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Legal and Constitutional Affairs Legislation Committee
Australian Transaction Reports and Analysis Centre

Australian Transaction Reports and Analysis Centre


CHAIR: I welcome officers from AUSTRAC. Mr Schmidt, do you have an opening statement today?

Mr Schmidt : No, no opening statement.

CHAIR: We will go straight to questions then.

Senator HUMPHRIES: I have asked some questions previously about the impact of the efficiency dividend being increased to four per cent and how it affects your staffing allocation. You have helpfully provided some answers for me from the last round of estimates. At that stage you indicated that AUSTRAC was considering reducing its staffing complement to deal with this. You said yes, you were, but you were looking at a range of strategies to meet the necessary savings, including realignment and restructuring of some activities and business unit structures. Have you made decisions about how that will work? Have you thought about that?

Mr Schmidt : If I could go to the cost side of things first and then talk about the staffing that flows from it, staffing numbers in budget papers are proxies for a starting point for an agency's consideration of how it will distribute its resources. Since we have met, we have had a close focus on our costs. We have realised savings. We have realised savings in travel and in some of our various other expenditures. We are in a fortunate position at the moment in that we have accommodation in four cities and all of those leases are coming up. We are looking at our requirements. We are about to move into shared premises in a new building with the Attorney-General's Department which will realise a small savings on an ongoing basis.

Senator HUMPHRIES: Where will that be? Is it in Canberra or is it outside Canberra?

Mr Wilkins : In Canberra.

Mr Schmidt : It is directly across the road from the current Attorney-General's Department building.

Senator HUMPHRIES: Oh, a very salubrious location.

Mr Schmidt : That will also offer opportunities for shared services, so that is a positive development. Perhaps one of the more major changes in the Sydney office, where we occupy five floors of a building in Chatswood—that is my head office—is that we are in negotiations with the landlord and we are proposing to drop a floor there and consolidate that accommodation. That will lead to savings. We are in discussions about downsizing the Brisbane Office and hopefully there will be more savings, perhaps through co-location with another government agency up there. At the Melbourne office, which is a bit further behind, we will get some consultants in to look at the current configuration down there as the lease comes to an end to decide whether there are opportunities for further savings. On the side of expenditure we have been able to free up some money, and of course the more money you free up, the more people you can fund through salaries and wages.

The budget this year is almost lineball with the budget we received in the previous year. There was a small additional amount, which we are very grateful for, in respect of the Wickenby project to fund three officers. Of course, if you have a budget which is much the same as the previous year's, there are escalating costs across the board including wage increases, rent escalations and whatever. So we have to find ways of making up that difference. There have been reductions in staff. We have had a turnover. We are down to a figure now of 305, which is a net reduction of some 20-odd people in the past 12 months. We anticipate a further reduction of perhaps even up to 22, but when I say that I must caveat it immediately because those figures reflect that, with the funding for the three additional Wickenby positions, we have some contractors in our IT area who will be converting from contractor positions. We will be converting those to APS positions. But the net result is that in the coming year up to 12 positions may have to be reduced.

Senator HUMPHRIES: I noticed in the figures you provided for the ongoing effect of the four per cent efficiency dividend that there was to be $1.376 million in this coming financial year, $1.395 million in 2013-14 and $1.409 in 2014-15. I have asked these questions of course of every agency, and I think in every other case the effect of the dividend is a decrease in the out years. Yours increases in the out years. The further you get from the one-off one-year, we are told, four per cent dividend, the higher the effect on your budget. Do you know why that is?

Mr Schmidt : I might pass to the Chief Financial Officer.

Mr Mazzitelli : There were moderate increases in our overall base budget in the out years as a result of other funding measures and therefore the one-off efficiency dividend supplied each year moderately increases.

Senator HUMPHRIES: So it is the increase in your budget that has led to the increase in the effect?

Mr Mazzitelli : That is correct.

Senator HUMPHRIES: You mentioned possibly 12 positions disappearing as a result.

Mr Mazzitelli : A net reduction.

Senator HUMPHRIES: The budget document is a bit hard to read in this respect, but they suggest that there is a reduction in staffing of two ASL arising out of the budget, and a funding reduction of approximately $12.13 million. Is that a gross figure that, netted, actually represents a stabilisation of your budget?

Mr Schmidt : Yes. As I said in answer to one of your previous questions, that figure is a proxy starting point based on the budget you have. How it actually reflects with bodies on the ground, as it were, depends on the budget allocations during the course of the year. Our budget is a little bit complex, because not only do we have the core funding from government for our major programs; we also have a significant technical assistance and training program, which means we have officers carrying out specific work in Southeast Asia, the Pacific and Africa. They tend to involve buckets of money for shorter-term periods, which can expire or be renewed, or new ones can come online. So this is a fluctuating figure, depending on the available funds during the course of the year. But there will, based on current trends, be a reduction.

Senator HUMPHRIES: Is the workload of AUSTRAC increasing?

Mr Schmidt : It depends on how you define the workload. The number of reports coming through the door from the reporting entities continues to grow. To manage that, one of the major initiatives we currently have in train, which was in the budget a couple of years ago now, is a massive reworking of our IT systems to be able to handle that significant flow of data. Most of the data we receive comes in electronically. The capacity of current technology to analyse that and free up people to do more sophisticated work is quite spectacular. We have funding and are currently midway through a project to update that. So on the one hand you have an increase in data coming through the door and on the other you have technology that will assist you to manage that and perhaps even produce a higher and more targeted output at the other end.

Senator HUMPHRIES: What is the size of your staffing establishment in Sydney, at the headquarters?

Mr Schmidt : 183.

Senator HUMPHRIES: Is there a reason AUSTRAC is headquartered in Sydney as opposed to, say, Canberra?

Mr Schmidt : It is a historical structure. Obviously I was not around—the organisation has been in place since 1989, I believe. There are obviously efficiencies in not being in the centre of Sydney. Also, we do have a major supervisory function in the organisation, and it is important for a regulator to be where its client base is. We have large financial institutions and other reporting entities in Sydney and we have a similar spread in Melbourne—which are in fact our two largest offices.

Senator HUMPHRIES: The budget papers talk about AUSTRAC wanting to implement new intelligence systems and tools to AUSTRAC analysts as part of a stated combating organised crime and enhancing analytical capability program. Can you tell us what that means?

Mr Schmidt : That was the IT improvement I was alluding to earlier. AUSTRAC is a leader in financial intelligence analysis in the world. We—before my time, obviously—handcrafted a number of the IT tools that are used to delve into that data. A lot of programs and equipment are now available commercially, and there have been vast improvements in IT capacity in recent years. So we have had a somewhat creaking, handcrafted system. The government has given us funds through the program you allude to in order to replace that and have more state-of-the-art equipment. Also, because the capacity has developed incrementally over time, you can have a number of systems running side by side but not necessarily communicating well with each other. Part of this program is to facilitate bringing all those systems together to get a whole-of-database perspective.

Senator HUMPHRIES: Approximately what proportion of the AUSTRAC workforce consists of IT skilled analysts?

Mr Schmidt : We have a significant IT base. The intelligence branch itself has 96. The IT total, though, is 14. We have 14 public servants and—how many contractors?

Mr Mazzitelli : Approximately 50.

