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Legal and Constitutional Affairs Legislation Committee
22/05/2018
Estimates
HOME AFFAIRS PORTFOLIO
Department of Home Affairs

Department of Home Affairs

CHAIR: We are dealing with the Department of Home Affairs. I again welcome Minister Fifield, filling in for Mr Dutton, and also Mr Pezzullo. The committee decided last night that we would complete outcome 1 this morning. We've started on program 1.8, cybersecurity, and we'll go from there.

Senator Steele-John was in continuation. If he's here, we'll go to him. If he's not, I have just got a couple of questions I need to ask on that subject. The Senate's referred to this committee in particular the proposed expenditure. The committee set Thursday, 7 July, as the date by which answers to question on notice are to be returned, and any questions on notice have to be lodged with the secretariat by 5 June. All evidence has to be taken in public. Witnesses in this committee, I think, know that they're protected by parliamentary privilege and all that that entails. Any questions going to the operational or financial position of departments or agencies which are seeking funds are relevant questions for the purpose of the estimates hearings.

The Senate has resolved that there are no areas in connection with the expenditure of public funds where any person has a discretion to withhold details or explanations from the parliament or its committees unless parliament has expressly otherwise provided. The Senate has also resolved that an officer of a department of the Commonwealth shall not be asked to give opinions on matters of policy, but this prohibits only questions asking for opinions and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted.

The extract read as follows—

Public interest immunity claims

That the Senate—

(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly raising claims of public interest immunity as required by past resolutions of the Senate;

(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;

(c) orders that the following operate as an order of continuing effect:

(1) If:

(a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and

(b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which the officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify the harm to the public interest that could result from the disclosure of the information or document.

(2) If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the minister.

(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or document.

(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from the disclosure of the information or document to the committee could result only from the publication of the information or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the committee as in camera evidence.

(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement does not sufficiently justify the withholding of the information or document from the committee, the committee shall report the matter to the Senate.

(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising the matter in the Senate in accordance with other procedures of the Senate.

(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal deliberations of, government, in the absence of specification of the harm to the public interest that could result from the disclosure of the information or document, is not a statement that meets the requirements of paragraph (1) or (4).

(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be required to provide a statement in accordance with paragraph (3).

(d) requires the Procedure Committee to review the operation of this order and report to the Senate by 20 August 2009.

(13 May 2009 J.1941)

(Extract, Senate Standing Orders)

Claims for public interest should be explicitly claimed. I think everyone in this committee particularly is now aware of what has to happen. If not, we'll deal with that as we come to it. The committee has decided the media can report these proceedings, but we do ask the media to stay within the boundaries that we've marked for their benefit and for everyone else's benefit.

I was just going to say that, in the absence of Senator Steele-John, I'll start, but at that moment, right on cue, he turns up. Are you ready to proceed?

Senator STEELE-JOHN: Feel free to kick off, Chair; I'll catch my breath.

CHAIR: If you're ready, you can go.

Senator PRATT: I've got questions on cybersecurity that relate to counterterrorism. I could ask those now.

CHAIR: All right.

Senator PRATT: I think technically it's 1.9, but I'm sure Mr Pezzullo won't mind if I ask those out of order.

CHAIR: Oh, yes, you do have a cybersecurity expert. Oka, Senator Pratt.

Senator PRATT: Thank you. As I understand it there is some discussion about a legislative proposal coming to the parliament which has been characterised in the media as a backdoor to allow intelligence agencies to access encrypted communications. Is it anticipated that any such legislation will be introduced into parliament in this sitting?

Mr Pezzullo : I refer to my evidence given last night in response to Senator Steele-John, who asked me a question in almost identical terms.

Senator PRATT: Okay. I clearly wasn't paying close enough attention to Senator Steele-John's questions, but I was here.

Mr Pezzullo : If it assists I might summarise. Yes, you were here.

Senator PRATT: I understand I was here.

Mr Pezzullo : I might summarise the evidence if that assists perhaps. As I said last night and in evidence I gave in February, as did a number of my officers, following an announcement by the Prime Minister in July 2017 where he and the former Attorney-General of the Commonwealth, Senator the Hon. George Brandis, QC, announced that, in order to deal with the need to balance on the one hand privacy and the legitimate right that businesses and individuals have to access secure end-to-end encrypted communications to conduct business and go about their lives and on the other hand ensure that security, intelligence and law enforcement agencies can lawfully maintain access to the communications and/or data so they can do their jobs, the government would be looking to introduce legislation that would not have the feature described sometimes in shorthand as a systemic backdoor to encrypted communications but would be targeted, proportionate and rely on models such as—and I'm paraphrasing the former Attorney General's announcement last year—potentially, the UK model, which has a combination of assistance notices that can be served on companies and/or capability warrants that can similarly be served on companies. But, beyond that, the details have not further elucidated by ministers, and we are developing draft proposals for ministerial consideration. I think that's the burden of the evidence I gave last night.

Senator PRATT: I'm not an expert in decryption, but I do understand that people do encrypt information and that agencies might seek to decrypt them and have access to technology that would enable them to do so and to target that decryption at specific risks or where some kind of attention is warranted in terms of managing risk or crime. Is that what you're saying?

Mr Pezzullo : In general terms, I suppose I am. It relates to the more contemporary phenomenon known as secure end-to-end encryption where, as a commercial offering, providers of these platforms are able to say to individuals or businesses: 'We don't hold any keys. We don't have any way to unscramble your communications. So come onto our platform. Use it as a messaging service, for instance, and you'll have a complete secrecy and confidentiality.'

Senator PRATT: Okay. I appreciate that this is complicated. How does the government intend to balance this out considering user privacy in terms of companies that essentially have trodden on their responsibilities to protect privacy and because of which, therefore, more and more users might seek to encrypt things for quite innocent reasons because they don't trust providers?

Mr Pezzullo : That's the balance that the government's asked us to consider in terms of draft proposals, and you'll see that balance expressed in the bill when it comes forward. Mr Taylor, who's got carriage of the legislation, has indicated on a number of occasions that he expects to be in a position to introduce that legislation soon.

Senator PRATT: So you're giving advice that will balance those issues.

Mr Pezzullo : Yes.

Senator PRATT: But clearly you can't disclose what the nature of that advice is now in detail.

Mr Pezzullo : We're developing options for ministers to consider.

Senator PRATT: Okay. So the government is proceeding with legislation to allow the development and use of a decryption key. The government will be able to—

Mr Pezzullo : No, I didn't say that, Senator. I said the government's asked us to develop options that would balance those twin imperatives between privacy on the one hand and lawful, legitimate, proportionate access on the other hand by agencies that have got a need to access those communications. I didn't say anything about a decryption key at all in terms of the legislation.

Senator PRATT: Okay. But if you were to decrypt something you would need some kind of tool with which to do that?

Mr Pezzullo : When the bill comes before this parliament, you'll see what the government's proposing.

Senator PRATT: But that's the legislation that governs the technology. I'm asking for an explanation of 'technology'.

Mr Pezzullo : It would codify the nature of the access that the government was proposing to put in place through statute.

Senator PRATT: Including defining the tools that might be used to do that?

Mr Pezzullo : The instruments that would be codified in law. As I said,—colleagues will assist me if other ministers have made reference to this, certainly I do recall the former Attorney-General Senator the Hon. George Brandis making reference indicatively, in a public statement, to things like technical assistance notices and what are known as technical capability warrants. He used those as examples modelled on UK legislation. But he didn't commit definitively—and of course he's no longer the Attorney-General—to those precise instruments being advanced to this parliament.

Senator PRATT: Okay. As I understand it there would be a number of ways of doing this. One would be to have a key to decrypt something. Another one might be to compel a company that offers encryption to provide that communication to government. I'm asking for a technical explanation. Can they unencrypt that information and give it to government under a legislative instrument?

Mr Pezzullo : All I can really do is refer to my answer in my evidence of last night. Ahead of the government considering the modalities that it wishes to advance to this parliament, any explanation of technical modalities would be highly premature. And it would also be presumptive of me because it would get ahead of ministers considering those questions, which do require an engagement with those technical issues—I fully accept that. But ministers have asked us to develop proposals, so they should hear from us first.

Senator PRATT: So we can't get an explanation from you of the different technical modalities, even just an explanation of them, because you think that in some way pre-empts the legislation?

Mr Pezzullo : Well, it possibly could. If I start to describe to you what you can find on any website that specialises in these matters, so talk about escrow keys and define what a back door is and other matters—you're free to roam over that technical literature at your convenience. Once you start to ask me, 'Well, what's your preferred mode or how would you go about it or what's the best way to do it?' that starts to get into advice that's being developed for ministers in the first instance.

Senator PRATT: So you can't even tell me what the possible ways of doing it might be?

Senator Fifield: I'm not sure that it's Mr Pezzullo's role to be a technology commentator. His role is to provide advice to government in the formulation of policy. Government will make decisions in relation to policy that will inform the drafting of legislation, which will be presented at the parliament after it's gone through the government's internal approval processes.

Senator PRATT: Okay. As I understand it, and you haven't characterised it this way, we could have back door decryption or we could have the authorisation of warrants. They're two examples. Has the government considered who will be responsible for oversight of this? Will it be the Minister for Home Affairs or the Attorney-General?

Mr Pezzullo : In addition to not being a technology commentator—and thank you, Minister, for summarising—

Senator Fifield: Not that you're not capable.

Senator PRATT: You could have a crack, Senator Fifield. I know that you would be able to do it as well.

Mr Pezzullo : Questions about the design of the scheme and oversight arrangements are matters for the government to consider as part of the overall package, including who would authorise any particular notice or capability warrant, to use the phrases I have already given in evidence.

Senator PRATT: Yes. Which agencies are the government proposing should be able to access encrypted information?

Mr Pezzullo : That information would be intrinsic to the design of the legislation, which hasn't yet come before ministers collectively.

CHAIR: I think, Senator, you've got all the questions for next estimates when there are some proposals there. Your time has finished, but we can come back to you. Like Senator Pratt, I'm far from being an expert in all this, so if you'll excuse my murdering of the technology. But a concerned citizen has approached me about an article that appeared recently in a paper. I preface this by saying I don't really use or understand Twitter. I think I've got 400 genuine followers and—

Senator WATT: I'm one of them.

CHAIR: Are you? Okay. I rarely use it. You must sit up all night waiting for the one I do a month. But I do have about—

Senator WATT: I've got a search function.

CHAIR: Okay. I have about 3½ thousand genuine followers on Facebook, which I do understand a bit better and do use. I see that one of my colleagues has 26,000 followers on their Twitter, which makes me feel a bit inadequate. But, according to this article, most of them are purchased. They're not genuine; they're fake bots. Are you able to buy fake bots? There's a purpose to these questions, which relates to national security, actually, so it's quite a serious matter.

Mr Pezzullo : Chair, if anyone's going to know about fake bots, it would be the National Cyber Security Advisor, so I'll hand to Mr MacGibbon.

Mr MacGibbon : I appreciate, Secretary, that you think I might know about fake bots. These social media companies are increasingly getting good at shutting down fake accounts, but there's no doubt that there are factories that produce literally people sitting behind keyboards and machines that are producing fake accounts across a whole range of social media companies, not just Twitter, and some of those are available to purchase. The reason why people do that is to possibly drive revenue sometimes—so clicking on ads, for example, and it may well be to spread what's loosely known as fake news. So there's different reasons for people to purchase.

CHAIR: But I could feel a bit better myself if I purchased 30,000 fake bots and then I could say I've got 30,000 followers, not just 400.

Mr Pezzullo : Could you live with yourself if you knew they were fake?

Mr MacGibbon : Chair, if you do watch carefully with your followers, you'll notice from time to time your numbers will drop. As these companies go through and cull, they find—

Senator WATT: Senator Macdonald's seen that a lot.

Mr MacGibbon : These companies do from time to time cull and you'll notice your numbers do drop from time to time.

CHAIR: Last month, Defence Minister Payne and Cyber Security Minister Tehan identified Russia as being behind cyberattacks on Australian government agencies, businesses and critical infrastructure, and that's in public statements by those two relevant ministers. I don't want to dwell on the issues in America—I don't really follow American politics, but there's newspaper talk about Mr Trump and Russian bots, fake bots, interfering with the election. Is there a concern that you can tell us about in this open hearing about Russian state sponsored campaigns to influence and interface or interfere directly in Australia via social media, as apparently, according to this newspaper article that's been referred to me, has occurred in the US and the UK?

Mr MacGibbon : The attribution that you refer to was I believe Minister Taylor, the Minister for Law Enforcement and Cyber Security, where the UK and the US came out and attributed the mass scanning of Cisco routers by Russia. Minister Taylor came out in support to say that we'd seen similar activity in Australia. So that was one particular incident. And there was large-scale scanning by Russia of a particular device or a feature in a device that could lead to reduction in security for the companies that deployed that particular router with the feature still turned on.

There is a separate issue on nation states influencing electoral outcomes. Certainly what I can say is that after the allegations of interference in the US presidential election in late 2016, the Prime Minister asked us, that is the Australian Cyber Security Centre and me and my previous role inside Prime Minister and Cabinet, to brief the opposition and minor parties as well as to work with states and territories to inform them of nation state activities and the potential for the ways in which nation states could compromise democracies. There's no doubt that since those events and subsequently in other countries, there have been allegations that nation states generally will start using the internet for influencing the outcome of democratic elections.

CHAIR: I, like most Australians, don't fully understand this. But I have concern following the issues surrounding former Senator Dastyari and Chinese government influence on Australia. so I was rather concerned with this newspaper article that was drawn to my attention that one of my Senate colleagues has 26,000 followers, many of whom appear to be Russian fake followers. It's explained to me that the appearance of being fake Russian followers is that the default language is shown as being Russian. Does that make sense?

Mr MacGibbon : I might seek some further details from you, Chair, so I can give proper advice. I might take that on notice—

CHAIR: Better than that, this is a newspaper article. I have a healthy suspicion of newspaper articles, so I don't always take them for granted. But I understand that my Senate colleague has 7,000 Russian language defaults and various other languages as well. By comparison, for 96 per cent of Mr Morrison's followers the default language is English, and the same for Mr Chris Bowen, who has a big number of followers, but their default language is English. This was handed to me. It doesn't mean much to me, but I would seek the committee's approval to table this so you can have a look at it and tell me what it is. It is a group of invoices, which I believe to be accurate, but I'd like you to have a look at them, which indicate, to my knowledge, the default language being some English, but Russian, Chinese and others. There's a whole table of them. I can send them to you electronically if that might be a better—

Senator WATT: What are you saying that is, Senator Macdonald?

CHAIR: I can pass it around, I believe that it is an ExportTweet analysis of this senator's Twitter followers which, according to the newspaper I'm referring to, the Daily Telegraph, shows 7,000 fake Russian followers. You can have a look at it. It may mean more to others than to me, but I am concerned about this in view of the warnings from various ministers about Russian bots. It's alleged that many of these fake Russian bots were once used in the Trump campaigns, half of them for Trump, half of them against Trump. That greatly concerns me. If the committee agrees, I'll table these. I'll pass them around the committee as well and send them to you electronically. My question is, could you examine these and come back to the committee on notice with any lessons or advice that you might care to provide the committee? I also want to ask you if you'd look at the bots which initially retweeted Russian news or propaganda that went dead. You will know what that means. Someone tried to explain it to me. Apparently they go dead, but they were recently, after three or fours, reactivated to retweet partisan comments on both sides of the American election. I'd also ask you if you would look at the large number of bots whose location appears to be, according to this, not even specified or located in parts of the world that have very strange language settings and which have, to those experts who talked to me, all the hallmarks of fake Russian accounts.

Senator PRATT: Chair, now is about the time where you call someone to order to ask them to get to the question.

CHAIR: Actually, I just asked a series of very—

Senator PRATT: It's all right; I'm just making—

CHAIR: All I've been saying in the last five minutes has been, could you particularly look at this? Could you also look at the large number of bots whose locations are not specified?' I'm not suggesting for a moment that this senator is doing anything wrong or is knowingly doing anything wrong, but it does concern me. People who understand this better than I have raised it with me as a very serious concern. Mr MacGibbon, I suspect you know more about what I'm talking about than I know, but it is something that, on the limited information, I have is very, very concerning, so I'd ask you on notice to have a look at these things. I think the secretary's taken my bundle. Could you just show it to Mr MacGibbon first of all to make sure it means something to him, and then the rest of the committee may want to have a look at it. Don't bother copying it, because there are literally dozens of pages. I will send them to the committee and to the department electronically. Mr MacGibbon, could you have a look at that and see whether it does—I understand ExportTweet is a private company that does this sort of thing for a fee. Do you know that?

Mr MacGibbon : I'd have to analyse it properly and take it on notice, if that's okay with you.

CHAIR: Yes.

Mr Pezzullo : Could I suggest, Mr Chairman, that a couple of things happen. One, Mr MacGibbon's just received a full inch of paper. Secondly, Mr MacGibbon's expertise mandate relates specifically to the cyber means, if you will. If there's a question here of interference or involvement in Australian politics, that would be a matter that the Director-General of Security typically would address. Whilst I'm very comfortable, subject to going through the minister, to take the question on notice in the generic, it might well be that advice is best tendered to the senator himself or herself—I'm not sure who's been referred to—and possibly the party leader, which is the standard way in which these matters typically are dealt with. But I might seek the minister's guidance as to—

CHAIR: Mr Pezzullo, I've asked a series of questions.

Mr Pezzullo : I understand that, Mr Chairman.

CHAIR: Which was, could you examine this and come back with any lessons or advice that you want to provide?

Mr Pezzullo : Possibly.

CHAIR: Apparently—so I'm told—I could go out and buy 30,000 fake followers and then my 400-follower tweet would look much more impressive with 30,000 followers who happen to be fake. That's what I've asked for.

Senator Fifield: We will take your questions on notice. As the secretary has indicated, it may be the case that some elements of your question will require referral to other agencies which may be outside the Home Affairs portfolio. But we'll take that on notice.

CHAIR: Thank you, Minister. As I said, I'm not for a moment suggesting this senator is knowingly involved in doing anything wrong. But, as I understand it, I could buy 30,000 bots and I could then be unwittingly spreading Russian propaganda. We know the havoc that is alleged to have occurred in America and in the British election, I understand. That's my point, Senator Molan. I'm not just talking about the senator who this article in The Daily Telegraph referred to, but there could be a salutary lesson for all of us. I raise this particularly following the issues around Senator Dastyari, which, again, have all been resolved. I'm not suggesting Senator Dastyari was knowingly doing anything wrong, but they are traps into which the uninitiated might well fall, and that's why I raise it publicly and seek some advice.

Senator Fifield: And I think that the secretary has alluded to the fact that, on occasion, agencies within the Home Affairs portfolio talk to members of parliament and talk to party leaders about things that people who are elected representatives should be cognisant of. That's usual practice, and if there's anything that comes out of this material that would warrant that then I'm sure that will occur as well.

CHAIR: Okay. Thank you for that, Minister, Mr MacGibbon, if you haven't already seen it, there is an article in the 1 May edition of The Daily Telegraph that elaborates a bit on it and was the catalyst for the concern that was raised with me by a concerned citizen. Okay, that's my time up.

Senator WATT: Chair, I just have one question arising from that. Minister, do you know whether any government resources were used in obtaining that export of Twitter followers?

CHAIR: Well, I don’t think the minister would—

Senator Fifield: I have no knowledge of what is before the committee.

Senator WATT: Could you take on notice for us, please, whether any government resources were used to compile that? I just heard that—

CHAIR: Perhaps you should ask me.

Senator WATT: I would like to, but you're not a minister. I just heard you say, Chair, that it's possible to obtain that through payment of a fee, so I'm interested in knowing who paid that fee and whether it was government resources—

Mr Pezzullo : or parliamentary.

Senator WATT: Or parliamentary, yes.

CHAIR: Let me clarify that. What I said was that this article suggests that you can get that at a fee. Do you know a group called ExportTweet?

Mr MacGibbon : No, I don't.

CHAIR: Do you know if there are private organisations who can, for a fee, provide that sort of information that I've given you?

Mr MacGibbon : I suspect there would be automated tools or services that can extract what you can probably do manually by going through every follower of a person. There are various apps and services that overlay a whole range of social media services, but I'm not familiar with the particular one to which you refer.

Senator STEELE-JOHN: My question goes to Mr MacGibbon. On 13 April, you were quoted in InnovationAus suggesting that, while Microsoft will store protected status data in Australia, Microsoft staff in other countries will be able to access the data. So will the protected data be able to be accessed by overseas staff?

Mr MacGibbon : I'm not sure if I was quoted in there or whether that was an InnovationAus commentary about what I said—

Senator STEELE-JOHN: No, you were quoted directly.

Mr MacGibbon : I'm not sure if it's accurate. I don't want to sound too cute for the committee, but I have two roles. One is as the national cyber security adviser and the other is head of the Australian Cyber Security Centre. In the capacity as the head of the Australian Cyber Security Centre, I can give you some indication of the Signals Directorate's cloud certification for protected status.

Senator STEELE-JOHN: Before we go there, I will just read your quote back to you. This is from the article on 13 April.

Mr MacGibbon : Sure.

Senator STEELE-JOHN: The [government] data associated with Azure and Office 365 resides in Australia. It's that simple. That's where the servers are.

Now you can store data in one place and access it in another, that’s a different question. The data associated with the Australian Government is in Australia. I am satisfied that there are mitigations in place on a whole range of threat vectors, one of which is where staff are located.

Mr MacGibbon : Thank you for clarifying that. That actually make it is much easier to answer the question. Two points have been conflated there. The first is that I'm satisfied that Microsoft Azure, in its protected form as certified by the Signals Directorate or the Australian Cyber Security Centre within the Signals Directorate, will be stored in Australia. A point I've made now since about 2003, when I was head of the Australian High Tech Crime Centre, is that data can reside anywhere in the world. You can demand data stay in Australia. It doesn't always make it more secure that it's in a particular geography. What I said is that it's good that we hold data in Australia, which means that data comes under Australian law and Australian agencies and others have more access to it, then other countries' agencies, theoretically at least, don't have lawful access to that data. That's the point I was making in that the concept of storing data in a geography is good and storing data in Australia is good, but it doesn't mean, by default, that it's 100 per cent secure.

Senator STEELE-JOHN: So to answer the question—

Mr MacGibbon : Sorry, Senator, the point is that there are two very separate issues. One is that I'm satisfied that Microsoft will be storing data in Australia and the other is just because data is stored in Australia doesn't necessarily make it secure.

Senator STEELE-JOHN: Will the data be able to be accessed by staff overseas?

Mr MacGibbon : If you're talking particularly about Azure, I am satisfied that the information security manual requirements are met in order to be—

Senator STEELE-JOHN: Yes, but—

Mr MacGibbon : Senator, there are mitigations that are necessary or there are mitigations necessary to meet the mitigations and I'm satisfied that—

Senator STEELE-JOHN: That's not my question though, as you would be well aware. The question is: will it be able to be accessed by staff not residing in Australia?

Mr MacGibbon : At this point I would say to the chair that there are confidential discussions between the Australian Cyber Security Centre and a private company which has been worked with for years by the Signals Directorate and Cyber Security Centre, as it works with all companies that eventually receive protected status.

Senator STEELE-JOHN: But it is a very simple question.

Mr MacGibbon : Not necessarily.

Senator STEELE-JOHN: You would be aware, Mr MacGibbon, why I'm pursuing this line of question, I am sure, because the four other companies which currently receive this status have to comply with a standard which requires them to locate their staff and be located within Australia.

Mr MacGibbon : I'm satisfied that, for all intents and purposes, the Microsoft Azure cloud, as certified, the protected cloud as certified, meets all of the standards required that are met by the other companies.

Senator STEELE-JOHN: So that would mean that they would be based in Australia?

Mr MacGibbon : Well, again, not necessarily. It depends on the architecture and it depends on the mitigations in place in the architecture and the policies and procedures. It is important that I clarify it. It is therefore not as black and white as some people would portray it, who, frankly, in some respects are being a little bit cute and malicious in the way in which they describe it.

Senator STEELE-JOHN: Am I to understand that you don't think it's particularly meaningful as to whether staff are located in Australia who can access this data or not?

Mr MacGibbon : I think it's very meaningful what the intent of the policy is, and it's my belief that risks have been mitigated in order to satisfy the requirements of that policy.

Senator STEELE-JOHN: Have the standards changed recently? Has the government sought to—

Mr MacGibbon : No, the standards are as they have been, and that is that there is a series of requirements whereby you must mitigate risks. My satisfaction is that the Commonwealth's risks are reduced by: (1) the adoption of cloud more holistically by agencies. Well-run cloud is much safer than servers stored in basements or under desks; (2) those cloud providers that are certified by the Australian Cyber Security Centre, which is part of the Australian Signals Directorate, are more secure and therefore reduce risk—there is no such thing as complete risk mitigation—and those requirements are met in different ways by different providers. It depends on the technology and the policies and procedures of companies, therefore, there is not one, single technical solution or architecture that could be met, or needs to be replicated, by any single company.

Senator STEELE-JOHN: But forgive me, Mr MacGibbon, there are four other companies which hold this status. They are Macquarie Government, Vault Systems, Dimension Data and Splice Tech. They don't have mitigations in place. They have to comply with the standard—

Mr MacGibbon : Actually, Senator, they have mitigations in place. The way in which they meet—

Senator STEELE-JOHN: Are you suggesting they have non-Australian-based staff?

Mr MacGibbon : No, what I'm saying is they met the requirements in a particular way—

Senator STEELE-JOHN: By meeting the standard?

Mr MacGibbon : No, you can meet standards and requirements and reduce risks, mitigate risks, in lots of different ways.

Senator STEELE-JOHN: None of these four companies have been given that option.

Mr MacGibbon : It would be churlish of me to suggest any particular way in which a company should. What they need to do is, in very extended multi-year discussions with the Cyber Security Centre, satisfy staff who are frankly very risk-averse, and it is right and proper that they do so. The aim is that we reduce the risk to the Commonwealth—not bring it to zero, because the only way you can bring the risk to zero is not to do business—and increase cloud adoption through certifying providers that have met the high standards. But there is no particular prescribed way to meet those standards. So long as the risk is mitigated, I'm satisfied. I am very satisfied that the risk to the Australian government in relation to the particular cloud provider that you're referring to is actually well met, and that we reduce the risk to the Commonwealth through certifying the Microsoft Azure platform.

Senator STEELE-JOHN: Can you not give me a direct answer as to whether this data will be able to be accessed by staff located overseas?

Mr MacGibbon : I am saying to you that I am satisfied that the requirements of the ISM are met.

Senator STEELE-JOHN: That isn't my question, though.

Mr MacGibbon : It's a fair question.

Senator STEELE-JOHN: It's a yes or no thing: is it able to be accessed by staff located overseas or not? You must know.

Mr MacGibbon : There are policies and procedures in place. It's not for me to go into each company's architecture; that wouldn't be appropriate for me to do. But I am satisfied that after many years of discussion with the Cyber Security Centre, which is part of the Signals Directorate, each of the five companies that you've named have satisfied those requirements. By the way, those companies need to be recertified at various times because the certification is at a point in time—

Senator STEELE-JOHN: So if I'm contacted by another Australian based company who is wishing to obtain this status from the Commonwealth, am I to inform them that the goal is to meet the standard or to satisfy yourself?

Mr MacGibbon : I'm saying, with respect, that the aim is to mitigate the risks associated with certain known threat vectors, which is what the policy tries to do, and that the Cyber Security Centre needs to be satisfied that those risks are mitigated. It would be improper to dictate any particular way that a company would do that; only that they need to meet a very high standard and mitigate risk, but not to the point of zero. The point is: even when they meet that standard, it doesn't mean there's zero risk. By its nature, just operating is risky.

Senator STEELE-JOHN: I'll move on to my next question. Will all Microsoft staff have access to protected government data? Will they have security clearance from the Australian Government Security Vetting Agency?

Mr MacGibbon : Again, not wanting to go into the full nature of what is a negotiation between the Cyber Security Centre and a private company, I'm satisfied that the Microsoft staff that will have access to data—all cloud providers by their nature, by the way the cloud operates, are potentially going to have at least access—will be appropriately or are appropriately—

Senator STEELE-JOHN: Have all standards been removed and replaced by what you personally consider to be satisfactory, Mr MacGibbon?

Mr MacGibbon : Not at all.

Mr Pezzullo : I think at the very end of Mr MacGibbon's preamble I heard him say, before your interjection, that they would be cleared.

Mr MacGibbon : Yes, absolutely.

Senator STEELE-JOHN: So they will receive clearance?

Mr Pezzullo : The answer is yes, which was the evidence he gave.

CHAIR: Senator Steele-John, do you have any more questions?

Senator STEELE-JOHN: I've got a couple more.

CHAIR: I'll go to Senator Molan, and we can come back to you.

Senator MOLAN: We have had some success in the past in relation to the developments of both Home Affairs and cybersecurity, it would seem to me. We spoke before, in passing, about the recent attribution to a Russian actor of what I would call an attack on, or a compromising of, Australian routers; you mentioned the mass scanning of Cisco routers by Russia. I think you only spoke about that in one sentence. Could you give us an update on that, on whether the ACSC was involved in providing advice to it and when it occurred? It does seem that we are seeing an impact of the new organisation, the integration of various agencies and the coming together of those agencies in a success.

Mr MacGibbon : I'm just trying to look at when the advice was issued originally; I think it was last year. The ACSC gave advice on how to turn off what Cisco calls a feature in the router. That advice was issued in 2017. Then subsequently, as I said, Minister Taylor came out on 17 April supporting the United States and the United Kingdom in attributing the targeting to Russian state-sponsored actors. The advice on how to mitigate was put out 10 or 12 months before us coming out again. This is not atypical for cybersecurity issues. As soon as we know of large-scale problems, the Cyber Security Centre and, at that time, the Computer Emergency Response Team—which is still located inside the Attorney-General's Department but as of July will be moved into the Australian Signals Directorate as part of the Cyber Security Centre—will go out to their constituencies and publish on their websites the mitigation advice for such things as this router feature; I'd call it not quite a feature but more of a vulnerability. It's typical of the way we work, which is to go out and tell people how to patch.

By publicising the fact that it was Russian state-sponsored actors in April 2018, the intent was multi-fold. One is to increase the likelihood that companies using these routers will turn off the feature because they know it's being abused by a nation state, and the second is to help set boundaries for acceptable behaviour by nation states online. The Australian government has made clear what it believes is the acceptable left and right of arc of behaviours of countries online. By naming state actors—and it isn't the only time the Australian government has come out and attributed malicious cyberactivity to nation states; it also came out—

Senator MOLAN: Did you say military cyberactivity?

Mr MacGibbon : It's a nation-state activity; whether it's by the military services or the nation state more broadly, we didn't go into that type of detail. But we've also come out in past months to attribute to the Russian cyberactors the large-scale NotPetya incident of last year and to North Korean actors the WannaCry global ransomware incident of last year. So the Australian government has come out on multiple occasions to attribute malicious cyberactivity to nation-states. The intent is twofold: to encourage businesses and government agencies to increase their protections, which is right and proper, and to define acceptable cyberactivities by nation-states.

Senator MOLAN: I assume, then, that the event Minister Taylor referred to in April of this year and ACSC advised about last year occurred before the advice. Has there been similar scanning by Russia or any other foreign entity since those days?

Mr MacGibbon : I might have to take that on notice, if I can. I don't actually know the answer. I presume that, since the feature needs to be turned off by the people using it, the vulnerability still exists, sadly, amongst some sections of the economy, and that there would therefore be others—whether they're the same threat actors or other malicious actors—who are also abusing the feature. I'll have to get back to you, if I may.

Senator MOLAN: What would you judge to be the purpose of that scanning?

Mr MacGibbon : This particular one would give you—from memory—an understanding of the way in which the network was set up, the actual architecture of a network, which could give you insight into ways in which you could attack that network. I can provide a more detailed brief and send it to the committee.

Senator MOLAN: That'd be very good.

Mr MacGibbon : That would be our public advisory, by the way, not, as the secretary said, a classified briefing.

Senator MOLAN: But does the fact that the feature has been turned off mean that whatever the scanning was doing could still be activated at some stage and impact on businesses?

Mr MacGibbon : If the feature was turned off then the actor wouldn't be able to undertake the activity that they were able to when it was turned on. Whether or not—

Senator MOLAN: Something was left behind.

Mr MacGibbon : something had been successfully then implanted in a system is a different matter. As you know, Senator, usually these activities are multistage, so there'll be an exploratory stage, information gathering, and then maybe exploiting vulnerabilities and placing malicious payloads into networks. It's hard to know, obviously, without being inside all of those networks, which clearly we are not. Our job is to try to reduce the likelihood of these incidents occurring through that broadscale inoculation, if I could use that as a phrase, and then to respond to incidents when they have occurred. But our preference is to prevent something happening in the first place.

Senator MOLAN: And ACSC plus the CERT is the way that you work with business, I assume.

Mr MacGibbon : Yes. In the current construct, until July, the Australian Signals Directorate houses the Australian Cyber Security Centre, which is made up of the Australian Signals Directorate, obviously, ASIO, the Australian Federal Police, the Criminal Intelligence Commission, the Defence Intelligence Organisation and the Computer Emergency Response Team. In July last year, when the Prime Minister announced the accepting of the independent review into the Australian intelligence community, he announced as part of the review recommendations that the Computer Emergency Response Team that is housed inside the Attorney-General's Department would—in a MOG, machinery-of-government, change—move over to the Signals Directorate and then they would be one single entity. ASD and CERT will become one, with the responsibility for protecting government systems, which the Signals Directorate has always had—state and Commonwealth—and the role of protecting businesses that CERT has traditionally held.

Mr Pezzullo : I might add to my evidence given yesterday in response to Senator Watt's line of questioning, because this is particularly on point. The announcement by the government last July that the role of the Australian Signals Directorate would be expanded is principally a matter of course for the Defence portfolio, but it should be noted by this committee, because we were assigned the cybersecurity policy role, and that's the context in which we deal with Defence on questions of policy. Mr MacGibbon just made a very important point, and I'd like to underline it for the committee—that the traditional, seven-decades-old role of collection of foreign signals intelligence has, by government decision and indeed by the support of this parliament, which passed relevant legislation just last month, given to ASD a broader mandate to operate in relation to cyber networks, principally from a defensive point of view, which is what Mr MacGibbon is talking about, but also, as the Minister for Home Affairs has spoken about, potentially in relation to the disruption of onshore networks, subject to advice going to government, where things like, for instance, child exploitation are occurring on those networks. I just want to underline it, because it's going to be a feature of the discussions of this committee for, I suspect, years to come, where the shorthand—regrettably repeated by journalistic standards that are not up to the standard that all of us would expect—conflates ASD with signals intelligence collection. The detail of that you'd need to ask about at another committee but, for the purposes of this committee, Home Affairs has got the cybersecurity policy role, where Mr MacGibbon supports me. That includes potentially using those capabilities not to collect intelligence but to operate on networks. That's the point I made to Senator Watt at some length yesterday. So the evidence that Mr MacGibbon gave just a moment ago is precisely on that point of the dual role.

Senator MOLAN: And that goes to a philosophical question in relation to—

Mr Pezzullo : We prefer those, Senator.

