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Economics Legislation Committee
Department of Industry, Innovation and Science

Department of Industry, Innovation and Science


CHAIR: I was going to say 'good morning', but I think we've just tipped over into afternoon. The committee will now examine the Industry, Innovation and Science Portfolio with questions for the department. The hearing will then follow the order as set out in the circulated program. I welcome the Minister for Resources and Northern Australia, Senator the Hon. Matthew Canavan, and also officers of the department. Minister or Dr Smith, do you have an opening statement for the committee?

Dr Smith : I do not.

Senator Canavan: I do not.

CHAIR: I might defer the government's questions to Senator Sinodinos.

Senator SINODINOS: I want to begin by asking about this, and I think it's appropriate to ask this of the department: there's been a lot of action on the women in STEM front, and I just want to get an update on where those initiatives were at, including things like SAGE. Is it appropriate to ask the department about that?

Dr Smith : Yes, it is, Senator. As you are aware, we have a number of actions on women in STEM, beginning with the National Innovation and Science Agenda in 2015, followed by measures that came through in the recent budget as well as work that is currently ongoing. I'm happy to ask one of my colleagues, Dr Mitchell, to take you through that.

Dr Mitchell : Yes, the government is indeed committed to increasing participation of girls and women in STEM studies and careers, and it's crucial that we nurture and tap into the entire pool of STEM talent in our population to support a more innovative, inclusive and prosperous economy. This is reflected in the 2018-19 budget, where the government committed over $4.5 million over four years to support long-term strategic approaches to encourage more women and girls to pursue STEM education and careers. This work has included developing the inaugural Women in STEM strategy; support to the sector to develop the decadal plan; and support to develop a Girls in STEM Toolkit to really open up the eyes of school-age girls to the exciting careers that can be there for them in STEM.

It has also included support for the inaugural Women in STEM ambassador. Professor Lisa Harvey-Smith was appointed as the inaugural Women in STEM Ambassador, and she has already been doing a great deal of work in her role even though she has just recently taken it up. Professor Harvey-Smith has completed a number of media engagements in her role. These have included an exclusive write-up in The Australian; co-hosting the Prime Minister's Prizes for Science late last year; and an interview with ABC News Breakfast and ABC radio. She also attended the meeting of the women's advisory roundtable in November last year and has met with a large number of key government stakeholders. Professor Harvey-Smith has recorded a number of promotional videos, including for the 2019 Prime Minister's Prizes for Science and one for the International Day of Women and Girls in Science. This video was shared on our Twitter account and it is the strongest-performing post ever.

On the International Day of Women and Girls in Science, on 11 February, Professor Harvey-Smith attended the University of Tasmania outreach program with over 200 girls from years 3 to 9. She spoke on ABC Radio and Channel 7 News on the importance of young girls meeting real women in STEM and posted on social media throughout the day. Professor Harvey-Smith and her fellow astrophysicist, Associate Professor Alan Duffy, posted a number of video exchanges on social media about the importance of the day which had nearly 2½ thousand views. On International Women's Day, Professor Harvey-Smith will be a panellist at an International Women's Day breakfast in Melbourne hosted by the Australian British Chamber of Commerce. She will also discuss her new ambassador role, how she has overcome challenges and achieved her goals, and the many, many positive aspects of having a career in STEM.

The support in the 2018-19 budget builds on the $13 million that came through the National Innovation and Science Agenda from 2016 to 2019-20. That's $13 million, as I said, for the following measures: the Male Champions of Change; the Women in STEM and Entrepreneurship grants program, which includes the Superstars of STEM, which is a fantastic initiative; and the Science in Australia Gender Equity project, which you mentioned, Senator. You asked particularly about SAGE. There was a valuation done last year and it found that it was already having a range of positive impacts. These positive impacts include: gender equity within the participating institutions, increased career satisfaction and opportunities, improved working practices to support career progression, increased visibility of women in science, and an increased proportion of women in STEM departments. Further to this work, the department is also doing a great deal of work to increase the number of female scientists, innovators and teachers recognised through the Prime Minister's Prizes for Science in all categories and has taken a range of steps to address unconscious bias and gendered language in the guidelines—all around further demonstration of the government's commitment to increasing girls and women in STEM. Together, these initiatives are encouraging—via the government—more girls and women to pursue STEM studies and careers and is ensuring that they are supported to pursue the rewarding career paths and build workplaces that appreciate connection between diversity of talent, skills and background to increase productivity.

Senator SINODINOS: When is the decadal plan for women in science due to be delivered?

M r s Urquhart : I was speaking with the academy today. We're working very closely with them on their draft decadal plan, as are many other passionate people in the sector. They have an expert working group that is very actively involved. There is a draft being finalised in coming weeks. The academy is intending to launch that decadal plan on 22 March.

Senator SINODINOS: Has anything in particular held it up? Are they subject to conflicting work requirements?

M r s Urquhart : Not that I'm aware of, Senator. In fact, as I said, they have had pretty enthusiastic engagement from the sector. Their expert working group includes the Women in STEM Ambassador, Lisa Harvey-Smith and other eminent women across science, technology, engineering and mathematics. The Academy of Technological Sciences and Engineering, although its name has changed—it's actually the Academy of Technology and Engineering—has been very involved obviously because it, in particular, brings an engineering and business industry perspective. Also, I'm aware of engagement by the Academy of Science with what you might call 'critical friends' across the sector. Those are significant women, deans of science and engineering in various institutions, and significant academics in mathematics who are very involved in reviewing the draft and working with the academy.

Senator SINODINOS: Going back to SAGE, is there any plan to expand the take-up within higher research institutions?

M r s Urquhart : You are obviously asking about research organisations participating in the Science in Australia Gender Equity program?

Senator SINODINOS: Yes.

M r s Urquhart : Since the start of the pilot in 2016, there have been 44 research organisations participating and actively working to implement policies and practices to address barriers that adversely affect women's career progress as scientists in academia. Examples of that include improvements in parental leave policies and entitlements, new support programs, funding schemes for staff with carer responsibilities, expanded on-campus childcare places and women-only recruitment processes for positions and disciplines where they're underrepresented. Of those 44 participating organisations, 15 of those were awarded inaugural SAGE bronze awards in December. They were the first cohort recognised with a bronze award. There are two further cohorts in the system. I should note that ANSTO and CSIRO were among the 15 in the first cohort. The second cohort are expected to submit applications for bronze in March, and the third cohort in July. It's worth noting for the portfolio that the Institute of Marine Science and Geoscience Australia are members of cohort 3, and they're expecting to submit applications in July.

Senator SINODINOS: Okay, very good.

Senator KIM CARR: Can I turn to another topic: the issue of complementary medicines. Senator Canavan, you might be needed for this. This is a matter I have raised in previous estimates. The department has responded to questions on notice S1-1 and S1-2. I sought advice from you as to when you were first made aware of the problems that we're having with the complementary medicines issue and the use of the Australian Made logo. It transpires that this is a matter that has been before the department for nearly two years. The point that I raised with you, Mr Lawson, was about why the department couldn't seek to resolve the difficulties which had obviously come about from unintended consequences of the changes to the use of the Australian Made logo and a result of the ACCC's interpretation of legislation that had been carried by this parliament. The ACCC chair had emphatically stated on numerous occasions that it was not a matter for the ACCC to interpret the guidelines but to actually act within them as they were written. You will recall I asked why this matter couldn't be resolved by regulation. Perhaps you could confirm my reading of your answer to my question. I asked why this matter couldn't be dealt with through regulation rather than a complicated legislative response to correct an administrative error in the legislation. I asked why regulations couldn't be deployed to sort this out. You confirmed my proposition that subsection 255(3) provides a mechanism by which regulations could be used. Is that correct?

Mr Squire : Yes, that's correct.

Senator KIM CARR: That is, particular classes of goods could qualify for 'safe harbour' defences. My question to you now, Mr Lawson—because you were the one who answered last time and I think you're the most senior officer on this—is: has there been advice to government to actually do that?

Mr Lawson : I'll ask my colleague to take you through the details of what's been happening. As we have indicated, the government has commissioned a task force to look at that.

Senator KIM CARR: I'll come to the task force. That's not my question. My question is: has the department recommended a course of action to the government—

Senator Canavan: Chair, and through you to Senator Carr, I think that's starting to get into a question of policy, particularly around the recommended path, but you're free to ask about advice that may have been provided.

Senator KIM CARR: My point you has been, all along, that this matter could be sorted out quite smartly by way of regulation. The department has now confirmed that that is a correct position—again today. My point to you now is: why hasn't that happened?

Senator Canavan: That's again a policy matter, sorry, Chair.

Senator KIM CARR: Then, Minister, if it's a policy matter perhaps you can enlighten me. Why has that not happened?

Senator Canavan: As Mr Lawson was pointing out, the government has announced and established a task force to investigate this issue. We are consulting in a constructive way with the industry affected here. You've jumped from asking a technical question over whether something could happen to a normative statement that it should. As I think I discussed in brief last time, we want to ensure, of course, that any use of the Australian Made logo is done in a way that's robust and defends the integrity of ensuring that such products are indeed Australian made.

Senator KIM CARR: Minister, why does the task force that you've placed some emphasis upon not actually have, as part of its terms of reference, consideration of regulatory change?

Senator Canavan: My understanding is that the task force has a broad terms of reference, and I'm not aware of—

Senator KIM CARR: I've got the terms of reference here. I can't see any reference to regulation.

Senator Canavan: What I was going to come to is that I'm not aware of the terms of reference limiting the task force in that way. As you know, Senator Carr, I'm not the responsible minister, but my understanding is that the minister's view on this matter is very open-minded and engaged in a constructive way on how we might tackle this situation.

Mr Squire : The task force is open in terms of examining the particular claims that have been made by the complementary medicines industry.

Senator KIM CARR: The industry may have another set of options to put you. I'm putting to you the question of regulations being a method to resolve this matter. You have confirmed that that is a viable solution. I want to know why that has not been put as part of the task force terms of reference.

Mr Squire : I draw your attention to point No. 5 in the scope, which says, 'Identify appropriate next steps for responding to the sector's concerns.' My reading of that is that it means that it doesn't exclude or preclude regulation or legislation changes if that is appropriate.

Senator KIM CARR: How long does it take before we actually see a factory close? Is that what drives this issue? Do we have to see the detrimental effects of this matter before the government actually does anything?

Mr Squire : The work of the task force, including meeting with industry and representations of industry, has demonstrated that this issue is more complicated and more difficult than the claims that may have been made. For example, two of the majority exporters, Blackmores and Swisse, have informed the task force that they don't use the logo on their export products and have enjoyed considerable success overseas. Also, the committee heard evidence this morning from the ACCC that it's not black and white that all complementary products are unable to use the logo. Indeed, evidence from the ACCC confirmed the view of the relevant industry association that simple encapsulation is not considered by the industry association as qualifying for a 'made in Australia' claim. So our research and exploration with the industry to date is starting to unpack this issue in a lot more detail. We've also engaged Colmar Brunton to undertake consumer research, which has indicated that consumers place a very high value on the Australian Made, Australian Grown logo and expect that products carrying that logo are 100 per cent Australian made and have 100 per cent Australian content.

Senator KIM CARR: You know that's not right, don't you?

Mr Squire : That's a greater expectation than what the current use of the logo—

Senator KIM CARR: What the law requires—

Mr Squire : Correct.

Senator KIM CARR: and has ever demanded or has ever operated on. So why would you possibly say that, Mr Squire?

Mr Squire : Because it's a fact. That's what the consumer research is showing.

Senator KIM CARR: You can state it's a fact, but it's completely irrelevant to this particular situation.

Mr Squire : I think it demonstrates that this is an issue that the department has taken very seriously, as has the government, in establishing the task force. We've met with industry. We've commissioned consumer research. We've commissioned an industry survey, undertaken by our department, and that research is showing that this issue is not as clear-cut as some may have—

Senator KIM CARR: Mr Squire, you were first contacted about this matter in August 2017. In that time, you've got the mirror out and you've had a look into it. That's what you've just said to us: you've had a look into it. You've done absolutely nothing about it. Is that not the case?

Mr Squire : I don't accept that.

Senator KIM CARR: What have you actually done again? You've had a survey. You've done some research. What have you actually done?

Senator Canavan: I'm happy for the officials to contribute as well, but, Senator Carr, you're again straying into areas of policy, given that you're asking the officials to make decisions. The government has heard these issues. It's responded with the establishment of the task force. As the official has indicated, this matter is perhaps not as clear-cut as you're putting forward, but we remain constructively engaged with the industry to ensure we get the appropriate outcomes and balance needed to maintain the integrity of the Australian Made framework and system, as well as to assist Australian manufacturing and opportunities in this country.

Senator KIM CARR: Is it the case that the department is actually looking at this as if it were another food product?

Mr Squire : No, that's not correct.

CHAIR: Senator Carr, I'm conscious that we're going to break for lunch in just a few minutes and Senator Sinodinos has a funeral to go to, so he won't be coming back immediately after the break. He has a couple of questions he would like to ask the department before the lunch break.

Senator KIM CARR: All right. Then we'll have to come back to this issue after the break.

Senator SINODINOS: I want to follow up on one of the initiatives from a couple of years ago: our becoming involved in the European Southern Observatory, with a happy signing ceremony and all sorts of other bells and whistles that I've been following on Twitter. There seems to be a bit of progress going on, but I thought I'd just get an official view about the progress on that initiative.

Ms Forsyth : Thanks for your question. Things are going really well. The department and the optical astronomy community have been working really closely together to implement the budget measure Maintaining Australia's Optical Astronomy Capability, and this work has really paid off. A consortium, led by Macquarie University, has established the new Australian Astronomical Optics, or AAO. It's a national industry focused optical instrumentation capability which is helping position Australia for the era of global astronomy. The AAO is this week hosting the 2019 Elizabeth and Frederick White Research Conference. It's a prestigious joint event organised by Australia and the European Southern Observatory. It's attracting over 200 national and international astronomers to Australia. It will share insights and stimulate research collaboration.

