Note: Where available, the PDF/Word icon below is provided to view the complete and fully formatted document
Senators in attendance:

Senator Nick Sherry, Assistant Treasurer

Dr Conall O’Connell, Secretary

Dr Rhondda Dickson, Deputy Secretary

Ms Rona Mellor, Deputy Secretary, Biosecurity Services Group

Mr Phillip Glyde, Deputy Secretary/Executive Director, Australian Bureau of Agricultural and Resource Economics

Ms Anne Hazell, Chief Operating Officer

Mr Steven Foley, Chief Information Officer

Ms Kate McRae, General Manager, Human Resources

Ms Karen Nagle, General Manager, Audit and Evaluation

Ms Alana Foster, General Manager, Levies Revenue Services

Mr Darren Schaeffer, Chief Finance Officer

Ms Vanessa Berry, Deputy Chief Finance Officer

Ms Amy Fox, Deputy Chief Finance Officer

Ms Ann McDonald, Acting Executive Manager, Corporate Policy Division

Ms Elizabeth Bie, General Manager, Ministerial and Parliamentary Branch

Ms Cathrine Stephenson, General Manager, Portfolio Strategy and Coordination Branch

Ms Cindy West, General Manager, Corporate Communications Branch

Mr David Mortimer, Executive Manager, Climate Change Division

Ms Fran Freeman, Executive Manager, Drought Policy Review

Mr John Talbot, General Manager, Forestry Branch

Mr Andrew McDonald, General Manager, Farm Adjustment Branch

Mr Mark Gibbs, General Manager, Climate Change Branch

Mr Paul Morris, Deputy Executive Director

Dr Terry Sheales, Chief Economist

Dr Jammie Penm, Chief Commodity Analyst

Mr Peter Gooday, General Manager, Productivity, Water and Fisheries Branch

Dr Helal Ahammad, General Manager, Climate Change and Environment Branch

Ms Jane Melanie, General Manager, Resources, Energy and Trade Branch

Mr Bruce Bowen, General Manager, Agriculture Branch

Ms Annette Blyton, Acting General Manager, Integrated Research Branch

Dr Kim Ritman, Acting Executive Director

Dr Gavin Begg, Acting General Manager, Fisheries, Land and Forestry Sciences Branch

Dr John Sims, Acting General Manager, Climate Change, Water and Risk Sciences

Ms Annette Blyton, Acting General Manager, Integrated Research Branch

Mr Ian Thompson, Executive Manager, Sustainable Resource Management Division

Mr Roland Pittar, General Manager, Fisheries Branch

Dr Sally Troy, General Manager, Communications and Reporting Branch

Ms Margaret Allan, Acting General Manager, Landcare and Sustainable Agriculture Branch

Ms Bernadette O’Neil, Acting General Manager, Business Systems and Grants Branch

Professor Glenn Hurry, Chief Executive Officer

Dr James Findlay, Executive Manager, Fisheries Management

Mr Malcolm Southwell, Acting General Manager, Operations

Mr John Bridge, General Manager, Corporate Governance

Mr Peter Venslovas, Regional Director, Darwin

Mr Mark Farrell, Chief Information Officer

Mr David Perrott, Chief Finance Officer

Dr Eva Bennet-Jenkins, Chief Executive Officer

Dr Raj Bhula, Program Manager, Pesticides

Mr Dan Webb, Corporate Services

Mr Craig Burns, Executive Manager, Trade and Market Access Division

Ms Victoria Anderson, General Manager, North Asia, Europe, Middle East and Africa, Trade and Market Access Branch

Mr Paul Ross, General Manager, Americas, South East Asia, Subcontinent, NZ and the Pacific, Trade and Market Access Branch

Ms Sara Cowan, General Manager, Multilateral Trade Branch

Ms Karen Schneider, Executive Manager, Animal Division

Dr Mike Nunn, Principal Scientist,  Animal Division

Ms Jenny Cupit, General Manager, Biological Quarantine Operations and Marine Pests Branch

Mr Rob Williams, Program Manager, Biological Imports Program, Biological Quarantine Operations and Marine Pests Branch

Ms Lee Cale, Acting General Manager, Animal Quarantine and Export Operations Branch

Dr Bob Biddle, General Manager, Animal Health Programs Branch

Dr Colin Grant, Executive Manager, Plant Division

Dr Bill Roberts, Principal Scientist, Plant Biosecurity

Mr Bill Magee, General Manager, Plant Biosecurity (Grains and Forestry) Branch

Dr Vanessa Findlay, General Manager, Plant Biosecurity (Horticulture) Branch

Ms Louise van Meurs, General Manager, Plant Quarantine and Export Operations Branch

Ms Lois Ransom, Chief Plant Protection Officer, Office of the Chief Plant Protection Officer

Mr Greg Read, Executive Manager, Food Division

Dr Narelle Clegg, General Manager, Residues and Food Safety Branch

Mr Mark Schipp, General Manager, Export Standards Branch

Mr Colin Hunter, General Manager, Food Exports Branch

Mr Dean Merrilees, General Manager, Export Reform Branch

Mr Tim Chapman, Executive Manager, Quarantine Operations Division

Mr Jonathan Benyei, General Manager, Cargo Branch

Ms Louise Clarke, General Manager, Co-regulation and Support Branch

Dr Chris Parker, General Manager, Passengers and Mail Branch

Mr Peter Moore, General Manager, Post Entry Quarantine Arrangements

Ms Jenet Connell, Executive Manager, Regional and Business Services Division

Mr Russell Phillips, Acting Executive Manager, Strategic Projects Division

Ms Nicola Hinder, General Manager, Partnerships Branch

Ms Kirsty Faichney, Acting General Manager, Biosecurity Policy Coordination Branch

Ms Debbie Langford, Acting General Manager, Legislation Branch

Mr Walter Spratt, Deputy Director, Australian Plague Locust Commission

Mr Norman McAllister, Deputy Chairman

Mr Tony Byrne, Acting Chief Executive Officer

Mr Allen Grant, Executive Manager, Agricultural Productivity Division

Mr Simon Murnane, General Manager, Livestock Industries and Animal Welfare Branch

Mr Peter Ottesen, General Manager, Crops, Horticulture, Irrigation and Wine Branch

Mr Greg Williamson, General Manager, Innovation, Productivity and Food Security Branch

Mr Richard Souness, General Manager, Food Branch

Mr Matthew Worrell, General Manager, Food Security and R&D Review Taskforce

Mr Walter Merriman, Chairman

Mr Stuart McCullough, Chief Executive Officer

Mr Roger Fletcher, Deputy Chair

Dr Meredith Shiel, Director

Mr Peter Woods, Chief Executive Officer

Mr Ted Woodley, Chairman

CHAIR (Senator Sterle) —I declare open this public hearing of the Senate Rural and Regional Affairs and Transport Legislation Committee. The Senate has referred to the committee the particulars of proposed expenditure for 2010-11 and related documents for the Agriculture, Fisheries and Forestry portfolio. The committee is due to report to the Senate on 22 June 2010 and has fixed Wednesday, 21 July 2010 as the date for the return of answers to questions taken on notice. Senators are reminded that any written questions on notice should be provided to the committee secretariat by close of business next Friday, 4 June 2010.

Under standing order 26, the committee must take all evidence in public session. This includes answers to questions on notice. Officers and senators are familiar with the rules of the Senate governing estimates hearings. If you need assistance, the secretariat has a copy of the rules. I particularly draw the attention of witnesses to an order of the Senate of 13 May 2009 specifying the process by which a claim of public interest immunity should be raised and which I now incorporate in Hansard.

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 (I) 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).

(Extract, Senate Standing Orders, pp 124-125)

As agreed, I propose to call on the estimates in the order shown on the printed program. We will take a break for morning tea at 10.30 am sharp. Other breaks are listed in the program. I now welcome Senator the Hon. Nick Sherry, Assistant Treasurer, representing the Minister for Agriculture, Fisheries and Forestry; Dr Conall O’Connell, Secretary of the Department of Agriculture, Fisheries and Forestry; and officers of the department. Minister, do you or Dr O’Connell wish to make an opening statement?

Senator Sherry —No, thank you.

CHAIR —Thank you. In that case we will go to questions.

Senator COLBECK —Good morning, Senator Sherry and Dr O’Connell. Can you give us the financial impact of the efficiency dividend on the department for 2010-11 please?

Mr Schaeffer —The impact of the efficiency dividend due to the movement in our base is about $410,000.

Senator COLBECK —What strategies does the department have this year to meet the efficiency dividend?

Mr Schaeffer —This is an ongoing efficiency dividend, so we have solutions in place that include—

Senator COLBECK —Just to clarify, are we talking about the common dividend or the additional dividend, or is that a compilation of both?

Mr Schaeffer —No, that is just the efficiency dividend of 3.25 per cent.

Senator COLBECK —That is the two, though, isn’t it, Dr O’Connell? There is the normal efficiency dividend at 1.25 and then the additional that we have had some discussions about over a period of time.

Mr Schaeffer —That is right, there is the two per cent.

Senator COLBECK —But my understanding was that additional two per cent was a one-off, but it is running for a number of years. That is correct?

Mr Schaeffer —It is running up until 2013-14.

Senator COLBECK —What is the department having to do to meet that additional reduction in its allocation this year?

Mr Schaeffer —In the portfolio budget statements for 2009-10 we had a reduction in ASL as well as some efficiencies through the department in our consultancies and in our travel.

Dr O’Connell —That effectively is now just based into our planning process, so it is captured in the way we just distribute the budget across the department and then manage staffing and other issues. There is nothing specific that you could say relates to that; it is more that we manage our budget within that field.

Senator COLBECK —You have an ongoing reduction in your staffing levels as part of that process?

Dr O’Connell —Not necessarily an ongoing reduction in staffing levels, just an ongoing budget that we operate within so we know how to plan within that each year.

Senator COLBECK —What are you going to do to meet the cut of $410,000?

Dr O’Connell —What we do now is distribute the budget amongst the various areas of the department and we will do that as part of a normal planning process as we come into the financial year. It will be managed as part of that.

Senator COLBECK —And they get to decide how they reduce their costs?

Dr O’Connell —Not directly. We do that collectively through a planning process.

Senator COLBECK —Last year you said, as part of this process, that you were not going to take on any graduates, for example. Your graduate program was going to cease for 12 months so that you could manage the ongoing impact of the efficiency dividend. What is the situation with the graduate program?

Dr O’Connell —The graduate program will be restarted in the coming year, so we plan to just restart it again. That was a one-year pause. As I mentioned in previous estimates, it was clearly planned that it would be restarted after that one-year pause.

Senator COLBECK —What is the cost implication of recommencing the graduate program?

Dr O’Connell —I would have to take that on notice.

Senator COLBECK —To what level is the graduate program going to recommence?

Ms Hazell —It will resume at the levels we had previously, which is approximately 60 graduates, plus our trainees, plus some Indigenous graduates as well.

Senator COLBECK —Is that all inclusive at 60 or are the other categories accumulative?

Ms Hazell —The other categories are in addition to the 60.

Senator COLBECK —So how many are we going to?

Ms Hazell —It will depend on how many trainees we find that are suitable and how many Indigenous graduates actually wish to come to the department, but we are looking at around 70 to 72.

Senator COLBECK —So 72 on top of the 60.

Ms Hazell —No, all up.

Senator COLBECK —So about a dozen trainees.

Ms Hazell —We normally have between 10 and a dozen trainees. It just depends on how many suitable candidates we can attract.

Senator COLBECK —There must be a budget for that. Someone must know what the budget for those programs is.

Ms Hazell —The additional cost of restarting the graduate program, due to the fact it is a half-year impact in the next financial year, is approximately $1.7 million.

Senator COLBECK —So it effectively does not start until next year.

Ms Hazell —Yes. The graduates do not actually commence until around the end of January 2011. The $1.7 million is the additional cost, so it is a part-year cost. This financial year we were finishing the graduate program that started in 2009, so we had from July to December. It is not a strict one-year full cost, because it is offset by the fact we had the graduates for part of this year as well.

Dr O’Connell —So it is two half-year costs.

Ms Hazell —But they are different, because one is for six months and one is for five months.

Senator HEFFERNAN —So 50 grand a head.

Mr Schaeffer —Because it is half-year—

Senator HEFFERNAN —No, I am calculating it for a full year. Is that 50 grand a head for a full year?

Mr Schaeffer —No. It is somewhere between 50 and 100 grand.

Senator HEFFERNAN —Could we have the figure?

Dr O’Connell —I will take the costings figure on notice. That should be straightforward.

Senator HEFFERNAN —Didn’t you say it is $1.7 million for six months, which is near enough to $3½ million for a full year, which is near enough to 50 grand a head?

Ms Hazell —I will get you an exact figure.

Senator HEFFERNAN —Can you then break down the 50 grand into what that represents?

Ms Hazell —Most of it will be salary.

Dr O’Connell —We will take that on notice so we give it to you precisely.

Senator ADAMS —Can you tell me what process you use to attract Indigenous graduates?

Ms Hazell —The Australian Public Service Commission has a program for attracting Indigenous graduates and also Indigenous cadetships and traineeships, and we are participating in that process.

Senator ADAMS —What level of qualification do they need to participate in the program?

Ms Hazell —To be a graduate they need to have a graduate degree, like any other graduate. For cadetships and traineeships, it is much less. It is year 10 for a traineeship. For a cadetship, I understand the program is for the end of year 12, and then we put them through a training program.

Senator ADAMS —And how many have you had in the past?

Ms Hazell —We have had a number in the past. The exact numbers I would need to take on notice.

Senator ADAMS —Thank you.

Senator IAN MACDONALD —You said that you follow the Australian Public Service Commission program for attraction. Unfortunately, they do not appear before this committee, so perhaps you could tell us how you attract these applicants.

Ms Hazell —They run the program for recruiting them, interviewing them and selecting the Indigenous graduates. We would say to them, ‘We are interested in three or four,’ and they will provide us with a short list of Indigenous graduates who have expressed an interest in our portfolio, and we then talk to them and see if they are interested in coming to us. They run the whole recruitment process.

Senator COLBECK —Is there a specific area of the agency that they are directed to? Which areas of the agency do they usually end up in?

Ms Hazell —Most of our Indigenous graduates and Indigenous trainees end up working in the biosecurity space, because that way they work in the regions and they tend to be closer to home, but we do have ones that come to Canberra as well. It depends on the interests of the person, their background and their degree.

Dr O’Connell —There is no specific area that we direct them to. They have the same opportunities as any other worker.

Senator COLBECK —I have probably come across a couple of them, particularly up in Northern Queensland, Thursday Island and places around that, working in AQIS and agencies such as that, which appeared to me at the time to be quite successful. Roughly, the graduate program works out to about $3.4 million per year?

Dr O’Connell —Roughly.

Senator COLBECK —So you have to provide some offsetting into the agency to pick up that $3½ million from somewhere. I would like to get some sense of how you are going to effectively work this efficiency dividend and these additional costs into the agency.

Dr O’Connell —That goes into the planning and internal budgeting process that we have underway now in order to deliver into the financial year.

Senator COLBECK —Do not tell me what you are going to do next year. Aside from the traineeship program that you have cut out for the 2009-10 year, or effectively for the year 2010, there are no graduates in the agency this year. What other measures did you have to cut out of the department to meet the efficiency dividend last year?

Ms Hazell —As the secretary indicated, once budgets were allocated last year it was up to the various areas to decide how they were going to meet those budgets.

Senator COLBECK —The secretary told us that the department did it collectively.

Ms Hazell —Yes, but there are some obvious things that areas would look at. Travel is one; use of additional contractors and consultants is another. Within broad parameters, there is still some flexibility in each area. The natural tendency, obviously, is to try and keep your staff and cut your administrative expenses if you can.

Senator HEFFERNAN —Did the contractors include 54/11-ers?

Ms Hazell —No, they did not.

Senator HEFFERNAN —Do they come back as contractors, I mean?

Ms Hazell —Our contract and non-ongoing employee numbers have been fairly low and stable all year.

Senator HEFFERNAN —We will come to that later.

Dr O’Connell —During that period last year we also restructured much of our corporate activities in terms of areas such as the HR services, finance services, media and others. There was a major element of restructuring to provide centralised services, which also helped us in that process. That was quite a significant decrease in the corporate—

Senator COLBECK —Did that involve consolidating responsibilities and reductions in staff?

Dr O’Connell —Yes. There was a significant consolidation of the corporate and finance HR responsibilities in the department, which provided efficiencies as well.

Senator COLBECK —What sort of staffing reduction in that core area came out?

Ms Hazell —In the HR area, for which I am responsible, there was a reduction of around 12 to 13 staff as a result of being able to consolidate the functions and restructuring.

Dr O’Connell —We can provide you with a breakdown of the changes across all the corporate areas if that would help.

Senator COLBECK —Okay. I was going to come to staffing. If you can give us your staffing numbers and a listing of who and where—

Ms Hazell —I can give you some overall figures now. If you wanted detail of staffing by area, I would need to take that one on notice and try and table it.

Senator COLBECK —I think you have given us a breakdown at the previous couple of estimates.

Ms Hazell —We can organise to table that for you. The current FTE at 30 April was 4,365.

Senator COLBECK —You do not have with you that detail that you provided to us in previous years?

Ms Hazell —I think it is probably easier if we organise to table it during the day, rather than just read out a list of numbers.

Senator COLBECK —You do not have something that you can put in front of us now so that we can have a look at it?

Ms Hazell —We can get it.

Dr O’Connell —We would have to have a look. I do not think we have something directly comparable, but we would have to see what we can provide. I also just want to point out that those numbers are indicative—at this stage, anyway—because we have not gone through the planning process. The way it occurs is that we manage it at the budget stage by an attribution of costs across and then, when we come into the planning process, we get much closer refined numbers.

Senator COLBECK —What I want to do is to analyse what the numbers are now so I can make some comparisons against what they were at the two previous budgets.

Dr O’Connell —Yes. We will be able to provide that.

Senator COLBECK —I have asked some questions about what is going to happen in the future, and I would be interested to know what is going to happen into the future if you can actually give me some sense of that. But what you are telling me effectively is that you have not planned that yet.

Dr O’Connell —No. I think there are two things. One is that we budget in the same way as in previous years. We have the budget provided and we have an estimation there of staffing levels, and of course we refine that when we come into the planning process and into the start of the financial year. We can certainly give you those comparable numbers with previous budget years.

Senator COLBECK —You do not know yet what your planned staffing changes are for the coming year?

Dr O’Connell —No. What I was saying is that we can provide you with numbers which give you the estimates now of the staffing changes, but they will be subject to revision, obviously, as we do the detailed planning.

Senator COLBECK —Are there any specific areas that you are targeting at this stage?

Mr Schaeffer —Broadly, we just use PBS, or portfolio budget statements, where there is an increase of 52 in ASL from our revised actuals from last year.

Senator IAN MACDONALD —Whereabouts would we find that?

Mr Schaeffer —It is in two parts. It is split by outcomes. Just bear with me and I will tell you the exact page.

Senator IAN MACDONALD —Dr O’Connell, you said you were going to provide that for Senator Colbeck. When were you going to do that? Later on today?

Dr O’Connell —We were going to see if we could manage that, because that would just come out of the numbers that went into the budget. We ought to be able to manage that today.

Mr Schaeffer —Outcome 1 is on page 28 of the portfolio budget statements, and outcome 2 is on page 69.

Senator IAN MACDONALD —That shows us what?

Mr Schaeffer —They are the overall ASL numbers for this year and last year.

Dr O’Connell —Some of those increases will be the graduates coming back on, for example.

Senator IAN MACDONALD —Page 28?

—Near the bottom, the last bolded number, is the number 771 for 2010-11 and 737 for 2009-10.

Senator COLBECK —I am just making a comparison back to last year’s budget papers. The average staffing level for outcome 1 was estimated to be 697, yet the estimated actual for 2009-10 shown in this statement shows 737. So you are actually looking to increase your staffing, or your staffing is higher than what it was estimated to be last year?

Mr Schaeffer —Yes.

Senator COLBECK —By about 40—and increasing through to 771 by about another 40 during the year; is that correct?

Mr Schaeffer —We would have to get the exact numbers, but there are increases there, yes.

Senator COLBECK —Do the figures that you have just given us include the proposed redundancies that are to come out of AQIS?

Mr Schaeffer —Yes, they do.

Senator COLBECK —What sort of numbers are we talking about there at the moment? There were about 30-odd redundancies through inspectors, as I understand it. Is there anything further out of that? I know that we will come to that later on.

Dr O’Connell —We can answer that generally now, but it may be sensible to just check with the Biosecurity people.

Senator COLBECK —We will do something in much more detail in the morning when we get to AQIS, but I just wanted to get a sense that there was an expectation of some reductions through that process given the reform discussions that are occurring at the moment.

Mr Schaeffer —Yes, there is.

Senator COLBECK —Was it about 30 redundancies for inspectors in the first round?

Ms Hazell —I am not sure about rounds, but the figures do include an estimate of the redundancies we think might occur in that program at this stage. But they are only an estimate and it depends on whether people elect to take up those offers.

Senator COLBECK —Okay, so there are no forced redundancies.

Senator IAN MACDONALD —Dr O’Connell, my impression of the department is that you are getting less and less involved in caring for our country, you are getting less and less involved in bioregional planning, which are things that your department used to do conjointly with Environment, and you seem to be getting less and less involved in fisheries. For example, your international fisheries now do not seem to have a dedicated area. First of all, can you tell me whether I am wrong on either of those. If you cannot tell me I am wrong can you give me, perhaps on notice but perhaps later in the hearing, the reduction of your staff in those areas?

Dr O’Connell —Between this year and next year in terms of budgeted requirements we can certainly look at that.

Senator IAN MACDONALD —I am talking, really, about last year to the year in which we are now. I am interested in—

Dr O’Connell —Not the forward year.

Senator IAN MACDONALD —And the forward year. I am asking for the current year and the forward year, because my impression is that there seem to be cutbacks in certain areas of the department which used to be a significant part of the department’s work. It now seems to have been abandoned to Environment, which is of great concern, of course, to agricultural Australians.

Dr O’Connell —We can provide those numbers on notice. You are looking, really, for three years from last year, this year and the budget year that is ahead.

Senator IAN MACDONALD —Yes. But am I generally correct?

Dr O’Connell —It would be no surprise to suggest that I think we are just as involved in caring for our country as we have been in the past in terms of the work jointly with our colleagues in the environment department. We still run joint process.

Senator IAN MACDONALD —I am pleased to hear that. I do not think that is the case, but I am pleased to hear that you are telling me it is.

Dr O’Connell —We still run the process jointly. We still have the ministerial board jointly making decisions. It is all joint approvals all the way through on that, so I do not see that that has been reduced. When we come to the other areas obviously we can talk through the specifics, but I am happy enough to take those numbers on notice.

Senator IAN MACDONALD —Thank you.

Senator HEFFERNAN —The overheads may well not be reduced, but I can assure you that what is happening in the paddocks is well and truly reduced. You want to take a run out to the bush and see what comes out the other end of the pipe. It is just disgusting.

Senator COLBECK —I would really like to get hold of those divided up numbers so that we can start having a look, because, like Senator Macdonald, I have some concerns about certain areas of the department where it appears quite evident that the capacities are actually reducing. Fisheries is one area that Senator Macdonald has mentioned. My understanding is that it has been significantly reduced.

Senator IAN MACDONALD —And forestry.

Senator COLBECK —And forestry, I think, is the same. I know that there has been a process of blending it all into climate change but, in terms of the actual work that appears to be being done in those two areas, we heard at the last estimates that there is very little input being put into the current MPA process that is going on around the coastline of the country, for instance. That potentially has a huge impact on the fishing industry, yet they are being basically left without representation. It would be very nice to actually have some sense of what the actual numbers in the various divisions are so that we can have a close look at that.