Senator MOLAN: Absolutely, it stays away from reality. It goes to a very important point. Can you tell me if this comparison is correct? When we think about the physical defence of a nation, we think about defence in-depth—and we had a bit of defence in-depth yesterday—but it seems that cyber at the moment, through the ACSC and the CERTs expects the close-in defence of banks and infrastructure et cetera. We touched on this yesterday. Is there an equivalent in relation to moving forward in the stream of data that comes into a country through the entry points, and therefore increasing our probability of being able to, both on the criminal side and on preventing people scanning or locating malicious software or turning things on and off? I guess the equivalent of an entry to a nation in a physical sense is a port or an airport, and we spent a full day yesterday talking about this. Is there an equivalent? How can you do it? The impression I got, Secretary, from the article that you were talking about yesterday and that we read some time ago is that there is a similarity here.

CHAIR: We will get to the answer that and then we might have to come back to you.

Senator MOLAN: No, I've finished.

CHAIR: We'll get the answer to that and then we'll go to Senator Watt and then to Senator Steele-John.

Mr Pezzullo : In the interests of brevity, Senator—and perhaps we might come back to it—philosophically to take my lead from you, cyber does lend itself to a defence in-depth model and it lends itself to a partnership between the government and industry, and you've just touched on those matters, and perhaps Mr MacGibbon can revert to those matters later.

Senator MOLAN: That's good, thank you.

CHAIR: Thank you. My apologies for being out and about on the phone. I'm trying to send that material, but my iPad seems to be locked. I think the Russians have got at me.

Mr Pezzullo : We couldn't possibly comment.

CHAIR: No, it's probably my incompetence that's done it. Senator Watt.

Senator WATT: I have just a couple of questions. Senator Macdonald's line of questioning was raising concerns about potential foreign interference in relation to a particular senator's account, Twitter account. I've got some similar questions for Mr Pezzullo. I don't know whether you've seen the coverage of the actions of the member for Dunkley who, it appears, worked with the Ukrainian ambassador to arrange for that ambassador to make a submission to the Australian Electoral Commission in relation to electoral boundaries of that electorate. There has been some concern raised that the member for Dunkley's behaviour may amount to him being a foreign agent as defined in the legislation. Is that something the department has explored?

Mr Pezzullo : Well, firstly, I have no direct knowledge of the matter to which you refer. Secondly, matters pertaining to submissions to the Electoral Commission are properly for another minister and another statutory officer, namely the head of the Electoral Commission—

Senator WATT: This is your legislation though, isn't it, the Foreign Influence Transparency Scheme Bill?

Mr Pezzullo : No, I was coming to that. Under the machinery of government, in a split of arrangements that the government has settled, the so called FITS Bill, the Foreign Influence Transparency Scheme, will be administered by the Attorney-General.

Senator WATT: Okay. So if we had a question as to whether the member for Dunkley and his behaviour amounted to him being a foreign agent and being subject to a foreign influence, that should go to the Attorney-General's Department?

Mr Pezzullo : Well, without accepting any of the premises of the question, any question about that scheme should be directed to the Attorney-General's Department in the context of estimates.

Senator WATT: Okay, thank you.

CHAIR: I just might indicate that in my questions I name no names of any particular senator. But it does raise another very interesting question, and I suspect that not many people have heard of it. Senator Hanson raised that issue with the committee. The committee has dealt with it. I'm not sure that I should be disclosing committee business. Anyhow—

Mr Pezzullo : Sorry, I can't help you, Mr Chairman.

CHAIR: No, but there is a question to this. Are you aware—and Senator Watt properly raised an issue, and I raised an issue earlier than that, but there is this other issue—the suggestion of attempts to influence this parliament by foreign entities encouraging people to make submissions. Is that something that you are looking at in broader—I guess I can't make it much more specific than that without disclosing committee business, and I'm not sure whether—

Mr Pezzullo : I understand the thrust of the question, and perhaps I can assist in this way. Influence is one thing, and the scheme that Senator Watt asked about, which is properly within the Attorney-General's remit, has embedded in that legislation and in the explanatory memorandum an explanation that influence, as long as it's transparent, known and attributed, is in and of itself not pernicious. Governments all around the world either make submissions, they—I won't say 'lobby', but they seek to engage with congresses or parliaments all around the world, and liaison of that nature occurs quite properly. Where influence starts to traverse into and becomes interference, which is covert, clandestine, often with a pernicious agenda that's undisclosed, sometimes using cyber as a vector—that's the kind of shorthand that we use; cyber could be a vector. In other respects it could be human influence: engaging with persons who knowingly or unknowingly might become an instrument of that interference.

Yes, that very much is something within the remit of Home Affairs generally—in two respects, and I just want to be very clear about this. The nature of the threat and collection of intelligence against that threat is properly solely a matter for the director-general of security, who has complete statutory independence as to how he goes about the investigation of such. And I simply don't want to traverse across his terrain. And for this estimates proceedings, as I understand it, you'll be taking evidence from that agency, I think, under Attorney-General's and I think coming across to Home Affairs subsequently. The director-general and his organisation as of 11 May came within Home Affairs, so any questions about the threat—how interference is manifested—to the extent that the director-general or his officers are able to give evidence in a public forum can I'm sure be properly directed to him.

As I said in my opening statement yesterday, where the department steps in or takes over or has a lead is in relation to the formulation of advice to government about strategies to deal with, counter or thwart such interference. Recently under a decision of the government we appointed for the first time ever a countering foreign interference coordinator, who's here with us today. He heads a very small team that's got access to all the relevant intelligence information. They don't duplicate the ASIO role under any circumstances. They don't interfere with it or transgress upon the independent prerogatives of the director-general or his officers. Where Mr Teal and his team take over is in developing options to respond: how do you distinguish properly between interference and influence? How do you call out interference? Sometimes you might do it quite publicly, and at other times you might do it very subtly. How do you ensure that in calling it out you don't cause undue hurt, alarm and distress to loyal, patriotic diaspora communities? That will be the remit of that unit. I trust that assists.

CHAIR: That is very useful. Is that person you identified currently in this committee or still in Attorney-General's?

Mr Pezzullo : No, he works to me. He's in the department.

CHAIR: And if we wanted to question about that, that would be—

Mr Pezzullo : Ordinarily under national security, 1.7—

CHAIR: Which we dealt with last night.

Mr Pezzullo : Yes.

CHAIR: Okay. Just for future reference—but that was very useful. And just for the benefit of the committee and everyone, I'm advised by the secretary that my comment about Senator Hanson's correspondence is not confidential to the committee. In fact, her correspondence and the committee's response is on our website, so it's a public document—just to allay my own concerns, now that I remember that.

Senator STEELE-JOHN: I'd like to clarify just very quickly the answer to the last question I asked Mr MacGibbon, which was whether Microsoft staff who will have access to protected government data will have security clearances from AGSVA?

Mr MacGibbon : Yes, but can I say that the 'yes' is a simple answer to what is a more complex question. The line of questioning you were pursuing related to access to data. And there is a difference between access to data and access to systems. You might do something to a system but not gain access to data. I'm satisfied that people who will have access to data in Australia, and the Microsoft staff—again, without going into the way Microsoft has architected its infrastructure, because each of the ways in which these now five companies and 11 companies in the unclassified space have certified is a matter between the cybersecurity centre and those companies, and I don't want to breach that confidentiality—but I'm satisfied that the staff who will have access to data are cleared by AGSVA, yes.

Senator STEELE-JOHN: Again, this is a situation where the other four companies don't get to make that distinction.

Mr MacGibbon : But, again, I don't think there's a distinction. There are ways in which people can mitigate risks. The world's a risky place. In connected technologies in particular, it's a very risky business, and our job is to reduce risk. If you strip down what the cybersecurity centre does, it's to reduce risk—not now, just for the Commonwealth, but for the entire Australian community.

Senator STEELE-JOHN: It's a risky place, and that's why we have standards.

Mr MacGibbon : It is a risky place. Standards need to be met. The way in which you meet those standards, the way in which you mitigate risk—it can be done in lots of different ways. And I can say to you—again, without breaching the confidentiality of each of those companies—that the architectures of each of the other four firms that you named will be different, and that depends on the technologies they're using, the way in which they stitch those technologies together and the way in which they have architected their business models.

Senator STEELE-JOHN: So, they will now be different?

Mr MacGibbon : No, I'm saying that even the four businesses that you are saying are fundamentally different to Microsoft will be architected differently—

Mr Pezzullo : Amongst each other.

Mr MacGibbon : Yes, against each other, because it depends on the type of technology they use, and how their business model functions. Some might have very bespoke software that they have built themselves and invested an awful lot of time and money in, which allows them to do things differently than if someone was using a commercial off-the-shelf product and putting it into their systems. So, it's not the case, and I'll vigorously defend this, that the four companies you named—yes, they are similar from the outside, absolutely, in the ways in which they—

Senator STEELE-JOHN: And they have to comply with the standard.

Mr MacGibbon : And I would say that there are five companies that have met the standard. That's the thing.

Senator STEELE-JOHN: You're happy that Microsoft has mitigated the risks?

Mr MacGibbon : I'm happy that they have mitigated the risks to meet the standard.

Senator STEELE-JOHN: Well, Australian companies don't get to mitigate the risks; they comply with the standard.

Mr MacGibbon : Again, I'm not sure, again, because I don't want to stray into what is Signals Directorate territory in Home Affairs testimony. But it's important for me to say that the Cyber Security Centre has certified five providers, four of which may look very similar on the outside, but when you—

Senator STEELE-JOHN: Four of which have met the standard.

Mr MacGibbon : Five of which have met the standard, four of which might look on the outside to be fundamentally the same, but if you popped the bonnet you'd find that they have architected themselves differently, depending on their business model and the type of software and hardware they're using. I would say that this will continue to evolve, and the ACSC staff are always happy to deal with these businesses to continually assist them to meet the standards to reduce the risks for the people of Australia by making sure that we're using modern technologies to store and do computing. That's ultimately the objective of the cloud policy of government and it's certainly the objective of the cloud standards that are maintained by the Cyber Security Centre.

Senator STEELE-JOHN: Okay, we'll leave it there. The practice inside the government has been for protected classified data to be kept on completely physically separate systems and infrastructure. So I'd like to ask you if it is true that Microsoft cloud will have protected and less-sensitive data on the same physical infrastructure separated only by software controls?

Mr MacGibbon : This the first time that we are moving from what's known as a community cloud, where it's a government community and only government data, held on what you would loosely call bits of tin, and a true hyperscale public cloud in the case of Microsoft, yes.

Senator STEELE-JOHN: Right. So the answer to that question is yes?

Mr MacGibbon : Yes.

Senator STEELE-JOHN: So, given that that is the case, don't you regard the Spectre and Meltdown malware examples as examples of situations—I'll remind you; you may not be aware of this: within the last half an hour, a fourth variant of Spectre Meltdown has been revealed by Google and Microsoft. Aren't they examples of situations where malicious programs found ways to break through software walls and steal secret information from other programs? And wasn't this only possible because the same hardware was used to store different information? If so, how was it decided that this risk was acceptable in the case of Microsoft's cloud services?

Mr MacGibbon : This is a particularly technical line of questioning—which, by the way, I'm more than happy to answer; I just think it's probably best in a different forum than this one. This is straying very much into my Cyber Security Centre role as opposed to my National Cyber Security Advisor role, which sits under the secretary here in Home Affairs, because of my dual-hatted role. I would suggest that this very legitimate technical line of questioning that I'm more than happy to answer is just not for this forum.

Senator STEELE-JOHN: Which forum would you suggest?

Mr Pezzullo : I can assist. Perhaps it wasn't made clear enough at the start, and I do apologise. Mr MacGibbon's got two roles. He reports to me on questions on policy—that is to say, national cybersecurity policy, some of the things that were being canvassed before: the protection of critical infrastructure at the national level, whether or not it's sensible to explore things like the cyberdisruption of child exploitation networks. When you start getting to the certification of standards, the role of the Australian Cyber Security Centre, they're properly questions to be asked in the Defence estimates, for two reasons: (1) under a decision made by the government last July, it decided to consolidate all of Australia's cybersecurity technical functions under the Australian Signals Directorate.

Senator STEELE-JOHN: So you would be suggesting to me, Mr Pezzullo, that the ASD portion of the Defence estimates would be the appropriate place?

Mr Pezzullo : I wouldn't want to give you advice on how to ask questions in another committee in another portfolio. What I'm saying is Mr MacGibbon has to straddle a boundary, and he reports to me on policy and he reports to the director-general designate of ASD on technical standards.

Senator STEELE-JOHN: Mr MacGibbon, will you be attending the ASD portion of the Defence estimates session?

Mr MacGibbon : I'm not too technically sure. I think at the moment that's PJCIS until ASD becomes an independent statutory agency. I don't exactly know what the best forum is.

Mr Pezzullo : The simple answer is: you'll need to consult Senate staff. I can't give you advice on which committee will oversee the estimates of the ASD.

Senator STEELE-JOHN: All right. But, whichever committee does, will you be attending that, Mr MacGibbon?

Mr MacGibbon : If questions are asked in relation to my role inside the Cyber Security Centre, I'll attend whatever the Senate asks me to attend.

Senator STEELE-JOHN: Wonderful, thank you; we'll pursue that line of questioning there.

Mr MacGibbon : Thank you.

Mr Pezzullo : I much preferred Senator Molan's philosophical questions, because I can engage with those.

Senator STEELE-JOHN: Yes, lovely. I think perhaps that this is a question for Minister Fifield, or it may be for Mr Pezzullo. The Australian Human Rights Commissioner, along with the ACT and Victorian governments, as well as various other organisations, has indicated serious concerns about the identity-matching bills, the powers that they will give the home affairs department and the risks they pose in relation to human rights—particularly in regard to laying the legal infrastructure to enable mass surveillance using facial recognition technology. Can you please explain the steps your department is taking to address these very serious concerns raised by our key human rights organisations in relation to your proposed legislation?

Senator Fifield: I'll ask Mr Pezzullo to speak to this and provide advice as to where that legislation is up to. I don't know off the top of my head if it's been referred to a Senate committee, for instance, or set for an inquiry, which I expect would be the case. But Mr Pezzullo might brief us on the status of the legislation.

Mr Pezzullo : For the relevant identity legislation, I think, indeed, that we have the subject matter expert sitting behind me. I'd appreciate hearing some footsteps in the general direction of the table—perhaps he's wearing very soft-soled shoes. But Mr Franzi—no, senator, I can't see him. Is there an officer approaching?

Senator STEELE-JOHN: There's a lot of milling about behind you, Mr Pezzullo.

Mr Pezzullo : If Mr Franzi is here—

CHAIR: If it's taken on notice that would be better.

Mr Pezzullo : Very happy to, Mr Chairman.

Senator STEELE-JOHN: No, I would not like to place it on notice. I want to try to get to the bottom of this.

CHAIR: Well, Senator Steele-John, that's fine, and the rules of Senate allow you to keep asking questions as long as you like. I would just point out, in fairness to other senators, that we are now dealing with what we hoped to do last night. We've had a fair session this morning—

Mr Pezzullo : I can answer in general terms.

CHAIR: Please, Mr Pezzullo—

Mr Pezzullo : I'd like to—

CHAIR: We have a lot of work to get through today. We haven't started on what we were supposed to do today.

Senator STEELE-JOHN: I'm aware of that, Chair.

CHAIR: So anything you can take on notice would be very much appreciated by other senators.

Senator STEELE-JOHN: I would like the most accurate answer I can get.

Mr Pezzullo : Senator, I'm joined by Mr Franzi, the acting deputy secretary for the relevant area, and by the Commonwealth CT Coordinator, Mr Sheehan. The legislation is currently before the Senate. It's been the subject of scrutiny by committee. Mr Franzi has appeared before that committee, so he can engage with your question. Could I ask you just to restate the question briefly?

Senator STEELE-JOHN: Yes, of course. The Australian Human Rights Commission, the ACT government, the Victorian government and various other organisations have indicated serious concerns about the identity-matching bills, their related powers conferred on the Department of Home Affairs and the subsequent risk they pose to human rights—in particular, their propensity to lay the foundation for mass community surveillance using facial recognition technology. Can you please explain the steps the department is taking to address these very serious and quite shocking concerns raised by our key human rights bodies in your proposed legislation?

Mr Franzi : To get to the point around mass surveillance, because that seems to be the driver of some of these speculations and concerns around the bill: the Identity-matching Services Bill does not allow or enable any mass surveillance capability. The facial identification service has the one-to-many kind of capability as a component of the government's National Facial Biometric Matching Capability.

Mr Pezzullo : Explain what one-to-many is.

Mr Franzi : One-to-many capability is where you submit an image. You don't know who the person is; it could be from a CCTV camera or be a still—

Senator STEELE-JOHN: I think we might be drifting slightly. I'm not suggesting that this establishes mass surveillance, I'm suggesting that it lays the foundation for mass surveillance. But the crux of my question is that the Human Rights Commission, along with two state legislative bodies of this country, has expressed serious concerns. I will quote to you directly the commentary by the Human Rights Commission in relation to this legislation. They have expressed the concern that the government has drafted laws that:

… are drafted too broadly, with inadequate safeguards, and that carries a high risk of violating the human rights of ordinary Australians," … "That risk is most obvious in the area of privacy but it could also lead to discrimination and infringe other rights."

This is our supreme human rights body, and I'm asking you very specifically what steps you have taken to acknowledge or mitigate those concerns within the proposed legislation?

Mr Franzi : There is a number of safeguards that are proposed in the bill. For example, only authorised agencies can actually have access to the data—being in the law enforcement domain, the national security domain—because they're separate systems. So for the facial verification system, government agencies will also be able to have access to that data because it's no different to what they do now with the document verification system, where you have to provide a range of information to get a response back. So there are protections in place there. You can't just do a mass kind of query and hope you get a whole bunch of images back. There are protections in place and penalties for unauthorised access or use. There is regular reporting in the bill proposed to parliament. There will be audits and controls around access.

Senator STEELE-JOHN: Okay.

Mr Franzi : So I don't think it does actually lead to establishing the framework for mass surveillance.

Senator STEELE-JOHN: Have you engaged with the commission—

Mr Franzi : Yes, we have.

Senator STEELE-JOHN: to discuss the surveillance?

Mr Franzi : Yes, with the Human Rights Commissioner and the Privacy Commissioner as well.

Senator STEELE-JOHN: Has the legislation been modified in any way subsequent to those discussions?

Mr Franzi : The bill is, as you know, currently before the Parliamentary Joint Committee on Intelligence and Security, and we will await their report. But we have already not only made a submission to the PJCIS but also had conversations and communication with the minister about potential modifications that could be made to the bill.

Senator STEELE-JOHN: All right, thank you very much. There is a growing body of research and evidence that points to the significant bias and false positive rate in facial recognition systems employed around the world. In a recent example, positive rates in facial recognition systems, including those gained through an EU FOI in relation to the South Wales Police, revealed that there was a 92 per cent false positive rate logged at a Champions League game final in Cardiff. I would put it to you the same question and concern that I have raised a number of times in this place, which is: what steps are you taking to minimise bias and error rates in your facial recognition systems?

Mr Franzi : I'm aware of those media articles. As you know, facial recognition technology is still being developed all the time. There is a range of academic organisations, vendors that are developing particular algorithms around facial recognition. The issue around particular biases for particular nationalities or face types is also well-known. And so what the department does is actually try to use a number of biometric algorithms as part of its facial recognition solutions. To give you an example, in some recent testing by the United States National Institute of Standards and Technology, which is the pre-eminent authority on testing, biometric algorithms—it runs a regular competition where vendors, academic organisations, universities, researchers, can submit algorithms—a Chinese algorithm performed really well. The problem with that was it only performed really well against a gallery of Asian faces. It performed very poorly against the gallery of African faces, for example. So these biases are well-known.

Mr Pezzullo : Is that because of the underlying data set?

Mr Franzi : It's because of the underlying data set that's used to develop the algorithms. It's very narrow. In the department, we tune our algorithms all the time against a wide-ranging algorithm. We're very fortunate in Australia that we are a multicultural society and we get people coming in and out of the country from various nationalities, so we tune our algorithm. We don't use just one algorithm; we use a number of algorithms. We also work with the US NIST regularly, to stay abreast of their research and look at where our algorithms are actually coming in their particular testing. I must say they are in the top three.

Mr Pezzullo : It'd be fair to say that we'd want to reduce false positives, wouldn't it, because that just creates more work?

Mr Franzi : Absolutely, because the whole idea, particularly with the SmartGates, is that you want a free flow of passengers and to reduce the amount of work for Border Force officers with people that get referred to them from the gates.

Mr Pezzullo : False positives are bad for business.

Mr Franzi : So you tune the algorithms—

Senator STEELE-JOHN: False positives are bad for people.

Mr Franzi : Absolutely.

Mr Pezzullo : It's a win-win then.

Mr Franzi : If you look at those media articles around the—I think it was—Welsh police, again some of these mass-surveillance-type facial recognition solutions are very much in the development phase, but people get starry eyed and they buy them. They perform really well when you go to the conference. You've probably been to a few, but you walk past and it captures your face and you see it on the screen and it starts to build up a gallery—okay; now I'm a person of interest. It works really well in a controlled environment, but once you actually move into a real-world environment like a football stadium or a large crowd event, then you get all the issues around different lighting, angles of faces, where are the cameras, do people have hats on, glasses on—

Mr Pezzullo : Hoodies.

Mr Franzi : A whole range of things.

Senator STEELE-JOHN: And the net result of these problems in these systems is that people are being falsely persecuted and imprisoned and subjected to extraordinarily negative experiences, due to the flaws in the technologies.

Mr Franzi : Yes. I fully agree.

Senator STEELE-JOHN: I would like—

Senator WATT: It was going to be your last question about three questions ago, wasn't it?

Senator STEELE-JOHN: It was indeed—just one more, though. You mentioned something about how you continually tune your algorithm. Could you briefly explain that process to me?

Mr Franzi : Without trying to get into ones and zeros, which I appreciate you would probably understand but I've got to make sure that I keep with the secretary—

Mr Pezzullo : The secretary might understand it too!

Mr Franzi : I'm sure you would, Secretary!

CHAIR: As briefly as possible, please. We have got a lot of work to do.

Mr Franzi : We have particular thresholds for the algorithm to say, 'That's a match,' and, below that particular threshold, it will say that it's not a match. We will regularly review, as the secretary referred to, how many of these false positives we are actually getting in our facial recognition systems and then look to adjust the algorithm accordingly to make sure that we're reducing that number of false positives. We work with the vendor to develop the algorithm more, based on new gallery sets, to get a much higher-performing algorithm.

CHAIR: We are now finished with 1.8, Cyber Security, and will move on to 1.9, Counter Terrorism. As I pass to Senator Watt, I'll just say that, every time I leave Australia, the facial recognition does not work, and I assume it's people like Senator Watt who don't want me to leave the country in case the country falls in to disrepair while I'm overseas. But, coming back in, they work perfectly. Someone can one day explain to me about that.

Senator WATT: That's because they're trying to keep you out!

CHAIR: No, no; it's the other way around, Senator. I think you're behind it all! Senator Watt, on 1.9, Counter Terrorism.

[10:29]

Senator WATT: We do have some questions but, given the time, we might actually put them on notice.

CHAIR: That would be great. Does anyone else have questions on Counter Terrorism? No? Thanks to anyone from Counter Terrorism who has sat through yesterday and today. I appreciate the Labor Party putting those questions on notice. We will now move to program 1.10, Australian Government Disaster Financial Support Payments.

[10:29]

Senator WATT: I've got a few questions in this section. Starting with some issues in Tasmania, I understand the NDRRA was activated on Monday, 14 May after the flood event in Tasmania began on Thursday, 10 May. When exactly did the Tasmanian state government request that NDRRA be activated?

Mr Cameron : The actual detail of those claims we'd have to take on notice. There are a vast number of claims on foot at any one time. We would need to come back to you. We can do that during the course of the day and are happy to do so.

Senator WATT: My question specifically is when did the Tasmanian state government request that it be activated?

Mr Cameron : The Tasmania government, for certain categories of NDRRA, activates the scheme itself, it's an own-motion thing. We would need to come back to you.

Senator WATT: If you can come back that would be great.

Mr Cameron : Yes, very happy to.

Senator WATT: Has assistance begun flowing to those impacted by the flood?

Mr Cameron : I'm happy to come back to you with the detail about it.

Senator WATT: What is the government doing to assist those primary producers who've been affected by the recent flooding in Tasmania?

Mr Cameron : Same. We'll come back to you on it.

Senator WATT: Can you come back to me on that today?

Mr Cameron : Yes.

Senator WATT: I also have some questions about the NDRRA determinations. Under the NDRRA determination from 2012, extraordinary costs that were incurred by state operation centres during disasters were eligible for funding from the federal government following the event. I realise there has been a new determination since then, and I will come to that, but under that 2012 determination what qualified as extraordinary costs?

Mr Cameron : I'm very sorry about this but I'm going to have to take that on notice as well, because the evolution of the determinations has been quite profound. You might be aware that in the recent budget there was reference to further reforms of the NDRRA and, in fact, when it's signed that will result in another determination.

Mr Grigson : We can get you that answer today.

Senator WATT: You might need to take these on notice as well. Under that 2012 determination, how many submissions did you receive to cover extraordinary costs for state operation centres?

Mr Cameron : Same.

Senator WATT: How many submissions were approved under that determination?

Mr Cameron : Same.

Senator WATT: What was the total cost of the approved submissions under that determination?

Mr Grigson : We will try and do that all for you today.

Senator WATT: Great. You might have a bit more luck with this one. The most recent NDRRA determination from 2017 and guideline 2, counter disaster operations, states that 'the establishment and operation of state operation centres are not eligible for extraordinary cost submissions unless state governments can provide proof of exhaustion of resources'. That is a change in the way those costs are dealt with. Under this new determination, what falls under the establishment and operation of state operation services? Is it salaries? Is it physical infrastructure?

Mr Cameron : I'm afraid I'm going to have to take that on notice as well. I'm sorry to disappoint you.

Senator WATT: How is exhaustion of resources quantified under the new determination? You will take that on notice?

Mr Cameron : You're correct. Sorry, Senator.

Senator WATT: You've got a lot of homework.

Mr Cameron : I do.

Senator WATT: What is the standard of evidence expected from state governments to prove exhaustion of resources?

Mr Cameron : I can probably talk about that in the general sense, if that happen helps. Exhaustion of resources would be a claim by the state. We would look at that in the sense of what we understood to be the operations of the centre. We would be ably assisted if we'd had, for example, liaison officers posted to the state to assist with the response and recovery effort. If on further examination, including sampling of financial claims post the event, it could be proved that there was genuine exhaustion of resources, we would be happy to consider the claim had merit.

Senator WATT: How many submissions for extraordinary costs have been approved under this new determination?

Mr Cameron : I'm sorry, I'll have to take that on notice.

Senator WATT: How many submissions have been rejected?

Mr Cameron : Again, I'll take that on notice.

Senator WATT: And what was the total cost of approved submissions under this determination?

Mr Cameron : And again.

Senator WATT: Thank you. Then there is a separate issue. The federal government is currently in the process of looking to reform the NDRRA to be applied from 1 July 2018. That's obviously not very far away, a bit over a month, from these new arrangements coming in place, and I understand they're not finalised yet. What engagement has been undertaken with state governments around this reform?

Mr Cameron : Quite a profound engagement strategy including, from memory, nine workshops around the country to ensure that there was national agreement. The 'N' in NDRRA is 'National' so we wanted to make sure we were all on the same page, as it were. You asked about the date. The budget measure refers to after 1 July. We're working with our state colleagues to make sure we've got the right date for implementation of the new arrangements, and we want to make sure that we don't inadvertently end up with some states who aren't going to be able to comply as well as they might want to—you asked before about the sort of evidence we would accept, in a slightly different context. We want to make sure that everyone is able to substantiate a claim to the same standard, or roughly the same standard, all at the same time.

Senator WATT: It sounds like there's some flexibility around that start date.

Mr Cameron : Absolutely, there's flexibility around the start date.

Senator WATT: Would you be looking at all states starting at the same time?

Mr Cameron : That would be ideal, and that's certainly what we'd be working to in the first instance.

Senator WATT: How many pieces of correspondence have you received and sent to state governments, regarding the NDRRA reform?

Mr Cameron : Pieces of correspondence?

Senator WATT: Yes. Feel free to take that on notice.

Mr Cameron : I want to be very clear what I'm committing to take on notice. Does that include emails?

Mr Grigson : It would be a great deal of it.

Senator WATT: Let's go with formal letters.

Mr Cameron : That might help.

Senator WATT: I'm assuming that anything really serious and important gets put in a formal letter, either from you or your minister, and vice versa.

Mr Cameron : You assume correctly.

Senator WATT: Let's go with formal letters. Has there been any engagement conducted with agencies outside of state governments?

Mr Cameron : I believe so—for example, the Local Government Association, and I think there have been a couple of other like bodies along those lines.

Mr Grigson : We'll get you a list, Senator.

Senator WATT: What do you mean by 'like' bodies?

Mr Cameron : The Local Government Association of Australia. I'm not entirely sure that we've tapped into each of the state local government or municipal bodies, but I'm pretty sure that we have touched with most of those.

Senator WATT: Have you had any dealings with state oppositions about the changes?

Mr Cameron : Not to my knowledge.

Senator WATT: Do you know, Mr Grigson?

Mr Grigson : I have the same answer: not to my knowledge.

Senator WATT: Do you know whether the relevant ministers or ministers' officers have briefed or had any engagement with state oppositions about what's being proposed?

Mr Grigson : I don't know.

Senator WATT: Could you take on notice whether that has occurred?

Mr Grigson : Yes.

Senator WATT: And, if so, for what purpose?

Mr Grigson : Yes.

Senator WATT: What transitional arrangements are currently in place to aid state governments with this change?

Mr Cameron : Transitional arrangements?

Senator WATT: We're moving to a new system. It's not uncommon that there will be some sort of transitional measures put in place to assist the movement to this new system.

Mr Grigson : Perhaps I can help you. The flexibility we talked about, in terms of the start date, I would see as part of the transition arrangement. We want to do everything we can to avoid a circumstance where a state may not be able to make a claim because they're not able to provide either the data or other evidence that we require to substantiate it. This is why we say, first, it's important if we can get to a point where all states start on the same date. At the same time, we don't want to push states to a particular date if that means, come the disaster season, we're stuck with states that can't provide the data to make a claim.

CHAIR: Just on Senator Watt's question for correspondence: as I recall, you've been talking about this, the new arrangements, for four years now.

Mr Grigson : It's an ongoing project. As Mr Cameron said, we've had quite a bit to do with the states in putting this together. We're very keen for states to start at the same time, but we don't want to take any unnecessary chances around states not being able to apply.

CHAIR: The new arrangements that you're talking about—I'm sorry, I've just been concentrating on the last of what you've saying—one of them related to the ability of local governments to do the work on an equal basis with private companies. In my case, that's particularly local governments in small country towns where they are the major employer. They can usually undercut the others, but in the past they weren't allowed an allowance for capital equipment hire, which private contractors were. They wanted to compete on the same ground. It was indicated to me a couple of years ago, and every time since, that that was being addressed. Has it been resolved?

Mr Cameron : Yes, it has. I think you're referring to the day labour.

CHAIR: Yes, that's it.

Mr Cameron : That was the phrase. That has been resolved.

CHAIR: But it wasn't just day labour, it was that private contractors coming in could include in their quote or tender an allowance for capital equipment, whereas councils weren't allowed to, as I recall.

Mr Cameron : I'm pretty confident that that has been resolved.

CHAIR: The fact that LGAQ haven't been onto me suggests that probably has been resolved.

Mr Grigson : We will say yes, Senator, and come back to you if that's not right.

CHAIR: My other question relates to the last Whitsunday cyclone. Have all of the payments been resolved there? I know from both the state and federal local members, and both mayors, the mayor and deputy mayor, that there have been some delays and concerns. Questioning at previous estimates had indicated that the state government, which is an integral part of the flow of money, was not completing the right forms or was slow in doing them. My general question is: are you aware of any outstanding contentious claims in relation to the Whitsunday cyclone?

Mr Grigson : No.

CHAIR: They've all been paid or resolved?

Mr Grigson : That's a different question, Senator. I'm not aware of any. I can check for you to see whether there are any outstanding.

CHAIR: Nobody has approached me, so that suggests that perhaps it has been resolved, but I was aware that the mayor of Mackay and the mayor of Whitsunday, going back six months, had some concerns. You're not aware of any disputes about that at the moment?

Mr Grigson : No.

CHAIR: After the break we will move to outcome 2 with the department, which is multicultural affairs and citizenship.

Proceedings suspended from 10:43 to 11:03

CHAIR: Welcome back. I declare resumed the Legal and Constitutional Affairs Legislation Committee's inquiry into the 2018-19 budget in the portfolio of Home Affairs. We are now dealing with outcome 2, Support a prosperous and inclusive society, and advance Australia's economic interests through the effective management of the visa, multicultural and citizenship programs and provision of refugee and humanitarian assistance. We're first of all dealing with program 2.1, Multicultural affairs and citizenship. I call Senator Watt.

Senator WATT: Thank you, Chair. I don't have too many questions in 2.1. There's obviously been some concern expressed in the community about delays for the processing of citizenship applications. Has the waiting time for citizenship applications being processed increased over the last 12 months?

Mr Pezzullo : I'll ask Ms Golightly to answer that. I think the question is: have the processing times in any way extended out?

Senator WATT: Maybe the easiest way to answer it is to talk about average waiting times now compared to 12 months ago, compared to three years ago.

Mr Mansfield : The answer to your question is, yes, they have increased in the last 12 months. In March 2016, they were an average of 12 months; and, in April 2018, they're an average of 16 months. That largely reflects two factors. One is that there is—

Mr Pezzullo : Is that per application?

Mr Mansfield : That's the amount of time between lodgment of the application and conferral of citizenship—that's, generally, attendance at a citizenship ceremony. The drivers of those increases in time are threefold. One is that the department has increased the integrity screening checking processes from a national security and criminality risk perspective and enhanced the way it does those activities. The second factor driving that change is growth in the number of applications overall. The number of applications has been increasing year on year from a very significant base. The third factor that's really driving those processing times is that the nature of the applications coming through have changed. As was discussed by Ms Golightly at last estimates, there has been an increase in the number of applications from people who arrived some years ago without any form of identity documentation, and the processes around positively establishing identity, obviously, take quite some time to achieve.

Senator WATT: Has there been any reduction in the number of staff employed to process citizenship applications over the last two or three years?

Mr Mansfield : No. There's actually been an increase in staffing. I'll just find the details around that—a 16 per cent increase in the number of staff from 1 July 2015 to 31 March 2018, and this reflects, obviously, the growth I mentioned earlier and the emphasis and focus that the government places on this program.

Senator WATT: Has the number of complaints to the department about delays in citizenship applications increased over the last 12 months to two years?

Mr Mansfield : I'd have to take the specifics of that on notice but, anecdotally, I would say, yes.

Senator WATT: So you have been getting more complaints?

Mr Mansfield : Around processing times, yes.

Senator WATT: In April this year Minister Tudge made a speech on the government's proposed changes to citizenship law and he indicated an intention to bring back the citizenship changes that Minister Dutton sought to have passed last year. Is the department preparing any advice or options for the new minister on citizenship changes?

Mr Pezzullo : Yes.

Senator WATT: And that would include changes to waiting times before you're eligible to apply for citizenship?

Mr Pezzullo : I don't propose to go beyond what Mr Tudge said in his speech. We're providing advice to him consistent with his public announcements.

Senator WATT: Has the department commissioned any research on the level of English that should be tied to citizenship?