The new AAO has successfully bid for a European Southern Observatory research project to design an adaptive optic system called MAVIS for the European Southern Observatory Very Large Telescope. When completed in 2025, MAVIS will enable the telescope to produce images three times sharper than any other telescope, with a wider and more sensitive view of the universe than ever before, creating huge scientific benefits for Australia and our astronomers.

The ANU is managing the day-to-day operations of the Anglo-Australian Telescope, which contributes to Australian astronomers making new discoveries in collaboration with the European Southern Observatory's Very Large Telescope. Statistics from the European Southern Observatory show strong demand from Australian astronomers for access to the European Southern Observatory's telescopes at La Silla and Paranal observatories, with 87 proposals for 3,000 observing hours in 2018-19. Australian-led proposals secured 633 hours in total, with 439 of these on European Southern Observatory's Very Large Telescope, the world's most advanced eight-metre telescope, during 2018-19, which is an excellent result so early in Australia's partnership with the European Southern Observatory.

Senator SINODINOS: To some this might sound a bit abstruse, that we are putting this money into a branch of astronomy, but from a national point of view what do we see as the benefits of doing that?

M r s Urquhart : One development that you may be very interested to know about is that the department has appointed in an industry liaison officer, based in my division, to maximise the benefits across research industry collaboration that we hope will flow from the partnership with European Southern Observatory. Each ESO member state can appoint an industry liaison officer. The role is to encourage industry engagement and also promote procurement opportunities. We are already well represented across a range of committees attached to the European Southern Observatory Council that relate to discussions on issues such as procurement.

The industry liaison officer is a gentleman called Anthony Holzwart. Anthony is a supply chain expert. He comes from our business adviser cohort associated with the Entrepreneurs Program. His job will be to identify Australian businesses and supply chains that are well positioned to bid for procurements at the European Southern Observatory and subcontract opportunities through other member states of the European Southern Observatory. It's not just with the organisation itself, but other members who may be obtaining procurement opportunities. Procurement opportunities might range in scope from building or upgrading of core scientific technology through to regular maintenance, logistics and service contracts at the facilities. I mentioned about the experience of Mr Holzwart. His appointment really links astronomy to that priority program, the Entrepreneurs Program, and has the potential to expand Australia's commercial supply chains into similar technology applications. We often talk about the connections between astronomy and significant breakthroughs like wifi. It's hard to predict where the opportunities may come, but they're there, and there are applications across satellite and aerospace, defence, remote sensing, industrial process control, mine monitoring and higher complexity imaging. He's already visited Garching in Germany, which is the location of the European Southern Observatory headquarters. He has met all the procurement teams, including the head of procurement and the director of operations at the Paranal Observatory. In the first week of February he attended his first meeting of the European Southern Observatory's industrial liaison officers. So he has hit the ground running.

Senator SINODINOS: Are there synergies between what we are doing with ESO and, for example, setting up the Space Agency?

M r s Urquhart : I certainly think there are; and equally with the Square Kilometre Array. I've moved recently to combine the work in my division on optical astronomy with the Square Kilometre Array team to ensure we maximise the opportunities for cross-fertilisation of that expertise. Equally, we maintain close connections and work closely with the Space Agency and associated departmental staff.

Senator SINODINOS: You raise the SKA. Is that now all finalised in terms of agreements on the costings at international level and how this will all go forward?

M r s Urquhart : There are some very positive developments. I might ask my colleague, David Luchetti, to take you through them.

Mr Luchetti : The SKA has made a lot of very positive progress over the last 12 months. Both France and Spain have joined the current SKA organisation, and the project is now moving towards a signing ceremony for the SKA Observatory Convention that we've been negotiating. That signing ceremony will take place in Rome on the 12 March. It will involve all the member countries. We currently have 12, as I said, with the addition of Spain and France. Importantly, Portugal have announced they will sign the SKA Observatory Convention on 12 March too. We're now starting to build quite an important grouping of member countries for the SKA. Importantly, from a project point of view, we're starting to see developments with the closing of the preconstruction period for the SKA. That's the design of the various elements of the SKA. We're probably three quarters through that process. That should be completed later this year or early next year. That will conclude with the system design review, which allows us to complete the design, test the design and then moved to a situation where we can actually put together a construction plan for the SKA. We expect that to go to the SKA Observatory Council probably around the middle of next year.

Senator SINODINOS: This construction is in WA, is that right?

Mr Luchetti : Part of the construction will be in WA at the Murchison Radio-astronomy Observatory, but there's also a host country, South Africa. They'll also build what is called SKA1 MID in an area called the Karoo.

Senator KIM CARR: Is New Zealand a part of it?

Mr Luchetti : New Zealand is a member country. They're currently considering their options and whether they actually sign the convention. They have indicated that they will probably take on an associate membership.

Senator KIM CARR: That means they're dropping back.

Mr Luchetti : They're taking on an associate membership. The nature of that will be determined when the observatory council is established.

Senator KIM CARR: Is their intention still to build the facility in New Zealand?

Mr Luchetti : No. The decision was taken about a year or two after the site decision in 2013-14 that we wouldn't be able to build the full SKA, which originally had a baseline from Western Australia to New Zealand. At the moment SKA1, which we will be building, will only be confined to WA.

Senator KIM CARR: And that's why New Zealand is dropping back?

Mr Luchetti : It's not really a reflection of that decision. It's actually a reflection of their astronomy community. I can't speak for New Zealand, but I understand that they may have some concerns about how many people within their community can actually utilise the SKA.

Senator KIM CARR: So they're not getting what they thought they were going to get out of it?

Mr Luchetti : I don't think it's a matter of what they thought they would get out of it. It's really the science return that they're expecting.

Senator KIM CARR: That is what I mean: what they thought they'd get out of it. That was the arrangement. They put some money in, to begin with, and they're not getting what they anticipated they would out of it.

Mr Luchetti : No. I think it's more about what their community will be able to utilise. It's the membership of their community. They don't think it's as big as they originally thought it would be.

CHAIR: Thank you.

Proceedings suspended from 12:32 to 13:31

CHAIR: The committee will now resume consideration of the Department of Industry, Innovation, and Science estimates. Senator Carr.

Senator KIM CARR: Could I have the officers for complementary medicines back, please. I'm just wondering if the department could clarify, Mr Squire, your evidence before in regard to Complementary Medicines Australia's advice to you about a solution.

Mr Squire : Sorry, I don't understand—

Senator KIM CARR: You don't understand what I mean?

Mr Squire : I don't understand the question, sorry.

Senator KIM CARR: I understood you to be saying that the CMA had not advised you as to a solution based on changes to the regulations. Is that correct?

Mr Squire : No.

Senator KIM CARR: So what did you say?

Senator Canavan: I can recall—I'm trying to be helpful here, Senator—a discussion around the views of some of the major manufacturers, I think, in this space. But maybe there was a separate discussion.

Senator KIM CARR: No, it was just here this morning.

Mr Squire : Obviously, the transcript will show this, but, if I recall correctly, my evidence earlier this afternoon was referring to evidence provided by the ACCC as part of their hearings this morning.

Senator KIM CARR: Yes. And what's your view of the CMA's position?

Mr Squire : Which particular position of the CMA?

Senator KIM CARR: In regard to a solution to this problem, what's the advice that the CMA have given to you?

Senator Canavan: Chair, I'm happy for the official to answer, although I would just note that the senator is asking the official about the views of somebody else—a third party's.

Senator KIM CARR: No, no—

Senator Canavan: I'm happy for the official to answer as he may be able to, but obviously he's not a spokesperson for the CMA.

Senator KIM CARR: Senator Canavan, I'm responding specifically to the advice Mr Squire has put to this committee in regard to the industry association's views on this matter, which I understood him to be saying to us a little over an hour ago.

Senator Canavan: I couldn't recall.

Mr Squire : As I indicated before, in evidence to this committee earlier in the day, the ACCC indicated that the advice from the CMA to them as part of the development of their guidelines was that encapsulation wouldn't result in a claim for 'Made in Australia' to be able to be sustained.

Senator KIM CARR: Right. What's the advice to the task force from the CMA?

Mr Squire : From the CMA?

Senator KIM CARR: Yes.

Mr Squire : The CMA has proposed a solution drawing upon the ability to make regulations under the Australian Consumer Law.

Senator KIM CARR: That's exactly right. I have here a copy of their submission to the complementary medicine task force. For the purposes of section 255(3)(b) of the Consumer Law, the CMA specifically recommended to the task force regulatory changes, which is consistent with the advice that the department of industry has just provided to this committee as well. Is that the case?

Mr Squire : Yes, Senator, that is correct.

Senator KIM CARR: I'm glad that we've cleared that up. Tell me this, Minister: why are there no industry reps on the task force?

Senator Canavan: I don't have responsibility for the portfolio and was not involved in the formation of the task force directly, so I'd have to take that on notice, sorry.

Senator KIM CARR: Is there any indication from the department as to what the thinking was?

Mr Lawson : It's a government task force, and we are consulting deeply with industry through that task force process. I might add, on the issue we were talking about with regulation. the fact that a regulation could be created doesn't mean to say that the right regulation has been found or proposed by anybody. One of the ways of going to a solution could be regulation, rather than legislation. But establishing what that regulation would be—

Senator KIM CARR: Yes, but that's your job, isn't it?

Mr Lawson : Absolutely. That's what we're going through with the task force.

Senator KIM CARR: The question is that you've had this problem before you since August 2017. The government sets up a task force in December 2018, and it's my understanding now that Australian Made Campaign Ltd is cancelling licences for the use of the logo because of what the ACCC is doing—based on the fact that this department, this minister, has done nothing to address this problem.

Mr Lawson : I don't think that's an appropriate articulation of what's been happening, Senator. I think some of the things that are going on with the right to use the logo reflect that one company challenged the ACCC interpretation in the courts and they lost that case. The court determined the interpretation by the ACCC was correct, and that's had implications for the licence holder to manage the process.

Senator KIM CARR: That's right—and you're quick to point out that there was bipartisan support for the law at the time, which was clearly the case—the unintended consequence of that law has been for the ACCC to interpret it in this way.

Senator Canavan: I'm not sure if there's a question there, Senator, with respect. You've obviously put your particular view on matters. I think to ask the witnesses to respond to that would be going into asking them for an opinion on policy matters. You're free to put those views. The government, as I said earlier, is working constructively with the industry. We've heard their concerns. We want to ensure a robust 'made in Australia' framework with integrity.

Senator KIM CARR: The minister has written to the Prime Minister and said that this task force will report by the end of this month. Will that happen?

Mr Squire : Senator, the task force is on track to complete its report and provide the advice to the minister by the end of this month.

Senator KIM CARR: Will there be a draft report shown to industry prior to its release?

Mr Squire : As the minister has indicated, it's a report of government to government, so there's no intention to provide the industry with a copy of the draft report.

Senator KIM CARR: Is the department aware that Australian Made Campaign Ltd is currently cancelling licences?

Mr Squire : Yes, Senator.

Senator KIM CARR: How many have they cancelled?

Mr Squire : I'd have to take that question on notice. It's a decision for AMCL.

Senator KIM CARR: Have you been able to calculate the likely impact of this imbroglio?

Mr Squire : As I indicated in my evidence earlier, part of the challenge with dealing with this particular issue is obtaining the evidence from companies about the impact that this is having on their operations. And, as I indicated, we've undertaken a survey of industry to ascertain the justification for some of those claims, and we're currently analysing the responses to that survey.

Senator KIM CARR: CMA's submission to the task force actually said, 'The ACCC interpretation of the revised legislation has conflated food and medicine.' Is that the case? Do you agree with that assessment?

Mr Squire : That is the CMA's claim. I don't see the connection that they've made between food and complementary medicines. The food information standards sit separately from the Australian Consumer Law, whereas the safe harbour defences—which are the subject of this discussion—sit across all products, both food and non-food, and, again, there is evidence before this committee that it's entirely optional for complementary medicine manufacturers to make use of these claims, if they are entitled to, whereas it's not the case for food.

Senator KIM CARR: No. So you don't accept the unanticipated consequences that have been outlined in the submission?

Mr Squire : I wouldn't say that was a correct interpretation of my statement. What the minister has done, and the government—indeed, what they have tasked the department to do, in terms of leading this particular task force—is to examine these claims that industry and the complementary medicine industry have made, to see what potential solutions may exist and then to provide advice to the government. So I'm certainly not saying that the claims by the industry or the complementary medicine industry are without basis. What we're attempting to do is to unpack, if you like, or determine if there is sufficient evidence to support, the claims they've made.

Senator KIM CARR: Minister, is the government prepared to make an undertaking that they'll fix this as quickly as possible?

Senator Canavan: Not being the minister myself, I'm not in a position, obviously, to foreshadow actions that may or may not be taken. As I mentioned, we are engaged constructively with the concerns that have been raised. We wouldn't have established the task force if we weren't committed to getting to the bottom of this issue and seeing what can be done, but, given that the task force is still ongoing and that I'm not the responsible minister, I can't provide much further information than that.

Senator KIM CARR: There is a serious issue here. This is a sector that involves an industry that has $4.9 billion—according to the letter, their terms of reference in fact state this—with 82 Australian based manufacturers and the employment of hundreds of thousands of Australians. You would have thought there would be a greater sense of urgency about this.

Senator Canavan: As I said earlier, we are engaged constructively with the sector. The overarching objective of the made-in-Australia laws and regulations is to seek to ensure that there's a significant head start given to those that have operations in Australia. So we want to make sure that the system is set up so it encourages people to create jobs and start manufacturing facilities in Australia. That's got to be a consideration.