Mr Schmidt : So a total of 64 contractors and APS in the IT area.

Senator HUMPHRIES: Your answer to my question last estimates about the number of contracted staff as of 31 January was 61, so the entirety of your contracted staff works in that IT area.

Mr Schmidt : No, Senator. We have a significant component there and, just as an aside, we are, as part of the Gershon review, gradually converting more and more of those positions to APS positions and will continue to do so. We also have a project management office. We have a number of programs in addition to the enhanced analytical capacity program we have talked about on foot and we bring in specialist project analysts and project managers to run those, so we have some contractors in that area as well.

Senator HUMPHRIES: What proportion of your workforce is at the SES level?

Mr Schmidt : The total number of SES at the moment is 11 excluding myself. If we round it down to 300, that is—whatever fraction; I am sorry, my maths is not very good—10 over 300.

Senator HUMPHRIES: Good. I think that is all I have got for AUSTRAC. Thank you very much.

CHAIR: I think we will finish there for lunch. Mr Schmidt, thank you and your officers for your very quick attendance today. That is quick and easy, 10 minutes. I thank you very much.

Proceedings suspended from 12:26 to 13 : 32

CHAIR: We will reconvene this public hearing into the Senate Legal and Constitutional Affairs Legislation Committee's consideration of budget estimates for 2012-13. I now welcome representatives from the Family Court of Australia. Mr Foster, good afternoon to you and your team. Do you have an opening statement for us?

Mr R Foster : No, Chair.

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

Senator BRANDIS: Thanks, Madam Chair. Mr Foster, let me start with the mistake made in relation to the proclamation of legislation concerning orders in relation to de facto couples, which had to be urgently corrected by retrospective legislation earlier this year. As I understand it, that oversight was first detected by a judge of your court, wasn't it?

Mr R Foster : I think that is right, Senator. I do not have the details in front of me, but that is my memory of it.

Senator BRANDIS: Does anyone with you have the details?

Mr R Foster : I think it was brought to the Chief Justice's attention in December last year.

Senator BRANDIS: In December last year. What happened then?

Mr R Foster : I would have to take that on notice. I do not have a brief on that—unless I can find out in the meantime.

Senator BRANDIS: Mr Wilkins, you can come in on this discussion too, if you like. Were steps made to make the government aware of what had been detected by the court?

Mr R Foster : I am just making some inquiries now, to try and find out for you.

Senator BRANDIS: We will wait for you; that is fine.

Mr R Foster : It is going to require a phone call, Senator.

Senator BRANDIS: That is fine. If you would not mind making that phone call, I will persist with the matter. The failure to proclaim the legislation took place in 2009, so presumably all relevant orders of the court between 2009 and the remedial legislation earlier this year were affected by it. Do you have an estimate as to how many orders were involved?

Mr R Foster : Sorry, Senator, I do not have that information with me—but obviously many.

Senator BRANDIS: It affected all de facto orders, didn't it?

Mr R Foster : That is right.

Senator BRANDIS: All orders in relation to separating de facto couples.

Mr R Foster : That is right.

Senator BRANDIS: Can you tell me, even if only approximately, since the 2009 changes to the law, how many de facto matters the court has dealt with?

Mr R Foster : I will try and get that information by phone, but otherwise I will need to take it on notice.

Senator BRANDIS: Well, can you do that urgently? It would be fair to say, would it not, Mr Foster, that since the change to the law in 2009 the Family Court or the Federal Magistrates Court deal as routinely with de facto separations as matrimonial separations and divorces?

Mr R Foster : Absolutely.

Senator BRANDIS: I understand that, in relation to de facto arrangements, many separations and terminations of relationships happen informally without judicial intervention. That is right, isn't it?

Mr R Foster : That is right.

Senator BRANDIS: However, would it be fair to surmise that, as the court's jurisdiction over de facto couples becomes more routine and familiar to everyday citizens, the proportion of its orders dealing with de facto terminations would reflect the same relativity to matrimonial separations as do de facto relationships to marriages?

Mr R Foster : You would think so, but I would not like to speculate. I would rather get the information.

Senator BRANDIS: All right. But you do keep statistics on the number of de facto matters?

Mr R Foster : Yes, we do.

Senator BRANDIS: Can you get those statistics for me please?

Mr R Foster : Yes.

Senator BRANDIS: Rather than muck around, if we are finished with your evidence but the statistics are still to arrive, would you mind just waiting for a moment and we will try and impose you back into the program so that we can get those figures onto the record straight away.

Mr R Foster : Yes.

Senator BRANDIS: It has been reported, in particular under the by-line of the journalist Nicola Berkovic in the Australianthat the Attorney-General's Department was advised of what is called in the newspaper 'the blunder' in December last year, but that the Attorney-General's office was not advised until 9 January this year. Is that right, Mr Wilkins?

Mr Wilkins : That is correct.

Senator BRANDIS: Are you able to tell us on what date the matter was first drawn to the attention of the department?

Mr Wilkins : I do not have that information. I will ask David Fredericks to answer the question.

Mr Fredericks : Senator, the matter you are referring to was identified by the department itself.

Senator BRANDIS: So reports that it was first identified in the course of a matter by a judge of the Family Court were incorrect, were they?

Mr Fredericks : No, they were correct—but that was in relation to the first error that occurred, back in 2006. That was in relation to the jurisdiction of the court flowing from the Family Court of Western Australia.

Senator BRANDIS: I see. Just confining ourselves to the other matter, the de facto legislation matter—which, as I understand it, relates to the failure to proclaim the 2009 amendments—

Mr Fredericks : Correct.

Senator BRANDIS: You say that was first identified by the department.

Mr Fredericks : That is right. The department did a due diligence exercise, having been advised in relation to the Family Court of Western Australia, which by early December revealed that there may be a similar problem in relation to the de facto jurisdiction of the court.

Senator BRANDIS: All right. And when you say 'early December', could you put a date on that please, Mr Fredericks?

Mr Fredericks : I can say it was the first week of December.

Senator BRANDIS: The first week of December. All right, that is close enough for me. When you say this due diligence was, as I understood you to be saying, precipitated by what had been revealed about the Western Australian matter, it is not the routine of the Attorney-General's Department to do these due diligence exercises?

Mr Wilkins : Yes, obviously we do actually. This is an unconventional type of provision, as you would appreciate, Senator—it is an unusual type of provision.

Senator BRANDIS: Did you say 'of provision'?

Mr Wilkins : It is a very unusual type of provision. You would not necessarily expect to find it in an act of parliament, actually. It is a provision that says the functions of the court are those which are prescribed, essentially—which is something that we no longer do and no longer have. So, yes, there should be due diligence, and there is due diligence—and that does occur in the department. I am satisfied that, in 99.9 per cent of cases there is not a problem; this one was a slip-up.

Senator BRANDIS: I understand that. How did it happen, by the way? In particular I am interested in finding out whether the fault that occurred was a fault that occurred within the Attorney-General's Department or whether it was a mistake that was made within the Department of the Prime Minister and Cabinet in terms of the preparation of the agenda for the relevant Executive Council meeting.

Mr Wilkins : No, I do not think it had anything to do with Prime Minister and Cabinet. I think it was entirely a problem with the way we conducted it.