Mr Pezzullo : The department has research to hand and continues to research the question of the level of functional competency that one requires to operate in a modern, liberal democratic capitalist society.

Senator WATT: Has any additional research been commissioned since the failure to pass that legislation last year?

Mr Pezzullo : It's a policy question, so I'll just check with Ms Geddes. Ms Golightly delivers the program; Ms Geddes advises on policy.

Senator WATT: She's on her way.

Mr Pezzullo : Could I request that you restate the question.

Senator WATT: Has the department commissioned any new research on the level of English that should be tied to citizenship since the legislation last year did not pass?

Ms Geddes : We continue working with the minister and his office around English language. As you might recall, in March Minister Tudge stated that English language requirements would be at the level IELTS modest.

Mr Pezzullo : Ms Geddes, the question was, 'Have we commissioned research?' which I think you should interpret as you see fit—but academic and other research to illuminate the level of functional competency that one requires.

Ms Geddes : I'll have to take that on notice, Senator.

Senator WATT: If you could take that on notice, that would be great. That's it for 2.1 for us.

CHAIR: Thank you, Senator Watt. Senator Di Natale, you have the call.

Senator DI NATALE: Thank you. Can I ask what advice the department provided to the minister for him to form the view that Melburnians were too scared to eat at restaurants because of African youth gangs?

Mr Pezzullo : The department, as well as our law enforcement agencies, provide advice to all of our ministers on law enforcement issues across all states and territories as required and relevant, and the minister draws his own conclusions from that.

Senator DI NATALE: Did you provide any specific advice around the view that was expressed by the minister that Melburnians were too scared to eat at restaurants because of African youth gangs?

Mr Pezzullo : Did I provide him with advice about eating at restaurants? No.

Senator DI NATALE: Or about the level of crime in Melbourne relating to specific groups?

Mr Pezzullo : Yes. We provide both the Minister for Home Affairs and the law enforcement minister with a variety of advices about patterns of crime—whether those crime types are geographically concentrated; whether they exhibit certain other characteristics; whether they're associated, for instance, with noncitizens—and that is just part of the standard process of advising both of our ministers: the cabinet minister, the Minister for Home Affairs; and our law enforcement minister.

Senator DI NATALE: Did you provide him with specific advice around the level of crime, prior to him making those comments, specifically relating to African youth?

Mr Pezzullo : I'll need to take the specifics on notice, but certainly I do recall assessments being provided in relation to what you might describe as ethnic based crime, yes.

Senator DI NATALE: I'll ask you specifically, though, to take that part of the question on notice.

Mr Pezzullo : Yes.

Senator DI NATALE: You didn't, though, provide him with any view about people being afraid to eat at restaurants?

Mr Pezzullo : As I indicated earlier, not in relation to threats to dining, no.

Senator DI NATALE: Have you, in light of those comments, collected any further information or done any surveys on people who are—

Mr Pezzullo : In terms of threats to diners? I took that to be a figure of speech by the minister and that he was seeking to highlight the apprehension people in Melbourne have in relation to certain violent crimes.

Senator DI NATALE: Many of the groups who were drawn into those comments didn't take that as a figure of speech. They took it very literally and it had a significant impact on those communities, so again I ask you: did you collect any information, based on the comments made by the minister, to confirm that in fact people were having fears about dining?

Senator Fifield: If I could just interpose—through you, Chair. I don't have the benefit of having Mr Dutton's remarks in front of me but, from my recollection, he was making the observation that law and order and crime, and particularly gang crime, are things that are front of mind for Victorians, and Melburnians in particular. That's something that I can certainly attest to, as someone resident in Melbourne. I think it was an entirely unremarkable observation that the minister made that there is concern in Victoria about the incidence of gang crime. We've seen it in Melbourne Square, just near the town hall. We've seen it in the form of the trashing of community centres. We have it chronicled in the media periodically. So I think Minister Dutton was simply reflecting community concern.

Senator DI NATALE: Again, Minister, I think the groups to whom Minister Dutton referred to specifically didn't take it as 'entirely unremarkable'. In fact, it had a very direct impact on them and their communities. The question, again, is: have you collected any data about people's willingness to dine out as a result of fears around crime?

Senator Fifield: I would agree with the secretary's observation that it was a figure of speech that Minister Dutton used—that Melburnians do pause as they go about their activities because they have in mind, because they have seen them chronicled in the press, that there is antisocial and, on occasion, violent behaviour, and that does give citizens pause for thought.

Senator DI NATALE: We asked people to reflect on their experiences and whether they do hold fears about dining in Melbourne. They have fears about the food that might arrive at their table. One person told us he was disappointed he was seated near the front door; it was rather cold. Another person was concerned that his coffee was a bit cold. Another person was concerned that his main meal came before his starter. None of the feedback that we've received has indicated that anybody has deferred a decision to go out and eat in public as a result of fears around crime. Do you have any evidence to support that contention?

Senator Fifield: Senator, I think you are seeking to diminish legitimate community concerns.

Senator DI NATALE: No, I'm seeking to establish whether this concern as outlined by the minister had any evidentiary basis. That's what I'm seeking to do. Bearing in mind that those comments had a very direct and detrimental impact on the specific groups to whom the minister referred, what I'm trying to do is establish whether there was any evidence to make the claims that the minister made.

Mr Pezzullo : The minister spoke—in the same interview, as I recall—about violent home invasions, carjackings, extortion and the trashing of public facilities. Have we provided advice in relation to those matters? The answer is yes.

Senator DI NATALE: And in relation to people being afraid to dine out in public?

Mr Pezzullo : I've answered that three times now, maybe four.

Senator DI NATALE: I want to move to another issue, which is the performance criterion for outcome 2 under program 2.1 in the budget statement of the Department of Home Affairs. It is:

strengthening the integrity and efficiency of citizenship systems to attract quality applicants and meet the needs of the Australian community and economy

Can you outline what criteria you use to assess whether somebody is a 'quality applicant' under the citizenship program?

Mr Pezzullo : Mr Mansfield touched on that earlier in response to a question from Senator Watt. I might just ask him, or perhaps Ms Golightly, to add to the previous evidence.

Mr Mansfield : Senator, the things that we are looking for in assessing an application are confirmed identity; that the person understands their rights and obligations as an Australian citizen, or would-be Australian citizen; and that they understand our democratic processes and Australian values. They're the things that are the focus of the application for Australian citizenship, and they're the things that we look at in addition to residence requirements and English language capacity.

Senator DI NATALE: Do you have very clear criteria in that regard? Do you have a specific list, and are people measured against each and every one of those specific indicators?

Mr Mansfield : The criteria are set out in the Citizenship Act and regulations.

Senator DI NATALE: Can I ask you, then, with regards to assessing people against that criteria: what is the process that you use to make a decision?

Mr Mansfield : People who are conferred citizenship need to first pass the citizenship test. That is a primary indicator for the department that the person understands Australian values and understands their rights and obligations. It also is an indicator of some level of English language competency. That's the primary mechanism that is used in relation to—

Senator DI NATALE: So, effectively, what you're saying is the definition of a 'quality applicant' is somebody who passes the citizenship test?

Ms Golightly : No. I think Mr Mansfield was giving you the details of one of the tests, which is the citizenship test. As we mentioned before, there are residency requirements as well—how long you have to have been here. We need to be able to absolutely verify your identity. That's another type. Each of these has particular criteria.

Mr Mansfield : And, of course, if people have engaged in criminal conduct or are assessed as posing a national security risk then that obviously is considered as part of the application and goes to whether they are a quality applicant or not.

Senator DI NATALE: I understand the various criteria in that sense, but you're using the words 'quality applicant' effectively to mean that somebody satisfied the requirements under the legislation.

Ms Golightly : Yes. That's the normal basis for assessment.

Senator DI NATALE: Again, I'm just not sure why you've used the term to attract 'quality applicants'. That has a particular connotation.

Mr Pezzullo : Sorry, perhaps you could assist us. I don't understand what the connotation is.

Senator DI NATALE: Well, it's obvious that somebody needs to satisfy the requirements that you just outlined. But you've used the adjective 'quality'—quality applicant—to describe what are the basic steps for somebody to satisfy in order for them to attain citizenship.

Mr Pezzullo : Sorry, I'm not following. What is it that we're seeking to connote with that?

Senator DI NATALE: Again, I just wanted to be clear about what your definition of 'quality applicant' is. Is it somebody who comes from South Africa as opposed to another nation?

Mr Pezzullo : The officers have stated the assessment is made under the law, and we just follow the steps laid out in the Migration Act.

Senator DI NATALE: Good. Thank you. That's all I wanted to get to. Thank you. I'm done.

CHAIR: Does the Commonwealth or the department assist financially the running of citizenship ceremonies around Australia?

Ms Golightly : No, not directly. The local governments receive untied grants from the Commonwealth, from, I think, the department of infrastructure and regional development.

CHAIR: As general funding?

Ms Golightly : It's general funding.

CHAIR: It's a long bow.

Ms Golightly : The councils run the ceremonies as they see fit.

Mr Pezzullo : What about in cases where we run the ceremony?

Ms Golightly : Then we pay for that. Sorry, on occasion the department will run a ceremony to either help with demand or for another reason. In that case, we would pay.

CHAIR: In cases, much publicised a little while ago now, of councils who refused to do citizenship ceremonies on Australia Day—did you tell us last time that their authority to conduct citizenship ceremonies has been withdrawn?

Ms Golightly : That's correct.

CHAIR: Has there been any change in that? Have any of them reapplied, or has there been—

Ms Golightly : Not to my knowledge. I'll just double-check.

Mr Mansfield : No, they haven't. There were representations made by another organisation for that to be reconsidered by the minister. The minister has written back to that organisation, indicating that it's up to the councils to come forward to the minister if they wish to be reinstated and to explain how they would fulfil the obligations as a person who confers citizenship, and that's set out in the code.

CHAIR: Very good. In those areas where the councils no longer perform citizenship, how do residents of those areas get their citizenship?

Ms Golightly : That's an example where the department can run ceremonies to meet that demand, and we have.

CHAIR: Someone once told me that members of parliament can conduct citizenship ceremonies?

Mr Mansfield : They are authorised to preside at citizenship ceremonies; yes, that's correct. And many do, through the councils, and members of parliament will quite often participate in those council ceremonies.

CHAIR: Yes, and that happens to me. Townsville City Council, or most of the councils up my way, do invite me and I get to them where I can. I just wondered whether there was ever a chance of me doing it by myself, not that I want to, not that I'm going to apply to. But what are the rules for that?

Ms Golightly : Normally the local council runs it, in terms of organising the event. The presiding officer, who officiates and administers the oath, is a separate issue. That can be a member of parliament, a local government member or the department. But the running and hosting of the ceremony and the cost associated with that is normally with the council.

CHAIR: Thank you very much for that. Does anybody else have any questions on 2.1, Multicultural affairs and citizenship?

Senator McKIM: Yes, Chair, I do.

CHAIR: Does anyone want to test their own citizenship as parliamentarians? Senator McKim.

Senator McKIM: Good morning, everyone. I want to ask about the new iteration of the government citizenship legislation. Perhaps in overview, could you provide an outline of where we're at there or where the government's at?

Mr Pezzullo : Beyond what Mr Tudge has said publicly, including in the speech to which Senator Watt referred, I'm not sure that there's much more I can usefully add. But perhaps Ms Geddes might correct that understanding.

Ms Geddes : You're right. But, just in terms of timing, the advice I've got here is that it has T status for introduction in the 2018 winter sitting.

CHAIR: What status?

Ms Geddes : T.

Senator McKIM: What does that mean?

Ms Geddes : That means it's got priority status.

Senator McKIM: That's inside baseball talk, Ms Geddes.

Ms Geddes : Sorry. It means it's got priority status—

Senator McKIM: For introduction in the second half of this year?

Ms Geddes : In the winter parliamentary sitting; that's right.

CHAIR: You were once a minister, Senator McKim; you'd know how legislation is prioritised.

Senator McKIM: We may have different terminology down in Tasmania. Could I confirm, did you say the second half of this year?

Ms Geddes : I said, 'in the winter parliamentary sitting period'.

Senator McKIM: Okay. So in the upcoming couple of weeks?

Ms Geddes : Yes.

Senator McKIM: So we can expect to see that, presumably, tabled in the lower house. Has there been any spike in applications for citizenship between the time the Senate struck the previous iteration off the Notice Paper and now?

Ms Golightly : We did see an increase leading up to that, and then it plateaued out again. But that's in the context of an overall increase in applications, year on year.

Senator McKIM: Sort of in trend?

Ms Golightly : There's an upward trend anyway, yes.

Senator McKIM: Yes. Do you have data with you about, for example, the number of citizenship applications on hand at the moment in the department?

Ms Golightly : The number of citizenship applications on hand as at 30 April for conferral is 209,826.

Senator McKIM: Just so we're clear what we're talking about, 'for conferral' means that people have applied for citizenship but they have not yet been assessed?

Ms Golightly : That's correct.

Senator McKIM: Okay.

Mr Mansfield : Or they're in the process of being assessed. A subset of those are under active assessment and some are awaiting assessment.

Senator McKIM: Understood. But, in any event, 'for conferral' means no determination or decision has been made by the department?

Mr Mansfield : That's correct.

Senator McKIM: Thank you.

Ms Golightly : Or they haven't attended their ceremony. That's the final step.

Senator McKIM: The department would still regard that as being in the conferral basket?

Ms Golightly : That's correct, yes.

Senator McKIM: Okay. Are you able to inform the committee how many people have had a positive assessment—that is, that they are entitled to become citizens but have not yet had citizenship conferred?

Mr Mansfield : I can inform you about the number of clients eligible to attend a citizenship ceremony, which would be a close proxy for that.

Senator McKIM: Yes, thank you.

Mr Mansfield : There's 10,920 clients allocated to a ceremony, and a further 11,092 clients that are yet to be allocated to a ceremony, but that's a normal, ongoing pipeline-management issue.

Senator McKIM: Thank you. Do you have figures that might go back for a couple of years in the same categories?

Mr Mansfield : I don't, but I could take that on notice.

Senator McKIM: Thanks. Perhaps we could go back five years for that data, please?

Mr Mansfield : Certainly.

Senator McKIM: Thank you. Do you have a breakdown on the number of humanitarian entrants as a subclass of those categories?

Mr Mansfield : Not those allocated to a ceremony. I do have the number of clients who acquired citizenship by migration stream, which includes the humanitarian stream, so I could give—

Senator McKIM: It's probably a reasonably long thing for you to read out. But if you could take that on notice that would be appreciated.

Mr Mansfield : Sure.

Senator McKIM: How many staff in the department are allocated to processing applications for citizenship?

Mr Mansfield : I'll have to take that on notice, because it changes all the time. Between 1 July 2015 and 31 March 2018, it has grown by 16 per cent, but I don't have to hand the figure.

Senator McKIM: Okay. So that's a 16 per cent growth—

Mr Mansfield : Staffing.

Senator McKIM: in effect, in the capacity of the department to assess citizenship applications?

Mr Mansfield : That's correct.

Senator McKIM: Thank you. If you can break that down in any way—perhaps chronologically, whether it's by financial year or any other breakdown that you're able to give—if you could provide that on notice.

Mr Mansfield : Yes, we can do that.

Senator McKIM: Thanks. I appreciate that. Has the department made its suite of Australian citizenship instructions publicly available? I understand the department committed to do that in response to the Commonwealth Ombudsman's report?

Mr Mansfield : I will take that on notice. We may be able to get the answer to that during the course of these proceedings. I just don't know the answer to that.

Senator McKIM: Yes. Okay. Perhaps, if the department is able to tell me—and I would understand if you weren't able to provide this today—I would like to know how the department is travelling in response to all of the recommendations in the Ombudsman's report. I can see Ms Golightly might have something to add there.

Ms Golightly : Yes. We agreed with all four recommendations and we have progressed all four. We expect them to be fully implemented by the end of this calendar year.

Senator McKIM: Have any been fully implemented as yet?

Ms Golightly : There were several parts to some, and—absolutely—we've completed a number of those sub-actions and are well progressed to finishing the lot.

Mr Mansfield : I may be able to assist with further details. Three of the recommendations related, effectively, to updating instructions, procedural guidance. As I understand it, all three of those instructions have been done. There is a technical process internally of getting them published, but it's well advanced and I understand they're undergoing some legal clearance at the moment, so there has been good progress on that.

Senator McKIM: Thanks, Mr Mansfield. I just wanted to go back to the number of applications on hand. We've spoken about, and you've given evidence about, the number of conferral applications on hand. Is there a different category called 'Assurance applications'?

Mr Mansfield : No.

Senator McKIM: So if we just take the subcategory of conferral applications that relate to the people who've been told that their application has been successful but who have been either allocated or not yet allocated to a citizenship ceremony—that is, they haven't actually become citizens yet but they've been told that they are eligible—do you have any data around the average length of time that someone would fall into that category? That is post a successful assessment but pre, as I said, the actual receiving of citizenship.

Ms Golightly : I don't think we have that level of detail here with us. We could take that on notice to see what we can find. But I will say that I wouldn't be surprised if it varies from place to place, because it depends on when local councils, normally, have scheduled their ceremonies. You can imagine some do more than others. We'll take that on notice and see what we can get for you.

Senator McKIM: Thanks, and can you include any breakdown you're able to provide, whether it's by state, territory or local government area. I'm not sure how you categorise your data or what your datasets are, but any breakdown you can provide there would be helpful.

Obviously Darebin council has had its authority to conduct citizenship ceremonies withdrawn by the minister. I am interested in whether that's slowing down the allocation of citizenship to people who live in that area and whether the department's got a strategy to ensure that people aren't disadvantaged by geography here.

Mr Mansfield : We certainly are undertaking ceremonies in those geographic areas. In some cases, people are electing to go to a ceremony in other geographic area. So we certainly are very conscious of that issue and in not disadvantaging people based on where they live.

Senator McKIM: You don't have an average length of time? Sorry, I may have asked that a moment ago. I'm just trying to clear that up.

Ms Golightly : No, sorry.

Senator McKIM: No problem. This next question may be one for you, Mr Pezzullo; I'm just giving you a heads-up.

Mr Pezzullo : I'm listening.

Senator McKIM: In terms of the new iteration of the citizenship legislation, are you able to provide any information to the committee about what level of English language test it contains?

Mr Pezzullo : Mr Tudge made some public comments about that recently. I will ask Ms Geddes to remind me and the committee what he said.

Ms Geddes : On 9 March 2018 there was a media release by Minister Tudge. It stated:

… government believes that modest English comprehension is fundamental to participate fully in community and ensure social cohesion.

So it's a modest level.

Senator McKIM: Is that a particular IELTS level?

Ms Geddes : It is. It is IELTS 5. I can read the descriptor for a 'modest user' out for you. It says:

The test taker has a partial command of the language and copes with overall meaning in most situations, although they are likely to make many mistakes. They should be able to handle basic communication in their own field.

Mr Pezzullo : They should be able to go okay in this committee, then!

Senator McKIM: Is that the department's interpretation of IELTS 5?

Ms Geddes : No, that's the IELTS descriptor.

Senator McKIM: I'm just wondering what 'in their own field' might mean, but you may not be the right person to ask, Ms Geddes.

Ms Geddes : No. Let me take that on notice and we can do a little bit of research and try to get back to you.

Senator McKIM: All right, thank you.

CHAIR: Doesn't it mean that if they're plumbers they've got to know plumbing terminology?

Ms Geddes : Yes, but I would like to take that on notice.

Mr Pezzullo : We'll just check what the objective definition is on notice.

Ms Geddes : That's right.

Senator McKIM: Thanks.

Senator LEYONHJELM: I received a reply to a question on notice from the department after the last estimates in relation to becoming a Swiss citizen. The answer indicated that one needs to reside in Switzerland for a long time, not have a criminal record or have recently been on welfare, to have participated in Swiss society and to have made Swiss contacts. The answer also outlined how Switzerland is one of the most prosperous and free countries in the world and that the Swiss believe migrants are well-integrated. My question relates to how Australia compares to Switzerland. Is having a criminal record a bar on Australian citizenship? If not, what proportion of new Australian citizens had a criminal record at the time they became citizens?

Mr Pezzullo : The requirement is stipulated in legislation.

Mr Mansfield : That's right. The requirements are set out in the Australian Citizenship Act and regulations. We look at each application on its individual merits.

Senator LEYONHJELM: So the answer, I assume, is no, it's not a bar; would that be correct?

Mr Mansfield : I'd have to take on notice the specific references, unless general counsel is able to assist.

Senator LEYONHJELM: You may also need to take this on notice: what proportion of new Australian citizens had a criminal record upon becoming a citizen?

Mr Mansfield : We'd have to take that on notice.

Senator LEYONHJELM: That's fine. Is having recently been on welfare a bar to Australian citizenship?

Mr Mansfield : No.

Senator LEYONHJELM: Again, you may need to take this on notice: what proportion of new Australian citizens were on welfare at some stage in the three years prior to becoming a citizen?

Mr Mansfield : We'd have to take that on notice.

Senator LEYONHJELM: Would you have the data?

Mr Mansfield : That would be information that we would need to source from the Department of Human Services.

Senator LEYONHJELM: All right, you can take it on notice and provide as much information as you have available.

CHAIR: When people apply for citizenship, don't you ask for their occupation or means of subsistence?

Mr Mansfield : I'd have to take that on notice. I don't know what's in the form. I suspect it does ask for their occupation, but I don't know whether it would elicit information that would be recorded in our system that flags, for example, that they are unemployed and accessing Centrelink benefits.

CHAIR: Okay.

Senator LEYONHJELM: Switzerland has a process for paying back welfare that the applicant has received so as to become eligible for Swiss citizenship. Are you aware of any impediments that would prevent a process like that being implemented in Australia?

Mr Pezzullo : The law at the moment.

Senator LEYONHJELM: The law would need to be changed?

Mr Pezzullo : As we've said to Senator McKim, there will shortly be presented to the parliament amendments to the Citizenship Act that go to criteria. No doubt when you scrutinise that legislation, the Swiss model and any other model that the senator sees fit to advance can all be considered. At the moment we always apply the law as it's stated.

Senator LEYONHJELM: So the answer to the question is: the impediment is the law. I assume that's what you're saying. Switzerland also has a process of checking whether a person has participated in Swiss society and made Swiss contacts. Is there any impediment, to your knowledge, to preventing a process like that being implemented in Australia?

Mr Pezzullo : There'd be no impediment. To the extent that it was soundly based on a relevant head of power, there's no reason why the parliament couldn't so provide. As Mr Mansfield earlier said, the act, as it's currently constructed, requires the administration of a test to be undertaken by the department. The assessment of a person's allegiance to our values and our way of life is measured through that test.

Senator LEYONHJELM: This may require you to speculate a little bit: do you think there is any connection between the Swiss approach to citizenship and the positive Swiss attitudes to migration?

Mr Pezzullo : I don't need to speculate. I don't know much about the Swiss case. I'll refresh my memory as to what my department told you about the Swiss model. It seems as though we've done some research for you in response to your question on notice. Australians have, generally speaking, a very high level of confidence in the program. The objective evidence for that is the long time series undertaken through the Scanlon Foundation's review and analysis, which goes back—I think I'm right in saying—four decades. It shows a very positive correlation between high confidence in the migration program and high confidence in the government's ability to manage its borders. Whether the Swiss are even more confident in their migration program and even more confident in their border protection is something that I'm now intrigued about.

Senator LEYONHJELM: Me too. Chair, may I ask one quick question about visas or do we not have the right people here?

Mr Pezzullo : We are the right people, but it's the wrong program.

CHAIR: It is the wrong program. I don't really want to open the floodgates, but if you have one—

Senator WATT: We've all got questions about—

Senator LEYONHJELM: Visas. Have you?

CHAIR: But if you have one question only and you are going to then leave us—

Senator LEYONHJELM: That's what I was intending to do, yes.

CHAIR: As long as it's no more than two.

Senator LEYONHJELM: It's just one question. I've been told that working holiday makers pay an application fee for their visa and that this fee is not refunded if they are unsuccessful in gaining a visa. Is that accurate?

Mr Pezzullo : There'd be a visa application charge that Ms Dacey would probably almost know off the top of her head.

Ms Dacey : Typically, as the secretary said, you do pay a visa application charge, regardless of whether you are refused or granted the visa. That remains, and you pay it.

Ms Golightly : For any visa.

Ms Dacey : Yes.

Senator LEYONHJELM: Part B of that question is just: are you aware of reports which I'm aware of that this seems to be discouraging backpacker numbers from coming to Australia, because of the uncertainty? Some countries, I understand, have negotiated quotas with Australia, and that uncertainty as to whether they will be admitted under the quota is discouraging applications. Have you heard that?

Ms Dacey : That would surprise me greatly, because we manage the caps, so we don't refuse on the basis that the cap has been met. We in fact demand-manage the number of places in any year, so any refusal would not be on the basis that the cap has been exceeded. The approval rate in working holiday maker is incredibly high, so that would in fact surprise me quite a bit.

Mr Pezzullo : The program is oversubscribed.

Ms Golightly : It is, and increased from last year.

CHAIR: What's the fee, by the way—off the top of your head?

Ms Dacey : The visa application charge is $440.

Senator LEYONHJELM: I'm not sure if there's a difference between the program being oversubscribed and people applying and being rejected and not getting their money back. Are you saying nobody is refused if they have paid their money?

Ms Dacey : I'm saying that the grant rate is 99 per cent, so the refusal rate is low.

Senator LEYONHJELM: Is the refusal based not on the cap but on other grounds?

Ms Dacey : It would be.

Senator LEYONHJELM: So everyone who's paid their money, if they're not rejected on other criteria, would be granted a working visa?

Ms Dacey : Essentially that's what I'm saying.

Senator LEYONHJELM: All right. So I'm misinformed.

Ms Golightly : If they meet the criteria, they are granted, yes.

Senator LEYONHJELM: Pardon me?

Ms Dacey : Yes, that's right. The only thing is: it might be in the next program year, in order to meet that cap, but essentially, yes.

Senator LEYONHJELM: So, if they apply one year and they are outside the cap, they might have to wait for another year?

Ms Dacey : Yes.

Senator LEYONHJELM: I see. That might be what I heard.

CHAIR: Are there no other questions on 2.1, Multicultural Affairs and Citizenship? Okay. We'll move to program 2.2, Migration, and I will start.

[11:49]

CHAIR: I think you told us last time the level of migration into Australia is 190,000 per annum.

Mr Pezzullo : That's the ceiling.

CHAIR: That's the ceiling?

Mr Pezzullo : That's the ceiling, and it has been at that level for a number of years now.

CHAIR: How many years?

Mr Geddes : It's been set since 2012-13 at 190,000, but in 2014-15 it became a ceiling, as the secretary just mentioned.

CHAIR: Is that subdivided into family reunion and skill?

Ms Geddes : It is two-thirds skill and one-third family reunion.

CHAIR: Is that fairly mandatory or is it just a guide?

Ms Geddes : That's how it's set.

CHAIR: So, if the family takes it up to 190,002, you are not rigid on that, are you?

Ms Dacey : Yes, Senator, we are.

CHAIR: Okay, that's good. In addition to that we take refugees. Can you just remind me of what we are, and what we are going to be, with refugee intake?

Ms Golightly : It is around 16,000 for the current year—just over 16,000. I will just get the right grid.

Dr Johnson : This year the program number is 16,250.

CHAIR: So, 16,250. Does that include the 12,000 Syrians?

Dr Johnson : No, Chair, that was a one-off in addition to, and that body of work is complete.

CHAIR: So that's happened. You may know this off the top of your head: Australia is the most, one of the three most, generous per capita of refugee intakes in the world?

Dr Johnson : Chair, Australia is consistently in the top three gross takers of refugees through the Refugee and Humanitarian Program. The top three for a number of years have been the US, Canada and Australia, and that's just in gross numbers.

CHAIR: That's gross numbers?

Dr Johnson : Yes.

CHAIR: Per capita then, in that company, we would clearly be well in front, for size of economy and population?

Mr Pezzullo : We tend to alternate with the Canadians per capita. It's one-two between us, anyway.

CHAIR: Some constituents have raised with me some information they've tried to get, but without much success. Do we have a costing per head of those who migrate to Australia?

Mr Pezzullo : Chair, a costing in terms of direct impact on the Commonwealth budget or the fiscal and economic effects of their migration?

CHAIR: Perhaps, in the first instance, the direct cost to the budget.

Mr Pezzullo : Yes, we've done some work with the Treasury on those matters, and some of that was captured in a publication that we and the Treasury put out recently. Can Dr Johnson speak to that, Ms Geddes, or do we need a more mathematically inclined officer.

CHAIR: You can take that on notice.

Dr Johnson : We would need to take that on notice.

CHAIR: I've been given figures that the refugee intake was 6.87 billion, the family reunion was 21 billion—this was the period for 2014-15—and the skill migration was 43 billion, and then by dividing the numbers—

Mr Pezzullo : In one year, Chair?

CHAIR: This is the 2014-15 period.

Mr Pezzullo : That would be bigger than the Defence budget. I wish I had that money available to me for other purposes. Are these second-order and third-order macro effects?

CHAIR: What I'm trying to find out is just what the cost is. The argument, which you've often heard, is that it costs Australia more than we gain. The contrary argument, of course, is that the ongoing contribution to the economy is such that—

Mr Pezzullo : The best thing we can do, Chair, is refer you to the recently published joint work that we and the Treasury put out called Shaping a Nation, the economic aspects of migration. In terms of the direct cost to our budget in terms of what we're appropriated for—operating administered and so on and so forth; and Ms Cargill might be able to shed some light on that—the question of the benefit of migration has been modelled by us and Treasury. It's a function of the extent to which your program is skewed towards skilled migration. We tend to, typically, get younger migrants who fit certain parameters that are set through government policy and approved under legislation who more readily go into the workforce and contribute earlier in terms of the payment of taxes—so that's on the revenue side—and, commensurately, have got a lesser draw on welfare. It depends on the composition of your permanent program as to the levels between skilled and family, which Ms Geddes spoke about. There's quite a considerable amount of data on the economic aspects, the benefits, if you will, and the costs in macro terms in that joint publication.

In terms of what the department is appropriated to directly undertake the programs, perhaps Ms Cargill could speak to the question of how much we spend on the refugee program, for instance; how much we spend on the permanent program.

Ms Cargill : The easiest approximation would be to go to the program level budget. The department is funded $207 million in 2018-19 for the migration program. In terms of any further splits in refugee and humanitarian, the refugee and humanitarian program is program 2.4 and that has a departmental appropriation in 2018-19 of $88 million.

CHAIR: I thank you for that and, if there are other figures, if you could give them on notice.

Ms Cargill : Certainly.

CHAIR: I think my constituent was looking at the overall cost and, I suspect, asking what the welfare cost was and, particularly, I suspect from what Mr Pezzullo has said, that would, to a degree, would relate principally, but not exclusively, to the family reunion quota or cohort.

Mr Pezzullo : Or to the dependants of skilled migrants where the primary visa holder would be the skilled entrant. He or she may have a partner and one or two children. They would be entitled, as permanent residents because they've come here under the permanent program, to access schools, hospitals, Medicare and, in some cases, benefits, including childcare and the like. So that's on the cost-to-budget side, and on the—

CHAIR: Can we get those figures?

Mr Pezzullo : You can get the modelling that's been done by us and the Treasury in the publications to which I've referred. Whether that's sufficiently granular to address the question raised by your constituent, I'll need to take that on notice.

CHAIR: Do we take figures of those who have immigrated to Australia who are immediately on welfare payments and what those welfare payments are?

Mr Pezzullo : I know that's modelled, because we've published it. Whether it's attributed to each individual visa applicant—perhaps Dr Johnson might know, but otherwise we'll answer you specifically on notice.

Dr Johnson : We'll take that on notice, because of the specificity of your question. I would add, though, that we do have data on the employment rate of the primary skilled worker, which the secretary was talking about, which we could give you as well. It's very high. The amount of skilled migrants that go straight into jobs is in the high 90s.

CHAIR: I'm asking these questions, because constituents have asked for them. They did ask the department, but got a typical department response, which I don't criticise. But there is—

Mr Pezzullo : It would have been informative and helpful then, by definition, Mr Chairman

CHAIR: We'll pass on. There is a lot of debate in Australia and, if we don't have figures on these, perhaps we should have them for no other reason than forming debate. I often think that my forbears have been here for seven generations and they've paid taxes and built all the roads around the country. Someone comes into the country a generation ago and has the benefit of all of that. I can understand—

Senator KIM CARR: Your original family were migrants.

Mr Pezzullo : And indeed they built roads and railways, too.

CHAIR: Many of them built the first roads, so they didn't have them.

Senator McKIM: Presumably they migrated from Scotland.

CHAIR: Clearly, there's some sensitivity from some politicians who are Johnny-come-latelies.

Senator KIM CARR: My first relative came out in 1817. What's the point? So what?

Senator McKIM: What is the point?

CHAIR: There isn't a point.

Senator KIM CARR: There you go. Thank you very much. I agree.

CHAIR: I'm simply making the comment that there is a feel with some people that they've been paying taxes for five generations, and others—

Senator McKIM: What, so they can't get a free ride?

CHAIR: You're saying that, Senator McKim, not me. Please control yourself. If you want to have a go later, it will be your turn shortly. This is a debate in the community, and it would be good to have some accurate—

Senator McKIM: Debate in all of that.

CHAIR: Senator McKim, you might be sensitive of the fact that you haven't contributed anything to our economy since you've been here, but please keep that to yourself. We can try and get those figures, and the figures of the contribution. You mentioned some assessment that had been done, on the addition, on the economy. Can someone on notice give me the reference, or if it's a document—

Mr Pezzullo : It's a publication, but we'll send the committee secretary a link to the document. It's publicly available. We'll also send the Treasurer's—it was a joint study that the Treasury and Home Affairs did, released by the two secretaries, myself and Secretary Fraser. Mr Morrison, on the day of its release, put a statement over the top of it summarising the net positive benefits of migration. We'll send that as well.

CHAIR: I have no doubt that there have been net positive benefits over a long period of time.

Mr Pezzullo : It deals with the draw on welfare and other services, the contribution of revenue and the benefits to the economy, in general, in terms of consumption and the like.

CHAIR: I have a final question, on this section, which my constituents have raised. We talk about Commonwealth expenses but they say that infrastructure, particularly that which is the responsibility of state governments, has to be continually upgraded for increasing population, particularly in Sydney and Melbourne, the capital cities, where most migrants, unfortunately, end up. Is there any assessment of the costs to state governments of the influx of additional people balanced against—as a separate question, perhaps—the benefit to state governments? Are there figures around?

Mr Pezzullo : There certainly are, to this extent. The Productivity Commission in 2016 produced an excellent—probably state-of-the-art—piece of research on the question of both net positive economic benefits of migration and second, third and other effects, in terms of impacts on infrastructure. The Productivity Commission specifically called out issues such as urban congestion, draw-on traffic. They made the point that the costs for the provision of those services are, typically, borne by states, territories and local councils for road maintenance, for instance. The PC was September of 2016. Am I right, Ms Geddes?

Ms Geddes : That's right.

Mr Pezzullo : The government has that report before it. It provided, from memory, a general early response but also commissioned some further work, some of which resulted in the joint assessment that I referred to earlier that we in the Treasury have done. And we continue to work on the question of second-order effects, including the non-direct physical effects that impact on states, territories, local councils and the like. It's a matter that the government is very seized of, beyond the direct impact on the Commonwealth budget.