Senator KIM CARR: I accept your view on that. I don't dispute your interest in this matter. But what troubles me is the actual minister's lack of attention to this. We're about to enter the caretaker period very soon, and I'm anxious that some action be taken prior to that happening or that an undertaking at least be given that, if there is urgent action identified in the task force report, there is consultation to see that it happens. We don't want to wait until after an election before remediation is undertaken, because it's quite clear what's required here, and it has been quite clear for some time what's required here.

Senator Canavan: I suppose all I can add is that, from my discussions with the minister and her office, they're very open-minded about the potential options going forward. They're obviously taking advice from the department through the task force and others engaged with the industry. I believe there has been significant consultation with the industry, both through the task force and before. The timing of the task force is, as has been outlined, due well ahead of the election, but I'll have to leave it to the minister, obviously, to decide the next steps upon the conclusion of the task force.

CHAIR: Thank you very much. Can I turn to another matter—the question of the Building Ministers' Forum? Have you got the relevant officers there for that?

CHAIR: Can I just confirm that we're now on program 2?

Senator KIM CARR: I thought this was all program 3—3.1. This is still the Building Ministers' Forum; I thought that was still program 3.

CHAIR: 3.1—the Building Ministers' Forum. I'm sorry, I always get these programs confused. I had the Building Ministers' Forum under program 2.

Senator KIM CARR: We had actually jumped way ahead with those science questions, without making too fine a point of this.

CHAIR: I know, but he used to be the minister, so—

Senator KIM CARR: Yes, I understand that; I understand some latitude is required here. But I wouldn't get too cute just now.

CHAIR: No, I'm literally just trying to keep up with you, Senator Carr.

Senator KIM CARR: So we're on the Building Ministers' Forum. I understand that the BMF communique has indicated that the ministers have 'agreed in principle to a national ban on unsafe use of combustible ACPs in new construction', subject to the cost-benefit analysis and other conditions. I'm just wondering, Minister, if you can tell me: is there a ban on the importation of flammable cladding or not?

Mr Power : I'm happy to take that, if you like. Your question is: is there currently a ban on the import—

Senator KIM CARR: No. As a result of the BMF on the 19 February, a communique was issued, and I've quoted the communique. As a consequence of that, is there a ban or not?

Mr Power : Is there a ban? The communique sets out that the BMF ministers have sought some work investigating a ban on aluminium cladding materials in construction. It doesn't go on to say, which I think you're getting at, that there should be a ban on the import or manufacture of aluminium cladding.

Senator KIM CARR: I see. So it's another one where you get the mirror out, isn't it? You're having to 'look into' this.

Mr Power : I don't know, Senator. It is what it says. It says that the building ministers have asked for work to be done on a ban in construction in Australia, not on import and manufacture.

Senator KIM CARR: When will the work be concluded?

Mr Power : The work is to look, as you said, at cost-benefit analysis of a ban, because the ban, as it is written up there—

Senator KIM CARR: Proposed—the proposed ban.

Mr Power : It's proposed. Of course, as you're aware, and we've talked about it here previously, there are currently bans that various state governments have put in place. The question here is, and the building ministers have asked it, whether that ban should extend further than that which the states have put in place now, which is for high-rise buildings, in the most part, and whether it should extend to other types of buildings of lower storeys—for example, residential et cetera.

Senator KIM CARR: The current code theoretically already bans this stuff, doesn't it?

Mr Power : Correct. In principle, the code, obviously, puts in place rules which mean that any cladding that is combustible and high risk, in fact, wouldn't meet the code. And Mr Savery's here and, of course, could add in detail to that.

Senator KIM CARR: Yes, of course he could, but all I want to know is: if we've got this prohibition already in the code, how is it that we've got tens of thousands of buildings across the country with this stuff all over them?

Mr Power : The reason for that is set out in great detail in the Shergold Weir report, which goes to issues of compliance across the system and the integrity of different players in the system. As you're aware, the Shergold Weir report sets out a prescription and a roadmap, effectively, for how to go about fixing these things.

Senator KIM CARR: We'll get to that. The point is that no-one takes much notice of the code, do they?

Mr Power : I wouldn't say that. But, certainly, as was set out in the report, there are weaknesses in the system, which I've said that Shergold and Weir identified, that go to the compliance and enforcement of the code, and that is, in fact, what the reforms proposed are to go and fix.

Senator KIM CARR: Of course, the Senate report, through this committee, identified all of those, and the government rejected its findings, didn't they?

Mr Power : I would say that a lot of the issues that were picked up in the Senate inquiry's process, which was quite comprehensive, were similarly picked up in the Shergold and Weir report—

Senator KIM CARR: Yes.

Mr Power : and so some of the work that's going on really is to address all the issues that have been presented in total.

Senator KIM CARR: Yes, I understand that. In fact, the Shergold report actually says that it's in response to the Senate report. It specifically states that, doesn't it?

Mr Power : I'm not sure whether it states that specifically.

Senator KIM CARR: Well, I can advise you that it does. But there are other reports too—reports from New South Wales and a number of others—so this is not a new problem, is it?

Mr Power : Again, I think that the Shergold investigation pointed out that there are some systemic issues in the sector which meant that now the reforms which have been put forward there, and that the BMF has agreed to progress, are really important to ensure that they don't continue.

Senator KIM CARR: The Shergold report was received when?

Ms Carew : It was received early in 2018 and made public in—

Senator KIM CARR: Not when it was made public; when was it received by the department?

Ms Carew : It was commissioned by the Building Ministers' Forum. I would have to take on notice the exact date—

Senator KIM CARR: I'll help you out here: It was in about September 2017, wasn't it?

Ms Carew : I would have to confirm that was the date. I understand it was only commissioned in August 2017.

Senator KIM CARR: That's right, but it was received some three or four months before it was actually made public. That would be right, wouldn't it?

Mr Power : I'm not sure—

Ms Carew : I would have to take that on notice and confirm. Building ministers, though, first considered it at their April 2018 meeting.

Senator KIM CARR: Yes, but it was made public—

Ms Carew : After that.

Senator KIM CARR: After that. And there was a three-year time line on that?

Ms Carew : For implementing the recommendations, that's right.

Senator KIM CARR: What's happened in the first year of the implementation period?

Ms Carew : Following the April meeting, all jurisdictions agreed to consider the recommendations further, and they were discussed again at the Building Ministers' Forum in August, where BMF ministers unanimously gave their in principle support to all the recommendations. Many of the states were moving during that period to implement reforms that were in line with the direction of the recommendations, and officials have been working on an implementation plan.

Senator KIM CARR: Sure. So, you've had it for a year, and you're now working on an implementation plan.

Ms Carew : The implementation plan will cover work that is already underway.

Senator KIM CARR: Yes. And when will we see this implementation plan? When will that be made public?

Ms Carew : We expect it to be public by the end of the month.

Senator KIM CARR: Do you expect that to be honoured?

Ms Carew : We are relying on all the states and territories. We've been working with them collaboratively. The end of February is only a short time away—

Senator KIM CARR: Yes, that's certainly true!

Ms Carew : and so we're hopeful that it will be complete and available.

Senator KIM CARR: In terms of the BMF meeting on 19th: were you ready for a resolution, even in principle, to propose a national ban on unsafe combustible ACPs? Was that your recommendation?

Ms Carew : That was the decision of the—

Senator KIM CARR: I know it was a decision, but was it the Commonwealth department of industry's recommendation to accept that?

Senator Canavan: That seems to be asking for policy advice, but I'll let the officials answer.

Senator KIM CARR: Well, my information is that the Commonwealth argued against that position at the meeting. Is that true?

Mr Power : Senator, first of all, the department doesn't take a position in terms of the Building Ministers' Forum.

Senator KIM CARR: No, I understand that.

Mr Power : In relation to the Commonwealth's position, I don't think it would be appropriate for us as officials to disclose what different ministers said particularly, or put into that discussion. But certainly, as Ms Carew said, the outcome of that discussion was an agreement with all ministers to pursue the ban, which is in the communique.

Senator KIM CARR: How many dwellings do we think are now the subject of combustible ACPs?

Mr Power : You are probably aware that there are audits that are going across all jurisdictions.

Senator KIM CARR: Yes, I understand that. What, do you think, is the number?

Mr Power : We take reports from each of the jurisdictions. We are constantly updating that. We've provided that to this committee and we can provide that again.

Senator KIM CARR: You must be able to provide us with the current number.

Mr Power : I'm not sure we have the current total number across all the states, at present, unless Ms Carew does?

Ms Carew : No, we don't, but we'd be happy to collate that and provide it to you.

Senator KIM CARR: Thank you. Today there have been further reports that nine more materials have been classed as noncompliant. Are you aware of those reports that the Victorian Building Authority has developed?

Mr Savery : I am aware of that. The reporting that you're referring to is inaccurate. There is not a ban on those products. What has occurred is that through an audit process of certificates—

Senator KIM CARR: I don't think I used the word 'ban'. Did I say ban? They were 'noncompliant'. Didn't I say that?

Mr Savery : Senator, you asked if I was aware of the media.

Senator KIM CARR: I'm saying to you that a further nine materials have been classed as noncompliant, I think are the words I used.

Mr Savery : Sorry, I mistook that you were asking if I was aware of the media.

Senator KIM CARR: Let's get to the point. You are aware of the report and you say that the way it has been presented is inaccurate.

Mr Savery : Correct.

Senator KIM CARR: So tell me this: does that change the number of buildings that are now affected with noncompliant flammable ACPs on their exteriors?

Mr Savery : Not necessarily, because those products have not been deemed noncompliant just because they may contain a level of polyethylene that would be of concern to the authorities. The reasons those certificates have been withdrawn by the conformity body vary quite widely, and it could be, simply, a case of there being inadequate documentation to support the certificate having been issued.

Senator KIM CARR: Has there been any conversation yet with the Border Force, in terms of the capacity for the Commonwealth to ban this product at the border?

Ms Carew : We have had some discussions with them. It would obviously be quite difficult to implement that type of approach.

Senator KIM CARR: Why?

Ms Carew : Just because, I think, of the sheer volumes. There are also a number of legitimate uses for the product.

Senator KIM CARR: Yes, but that's not the question I asked you. It was: have you had a conversation about how you would go about banning the product?

Ms Carew : There have been conversations, yes.

Senator KIM CARR: And they're saying it's difficult to implement a ban at the border.

Ms Carew : That's correct.

Senator KIM CARR: It's because they don't have resources to do it; is that their issue?

Ms Carew : I would have to check the notes of those discussions.

Senator KIM CARR: I see. Was it difficult to ban asbestos from buildings?

Ms Carew : I think that would probably be a question for the Federal Safety Commissioner.

Senator KIM CARR: But you are familiar with the same pattern, aren't you?

Mr Power : Sorry, can you repeat that?

Mr Lawson : Asbestos is a product that is intrinsically dangerous—

Senator KIM CARR: Yes, so is this stuff.

Mr Lawson : and it's been banned. We've heard previously that there are legitimate uses of this product. The issue has been that compliance mechanisms for the code, through the various states, haven't worked in making sure this product is not put in the wrong place. It can be used, in some places, quite safely.

Senator KIM CARR: You can outline those for me, can you, Mr Lawson?

Mr Lawson : The ABCB will give you a much more detailed explanation, but my understanding is it's unsafe when it's over three storeys. That's the use when that product is considered unsafe. It has, as uses—

Senator KIM CARR: That's the problem. That's the claim that's used, isn't it? There's no way of regulating that, is there—whether it's used on one storey, two storeys or three storeys?

Mr Lawson : The building compliance processes of the states are supposed to regulate that. The question is: have they been doing that? Clearly that has been ineffective, and that's the issue. So we're trying to take a national approach to making sure that an appropriate solution is provided.

Senator KIM CARR: What are you doing on labelling issues? The permanent labelling of ACPs is critical. What are you doing on that?

Ms Carew : The BMF has also agreed to develop a technical specification that would allow the labelling of those products. The ABCB will now work with Standards Australia to develop that with a view to converting that into an Australian standard that would be referenced in the code. Mr Savery may be able to talk more to that as well.

Senator KIM CARR: How long will that take?

Ms Carew : I understand that a technical specification takes about four months.

Senator KIM CARR: Given the evidence that's been presented to numerous inquiries, including the Senate inquiry, about product substitution, document fraud and various other criminal activities in regard to labelling and these certification processes, how confident are you that we'll be able to deal with that matter?

Mr Power : The purpose, I think, of the technical specification and then labelling is to prevent or, certainly, make much more difficult, the substitution of products. Coupled with other reforms in the sector—for example, in relation to certifiers et cetera—the BMF's work and view is that those reforms will make that much less likely. You can never fully stamp out all poor practices in the sector, but certainly that's one of the steps which we'll support.

Senator KIM CARR: The communique talked about fast-tracking this work. Did I read that correctly?

Ms Carew : That really refers to the fact that, rather than developing an Australian standard for labelling in the first instance, the technical specification, which, as I said, takes about four months, can be done more quickly. That's the reference to fast-tracking.

Senator KIM CARR: When will it commence?

Ms Carew : The work to actually develop the technical specification is about to commence.

Senator KIM CARR: It hasn't started already?

Ms Carew : Mr Savery may be able to—

Mr Savery : There has been some background work involving discussions between the Senior Officers' Group, who report to the Building Ministers' Forum, and Standards Australia. The Senior Officers' Group need to complete the scope—

Senator KIM CARR: Mr Savery, you've provided evidence to the Senate before on these matters.

Mr Savery : Correct.

Senator KIM CARR: The word 'urgency' doesn't really ring large in your province, does it?

Mr Savery : I don't think that's correct. What I'm explaining to you is a process that's outside my control.

Senator KIM CARR: Can you remind me: when was the decision of the BMF on this matter?

Mr Savery : On the labelling?

Senator KIM CARR: Yes, on labelling.

Mr Savery : The first time that they discussed it, I think, was in October 2018 or it may have been—

Senator KIM CARR: No, no. Check your records. That's not quite right.