Senator BRANDIS: So the officer responsible simply through oversight, omitted to have the matter placed on the Executive Council agenda back in 2009 and that oversight was never noticed until the first week of December last year?

Mr Wilkins : It was not about the commencement of the provision—that was not the problem. The problem was that there needed to be an extra bit conferring jurisdiction formally on the court, and there is a provision in the legislation prescribing that—which, as I say, is unusual and which recent legislation, as you know, which has come before the House has actually altered to get rid of, on the advice of parliamentary counsel that we should not have that in the legislation. So that bit was obviously not identified by the officers concerned—it would be the branch concerned—neither back in 2006 nor subsequently, as Mr Fredericks pointed out, in 2008-09, when the next similar provision was commenced. And so officers from the department obviously went and did due diligence based on the intelligence we got on the 2006 matter. So there had been a failure, if you like to think of it that way, from 2006 through until when this was actually discovered, initially by the courts and then by us doing due diligence.

Senator BRANDIS: All right. I am still curious. We have now established that the problem was identified in the first week of December. Do you dispute the report by Nicola Berkovic that it was first notified to the Attorney-General's office on 9 January this year?

Mr Fredericks : No, we do not. There were some intervening steps.

Senator BRANDIS: What were they?

Mr Fredericks : On 5 December the department sought advice from AGS in relation to the matter.

Senator BRANDIS: Yes. And that advice was presumably received shortly thereafter.

Mr Fredericks : That is right. That advice was received as a draft advice on 21 December.

Senator BRANDIS: But surely, Mr Fredericks, the nature and consequences of the oversight were appreciated by the officers who became aware of it, as soon as they became aware of it.

Mr Wilkins : I have talked to the officers concerned. I think it is probably fair to say there was, if you like, a question of judgment—do you get excited about this thing or do you try and get legal advice that confirms that it is a problem. And the officers concerned, I think, were wanting to make sure that they were not creating a problem or concern where none existed, and so they were getting the AGS advice to make sure of that. In retrospect, you may have done it some different way.

Senator BRANDIS: Mr Wilkins were the officers—I am not going to ask their names—legally qualified?

Mr Wilkins : The officers concerned between 2006 and 200—

Senator BRANDIS: No, no. I do not want to go on for too long about this Mr Wilkins, but it does seem to me that once the oversight had been identified, and once the officers had satisfied themselves that indeed it was an oversight so there was no area of factual controversy, the legal consequences of the oversight would have been pretty obvious to anyone, certainly any lawyer.

Mr Wilkins : I think that is right and I think at the point where they decided that they had made the judgement that there was a problem they took steps to alert the Attorney General. This was in the middle of the Christmas season—

Senator BRANDIS: The cabinet reshuffle

Mr Wilkins : There was a cabinet reshuffle. It was also in the middle of the Christmas period. But notwithstanding that I think they took what they considered was the best action at the time, to alert the Attorney General as soon as they possible could.

Senator BRANDIS: No doubt they acted in good faith in taking the steps that they thought were the appropriate steps. But I do not know if we can say they acted as soon as they possibly could in alerting the Attorney General, if it is right to say that the officers knew in the first week of December what had in fact happened, or what was the nature of the oversight—and as we have agreed the legal consequence of the oversight would have been pretty obvious for all to see. I can understand why, out of abundant caution, they might have sought advice from the AGS to confirm their view. But I do not see why they would not at once have alerted the Attorney General's office to say, 'We think we have a problem here, we're seeking a confirming view from the AGS but we think we have a problem here,' rather than allow this matter to lie, not exactly in abeyance but not being brought to the Attorney General's attention for a month.

Mr Wilkins : Look, Senator I agree with that, what you have just said.

Senator BRANDIS: Yeah, okay. Now, the new Attorney General—when did Ms Roxon, help me here Mr Wilkins, when did Ms Roxon get sworn in as the Attorney General?

Mr Wilkins : The 14th of December.

Senator BRANDIS: The 14th of December. So, there was never a time at which Mr McClelland was made aware of this?

Mr Fredericks : Senator, he obviously had been made aware of the consequences of the failure in 2006, because he was the Attorney General at the time that that was rectified.

Senator BRANDIS: Right, but, just confining ourselves to the defacto-spouse issue, there was never a time before Mr McClelland left office, at which he was apprised of this oversight?

Mr Fredericks : No Senator.

Senator BRANDIS: Alright. I am surprised the new Attorney General did not contact the opposition. Because, although the opposition might, of course, criticise the government for this mistake, the correction of the mistake was never likely to be a party-political issue. When I first read about it in the newspapers I immediately made it clear that the opposition would support urgent retrospective legislation to validate all of these, no doubt many thousands, of orders. Is there a reason why the Attorney General did not seek the immediate cooperation of the opposition?

Mr Wilkins : I am not sure that I am in a position to answer that.

Senator BRANDIS: Senator Ludwig, you represent the Attorney General here.

Senator Ludwig: Thank you, Senator Brandis, I can check with the Attorney General whether she wants to provide any additional answer to the questions.

Senator BRANDIS: Would you take that on notice?

Senator Ludwig: I will, I am also not sure what happened in 2006, so I would not mind refreshing my mind of whether, at that time, the then-Attorney General brought it to the attention of the opposition—

that oversight—and then the following up.

Senator BRANDIS: No, we have heard the 2006 oversight was only identified in 2009—I am sorry, last year—as well.

Mr Wilkins : The only thing I was going to say was that there quite was a lot of follow-up legal advice as a result of that initial discussion and uncovering of that matter with the Attorney. I guess on the best way forward, and how this could be dealt with, that might explain why—until there was some clarity around what the way forward might be—it probably would not have been valued sense in talking to yourself until there was a—

Senator Ludwig: I will check and see what the timeline was like.

Senator BRANDIS: I would appreciate that, Senator Ludwig. I mean, partisan arguments not withstanding, and the proper criticism of the opposition might choose to make the government ultimately responsible for the oversight, notwithstanding, there was never any remote prospect that the opposition would not afford cooperation in what was the correction of essentially a clerical error—an important clerical error, but essentially a correction of a clerical error which would have needed urgently to be corrected. I am a little surprised that an approach to the opposition was not made immediately and that the problem was identified at least at the political level of the government.

Senator Ludwig: No, I take your point.

Senator BRANDIS: Okay, that is fine. Do you have those dates, Mr Foster?

Mr R Foster : Yes, but can I just correct the evidence that I gave you earlier?

Senator BRANDIS: Yes, by all means.

Mr R Foster : I said, 'a judge advises the Chief Justice.' That was not the case. I am now told that the Chief Justice received notification by email from the department on 22 December. She immediately told the judges that the court—

Senator BRANDIS: Just pausing there: that is the date, Mr Fredericks, you told me that the AGS advice had been received, was is not—22 December?

Mr Fredericks : Correct.

Senator BRANDIS: Back to you, Mr Foster.

Mr R Foster : And the Chief Justice immediately informed the court.

Senator BRANDIS: Right.

Mr R Foster : Then a judge—I am not sure who it was—on or around 7 January had a case before him or her and advised the profession at that time that there was an issue. Then the Chief Justice discussed this matter with the Attorney-General on 9 January.

Senator BRANDIS: And it is right to say that was the first occasion—on 9 January—on which it was drawn to the attention of the Attorney-General?

