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Rural and Regional Affairs and Transport Legislation Committee
Department of Agriculture and Water Resources

Department of Agriculture and Water Resources


CHAIR: We will move to outcome 1.

Senator RICE: I want to start with forest products—plantations and regional forest agreements.

CHAIR: Could I put on record that Mr Thompson has approached the table having broken his leg in a bicycle accident. Welcome back.

Mr Thompson : Thank you, Senator. If I was a horse, someone might have shot me.

CHAIR: That is what they say about me!

Senator RICE: I want to start by asking about plantations and in general about initiatives and programs that the government currently has underway supporting plantation wood production.

Mr Thompson : Outside of our natural resource management programs and the support that is available within them for farm forestry, I do not think we have any direct programs supporting plantation forests at the present time. Plantation forests certainly have opportunities for participating in carbon programs and plantation forestry is an area where significant research is being undertaken by the relevant R&D corporation.

Senator RICE: Given the failure of the MIS schemes, on which the Senate inquiry is about to conclude and report, are there any plans or prospects for ongoing other programs that potentially support both better use of the resource from existing plantations and potential for further expansion?

Mr Thompson : In terms of future programs, that would be a matter for the government. There are no current programs being planned. In terms of more efficient use of plantations and forest timber, again, the major activity in that area is in the research field, where the RDC is doing work to improve utilisation, management and those sorts of things.

Senator RICE: What is the relevant RDC?

Mr Thompson : Forest and Wood Products Australia.

Senator RICE: How much of that is supported by government?

Mr Thompson : It is like the other RDCs: There is a levy that is paid by industry. I do not have the numbers with me at the moment, but the government does support it. I think the RDC had a total budget of around $9 million to $10 million, so around $4 million to $5 million. We will come back on notice on the exact financial details.

Senator RICE: Moving on to the regional forest agreements, Minister, you received the independent reviewer's report on the Tasmanian Regional Forest Agreement in December. It is for the period 2007 to 2012. I note that we are now in 2016.

Senator Ruston: Unfortunately, as you probably know, we do not have control over what state governments choose to do or not to do.

Senator RICE: I would like an update on what the planned process is from here on that agreement and the other regional forest agreements.

Senator Ruston: As I mentioned in my throwaway remark before, the state governments are the ones who have jurisdiction over the delivery of the RFAs. We are working closely with the governments in Australia where RFAs apply. As you well know, they do not apply in a number of states. We have the review back from Tasmania. We understand that the reviews from New South Wales and Western Australia are well underway. In your home state of Victoria, we are still waiting to find out from the Victorian government when they will be providing that view. I understand that consequentially they are also looking at some issues in relation to the future of how they wish to deal with their forestry arrangements into the future, and they are running them concurrently. So we are still awaiting advice from the Victorian government as to how they wish to progress that in your home state.

Senator RICE: With the Tasmanian one, where you now have the independent review of it, what is the time line for action on the Tasmanian RFA?

Senator Ruston: I might just hand to the department, because they will have all the statutory time frames.

Ms Lauder : As far as Tasmania goes, as you know the independent review has been completed. We are working with the Tasmanian government now on the combined government response to that and then the negotiation of the RFA. Because we need to get agreement between both governments, there is an expectation that it could take between six and nine months. They are hoping to get it done by midyear, but at the latest by the end of the year.

Senator RICE: What is the timing of the expiry of the Tasmanian RFA?

Ms Lauder : 2017. As long as it is done this year we have time for all of that. That is Tasmania. Western Australia have just agreed on the scoping agreement, which is the agreement of the process for the independent review. They are working with us at the moment to identify the independent reviewer, and then that process will happen. So Western Australia is on track. Theirs is due in 2019. Again, they are expecting it to be completed, if not by the end of this year, early next year. You have had an update from the minister on Victoria.

Senator RICE: I would like to focus on Victoria, particularly the East Gippsland one, because that expires in just under a year. That was the first one. I am interested in what the process is going to be, given that expiry date.

Senator Ruston: At this stage there are preliminary discussions being undertaken with the Victorian government. I am probably not in a position to give you any more information. Obviously it is a negotiation that has to be agreed between the Commonwealth and the Victorian government. If the Victorian government choose not to proceed within the time frames that are statutorily required, the department can give you an indication of the triggers that follow from that. As you probably well now, if the RFAs are not in place the situation reverts to what the legislation would require of Victorian forestry in the absence of those RFAs being in place. Is there anything further you want to add that?

Ms Lauder : Not on Victoria.

Senator RICE: Looking at the independent reviewer's report for the Tasmanian RFA, we have had almost 20 years now of management of forests under RFAs, but the review is filled with statements such as:

Assessment of the overall outcomes of the RFA for the conservation of biodiversity requires a greater commitment to appropriate research and assessment … Judging the overall success of threatened species management and the broader biodiversity outcomes under the RFA is difficult given the limited monitoring of outcomes … there is a need to build knowledge both to determine the success or otherwise of the integrated land management approach of the RFA … It is not clear how some of the data adequacy concerns can be addressed.There is limited data in some areas, and a lack of, or declining resources available to collect data across a number of areas covered by criteria and indicators—

And finally, sadly—

… Forest research in Tasmania reached a high water mark during the first fifteen years of the RFA. The future outlook is much less encouraging …

How is the proposed process to extend the RFAs going to take into account the absence of meaningful data that would indicate that native forest logging is in any way ecologically sustainable?

Senator Ruston: There are a heap of things that obviously feed into your very long preamble to the question. Obviously the process of the RFA, because it allows the people that are on the ground to be making the decisions and providing the information about what is operating in Tasmania—that is the reason we have these particular reviews that occur every five years—obviously the report informs what the new RFA will look like and, therefore, the issues that you have raised in the preamble to your question will inform what the RFA looks like. It probably demonstrates to a large extent the value of the process that was put in place.

Senator RICE: I understand that the government's intention is to roll them over for another 20 years. How do you see that a new RFA is going to address this fundamental lack of data that we have now experienced for 19 of the 20 years of the first RFAs? 19 years on the independent reviewer is telling us that there is insufficient data, insufficient monitoring and we cannot assess whether ecologically sustainable forest management is a reality or a complete furphy.

Senator EDWARDS: Define 'furphy'.

Senator RICE: Something that is not proven.

Senator Ruston: Reiterating my comments in answer to your previous question, the purpose of these reviews is to inform further decision making. In relation to issues about the comments from the independent reviewer about the lack of data, that obviously tells us that in the future RFAs we need to address the research component of forestry. I assume you are only talking about native forests.

Senator RICE: Yes, native forests in particular.

CHAIR: Do the officers want to answer?

Mr Thompson : I was going to make the point that the review of recommendations go quite a way to some things that could be improved in forest management. Some of them relate to transparency and the development of plans. They relate to engagement of various people in doing things, and they do call for further research. They are the sorts of things that will have to be taken into account in implementing the new RFA. The only other thing I could say is that I am relatively new to forests, but in all other areas of natural resource management, data and absolute knowledge about the resource you are managing is difficult to come by and expensive, so it is a matter of making sure we target the right sort of information that enables management decisions to be made. They often do not have to have comprehensive information. It is good indicative information about what the behaviour is. So they are talking about, as the recommendation of the review was talking about, with the state build better monitoring frameworks and those sorts of things.

Senator RICE: We have had 19 years of doing that and we still have not got there, so how can the community have any confidence that we are going to be any better in the next 20 years? That is probably a rhetorical question.

Senator Ruston: And I think the problem you have here is that we are talking about a point in time, but quite clearly this final review that we have before us is the one that will inform the decision in terms of the terms of the rollover of the RFA for Tasmania. The whole purpose of this review is to inform what goes on. You can talk about anything that happens historically. I am not in a position to comment on that. What I am in a position to comment about is that I have the review, I have the recommendations, I have the concerns of the expert panel and obviously they form part of the process to make sure that the RFA deals with the issues that have been identified.

Senator RICE: The review concludes, with reference to the objective of providing for future growth and development of Tasmanian industries associated with forest and timber products, that this has not been achieved for the native forest based industry because of economic conditions and broad market force. And it reflects on the other objective, of encouraging significant employment opportunities and investment throughout Tasmania, that this has not been achieved with significant reduction in the size of the native forest industry. So my question is: given this combination of things will you, as part of your review process, at least consider the option of letting the RFAs gracefully expire and begin the full transition of logging out of native forests into plantations, where 85 per cent of the industry is already based?

Senator Ruston: Obviously you know the answer to that question before you even asked it. We believe that there is a sustainable opportunity for forestry in Tasmania not just in plantations. If you are going to look over the last 20 years of forestry in Tasmania there are a whole heap of things that have impacted on that. And I think you would have to consider they were quite exceptional. The listing of quite a substantial area—

CHAIR: That will do. We surrender.

Senator Ruston: Sorry, I am not going to surrender, Senator Heffernan.

CHAIR: I do!

Senator Ruston: This is actually a really significant issue for the people of Tasmania, Senator Heffernan, mainly because their economic viability is vested quite substantially in the forestry industry. They have been through a tremendously traumatic time over the last 20 years, and it is a pretty significant issue for them, even if it may not be a significant issue for you.

Mr Thompson : I would like to I just add something to an earlier question, and it might shed some light on this. You asked earlier what the income of Forest and Wood products Australia. In 2015-16 they had an income of $9 million, and $5.2 million from industry levy contributions with Commonwealth matching contributions of 3.5 million. The reason why the matching contributions are lower than the industry ones is that the industry makes voluntary contributions. That industry can make a voluntary contribution clearly depends on the profitability of that industry, and legislation has recently been passed to enable Commonwealth matching contributions to be made to those voluntary ones. So as the profitability of the industry increases they make voluntary contributions. That would provide better research information, some of which can go towards monitoring or improved management practices, including for native forests as well as plantations.

Senator RICE: In a situation where the profitable part of the industry is the plantations sector, that is increasing. Native forest logging is the rump of the industry, so I do not see why the government should not just accept the writing on the wall.

Senator BULLOCK: There are, as you would probably expect, a whole heap of questions, but I am going to duck out and see someone shortly so I want to get a question of my own in before I go. It goes to the actual additional estimates statements, which we have largely ignored during the day, and in particular to the Farm Household Allowance. The estimate from the budget was $117½ million and by the time we got to the additional estimates that figure had been amended to $79.2 million, which is a very significant decrease in the Farm Household Allowance. I wonder what factors have led to that reduction, whether it is just too hard to get perhaps? What lies behind that significant reduction?

Mr Morris : I might kick it off and then handover to Mr Padovan to give you the more detailed answer while he gets his thoughts together. Effectively, the farm household support program is a demand-driven program, so estimates that appear in the estimates statements are based on forecast demand in the future. So it is not a change in allocation of funds to the program but rather—

Senator BULLOCK: Demand has dried up. Things are going swimmingly on the farm.

Mr Morris : It is related to the history of demand for the program and then expected future demand.

Senator BULLOCK: So the conclusion is that things on farms are doing just so much better than they were expected to be doing at budget time; is that right?

Mr Morris : The forecasts have changed, that is correct. The forecasts were higher in the past in terms of demand for the program and now they have come down.

Senator BULLOCK: This is only over 2015-16. It is not as if we are trying to forecast 10 years into the future.

Mr Morris : That is right. It is a change in the forecast.

Senator BULLOCK: Our best guess at budget time was $117 million, now that is down to $79 million—a huge cut. I know Senator Williams has his finger on the pulse and everything else in Inverell; things must be looking good on the farm.

Senator WILLIAMS: They are—record cattle prices, wonderful lamb prices, the wool price is up, the season is good. It is the best it has looked for decades.

Senator BULLOCK: Okay. I will take that.

Senator WILLIAMS: Wine exports are up.

Senator BULLOCK: I know wine exports are up. I am not sure there would have been terribly many—

Senator WILLIAMS: The best beef prices ever.

Senator STERLE: We just have not got enough of them.

Senator WILLIAMS: We only have 26 million. We need about 36 million.

Senator BULLOCK: Right. So we will have no complaints from farmers doing it tough.

Senator WILLIAMS: The wheat price is still terrible.

CHAIR: This is not time for a discussion.

Senator BULLOCK: I was a little surprised, Chair. I am happy with the answer. I am more than pleased with the answer, but I am surprised that things have picked up so much on the land in the space of a few months.

CHAIR: Tick, tock, tick, tock.

Senator WILLIAMS: Chair, can I point out to Senator Bullock that agricultural exports have now taken over coal exports as our second highest exporter.

Senator BULLOCK: That says something about coal.