Mr Savery : I haven't got the record in front of me, but it would be a 2018 date.

Senator KIM CARR: It's my understanding that the decision to fast-track this was August 2018, and you're telling me that in February 2019 you haven't started.

Mr Savery : What I'm telling you is that we're talking about a process that's not under the jurisdictional control of the Australian Building Codes Board. It was assigned to the—

Senator KIM CARR: Sorry, so I've accused you of—

Mr Savery : It was assigned to the Senior Officers' Group. That's not—

Senator KIM CARR: There we go! There is a study in inactivity if ever you wanted one—the Senior Officers' Group. We can probably wait some time for that to actually address this issue. This was urgent in August last year, and it hasn't started yet. The Senior Officers' Group have got this in hand, have they?

Mr Savery : They have been requested to undertake this work by the Building Ministers' Forum.

Senator KIM CARR: And they haven't started.

Mr Savery : They have started. They've commenced discussions with Standards Australia. They're developing a scope that will be put forward as a proposal for change. Standards Australia have identified it as a priority piece of work.

Senator KIM CARR: That's good. Who's going to pay for it?

Mr Savery : Standards Australia have accepted that they will undertake the work through their own funding processes.

Senator KIM CARR: It was critical in August. When do you think we'll see a result?

Mr Savery : On the basis that Standards Australia receives the scope, they've indicated that they'll complete it within four months.

Senator KIM CARR: When did you say they were going to receive the scope?

Mr Savery : They have to receive a proposal for change.

Senator KIM CARR: When will they do that?

Mr Savery : We have to have the scope delivered by the Senior Officers' Group. There may have been a meeting recently that I'm not aware of.

Senator KIM CARR: I'm sorry to be so obtuse. I'm trying to get clear in my mind when this urgent action is actually going to be undertaken.

Ms Carew : There have been discussions among senior officials to finalise the scope. The decision of the building ministers in August was to develop an Australian standard.

Senator KIM CARR: A critical decision—it was a critical, they said, wasn’t it?

Ms Carew : In the work that the senior officials undertook, it was recognised that the development of a technical standard would allow something to market quicker, so effort has gone into preparing that scoping document. We had the decision earlier this month that ministers were comfortable to proceed with a technical specification in the first instance. We can now finalise that scope and provide it to Standards Australia.

CHAIR: Can I just clarify something. The Senior Officers' Group: are they Commonwealth department based or are they state based senior officers?

Ms Carew : There are representatives from all jurisdictions on the Senior Officers' Group. It is chaired by Queensland.

CHAIR: The Senior Officers' Group—just to be clear—are a subdivision of the Building Ministers' Forum, or are they department—

Ms Carew : They support the policy work that the Building Ministers' Forum directs.

CHAIR: And they're based all over the place?

Ms Carew : That's correct.

CHAIR: In state departments?

Ms Carew : That's correct.

CHAIR: Thank you.

Senator KIM CARR: The August meeting also talked about ministers directing the Building Regulators' Forum to work with responsible fire authorities on the best methods of making information available to assist them to respond to buildings on ACPs. There's been a fire in Melbourne with this stuff just recently, and I'm just wondering: how are we going in regard to that particular clause of the communique?

Ms Carew : Building regulation is not a responsibility of the Commonwealth, so, while we have an observer on the Building Regulators' Forum, we are not really an active participant.

Senator KIM CARR: That's certainly true.

Ms Carew : I would have to take notice what the building regulators have done, but I do understand they have taken action and they're all working very closely with their respective fire departments.

Senator KIM CARR: Thank you. Who is the officer that's on the forum?

Ms Carew : The officer from the Commonwealth?

Senator KIM CARR: Yes.

Ms Carew : An officer from my branch.

Senator KIM CARR: Are you not able to tell me who that is?

Ms Carew : His name is Rod Harris.

Senator KIM CARR: So he'll be reporting to you, won't he—would that be the case?

Ms Carew : He does report to me; that’s correct.

Senator KIM CARR: When did it meet last?

Ms Carew : I cannot recall.

Senator KIM CARR: Another urgent bit of work, is it?

CHAIR: Ms Carew, can you clarify for me when that—how often does the Building Ministers' Forum meet?

Ms Carew : I'm sorry; I didn’t hear the question.

CHAIR: The Building Ministers' Forum—how often does that meet?

Ms Carew : They meet, generally, two to three times a year.

CHAIR: And they're set in advance, those meeting dates?

Ms Carew : Usually. The charter for the Building Ministers' Forum requires that they meet at least twice a year, but there have often been three or four as well.

CHAIR: How long has that forum been in existence?

Ms Carew : I believe it's been in existence since about 2005.

CHAIR: And it meets twice a year? Okay.

Senator KIM CARR: The minister indicated on 8 February that the Victorian government should conduct an audit of public information on the high-risk buildings that contain the cladding. Were there any concerns expressed about that matter—publicly identifying the buildings that were actually the subject of the previous audits that had been undertaken?

Mr Power : I think there's been discussion around it, and I observed even discussion in Victoria by the regulator and also by the fire authorities about a disclosure of particular buildings. My interpretation—what the minister was talking about was disclosure to people who are occupying buildings so that they know the situation of the building. I think a separate matter is publication or disclosure of buildings to the greater public, and people have talked about whether that would incite—

Senator KIM CARR: Arson.

Mr Power : arson. But, as I said, I think the minister was referring to a different point, which was the fact that people who live in buildings might themselves want to know, privately, the state of the outside cladding of those buildings.

Senator KIM CARR: There is this question about arson, isn't there—a public safety issue?

Mr Power : That's the issue that's been raised by people, but I do recall also, for example, the members of the Victorian fire authority saying that they didn't believe that risk was present. If that information wasn't publicly available, it was made available to the members, the people who occupy the building.

Senator KIM CARR: In regard to the Commonwealth's role here, Minister, is it your view that the Commonwealth actually does have responsibilities in regard to building standards in this country?

Senator Canavan: Again, not being the responsible minister, it's been explained to me—and most of the explanation involves this matter that we're talking about, because it's been topical—that our role is to coordinate and seek the cooperation of the states to form an appropriate building code and to ensure that it is appropriately enforced. But my understanding is that primarily the enforcement and monitoring of that code is at a state or territory level.

Senator KIM CARR: What happens in circumstances where the Commonwealth actually finances a building?

Senator Canavan: I'd have to take that on notice, but other witnesses might have information.

Mr Power : Sorry, Senator: is the question what happens where the Commonwealth purchases—

Senator Canavan: Where effectively the—

Senator KIM CARR: The financing.

Senator Canavan: You mean, we're going to own it?

Senator KIM CARR: That's right.

Senator Canavan: It is a hypothetical case. It potentially—

Senator KIM CARR: It's not a hypothetical, but I'll give you a very specific case.

Senator Canavan: I'm happy to try.

Senator KIM CARR: For instance, at a university, where the Commonwealth's provided money under the EIF program or various others and the building's then been put up in breach of the building code, with cladding—

Mr Lawson : Perhaps I can help. Those universities and so on are located in states. The states have the responsibility to maintain and regulate the safety of the construction of those buildings. Agencies such as universities or indeed Commonwealth agencies have occupational health and safety obligations to their employees, and they need to take those things into account, but that's separate issue from the approval of the building in the first place.

Senator KIM CARR: When it comes to the building code, the Commonwealth's only too happy to put conditions—industrial relations, for instance. It makes all sorts of conditions, for tendering and various other things. But it seems that when it comes to the actual public safety issue the Commonwealth seeks to wash its hands of it.

Mr Lawson : The building code that we're concerned with is the National Construction Code; it's not that other building code that's industrial relations—

Senator KIM CARR: No, I accept all that. But knocking over a union is an entirely separate matter from public safety. You can see how that would be relevant. I can see how that works. But the point remains: there are public safety issues here, and what is the Commonwealth's responsibility, Minister, in regard to public safety and, as the Shergold report points out, public confidence in the national building code?

Senator Canavan: In fairness to the officials here and I suppose also myself as minister, I think the questions you're raising go closer to overall government procurement policy matters. The examples you've given are not necessarily ones that will be administered by this department if that were to happen—for example, the financing of a building at a university. But obviously at different times the Commonwealth does finance the construction of infrastructure, including buildings. Usually it's in an arms-length way, of course. We may be providing funds to it but not managing the contract or engaging directly with building construction firms. So I might have to take it on notice—

Senator KIM CARR: Sure.

Senator Canavan: because I think it does go to more overarching government priorities.

CHAIR: It is an interesting issue, though, and I think Senator Carr does have a point. There were four government buildings in Adelaide, some of which were commissioned by the former Labor state government in South Australia, which had issues with cladding. I imagine the Commonwealth might have contributed some funding towards those buildings, though the Commonwealth had no control over the materials that were being used—that was a state government responsibility. It would be interesting to know where the Commonwealth's responsibility stops and starts if it contributes to infrastructure projects that are the responsibility of the state and the state uses flammable material.

Senator Canavan: It is probably one for the Department of Finance, but I will take it on notice and see what we can do.

Senator KIM CARR: Thank you. Are any additional resources being provided to allow for the implementation of the Shergold report?

Mr Power : Each state is providing resources to that in their own jurisdiction. There are a number of actions being taken. For example, New South Wales has announced a number of actions very recently. So there are definitely additional resources being put into that. The Commonwealth, in our team here, is also applying more resources to that. Mr Savery might want to comment in relation to the ABCB.

Mr Savery : The Australian Building Codes Board has also undertaken word in regard to five of the Shergold-Weir recommendations. They are matters that have been identified by the building ministers as things that the ABCB can contribute to—education and training, awareness raising and those kinds of things.

Senator KIM CARR: That's two. What about the other three?

Mr Savery : The other three relate to the review of international fire engineering guidelines and their governance arrangements; the development of a national best practice model for performance solutions, to teach practitioners how to use performance; and the development of a national dictionary of terms, which essentially collates and consolidates all of the terms and definitions used by the states and territories and the ABCB. I'll give you an example—and it is the one I usually give. There are eight definitions of 'building' in this country. So the aim of this would be to come up with one definition of building.

Senator KIM CARR: The Shergold report also recommends national construction licensing. It talks about nationally consistent licensing—and there are variations on it. What work has been done on that?

Mr Power : It is one of the priority recommendations that have been identified. The work that we referred to earlier about implementation will set out the timing around those, but there is already discussion and work going on behind the building ministers, at the senior officials group, on that; it is in progress. We are at the early stages of bringing harmonisation to this. Not all states currently license all types of practitioners. There has been work, as I understand it, to identify what practitioners are licensed in which states and the way that those practitioners overlap in certain states. There has been an investigation along those lines. The work, which is underway, is about how those things can be brought together over time in conjunction with the licensing of each practitioner in the various supply chains or the approval chains.

Senator KIM CARR: Do you have a list of those particular areas at the moment?

Mr Power : There is a list of the different practitioners that Shergold and Weir did recommend.

Senator KIM CARR: I understand that. I have read the report—and he has priority areas that need to do it in a sequential way. I am interested in the list of areas that are currently unlicensed.

Mr Power : As I was saying, in different jurisdictions that list is different. As I understand it, each jurisdiction licenses different practitioners—

Senator KIM CARR: Plasterers, for instance—where are they licensed?

Mr Power : I don't have in front of me where plasterers are licensed and where they are not.

Senator KIM CARR: And builders, of course, are defined differently in every state, aren't they?

Mr Power : To some extent, my understanding is yes—and that is part of the challenge of bringing harmonisation.

Senator KIM CARR: That's why we need national licensing, isn't it?

Mr Power : Certainly, as set out in the report, harmonisation across Australia is the objective of that. Of course, the practicality is the way that those are distributed amongst the states at the moment. That's the starting point. So bringing that together is a challenge.

Senator KIM CARR: Sure. In terms of fire safety, the requirements of the code limiting the ability of fires to move between floors in multistorey buildings: are you able to provide advice on that? Is there a particular provision in the code which deals with that matter?

Mr Power : Almost 75 per cent of the code deals with fire safety—

Senator KIM CARR: You would think so, yes.

Mr Power : and structural reliability. There are numerous provisions that would be relevant to the question that you've asked, including things like compartmentalisation and the external spread of fire.

Senator KIM CARR: You've say that's the intent of the code. We've also heard that it's not being implemented, that there's a problem with enforcement. Would you agree?

Mr Power : The clear indications from the work of not only the Shergold Weir report, as you indicated, but other reports which have developed over the years often by individual jurisdictions point to the fact that there are areas of noncompliance.

Senator KIM CARR: Is there a position adopted by the Commonwealth to rectify that situation?

Prof. Saunders : If I understand your question correctly, the Commonwealth definitely supports greater enforcement and compliance through the chain of the code. As you said at the outset, the code currently, if complied with, prevents the application of flammable cladding or other materials in unsafe situations, so we definitely support greater enforcement of compliance with the code.

CHAIR: By the states?

Prof. Saunders : That's correct, Chair. As you know, the responsibility and, as we've been through, the regulators for that reside in each of the states

Senator KIM CARR: My next questions are on R&D.

CHAIR: I'm quite happy to move to R&D. I think I've got my Building Ministers' Forum and cladding questions on the record. Actually, Mr Power, you said that 24 recommendations came out of the Shergold Weir report. Can you just clarify for me how many of the recommendations are the responsibility of the Commonwealth versus the responsibility of the states?

Mr Power : I don't think we could allocate responsibility that specifically. As we've said, building is really the responsibility of the states and territories, but we are working to facilitate harmonisation in a range of areas in relation to building policy. We're also seeking national consistency in the implementation of all those recommendations.

CHAIR: Just explain to me: in those building ministers forums, have the states agreed to adopt all 24 recommendations of the report?

Ms Carew : In principle.

CHAIR: Does the Commonwealth or do the states themselves monitor the application or the implementation of those recommendations?

