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Rural and Regional Affairs and Transport Legislation Committee


In Attendance

Senator Ruston, Assistant Minister for Agriculture and Water Resources

Department of Agriculture and Water Resources


Mr Daryl Quinlivan, Secretary

Ms Cindy Briscoe, Deputy Secretary

Ms Emily Canning, Acting Deputy Secretary

Ms Lyn O'Connell, Deputy Secretary

Mr Malcolm Thompson, Deputy Secretary

Landcare Australia Ltd

Mr Shane Norrish, Chief Executive Officer

Mr Jean-Marc Maissin, Communications Director

Dairy Australia Limited

Mr Jeff Odgers, Chair

Mr Ian Halliday, Managing Director

Ms Emma Braun, Company Secretary

Mr Charlie McElhone, Group Manager, Trade and Strategy

Meat and Livestock Australia Limited

Mr Richard Norton, Managing Director

Rural Industries Research and Development Corporation (AgriFutures)

Mr John Harvey, Managing Director

Mrs Kay Hull, Chair

Horticulture Innovation Australia Limited (Hort Innovation)

Mr John Lloyd, Chief Executive Officer

Mr Selwyn Snell, Chair

Plant Health Australia

Mr Greg Fraser, Executive Director and Chief Executive Officer

Mr Darryl Barbour, Manager, National Fruit Fly Council

Ms Susanna Driessen, General Manager, Emergency Response

Mr Michael Milne, Company Secretary and Chief Finance Officer

Mr Rodney Turner, General Manager, Preparedness and Research and Development

Australian Pesticides and Veterinary Medicines Authority (APVMA)

Dr Chris Parker, Chief Executive Officer

Ms Amy Fox, Deputy Chief Executive Officer

Mr Alan Norden, Executive Director, Registration Management and Evaluation

Australian Fisheries Management Authority (AFMA)

Dr James Findlay, Chief Executive Officer

Dr Nick Rayns, Executive Manager, Fisheries Management Branch

Mr Peter Venslovas, General Manager, Fisheries Operations Branch

Mr John Andersen, General Manager, Corporate Services Branch

Fisheries Research and Development Corporation (FRDC)

Dr Patrick Hone, Managing Director

Mr Peter Horvat, General Manager Communication Trade and Marketing

Mr Crispian Ashby, General Manager Research and Investment

Mr Matt Barwick, The National Carp Coordinator

Mr John Wilson, General Manager Business

Corporate Matters

Finance and Business Support Division

Mr Scott Brown, Acting Chief Finance Officer

Mr Jason Lucas, Acting Assistant Secretary, Industry Support Branch

Corporate Strategy and Governance Division

Mr Neal Mason, First Assistant Secretary

Ms Melissa Brown, Assistant Secretary, Parliamentary, Communication and Portfolio Business

Ms Bronwen Jaggers, Assistant Secretary, Planning and Governance

Ms Kylie Barber, Acting Assistant Secretary, HR People Branch

Ms Tiffany Blight, Assistant Secretary, Workforce and HR Strategy

Information Services Division

Mr Peter McKeon, Chief Information Officer

Mr John Mason, Assistant Secretary, ICT Services and Enablement Branch

Assurance and Legal Division

Alice Linacre, General Counsel

Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES)

Dr Steve Hatfield-Dodds, Executive Director

Mr Peter Gooday, Assistant Secretary, Agricultural Commodities and Trade Branch

Mr Beau Hug, Acting Assistant Secretary, Farm Performance and Forestry Branch

Mr Bertie Hennecke, Assistant Secretary, Biosecurity and Fisheries Branch

Outcome 1

Farm Support Division

Ms Emma Cully, Acting First Assistant Secretary

Mr Cameron Hutchison, Assistant Secretary, Regional Investment Corporation Branch

Ms Paula Svarcas, Assistant Secretary, Farmer Assistance Branch

Sustainable Agriculture, Fisheries and Forestry Division

Mr Ian Thompson, First Assistant Secretary

Ms Michelle Lauder, Assistant Secretary, Forestry Branch

Ms Julie Gaglia, Assistant Secretary, Agvet Chemicals Branch

Mr Tony Harman, Acting Assistant Secretary, Fisheries Branch

Ms Cassandra Kennedy, Assistant Secretary, Sustainable Agriculture Branch

Agricultural Policy Division

Ms Joann Wilkie, First Assistant Secretary

Mr Nick Blong, Assistant Secretary, Projects and Innovation Branch

Ms Jo Grainger, Assistant Secretary, Plant Industries, Infrastructure and Workforce Branch