Mr R Foster : I am not sure about that, but that was the time the Chief Justice spoke to the Attorney-General.

Senator BRANDIS: Senator Ludwig, will you take that on notice?

Senator Ludwig: I will take it on notice.

Mr R Foster : In relation to the numbers, we will have to do a special computer run to get the numbers, so I have to take it on notice.

Senator BRANDIS: We are certainly talking about—

Mr R Foster : A significant number.

Senator BRANDIS: Thousands and thousands of orders. I want every order in relation to a de facto matter between the commencement of the legislation 2009 and the passage of the remedial legislation at the beginning of 2012.

Mr R Foster : We can do that, but we need to take it on notice if that is okay.

Senator BRANDIS: Yes, it is okay. I will turn then to the amalgamation of the courts. That is not happening now, Mr Foster?

Mr R Foster : Apparently not.

Senator BRANDIS: Are you still the Acting CEO of the Federal Magistrates Court or are you now in full figures the CEO of the Federal Magistrates Court?

Mr R Foster : No, I am still the Acting CEO of the Federal Magistrates Court.

Senator BRANDIS: You must be the longest-acting office bearer in the history of the Commonwealth of Australia.

Mr R Foster : Since November 2008.

Senator BRANDIS: It is extraordinary. I want you to take us through it, please, specifically and in detail, in particular by reference to dates. When we last met in February I put a series of questions to you in your capacity as CEO of the Family Court and Acting CEO of the Federal Magistrates Court. I think it is fair to characterise your responses to me as along the lines, 'This matter is being reconsidered, but no final decisions have been made.' Would that be a fair characterisation of the position you took at the last estimates hearing?

Mr R Foster : Yes, I think so.

Senator BRANDIS: All right. Well, time marches remorselessly on and we now have clarity here. Between February of this year, when we last spoke about this, and now, can you please give us a chronology of the decision-making steps and the decisions that have been made ultimately leading to the abandonment by the government to its decision to move to the two courts.

Mr R Foster : Well in terms of the administration, Senator, there are no further decisions to be made because the administrations have effectively merged.

Senator BRANDIS: I know, but I am talking about the merger of the courts themselves.

Mr R Foster : Well there was nothing that was being done on behalf of the courts until the announcement was made by the Attorney-General at the Federal Magistrate's plenary on 26 April.

Senator BRANDIS: That was her speech to the Brisbane Federal Magistrate's conference, the plenary. All right. So that announcement is made on 26 April. Mr Wilkins, can you tell us the date on which the decision was made, announced on April 26, not to proceed with the merger?

Mr Wilkins : I do not think I can give you an actual date, Senator.

Senator BRANDIS: Well, was there a decision?

Mr Wilkins : There certainly was a decision. The Attorney-General obviously made a decision and then announced it. I do not know when she made the decision.

Senator BRANDIS: My point being that this was not just a matter inanition. There was a conscious decision to abandon the policy that had been announced by Mr McClelland several years ago, and which we have discussed as every estimates round since.

Mr Wilkins : Well, she put it in the context of the Skehill report.

Senator BRANDIS: Yes.

Mr Wilkins : And with a consideration of the recommendations in the Skehill report she came to a decision, I assume, also based on consultation with other ministers.

Senator BRANDIS: Do you know if it went to cabinet?

Mr Wilkins : Well the Skehill report certainly went to cabinet.

Senator BRANDIS: I know that, but the decision not to proceed to merge the Federal Magistrates Court and the Federal Court into a single court into a single judicial entity, did that decision go to cabinet?

Mr Wilkins : I am not sure whether it went to cabinet or not.

Senator BRANDIS: Do you remember, Senator Ludwig? You were in cabinet.

Senator Ludwig: Cabinet matters are not something I am going to comment on.

Senator BRANDIS: No, I am not asking you to comment on cabinet matters. I am asking you to comment to tell us whether what is uncontrovertibly the case: a decision of your government was made, a decision by the cabinet was made or a decision by the minister was made. That is all.

Senator Ludwig: Well, it was announced by the minister on 26 April. That is the extent that I am going to engage in cabinet issues. Can I say though that it is open to the Attorney-General to take that opportunity on 26 April to set out her vision and view for the court structure, which she then did.

Senator BRANDIS: All right. Now remind me please, Mr Wilkins, of the date on which the Skehill report was received by the government.

Mr Wilkins : I think you will need to ask the Minister for Finance and Deregulation, Senator. I do not have that information here.

Senator BRANDIS: Has the Skehill report been released?

Mr Wilkins : No.

Senator BRANDIS: All right. Just have a look at this document please, Mr Wilkins. That is the Skehill report, is it not?

Mr Wilkins : I do not know. I did not see the final Skehill report, so I do not know what I am comparing it with.

Senator BRANDIS: You are familiar with the Skehill report though, are you not?

Mr Wilkins : I did have a read of it at some point.

Senator BRANDIS: Yes. Well, just take as long as you like to have a look at the document. Maybe we can adjourn for a few moments while Mr Wilkins looks at the document.

Mr Wilkins : It does not really look like the Skehill report, no.

Senator BRANDIS: What do you think it is, Mr Wilkins?

Mr Wilkins : It looks like a cabinet document.

Senator BRANDIS: Yes.

CHAIR: Senator Brandis, before you go on—are you seeking to table this document?

Senator BRANDIS: Yes, I am.

Senator Ludwig: The difficulty is that it is, or that it looks like—and without having had an opportunity to look at it—a cabinet-in-confidence document. It does seem that Senator Brandis has through some unknown party obtained a copy of that and is now seeking to table it in the committee. I would object to that; it should not be tabled.

CHAIR: Given the nature of its confidentiality?

Senator Ludwig: That is right.

Senator BRANDIS: May I be heard on that objection?

CHAIR: You can, but I might need to take advice about this because I do not think I have ever had anyone seek to table a cabinet-in-confidence document before.

Senator BRANDIS: The document is marked cabinet-in-confidence. I am telling the committee that the document that I have given to Mr Wilkins is the Skehill report together with a number of the appendices to the report. Whether, at the time the document was made a cabinet document, it was re-engrossed in a form different from the original form in which Mr Skehill reported to the government, I do not know. I can tell you, Mr Wilkins, as I am advised, that the document I have given you—certainly the text of the document I have given you—is the Skehill report. What I propose to do, if I may foreshadow this course now, is to take you to certain of the recommendations concerning in particular the relationship between the two courts, which you have already anticipated the form part of the Skehill report; I am going to take you to the specific text.

Senator Ludwig: Again, irrespective of how Senator Brandis wants to characterise the document, it is marked cabinet-in-confidence. I have not had an opportunity to look at it. On its face, it is a cabinet-in-confidence document. Senator Brandis should not have a cabinet-in-confidence document unless it was during his period—and I doubt that. On that basis, I would ask you to get further advice. It would be inappropriate for this matter to be tabled. It would be inappropriate for Senator Brandis to ask questions in relation to the document and to take Mr Wilkins to issues within the document and for Mr Wilkins to comment on it. Can I just put that down.

CHAIR: I am going to suspend these proceedings for five minutes while I take some advice on that. You are obviously objecting on public interest grounds?