CHAIR: I have some other questions about where migrants end up when they arrive in Australia, but I'll come back to that later.

Senator WATT: I did have a couple of questions about the report Shaping a nation that Mr Pezzullo referred to. I'm not sure if we have officials who were involved in the preparation of that report?

Mr Pezzullo : I think we do. Is Mr Russo here?

Ms Cargill : Yes, he's on his way.

Senator WATT: Thanks.

Mr Pezzullo : I think, Senator Watt, just to surprise you pleasantly, we have an actual expert approaching the table.

Senator WATT: Are you saying you're not an expert, Mr Pezzullo?

Mr Pezzullo : I should be falsely modest! All of my other colleagues are experts in their own domain, but Mr Russo has a particular expertise. Here he is. It'd better be good, now, after that!

Senator WATT: Thanks, Mr Russo. Just by way of background, this report, titled Shaping a nation: population growth and immigration over time, was a joint report published by the Treasury and the Department of Home Affairs. Is that correct?

Mr Russo : That's correct. We worked on it together, as a collaborative effort, throughout last year.

Senator WATT: And that was only released a couple of weeks ago. Is that right?

Mr Russo : It was published on 16 April. It's on the Treasury Research Institute website. As the secretary said, we'll provide that link later.

Mr Pezzullo : Chair, that's the report I was referring to.

CHAIR: Thank you.

Senator WATT: It's a pretty robust report, it would appear. Did that take quite a long time to work on?

Mr Russo : Yes, that's correct. We also wanted to portray a range of dimensions around immigration, historically—what we've seen over recent decades, the composition of immigration leading to where we are today. We also, I guess, wanted to do it in a way that was accessible and easily usable by the general public and academics and other people that are interested. So it did take some time to put it together.

Senator WATT: It has many things to say about the implications of migration to Australia, many positive aspects of that. I noticed that it had some figures around jobs growth. I suppose the basic point is that migration has played a very big role in jobs growth, in Australia, in recent years. In summary, what would you describe as the findings of that report?

Mr Russo : The way I would describe that—there's a detailed analysis in there on participation rate trends in the Australian labour market. That part of the report really, I guess, points out the fact that Australia, like many other countries, has an ageing population. What that means over time is that in the absence of immigration you would see a situation where the participation rate would, generally, decline. It would have already started declining. In fact, the size of the Australian labour market, the labour force, would eventually decline itself.

In the influx or intake of migrants that are generally younger than the broader population we see a high degree of skills, and they are job ready. What that has done is offset that demographic ageing effect. That's allowed the participation rate to stabilise and, in fact, increase slightly over the recent decade or two.

Senator WATT: I think the report found that about two-thirds of the jobs growth in Australia, being 850,000 net jobs created over the past five years, was recent migrants.

Mr Russo : Yes, that sounds about right.

Senator WATT: In fact, for full-time jobs it was a high percentage again. The report said that migrants accounted for a touch over 72 per cent of new full-time jobs created.

Mr Russo : Yes, that's correct.

Senator WATT: And that's over a five-year period?

Mr Russo : I think that was 10 years. I'd have to go back through and check exactly.

Mr Pezzullo : Does that track, Mr Russo, the contribution that migration makes to population growth generally? Isn't it about 70 per cent, roughly?

Mr Russo : Yes. The contribution to population growth over the decade to 2016 was 59 per cent from immigration. Over two decades it was about 54 per cent. It's slightly higher than that.

Senator WATT: So we're saying that over the past five years, according to this report, 850,000 net jobs were created, and about two-thirds of those involved recent migrants and over 72 per cent of the full-time jobs over that period involved recent migrants. So of those 850,000 net jobs created, do you have a sense of what visas the recent migrants who formed that jobs growth were entering on?

Mr Russo : So from the permanent program, particularly the skilled program, which in total accounts for about two-thirds of the permanent—I don't want to step on other people's toes, but that's roughly correct—but also the temporary skilled stream. So roughly two-thirds. So that's where a lot of that comes from, and both the primary skill applicants and the secondary skill applicants play a big role in that overall figure, because the very fact is that they're brought in for that purpose.

Senator WATT: And what proportion of the overall intake is the permanent intake, roughly?

Mr Pezzullo : What proportion of the intake is the permanent intake? It's all of it.

Senator WATT: I suppose what I was trying to get to is—

Mr Pezzullo : All permanent migrants are permanent migrants.

Senator WATT: What I was talking about is permanent as opposed to temporary, because—

Mr Pezzullo : I see.

Senator WATT: This report doesn't break it down by temporary versus permanent. I read the report as saying that recent migrants accounting for two-thirds of the jobs growth is a combination of temporary and permanent migrants. Is that a correct—

Mr Russo : Yes, that's correct.

Mr Pezzullo : So the question would be what role do 457s play in that pool of—

Senator WATT: Yes, 457s, working holiday—

Mr Pezzullo : It would be principally 457s.

Ms Dacey : There are a number of temporary skilled programs, and they vary in size. Very much back of the envelope, just trying to assist you, the 457 cohort was around 100,000 annually and decreasing in size over recent years. There are other sort of much smaller, bespoke temporary skilled programs as well. But the 457s with their four-year validity would have been probably the bit that you're interested in in your analysis.

Senator WATT: I know these are rough figures.

Ms Dacey : They're rough.

Senator WATT: But if we're saying that 457s over that five-year period were running at roughly 100,000 a year.

Ms Dacey : Roughly.

Senator WATT: Does that mean then that 457s constituted around 500,000 of these 850,000 net jobs created?

Ms Dacey : Look, just on the back of the maths envelope, if the skilled program has been running at about 128,000 a year, that would kind of roughly add up to—

Senator WATT: To 600,000, roughly?

Ms Dacey : Yes.

Mr Pezzullo : Once you net off dependents, because skilled migrants have dependents.

Senator WATT: Yes.

Mr Pezzullo : Some of whom will go to—

Senator WATT: Again, I get that these are rough figures, but we're working off about 850,000 net jobs created over five years. On those numbers, you're talking about 600,000 or so being 457s.

Ms Dacey : Over five years, maybe 500,000.

Senator WATT: So 500,000, and then working holiday visas would be another portion of that?

Ms Dacey : Yes, but remember working holiday visas are not really a skilled visa; they're a cultural exchange program that just happens to have the ability for a backpacker, as they're often called, to work for six months.

Senator WATT: But people who hold those visas would be included in that 850,000?

Ms Dacey : Possibly.

Senator WATT: Do you know roughly how many of them there are a year?

Ms Dacey : It depends. There are different caps for different countries. If you just bear with me for one minute. I can give you a global total for—

Senator WATT: Yes. I don't need a breakdown by country but just a global—

Ms Dacey : No, that's fine. About 180,000 a year. No, 200,000. My apologies. So in the 2016-17 year, we granted 211,011 working holiday-maker grants.

Senator WATT: Student visas?

Ms Dacey : Students have a 40-hour a fortnight criteria while studying, and then, generally speaking, unlimited when they're not studying. Those numbers are quite significant and growing and we don't get reporting on the number of hours that people work on their student visas because we're interested in the study aspect of the visa, because that's the primary grant purpose.

Senator WATT: Roughly how many student visas are being granted per year?

Ms Golightly : In 2016-17, the number granted was 343,035.

Senator WATT: And you don't know the proportion of them that actually go on to work?

Ms Dacey : I couldn't give you that information.

Senator WATT: Okay. It's possible these rough figures—about 100,000 per annum on 457s or skilled visas, 200,000 per annum on working holiday visas, 300,000-odd on student visas, some of whom work—underpin, I suppose, how it is that about two-thirds of these new jobs created overall are due to recent migrants, because they're the kinds of categories we're talking about there.

Ms Dacey : That's right.

Mr Pezzullo : Once factorised.

Senator WATT: Sorry?

Mr Pezzullo : The modellers would have had to make assumptions about how many hours a week a student works. You can't simply add the gross numbers; you've got to factorise them. And, just for the record, it's important to recall that the government abolished the 457 program over a year ago.

Senator WATT: Yes, but it replaced it. I won't be too much longer on this. So this data was up until 2016?

Ms Golightly : 2016-17.

Senator WATT: Okay. Is there any reason to think that these proportions, the two-thirds being recent migrants and 72-odd per cent being full-time jobs, would have changed markedly more recently, if you were taking that data now?

Mr Russo : We haven't done any follow-up analysis for recent months and recent quarters. I don't have any evidence to suggest otherwise.

Senator WATT: Yes. If you were doing a similar piece of research for the past five years, it would probably be fairly similar.

Mr Russo : I'd suspect so. I won't offer a number. I'd also add that—

Mr Pezzullo : You'd have a first-year impact of the split of the temporary program into the two-year component and the four-year program. The latter has a permanent pathway and the former doesn't.

Senator WATT: Yes.

Mr Pezzullo : That's been on foot now for 12 months, so that would roll into the data.

Senator WATT: Okay.

Mr Russo : The other thing I'd add is that the general labour market conditions, employment growth, in 2017 were the strongest on record at over 400,000. So you'd suspect, as the secretary suggests, that migrants and visa holders would be a strong part of it.

Senator WATT: Would be a strong part of it—yes. So it would be fair to say that, over the last five years, again the majority of jobs growth has been driven by migration.

Mr Russo : Yes, more than 50 per cent. I don't have an exact number on me.

Senator WATT: And, again, it would be fair to assume that, over the last five years, 70-odd per cent of full-time jobs created would have been driven by migration.

Mr Russo : That one's a bit different. I'm happy to take that on notice. The only thing I'd note is that, in the labour force figures produced by the Australian Bureau of Statistics, the proportions of full-time and part-time jobs and other trends do move around quite a bit. So I'd probably caution against reaching that conclusion. But I'll take it on notice.

Senator WATT: Okay. But, on the previous question, it would be fair to assume that over the last five years the majority of jobs growth has been driven by migration—as long as we're not getting into full time and part time but in an overall sense.

Mr Russo : Yes, I'd say so, and we can check that for you.

Senator WATT: Okay. As you've probably seen, in recent times there have been a number of statements from ministers about a million new jobs having been created in Australia over the last five years. Based on what you've said, would it be fair to assume that the majority of those have been driven by migration?

Mr Russo : Perhaps more than 50 per cent, but again I can look at the figures and provide—

Senator WATT: So it is likely to be more than 50 per cent?

Mr Pezzullo : Recalling our earlier evidence, of course, that migration's contribution to population growth is running at well over 50 per cent.

Senator WATT: Yes.

Mr Pezzullo : It might not be linear, but it would be passing strange to think that your population had been driven in part by migration but your jobs growth had not.

Senator WATT: No, I understand: they're interlinked.

Mr Pezzullo : It would be illogical to think that they were operating in different directions.

Senator WATT: Thanks. That's it.

CHAIR: Senator Watt, we can come back to you—

Senator WATT: No, I'm done, actually.

CHAIR: You've finished? That's good. There is another thing I wanted to raise. For migrants coming into Australia, in the skilled category or in any category, is there an allowance for those who want to live, or are encouraged to live, outside Melbourne and Sydney, where it appears, according to newspaper reports, there are huge infrastructure bottlenecks because of rapidly increasing populations, exacerbated by—

Mr Pezzullo : I'm not aware of any allowances paid.

Ms Dacey : There are not allowances. One of the streams is called RSMS, which is Regional Skilled Migration Scheme, and it's specifically designed to help businesses in regional areas. So there's no cash payment per se, but there are a range of program settings that make it easier for regional employers to identity skilled workers.

CHAIR: For someone under that Regional Skilled Migration Scheme, if the visa says that said you're going to live in the region with this employer, then therefore that's where you are for a period of time? Is that controlled by the visa that's issued? In what way is it controlled?

Ms Dacey : No. Our ability to force people to stay in the region once the visa is granted—we don't have that.

Mr Pezzullo : Chair, I'll draw your attention to the evidence given by the department in the February estimates, where Mr Wilden indicated that as a matter of policy design the government's asked us to look at conditionality around visa parameters, which could include, potentially, an incentive—not cash—to stay in a region. I note that Mr Tudge recently made some public comments to that effect, that it's something he's asked the department to look at, and I wouldn't propose to go beyond his remarks.

CHAIR: Can you identify his remarks for me?

Mr Pezzullo : Yes, I can. As I recall, they were made in response to an inquiry from a journalist, but they were remarks quoted and attributed to Mr Tudge.

CHAIR: Can you summarise, without binding Mr Tudge to your summary, but just so I can—

Mr Pezzullo : Indeed, and I'll of course, through the minister, correct the record to the extent that I paraphrase this not quite right. But Mr Tudge said, when asked about the policy development work that's been underway—which included, I must remind the committee, and we've given evidence about this before, a public consultation that we did late last year, in August or September, if I recall—

Ms Dacey : That's right.

Mr Pezzullo : Mr Tudge, when asked about that policy work, said that (a) it's a matter that's yet to come before the government and (b) when it comes before the government we'll consider it and (c) in relation to regional locality there would be a question, given our Constitution and the freedom of movement and commerce around the nation, as to how one would—he didn't use this phrase, but I'll use it—tie or bind or connect a person to a specific locality. And he might have made some other utterances along those lines. But Ms Geddes appears to have his statement before her, so perhaps she's the better witness.

Ms Geddes : I can read out the quote in the Daily Telegraph dated 15 May. The article was titled 'Go bush or go home', and Minister Tudge said that many migrants who don't stay long in the region once they have had their permanent visa had become a major issue:

Many migrants are sponsored for permanent residence on the basis of an intent to live and work in regional Australia but don't stay long in the region once they have their permanent visa.

And as the secretary just stated, that's some of the work we're exploring for Minister Tudge.

CHAIR: Okay, so the work is being—

Mr Pezzullo : There is policy work that's yet to be finalised and hasn't been brought before ministers that, as I recall the evidence given back in February, relates to conditionality around certain visa classes and types.

CHAIR: Are there figures on how many of the 190,000 or more—if you add refugees to it, 210,000-odd—who come to Australia each year live in Sydney, in Melbourne, in Brisbane, in Adelaide? Are there statistics available?

Mr Pezzullo : I think we do have regional breakdowns.

Mr Russo : Yes, and we can provide you with a more detailed background, but in the research that was referred to earlier we found that 83 per cent of overseas-born people are living in capital cities and 61 per cent of Australian-born. And then there are other numbers for across capital cities, across Australia. We could provide those.

CHAIR: So, that's in your paper, is it—those figures?

Mr Russo : That's correct, yes.

CHAIR: That's very, very interesting. It could have a lot to do with elections and different things.

Mr Russo : Two-thirds of Australia's population lives in capital cities.

CHAIR: Of those living in capital cities, there is a preponderance of non-Australian-born voters. Is that what you said?

Mr Russo : Well, what I said was—

CHAIR: Or citizens.

Mr Russo : that 83 per cent of overseas-born people live in the capital cities.

CHAIR: All right. Well, we must have a closer look at your paper. Has someone agreed to give me either the link—

Mr Pezzullo : Yes.

CHAIR: or provide that on notice. Okay.

Senator McKIM: I do have some questions in this output group, but before I do I just want to inform the committee that another refugee died on Manus Island this morning—a Rohingyan man, actually someone I met during my Manus Island trips last year. It is yet another life destroyed by our government's punitive policies. I want to ask whether the committee would consider re-opening output 1.4 so that I can ask the department some questions about that.

CHAIR: Well, that's a matter for the committee that I can put to the committee. I would think not, but we have a long way to go. And if your information is correct, I'd extend my condolences to the person's family and not make a political issue about it as you do with your explanations, Senator McKim. I think that's appalling. But anyhow—do you have other questions?

Senator McKIM: Well, I request a private meeting prior to the luncheon suspension so that I can move that we re-open the output group to allow me to put some questions to the department about this. And if the committee accedes to that then the department will have time over the lunch break to ensure that the relevant officers are present.

CHAIR: Okay. We're due to break in three minutes anyhow, so we'll do that.

Proceedings suspended from 12 : 27 to 13 : 37

CHAIR: Thank you. I call back to order this hearing of the Legal and Constitutional Affairs Legislation Committee dealing with the 2018-19 budget estimates in the portfolio of Home Affairs. I think we've finished with Migration.

Senator McKIM: Chair, sorry, you had just gone to me before the luncheon break and I can indicate that I believe we are still on 2.2.

CHAIR: Yes, 2.2.

Senator McKIM: I have a couple of questions.

CHAIR: Does anyone else have questions on 2.2? Senator Carr and Senator Hinch as well. Okay, Senator McKim.

Senator McKIM: Thanks, Chair. I presume I'm in the right outcome group here, but I wanted to ask about the humanitarian entrance program and the intention to increase it to 18,500. Am I in the right place?

Mr Pezzullo : That's 2.4.

Senator McKIM: Although there were some questions about the size of the humanitarian entrance program in this outcome.

Mr Pezzullo : There were. The Chair was asking a question about the size of migration and he asked a supplementary question, as it were, of how many refugees come under that.

CHAIR: It was each category.

Senator McKIM: I'm happy to ask it in 2.4. That's fine.

CHAIR: Okay. Senator Hinch, I think you require 2.3, actually. Do you have anything for 2.2?

Senator HINCH: No, 2.3.

CHAIR: We'll come back to you then. Senator Carr.

Senator KIM CARR: Thank you. Secretary, I'm wondering if I can get some further advice on the non-discriminatory nature of our program. I note the objectives of the program are spelled out in the PBS. We do have a non-discriminatory program, do we not?

Mr Pezzullo : Yes.

Senator KIM CARR: And that's been the situation since when?

Mr Pezzullo : Effectively since the first moves were made to dismantle what was formerly known as the White Australia policy after 1966.

Senator KIM CARR: Okay, so since 1966, thank you.

CHAIR: Labor Party policy.

Senator KIM CARR: In practical terms, how does that term policy architecture? What are the procedures to support a non-discriminatory migration program work?

Mr Pezzullo : The Migration Act is read together with the Racial Discrimination Act and other domestic pieces of legislation, along with our international obligations as codified in domestic statute, along with, of course, jurisprudence.

Senator KIM CARR: Does that mean, for instance, that we accept visa applications from people from all countries around the world?

Mr Pezzullo : Yes.

Senator KIM CARR: Is there any country we do not take an application from?

Mr Pezzullo : We do not bar applications by country.

Senator KIM CARR: I presume, though, that there are different levels of scrutiny for some applicants from some countries. Is that right?

Mr Pezzullo : We apply different risk factors. One risk factor does pertain to country of origin.

Senator KIM CARR: What are the nature of those risk factors?

Mr Pezzullo : They relate to our responsibilities to screen applicants from the point of view of character security, which includes both criminality and national security concern, as well as health.

Senator KIM CARR: So, health, security—

Mr Pezzullo : Character, with security having a component that pertains both to criminality, and also national security.

Senator KIM CARR: Does national security go to any issue in regard to the country of origin?

Mr Pezzullo : It could be a factor, yes.

Senator KIM CARR: How often has that been the case in your experience?

Mr Pezzullo : How often is security a factor?

Senator KIM CARR: Security in terms of country of origin.

Mr Pezzullo : Well, the risk factors are universally applied to all applications.

Senator KIM CARR: But do you say that there are some countries that, on the balance of probabilities, are higher risk than other countries?

Mr Pezzullo : Yes, in general terms. I wouldn't want to be much more precise than that, but in general terms, yes.

Senator KIM CARR: There are? Which countries?

Mr Pezzullo : As I said, I wouldn't want to be more precise than I'm being at the moment.

Senator KIM CARR: Why is that?

Mr Pezzullo : Well, in part, once you start to unpack our risk methodology, it's possible to reverse-engineer how decisions are made and it's possible, therefore, to work out ways through our screening processes.

Senator KIM CARR: You think it undermines the integrity of the scheme, is that what you are saying?

Mr Pezzullo : It has the potential to, yes.

Senator KIM CARR: I take it that the department is actually committed to a non-discriminatory policy?

Mr Pezzullo : It most certainly is, as we're required to under law.

Senator KIM CARR: Yes, so it is a commitment based on law, but also a philosophical commitment?

Mr Pezzullo : Yes, indeed.

Senator KIM CARR: So there has been no policy proposals or program options that have been presented for consideration to change that position?

Mr Pezzullo : Absolutely not.

Senator KIM CARR: Have you been asked to prepare any?

Mr Pezzullo : No.

Senator KIM CARR: So there has been no proposals to change the language in regard to the terminology around the program?

Mr Pezzullo : Not in the direction of moving it towards a more discriminatory policy basis, particularly as regards to race, which is my inference from your line of questioning, no. The government is committed, as a matter of policy, and Minister, I might refer to you as a matter of philosophy, to a non-discriminatory immigration program. That has been a bipartisan position since the initial steps were made in 1966 to begin to dismantle the policy known at the time as White Australia.

Senator KIM CARR: Yes, of course. In recent conversations in regard to South Africa there has been some public debate about whether or not there has been a change in the government's attitude.

Mr Pezzullo : If you are referring to public comments made by the minister and indeed by other members of parliament to the need to look closely and carefully at some cases that have gained public notoriety, then that's not a question of amending any law or applying a new standard of administrative decision-making or re-interpreting jurisprudence.

Senator KIM CARR: If we take, for instance, this issue, which I think you've mentioned before, of the change from the 190,000 target to a 1,000 ceiling, how did that language change? Why was that?

Mr Pezzullo : Are you speaking of the permanent program?

Senator KIM CARR: Yes, the permanent program.

Mr Pezzullo : Through the course of 2014-15—and I have to refresh my memory because there was a ministerial change halfway through that financial year—the government decided to ensure that the permanent program was managed, not as a target that had to be delivered every single year on number, irrespective of the screening outcomes, but to treat the program as a ceiling within which two components would be managed as separate components, so you couldn't swap between the two programs. They are the permanent skilled program, which runs at almost 70 per cent—it's about two-thirds of the program—and the balance being known as the family program. The government's direction from 2014-15 has been to treat both individual components as well as the aggregated streams as a ceiling and to ensure that screening all the risk factors that I mentioned earlier—suitability of applicants—is placed first and foremost over and above the achievement of a numerical target.

Senator KIM CARR: I see. But there was a direction there. You're saying that there's been no direction from the minister to you as secretary or any other senior officers to change the language in regard to the non-discriminatory migration program?

Mr Pezzullo : Absolutely not. And the converse would be to change in the direction of a more racially discriminatory policy—absolutely not.

Senator KIM CARR: In regard to the priority processing, have there been any directions issued in regard to the areas which you should provide priority for, for the period through to 2018-19?

Mr Pezzullo : Priority in terms of the processing—

Senator KIM CARR: In terms of the visa applications, has there been any direction on what areas you should give priority to?

Mr Pezzullo : One, the permanent program is to be managed to the ceiling that I mentioned. We are to focus on the quality of applications and not to—as was perhaps the case in the past—focus solely on the achievement of numerical targets.

Senator KIM CARR: But no other visa categories are to be given priority?

Mr Pezzullo : It might be that Ms Golightly's got some more refined information to provide to you.

Ms Golightly : Within some of the categories—for example, within the family stream—there's a ministerial direction that's been in place for quite some time about the priorities within that stream but, overall, the answer is as the secretary mentioned.

Senator KIM CARR: I see. Apart from the family stream, there have been no directions from 2017-18, or through, say, for instance, 2016-17—is that right?

Mr Pezzullo : For comparison with 2016-17?

Senator KIM CARR: Yes.

Mr Pezzullo : I will just check as a matter of fact, because the minister is able to issue formal directions and guidance, but I'll just check with Ms Golightly or Ms Dacey.

Ms Golightly : I'm not aware of any change in the guidance issued by the minister between last year and this year.

Senator KIM CARR: I see. Do you have any?

Ms Dacey : No, that's correct. It's just in recognition of the fact that demand exceeds supply every year.

Senator KIM CARR: That's the only issue, is it?

Ms Dacey : That's how we dispose of that places in an orderly—

Senator KIM CARR: The family stream—what where the changes involved with that direction?

Ms Dacey : It came about largely because we were trying to give clarity to people who were applying through the program. I can tell you the order of priority processing if that would help you. So Partner, Prospective Marriage and Child visa applications are the highest priority. Orphan Relative visa applications are the second highest priority. Contributory Parent and Contributory Aged Parents are the next highest priority. Carer visa applications are the next highest priority. And then, Parent, Aged Parent, Remaining Relative and Aged Dependent Relative are applications in which the sponsor is a person who has entered Australia as an IMA. It was part of the suite of measures put in place as the framework around trying to encourage people to come in through lawful pathways.

Ms Golightly : Just to be clear, that was the same last year as it is this year.

Ms Dacey : Yes.

Senator KIM CARR: Sure, but that's the nature of the change.

Ms Golightly : I'm not sure what you mean by change.

Senator KIM CARR: You indicated in a previous question that in the R&D there had been a direction around the family—

Ms Golightly : And I think I said that direction had been in place for quite some time.

Senator KIM CARR: I know; I'm not disputing that. I am just going to what the nature of the direction was.

Ms Dacey : That's what I said to you.

Senator KIM CARR: And I think Ms Dacey has answered the question properly. Can I ask you on notice to provide me the details of the priority process directions for each of the visa subclasses?

Ms Golightly : Well take that on notice.

Senator KIM CARR: There's an opportunity here, Mr Pezzullo, for you to correct the record, yet again. There is a report that was given some coverage—

Mr Pezzullo : When you say 'yet again', I'm not sure I've had to do it at all.

Senator KIM CARR: Oh, you have, you have! From opening statements in these estimates, you've—

CHAIR: Senator Carr, do you want to do this quickly or will we come back to you because your time is finished?

Senator KIM CARR: We'll keep Mr Pezzullo in suspense a moment longer, and you can come back to you because there's a range of questions I need to follow through with.

CHAIR: Thank you. Senator Carr has been questioning something about South Africa, which I didn't quite follow, but I just wonder if the government announced program to take 20,000 Syrians fits into this same category? As I understand it, the government, as were all Australians, was concerned about mass murders in Syria, confiscation of property in Syria, groups of people in Syria being particularly ill-treated or ill-affected, and I wonder if that would also fit into that category that Senator Carr is concerned about.

Mr Pezzullo : The Syria-Iraq refugee program is now closed. It's been fully subscribed. That would logically come under program 2.4.

CHAIR: I'm not asking about the program. I'm saying Senator Carr's comments about South African—

Mr Pezzullo : Oh, I see, in terms of discrimination—

CHAIR: Yes, is it the same category as Syrian, which was specifically set as a group? Not Turkish, not Lebanese, not Cretans—

Mr Pezzullo : I see. Yes, under program 2.2 it's right to ask questions about the non-discriminatory nature of all our migration streams, inclusive of the refugee and humanitarian streams.

CHAIR: That was my question: was the government at fault in having 12,000 Syrians—not Turks, not refugees generally, but particularly Syrians—last year or the year before in the way that Senator Carr suggests there might be some fault in talking about South Africans, who are also subject, as I understand, from media reports of murders

Mr Pezzullo : I understand no. Sorry, I misconstrued your question. The Abbott government, towards the end of 2015, announced a special humanitarian intake for both Syrians and Iraqis. It was a two-country process for those persons who had been displaced as a result of the conflict across those two countries and who were refugees or had been determined to be refugees. By definition, because you're targeting a particular conflict, you're going to be taking refugees in from a particular locality—some from Syria, some from Iraq. That program was managed in accordance with our normal procedures, with the UNHCR and other relevant bodies.

CHAIR: In similar circumstances, you could do the same for those from the Congo or those from South Africa or those from New Zealand, if they want to escape a socialist government or something?

Senator PRATT: The first preference is usually to support countries to stabilise populations where they are.

Mr Pezzullo : It's the government's policy to employ a suite of measures, some of which do entail humanitarian assistance provided either in country or to contiguous countries, an example being the support that we provide in Turkey, Lebanon and Jordan—on the periphery or the environs of that conflict. But, particularly in cases of persecuted minorities, where there is very little chance if any chance of a reasonable prospect of return—so, you've got persecution as well as no real prospect of a return to, if you will, ancestral living environments—then what are, frankly, relatively scarce places in the global pool of refugee places—I think Dr Johnson spoke about the fact that the US, Canada and Australia are in a class of their own, if I can use that term, in terms of taking permanent refugees, both in absolute and per capita terms. These are places that are quite scarce relative to the demand. The UNHCR estimates that there are some 65 million persons who are displaced in one way, shape or form through conflict.

Senator PRATT: Yes, that's right.

Mr Pezzullo : About a third of those, almost 21 million, have been displaced across an international border and are living in camps and the like.

Senator PRATT: Are there any examples of people successfully seeking asylum from South Africa in recent years?

Mr Pezzullo : There have been some cases. Ms Golightly, without identifying individuals, perhaps—

Senator PRATT: No, I'm not talking about Australia specifically. I'm talking internationally and within Australia, whether people have successfully—

Mr Pezzullo : I'm not sure that Ms Golightly has global data, but do you have some data that could assist the senator?

Ms Golightly : I have the numbers of applications we've received from South Africa, that we have on hand.

Senator PRATT: For humanitarian visas?

Ms Golightly : For humanitarian visas, yes. At the moment we have on hand 39 offshore applications which relate to 127 people, and we've had 50 onshore applications which relate to 86 people.

Senator PRATT: Are you able to give us any information currently about the kinds of grounds that people are stating for—

Mr Pezzullo : Perhaps in general terms.

Ms Golightly : In general terms—

Mr Pezzullo : Without identifying specifics.

Ms Golightly : In fact, I don't have the specifics of the applications, but the type of criteria that they of course have to meet, or the key one, is evidence of persecution, so that's exactly what we'll be looking at.

Mr Pezzullo : A well-founded fear of that persecution.

Ms Golightly : Yes.

Senator PRATT: But to date you haven't accepted any of those applications?

CHAIR: If we can get back to order, these are my questions, my time.

Senator PRATT: No, they're relevant to—

CHAIR: You'll have an opportunity to ask your questions if you want. This is my time, my questions. I'm just so generous!. I can't believe how generous and calm I am in letting other senators hijack my question times!

Senator PRATT: Thank you, Chair.

CHAIR: But perhaps we can leave it there.

Senator PRATT: I hadn't realised you'd taken the call specifically, I thought you were following on from Senator Carr. My apologies.

CHAIR: No, Senator Carr had finished. The Labor Party's 10 minutes had finished. This was the government's 10 minutes, six minutes of which you've taken. I'm just so generous! I can't believe how—

Mr Pezzullo : Senator Carr was moving onto other matters.

Senator KIM CARR: You bet I was!

CHAIR: I was going to ask you some other questions, but I'm grateful that my colleague has pre-empted and read my mind and asked those questions, so I'll leave mine there. It was just that I wanted to get the similarities between the Syrian-Iraq issue and, as I said, what might happen in the Congo, Somalia, South Africa or anywhere else. I think between the two of us we have those answered. Now, on outcome 2.2, migration, does anyone else have questions?

Senator KIM CARR: Yes. On 14 April this year there was a report in The Australian, Secretary, that said that you flew to Brisbane to pitch to Minister Dutton the idea of cutting Australia's permanent migration program by 20,000. Would you like to comment on that claim?

Mr Pezzullo : First of all, I don't comment on the detail of advice ever given to government.

Senator KIM CARR: I would expect that, yes.

Mr Pezzullo : Secondly, it's illogical to say that a secretary or anyone else would pitch an idea to a minister, so called. Our job is to develop options—the more the better—to give ministers a maximum range of choices. Then it's for them to have regard to that advice. They take advice from all sources. I've got a minister at the table who might want to indicate how he takes his advice. I'm sure his department is a valued source of advice but as are others. Then the minister decides what to take forward to colleagues.

Senator Fifield: That's right. Just taking up the invitation there, ministers receive a range of advice from departments, from their own considerations and from any number of sources.

Senator KIM CARR: Thank you, Minister; I am aware of this. Did the options paper referred to in the article exist?

Mr Pezzullo : I don't have the news report in front of me, and I will follow the chair's guidance to (a) be sceptical always of what's reported in the media and (b) check it in any event. If I recall rightly, the meeting in question would have related to normal engagement with a cabinet minister in finalising portfolio budget arrangements. When I read that article, it struck me that it—

Senator KIM CARR: Can I get you to repeat that? It was portfolio budget arrangements?

Mr Pezzullo : To the extent that it described anything vaguely factual—and you always have to run that test over all media reports—it would have related, going to process here rather than content, to the annual cycle of settling the draft migration program, which the minister, of course, takes advice on and comes to a view about what he wishes to propose to colleagues.

Senator KIM CARR: Was there an options paper produced?

Mr Pezzullo : Again, I'll go to process. Annually we provide options for the minister of the day on the migration program, which from year to year is settled through the budget cycle. I'm speaking here on a matter of general principle rather than what may or may not have happened in that specific instance. We would have developed options for the minister to consider in the normal annual budgetary cycle. I'll refresh my memory as to what that news report asserts. If I have materially, or even vaguely, misled the committee I'll of course correct my evidence. But I do recall reading that report and thinking it had a degree of resonance in terms of processes employed every year for settling the annual budget.

Senator KIM CARR: Ms Geddes, did that news report, to the extent that you recall it, have any other resonance for you?

Ms Geddes : No, it didn't.

Senator KIM CARR: Obviously it's not your practice to reveal the details of advice to ministers. I accept that.

Mr Pezzullo : I don't think any secretary—

Senator KIM CARR: No. I don't expect that you will. But the question that was subsequently raised concerning that was on the issue of lowering of the migration levels. A suggestion was that this was a matter that had been canvassed within senior elements of the government based on a proposition that the department had put forward. What I'm seeking from you is your response to the claim that the department had made a recommendation to reduce the immigration ceiling, as it's subsequently become, from 190,000 to 170,000.

Mr Pezzullo : I'll answer in two parts. The first part of my answer is this. As Mr Dutton, the Prime Minister, I think, and possibly the Treasurer have all said—certainly Mr Dutton said it, because I can recall the transcript of his remarks very directly—that they canvass these issues with their colleagues in a number of fora. I think the assertion was that Mr Dutton had raised these matters in cabinet. I think Mr Dutton said—through you, Minister, if I may—that he wasn't going to disclose or discuss what may or may not have been discussed in cabinet. But he said on the record—I recall watching him in an interview; I can't remember the outlet—that through the cabinet process ministers discuss matters of this ilk all the time. I'd refer any other questions on the detail of that through Minister Fifield to Mr Dutton. On the question of what advice we, the department, had generated, which might have informed those discussions—the discussions to which Mr Dutton refers—I'd refer you to my earlier answer.

Senator KIM CARR: So the options paper that has been referred to—

Mr Pezzullo : Sorry, Senator, by you. I've said that the department developed options, always develops options. This is an annual standard process.

Senator KIM CARR: That's a perfectly reasonable proposition. The department must develop options in the budget process.

Mr Pezzullo : Within the context of the annual budget, yes.

Senator KIM CARR: Of course it must, particularly if you're expending the sort of money that I think you've indicated is involved with this program.

Mr Pezzullo : I just want to be clear about the evidence I've given as opposed to your summary of my evidence.

Senator KIM CARR: Indeed. I've asked you specifically: did an options papers exist?

Mr Pezzullo : And I'll restate my earlier evidence that options are always developed in the context of the framing of the annual budget because the migration program is settled on a year-by-year rolling basis in the budget.

Senator KIM CARR: So I ask you on notice: can that options paper be provided to the committee?

Mr Pezzullo : I'll refer that question to the minister on notice.

Senator KIM CARR: Of course you will and, if not, will the minister be claiming public interest immunity?