Mr Andrew McDonald, Assistant Secretary, Food, Investment and Energy Branch

Ms Anna Willock, Assistant Secretary, Biotechnology, Diary and Levies Policy Branch

Trade and Market Access Division

Ms Louise van Meurs, First Assistant Secretary

Ms Jodie McAlister, Assistant Secretary, Bilateral Engagement Branch

Mr Matthew Worrell, Assistant Secretary, Multilateral Agriculture Policy and Bilateral Branch

Mr Simon Smalley, Assistant Secretary, Strategic Trade Policy and China Branch

Ms Ann McDonald, Assistant Secretary, Export Legislation Taskforce

Animal Health Australia

Ms Kathleen Plowman, Chief Executive Officer

Australian Livestock Export Corporation Ltd (LiveCorp)

Mr Samuel Brown, Chief Executive Officer

Mr Terry Enright, Chair

Outcome 2

Biosecurity Operations Division

Mr Nico Padovan, First Assistant Secretary

Mr Dennis Way, Assistant Secretary, Veterinary and Export Meat Services

Exports Division

Ms Fran Freeman, First Assistant Secretary

Ms Barbara Cooper, Assistant Secretary, Meat Exports Branch

Dr Narelle Clegg, Assistant Secretary, Live Animal Exports Branch

Mr Cameron Hutchison, Assistant Secretary, Live Animal Exports Branch

Dr David Cunningham, Assistant Secretary, Exports Standards Branch

Dr Melissa McEwen, Assistant Secretary, Residues and Food Branch

Biosecurity Animal Division (including Australian Chief Veterinary Officer)

Ms Jackie South, Acting First Assistant Secretary, Biosecurity Animal Division

Dr Carol Sheridan, Acting Assistant Secretary, Animal Biosecurity Branch

Dr Beth Cookson, Acting Assistant Secretary, Animal and Biological Import Assessments Branch

Dr Sam Hamilton, Acting Assistant Secretary, Animal Health Policy Branch

Dr Robyn Martin, Acting Chief Veterinary Officer, Australian Chief Veterinary Office

Biosecurity Plant Division (including Australian Chief Plant Protection Officer)

Dr Marion Healy, First Assistant Secretary

Dr Kim Ritman, Australian Chief Plant Protection Officer

Dr Sally Troy, Assistant Secretary, Plant Health Policy Branch

Ms Kylie Calhoun, Assistant Secretary, Plant Health Policy Branch

Ms Lois Ransom, Assistant Secretary, Plant Import Operations Branch

Mr Peter Creaser, Assistant Secretary, Plant Systems and Strategies Branch

Mr David Ironside, Assistant Secretary, Plant Export Operations Branch

Dr Gabrielle Vivian-Smith, Assistant Secretary, Plant Sciences and Risk Assessment Branch

Dr David Dall, Principal Scientific Analyst

Compliance Division

Ms Peta Lane, First Assistant Secretary

Dr Robyn Cleland, Assistant Secretary, Compliance Policy Branch

Mr Dean Merrilees, Assistant Secretary, Compliance Controls Branch

Mr David Mackay, Senior Director, Compliance Testing and Intervention Branch

Mr Andrew Patterson, Acting Assistant Secretary, Enforcement and Sanctions Branch

Biosecurity Policy and Implementation Division

Mr Matthew Koval, First Assistant Secretary

Mrs Jo Laduzko, Assistant Secretary, Biosecurity Policy and Response Branch

Ms Lee Cale, Assistant Secretary, Biosecurity Implementation Branch

Committee met at 09:02

CHAIR ( Senator O'Sullivan ): I declare open this public hearing of the Senate Rural and Regional Affairs and Transport Legislation Committee. The Senate has referred to the committee the particulars of proposed expenditure for 2018-19 and related documents for the Agriculture and Water Resources portfolio. The committee may also examine the annual reports of the departments and agencies appearing before it. The committee has before it a program—adjusted by attaching officers from Trade and Market Access Division onto outcome 2—listing agencies relating to matters for which senators have given notice. The proceedings today will begin with an examination of outcome 1 of the Department of Agriculture and Water Resources.