Ms Carew : The Building Ministers' Forum is oversighting progress. The implementation plan that we have spoken about will set out progress so far as well as the planned reforms and time lines for those going forward.

CHAIR: I'm assuming that maybe by the next estimates you can come back to us with something a little bit clearer about that implementation plan so we don't have to go over and over the same questions.

Ms Carew : I would hope so.

CHAIR: That would be terrific, thank you.

Senator KIM CARR: When was the last time the Building Ministers' Forum actually reported to the COAG ministers?

Mr Lawson : The Building Ministers' Forum isn't a COAG subcommittee.

Senator KIM CARR: One of the complaints about the Building Ministers' Forum is that it's off to one side and not much happens. I know, in my case, it took eight years on disability changes—eight years! And we did something about that. The WaterMark was another one that went on forever. We did something about that. The question remains that, if it's off to one side, it never gets the attention it deserves. Does it ever report to COAG at a central level?

Mr Lawson : I think there are two parts to that. My understanding is that, because it is not a formal COAG process, it doesn't have a formal reporting rule through that. We'd have to take it on notice. I think first ministers have discussed some of these issues, because, as you're aware, these issues are important, but we would have to take it on notice as to whether there has been that discussion. That's really PM&C—

Senator KIM CARR: What's the date for the return of answers?

CHAIR: That is a good question. It's 26th March.

Mr Power : I think the short answer is that we don't have that date or answer in front of us. We can take that—

Senator KIM CARR: I can understand that. I can't recall an occasion when that happened, but you might be able to correct that.

Mr Power : I think we'll have to take that on notice.

Senator KIM CARR: This committee is due to meet again in the week of the budget, isn't it? It's a Thursday. We'll have answers back by then, won't we?

Mr Power : I don't think that answer is terribly difficult to get.

Senator KIM CARR: I know. I suspect the answer is never.

Dr Smith : We'll check it and take it on notice.

Senator KIM CARR: I think Mr Lawson might have something to help us with that.

Dr Smith : We're just checking.

CHAIR: Could I ask you to also take on notice, Ms Carew, how many times and the dates the Building Ministers' Forum has met since it was initiated. I think you said it began in 2005.

Ms Carew : I'd be happy to do that.

Senator KIM CARR: Did you want to add something, Mr Lawson?

Mr Lawson : The communique of the COAG Industry and Skills Council on 3 October 2018 did point out that they had received an update from the Building Ministers' Forum, but it only says that. I don't believe that has driven up a thing into first ministers.

Senator KIM CARR: Can we talk about R&D?

CHAIR: We seem to have jumped around somewhat.

Senator KIM CARR: I'm on 1.2. I've got it on business R&D.

CHAIR: I'm happy to move back to program 1.

Senator KIM CARR: Right. We will do R&D first. Has the National Reference Group, the consultative group between this department and the ATO, met?

Ms Mulder : The National Reference Group does have a history with the program. It has met several times since it commenced at the start of the incentive, but we have been looking at how we engage nationally, so officially it hasn't met for some time.

Senator KIM CARR: That's what I thought.

Ms Mulder : Having said that, they did come together for consultations for the proposed legislation in July last year.

Senator KIM CARR: So they met last in July last year?

Ms Mulder : Not formally as an NRG. Organisations were invited as part of the consultation process.

Senator KIM CARR: Let me get it clear: has the group met or not?

Ms Mulder : In terms of its professional capacity, not for some time. That's correct.

Senator KIM CARR: What does 'not for some time' mean? When does that mean? When did it last meet?

Mr Mullaly : Its last official meeting, I think, was March 2017.

CHAIR: When do you expect it will meet again?

Mr Mullaly : We've gone through a process to look at the purpose of the National Reference Group. Existing members were part of that process of looking at what it should achieve. We will now have our first meeting of the RDTI roundtable, on 7 March, and that meeting will constitute previous NRG members as well as new membership. We invited them to broaden the reach of the membership.

Senator KIM CARR: A sort of two-year hiatus between the two?

Ms Mulder : In the interim we did do considerable stakeholder engagement at the individual level, but we have certainly come to the conclusion that a national forum, along with our individual consultation, is a good way to go.

Senator KIM CARR: I have a vague memory that there was actually a requirement under the old legislation. Is that right?

Ms Mulder : Not to my knowledge, but I can clarify that.

Senator KIM CARR: Were you unhappy with the old group? Is that why you didn't call it together? Is there a problem?

Ms Mulder : My understanding—and please note that I wasn't in the program at that time—is that the purpose of the group had started to sway, and that's why they decided—

Senator KIM CARR: What does 'sway' mean?

Ms Mulder : Sorry. As you mentioned, the group is co-administered by the ATO and us. The purpose of the NRG, and primarily the purpose of their new RDTI roundtable, is to have stakeholders engage with the administration of the program around administrative and operational issues. It's not a policy forum. I understand that the original intent of the NRG had started to move away from its purpose and we wanted to go through a process and reinvigorate the RDGI roundtable, which we're doing now, to go back to the original purpose.

Senator KIM CARR: I had a notion that it was part of the regional legislative package—

Ms Mulder : I'd have to confirm that.

Senator KIM CARR: But you would have picked that up, surely. I must be wrong. You would have picked it up if there had been a breach of the act, surely.

Ms Mulder : Again, I'd have to clarify that for you, but we haven't stopped engagement; it's just been at a more individual and state based level. The state reference groups have continued during that time.

Senator KIM CARR: What's this new body all about?

Ms Mulder : It's called the RDTI roundtable. It's membership includes existing members of the NRG and new membership to have a broader edge.

Senator KIM CARR: Who are they?

Ms Mulder : Apologies, Senator—I'll have to take that question on notice. I just don't have the list in front of me. We are going to the process of finalising membership at the moment. We are inviting some businesses to attend and I'd like to seek their permission first before we put their names out publicly. But we are inviting members—

Senator KIM CARR: That's a normal criterion for a consultation group—that people know who you are consulting. That's the whole point.

Ms Mulder : Yes, and it will be public, and we will certainly be publishing the content of our meetings, once they've happened.

Senator KIM CARR: Have you got terms of reference for this group?

Ms Mulder : We have a draft terms of reference which we would obviously take to the first meeting before they become final.

CHAIR: I just don't have a sense of how many people are participating.

Ms Mulder : The difference as well from the NRG to the new RDTI roundtable is that it will be a rolling membership, which means there are a considerable number of members. We are talking about a number of around 30.

CHAIR: Are they participating as individuals or as representatives of businesses?

Ms Mulder : As representatives of their organisation. Not all members will be invited to the same meeting. They'll be invited to one or two of those meetings.

Senator KIM CARR: How do you get continuity of advice if not the same people are—

Ms Mulder : The intention is, depending on the agenda item and the focus of the agenda item, to have the right people in the room to give advice around those issues. I guess that was a proposal coming from the previous NRG.

Senator KIM CARR: You don't think you're asking the people to get the answers you want to hear?

Ms Mulder : I don't think so, Senator.

Senator KIM CARR: It could be interpreted that way, though, surely.

Ms Mulder : I would hope not.

Senator KIM CARR: That would be unfair, would it?

Ms Mulder : I think so—yes. We are genuinely trying to seek views.

Senator KIM CARR: You haven't talked to anyone, it would seem—no group—for two years. I suppose they should feel lucky that they're being talked to at all.

Ms Mulder : Certainly you are correct—the NRG hasn't met for some time—but we engage with stakeholders all the time.

Senator KIM CARR: It's gone pretty well, hasn't it—the consultations? You've just done another report. I thought that went swimmingly—didn't it? There was widespread advice. It was a very good recommendation. You know we both agreed on that. There was quite clearly very widespread concern about the legislation. Surely you would have picked that up in your consultation.

Ms Mulder : Again, the RDTI and the NRG is not a policy forum; it's an administration forum.

Senator KIM CARR: Have you asked anyone about this proposal to outsource the integrity support measure?

Ms Mulder : Apologies; what you mean by 'asked anyone'?

Senator KIM CARR: Outsource or privatise.

Ms Mulder : Do you mean our expression of interest?

Senator KIM CARR: Yes, consulting with people about implementation. Isn't that what you just said to me? You were talking to people about how to run and implement the program?

Ms Mulder : Given this is an expression of interest process and a tender process, there are some restrictions.

Senator KIM CARR: I'm sorry; so you haven't actually consulted with them at all. You've only got an expression of interest.

Ms Mulder : We certainly consulted within the department and with the Australian Taxation Office.

Senator KIM CARR: So you consulted the department about the department's actions? Is that what you are saying?

Ms Mulder : We've certainly been doing robust work to look at the—

Senator KIM CARR: It doesn't sound very robust to me. You consulted the department about the department's implementation?

Ms Mulder : About the process going forward—that's correct.

Senator KIM CARR: So who else have you spoken to about it?

Ms Mulder : In terms of the expressions of interest? Again, it's a tender process. We haven't engaged in that regard.

Senator KIM CARR: Let me go to specific measures then. The expression of interest for the program integrity support, I understand, closes next Wednesday. Is that right?

Ms Mulder : It closes on Wednesday the 27th; that's correct.

Senator KIM CARR: Are you able to tell me how me people have responded?

Ms Mulder : No, I'm not, unfortunately. That is due to probity reasons.

Senator KIM CARR: Yes, yes. That's why I asked if you were able to tell me. The purpose of expression of interest was to identify potential suppliers to assist the program's integrity function. Is that correct?

Ms Mulder : That's correct.

Senator KIM CARR: Are there program integrity functions that the department is required to do?

Ms Mulder : Yes, the department is required to undertake integrity functions.

Senator KIM CARR: Is there a lack of expertise in the department in terms of interpreting the applicability of the act in regard to R&D?

Ms Mulder : No.

Senator KIM CARR: So why do you need to outside of the department in terms of a core public service function in the administration of the law?

Ms Mulder : As I'm sure you're aware, the May 2018 budget announced increased resources for the integrity and improvement of program administration. This is one of the strategies that we are undertaking in order to achieve that. We are not outsourcing core functions or delegations of the department; we are at this stage seeking expressions of interest from external providers in terms of how they may be able to support us with those integrity and compliance functions.

Senator KIM CARR: So this is enforcement action by external providers?

Ms Mulder : They will be working with us in a complementary capacity, but the core functions of decision-making and delegations remain with the department.

Senator KIM CARR: Why do you need private providers to do this?

Ms Mulder : This is a way of implementing the 2018 budget measure. It's complimentary to what we have at the moment. In many ways, it's a private-sector-public-sector arrangement which will allow us to leverage the best outcomes.

Senator KIM CARR: Would the AFP go to outside providers to help them enforce the law?

Ms Kelly : I'm responsible for the Administration of the program. As you would expect, we're implementing the budget measure from the May budget last year. That budget measure was about increasing our capacity for compliance work in this program. Part of that capacity increase is additional staff, and we have taken on additional staff to do that and are investing in the capability of those staff. But we're also looking at a range of other ways to increase the capacity to where we think it needs to be. So this expression of interest process is part of exploring whether there are other ways to boost the capacity we have to do compliance within the program.

Senator KIM CARR: By going to private providers?

Ms Kelly : For certain aspects that would support our actions in conducting compliance work.

Senator KIM CARR: How are you possibly justifying going to private providers for running these programs?

Ms Mulder : At this stage we're running an expression of interest process to see whether or not there is something that the market can provide to us to support us in doing this. So we're still at the expression of interest process, and no final decisions have been made.

Senator KIM CARR: On whose advice did you seek this course of action?

Ms Mulder : As you would expect, when a budget measure is announced, it's the department's responsibility to implement that budget measure.

Senator KIM CARR: Privatising?

Ms Kelly : Government has indicated that it wishes to increase the compliance work on the program and it allocated certain resources for doing that, and now it's up to the department to explore the options and the most effective options for us in increasing that capacity.

Senator KIM CARR: I see. So how many extra staff did you put on?

Ms Kelly : I will ask Ms Mulder to provide the detail there, but we have had additional staff join the program.

Ms Mulder : That's right. We had additional staff in terms of implementing some of the reforms as well as the integrity and compliance functions—around nine ASL.

Senator KIM CARR: How much money were you provided to do the extra compliance work?

Ms Mulder : As it's an open tender process and we haven't put those financials into that process, we certainly received, as you will see in the PBS, $15 million to undertake reform work, but I wouldn't like to break that down.

Senator KIM CARR: There's no way nine people would take up $15 million.

Ms Mulder : No, but that $15 million was for a range of reform work, not just this work, so it's not connected to the EOI. We haven't put that information in the EOI.

Senator KIM CARR: When are you intending to go to a tender for this?

Ms Kelly : That would depend upon the response to the expression of interest process.

Senator KIM CARR: I hope it's not before the election—I really do.

CHAIR: Senator Carr, that sounds very threatening.

Senator KIM CARR: It is just really outrageous to privatise a core function like audit and compliance when you've been provided $15 million to do the job? I'm just wondering: how do you manage the conflict-of-interest situations here?

Ms Mulder : We have asked those who are applying through the expression of interest process to address that question, and we will consider that.

Senator KIM CARR: Who have you asked?

Ms Mulder : Potential providers.

Senator KIM CARR: Really? You asked them to address conflict of interest—people who are subject to the conflict of interest?

Ms Mulder : It's the part of the process that we will work through once we receive submissions.

Senator KIM CARR: Can you tell me anywhere in the taxation system where this would work?

Ms Mulder : I understand that there are other government agencies which outsource various natures of work.

Senator KIM CARR: In the taxation system?

CHAIR: Senator Carr, I think that's inappropriate. This agency is not the ATO, so they are not familiar with all the operations of the tax system. I think that's an entirely unreasonable question.

Senator KIM CARR: Madam Chair, the department surely got advice on this.

CHAIR: But that wasn't the question that you asked. You asked what other areas of the taxation system were privatised?