Mr Pezzullo : Through the minister at the table, I'll refer it to the minister.

Senator Fifield: We'll take it on notice.

Senator KIM CARR: Thank you. The current migration program scope and size has, in the past, been identified as much more centric to the budget framework. This year it appears to have been presented as part of the regional program, the migration program, in Home Affairs. Is that a change in procedure? Regional Australia, stronger economy, delivering stronger regions, page 115 is where I find the—

Mr Pezzullo : I'm happy to speak to the budget measures document that pertains to Home Affairs. How the overall budget papers were constructed, I would ask that those questions be referred to the Treasury and, as appropriate, to the finance department—unless Ms Cargill has got additional elimination that she might wish to provide.

Senator KIM CARR: Any advice you can tell me as to why there's been a change—

Mr Pezzullo : I think the budget paper to which you refer is a general whole-of-government paper. From memory, it's the Treasury that puts it together, but I might be mistaken about that. But, if Ms Cargill is still around, she might be able to answer that question.

Ms Cargill : I've got nothing to add to the secretary's response. There was no specific budget measure in our portfolio budget statement related to the size of the migration program.

Senator KIM CARR: So that's why the ceiling has been relegated to the regional program, is it?

Mr Pezzullo : I'm not sure relegated is the right term; it might have been elevated.

Senator KIM CARR: Elevated?

Mr Pezzullo : It could have been. I don't think the regions are relegated in any way, shape or form.

Senator KIM CARR: Perhaps you can tell me this. You say it's a matter of convenience, is it, that it be put into the regional statement?

Mr Pezzullo : We don't construct the budget papers, Ms Cargill, do we?

Ms Cargill : Correct; that's not our statement. We would contribute to it.

Senator KIM CARR: How many people applied for the migration program in 2016-17?

Mr Pezzullo : It's a question for Ms Dacey or Ms Golightly?

Ms Dacey : We'd have to take the number of lodgment applications on notice. We can certainly take you through the delivery numbers, though.

Senator KIM CARR: How many were granted?

Ms Dacey : There were 183, 608 delivered last year.

Senator KIM CARR: But the planning level, I guess, was at that time, wasn't it?

Ms Dacey : It was 190.

Senator KIM CARR: Why was the figure of 183 visas granted not the 190?

Ms Golightly : So there are a number of factors that affect the finalisation of the outcomes we achieve in any year. But the three main ones are—and we've seen this over the last few years—are balancing managing the increasing complexity of the caseload and the applications that we're receiving and the applications are growing as well as balancing that with the risks and growing risks that we are identifying and, therefore, then have to treat through very careful examination of each application. Indeed, we're also seeing greater variation in the application quality and completeness. You can imagine, if an application is not complete, that's going to have an impact.

Senator KIM CARR: Can we compare it to this year's program year-to-date? We're almost at the end of the financial year. How many people have applied?

Ms Dacey : Again, I don't have the lodgement numbers. I have what we have delivered.

Senator KIM CARR: How many have you granted then? Take the other on notice, if you would—same for the previous question.

Ms Dacey : Yes. As at 30 April, we have delivered 91,302 in the skill, stream—that's all the skills streams—and, in the family stream, 44,193. In the child stream, which sits outside the planning elements, it's a demand driven bit that we fit within the ceiling, 2,591.

Senator KIM CARR: Would you say that's considerably down on the previous year?

Ms Dacey : It's probably down on where we were this time last year.

Senator KIM CARR: It's a substantial reduction?

Ms Dacey : There are many things that go into delivering a program in any given year, and, in the last few weeks of a program year in particular, there can be many ons and offs. In all honesty, in the last few weeks, you can get some quite significant—

Senator KIM CARR: Sure. But you told me you don't have the applications number before you, but you must have some sense of it. Are the application numbers up or down?

Ms Dacey : Intuitively—up. And I've given evidence to this committee before that that's actually the case every single year. We're always oversubscribed in both the skills and family streams.

Senator KIM CARR: Sure. So why then is—you're saying the quality is down?

Ms Golightly : Quality and risk factors are up—and, just the complexity of the applications in a global market, you can imagine, people have quite complex histories.

Mr Pezzullo : Senator, if I may: I'll give you an example. As we connect what were formally stand-alone isolated immigration integrity risk systems to intelligence databases under a program that commenced in 2014-15 and was accelerated, through some investment that the government put in 2015-16, as you couple more databases onto your checking mechanism, you get more of those hits in our trade. They have to be resolved. Some of these databases are very sensitive and highly classified so I'm not going to detail the nature of the connections that we have, other than to say they're real-time intelligence related data-checking systems. Every time you get a hit, you have to resolve it. An officer who has to resolve that match takes time to do that, and that necessarily means that more time is spent—to Ms Golightly's point—on that application than previously would have been the case. In some cases, more time has been spent per application to resolve those anomalies.

Senator KIM CARR: There have been these incremental changes. But it could also be the case that the government's made a deliberate decision to reduce the numbers in a migration program without announcing it. The effect of your changes is to have fewer people come into the country. Is that the case or not, Mr Pezzullo?

Mr Pezzullo : The effect of both the ceiling measure and the more rigorous scrutiny measure—known formerly of visa risk assessment, or VRA—has in the last couple of program years seen an outcome below 190,000. That is a factual answer to your question.

Senator KIM CARR: Yes. But a substantial reduction. These are not insignificant drops.

Mr Pezzullo : Well, they're reduced.

Senator KIM CARR: But they might well be within the 20,000 we spoke of earlier.

Mr Pezzullo : Well, I probably wouldn't get ahead of where we're going to be at midnight on 30 June at this stage. It might be a matter that we can re-engage on after 30 June.

Senator KIM CARR: Thank you. We'll come back to this.

CHAIR: You'll come back?

Mr Pezzullo : I don't believe I have to clarify any evidence.

CHAIR: I'll go to Senator McKim. I just want to remind all senators that we have Visas, which I think will be quite lengthy, and 2.4, Refugees, to come. And then all of outcome 3. So, if questions are available on notice, we can always think of that option. But Senator McKim on 2.2.

Senator KIM CARR: I have further questions.

CHAIR: Senator McKim just came to me said he had questions. Sorry.

Unidentified speaker: That was Senator Patrick.

CHAIR: Was it? I'm sorry. Well, I'm doubly sorry. You may well sue me for defamation in accusing you of being Senator McKim, Senator Patrick.

Senator PATRICK: Parliamentary privilege would fetter me in that, Chair.

CHAIR: I'm sorry, Senator Patrick. Off you go. This is on 2.2, Migration.

Senator PATRICK: Yes. I've only got a few questions, and a follow-on from a discussion we had last estimates. Very shortly thereafter you announced the business start-up trial. When is that likely to commence in reality? When is the substantive—

Ms Geddes : You're referring to the global talent scheme that Minister Tudge launched?

Senator PATRICK: Yes.

Ms Geddes : We're running a pilot from 1 July. So at the moment we're working with industries, including start-up companies to develop that pilot. That will run for 12 months. Then we go into full implementation, 1 July next year.

Senator PATRICK: That's when we're likely to see the first migrants arriving having gone through a process that's being set up?

Ms Geddes : Yes, that will be looking to match the requirements of those businesses in the program with the skills that they require from people overseas, yes.

Senator PATRICK: Just to confirm, there was the entrepreneurial program that you announced in the last three months. Is that what that program was called?

Ms Geddes : No. This is the global talent scheme which is a new initiative launched by the government which will come into effect 1 July next year after 12 months of pilot.

Senator PATRICK: Okay. I'm sure that perhaps in answers to questions on notice, and in fact very shortly after the last estimates, you announced something—it might have even been with Premier Marshall—about an entrepreneurial scheme.

Ms Dacey : Senator, if may assist—there are two elements to the global talent stream. One is about start-ups onshore, and one is about executive positions more generally. Is that the confusion by any chance?

Senator PATRICK: I guess that probably helps clear it up.

Ms Dacey : There's sort of two substreams of it.

Senator PATRICK: Two elements of it. Perfect. There has been discussion about regional migration and the way that might be approached. Could someone give me an update on how the department is considering that topic? And whether or not there would be any consultation with the community? What sort of settings are they looking at and how might those be derived?

Mr Pezzullo : Senator Patrick, I addressed that issue earlier in the day but, just to summarise my evidence, I restated what an officer of my department said in February at the estimates meeting then, which was that we had been asked to look at, as a policy option, the question of regional locality arrangements, noting that, of course, under our constitutional arrangements, there are freedoms of movement in relation to movement of natural persons and commerce. Subsequently, Mr Tudge has said, as a matter of policy, the government's interested in looking at this, noting that there are legal issues that will need to be looked at. The only other thing that I can possibly add—you asked about consultation. I have previously referred in these proceedings to the public consultation that occurred last year for about an eight-week period in relation to the future of the migration system, the framework of visas. One of the issues that was looked at there was a qualifying period; there was public consultation. We got several hundred submissions, I think.

Ms Geddes : It was around 200.

Mr Pezzullo : We got quite a number of submissions, some of which touched on the sorts of criteria that might go into a qualifying period, provisionality and the like. We've done what the government asked us to do in terms of that consultation. Really all I can say, as Mr Tudge said recently, is that it is a question that is of interest to the government, and the government's asked us to further develop policy in that area.

Senator PATRICK: In the further development of that policy, is the department open to looking at different growth areas? For example, Adelaide, as a metropolitan city, has a similar sort of growth, or is in a similar growth band, to regional Queensland and regional New South Wales. There are very remote areas, perhaps, where the growth rates are less than 10,000. There might be another band of 10,000 to 50,000, and another one above that. Has the department had a look at any policy with regard to that?

Mr Pezzullo : I'd be reluctant to add much more detail to either the evidence provided in February, certainly that goes beyond what Mr Tudge said recently, as the minister, and what I've said earlier today, on the basis that the specifics, including looking at growth centres, looking at specific localities, would be intrinsically something that you'd have to cover in the detail of any draft proposal that really should be put before the government first. It's a matter for ministers to determine these matters. If there's anything that I can further advise, either on notice or at a subsequent meeting of this committee, I'd be happy to, but only after the government has, of course, considered these matters first.

Senator PATRICK: Sure. In your approach to your analysis for government, I presume that you would do modelling of some sort. Is that how you would approach that?

Mr Pezzullo : We always try to develop both options as well as the evidence for those options on the basis of data, modelling, research, as best as we can achieve it in both the time available and having regard to the data that's available. This will be, on this occasion, no different.

Senator PATRICK: If I were to put on notice some requests for some information—I appreciate that you might not want to share the department's preliminary views, but you may well have information that has effectively been paid for by the taxpayer, so it belongs to the public. I presume you will have no issue if I make inquiry as to what data you might have available at this point in time.

Mr Pezzullo : If you're asking me to take on notice coming back to the committee on data we have that's pertinent to the question of regional-locality-type visas, I'll see what's available and I'll take that on notice.

Senator PATRICK: And things like the constraints. I'll go back and have a look at the Hansard, as you suggested—and thank you for that suggestion—but I'd be interested in some of the other constraints: as you said, constitutional constraints and any other constraints that might bind you or inhibit any policy thinking.

Mr Pezzullo : Once we start to enumerate those factors, we might as well give you the policy paper. It's really a matter for the minister, so I'll refer your request to the minister. You're almost describing the policy.

Senator KIM CARR: Across the visa classes, apart from the refugee visa, is there a capacity for any residential qualification to be imposed upon a person who's granted a visa who's a permanent resident of this country?

Mr Pezzullo : Ms Dacey spoke about the regional skilled migration visa earlier, so there was some evidence given before that I refer you back to, but, as the department stated back in February, and I restated this morning, in terms of locality, which is the burden of the senator's question, subject to there being some kind of policy change that can be put into effect legally—

Senator KIM CARR: It'd be a legal challenge, wouldn't it?

Mr Pezzullo : The government would need to consider the policy first and then it'd have to be enshrined in the legislation.

CHAIR: I don't want to curtail questioning, but a lot of these are hypothetical about what legislation might say in the future, and, quite frankly, a lot of this we've been over before. I know other senators have different obligations in different estimates. If we are going to have every senator ask the same question over and over again, we are never going to finish. Please can we move on to new questions in 2.2, Migration. If we've finished that, we'll go into 2.3. I have a long list of—

Senator PATRICK: I actually found Senator Carr's quite helpful.

Senator KIM CARR: I think that is actually a new question.

CHAIR: I have a long list of senators who have questions on visas and on refugee and humanitarian, so if we can proceed—

Senator KIM CARR: Mr Chairman, we're entitled to ask at law: is it possible to impose an indenture on a permanent resident?

CHAIR: Senator Carr, you're not entitled to ask anything just at the moment. This is not your time. It's another senator's time that you're taking up. We'll come back to you later if you have a question that hasn't been dealt with previously. I don't know why I get myself into excitement trying to run this committee so that all senators have a fair go. Now where were we? Senator Patrick.

Senator PATRICK: Thank you. Issues of law are not matters of policy for government to decide upon; they are simply what they are.

Mr Pezzullo : Indeed.

Senator PATRICK: I wouldn't mind understanding what those constraints are in law and how they might affect policy.

CHAIR: Look, you're not allowed to ask questions—

Senator PATRICK: Yes, I am actually allowed to ask it, Chair. You can't constrain me in what I ask.

CHAIR: You're not allowed to ask for legal opinions, which is what you're asking for.

Senator PATRICK: I'm asking what the legal constraints are.

CHAIR: That's asking what the law—

Senator PATRICK: If they wish to offer up a public interest immunity, they can. Mr Pezzullo's very, very experienced at that.

CHAIR: We've never been able to ask questions these officers questions of law. For one, they're not qualified to answer.

Senator PATRICK: The question stands. I wouldn't mind an answer to that, unless you wish to offer some sort of immunity.

Mr Pezzullo : I can answer as a matter of policy.

Senator PATRICK: Thank you.

Mr Pezzullo : I gave evidence—not a legal opinion—on the state of the legal framework—

CHAIR: But you've done this already, Mr Pezzullo, three times, as I recall.

Mr Pezzullo : on 26 February this year, and I'd refer you to that evidence, Senator.

Senator PATRICK: Alright. Thank you.

Mr Pezzullo : Some three months ago.

CHAIR: Any other questions on 2.2?

Senator McKIM: Yes. It's in the nature of checking I'm not going to miss my opportunity if I ask—

CHAIR: Senator McKim, you raised this with me. You will not miss it. Mr Pezzullo said it came under 2.4. Even if he's wrong, I will ensure that you get to ask those questions.

Senator McKIM: Thank you, I appreciate that in relation to my previous line of questioning. This is a different line of questioning on a different subject.

CHAIR: Well, what do you want to know?

Senator McKIM: I would like some advice as to questions relating to the special attention that Minister Dutton asked to be given to South African farmers would be best addressed in this output or in Visas?

CHAIR: That's already been asked by Senator Carr at length and then at much shorter notice by me. We've actually dealt with that.

Senator McKIM: So it does fit in this output, and I do have questions.

CHAIR: I have just been saying, if every senator comes in and asks the same questions that other senators have asked, then we're going to be here until—

Senator McKIM: How do you know what my questions are when I haven't asked them?

CHAIR: Can I ask you then to have a look at the Hansard.

Senator McKIM: I was here. They're not the same questions. You're making an inaccurate assumption based on no reality or evidence whatsoever.

CHAIR: Well, why did you ask, if you'd heard Senator Carr and me ask questions about the same issue? Because you simply want to waste time and for some reason—

Senator McKIM: Because my view was that you were asking them in the wrong outcome.

CHAIR: it turns you on.

Senator McKIM: What? Not sure we need to be—

CHAIR: You always have to try and disrupt the committee when other senators are here to ask serious questions.

Unidentified speaker: Is this really conducive?

Senator McKIM: It's very collegial in the Legal and Constitutional Affairs Committee. Mr Pezzullo, Minister Dutton's made it clear that South African farmers deserve special attention.

CHAIR: What's the question?

Senator McKIM: I'm well entitled to—

CHAIR: What is the question?

Senator McKIM: The question is, Mr Pezzullo, Minister Dutton has made it very clear that South African farmers deserve special attention and has said publicly—

CHAIR: What is the question?

Senator McKIM: 'We are certainly applying that special attention now'. That's a direct quote from Minister Dutton. What is the special attention that the department is applying to South African farmers at the moment, if any?

Mr Pezzullo : As a matter of general policy, I was asked earlier about issues of discrimination and I don't have anything more to add on those questions. If there are questions of process—

CHAIR: Have these questions been answered previously?

Mr Pezzullo : Not in terms of the processing per se. I was asked earlier about discrimination.

Senator KIM CARR: That's right. I didn't mention farmers.

Mr Pezzullo : Well, indeed. Perhaps there's some material that Ms Golightly might have on the processing side of Senator McKim's question.

Senator McKIM: Thank you.

Ms Golightly : Basically, like anybody, South Africans can apply for any visa they wish and they'll be assessed against the criterion set out in the law. In terms of processing, the normal arrangements apply where we assess the claims against whichever is the relevant criterion. That might include and often does include interviewing the applicant. That is the same here. The minister can decide which decisions he takes and which ones he delegates to the department, and he makes those decisions on various visas. In terms of those from South Africa, the minister has asked us to prepare the assessment—the work that goes into normally assessing—for submission to him, and he will then make a decision about whether he takes the decision or delegates that to the department.

Senator McKIM: Has the minister asked you to prioritise preparing those assessments for people from South Africa or for white South African farmers?

Ms Golightly : No, Senator.

Senator McKIM: He hasn't?

Ms Golightly : No.

Senator McKIM: So, as far as the department's concerned, there's no special attention being given to people who are either from South Africa or South African farmers or white South African farmers.

Ms Golightly : They are being assessed according to the criterion in the law.

Senator McKIM: Yes, but without any priority.

Ms Golightly : No, there are no additional requirements from the minister.

Senator McKIM: So they're just in the normal, I guess, queue that exists within the department for assessment.

Ms Golightly : That's correct.

Senator McKIM: How many claims for asylum from South African farmers have been received in the current financial year? And how does that compare?

Mr Pezzullo : I think I would need to refer to the evidence that was given earlier—the numbers were provided earlier.

Senator McKIM: I appreciate that. I want to refer you to a 2015 decision made by the department, which was upheld in 2017 in the Administrative Appeals Tribunal. The department rejected a claim for asylum from a white South African because 'the vast majority of crimes against whites are not racially motivated but rather are crimes for financial gain.' That's a quote from the department's decision—

CHAIR: What's the question?

Senator McKIM: That's a quote from the department's decision. Has the department's view on that changed in the interim between then and now?

Mr Pezzullo : Over the course of three years, I'm not sure that I've got that information readily to hand. I certainly wouldn't want to—

CHAIR: So you will take it on notice.

Mr Pezzullo : I'm sure the quote is accurate, but I'll take on notice the circumstances of the 2015 case and where we are now.

Senator McKIM: Thank you. That case was appealed to the AAT in 2017—I'm happy to give you the case number, it's 1511441 in the AAT on 12 September 2017—

CHAIR: And the question is?

Senator McKIM: and the AAT said this: 'The applicant claimed to the department that—

CHAIR: And the question is?

Senator McKIM: I'm asking the question, Chair.

CHAIR: You're not; you're reading out a result from the AAT.

Senator McKIM: Are you suggesting that you're going to rule me out of order for reading out a quote to prepare the context of the question?

CHAIR: Perhaps you could ask the question and then if needed you could elaborate—

Senator McKIM: Perhaps you could let me read out the quote.

CHAIR: But I'm sure Mr Pezzullo will be able to answer the question if you ask the question.

Senator McKIM: I'm trying to get to the question, Chair, and you are rudely and continually interrupting.

CHAIR: I am running the committee as a chair should run the committee. Ask a question, don't make a statement.

Senator McKIM: Mr Pezzullo, are you aware of case 1511441 in the AAT in September 2017?

Mr Pezzullo : Not personally, no.

Senator McKIM: I think you said not personally, is that correct?

Mr Pezzullo : Not personally, no.

Senator McKIM: Could you please take on notice this question: in regards to that decision by the AAT—and I won't ask you details about that because you've said you're not aware of it, and that's fair enough—which was made just over six months ago now—

CHAIR: You've given the date. We know that.

Senator McKIM: Are you right, Chair, are you?

CHAIR: Do you have a question? If not, I will go to someone who does have a question.

Senator McKIM: Yes. I will start again the question I was asking before you interrupted me, Chair. Mr Pezzullo, could I ask you please to take on notice whether the department has any different view on the circumstances of—

CHAIR: You've already asked that question.

Senator McKIM: white people in South Africa that has changed since the AAT decision was made?

Mr Pezzullo : I'll take it on notice, including whether any new information has come to hand.

CHAIR: Thank you, Mr Pezzullo. Do you have anything else, Senator McKim?

Senator McKIM: Not in this outcome, thank you, Chair.

CHAIR: Does anyone else have questions relating to 2.2, Migration?

Senator KIM CARR: Yes. Is Home Affairs responsible for population policy?

Mr Pezzullo : No.

Senator KIM CARR: Is the visa-simplification review something that you're dealing with differently from the review into the regional—

Mr Pezzullo : No, it's the larger category that I was referring to in my answer to Senator Patrick and to which evidence was given back in February. The government has asked us to look at the visa framework with a view to both simplifying it and seeking to improve it. That was the subject of public consultation—I keep forgetting this—I think in August and September of last year, and I referred to that review earlier.

Senator KIM CARR: Is this where the proposal is to reduce 99 visas down to 10?

Mr Pezzullo : Amongst other elements.

CHAIR: Is this 2.3 or 2.2?

Mr Pezzullo : It's really straying into 2.3.

CHAIR: Is it?

Mr Pezzullo : Yes.

CHAIR: We have a lot of senators patiently waiting for 2.3.

Senator KIM CARR: If it's straying—

Mr Pezzullo : It's at the boundary. In totality, the visa system constitutes the migration program, so you're stepping between 2.2 and 2.3.

Senator KIM CARR: I see. Okay.

Mr Pezzullo : As long as we don't go into the interstellar space, we should be fine.

CHAIR: Please.

Senator KIM CARR: I just wanted to know how you got the figure of 10.

Mr Pezzullo : It's a proposal that the department has worked on based on its detailed knowledge of the visa system. We went to government in—Ms Geddes will assist me—March of 2017. The government said, 'You should consult with interested stakeholders.' There is no proposal that's gone back to government that is to say it's 10 or 15 or 12 or 20. That's still a matter that will be considered by the government. But for purposes of—I think, Ms Geddes, it's fair to say—public consultation we went out in August of last year and said, nominally, 'If you were to streamline visas, rationalise how they work together, both in terms of their individual categories and how those categories are interrelated one with the other, what would you think about such a visa system?'

We got several hundred submissions back. Some of them touched on questions of a qualifying period. Some of them touched on questions of the ability of migrants to integrate into the Australian way of life. Some were on the regional type issues that Senator Patrick was referring to, that some parts of Australia need population growth and other parts, perhaps, less so. All of those questions came from very committed expert stakeholders. We are currently working through that feedback and preparing advice for government.

Senator KIM CARR: So you had this notion of a provisional period for a provisions—

Mr Pezzullo : I think it was called a qualifying period. I'd just have to check the detail of that.

Senator KIM CARR: Okay. The purpose of that is to—what's the purpose?

Mr Pezzullo : I'll refer the detail to Ms Geddes and Dr Johnson. The policy discussion paper set out the rationale for not what is government policy but what could become government policy, subject to consultation with the public—that is to say, what benefits might be achieved if migrants were to be settled in Australia on a provisional or qualifying basis that allowed them to integrate, to become more familiar with our cultural norms, language requirements and the like, and then permanency could be granted thereafter. I just want to stress it is not government policy, but we were authorised to consult with the public. As I said, that occurred over a six- to eight-week period last year.

Senator KIM CARR: There was a pretty strong reaction to this proposal, wasn't there?

Mr Pezzullo : In terms of 'strong', Ms Geddes, can you assist?

Ms Geddes : I'm not sure what you understand by 'strong', Senator.

Senator KIM CARR: I understand 55 per cent opposed the provisional period before a visa holder can apply for permanent residency. Would that be correct, in terms of response to the paper?

Ms Geddes : I'd have to get back to you on that one.

CHAIR: Take it on notice.

Ms Geddes : Certainly, I was involved in many of the consultations. There were some very good conversations about not so much the length of what a qualifying period would be but the intent behind a qualifying period—for people to understand and to be part of community in Australia, to be part of our values which would support them better through to citizenship.

Senator KIM CARR: The department was quoted as saying that it dismissed these concerns:

… almost entirely based on the authors' personal circumstances and likely related to the fact that the policy consultation paper did not directly reference a pathway from temporary to permanent residency.

Have I accurately reflected the department's view?

Mr Pezzullo : Can I just check? I can't quite recall the summary.

Senator KIM CARR: I don't have the actual source; it's in my notes here. But this is an opportunity for you to tell me whether or not the department has a view similar to that about the consultation responses.

Mr Pezzullo : I think we'd better take it on notice.

Ms Geddes : Yes, I'd have to take that on notice.

Mr Pezzullo : That's a very specific—

Senator KIM CARR: I'm equally concerned that—has the department actually made up its mind about these measures?

Mr Pezzullo : It's not for the department to make up its mind.

Senator KIM CARR: Clearly it is, because you're going to make recommendations based on the feedback you've had.

Mr Pezzullo : We'll make up our mind as to the advice that we give and, as I said in my earlier answer on another matter, we'll give that advice to ministers.

Senator KIM CARR: There seems to be nonetheless a view being expressed from other elements of the government. The Department of Social Services has commented in various papers that humanitarian entrants will be excluded from social security changes. Were there some concerns expressed by other agencies within government to these proposed changes?

CHAIR: Do you have that information?

Mr Pezzullo : I'm not sure what the provenance of that view that you attributed to DSS is.

Senator KIM CARR: It claims to be a cabinet paper.

Mr Pezzullo : I can't imagine how you would have access to such a document.

Senator KIM CARR: You can't imagine, can't you?

Mr Pezzullo : No.

Senator KIM CARR: No, I'm sure you can't.

Mr Pezzullo : Not in the ordinary course of business, unless you're moonlighting as a cleaner after hours and you picked it up off the desk of—

Senator KIM CARR: With this government, there seem to be quite a few cabinet papers.

Mr Pezzullo : I don't have any comment.

Senator KIM CARR: Senator Fifield, has there been an inquiry launched into the leaking of the cabinet papers in regard to the visa reform matter that has been given some publicity?

Senator Fifield: I can't assist you there.

Senator KIM CARR: Can't you? I would've thought they would've sent the plumbers in by now, surely, to block this leak.

Mr Pezzullo : In fairness, we have given evidence on this before. My memory has been peaked. I think former Secretary Pratt of the Department of Social Services has given evidence in other fora to say that he was personally disappointed that a document appearing to come from his department had found its way into the media and that he'd referred the matter—from memory—to relevant authorities.

Senator KIM CARR: Yes, of course, and naturally secretaries always express their disappointment when there are leaks of this type.

Mr Pezzullo : Yes, we do.

Senator KIM CARR: But the issue that I'm seeking to get an assessment from you on is the department's response to this consultation paper. There are pretty strong reactions to it. Has that had any effect on your thinking about the way in which you take this forward?

Mr Pezzullo : The whole point of a public consultation process is to take on board stakeholder views, to balance those stakeholder views with empirical evidence and other research, to finalise policy options for government and then to put those options to ministers, who in the end make these decisions.

Senator KIM CARR: Will this feed into the continuous survey of Australian migrants that the department is now undertaking?

Mr Pezzullo : That's a statistical exercise. Sorry, what's the question?

Senator KIM CARR: Will this response that you're developing in response to this consultation paper—

Mr Pezzullo : If I'm not mistaken—and Mr Russo can perhaps rejoin me—the continuous survey relates to things like employment outcomes and access to welfare. I think it might even relate to—

CHAIR: The question is: is your thinking—

Mr Pezzullo : They're two different things—

CHAIR: It would be helpful if people listened to the question and answered the question.

Senator KIM CARR: Fancy that—getting a tutorial on how to answer questions!

Mr Pezzullo : You're asking me about a statistical metric.

Senator KIM CARR: We'll put that in that Sir Humphrey school as well, hey?

CHAIR: Perhaps I should intervene more. This is for senators to ask questions, not for officials to go off on tangents that they might be interested in. If we have senators asking precise questions, we should be able to get officials to answer questions precisely.

Mr Pezzullo : Mr Chairman, I will give a precise answer to the precise question I was asked. There is a statistical measure called a 'continuous survey' and there is a stakeholder consultation process. The two are not related. I'm sure that's quite a precise answer.

Senator KIM CARR: Thank you very much. On that issue, then, I can't seem to find any of the survey results on the department's website post 2011.

Mr Pezzullo : Again, I will need to be assisted by Mr Russo—

Senator KIM CARR: Is the department intending to release the survey results on its website?

Mr Pezzullo : I can't quite recall whether that's our series or that of the Bureau of Statistics. I will just need to be assisted in that regard. The relevant officer is at the table.

Mr Russo : Our apologies if the continuous survey is difficult to find on our website. We will make copies available to the committee.

Senator KIM CARR: Thank you, but this is not just of significance to the work of this committee. Why isn't it published on the website?

Mr Russo : I believe it is.

Senator KIM CARR: You think it is?

Mr Russo : I believe so, yes.

Senator KIM CARR: I see. That's good. Is it compulsory for the visa holders to participate in the survey?

Mr Russo : The way it works is similar to other—

Senator KIM CARR: Is it compulsory

Mr Russo : No, it's not.

Senator KIM CARR: Okay, thank you.

Mr Russo : Could I just quickly follow up?

Senator KIM CARR: You want to provide me with additional information?

Mr Russo : Yes. When the ABS sends out its labour force, census or other documents to collect statistical data, that is mandatory. As distinct from ABS surveys, the survey that we send out is voluntary. Its main purpose is to collect data so that we understand what's happening in labour force participation.

CHAIR: So the answer to the question is no, which you gave five minutes ago.

Senator KIM CARR: Mr Russo, how do you establish the integrity of the survey if you don't actually know that everyone is participating in it?

Mr Russo : Like with other surveys, we try to structure it in a way that is reasonably representative of the broader population. I can follow up and provide further information—

Senator KIM CARR: But you're satisfied that the sample is sufficiently representative, are you? That's the answer?

Mr Russo : Yes, particularly in looking at things like the skilled migration program.

Senator KIM CARR: This is particularly important given the question around labour market outcomes, which you're placing some emphasis on.

CHAIR: And the question is?

Senator KIM CARR: You are satisfied that the sample is sufficiently representative?

Mr Russo : Yes.

Senator KIM CARR: Thank you very much.

Senator WATT: I just want to come back to that report we were discussing before the lunch break.

Senator KIM CARR: You've got some answers for me, too, I believe.

Senator WATT: This is the report entitled Shaping a nation. I had a look at those figures we were talking about over the lunch break. I'm still trying to reconcile different numbers. Just to recap, that report said in the five years leading up to 2016 there was net jobs growth in Australia of 850,000 people, or thereabouts, and that—

Ms Dacey : Could you remind me which page that is?

Senator WATT: Of course I left the highlighted version in my office! But I will find it. I know it's fairly late in the report. It's the second paragraph on page 37. It says:

Migration has been critical to growth in the Australian workforce in recent years. Recent migrants accounted for two-thirds (64.5 per cent) of the approximately 850,000 net jobs created over the past five years … For full-time employment, the impact is even more pronounced—

CHAIR: The officer has the passage. What's the question?

Senator WATT: There are other people at the table who might be interested as well. So, full-time employment is 72.4 per cent. We talked about the proportion that was skilled visas, temporary visas, holiday visas. I'm interested to start by breaking down permanent versus temporary migration. So it was 850,000 net jobs created overall and that would have included migrants and non-migrants. Within the migrant component, which is two-thirds, what proportion, roughly, are temporary migrants and what proportion, roughly, are permanent migrants?

Ms Dacey : Senator, firstly, I don't feel that I could answer confidently. The stats I gave you this morning were to the best of my knowledge. I feel like anything now would be—

Senator WATT: One reason I was still a bit unclear after those figures was that the categories we talked about, I understood, to all be temporary categories, so what used to be called 457s are skilled temporary visa—

Ms Dacey : Yes.

Senator WATT: Working holiday visas, temporary visas.

Ms Dacey : Yes.

Senator WATT: And student visas, temporary visas.

Ms Dacey : Correct.

Senator WATT: Outside of those categories—and you gave me the figures for those—there are also obviously permanent migrants?

Ms Dacey : And there are other temporary visas as well.

Senator WATT: Apart from 457s.

Ms Dacey : Yes. They are the biggest ones. They are the major cohorts. There are 100 visa subclasses and there are actually others beyond those major cohorts that we were talking about which fall into the category of 'skilled temporary', and I don't have statistics on all of them.

Senator WATT: The number we were talking about before the lunch break was, roughly, 100,000 per annum of 457s. I think you said 120,000 last year, but you said to be safe, probably about 100,000.

Ms Dacey : I think I said 100,000, roughly, and reducing.

Senator WATT: And working holidays you said, roughly, 200,000 per annum?

Ms Dacey : Last program year, that's right.

Senator WATT: And students was, roughly, 343,000.

CHAIR: And the question is? You're just asking the same question.

Senator WATT: I'm trying to remind—

CHAIR: Mr Dacey said that she can't add any more.

Senator WATT: I know you're impatient. We will be here until 11 o'clock so just settle down and we'll get through it.

CHAIR: Yes, but there are other senators who have serious questions and not repeating questions they have already asked twice beforehand. Ms Dacey has told you that she has given you everything she can. If you have other questions she will probably take them on notice because she's told you all she can.

Senator WATT: Are you Ms Dacey? I didn't know that you were Ms Dacey. That's Ms Dacey there. She can answer the questions and if you stop interrupting me—

CHAIR: If you have questions, Senator,—

Senator WATT: I am trying to and you keep interrupting. Just settle down and we will get through it.

CHAIR: ask questions, please, don't make statements, and please don't repeat questions that you've already asked twice before.

Senator WATT: Are you finished? Are you finished?

CHAIR: If you don't have any questions, I will move onto the next program.

Senator KIM CARR: No, I want to finish mine.

CHAIR: We'll move to you then, Senator Carr.

Senator WATT: No, you won't. I haven't finished. You keep interrupting me.

CHAIR: Can you ask your question or move on.

Senator WATT: Of the 850,000, is it possible to give approximations? About two-thirds were migrants. Is it possible to give approximations of the split of that two-thirds which is temporary as opposed to permanent?

Ms Dacey : I don't know, Senator.

Ms Golightly : Senator, we would have to take that on notice, and then we would have to work that out.

CHAIR: As you were told five minutes ago.

Senator WATT: Please, Chair.

CHAIR: You were told that five minutes ago.

Senator WATT: The reason I think it's possible to work something out is that you have been able to give figures for some of the categories of temporary visas.

Ms Golightly : Yes, and if it's possible we'll take it on notice to see what's possible.

Senator WATT: For the relevant years that you gave me temporary figures for, what are the equivalent figures for permanent migrant numbers?

Ms Golightly : I think we gave you figures for the 2016-17 year—

Senator WATT: Yes.

Ms Golightly : and that included skilled migration—

Senator WATT: Yes.

Ms Golightly : which has a permanent component.

Ms Dacey : The migration program is all permanent.

Senator WATT: So, within those 100,000 per annum, some of them are permanent?

Ms Dacey : No, no.