The committee has fixed Friday, 6 July 2018 as the date for the return of answers to questions taken on notice. Senators are reminded that any written questions on notice should be provided to the committee secretariat by close of business on Friday, 8 June 2018. I understand that there is an attempt to try to answer some questions on notice. My view is that, unless the committee directs otherwise, even if they are delivered today, they will just be treated as answers to questions on notice and published and distributed in the normal form.

Under standing order 26, the committee must take all evidence in public session. This includes answers to questions on notice. I remind all witnesses that, in giving evidence to the committee, they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to the committee. Such action may be treated by the Senate as a contempt. It is also a contempt to give false and misleading evidence to the committee.

The Senate by resolution in 1999 endorsed the following test of relevance of questions at estimates hearings: any questions going to the operations or financial positions of the departments and agencies which are seeking funds in the estimates are relevant questions for the purposes of estimates hearings. I remind officers that the Senate has resolved that there are no areas in connection with the expenditure of public funds where any person has a discretion to withhold details or explanations from the parliament or its committees unless the parliament has expressly provided otherwise.

The Senate has resolved also that an officer of a department of the Commonwealth shall not be asked to give opinion on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinion on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted.

I particularly draw the attention of witnesses to an order of the Senate of 13 May 2009 specifying the process by which a claim of public interest immunity should be raised. Witnesses are specifically reminded that a statement that information or a document is confidential or consists of advice to government is not a statement that meets the requirements of the 2009 order. Instead, witnesses are required to provide some specific indication of the harm to the public interest that could result from the disclosure of the information or the document. I incorporate the public interest immunity statement.

The extract read as follows—

Public interest immunity claims

That the Senate—

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

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

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

(1) If:

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

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

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

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

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

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

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

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

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

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

(13 May 2009 J.1941)

(Extract, Senate Standing Orders)

I note that Auspic is with us in the room. Given there is a new batch of officials, the position is that, if there is no objection—and there has been no objection from the committee—they will be given free rein of the room. I recommend, officials and senators, that, if you have documents or artefacts in front of you that you do not want caught in the picture, we will be responsible on this occasion to provide the security to ourselves.

I now welcome Senator the Hon. Anne Ruston, the Assistant Minister for Agriculture and Water Resources. I also welcome Mr Daryl Quinlivan, the Secretary of the Department of Agriculture and Water Resources, and officers of the department. Minister Ruston, do you or Mr Quinlivan wish to make an opening statement?

Senator Ruston: No, thank you.

Senator BROCKMAN: Can I just seek a point of clarification. The Trade and Market Access Division has moved to this afternoon. Is that all aspects of the Trade and Market Access Division or just to do with live export?

CHAIR: I think that would probably be the most useful thing to do with it.

Senator BROCKMAN: I just wanted to make sure.

Senator Ruston: Chair, it would be preferable because, of course, the same officials relate to all of the Trade and Market Access Division—they are not separate.

CHAIR: That being the case, that is how we will proceed.


CHAIR: We will start with outcome 1.

Mr Quinlivan : I think we are starting with the Farm Support Division.

CHAIR: We are.

Senator McCARTHY: I just wanted to ask who in the department is responsible for ensuring that the substantial investment by the government is being invested well.

Mr Quinlivan : Substantial investment in what particular area, Senator?

Senator McCARTHY: I am actually looking at the levy system. Who evaluates whether the levy system is working effectively?

Mr Quinlivan : If you are asking about the levies that support the R&D corporations or the levies that support the department's biosecurity and other related matters, we had a discussion about the levy system and we had both the policy people and the operational people here last evening.

Senator McCARTHY: Yes, I realise that in relation to the Horticulture Innovation discussion, but I just wanted to ask straight off: who is responsible for it?

Mr Quinlivan : The people who were here last night.

Senator McCARTHY: Is anyone in the department aware of the 'Phenomenom' campaign?

Mr Quinlivan : We had a long discussion about that as well with MLA—no, I am sorry; you are quite right. It was with the CEO of Horticulture Innovation, and he was familiar with it.

Senator McCARTHY: Anyone in the department?

Mr Quinlivan : I do not think so. From memory, the upshot of that conversation was that it was a vegetable industry program and the department certainly had no involvement. I think Horticulture Innovation also had only a marginal involvement.

Senator McCARTHY: Has anybody watched the program, Mr Quinlivan? I am just following on from that discussion last night.

Mr Quinlivan : We had no—I think the take-out from the conversation yesterday was that there was no real awareness of it in the department and not much in Horticulture Innovation, for that matter.

