, pizzling answer I have ever heard. Mr Glyde, congratulations! You did my head in! And no-one has done that before. I know I have a short span of attention, but boy oh boy, you had me, mate! That was on Senator Rhiannon's question on what constitutes raw meat. Gee whiz; well done.

Senator EDWARDS: We will call that a kangaroo episode!

CHAIR: Let us hope it does not come up in the May budget estimates! On that, Minister, thank you for your attendance today, and Dr Grimes and the staff and the mob from the department. Dr Thompson, what a brilliant effort from you and your crew. Thank you very much.

Committee adjourned at 22 : 09