Ms Golightly : No, that's the temporary.

Ms Dacey : No, we're confusing things, which is why I think taking it on notice might be helpful.

Senator WATT: Well, I'd be keen to get what you've got there now. If we're talking about temporary categories, the main ones are—skilled?

Ms Dacey : Skilled temporary, which was 457 and is now TSS, yes.

Senator WATT: And the number for 2016-17 was?

Ms Dacey : Just bear with me for a moment.

Mr Pezzullo : This has been provided.

Ms Dacey : It has.

Ms Golightly : Yes, we have provided it.

CHAIR: You've provided this before, today?

Mr Pezzullo : Yes.

CHAIR: So you're asking it again?

Senator WATT: Yes, I am.

CHAIR: If you want to waste a bit of time.

Ms Dacey : Senator, I don't have a precise program number. You'll recall that earlier this morning I kept saying it was a back-of-the-envelope one.

Senator WATT: Okay. Are there any other major categories of temporary visas which allow people to work in Australia?

Ms Golightly : We've given you the major categories.

Senator WATT: So the three that we've gone through are the major ones?

Ms Golightly : They are the major cohorts.

Senator WATT: And we worked out that about 600,000 of those in total were granted for 2016-17.

Ms Golightly : I think we said that those were the rough figures, and we've taken on notice to try and get you whatever we can in terms of more accurate figures.

Senator WATT: Yes. The number of temporary visas issued exceeds permanent migration visas?

Ms Dacey : In general terms, yes.

Senator WATT: Yes—because, even just across those three categories, we were talking 600,000 or so temporary visas in one year; there are nowhere near 600,000 permanent visas granted.

Ms Dacey : Correct. That's right.

Senator WATT: In fact, it's something like 150,000 to 200,000 per year, isn't it?

Ms Dacey : In permanent?

Senator WATT: Yes.

Ms Dacey : About 123,000 to 128,000.

Senator WATT: Okay, let's work with those figures. Again, I understand they're rough. The number of permanent visas granted in that particular year is about one-fifth the number of temporary visas. You said it was about 120,000 permanent versus 600,000 in just these three temporary categories, so that's one-fifth.

CHAIR: Well, what do you want the officer to say?

Ms Golightly : I'm not sure what the question is, Senator.

Senator WATT: I'm trying to work out some rough figures. Of those two-thirds of the jobs created that were driven by migration, is it a reasonable assumption that about a fifth of that number would be permanent migrants?

Mr Pezzullo : No.

Ms Golightly : No.

Senator WATT: Why not?

Mr Pezzullo : Just because the various temporary categories, including working holiday-makers and students, have got work rights, it doesn't mean that they're spending every hour of the working day working.

Senator WATT: No. Sure.

Mr Pezzullo : So you have to factorise. That's why Mr Russo, some time ago, took it on notice and will express back to the committee the methodology that factorises the relative proportions—say, in the case of students, how many hours students are working—because you've got to construct this from the bottom up. A student comes to Australia to study. They are then given work rights to assist whilst they're here. It doesn't mean that they're in full-time employment. If they're in full-time employment, that is actually not consistent with the terms of their visa.

Senator WATT: But where we got to before the lunch break was that Mr Russo said that it would be reasonable to assume that, just as about two-thirds of that jobs growth leading into 2016 were migrants, similarly, the one million jobs created over the last five years up to now would certainly be more than 50 per cent and likely to be in the same range.

CHAIR: And the question is?

Senator WATT: I'm just asking if that's correct.

Mr Russo : Well, as I mentioned earlier, that sounds about right, but I'd like to take it on notice in terms of just confirming those—

Senator WATT: If you could take on notice, then, what the proportion of the five-year figures is—

CHAIR: He just said he would.

Senator WATT: I'm just making sure that he's clear on what I'm asking.

CHAIR: I would have loved to have seen you in a trial, Senator Watt!

Senator WATT: I would have whipped you, that's for sure.

Mr Russo : If I could add just one other—

CHAIR: You'd never get out a question to the witnesses.

Senator WATT: No, not if I had a judge—

CHAIR: The judge would throw you out of court.

Senator WATT: who constantly shut me down in the way that you do.

CHAIR: You keep trying to give evidence yourself.

Senator WATT: Your problem is that you don't know whether you're the judge, the chair, the prosecutor—you're all over the place—and you don't let people have a fair go. That's why this committee blows out every single time we're in here. Mr Russo, are you clear on what I'm asking?

Mr Russo : Yes, I'm clear on that. That's fine. I—

CHAIR: He couldn't help but be clear; you've asked him five times.

Mr Russo : Can I—

Senator WATT: Well, you make me ask the question three or four times, so of course he's clear.

Mr Russo : I'll just confirm those numbers so that you have the most accurate figures. I'd also like to quickly note that those broad sets of analysis that you have been referring to, and the 800,000-plus, are all actually based on Australian Bureau of Statistics data, in terms of their detailed labour force data. In looking at the various splits that you referred to earlier, we'll do our best to give some figures or some numbers that are indicative, but it will not be perfectly aligned to the Australian Bureau of Statistics measures, which run off their own survey.

Senator WATT: Sure.

CHAIR: Your time is well finished, Senator Watt. Is there anyone else who has questions on 2.2?

Senator KIM CARR: Yes. You threw me before, Mr Secretary, when you said that I was in 2.3, because I've looked here on page 48 of your PBS, which clearly states that it's 2.2. There is a reference here in the chart which describes the new performance indicators for employment outcomes for visa holders. Is this the first time that the department has used this performance indicator, the labour market outcomes survey?

Mr Pezzullo : I don't know. Ms Cargill or someone else could assist, but I don't personally know. I'm not sure that I've misled you, in any event. You were asking about the streamlined visa system?

Senator KIM CARR: No. I was actually asking you about the labour market outcomes survey.

Mr Pezzullo : That is 2.2.

Senator KIM CARR: We agree we are on 2.2. Can I ask you to have a look at this table. It specifically refers to the targets.

Mr Pezzullo : I recall it. The question you asked was: is this the first time that measure's been expressed? I don't know the answer to that. It might be the first time. I just don't know.

Senator KIM CARR: Is there no-one here who knows that?

Mr Pezzullo : Ms Cargill might know is what I said. You might just take Ms Cargill directly to the measure.

Senator KIM CARR: This is page 48 of the PBS:

Labour market outcomes of surveyed migrants 18 months after arrival/visa grant as reported in the Continuous Survey of Australian Migrants …

And then there are a series of targets. Did you see that column there? Is this the first time that this performance indicator has been used in terms of employment outcomes for visa holders?

Ms Cargill : I'll need to go and check the 2016-17 measure.

CHAIR: The question is: is this the first time? You either know—

Senator KIM CARR: And the answer is, 'I'll have to check.'

CHAIR: If you don't know, you'll check. Okay.

Ms Cargill : I'll check.

Senator KIM CARR: If it is the first time, who's made the decision to put this indicator in? What are the consequences if you don't meet the target?

Mr Pezzullo : We'll take all of that on notice.

Senator KIM CARR: Thank you. Is there any consequence for the migrant? It's a departmental target, but is there a consequence for the individual migrant?

Ms Dacey : In an assessment sense?

Senator KIM CARR: In the sense that this target exists, does it have any implications for participants in the program? Mr Russo said that it's not compulsory that people participate in the survey.

Ms Dacey : Senator, it's not part of our program criteria, if that's what you're asking.

Senator KIM CARR: I'm just reading off your own PBS and I'm wondering what the knock-on effect is for the individuals who are directly affected by this.

Mr Pezzullo : It's a target for the department.

Senator KIM CARR: It is for departmental only? That's all. That's the question.

Mr Pezzullo : I'm just trying to think. I just can't see how it would flow through to a consequence for the migrant.

Senator KIM CARR: Okay. Do you use this Continuous Survey of Australian Migrants measure for any other aspect of the migration program or any other migrant settlement outcome?

Mr Pezzullo : It's one of the research inputs that the statistical staff use.

Mr Russo : I guess I'd say it's partly the other way round, in the sense that we're trying to track what happens downstream after migrants do—

Senator KIM CARR: Sure. So it has traditionally been used as a research tool. Would that be a fair description?

Mr Russo : To inform discussion and debate—

Senator KIM CARR: Yes. That's what a research tool is.

Mr Russo : and policy thinking, yes.

Senator KIM CARR: But this is the first time it's been used for an operational tool?

Mr Russo : I think we were going to check on that.

Senator KIM CARR: I know, but it strikes me that's the way it is being used in this circumstance. If so, why has it been used in this way? Thank you. You'll obviously take that on notice?

Ms Geddes : Yes.

Senator KIM CARR: Is immigration advice and application assistance appropriate to outcome 2.2?

Mr Pezzullo : Outcome 2.3, although I think that those are for refugee outcomes, so that's outcome 2.4.

Senator KIM CARR: So outcome 2.3, is it?

Mr Pezzullo : No, I misspoke initially. It's to support asylum seekers and the refugee determination process, so that's 2.4.

Senator KIM CARR: Okay. I think that concludes my questions for 2.2. Sorry, there is this other matter. You did indicate before your review of the arrangements in regard to regional qualifications for visa conditions. Will your assessment on that matter include whether or not there will be sufficient services available for visa holders in regional areas?

Mr Pezzullo : As I said to Senator Patrick, all of the feedback received through the public consultation process will be taken into account. I can't recall immediately—Ms Geddes will correct me—but I imagine that part of the response we would have got, plus our own research, would suggest that support services are important in terms of assisting new migrants to settle in regional and country areas. I'm sure that that will be a factor taken into account as we finalise advice for government.

Senator KIM CARR: You would have modelling already as to where these services exist, wouldn't you?

Mr Pezzullo : I'm not sure that we've had modelling. We consult with colleagues in relevant departments including infrastructure, regional development, cities and elsewhere. We have regular consultations with state and territory governments and the framing of the annual migration problem and the like. We undertook the research that's been mentioned several times today with Treasury. We would have an underlying evidence base, yes.

Senator KIM CARR: Is it seriously being proposed that you would indenture a visa holder to a specific employer?

Mr Pezzullo : (a) 'Indenture is a pejorative term, (b) we haven't settled the options that'll be put to ministers, and (c) they'll hear about it first from officials before anyone else does.

CHAIR: Which I think you've answered about ten times today.

Senator KIM CARR: Yes, that's right. I just want to be clear about that though.

Mr Pezzullo : No-one's going to be indentured to anyone as far as I'm concerned.

Senator KIM CARR: That would be the qualification that would require them to be linked to a specific employer.

Mr Pezzullo : I think that's a mistaken assumption, but it's best—through you, minister—for me to say that these matters are still in the policy development process, a process initiated in March 2017 by a decision of government. It's not yet concluded and the advice will go to ministers.

Senator KIM CARR: Thank you very much.

CHAIR: Does anyone else have questions on 2.2, Migration? Okay. Thank you to those officers involved with outcome 2.2. We now move to outcome 2.3. I have a number of senators here. I'll start with Senator Carr.

Senator KIM CARR: Perhaps you'll just give me a moment; I'll get my papers in order.

Senator MOLAN: Can I ask one simple question. The provisional period of permanent residence, is that what Senator Carr was talking about there?

Mr Pezzullo : He did refer to that, yes.

Senator MOLAN: That's another way of referring to the same thing?

Mr Pezzullo : A qualifying period or a period of provisionality.

CHAIR: I will go to Senator Molan first on 2.3.

Mr Pezzullo : Senator Carr, I specifically disabused you of that term.

Senator KIM CARR: That's right.

Senator MOLAN: Thank you. It would appear I've got the call. There are some potentially very good stories coming out of the views that you've got and the way that visas are being developed and we've had the same system now pretty well for 30 years. The reforms that you seem to be going through with, or at least are starting to go through with, have the potential to, as I think you said, simplify the overall system and to improve it at the same time. There are three areas that I'm interested in. The first one is the visa reform that does apply to attempting to decentralise and encourage people to move out of the biggest cities. I've certainly seen it—and I think you've just confirmed it—that that is referred to as a provisional period of permanent residence. I believe—

Mr Pezzullo : Well, it would be, if this is policy development—

Senator MOLAN: It would be if it came in, yes.

Mr Pezzullo : All subject to government decision.

Senator MOLAN: Absolutely. But we've gone out to consultation, I believe, at some stage, haven't we? What was the published response to that?

Mr Pezzullo : We gave evidence earlier, but I might get Ms Geddes to repeat the key features. There was a six-to eight-week public consultation period in the spring of last year. From memory, results were posted on the website, I think.

Ms Geddes : That's right.

Mr Pezzullo : And as I said to Senator Patrick earlier, specific design questions, whether it's provisionality, regional locations or how the incentive system would be developed to underpin those parameters, are matters that have now come back into the department for consideration. And as I've said several times today, final options will be put to ministers in due course and then it will be for ministers, having asked us to undertake the consultation process, to determine the way ahead.

Senator MOLAN: How is it different, then, than what we've got? At some stage—we can encourage people to go out into the regions, but a period of time until they get permanent residency.

Mr Pezzullo : Ms Dacey referred to the current arrangement, in relation to which I think she might have said words to the effect that there's no firm incentive to abide over the duration of the visa to the regional skill vacancy that you originally filled. So obviously, without pre-empting government decision-making, we're looking at how incentives, as opposed to disincentives, might be created.

Senator MOLAN: Good.

Mr Pezzullo : But I'd prefer to not go into more detail than that. It's really a matter for ministers.

Senator MOLAN: That's fine. Thank you. Am I correct in saying that the last major visa change was 30 years ago?

Mr Pezzullo : In terms of the introduction of the points system, that goes a little bit further back past that. There was a major rewrite of the Migration Act, which was largely to do with the administrative decision-making process in the late eighties. Dr Johnson's probably been in this game longer than most of us, notwithstanding his very youthful appearance. But this would probably be the most significant set of changes in terms of what's been proposed through the policy consultation paper—quite a significant set of changes. But I'd be loath to compare them with earlier periods, because the government hasn't settled whether it's going to proceed in this direction at all. So, I'm not sure what it is that we're comparing it with.

Senator MOLAN: Certainly. But even I remember Systems for People—a project that the previous Labor government brought out. I think it was going to cost $700 million. Do you see any of the product of Systems for People within the department?

Mr Pezzullo : Systems for People is on a slightly different tangent. If I may, it's more about visa management—that is to say, what are the decision-support tools, what are the databases, what are the case management systems, the identity systems? Some of these have been touched on already. Yes, it is the case that that project was roughly in that order of magnitude of cost. Not all of it was successfully delivered. There is an ANAO report that I would refer you to in that regard. But elements of the capability were successfully deployed, the ANAO found, not to the full extent of the project value. And I would describe, in fairness to that project, that some of the antecedents to our case management, risk management, analytics and identity management systems had their genesis in Systems for People, and they have been built upon greatly with some of the other measures that I spoke about earlier. But that's really about the technology, the automation, the intelligence-driven decision-making system to manage each individual application rather than per se the structure of the visa system itself. In other words, how many visas do you have? Do they have conditions attached or not attached to them? Do you have some visas that relate to regions, for instance? That's about policy design. Systems for People or the system that—

Unidentified speaker: Did you speak about this yesterday?

Mr Pezzullo : Briefly. The system that we're currently discussing with industry, through a structured process—as was discussed yesterday, for probity reasons there's some limitation on what we can say. It's really about engaging with industry, about whatever the visa framework you have—whether you have 100, five, two or 1,000 visas—how you manage the an applications in an era where: a) people have high expectations about digital; b) where volumes are pressing; c) where resources are always going to be constrained; and d) to the point about risk factors that Senator Carr asked about, you're dealing with more complexity because you're getting applications from places that perhaps you haven't traditionally seen before, and you're getting many more sources of information through intelligence databases than you've ever had before. So how you pull all those pieces together in a system sense is really the process that Ms Golightly is leading.

Senator MOLAN: Is going through now?

Mr Pezzullo : I don't want to mislead you—it is complementary with the policy redesign work that Ms Geddes is doing, but what Ms Golightly is doing is really on the system side.

Senator MOLAN: Did I hear correctly that 42 million visas are processed, issued, gone through each year?

Mr Pezzullo : They're travel movements.

Senator MOLAN: Okay.

Mr Pezzullo : The visas are north of eight million.

Ms Golightly : Nearly nine million.

Senator MOLAN: Nine million?

Mr Pezzullo : Inclusive of New Zealand travel. New Zealand travel is visa on arrival. If you include those numbers, it's touching nine million.

Senator MOLAN: The last point I would like to inquire into is: you have established call centres. Have you got someone who could—

Mr Pezzullo : Ms Golightly.

Ms Golightly : Yes, senator.

Senator MOLAN: How many new jobs? It's South Australia, I think?

Ms Golightly : The successful tenderer for the call centres is a company which is based in South Australia. I'd have to take on notice whether we have any information about how many extra staff they have employed. But that contract is in the process of being transitioned in and they'll take over the full operation of the call centres on 1 July this year.

Senator MOLAN: Good. Did you pull jobs back from overseas? Were you using overseas call centres previously?

Ms Golightly : We weren't using overseas call centres as such. We have staff, as you know, posted all around the world, employed by the department—

Senator MOLAN: But not in a call centre capacity?

Ms Golightly : They were taking inquiries, and running call centres, but they were staff employed by the department or the Commonwealth.

Senator MOLAN: Okay. Thank you very much. That's all I have.

CHAIR: Thank you. Senator Molan. Senator Carr has a question.

Senator KIM CARR: I was wondering, Mr Secretary, yesterday—this goes to a program right across all the outputs that—you indicated to me yesterday that you were going to provide information about the IBM contract. What's happened to that?

Mr Pezzullo : The information?

Senator KIM CARR: Yes.

Mr Pezzullo : I'll just check with the chairman because this takes us back to corporate. I wanted—

Senator KIM CARR: It is across all the programs, so it affects this one.

Mr Pezzullo : Quite likely, but I'm seeking guidance which I think I'm entitled to do.

CHAIR: What was the question?

Mr Pezzullo : It was about the enhancement to our, if you will, IT backbone or infrastructure.

CHAIR: And how it relates to visas?

Mr Pezzullo : In part, yes.

CHAIR: Well, if it relates to visas—

Mr Pezzullo : We can do it? Excellent. Thank you. Mr Franzi is here. He's got that data for Senator Carr that was asked yesterday.

Senator KIM CARR: Thank you.

Mr Pezzullo : Senator Carr, for the benefit of members, you asked about the budget measure in 2017-18 to expend $130 million on the purchase of both hardware as well as software, licences and the like to enhance our data capability.

Senator KIM CARR: That's right. Thank you.

Mr Pezzullo : You asked about the breakdown of that program.

Senator KIM CARR: That's right.

Mr Pezzullo : Mr Franzi was sent away to do some homework. I'm told that he's completed his homework.

Senator KIM CARR: Thank you very much.

CHAIR: I think there was some discussion yesterday whether we dealt with this in visas or corporate.

Senator KIM CARR: All I want to know is the information—not where it be dealt with.

Mr Franzi : Senator Carr, good to be with you again.

Senator KIM CARR: Sure it is!

Mr Pezzullo : Don't speak too soon.

CHAIR: No need to tell lies!

Mr Franzi : We've got some detailed information. It breaks up into about eight line items, but I'll hand over to the acting CFO who will go through line by line—

Senator KIM CARR: Do you have it written up in a table?

Mr Franzi : We have got a table.

Senator KIM CARR: Would that be able to be tabled?

Mr Franzi : Yes.

Mr Pezzullo : Not before I've had a look at it.

CHAIR: This is one of the problems with senators insisting that we have an answer tomorrow.

Senator KIM CARR: I don't think this—

CHAIR: You've just indicated that—

Senator KIM CARR: I've asked for a table. If the secretary wants to have a look at the table, I don't think there's anything improper in that.

CHAIR: I think the secretary, as one could well appreciate, wants to know what goes out of his department. And he relies on his officers, but the buck stops with him.

Senator KIM CARR: He can read out the table. He can show the secretary. What I want to know is how much and what sort of detail—in my notes now—and whether or not you're going to hand me a table. I mean, it's not—

Mr Pezzullo : Could I have a quick look?

CHAIR: It may be that Mr Franzi isn't in a position to answer the questions because he—

Senator KIM CARR: He is in a position to answer the question; he's just indicated that.

CHAIR: Until the department or head ticks off on things, from my understanding, and yours, Senator Carr—you're occasionally a minister—

Senator KIM CARR: Yes, I have been, for considerably longer than you, if I recall!

CHAIR: You were a minister for six years.

Senator KIM CARR: Yes, I was.

CHAIR: I was a minister for nine years, so—

Senator KIM CARR: Not in the cabinet, though.

CHAIR: Oh, gee! Oh, wow! You're so important, Senator Carr! Nine years—and you've had less than six, as I recall.

Senator KIM CARR: Is the table available?

Mr Pezzullo : I've asked the officers to highlight certain key facts from the table and to provide the committee with an abbreviated, summarised version of it, which can be prepared over the course of the rest of the afternoon.

Senator KIM CARR: Thank you. What's the information?

Ms Cargill : Of the two largest components of the $130 million, the first relates to IBM. We have actually placed an order for software expenditure of $17 million and hardware expenditure of $1.163 million, and that's placed under the department's existing IBM licensing software and services agreement. And the hardware expense will be procured from the DTA commercial off-the-shelf software and hardware panel, and that's an open procurement.

Mr Pezzullo : Ms Cargill, could you just explain what DTA is.

Ms Cargill : The Digital Transformation Agency. They have responsibility for whole-of-government ICT arrangements.

The second major component is with Teradata. This consists of $69 million capex and $28 million opex for procurements and extension of the existing data warehouse and analytics platform, which provides a high-reliability capability to support critical business and intelligence services. We've placed an order under the department's existing Teradata deed of agreement, and the Teradata deed of agreement was a limited tender for specific Teradata software and services.

Senator KIM CARR: Thank you. Would you have the dates for the placing of those orders?

Ms Cargill : Certainly. The IBM contract order was executed on 15 May and Teradata—

Senator KIM CARR: Sorry, that was 15 May this year?

Ms Cargill : That's correct. And Teradata was on 17 May this year.

Senator KIM CARR: One was a limited tender and the other was just the contract extension—is that right?

Ms Cargill : We actually placed an order on an existing agreement, which was established by a limited tender.

Senator KIM CARR: When did you go to market for the IBM contract?

Mr Pezzullo : The original one.

Ms Cargill : The original? I don't have that information. I will take that on notice.

CHAIR: Senator Carr, I thought this was related to visas; it's clearly not. If you've finished—

Senator KIM CARR: It's the whole program.

CHAIR: Are you finished?

Senator KIM CARR: Yes, I am—I get your point. If I could get the table, I'd appreciate it. Thank you.

CHAIR: Secretary, can I clarify: you've taken that on notice; you're not tabling anything now?

Mr Pezzullo : Correct.

CHAIR: Sorry. I don't care what you do, but just be clear. Which is it? Are you tabling it?

Mr Pezzullo : The version that I glanced at was far too detailed, as far as I'm concerned. A summarised version would be adequate to answer the senator's questions.

CHAIR: So you'll take it on notice? It's not being tabled? That's all I'm asking.

Senator KIM CARR: The secretary said it would be available this afternoon.

Mr Pezzullo : Yes. It can be prepared and be available by the dinner break.

CHAIR: When it's ready, can you hand it to the secretariat, who will distribute it to committee members.

Senator KIM CARR: Thank you very much.

Mr Pezzullo : Thank you, Chair.

CHAIR: Senator Hinch, thank you for waiting so patiently.

Senator HINCH: I have a question for Senator Fifield. This morning we saw Minister Dutton give us the latest on the athletes who overstayed their welcome after the Commonwealth Games. The minister said there were about 195 or 200 who had come in and there were another 50—not 20, but another 50, some of them from Cameroon—who have not been seen since. Have you got any update on them, at this stage?

Senator Fifield: I'll ask officers of the department if they can provide anything additional.

Senator HINCH: Mr Secretary, of the 195 or 200 that you or the department are aware of, can you run us through the process of what happened there? Have they turned themselves in or have they been tracked down? What happened to the first 200?

Mr Pezzullo : I will refer, principally, to Ms Golightly's evidence of yesterday. In summary, persons who came in under a visa 408 subclass, which was a dedicated visa for the Commonwealth Games, we issued 8,000-plus—didn't we?—

Ms Golightly : We issued 13,681.

Mr Pezzullo : over 13,000 that related to athletes, coaches and staff et cetera. Because we have a border management system, we know who has come in and who has left. So the difference is the number of, if you will, overstayers. Once their 408 visas expired on 15 May, at midnight, a number lodged protection claims. They went to Legal Aid and other sources of assistance and they lodged claims. Ms Golightly's evidence yesterday was to the effect that about 205 such claims have been received. The remaining difference—that is, of the one's who've gone home, you add to that the protection claims—the difference—

Ms Golightly : And other visas.

Mr Pezzullo : Or applied for other visas, the difference is some 55. They are now unlawfully in the community.

Senator HINCH: Stay for a minute with the first 200. Minister Dutton said this morning the Australian people will not be taken for a ride over this. You have 200 people. Are they all seeking protective visas?

Mr Pezzullo : Those persons have lodged applications for various types of visas, principally protection.

Ms Golightly : It's 190 protection visas. The total is 205. So, yes, 15 other visas.

Senator HINCH: Does it occur to be a mite strange, to the department, that these are people who have been selected to represent their country at a major sporting event yet are too scared to go home?

Mr Pezzullo : I work in the immigration field. Nothing is strange, Senator. But keep it in perspective too. We issued over 13,000 visas. I think it's fair to say the organising committee and other stakeholders felt that it was a very successful games. I think Mr Dutton's also on the public record—I've seen his remarks, which are quite apposite here—that it's the cost of or the price of doing—

Senator Fifield: The transaction cost.

Mr Pezzullo : The transaction cost—thank you, Minister Fifield—of hosting such a prestigious event that brings prestige and economic benefit, in this case, to the Gold Coast. The fact that some 250 persons did not leave in accordance with their stipulation has to be kept in perspective against the 13,000-plus visas that were issued.

Senator HINCH: I accept that. The 200 who sought protection visas, are they now released—that's the wrong word—into the community, free to wander around and do what they like, and are they like any other citizen?

Mr Pezzullo : Unless there is an exception that Ms Golightly will remind me of, they are abridged. They are issued with what's called a bridging visa. That allows them to stay in the community. I refer you to her evidence of yesterday. Those who are unlawful, which is the other category, are not on any visa by definition and they are the subject of attention from the ABF, which Mr Dutton has also spoken about.

Senator HINCH: Of the 50 who are out there, if they are tracked down, by the AFP, I presume, and Border Force—

Mr Pezzullo : No, the Border Force.

Senator HINCH: are they put straight into detention or are they also processed and given bridging visas?

Mr Pezzullo : It does depend on the circumstances. I don't want to cut across the ABF operational planning but, if they have no lawful reason to be in Australia, they will be removed.

Senator HINCH: They will be taken straight to a detention centre and be removed?

Mr Pezzullo : In the most efficient manner. In some cases, if the ABF can take them straight to a plane, they will. Otherwise, it will be via a detention centre.

Senator HINCH: As the minister said this morning, with legal aid and pro bono lawyers, the other 200 could be here for a year, couldn't they?

Mr Pezzullo : It is the case that between internal review, administrative merits review, ultimately, judicial review, some of these cases can take a very long period of time, yes.

Senator HINCH: A final question: does the department take any responsibility for maybe encouraging these people to stay here? In the Commonwealth Games in 2006, a Cameroon weightlifter overstayed his welcome, was given a visa and represented Australia at the 2012 Commonwealth Games. If you are from Cameroon, wouldn't you think, 'I'm going there, because I can stay and I may represent Australia eventually.'

Mr Pezzullo : The incentives to stay in Australia are many and varied. It could equally be said that if you're a spin bowler coming to Australia you might get favourable treatment, too. There are many different incentives that people have. We treat all applications on their merits. We assumed that people who were credentialled by their national governing body to be representatives of their country were going to do just that. Out of 13,000-plus people, 250 decided to not do that.

Senator HINCH: Your department is entitled to be sceptical of people who say, 'I want a protective visa, yet I was safe enough to train with my country, to be picked by my country, to travel to my country, and then say 'I'm too scared to go home?

Mr Pezzullo : Every decision will be taken on individual merits. The circumstances of whether a person can demonstrate a well-founded fear of persecution, which speaks to the point you have just made, will be considered in each and every case individually.

Senator HINCH: Thank you.

Senator GRIFF: My questions relate to the privatisation of the visa processing system.

Mr Pezzullo : I'm not familiar with that reference, Senator, so you'll have to be a bit more precise.

Senator McKIM: He's rejecting the categorisation of it as privatisation.

Senator GRIFF: The proposed visa processing system.

Mr Pezzullo : The creation of a global digital platform for visa processing.

Senator GRIFF: My office has received quite a number of calls from Home Affairs employees expressing concern about their jobs and about the security of the proposed new system. That indicates to me that it has been poorly communicated or that some staff have considered it to be poorly communicated to them. What exactly is being communicated to staff to date?

Mr Pezzullo : Ms Golightly can speak to the detail of staff communications. On the two key issues that have been raised, first of all in relation to security, there is probably no department that's more focused on the application of national security in the area of border management than my department. I can assure you of that. If the department wasn't focused on it, we have a government that very much is. We don't need to be reminded in that regard.

Secondly, I gave evidence on this yesterday, as did Ms Golightly, so I'm not going to repeat it other than to say that all decision-making would be reserved to Commonwealth officials. All the intelligence data, all the data itself would be held by the Commonwealth and nothing would be placed in the private sector that would relate to the security function. So that fear is not well-founded at all. I know it's something that's been projected and in some cases used for other purposes.

In relation to employment, our intention is to create a circumstance in which, through automation of the business process around volumes which are massively increasing—if not in double digit rates for most visa categories, it's certainly high single digits—we would release staff to do more value-added work such as intelligence, risk assessment, biometrics, identity matching and the like, and determination of complex cases where human intelligence is more properly applied, as opposed to routine business processing where artificial intelligence might be better suited. Ms Golightly, on the question of staff engagement and communication, perhaps you might care to add to my answer.

Ms Golightly : We have very regular and ongoing engagement with staff. The key messages there are exactly flowing on from what the secretary has just said. We face increasing volumes. They are increasing in double digits. Indeed, they are expected to increase by 50 per cent over the next 10 years. We talk regularly with staff about how we meet that demand, particularly in an environment of limited resources. We also talk to staff a lot about where we are in terms of market engagement. As we said in evidence yesterday, we were asked to discuss and consult—to work with the market—on what might be possible. So we keep them regularly informed about where we're up to with that engagement. We also talk a lot with staff about how we might design any new system, whether that be the system in its broader sense—work processes and procedures—as well as IT systems. Of course, they are very familiar with it and deal with it day-to-day, so we're very keen to get their input on what is a good design.

Senator GRIFF: How many staff are actually employed in visa processing?

Ms Golightly : In visa processing it's, I think, just under the 2,000 mark. I'll stand to be corrected on that.

Senator GRIFF: Will any be made redundant, or would they be given other tasks?

Ms Golightly : Sorry, I didn't hear the beginning—

Senator GRIFF: Will any be made redundant out of that 2,000 as part of this process?

Ms Golightly : There are absolutely no decisions yet that government has made about whether, in fact, this proposal will go to market. What we've been asked to do is engage with the private sector to see what might be possible in terms of service provision, and decisions around the future of those proposals are yet to be made.

Senator GRIFF: But part of that proposal will be a reduction in staff or possibly seconding people, I would imagine?

Ms Golightly : As the secretary just mentioned, in fact what we would aim to do is have our staff work on much higher value added tasks, first and foremost. The secretary gave some examples where, instead of the routine processing of transactions, they would be engaged in more value-added work. Without any decisions being made yet by government, anything around staff reductions et cetera would be speculation.

Senator GRIFF: However, your intention is—subject to any decisions taking place—that you would redeploy the people and not lay people off?

CHAIR: Senator, there is a rule against hypotheticals, and you're just demonstrating the reason for that. Until it happens, it's all speculation. You questions may be relevant next estimates, but this is the difficulty when officers are asked to speculate on what hypothetically might happen and might not happen. It just makes it very difficult.

Senator GRIFF: Hypothetically, Chair, we have a system that may or may not be running.

CHAIR: Hypothetical questions are not really relevant to the 2018-19 budget because no decision's been made. That's the difficulty. I know people like to speculate but it makes it very difficult to answer questions when it's all hypothetical. That's why the rule is that there shouldn't be hypothetical questions.

Senator GRIFF: Are there any feedback processes in place for staff in relation to the possible change of systems?

Ms Golightly : The short answer is yes, but Mr Kefford may be able to give some more detail. Certainly any of the discussions, meetings and forums we have with staff are interactive forums and staff are very much encouraged to, and do, provide their advice and input. I've witnessed that and been involved personally, as have Andrew and other senior staff in the department.

Mr Kefford : One of the key elements to which the secretary and Ms Golightly have already referred is the co-design process that we are conducting at the moment. To deliver the benefits of that we've established two teams comprising staff from across the department as well as the two potential providers. We are working through, in great detail, the proposed way in which the new service model might be delivered. One of the features of that, though, is that, on a regular cycle, a wider group of staff from across the department are invited to attend presentations and ask questions and test and extend the thinking of both those teams.

Another key process will be happening in the next short while. Over the next couple of weeks, for the second time since the original market consultation paper was released in the middle of last year, we'll be conducting a series of consultations and briefings in the state offices for the department so that we're able to share the work that's going on and also take advice from the front line, as it were. Indeed, as part of the co-design process, we have actually taken teams down to our Hobart processing office to get a sense of what that looks like and that allows a two-way exchange. There's an ongoing and structured process to ensure that staff are both made aware of what's happening but also have the opportunity to contribute the benefit of their expertise.

Senator GRIFF: Mr Kefford, at an industry briefing you said the department was 'keen to explore commercial value-added services that will assist in attracting people to Australia'. Can you elaborate on what type of commercial value-added services you are looking at or would consider?

Mr Kefford : Certainly. Ms Golightly has just reminded me, of course, to contain the discussions to what we can properly say within bounds of the probity of the process. Nevertheless, the model that we have sought to explore through the market consultation and engagement process is one where the global digital platform, so the work flow engine, as it were, is privately funded, maintained and built. One of the features that sits around that, though, is testing, again, the market's interest, capability and capacity to explore, in conjunction with the formal sovereign function of the visa decision-making, whether there are opportunities to connect applicants to other services that might add to the experience of them travelling. Simple examples of that would be things like travel bookings for tourists. More complicated ones that we're starting to explore are things like connections to government licensing for people who are coming in on a work visa, for example, or perhaps connections to other service providers, be that accommodation or other things in Australia, so separate to but associated with the applicant's purpose for coming to Australia.

Senator GRIFF: Have you undertaken an estimate as to how much revenue you think would be generated through these commercial value-added services?

Mr Kefford : Not at this point, because the whole process, as I have described, of the engagement we're currently undertaking is to test, primarily of course, the capability of potential providers to deliver the core platform and the capability that's required to support our decision-making. Then around that as part of the overall commercial model, we are, as I say, testing and exploring what sorts of services might be able to be added with the overall goal of seeking to enhance the attractiveness and competitiveness of Australia as a destination across those key visa applicant classes that support our key export industries.