Dr O’Connell —I do not think that we are looking at any changes in the numbers in terms of fisheries and forestry between this year and the budget that is in front of us. I am aware of any at the moment, although I could confirm that for you.

Senator IAN MACDONALD —It would be interesting to have the comparison with last year.

Senator COLBECK —Senator Macdonald is right; you have already done the damage in those particular areas where the cuts have already been made. In fact, the figures probably will not even show us what the employment in forestry is anymore because it has been merged into climate policy, so it is impossible to find out what they are and who they are. In fact, if I go back to some figures that I have from last year, there is nothing listed in respect of fisheries and forestry after 30 June 2008. They have effectively disappeared into other areas of the agency, and my figures do not show me anything for them. Forestry has been merged into climate, so how we are able to identify that is the sort of thing that I would like to have a look at.

Dr O’Connell —Yes. We will give you those numbers.

Senator IAN MACDONALD —Has there been any thought given to changing the title of the department from ‘agriculture, fisheries and forestry’ to ‘agriculture and supporting the environment department’?

Dr O’Connell —That would be a matter for the Prime Minister, as usual, in terms of machinery of government.

Senator Sherry —Totally speculative, but we will take it on notice.

Senator COLBECK —It is probably a good question to take on notice, Senator Sherry, because the department is being diminished day by day. In fact, it only has half a minister these days.

Dr O’Connell —The department is increasing its staff this year. That is the point of the estimates that you have in front of you.

Senator COLBECK —Increasing staff and increasing the effectiveness are not necessarily the same thing. Just because there are more people does not mean it is effective. As I said, we only have a half-time minister now.

Senator Sherry —I do not agree with your comment about a half-time minister and I do not agree with your comment about staff reductions. It is clearly not factual.

Senator COLBECK —I did not say anything about reducing staff. We have acknowledged that the staff numbers are increasing, but the minister is not working on the portfolio full time.

Senator Sherry —I can assure you he is a very hardworking minister. It is not uncommon for ministers to have responsibilities that take them across a multitude of government areas. This is an issue for debate. If you have some questions for the departmental officials, I am very happy for you to put them.

Senator HEFFERNAN —There is not a single solitary soul in the government who lives in the bush, though, is there?

Senator Sherry —I do not agree with that. I live in a regional centre. There are at least some I can think of.

Senator HEFFERNAN —No, I am talking about a rural working environment. We know where you live.

CHAIR —I would not go there, Senator Heffernan, because we can certainly tackle what the Nats do outside of the farm gate. Senator Macdonald, do you have questions?

Senator IAN MACDONALD —On the previous point, Dr O’Connell, clearly the increase in staff is not going into fisheries and forestry. I do not think anyone would argue that. What general area is it going into? Is it biosecurity, administration or, as I suspect, climate change, whatever that means these days?

Dr O’Connell —As I said, we will give you the breakdown. Certainly some of it is the graduates coming back again, as we pointed to before. Some of it is biosecurity as well.

Senator NASH —Is there any supporting work, now that the minister does have this dual role and is now Minister for Population as well? There are some concerns around the question: if agriculture was taking a hundred percent of his time before, how is he managing the extra workload? In terms of the department itself, does any of that support work for population come out of this department at all?

Dr O’Connell —The short answer is no. There is a unit in the Treasury that provides support to the minister. During the initial transition stage we provided some administrative support just to manage that change. But it is fundamentally managed by the Treasury, including with a departmental liaison officer from the Treasury.

Senator NASH —Will there be any call on the resources that you could foresee, though, from your department in terms of the research capacity that you have for things like regional population and those types of areas?

Dr O’Connell —Insofar as we would expect to play our role in whole-of-government work as a department, yes. But beyond that there is no specific tasking. As I say, it is really working through the processes that the Treasury put in place.

Senator BACK —Dr O’Connell, just turning to biosecurity, the biosecurity group was removed from the schedule of prescribed agencies and transferred to the Department of Agriculture, Fisheries and Forestry on 1 July 2009.

Dr O’Connell —Yes. You are referring to Biosecurity Australia.

Senator BACK —The 2008-09 budget papers indicated $20,843,000 for biosecurity, with $21,440,000 for 2009-10. Can you tell us what the level of resourcing for biosecurity is in 2010-11?

Mr Schaeffer —That is not an easy question. The resources have been wound into the department, as you have said, and they have been reallocated across a number of other divisions. We can get you the figure. We will just need to take it on notice.

Senator BACK —If you can get us the figure, can you also perhaps assist us a bit further by giving us a breakdown of expenditure revenue and particularly staffing for this coming financial year and beyond?

Dr O’Connell —Yes.

Senator BACK —Could we have that prior to us actually getting to the topic of biosecurity, which is tomorrow.

Dr O’Connell —We will do our best to get it to you.

Senator BACK —Thank you very much.

CHAIR —Are there any further questions of the executive?

Senator HEFFERNAN —Yes. The other day I gave your department officials a pot of meat product from the US and sought a paper trail to it. Could I get the pot of meat back for estimates this week? I asked for it last week. There is a very interesting story behind the pot of meat.

CHAIR —If you cannot find it, Dr O’Connell, I will lend Senator Heffernan $1.80 and he can go and buy another one. Senator Macdonald, do you have any further questions?

Senator IAN MACDONALD —Dr O’Connell, as of this morning we still have not got answers to questions we asked at last estimates. It makes it very difficult for us to follow things along when three months later we do not have the material. Should I be blaming you or are they stuck on the minister’s desk, waiting for a political check?

Dr O’Connell —I will have to have a look and see what the status of those questions is.

Senator IAN MACDONALD —No, you do not need to look. I will give them to you: Biosecurity Services Group, question 17; and Meat and Livestock Australia questions 02, 03 and 08 to 12. The ones I am more interested in are: Sustainable Resource Management questions 03, 04, 06, 14 and 15; and Agricultural Productivity Division questions 03 and 10. As I say, the ones that I am most interested in are the Sustainable Resource Management questions. Is there some reason why there are no answers to those?

Dr O’Connell —I will have to take that up with the minister’s office.

Senator IAN MACDONALD —You are getting to the nub of my question. Have you provided the answers for the minister?

Dr O’Connell —Obviously the minister is responsible for the answers. We do not provide answers to the minister.

Senator IAN MACDONALD —Of course, I know that.

Dr O’Connell —We provide drafts for the minister’s consideration and it would be quite wrong of me to presuppose how the minister handles that.

Senator IAN MACDONALD —I appreciate that.

CHAIR —Have you provided the drafts to the minister?

Dr O’Connell —I would have to have a check on timing, but typically—

Senator NASH —You would know, Dr O’Connell, if you have provided the drafts or not.

Dr O’Connell —If I could complete my answer, it might help. Typically these may involve some iterations to ensure that they are accurate, and I would have to just check whether that is the case.

Senator IAN MACDONALD —I would back your accuracy against the minister’s any day, I might say, but let me put it another way, then. Have you provided to the minister all advices that he might need to adequately answer questions that this committee put to the minister last time, as you rightly point out?

Dr O’Connell —That would be a question, in a sense, to put to the minister as to what would be necessary for him to be confident about an answer, and that is probably exactly where you get iterations on getting a response. That is very typical, as you would be aware, of questions on that.

Senator IAN MACDONALD —Do you advise the minister of parliament’s direction to him, and through him to you, that questions have to be answered by a certain day? It is well before today, but we still do not have those answers.

Dr O’Connell —I think the minister is well aware of the Senate’s requirements.

Senator IAN MACDONALD —Would you be able, during the next two days—and perhaps Senator Sherry could help here—to get a message to the minister’s office to find out why he has not answered those questions in accordance with the resolution of the Senate?

Senator Sherry —I can indicate I have just posed that question and I hope to be able to provide a response to you in the next two days.

Senator IAN MACDONALD —Excellent. Thank you.

Senator COLBECK —Are there any questions where the department has not provided any information to the minister?

Dr O’Connell —Of the set that are outstanding, you mean?

Senator COLBECK —On these questions.

Dr O’Connell —We have certainly provided information in terms of briefing for responses to questions.

Senator COLBECK —Are there any questions, though, where you have not provided any information?

Dr O’Connell —As I say, these processes normally require iterations to clarify to the minister’s satisfaction that the information is sufficient.

Senator COLBECK —Some of us have actually been in the minister’s position before and we understand that. What I am trying to find out is: are there any questions from the committee where you have not provided any information to the minister?

Dr O’Connell —No. As I said, there are none. It is a question, I think, of whether or not the minister has found that information sufficient for him to be able to provide an answer, and that is a question for the minister.

Senator Sherry —And, as I have indicated, I have just asked that we establish where any outstanding questions are and when we are likely to get an answer, and hopefully I will be able to provide a response in the next two days.

Senator COLBECK —That is fine. Dr O’Connell, are there any questions for which there is outstanding information for you to provide to the minister where he has questioned some of the information that you have sent to him?

Dr O’Connell —I hate to say it, but I would probably have to take that on notice or try to get back to you on that. I do not have the information in front of me.

Senator IAN MACDONALD —Dr O’Connell, what do you mean by iterations?

Dr O’Connell —Obviously when a question is asked the minister is responsible for providing the answer, as you would be aware. The department provides information to brief the minister on a possible response, and in the normal course of events when a department briefs a minister the minister can ask for clarification, more information or something of that nature. That would be the normal business of briefing a minister and ensuring that the minister is at a stage where he or she is comfortable to sign off on an answer. So it is just the normal business, if you like.

Senator IAN MACDONALD —Bearing in mind that you have a staff of 3,000 looking at these things and the minister has a staff of seven or eight or whatever, and the minister has another portfolio to administer as well, am I to take it from your answers that the minister’s small group are alerting themselves to answers that your 3,000 staff have not been able to provide?

Dr O’Connell —No, I would not want that suggestion to be put from what I am saying. I am just explaining the normal process of briefing a minister to provide an answer to a question and that at times there will be the request for clarifications or more information. That is the normal process of briefing a minister on anything.

Senator IAN MACDONALD —Can I suggest—not to you, Dr O’Connell, but to Minister Sherry—that the iteration is the political wisdom of letting the answer out or otherwise.

Senator Sherry —I know you have been a minister and I know Senator Colbeck has been a minister. You are well aware of the iterative process exchange between a minister’s office and the Public Service on a whole range of issues, including to answers to questions on notice. I have already indicated that I have just made inquiries to the minister’s office to see what is outstanding and where it is. I cannot really add anything more.

Senator IAN MACDONALD —No, you cannot. Mind you, when Senator Colbeck and I were around we were never late with answers to questions.

Senator Sherry —You weren’t, were you? We might track back through the record, but whatever your record is in the Treasury area I can recall a lot of outstanding answers.

Senator HEFFERNAN —Can I just ask whether the department has been asked to provide a contingency plan for out-of-estimate spending for the spring in the event—which will come up tomorrow—of a likely locust plague. It is not only a likely locust plague but a bloody huge one. Can I just say to you there has been a complete failure to address the seeding season—that is, out in the pastoral country there are bloody hundreds of thousands of acres of locusts that have laid eggs now and in the spring. So has the government sort of thought, ‘Gee, we might have a problem in the spring—where is the money going to come from?’ because it will have the capacity, if the eggs that are laid hatch and the season is right, to do huge damage to the crop?

Dr O’Connell —And the Plague Locust Commission will be in attendance when the Biosecurity Services Group—

Senator HEFFERNAN —Yes, but my question is: have you been asked to provide a contingency plan?

Dr O’Connell —I think we can cover the issue of management of locusts when we have the relevant people on.

Senator HEFFERNAN —But don’t you know the answer? It is simple: have you been asked to provide anything? You are the boss.

CHAIR —We know it is coming on later. Senator Colbeck has the call, Senator Heffernan. Senator Colbeck, do you want the call or do you want your colleague to take the call?

Senator HEFFERNAN —Do you know the answer or not?

CHAIR —You have just been told, Senator Heffernan, that it is coming up later. We have a timetable here that we agreed that we would follow.

Senator HEFFERNAN —Have you been asked to provide a contingency plan? You are the head of department.

CHAIR —Dr O’Connell, you can answer it later.

Dr O'Connell —It would be best answered when we have the relevant people here.

Senator HEFFERNAN —Take it on notice if you do not know.

Senator Sherry —We do not need to take it on notice.

Senator HEFFERNAN —I want to know. You are the head of the department.

Senator Sherry —Just wait for that area of the department, and we will have the officers here.

CHAIR —That is why, Senator Heffernan, we sit here and we all agree as the Senate committee that we will follow the timetable.

Senator COLBECK —Dealt with in the overall budget context, I suppose the question could be quite—

Senator HEFFERNAN —That is where we are now.

CHAIR —Your colleague has the call, Senator Heffernan.

Senator COLBECK —We could ask you to have prepared for us for when we get to it tomorrow an answer on whether there is a budget allocated to what is going to be a significant issue to deal with, so let us put that part on notice as well. Can I just come back to Senator Macdonald’s questions on the questions on notice. Dr O’Connell, you are telling us that you do not know whether all of the information from the department that is required to answer the questions or requests that might have been made from the minister’s office has been responded to? There are only 15.

Dr O’Connell —Sorry; I am unclear on that question.

Senator COLBECK —There are 15 questions that are outstanding and Senator Macdonald has indicated those to you.

Dr O’Connell —That they are under consideration is all I can effectively say, obviously.

Senator COLBECK —You do not know whether all the department’s responsibilities, at this stage, have been met, as far as those questions are concerned. You do not know that.

Dr O’Connell —Going back to my earlier point—

Senator COLBECK —You have provided information to the minister on every question. He may have asked some questions on some of them, and you do not know whether those questions have been answered?

Dr O’Connell —No, what I am saying is that, until the questions have been signed off, the department’s responsibilities are effectively not settled. That is obvious, in the sense that we may always be asked for more information or more clarification, or redrafting. It is not a question of me being able to say the department has finalised its job and it is somebody else’s job. This is an exercise.

Senator COLBECK —Unless you have received briefs back requesting further information, you do not know whether there is any more that you have to do. What I want to know is: have you fulfilled all the commitments, notwithstanding the fact that you have not received anything back on those 15 briefs? You know what we are trying to find out—whether you have done all your work or whether the minister still has not signed off on the questions or not? I know you do not want to put your minister into it and you are being a good secretary. I understand that, but we just want to know what is going on with the questions.

Dr O’Connell —I think I will have to leave the question where I have left it. I do not know that I can add anything more to it.

Senator COLBECK —On ‘can’ and ‘wanting to’, I suppose we will take a definitional difference, but okay. We will have to be content with the fact that Senator Sherry has asked to find out where they might be and when we might see them. Do we have any impending retirements coming up in the agency during the year? We might spark Senator Heffernan up there. You do not know? Okay.

Ms Hazell —None that we are aware of, but it depends on what staff decide to do during the year.

Senator COLBECK —Okay.

Senator HEFFERNAN —Are there still a few people in the scheme?

Ms Hazell —If you are referring to people still in the CSS superannuation scheme, yes, we do have people who are still in that scheme.

Senator Sherry —That is perhaps a more appropriate question for the public sector superannuation area in finance.

Senator HEFFERNAN —Yes, but do you keep a tab on them for future planning of gross intake and retirements, because, obviously, it is a nice little setup, to go out on 54/11 and come back somewhere as a contractor. How many of those would you have?

Senator Sherry —I think that the personal retirement decisions of individuals in the public sector—and, indeed, us—are personal, and I do not believe that it is appropriate for the department to be going up to people who are 54 years and a couple of months old and say, ‘You are a 54/11-er, what is your intention?’

Senator HEFFERNAN —No, but I just wondered how many are in the system, because the system must run out of them in due course.

Senator Sherry —Yes, of course, but that is an issue for the public sector superannuation.

Senator HEFFERNAN —It is not an issue for the department? It is an incentive, I have to say, a tempting incentive.

Senator Sherry —The data you are requesting is an issue for Comsuper, public sector super.

Senator HEFFERNAN —That is fair enough.

Senator Sherry —Whether you are at the finance estimates—I am happy to take a question not on notice from here but to ensure that there is a question to get you some sort of data on this and, if necessary, a breakdown by department.

Senator HEFFERNAN —Thank you very much. I was just curious to know whether the department kept tabs on the number because, obviously, there is a pattern of behaviour.

Ms Hazell —We do not inquire into people’s intentions—

Senator HEFFERNAN —You would not know how many 54/11-ers you have got?

Ms Hazell —Not off the top of my head, and I certainly would not be asking—

Senator HEFFERNAN —Not off the top of your head, but would the department know?

Ms Hazell —I can give you a rough age profile, but I cannot break that age profile into who belongs to what super scheme.

Senator HEFFERNAN —No, I do not want that. I would have thought it was prudent planning to know that number. You can take it on notice if you like.

Ms Hazell —We look at our overall numbers of people who separate and plan accordingly. It is my experience, in the last 12 months, that this has not been a factor.

Senator HEFFERNAN —But you do know the number?

Ms Hazell —No, I do not know the number.

Senator HEFFERNAN —Wouldn’t it be prudent to know that number?

Ms Hazell —It does not particularly make much difference to our planning. We look at our age profile, generally. We have a fairly stable trend in separations.

Senator HEFFERNAN —Mr Secretary, if you would like to take that on notice and do your best?

Dr O’Connell —What is the question, precisely?

Senator HEFFERNAN —How many 54/11-ers do you have?

Dr O’Connell —And 54/11 means?

Ms Hazell —How many people who are 54 years and 11 months?

Senator HEFFERNAN —They know what it means.

Ms Hazell —How many people have taken it?

Senator HEFFERNAN —How many people in the department, under the old scheme, are 54/11-ers—‘Get out before you are 55’?

Dr O’Connell —During this coming year?

Senator HEFFERNAN —How many are on the payroll now? There you go.

Ms Hazell —How many CSS members on the payroll now who are in the age bracket 54 to 55?

Senator HEFFERNAN —Which will be 54/11-ers, yes; how many people left in the system. That is all. It is not very complicated. I still do not know what your PhD means.

Senator COLBECK —Dr O’Connell, you have five of your executive staff at the moment in deputy roles, including a deputy secretary. Can you give us a sense of how you are managing through that process, in acting roles?

Ms Hazell —I assume you are referring to figures in last year’s annual report, because we do not have five deputy secretaries in the department.

Senator COLBECK —No, sorry, you have five members of executive staff, including a deputy secretary, in acting roles at the moment. What I am asking Dr O’Connell is: what process is he dealing with to resolve that issue?

Dr O’Connell —We have now got all substantial deputy secretaries—three of them.

Senator COLBECK —There are three of them?

Dr O’Connell —Yes, three deputy secretaries and me.

Senator COLBECK —Your organisational chart is out of date then?

Ms Hazell —It is out of date effective today.

Dr O’Connell —Our organisation chart, I do not think is out date, but it would be as of today because we have had a new deputy secretary start today, Dr Rhondda Dickson.

Senator COLBECK —Which position is that in?

Dr O’Connell —Anne Hazell has been acting in that position over recent times, pending Rhondda Dickson coming on board.

Senator COLBECK —You have four other people across different elements of the agency that are also in acting positions, or has that situation been resolved as well—corporate policy, corporate services, BSG strategic projects and BRS.

Dr O’Connell —That is not at deputy secretary level.

Senator COLBECK —No, SES I am talking about. Sorry, they are SES positions?

Dr O’Connell —SES positions.

Ms Hazell —The quick answer is: the corporate services one is my substantive job. Now that I have finished acting as deputy secretary, I go back to that job.

Senator COLBECK —That is resolved as of today, as well?

Ms Hazell —Yes.

Senator COLBECK —Corporate policy?

Ms Hazell —We have somebody acting in that position.

Senator COLBECK —Which is effectively my question. My question is: what is the time frame and what is the process to actually resolve those acting positions? Is there intention to make the people who are acting in them permanent?

Dr O’Connell —That is an internal staffing decision, and obviously that depends on how we manage our processes.

Senator COLBECK —Are there recruitment processes in place to deal with those?

Dr O’Connell —Not necessarily with all the vacancies that you are looking at. I would have to take on notice the specifics of the different positions that you are looking at, but obviously those go to how we are managing the SES planning overall.

Senator COLBECK —There is one officer who has been in an acting position since that position was created—the BSG projects division. Is there any reason why that continues to be an acting position?

Dr O’Connell —The position there is one where the relevant substantive officer is on leave. It might be most useful if we are able to provide you with an account overall, if that is helpful, if you have an interest in what is happening on the SES acting positions.

Senator COLBECK —As of today, there is one deputy secretary that has been resolved and there is another in corporate services that has been resolved because of the previous decision.

Dr O’Connell —There will be a further one resolved also on that. There would be the HR general manager position as well. Some of these things rattle through, if you like.

Senator COLBECK —They are cascading.

Dr O’Connell —They can cascade, depending on how they work. Yes.

Senator COLBECK —Can we go back to the BSG position, which has been an acting position for almost the entire life of that particular division. Is there a reason why that is in that state?

Dr O’Connell —I am perhaps unclear as to the specifics there, but I think that with the relevant position that you are talking about, the division head, the executive manager is on leave, and before that it was a substantive position, I think. It is strategic projects. No, I think that was substantively occupied before and he is just on leave—on long service leave. As I say, if you are comfortable, I can just provide you with an account of the lengths of actings in these positions and the reasons.

Senator COLBECK —That might help. We can deal with it that way. At previous estimates you gave us some details of your campaigns and advertising. What have you got going at the moment in your advertising space, bearing in mind that I think we had a debate about the difference between campaigns and advertising?

Ms McDonald —We do not have any major campaigns going on as such, but our expenditure on advertising, which is non-campaign advertising, and recruitment in the year to date, as at 30 April, is now $473,966, so there is activity in that area.

Senator COLBECK —The primary focus for that advertising is what?

Ms McDonald —It goes across a range of programs and, as I said, it includes recruitment as well. The recruitment component of that is around half of it, so $268,818. Non-campaign advertising is things such as tenders, public announcements of grants rounds, information sessions, operational information and that sort of thing.

Senator COLBECK —And what is the value of that? That is the other 50 per cent?

Ms McDonald —The recruitment advertising is $268,818, and the non-campaign advertising—so the other part of that—is $205,148. That is year to date, so July 2009 to 30 April this year. The total figure, as I said, is $473,966.

Senator COLBECK —What is remaining in your budget and what are you projecting to expend for the rest of the financial year?

Ms McDonald —It is hard to make predictions on non-campaign advertising, because it really depends on what the programs themselves want and what is going to come up in the next couple of months until we finish this financial year, so I cannot really make any predictions.

Senator COLBECK —What has happened to the Quarantine Matters! campaign? What is happening with that, for example?

Ms McDonald —The Quarantine Matters! campaign was a discrete campaign activity which ended in early July last year, as was scheduled with that program.

Senator COLBECK —And so there are no proposals or plans to do anything further in maintaining people’s understanding and knowledge of the importance of quarantine? There is no expenditure at all going into that process?

Ms Mellor —We do not have a campaign as such planned at the moment. We have a range of marketing and education activities and are working on trying to find the most optimal ways to bring risk and management of risk to the attention of those who need it most.

Senator COLBECK —What is the funding for the marketing and education campaigns?

Ms Mellor —The funding for the marketing and education is included within the corporate communications budget. Biosecurity Services Group puts forward a range of opportunities and they are funded out of that budget.

Senator COLBECK —How would I identify how much you have spent in this financial year on those programs, your marketing and education programs?

Dr O’Connell —We could provide a breakdown, I think, in terms of what relates to biosecurity services, if that is the area you are asking about.

Senator COLBECK —You do not have those numbers.

Dr O’Connell —We do not have it on us here, I think.