CHAIR: Back to the job.

Senator BULLOCK: Going back to where we were on productivity growth because we were talking to ABARES about productivity growth, it is obviously going to be important for us if we are going to remain competitive. The question is what is the department's priority for developing a formal agricultural productivity work plan?

Mr Morris : I think the approach from the government to productivity was spelt out in the Agricultural competitiveness white paper. Within the white paper there is a section of policies called 'Farming smarter'. Within that set of programs include some additional money for the Rural Research and Development for Profit program and extending that program out over eight years rather than the original four years—so an additional $100 million into that program. Also, importantly, there is a new set of targeted R&D priorities that were set for the R&D corporations. Those R&D priorities are very much targeted around bringing R&D back to an on-farm emphasis.

If you go through the priorities outlined in the paper, they talk about focusing R&D on advanced technology, on supply chains, robotics, digitisation, big data, genetics, precision agriculture and those sorts of things. It talks about biosecurity, which is so important for our access to overseas market. It talks about soil, water and managing natural resources, which is the underpinning resource base to the farm and then, importantly, making sure that the R&D is actually adopted by the farmers. The fourth priority was around adoption of R&D. Those R&D priorities have now been passed to the RDCs and an indication given to them that these are the government priorities for R&D going forward. By focussing on those there is an intention that that will lead to stronger productivity growth in the future. Those two key elements—additional money for R&D and a refocussing of priorities on farm—were key elements of the White Paper.

Senator BULLOCK: Two persuasive answers in a row—you are going to get a reputation! There was a previous agricultural productivity plan, and some of the tasks under that plan were continued by task groups that were reporting to a senior officials committee. What were the tasks that were continued?

Mr Morris : I think what you are talking about is that under the Agriculture Senior Officials Committee, which is a state and Commonwealth committee that looks into state and Commonwealth cooperation across agriculture. there was an R&D committee. Perhaps you are talking about that.

Senator BULLOCK: Is there anything that is still ticking under that and does that committee still exist?

Mr Morris : Clearly discussions continue to occur through state and Commonwealth forums, the Agriculture Senior Officials Committee, around a whole range of issues including R&D and many other things. Those discussions still continue through what is called AGSOC and also through the agriculture ministerial council.

Senator BULLOCK: Are you telling me there that that committee did get replaced by other organisations that are continuing to meet?

Mr Morris : I am saying those discussions occur at a higher level.

Senator BULLOCK: I am not talking about the discussions, I am talking about the committee. There used to be a committee?

Mr Morris : Yes.

Senator BULLOCK: Now, there are still discussions taking place but not at that committee. Is that your answer?

Mr Morris : I will have to confirm whether that committee still exists or not. I am just not sure. Maybe one of my colleagues could—

CHAIR: Are there any of these questions that we could put on notice?

Senator BULLOCK: I am just asking, Chair.

CHAIR: I know, but I am asking you. You do not have to ask him, you can put it on notice.

Senator BULLOCK: Senator Sterle is the arbiter of these matters, not me. I just ask the questions.

Senator STERLE: If you want to you can put them on notice.

Senator BULLOCK: I am happy to put them on notice.

Senator EDWARDS: In the spirit of that I will put mine on notice as well.

Senator BULLOCK: I am not particularly driven in these matters.

CHAIR: Thank you very much for putting those on notice.

Senator RHIANNON: Which Californian lawmakers are Australian government representatives currently speaking or working with to lift the Californian ban on imported kangaroo parts?

Ms Bie : The Australian government is talking with a range of Californian government lawmakers on the matter of kangaroo market access to California.

Senator RHIANNON: Could you provide details of the government lawmakers you are working with.

Ms Bie : There are many meetings with many of them on a whole range of market access issues. I could not provide details of specific people.

Senator RHIANNON: Even the leading people that you would be meeting with? There would be some key people. Can you provide those details please.

Ms Bie : The representative in Market that has been leading on the meetings, including representations that have happened with Ambassador Beazley and ministers Turnbull and Hunt, met with Governor Brown and senators Lara and de Leon, but they are just a couple amongst a range of senators.

Senator RHIANNON: Could you take it on notice and provided the list please.

Ms Bie : We could take the question on notice.

Senator RHIANNON: A complaint has been filed with the Californian Fair Political Practices Commission that Australia may have acted illegally because it did not declare financial payments or register as a lobbyist employer when it provided $143,000 to the KIAA to help pay the Californian legal firm Manatt, Phelps and Phillips to lobby Californian lobby makers against the ban. I understand the department advised the Australian government that it is trying to 'determine the most appropriate resolution to the allegations in the complaint'. Can you describe what you mean by 'the most appropriate resolution'?

Ms Bie : The resolution will be up to the Fair Political Practices Commission. I could not pre-empt their decision. There have been a number of—

Senator RHIANNON: No, this is about your tactics, about the government's tactics. This is the department advising the Australian government: it—the department—is trying to determine the most appropriate resolution. I am trying to understand what you mean by 'the most appropriate resolution'. Is it to overturn the ban? Is there some middle course? What are your plans?

Ms Bie : The appropriate resolution of the matter before the Fair Political Practices Commission, is that what you refer to? There have been a number of meetings in relation to that and interactions where they have asked for the process that we have been following. They asked about the grant. We have provided factual information and then the Fair Political Practices Commission determines the appropriate outcome. Perhaps I am misinterpreting your question.

Senator RHIANNON: That is useful. I am trying to understand the process and who you have been meeting with. Can you provide details of who you have met with?

Ms Bie : I would have to take that on notice. I have not had the meetings myself.

Senator RHIANNON: And also who the Australian personnel at those meetings were?

Ms Bie : Yes, I can take that on notice.

Senator RHIANNON: The Australian government has tried to influence an outcome, here.

Ms Bie : No. The Fair Political Practices Commission requested meetings. I understand that that is a normal part of the process when they are clarifying an allegation put before them. We have simply met with them and answered questions.

Senator RHIANNON: The CEO of the KIAA, Mr John Kelly, was funded $236,664 from 2008 to 2011 for an RIRDC project called Research to assist market development for kangaroo products in California and New York. The department has advised that the majority of this funding, just over $200,000, was used by the project provider, Mr Kelly, to 'engage a firm of US consultants to develop and implement a process to inform Californian and New York legislators in 2009 and 2010 as to the regulation and sustainability of the kangaroo industry.' Who were the firm of US consultants referred to there?

Ms Bie : In 2009?

Senator RHIANNON: Yes, and 2010.

Ms Bie : I am not familiar with that particular report. I will have to take that on notice.

Senator RHIANNON: There is nobody here who has this information? It is an issue we have been dealing with at estimates. It is a lot of money that has been allocated to one aspect of an industry that is not huge.

Ms Bie : I have experience of the grant that is $143,000, but not that particular report that you are referring to.

Senator RHIANNON: You do not know who the consultants are. You will take it on notice?

Ms Bie : I will.

Senator RHIANNON: I understand that $811,000 was provided to fund the kangaroo market access project, where the Department of Agriculture and Water Resources is partnering with KIAA, the Kangaroo Industry Association of Australia—do you have some information about that?

Ms Bie : Is that the recent announcement?

Senator RHIANNON: Yes, one of the initiatives to assist with market access for kangaroo meat and meat products to Asian markets.

Ms Bie : My colleague, Ann McDonald, will be able to help you on that.

Senator RHIANNON: How much of this money is going to the department and how much to KIAA to expend?

Mrs McDonald : We are still working through exactly what that project will entail, so I have not got that information yet.

Senator RHIANNON: Do you mean the project has not started or that it has started and you are not able to report on it yet?

Mrs McDonald : The project has started and, yes, we are not able to report on it yet. There will be a number of activities that will happen within Australia and in other markets to promote the industry but they have not been finalised yet.

Senator RHIANNON: You say there are a number of activities, I think it is a fair assumption that you know what those activities are?

Mrs McDonald : Yes, I know some of them. There is money that has been provided to the kangaroo industry to develop an export market strategic plan and that is $45,000 over 18 months. There is also money that has been provided to engage a presence in China to represent the industry.

Senator RHIANNON: Is that like a salary for somebody?

Mrs McDonald : Yes and no. It is pretty much just a telephone answering service. The China-Australia Chamber of Commerce office in Beijing will be helping out with that one.

Senator RHIANNON: How much will be allocated to that?

Mrs McDonald : Off the top of my head, I think that is about $30,000.

Senator RHIANNON: So $30,000 to the China-Australia Chamber of Commerce in China—

Mrs McDonald : To provide a presence there. They will be taking inquiries, bringing information back to the kangaroo industry back here in Australia and then providing information back to the inquirers.

Senator RHIANNON: What are the other activities?

Mrs McDonald : There will be a DVD that the industry will produce. It is a commercial DVD that will complement the DVD that was produced some years ago on the regulations underpinning kangaroo processing. The kangaroo industry is in the process of finalising arrangements for that. I have not got the exact amount that will cost as yet.

Senator RHIANNON: What about other activities?

Mrs McDonald : We are looking at events. The project is to assist with market access to key Asian markets, so obviously China is one of the countries that we are looking at and we are at looking at activities over there. We might be, for example, holding information sessions with animal welfare bodies over there to give them some information about this industry: how it works and the harvesting and so on, the sustainability, and how animal welfare matters are addressed through that. We already have access to Japan and Korea, so we will be looking at activities to expand access into those markets and increase our market share. There are a number of activities around public relations both here in Australia and in those overseas key Asian markets.

Senator RHIANNON: How much has been allocated for those events?

Mrs McDonald : For the events themselves, the expanding market access into—

Senator RHIANNON: You mentioned events in three countries: China, Japan and Korea—how much have you allocated for that overall?

Mrs McDonald : We have not worked out the details of exactly what those events will be at this stage. We have some approximate budget figures, but until we have actually looked at contracts and looked at arrangements there then it is difficult to say exactly how much they will cost. There are trade fairs, for example, that we are looking at targeting, but until they get a little bit closer and we work out how much it is going to cost to participate then it is hard to say exactly what that will cost. The budget figure that we have come up with is about $811,000 at this stage.

Senator RHIANNON: Thank you for providing those details. Could you please take it on notice to provide details of any other activities and also how much each one will cost, even if it is approximate at this stage?

Mrs McDonald : Yes.

Senator RHIANNON: Going back to the start of the question, I was trying to understand how much of this allocation of a bit over $800,000 is for the department and how much is for KIAA.

Mrs McDonald : I will take that on notice as well.

Senator RHIANNON: What is the role of KIAA's CEO, John Kelly, in this project?

Mrs McDonald : He is assisting as the project manager, so he is developing the project plan. He has also been involved in contracting the presence for the KIAA in China and he will have various other roles in trade fairs that we might go to. He also has a role in the development of the commercial DVD that I mentioned earlier, so he has quite an important role in a number of those activities.

Senator RHIANNON: Will they also involve paying lobbying consultants as part of this work?

Mrs McDonald : At this stage we are not engaging lobbying consultants at all.

Senator RHIANNON: Are there consultants who assist on any of the work, like identifying events and how they should be run?

Mrs McDonald : That is something that I would expect the Australian Chamber of Commerce would be able to assist with. That is one of the services they can provide.

Senator RHIANNON: So you are not expecting to do any market research to assist with this?

Mrs McDonald : Austrade can help out with that. I think we already talked earlier about the RIRDC report that provided some information to the industry about the sorts of opportunities that exist in the markets that they have already.

CHAIR: How much longer will you be? You are double.

Senator RHIANNON: Can I come back? How are you running?

CHAIR: We want to go home tonight.

Senator EDWARDS: How many kangaroos are there in Australia?

Senator RHIANNON: Do you want that broken down by species?

Senator EDWARDS: Two hundred-and-how-many million?

CHAIR: Can you put them on notice?

Ms Bie : I think there were 44 million in 2014, but I might have to take that on notice.

Senator EDWARDS: But it has been a better season since then.

Ms Bie : In 2014 there were 49.3 million.

Senator WILLIAMS: How long were the Aborigines eating them for?

Ms Bie : Sorry?

Senator WILLIAMS: It does not matter.

Senator EDWARDS: That is an estimate, I take it.

Ms Bie : It is an estimate.

CHAIR: Can you put some on notice, Senator Rhiannon, because we want to go home tonight.

Senator RHIANNON: I know, and so do I, but I have been waiting all day. Are you doing a round and we can come back again? I want to be fair to other people as well.

CHAIR: No, try and clean it up.

Senator RHIANNON: I understand that five agricultural counsellors are to be posted in Vietnam, Malaysia, the Middle East, China and Thailand over four years. Is this the projectable cost: $16.3 million?