Senator GRIFF: Thank you. I have just one last question, Chair. I will actually go back to the same topic in a moment, but I would just like to refer to Budget Paper No. 2, which states, 'Government will improve the targeting of visas for general practitioners to areas of doctor shortages.' Can you talk me through how this arrangement will work? Will there be a specific visa or will visa approval be contingent on the GP's intended location?

Ms Geddes : Sorry, Senator, could you say that again? Sorry.

Mr Pezzullo : It's a new policy, Senator, or a variation on a visa policy, so it's Ms Geddes and her group.

Senator GRIFF: Ms Geddes, it's just the statement that's in the actual budget paper which says that the government will improve the targeting of visas for general practitioners to areas of doctor shortages. Is this a specific visa or will visa approval be contingent on the GP's intended location?

Ms Geddes : I'll take that on notice and get back to you, Senator.

Senator GRIFF: Okay. Thank you.

CHAIR: Thanks, Senator Griff. We are 15 minutes late but we will go to afternoon tea now.

Proceedings suspended from 15:43 to 16:03

CHAIR: I call back to order the Senate Legal and Constitutional Affairs Legislation Committee and its inquiry into the 2018-19 budget in the Home Affairs portfolio. We're dealing with outcome 2, currently with visas, and Senator Griff, who just had some questions, tells me he has one more question and then he'll leave us alone for a little while. That's an incentive to allow him to go back and ask the final question.

Senator GRIFF: Thank you, Chair. Mr Kefford, going back to our previous discussion about the commercial value, I have a couple of questions. Are you considering, as part of this, identifying sales opportunities and serving ads, if you like, or would you be directly connecting businesses through links perhaps—connecting the person that's applied via links?

Mr Kefford : As I was describing in my previous answer, we're in the process of testing and exploring various options that providers may be able, and willing, to attach to the core platform service. Certainly the focus is on where we can add the most value. That would lead us down a path of connections to service providers or sources of information rather than straight up and down advertising, but at the same time no options are in or out in that space because we're exploring.

Senator GRIFF: Will you pass data to these entities if people give you permission? If you are directly connecting them, will you pass data that you have onto these other entities?

Mr Kefford : Again, this is one of the things we are testing, but there will be a clear separation between the platform, which is the sovereign function supporting the visa decision-making, and an invitation for the applicant to connect or be connected to these other services.

Senator GRIFF: But if the applicant gives you permission—

Mr Kefford : It will be a permission based connection piece. That is the current thinking. But, again, we're continuing to test that concept.

Ms Golightly : And, of course, everything has to abide by privacy rules.

Senator GRIFF: Of course. Thank you.

Senator WATT: How many ministerial interventions has the minister made since becoming the responsible minister?

Ms Golightly : There have been 523 cases referred to the minister so far in 2017-18 for his consideration, with 377 visas being granted as a result of ministerial intervention.

Senator WATT: How many of those interventions have related to subclass 600 visas?

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

Senator WATT: That's tourist visas, isn't it—subclass 600?

Ms Golightly : I'll check that, but I'm pretty sure that's right. There are so many classes of visas!

Senator WATT: There are. You are probably aware of an instance that has had some media coverage. On 17 June 2015 Minister Dutton intervened to grant a subclass 600 visa for an individual arriving at Brisbane Airport. Are you aware of this case? This is a young woman who came in on a tourist visa and there was some suggestion she'd be working as an au pair.

Ms Golightly : I'm vaguely aware, yes. I'm not across the full details of the case, but we wouldn't be able to talk about individuals anyway.

Senator WATT: Sure. I have quite a few questions about this case, but I'm absolutely not interested in finding out the individual's name. I respect her privacy.

Ms Golightly : It's all other details, not just their name.

Senator WATT: I take it, Ms de Veau, you know something of the background to this case.

Ms de Veau : Yes, I'm aware of the AAT decision in relation to the FOI claim.

Senator WATT: Great. Without identifying the individual concerned, why was this person's visa cancelled at the airport on arrival?

Ms Golightly : Without going into the particulars of the case—

Mr Pezzullo : Senator, I'm not sure how we can answer in a way that doesn't identify particulars by speaking to particulars. It's paradoxical.

Senator WATT: But that question asking why an individual's visa was cancelled doesn't in any way identify that individual.

Senator Fifield: It's not just an issue of whether an individual is named or not; it's speaking to an individual case, which officers at the table aren't really in a position to do.

Senator WATT: I'm not sure if that's right. We have had two other people arrive at the table. They may very well know some details.

Mr Pezzullo : I have no idea why they have arrived at the table, but the minister has—

Senator PRATT: They probably do!

Mr Pezzullo : They might well, Senator. I will determine the sequence of advice given by officers of my department. This is a matter that Minister Dutton has spoken about in the House. It's never been raised with me. I'd prefer to seize myself of the facts first before I contemplate giving any kind of information to this committee, probably on notice. In any event, most of it I would refer to the minister.

Senator WATT: Why? So you want to claim a public interest immunity?

Mr Pezzullo : No. I said I'd like to seize myself of the facts of the case.

Senator WATT: There have been many other situations today in which officers with knowledge of policies or individual situations have given evidence and—

Mr Pezzullo : In this case—I stated quite clearly and I'll restate it—a minister of the Crown has given advice to the House of Representatives; I'd like to have a look at what he said and I'd like to look at the facts of the case, and then I will determine whether the department can possibly add to the store of knowledge that this committee has of the matter.

Senator WATT: The minister was prepared to talk about it in the House, but you say now that we can't ask questions about this instance?

Mr Pezzullo : I'd like to hear your questions. As I said, I'm going to hear your questions and seize myself of the facts.

Senator WATT: It has been widely reported that ABF officers, on her arrival in Australia, suspected that she intended to undertake paid work on a tourist visa and that would obviously put her in breach of that visa. Is it your understanding that's correct?

Mr Pezzullo : I said I don't know; I'm going to seek facts.

Senator WATT: Can you seek those facts from the officers who are here, please?

CHAIR: Mr Pezzullo, what I think you're saying is you will take it on notice and, if necessary, you'll make a claim for public interest immunity.

Mr Pezzullo : As required, yes.

CHAIR: I'm sorry—I wasn't listening—is this referring to Senator Di Natale or Mr Dutton?

Mr Pezzullo : Mr Dutton and the so-called matter of the au pairs.

CHAIR: Senator Di Natale, I thought, was in the same situation. I wasn't listening, so I wasn't sure which one you were talking about.

Senator Fifield: If it assists the committee, chair, I might share a statement that the minister issued on 26 March, where he said: 'I refer to a report published in various media outlets today, authorised by Lisa Martin of AAP. Through her questions to my office and her published article, she seeks to suggest that decisions I have made as minister have been to my personal or family's benefit, in particular in relation to the employment of an au pair. I categorically reject those inferences. Ms Martin was provided with direct responses to that effect in September 2016 but she continues to publish material which suggests otherwise or contains inferences of impropriety. For the wider record, I do not know personally know the individuals concerned, nor does my wife. They have never been associated with us in any way. We have never employed an au pair. In my capacity as minister, I have never acted outside the ministerial code of conduct. In my capacity as minister, I have intervened in hundreds of cases to either grant or cancel visas. I take this responsibility extremely seriously. I'm particularly proud of my record of cancelling the visas of criminal motorcycle gang members, serious criminals and child sex offenders. Should Australian Associated Press or Ms Martin wish to allege I've used my ministerial office for personal gain, then they should do so and face the consequences, rather than seeking to peddle inferences which are untrue.

CHAIR: That seems pretty clear.

Senator WATT: Nothing I was going to ask was going to imply otherwise.

Senator Fifield: I thought that would be helpful context.

Senator WATT: That was one of the things that Mr Pezzullo wanted to hear before he could answer questions, so it is useful that he's heard that now. I repeat: did ABF officers suspect that this individual intended to undertake paid work on a tourist visa?

Mr Pezzullo : I will take that on notice.

Senator WATT: Surely, if there's officers here—

Mr Pezzullo : I will take that on notice.

Senator WATT: Can you let me finish my question?

Mr Pezzullo : Indeed, Senator. But—

Senator WATT: Surely, if there are officers here who have that information which has been reported, you could just lean across and get that information.

Mr Pezzullo : I'll take it on notice.

Senator WATT: How did ABF officers come upon this information that this individual intended to undertake paid work on a tourist visa?

Mr Pezzullo : I'll take it on notice.

Senator WATT: Did she inform ABF officers of that intention, or did they become aware of this through their own investigations?

Mr Pezzullo : I will take that question on notice.

Senator WATT: Why is it that, at every stage, the blanket is thrown over questions about this incident? As you well know, there's been a very long-running FOI application that has been resisted by your department for some time now, refusing to provide details. I'm now asking questions which I reckon could be answered by people in this room, and you're taking them on notice. Why the cover-up?

CHAIR: That is not an appropriate question of officers—suggesting there's been a cover-up. Perhaps it's a question that should go to the minister.

Senator WATT: Okay, Minister, why the cover-up?

Senator Fifield: Well, I reject your assertion, Senator Watt.

Senator WATT: Why is it that we can't even ask whether ABF officers intended this person, who we don't know the identity of and have no intention of asking the identity of, intended to undertake paid work?

Senator Fifield: You can ask the question, through the chair, which you have done, and it's been—

Senator WATT: Mr Pezzullo hasn't even made any attempt to ask his officers whether they have that information here.

Senator Fifield: It's been taken on notice.

Senator WATT: Why is it that, in other instances today—

CHAIR: That's not an appropriate question.

Senator WATT: Can you wait and hear my question? Why is it that, on many occasions today and yesterday, Mr Pezzullo, you have asked your officers for information which you have then provided or you've allowed them to answer questions, but the minute we get anything close to the minister, the shutters go up?

Mr Pezzullo : In relation to the issuance of an individual visa, I'm not sure I have lent across and asked anyone anything.

CHAIR: You've asked the question, it's been taken on notice and you will get a response.

Senator WATT: Let's see if you can answer this. We all know that the end result of this case was that the minister intervened and granted a visa, after some involvement of the minister's office. If—

Mr Pezzullo : You say, 'we all know'—I don't know that. I'm going to look—

Senator WATT: That's on the public record.

CHAIR: And I don't know that.

Mr Pezzullo : What? In a newspaper report?

Senator WATT: Yes.

Mr Pezzullo : I think the minister made clear his view of the approach been taken by that journalist and you heard that statement read out by the minister at the table.

Senator WATT: No. This is what you did yesterday. What the minister rejected was any implication that this au pair was his own family's, or that his family sought to gain. The minister did not—

Mr Pezzullo : Or known to him.

Senator WATT: The minister did not reject the assertions that he intervened—because he did—or that his office was involved.

CHAIR: Mr Pezzullo said he will take it on notice.

Senator WATT: So, my new question—which I haven't yet asked—is: forget about this case, in any other case, if a minister didn't intervene, what would happen to an individual at—

CHAIR: That is a hypothetical.

Senator WATT: What is the law—

CHAIR: That's asking for legal opinions. You're a lawyer. You know how to ask questions. You're the only chair who does this, of all the committees.

CHAIR: Perhaps I'm the only chair who is correct.

Senator WATT: What would happen to an individual who arrived in the country on a tourist visa who intended to work? They'd be deported, wouldn't they?

Mr Pezzullo : In general terms—

Senator WATT: In general terms, they would be deported.

Mr Pezzullo : their individual case would be assessed at the border.

Senator WATT: And, if they were found to have an intention to work on a tourist visa, they would be sent back home. Right?

Mr Pezzullo : Anyone who lacks a lawful right to enter the country does not enter the country.

Senator WATT: It is correct to say that in this case the minister granting this person a visa prevented them from being returned to their point of origin. That is a logical fact.

Mr Pezzullo : I'm not going to speak about this case. In general terms, the moment someone is rendered to be lawful, they can enter the country.

Senator WATT: How many other individuals in similar circumstances—who have entered on a subclass 600 visa, a tourist visa, but where there is a suspicion that they will undertake paid work—have been deported or sent back home?

CHAIR: We want you to have the exact number now on the spot!

Mr Pezzullo : I will take it on notice.

Senator WATT: It's perfectly reasonable. Ms Golightly took a question before on notice about the number of interventions for subclass visas.

CHAIR: Mr Pezzullo said he will take it on notice.

Senator WATT: Thank you. How many other individuals in similar circumstances—who have entered on a subclass 600 visa but where there is a suspicion they will undertake paid work—have been allowed to stay as a result of ministerial intervention?

Mr Pezzullo : I'll take that on notice.

Senator WATT: How did this case come to the attention of the department to put a brief to the minister?

Mr Pezzullo : I would need to take that on notice. I don't know.

Senator WATT: Is there else anyone here who can answer that?

Mr Pezzullo : I will take it on notice.

Senator WATT: It feels like a cover-up.

CHAIR: Just ignore that.

Senator Fifield: That reflects on the department, which is not appropriate, Senator Watt.

Senator WATT: Well, Mr Pezzullo has made no attempt to find out answers to any of these questions—

CHAIR: Do you have a question?

Senator WATT: This comes after a long-running FOI battle to extract information that his department has resisted.

CHAIR: Do you have a question?

Senator WATT: Who within the department was first contacted in relation to this case?

Mr Pezzullo : I'll take that on notice.

Senator WATT: Was it you?

Mr Pezzullo : I can answer that one very directly. The answer is no.

Senator WATT: What involvement did you have in this case?

Mr Pezzullo : None.

Senator WATT: So you weren't contacted by anyone at the Brisbane Airport?

CHAIR: He's just said that.

Mr Pezzullo : No.

Senator WATT: I want to step through the potential—

CHAIR: Your time's finished, anyhow, Senator. I'll go to another senator. Senator Martin?

Senator WATT: You're getting cranky as the day goes on, aren't you?

CHAIR: If you had to put up with the stupid questions that are asked by colleagues who should know better—

Senator WATT: What an excellent display of your impartiality, Chair.

CHAIR: There are some senators who should be able to ask a question clearly.

Senator WATT: I have asked several questions, and most of them have been taken on notice.

CHAIR: You have failed the test every time. My colleagues and most of the crossbenchers can at least ask a question. You seem to be incapable of doing it.

Senator WATT: Excellent impartiality, chair.

CHAIR: I would have loved to have seen you in a court of law—you would have been thrown out by now.

Senator MARTIN: Secretary, I didn't quite hear your definition of 'visa processing privatisation' as you called it, as I see from my notes. Has your department undertaken a staffing impact analysis, should your department seek assistance?

Mr Pezzullo : Was the question pertaining to staffing impacts?

Senator MARTIN: Yes.

Mr Pezzullo : I refer you to the evidence given to Senator Griff.

Senator MARTIN: Do you know how many staff in Home Affairs in Hobart undertake short-term visa processing?

Mr Pezzullo : I don't personally, no. It might be a matter of detail that we'd need to take on notice.

Ms Golightly : We will take that on notice.

Senator MARTIN: I presume you will take this on notice as well: how many public servants in other states undertake short-term visa processing work?

Ms Golightly : We will take that on notice.

Senator MARTIN: If private companies successfully bid for this public service work, how many jobs would you estimate or could you estimate may or may not be lost in Hobart, or redirected or retrained?

Senator Fifield: I think that question was posed earlier. It's hypothetical, because it assumes the government may make a decision. Government has not made a decision, so officers can't speculate.

Senator MARTIN: I take that point, Minister. Surely with budget estimates, the budget is hypothetical as well?

Senator Fifield: The budget is based on a range of inputs.

Mr Pezzullo : And approved programs.

Senator Fifield: And approved programs.

Senator MARTIN: At this stage you also can't guarantee that no Tasmanian jobs would be lost in the public service as a result of this process?

Mr Pezzullo : We'd refer you to the evidence given earlier to Senator Griff's question. It wasn't particularly about Tasmania, I grant, but the same principles apply.

Senator MARTIN: I am specifically interested in Tasmania.

Senator WATT: Mr Pezzullo, you said you weren't contacted by anyone from the airport. By the way, I remember that you and your officials were quite happy earlier today to take questions about the individual family in Biloela in Queensland that Senator McKim was asking questions about. There wasn't any issue there about sharing details of an individual case. Why is this one different?

Mr Pezzullo : Because in that case the facts pertaining to a so-called—I have to remember Senator McKim's phrase—a raid that somehow curtailed—I'm trying to remember accurately and faithfully events from a day and a half ago—a raid that somehow curtailed their legal rights of access, the suggestion there being that we had somehow curtailed their legal rights. The commissioner and I were keen to set that to rights, that no such curtailment of lawful rights had occurred.

Senator WATT: Wouldn't you in this case want to take the opportunity to assure the public that there's been absolutely no wrongdoing by the minister in this case either?

Mr Pezzullo : We can easily refer—Minister Fifield has very helpfully—

Senator WATT: Sure, and I accept what the minister—

Mr Pezzullo : in the minister's statement—

Senator WATT: I accept at face value what the minister is saying, that there was no personal connection to his family. I'm not disputing that. But there continues to be questions about this case because it does seem to be an unusual one. I want to give the minister—Minister Dutton—the opportunity to demonstrate that there isn't anything funny that's gone on here.

Mr Pezzullo : The minister has made a statement on the record to the House of Representatives. He understands full well his obligations in that chamber in terms of providing accurate information to that chamber. I'm sure that he's taken every opportunity available to him as a minister in the House to so clarify the record. I think you heard that repeated earlier by the minister at the table.

Senator WATT: Of the—

Mr Pezzullo : But, if it helps, you're seeking to give him some kind of additional opportunity to speak to this matter and I suppose we could refer it to Mr Dutton to see if he has anything further to add.

Senator WATT: Mr Pezzullo, were you involved in preparing, reviewing or approving any brief that went to the minister on this matter?

Mr Pezzullo : Personally, no.

Senator WATT: Is it common practice for you not to be involved in a brief to the minister about ministerial interventions?

Mr Pezzullo : We grant eight million visas per annum. How many visas were—

Senator WATT: But ministerial interventions?

Mr Pezzullo : the subject of MIs?

Ms Golightly : There were 523 cases.

Mr Pezzullo : Over what time period?

Ms Golightly : That's just this year to date.

Mr Pezzullo : Calendar year or financial?

Ms Golightly : Financial.

Mr Pezzullo : So, it sounds like our run rate is 10-12 cases a week. No, I don't review them.

Senator WATT: So it's not common practice for briefs requesting or commenting on ministerial interventions to go through you?

Mr Pezzullo : Not through me. Every brief that's given to the minister is copied to me.

Senator WATT: Okay. So you got a copy of this brief?

Mr Pezzullo : I would imagine so, but even that I would have to take on notice and check.

Senator WATT: Okay. But you don't recall approving the brief?

Mr Pezzullo : No, I certainly did not approve any such a brief.

Senator WATT: Again, I think it's been reported that this case was referred to the department from the minister's office. Is it common that the minister's office refers requests for ministerial intervention to the department?

Mr Pezzullo : Well—

Senator WATT: As opposed to them coming into the department and then going up—

Mr Pezzullo : Understood. I will answer in general terms. Under the act, the minister has a set of powers that are articulated in the act. Those most relevant here are nondelegable. Persons approach the minister of the day to exercise those non-delegable powers in all manner of ways. Sometimes they approach the office directly, sometimes they do come through the department and sometimes members of this parliament raise matters. What other avenues and vehicles are there, Ms Golightly?

Ms Golightly : There would be correspondence to the office and that sort of thing.

Mr Pezzullo : That goes into the minister's office?

Ms Golightly : Yes.

Mr Pezzullo : As distinct from correspondence to the department?

Ms Golightly : As well as that.

Senator WATT: In one of the media reports about this—I think it was in The Australian on 19 May, an AAP article—one of the quotes was: 'AAP understands that the au pair made a phone call to a contact while detained at the airport and was 'quickly' granted a new visa which allowed her to lawfully enter Australia.' Who did this person call to facilitate the grant of the ministerial intervention?

Mr Pezzullo : I have no knowledge of those circumstances and particulars myself, so I will take it on notice.

Senator WATT: Again, I accept that there's no connection to the minister himself. Is it correct that a Liberal Party contact of the minister received a call from the au pair, or made a call to the minister's office, which facilitated this intervention?

Mr Pezzullo : I have no idea. My understanding of this matter is going to be limited, once I've reviewed the material taken on notice, to what my department did, who contacted the minister's office and how information comes to be put before the minister. As I said in my previous answer, it is not solely through the department, but I'm not going to confirm, deny, speculate or infer that that reporting is in any way accurate.

Senator WATT: But you will take my question on notice?

Mr Pezzullo : Yes. And, to the extent that the department is in possession of relevant facts, I will review that on notice and provide it to the committee on notice.

Senator WATT: Was the call that was made to the minister's office which facilitated this ministerial intervention made by a person who was known to the minister or to the minister's office?

Senator Fifield: I think Mr Pezzullo's already indicated that he doesn't have any knowledge in relation to these matters. Certainly I don't, and I can't attest to the veracity of what you are asserting.

Senator WATT: Sure. Could you take that question on notice though, Mr Pezzullo? You don't have those facts to hand, but I'd appreciate it, given the number of other questions you've take on notice.

Mr Pezzullo : Insofar as it relates to a chain of events that I have, generally, taken on notice. But otherwise, I'll refer to my previous answer.

Senator WATT: In providing a brief to the minister which outlined his options—potentially, to intervene or to not intervene—what steps were undertaken to ensure that this person met all the terms of the tourist visa, in particular, there being no intention to work?

CHAIR: Well, Senator, you're asking questions where Mr Pezzullo already says that he has no personal knowledge—

Senator WATT: I haven't asked him that question.

CHAIR: But he said he has no knowledge, and you're asking if he's done this or the other. He's taken the questions on notice and he'll get back to you.

Senator WATT: Well, he can't take a question on notice if I haven't yet asked him that question. Can he?

CHAIR: Well, you're asking him who did this and who did that.

Senator WATT: Yes.

CHAIR: Well, he doesn't know. He's already told you he doesn't know.

Senator WATT: Who else do you propose that I ask? He's the secretary of the department.

CHAIR: Okay. But he can't answer. He's taken it all on notice and will get back to you.

Senator WATT: Did you take that last question on notice, Mr Pezzullo?

Mr Pezzullo : As I said in my earlier answer—because you had already asked me about how it came to be the case that the minister was seized of these facts, received advice from the department and, it is said, intervened; I don't know the truth of any of that—I can't attest to any of that. I have taken the entire chain of events on notice.

Senator WATT: Yes, insofar as I've asked you questions. I do have some other questions relating to this incident, and I suspect you're going to take them on notice, but I need to ask them before you can take them on notice. Is that right?

Mr Pezzullo : I suppose so. I'm not—you've asked me a question of procedure, it's probably not one for me.

Senator WATT: Let's keep going. Was this individual granted a subclass 600 visa with special work rights?

Mr Pezzullo : That's another matter that I'll need to look at and take on notice.

Senator WATT: And in a general sense, if someone is granted a subclass 600 visa without special work rights, it would not be legal for them to work in Australia, would it?

Mr Pezzullo : If the visa doesn't have work rights attached to it, then they can't work.

Senator WATT: Was any compliance check undertaken on this particular case to ensure that the person didn't work after the grant of their visa?

Mr Pezzullo : Consistent with my previous answers: as to the extent to which the department or the Australian Border Force has played any role in this matter, I'll look at it, and look at it as part of having taken the question at large on notice.

Senator WATT: Well, let's not be tricky here.

Mr Pezzullo : I beg your pardon?

Senator WATT: I'm asking specific questions that I'd like answers to either here or on notice. So please don't come back to me in a few weeks time and say that you've answered the question at large, and not answer the specifics.

Mr Pezzullo : I've taken that specific question on notice.

Senator WATT: Thank you. In a general sense, what compliance activities are undertaken by the department to ensure that people granted a subclass 600 visa without work rights do not then go on to work in a general sense? What do you do?

Mr Pezzullo : That really relates to the larger, visa compliance and enforcement program of which the commissioner and I spoke yesterday. There are a range of targeted activities, as well as activities that are undertaken when matters come to light. I can provide—as part of the not general but the particularised response to you on notice, I can describe those general procedures at that point.

Senator WATT: In a case of ministerial intervention, when a visa is granted, is it correct to say that a condition can be imposed on that visa that specifically states that the holder must not engage in paid work?

Mr Pezzullo : It's a discretion. If the discretion is available under the law, then it can be so attached. But I might just check, and you're asking at the level of general application—

Senator WATT: In a general sense.

Mr Pezzullo : Without commenting on this case, Ms Golightly, what's the answer to the senator's question?

Ms Golightly : It's as you stated, Secretary: the minister can make a special condition on the visa.

Senator WATT: Did that happen in this particular case?

Mr Pezzullo : Again, we're back to the specifics, so we'll take it on notice.

Senator WATT: Sure, thank you. I think this is a different question to what I've asked already but similar. How many other times has the minister intervened to grant a visa for a person who indicated they intended to work illegally in Australia?

Mr Pezzullo : I can't imagine that anyone would be granted a visa to work illegally.

Senator WATT: No, someone who had indicated an intention to work illegally on arrival.

Ms Golightly : Every case is looked at on its merits. There is a difference, I would imagine, between someone stating they were going to work illegally versus an assessment made about their genuineness. But that's a general comment.

Senator WATT: Again, if these reports are true—and that's an 'if'—then this person entered the country, indicated an intention to work and nevertheless was granted a visa following ministerial intervention So I'm interested to know how many other times that has occurred.

Senator Fifield: Can I just say that the department hasn't attested to the veracity of anything within that.

Senator WATT: No, I said 'if those reports are correct'.

Senator Fifield: I just thought it important to emphasise that the department hasn't attested to that.

Senator WATT: Yes. You'll take on notice, though, how many other times that has occurred?

Senator Fifield: When you say 'other', you're implying—

Senator WATT: Well, how many times has this occurred?

Mr Pezzullo : Has what occurred?

Senator WATT: Someone has entered the country on a tourist visa, indicated an intention to work and has ended up remaining in Australia because of ministerial intervention to grant them a visa.

Mr Pezzullo : Without suggesting that that's occurred in this case, we'll look at that question on notice.

Senator WATT: Thanks.

CHAIR: Is the question on how many times people been granted visas, even though they've told the officer, 'I'm going to work illegally'? Is that the question?

Senator WATT: Yes. According to these media reports, that's what occurred here.

Mr Pezzullo : We'll look at the question of whether a person states—I'm not commenting on this case—'I intend to work.' If a person says, 'I intend to work illegally, that is'—

Senator WATT: I suspect they don't use the word 'illegally'!

Mr Pezzullo : That's the way you've been describing it, so we'll look at it in terms of where a person indicates an intention to work, potentially contrary to the conditions of the visa upon which they've entered. I'm not commenting on this case at all; we'll look at whether there are instances where discretion has been exercised in those circumstances.

Senator WATT: How much has the department spent on legal fees in relation to this case since June 2015?

Mr Pezzullo : It won't go to the specifics of the determination process, but it does go to a matter that I think has been in the tribunal for a period of time. Perhaps this is something that Ms de Veau can assist you with.

Senator WATT: Yes. Ms de Veau was just out of the room, but she's now back, so she might be able to join us.

Mr Pezzullo : The question related to fees legal fees, I think, pertaining to whatever—is this a merits review?

Ms de Veau : No, it was an AAT decision in relation to an FOI decision.

Mr Pezzullo : So the FOI pertained to this particular—

Ms de Veau : There were two cases.

Mr Pezzullo : And it related to the so called granting of the visa to the au pair?

Ms de Veau : Correct.

Senator WATT: My question is: how much has the department spent on legal fees?

Ms de Veau : I don't have that information to hand, but I can take it on notice.

Senator WATT: Thanks.

Mr Pezzullo : Is that matter concluded?

Ms de Veau : The matter is concluded, with a win—

Mr Pezzullo : Did we win?

Ms de Veau : for the Commonwealth, yes.

Mr Pezzullo : Oh, we won. Good.

Senator WATT: That is why we are using the estimates process. Since this intervention, how many times and on which dates has the minister been briefed by the department about this case?

Mr Pezzullo : The case in the tribunal?

Senator WATT: Yes.

Mr Pezzullo : We have regular reporting to ministers, plural, about the state of play of litigation. Ms de Veau, can you assist at all in this regard?

Ms de Veau : I can indicate that, as you said, Secretary, there are regular reports in relation to the litigation that goes to the minister's office. I wouldn't be able to say with any certainty on how many occasions this matter was reported to his office.

Senator WATT: Could you take that on notice for us. More broadly, talking about this case, since the granting of this visa, are you aware of the minister having been briefed on the circumstances of this individual at any point?

Mr Pezzullo : I don't know if a visa was granted. I have seen press reports that you've referred to, about which I've heard the minister speak in the House. I don't know that any visa was granted, so I'll look at that as a matter of fact. With that qualifier, sorry, your question—

Senator WATT: How many times has the minister been briefed about circumstances relating to this individual since what we understand was the granting of a visa?

Mr Pezzullo : I'll take it on notice to the extent that, if there have been press reports, for instance, and the department, for instance, has prepared talking points that speak to the veracity or otherwise of the reporting, or its truth or falsity otherwise, it might fall within the ambit of the classification of 'briefings to the minister'.

Senator WATT: I'm happy for you to define it as you wish.

Mr Pezzullo : Sure.

Senator WATT: As you mentioned, there was another instance on 1 November 2015 in which the minister apparently intervened to grant a different subclass 600 visa to a different person. Are you aware of this case?

Mr Pezzullo : I don't think I mentioned anything about the first—

Senator WATT: I think Ms de Veau might have mentioned that there were two cases.

Mr Pezzullo : Are there two cases?

Ms de Veau : There are two cases. The FOI decision related to two cases.

Senator WATT: I think the minister might have actually referred to a second case in his own statement—Minister Dutton, this is.

Senator Fifield: I'm not aware.

Senator WATT: How did this case come to the attention of the department in such a way that it then put a brief to the minister?

Mr Pezzullo : I think we're just going to restart the production line.

Senator WATT: If you can take that one on notice. In these sorts of situations, where someone arrives, there's a question about their validity in staying here and a visa is granted on a fairly quick basis, how is the department assured of the usual health, security and character requirements that go with the granting of a visa?

Mr Pezzullo : You're asserting, as a matter of fact, that visas (a) were issued and (b) were issued quickly. I don't know that to be the case. Consistent with the other visa—I think we're on a second one now—I'll look at the facts, take your question on notice and see what I can assist the committee with.

Senator WATT: I won't go through the full line of questioning for the first instance, but for the second case, which apparently occurred on 1 November 2015, could you please take on notice: who made representations to the minister or the minister's office on behalf of this person; were they known to the minister or his office; what steps were undertaken by the department to ensure that the visa was granted with integrity and that the minister did not know the individual he was granting a visa for. In either of these cases, was any advice provided to the minister that granting a visa to either of these individuals was high risk because of their intention to work in breach of that visa?

Mr Pezzullo : Consistent with my responses to your first line of questioning, I've taken on notice and will take on notice questions that relate to the activities and actions and decisions of the department and the Border Force. Those questions, which you intimated again are of interest to you in the second case and which relate to the minister's personal knowledge, who made representations, who rang his office, I'll refer to the minister. They're properly questions that the minister should consider.

Senator WATT: Finally, were either of the individuals in these cases previously counselled for breaching work restrictions, and, if so, on how many occasions?

Mr Pezzullo : Again, I'll look at the facts of the matter, insofar as they're known to the department, and I'll take that question on notice.

Senator WATT: Thanks. That's it, Chair.

CHAIR: I just have a couple of very short questions. The 457 visa—and we did go through this last time—has been replaced by what? Can you just remind me.

Mr Pezzullo : The 457 visa class is now closed. It's been replaced by a two-tier temporary visa. Ms Golightly and Ms Geddes can speak to the detail. In short order, in April last year, a two-year visa renewable once for another two years—two-plus-two, let's call it—for specified skills vacancies was introduced. That visa does not have a pathway to permanent residency; you can't apply for permanent residency. For shorthand, we'll call that the two-plus-two visa. The temporary skills shortage visa, or the TSS, is for a period of four years. Like its predecessor, although it's set on a narrower base of skills that are said to be in short supply, that does have a permanent pathway to permanent residency insofar as after three years you can make an application for permanent residency on the four-year visa. So the first one is two years plus two years, non-renewable; you have to go home. It's for shorter term skills shortages. With the four-year visa—'medium term' is the phrase we use internally—you come here and, ordinarily, you have to leave at the end of the four years unless you've made an application for permanent residency.

CHAIR: And, for these visas, you have to fit into a category that has been determined by regulation?

Mr Pezzullo : There's an instrument, which Ms Geddes and Dr Johnson can speak to, whereby the Department of Jobs and Small Business—the former Department of Employment—does the principal work. They look at the data; they look at skill shortages across Australia including by sector, by region and so on and so forth; and they determine a so-called skills shortage list. They provide that list, if memory serves me correctly, under the instrument to the Minister for Jobs and Small Business—in this instance, Minister Cash—who then makes a recommendation to the decision-maker, who, under the instrument, is the minister for immigration and also the Minister for Home Affairs, Mr Dutton. He holds a dual appointment.

CHAIR: So if I or anyone—and many people approach me with this—wanted to put a submission to the government that they've got it wrong or they haven't included their interest in a worker, the job that that worker would have in the category, then their submission goes to the small business minister rather than the—

Mr Pezzullo : If it pertains to skills that are said to be in short supply, that is a matter principally for the Department of Jobs and Small Business.

CHAIR: Not for Mr Dutton?

Mr Pezzullo : No.

CHAIR: I guess it then follows that the estimates questions on those are for that portfolio rather than this one.

Mr Pezzullo : Questions of, 'Do we need welders or chefs or persons to work in hospitality?' are principally a matter for the Department of Jobs and Small Business. We collaborate, obviously, but they prepare the advice. That advice—correct me if I'm wrong, Ms Geddes—goes in the first instance to Minister Cash.

Ms Geddes : That's right.

CHAIR: My question was: can I raise it in this estimates or would you say go and see—

Mr Pezzullo : If it pertains to the shortage of skills, that's a matter for the other department.

CHAIR: Okay.

Mr Pezzullo : Once the home affairs/immigration minister receives the advice, he signs off and says, 'Yes, these skills are in short supply.' We then administer the program.

CHAIR: So if I wanted to ask you: 'Does it appear to be working well? Do people seem to be happy? Do you have any many complaints that some people can't engage'—I'll call them backpackers, but it probably fit the short-term category you spoke about—that's not a matter for this estimates?

Mr Pezzullo : Principally, it's for the other department. I can say that we had a 12-month transition period from the time the government announced the transformation in April 2017. They gave us 12 months to introduce the new scheme. I can speak directly about what this department was advised by stakeholders but, principally, our colleagues in Jobs and Small Business would say the same: some sectors felt—I think it's fair to say, Ms Geddes—that too many categories were taken off; that is to say, they couldn't find Australian based or Australian workers for those categories. Other industries felt that perhaps it could be said that too many foreign workers were coming in. There was a variety of views, and some of this was played out pretty visibly through the press. Is it worth me asking Ms Geddes to add to that answer?

CHAIR: No, I was really only after the broad answer. Some people approach me in my role as a senator for Queensland and say, 'We can't get workers; they're not in the skilled category.' In fact, there was one I should've written to Mr Dutton about—as to why this category wasn't put in—but I'm glad I didn't, because it would've been the wrong person. It's Mr Laundy I should write to, is it?

Mr Pezzullo : The cabinet minister is Minister Cash.

CHAIR: Okay. I think that's all I had. Are there no other questions on visas?