Senator McCARTHY: Okay. I will go to the RIC. It is unfortunate that the RIC is unable to attend estimates on this occasion, so can I just put to you: has the board appointed an acting CEO for the RIC yet?

Mr Hutchison : The board has not yet appointed an acting CEO. That is a matter that is still being finalised.

Senator McCARTHY: Why hasn't the board appointed one?

Mr Hutchison : It is a significant appointment, and the board is working with the government on the appointment of an acting CEO.

Senator McCARTHY: When will it be finalised?

Mr Hutchison : It is a matter for the government and the board.

Senator McCARTHY: You have no time frame?

Mr Hutchison : I cannot offer you a time frame, no.

Senator McCARTHY: The government has not provided any time frame?

Mr Hutchison : No, Senator. I would expect it is to be done shortly or imminently, but beyond that I cannot offer you a specific time frame.

Senator McCARTHY: Is the department confident that the RIC will be up and running or functioning by 1 July?

Mr Hutchison : Certainly the government's expectation as set out in the bill is that the Regional Investment Corporation will be up and running by 1 July. The board are working to that effect. They have been in place now some five or six weeks and have had several board meetings already to take the decisions that they need to take to set the organisation up. It is certainly, as I understand it, their intention to be up and running from 1 July, and we as the department continue to provide support to the board while they establish themselves and their own workforce to that end.

Senator McCARTHY: Will the department need to provide assistance to the RIC on the ground in Orange?

Mr Hutchison : We are providing assistance now.

Senator McCARTHY: In what way?

Mr Hutchison : In terms of, I suppose, supporting the Regional Investment Corporation in implementing the decisions that the board is taking—things around property, infrastructure and ICT. There is a team within the department that is servicing the RIC in that regard to give effect to some of the decisions that the board takes. But, ultimately, the RIC is the decision-maker on those matters now. We are assisting. The RIC will over time establish its own workforce starting at the top with the CEO, as we have just touched on. As the organisation grows I would expect that the department's role in that support to transition out.

Senator McCARTHY: You say that a team in the department is supporting RIC. How many are in that team?

Mr Hutchison : I think there are about 26 FTEs in that team at the moment.

Senator McCARTHY: Where are they located?

Mr Hutchison : They are located within the Farm Support Division here in Canberra.

Senator McCARTHY: Has the RIC commenced advertising for positions in Orange?

Mr Hutchison : No, Senator.

Senator McCARTHY: Are there any department staff on the ground in Orange now?

Mr Hutchison : No, Senator.

Senator McCARTHY: So the 26 are located here in Canberra and are doing the work from Canberra at the moment?

Mr Hutchison : Yes, they are located within our Farm Support Division, which is within the Canberra office.

Senator McCARTHY: Have departmental officials travelled to Orange at all to assist with the set-up of RIC?

Mr Hutchison : Yes, since the RIC was announced back in May 2016 there have been several visits to Orange. In May 2017 the then Deputy Prime Minister announced the government's intention for the RIC to be established in Orange. Since then there have been visits to Orange to work with relevant stakeholders there around property options. So, yes, trips have occurred by the department to prepare information for the RIC board.

Senator McCARTHY: Those trips by departmental staff—were they in May or have they been in other months as well?

Mr Hutchison : I would have to take on notice specifically when those trips have occurred. I will probably try to find that information for you today. I think we have travelled to Orange as recently as this month to assist the board with some of its arrangements in Orange, but there is no-one on the ground in Orange in that capacity at the moment.

Senator McCARTHY: Can you provide to the committee the dates on which departmental staff have gone to Orange and how many departmental staff have gone?

Mr Hutchison : I can certainly provide the dates. In terms of numbers, I would need to confirm that and I would definitely need to take that on notice.

Senator McCARTHY: Is it of concern that we are almost at the end of May, the RIC has no CEO or staff and it is meant to be functioning by 1 July?

Mr Hutchison : The board has been in place now for some five or six weeks, and it is working I think quite rapidly to establish the organisation by 1 July. My understanding is that it is intent on meeting that commitment. I do not have any particular concerns. The time frames for the appointment of the acting CEO, as I said, are a matter for the government and the board, and that process is in train. But from there on it is a matter for the board and the appointed CEO to get on with the decisions that need to be taken.

Senator McCARTHY: Just with your 26 staff, are they going to continue working with the RIC if there are no staff and it is not functioning by 1 July?