Senator Ludwig: It is a cabinet-in-confidence document. On the face of the record it looks like that.

CHAIR: I need to take some advice about how we deal with that—whether we need to have a committee meeting to deal with it or whether as chair I can simply make that ruling.

Senator BRANDIS: Before you make a ruling—

CHAIR: I have just said I am not sure whether I need to do that or whether I need to actually have a committee meeting and for the committee to authorise to either accept or not accept this document based on the public interest grounds the minister has provided to the committee. I am going to suspend the committee now for five minutes while I get some advice from the clerks on how we handle this.

Proceedings suspended from 14:03 to 1 4:12

CHAIR: Let's reconvene this public hearing with the Family Court. Mr Foster, I am going to ask senators if they have any questions for you about matters other than the document we have been given and the document we are going to consider as a committee at 3.30.

Senator BRANDIS: I have lots of questions for Mr Foster, but I am not going to ask those questions until the treatment of the document that I have sought to table is resolved.

CHAIR: So you do not have any other questions?

Senator BRANDIS: Not to Mr Foster in his capacity as CEO of the Family Court.

CHAIR: That is all I am trying to ascertain.

Senator BRANDIS: But once the status of the document is resolved one way or another I want to come back to the recommendations of the Skehill report.

CHAIR: I understand that.

Senator BRANDIS: I will ask one question unrelated to this but related to the Family Court. Has there been any further development in the thinking of the court concerning the replacement of Justice Monteith in Townsville? Do you remember I asked you about this in February, Mr Foster?

Mr R Foster : There has been an advertisement placed in the press for judicial positions—one in Townsville or Queensland, one in Sydney and one in Adelaide. Justice Burr retires this Friday in Adelaide, so there are currently three vacancies.

Senator BRANDIS: When I tackled this issue in the last estimates you told me, as I recall, that your view, from an administrative point of view at least, was that there should be a new judge in Queensland but he should be Brisbane based. Then we had an adjournment and Senator Ludwig, having heard the debate, helpfully came back and told the committee that it was the view of the government that Justice Monteith should be replaced by a Townsville resident Family Court judge.

Senator Ludwig: I think I used the word 'preference'.

Senator BRANDIS: The government's preference—thank you, Senator Ludwig—was that Justice Monteith should be replaced by a Townsville resident Family Court judge. Where are we at now, beyond the placement of the advertisement?

Mr R Foster : I think the advertisement date has now closed. It is a matter for the department.

Mr Wilkins : I think it might be useful, Senator, if I get David Fredericks to give you a brief on where that is up to.

Senator BRANDIS: Yes, Mr Fredericks, that would be helpful.

Mr Fredericks : There were three vacancies for the Federal Court advertised on March 23 and 24. They specifically related to appointments in Sydney, in Adelaide and in Queensland. In relation to the Queensland appointment, there was a special note put in the advertisement to this effect:

There is a strong preference for the Queensland appointment to be based in Townsville, but the final location will be determined by the calibre and requirements of candidates. The successful Queensland candidate will be expected to frequently circuit in Northern Queensland.

Senator BRANDIS: That sounds a bit two-bob each way, if I may say so, with respect, Mr Fredericks.

Mr Fredericks : Senator, it is what it is.

Senator BRANDIS: The government's preference at the urging of the opposition and Mr Jones, the member for Herbert, is that the judge should be based in Townsville. May we expect, all things being equal, that when the vacancy is filled the new judge will be based in Townsville?

Mr Fredericks : That will, as the advertisement says, be determined by the calibre and requirements of the candidate.

CHAIR: Mr Foster, we might move to you in your capacity as Acting CEO of the Federal Magistrates Court, and we will jump back to your role in the Family Court. In your capacity of Acting CEO of the Federal Magistrates Court, do you have any opening statement?

Mr R Foster : No I do not.

CHAIR: All right. Senator Brandis, do you have question of Mr Foster with his Federal Magistrates Court CEO?

Senator BRANDIS: Yes, I do.

CHAIR: Let's move to that then.

Senator BRANDIS: Mr Foster, the Altobelli litigation. Where are we with that, please?

Mr R Foster : It really is not my position to comment on the Altobelli litigation, Senator.

Senator BRANDIS: I am just asking you where it is.

Mr R Foster : It is not a matter that I follow closely at all; it is a matter between individual magistrates and the government. It is not something that I have been involved in or followed very closely, quite frankly. I have taken a conscious effort to step completely back from it.

Senator BRANDIS: All right. Well, I will ask those questions of the Australian Government Solicitor and of the department. Mr Foster, the Federal Magistrates Court is currently operating at a deficit, is it not?

Mr R Foster : Yes.

Senator BRANDIS: Can you just put a figure on that for me please?

Mr R Foster : We have had approval to run at a deficit of $3.6 million for this financial year.

Senator BRANDIS: Can I take you to the portfolio budget statement please? Have you got a copy of the portfolio budget statement there?

Mr R Foster : Yes I do, thank you.

Senator BRANDIS: Looking at the forward estimates, can you identify when it is expected that the court will return to surplus?

Mr R Foster : If I can respond in general terms first of all, I think it is fair to say that both the Family Court and the Federal Magistrates Court over recent years have been running at losses.

Senator BRANDIS: Yes. All of the federal courts other than the High Court have.

Mr R Foster : I think that is right.

Senator BRANDIS: I can give you the figures actually, if you want.

Mr R Foster : I do not need them, Senator, other than to say that we have been running at losses. We have taken many initiatives and made lots of change to generate efficiencies. However, we still, despite all of that, continue to face significant ongoing financial pressure in both courts, in the Federal Magistrates Court and in the Family Court. The ongoing application of the efficiency dividend and other savings measures must be achieved from our variable costs, not from our fixed costs, and it is going to be extremely difficult to balance our budget. The Minister for Finance and Deregulation, as I said, approved the financial deficits for the current financial year: Family Court $3.15 million and the FMC $3.6 million. However, there is an expectation by government that the courts do not run any future or further deficits.

Senator BRANDIS: For how many years now has the FMC been running at a deficit?

Mr R Foster : The last five years, Senator.

Senator BRANDIS: The last five years. So what is the cumulative deficit out of those five years?

Mr R Foster : $16.8 million.

Senator BRANDIS: 16.8, that is quite a lot, compared to your overall budget. So do I understand your last answer to mean that you do not expect approval from the finance minister next year to run at a deficit?

Mr R Foster : I think there is an expectation that we will take whatever steps we can to bring the budgets back into balance and—

Senator BRANDIS: But that would have been the case in each of the last four years, would it not? Is that not just a general admonition that the finance department gives every agency that falls into deficit?

Mr R Foster : I think it means that the steps we take will certainly have to be more significant than they have been in the past and I think inevitably would result in some sort of reduction in services that the courts can provide.

Senator BRANDIS: Can you tell me please where those service reductions might apply? What is the nature of the service reductions and, if they are location specific, in which parts of Australia will those service reductions be felt most acutely?

Mr R Foster : I am not in a position to specify exactly what items there are at the moment. There are a whole range of issues that are under discussion, including a reduction of staff levels, a general reduction in travel costs and our admin costs, the possibility of looking at some of our regional services and the way we provide them—

Senator BRANDIS: Whereabouts in particular?