Ms McDonald —Sorry, Secretary. I have the budget for the biosecurity services account team for this financial year. I do not have the actual expenditure out of that figure I have just given you, but the total budget is about $1.65 million.

Senator HEFFERNAN —Does that include cattle from the US for the BSE import risk analysis process?

Ms Mellor —No.

Senator HEFFERNAN —Why not?

Ms Mellor —That is funded out of other departmental expenditure.

Senator COLBECK —Your overall marketing and education budget for biosecurity for the year is about $1.65 million.

Ms McDonald —Yes. That includes the whole costs of that biosecurity account team. The figure I gave you earlier was what has been spent on advertising itself. This is the costs of the whole team, so it includes staff as well, and various other costs.

Senator COLBECK —How much of the $205,000 has been spent on advertising for biosecurity?

Ms McDonald —I will have to take that on notice. I do not have the split.

Senator COLBECK —Can you break down the $205,000 between tenders and advertising?

Ms McDonald —No. All I have is non-campaign advertising and recruitment advertising and the total for that.

Senator COLBECK —You only have those three figures, the non-campaign being $205,000, the recruitment being $268,000 and the total being $473,000?

Ms McDonald —Yes.

Senator COLBECK —Going back to the marketing and education budget, what is the split in that budget? You have said some of it is staffing. What is the split in staffing and expenditure for marketing and education?

Ms McDonald —I will have to take that one on notice. I have not got that split with me here today.

Senator COLBECK —You are spending $1.65 million. How much of that is staff?

Ms McDonald —That is in the budget. The team at the moment is 11. There are 11 people. Some of those are in the Canberra office, and there are officers spread around the regions as well.

Senator COLBECK —Is any of that money spent on consultancy?

Ms McDonald —I will have to take that on notice. I am not sure. I do not have that information with me right now.

Senator COLBECK —Would I be able to find in the budget papers the allocation of staff in marketing, education and biosecurity, or is it something that you will have to give me detail on?

Ms Mellor —No. It is in the total staffing numbers.

Senator COLBECK —It is not broken down in staffing.

Ms McDonald —No.

Senator HEFFERNAN —Are we going to get the consultancy figure out of that discussion?

Ms McDonald —If there are consultants. We do use consultants in the corporate communications area.

Senator HEFFERNAN —Can you identify the consultants?

Ms McDonald —I will have a look at the financial information.

Senator HEFFERNAN —I would be interested to see how many 54/11s you have.

Senator Sherry —Definitely.

Senator NASH —Please just clarify for me supplier expenses. I will make it easier and take you to page 83. It says that in 2009-10 the estimated actual was $232,703,000. Can you give us an idea of what the supplier-related expenses consist of. What are they, actually?

Mr Schaeffer —They comprise lots of different things: consultants, travel, administration, rent and things of that nature.

Senator NASH —Can you give us a more detailed understanding of what that is, rather than just those few categories? Perhaps you could give us the break-up of where the costings are attributed across all of those areas. Just moving onto the total expenses, I think that was $678 million, which is an increase of nearly $12 million. It says in the PBS that the change is primarily due to an increase in supplier expenses. Which of those areas that you were talking about are particularly going to contribute to that $12 million?

Mr Schaeffer —I will have to take that on notice for you.

Senator NASH —Okay. I am guessing you will have to do that for this one as well, then. It actually shows in the forward estimates that there is going to be a decrease in those supplier expenses, so I am just interested to know where those savings will be made. It is around $9 million, you say in the PBS.

Mr Schaeffer —Yes, we can take that on notice. It is not necessarily savings. It could be just the fact that our base continues to move, with measures and different programs coming and going.

Senator NASH —All right. That would be good. If we could have that before next estimates too, that would be really useful.

Mr Schaeffer —Sure.

Senator NASH —Even by the due date, perhaps. That might be helpful as well. Thank you. I imagine that would be fairly straightforward and not too hard to find.

Mr Schaeffer —Yes.

Senator HEFFERNAN —Could I ask whether you actually have in your budget a contingency for travel to the United States to have a look at the Mexican and Canadian borders, with regard to the application by the United States, Canada and Japan to import their meat into Australia, which has been now subject to a full import risk analysis? It would be in the biosecurity area.

Dr O'Connell —We will be able to cover that under the Biosecurity Services Group.

Senator HEFFERNAN —You will have the contingency planning for that?

Dr O'Connell —We will be able to let you know what the financial plan is, I think, when we have that group come on.

Senator HEFFERNAN —Have you got someone going to Japan to have a look at the foot and mouth thing?

Dr O'Connell —Again, we can probably we can cover that in the Biosecurity Services area.

Senator HEFFERNAN —It does not come to your attention?

Dr O'Connell —A lot of things about foot and mouth have come to my attention, yes, indeed.

Senator COLBECK —Can you just run through the current discretionary grant programs that you have got running at the moment?

Mr Schaeffer —Do you want a list of them?

Senator COLBECK —Yes, please.

Mr Schaeffer —Sorry, are you after a list of our programs or—

Senator COLBECK —Discretionary grants programs that you currently have running at the moment.

Mr Schaeffer —There is a long list. They are throughout our budget papers, and most of our programs have discretionary grants components to each of them.

Senator COLBECK —Okay. You have got a consolidated list there?

Mr Schaeffer —We do have a consolidated list, yes.

Senator COLBECK —Could you table that.

Senator Sherry —It is a long list. We will make a copy and you can have a look at it during the break.

Senator COLBECK —If you could table it for me that would make life a lot easier. Can you tell me what discussions you had with the department of industry in relation to the reduction in availability of the food industry grants?

Dr O'Connell —If we could deal with that when we get to the relevant area it would probably be most useful. If we are going to go into specific areas it is best to have that discussion when the people who are engaged with that process—

Senator COLBECK —I am more than happy to deal with the impacts of that when we get to that.

Dr O'Connell —I think even the management of the—

Senator COLBECK —But I just want to know whether or not any conversations have been held with—

Dr O'Connell —I would be most comfortable taking that when we have the area that is dealing with the programs.

Senator COLBECK —Okay. All right, we will deal with that then. Chair, I think that nearly covers our corporate services division at the moment.

CHAIR —Are there any other further questions of corporate services? If not, I thank the officers and now call the officers for climate change, which includes forestry, droughts and exceptional circumstances. I welcome officers from climate change. We will break in 10 minutes for morning tea, but I think we will go straight to exceptional circumstances.

Senator IAN MACDONALD —Thank you, Mr Chairman. Can someone just give me a very, very quick update on the exceptional circumstances for north-west Queensland. I do not mean exceptional circumstances relating to drought; I mean exceptional circumstances relating to unusual flood.

Mr Mortimer —That area is one of a group of areas currently in EC which is due to come out in the middle of June. The National Rural Advisory Council—

Senator IAN MACDONALD —Sorry, what is to come out in June?

Mr Mortimer —That area in Queensland that you are referring to, if you are talking about south-west Queensland.

Senator IAN MACDONALD —No, north-west. This was not an EC drought; it was an EC flood.

Mr Mortimer —The gulf region?

Senator IAN MACDONALD —Yes, the gulf region.

Mr Mortimer —The gulf region has been declared to be an EC.

Senator IAN MACDONALD —Yes. I am just saying can you give me a quick update. I am aware of that.

Mr Mortimer —Yes.

Senator IAN MACDONALD —How many have applied? How much money has gone? What is happening?

Mr Mortimer —Mr Macdonald might give some information.

Mr McDonald —I will just check and see if I have got that information with me. I do not believe I do.

Senator IAN MACDONALD —Okay. It is really just an interest in how it is going. It was quite unusual and the first of its kind in exceptional circumstance applications, as I understand it. I was just curious as to how it was being taken up, how many had applied for assistance and what assistance had been made available, so could you get that for me?

Mr McDonald —We will probably have to take that on notice.

Senator IAN MACDONALD —Yes. It was also a lead-in question. The sugar industry in the Proserpine region was affected by Cyclone Ului. Is the government looking at a possible exceptional circumstances program for cyclone assistance, in the same vein as drought, which we are all very familiar with, but acknowledging they have to be exceptional droughts, and flood, which we have just dealt with in the gulf country, which, again, was a quite exceptional flood? Is there any work being done on exceptional circumstances for a cyclone which comes through and, in the manner of droughts and floods, is quite exceptional and certainly beyond the control of any primary producer, or any cane grower, in this instance?

Mr Mortimer —In terms of the cyclone you refer to, there has been no application for exceptional circumstances assistance as a result of that event. Typically, the response measure from government for these cyclones is the Natural Disaster Relief and Recovery Arrangements, which provides a Commonwealth-state framework to get assistance to people affected in a very immediate sense. The money flows straightaway in the different forms and there are a range of measures available there. More broadly and, indeed, if you think about the history of it, that is the way the assistance has been done. For example, Cyclone Larry a year or two ago, which was probably the best known and most destructive one, was dealt with by NDRRA and some extra measures. Conceptually, exceptional circumstances assistance is available to farmers who are affected by cyclones. The key issue is that it would have to be demonstrated to be a one in 20 to 25 year event and to have a sustained, prolonged impact on farm income.

Senator IAN MACDONALD —It requires an application, in this instance, by the Queensland government, for exceptional circumstances?

Mr Mortimer —That is right.

Senator IAN MACDONALD —You said earlier that no application had yet been received?

Mr Mortimer —That is right.

Senator IAN MACDONALD —I understand that freight subsidies have been implemented for primary producers affected by floods in south-west Queensland, and it was a $5,000 grant across the board. Has there been any thought of doing that for sugarcane farmers, who have perhaps not transport difficulties or freight subsidies but other difficulties, as something different from the NDRRA?

Mr Mortimer —Essentially, as you say, the NDRRA measures provide grants immediately for farmers and other people affected to apply, as they see fit. That money that is provided for NDRRA—and there are tiers of that, depending on what is triggered by the government—can be applied by farmers and others as they see fit. In terms of the transport subsidies that you referred to in the south-west, that is a separate issue because that is a measure that Queensland provides under its state drought policy. The Queensland government has its own separate, independent system of drought assistance which revolves around the state declaring areas to be in drought, and those state declarations and indeed revocations from drought can trigger access to freight subsidies for farmers to take the stock in or out of the area.

Senator IAN MACDONALD —The Commonwealth has no part in that?

Mr Mortimer —No. The Commonwealth’s broad-ranging policy is not to support freight subsidies for movement of stock and fodder during drought.

Proceedings suspended from 10.27 am to 10.46 am

CHAIR —Welcome back. We are in continuation with the officials from Climate Change.

Senator WILLIAMS —I have a few questions on EC and rainfall. When an EC application is received, what rainfall figures are researched? Do they have to be from a registered rain gauge? Do they pay any attention to a farmer’s record, for example?

Mr Mortimer —That is fine. When the applications come to the department, we get advice from the Bureau of Resource Sciences within the department. They advise on issues that are science based. In terms of rainfall, the data that is used is Bureau of Met data.

Senator WILLIAMS —Only Bureau of Met?

Mr Mortimer —Yes, I think that is right.

Senator WILLIAMS —I refer to the application that went into the Bundarra area south of Inverell, and here is the problem: the Bureau of Meteorology areas are the towns of Barraba, Delungra, Inverell, Bundarra and then right across to Uralla. There are many areas in between that have been severely drought affected not only for this year but for several years compounding. It is some distance—it could even be 100 kilometres—between registered rain gauges and the towns. Does the department pay any attention to the rainfall records kept by the farmers, or is it, as you said, just up to the bureau records?

Mr Mortimer —They are provided to the department and also to NRAC when they do a tour of the region. Often farmers will provide the data from the rain gauges on their farms to NRAC. That helps paint a picture, in terms of the variability and how the rainfall lands across a region. In terms of the threshold issue about defining a one in 20 to 25 year rainfall event—

Senator WILLIAMS —Are you referring to the nought to five percentile?

Mr Mortimer —Yes, it is just another way of describing the same outcome. The Bureau of Met data is used. Essentially that is used because there is a sound and rigorous methodology around that. We have had discussions with the Bureau of Rural Sciences from time to time about that, because certainly people raise the sort of question that you raised. But the response has been that, if you move away from the Bureau of Met recorded data stations, you get a whole pile of problems, in terms of having a reliable and sound methodology that can give you accurate outcomes. In terms of the process as a whole, having that reliable and sound methodology is important.

Senator WILLIAMS —This is the problem we have in the Bundarra area. The Bureau of Met rain gauge has recorded much more than many of the outlying properties. Perhaps you should look at registering some of these properties with a registered rain gauge for the information of the Bureau of Meteorology so they can have a clearer picture. It is a very patchy situation. Some areas have had some very good rainfall over the last couple of years, but you only have to go 10 kilometres away and it has been very low rainfall. I see that as one of the serious problems with this.

Mr Mortimer —I hear what you say. It is something that the department and NRAC are very much conscious of and have discussed with the Bureau of Resource Sciences. But the important thing is that there is a reliable methodology that gives fair accurate outcomes.

Senator WILLIAMS —Who appoints the inspectors on NRAC?

Mr Mortimer —The minister appoints those people.

Senator WILLIAMS —I had a serious problem when NRAC went to the Bundarra area last January. There had been some rain over Christmas; it is basically summer rainfall country. It does get winter rain, but of course there is very little growth in pasture during winter, with the frosts and cold weather. There was an inspector from Western Australia—I assume from southern Western Australia, where there is probably very little summer rain; I grew up in South Australia—and an inspector from Victoria. One of my concerns is that two out of three inspectors were not familiar with the pastures and the farming country because they came from a southern climate, a winter rainfall climate, and perhaps did not have a lot of knowledge of how summer rainfall country works and what effects there are in wintertime when the frosts hit. I find that concerning. Perhaps NRAC, when they go to a specific area, could use local farmers who have a knowledge of that farming area?

Mr Mortimer —The NRAC has a policy—and it is a policy that the council itself has developed and put in place—that, if an EC application relates to a particular state, the members of NRAC who go to do the regional inspection be from other states. Essentially, that is designed to provide some perspective on the issue. All the members of NRAC, with the exception of the government-appointed member—which I have to declare is me—are farmers, as well as a state-appointed representative. They are farmers from different parts of Australia who bring an understanding of farming; in terms of understanding the issues of a particular region, that is explained and set out by the farmers in the region that the NRAC members talk to when they do their inspection.

In the case of the Bundarra region there are two NRAC members, who are farmers from other parts of Australia, who broadly understand what farming is about, even though they might have different or more specialised systems in their own state or on their own farms. They went across and I am confident that they were able to discuss and understand the nature of the farming issues in that region.

Furthermore, the two NRAC members who do the inspection and talk to the farmers in the region do a report. They make a recommendation, and that goes to the full NRAC council, which considers it formally, and so the information, advice and expertise of all members of NRAC are brought to bear when the full council considers the issue and makes a decision on it.

Senator WILLIAMS —Okay. I disagree with you. When they got to Bundarra, the application was put in, and I think NRAC agreed in December to go and visit the area. There had been some rain over Christmas. Of course, the grass ran straight to head, and there is grass this high and green, but once it dries off with a frost or just dries off with lack of rain, it is basically useless, no protein, especially if it gets a shower of rain on it after it has dried off. I just think local knowledge is the best knowledge, and so I happen to disagree with you there about farmers from other areas.

There seemed to be some delay by the time NRAC had been directed to visit the Bundarra area before they got there. Do you have enough NRAC inspectors, or do you feel you should have more and be resourced more?

Mr Mortimer —The NRAC council has eight members. They all have other jobs, but they all fulfil their duties and, I would say, do so very willingly. The actual inspections and the timing of those are the result of discussions between the NRAC secretariat and the department, the officials of the relevant state, in terms of lining up meetings and so on, and the availability of the NRAC members. Over the years NRAC members have done a huge number of inspections, 20 or 30, coming up in different times to meet the deadlines for EC expiry, and I would have to say I am pretty confident they get in and do the job as promptly as they can.

Senator WILLIAMS —That may be your confidence, but it does take several weeks. For example, the second application for Bundarra I know had been handed on to NRAC. Do you know where that is up to?

Mr Mortimer —Mr McDonald might do an update on the details of that.

Mr McDonald —The revised application is currently before council. They met on Friday to have further discussions about it and we expect they will be able to settle their advice this week.

Senator WILLIAMS —Are you getting many applications for EC? Is the number of applications growing each week or has it been rather stable?

Mr Mortimer —It has actually fallen away, I think I would say, and that is consistent with the fact that there have been better seasons in many parts of Australia in the last year or two. The starting point, I guess, is that until about last year there was a very big amount of Australia in EC. In the last year or so considerable areas have come out EC, particularly in Queensland and New South Wales. There have been requests, when I think about it, in the last year in the south of New South Wales, the Bega area. There have also been requests from Bundarra and also Dunedoo-Mudgee.

Senator WILLIAMS —Mudgee areas. It got rejected, didn’t it?

Mr Mortimer —And then there was the request in the Gulf. I think that really is it, plus there have been a few new ones that have just come in recently from South Australia.

Senator WILLIAMS —I actually had a meeting last Tuesday evening at Delungra, and that area of Delungra, Bingara, Bowra to Bundarra is in extreme drought and, as I said it is a compounding drought. It is not as though they were only just cut off this summer. It has been going on for several years, and that is why the water is so low—the water storages, the creeks, et cetera—and that is why the pain is so severe financially, because they have lost their cash flow. I can assure you that it probably will not be long before you will have an application from the Delungra area as well.

CHAIR —Thank you, Senator Williams. Before I do go to Senator Colbeck, while we are talking about drought, I believe the minister has announced the drought policy for WA. Mr Mortimer, would you like to just tell us how that will work and how it will compare?

Mr Mortimer —I will pass it to Fran Freeman, who has direct responsibility.

CHAIR —If Senator Adams wants to talk about Western Australia, too, that is fine.

Senator NASH —And me.

CHAIR —And Senator Siewert is in the room. Sorry. I did not realise Senator Siewert is in the room as well. Seeing as there are more West Aussies, you may as well tell us the answer then, Mr Mortimer.

I just want to know how different it differs from the existing EC arrangements?

Senator Sherry —You might be all lined up. The public servants are all lined up, but I am not sure I am lined up to this, but over to you.

CHAIR —I am sorry, Ms Freeman. If you could tell us how it differs from the existing EC arrangements.

Ms Freeman —Certainly. You are quite right that the Australian government, in partnership with the West Australian government, has recently announced its plans to conduct a pilot of drought reform measures in WA. The pilot will run from 1 July 2010 to 30 June 2011, and payments under one component, the Building Farm Businesses, will continue until June 2013.

The pilot will be testing seven measures in response to the national drought policy review, and the measures are designed to move from a crisis management approach to risk management. The total cost of the pilot is $22.9 million. The Australian government has allocated $17.9 million and the West Australian government is contributing $5 million. The pilot will not—and I think is an important point—affect regions in other parts of Australia that are currently exceptional circumstance declared, and the intention is that the pilot will inform ongoing work on drought policy reform. It will be reviewed in 2011 and will provide the basis for future consideration of a new national drought policy, including measures, implementation and discussion with state and territory governments.

CHAIR —Now that I have poked a stick in a bees’ nest, would any other West Australians wish to continue with questions to Ms Freeman on the West Australian drought policy pilot?

Senator COLBECK —Can I just ask one question first?

CHAIR —Yes, Senator Colbeck.

Senator COLBECK —You have got a one-year trial and you have indicated the funding of $22.9 million, and you said it is a one-year funding. Why is the expenditure running to four?

Ms Freeman —That is because one measure, the Building Farm Businesses, will actually run for four years and the 2009-10 money—there is a small amount allocated for this financial year which is largely related to the start-up costs of the pilot. That includes, for example, Centrelink getting their IT systems in place, for example, for the rollout of some of their measures. So there is a range of costs in 2009-10.

Senator COLBECK —Centrelink and IT systems.

Ms Freeman —Basically, Centrelink will be responsible for a number of measures.

Senator COLBECK —No. I just have some experience with Centrelink and their IT systems, that is all, and that is why I asked the question.

Mr Mortimer —I think in terms of expenditure to four years, that is because the farm business grants will be payable over four years. Once a farmer becomes eligible for them, he is eligible for potentially the full amount, and that is payable over four years.

Senator COLBECK —That is the Building Farm Business element of the program.

Ms Freeman —As I said, yes.

Senator SIEWERT —Sorry. While we are still clarifying this?

CHAIR —Yes, Senator Siewert.

Senator SIEWERT —I am sorry. I missed what you said that the first year was called.

Ms Freeman —Basically, the pilot commences on 1 July 2010.

Senator SIEWERT —This year. Yes.

Ms Freeman —Eligible farmers, from that commencement date—

Senator SIEWERT —Have a year to reply.

Ms Freeman —Yes.

Senator SIEWERT —Okay. The $22.9 million then goes for the four years.

Ms Freeman —Yes, that is correct. For one measure, the Building Farm Businesses measure, actually you apply, and there is certain eligibility criteria for that, but subject to a successful application in 2010-11, the grants will actually be paid in the subsequent three years as well.

Senator COLBECK —What component of the $22.9 million is that?

Ms Freeman —$8.4 million.

Senator SIEWERT —$8.4 million, that is the business planning?

Ms Freeman —Building Farm Businesses.

Senator SIEWERT —Okay. Can you give us the breakdown of that. Of the $22.9 million, can you give us a breakdown of what component pays for what?

Ms Freeman —Yes. I will happily take that on notice and give you the outline.

Senator SIEWERT —Okay. People have got basically 12 months to register for the program.

Ms Freeman —The measures will start effective from 1 July. People can start the range of measures that they would care to express their interest in and apply for, and they are eligible to do that from that start date. Depending on what they would like to apply for, they may access them sooner rather than later, yes.

Dr O’Connell —For example, the Farm Family Support component is immediately available from 1 July.

Senator SIEWERT —How much is that?

Ms Freeman —What I will take on notice is to give you an outline for each of the measures.

Senator COLBECK —If you have that with you, you could table it for us so that we can have a look at it now.

Senator NASH —Yes, if we get it now.

Senator COLBECK —It would really help the committee if you could actually table that list with those details in it.

Ms Freeman —We can get that for you. I do not have it with me at the moment, but we can, yes.

Senator COLBECK —Is it possible that we get that info quickly?

Ms Freeman —Yes.

Dr O’Connell —I think the basic budgetary information you are after is in Budget Paper No. 2, page 88.

CHAIR —Senator Siewert, you still have more questions? I know Senator Adams has something while we are on that, but you are still not on the same line of questioning?

Senator SIEWERT —You are on this?

Senator ADAMS —Yes, on this.

Senator SIEWERT —I was waiting for the table, so I will have a look at it.

CHAIR —Okay. We will come back to you. Senator Adams.

Senator ADAMS —On the Western Australian pilot, it is obviously about moving from a system of crisis management to risk management. I cannot find in the program exactly what you are looking at as far as risk management is concerned. Could you tell me what farmers have to actually apply for in that respect?

Ms Freeman —Certainly. One of the measures in the pilot is actually called Farm Planning. This measure will be funded and delivered by the WA government. There will be up to $7,500 for farmers to undertake training to develop or update a strategic plan for their farm business. The plan is that it will identify priority activities to help improve the management and preparedness of their farm business to respond to future challenges. That is a key component. Included in that is obviously risk management and financial management. All those elements would be included in the development of that strategic plan.

Senator ADAMS —I would like to drill down a little more into the risk management area. What would you expect in the business plan for that?

Senator NASH —How much funding goes to that Farm Planning component?

Ms Freeman —There is $7,500—

Senator NASH —No, the overall quantum.

Ms Freeman —It is part of the Western Australian input, so it is not actually on page 88 of the Budget Paper No. 2. I will find that number.