Mr Hutchison : We have certainly explored arrangements which would allow our staff to be seconded to the RIC to continue to assist them beyond 1 July while their workforce is established. That is something we have contemplated, and we have arrangements in place ready to enact if required.

Senator McCARTHY: How long is that secondment being arranged for?

Mr Hutchison : It has not been arranged yet. In some terms it could be as long as necessary while the RIC gets its staff on board. We would envisage that, given it is the middle of May, that will probably need to occur beyond 1 July. But for how long that occurs is a bit of an unknown at this point, because it will depend on how quickly the recruitment processes for the RIC occur, and that will be a matter for the board and the CEO.

Senator McCARTHY: Does it impact on other operations within the department if it looks like those 26 staff have to continue being seconded beyond 1 July?

Mr Hutchison : No, it is something that we are aware of and it is something that we would factor into our decision-making. The work we have been doing for a couple of years on the RIC has been part of the Farm Support Division's core business for the last couple of years. I think we are well placed to continue that.

Senator McCARTHY: Has the RIC finalised the REOI for delivery of Farm Business Concessional Loans?

Mr Hutchison : No, that is still a process that is ongoing, with the board as the decision-maker on that expression of interest process.

Senator McCARTHY: On 12 February 2018 the department released an REOI for the loan assessment and management services for the delivery of Farm Business Concessional Loans for the Regional Investment Corporation. Why has there been no movement there?

Mr Hutchison : The process is ongoing. It is a significant procurement process. Under the Commonwealth Procurement Rules I will be limited in the amount of detail about procurement processes that I can discuss, given the commercial sensitivities within. But it is an ongoing process. There was a first stage that the department completed to test the market and get an indication from the market about who might be placed to provide that sort of service to the Regional Investment Corporation. The board did ask us to commence a second stage with shortlisted applicants to get some further information from them to assist them with their decision-making process. But I would not characterise it as there being no progress. It is ongoing, but, given it is a commercially sensitive procurement, there has not been a lot of public information around it.

Senator McCARTHY: Has the RIC operating mandate been finalised?

Mr Hutchison : No, Senator.

Senator McCARTHY: Why not?

Mr Hutchison : The operating mandate is a matter for the responsible ministers to issue to the RIC. That will be tabled in parliament in due course.

Senator McCARTHY: So you do not have a time frame? You say 'in due course'. Is there an expected time frame in relation to that?

Mr Hutchison : Practically speaking, it is probably reasonable to assume that the operating mandate would be in place by 1 July for the start date. But, again, that is a matter for responsible ministers. The mandate is a requirement in the legislation, so it will occur and it will be tabled. That is a matter for the responsible ministers.

Senator McCARTHY: Has work commenced on developing rules for the farm business loans?

Mr Hutchison : There are no rules per se in terms of the definition in the act. The work that is ongoing and will be a matter for the board is the issuing of program guidelines around that. The act sets out clearly that there will be a farm business loan program with the level of detail in the act. I would expect that the operating mandate would also go to things like high-level eligibility criteria that the board would want to take into account when establishing its guidelines. The board will be required to finalise its guidelines with the government through its usual approval processes, but they will be released as well in due course in time for a 1 July start-up, I would expect.

Senator McCARTHY: I will just go back to your departmental staff. In terms of possible secondment beyond July, will those staff members need to be based in Orange?

Mr Hutchison : That is not my expectation. We can continue to provide support to the RIC from the Canberra office. Obviously, the RIC has announced that it will establish itself in Orange. I would expect the board and the CEO to take recruitment decisions around that and establish their own workforce in Orange in good time.

Senator McCARTHY: Thank you.

Senator CAROL BROWN: I just want to turn to the national drought agreement. Can the department provide updated information about the drought reform process—how is it being managed, which stakeholders have been part of the review, when the department expects the new agreement to be signed and whether current measures are adequate for farmers currently facing protracted drought conditions?

Ms Cully : My group has been leading from the Commonwealth's perspective in relation to the Intergovernmental Agreement on National Drought Program Reform. We canvassed at last estimates the review process that we had done. It included consultation with over 70 industry stakeholders. Some of those provided written submissions. Of the 70, 14 provided formal submissions. But there were additional informal consultations undertaken by not only the Commonwealth, with the National Farmers' Federation, but also by the states and territories as part of their input into the review process. The review has now been published on the department's website and contains a range of findings, including one which stands out to me about the importance of preparedness as a drought policy setting and objective going forward. You asked about next steps.