Senator KIM CARR: They must know whether or not this works anywhere else.

Ms Mulder : We have certainly been discussing and working with the ATO. They are across that we are looking at this strategy.

Senator KIM CARR: Okay. Let's go through then. What is the scale of your current auditing and compliance activity? What are you doing at the moment in terms of compliance and audit activity?

Ms Mulder : I recall that we had this discussion at the last estimates. Having said that, I'm also aware that the Australian tax office has provided figures around their compliance activities as part of the Senate hearing. As co-administrators, we do like to stay in alignment with each other. In 2017-18 we initiated, as the department, 885 compliance activities, which make up preregistration reviews, registration reviews and statutory assessments, which includes the advanced and overseas findings. But I would note that all registrations that come into the program are looked through a risk filter process. So, in terms of reach, we do look at all applications.

Senator KIM CARR: Have you had many disputes about your compliance activity?

Ms Mulder : We have a right of reply and people don't agree with our assessment, and that is an internal review which I think is also part of those statistics. Then, if they disagree with the outcome of the internal review, matters go to the AAT in the first instance.

Senator KIM CARR: Are you able to tell me how many audits have actually been disputed?

Ms Mulder : I can certainly say that, in terms of internal reviews, we had 83 internal reviews initiated in the 2017-18 financial year.

Senator KIM CARR: I want to be clear about the changed arrangements. Would it be true to say that, in regard to the registered claims, the initial contact for taxpayers will be a notice that the finding process has commenced and an attached statement or issues of concern about the eligibility of claimed activities? Is that where it starts?

Ms Mulder : In terms of when we initiate a compliance activity, that's correct. I notify the company and we provide them with a notice of examination, which outlines the issues or the concerns that we see as part of their registration, and can seek to clarify and receive some further information from them.

Senator KIM CARR: How is that different from the previous method of assessment?

Ms Mulder : The previous method was more of an escalating process. It had longer time frames and it may have started off with something like a desk review or an original risk assessment and then escalated through a process, which may have meant multiple contacts with the company and an extended period of time. As of 1 July we have instigated a more streamlined compliance process.

Senator KIM CARR: It has been put to me that what's now happening is that the taxpayer is asked to send in supporting contemporaneous documents in an arms-length process, and that AusIndustry will then make a determination as to whether or not it will recommend disallowing the claim to Innovation and Science Australia. Is that correct?

Ms Mulder : To a degree, yes, that's correct. We certainly do notify companies when we identify them for compliance activities. We allow them an opportunity to respond. That may be in written form or, in some cases, it may be a meeting or it may be a combination. We certainly have time frames around that response and do our best to work with companies to get the information that we need in order to make a finding, noting that the information we are requesting is information that should be part of the R&D activities that they've undertaken and part of the evidence that they use to self-assess.

Senator KIM CARR: Has AusIndustry had representations to the effect that this streamlining is in fact counter to case law, and that the regulator must look at the supporting documentation before it forms a view on the eligibility?

Ms Kelly : I don't think Ms Mulder said that the regulator formed a view prior to considering the documentation. It was merely the order and the number of times that we went back to the applicants and the nature of the documentation that was provided.

Senator KIM CARR: Let me rephrase the question: has it been put to you that your processes are in fact in breach of case law precedent?

Ms Mulder : No, it has not.

Senator KIM CARR: You've not had that advice?

Ms Mulder : No.

Ms Kelly : I think quite the contrary. The process that you described is the proper administration of the act. It's giving the applicant an opportunity to put material that is then considered, and then advice is provided to the decision-maker, which in this case is Innovation and Science Australia.

Senator KIM CARR: Is it the case that an Innovation and Science Australia finding was sent to a taxpayer without the customary reasons for decision document and that the taxpayer was informed that these could now only be obtained by making a freedom of information request?

Ms Mulder : I'm not sure I completely understand your question.

Senator KIM CARR: Do you want to take that on notice, because this is a specific—

Ms Mulder : No, if you could rephrase it for me, that would be helpful.

Senator KIM CARR: I'll read it directly: is it the case that an Innovation and Science Australia finding was sent to a particular claimant, or a taxpayer, without the customary reasons for decision document and that the taxpayer was informed that this could only be obtained by making a freedom of information request?

Ms Mulder : I probably couldn't answer that definitively, so I'm happy to take it on notice.

Senator KIM CARR: Will you take that on notice and check your records.

Ms Kelly : We certainly will, and, of course, we would never discuss the particulars of an individual case.

Senator KIM CARR: No, and I didn't ask you about a specific case. I'm asking: has it occurred, and you'll be able to tell me yes or no. You don't have to identify the particular case, but your records will show whether or not this has actually happened.

Ms Kelly : We will certainly seek to confirm or establish that.

Senator KIM CARR: That's what has been put to me. I have not identified a claimant. I'm identifying a process.

Ms Kelly : Of course.

Senator KIM CARR: In regard to the announcement that I see in the Financial Review today that the government's introducing new guidelines for software, what's the situation there?

M s Mulder : That's correct. The department has today released the guidance for software development.

Senator KIM CARR: Have they been tabled, the guidelines?

M s Mulder : They went up on our website this morning.

Senator KIM CARR: Is it expected that they will deal with the concerns that have been expressed about the position on software?

M s Mulder : Our expectation is that the guidelines released today, which are in a more user-friendly and easy-to-read format, will better clarify what's eligible and what's not eligible in the program and provide more certainty to those businesses that are undertaking a self-assessment as they apply for the RDTI.

Senator KIM CARR: It's too early to get a response yet, I suppose?

M s Mulder : A response in what regard?

Senator KIM CARR: From industry on this matter. Have you had any response from them?

M s Mulder : I think it perhaps may be a little early.

Senator KIM CARR: When did the Financial Review get the guidelines? It was clearly before they were published on the departmental website. I read the article at five o'clock this morning, so presumably they were given yesterday. Is that the case? Is it normal practice for the department to release its guidelines—

Senator Canavan: We'll take it on notice.

Senator KIM CARR: I think we can probably work out the timelines here. But is it normal practice to release the guidelines in that way?

M s Mulder : I think we've taken that on notice, Senator.

Senator KIM CARR: Is it normal practice though?

Senator Canavan: I'm not aware of these specific circumstances, but it often is normal practice for the government to seek to get some exposure for what it's doing, partly so that people can know that there are, in this case, updated guidelines and can find them. I don't think there's anything unusual in that regard.

Senator KIM CARR: Under the administrative orders, Minister, this is the department that's responsible for science policy, isn't it?

Senator Canavan: That's my understanding. I'm not sure exactly what the administrative orders say, but—

Senator KIM CARR: You are responsible for science policy under the administrative orders, aren't you?

M r s Urquhart : Yes, Senator.

Senator KIM CARR: In terms of the review that Minister Tehan has announced on science priorities, were you consulted?

M r s Urquhart : Yes, we were. I assume you're referring to the media release from a day or two ago?

Senator KIM CARR: Yes.

M r s Urquhart : The headline of that media release is a little bit misleading. It's actually a review of how the science and research priorities apply to the ARC grants. You'd also be aware that we're doing work reviewing the science and research priorities more broadly, and we're looking forward to the work that's being undertaken in the ARC contributing to our own examination of the science and research priorities.

Senator KIM CARR: When were you consulted about the ARC review?

M r s Urquhart : I would have to take that on notice, unless my colleague Dr Mitchell recalls the timing. But there was an announcement last year by the Minister for Education, and we had discussed it with the Australian Research Council around that time.

Senator KIM CARR: That was the one about the grants, from October last year. I'm talking about the one made two days ago.

M r s Urquhart : That's right, but it refers to the same activity.

Senator KIM CARR: So it is the same activity? It's just a re-announcement?

M r s Urquhart : You'd have to ask the department of education.

Senator KIM CARR: That's where the confusion is; it's just the same announcement. So this is the one announced on 19 February, where they announced a whole series of people on it. Is that the same one?

M r s Urquhart : My recollection is that the media release from 19 February did talk about the experts that were being assembled to have a look at that work, yes.

Senator KIM CARR: Is that from the advisory council?

M r s Urquhart : The details of that, you would have to ask the Australian Research Council, I'm afraid.

Senator KIM CARR: That's not your area; I agree. Although, there is no departmental representative from this department on that, is there?

M r s Urquhart : I don't think there is mention in that media release of that. We haven't got to discussing whether there would be observership with the Australian Research Council.

Dr Mitchell : The panel will consist of the following members of the current ARC advisory council.

Senator KIM CARR: Yes, I can see that; I have got the press release in front of me. I am just wondering if this department is responsible for science policy, whether or not you would be involved?

M r s Urquhart : We have been in discussion with the Australian Research Council about their work and, as we said to the Australian Research Council, we look forward to that work informing our own so we will continue liaising closely with the ARC about that work as it unfolds.

Dr Mitchell : And I can confirm Mrs Urquhart's evidence that we have been in discussions with the ARC.

Senator KIM CARR: When is your review due to be concluded?

M r s Urquhart : That work is under way at the moment. I will just consult my notes about exactly the timing for that.

Dr Mitchell : The review was originally due in 2017 but was deferred to ensure it takes into account the most current policy context, including the National Science Statement that came out in 2017, the government's response to Innovation Science Australia plan in 2013 that came out in May 2018. It would have been considered as part of the National Science and Technology Council.

Senator KIM CARR: Can you tell me when it is due?

M r s Urquhart : We don't have a specific due date for that work.

Senator KIM CARR: So it is on the never-never, is it? Is it one of those sorts of reviews?

M r s Urquhart : I would like to think not. We are keen to examine and we have done quite a bit of work already about the model.

Senator KIM CARR: Of course you are. How long have you been doing that? You have been reviewing this quite a while, haven't you?

M r s Urquhart : We have been undertaking work in the department looking at the priorities and how they are applied.

Senator KIM CARR: When did you say it started?

M r s Urquhart : The priorities were established—

Senator KIM CARR: I know when the priorities were established; this is the Chubb list, isn't it? I know when that was done. I am wondering when the review started.

M r s Urquhart : It is not a formal review; it is work that is undertaken within the policy area. There was an expectation of us that we would review, examine the priorities and their implementation at the two-year mark.

Senator KIM CARR: When did it start?

M r s Urquhart : I'm sure that we have been doing background work since 2017, but in terms of—

Senator KIM CARR: That's what you said; that's right. When in 2017?

M r s Urquhart : I couldn't tell you precisely; I would need to go and examine—

Senator KIM CARR: Will it be early?

M r s Urquhart : I would need to look at my notes.

Senator KIM CARR: So it has been going on for two years now, has it?

M r s Urquhart : Obviously we take an active interest in the implementation of the priorities across the sector. As Dr Mitchell said, we are looking forward to the opportunity to have the National Science and Technology Council look at our work in that space.

Senator KIM CARR: It has been delayed but we are not certain for how long.

M r s Urquhart : We will be discussing with the National Science and Technology Council and ministers the plan for that work.

Dr Mitchell : Work has been under way. The work is considering, for example, the intent and the potential effects of prioritisation of science and research, including: an assessment of priority systems in Australia, the challenges posed by the current form of the priorities, the benefits and challenges of alternative models of prioritisation including international examples, the role of the priorities in the broader science policy framework, and considering the release of the National Science Statement in the 2030 strategic plan.

Senator KIM CARR: Who is doing this informal review that has been going on for two years?

M r s Urquhart : We are undertaking that in my division.

Senator KIM CARR: It's your division? So there is a whole division doing it?

M r s Urquhart : No, it's the science policy team.

Senator KIM CARR: How many are in the science team?

Dr Mitchell : It is a small subset of that team.

Senator KIM CARR: I bet it is! So who is doing the review?

Dr Mitchell : I will take that on notice.

Senator KIM CARR: Surely you must know; it has been going to two years. It must be on someone's desk—this is the review; this is the person—so who is it?

M r s Urquhart : Senator, as you would expect, officers are undertaking that work in my division. They report to me, the head of division.

Senator KIM CARR: You told me that. I just want to know who it is.

M r s Urquhart : We'll also be taking that to the National Science and Technology Council.

Senator KIM CARR: I've got that. You've told me all of that. I want to know who is doing the review. It's not so difficult a question. Who's doing it?

M r s Urquhart : I've said the review work is being undertaken by officers in that team.

Senator Canavan: I've let this go for a while but Senator Carr is asking the same question, repeatedly.

Senator KIM CARR: I haven't got an answer!

Senator Canavan: I heard that the official had taken that question on notice.

CHAIR: I think that's fair and reasonable.

Senator Canavan: My conclusion, here, is that the answer to Senator Carr's question is around identifying staff that would be below the SES level of the department. The normal convention is that we don't name such staff. But it's been taken on notice so we'll seek to provide you with information on that.

Senator KIM CARR: The officer just had to say that!

CHAIR: Thank you, Senator Carr.

Senator KIM CARR: They just had to say, 'Sorry, it's a junior officer doing the review.'

CHAIR: I think the senator said that.

M r s Urquhart : I indicated—

Senator KIM CARR: If it's a junior officer who's been working on this for two years, maybe that accounts for the delay.

M r s Urquhart : I thought I indicated that it was officers in the section and they reported to me as the head of the division.

Senator KIM CARR: And they've reported what?

M r s Urquhart : They report to me, on an ongoing basis, about that.

Senator KIM CARR: If they've been working on it for two years they must have quite a body to report.

M r s Urquhart : There's no doubt that we have ongoing discussions about the science and research priorities and their implementation.

Senator KIM CARR: How much did they spend on this review?

M r s Urquhart : If you would like me to calculate the costs of salaries in that team and make an attribution—

Senator KIM CARR: It's a simple matter. It's a simple question. I get the impression that not much has gone on. I get the impression that you don't have any sense of when this is going to come to an end. I get the impression that you're making this up as you go along. Would that be a reasonable—

CHAIR: That's unreasonable, Senator Carr.