Mr Smalley : Yes, that is the case.

Senator RHIANNON: Was the Kangaroo Industry Association of Australia, or any other kangaroo industry representative, consulted as to its preference for the placement of these new counsellor positions?

Mr Smalley : I am sorry—I cannot recall specifically whether the kangaroo industry was among the group of many industries that were consulted, nor what views they might have expressed.

Senator RHIANNON: Could you take it on notice, please?

Mr Smalley : I certainly can.

Senator RHIANNON: Could you describe what sort of counselling these positions are going to be providing? I gather it is about marketing and influencing decision-makers in these countries. Is that their purpose?

Mr Smalley : Not quite. We already have a network of counsellors. The counsellors' functions are about gaining and maintaining, or improving, market access for Australian agricultural products. They also resolve technical market access issues that arise from time to time.

CHAIR: Any facilitation fees?

Mr Smalley : No, they do not have facilitation fees.

CHAIR: Bullshit they don't! The place is driven by them.

Mr Smalley : They also seek to work in multilateral organisations and in the international commodity group organisations to work on the development of international standards. They also seek, through those organisations, to remove distortions to international trade. They build relationships with our trading partners and they facilitate technical assistance through capacity building and through agricultural cooperation. That is the nature of the functions that they undertake. It is not marketing per se; it is more about our technical market access issues.

Senator RHIANNON: Thank you for setting that out. I want to move on to the issue of plans to export wallaby skins from Tasmania. Mr John Kelly, I understand, has applied to export 60,000 Bennett's wallaby skins per annum from Tasmania. What overseas market—

CHAIR: Wallaby skins?

Senator RHIANNON: Yes. What overseas markets are being targeted for these wallaby skins?

Mrs McDonald : I am not aware of that proposal, but we do export wallaby and kangaroo skins to a number of markets overseas. Because they are a non-prescribed good, the department does not become involved unless the importing country requires a certificate from the department attesting to the health status or similar of that particular commodity. He could be targeting a number of countries.

Senator RHIANNON: But your work would not intersect with that—is that what you are saying? There would be no need for you to have an awareness of that or to get involved?

Mrs McDonald : That is correct—unless the importing country that he was targeting requires government certification to accompany that consignment.

Senator RHIANNON: Considering Mr Kelly received substantial government funding as a consultant to grow kangaroo markets, where do conflict of interest questions stand given the Australian governments continuing and substantial financial support for Mr Kelly's efforts to reopen the Californian market, and particularly considering how there are now legal complaints about how that work has been undertaken? How are you handling this apparent conflict of interests?

CHAIR: Do you want to take that on notice?

Senator RHIANNON: It is a useful question for all of us to hear the answer to.

Ms Bie : The grants that I have been involved with are not personally paid to Mr John Kelly. Rather they are paid to the Kangaroo Industry Association. Mr Kelly may be involved in signing on behalf of the broader industry, but the association is made up of a number of members. Our interaction on the work—the $800,000 projects that you have been talking about—is with the KIAA and broader industry groups.

Senator RHIANNON: Is there anybody at that association, apart from Mr Kelly, whom you work with?

Mrs McDonald : Yes, there are several other people in the KIAA who are quite active in that association.

Senator RHIANNON: Who are they?

Mrs McDonald : There are the principals at Macro. There are also the principals at Wulkuraka, which is another kangaroo export establishment in Brisbane. There is also another establishment, Southern Game Meats, who are also very active.

Senator RHIANNON: Is it still the case that there are only four meat exporters involved in the kangaroo export trade?

Mrs McDonald : Right now there are five operating export registered game meat establishments that produce meat for human consumption for export.

Senator RHIANNON: Could you provide the five names? I only have four.

Mrs McDonald : I will take that on notice and provide it to you if I am able to.

Senator STERLE: I want to talk about drought. Once again I will offer this to you, Mr Quinlivan: I am happy to have quick answers—no statements, no ministerial statements.

Mr Quinlivan : We have got the message.

Senator STERLE: Can you provide an update on the current uptake of the drought concessional loans and drought recovery concessional loans?

Mr Padovan : Are you happy with an aggregate figure for each of those loans?

Senator STERLE: I certainly am.

Mr Padovan : In terms of the drought concessional loans, as at 31 December 2015, we have seen an uptake of $199 million.

Senator STERLE: That was $199 million?

Mr Padovan : Yes. For the drought recovery loans, the uptake, as at 31 December 2015, has been $15.59 million.

Senator STERLE: The white paper has provided $2.5 billion in drought concessional loans over 10 years, yet—you will correct me if I am wrong—less than $200 million in drought concessional loans was taken up in 2014. It is just less than $200 million. That is right; you have just proved that. So the $2.5 billion contributes to the government's claim that the white paper is a $4 billion investment, is that correct?

Mr Morris : The $2.5 billion is over 10 years, starting from—

Senator STERLE: That is $2.5 billion?

Mr Morris : Yes.

Senator STERLE: I am sorry. I am having trouble hearing you. It is $2.5 billion?

Mr Morris : Over 10 years.

Senator STERLE: Did I say that?

Mr Morris : No, I was just clarifying that it is over 10 years.

Senator STERLE: Based on the evidence available from the take-up rate for concessional loans, is the $4 billion investment claim correct?

Mr Morris : That is correct because the $4 billion includes the full suite of programs and packages under the white paper. There was the long-term loan program—the one you are talking about—which is $2.5 billion, or $250 million a year. There was also $250 million for the transitional loan program, which was for the 2015-16 year. Then there was a whole suite of other programs, as outlined in the white paper, including some of the ones I mentioned earlier. There was $100 million for the extension of the Rural Research and Development for Profit program. Senator Ruston mentioned the money for the water infrastructure program. There are a range of other programs which are spelled out in the white paper.

Senator STERLE: Is there a set figure per year to go to those programs?

Mr Morris : It varies. Some of them are one-year programs, some of them are four-year programs and some of them are the 10-year programs.

Senator STERLE: It is all spelled out in the white paper, or is there an additional piece of paper?

Mr Morris : Absolutely.

Senator BULLOCK: Given the experience to date, do you think the $2.5 billion in loans that are available will be fully taken up?

Mr Morris : The money is set at a level which would enable demand to be met in future drought years. If we had full uptake of the loan program then there would be difficulties, obviously, in meeting all the demand. It is set at a level that, hopefully, will meet all future demand over the coming 10 years.

Senator BULLOCK: It is not that I wish drought on anybody.

Mr Morris : No, absolutely not.

Senator STERLE: There has been some confusion, I believe, surrounding the eligibility criteria for drought affected communities to be drought declared, which would allow councils to apply for the $35 million Drought Communities Program. Is there an eligibility criteria for the Drought Communities Program?

Mr Padovan : The decision as to eligibility for the Drought Communities Program is one for the Deputy Prime Minister. It is a program that is managed by the Department of Infrastructure and Regional Development. In terms of the factors that are considered, we certainly have a role in providing advice and support to that department. There are a number of factors that are considered in terms of who may be an eligible council. There are currently 20 declared councils that are eligible to submit projects under that program. The factors that we considered were issues around rainfall deficiency in that area, the number of agricultural businesses and the extent to which the region was dependent on agriculture as a primary source of income, remoteness and accessibility. Whilst the guidelines make it clear that it is a decision of the Deputy Prime Minister, there are certainly a number of factors that are considered in consultation with our minister.

ACTING CHAIR ( Senator Sterle ): There is not a rock-solid list of boxes you tick, and then you are going to get it? There are some guidelines, but, as you said, it boils down to the minister at the end of the day?

Mr Padovan : Given the level of funding, there is scope there for around 23 councils or LGAs to receive funding under that program. There is a level of discretion that is applied by—

ACTING CHAIR: Where do we find out what the criteria are? Where is the list or the guidelines?

Mr Padovan : Councils are eligible to apply, and through that process there is information provided in support of those claims.

ACTING CHAIR: Could you provide the committee with that.

Mr Padovan : That is a matter for Department of Infrastructure and Regional Development, so the request should be considered—

ACTING CHAIR: Okay, it is not you guys. Will the Accessibility/Remoteness Index of Australia continue to be used as the source for determining the remoteness of a local government area?

Mr Padovan : That is a matter for the department of infrastructure. That is what is currently being used.

ACTING CHAIR: Infrastructure and Regional Development—okay. So it is not you guys at all, so you could not tell me anything to do with it.

Mr Padovan : We provide advice as to issues around rainfall deficiency, agricultural business and so forth.

ACTING CHAIR: Could you tell me if the data or the index will be updated, or does it stay the same forever?

Ms Kennedy : I can probably help with that. The ARIA, which you have mentioned, is publicly available. It is hosted by the University of Adelaide, as I understand it. It is essentially the standard ABS-endorsed measure of remoteness. That has been a source of information that we have provided to the department of infrastructure, which I understand has been part of informing the Deputy Prime Minister in his decisions so far.

ACTING CHAIR: So it comes down to you guys. Will it be updated, or is that it forever?

Ms Kennedy : Sorry, I should clarify: we do not have anything to do with the construction of the ARIA itself. As I said, it is hosted by the University of Adelaide.

ACTING CHAIR: All right. And, if I want to know about updates or what will replace it, I have to talk to the department of infrastructure?

Ms Kennedy : No, it is not a government-owned initiative. It is publicly available information. I am not 100 per cent across what might be the sources of funding that go into that, but it is classified, as I said, as the standard ABS—Australian Bureau of Statistics—endorsed measure of remoteness for Australia.

ACTING CHAIR: So I should put that question to the minister on whether it will be updated—is that right? I am just trying to find out.

Mr Quinlivan : Potentially to the ABS.

Ms Kennedy : I think so.


Mr Quinlivan : Yes, it sounds like it.

Senator BULLOCK: Is that the index that is subject to some dispute? In the back of my mind there are arrangements based on remoteness on which, when you place them in a Western Australian context, you are inclined to say: 'Remote? You think that's remote? This is remote?' They are based on a distance which, in Western Australian terms, is just down the road, and that is the limit of remoteness according to the index. Is that the same index?

Mr Quinlivan : I would expect so.

Senator BULLOCK: If that is it, it needs some revision.

ACTING CHAIR: That is exactly right. Due to this index, remote local government areas such as West Wimmera fall through the cracks to receive appropriate funding support from the Commonwealth. Can someone tell me why there is not a process for councils that are unfairly disadvantaged in this way to have their situation reassessed?

Mr Padovan : When councils apply, they apply to the department of infrastructure or, in fact, to the Deputy Prime Minister, and in a couple of cases they have sought to be reassessed. There is a process that the department of infrastructure manage to support that.

ACTING CHAIR: But it comes down to the minister's final decision.

Mr Padovan : That is correct.

ACTING CHAIR: Hence, if Minister Joyce or Minister Truss has a change of heart—

Mr Padovan : Minister Joyce is simply consulted in the process. The decision is one—

ACTING CHAIR: Oh, so it is Minister Truss, because it is the department of infrastructure.

Mr Padovan : That is correct.

ACTING CHAIR: So it is all up to him. Can you tell me what states have been declared drought affected.

Mr Padovan : Under the Intergovernmental Agreement on National Drought Program Reform, the notion of a drought declaration does not exist. We have moved on from that.

ACTING CHAIR: So what do we use?

Mr Padovan : Depending on the program, it will depend on how drought is determined for that particular program. We generally use rainfall deficiency. For example, for concessional loans we use rainfall deficiency as the measure of determining the extent to which—

ACTING CHAIR: Sorry, I just want to come back a step. How do we determine who is in drought and which is a drought affected state? What do we do?

Mr Quinlivan : I think Mr Padovan was giving our best answer to that question. We do not use that concept anymore.

ACTING CHAIR: So it just goes on who gets a loan.

Mr Quinlivan : Yes. I think he was answering that question.

Mr Padovan : With the Intergovernmental Agreement on National Drought Program Reform in 2013, we have moved away from the notion of states declaring drought.

ACTING CHAIR: So it is just areas?

Mr Padovan : It depends on the program. If you were to ask me in relation to a particular program, such as concessional loans or the Drought Communities Program, there would be different factors that are taken into consideration in determining eligibility—the extent to which there is drought. But generally we use the rainfall deficiency analyser produced by the Bureau of Meteorology as the benchmark for determining—

ACTING CHAIR: So how much rainfall they have had?

Mr Padovan : How much rainfall they have had and how much rainfall they have had relative to long-term trends, so are they in the bottom five per cent of the long-term trend or the bottom 10 or the bottom 20.