Mr R Foster : Anywhere where we provide a regional service, where we have a fixed location.

Senator BRANDIS: In Queensland, being the most regionalised of the states, do you provide more regional services than in any of the other states?

Mr R Foster : We provide lots of regional services also in Victoria—there are a lot of circuit locations in Victoria—but we use the facilities of the state courts. So we are looking, in places where we have a fixed facility, where we do not share with the states, at whether we could operate our services differently. In Dubbo, for example, just off the top of my head, we have a leased commercial building which is established for family law business. There is a fixed cost and that facility is not used all that frequently; it might be possible for us to withdraw from that facility and provide circuit services through the state court system. They are the sorts of things we are looking at, but certainly we have got leases, we have got make-good requests—there is a whole range of issues to look through before any decision would be made. We are working very closely with the Attorney-General's Department and would expect to be in a position, perhaps in the next couple of months, to start making some decisions or announcements about what we might have to do.

Senator BRANDIS: Nevertheless, the bottom line is there is going to be a reduction of the court services?

Mr R Foster : I think inevitably there is going to be some reduction in services, yes.

Senator BRANDIS: And that will include, as you have said, staff reductions and reductions in the capacity of the court to serve regional areas of the country?

Mr R Foster : Not just rural; I think there will inevitably be further delays in any of our registries across the country. The objective is to try and minimise that delay and make it equal as much as we possibly can across the country, including both rural and regional.

Senator BRANDIS: When you speak of staff reductions, are you talking about the administrative staff of the court or the federal magistrates themselves or both?

Mr R Foster : In relation to federal magistrates, they are appointed until age 70, so it is pretty hard to reduce the numbers.

Senator BRANDIS: Except, as you have done with the Family Court, by the nonreplacement of retiring or deceased federal magistrates.

Mr R Foster : That would be, again, a matter for the government to make that decision. But certainly we would be looking at our staffing numbers across the country in all aspects of the services that we deliver.

Senator BRANDIS: And that will result particularly if there are greater delays, presumably, and greater costs to the people bringing their matters before the court?

Mr R Foster : There is certainly a real potential that there will be greater delays in the system.

Senator BRANDIS: Has the number of cases commenced in the Federal Magistrates Court increased or remained constant or fallen in the last 12 months?

Mr R Foster : I could probably read to you—

Senator BRANDIS: Just read me the figures.

Mr R Foster : I have filings from 2000—which I think is a significant date, being when the FMC was first established—and from these figures you can see how the work has shifted from one court to another, and then the total number of applications for final orders as between both courts, which gives you an indication of whether the workload across the courts is going up or down. In 1999-2000 there were 21,939 matters filed in the Family Court of Australia. I will jump through to 2006-07.

Senator BRANDIS: You said the Family Court of Australia?

Mr R Foster : Before the FMC started, they were all filed in the one place. So there were nearly 22,000 filed in the Family Court. In 2006-07 there were 7,854 in the Family Court and 15,816 in the FMC, for a total of 20,539— a reduction of six per cent in filings. In 2007-08, 4,457 in the Family Court of Australia and 14,899 in the FMC, for a total of 17,306, which is a reduction of 21 per cent from 2000. This position starts to change as we get into the later years. I think that is an important point to make. In 2008-09, 3,834 in the Family Court and 15,549 in the FMC, for a total of 17,969—a reduction of 18 per cent on the 2000 figures. The workload is starting to go back to where it was in 2000. In 2009-10, 3,692, 16,818, for a total of 19,285—a 12 per cent reduction on the 2000 figures. In 2010-11, 3,249, 17,515, a total of 19,426—an 11 per cent reduction on the 2000 figures. And our estimated figures for 2011-12 are 3,300 in the Family Court, 17,300 in the FMC, for a total of 20,600, which is a six per cent reduction on where it was in 2000. This trend, we believe, is going upwards, and the workload has nearly reached the figures that they were back in 2000. So, in answer to your question, I would say that the workload of the FMC is increasing significantly.

Senator BRANDIS: Right. Of the years you have given me, is 2007-08 the year in which there have been the fewest number of filings in the FMC—114,899?

Mr R Foster : Yes.

Senator BRANDIS: And it has increased in every subsequent year to the last year for which you have full figures, 2010-11, when it is up to 17,515?

Mr R Foster : That is right.

Senator BRANDIS: And then your estimate of the 2011-12 year, which obviously—

Mr R Foster : Is only an estimate.

Senator BRANDIS: It is a guesstimate, because we have still have got five or six weeks to run.

Mr R Foster : That is right.

Senator BRANDIS: It is 17,300, so it is about constant?

Mr R Foster : I think it is going to be a slightly increase.

Senator BRANDIS: So, basically, in four years, it has gone from under 15,000 to about 17,500?

Mr R Foster : That is right.

Senator BRANDIS: And in each of those years you have had to run a deficit?

Mr R Foster : Yes.

Senator BRANDIS: And in each of those years the resourcing of the court has not been adequate to enable the court to maintain the full suite of services?

Mr R Foster : The Chief Justice has authorised me to say, as she was the Chief Federal Magistrate when the court was established, that quite frankly the court was never resourced properly from day one. It was her view that there was to be a review of the court's resourcing four or five years after the court commenced, and that has never occurred. So the Federal Magistrates Court has had to live on the goodwill and cooperation of the Family Court of Australia and to a lesser extent the Federal Court of Australia, and it has grown to such an extent that there has never been sufficient funding to cover the court. That is consequently why we are running at such significant deficits.

Senator BRANDIS: And since 2008 until April of this year—for four years, effectively—under the shadow of uncertainty as to its very future?

Mr R Foster : Yes, that is right.

Senator BRANDIS: You have told me in previous estimates that at the time that had a terrible effect on the morale of the federal magistrates.

Mr R Foster : That is unquestionable.

Senator BRANDIS: I would not expect you to have the figures for filings in the Federal Court of Australia, but is it your understanding that among the three federal trial courts—the Family Court, the Federal Court and the Federal Magistrates Court—there are more matters filed in the Federal Magistrates Court than in the other two federal courts put together?

Mr R Foster : If it is a question about the Federal Court you would have to ask Mr Soden, but I think that would certainly be the case. I can give you the general federal law statistics for the FMC as well. The figures I gave you were only for family law.

Senator BRANDIS: It might be useful. If I may say so, you or perhaps the Chief Justice, through you, obviously want to get this off your chest, so let me not stand in your way. Why don't you give us all of the figures about which you wish to acquaint the Senate?

Mr R Foster : Mr Agnew will give the stats in relation to the general federal law for the FMC.

Senator BRANDIS: Mr Agnew: by the way, why are you the 'Acting' Deputy CEO? Is everybody acting in the Federal Magistrate's Court at the moment?

Mr Agnew : I certainly am! For the year to date the figure for filings in the court's general law jurisdiction is 5,900.

Senator BRANDIS: I am sorry—let us just specify our terms here. you say 'the court's federal general law jurisdiction'. You are talking about the Federal Magistrates Court's non-family-law case load. Is that correct?

Mr Agnew : That is correct. For the year to date—30 April—there were 5,900 matters, for 2010-11 there were 6,667, for 2009-10 there were 6,948, for 2008-09 there were 6,573 and for 2007-08 there were 7,093.