Senator CAROL BROWN: Just before you go on, you said that 70 stakeholders have been consulted?

Ms Cully : That is correct.

Senator CAROL BROWN: And there are a number of formal submissions. Can I have a list of those 70 stakeholders?

Ms Cully : Yes, you can. It would probably be easier to table them or take them on notice rather than read them into the record.

Senator CAROL BROWN: Yes, that is fine. How were they consulted? You have the 14 written submissions. How did they pass their view—how did that work?

Ms Cully : In a previous role Mr Hutchison wrote to those 70 stakeholders setting out the review and asking for particular feedback from them. As a result of that approach it offered all parties the opportunity to make written submissions. The parties that took up the opportunity to make the written submissions comprised the 14 that I referred to earlier.

Senator CAROL BROWN: There were no other comments? It was only those written submissions that were looked at in terms of the formation of the review?

Ms Cully : No, I would say that the written submissions are a formal conveyance of positions that came from stakeholders. In addition to that, we and our state and territory counterparts regularly meet with a range of stakeholders. In pretty much every meeting that I can remember with our stakeholders it has been a standing item. For example, when I have met with the NFF on numerous occasions it has been a standing item. So we have taken verbal feedback as well as those written submissions.

Senator CAROL BROWN: That is what I was asking. So, through that process with the 70 stakeholders, that verbal submission was fed into the review process?

Ms Cully : That is correct.

Senator CAROL BROWN: You were going to tell me when we can expect the new agreement to be signed—hopefully you were going to tell me.

Ms Cully : Agriculture ministers at their last meeting agreed to extend the current agreement until such time as it is replaced. That is an important policy step, because it means we have stability in terms of the climatic conditions you referred to in your earlier question. In terms of the timing of that, we are working as quickly as we can with the states and territories to draft and produce a new agreement that will be acceptable to all of us and maintain the hard-fought progress of the current drought agreement. So I cannot be drawn on a time frame, but operationally we are working to 'as soon as possible'. That could be as soon as before the end of this financial year, but if it takes a little more time to make sure that the agreement is robust and appropriate for the future then that is something that we will factor into our advice to government.

Senator CAROL BROWN: Did you receive any feedback about the decision to extend the current one and not sign off on the—

Ms Cully : No, Senator.

Mr Quinlivan : I think my recollection from the discussion with the ministers was that the expectation on the part of the stakeholders was that there would be continuity of the existing agreement, and the ministers I think were all of a mind to have the new agreement in place as soon as possible. So I do not think there are any surprises.

Senator CAROL BROWN: I was not really suggesting that. I just wanted to know whether you received any feedback after the decision by the ag ministers' meeting. With the list of the 70 stakeholders that were consulted, do you have the list there of the 14 that actually provided the formal submissions?

Ms Cully : Yes, I do.

Senator CAROL BROWN: Can we have that list now?

Ms Cully : The list appears in the review that is published on our website. I will just locate it for you.

Senator CAROL BROWN: Are the written submissions on the website?

Ms Cully : No, they are not. But extracts of the written submissions form part of the review report. So some quite neat summaries of not only the stakeholders that were consulted or provided those written submissions but also the nub of the feedback that they provided are in that review report.

Senator CAROL BROWN: Are the full written submissions available?

Ms Cully : No, the full written submissions are not available, but the bodies that provided them I am sure may make them available upon request.

Senator CAROL BROWN: Why aren't they available? Why can't you give them to me?

Ms Cully : They were provided in terms of input into the review, not on the understanding that they would be made public, the reason being that we would encourage frank feedback and sometimes public submissions may not necessarily allow for that.

Senator CAROL BROWN: They were advertised as being confidential submissions?

CHAIR: Ms Cully, I think probably just in the next—we may have to contemplate that. You may have to take some advice. My initial reaction is that, if the senator wants it taken on notice to supply them, you would really have to supply them.

Mr Quinlivan : Perhaps what we could do is contact the 14 submitters, let them know that you would like to have the submissions and say that it is our intention to produce them unless they have a strong reason not to. If they have a strong reason not to then we would discuss with you before we provided them. We do not have any reason to believe that they would want to protect these things, but I think as a courtesy we could check first.

Senator CAROL BROWN: That is fine, but was it advertised that they would be confidential submissions?