ACTING CHAIR: Can you tell me then why the Drought Communities Program is only available in Queensland and New South Wales?

Mr Padovan : The Drought Communities Program is not available only in Queensland and New South Wales; other states also have—


Mr Padovan : As you have mentioned, Senator, West Wimmera and other Victorian LGAs have sought to be considered. As I mentioned earlier, that is a matter for the department for infrastructure and the Deputy Prime Minister.

ACTING CHAIR: But I believe I said that at West Wimmera they fell through the crack; they did not get it.

Mr Padovan : But they are not precluded from applying; it really depends on—

ACTING CHAIR: They applied, but they fell through the crack; they did not get it—am I right?

Mr Padovan : They applied and were not—

ACTING CHAIR: Okay, so it comes back to this: the programs are only in Queensland and New South Wales.

Mr Padovan : At the moment the only LGAs that are covered under that program are in Queensland and in New South Wales.

ACTING CHAIR: Are in those two states.

Mr Padovan : Yes.

ACTING CHAIR: Can you tell me why?

Mr Padovan : That is a matter for the department of infrastructure.

ACTING CHAIR: Okay; I knew that was coming. Did the minister make any decisions in this?

Mr Padovan : The minister was consulted.

ACTING CHAIR: That is enough for me. Can you tell me what advice the department provided to the minister regarding eligibility for the Drought Communities Program?

Mr Padovan : The advice we provide generally goes to the matters I mentioned earlier. So in relation to local government areas that have applied, we provide information around rainfall deficiency for that region, the number of agricultural enterprises in that region, the economic impact or likely economic impact of drought in that region, and also, as Ms Kennedy mentioned earlier, the data around remoteness.

ACTING CHAIR: So how long has it been the case where the minister decides who gets drought funding? Is it a long-term or a short-term thing?

Mr Padovan : For the Drought Communities Program? It is spelt out in the guidelines in terms of which councils are declared as—

ACTING CHAIR: Yes, who gets it. Obviously there is some differentiation—like Senator Bullock, I do not wish any poor bugger to be in drought, but as I take—

Ms Kennedy : Can I make a small clarification? I think you might be speaking at slight cross-purposes. The declarations for the purposes of the Drought Communities Program are only for the purposes of the Drought Communities Program. There is a range of other drought related and hardship related assistance available that, as Mr Padovan has already said, uses different types of criteria.

ACTING CHAIR: I understand that.

Ms Kennedy : For instance, you have mentioned west Wimmera. They are one of the LGAs, for instance, that is receiving support from the Commonwealth through our social support measure. There are different programs that have different ways of assessing need.

ACTING CHAIR: Sure, and they would come with different amounts of money too, wouldn't they? You called it the 'social support measure'. I am just trying to think: the drought concessional loans program is up to $199 million while the other one is up to only $15.59 million, so are you saying to me they will get some money, but some might get this much, some might get that much? Who gets to say who gets what? Who has the final decision?

Ms Kennedy : That is a bit of a complicated question in one sense. The Drought Communities—


Ms Kennedy : No.

ACTING CHAIR: You can tell me; I won't get mad.

Ms Kennedy : The Drought Communities Program is the only one—unless I am corrected by one of my colleagues—that I am aware of out of the Commonwealth drought related programs that is paid directly from the Commonwealth to councils. Other measures, such as the social support one that I just mentioned, are essentially an increase of Commonwealth service providers in that identified LGA.

ACTING CHAIR: So it does not actually tip big money into the farm to get more food or whatever it is? It is just some social stuff?

Ms Kennedy : Community support, so counsellors and those sorts of things, whereas the majority of the other Drought Communities Program is related to the councils, so up to $1.5 million is something that goes to the council for eligible projects. The other measures that you have mentioned are based on individual eligibility, which, as Mr Padovan said earlier, is in line with the 2013 IGA on drought policy reform.

ACTING CHAIR: Right. How long has it been the case that the minister gets the final say—who's in, who's out?

Ms Kennedy : For the Drought Communities Program?

ACTING CHAIR: Any drought—concessional loans, the whole lot.

Mr Padovan : For concessional loans, the minister is not involved in the decisions. The allocation of funding to the states is obviously a decision of government, but the actual decision as to who gets a loan is very much a responsibility for the delivery agency. The guidelines for the Drought Communities Program were quite clear at the outset, given the limited funding available, what the process was in terms of a council declared eligible.

ACTING CHAIR: So it has been since 2013 that the minister has the say; is that right?

Ms Kennedy : No. The Drought Communities Program is one that was newly announced under the white paper, so it is recent.

ACTING CHAIR: Okay, it is recent. Thank you. You get these creepy things up your spine now and again at estimates when you see previous deputy secretaries who you thought had left. I am sure that looked like Mr Glyde, as he was gliding across the floor! Did I imagine that? Is the department aware of drought declarations in other states?

Mr Padovan : We are certainly aware states such as Queensland still reference drought declarations.

ACTING CHAIR: Any other states?

Ms Kennedy : My understanding is that Queensland is the only state that calls drought declarations. All the different jurisdictions have different committees or advisory groups and ways of identifying communities in need because of drought.

ACTING CHAIR: Okay. So why is it that some councils assessed as eligible for the Commonweath's drought assistance package are deemed ineligible for the Drought Communities Program? How does that work?

Ms Kennedy : Sorry, do you mean the drought assistance package in the broad sense, including the social support measure, as I mentioned? You are right because at the moment, there are 73 LGAs across Australia, not just New South Wales and Queensland that are receiving support, whereas, as Mr Padovan said, the Drought Communities Program is a much smaller subset of councils.

ACTING CHAIR: Thanks for that. What is the Commonwealth's drought assistance package?

Ms Kennedy : I do not think there is something that is actually called the drought assistance package.

ACTING CHAIR: Is it drought assistance packages—maybe it is a spelling mistake. Is there a raft of them?

Ms Kennedy : Yes, I think that is probably the answer. There are many different measures that we have that go towards supporting people in drought.

ACTING CHAIR: Would it be fair for me to say that councils assessed as eligible for, say, some of the Commonwealth's drought assistance packages are deemed ineligible for the Drought Communities Program?

Ms Kennedy : As Mr Padovan has said, there are different eligibility criteria for the different measures.

ACTING CHAIR: So it has happened. And it all boils down to ticking some boxes, but it is up to the minister.

Ms Kennedy : For the Drought Communities Program, it is a matter for the Deputy Prime Minister to decide.

ACTING CHAIR: Oh my god, it is getting worse.

Mr Quinlivan : Can I clarify. When you talk about the package, if by that you mean the full collection of Commonwealth drought programs—

ACTING CHAIR: I would say so, yes.

Mr Quinlivan : there are a couple that we have been talking about—

ACTING CHAIR: No, Commonwealth drought assistance packages and the Drought Communities Program.

Mr Quinlivan : Yes. Some of them are paid to local government authorities in the two forms we have described. The infrastructure and the one via the states which is paid for social support. Others are paid via concessional loans and so on to farming businesses, and then there is the farm household support, which is paid to individuals. When you say the minister is making the decision, in those latter two which is where the vast majority of the money is paid, ministers' roles are in setting the policy framework and the guidelines not in making the decisions.

ACTING CHAIR: But there is some of this money, programs or packages—or whatever you want to call them—where the minister has the determination as to who gets it.

Mr Quinlivan : The infrastructure program that we have talked about, that is Minister Truss. All the others are not settled that way.

ACTING CHAIR: I got that.

Mr Quinlivan : I just wanted to be sure.

ACTING CHAIR: The new rural financial counselling arrangements have been announced and that was done by Minister Joyce on 22 December 2015 which I believe has resulted in cuts to certain services in regional areas. I am led to believe central west New South Wales—I do not know if that yours, Senator Williams—has been hit hard. Has the department undertaken an analysis of the impact reduced funding will have on farming families who will find it harder to access rural financial counsellors?

I know Senator Rhiannon touched on the counsellors earlier on.

Mr Padovan : I can provide the initial response and then I will hand over to Mr Murnane on the detail. In terms of the claims around cuts, that is not quite the case. The level of core funding for the RFCS continues to increase year on year.

ACTING CHAIR: For the what?

Mr Padovan : For the Rural Financial Counselling Service. It has continued to increase year on year. What we have done as we have moved into a new grants round—we will commence a new grants round on 1 April—is we have gone through the evaluation process and identified the new providers. We have consolidated the number of regions from 14 down to 12, which in the case of the Central West has meant bringing two regions, essentially, into one, and also gone through a redistribution of funds, so looked at the RFCS more broadly and the way in which funding was allocated to the programs, taken into account the findings of the NRAC review and looked for a more proportionate way of allocating funds based on demand across regions. We looked at, for example, the number of farm businesses in each region, the number of farms that were in the bottom quartile and a number of other factors and used that to determine the funding allocation. It really is focused on moving the money to where the demand is and, in doing so, there has been a changed funding distribution. In the case of Central West, which is the area that I think you are referring to, I might hand over to Mr Murnane to walk through—

ACTING CHAIR: So you have moved money to where it is needed more than other areas. Is that what it was?

Mr Padovan : We have moved the money based on where the demand is. We had pretty good data on where the demand is.

ACTING CHAIR: I have got that. So you are saying to me loud and clear that funding for rural counsellors has increased?

Mr Padovan : The core funding for the RFCS has increased. Year on year we see an increase in the base funding or the core funding for the Rural Financial Counselling Service.

ACTING CHAIR: But, core or whatever, has there been an increase in funding to counsellors compared to previous years? Core or uncore, what is it?

Mr Murnane : The core budget appropriation for the Rural Financial Counselling Service has increased modestly year on year for the last several years.

ACTING CHAIR: How long is several?

Mr Murnane : The overall picture about the total funding available for the service is complicated a little bit by two other factors.

ACTING CHAIR: Decomplicate it for me.

Mr Murnane : One is that state governments are also contributing to the financial counselling service, and each state government provides a different amount of money to the services.

ACTING CHAIR: Sorry; I am not being rude. I just want to know: has total funding increased? Has it increased?

Mr Murnane : The core funding has.

ACTING CHAIR: What is the difference between core and—

Mr Murnane : I was just about to get to that. Year on year, governments have often made decisions to provide supplementary funding for rural financial counselling services. For example, in the agriculture white paper the government announced an extra $1.8 million for the RFCS for drought affected areas. That was on top of the base or core funding. In previous years, in 2013-14 and 2014-15, there was about $2½ million in each year that the government also announced on top of the core funding. That sort of does complicate the picture a little bit, unfortunately.

ACTING CHAIR: So total money—is there more each year? Has there been more? I know you are splitting it up for me and you are trying to do me a favour. I just want to know if there is more dough.

Mr Murnane : What might be easiest is if I give you the table that shows the different sources of funding over different years. It sets out the amount of money that—

ACTING CHAIR: Sorry; this would be real money delivered and not promises? Real money delivered?

Mr Murnane : Yes, it is real money.

ACTING CHAIR: Okay. You do that for me. That would be great. I will put some questions on notice. Mr Quinlivan, I will put this to you. I want to talk about that brilliant piece of work by the Rural and Regional Affairs and Transport References Committee—

Senator WILLIAMS: Who chaired that?

ACTING CHAIR: me—on the industry structures and systems governing the imposition and dispersement of marketing research the levies in the agriculture sector. Can you tell us where the Australian government's response is up to?

Ms Freeman : The government is currently considering a response to that Senate inquiry report.

Senator STERLE: Is that like the beef—I could not help that. So it is on a shelf somewhere and they will get around to it. Has the department consulted with industry on their response?

Ms Freeman : Not explicitly, but one of the things that is probably of relevance is the matter relating to the levy payer database. That is obviously a critical finding of that. The government is looking at potentially amending the relevant piece of legislation to allow industries to consider whether they would like to develop a levy payer database.

Senator STERLE: So there are conversations going on?

Ms Freeman : Yes.

Senator STERLE: Good.

Ms Freeman : We are progressing that legislative work.

Senator STERLE: Tremendous. That is the minister's office with assistance from the department?

Ms Freeman : Correct.

Senator STERLE: With industry or industries, or some—

Ms Freeman : Yes. The department is working with the minister and Minister Ruston on that matter and progressing the legislative amendment.

Senator STERLE: Is there any industry in particular that you are talking to or is it the whole horticultural and agricultural industry?

Ms Freeman : There has been a range of ongoing conversations, obviously, in relation to the levy payer database. Specific ones have taken place with GRDC, AGWA, MLA and HIA, who all probably have a relatively pressing need to develop a database for their own purposes.