Senator BRANDIS: The 5,900 figure was to 30 April, so if you extrapolate that to May-June—and I know it can only be an estimate—would you expect that those figures would be reasonably constant? The figures go between 6,573 in 2008-09 and 7,093 in 2007-08. So there does not seem to be a particular trend line there; they seem to be reasonably flat in the high 6,000s. Is that what you would expect if you extrapolated for the current financial year?

Mr Agnew : That is pretty much what I would expect at the moment, yes.

Senator BRANDIS: The general federal law matters are all your non-family-law matters. Is that correct?

Mr Agnew : That is correct.

Senator BRANDIS: The figures you gave me before, Mr Foster, were family law matters. Is that correct?

Mr R Foster : Yes, only family law matters in relation to applications for final orders.

Senator BRANDIS: So, taking the most recent complete year, in 2010-11 the Federal Magistrates Court dealt with 17,515 family law matters and 6,667 general federal law matters.

Mr R Foster : That is correct.

Senator BRANDIS: That is what the two sets of figures you have given me tell us. And there is no third category—everything that is a non-family-law matter is classified as a general federal law matter, right?

Mr R Foster : The only difference is that in relation to family law I have not given the filings for interim applications or divorce applications. They are only applications for final orders.

Senator BRANDIS: Would it make the exercise more thorough if you gave us those figures as well?

Mr R Foster : We would have to take those on notice, but the divorces are at, from memory, around about 45,000 a year.

Senator BRANDIS: But when you talk about the divorces you are dealing with non-contested applications, aren't you?

Mr R Foster : Yes. They are three to four minute hearings by a registrar.

Senator BRANDIS: So these are registrars' matters?

Mr R Foster : That is why, for the purposes of this discussion, it is possibly best to keep them down to applications for final orders, but certainly the interim matters are significant.

Senator BRANDIS: Sure. To draw it all together, therefore, it seems to me, Mr Foster—without meaning to put words in your mouth; I just want to summarise what I take from what you have told me—that there is a greater pressure on the court through an increase in the case load, in particular in the family law jurisdiction, which is the lion's share of its jurisdiction. That is right?

Mr R Foster : Yes.

Senator BRANDIS: There has been for the last four years insufficient resourcing of the court, requiring it to go into deficit in every year and now you have been told by the Department of Finance and Administration that a deficit for next year will not be entertained. Is that right?

Mr R Foster : We have been told, I guess like everybody else, that we are expected to take whatever steps are necessary to bring our budget back into line.

Senator BRANDIS: And you propose to be obedient to that requirement, and therefore the services will be further cut back and there will be greater delays?

Mr R Foster : As you would be aware, as it was announced in the budget, there will be some court fee increases as of 1 January. We are preparing a submission with the assistance of the Attorney-General's Department to go to the minister for finance. In that submission we would be proposing or suggesting that, if the fees are increased, we should possibly get some supplementation to our budget out of that increase in fees.

Senator BRANDIS: Good luck.

Mr R Foster : It might be a forlorn hope, but that is something we are going to put up. That would certainly help our bottom line.

Senator BRANDIS: No doubt you have studied the budget papers. It would be a forlorn hope if you are treated the way a number of other agencies in the portfolio have been treated.

Mr R Foster : To be fair, though, we were excused from the increase in the efficiency dividend—the four per cent efficiency dividend for two years. That was a significant recognition that the courts do have some serious financial issues to deal with.

Senator BRANDIS: So there are greater pressures on the court through the increase in the case load, and therefore the workload. There has been inadequate resourcing of the court. You feel constrained to cut back on services and increase the fees. There had been, until the Attorney-General made her announcement of 26 April—a dark shadow hanging on the very continued existence of the court which, has had a very bad effect on the morale of the members of the court. As well as all of that, there has been this Altobelli litigation, in which at least initially most of the members of the court felt constrained in an unprecedented way to sue the Commonwealth of Australia in relation to their entitlements and remuneration. That does not paint a very pretty picture of the court.

Mr R Foster : I am not sure what a pretty picture means in that context.

Senator BRANDIS: Your magistrates are overworked, underresourced and until last month had no certainty about whether the court itself would even continue to exist. Is that right? That is a fair summary?

Mr R Foster : I guess I see the court sometimes in broader terms than just the members of the court—also the staff of the court and the issues and initiatives that have taken place. In relation to the federal magistrates themselves?

Senator BRANDIS: Yes.

Mr R Foster : I think the uncertainty over the future of the court over the past three or four years has obviously had a negative effect on the court. I was present when the Attorney made the announcements about the future of the court and I would have to say, from my perspective sitting in that room, that that announcement was extremely well received.

Senator BRANDIS: I am sure it was. If you are told that you are under an institutional death sentence and it is announced that that sentence is being commuted to life tenure, then of course the federal magistrates are going to be relieved. The many, many federal magistrates who speak to me have told me how relieved they were. But it does not mean that the administration of this court—not your fault, of course, Mr Foster—for years now has not been a complete shemozzle.

Mr R Foster : I think to describe the administration of the court as a complete shemozzle is inaccurate, quite frankly. I do not think it has been a shemozzle at all; in fact, I think that the administration of the court has been quite effective.

Senator BRANDIS: Let me withdraw the word 'administration'—the treatment of the court.

Mr R Foster : That is an entirely different question, I think.

Senator BRANDIS: Yes, indeed. I am not sure I can go on right now without dealing with some of the matters in the Skehill report so I might pause there. Just bear with me a moment, Mr Foster. Can you address for me, please, the issue of the negotiation between the Department of Finance and Deregulation and the court in relation to the charging of commercial rent for non-judicial space?

Mr R Foster : I will ask Mr Harriott to respond to that question.

Mr Harriott : In terms of the Commonwealth law courts, there has been a process underway for the last couple of years. There has been some uncertainty for the courts and tribunals as tenants as to the ongoing leasing and funding arrangements for occupying space in Commonwealth law courts. Allied with that, there have been some announcements around target density occupational areas for what they classify as office space—so quite a bit of framework being put in place by the department of finance. Essentially, what has happened over the last three years is that there have been two reviews. The most recent one has arrived at an arrangement whereby about 80 per cent of the Commonwealth law courts have been determined as meeting the test of 'special purpose' property.

Senator BRANDIS: Determined by the DFD?

Mr Harriott : By the department of finance; that is right. So, essentially, about 80 per cent of the Commonwealth law courts' space and related costs and funding is being transferred over to the department of finance. For example, in the Family Court's budget papers you will see a shift of nearly $25 million. That is also reflected in some of the other courts and tribunals—a shift of about 80 per cent of the funding and costs over to the department of finance. The residual that is left with the courts is what they have determined as being office space. 'Non-office' picks up things like courts, chambers, waiting areas and the like. 'Office' space typically picks up areas behind the registry counter where there are workstations and people performing, if you like, office work. Essentially, we are left with about 20 per cent of the costs and about 20 per cent of the funding. As said, there has been an initial transfer of funds. That will be revisited as part of the additional estimates process because in some instances we had to do a bit of an estimate.