M r s Urquhart : I'm sorry if you have that impression, Senator Carr. The department has been undertaking work. We've previously found that data issues mean that research activities against each priority cannot be measured and reported to an acceptable level of accuracy. We're currently carrying out preliminary internal work to examine the policy rationale for the priorities and their role in supporting the science system, consistent with the national science statement and ahead of considering any changes to the priorities themselves.

As Dr Mitchell outlined, there are a set of things that we have considered and decided to pursue, in that review work, that she has outlined. We've produced a draft discussion paper, which has been circulated within relevant agencies for feedback. A summary of that preliminary work is intended to be presented at the National Science and Technology Council. We then anticipate getting feedback from that process to inform the next step. Any review of the priorities involves further widespread consultation, prior to any conclusions being drawn.

Senator KIM CARR: Minister Tehan says that there are 'other reviews'—it's used in the plural—'of the priorities'. Can you enlighten me? What other reviews are there?

M r s Urquhart : The only review I'm aware of is the work that we're undertaking and the review that the education minister has announced.

Senator KIM CARR: It says, 'other reviews'.

CHAIR: Maybe that's a more appropriate question for the education and employment committee.

Senator KIM CARR: I'm just wondering. Perhaps it's because he hasn't talked to you, about this press release, that he could make an error like that.

M r s Urquhart : No, but the Australian Research Council has spoken to—

Senator KIM CARR: Okay, I'll take it up with the ARC. Fair enough. If I could ask a few simple questions about the SKA—

M r s Urquhart : Certainly.

Senator KIM CARR: there was a reference there—we spoke of this earlier—about the industry procurement officers. Do you regard that as a downgrading of the industry engagement?

Mr Luchetti : I'm struggling to think of a context for the question. Previously, we were talking about the industry liaison officers who work with the European Southern Observatory.

Senator KIM CARR: There was an industry group that operated on ESO. How many are there?

Mr Luchetti : Sorry, Senator. In Australia we have a body called the Australian SKA industry consortium. They meet a couple of times a year. We use the opportunity to provide an update on where the project's at and talk about potential opportunities. We continue to do that. But given the nature of where the SKA is up to, in that we haven't started procurement for the construction of the telescope, activity with that group has been very much on an information-sharing basis.

Senator KIM CARR: But there used to be a group operating here. I thought there were about 60 companies involved.

Mr Luchetti : That's ASKAIC—the Australian SKA industry consortium.

Senator KIM CARR: How many are involved now?

Mr Luchetti : It varies. Because of what I just explained, companies come and go from the group. I think most maintain a watching brief. But, because their focus is on current industry opportunities, we find that some will participate for a few meetings and then drop off. Just to answer your question, in our database at the moment we have over 100 companies registered.

Senator KIM CARR: But you only have six, according to your annual report, participating in the preconstruction work program.

Mr Luchetti : That's right. That relates to the grants for working on the design of the project. Currently at the moment, it's mainly research institutions such as CSIRO and the University of Western Australia—

Senator KIM CARR: I mentioned companies.

Mr Luchetti : Yes. Those institutions are the lead bodies that we have and they work with a variety of companies. In the case of the University of Western Australia, they are working with a company called ThoughtWorks and also a company called Amazon Web Services. CSIRO worked with Aurecon. In the past we've had Cisco Systems.

Senator KIM CARR: I see. So you've got 100 on your mailing list but only six that actually engage directly.

Mr Luchetti : That's because of where we are in the project at the moment. The focus is on design, not construction.

Senator KIM CARR: That is what I am saying, though. There used to a much larger group of people actively engaged.

Mr Luchetti : We weren't at the number of 60. It may have been slightly more than six, but it would have been around a figure of 10 at most.

CHAIR: Senator Carr, I am conscious that we are revisiting issues we have already covered in a different part of the program and also that it is time to break.

Pr oceedings suspended from 15:07 to 15:26

CHAIR: The committee will resume its consideration of estimates in the Industry, Innovation and Science portfolio. Senator Carr.

Senator KIM CARR: Because we're trying to finish this by 4 pm, I'll come back to the SKA if I get a chance, Mr Luchetti—not now; I'll come back to you if I've got time. Can I just deal with the National Science and Technology Council. Has that met?

M r s Urquhart : A meeting is scheduled.

Senator KIM CARR: When is it scheduled for?

M r s Urquhart : I think it's 25 February.

Senator KIM CARR: The 25th, is it?

M r s Urquhart : Yes, 25 February.

Senator KIM CARR: When did it last meet?

M r s Urquhart : This will be the inaugural meeting of the council in its evolved form—that's the National Science and Technology Council. Obviously, we have dates for the meetings of the Commonwealth Science Council. I think we provided those in our answers to questions on notice from you.

Senator KIM CARR: Yes, you did. The old council hadn't met for a while, had it?

Unidentified speaker: August 2017.

Senator KIM CARR: Why did the old council not meet in 2018?

M r s Urquhart : Meeting dates, obviously, depend on the availability of members. The Commonwealth Science Council was considerably larger than the new model of the National Science and Technology Council. It had a great deal more ministerial representation but also considerably more sectoral representatives. So one challenge was travel and other commitments of members, meaning scheduling a meeting would be challenging on occasion. But I should point out that the Office of the Chief Scientist has performed the secretariat role for the Commonwealth Science Council as well as for the new National Science and Technology Council.

Senator KIM CARR: Yes. We're not blaming the Chief Scientist for not meeting, though.

M r s Urquhart : No, I'm not blaming him at all. I'm just explaining that it's my understanding that those challenges existed.

Senator KIM CARR: Sure. The previous meeting, I understand, was on 17 August 2017. That's a fair length of time, isn't it?

M r s Urquhart : 17 August is correct.

Senator KIM CARR: It's a fair length of time, though, isn't it, to not have a meeting?

M r s Urquhart : The Commonwealth Science Council met in that period less frequently than intended; that is true. It's intended, with the new model, that meetings can be scheduled more easily.

Senator KIM CARR: I see. You've said that it's smaller, with fewer ministers. Why is that?

M r s Urquhart : The intention is that the Prime Minister will continue to chair, the Minister for Industry, Science and Technology remains the deputy chair; and other ministers can be invited according to agenda items and their relevance to a minister's portfolio.

Senator KIM CARR: You've managed to eliminate most of the non-scientific members of the council.

M r s Urquhart : I wouldn't cast it like that.

Senator KIM CARR: How would you classify it? You've reduced the size. On what basis have you deselected people?

M r s Urquhart : I wouldn't characterise it as deselecting people. It's rather that the membership has been assembled to, I guess, focus on the issues that we expect to unfold in the agenda ahead, so there has been attention to that.

Senator KIM CARR: Sorry, I didn't quite catch the answer to the question. On what basis did you actually remove people? What was the rationale?

M r s Urquhart : It wasn't a matter of removing people. As I explained, the intention with the new model, the National Science and Technology Council, is that it is focused on the forward agenda. The refreshed council has the opportunity to develop advice for the immediate and long term through a restructured work program. The horizon-scanning work that was a feature of the Commonwealth Science Council's work program continues. It's also intended the refreshed council will have research challenges agreed to address current or emerging issues, and will obviously also consider other issues pertaining to the science and research system, such as support for research on gender equity in STEM.

Senator KIM CARR: Right. How do people get selected, then? They get appointed by the minister, clearly, but on what basis? What are the criteria?

M r s Urquhart : There's no doubt that these are significant appointments, and there was considerable consultation in government. And, as I've said, the members were chosen on the basis of—

Senator KIM CARR: Sorry, 'significant consultation'?

M r s Urquhart : As you would expect with significant appointments within the usual processes.

Senator KIM CARR: All right. What was the nature of this significant consultation?

M r s Urquhart : I suppose my emphasis is on them being significant appointments. As I'm sure you appreciate, that involves a process of consultation with prime ministers and other ministers.

Senator KIM CARR: So the significant consultation is talking to the Prime Minister?

M r s Urquhart : I would apply the 'significant' to the appointment.

Senator KIM CARR: You did say 'significant consultation'.

M r s Urquhart : I did.

Senator KIM CARR: Right. So I just—

M r s Urquhart : I'm correcting myself.

Senator KIM CARR: want to know what that involved, apart from talking to the Prime Minister. The minister wrote a letter to the Prime Minister, did they? Is that what happened?

M r s Urquhart : I think it was considered in cabinet.

Senator KIM CARR: In cabinet? What date was the cabinet meeting?

M r s Urquhart : I'll have to take that on notice. I don't have that date in front of me. It was in the second half of last year.

Senator KIM CARR: How long would it take you to get that date? Would it be easy? You'd have an officer here somewhere that could probably pull that out of the records pretty smartly, wouldn't you?

M r s Urquhart : We obviously work with the Office of the Chief Scientist and with ministers to consider improvements that could be made to the Science Council model, as well as looking at the appointments to that model, and its future work program and how it might be focused. So there was all of that work undertaken last year.

Senator KIM CARR: Sure.

M r s Urquhart : In terms of the specific time lines, I would have to take those on notice.

Senator KIM CARR: No, I'm interested in the date on which it went to cabinet.

M r s Urquhart : Yes, and I said I would have to take that on notice.

Senator KIM CARR: Yes, and I'm asking you: do you have an officer here that can check that? It wouldn't be too difficult.

M r s Urquhart : I've just spoken to Dr Mitchell on the side, and she's indicated we would need to take it on notice.

Senator KIM CARR: I've heard that. I'm asking you again: do you have an officer here that can tell me the date it went to cabinet?

M r s Urquhart : No, I don't.

Dr Smith : We don't normally provide dates for cabinet meetings.

Senator KIM CARR: Yes, you do. I'm not asking you about the nature of the advice you provided. Under the normal regulations and the normal protocols, the date on which a decision is made by cabinet is absolutely consistent with advice provided to a Senate estimates committee.

M r s Urquhart : What I can say is that the refreshed council was announced by the minister on 28 November.

Senator KIM CARR: Yes, I know—the date on which the Leader of the Opposition made a very significant speech at the Academy of Science. I want to know the date on which the cabinet considered this.

Ms Kelly : We might have to discuss that with the Department of the Prime Minister and Cabinet. My understanding is that the usual practice is that to reveal a matter that is considered does reveal the deliberations of cabinet.

Senator KIM CARR: No, that's not right. It's just not right. The date on which a decision of cabinet is made is a perfectly legitimate and long-established practice of Senate estimates. It is not the case that you have to consult with anyone about that.

Ms Kelly : Senator Carr, that's not my experience of other committees that I have appeared at—but if we could clarify that with the Department of the Prime Minister and Cabinet.

Senator Canavan: I think we should take this question on notice, given the discussion between the senator and officials. I'm not aware of the previous practice. To me, it does certainly go to matters under the Department of Prime Minister and Cabinet, so I'd like to take that on notice and get back to the committee.

Senator KIM CARR: You'd be able to tell me the date on which non-government members were approached to sit on the council?

M r s Urquhart : From the notes in front of me, Senator, no, I can't tell you that.

Senator KIM CARR: There is a National Science, Technology and Research Committee, is there?

M r s Urquhart : That's correct, there was a national science, technology and research committee that sat underneath the Commonwealth Science Council.

Senator KIM CARR: Does it exist, or not?

M r s Urquhart : There still will be senior officials meeting that will sit under the new National Science and Technology Council. It's intended that it meet annually.

Senator KIM CARR: What is the membership of that body?

M r s Urquhart : Can we come back to you to give you the precise list of the members of that committee, Senator? But it's the usual representation of portfolios that you would expect.

Senator KIM CARR: Given that you've got a meeting on 25 February, have you got an agenda?

M r s Urquhart : Obviously, there is an agenda, but it's with ministers' officers at present so I'm not at liberty to speak about it.

Senator KIM CARR: It's been agreed though, has it?

M r s Urquhart : It's under consideration by ministers as we speak, Senator.

Senator KIM CARR: When will the Chief Scientist report to cabinet on the activities of the council?

M r s Urquhart : There's not a date specified for that, but, as you know, in the terms of reference I think there is reference to the Chief Scientist reporting to cabinet annually.

Senator KIM CARR: When you were establishing this new body, was there any consideration given to international practice, in terms of other government structures?

M r s Urquhart : We like to consider international practice generally—sorry; that's not what you're asking, Senator. You're asking whether we looked at best practice in terms of science councils: yes, we did.

Senator KIM CARR: Which countries?

M r s Urquhart : My recollection is that we looked at models in the United Kingdom and also in the US, just as we did with the establishment of the Commonwealth Science Council at its outset.'

Senator KIM CARR: Will there be any public engagement on the activities of the council?

M r s Urquhart : Certainly. It has been the practice with the Commonwealth Science Council to issue a communique at the conclusion of the meeting. It's intended that that will continue.

Senator KIM CARR: Will there be reports published?

M r s Urquhart : I would expect so. The Horizon Scanning work that the Commonwealth Science Council was undertaking will continue in the National Science and Technology Council's agenda.

Senator KIM CARR: Will there be any restriction on members' capacity to discuss the proceedings?

M r s Urquhart : Senator, there's not been any instructions issued to members about a restriction on their capacity to discuss proceedings. As I said, there will be a communique issued. The nature of this meeting is that it is a meeting with sector representatives. There will be summaries published about the discussions at the meetings.

Senator KIM CARR: And so will the portfolio minister be required to respond to the reports of this new body?

M r s Urquhart : Are you referring specifically to the Horizon Scanning reports?

Senator KIM CARR: No, in terms of any of the reports that it commissions—that, as you've indicated, it will be required to do—will the portfolio minister be required to respond to the reports of the NSTC?

M r s Urquhart : What I referred to in my comments were the Horizon Scanning reports, and there has been considerable interaction in government around the Horizon Scanning reports emerging from the Commonwealth Science Council, and I would expect that to continue with the National Science and Technology Council.