Senator NASH —I need that clarified, if that is all right?

Ms Freeman —That is all right.

Dr O’Connell —This is a joint project between WA and us.

Senator NASH —I understand all that, but Senator Adams’ question is about the risk management.

—Yes, I understand.

Senator NASH —You are saying Farm Planning is the main component to address that risk management. There is no federal funding. That is all coming out of the state budget.

Dr O’Connell —The state budget.

Ms Freeman —Once you have completed your strategy plan, eligible farmers who have developed a strategic plan and identified priority areas, subject to certain eligibility criteria, those farm businesses can apply for a Building Farm Businesses grant, which is a joint Commonwealth/WA government funded grant program.

Senator NASH —Senator Adams.

Senator ADAMS —No, that is all right. We are just trying to get the components of what would be expected in their risk management part of the plan.

Ms Freeman —In that grant program, there are grants of up to $60,000 in two components for eligible activities in the strategic plan. That includes a business adaptation grant of up to $40,000 that help farm businesses prepare for the impacts of drought, reduced water availability and a changing climate. There is also a landcare adaptation grant of up to $20,000 with a natural resource management focus and a broader public benefit. Your business undertakes the Farm Planning exercise and eligible businesses coming through that planning process can then apply for the grants of up to $60,000.

Senator NASH —That is under the Building Farm Businesses?

Ms Freeman —Yes.

Senator ADAMS —All right. Could we get back to my question?

Ms Freeman —On risk management, yes, certainly. Basically, there are three components of the Farm Planning with a view to strengthening your farm business. They are: the business elements of your business, the natural resource management aspects of your business and your personal and business goals—issues like succession planning. Within the business element there are a range of issues to do with risk management that would be included as a core component of Farm Planning.

Senator ADAMS —Do you consider it actually does provide a long-term solution?

Ms Freeman —Yes. The purpose of it is to strengthen the strategic planning capability of farm businesses. The role of the government is to provide some professional assistance to help farmers in the development of their plans.

Senator ADAMS —When that plan is put forward, who makes the decision whether these people are eligible or not?

Ms Freeman —There are a range of eligibility criteria for the Building Farm Businesses grants. Basically, to be eligible for the grants, your business must be obviously located in the pilot region, you must have developed or updated the plan, you have to have an independent assessment that the implementation of that plan will lead to a more viable farm business—

Senator ADAMS —Who would do the independent assessment of it?

Ms Freeman —The details of that are currently being settled with the Western Australian government.

Senator ADAMS —This starts on 1 July. We have got about five weeks to go and we still have not got it settled. When do you expect it will be settled? Is the program going to be able to commence on 1 July?

Ms Freeman —Yes, it will.

Senator ADAMS —In five weeks you have got those negotiations and they will all be finished, sealed and ready to go?

Ms Freeman —Yes. That program will be ready to go on 1 July.

Senator ADAMS —Okay. Could you continue describing the assessment and where we go?

Ms Freeman —Yes. For completeness, I should continue on the remaining eligibility criteria for the Building Farm Businesses grants. The total net value of off-farm assets of all members of the farm business must be less than $750,000.

Senator ADAMS —Okay. I am just thinking about some of the off-farm assets in Western Australia where the median price of a house is $500,000 now. If that family owned a house anywhere, $750,000 would be the limit—is that right? I am getting back to succession planning, really. Say, the parents decide that they are going to go and the son decides he will try and take it on and stick with it, with a total of $750,000 for off-farm assets, where are the parents going to live? It will be pretty jolly difficult. As I said, in WA the median house price currently is $500,000.

Ms Freeman —Yes. It is the combined total net value of off-farm assets. So I think that is another point. Just for completeness on those measures, the other remaining eligibility criteria for that measure is that at least one member of the farm business must be a farmer who, under normal circumstances, contributes at least 75 per cent of his or her labour and derives at least 50 per cent of his or her income from the farm business and has been a farmer for at least two consecutive years.

Senator COLBECK —When you are talking about ‘net’, that takes into account any liabilities on assets as well?

Ms Freeman —Yes.

Senator COLBECK —It might be they might have a $750,000 house but they could have a $500,000 mortgage on it.

Ms Freeman —A mortgage, yes.

Senator COLBECK —That nets it back down to $250,000.

Ms Freeman —Yes, it is a net number.

Senator ADAMS —Very difficult to meet those guidelines, I think.

Senator COLBECK —The stuff on page 88 is handy, but do you have a chart that gives us some detail on this rather than just the different elements? I am just interested in knowing who is going to be administering what elements of the program. You have got a few agencies that are mixed up in there and I understand Centrelink, for example, is a service delivery agency.

Ms Freeman —Yes.

Senator COLBECK —How much of the $22.9 million that they have got as part of the overall funding for this is to provide benefits and how much is for them to do their IT, for example?

Ms Freeman —We can take that on notice.

Senator COLBECK —Is the cost of their IT included in that $22.9 million?

Ms Freeman —It includes all the costs, in terms of departmental and administered costs for the pilot are through the papers. We can provide them to you.

Senator COLBECK —How much of the $22.9 million is actually going onto the ground and how much is being picked up in delivery costs?

Dr O’Connell —We will give you that breakdown on notice. We will have to get that.

Senator COLBECK —Do you have any sense of what that is?

Dr O’Connell —I would have to take that on notice and give you an accurate answer rather than take a stab at it, because it goes across all those agencies.

Senator COLBECK —I understand that it does, but who is the lead agency in all this?

Dr O’Connell —Obviously, we are the lead agency.

Senator COLBECK —Okay. What is the on-the-ground benefit of the program?

Dr O’Connell —In terms of the break up of the total, as I say, I would have to take that on notice to give you an accurate answer. I do not want to not give you an accurate answer.

Senator COLBECK —It would be very nice to get that as quickly as possible. I do not want to regurgitate this morning’s discussions, but it is a fairly fundamental question sin the overall scheme of things. Are all of the administrative costs for the program are incorporated in that $22.9 million?

Ms Freeman —Yes, that is correct.

Senator COLBECK —What about who is administering each of the different elements of the program? Are each of the agencies going to be looking after pieces themselves or is Centrelink going to be the front-end delivery agency? Where is the point of contact and who is going to be putting all this stuff up?

Ms Freeman —Basically, it varies across the different programs. I am happy to run through them. As I mentioned, the Farm Planning measure is being funded and delivered by the Western Australian government. The Building Farm Businesses program will be jointly funded between the Commonwealth and the Western Australian government and will be administered by the Western Australian government. Strong Rural Communities is funded by the Commonwealth and will be administered by our department, the Department of Agriculture, Fisheries and Forestry. Farm Social Support will be delivered by the Commonwealth and funded by the Commonwealth, and a number of agencies, including Centrelink, FaHCSIA and the Department of Health and Ageing are responsible for that measure. Farm Family Support will be delivered on behalf of DAFF by Centrelink, and the Farm Exit Support measure, similarly. Beyond Farming will be delivered by a service organisation on behalf of the Commonwealth.

Senator COLBECK —That program will go out to tender?

Ms Freeman —I beg your pardon?

Senator COLBECK —You said by a service agency. What do you mean by that?

Ms Freeman —Beyond Farming, that will be delivered by a non-government organisation contracted to the Commonwealth.

Senator COLBECK —Do you have a tender out for that at the moment?

Ms Freeman —Yes, we have a number of proposals we have received.

Senator COLBECK —Okay. You have opened tenders, tenders have closed and you are in a tender assessment process?

Ms Freeman —Correct.

Senator COLBECK —What is your time frame for awarding the tender?

Ms Freeman —We are in discussions with a number of NGOs, so I will take that on notice.

Senator COLBECK —By the time you give me an answer to the question on notice, we could be past 1 July, which is the commencement date of the program.

Ms Freeman —The intention is to have personnel on the ground from 1 July.

Senator COLBECK —You will have to, for an organisation to start up that program, award a contract pretty quickly, given that we are five weeks from 1 July.

Ms Freeman —Yes.

Senator COLBECK —I would have thought perhaps three or four weeks to actually get organised to start program like that would be a reasonable time frame for any organisation to expect to have.

Ms Freeman —Yes.

Senator COLBECK —Potentially within a week, you would be, all things being equal, awarding a contract?

Ms Freeman —Yes, we will be well underway.

Senator COLBECK —What are your measurement programs? What have you got in place and what are you planning to actually measure this program? It is a trial, obviously, although it has a reasonable period of time of four years for some of the elements of it. If it is a trial and it is as precursor to local policy, what measurement processes do you have in place?

Ms Freeman —Basically, the intention of the government is to review the pilot in 2011, as I said, and the scope of the review, including the data requirements, is currently being finalised now within the Commonwealth government and with the Department of Food and Agriculture, Western Australia, with the Western Australian government.

Senator COLBECK —So that is going to be a joint process?

Ms Freeman —Yes.

Senator COLBECK —You are setting the performance criteria for that now?

Ms Freeman —Yes, we are currently discussing the terms of reference for that review and what the associated information requirements will be.

Senator COLBECK —Is the review going to occur after the trial or is it going to be something that you will do progressively? Are there, for example, key points during the start up, mid point or whatever of the trial where you will consider how things are going at different phases, or are we just going to wait till afterwards and have a look to see how it went?

Ms Freeman —No, the government will be monitoring and reviewing the uptake of each of the measures progressively, and then the review will be completed following the completion date of the pilot, with the exception of the Building Farm Businesses grants. The review will be completed in 2011.

Senator COLBECK —How many farmers do you expect would be eligible for the $60,000 grants?

Ms Freeman —Basically, what we have done is that there have been a number of factors our Western Australian colleagues’ and ourselves considered. We expect that there might be some farmers who will be disappointed by the uptake.

Dr O’Connell —I think I would refer you to Minister Burke’s recent piece in the Land, on 20 May, where he sets out the thinking. What we expect to occur is a process where people go through the planning. That will be quite an extensive process in terms of getting their strategic plans in place. He has been very concerned to make sure these are not just template plans, that they are plans quite specific to each property and that they are suitably tested. During the year that this is running  we will look at those who have got plans in place and those who are eligible for grants under the eligibility criteria, with the expectation that probably during this period only a few hundred of those strategic plans will be completed.

It will depend, obviously, on how people apply themselves to it. That is suggesting that perhaps around 150 of those will get to apply for the business grants in this time. This is obviously a pilot. It is a trial of the processes to see if this will work. We are looking, at this stage, at this being relatively constrained in that part of it, but of course the other aspects of the program—Farm Family Support and the social support areas—will be open to anybody. Any of the roughly 6,000 farmers in that region who qualify for the Farm Family Support can access that directly in the normal, demand-driven way.

Senator NASH —Can I just clarify: the program is capped?

Dr O’Connell —The government, I am sure, will keep this under review, but the intention is that elements will be within those estimates that have been provided. We have an estimate overall of $22.9 million, which we are expecting to work within. We will certainly be keeping that under review, but that is the estimate that the government is using at the moment.

Senator NASH —I will come back to that. Sorry, Senator Colbeck.

Senator COLBECK —It is actually a very good question, particularly given that we do not know how much is going to be on the ground and how much is going to get swallowed up within various agencies for their own internal costs. With the strategic plans that are being developed, that is the area that has been contracted out to an NGO to do—the strategic planning?

Ms Freeman —No, Beyond Farming.

Senator COLBECK —The strategic plans will be developed by who?

Ms Freeman —They will be developed by the individual farmers with professional assistance. That program will be overseen by the Western Australian government.

Senator COLBECK —Okay. That is being wholly funded by the Western Australian government?

Ms Freeman —Correct.

Senator COLBECK —What role does the Commonwealth play in that process?

Ms Freeman —We are obviously interested in how that measure is rolled out, but that program is fully funded and delivered by the Western Australian government. For us, it is about ensuring that there are strategic plans developed to help farmers prepare for future crisis, which is the overall intent of this pilot program, and also that, with the plans that are developed and the priority actions identified for those farmers applying for the Building Farm Businesses grants, there is a segue in terms of the Building Farm Businesses grants: they will seek to strengthen the activity and the planning in one program, and then the activities undertaken in the farm business grants.

Dr O’Connell —The processes of getting the strategic plans in place will involve the actions of courses and facilitators. There will be some training support which will come through, approved and overseen by the WA government, but this is essentially a partnership between us and the WA government to make this work.

Senator COLBECK —Ms Freeman, you talked about there not being template-type plans. Obviously, that is a specific criterion that we are looking at to make sure that you do not just have a series of these things that come off production style. That is why there is the interest. I agree that that is an important objective. Is there any interaction that will occur, for example, with rural financial counsellors, who probably would have a fairly good idea of a lot of the potential clients in this category given the work that they are already doing and their knowledge of a lot of these businesses, I would have thought? What interaction is going to occur there and how does that fit in with the requirements of this process?

Mr McDonald —The role of the rural financial counsellors will largely remain the same as the role they currently perform. They can certainly assist farming clients with that sort of information you are referring to. In respect of the WA pilot, they will be able to help clients with their applications with respect to the measures and they will be able to work with clients around their financial information.

Senator COLBECK —There is not going to be a capacity for a rural financial counsellor who already has built up a rapport, which is a very important part of this overall process and is something that has been valued for a long time through the rural community in the relationship with rural financial counsellors? There is not going to be a capacity, for example, for rural financial counsellors who have already built these relationships to play a pivotal role in the development of the strategic plans? Are we ruling that out?

Ms Freeman —The Western Australian government are funding and delivering this measure. They will be endorsing appropriately skilled trainers to deliver this measure.

Senator COLBECK —Appropriately skilled trainers?

Ms Freeman —In terms of a range of people to provide the different skill sets to work with farmers in developing their plans across those elements of the economic aspects of their plan, the NRM aspect of their plan, and the personal business elements of their plan. So they will be done.

Senator NASH —Sorry. Just to interrupt and to clarify, do you mean farm consultants or those sorts of people?

Ms Freeman —Really that is a matter for the Western Australian government, but they are currently—

Senator NASH —Wouldn’t you have had some discussions about what type of arrangements would be in place?

Ms Freeman —Yes, and they are currently going through a process to recruit appropriately-trained personnel—including some relevant consultants, obviously—who are qualified to deliver these measures.

Senator COLBECK —We are talking about a whole-of-farm management plan, effectively. Are you including NRM and the financial—

Ms Freeman —It is a holistic strategic plan for your business.

Senator COLBECK —So it is a whole-of-farm management plan type of circumstance that you are talking about pulling together?

Ms Freeman —Yes.

Senator COLBECK —In that circumstance, you are going to have to pull in land management, financial management, potentially agronomy and a whole range of things to develop a plan. In that circumstance, what is the proposed life of these plans? Are we talking about a plan that sits there and has an outlook of, say, five years? What are the criteria that sit underneath this? This is pretty fundamental to someone’s property and their operations, and it has all sorts of potential—positives and negatives, but largely quite positive.

Dr O’Connell —The plans are to be developed by the farmers themselves, obviously with assistance. It is not that others come in and draw up the plan for them.

Senator COLBECK —That is obviously starting to clarify itself, and the breadth of it is more than what perhaps initially appeared when we were talking about a strategic plan for the farm. I am not criticising that, I have to say, because I am a firm believer in whole-of-farm management planning, including environmental management, NRM and all those sorts of things. I think it is a positive way to go, but I am just trying to get a sense of how it is going to work, what the interactions are and what we are looking to see. It is an important element of the process that is being effectively undertaken by the Western Australian government, and there is no argument with that, but I want to know how the whole thread pulls together, because once you have that initial plan on the table it actually is a direction setter for the farm, potentially for a long period of time. What is the life of the plan, what are the review periods and all that sort of stuff? For certain elements of farming, it could go out a long way. If there is some forestry that is involved, for example, it could have a 10-, 20- or 30-year life cycle on it. I am just interested to know what we are saying that we want out of this, because it is going to drive so many different elements of the direction of the property.

Dr O’Connell —I was just going to say that I think what we are clearly after, if you like, is the level of a strategic plan where a farmer then can have confidence that they understand their direction over future years and are in a position to make assessments about whether or not they want to continue in their current vein or make significant changes to either their investment patterns or their life choices, if you like. By virtue of saying that, it is not a proforma approach. It is also going to be the case that it is not certain—‘It is a five-year plan’, or, ‘It will have these components’. But it clearly is a plan for years in advance and clearly would be something which would require that it is at a level where people can make investment choices, to some degree, based on it. They can then, out of that plan, make an application for these sorts of grants or decide, potentially, to move out of the business. We are talking about that level of planning.

Senator COLBECK —So it is effectively a decision to define the document.

Dr O’Connell —Certainly guiding.

Senator NASH —I want to start at the beginning. We take it that it is capped. I just want to take this of step by step, if we can. I think, Dr O’Connell, you said there would be up to 150 farmers who would be eligible to get the grants of $60,000, so if we look at what is on offer, $8.4 million for that—by the way, how are you going with the list of funding you were going to take on notice? You were going to try to get back to us fairly quickly.

Dr O’Connell —We are taking that on notice.

Senator NASH —Okay. Can I, perhaps, suggest that maybe one of the officers in the other room could have a look at Minister Burke’s press release of 5 May, which categorises the different areas. If they could apply the funding for that, which I am sure would be a very simple process, that would save us all going backwards and forwards. So we are up to the 150. So there is $8.4 million available for Building Farm Businesses, so that would be—what?—about 140 farmers who would be able to get the grant of up to $60,000. Obviously it is up to $60,000.

Ms Freeman —Yes.

Senator NASH —If we assume they all went for the total amount, the maximum number of farmers would be 140. Can you just, perhaps, explain for us a little further how those 140 will be allocated those grants. I understand they will go through that Farm Planning process, but, if 3,000 applications hit your desk at one time, given that 6,000 farmers are going to be involved in this, I think, by the figures, how are you going to determine which are the most worthy 140? Is it creating a bit of an expectation when you talk about the 6,000 farmers who are going to be involved in this, that they will all be eligible for up to $60,000? I say that because up until now that has been the understanding; there was not this view that there would be only 140 farmers eligible.

Dr O’Connell —Earlier on I mentioned the minister’s piece on the land which explains the background to where we expect the business grants to go to.

Senator NASH —You did. For everybody who is watching right at this moment and who have not read that, Dr O’Connell, would you like to pick out the salient points that would answer my question.

Dr O’Connell —There are roughly 6,000 farmers in the area. There is no expectation that all 6,000 of those will undertake planning processes during this period or that they will get to the stage where they are applying for grants. It is very clear that the minister is concerned to make sure that what we do not do is just have a template approach which stamps out plans in order to hit the time frame of an application for grants. The expectation is that probably there will be a few hundred farmers who will produce strategic plans during this 12-month trial period—and it is a trial, obviously—and then the expectation is that perhaps 150 of those might get to the level of applying for grants. That is the basis, I guess, on which these numbers are in front of us. This is just obviously a trial of a future approach and what we want to make sure of is that this can work through. The minister has been quite clear that he wants to see this happen in a measured way so that we do not inadvertently create new problems having come out of a system which people have agreed is not adequate.

That said, for all the 6,000, roughly, farmers in that region, any of them who are eligible can go to counselling and mental health and then the eligible can deal with the Farm Family Support. Once you hit the eligibility criteria you will be accessing the components directly. There are others which require you to go through the strategic planning process and then make an application. The current estimate, on what we have got, is that we will have that 140, 150 level. We will obviously monitor this and keep it under review. We will keep the government up to date with what the uptake is and what that means.

Senator NASH —Okay. I will clarify all of that. In the minister’s press release where he says ‘almost 6,000 farmers in the trial region are expected to be eligible for assistance under the package’, whereas some have read that as ‘6,000 may well be eligible for grants under the Building Farm Businesses’, what you are saying is that the majority of those will only access those support type mechanisms and you are expecting only a few hundred to take the option of the Farm Planning leading on to Building Farm Businesses—is that correct?

Dr O’Connell —At this stage, within this one-year period, yes, that is the expectation we have.

Senator NASH —Okay. I want to clarify again, because I do not quite understand what you have based your estimate on for there being only a few hundred farmers to take up the Farm Planning option and move through to the Building Farm Businesses. What has the department estimated that figure on, that couple of hundred farmers, given that there are 6,000 in the region?

Dr O’Connell —I will take on notice the detail of how the estimates are put together, but, as I mentioned, the clear sense that we have here is that we are testing this. We want to make sure that the—

Senator NASH —No, I understand.

Dr O’Connell —That is an important part of the costing.

Senator NASH —I will cut you off there, Dr O’Connell. I understand all that completely and I am not saying it is not worthy. What I am trying to understand is how it is going to work. If I am a farmer and I live in that region and I have heard about this and I think, ‘Fantastic; I want to go down this Farm Planning route, and I want to move into this Building Farm Businesses grants area,’ what will the department use to determine the most worthy hundred or so of those applicants if, indeed, thousands of the farmers in that region put forward an application to you? I am trying to understand why it is that the department is assuming there will only be a few hundred. Somebody must have some idea of that.

Dr O’Connell —As I say, I can take on notice the breakdown of precisely how we get these costings.

Senator NASH —In all honesty, Dr O’Connell, can I just very gently say that is not at all useful when that is a key component to the backbone of this whole program. The whole issue in addressing the risk management—and I will delve into that a bit further shortly—is this Farm Planning and Building Farm Businesses, and you cannot tell me how the department has arrived at an estimate of a few hundred farmers taking it up.

Dr O’Connell —No, what I said was I explained how the estimate comes about. It comes about from looking at the overall numbers in the area and making an assessment of how many you might expect to be able to get through the strategic planning process in the 12 months, with the WA government—

Senator NASH —That is exactly the point I am trying to clarify.

Dr O’Connell —running a process where, it is quite clear from both governments, both governments want to ensure that those strategic plans are developed to a high quality on purpose-tailored plans—so that they are not template plans; they require that individual attention—and that during this period only a certain number of those are likely to come through to the level of completion and then to the level of application for grants.

Senator NASH —I understand all that, Dr O’Connell. You have said that before—and, when I say I understand what you mean, I do understand what you mean.

Dr O’Connell —And I—

Senator NASH —Just hang on a sec, Dr O’Connell. There may well be somebody in the other room who does have some understanding of how the department has come to the decision that there will only be a few hundred come forward. I am just asking you if you could ask one of the officers, perhaps, to give that some thought over the next couple of hours. Somebody may well know, given that that is the backbone of the risk management approach.

Dr O’Connell —This involves assessing across these portfolios and the WA government, and I would need to confirm the accuracy with those. I would have to take that on notice if what we are looking at is the costings information for breaking this down. We would have to take it on notice.

Senator NASH —Okay. I have got to say this is extraordinary. It is a key component to the program and nobody can tell us how you arrived at that figure, but I will move on, Dr O’Connell, because we are going to go around in circles.

Senator Sherry —Do you want us to take it on notice or not?

Dr O’Connell —I think I have provided it.

Senator NASH —No, we would like an answer. We know what happens with taking it on notice.

Senator Sherry —We are taking it on notice. That is our answer.

Senator NASH —Thank you for that.

Senator Sherry —We are getting into a heavily repetitive three- or four-way question which we are taking on notice.

Senator NASH —We are. It is lucky we have got a lot of time, because we might have to repeat a few of them.

Senator Sherry —You can repeat all you like, but we are taking it on notice.

Senator NASH —I heard you, Minister. Thanks.

Senator Sherry —Good.

Senator NASH —Can I just move to this issue with the plans and those that are going to be working with the farmers. You indicated, I think, Ms Freeman, that those people that will be working on the plans with the farmers are being determined at the moment. How many people are you assuming will be employed in whatever you are going to call that role to assist the farmers?

Ms Freeman —That is a matter for the Western Australian government. I know that they are currently settling all those details now.

Senator COLBECK —Do we know roughly how much it is estimated to cost per plan?