Senator STERLE: Good.

Ms Freeman : Obviously, we expect interest from other RDCs as well.

Senator STERLE: That is all I need to know. In that case, thank you very much. We are finished with that mob and we can go to the next mob.

CHAIR: What we have left then is outcome 2: biosecurity and water.

Proceedings suspended from 21:13 to 21:24

CHAIR: Righto, come on! Come behind!

Mr Quinlivan : Chair, while people are getting themselves organised I just wanted to report on a conversation we had earlier today with Senator Cameron about submissions to Mr Hogan's consultations on the CO-OPS program.

CHAIR: Mr Quinlivan, can I just clarify? It was not about the flight paths over his house in the Blue Mountains!

Mr Quinlivan : No, that was a fair bit of—

CHAIR: Oh, that was yesterday!

Mr Quinlivan : That is right. At the time I said that we had some of the submissions but we were not aware of what proportion of submissions and we were not aware of the assurances or context in which the submissions had been made to Mr Hogan. So we thought it was prudent to consult with him and potentially with the people who made the submissions so they were aware that potentially we were going to release them to the committee.

We have not been able to make those contacts today, so my preference is to hold those documents until we have had those discussions and then we would consider release to the committee.

CHAIR: We are most grateful for the update. Do you want to lead-off, Senator Sterle?

Senator STERLE: Yes, in continuation—I just want to finish off on the drought. I have one more question—sorry to go back to it—

Senator Ruston: I think they have all gone.

Senator STERLE: It does not matter—Mr Quinlivan is there. That is fine.

Senator Ruston: It does not matter; we will take it on notice.

Senator STERLE: No worries. I have an article here dated 1 October 2015 which says:

Speaking from Longreach last week, Mr Truss announced that both shires remained ineligible for the new funding package despite being drought declared by state authorities since 2013.

Those shires were Quilpie and Boulia. Another article, entitled ' Quilpie, Boulia and Carpentaria shires eligible for $1.5 million Federal drought funding', dated 23 December 2015, says:

Deputy Prime Minister Warren Truss said there was special consideration given to the Quilpie Shire Council.

"That latest update means Boulia and Carpentaria shires now qualify for the assistance under the guidelines."

He goes on:

"Barnaby Joyce and I have decided to use the discretion that is available to us under the program to also declare Quilpie. Quilpie's rainfall figures do not support the application on the basis of the one-in-20-year rainfall deficiency, but everyone who visits Quilpie comes back with the same report — that it is as bad as the neighbouring shires."

Can you put any light on that for me, Mr Quinlivan?

Mr Quinlivan : The first part of it is a decision-making process that Mr Truss has gone through, which I will not comment on because I do not know the detail. I know that with the second part of it there was a view by most people who were informed about conditions in that general area that all of those areas were having a similar experience of drought and rainfall deficiency, hence the Queensland government declaration. But parts of Quilpie had been the lucky recipients—or unlucky, if you look at it in this context—of a couple of storms, which had just tipped them below the rainfall threshold. So they had not qualified on that rainfall deficiency criteria as the surrounding districts had, even though their experience was essentially the same. Their perception, which I think others shared, was that their treatment was anomalous and so I expect that is the basis on which the so-called 'discretion' has been exercised.

Senator STERLE: It is good that Quilpie did get it—there is no argument. But I just want to know what changed from 2013 to December 2015?

Mr Quinlivan : I think that the discretion was exercised is essentially what I am saying. But there was a rationale for it.

Senator STERLE: I suppose I should tell all the mayors out there to roll Minister Joyce out to their areas and hopefully they might get it.

Mr Quinlivan : I think that the issue was more the proximity to the threshold than anything else—the rainfall deficiency threshold.

CHAIR: And, of course, the other thing about rainfall is that there is a 20-year average to set the mean. But what if the 20-year average keeps coming down? And that is the long-term forecast for south-west Western Australia et cetera—for some places in Australia. And it also depends on when a one-off great event falls which gets you above the threshold.

Mr Quinlivan : Yes.

CHAIR: Up there, if it falls at the wrong time it is the same as out here. You can get four or five inches of rain in the middle of January and it will strike a few Bathurst firs and all the rest of the weeds—and if you have a bit of lucerne, which a lot of people do not have—but then by May you are in full drought.

Senator EDWARDS: Over previous estimates we talked about financial counsellors. I have been here since 2011, and the number has fluctuated. How many financial counsellors do we have? What kind of numbers have we had, say, going back to 2008?

Mr Padovan : The number of counsellors at this point is around 120, or 108 full-time equivalent counsellors.

Senator EDWARDS: One hundred and—

Mr Padovan : There are 120 actual counsellors, but around 108 full-time equivalents given that some are part-time.

Senator EDWARDS: Going back over the years, how does that compare?

Mr Padovan : I do not have that at hand; I would have to come back to you on it.

Senator EDWARDS: Would you mind? I just want to see whether it has been pretty stagnant or whether we have had a 100 per cent increase and what the commitment is now compared to what it used to be.


CHAIR: We are now in outcome 2: Managing biosecurity and imported food risk

Senator STERLE: Chair, I have some questions on outcome 2. Ms O'Connell, where have they been hiding you for the last 13 minutes?

Ms O'Connell : I have been waiting patiently next door.

Senator STERLE: Mr Quinlivan, this where I was told to ask my questions when I was talking about that equine virus. Who do I need to talk to—Dr Mark Schipp and others?

Ms O'Connell : He is just joining us.

Senator STERLE: Great. I have to remember where I was at.

Ms O'Connell : I actually thought we had covered the questions earlier, because Dr Schipp came to the table and dealt with it, along with APVMA.

CHAIR: No, it is done here.

Senator STERLE: See, Ms O'Connell, I got you and you have to surrender. I wanted to ask what it means to the horses, and Dr Schipp said that we will do it here. Dr Schipp, tell me what happens to the brood mares, the stallions or whatever. Fill me in.

Dr Schipp : The equine herpes virus consists of nine different serotypes or nine different viruses, and the vaccine covers types 1 and 4. Type 1 causes abortion and stillbirth in horses and type 4 causes rhinopneumonitis—upper respiratory tract and lung infections. The vaccine is used to prevent abortions and stillbirths and to counter the effects of this respiratory tract infection. Without access to vaccine, stronger biosecurity becomes more important, and there are a number of biosecurity measures that can be taken at the farm level or the property level to supplement the use of a vaccine.

Senator STERLE: So there are two strains of it? Is that what you said?

Dr Schipp : There are strains 1 and 4 that appear in the vaccine.

Senator STERLE: And type 1 is the nasty one—the abortions and stillbirths?

Dr Schipp : Yes, and also some neurological disease. Type 4 causes rhinopneumonitis.

Senator STERLE: What is that—blocked noses and sneezing?

Dr Schipp : Yes; a runny nose and sometimes permanent lung damage.

Senator STERLE: I will raise the case of the thoroughbred industry and the pacing industry. What could that mean to their businesses, let alone animal health?

Dr Schipp : This virus is present and endemic in Australia. It is not exotic to Australia; it is always here.

Senator STERLE: It is endemic here?

Dr Schipp : Yes, but notifiable in a number of states. Without access to the vaccine, it will mean that you would expect to see more abortions. That would impact on the breeding industry. You would expect to see impacts on the racing industry because of the effects of rhinopneumonitis.

Senator STERLE: How long has it been endemic here in Australia?

Dr Schipp : I do not have the history of its entry. One of my colleagues might be able to assist.

Senator STERLE: That would be great.

Dr Martin : I cannot say exactly how long it has been here, but for abortions—which is of course the very serious form—I think it was about 1977 that they first occurred.

CHAIR: That was before I was born—1977.

Senator STERLE: I think AC/DC had A Long Way to the Topback then. We know that Zoetis are no longer importing Duvaxyn. How long has Australia been without vaccine? Is this just a recent phenomenon?

Dr Schipp : As we heard earlier, the existing permit expired in 2014.

Mr Chapman : I am sorry, but I cannot add to what we said earlier. My understanding is that it was mid-2014 when that import permit expired. I am not aware of whether there have been any other importations or what the stock in Australia was.

Senator STERLE: Is APVMA or the department or Biosecurity aware of whether there has been a spike? It is endemic, you said.

Dr Schipp : There is no obligation to report the disease to the Commonwealth department.

Senator STERLE: For the thoroughbred and pacing industry, they lost the vaccine in 2014. How could we end up in a hole like this where we do not have any vaccine?

Dr Schipp : As we heard earlier, the vaccine is imported at the request of the manufacturer. The manufacturer withdrew their application.

Senator STERLE: I understand that and I also understand that you mentioned, or maybe Mr Chapman mentioned another drug. What was that other drug—which is not ticked off yet? Or are there a number of drugs?

Mr Chapman : I heard my name again, but I am not sure I can help.

Senator STERLE: Sure, you do not have to worry too much. But we know there is another drug or that there are other drugs, don't we?

Mr Chapman : Yes. It was another drug made by Zoetis.

Senator STERLE: By the same company that make Duvaxyn?

Dr Schipp : Yes.

Senator STERLE: Yet there has not been any emergency. Are there any permit guidelines or anything like that which say, 'Hang on; we want this vaccine in our nation'?

Mr Chapman : People come to us with applications for an import permit and we process them. But it is not something we will be proactive on and say, 'Hold on a sec; there is nothing here—somebody had better do something.'

Senator STERLE: Has anyone in the industry been proactive? Has anyone said, 'Let's pull our fingers out; we have to have this stuff on the shelves'?

Dr Schipp : We have not received an application.

Senator STERLE: Where does a customer go to say, 'This is madness—we need this vaccine in this nation'? Where do they go? To the supplier, the manufacturer? This just sounds really strange. How do we put it down to a company that makes, imports and distributes a vaccine—how as a nation do we leave it up to them whether they want to bring it in?

Ms South : I might have a go at that one. Vaccine importation is very much driven by commercial priorities. We do have situations where individuals have a particular need. When we become aware of those situations, we have to direct them back to a particular manufacturer—because they are the ones we are dealing with in the sense that they are the ones who apply for the import permit and who are responsible for meeting the biosecurity conditions and so on. We cannot underestimate the amount of effort that is involved in submitting an application and all the information that is required.

Senator STERLE: I have got that. So, Ms South, on that, you are aware of cases where people—whoever they may be—have said, 'Hey, we want some vaccine; we need it,' but you have sent them off to manufacturers?

Ms South : In my experience in this role, that is the situation that I have come across: that we have had to refer them back to a manufacturer because it is really not feasible for an individual to be meeting the biosecurity requirements.

Senator STERLE: I have got that. I understand that is not your role. But the concern I have is that obviously there are people who have come out and said, 'Hey, we want it,' and obviously they have gone back to the manufacturer, this Zoetis mob, who have just gone 'prft'.

Ms South : There are some commercial sensitivities around what Zoetis is actually doing, but at the end of the day our responsibility is to assess import permit applications that are presented to us.

Senator STERLE: I understand, Ms South. I am not having a crack at you. There are commercial sensitivities. I tell you what: this is like—what is that seed mob you are always going on about?

CHAIR: Monsanto?

Senator STERLE: Monsanto. I am not blaming anyone, but someone has to fix it. I cannot believe we are in a situation where we have to leave it up to private enterprise to decide if we are going to have a serum or a vaccine available and, if they do not feel like doing it, stiff. Is there no other company that provides another option? Is there any competition in this area to your knowledge, Dr Schipp?

Dr Schipp : No, it is a very small market, and Australia itself represents a small market, so there is a lack of commercial incentive to put forward an application.

Senator STERLE: All right. I will not go on too much but, if a stud gets this going through it or whatever, tough. That is where we are at at the moment.

Dr Schipp : They should continue to encourage Zoetis to submit an application.

Senator STERLE: What can the minister do? What can a government do? I know Senator Heffernan might bounce me.

CHAIR: No, no.

Senator STERLE: But, seriously, can a minister come out—Minister Joyce, if you are listening, or whoever it may be—and say: 'Well, come on. This ain't good enough. We need to get things moving'? Is that in the realms of the minister or the Treasurer? Who is it?

Dr Schipp : We have previously strongly encouraged the manufacturers to submit an application in the national interest.

Senator STERLE: I understand, but the manufacturer has said, 'I'm not doing it.' It is not as though another manufacturer can come in. We have got ourselves in an absolutely ridiculous situation here as a nation. I am not having a crack at you. I am gobsmacked.

CHAIR: So what is the outcome for a horse stud or the local pony club?

Dr Schipp : As I previously mentioned, we might expect to see a higher rate of abortions and persistent respiratory tract infections.