Senator PRATT: Yes, I've got two or three questions on visas. There's been some discussion of these issues already this evening, so I'll try not to traverse the questions that at least two of my colleagues from other parties have asked. I'm seeking to understand better and interrogate some of the assumptions on the global digital platform—what it means and some concepts in the program—and to understand where it's up to. I understand, as you've said, that you've not yet made a decision to send this work to the private sector.

Mr Pezzullo : The government hasn't.

Senator PRATT: Yes, I beg your pardon.

Mr Pezzullo : We're preparing advice for government.

Senator PRATT: But you're doing the preparatory work for that decision. Is there any money in the budget for this work or for upcoming tenders?

Ms Golightly : In the 2017-18 budget, last year's budget, we received funding over four years of $185.4 million.

Senator PRATT: So, $185.4 million. Goodness, that's a lot of money!

Mr Kefford : The composition of that amount—

Senator PRATT: Yes, please.

Mr Kefford : There was net funding for the reform market engagement process of $40.5 million. There was $14.6 million for ICT capability upgrades within the department.

Senator PRATT: Something you'd probably need to do anyway.

Mr Kefford : And the balance of the spending on that then was $19.8 million net for the telephone call centre outsourcing process, which Ms Golightly referred to earlier in the day. The balance of the $180 million comprised a deferral of savings that were in the budget to align with the wider path of the then intended course of reform.

Senator PRATT: Sorry, can you explain to me what that means.

Mr Kefford : There were existing savings in the budget that were moved to align with the work that we're now doing. There was $95.4 million in what you might characterise as new spending on those three categories, and the balance was an adjustment of the timing of other savings to be achieved in the delivery of business.

Senator PRATT: These are savings in the forward estimates that will be attributed to the implementation of this program in the future?

Mr Kefford : That was separate. The $90 million was pre-existing; that was from the 2016-17 budget, as I understand.

Senator PRATT: Are there any savings in the budget attributed to the future implementation of this program?

Ms Golightly : No, not to the global platform because there is no decision—

Senator PRATT: It hasn't been a government decision.

Ms Golightly : Yes. Of course, the department continues to improve its efficiencies.

Senator PRATT: My understanding is that the global digital platform is your architecture, and then you've got two potential partners?

Mr Pezzullo : Two potential partners.

Senator PRATT: Does the global digital platform belong to one of those partners or is it yours?

Mr Pezzullo : It's ours. That's our description of the Commonwealth program.

Senator PRATT: Okay, I just wanted to clarify my own understanding of that. We've been through, today, some of the steps in the implementation of this program, specifically as it relates to staff but also partly in relation to a market consolidated paper and a request for expressions of interest. Can you briefly explain the steps in that paper and the request for expression of interest?

Ms Golightly : I gave evidence on this yesterday, about the different phases of the request for expression of interest. Briefly, the first phase was a discussion paper and then the release of the expression of interest itself. We had many companies respond to that. The first phase then was to assess those proposals and claims made by the companies, to short-list to a smaller group, where we put through a second phase, which was testing them with a range of different scenarios which replicated different parts of the visa process.

Senator PRATT: So you've done some of that scenario-testing?

Ms Golightly : Yes.

Senator PRATT: Can you give me some examples of the scenario-testing you've done?

Ms Golightly : It would have gone to things like different types of visas to be processed or—

Senator PRATT: Did the scenario-testing include scenarios where you might be matching, for example, tourism or education or coming in to access health treatment—the combination of those scenarios? That's part of what you're aiming to combine, possibly, in the expressions of interest that have gone forward.

Ms Golightly : I'm not entirely sure I follow the question, sorry, but these scenarios—as, actually, Mr Kefford gave evidence earlier today—first and foremost are trying to test the capacity, capability ideas that various market players have around, first and foremost, the processing of visas. Then there may be other value-added services on top of that. So the scenarios—

Senator PRATT: Okay. I think I do understand now. For example, you might be able to use analytics. I'm trying to work out how you would have ideas for assessing a visa that are different to what the department does already. Clearly you're not seeking to change the criteria.

Ms Golightly : Of course not.

Senator PRATT: So you have to have a system in place that makes the same decision that the department would otherwise make.

Ms Golightly : We are looking for a system that will assist with the processing of visas against the criteria set by the law of the day. So there are any number of different technical but also workflow-type solutions that may get you to that result.

Senator PRATT: Where that workflow algorithm—

Ms Golightly : It could be, yes.

Senator PRATT: Which might be outsourcing, in your mind, a particular component—a company might do all the offshore work of ID checks or something, to streamline something, rather than it being done by individuals. Is that what you mean?

Ms Golightly : At the moment, we already have some commercial partners that help with different parts of the process. This is looking at how we could possibly use technology and other innovations to assist the department to make visa decisions and manage the process from the application being lodged through to the department making the decision to grant or not grant.

Senator PRATT: I think I understand what you're saying. I don't expect you'll be able to tell me, but when do you expect to put a recommendation to the minister?

Mr Pezzullo : In due course.

Senator PRATT: In getting to that point in time, in due course, what is the estimated cost to the department in wages, consultancies, advertising, travel, roadshows, expressions of interest?

Ms Golightly : The financial information that Mr Kefford read out before—I think it was the $40.5 million figure over several years—is the budget we have for that work.

Senator PRATT: And how much have you spent to date?

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

Senator PRATT: Okay. There's been some discussion today of concerns about the existing jobs of people who do this work. Have you done any modelling about the impact on the workforce?

Mr Pezzullo : We'd refer to our previous answers, particularly to Senator Griff.

Senator PRATT: Which were that it will have an impact, but you're not sure how specifically?

Mr Pezzullo : No. No, the evidence that we gave was that, subject, of course, to decisions of government, our preference would be to retrain, redeploy and—

Senator PRATT: Yes, I heard that part.

Mr Pezzullo : have our public officials work on higher value-added tasks.

Senator PRATT: Essentially, though, you're saying you don't know yet whether all of the existing staff would be deployed to other tasks or whether some people would still be doing this work.

Ms Golightly : I think I gave evidence—I'm pretty sure I gave evidence—that to say anything would be speculation ahead of—

Mr Pezzullo : That's right.

Ms Golightly : government's decision. I should also note this is of course a 10-year program, so—

Mr Pezzullo : I think we've stated it as such in the discussion papers, have we not?

Ms Golightly : We have, yes.

Senator PRATT: So you're not ruling out redundancies specifically at this point, but you are saying you want to put people on other work. I can't imagine you will be more specific. We've covered—

Mr Pezzullo : Noting that it's likely to be a 10-year program of very significant transformation, it's simply impossible to speculate at this point what the year-by-year employment impacts will be—other than to say that, wherever possible, even if you can automate a routine process and assign artificial intelligence to undertake that process, your better asset is the judgement, intuition and intellect of your human intelligence—

Senator PRATT: That's right.

Mr Pezzullo : and you use that intelligence for that purpose.

Senator PRATT: How can you be sure, though, that you're not outsourcing those decisions that should be made by people within this process?

Mr Pezzullo : Because there is an overriding parameter that no decisions will be taken, other than by public officials, in relation to the grant or denial of a visa.

Senator PRATT: Okay.

Mr Pezzullo : I will give you a practical example. It goes back to Senator Macdonald's question about trying to target or be very precise in how you address skills shortages in one part of Australia and not take a blunt instrument to it. If you have an automated decision support system, you could have an algorithm that is constantly looking for the applications that most suit the need at the time. For instance, we need welders in one part of Australia but we need chefs elsewhere, and we don't particularly need a whole lot of people to go into the outer suburbs of some of our larger cities. If I can state it perhaps too simply, Senator, you and I would agree that you could get a whole lot of humans and paper files in a room, untie the ribbons, open the applications and say, 'Welder keen to live in the lovely parts of WA,' from which you come, or the lovely parts of Northern Queensland from which the chair comes, and a whole lot of humans could stack those files. Now, you could waste a lot of human time doing that, or you could have a very smart machine triage the applications in an instant and throw to the top of the decision pile—not for decision, but to the top of the decision conveyor belt—the applications that are most in tune with our requirement to get the best and brightest into the places and locations and jobs that we want them in.

Senator PRATT: Yes.

CHAIR: Senator, do you have a lot more?

Senator PRATT: No, I don't. I've got perhaps two more—actually, three more, but they're short. I'm sure you're aware of the anti-privatisation campaigns being run by concerned workers and their unions. Has there been an impact on workforce morale, and, if so, how you're managing that?

Mr Pezzullo : There was evidence given earlier about staff engagement and ensuring that staff provide feedback. My only anecdotal addition to that evidence is that, when I visit different parts of the department, officers who are not only comfortable with technology but sort of immersed in it—it's part of their own lives—are very much looking forward to having, frankly, more sophisticated tools available to them at work than perhaps is currently the case. In some cases, in a reversal of decades-long practice, you probably have more functionality in your private devices than you have sometimes in mass public sector systems that require periodic injections of very significant capital.

Senator PRATT: Has there been an impact on workforce morale?

Ms Golightly : I think the other issue in terms of morale is we need to do something to address the increasing volumes because that, with limited resources, possibly also has an impact on morale.

Senator PRATT: I appreciate there are a range of issues that impact on morale. You've highlighted what you would characterise as the positive ones from this project. You've highlighted the impacts on morale of the current technology and the current systems. Are there concerns from your workforce in relation to the outsourcing of this work? Are those views being expressed in the kinds of meetings and consultations that you're having internally?

Mr Pezzullo : Mr Kefford, what have you picked up in your discussions?

Mr Kefford : Secretary, we're seeing—as you might anticipate with a significant change program—there's a range of responses, from the very positive ones that you've described, to people who are more concerned. This comes back to the sorts of engagements that we were talking about before. One of the things I didn't mention is there's a regular program of formal engagement with our national staff consultative forums through their industrial arrangements, and I briefed that body, I think it was only last week. I think what we are trying to do is hear the concerns, understand the concerns as they're expressed, and then provide information, in the context as we have been discussing with you this afternoon, where we are part way through a process of exploring what might be possible.

Ms Golightly : And we've had extremely good staff engagement with that, which is a positive.

Senator PRATT: Can I ask if there's been an increase at all in the number of staff accessing the Employee Assistance Program?

Mr Pezzullo : That's not really in Ms Golightly's program.

Senator PRATT: I guess you wouldn't actually know, if they're confidential, for what reason someone's accessing it.

Mr Pezzullo : I think, on a de-identified basis, quite separately—and just alerting the chair to the fact this is probably more a matter for corporate—there are certainly reports that de-identify the cases, and the Employee Assistance Program providers do provide general advice on why; not why people are specifically accessing service, but the kinds of trends that they're seeing.

Senator PRATT: I can put that on notice. Can you take that on notice in the context of corporate? In your role as secretary, have you met with the union or concerned workers to explain what is happening and the progress? I appreciate you have been engaging through the workforce, and through the workplace itself, but have you met with the unions specifically?

Mr Pezzullo : The answer to the first question in relation to the unions is no. The answer to the second question: I've not come across, if you like, a formed group of concerned workers, but I do meet with my workers, I have my offices where I have town hall meetings, and I visit, particularly state and territory capitals where a lot of the processing work is undertaken, and I'm constantly speaking to staff about this.

Senator PRATT: Would you undertake to meet with the union about this particular project?

Mr Pezzullo : It's principally the CPSU, I suppose. If they had a particular point of concern about something that's not yet gone to government, I'm always willing to engage with them. We've currently got another engagement on at the moment that's occupying our time and, hopefully, will be soon decided in the commission.

Senator PRATT: It sounds like you have some capacity to meet with them about this issue specifically, if they make a request.

Mr Pezzullo : Yes; well, I've got a willingness, I'm not sure about the capacity.

Senator PRATT: A willingness if they make a request.

Mr Pezzullo : Yes. I'll try to find some more time in the day. But I've certainly got a willingness to; whether I have got capacity, in terms of diary, I'll look at it.

Senator PRATT: Lastly, if you are able to provide on notice copies of any speeches to staff, or department-wide emails or communications on this proposal—

Mr Pezzullo : Senator, just to be clear—because I'm sure relevant representatives will see this evidence—I'm not interested, and I'm sure that the union officeholders are not interested either, in having a generalised discussion in ideological terms. So phrases like 'outsourcing privatisation'—if people want to have that discussion, we'll just write to each other. If people want to actually talk about specifics, to the extent that I can share those specifics—subject, of course, to the overriding parameter that this matter has to go back to government, as we have been directed to—then I'm happy to have a conversation, when diaries suit.

Senator PRATT: Thank you for that undertaking. I'm also seeking on notice copies of any speeches to staff or department-wide emails or communications on these proposals.

Mr Pezzullo : That relate to this?

Senator PRATT: Yes.

Mr Pezzullo : We will provide that on notice.

Senator PRATT: Thank you. I have other questions for this section

CHAIR: Is that 2.3?

Senator PRATT: Yes.

Senator McKIM: As do I, Chair.

CHAIR: I would have stopped you before, Senator Pratt, if I'd known you had other questions.

Senator PRATT: I was finishing on that global platform. I'm done on that.

CHAIR: Mr Pezzullo, can you or your officers indicate to me whether there has been any upsurge in applications for some form of visa from people who would have been Venezuelan citizens as a result of the very unsettled, if I can put it that way—

Mr Pezzullo : I'm not aware of that data specifically, but perhaps Ms Dacey might be aware.

Ms Dacey : Senator, I don't have any statistics and, anecdotally, I don't think we would have them. We have seen growth coming out of South America generally, particularly in students, but not around Venezuela specifically. I'll confirm on notice.

CHAIR: Okay. The political situation there is quite difficult, but there's been nothing noticeable?

Ms Dacey : I will take it on notice to make sure we give you the right information.

CHAIR: We were talking about Syria and Iraq earlier and also South Africa. Has there been any sort of special consideration given to those applications from Venezuela?

Mr Pezzullo : No, not in the context of humanitarian or refugee interest.

CHAIR: I've recently been consulted by someone who lives in my area, who wouldn't be a constituent because I don't think they're Australian, and I won't mention any names, but I have written to Mr Dutton with a plea or a submission. The person told me that she had to do tests and it took her some time to get the required No. 6 in all bands. She kept going back to school, to Griffith University, and others and it was a long process in which both she and her husband were fully engaged. She finally got all the results she needed and then she applied to Immigration and they said that the age required to apply has recently been changed from 50 years to 45, just days before she passed the final test making her ineligible to apply.

Mr Pezzullo : There was a measure in recent times, some time previously that did vary—

CHAIR: The date she gave me was 19 August 2017.

Mr Pezzullo : That would have been a decision, I think, in the 2017-18 budget. The tests, Chair, related to English language it sounds like.

CHAIR: As I say, I have written, I don't want to go—

Mr Pezzullo : We'll say tests generically. Dr Johnson, can you shed light on the measure where the age limit was lowered?

CHAIR: Writing, reading, listening and speaking.

Dr Johnson : There is an age requirement which has been lowered because the general thrust of our skilled migration program is to attract highly skilled but also younger workers. I think you heard evidence before from Mr Russo that the Productivity Commission inquiry recommended that to address the aging population we should try to attract younger workers. In this case it sounds like the person, on the one hand, got the six for the English and then unfortunately crept past the age bracket requirement.

CHAIR: Does the minister have discretion in circumstances to allow these—

Mr Pezzullo : Only insofar as the law allows, or provides for. Dr Johnson, is there discretion available in this case?

Dr Johnson : I'd have to take that on notice.

CHAIR: Well, your question on notice may catch up with my submission to the minister. Both people are gainfully employed in situations where they are needed. Their children are all at school. In fact, I think the children might have even been born in Australia. He completed years 1 to 6 and has spent more than half of his life in Australia—an outstanding effort. They're in Scout groups, in the church, the school tuck shop et cetera. They have relatives in Australia as well who are already Australian citizens. If the minister does have discretion, it seems to me a classic case where discretion should be exercised. Bearing in mind, in addition to that, they're from Venezuela, and who knows what's happening in Venezuela at the moment? It's a very, very difficult situation.

Mr Pezzullo : Did I hear you say that you would provide a submission to the minister on this?

CHAIR: Yes, I have, mentioning names, which I don't want to do here.

Mr Pezzullo : No, but you're intending to?

CHAIR: In fact, I have.

Mr Pezzullo : In that case, when that arrives, we'll be able to look at the case because it'll be referred to us for advice, and we'll provide advice to the minister.

CHAIR: My question was: does the minister have discretion? Anyhow, that's been taken on notice. But there may be other people in that situation where ages were changed almost retrospectively.

Mr Pezzullo : We'll check, on notice, whether there was a transitional arrangement also agreed by the minister. It might have had a step-down element—but we'll check that.

CHAIR: All right. I shall leave that there, and we will move on.

Senator McKIM: Mr Pezzullo, I've also got some questions on the topic that Senator Pratt was just asking about. I don't want to get into another semantic argument with you, but I'm going to call it 'privatisation' because I believe that's what it is. I wanted to ask specifically about my home state of Tasmania. Can you just firstly confirm that, by the very nature of the type of visas that are more commonly assessed in Tasmania and the time frames and the batches that are being considered for privatisation first, Tasmania's in effect going to be the first cab off the rank here in terms of potential impacts on the services that are provided out of the Hobart office.

Mr Pezzullo : That would depend entirely on the sequencing of the program of transformation, which in turn depends on the government deciding to proceed.

Senator McKIM: I understand that, but the department's got a draft plan that groups, in chronological order, a suggested sequence. The Hobart office is first cab off the rank; is it not?

Mr Pezzullo : I think there's a nominal sequence contained in the market documents.

Ms Golightly : That's right.

Senator McKIM: What's the first batch in the nominal sequence, Ms Golightly?

Ms Golightly : I think the expression of interest mentioned that we would undertake temporary visas first because that's the high volume of nine million a year. But, within that, decisions are yet to be made as to which visa would go first or whether it might even be a country that goes first. Any of these are hypothetical.

Senator McKIM: Most of the work of the Hobart office of your department in the context of visa assessments is on temporary visas, isn't it?

Ms Golightly : Given the volume, it's the bulk of our work everywhere.

Senator McKIM: Are there any other visa classes that are assessed out of Hobart apart from temporary visas?

Ms Dacey : Yes, there are.

Senator McKIM: What percentage of the workload of the Hobart office falls within the classification of temporary visas?

Ms Dacey : I'll have to take it on notice.

Senator McKIM: Would you accept that it is the majority, though?

Ms Dacey : As Ms Golightly said, it's the majority almost everywhere.

Senator McKIM: So you're saying that in every single Home Affairs unit that does visa assessments the majority of visa assessments are on temporary visas?

Ms Golightly : What we're saying, Senator, is that we were asked to consult with the market to look for ways that they may be able to help us with the increasing volumes in our visa workload. The vast majority of the visa workload falls into temporary visas. The growth pattern is expected to be about 50 per cent over the next 10 years.

Senator McKIM: In temporary visas?

Ms Golightly : Given that most visas are temporary visas, it follows. What we are trying to do is look at how we sustainably meet that volume while protecting the border at the same time.

Senator McKIM: We heard evidence earlier that some of the private sector companies, consortia or organisations that you're dealing with visited the Hobart office. Why was the Hobart office chosen?

Mr Kefford : What we did as part of the co-design process that we've been talking about through the course of today was to take a subset of the two co-design teams to the Hobart office on a day visit to expose them to our current business in the stage of the co-design that was called baseline—the first part of that process was to understand what we do now. The decision to go there was as much about proximity and the ability to observe the business there as anything else.

Senator McKIM: Proximity to what?

Mr Kefford : At the moment, they're working here with us in Canberra. In comparison to—we could have taken them to Shanghai, but that would've been a much bigger exercise.

Senator McKIM: You could've taken them to Melbourne, which would've been half the distance and half the cost. So, again, why did you choose Hobart?

Mr Sterland : It was about the product mix that is delivered in the Hobart office and the availability of officials there to meet with the co-design team and share information.

Senator McKIM: So, it wasn't about proximity. Hang on—

Ms Golightly : We may well visit other offices.

Senator McKIM: You may well, but you haven't.

Ms Golightly : We haven't finished this part of the process.

Senator McKIM: I can tell you the Hobart office is particularly concerned about this, and I've had very strong representations from a number of people—

CHAIR: Is there a question?

Senator McKIM: employed by your department in the Hobart office. One of the things they would like to understand is why the Hobart office was selected as so far, on the evidence you've just given, it's the only office at which access like this has been delivered. So, given the first response was proximity and that they are based in Canberra, proximity doesn't seem to be a logical answer—

Ms Golightly : It does when we run a global business. Also, the feedback—and Mr Kefford can add to this—I've had is that the staff appreciated the involvement that they had. So I'm not so sure I've had the same feedback that you've had.

Senator McKIM: Maybe you haven't. I don't know, but I know what feedback I've had. Firstly, when you say you run a global business, you don't assess visas through Home Affairs offices around the world, do you?

Ms Golightly : Yes, we do.

Senator McKIM: You do? So you've got staff—

Mr Pezzullo : Yes, is the answer.

Senator McKIM: What percentage of your visa assessments is done overseas?

Ms Dacey : There is a workforce of approximately 2,500: onshore about 1,800; and offshore 1,200.

Senator McKIM: I didn't quite understand the breakdown.

Ms Dacey : There are slightly more onshore than offshore. I use a 3,000 number; 1,200 offshore; 1,800 onshore.

Senator McKIM: You've got significantly more here in Australia?

Ms Dacey : Correct. That includes locally engaged staff offshore who work in our visa processing network.

Senator McKIM: Are they departmental employees, not contractors?

Ms Dacey : Yes.

Mr Pezzullo : No, they're employees who are foreign citizens.

Senator McKIM: Again, given a base in Canberra, why not Melbourne? Why Hobart?

Ms Golightly : Why not Hobart?

Senator McKIM: The question is: why Hobart? Someone's got to make this decision, Ms Golightly. Did you pull them out of a hat? What did you do?

Senator PRATT: I think Hobart's worried that they've been specifically targeted for job cuts.

Senator McKIM: Hobart is definitely worried—they're definitely worried they're going to be the first tranche that's up to lose their jobs. That's the concern I'm getting from the Hobart office. To be frank, your answers aren't allaying those concerns, and I share those concerns.

CHAIR: She's answered it though.

Senator McKIM: No, she hasn't.

CHAIR: Whether or not of the type you wanted, but she has answered it.

Senator McKIM: With respect, Ms Golightly, someone had to make a decision that the Hobart office would be the first one visited. On what basis was that decision made?

Ms Golightly : Mr Kefford has already answered that question.

Senator McKIM: Proximity?

Ms Golightly : It was in terms of location, it was in terms of availability of staff and it was in terms of a good example of the type of work we do. The purpose of the visit was to have a co-design process with our staff about understanding what it is that they do now. I also added that we may well visit and plan to visit other sites as part of the co-design process.

Senator McKIM: I understand that, but to date you haven't and you haven't—

Ms Golightly : We've only just started the co-design process in the last couple of weeks.

Senator McKIM: I understand that, but to date you've given no commitment you intend to visit any other areas. So, again, why is Hobart a better example of the work you do than your Melbourne office?

Ms Golightly : I didn't say it was a better example; I said it was a good—

Senator McKIM: You said one of the reasons was that Hobart is a good example. Is Melbourne a good example?

Ms Golightly : Yes, they're all good—

Senator McKIM: Is Brisbane a good example?

Ms Golightly : It was, as I said—

Senator McKIM: Hang on. Is Brisbane a good example?

Ms Golightly : As I said, it was a combination of factors, and I don't think picking any one of them is categorising my answer correctly.

Senator McKIM: Well, Ms Golightly, firstly you said proximity to Canberra?

Ms Golightly : I said proximity in terms of the location of our global business?

Senator McKIM: When I asked 'Proximity to what?' the response was Canberra. That's the response.

Ms Golightly : I think Mr Kefford said that, and we explained—

Senator McKIM: This is Alice in Wonderland stuff.

CHAIR: Senator, you asked the questions. Please allow the officer to answer before you shout her down again.

Senator McKIM: Proximity to what?

CHAIR: Ms Golightly has the call.

Would you please continue your answer?

Ms Golightly : I think I've answered the proximity question.

Senator McKIM: Proximity to what, Ms Golightly?

Ms Golightly : In terms of our global business, its proximity to Canberra, as Mr Kefford said.

Senator McKIM: Do you accept that Melbourne is closer to Canberra than Hobart?

Ms Golightly : Yes, it is.

Senator McKIM: Do you accept that Sydney is closer to Canberra than Hobart?

Ms Golightly : Yes, it is.

Senator McKIM: So proximity and a good example of the work you do. Are there any of your capital city offices that are not good examples of the work you do?

Ms Golightly : No, but we also talked about availability of staff and I think Mr Kefford also mentioned—

Senator McKIM: So Hobart was the only office where staff were available for this to occur?

Ms Golightly : We looked at a whole range of factors, which I have outlined, and the combination of them led to a decision around Hobart.

CHAIR: Thank you, Ms Golightly. I think that is the fourth time you have given the same answer, but it's the same question.

Senator PRATT: I want to ask some questions about visa automation. I might start with the two-tier visa system. As part of this proposal for delivering visa services for Australia, there's a differentiated service delivery offering, as I understand it. What do you mean by value-added services within a two-tiered visa system?

Mr Pezzullo : Mr Kefford might just go back over the evidence he gave earlier.

Mr Kefford : The expression of interest document sets out the operation of the core platform, and then one of the issues that we highlighted to explore was what opportunities might exist to provide value-added or premium services. They're already part of the department's service offer, so Ms Golightly referred earlier to the service delivery partner arrangements around the world. So, examples of that include, in some cases, expedited processing or higher levels of assistance in completing applications, and it's those sorts of continuation of current activities that are contemplated in that part of the REOI process.

Senator PRATT: Do you expect that this will displace migration agents in some of this work?

Mr Kefford : I think that would be speculating as to the overall delivery arrangement that we're not up to yet. There are a range of roles and current actors in the system, and we're looking at the entirety of the system as we develop a new global platform to deliver all of the visa services.

Senator PRATT: Clearly, you're saying the department will make the decision ultimately, but it's certainly possible that you might be displacing migration agents from the work that they're currently doing?

Ms Golightly : It's a bit the same as what we were saying a bit earlier. Because decisions haven't been made about even whether we will do it let alone what form that will take, just like with the staff, any speculation about what might happen in the future is a little difficult now.

Senator PRATT: Have migration agents—

Ms Golightly : But what we are trying to do is automate the process where that makes sense to automate the process, which is a bit different to the decision-making, as we've discussed.

Senator PRATT: What kind of services could be sold on? I think you have highlighted tourism ventures and migration services; is there anything else?

Ms Golightly : Can I just clarify? I'm not entirely sure what you mean by sold on.

Senator PRATT: Packaged up, perhaps.

Ms Golightly : What we're looking for is whether the market can provide complementary other services which are attractive to people who might be thinking about coming to Australia and making that journey, if you like, easier for them.

Senator PRATT: So what? Wedding services or—

Ms Golightly : I think Mr Kefford gave evidence before about the types of services.

Senator PRATT: Yes. Can you provide a list of some of the kinds of services that are considered, on notice?

Ms Golightly : So there isn't a definitive list. This is the whole point in working with—so we have given some examples today which would be illustrative of the types of services.

Senator PRATT: They're illustrative, but they don't give a real indication of the breadth that you're looking at.

Ms Golightly : We can take on notice if there are other examples we can give.

Senator PRATT: Okay. Are you concerned about the risk that this could pose to potential overseas travellers who might perceive they're purchasing a service via an Australian government supplier? How will you ensure that that's not the case?

Mr Pezzullo : What's the risk? I didn't quite capture the description of the risk.

Senator PRATT: If someone advertises they're authorised to take your visa application and make sure that it's expedited at the same time as they're selling you an education product for an for an English school that ends up going bankrupt three months later and you lose all your fees that you have paid to that education institution. How are you mitigating against those kinds of risks?

Ms Golightly : I think there are a couple of things there. At the moment, we currently today have third party providers that help with accepting applications on our behalf, so we're well-versed in working in this area. But, in any case, it will be quite clear that the visa application is a government application, and—should government make decisions to go forward in any way, shape or form—we would obviously be putting in place controls to protect the reputation of that visa process.

Senator PRATT: But mistakes can happen quite easily. If they do sign up for an inappropriate education product for them—and we have seen lots of examples of that—that if you're combining that application—

Ms Golightly : Well, we're not necessarily going to—this is quite hypothetical about what we are doing or not doing.

Senator PRATT: What do you mean by differentiated services including premium options? And what's the potential revenue from this?

Mr Kefford : I refer to the answer I gave before around those premium service offers might be. At this point we haven't modelled what the revenue—

CHAIR: Senator Pratt, I think one of your colleagues has already asked all these questions.

Senator PRATT: I think it even traverses some of the questions I've asked, but there are windows within the kinds of questions that we're asking to get the complete picture that I need to ask. Can I ask about what you have done in considering these issues to look at the integrity of the visa applicant's data and privacy in these processes?

Ms Golightly : First and foremost, we have been very clear right from the start that the visa applicant data is owned and protected by the Commonwealth; all data is to be stored, for example, onshore and in right levels of security settings; and all of the privacy and associated relevant legal requirements are stipulated. So that's the high-level answer.

Senator PRATT: And you'll have specific measures to prevent the onselling of personal details?

CHAIR: If this proceeds.

Ms Golightly : If it proceeds. The details would be the property of the Commonwealth and not the provider anyway.

Senator PRATT: What are the likely revenue implications for the provider, in terms of anticipating how much it will cost, and have you modelled any of that?

Ms Golightly : Cost to do what?

Senator PRATT: For measures for keeping privacy tight and for the revenue applications for those you're outsourcing too. I'm assuming there's a model here where you take the visa application fee, and the government will offset its costs, but the application fee will come in to the private provider rather than in to the government.

Ms Golightly : No, that's not being contemplated.

Senator PRATT: What modelling has the department undertaken and for what parts of the program?

Ms Golightly : I'm not sure I understand the question.

Senator PRATT: Have you undertaken any modelling?

Ms Golightly : In terms of the global digital platform, no. We're in the process of exploring what is possible.

Senator PRATT: Have you briefed the minister or his office or the Department of Finance about expected costs?

Ms Golightly : We have provided some costing information, I think, to the Department of Finance.

Senator PRATT: Are you in a position to disclose those costs to the committee, on notice?

Ms Golightly : No. I'm being very careful because, as you can imagine, for something of this size the probity restrictions are quite tight.

Senator PRATT: Okay. How will the Commonwealth regulate the fees charged?

Ms Golightly : The Commonwealth will always be the decision-maker, in terms of visa application fees.

Senator PRATT: What kinds of visa subclasses could be suitable for a high-fee quick-service process, do you think?

Ms Golightly : I think it's way too early in the process to speculate about that.

Senator PRATT: How do you intend to balance competing interests and make sure our visa system and processing times are still fair for people who can't afford to pay a premium for a visa outcome?

Ms Golightly : The whole point of looking at better ways of doing this is to bring processing times down for everybody.

Senator PRATT: Okay, but does a premium service include possible fast tracking of visa applications for people who can afford to pay extra?

Ms Golightly : That may be one way it works. Again, it's a hypothetical. Another way could be additional assistance with aspects of the form. It could be anything, really.

Senator PRATT: Thank you. I've still got more questions on visas, Chair, but I think you indicated that my time had expired.

CHAIR: It has, yes. I have some questions about the same subject, but my questions are questions that haven't been asked five times previously by various senators. There have been comments made about staff and appointments being made with the CPSU. Clearly, a lot of these questions are coming from the CPSU. In the area we're dealing with, in visas, do you have statistics of what percentage of the staff involved in this area are members of the CPSU?

Ms Golightly : I don't—

CHAIR: Perhaps I'll ask Mr Pezzullo. Do you have statistics on how many members of the department are members of the CPSU? That's the first part of the question.

Mr Pezzullo : We must have to the extent that when we conduct a ballot—I know that data is to hand in our human resources area. I'm saved by the FAS; he can answer the question.

Mr Venugopal : We don't know the exact number of CPSU members but we think it's around one-third of the department.

CHAIR: About 33 per cent.

Mr Venugopal : That's right.

CHAIR: The ABS figure across the board is that, I think, about 34 or 38 per cent of public servants across all sections are members of the CPSU. Clearly, if—a big if—this were privatised, outsourced or whatever terms have been used, the CPSU would probably have a substantial drop in membership. Would that be a fair assumption?

Senator PRATT: I don't think it's helpful to the department for you to be so ideological; but go for it.

CHAIR: It's clear where these questions are coming from. The CPSU has clearly wound you up, Senator Pratt and Senator McKim—

Senator PRATT: I talk to the people often enough; you're right about that.

CHAIR: For them and for all unions it's a matter of life and death.

Senator LINES: You asked this at last estimates.

CHAIR: I asked this at last estimates, did I?

Senator LINES: Yes, you did, Senator Macdonald. It's a repeat question.

CHAIR: Then the answer should be readily available. But I'd like you to refer me to the section of the Hansard

Senator LINES: I'm sure you can find it yourself.

CHAIR: because I haven't noticed it. Senator Lines, you have such a good memory when it comes to other activities you do in this building.

Senator LINES: Really?

CHAIR: Yes.

Senator LINES: Perhaps you should tell me what they are.

CHAIR: Well, no, I don't want to be that rude. I'm fascinated at your recall, which seems to be absent in other activities of your role here. Of those involved in the visa area, do you have specific statistics of how many in the visa area would be members of a union?

Mr Pezzullo : I'm not sure we'd have that by group, would we?

Mr Venugopal : No, Secretary, you're right; we wouldn't have that level of detail because it's not a requirement for staff to tell us if they are members of the union or not.

CHAIR: How did you say you knew?

Mr Venugopal : As the secretary mentioned at the beginning of the evidence, to your question, when we started enterprise bargaining, back in 2015, there was a protected action ballot order—which is a requirement under the Fair Work Act—before the union or its members could be allowed to take protected industrial action. As part of that, there is typically an exchange of information between the Fair Work Commission, the union and the employer. Through that, we were aware that it is roughly in the order of a third.

CHAIR: Do you collect union fees? I only ask that to say: do you know what a union fee is?

Mr Pezzullo : Is it done through payroll?

Mr Venugopal : It is directly paid by staff to the union.

Mr Pezzullo : We don't arrange it through payroll. We don't deduct it.

Mr Venugopal : We don't deduct it on behalf of staff, but staff can set it up for the payment to go to the union through payroll. It's just like staff can set up payments to go to different bank accounts, for instance.

CHAIR: I'm not asking for any personal knowledge, here, but does the department then know what the union fee is? Why I ask this question is, if the average applies and if there are 3,000 people, which is a very rough estimate, and they somehow become outsourced or privatised, as is being alleged, one would think that—one-third of 3,000 is 1,000—the 1,000 members might then, undone from the shackles, leave the union. And it would cost the union a lot of money, which perhaps explains the insistence of senators asking the same questions over and over again. Do we know that?

Mr Venugopal : From flyers that the union typically leaves around the workplace, I recall seeing a figure of around $650 to $700 a year, but it has been a while since I have seen such a flyer.

CHAIR: That's useful. It just helps me make those calculations. Thank you very much. That does my questions, for the moment, on 2.3. Does anyone else have questions on 2.3?

Senator McKIM: Yes, I do, Chair. This is back on the same topic, of you testing the market around whatever you want to call it. I'll call it privatisation of advice to the department on visas. Do you have time frames for when you'll go to government with recommendations?

Mr Pezzullo