Ms Freeman —Basically, $7,500 has been allocated for that cost per eligible farm business, and that consists of $6,500 per farm business to support participation in approved training to develop or update a written strategic plan and for an independent assessment. Another part of that component is up to $1,000 per farm business, paid by reimbursement, to offset the costs of attendance, such as travel, accommodation and childcare costs.

Senator NASH —Can I just ask again—and I know you are working on this for us—about the quantum of funding. I know it is WA funded—the $7,500 each. What is the overall total of that bucket?

Ms Freeman —We have taken that one on notice for you previously. It is $5 million all up from the Western Australian government as their contribution to the pilot.

Senator NASH —Okay. You do not know specifically for that.

Senator COLBECK —Has there been any comparative cost done on how much it actually costs to do one of these things? I do not know whether the $7,500 was something that the Western Australian government came up with, or whether it is something that has been discussed backwards and forwards between the Commonwealth and the Western Australian state government. Has there been any assessment, based on previous experience, as to what it actually costs to prepare one of these things? We are talking about training and assessment of $6,500 and there is $1,000 for other ancillary costs. Have you had any advice as to what it actually costs to do one of these things? What if someone wanted to bring in a consultant that had experience across the broad elements of this to provide that?

Senator NASH —A lot of them do.

Senator COLBECK —A lot of farmers do not actually have the time to do this. They are too busy managing their properties.

Senator NASH —That is right.

Senator COLBECK —What is the basis of this amount of money that has been allocated? Is it based on anything we know about?

Ms Freeman —This is quite a holistic farm plan and the elements to develop this are probably a little bit different from some of your traditional whole-farm plans. They have been really trying to look at the business elements, the economic aspects, the social aspects and the environmental aspects of your plan.

Senator COLBECK —I understand what they are. I know people who have been through the process.

Ms Freeman —I know what you are saying, but the point I am making—

Senator COLBECK —That is why I am asking the question. I know some people who have actually looked at their properties in this, and they have looked at it from a whole range of things. They have looked at it so that it can actually provide almost down to working with local government on planning issues. I am not criticising the concept. I am not saying it is bad or any of that sort of thing. I have a lot of time for the process, but what I want to know is: how was this amount derived and how adequate is it going to be to assist someone to do it, and how flexible is it to be able to allow someone to apply the costs where they properly lie in developing it? There is no point in having this amount of money if someone sits down and does a calculation and says, ‘It is going to cost me $25,000 to develop my whole-of-farm management plan’—or strategic plan or whatever you want to call it for the purposes of this project—‘I’m going to get potentially $7,500,’ and so they cross the box and do not bother. I want to understand what the basis of it is because, as we have discussed, it is a significant document and it is an important document for a decision-making process.

Ms Freeman —The costing for this, the $7,500, were a matter for the Western Australian government. This matter is being provided for by them. I will just repeat the breakdown of those costings. Of that $7,500, there is up to $6,500 of that money per business to develop the plan. That includes up to $2,500 available to offset the costs of developing the financial components of the strategic plan, and that includes an independent assessment that the implementation of that plan will lead to a more viable farm business. These funds will be paid to the service providers approved by the Department of Agriculture and Food in Western Australia, just to clarify a point.

Dr O’Connell —Some of this information is readily available now on our website. Ms Freeman is just taking that answer from the frequently asked questions. It might be useful if we can provide that to you as well, just so that you have got those questions and answers directly.

Senator NASH —Okay. What we can understand from that then is that the farm planning is the responsibility of the Western Australian government and they are the ones—perhaps through you—who can get the information about how many people you assume will be providing this assistance to this farmers. Just to clarify, you have just said the payment will go directly to those people assisting?

Ms Freeman —To the service providers, yes.

Senator NASH —To the service providers. If we could have some very clear detail around the criteria upon which the service providers are going to be appointed, how the funding—the appropriate figure of $6,500 to be paid to those providers—was arrived at by the WA government, and how many of those people are assumed will be needed to assist the farmers putting forward their plans? I would say that is very pivotal to how this is all going to work and it is very surprising that you cannot give us that information at this point.

Can I just take you to the Farm Exit support grants, which is the grants of up to $170,000 to support farmers who make the decision to sell their farm business. I note in the budget papers there is a $0.3 million component for the Farm Exit Support. That is not even going to give two farmers Farm Exit Support. Can you explain that to me. If we take the $0.3 million as $333,000, that is not even enough for two farmers to be able to access Farm Exit Support. Could you explain that to the committee.

Ms Freeman —I should say, this funding can be supplemented. Part of the pilot region has previously been ‘exceptional circumstance’ declared.

Senator NASH —None of WA is EC declared at the moment, is it?

Ms Freeman —Not at the moment, but it has previously been. Under that, those farms who were EC declared on or after September 2007 may be eligible for EC exist assistance under existing EC arrangements. This funding can actually be supplemented through existing EC exit program funding.

Senator NASH —Okay. I take that point, but this is under what is what titled The new package of measures to be trialled in Western Australia to address a new way forward for dealing with drought. A Farm Exit Support under that that is only going to be for one-point-something farmers. What is the point of that? I am not saying that support is wrong and should not be there. Under EC we have had some very, very worthwhile measures that have been extremely useful. But this is under the package that the ministers put forward, saying it was a new package of measures to address a new way forward for drought policy. Can you just explain how that fits in there under that context.

Dr O’Connell —Obviously, as I mentioned before, we will be monitoring and keeping under review for the government the take-up of these. What we have here is a running assumption that the majority of people who come in to reach the end of their strategic planning, within this year, will not have made the sorts of decisions on exit that will be required. This is not something people do lightly. We are talking about funding within the year. Would we expect a large percentage of people to decide to exit farming in this next year? Our basis is that it is unlikely that people will do that. This is something that people take time to do. We have in there an estimate that is available, and we will keep that under review. But the underlying assumption is it takes people some time to reach a level at which they are going to make that decision.

Senator COLBECK —You are effectively banking on people not finalising their strategic farm plan within the 12 months of the trial, which will limit your liability for other elements of the program going out.

Dr O’Connell —I do not think that that would be an accurate way of characterising it. It is quite clear that we want to test a new set of arrangements in a way which is responsible and allows people—

Senator COLBECK —But you are estimating that 100-odd people will get through their farm management plan or strategic plan within the 12 months.

Dr O’Connell —It is several hundred. It is a question of how many then will have reached the stage of having had applications for grants agreed, so we are talking about estimates at that stage. Then, when we come to the exit component, of course you would not expect many people to have gone through a farm-planning process and made an exit call and done that within that year. That is not the normal practice for farmers.

Senator NASH —So why is it even in there? You must admit, it looks quite strange to have a component in there which is going to deliver some funding, if we work on the total amount of figures available, to one farmer out of 6,000 eligible farmers. In the context of this whole pilot, and I am quoting from the Budget Paper No. 2 here:

The measures are designed to encourage farmers and farm families to adopt self-reliant approaches to managing farm risks and adjust to the impacts of climate change and reduced water availability.

How does $300,000 for farm exit support, which is only going to deliver to one farmer, fit under what you are saying the context of program is?

Dr O’Connell —That is an estimate for the purposes of budgeting. That measure is not capped, so if there is additional we will look at that over time. But I think—

Senator NASH —Hang on just a sec, Dr O’Connell, just so I can get this. So that measure is not capped. When you say that, has there been any discussion or any forethought given to the potential—

Dr O’Connell —Our estimate is still that the—

Senator NASH —Can I finish my question, please?

Senator Sherry —You are not letting him finish the answer.

Senator NASH —He had finished the answer.

Senator Sherry —He had not finished the answer. Will you please let him finish? You are so keen to get your questions out.

Senator NASH —Because we are not getting a lot of direct answers.

Senator Sherry —Let him finish his answer.

CHAIR —Dr O’Connell, would you like to finish your answer to Senator Nash’s question, and then she can move on to the next one.

Dr O’Connell —I was saying that measure is not capped. The estimate is an estimate on the take-up. For the reasons I gave, you would not expect significant take-up of an exit grant within a year. Beyond that year, the government will have to make decisions as to where to go with this pilot and how to take it forward afterwards. That is very clear in the 2011 review process. The fact that we have that in there is a clear indication that exit grants are available, and that is one of the purposes of the program. We have a low estimate in there because, simply, it is highly unlikely that significant numbers will be able to go through a full strategic-planning process, plus make the significant decisions that they need to make to exit, and then go through the processes of exiting to the degree that they are able to then get the funding. We have that amount in there really as a place holder; it is not supposed to indicate that we have no more than $320,000 available, and that is the end of it.

Senator NASH —If, as I was trying to clarify to save you all the bother of that answer, there is further funding required for the farm exit support grants, where will that be coming from?

Dr O’Connell —That will obviously be a matter we would have to take up with the government along the way.

Senator NASH —What process would that take, given the government’s very clear indication of adhering to fiscal responsibility?

Dr O’Connell —You would normally expect to go to additional estimates or something along those lines.

Senator NASH —Correct me if I am wrong, because I do not want to take this out of context at all, but in that answer you were talking about the exit grants being part of the target of the program, so I will just return to what I raised before. This is being described as a program that is designed to encourage farmers and farm families to become more self-reliant, to deal with future drought preparation, which, as a farmer, is an extremely worthy thing to do. I fail to see how providing grants to leave the farm in any way fits with measures that are trying to get farmers to deal better with drought in the future. I am not saying they are not necessary; I find it difficult to see how they sit under the context of this new much-heralded program of new measures.

Dr O’Connell —The intent of the government—and, again, it has been laid out by the minister quite clearly—is to support farmers to develop a strategic business plan and then allow that they have choices that follow from that, including whether to stay on the land and think about investments required to manage their risks or potentially to leave the land with dignity. Either way, the program is designed to support those decisions.

Senator NASH —So issues like the funding for income support, eligibility for healthcare concession cards, youth allowance for children, early release of superannuation and all the social support mechanisms—none of those really fit under this target of getting farm families to adopt self-reliant approaches to managing farm risks. I am not saying they are not useful and appropriate, but they are sitting under a program that is talking about new ways for farmers to deal with the threat of drought in the future. They are really just a repetition of the existing measures. Is that a fair comment?

Ms Freeman —There are a range of measures in this pilot that are aimed along several streams about strengthening farm businesses, and we have discussed that. But It is also about providing services to farms in hardship, which we talked about the Farm Family Support measure. It is about keeping food on the table for those farms that are in hardship. There are also measures about strengthening rural communities and providing, for example, a range of additional mental health services to rural communities. So it is about building the resilience across the several aspects of the business, the household and the community.

Senator NASH —Can we just go to the Building Farm Businesses and the grants of up to $60,000. I want to get a clearer sense of how that is all going to work. You mentioned, Ms Freeman, there would be the business elements, NRM, succession planning—all those sorts of things.

Ms Freeman —Yes.

Senator NASH —But what sort of practical, on-the-ground things are you expecting from farmers if they come to you and say, ‘We’d like to have this grant of $60,000. We’ve done our farm plan. These are the practical things we’re going to do on the ground with that money’?

Ms Freeman —The list of possible eligible activities has been made public by the government. For the farm business adaptation grants, for example, that includes things like benchmarking, training in management skills, capacity building and—

Senator NASH —What does that mean, though? On the ground, as a farmer, what would I be doing if I was meeting that criteria?

Ms Freeman —Basically, you have gone through your planning process, you have developed your strategic plan and you have identified, with the help of professional advice, what you think will need to be the priority activities that will make your farm business more viable into the future.

Senator NASH —Yes. And what are you expecting some of those to be? There must have been some discussions with rural people before this program went into place about the types of things they could see—on-farm activity—that the money could be well-utilised for that would help them prepare for future droughts.

Dr O’Connell —Again, we have considerable information on our website in the frequently asked questions. That gives a very significant list of the sorts of things that would quite eligible. To some degree we can easily settle many of your concerns by providing this directly to you.

Senator NASH —If you could table that, that would be great. But what would you say were the two or three key areas in there that you expect to be most utilised?

Ms Freeman —I think it is hard to pre-empt what farmers themselves will identify.

Senator NASH —I understand that, but have you had any discussions with farmers prior to this program taking place that have alerted you to the fact that there might be things that could be done differently in on-farm practices that would lead to better management for drought in the future?

Ms Freeman —Yes.

Senator NASH —This whole program is predicated on that. Somebody surely must have had discussions with the department at some point saying, ‘This is what we can do on a farm.’

Ms Freeman —Yes. I should sort of predicate that all this was done as part of the national review of drought policy, and there was extensive consultation with a four-digit number of parties who have provided input to the different reviews. So, yes, they have been consulted heavily.

Just to give you a few examples on the cropping side, the costs associated with improving soil quality, the adoption of precision farming techniques, auto-steer tramlining, yield mapping and WeedSeeker technology were some of the ones that have been suggested. That involves land monitoring and evaluation using, for example, soil fertility testing. I can go on if you would like, but they are the sorts of ones that are out there and that are publicly available as lists of possible eligible activities.

Senator NASH —You mentioned precision farming. I know you are talking tramlining but, within that, will there be the capacity for farmers to put forward a request for funds for machinery adaptation to move to direct till or no till?

Ms Freeman —Yes, there will be. There is an explicit item in there about equipment purchase or modification to help improved sustainability of production.

Senator NASH —Terrific. Can I just move to—

CHAIR —I am sorry, Senator Nash. Senator Williams does have questions on climate change, and we are going to have to move there soon.

Senator ADAMS —I have a lot on the same subject as Senator Nash.

CHAIR —Okay.

Senator ADAMS —I am just not interrupting.

CHAIR —I beg your pardon?

Senator ADAMS —We have gone through the exit grants. I have a lot of questions on that. I have also got quite a lot on the subject we are talking about now.

Senator NASH —I will not be much longer. I am merely trying to adhere to your authority, Chair. I will just ask another couple of quick ones and then go to Senator Adams, and, if there is time, come back at the end. The minister, after this was all announced, said, ‘The lines on the map are gone. We have one test, a hardship test,’ which you have been referring to. What is the actual definition of the hardship test that the department uses?

Ms Freeman —For the Farm Family Support, the relevant criteria are that your business must be located in the pilot region; you must contribute a significant part of your labour and capital to your farm business; you must derive a significant part of your income from the farm business; and you must satisfy asset and income tests and meet mutual responsibility requirements.

Senator NASH —Sorry, Ms Freeman. Isn’t that the eligibility?

Ms Freeman —I beg your pardon.

Senator NASH —Sorry. No. It was just the definition of the hardship test.

Ms Freeman —I beg your pardon.

Senator NASH —Yes. Just the definition of the hardship test.

Ms Freeman —I beg your pardon. That was my misunderstanding.

Senator NASH —No problem. Basically the minister was saying that if you are in hardship you will qualify; if you are not in hardship you will not. I am just trying to get an understanding for the committee.

Ms Freeman —Yes. The key policy point there is to differentiate it. It is not just about drought. That is the important point when considering it as a cause of hardship.

Senator NASH —Yes. So what is the definition that is used?

Mr Mortimer —Essentially, the hardship that a farmer is suffering is assessed, in the same way as a person in the broader community who does not have adequate means. For example, perhaps their businesses are not travelling well and they do not have employment. If a person is in a difficult financial situation, they can apply for assistance. This would be the specific measure that is available for the farm sector to allow them to be helped when there is hardship, regardless of whether it is cause by weather, prices, outputs or anything like that. It is a broad-ranging measure to put food on the table, to use the colloquial measure, for farmers in difficulty. As you mentioned earlier, it would be available without regard to geography or location. In other words, it is about envisaging how you would assist farmers who are doing it tough in a world where there is no EC policy in place and there is no process for applying for EC. You have to deal with all the consequences of that.

Senator NASH —Okay. I can understand that. So let us assume that, in a hypothetical world, EC does not exist. Did you just say things like prices of outputs would be included in looking at hardship?

Mr Mortimer —Yes, essentially. Those things are looked at. What is looked at is the bottom line, the farmers’ financial situation: do they have the money in the bank to be able to look after themselves. There will be a related assets test et cetera, but the fundamental question is: does the farmer have the money to provide for themselves?

Senator ADAMS —Coming back to the exit grants, I am quite surprised about the fact that no survey has been done or anything else. We are looking at 67 shires in WA that are actually eligible for this pilot, and you are saying that, out of this, 140 farmers will be eligible. Dr O’Connell, I am led to understand from what you said that you did not expect a number of these people to have had their business plans up within the year. I can assure you they have crisis meeting after crisis meeting, and this is one of the reasons this plan has been brought forward, with the joint cooperation of the state and of the federal government. These people have got their plans. They are absolutely desperate, and the fact that the scheme does not actually start until July, I can assure you, means there are an awful lot of people out there just desperately hanging on until July to put forward those plans. I think you will be very surprised by how quickly they come in.

As Senator Back has just reminded me, there are 25 percent of farming properties in Western Australia for sale at the moment. Probably there will be a lot more as well, once they have completed their plans, but most of those plans are well and truly done. These farmers have done everything possible to work out where they are going, what they are doing and how they can survive. The first of July is five weeks away, and we have still got tenders out for the agencies that are going to deal with it. The whole thing really does worry me. I do forward planning myself and I just cannot see how the scheme is actually going to be up and running and you will have—

Senator O’BRIEN —Is there a question?

Senator ADAMS —Yes. The question is: just how is it going to work? In 67 shires there are 140 farmers that you are budgeting for to come up with a plan. It does not make sense.

Dr O'Connell —Can I just make a correction. You suggested that I said only 150 would be eligible. It was not eligibility that we were talking about; it was the question of getting through the stages. There may well be considerably more than that who are eligible. It is a question of how many people get through the stage within the year. Obviously, we will keep that under review. This is a trial and we will be monitoring and reviewing it and keep the government well informed as to how this is tracking.

Senator ADAMS —As I said, 67 shires, seems a very, very low figure that you are looking at of people who will come forward in that respect. With regard to the risk management issue, has the federal government looked at the issue of multiperil crop insurance as being a risk management tool?

Mr Mortimer —If you wish, I am happy to take that question. Yes, the question of multiperil crop insurance has been put forward a number of times and I recognise it has frequently been put forward by farmers in Western Australia. The department did a major study on multiperil crop insurance a few years ago in conjunction with the insurance industry. I cannot remember exactly when, but not that long ago. It was done as a task force between government, the farmer organisations and the insurance industry. In fact, the task force was headed by a senior executive from the insurance industry, which did a very thorough analysis of all the issues around multiperil cropping, starting with the data on production and rainfall outcomes across Australia by region and so on.

The conclusion of that study was that multiperil crop insurance in Australia was not viable; that it would only operate with very considerable government underwriting and that there are particularly difficult issues within it in terms of adverse selection, which, translated, basically means that the farmer has better data on the ground and can pick and choose which part of his farm he insures and also which he does not, such that he could inevitably always come out ahead on the insurance, at the expense of the insurer. There is also the broader moral risk issue in terms of encouraging farmers to do things that, sensibly or practically, they should not do. It was considered by the government and the minister of the day and they decided, at the time, not to pursue it.

Dr O’Connell —Can I just refer also to the Productivity Commission work on the drought review. There were quite a few observations that the Productivity Commission made at the time, particularly that government support intervening in this area could impede the development of a commercial product, but it also raised those well-known issues around the reasons why it is perhaps difficult to get a commercial product going around moral hazard, data availability, operating costs and adverse selection. There was also a report in May 2009 by Minister Terry Redman in Western Australia. That also discussed it and basically held to the same line. Broadly speaking, there are not any commercial products available and there are probably good reasons why they are not available. There is also a broad sense that government intervention in the area would only ensure that there was not and would subsidise the potential failings that are there in commercial multiperil crop insurance.

Senator ADAMS —Mr Mortimer just mentioned drought. Frost in Western Australia is probably one of the key indicators of crop failure. You look at where you are going to grow whatever grain you are going to grow and think, ‘If we get a really bad frost,’ you are not going to put it into that particular area. I think the comment about farmers being able to actually go and grow a crop in a place that is going to be prone to frost is just ridiculous. You are out there trying to make the most out of what you have put into growing that crop. Gone are the days where you just throw a crop in the ground and shut the gate and say, ‘She’ll be right.’ The cost to actually put in a crop, with fertiliser and chemical, is huge. I just take umbrage to the suggestion that people would be going to grow crops in an area where it would be frosted. The drought is different, but that does not gel.

Mr Mortimer —I am not taking a particular position on that. I am just listing through the findings of the study and I guess the study was looking at all the risks, in another sense, around multiperil crop insurance, in terms of the insurers, the people who would operate it and the potential funders who would fund it. I am sorry. I was not making any criticism or observation about farmers. It is just really the whole-of-industry perspective and what may be the issues and problems.

Dr O’Connell —These are the issues that repeatedly come up in the analysis of multiperil crop insurance. Certainly, from overseas experience, as far as we are aware, there are not any schemes which work without very large government subsidies. Certainly, in the US the US government has had to cover the shortfall of schemes where indemnity payments continually exceed premiums. It is just a generic set of problems. It was not necessarily Mr Mortimer’s personal views, as they say.

Mr Mortimer —No.

Senator ADAMS —I was just waiting for the ‘frost’ word and it did not come. With a farmer looking forward and thinking, ‘What can I do as far as the risk management side goes,’ this would probably come forward in a number of plans. That was really the reason I was asking. That would be a definite ‘no’ and crossed out, and would it go against them, because it is looking to the future. How can we deal with what is happening, as far as the sustainability of actually being able to keep your farm going. Anyway, I will leave it to my colleagues.

Senator COLBECK —Senator Adams raises an interesting point about a lot of farmers having already completed a plan for their property. As far as recognition for this process is concerned, what will be the status of those plans?

Ms Freeman —That is a good question, and it is one that WA have been considering in the context of recognition of prior learning, obviously, and similarly, noting that some farms have already undertaken varying degrees of planning. The farm planning course is viewed as actually either developing or updating a farm plan. Obviously, it will depend on a case by case for different individuals, but yes, there is an intent to recognise the fact that some farmers—

Senator COLBECK —If there is a plan in place, there will be a formal recognition process of that?

Ms Freeman —Yes, and I should say, WA government are currently settling the specifics around that, but it is to note the fact that many farmers are at different stages along, if you like, the planning continuum and to take account of the fact that the process needs to recognise that.

Senator COLBECK —The WA government will have a recognition process and an assessment process of those plans before potentially passing a farmer on to the next stage?

Ms Freeman —Yes.

Senator COLBECK —What will be the status of these plans once they are formally recognised by either level of government? Will they be business based or property based?

Ms Freeman —Business based, yes.

Senator COLBECK —Business based?

Ms Freeman —Correct.

Senator COLBECK —If the farm is sold, what is going to be the attitude—there are some things, potentially, that will change with the change of ownership, but a lot of this stuff will be actually property based. Has the status of the plans been looked at with respect to the property that they apply to?

Ms Freeman —The formal details of all the program measures, including the guidelines, which would include elements of that are currently being finalised. They will be available shortly.

Senator COLBECK —So at this point the actual status has not been considered of those plans in relation to the property, given that you are looking at environmental management, NRM issues, all those sorts of things? I just want to know, once they have been given some form of recognition by a level of government, what the consideration of that status may be and what the impacts of that may be. Has that been considered?

Dr O’Connell —I think, in the sense that there is a farm business and the farm business has a strategic plan, if that farm business sells a farm or sells some property to another business then there are components of the first business’s plan which will become more or less relevant as a result of that sale and the other business will clearly have to take on board either replanning for what it has acquired or managing to take on that component. But you would expect—

Senator COLBECK —I think you make my point. That is why I am asking the question, because it is a process that has had a form of recognition and—

Dr O’Connell —But there is certainly no sort of requirement. If a business acquires land, there is no requirement on that business to maintain the planned objectives of the previous business. These are different businesses. They all have different business contexts, different strategic objectives and different ways of handling their assets, just as normal.