Senator STERLE: And stillbirths. Is it contagious? Can the horses breathe on each other and give it to each other?

Dr Schipp : Yes.

Senator STERLE: That is even worse. So, if it goes through a stud and there is nothing to clean it up, all those valuable horses could be worth absolutely nothing in a couple of weeks.

Dr Schipp : That was the reason for my comments about biosecurity. It is very important to separate infected from clean horses.

Senator STERLE: How come this hasn't flared up?

Senator BULLOCK: Did you say as well that there is no obligation on the owners of such horses to notify the Commonwealth?

Dr Schipp : That is right. It is not a federally notifiable disease.

Ms O'Connell : But that is because the disease already exists here.

Dr Schipp : Because it is endemic in Australia.

Dr Martin : I should just clarify that they do notify the state. Under state legislation for animal diseases, you notify the state. So they do notify the state.

Senator BULLOCK: I was a bit confused, because I thought I heard 'notifiable', and then they were not notifiable.

Senator STERLE: I do not intend to run out there like some senators and do a doorstop on it, but if there are horses infected—and it is not uncommon at the races for a stable to have three, four or five starters—and they have that, is it detected straightaway, or can they go to the races and cough over the other horses. Is that possible—and then they all have it?

Dr Schipp : It is quite possible for horses to be infected without showing clinical signs or to be spreading the infection after apparently recovering.

Senator STERLE: And that would be the end of their racing if they have that.

Dr Schipp : Not necessarily, but some do end up with chronic infections or chronic obstructions in their airways, which means that they are not able to race.

Senator STERLE: Thank you very much for your assistance. I do not think I can go any further on that one.

Senator SIEWERT: I want to follow-up on the implementation of the new biosecurity legislation, in particular the questions I raised during the debate, about which Minister Joyce wrote back to me, which I appreciated very much. I want to ask about progress on some of the issues he indicated that the department was following up.

During the debate we discussed fairly intensely the issue of establishing a mechanism for transparency for approved arrangements, and that this would be established under regulations under the new biosecurity legislation. I am just wondering where that process is up to?

Ms O'Connell : The first thing to advise is that in terms of the regulations for the new legislation there was a significant tranche of those made publicly available last Friday for consultation—a significant tranche, in fact almost all of the regulations now. They were done in two tranches, one of them last Friday and one of them some weeks earlier. They were made publicly available and open for comment until about 24 March.

Senator SIEWERT: I missed the ones from last Friday.

Ms O'Connell : The legislation comes into effect on 16 June 2016, so these are the regulations that underpin it. They are now publicly available and open for comment. We welcome any comments on those regulations. I am not sure if Mr Koval has anything further to add in relation to the specific issue you raised about transparency or import risk assessments.

Mr Koval : You asked the question about transparency in the approved arrangements framework. As the bill was going through there were a couple of things. The department will continue to publish details of arrangements on its web site, with the arrangement holders' permissions, and we will continue to do that. Also, as Ms O'Connell mentioned, we have the draft regulations out there for comment at the moment.

Senator SIEWERT: Have you then made any decision on any progress on the Environmental Biosecurity Strategy and Action Plan, or measures that address issues around environmental biosecurity?

Mr Koval : We have. We are working on the environmental biosecurity engagement strategy and how we might have better visibility of what we do in environmental biosecurity. It is a work in progress. This year we hope to be even better positioned to release some of it.

Senator SIEWERT: When was that?

Mr Koval : During the course of this year.

Senator SIEWERT: Do you have a time frame?

Mr Koval : I do not have a hard time frame at the moment, but I am happy to take that on notice and come back to you with some hard time lines, if that is of help.

Senator SIEWERT: What is the process for engagement on the engagement strategy?

Mr Koval : At the moment we are working internally with the government. Then we will have to go out and seek views, if you like, from those that we want to engage with to make sure that what we propose is actually helpful and meaningful to them.

Senator SIEWERT: Has that been included—

Mr Koval : We will do that through the corporate issue.

Senator SIEWERT: It sounds like it is a question I need to ask at estimates in May. Have you finalised the National Environment and Community Biosecurity Research, Development and Extension Strategy? In fact, it was originally prepared as a draft in April 2014.

Mr Koval : Not that I am aware of. I will take that one on notice and get back to you.

Senator SIEWERT: That would be appreciated. At the same time could you also take on notice the question of what resources have been committed to its implementation, if they have been?

Mr Koval : Okay. Certainly.

Senator SIEWERT: Has the government prepared a national priority list of pests and diseases not yet established in Australia that are of environmental biosecurity concern?

Mr Koval : That is a bit of work that has to be done more broadly within the government, not by us. I am not aware that we have actually finalised a list of pests that are of environmental concern. But, again, I will take that on notice and come back to you.

Ms O'Connell : Senator, we do have lists of pests and diseases that are of concern, but the ones of environmental concern are not segregated from those of other concern.

Senator SIEWERT: You have the general list.

Ms O'Connell : That is right. But we have not segmented it—and some of them will be on more than one list in terms of being an environmental concern and also a production concern, for example.

Senator SIEWERT: Okay. Could you take on notice how regularly that is updated and reviewed?

Mr Koval : Yes, certainly.

Senator SIEWERT: That would be appreciated. Following the debate we had in the chamber and then Minister Joyce's letter, the government said that they would start work on building stronger relationships with environmental stakeholders through forums such as the National Biosecurity Committee. Can you update me on progress in that matter?

Mr Koval : The Department of the Environment actually do come along to and sit on National Biosecurity Committee, to make sure that we have their input into that committee. We also have the Department of the Environment in some of the other subcommittees around the National Biosecurity Committee.

Ms O'Connell : For example, one of those is when there is an emergency response required; the Department of the Environment is represented.

Mr Koval : That is right—the national management committee. When we actually do have an incursion and we are talking about how we are going to respond to that, they are involved. They are involved in the scientific side of the assessment of responses as well. So we do have the Department of the Environment actively engaged in what we do around those incursions.

Ms O'Connell : Also, in terms of the new biosecurity legislation, we are about to hold the first stakeholders sort of information forum on 23 February, and we will have some of those stakeholders present represented there.

Senator SIEWERT: Could you provide me with a list of the stakeholders that have been invited?

Mr Koval : Certainly.

Ms O'Connell : We will do so, yes.

Senator SIEWERT: Is the government considering the preparation of a 'state of biosecurity' report to provide regular updates on our state of preparedness to respond to and prevent biosecurity risks?

Mr Koval : One of the tasks, I suppose you could call it, that I have on my work program is to think about how we can actually assess the health of the biosecurity system, the state of the biosecurity system. So it is something that is on my work program to start to develop so we can think about how we report on that on a regular basis.

Senator SIEWERT: How far along in your work program is it? Is it scheduled for further work this year?

Mr Koval : It is not necessarily an easy thing to do. We are in conversations with one or two universities, for example, to see how we might do this and how we might start to develop this over time. So we are in the early stages of it, but we are speaking to universities, one in particular, about how we might want to do this.

Senator SIEWERT: So there is no actual time frame on it? It is just kicking along?

Mr Koval : No, it is a complicated piece of work.

Mr Chapman : Senator, there are preparedness plans in place. For instance, we have the AUSVETPLAN and the AQUAVETPLAN, and those plans are in place so that we can have adequate and appropriate responses should there be a disease outbreak. So it is not exactly the same as you were asking Mr Koval, which was: how do we know what our overall level is—

Senator SIEWERT: Yes.

Mr Chapman : but it is important to know that we do have a range of preparedness plans in place that work across the Commonwealth and the states and territories so that, should emergencies occur, we can respond with pre-prepared plans.

Senator SIEWERT: Okay. Can I go back to a general update of a question on notice. When we were discussing the frozen berries incident we had extensive discussions and you took a question on notice from me about how processes have changed in relation to advice from FSANZ and their extended risk evaluation since the frozen berries incident. Following up question No. 38 from the last estimates, in the answer to my question on notice you said:

Separately, the department is considering both regulatory and non-regulatory reform options to improve the management of imported food under the Imported Food Inspection Scheme to ensure food safety outcomes.

Could you please update me on the two regulatory reform options that you have been considering and where you up to on that, please.

Ms Vivian : In terms of the food regulatory options, it is in discussion with government at the moment, but maybe what I could do is just talk about the areas where we are looking at making improvements—

Senator SIEWERT: Yes, that would be fantastic.

Ms Vivian : rather than about options as such. In terms of the key options that we are looking at, one of the things is how we can improve the supply chain assurance, particularly for certain foods that present a risk to Australia. Good practice, when you look across the world, is that people are moving much more to get supply chain assurance from the importers so they are aware of good agricultural practices and good hygiene practices. That is one area.

Another is giving us some ability to better manage new and emerging food safety risks, so that when a risk occurs we can take some better action. In some of the areas when a food incident emerges you are waiting on a whole lot of things happening—where and what is happening. So another area we are looking at is getting some better powers to deal with those emergencies at that time.

One of the challenges we have is that people often say, 'Look, you have seen this happening across the world. Why aren't you doing something about it?' The current scheme limits our ability to look at some of those things. So we are talking about some changes where we could actually start having a look at things that might be coming into Australia that might be presenting some serious concern.

Senator SIEWERT: Sorry to interrupt. What sort of changes would you need to do that?

Ms Vivian : It is a matter with government, and we are working with industry. Under the Biosecurity Act, where we see a bit of an issue we can start having a look at it. If we start to see a risk happening overseas, at the moment we can only direct food to be inspected if it falls under the two categories, so we are talking about maybe having the ability to start having look at some of that food so that we can then provide information to FSANZ, so that we have a better sense of what is happening. That is what we would be looking at.

Senator SIEWERT: Before it is categorised?

Ms Vivian : Yes, that is right. As well, the other area which is part of our current work is increasing the number of importers with a food import compliance agreement. That is very much moving to working with importers so that they put arrangements in along their supply chain. That means that they have good assurance about it and also means that we need to focus less on that and can focus more on riskier foods.

Senator SIEWERT: In terms of your looking at those, what is your time frame for any possible changes?

Ms Vivian : That really is a matter with government.

Senator SIEWERT: Do I understand it correctly? You have provided advice to government on this?

Ms Vivian : We have been providing advice to government for a while, and we are working through the mechanisms at the moment.

Senator SIEWERT: Okay. Do you know if there are any time frames for making the types of changes that we have just been talking about?

Senator Ruston: No. I will have to take that on notice.

Senator SIEWERT: If you could take it on notice—

Senator Ruston: Yes, sure.

Senator SIEWERT: that would be great. Thank you very much for the update.

An h o nourable senator interjecting—

Senator EDWARDS: So did I. I was just about to launch.

Senator SIEWERT: I have been sitting here patiently for a hell of a long time.

Senator EDWARDS: Same, same.

Senator EDWARDS: In terms of the current salmonella outbreak, have you had any engagement with either the Victorian department, other health departments around Australia and/or FSANZ on that issue?

Ms Vivian : Yes. We have had engagement. I can ask my colleague to elaborate a bit more on that.

Mr Ironside : We have been working with FSANZ and the Victorian department of agriculture. As you are probably aware, the source of the current salmonella incident is thought to be locally produced food, so it does not fall directly within the scope of the Imported Food Inspection Scheme. But, certainly—

Senator SIEWERT: That is why I was asking about it.

Mr Ironside : Sure. Nevertheless, it is something that we are paying close attention to, and we are working with FSANZ and the Victorian department of agriculture to watch the developments, to see how they pan out and to consider whether there are any implications for imported food.

Senator SIEWERT: What would be the implications for imported foods?

Mr Ironside : For example, in the last little while we have checked to determine whether there are any imports of similar types of commodities—so fresh leafy vegetables from overseas. We have found that in the past 12 months there have been no imports of similar products at all, so that is a good thing. There are some frozen leafy vegetables that are imported, but they are typically blanched to preserve the colour of the leaves. If you have ever bought frozen spinach, you will know that it is very bright green. That is because it is blanched after it is picked. That blanching process gives a measure of control for any microbial contamination that might be on the product at the time. We do not believe that, at the moment, there are similar products that would present a similar risk that are coming across our border.

Senator SIEWERT: With that particular type of salmonella strain?

Mr Ironside : With that particular type of salmonella on that particular type of product.

Senator SIEWERT: Okay. Thank you. Is that your only level of involvement with this particular outbreak—that is, looking at the potential for problems with imported food?

Mr Ironside : I believe that there has been some involvement with our export areas that have been considering whether any of the product may have been exported, but I am not—

Senator SIEWERT: Was any of it? Am asking in the right place now?