Ms Cully : The correspondence was silent on whether they would be made public—only that they would be informing the review. I do not anticipate that stakeholders would have a problem.

CHAIR: Within your memory, Ms Cully, do you have submissions where they did ask that you take them in confidence?

Ms Cully : No, they did not. They were silent.

CHAIR: I think the suggestion of the secretary is a sound one. Are you okay with that, Senator?

Senator CAROL BROWN: I am reasonably happy as long as you report back on any that have indicated that they would like it to be confidential. That would be good.

Senator Ruston: Chair, there are two different issues here. One is, obviously, making their submissions available to the committee, which I am sure nobody would have a problem with. The other one is making them publicly available or publishing them in any way. Perhaps the senator may reflect on whether she wishes to see them for her own satisfaction, which obviously could be done under another mechanism, or whether her intention is to use the information in the public domain. I think that needs to be clear before we speak to them.

CHAIR: It is probably a bit hard for Senator Brown to respond to that until she knows what is in the submission.

Senator Ruston: Indeed, but we need to—

CHAIR: The first tranche is for the department to speak to the submitter and say: 'We have had a request to supply to the committee. Do you have any particular objection to that happening?' We are anticipating that there probably will not be. You can tell them that there remains a likelihood and it would be best if the submissions come without any caveat so that, if the senator chooses to publish part or all of the submission, she is able to do that. Let us get through that bit first and then, if there are some that are sensitive, I am sure that Mr Quinlivan will deal with you, Senator Brown, and we can work our way through the issues of those where they want part or all of it to be kept confidential. Does that work for you, Minister?

Senator Ruston: Yes. I was just aware of the fact that this committee does not have the capacity to take anything in confidence. So, if anything is provided in confidence, we would have to go by another means.

CHAIR: And there is the old rule: we have to assume that, even if it is taken in confidence, it will not remain in confidence. Are you okay with those arrangements, Senator Brown?

Senator CAROL BROWN: I am okay with that. But I am sure that the organisations that did submit are pretty much used to how the parliamentary process works. If it was not indicated that they would be confidential then they would probably expect that they would be asked for and could become public. I am happy to go with Mr Quinlivan's suggestion.

CHAIR: Senator Brown, you are far more reasonable than most of your colleagues in the Labor Party. We do appreciate it.

Senator CAROL BROWN: I always find my colleagues very reasonable. The 14—I am just having a look at the—

Ms Cully : I have the list in front of me now. I suspect that we might be looking at the same thing.

Senator CAROL BROWN: Is it 13 or 14?

Ms Cully : It is 14.

Senator CAROL BROWN: Can you read them out to me?

Ms Cully : I definitely have 14.

Senator KETTER: Are they listed at appendix D of the review?

Senator CAROL BROWN: Appendix C or D?

Ms Cully : Yes, they are.

Senator KETTER: I count 13.

Ms Cully : I may have a discrepancy in my figures. I stand corrected. Yes, there are 13.

Senator CAROL BROWN: So it is AgForce Queensland, Australian Bankers' Association, National Farmers' Federation, NSW Farmers, NSW Rural Assistance Authority, NSW Regional Assistance Advisory Committee, Queensland Rural and Industry Development Authority, Rural Business Development Corporation (WA), Rural Business Tasmania (including RFCS Program Committee), Rural Financial Counselling Service—Gippsland (Victoria), Rural Financial Counselling Service—NSW Central Region, Tasmanian Farmers and Graziers Association and the Victorian Farmers' Federation?

Ms Cully : That is correct.

Senator CAROL BROWN: Did you answer all of my questions?

Mr Quinlivan : I think so.

CHAIR: How many answers are there to go?

Senator CAROL BROWN: Is there anything else you would like to tell me, Ms Cully? I think we did talk about whether—

CHAIR: There is only one answer to that, Ms Cully.

Senator CAROL BROWN: That is not going to work, is it? Did you say there were extracts on the website?

Ms Cully : There are no extracts, but there is a summary of the submissions which we have extracted, condensed and put in the review report. So it is not an extract, but it is a summary.

Senator CAROL BROWN: And that is on this website—the site that we are on?

Ms Cully : That is correct.

Senator CAROL BROWN: Did any of the submissions raise concerns about the delivery of drought loans by the RIC?

Ms Cully : I would have to take that on notice to be 100 per cent certain, but my recollection is that that was not raised. I would like to confirm that though.