Senator COLBECK —I just think it is a question that is seriously worth considering, because—whether it has a formal or a legal status—it has had a recognition from a level of government, and there is potential for that to be used in certain forms and circumstances. And I just wondered whether that had been considered as part of this overall process. The implications of that should be considered—I do not know what they are; I have not had time to put my mind to them—but it has certainly cropped up in discussions that I had with some other property owners about the development of their whole-of-farm plans, and in the discussion we had earlier about the potential long-term implications of that depending on what activities are being conducted at what time and where. It even goes to the extent that some people consider it as a potential planning document. So that is why I asked the question. Treasury is listed in there with funding over the four years. What is the role of Treasury in that—effectively the bank?

Ms Freeman —Yes.

Dr O’Connell —Effectively, the bank, yes.

Senator COLBECK —So they are holding funds?

Ms Freeman —Yes, that will be transferred to the WA government.

Senator COLBECK —That will be transferred out to agencies for—

Ms Freeman —Yes, particularly the WA government.

Dr O’Connell —The new financial arrangement between the Commonwealth and the states has most funding from the Commonwealth to the states go through Treasury as part of national partnership agreements.

Senator COLBECK —Via Treasury. Yes, I think we have had that conversation before. The stronger Rural Communities grants, how are they to be distributed? Is it geographically or one per council or are they capped? How do they work?

Ms Freeman —Basically, communities and local government organisations will be applying on the basis that they are undergoing a significant downturn due to an agriculture related hardship, so, if you like, the fundamental nature of their application will need to address that.

Senator COLBECK —What will be the triggers for that?

Ms Freeman —The details and the guidelines of all that are all currently being settled, but I can give you some further details, if you will bear with me. But, again, it is basically helping communities to manage that hardship related to it and to basically build resilience. There are grants up to $300,000 available per grant, but I should say, though, that the details are currently being settled.

Senator COLBECK —Okay. Application of this program to other primary industries, say, fisheries—is there any consideration of that?

Ms Freeman —For this, basically the rules in terms of eligibility are similar for exceptional circumstances in terms of what industry groups are covered. So, with EC, for example, it would cover aquaculture but not wild catch, and so there is a similar principle being applied in this pilot.

Senator COLBECK —Okay. And while this pilot is going on there is still the capacity for state governments to apply for EC for particular reasons?

Ms Freeman —Yes, with the exception of the pilot region in WA. The WA government has agreed to not apply for EC for any area within the pilot region.

Dr O’Connell —So, for the rest of the country, the EC rules as they stand apply and applications can continue to be made.

Senator BACK —While Senator Colbeck is getting information I might just ask a question. The exit grant program ceased in the recent past and it has now been reintroduced. Is that correct?

Mr Mortimer —Just in terms of history, currently exit grants are available in EC declared areas, and there were also exit grants available under the previous—Agriculture Advancing Australia program—which might be the program you are thinking of in terms of the program that ceased.

Senator BACK —And why did that cease?

Mr Mortimer —I think the program came to an end and the government at the time made the decision not to extend it. I really cannot remember any more details on it. It was taken a few years ago.

Senator BACK —So it is reintroduced, what, this coming year?

Mr Mortimer —No, the exit grants were available under pilot, but at the moment the only—

Senator BACK —No, I am not talking about the pilot.

Mr Mortimer —The only exit grants available at the moment elsewhere are through the EC arrangements.

Senator BACK —And the funding for those in the coming year?

Mr Mortimer —It is in the budget documents, the PBS statements. On page 19 of the PBS in table 1.2 of ‘budget measures’. Halfway down the page, at ‘Drought assistance, re-establishment assistance’, and it has funding provided for the year of $24 million.

Senator BACK —$24.4 million.

Mr Mortimer —That is including departmental expenses, which is 0.4, yes.

Dr O’Connell —0.422.

Mr Mortimer —$24 million exact for administered expenses—in other words, available for farmers.

CHAIR —Senators, we are getting close to 12.30 pm.

Senator COLBECK —My questions were on EC in particular, and we asked some questions last time about who is who in the zoo as far as EC is concerned at the moment and about NRAC’s touring schedule and what their program is. Do we have that information easily available?

Mr Mortimer —Yes, we should be able to give that to you.

Senator COLBECK —If it is in a form that you can just table so that we do not have to take time, that would be good. But I am reluctant to take it on notice.

Mr Mortimer —Yes. I do not have it in a form that can be handed over, but I should be able to take you through it fairly quickly, if you are happy to do that.

CHAIR —I will hold you to that, Mr Mortimer, because we have an agreement for 12.30 pm.

Senator COLBECK —I just want to make sure I get hold of the data. I do not want it to be lost in the questions on notice process. I am happy to come back to it towards the end, if we have time.

CHAIR —Senator Back, did you want to wind up your last question?

Senator BACK —I was just going back to an interview with the minister on the ABC on 21 April, I think, in which he said he would like to extend the one-off exit grants to farmers regardless of whether they are eligible under EC assistance. Are you familiar with that comment he made?

Mr Mortimer —No, I have to say I cannot remember it, I am sorry.

Senator BACK —The details that I would be keen to pursue as a result of that would be: what has been the take-up of exit grants by farmers who are eligible?

Mr Mortimer —We probably can give you that.

Mr McDonald —Sorry, can you repeat that question?

Senator BACK —Yes, certainly. I want to know what the take-up rate has been by eligible farmers of the exit grants?

Mr McDonald —Yes. For this financial year to 31 March there have been 110 EC exit grants paid to recipients.

Senator BACK —Can you tell me, either now or on notice, of those, what was the total number who applied and, obviously, then the deduction would be those who have been ineligible.

Dr O’Connell —We can take that on notice.

Senator BACK —Thank you, if you would. Finally: do you have the information that suggests—or do you have any information other than the pilot area in WA which, I think, Senator Adams and I have a particular concern on—whether there are more farmers wanting to leave the land and avail themselves of these grants?

Mr Mortimer —I think we will take that one on notice. That would be the best idea.

Senator BACK —You do not have that information?

Mr Mortimer —No. It is impossible to say, really. It is a pretty complex issue in terms of our being able to say what drives farmers’ decisions on these matters.

Senator BACK —Necessity is becoming one of them. Thank you.

Senator NASH —I just wanted to clarify something. At the beginning, Dr O’Connell, I think you said that obviously you would be trying to work within the budget of the $22.9 million or whatever it was. But then we ascertained that the Farm Exit Support grants are not capped. Are any of those other components in that same category as the Farm Exit Support in that they are not being capped? Would any of those other areas be treated the same as the Farm Exit Support, which you indicated was not capped?

Dr O’Connell —Certainly Farm Family Support, which is the sort of ‘food on the table’ money, is not capped.

Senator NASH —The others, we assume, are all capped?

Ms Freeman —We can provide you with a list, if you like?

Dr O’Connell —We can provide you with a list.

Senator NASH —Okay. Thank you.

Senator COLBECK —I was going to make a comment, because there was an article in the Weekly Times saying that this was an uncapped program. So some clarification would be—

Dr O’Connell —I will have a look at the Weekly Times.

Senator NASH —I just wondered if perhaps, in your taking that on notice—thank you—we could have that back in the next couple of days. That one should not be too hard. Rather than go through the lengthy process, if we could have it in the next couple of days, that would be very useful.

[12.34 pm]

CHAIR —Dr O’Connell, I hope the correct officers are at the table. We are now going to go to climate change.

Senator MILNE —At the global negotiations last year in Copenhagen, the Australian government sought to have some extreme weather events, which are referred to as ‘force majeure’, excluded from Australia’s emissions in terms of the negotiations. In relation to drought, what advice has there been, or what work has the government the Department of Agriculture, Fisheries and Forestry done, in determining whether the climate emissions from drought can be factored out or at what level a drought changes from being a drought to a force majeure, for the purposes of calculating Australia’s emissions?

Mr Gibbs —The level of detail in the data has been worked through by the Department of Climate Change and Energy Efficiency. There are two separate issues here. There are large, major natural disturbances which are a preliminarily result of major bushfires, which were part of the negotiations to try and exclude those events. The second part is what is termed interannual variability, and Australia’s position on that was to try and smooth out those interannual variabilities, of which drought would form part. But those negotiations and the figures that you may be looking for are really a question that should be put to the Department of Climate Change and Energy Efficiency. Within this department, we do not have figures and have not done an assessment on the impact of drought on emissions.

Senator MILNE —Going back to this issue, I am well aware of the bushfires one, but when it comes to drought are you arguing that the impact of the emissions on drought should be averaged over a period of time?

Mr Gibbs —Essentially, yes. There are a number of different ways that you can smooth out interannual variability. The principal reason why Australia took that position was that we felt that those events are due to natural occurrences, so it was very difficult for a farmer to manage for those emissions if it is a consequence of a natural occurrence.

Senator MILNE —The point I am making is: in a world with a changing climate, how are you going to differentiate between interannual variability and the impacts of climate change? When is a drought more than a drought? When is it a climate-related event?

Mr Gibbs —I think that is a very good question. That is part of the analysis the DCCEE undertake and part of the discussions which are wrapped up into the international negotiations which they lead.

Senator MILNE —That might be fine for the department of climate change, but you are the department of agriculture. Surely agriculture should have a big say in what constitutes drought in the context of these negotiations. It is going to have a big impact on what farmers have to account for.

Mr Gibbs —We obviously have definitions of ‘drought’, but these are international negotiations. We are talking about large changes in emissions. Obviously, one definition of a drought in Australia may not be a natural occurrence in another country, and so it is wrapped up in international negotiations at the moment.

Senator MILNE —I am fully aware it is wrapped up in international negotiations. The point I am making is that, out there in rural Australia, people have to be given a sense of whether they are going to be accounting in the future for emissions as a result of drought, because I find it very hard to see how you are ever going to prove that a drought is not climate related. It should be the department of agriculture in there up to their necks, with the department of climate change, trying to clarify this very fast, I would have thought.

Mr Gibbs —I think the roles and responsibilities of the respective departments are that the department of climate change do measure emissions from the land-based sector at a national level and, over time, can show you spikes in the data, which may or may not be the result of the drought. That is why I am asking you to refer that question to the department of climate change. I do not have that data in front of me and the department has not collected that data in the past, to my knowledge.

Senator MILNE —Okay. I will move on in relation to these issues, then. Last year, in an agreement with the coalition, the government agreed to set up an expert committee that would meet to determine and develop the methodologies for accounting for carbon that is sequestered in the soil and a range of other issues. So the committee was to look at the methodologies for Kyoto-compliant variables and non-Kyoto-compliant variables like soil carbon. Shortly afterwards, the government declared, even though that legislation was defeated, that this was now government policy. Can you tell me when that expert committee was set up and who from the Department of Agriculture, Fisheries and Forestry is on it.

Mr Gibbs —I assume that you are referring to the Domestic Offsets Integrity Committee.

Senator MILNE —There were two committees.

Mr Gibbs —I am only aware of one at this stage: the Domestic Offsets Integrity Committee. It was announced that that would be established to look at the methodologies for those emissions that you are referring to.

Senator MILNE —That is right.

Mr Gibbs —That committee has not been established yet. The process is underway to select members of that committee, which is being run by the Department of Climate Change and Energy Efficiency, and this department is assisting in that.

Senator MILNE —Six months later, we have no committee set up to even look at determining what the methodologies might be. Has there been an interim committee working on this, and who from the Department of Agriculture, Fisheries and Forestry is on the interim committee?

Mr Gibbs —There has been no interim committee in the meantime. The voluntary market and the national carbon offset standard commence on 1 July 2010.

Senator MILNE —Okay. When do we expect this expert committee to be set up, and do we expect the Department of Agriculture, Fisheries and Forestry to be represented on it?

Mr Gibbs —My understanding is that the applications for that committee have now closed and they are now being assessed by members from the department of climate change and the Department of Agriculture, Fisheries and Forestry. My understanding is that there will not be an official from the department of agriculture on that committee. There will be experts in the sense of research, and they may include a representative from CSIRO, but the actual make-up of that committee is determined by the Department of Climate Change and Energy Efficiency.

Senator MILNE —Okay. In the budget papers under ‘Climate Change Research Program’, there is a statement:

The Climate Change Research Program is helping primary producers adapt to climate change, particularly in the areas of soil carbon, biochar, nitrous oxide and livestock emissions; and on-farm demonstrations to the farming community of research outputs.

Could you describe to me what you have already done on soil carbon and where it is being implemented.

Mr Gibbs —On soil carbon, that falls under the Climate Change Research Program. That has been underway for a couple of years now. We have undertaken just under 900 sites of sampling across Australia, and that is being analysed at present and we expect about 20 per cent of those samples to be analysed by the third quarter of this year.

The information from the soil carbon program—and this is important—goes to a tool which DCC are currently preparing which will allow farmers to assess whether soil carbon is increasing on their farm as a matter of a change in management practice. That tool takes into consideration weather events, the soil quality, the fractions of carbon within the soil. In short, the information that comes from our research goes to the Department of Climate Change to a tool which involves a lot of complex statistical analysis and modelling which is then presented to farmers.

Senator MILNE —At the moment we are in the data collection phase and there has been not really anything happening on the ground. Obviously, the research stage, sorry, has been happening on the ground.

Mr Gibbs —Correct.

Senator MILNE —But in terms of outputs, we are still into the data collection phase.

Mr Gibbs —There is work going on in DCC in terms of preparing a model to take on the data. It is the same model which has been used in the past for forestry. It is now about building that model to include soil carbon in it, but the research program which DAFF is responsible for is doing on the ground work and collecting data at present.

Senator MILNE —Okay. We are collecting data in soil carbon. What about biochar?

Mr Gibbs —Biochar, we have a program which started towards the end of last year. It is about $1.4 million. We have analysed 70 different types of biochar at the moment. That is a reflection that not all biochars are the same. It actually matters where you get it from. In some of those trails we have actually found that there are issues about toxicity of biochar, depending on where you get it from, so you have got to be careful about where you put it in a farming system.

We have also found that some of the waste streams actually generate better productivity benefits, such as manure compared to more woody waste streams. That is where we are up to with that part of the program at the moment. That program also will do a lifecycle analysis to look at the whole process of generating biochar and the emissions that come from that.

Senator MILNE —And what about nitrous oxide?

Mr Gibbs —At the moment we have a program which is going on around Australia led by GRDC. That has been doing sampling of nitrous oxide in different cropping systems. The sampling from that and the data collected from those trials for the first year have been completed, and now they are analysing the data from that as well.

Senator MILNE —What do we know as a result of that?

Mr Gibbs —We know a number of different things about crops and the rate of nitrous oxide coming from them in terms of applying fertiliser. We have had some early findings about inhibitors, the benefit that inhibitors may have for reducing nitrous oxide which would be useful in terms in forming methodologies in the future.

Senator MILNE —What about the livestock emissions?

Mr Gibbs —We have an $11 million program on livestock emissions with about 18 projects across Australia. That is predominantly looking at methane emissions. We have sampled a number of herds in New South Wales and we have also, with CSIRO, developed a better way of measuring emissions coming from cattle. There is also nitrous oxide emissions testing coming out of the waste streams as well.

Senator MILNE —How much of this research is actually getting out to the rural community? What program have you got to talk to people about what you are actually doing?

Mr Gibbs —We have a couple of ways of distributing the results, and we have to be careful; we do not want to get too far ahead of what the science is telling us in terms of getting those meaningful results out. The MLA are the coordinator of that project. They do a number of workshops talking to parts of the industry. We put out information through publications under Australian’s Farming Future and attend conferences, et cetera.

Senator MILNE —Finally just in regard to the relationship between adaptation, mitigation and food security, I note that you have a food security program, but to what extent is there an interface in the department between the work on climate change and the work on food security?

Mr Gibbs —There is a strong interface. We work regularly with the relevant area in the Agricultural Productivity Division. A part of the Climate Change Research Program also deals with adaptation as well. Again, that is a program where we look at what can we expect to happen to the climate over a long term using climate scenarios. We have workshops with farmers which talk about techniques that they are currently using to manage for climate and for productivity, and we also start to assess how well those practices are going to perform into the future.

Some of those projects are also dealing with the interplay between adapting to climate change itself and also the risks that that may pose to emissions. The whole program effectively targets the productivity angle; for example, reducing waste emissions to convert it to energy, looking at reducing fertiliser to reduce nitrous oxide emissions. It is about productivity and assists in improving or helping address the food security challenge.

Senator MILNE —How are you going to prove that changes to your production system were additional in terms of climate accounting if it can be demonstrated that they were also appropriate strategies for improving productivity or reducing soil erosion, for example? This was a point that came up last week at the Farm Institute, where the Americans have changed their farm practices in order to stop soil erosion. Having done that, they can hardly claim additionality by asking for a climate benefit, because they were already doing it for another purpose. How are you sorting this out in thinking about where it might go in terms of climate accounting?

Mr Gibbs —The point you raise is a good one. It is one of the issues raised under the National Carbon Offset Standard. In the past, Australia has looked at additionality from the point of view of the financial perspective. If there was a task or a practice change which had a cost where you needed an additional, say, price mechanism, or a subsidy or a grant program to operate, then that would classify as additional. But the implementation of the National Carbon Offset Standard and, indeed, the issues of additionality or permanence coming through the Agricultural Research Program is something that will need to be assessed by the Domestic Offsets Integrity Committee as we go.

Senator MILNE —When do you expect the Domestic Offsets Integrity Committee will have anything to say on these issues?

Mr Gibbs —I think it will take some time for agriculture methodologies to be sorted through. It is probably one of the hardest sectors to look at emissions and quantify them. My understanding is that the Domestic Offsets Integrity Committee will be looking at not just agriculture emissions but a couple of other sources which they may have earlier findings on. There is also potentially an opportunity to look at methane reductions from projects which reduce waste and capture the methane gas and burn that, which could be an early win, if you like, or an early methodology. That is something which has been used through CDM projects across the world today.

Senator MILNE —Given that the National Offsets Integrity Commission has not met, has not started doing anything yet, a claim that you could get an emission reduction in the next short while by reducing agricultural emissions through biochar, et cetera, is wildly optimistic, wouldn’t you agree, if you have not even met, let alone have the methodology?

Mr Gibbs —It would certainly be the case for biochar, because it is difficult to see how biochar comes into our national accounts at present.

Senator MILNE —It does not.

Mr Gibbs —Exactly.

Senator MILNE —Neither does soil carbon. That is why I am asking the question. Soil carbon is not there either under Kyoto. There is no guarantee it is going to be there at all. So we have no methodology for reducing our emissions by achieving 60 per cent of the five per cent through soil carbon at this point?

Mr Gibbs —I would say that soil carbon poses a number of difficulties. It is not a golden solution. Science has to actually inform us about the extent to which we can capture carbon and keep it there as well. I do not think it is a silver bullet, but it is probably one important part of the agriculture contribution to this debate.

Senator MILNE —I agree that it is not a silver bullet and it is a contribution. What I am trying to establish is whether, at this stage, in the absence of a methodology, you can actually claim a massive reduction in emissions, or any reduction in emissions?

Mr Gibbs —No, not from soil carbon, you could not.

Senator MILNE —Thank you.

Senator HEFFERNAN —You do not really think that farmers are going to cop that, do you?

Mr Gibbs —I am not quite sure if I understand your question, sorry.

Senator HEFFERNAN —If we are going to go into a carbon-trading operation where we are in on the debit side—and the government said we are going to be out on the debit side, excluded—and you are out the back of Booligal and you have got lignum and you are in drought, if a storm goes across my place but not across yours and lights up the lignum and the annual saltbush and not the perennial saltbush because it is creeping saltbush or something, you do not really think you are going to have a system where you can calculate that I get a credit and you get a bill?

Dr O’Connell —Mr Gibbs was pointing to the Domestic Offsets Integrity Committee as being where that will be decided or not.

Senator HEFFERNAN —We might as well get it on the record here now. This is proposing that agriculture is going to be in on both sides of the equation—if you want farmers continue to farm, that is. You may not. You may decide you can eat the bloody leaves off the trees or something.

Dr O’Connell —Can I clarify a point? I think the Domestic Offsets Integrity Committee is dealing with voluntary offsets. Mr Gibbs could confirm that.

Mr Gibbs —I think that is the point: it is voluntary action. So if farmers do not want to participate then they will not.

Senator HEFFERNAN —I am aware of the voluntary action. But my point is: you cannot calculate it. Come for a drive with me and I will tell you what I am talking about. You might have all sorts of bushes struck up in a storm in a drought, and your proposition is that, in a drought, the farmer gets a bill. If you are in the scheme and you denude your property and it is not, as Senator Milne says, some sort of natural catastrophe but a calculable denuding, then in theory, if you are in on the debit side, you would get a bill. Could we have the details of the animal emission sites that you say the MLA are supervising?

Mr Gibbs —Yes, I can organise that for you.

Senator HEFFERNAN —Do you actually know what they are doing? Are they going out and saying, ‘That cow is eating loose and that one is eating straw,’ or, ‘That one is eating some sort of woody wheat out the back of Bourke.’ Do they do that sort of detail?

Mr Gibbs —I think it is worthwhile to point out that there is a mixture of on-farm and off-farm testing that is going on under the livestock program. Off-farming laboratories is where I would say a lot of the work is actually going on. That is where we test different food types.

Senator HEFFERNAN —What they eat, yes, but if I have got Bullo Bullo Station out the back of bloody Yuendumu and it is 2½ million acres and a storm goes across—Senator Back will know all about this—and it misses a bit, you do not really think that you can accurately work out what the cow is eating, do you?

Mr Gibbs —I think it goes back to a point that I was making before.

Senator HEFFERNAN —Are you going to walk around and try and tell the farmer that, ‘Your cows on your farm through this period made these emissions,’ when there are 50 different versions of what they could eat?

Mr Gibbs —It is difficult. I made that point to Senator Milne. It is particularly difficult in extensive farming systems. It is easier down south that to control or measure emissions than it is up north, where you have less contact with the animals.

Senator HEFFERNAN —Let us go with down south now. I accept that, if it was a feed lot, you could manage it. I agree to that. You could do it in a feed lot. But if you are down south and you have a lucerne paddock that has not flowered, it is going to be a completely different emission to the one that has flowered, and that happens all over a period of six weeks. How do you work that out?

Dr O’Connell —Just to bring us back to the Domestic Offsets Integrity Committee—

Senator HEFFERNAN —Yes, but this is going to be fed into this so-called voluntary system.

CHAIR —Senator Heffernan, I remind you just to allow the officer to answer your question.

Senator HEFFERNAN —Yes. All right.

Dr O’Connell —Mr Gibbs was pointing to the committee as being the forum where these issues will be dealt with.

Senator HEFFERNAN —Can we be part of the forum?

Dr O’Connell —That was an open question, I think.

Senator HEFFERNAN —It is great to come up with theories. There are plenty of great theories that failed in practice. You can calculate what is happening at the Rockdale feedlot, especially if JBS Swift gets a hold of it. They will have 350,000 cattle on feed—

CHAIR —Senator, I would urge you to ask a question. You did cut in on Senator Milne and she has one more question.

Senator HEFFERNAN —Can we part of that?

CHAIR —The only answers are ‘yes’, ‘no’ or that you will come back to him, because Senator Milne is waiting.

Senator HEFFERNAN —Can you provide—

Senator Sherry —I think we should let Senator Milne finish her questions. You will be here this afternoon.

CHAIR —That is exactly right. Thank you, Minister. I appreciate that. Senator Milne, you have two minutes left. Senator Heffernan, you are finished.