Unidentified speaker : Yes—

Senator SIEWERT: Sorry. I am not asking in the right—

Mr Ironside : No.

Ms Vivian : Yes.

Ms O’Connell : You are asking in the right place. We will just have someone answer that.

Ms Van Meurs : We have some exports of the same sort of product to Singapore, Hong Kong and Thailand. We have engaged our posts in those areas to ensure that we have worked with the FSANZ to tell our trading partners of any concerns that they may have.

Senator SIEWERT: When you are saying a similar product, are we talking about from the particular farm involved, or just generally this type of product is exported to those countries?

Ms Van Meurs : We have a Plant Export Operations area which provides certification only for phytosanitary, not for sanity purposes on plant exports. We have linked in with FSANZ and we are able to provide information about tracing the product, but we do not provide certification on that particular issue.

Senator SIEWERT: Sorry. Does that mean that you do not know whether the particular plant materials have come from that particular farm—is that what you are trying to tell me?

Ms Van Meurs : We are able to trace the product to the farm through our certification process, but we do not specifically test for food poisoning contamination.

CHAIR: Is there a—

Senator SIEWERT: Hang on. I had not finished.

CHAIR: I just want to ask: is there a swipe test or something for salmonella on a lettuce leaf?

Dr Parker : In regard to export, the Australian government's responsibility is around meeting importing country requirements and providing certification against those requirements.

Senator SIEWERT: Does that mean that we do not do it to our level—that we can go down if they are not at the same standards that we are?

Dr Parker : I am not aware of there being certification requirements by the Australian government when we export plant products for things like salmonella.

Senator SIEWERT: You are not aware that we have any controls for export for salmonella?

Dr Parker : Our job is to certify against what the importing country requires. There would be a range of quality assurance programs that industry would run or individual companies would run that would address those issues of food safety.

Senator SIEWERT: So, if the importing country does not require or does not have quality control or testing for salmonella, we are not required to ensure that it is not present?

Dr Parker : They may well do tests at the border; all I am saying is: they do not require those tests of us or certification against those types of things.

Senator SIEWERT: Certain countries or all the countries we export to?

Dr Parker : It would be impossible to generalise. We export to a range of countries that have a range of experiences and a range of requirements.

Senator SIEWERT: But we do not test for any salmonella when we are exporting?

Ms Van Meurs : No. Within the department of agriculture, we are required under the International Plant Protection Convention to ensure that, if an importing country has concerns over pests and diseases that we might have in Australia—and when we talk about those we are talking about insects and different diseases on, for example, mangoes—we are able to mitigate those. And that is the protocol that we have developed with that country. The department of agriculture looks at those certification processes. We are able to provide some traceability help for our sister organisations such as FSANZ, but we do not provide certification for food safety aspects from the plant perspective. We do a lot of work with those countries on the phytosanitary side.

Senator SIEWERT: I do want to have a third go at asking the question—

CHAIR: They did not end up answering my question.

Senator SIEWERT: They did not answer mine before they did not answer yours, and it is: do we know, as to the three countries that you outlined have had similar sorts of products, whether any of the products from the particular farm that is involved in this particular outbreak went there?

Dr Parker : Yes we do. We have written to those three countries involved with 23 identified consignments that may contain lettuce from that particular establishment, and they have been notified of that and, at this stage, the only action that I am aware of from any of those countries is a heightened inspection at the border for Thailand. There are no bans in place or anything. This is regular business—that we would clearly notify our trading partners when issues may or may not arise, and it is something that they would do for us as well.

Senator SIEWERT: Do we know if there have been any reports of any illness in any of those three countries?

Ms Van Meurs : We are not aware of any.

Dr Parker : We are not aware of any.

CHAIR: You did not actually answer the question: is there a test, swipe or otherwise, for salmonella? If you do not know the answer, just say, 'I don't know.'

Dr Parker : I do not know.

Ms O'Connell : I think we are better off deferring to FSANZ for tests for salmonella.

Mr Ironside : There are some tests for salmonella and we certainly test a number of products, mostly ready-to-eat products, when they are imported into Australia, so—

CHAIR: Is it a swipe test?

Mr Ironside : No, it is not a swipe test. It has to go to a lab and be cultured up, and then the cultures are assessed for the presence of salmonella.

CHAIR: Just because I am thick in the head and it is late at night, can you tell me: how does a lettuce plant get salmonella?

Mr Ironside : Normally—and remembering that we do not have a trade in imported fresh lettuce leaves—it is my understanding that it is likely that that would happen through exposure to contaminated water, typically; or some other contamination from the point where the lettuce is harvested to where it is retailed or consumed.

CHAIR: So we do not really know?

Mr Ironside : No, it is very difficult to know with microbiological contamination to identify exactly where the contamination happened.

Senator SIEWERT: Have you been working with the Victorians to find that out or not?

Mr Ironside : No.

CHAIR: I have a place next to Jindalee, and you can go there and buy a semi load of cow shit—I suppose that is the best way to put it—recycled cow manure, and they heat it so it does not grow a whole lot of weeds and rubbish. Could it be possible, if you put that on your vegetable garden, that you could pick it up there?

Dr Parker : I would suggest that they are really matters for the health department. They are matters of human health. And, particularly in this current case as far as we are aware, a definitive cause and the definitive nature of what has gone on has not been established; that is part of the investigation that is ongoing.

CHAIR: This is my last question because we all have to go home. The superbug MCR-1, which is to do with a thing called colistin, do we have border protection against the entry of that? Take that on notice.

Senator SIEWERT: I want to ask about yellow crazy ants.

Ms O'Connell : We are aware of yellow crazy ants.

Senator SIEWERT: Is it better if I ask questions here or just put them on notice for Environment?

Ms O'Connell : Here is fine.

Senator STERLE: On notice is even better.

Senator SIEWERT: I am getting a lot of pressure here. I have some that I will put on notice. But can I ask how you work with environment on yellow crazy ants, because it clearly fits in there as well. They fund work on wet tropics, for example?

Mr Koval : Certainly. Department of Environment is leading on it. We work with them on yellow crazy ants.

Senator SIEWERT: I will put the questions in there and any that need to go to you on notice.

Mr Koval : Okay.

Senator EDWARDS: I think I have the call. Mr Chapman, I reckon you answered these questions before. I am interested, because as Parliamentary Secretary Ruston knows, we have a very unique environment in South Australia. We have Kangaroo Island where the bees are free of everything, and they breed stock for a lot of places around the world. But now we are importing bee semen, and there is currently a review process around this. Can you tell us about the policy around that? I am intrigued.

Mr Chapman : In December 2014 the bee industry council formally requested us to do a review of the risks that might be associated with the importation of bee semen. They were very keen that we allow bee semen to come into this country so that we can improve bee genetics in Australia for a couple of reasons: firstly, to improve productivity, but the other really important one is to improve disease resistance. In particular, there are bees overseas which have greater resistance to varroa mite than bees in Australia do. They obviously are a naive population. You might also remember that in the recent Senate inquiry on the future of beekeeping and pollination service industries in Australia the issue of bee semen was promoted, and again it is about improving bee genetics for disease resistance in Australia. We released a draft risk review on the importation of bee semen in December last year and that has gone for consultation and review by stakeholders. We have received some commentary back and we are expecting to release the final policy in the next few months once we have considered some of the input that has been provided to us by stakeholders.

Senator EDWARDS: Are you getting any heat from the stakeholders? Are you getting any heat from industry?

Mr Chapman : No. The industry wants bee semen to be imported into Australia. Some questions have been raised about other diseases that might be carried in bee semen, but there is a fair degree of uncertainty about that so we are considering it. The main issue which we were concerned with in doing our review was to ensure that we can keep out the genetics of Africanised European honey bees, and they are the ones which are more aggressive and less productive. That has been a key issue that we have been looking at. It basically parallels the import conditions that we have for queen bees.

Senator EDWARDS: Are you driving this or is the industry? Are they pushing you? How much pressure are you under?

Mr Chapman : It is not so much pressure. The industry wants it, but it is very important for Australia. We are the only continent that does not have the varroa mite. Improving the genetics in the country will mean that, if and when we get an incursion of the varroa mite, there will be greater resistance so there will be less damage to the bee population. That is not only important for honey production, obviously, but for pollination and for agriculture more generally. It was relatively easy for us to do because we had already done the risk assessment on the importation of queen bees. Industry want it and we want it too.

Senator EDWARDS: Clearly you know a lot about it. How is the population of Australian bees? Are we at a critical time? What is the story?

Mr Chapman : No, I do not think there is any immediate pressure at the moment, but an industry wants to improve its genetics and this is really putting in place an insurance policy so that, if varroa mite does arrive, Australian European honey bees are better able to cope.

Senator EDWARDS: It is about increasing the population and protecting it from disease?

Mr Chapman : It is not about increasing the population; it is about improving the genetics so there is better disease and mite resistance.

Senator EDWARDS: How do you get bee semen into the country?

Mr Chapman : The bee semen is collected in the exporting country and it is sent in little vials.

CHAIR: Better still, do you have to kill the bee to get the semen? How do you get the semen out of the bee?

Mr Chapman : That is the most common question that we are asked.

Senator EDWARDS: Thank you; you asked what I was—

CHAIR: He wanted to ask it.

Senator EDWARDS: I do not know how you do that.

Senator SIEWERT: Every time we talk about this, we just end up cracking up.

Mr Chapman : It is part of the vernacular. Everyone wants to know how you get semen out of a bee. I cannot claim to be an expert. You can—

Senator SIEWERT: I told you not to go there.

Mr Chapman : How come I am the only one with a straight face here?

Senator EDWARDS: What constitutes an expert?

Mr Chapman : There are videos of this on YouTube. Basically you squeeze the bee, which everts its endophallus, and then the semen is collected from the end.

CHAIR: And the bee is still alive when you are finished?

Mr Chapman : No, but—

CHAIR: So that was the answer. To get the semen you have to kill the bee.

Mr Chapman : Bees also die when they mate naturally. In fact they explode.

CHAIR: On that cheerful note: thank you. God help the human species. Who is next?

Senator BULLOCK: There are some programs on Channel 2 that I do not watch on principle, but you may be familiar with a 7.30 report program alleging cruelty to greyhounds exported to Macau. Has the department done any investigation of the alleged facts behind that program?

Dr Clegg : With the concerns raised on the ABC program about greyhounds, we have received numerous letters and correspondence from various people, from animal welfare groups and members of the community and also from Greyhounds Australasia. There is a long history of concern about greyhounds that are exported overseas. Just looking back through our ministerial correspondence files, the department has had advice on this dating back to 2005. The request are quite similar: can the federal government step in and stop greyhounds being exported to countries where—

Senator BULLOCK: So it is a refrain? There is not new material that has come out of this?

Dr Clegg : No.

Senator BULLOCK: From your point of view, there has not been cause for a fresh investigation in response, because it is all in the file?

Dr Clegg : We have looked at the information, and is similar to the information that has been received previously. The department's role in exports is to certify the importing country's health requirements. We do that. Greyhounds Australasia has developed its own passport system.

Senator BULLOCK: Has the department provided verbal or written advice to the minister or his staff about the greyhound passport system which you just alluded to?

Dr Clegg : Yes, we have.

Senator BULLOCK: There is a form GED200314, which you would have memorised, which includes a field to provide information about the greyhound passport system. Is this form currently on the departmental website?

Dr Clegg : It is not a form that we would use, no.

Ms Evans : It is not on our website. It is not our form.

Senator BULLOCK: Do you know who created the form?

Dr Clegg : Greyhounds Australasia would be the owner of form.

Senator BULLOCK: Greyhounds Australasia claims that it did not create this form. Were you aware of that?

Dr Clegg : No.

Senator BULLOCK: You do not know who created the form. I have already asked that. Has the department met with any welfare groups regarding the 7.30 report?

Dr Clegg : No, we have not.

Senator BULLOCK: Why will not the department engage with the greyhound industry to provide better welfare outcomes for dogs exported for racing purposes? That is a loaded question, but there you go.

Dr Clegg : The department has responded to the greyhound industry on the number of occasions about the expert process for greyhounds. About 684 dogs were exported the last year that were greyhounds out of about 8,000 animals. That is roughly 7 per cent. Of those, about 200 greyhounds were exported to Macau, where the greyhound racing industry prefers that greyhounds do not go. So we are talking about a very small number of animals that are being exported by registered greyhound people.

Senator BULLOCK: Do you think there is a cruelty problem with some export of greyhounds?