Senator KIM CARR: Would you anticipate they are the only reports which the portfolio minister would be required to respond to?

M r s Urquhart : If you're suggesting that the National Science and Technology Council may well oversee other reports and if you're asking if the minister would then be interacting with those reports, we're sort of talking in the hypothetical but, in principle, that opportunity exists.

Senator KIM CARR: Given that the committee that preceded this one hadn't actually met for the better part of two years, what does it say about the government's attitude to scientific advice of this type?

Senator Canavan: My understanding from previous estimates is that it hasn't been uncommon for this committee to not regularly meet. The government has taken significant steps to invest in science and research, including in the last budget with a significant, I think, $1.5 billion package of investment in both government and non-government capabilities. As the officials are outlying, arrangements have been put place to ensure future meetings. I am more interested in action than meetings anyway.

Senator KIM CARR: We will see what happens on the 25th won't we.

Senator Canavan: I won't be there.

Senator KIM CARR: I can tell. I might go to Mr Luchetti again in terms of the SKA. Mr Luchetti, you've indicated before to Senator Arthur Sinodinos that you are due to sign a treaty in March, that was correct was it?

Mr Luchetti : That's right March 12.

Senator KIM CARR: In Rome. I take it Australia has agreed to sign this treaty?

Mr Luchetti : That's correct.

Senator KIM CARR: That's good. When will the treaty or the text of the treaty be made available?

Mr Luchetti : I will have to take that on notice. There is a process that I understand that it goes through. We then need to ratify the treaty and then it moves into JSCOT and through that process. I'm not sure if it's just through that process or whether it generally becomes publicly available or all the member countries release it.

Senator KIM CARR: You would've signed it presumably. It's not a matter for ratification is it?

Mr Luchetti : It still needs to be ratified through the Australian system and it's the same for a number of the other partner countries—

Senator KIM CARR: It should be treated as a formal treaty process?

Mr Luchetti : That's right. Just to add, there are a number of member countries that may sign the treaty at a later day, so that's why it may not be publicly released until those countries have the opportunity to sign.

Senator KIM CARR: Does the ratification process have any impact on any financial allocations?

Mr Luchetti : No, it doesn't.

Senator KIM CARR: What are the outstanding financial allocations required from the Australian government?

Mr Luchetti : At this point in time there's a range. We have an obligation to continue to fund the SKA organisation, so that's the UK company where the headquarters are located. We are also still supporting some companies or institutions that are participating. As I mentioned earlier, we're getting close to the end of the pre- construction phase, so there's still some funding for that. But then we still move into a bridging period, which is between the end of pre-construction to construction. The Australian government is providing some funding to support those activities also.

Senator KIM CARR: How much is it providing?

Mr Luchetti : That figure is, if I get that maths correct, $25 million over 2018-19 and 2019-20.

Senator KIM CARR: Are there any outstanding appropriations required?

Mr Luchetti : There are. There's an obligation for Australia to provide support with regard to an engineering centre, which is to be determined where it will be located. We're thinking it will probably be in Geraldton. There is a science operations centre and we are in talks around that. There is also the need for regional centres. This is to help process the data. That's something else that we need to identify funding for.

Senator KIM CARR: I will come back to the specifics. Isn't there also an issue about power supply?

Mr Luchetti : That will be met within the budget of the SKA organisation. There is a power supply that does need to be provided to SKA 1 but that's not a cost that Australia needs to meet.

Senator KIM CARR: In terms of forwards what is the total that's required?

Mr Luchetti : None of those things have been designed as yet. The other thing I should add to that list is a permanent accommodation facility out at the site. We are finalising the design, so that influences what we need with regard to the capability of those facilities, so we don't have costings for those at the moment.

Senator KIM CARR: When do the decisions have to be made on those funding commitments?

Mr Luchetti : We expect—once again, keeping in mind that we don't have a final design—that will probably happen around the time that the construction proposal is signed off. So sometime towards the end of 2020, we'll have an idea of, roughly, what those costs are. We also have a requirement to come back to government in 2020, to provide not only some details around what the cost of SKA will be but also what will actually be built here in Australia.

Senator KIM CARR: You don't have any estimates at all about what's required?

Mr Luchetti : No, we don't.

Senator KIM CARR: So there's no need for any funding commitments to be put into this budget?

Mr Luchetti : No.

Senator KIM CARR: No budget bids are currently under review?

Mr Luchetti : None that I'm aware of, no. Sorry—I should say: none that I'm aware of, in the sense that I wasn't sure whether I should be actually commenting on proposals that might be going into the budget. But we don't have any.

Senator KIM CARR: But this is a long-term project. I mean, the Commonwealth has had to commit moneys in advance. What's the total commitment so far?

Mr Luchetti : We've spent almost $400 million over the last decade.

Senator KIM CARR: You must have an indication of, roughly, what's required to get to the construction stage?

Mr Luchetti : As I mentioned, to get to construction it will be $25 million in further activity. At this stage, we're working on the basis that construction will cost Australia roughly $145 million.

Senator KIM CARR: That was the figure I was looking for. So another $145 million is needed, roughly, in 2020?

Mr Luchetti : Construction is over a period of five years.

Senator KIM CARR: But the commitments will have to be made in 2020?

Mr Luchetti : That's right, and it is appropriated, because we have it in the NISA funding. So that money is already appropriated for construction.

Senator KIM CARR: I see. So there's an allocation made?

Mr Luchetti : That's right.

M r s Urquhart : The uncertainty that Mr Luchetti is referring to relates to the accommodation block, the engineering centre and the SKA regional data centre. The reason for that is that, first, a construction design has to be finalised, and the new SKA Observatory, once members—is it five members?—have ratified the convention, will come into being. It will agree construction. So it's the SKA Observatory, the new international legal organisation, that will be responsible for the construction decision. Then also, in the interim, work has got to be progressed on the operating plan, and obviously those items that we mentioned—the accommodation block and the size of it, the engineering centre and what it requires, and, indeed, the SKA regional data centre—all depend on how the operations plan lands.

Senator KIM CARR: But that costing issue has yet to be resolved? That's the point.

M r s Urquhart : That's correct.

Senator KIM CARR: You've got an envelope; presumably you have to meet that envelope?

Mr Luchetti : We have an envelope for the construction and operations and current activity—that's right.

Senator KIM CARR: My understanding is that the procurement guidelines may not necessarily be consistent with the Australian government's procurement process. Is that the case?

Mr Luchetti : That's not the case, because the procurement policy and the associated guidelines have not been settled. That's something that will happen over the course of the next year.

Senator KIM CARR: So how do you know that they will be consistent? That's the alternative construction.

Mr Luchetti : I just can't comment on the guidelines at the moment because I just don't know.

Senator KIM CARR: Is that the answer—you don't know?

Mr Luchetti : Yes, that's right.

Senator KIM CARR: In terms of your policy remit, you must have instructions on how to operate this; what initiatives are you authorised to take to maximise Australian industry participation in the construction of the SKA?

Mr Luchetti : We're looking at a number of areas that Australia has a strong interest in, and that reflects the infrastructure out at the site—which, naturally, we would be very competitive in providing. But we don't want to be known for just providing the infrastructure for the SKA. We want to be involved in the smarts also. And, because of our involvement in the various pre-construction consortia, we effectively have a number of fingers in different pies. So that's relating to elements of the project such as the central signal processor, the signal and data transport system, the science data processor—all those kinds of things that we would like to have industry engagement in.

Senator KIM CARR: Do you have any sense of the number of people that will be employed on the SKA in Australia?

Mr Luchetti : We don't. It is something that's in active discussion at the moment within the project. We have various figures. At times we talk about people we might have working in our Science Operations Centre, and we're looking at a number of about 50. But, once again, that's a very rough figure. But then also, during the construction period, we expect that we may have upwards of 200 people out at the site, but that would obviously tail off at the end of construction.

Senator KIM CARR: I'm sure there'd be more than 50 in terms of ongoing operations.

Mr Luchetti : That's the Science Operations Centre, but then there's the Engineering Operations Centre and various other elements. So, we would expect—I'd be making a number up—a reasonable profile.

M r s Urquhart : And it's probably important to emphasise that there's active discussion about host country arrangements underway at the moment, so they're not settled. And, as I mentioned before, you need to settle an operations plan and understand what you're building and how you're going to operate it before you know exactly what that will mean for numbers of jobs. I think another important point is that we're obviously involved in an international collaboration. There are a considerable number of countries involved, and all of those countries also have an interest in the employment opportunity. So it is what you would call a live discussion.

Senator KIM CARR: You mentioned earlier that you've brought together your capabilities in terms of optical astronomy. What financial obligations are we required to meet in regard to commitments to the Giant Magellan?

Ms Forsyth : I don't have much detail with me in regard to the Giant Magellan Telescope, or the GMT. My understanding—and I'll take it on notice to confirm—is that we don't have any outstanding obligations, and the funding is managed by Education.

Senator KIM CARR: You don't run that?

Ms Forsyth : We contributed money a number of years ago, over a period time.

Senator KIM CARR: It used to be run out of this department.

Ms Forsyth : I might have to take some of these questions on notice.

M r s Urquhart : The Department of Education and Training was managing the funding that went to the Giant Magellan Telescope, not the Department of Industry, Innovation and Science.

Senator KIM CARR: When did that happen?

M r s Urquhart : That pre-dates my arrival in Science Policy, which was 2013.

Ms Forsyth : It was a period from about 2007 to about 2013.

Ms Weston : The department has had representation on the Giant Magellan Telescope Advisory Committee. It's being run out of the ANU at the moment, who are looking after Australia's interests in that. There is active discussion at the moment about contributions from the US, for instance, and the work towards the build for that. But this is one of those assets that has moved between portfolios as there have been machinery changes.

Senator KIM CARR: I see. The original contribution came out of this department, though, if I recall rightly.

Ms Weston : I think that was part of the Super Science—

Senator KIM CARR: Super Science Initiative—that's right.

Ms Weston : Or 2008-09—around that time.

Senator KIM CARR: I would have thought there was actually a requirement now that they're in the build stage for additional support.

Ms Weston : We can take this on notice, but my recollection is that we were an early contributor and there are other contributors who now need to step up. But we will take that on notice for you.

Senator KIM CARR: Thank you very much.

Mr Luchetti : Perhaps I could just add to the answer to one of the questions Senator Carr asked. You were asking about how much money is allocated currently for SKA. It's $293 million over the forward estimates and beyond.

Senator KIM CARR: And that's already in the budget?

Mr Luchetti : That's already in the budget.

Senator KIM CARR: And you said these current forward estimates?

Mr Luchetti : That's right—this forward estimates and beyond, because it's not just a four-year measure; the funding goes I think until 2025-26.

Senator KIM CARR: But that's the full $293 million?

Mr Luchetti : Yes.

Senator KIM CARR: Thank you.

Senator PATRICK: I want to ask some questions about where we are up to in relation to the announcements made by the government in relation to advanced manufacturing. There was a $100 billion allocation of funding. I just want an update from the last estimates on the Advanced Manufacturing Growth Fund, Dr Richards. We have done two rounds now, is that the case?

Ms Ryan : Yes, we have had two rounds of the Advanced Manufacturing Growth Fund program.

Senator PATRICK: And that basically completes that funding activity, doesn't it? Is there any money left over in that?

Ms Ryan : No. We have achieved all of the Advanced Manufacturing Growth Fund priorities.

Senator PATRICK: Do you have an idea of the spend across South Australia and Victoria?

Ms Ryan : I think I'll have to take that one on notice.

Senator PATRICK: Okay, thank you. What about the stimulating advanced manufacturing research projects? That was $24 million. Can I have an update on that, please?

Dr Richards : The $24 million was a composite of programs. I think, if I can get those right, there was $20 million for the cooperative research centres. Those projects were announced on 6 December, and that fully expended that fund. I think one project rolled over with some into the next round, but wasn't quite squared away in that first one. Then there's the $4 million Advanced Manufacturing Early Stage Research Fund. That's delivered by the Advanced Manufacturing Growth Centre. There are four projects valued at $809,000 in that. That stimulated a total investment of $6,486,000.

Senator PATRICK: That's not a bad ratio. So what happens to the remaining $3 million?

Dr Richards : There's a pipeline of projects behind that being considered with the growth centre.

Ms Ryan : I have that split between Victoria and South Australia, if you'd like that? We have $33.4 million in Victoria and $10.8 million in South Australia. That's for the grant funding.

Senator PATRICK: Thank you very much. Can anyone provided an update on the scholarships program, please.

Ms Ryan : We've received the applications for the Automotive Engineering Graduate Program. The panel will be meeting shortly, in about two to three weeks, and then we'll go to the minister for decisions shortly thereafter.

Sorry, that will go to the program delegate—not the minister.

Senator PATRICK: Does that start in time for this year's academic commencement?

Ms Ryan : Yes. As I mentioned, the committee will be meeting shortly, and then the decision will be made shortly thereafter, so that will be in time for the new academic year.

Senator PATRICK: And the SEMA Garage concept, the—

Dr Richards : The innovation lab?

Senator PATRICK: Yes, the innovation lab, sorry—SEMA is the US name.

Ms Ryan : Similarly, we've constituted the assessment panel and they'll be meeting shortly, and, again, the decision is going to the delegate shortly.

Senator PATRICK: I understand that there are still going to be two sites, one in Victoria and one in South Australia?

Ms Ryan : That's right, yes.

Senator PATRICK: Do we have any idea when they are going to start operating?

Ms Ryan : The Victorian lab will be operational by mid-2019, the shopfront in South Australia will access the Victorian lab by September this year, and it's mid-2020 for the South Australian lab.

Senator PATRICK: Who is that service being provided through?

Ms Ryan : That's being provided by the Australian Automotive Aftermarket Association. That's an industry association.

Senator PATRICK: All right, thank you. That's all I wanted for that. I was wondering if I could speak to the Space Agency if they're here.