Senator MILNE —I understand that, in the negotiations with the coalition, $20 million was to be set aside for this Domestic Offsets Integrity Commission and its work. It is now six months and it has not been set up, so I presume none of that money has been spent.

Dr O’Connell —That is under the Department of Climate Change and Energy Efficiency.

Senator MILNE —None of that money is in your budget?

Dr O’Connell —I do not think that was in our budget. That will be the Department of Climate Change of Energy Efficiency.

Senator MILNE —I will be very interested to know what they are going to spend that $20 million on in the next six months. I will ask them. Thank you.

Proceedings suspended from 12.59 pm to 2.00 pm

CHAIR —Welcome back. There is a question from Senator Heffernan in continuation.

Senator HEFFERNAN —Is the animal emissions study being conducted by the MLA or are they funding it? Where does the MLA fit in?

Mr Gibbs —The MLA have funding in the program but they are essentially the coordinator of a number of projects under that program.

Senator HEFFERNAN —Who decides the actual site for the program?

Mr Gibbs —There was a process for going through the research program and analysing bids. Through that process, for example, the CSIRO put up a bid to conduct analysis of methane emissions at a site. That was judged by an expert panel and that is how the site was selected.

Senator HEFFERNAN —Can we have those details?

Mr Gibbs —The details of the sites you have asked for have been taken on notice.

Senator HEFFERNAN —And how the sites were decided.

Mr Gibbs —The sites were as a process—

Senator HEFFERNAN —But can we have the details involved including the process? I would like to see how they decided that that was a good site and perhaps that one was not.

Mr Gibbs —We can take that on notice, Senator.

Senator HEFFERNAN —And so you will let us know the current sites and the extent of what they are looking at—whether they are looking at goats or cows or whatever? Is there a management panel—who controls the game, the MLA or you fellows?

Mr Gibbs —There is a steering group which is led by MLA and which basically makes sure that the projects are meeting their milestones in a timely way consistent with the contracts. We sit on that steering group with the MLA, and other proponents of the projects sit on that steering group as well.

Senator HEFFERNAN —So could we have the details of the people who sit on that panel—their names and who they represent?

Mr Gibbs —Okay.

Senator HEFFERNAN —Is it the policy of the department—DAFF—to be doing research which has as part of its logic that agriculture will be included on the debit side of any future carbon plan or whatever? Does the logic behind all of what you are doing include agriculture? Is that why you are doing it?

Mr Gibbs —The logic of the program is that in order to analyse the contribution that agriculture could make to reducing emissions we need to do research on methane emissions in livestock and nitrous oxide in fertiliser and investigate the carbon sequestration in soils.

Senator HEFFERNAN —But as a separate proposition to any trading scheme?

Mr Gibbs —You need to understand how much of the methane emissions and the nitrous oxide emissions that soil carbon can contribute to the issue of reducing emissions. The contribution that that may or may not make to a trading scheme is something that we work with in a whole-of-government process with DCC.

Dr O'Connell —Just to clarify, Senator, the government’s position has not changed on agriculture being—

Senator HEFFERNAN —Which excludes agriculture—

Dr O'Connell —That is right.

Senator HEFFERNAN —on the debit side.

Dr O'Connell —It excludes agriculture from the CPRS.

Mr Gibbs —I think it would be worth while clarifying what you mean by the debit side, Senator.

Senator HEFFERNAN —In the United States they are out on debit and in on credit and, as you know, I presume that signing up to the Kyoto Protocol created some technical problems on the credit side—you can only include the trees; you cannot include the other things that we talked about this morning. But your position for DAFF is that you are assuming that the present government policy excludes agriculture from any trading scheme?

Mr Gibbs —Correct.

CHAIR —We will now go to forestry.

Senator MILNE —I would like to start by drawing your attention to the grants that were made under the Tasmanian Community Forest Agreement Industry Development Program. There was some $42 million, and the aim of that from 2006 onwards was to transition to plantations. I want to ask a generic question and then a specific one. Was there any requirement with that grant funding that the company to which the grant was made actually keep that equipment for any length of time or, if they sold the business within a relatively short time of having got the grant, did that just mean a capital gain for that particular company? What were the provisions in relation to that?

Mr Talbot —Off the top of my head on that question—I will take it on notice—I think that for all the Tasmanian Community Forest Agreement grants there was a three-year asset retention period, which meant that basically, if people tried to sell the equipment within that period of time, the Commonwealth had an interest in it and therefore the Commonwealth possibly could look at a refund of part of the money or something like that. But I would like to take that on notice, because I do not have a copy of the contract here.

Senator MILNE —Okay. Please also take on notice how many of the recipients of the grants have changed hands since they got the grants within the period—if it is a three-year period, as you recall, or whatever the period is—and how many of those, and which ones, the Commonwealth has actually exercised its responsibility with.

Mr Talbot —Yes.

Senator Sherry —Sorry, Senator Milne. Is that just for Tasmania or is it Australia-wide?

Senator MILNE —No, I am speaking specifically about the $42 million that went to Tasmania under these three grants programs under the Tasmanian Community Forest Agreement Industry Development Plan. I now want to go to Forest Enterprises Australia, which got a grant of $7,067,125 for the purchase of plant and equipment, mobile equipment and a range of supporting civil building and electrical work upgrades to upgrade sawmill and kiln-drying plant. Forest Enterprises Australia is now in administration, I understand. Has the Commonwealth now moved to recover its $7 million in the course of that liquidation or administration?

Mr Talbot —If this is one of the Tasmanian Community Forest Agreement grants—and I do not have information here—

Senator MILNE —Yes, it is.

Mr Talbot —We are reviewing a number of those at the moment.

Senator MILNE —You are reviewing a number of those? What does that mean?

Mr Talbot —We are getting legal advice on what our responsibilities are in terms of these companies who have received significant grants from us.

Senator MILNE —What due diligence was exercised in relation to the disbursement of these grants by the Commonwealth, and who was responsible for that due diligence?

Mr Talbot —I guess that, in terms of grants, there are various corporate governance frameworks. With all these contracts that we give, they generally go through our legal area. We ensure—usually both with field visits and with keeping up with the milestones—when claims are put in that milestones have actually been delivered on. So there are a range of things that we do, and that is another one. To fill you in fully, I would have to take it on notice.

Senator MILNE —There are a number of issues in relation to these Community Forest Agreement grants, because as you would be aware the industry is in dire straits in Tasmania at the moment and a number of contractors are allegedly—they are saying so—in dire financial circumstances. A number of those were recipients of these Commonwealth grants. What field visits or ground truthing has the Commonwealth done in relation to any of these grants? How many actual visits has the Commonwealth made to any recipients in the Tasmanian Community Forest Agreement list?

Mr Talbot —I know there were a range of visits made in relation to these grants. I would have to take that on notice. These visits happened a while ago now, and I just do not have any details here with me.

Senator MILNE —Perhaps you can tell me if there was a $10 million grant to Ta Ann Tasmania, based at Smithton? Can you tell me whether there has been any follow-up or due diligence in relation to that particular grant and, indeed, the performance?

Mr Talbot —I am sorry, Senator; I will have to take that notice.

Senator COLBECK —Can I just raise a point of order, Chair, please?

CHAIR —Yes, of course.

Senator COLBECK —Just on Senator Milne’s comment with respect to the purpose for the grant, when she said that it was to assist the industry transition from native forest plantation, that is not my recollection of the rationale for the grant programs. My understanding of it is that it might have included some assistance to transition to plantation but it was to adjust to changes in the forest resource, not just to transition to plantation. I just want to put that on the record because it does have a context in the overall scheme of things, particularly when you are talking about Ta Ann, for example, who I think did get a grant—

Senator MILNE —They got $10 million.

Senator COLBECK —but they are utilising lower grade native resource that used to go to chip products or low-value products and making them into a higher value veneer product. I think it is an important clarification that it was not to transition out of native forest into plantation but it was to assist with transition to a changing resource, which we all accept is occurring in the state.

CHAIR —Thank you, Senator Colbeck.

Senator MILNE —I did ask who in the Commonwealth was responsible for due diligence, and you said that it went to your legal teams. A legal contract is a separate thing from someone actually assessing whether these companies are economically viable and whether there is any likelihood of them going broke et cetera—what their probabilities are. Who does that for you?

Mr Talbot —Within the branch, normally the managers and the general managers would do the due diligence. I am afraid I was not around when these grants were being done, but normal practice is that if they are over a certain amount we do get advice for a financial assessment, we do get legal advice, and—depending on the particular circumstances and what questions are raised in terms of the paperwork that is put forward—we do clarifications. I am quite happy to take it on notice. Unfortunately these grants were done a while ago, so I would have to take it on notice.

Mr Mortimer —Could I just make an observation that, as Mr Talbot says, the grants were made some years ago—I am not sure how many. The point is that at that stage, even with due diligence, it is impossible for the Commonwealth to know whether a few years down the track the company will or will not fail. I will just make that observation about our processes, which do at the time seek assurances about the company viability and capability. We spend the money and all that is done, but from our point of view it is impossible to know what might come some years down the track.

Senator MILNE —Yes, I appreciate that, Mr Mortimer, but you will also remember that the Auditor-General audited the oversight of this program in the first couple of years and found the oversight to be incredibly wanting. They indicated that there was no ground-truthing, that in some cases there was no due diligence exercised by the Commonwealth and that the state of Tasmania was allowed to make these recommendations without the Commonwealth checking up. The reason it becomes critical now, apart from verifying how Commonwealth money was spent, is that we have a situation where there is a discussion about another round of compensation in the Tasmanian forest industry. I think it is important that we find out that the money was spent as it was supposed to have been spent and, if companies have been onsold, that the asset value is returned to the Commonwealth before we go into another round. That is why it is critically important here, and I would ask you to take it on notice.

I would like you to also take a question on notice in relation to the Wesley Vale pulp mill, which you would be well aware has now closed. It got $1.267 million for the purchase and installation of three natural gas boilers to replace the oil and LP gas at Wesley Vale. Can you also establish whether there was any commitment of ongoing operation of that company at the time that that grant was made and what we are doing to get back some of that value now that that mill has closed?

Mr Mortimer —I understand the question and, as Mr Talbot said, we will certainly get the details of that. He indicated we were getting advice on what legal mechanisms are available to the Commonwealth, and we will report on that.

Senator MILNE —What process will you use to establish whether all of these contractors, who got substantial grants through this period, actually spent the money on what the grants were allocated for? Can you take that on notice?

Mr Mortimer —Yes. I certainly understand that.

Senator MILNE —Thank you.

Senator BOB BROWN —Mr Mortimer, why was legal advice not gotten at the outset when these grants were made?

Mr Mortimer —The question is somewhat different at the end as opposed to at the beginning. The question at the end is not just the exposure but what mechanisms are available to the Commonwealth. It is a bit more complex at that point.

Dr O’Connell —Senator, the Tasmanian Community Forest Agreement Programs go back to 2005 and they go across both the current government and the previous government. Given that, my preference will be to go on notice in terms of assessing exactly what advice occurred in the early part of the program, because it is quite a long time ago and your question presupposes that there was no legal advice taken on the structure of the grants or the contracts. I just want to be sure about that.

Senator BOB BROWN —If you take it on notice, would you give the committee all legal advice—indications of when it was sought, what question was asked, by whom, within the department, relating to grants in Tasmania and elsewhere in Australia since 2005?

Dr O’Connell —We certainly could look at the timings. The content of the advice may be a question of legal privilege, potentially.

Senator BOB BROWN —Not just the content, but who asked the question and what it was—that is not a matter of legal advice. I will leave you to determine whether the legal advice is available to the committee. I recommend it should be. What is the legal advice being sought now? When was it sought and who sought it? The question that follows on from that is—perhaps you Dr O’Connell—could you give the committee an assessment of the current economic and industry problem besetting the industry in Tasmania.

Dr O’Connell —That is probably a question that is better handled by those who are specialists in the area and may include some assessment from our colleagues in ABARE and others—noting that that is a very complex question.

Mr Talbot —I can give some insights. I would probably also have to rely on ABARE. I guess some insights are—basically from meetings with industry—the challenges of maintaining the Japanese woodchip market. One of the comments to me from industry was that one effect has been the requirement for Forest Stewardship Council certification. Another thing has been, after the global financial crisis—

Senator BOB BROWN —If I may interrupt—on the FCS requirement: requirement by whom?

Mr Talbot —The requirement of the companies in Japan who are purchasing the product.

Senator BOB BROWN —The companies are requiring FCS certification for woodchips before they will purchase them?

Mr Talbot —Yes.

Senator BOB BROWN —When did that start?

Mr Talbot —I am not sure when it started, because I actually think it was a gradual process with some companies adopting it early and some a bit later. But I should put a caveat on that. It is not all the companies; there are still companies that do not require FCS certification in Japan.

Senator BOB BROWN —Can you tell the committee which companies they are?

Mr Talbot —I would not know off the top of my head. They were all—

Senator BOB BROWN —Could you take that on notice for us, please?

Mr Talbot —Yes. I would add the caveat that it was a general discussion and in most cases no companies were mentioned, but I will do my best for you.

Senator BOB BROWN —Thank you.

Mr Talbot —In terms of the Japanese market, one of the other things is that the Japanese economy went through the global financial crisis. Some industry people have told me that some of the companies have restructured and are now closed in Japan and operate out of China. In terms of the way the markets operate differently in Japan and China—and I will have to leave this to my ABARE colleagues—my understanding is that the Japanese market is far more protected and therefore you can get higher prices there than you can in China. But I am sure there are other economic factors there as well.

Senator BOB BROWN —Is the current problem in Tasmania due to the global economic downturn?

Mr Talbot —I would be speculating there. I would say that it would have been at least some of the effect. I do not know the extent. It would really require some detailed analysis by somebody to come to a landing on that.

Dr O'Connell —I would be uncomfortable in asking Mr Talbot to go beyond his direct skill set and knowledge there without going to some of our other analysts—perhaps ABARE or others—on the market issues.

Senator BOB BROWN —You do not think the forestry branch of the Commonwealth would have an understanding of what the current problems besetting the industry in Tasmania are?

Dr O'Connell —The point I was making before is that the problems are very complex when you ask a question such as ‘Is it the global financial crisis?’ It is a complex set of issues around the global financial crisis, clearly the price of woodchips and other issues relating to the structure of the industry. There is a whole suite of issues and I think probably asking for a quick analysis of what the problems are is not something that—

Senator BOB BROWN —But I did not ask for a quick analysis; I asked for any analysis that you might have.

Dr O'Connell —To the degree that we have work that ABARE has undertaken in the area, I can certainly provide that to you on the record.

Senator BOB BROWN —To what degree, in your knowledge if you have any, is the supply of eucalypt wood to the world market from outside Australia bearing in on the ability of Australia to sell eucalypt products outside the country?

Mr Talbot —I would have to take that on notice.

Senator BOB BROWN —Would you, please?

Mr Talbot —Yes. I was reflecting then because I know, for example, that countries like Chile have just recently had earthquakes. I know their port is still operating but I do not know the effect that it has had on their plantations. But there has been speculation in the paper about how much they will be able to supply in the near future.

Senator BOB BROWN —Do you what the area of eucalypt plantations in Australia is?

Mr Talbot —Not off the top of my head.

Mr Mortimer —We can provide that to you. It is done in the State of the forests reports, I think, on a regular basis.

Senator BOB BROWN —Could you also provide the area of eucalypt plantations elsewhere in the world?

Mr Mortimer —That might be a bit harder but we will see what international statistics are available through international organisations.

Senator BOB BROWN —Do you know if it is true that there is a bigger area of eucalypt plantations in China than there is in Australia?

Mr Talbot —I would have to take that on notice.

Senator BOB BROWN —Thank you.

Mr Talbot —I believe that the main countries we would be looking at are South Africa, China, parts of South America and ourselves. There might be another country. We will have a look at that for you.

Senator BOB BROWN —That is Vietnam.

Mr Talbot —Yes, Vietnam.

Senator BOB BROWN —And Spain and Portugal.

Mr Talbot —Yes, you are right.

Senator BOB BROWN —And a few others as well. Can you tell me if Gunns Limited wishes to cease the export of woodchips out of Tasmania?

Mr Talbot —I do not know the answer to that.

Mr Mortimer —I think that is a question you would need to ask Gunns. It is not something for us to say.

Senator BOB BROWN —Really?

Mr Mortimer —We do not run Gunns.

Senator BOB BROWN —No, you do not.

Senator COLBECK —I will get their number for you!

Senator BOB BROWN —But you are not aware of what is going on within the industry? Senator Milne is asking questions about more than $40 million of taxpayers’ money going into the industry in recent years. That industry, instead of being buoyed by that, according to newspaper reports in recent weeks—please countermand me if you disagree—is in great trouble indeed, to the point where it has called on environmentalists to help it get out of that trouble. I am sure this would be of interest to the forestry branch, which has been involved in many millions of dollars going into this industry. Can you tell the committee what has caused this situation? With all those contracts and all that Commonwealth taxpayers’ money given to the industry in recent years, we would have expected it to be retooled and rejigged for the future.

Dr O'Connell —Senator, the question you asked was whether Gunns was seeking to stop exporting woodchips.

Senator BOB BROWN —I asked that previously and you said you could not answer that.

Dr O'Connell —I think we said that would be one for—

Senator BOB BROWN —I am now asking you a question which I would like you to answer if you can.

Dr O'Connell —I am not sure what the question is now because that was a follow-on from the previous one.

Senator BOB BROWN —Okay, I will put it to you again: can you tell the committee why the forest industry in Tasmania is in trouble at the moment?

Dr O'Connell —I think we have just explained to you that there is a whole suite of economic issues and structural issues. It is not a simple answer.

Senator BOB BROWN —Yes, and you said it complex and you did not have time—

Dr O'Connell —I said I would provide to you on notice information we had which would help, and I am more than happy to do that.

Senator BOB BROWN —But you cannot tell the committee without notice why the Tasmanian industry is in trouble.

Senator Sherry —Senator Brown, I think Dr O’Connell also indicated that there are experts who will be available from ABARE. He did not say he would take everything on notice. There will be people here from ABARE, which is a specialist research organisation, who we are sure can give you some additional information.

Senator BOB BROWN —Minister, I am speaking to the forestry branch of your department.

Senator Sherry —No, it is not my department.

Senator BOB BROWN —It is; you are the minister representing the minister. If you want to—

Senator Sherry —I am representing Minister Burke, but it is not me who is not me who is the minister responsible for this department or indeed the forestry section.

Senator BOB BROWN —disentangle yourself from the department, I am happy.

Dr O'Connell —Senator, we mentioned quite clearly there is a downturn in the woodchip price, which is clearly a significant element. You are talking also about demand issues. There is the current structure of the industry down there. But what I am saying is: if you want a reasonably comprehensive answer, I would need to take that one on notice.

Senator BOB BROWN —Thank you; I will look forward to that. Have there been any approaches, either to you or, so far as you know, to the minister or any other arm of government, this year about the situation in Tasmania with a view to getting assistance or in any other way being informed about what is happening in Tasmania?

Dr O'Connell —You would need to direct your question about whether the minister has been approached to the minister, obviously, but certainly there has been—

Senator BOB BROWN —Could you take that question on notice for the minister, please?

Senator Sherry —I will take it on notice for the minister.

Senator BOB BROWN —Thank you.

Dr O'Connell —There certainly have been briefings and there has been engagement by the minister with the Tasmanian forest industry interests. Mr Talbot can give you some background to that.

Mr Talbot —Last week there was a meeting between Minister Burke, Minister Green and some members of the Tasmanian forest industry.

Senator BOB BROWN —Can you tell the committee who those members were?

Mr Talbot —Of the industry? Yes, I can. Dr Julian Amos, Mr Rob Woolley, Mr Ed Vincent, Mr Barry Chipman, Mr Ross Britton, Mr Peter Volker, Mr Greg L’Estrange, Mr Bernard McKay, Mr Arnold Willems, Mr David Leigh, Mr Vince Erasmus, Mr Bob Gordon and Mr Ian Dickenson.

Senator BOB BROWN —Where was that meeting held?

Mr Talbot —It was held at one of the function rooms at the pier in Hobart, but I am not sure of the name of the venue. I do not have it in my notes, but it was held in Hobart. The main things that were discussed were, as you have already said, the state of the industry, including the concerns about the Japanese woodchip market; concerns about managed investment schemes; the Gunns pulp mill was also raised; forest certification schemes were also raised; the issue of forest contractors was raised; there were also issues around sawmills; and there were also issues of when plantations would be able to produce high-quality soil lots, for example, which they feel is many years away yet.

Senator BOB BROWN —What requests were made of the federal government with respect to issues relating to contractors?

Mr Talbot —At the meeting, it was primarily a discussion of the issues facing the industry at the current time. At the moment the idea is that people work through this roundtable, which I think is to be chaired by Rob Woolley, and then to advise government of what they may need. There was no commitment.

Dr O’Connell —My understanding—and Mr Talbot can correct me if I am wrong—is that there were no specific requests made. It was an exchange of information. It was not a case that this was a meeting at which there was, if you like, a log of claims or a set of requests. Rather, this was an information exchange to get a common base of knowledge.

Senator BOB BROWN —Were you there, Mr Talbot?

Mr Talbot —I was there, and what our secretary said is correct.

Dr O’Connell —Again, I think any issues around what requests may have been put to the minister or the government more generally would need to be put to the minister or other ministers.

Senator BOB BROWN —But no general request was made?

Mr Talbot —No requests were made.

Senator BOB BROWN —There was no general request that Commonwealth assistance might be sought?

Mr Talbot —Not to my knowledge.

Senator BOB BROWN —Was some solution to the issue of the woodchip exports put forward by the participants at the meeting—or to any of the matters that you raised?

Mr Talbot —The meeting lasted only an hour, due to the minister’s schedule, so there was enough time for people to explain what their issues were. But there was nothing further than that.

Senator BOB BROWN —Is there to be a further meeting?

Mr Talbot —I do not know, Senator.

Senator BOB BROWN —Was there was a request for one?

Mr Talbot —Not to my knowledge.

Dr O’Connell —Again, I think these questions need to be put to the minister, given that the minister would have been the person this was requested from. Otherwise it is going to put Mr Talbot in a position where he is trying to answer for things that he cannot sensibly—

Senator BOB BROWN —I am quite happy for that. Would you put those questions on notice please? Would you also put the question on notice as to whether the minister held any other meetings with industry representatives or people interested or associated while he was in Tasmania; and, if so, who they were.

Senator Sherry —We will take it on notice.

Senator BOB BROWN —Yes, that is what I am asking. Thank you, Minister. The other question I would like to follow through with is: in your information has the Prime Minister been alerted to the fact that there is a problem with the industry in Tasmania?

Dr O’Connell —That question would need to be put to the Prime Minister’s portfolio or the Prime Minister’s office directly.

Senator BOB BROWN —Can I put that to the minister’s office through you?

Senator Sherry —We will take it on notice.

Senator BOB BROWN —Thank you. In the assessment of the Forestry Branch, is there an opportunity for a change in direction of the industry out of native forests into a plantation based industry?

Mr Mortimer —That is an open ended question which it is really not appropriate for us to go into. It is something that may or may not be taken up by industry or government.

Senator BOB BROWN —Can there be anything more appropriate for me as a senator to ask the Forestry Branch, which has the experts in the Commonwealth about this particular industry, about than the potential restructuring of an industry of that order?

Dr O’Connell —At present, as you know, the industry can access timber from RFA forests and can set their direction on that and plantation, if they wish. Unless that changes for some reason, it can continue on. Whether or not the industry players themselves want to change their structure is a question to put to them. From the perspective of the government at the moment, obviously the RFA forests remain accessible to industry under the conditions that have stood for some time.

Senator BOB BROWN —So you do not think that looking at the current troubles of the industry in Tasmania brings up the relevance of whether the Commonwealth should reassess the industry’s options for the future?