At the moment we are working through, with the department of finance, the ongoing leasing arrangements and working towards heads of agreement, an MOU and some sort of lease documents. It has been quite a convoluted process. I guess the benefit for the court has been that there was a fair degree of uncertainty about the ongoing funding for the rents, and potentially the court is facing some unsupplemented rent increases based on market rents, and a lot of that pressure has been shifted by this process. In terms of managing the buildings, the 80-20 split might be a little bit problematic, but we are certainly working with the department of finance to give effect to that decision.

Senator BRANDIS: When you say it might be problematic, what do you mean?

Mr Harriott : In managing a building, splitting out an 80 per cent chunk as being special purpose in nature and being managed by department of finance and approximately 20 per cent of the space being managed by the tenant is potentially—

Senator BRANDIS: It sounds to me, I must say, to be a bizarre way to manage a court.

Mr Wilkins : I think Mr Harriott has done a good job at explaining why it makes sense. The 80-20 split may be peculiar, and I think it will probably have to wash out in due course, but it actually is a positive change in terms of taking the issues around the management of property away from the courts and telling them to concentrate on what they do best.

Senator BRANDIS: But the whole story here—and we cannot yet go into the Skehill report until we have decided whether the document I have presented to you is to be tabled or not, but one way or another we are going to get there today—and the whole approach to the courts, not just the Federal Magistrates Court, seems to me to be a story of the department of finance asserting more and more control on behalf of the executive arm of government over the judicial arm of government in a way that I, as an officer of the court and as a practitioner, find very alarming. If you read the document I have put before you—I am sure you are familiar with it—the author of that document seems to take a very Sir Humphrey Appleby view of the separation of powers, I am bound to say. The institutional autonomy of the court—of the courts, plural—seems to me to be accorded, at best, nominal respect.

Mr Wilkins : It depends whether you think it is essential to the separation of powers that the courts own their own property.

Senator BRANDIS: I think it is important that the courts have as much autonomy and independence from the executive as they can be vouchsafed. That includes not merely as a matter of legal doctrine but in terms of practical administration, including the way in which they control the day-to-day operation of the functions of the court, including the registry, and material matters too, including such material matters as property ownership, leasehold, day-to-day administration.

Mr Wilkins : I suppose there is a different view that it is not of the essence of the separation of powers that they need to own property. They need to have some security over that tenure, but their main business is not to be property managers and owners of builders of property.

Senator BRANDIS: No, I accept that. But, if the courts are to be accorded the full measure of independence that chapter III of the Constitution presumes they are to have, then it seems to me that, when in doubt, an issue of control and management between the executive government and the courts ought to be resolved on the court's terms, where possible.

Mr Wilkins : Does that go for all budget matters?

Senator BRANDIS: This is the point, Mr Wilkins. I do not think that courts, as an independent constitutional arm of government, occupy the same position as just another agency of government. Yet the attitude of the Department of Finance and Administration seems to be increasingly—and I am not alone in saying this—to treat the courts as if they were just another agency of government, which plainly they are not. We can get into the weeds and have a particular argument about, for example, whether the property management function is best handled by the court or the Department of Finance and Deregulation, but the general approach to the courts as exhibited in the document I have given you, as exhibited in the attitude of the department, seems not to pay sufficient respect to the constitutional independence and autonomy of the courts.

Mr Foster, in her announcement of 26 April—perhaps to sweeten the pill—I understand the Attorney-General also foreshadowed some changes to the status of the members of the Federal Magistrates Court and perhaps even to the name of the court. Can you speak to that issue, please.

Mr R Foster : Yes. The Attorney-General announced that the merger of the FMC and the federal courts will not be proceeding.

Senator BRANDIS: Did she give a reason, by the way? That was not a public speech, was it?

Mr R Foster : It was a speech to the plenary of the federal magistrates.

Senator BRANDIS: I understand that, but that was not a public forum.

Mr R Foster : No, it was not a public meeting. It was a closed meeting for federal magistrates.

Senator BRANDIS: That was what I meant. Before you go on to answer the specific question I asked you, just tell us whether the Attorney-General gave a reason why that decision had been made and what she said.

Mr Wilkins : The speech is public. What she said was:

… I am pleased to announce today that Government will be accepting one of Mr Skehill’s recommendations, which is to not proceed with the proposed formal merger of the Federal Magistrates and Family Courts.

I know you will welcome this decision.

Mr Skehill’s recommendation reflects my belief, as the new Attorney-General, that the Australian community is best served by a separate and distinct Family Court and Federal Magistracy.

This new direction will go a long way to providing each Court’s judicial officers with the certainty they need to engage in constructive long-term court planning.

Planning that should go in the first instance, in my opinion, to developing a clearer and better-understood apportionment of work and jurisdiction between the Courts.

While this is currently guided by the Protocol between courts, this largely rests on the good working relationship currently in evidence between the Chief Justice and Chief Federal Magistrate - circumstances that cannot always be guaranteed. In the alternative, more clearly defined and articulated roles, developed through extensive consultations with the courts, will ensure such arrangements are better understood by Court users today, and applied into the future.

We also proposed to formalise the shared administrative arrangements between the Federal Magistrates Court and the Family Court by recognising a single CEO position and agency under the Financial Management and Accountability Act — but with both Courts of course retaining their separate statutory status.

We could go on further, but—

Senator BRANDIS: I must say, I was not aware that that speech had been made public. Would you mind tabling that please, Mr Wilkins?

Mr Wilkins : I have got an excerpt.

Senator BRANDIS: Thanks, that is helpful, Mr Wilkins. What did the Attorney say about the change to the status of the court and its members, Mr Foster?

Mr R Foster : She did mention that she would consider changing the name of the court and would hear from the court about what their views were in that regard.

Senator BRANDIS: So that has gone no further at the moment?

Mr Wilkins : We need to get the copy of the speech back!

Mr R Foster : To my knowledge, that has not gone any further, but I am not sure what has been happening within the Attorney-General's Department.

Senator BRANDIS: Mr Wilkins, within your department has the idea of changing the status and indeed the name of the Federal Magistrates Court been progressed? If so, how?

Mr Wilkins : Internally there has been some progress in relation to that.

Senator BRANDIS: Where are we at, Mr Fredericks?

Mr Fredericks : The matter is being progressed internally. Ultimately the timing of any public announcement around that is a matter for the Attorney.

Senator BRANDIS: I understand that, but is it the position of the government that there will be the change that was suggested as a possibility by the Attorney-General, or has no decision yet been made?

Mr Fredericks : In fairness I need to rely on the public pronouncement that has been made by the Attorney-General in relation to that. I can now articulate that to you, if you like.

Senator BRANDIS: Beyond what the Attorney-General announced on 26 April which, as I understand it, stopped short of giving an actual commitment that this change would be carried into effect, has the matter progressed any further?

Mr Fredericks : I do apologise, but I do not think I can add to what I said earlier. The matter is being progressed internally. The Attorney has made a statement publicly, including to the magistrates, that was welcomed. Ultimately, the next step is a matter for the Attorney.

Senator BRANDIS: That will do. Those are my questions to you as the Federal Magistrates Court acting CEO. I have some more questions for you concerning the Family Court. I also reserve the right to come back and ask some questions about the FMC after I have consulted the speech.

Mr R Foster : I certainly will wait.

CHAIR: Mr Foster, we are meeting at 3:30 pm to consider the status of this document, so I ask you to hang around until after the committee has made a decision.