Dr Clegg : I think that animal welfare for any animals exported from Australia cannot be guaranteed with an export permit or with a passport. You do not know where they going to.

Senator BULLOCK: Do you think that a passport system that had some government involvement would improve the chances of reducing cruelty to the greyhounds?

Dr Clegg : That type of system might improve the information that the greyhound industry has about certain activities of members. It might do that, but it is not a guaranteed of improved welfare. Hong Kong to Macau—

CHAIR: The almighty bribe overcomes all those forms.

Senator SIEWERT: My understanding is that the industry itself has restrictions on exporting to countries that have lower welfare standards than we do. I think you could easily argue that the countries that have been particularly highlighted have lower welfare standards than we do. Yet certain greyhound owners or breeders have been exporting to Macau. Therefore, they are not complying with their own ban. Have you spoken to them about how the government can help with that, to help them enforce their own ban?

Dr Clegg : No, but the issue there is that the greyhound racing industry is regulated by the states and territories. They receive the revenue from the greyhound industry. I think they have been in consultation with Greyhounds Australasia and its passport system. I think they have been discussing how they can improve compliance with the management of greyhounds, not only overseas but also in Australia.

Senator SIEWERT: I will put some other questions on notice.

Senator STERLE: Ms O'Connell, let us have another sparring round on Serana. If you are nice to me, I am going to fall off the chair. I have high expectations that you will attack me like we normally do. Let us go back to our hardy annual here. In relation to the investigation into Serana Pty Ltd, we were previously advised that a brief of evidence was submitted to the Commonwealth Director of Public Prosecutions on 9 April 2015. Is that correct?

Ms Vivian : Yes, that is correct.

Senator STERLE: Has any response or recommendation been forthcoming from the CDPP?

Ms Vivian : No, we have not received a response from the CDPP on that.

Senator STERLE: Is the department concerned about the length of this matter?

Ms Vivian : Whilst you refer to it as the Serana investigation, I need to reiterate that this is an investigation into a number of entities. It is a complex criminal case.

Senator STERLE: What is complex about it?

Ms Vivian : The international supply chains makes it complex. The nature of the product makes it complex. We have even had to devise some new testing processes during the investigation. In terms of the time frames you talked about, we lodged one brief in April, and in terms of the overall investigation we also lodged another brief with the DPP in December and we are working on some other briefs. So whilst I cannot speak for the DPP, my surmise would be that they are probably looking to look into all of the briefs in terms of some of their decision making.

Senator STERLE: Am I correct in saying that back in April 2014 there were some results of testing on serum from Serana? Were you aware of that?

Ms Vivian : Are you talking in terms of the brief to the DPP or the investigation?

Senator STERLE: You tell me what I am talking about. There was some testing done and there were some results provided in April 2014.

Ms Vivian : During this investigation there have been a number of tests undertaken on a range of samples from differing entities.

Ms O'Connell : I think the April 2015 date—

Senator STERLE: 2014. I am told that there were some results from testing that came out in April 2014 and it was serum from Serana.

Mr Terpstra : Yes, that is correct. There were some tests of a range of serum that was located at Serana premises that was undertaken in April 2014.

Senator STERLE: Did they show that there was any foreign provenance? What does 'provenance' mean?

Mr Terpstra : 'Provenance' means where it is from.

Senator STERLE: Was anything foreign in those tests?

Mr Terpstra : The test results from those particular samples revealed that they were likely to be from either Australia or New Zealand.

Senator STERLE: Okay, which is not against the law—being from New Zealand. Have any other tests on serum from Serana proved that it is not from Australia or New Zealand?

Mr Terpstra : There are a range of other tests that we have conducted where investigations are still ongoing, and I cannot provide any comment on that without potentially undermining investigation progress.

Senator STERLE: How many samples were taken for testing? Can you tell us that?

Mr Terpstra : There were a number of samples that were tested—both serum that was marked and some serum bottles that were unmarked—during the warrant itself. There were a range of tests that were conducted on a variety of samples in both of those categories.

Senator STERLE: Can you give me some numbers, please.

CHAIR: Can I just assist myself in thinking this through. Is this a live operation?

Mr Terpstra : It is still ongoing, yes.

CHAIR: So are we at any risk at all of interfering with the—

Senator STERLE: Chair, I will help you. If you have been listening to my questioning—

Mr Quinlivan : We are being very careful.

CHAIR: That is all right, if we are all being very careful.

Senator STERLE: We have already had someone spin out because I said it was corrupt and they took it personally. I still reckon there is something fishy going on there, but I am not calling anyone corrupt.

CHAIR: Proceed with caution.

Senator STERLE: People sook up on me. So how many tests have been done, on how many samples?

Ms Vivian : Again, we are trying to be careful, because it is an ongoing investigation. My colleague just talked a bit about those tests that were done in April, but in the last estimates I talked about some—

Senator STERLE: I was not here. Sorry.

Ms Vivian : Yes, so I just thought I might update you on those. I said that we had taken and tested 31 samples. When I say that this is out of the investigation, I am not linking it to any particular entity in providing this to you. Out of that, I suppose that what we found concerning was that 30 tested positive to bovine viral diarrhoea virus types 1 or 2. BVDV type 2 is not present in Australia, and these results in themselves established that some of this serum has been illegally imported into Australia.

Senator STERLE: It has been?

Ms Vivian : That is the only way, we surmise, that it could have got into Australia, because it is not present in Australia at the moment.

Senator STERLE: Thank you for that. How much has this inquiry cost the taxpayer so far—bearing in mind, for those listening, that the company is shut down?

CHAIR: Surely there is no-one listening.

Senator STERLE: Eh?

CHAIR: There would be no-one listening. Why would anyone be up at this hour of the night?

Senator STERLE: Well, you ask them when they whinge about your chairmanship. I just want to know how much it has cost the taxpayer so far.

Ms Vivian : For this inquiry—and again I reiterate that there are a number of entities involved in this inquiry, which often makes it difficult to answer your questions, because you are coming from one particular entity—the total cost of the investigations to about 8 February is one point—

Mr Terpstra : It is to 31 December, actually.

Ms Vivian : Sorry. I apologise; it is to 31 December. I am giving them on 9 February. It is $1,183,819.

Senator STERLE: Far out—$1,183,819, and it is still ongoing. So that $1.183 million is taxpayer dollars? That is a cost to the taxpayer?

Ms Vivian : That is the cost, but I would also state, in terms of looking at this as an investigation—and we constantly do—that we look at what is the potential impact to Australia from illegal importation of this item.

Senator STERLE: So that was up to when?

Ms Vivian : That was up to 31 December.

Senator STERLE: Are there any figures for what it has cost after 31 December, or do we not know that yet?

Mr Terpstra : No, we do not have that yet—I am sorry—because some of those things relate to invoicing and so forth. They have not necessarily been processed.

Senator STERLE: All right. So in May we will know there is more. Can I just ask you this. It has been going on for two years now. Don't panic—it is not going to affect the investigation. Why has it taken so long with no charges laid? It is only 31—is it 31 bottles of serum? I am not talking about a bank heist.

Mr Terpstra : Part of the reason that these things take such a lot of time is, as Ms Vivian has already outlined, the complexity of the supply chains. But a deal of the evidence needs to be gathered from a range of parties overseas and, for that evidence to be gathered in a way that can be admitted to an Australian legal process, there are certain protocols as to how that actually has to happen. We have submitted through Interpol what we call mutual assistance requests to other agencies, including other law enforcement agencies. All of those things, unfortunately, add significant amounts of time to time frames. There have also been things like translation of foreign documents, translation of phone conversations and those sorts of things, which of course once again all add to time and cost.

Senator STERLE: So we are chasing baddies overseas. Can you tell us where we are chasing them? You cannot say. But this serum is from one country, two countries, 10?

Mr Terpstra : The serum originally appears to have come from a number of countries in South America, and there are connections also in the EU.

Senator STERLE: In the EU? Well, we will—

Mr Quinlivan : Senator, I think we should stop there.

CHAIR: We are.

Senator STERLE: No, I am having too much fun! You do not know I waited all day to talk about bull serum!

Mr Quinlivan : I would like to make the point, though, that this is a serious criminal matter and so normal parameters about time and expense do not really apply here.

CHAIR: No—not worth the risk.

Senator STERLE: No, you are wrong, Mr Quinlivan! This has been very informative. I have not raised my voice. I have not sooked up or anything. It is good. I am getting some info.

CHAIR: Okay. Come on, then. What is next?

Senator STERLE: Don't you 'come on' me. I'm telling you I am on the edge. I might ask about water now, since you have upset me!

Mr Quinlivan : Are we ready for that?

Senator STERLE: Don't get in the middle, mate. It's not worth it! Thank you very much, Ms Vivian. That was very informative—and Mr Terpstra. Thank you. That was very good.

CHAIR: Come on. The very patient Mr Slatyer is approaching the table.

Mr Quinlivan : Chair, just checking we are letting everyone other than the Water Division go?

CHAIR: I think so. Get going while the going's good.

Mr Quinlivan : And, Senator Sterle, we are going to give you a call about your China question.

Senator STERLE: I forgot about that. Thank you.

Mr Quinlivan : We are reminding you, but we are going to deal with it outside this forum.

Senator STERLE: That is just an inquiry—my own personal inquiry. That is great. Thank you. I forgot all about it.


CHAIR: I welcome the Water Division to the table. You are on.

Senator SIMMS: Good evening. I am sorry I missed the earlier part of the discussion. I was in a committee elsewhere. But I did enjoy the update on bees. I have a few questions about the water office and the Environmental Water Holder. Can you confirm for me—I think this is probably a question for you, Minister—that there is no funding in the budget for the Commonwealth Environmental Water Holder beyond the 2016-17 financial year?

Senator Ruston: The Commonwealth Environmental Water Holder sits under the Department of the Environment, not under the department of agriculture.

Senator SIMMS: Oh, no. I was told it was for here.

Senator Ruston: No.

Senator SIMMS: So I have sat through all of that and I have come to the wrong spot.

Senator Ruston: Obviously, you can put your questions on notice to any committee, but we are certainly happy to follow up and get you the information.

Senator SIMMS: That is fine. I will put them on notice. That is fine. Thank you. In that case, I will leave you all to it! Good night.

Senator Ruston: You have won the prize for being the best senator!

CHAIR: Do you think that was worth the wait! Well, I have some questions for you, Mr Slatyer: how do you keep so skinny and fit looking? What is going on?

Mr Slatyer : That is a personal question!

Senator WILLIAMS: Don't be led by the chair, young man!

Senator STERLE: I am afraid, Chair, that none of my questions will bring a minister down! You are doing it well enough on your own.

CHAIR: I will just ask my usual question. Do you want to go into the northern development water resource—70-odd per cent in three catchments? Do you know what the run-off is in the gulf catchment? 98,000 gigalitres. Do you know how much they divert? Fifty-five out of 98,000. But, as you know, First Assistant Secretary, I am still very irritated at the weak-livered bloody politicians. The buyback book has made it very difficult, given that most river systems in the Murray-Darling—which is 6.2 per cent of Australia's run-off, and 23,400 gigalitres—is overallocated in some river systems by at least 150 per cent. To establish enough water in the buyback book, we actually—given we are already overallocated—issued more licences, knowing we were going to buy them back. So in fact the buyback into the water holder's book is actually, in my view, a fraud, part of it. I mean, how in God's name do you think you are going to fix the system, which is overallocated and which the forecasts say will have a 15 per cent decline in rainfall and a 35 per cent decline in run-off over the next few years? How in God's name do you fix the book by saying, 'We'll issue some more licences and agree to buy them back before we issued them'?

Mr Slatyer : Tony Slatyer, First Assistant Secretary, Water Division—

CHAIR: You used to do a fantastic job in the Northern Development Taskforce.

Mr Slatyer : I could not quite catch your question in your statement.

CHAIR: You know what I am talking about: the Nimmie-Caira buyback—right? It is mostly supplementary water, which is below the dam, which is an event based in the river, which used to be off-allocation. To get to the outer limits of the Nimmie-Caira flood plain floodwater, we, the government of the day, and New South Wales—and we, the Commonwealth, funded it—agreed to issue licences for what was authorised water, not licensed water. And, before we issued the licences—which then added to the overallocation if we issued them—we agreed to buy them back at 2¼ times their market value. How in God's name does that make sense? Can I just say: it is time to go home. Don't answer it. It's a bloody con job.

Thank you very much everybody. It was a great day. Thank you very much behind the glass up there. Thank you to the professionals at the secretariat, and every other patient bugger in the system.

Committee adjourned at 22:42