Dr O’Connell —If you are talking about what might be the economic drivers of change in industry direction, of course the industry players may want to change the resource that they access and the conditions of that. But that would be a separate issue from the issue of whether or not the resource itself is available in terms of meeting RFA requirements. At present, of course, it is available.

Senator BOB BROWN —Do you know of any time in the last 30 years when the industry has changed direction in Tasmania without Commonwealth money being injected into the industry at that point of change?

Dr O’Connell —I would have to check the record.

Senator BOB BROWN —Take that as a question as notice.

Dr O’Connell —Will do.

Senator BOB BROWN —Can you or Mr Talbot tell the committee how much Commonwealth moneys have gone to the Tasmanian industry since 1988, or would you take that on notice?

Mr Talbot —I would have to take that on notice.

Mr Mortimer —There is quite a bit of time there.

Senator BOB BROWN —At the 2004 election, famously, Prime Minister Howard committed $50 million to go into the industry and into support for the pulp mill as well. Can you account for that $50 million, and is that covered by the amounts that Senator Milne was asking about?

Mr Mortimer —We will have to check on that and come back to you.

Dr O’Connell —By recollection, I think quite a large amount of that money was to be appropriated to the industry department, so we will have to check. I do not think it is through this department.

Senator BOB BROWN —In 2004, again famously, Prime Minister Howard, with the support of the CFMEU and with the industry buoyant at the time, put a proposal which had the enormous support of the industry. Can you tell me how many jobs have been lost out of the industry since October 2004?

Mr Mortimer —We will have to come back to you. We do not have those statistics with us.

Senator BOB BROWN —Do you know how many jobs there are in the wood related industry in Tasmania at the moment and what the breakdown for that job component is?

Dr O’Connell —We certainly can access that and have it. I do not know whether we have it with us at the moment, but we can certainly take it on notice.

Senator BOB BROWN —Would you do that? Can you, for each year since 2004, give a total and a breakdown for the job make-up of the Tasmanian industry, including the number of jobs in the woodchip component?

Mr Talbot —Okay, we will take that on notice.

Senator BOB BROWN —Finally, have you received from the minister’s office a copy of a proposal for World Heritage nomination of forests including the Upper Florentine, the Weld, parts of the Western Tiers and the Tarkine and, if so, have you done an assessment of what the economic and environmental benefits of that proposal would be?

Mr Mortimer —I gather it is an issue for the environment department, Senator.

Senator BOB BROWN —No, this is for your department because it involves forests directly.

Dr O’Connell —What time frame are we talking about? Are you talking about now?

Senator BOB BROWN —I am talking about this particular proposal which came from my office and that was—

Dr O’Connell —To my knowledge we have not received anything but we could check our records and just see if—

Senator BOB BROWN —I will give you a copy of it just to make sure.

Mr Talbot —We will check our records as well.

Senator BOB BROWN —Thank you.

Senator MILNE —Just to finish this issue of the whole community forest agreement industry development program, when the Auditor-General reported previously he said that DAFF had not reported against all outcome indicators for the programs in the 2006-07 annual report and as a result parliament had not been informed of the achievements or otherwise of the programs in meeting their objectives. He said that consideration needed to be given to the performance data being collected for these indicators and the level of department verification required. This is particularly important as DAFF has indicated that it intends evaluating the programs when completed in June 2009. Has DAFF evaluated the programs and has it reported yet on the performance data it uses and the verification et cetera? If it has, where can I go to find this report on the outcomes of the program?

Mr Talbot —In terms of an evaluation of the program, we have finalised an agreement with the Tasmanian officials and we are about to go out to tender for people to do an evaluation of various programs under this agreement. In terms of your second question, I would have to take it on notice, have a look at the documents myself and come back to you.

Senator MILNE —So the program finished in June 2009 and you are only now about to release an expression of interest or whatever for an evaluation of the program. Is that correct?

Mr Talbot —We are now but I think there are a couple of issues there. Yes, the Commonwealth component finished around June/July last year but I think parts of the Tasmanian components went on until—will be completed shortly. So there are still elements within the Tasmanian phase that are just about to be completed. So, yes, we are and we are looking at the major programs that the Commonwealth worked on.

Dr O’Connell —I think it is also relevant that the time frame for investment takes you beyond the June 2009 period and some of this work was reimbursement work on the basis of when the investment had been made, so we would not have all of the information just on June 2009; it comes in as the investments are made.

Senator MILNE —What I am asking is that you provide on notice any evaluation that has been done of this program. In particular, what are the categories of performance data you were collecting against which you intend to evaluate, and what is the time frame in which we can expect evaluation of these programs.

Mr Talbot —Yes.

Senator MILNE —Thank you.

Senator COLBECK —Firstly, can I go to the forest industry database. Last estimates we talked about a draft being completed by March/April with a final version in July. Can you give us the status on that?

Mr Talbot —The database is still due to be completed in July. We intend having meetings with the industry in Melbourne and Canberra—I think the one in Canberra is this week and the one in Melbourne is next week but I am not sure of the dates—where the industry will be able to see an operational version of the database to see if it meets their needs or if any tweaking needs to be done.

Senator COLBECK —So it is still due for completion?

Mr Talbot —It is still due for completion in July.

Senator COLBECK —Do we have the draft yet?

Mr Talbot —I have seen an early version of the database that shows how it works. The idea is to show a live version of the database to industry late this month or early next month to see if it meets their standards and if there is any tweaking that needs to be done.

Senator COLBECK —So we await an announcement of its availability in July. I move on to the Forest Industries Climate Change Research Fund. You told us in estimates that applications for this fund had been provided to the assessment panel in early February. When did the assessment panel finalise its assessments of the applications?

Mr Talbot —Those projects have been announced. There were 20 projects for $4.7 million.

Senator COLBECK —Yes. So those were announced on 29 April and 3 May?

Mr Talbot —I think that is right. It was around those dates that they were announced.

Senator COLBECK —Do those projects that have been announced add up to $4.7 million?

Mr Talbot —No, I think there are some that have been announced and some that are about to be announced.

Senator COLBECK —My understanding is that there are 10 projects that have been announced for just under $3 million.

Mr Talbot —That would probably be correct. I do not have those press releases with me.

Senator COLBECK —I do but I have not compiled what is on each one. When will the final $1.77 million be announced?

Mr Talbot —I would have to take that on notice.

Senator COLBECK —Can you tell me what is holding it up? I think that all the submissions went for assessment at one time, didn’t they? That is my recollection.

Mr Talbot —I would have to take that on notice.

Senator COLBECK —But I thought we talked at the last estimates about all of the projects being assessed at once. That is my recollection. So you do not know when the final $1.77 million is going to be announced?

Mr Talbot —No, I do not.

Senator COLBECK —Do you know if the assessment on that amount of money has been finalised?

Mr Talbot —The assessment has been done.

Senator COLBECK —So it is effectively a matter with the minister at this stage?

Mr Talbot —Effectively, yes.

Senator COLBECK —Okay. That is fine; a simple, easy answer. What is happening with the balance of the fund of about $232,000?

Mr Talbot —No decisions on that yet.

Senator COLBECK —It has not been spent on administration.

Mr Talbot —No.

Mr Mortimer —This is administered funding. Departmental funding is not part of this.

Senator COLBECK —Departmental funding is not part of this?

Mr Mortimer —No.

Senator COLBECK —I asked the question because I have seen, for example, a $17 million grants program recently announced in Tasmania where $900-odd thousand was taken out for administration. That is why I am asking the question. It was a bit of a surprise to everybody.

Mr Mortimer —I understand. In this case, the numbers in front of you—the $8 million—is all administered funds to be spent on stakeholder issues.

Senator COLBECK —Do we have completion dates on the respective projects?

Mr Talbot —We would have completion dates for—

Senator COLBECK —The 10 that are announced, I suppose. It is a bit hard to have a completion date on something that has not been announced. Can you give us what those completion dates are?

Mr Talbot —I do not have that information with me. I will have to take it on notice.

Senator COLBECK —So you do not know, for example, whether the A3P Council that got $65,000 to look at carbon accounting methods for wood products processes to help determine the best approach for businesses to thrive in an emissions trading scheme is going to be finalised before the potential for an emissions trading scheme?

Mr Talbot —I do not have the details of any of the funding deeds with me here. A number of them are being worked through at the moment which will have milestones and completion dates. I just do not have that information here.

Senator COLBECK —Did the government’s decision to put off the ETS have an impact on the allocation of funding under the program?

Mr Talbot —No.

Senator COLBECK —So it has not had any impact on that last $1.77 million yet to be announced?

Mr Talbot —No.

Senator COLBECK —Moving to illegal logging: can you give us an update of where we are up to with respect to illegal timber?

Mr Talbot —We are still completing the final regulatory impact statement on that.

Senator SIEWERT —When will that be finished?

Mr Talbot —We expect to complete it shortly.

Senator COLBECK —The commitment at the election was effectively to ban illegal logging. It is highly unlikely that there is going to be that sort of process in place prior to the election as things stand at this stage. How far away is the regulatory impact statement from being finalised?

Mr Talbot —All I can say is that I believe that we will have things completed shortly. I would not like to be any more definite.

Senator COLBECK —So has the department completed its work on the regulatory impact statement?

Dr O’Connell —I think there is a whole-of-government process which we need to go through. Typically, with a significant piece of regulation, we are going through that. We are very close to the end of it, we believe.

Senator COLBECK —I am asking questions about the regulatory impact statement which Mr Talbot has just referred to. I want to know whether the department has completed its work on the regulatory impact statement.

Dr O’Connell —The regulatory impact statement is really part of the whole process which we are getting cleared through whole of government.

Senator SIEWERT —Getting through—did you say whole of government?

Dr O’Connell —For example, there is the Office of Best Practice Regulation or whatever it is called which we need to liaise with to ensure that the regulatory impact statement passes the criteria required of it. As Mr Talbot said, we are confident that we are in the final stages of this process.

Senator COLBECK —When is the regulatory impact statement going to be available for industry and public scrutiny?

Mr Mortimer —The government makes a decision about the release of the regulatory impact statement. It is an issue at the discretion of the government. Sometimes they can release it before the decision; sometimes afterwards but it is essentially the government’s call.

Dr O’Connell —I think we need to just not second guess what the government is going to do and the time of announcement and others here.

Senator COLBECK —There is a deal of interest in this issue as I think Senator Siewert will demonstrate shortly when she asks some question, and feel free to deal with it. One of the real issues that the minister has expressed as a concern in dealing with illegally imported timber is identification of that timber. Where are at; and what strategies are we looking at to actually manage that process?

Dr O’Connell —Again, we are, as I just mentioned, within the process of government to decide matters here and I do not think we can second guess decisions of ministers at this stage.

Senator COLBECK —It is a good way to shut down any questions just to be in limbo between the minister and the department.

Dr O'Connell —I am not trying to shut down questions, Senator. What I am saying is that there was the commitment made and we are giving effect to the commitment. There has been a public process under the regulation impact statement which took into account a range of submissions and we are now going into the process of the government giving consideration to all that and so there has been—

Senator Colbeck —So there has been a process of consultation?

Dr O'Connell —Yes, there has been an extensive consultation process.

Senator COLBECK —How many submissions were made?

Mr Talbot —During the draft regulatory impact stage, I think—just off the top of my head—we interviewed about 69 companies through the CIE process. Then a report was put out and then again submissions were taken and there was a final report put out by CIE. So there was substantial consultation with industry, NGOs and church groups leading up to this. I remember even at the beginning of the process the department running a seminar and having these groups in the room.

Mr Mortimer —What happened is that the CIE did the draft regulatory impact statement and consulted widely on that. It put out documents for public consultation and its document is now in the public domain. What happens then is that the work comes in to government and the government then finalises that work in-house, so to speak—getting advice on issues as it sees fit—and that leads through to government taking a decision on it, which is essentially normal practice.

Senator Colbeck —Can you provide us with a list of those that were consulted through  that process on the RIS?

Mr Talbot —Yes. I was just going to say that they are actually in the back of the CIE report.

Mr Mortimer —So it is already public.

Senator COLBECK —So they are listed in the CIE report?

Mr Talbot —I am pretty sure they are listed in that report, but I will provide the list anyway.

Senator COLBECK —I can check that out; that is fine.

Senator SIEWERT —I want to follow up on the RIS. I gather from what you are just saying that you are not clear on the process yet as to whether that will be released publicly before the government makes a decision on where it is going on this issue. Is that correct?

Mr Talbot —It is a matter for the minister.

Senator SIEWERT —Is the report going to be publicly released?

Mr Talbot —It is the same again, Senator. It is a matter for the minister.

Senator SIEWERT —I will try again on time lines. What are the time lines? Is it likely we are going to see it before the election?

Senator Sherry —I am sorry, we really cannot say.

CHAIR —Do you know when the election is? Will you let me know?

Senator SIEWERT —We know it is going to be some time in the second half of this year. This is an election promise and we are still waiting for the report implementing the election promise.

Senator Sherry —I guess we will know by the time the election is called whether it has been publicly released or not. I will pass the request on to the minister’s office—

Senator SIEWERT —And the community will know whether you kept your promise or not.

Senator Sherry —If we have met the commitment by the time the election is called everyone will know it has either been released or it has not been released.

Senator SIEWERT —Right, that is a promise not kept.

Senator MILNE —The ever growing list.

CHAIR —Now settle down and just ask your questions. They have taken their cranky pills.

Senator COLBECK —We have taken it and that is why we are cranky.

Senator SIEWERT —Exactly. We have been following this only for the last 2 ½ years so it should not be that hard. We are finding it hard to get this information out of you at the moment about what is happening with the government proposal. But in the recent copy of of 2 March Alan Oxley talks about the URS report which I will go to in a minute, but also he talks about commitments by the government releasing a proposal, or says that a proposal on illegal timber has already been submitted to cabinet. Is this correct?

Dr O’Connell —I cannot comment on what has or has not been released to cabinet, and I think the question of where he got that information would be a better put to Mr Oxley. It was certainly not from us. As I said at the start of this discussion, we do believe that we are in the final stages of dealing with this issue.

Senator SIEWERT —Have you had any meetings? Has either the minister or the staff of DAFF had any meetings with Mr Oxley regarding either the URS report or a cabinet submission?

Mr Mortimer —The department has certainly had no discussions with Mr Oxley about a cabinet submission. That would be entirely inappropriate.

Dr O’Connell —You would need to ask the minister—

Senator Sherry —I will take on notice the question to the minister.

Senator SIEWERT —Okay. Has the department had any discussions around this issue with Mr Oxley?

Mr Mortimer —I am not aware of any. I do not think the department would be doing that. Essentially, Mr Oxley has speculated in a journal about the views on a matter. That is as much as we can say.

Senator SIEWERT —Minister Sherry, please take on notice the question about the whether the minister has had any meetings with Mr Oxley regarding the URS report or the government’s proposal. The government has commissioned several other reports on the industry-wide code of conduct. There was a report led by the Timber Development Association on illegal timber imports. Has that project been completed?

Mr Talbot —The report has been completed; it has not then released as yet.

Senator SIEWERT —When is it likely to be released?

Mr Talbot —That would be a decision for the minister.

Senator SIEWERT —How much did it cost to produce the report?

Mr Talbot —I do not have that information on me, but I will get it for you.

Senator SIEWERT —Please also tell us who was consulted as part of that project.

Mr Talbot —I would have to take that on notice. It would have been a range of timber importers and other industry associations, but I cannot remember the extent of the consultations. They were done quite a while ago.

Senator SIEWERT —Could you take that on notice, please?

Mr Talbot —Yes, certainly.

Senator SIEWERT —Is it likely that that report will be released when the risk report is released?

Mr Talbot —I could not say. These are decisions for the minister.

Senator SIEWERT —When was that report completed?

Mr Talbot —It was quite a while ago now. I would have to take that on notice, but we did a range of reports to help us get our thinking together to start developing frameworks.

Senator SIEWERT —Are we talking a couple of years?

Mr Talbot —No, it would not have been that long ago. I think it was completed six or seven months ago.

Senator SIEWERT —Okay. I had no idea what you meant when you talked about ‘some time ago’. I understand that there was another report: the priory forest industries report. Private industry was commissioned to develop a report on the methodology of assessing the risks of importing illegally-sourced timber. Is that right? I may have got the company that did it wrong, but have you done a report on the methodology of assessing risk?

Mr Talbot —I am not sure on that one. I may know it under a different name. I will take that one on notice.

Senator SIEWERT —If there was a report, I would like to know the answers to the same questions I asked about the previous report: when was it finalised, what was the cost and when is it going to be released? Then there is the URS report that was, I understand, looking at the comparison between various verification schemes. Is that correct?

Mr Talbot —Yes. That has not been released. It will be subject to the minister as well.

Senator SIEWERT —Do you have terms of reference for that report?

Mr Talbot —Not on me here.

Senator SIEWERT —Could you please table those?

Mr Talbot —Certainly.

Senator SIEWERT —Again, what was the cost of that report, when will it be released and is the idea of that report—and I realise I may be getting into policy issues—was that looking at voluntary codes versus any mandatory scheme?

Mr Talbot —The report was basically looking at a range of schemes that operate throughout the world and how robust they are.

Senator SIEWERT —That has been finalised?

Mr Talbot —All the reports that we have done have all been finalised.

Senator COLBECK —What interaction have you had with the department of environment over the review of the EPBC Act?

Mr Talbot —Certainly we have had discussions with the department of environment in relation to RFAs, as they were part of the review of the EPBC Act. Obviously, the EPBC Act mentions looking at improving some elements of the RFAs, so I can say we have had discussions.

Senator COLBECK —The government said that it is not going to review section 38 as it currently applies to the RFAs, and I accept there is that specific reference to the agency, but what about in a broader sense, Dr O’Connell? It potentially has pretty broad implications for the agency as a whole, the specifics on forestry and RFAs, and that is accepted.

Mr Mortimer —There have been preliminary discussions with the environment department on how to go forward on this. A whole-of-government response will be developed to the so-called Hawke review developed. The environment department is leading on that and we will contribute in terms of the RFA issues.

Dr O’Connell —Certainly, there have been preliminary discussions, yes, but definite discussions, if you like. So if your issue is: have we had engagement with the management of the review findings? Yes, we have, and we will continue to do so.

Senator COLBECK —Dr O’Connell, what about fisheries, I know we are not in that area and we will come to that later, but there is an engagement at that level as well?

Dr O’Connell —Yes, and certainly again with the fisheries issues—

Senator COLBECK —We will come back to that later on, but that is an acknowledgment. In November, the Primary Industries Ministerial Council agreed for the need for government cooperation on forestry certification and called on the Green Building Council to include accreditation of AFS for certification. Can you give us an update on where that is at and what other work is going on with various agencies around that matter?

Mr Talbot —Certainly, as you have said, there was that announcement out of the Primary Industries Ministerial Council and certainly after that the Green Building Council recognised the AFS just like the FSC for one point. Agencies were asked to go away and look at this issue. The one that is most public at the moment is the Victoria timber policy, where it recognises both schemes. Queensland has put out more statements and a bit of a draft at the moment talking about the direction they are going in in terms of recognising these schemes. I think that in the other jurisdictions it is probably more in the development stage or still under consideration.

Senator COLBECK —What about within your conversations across government generally within general government procurement policy? I acknowledge the work that has been done through PIMC and it is positive but what about through other government agencies generally with respect to their overall procurement policies? Is there something that is being managed by this agency in relation to that?

Mr Talbot —In terms of Commonwealth procurement we have encouraged and reminded other agencies about treating the certification schemes equally. I will have to take this on notice because I am sure I am going to get some of the words wrong but one of the environmental guides—I am not sure whether it is to the Commonwealth procurement scheme—mentions certification schemes. I will give you details on that, Senator.

Senator COLBECK —You will give us the name of that particular guide that provides that information. You do not know for certain whether or not that is happening across all agencies. Who would monitor that?

Mr Talbot —I would have to take that on notice. When I said we went out to other agencies we did get fairly positive responses from most agencies to this. It shows that it is on a number of agencies’ radars.

Senator COLBECK —Are you aware of any particular barriers to obtaining the two major accreditations?

Mr Talbot —I am not aware of any barriers. I think the two issues are probably time and money. If you want to gain accreditation, you have to go through a series of procedures to gain accreditation. When most companies talk to me about gaining accreditation the two things they talk about is the time it takes and sometimes the cost as well.

Senator COLBECK —Have you had any conversations with someone like Andre de Fraitas from the Forest Stewardship Council International, who was out here last year talking about this, or people from AFS? I have to say I am quite surprised that you would have no idea of potential barriers to obtaining relative accreditations given what I know some of the industry players have been through. You have not had any conversations with VicForests about what they have been through with respect to their certification attempts through FSC for example?

Mr Talbot —To my knowledge I cannot remember it being raised with me. I am sorry.

Senator COLBECK —And in your conversations with contractors when you were in Hobart last week—and Senator Brown quite rightly raised it as an issue because it is—you were not aware of any barriers to certification of forest products out of Tasmania, for example to FSC, including a specific note not to accept timber out of Tasmania from FSC Australia?

Mr Talbot —What I am aware of is the issue in relation to FSC and the Japanese market. What I am also aware of now that I think about it is the difficulties players have had, particularly if they harvest native forests, of getting FSC certification.

Senator COLBECK —There is effectively no FSC accredited native forest in the country, is there?

Mr Talbot —I actually think there are small areas of native forest that are FSC certified.

Senator COLBECK —If you have advice as to that, I would appreciate receiving it—on notice, of course.

Mr Talbot —On notice, yes.

Senator COLBECK —Do you have a general sense of where they are?

Mr Talbot —Not off the top of my head. For some reason northern New South Wales comes to mind, but I will take it on notice.

Senator COLBECK —Okay—I would appreciate hearing that. Did you have any consultation with either the department of environment or the New South Wales government over the red gums in the forests that have just had their status changed?

Mr Talbot —We have had some discussions, but they were mainly in terms of the NRC notifying us of what they were doing and their processes.

Senator COLBECK —NRC being?

Mr Talbot —The New South Wales Natural Resources Commission.

Senator COLBECK —You would not have been asked for any advice on those, or had any discussions about those particular forests?

Mr Talbot —I would have to take that on notice. The reason is that I do not think I have been involved in any discussions, but I think that one of my staff may have been recently. The river red gums are a New South Wales issue.

Mr Mortimer —I am inclined to think it probably means that there may have been discussions between offices on information, but the Commonwealth is not engaged in the issue.

Senator COLBECK —Sorry?

Mr Mortimer —This department is not engaged in the issue.

Senator COLBECK —Not engaged in the issue?

Mr Mortimer —No.

Dr O'Connell —I think you are talking about the recent change in the New South Wales’ government stance, rather than the long-run discussions? Over the long run this has been an issue for quite a while, but I think—

Senator COLBECK —I know that there has been some Commonwealth input, because we have discussed it previously.

Mr Mortimer —With the environment department.

Senator COLBECK —I know that the department of environment has been doing some assessments based on logging methods within those forests.

Mr Mortimer —Yes.

Senator COLBECK —Did you give any advice to the department of environment with regard to that sort of work—the logging methods? Although it is a bit redundant now, of course.

Mr Talbot —I do not think we gave any information at all on logging methods. But I will take it on notice, simply because I was not involved in the logging discussions—but I do not think so.

Senator COLBECK —It does go back a little while now, I know. I have got some questions on international timber market analysis, but I might just hold those until we move into ABARE, because I think that crosses over a bit. Senator Brown had a crack at that earlier.

CHAIR —That is good, because it is 3.15 pm.

Senator COLBECK —I was watching the clock.

CHAIR —Yes, and I was letting you go—I knew you would run for the line, as you always do.

[3.19 pm]