Senator KETTER: Do you have a view as to whether the current drought measures are considered adequate, bearing in mind the responses you have had to the review?

Ms Cully : The Commonwealth assistance programs as part of our drought policies are extensive. Some highlights are our concessional loans program, which is substantial and remains over time. That will be administered through the RIC from 1 July. The Farm Household Allowance is yet another one of the measures. We have banking and taxation assistance. One of the ones which I think goes particularly to the preparedness that I spoke about earlier is Farm Management Deposits. We continue to see increased holdings in those deposit accounts, which allow farmers to provision for times of bad in the good years. The utilisation of those is going up over time. So I think that suggests that our policy settings as the Commonwealth are appropriate. What I have not gone into are the numerous measures that states and territories have put in place. For example, New South Wales recently announced a drought coordinator position on top of the substantial measures that they already have in place. So I think you have to look at the national drought program and our reform as a collective of actions by the states and territories and by the Commonwealth. I think it is fair to say that the Commonwealth's commitment to drought support is substantial and ongoing.

Senator KETTER: Okay, but, on the basis of the review, can you tell us whether there are any emerging themes as to concerns about the drought measures from stakeholders?

Ms Cully : I would not characterise them as concerns. I would characterise some comments relating to things like ongoing attention to farmer wellbeing and our recognition that climate impacts are increasing over time. If I reflect on the comments, wellbeing was a theme that came out from all of the states and territories and the Commonwealth. We have measures in place, through the health portfolio and also through our Rural Financial Counselling Service, to provide that wraparound support.

Senator KETTER: Were concerns raised in the review about farming families that have exhausted the Farm Household Allowance and are still facing drought conditions?

Ms Cully : I would have to take that on notice. I do not recall them.

CHAIR: I can help you. The answer to that is 'yes'. It is very widespread. The three years is some sort of mandatory cut-off point. We are saying to these people, 'Look, we recognise that for the last three years you have been in conditions that warrant this support for you, but at midnight tonight, or when you wake up tomorrow, we do not recognise your need for this support'. I do not know of any other form of social security—you can enlighten me—that terminates so abruptly without some other change in the circumstances. If I am receiving employment benefits to put bread on my table, there are things that can affect that and my ability to qualify. But, where you have a no-change position—this is critical. I have done nearly four weeks in the bush—Boulia; Bedourie—and I have just gone door to door. The families who are on it and who are coming to the end of it are really beside themselves about where to go. Six years without rain; live cattle job before—I can go through all the drill—and no stock left on the place. Dad is away now trying to get a job somewhere else. I personally believe—anyway, in answer and to support Senator Ketter, there is deep feeling out there amongst those who are going to be affected. Do we have any plans about what we might do with this? It is just like a brick wall. You just come to an abrupt end.

Mr Quinlivan : That is a policy matter for the government.

CHAIR: It will require a change in legislation, won't it?

Mr Quinlivan : It would, yes.

CHAIR: Is it legislation or regulation?

Mr Quinlivan : I am pretty sure it is the primary legislation.

CHAIR: Senator Ketter, you and I can pony up together and we will do something about this, because it definitely needs a visit.

Senator KETTER: Can I just follow up on that. I am concerned that—I accept that it is a policy question, but in answer to my earlier question I would have thought that the issue that the chair has raised would have featured. That is a significant issue. Ms Cully, when you talked about the fact that the feedback you are getting is that you are not considering farmer welfare or the welfare of people, was that code for this particular issue that we are talking about?

Ms Cully : No, it was not.

Senator CAROL BROWN: Given the statement the chair just made and Senator Ketter's questions, it is disappointing that you are unable to at least tell us some of the—whether this was an issue that was raised within the review and you have to take it on notice.

Mr Quinlivan : I think we are saying that it was not raised in any prominent way in the review and it has not been a major part of the conversations with Commonwealth and state ministers on the matter that I have been party to. We probably can give you some numbers to give you an idea of the scale of those who have been in receipt of Farm Household Allowance and those who have reached the stage that the chair was talking about—at the end of the three years. The concept here is that, if you meet the eligibility criteria, you effectively get access to a Newstart equivalent and the assets test is suspended for three years. That is the concept: that the assets test is suspended for three years and then, at the end of the three years, the assets test that applies for everyone else then applies to the recipients of the Farm Household Allowance. That is the concept. Can we provide the numbers?

Ms Svarcas : Yes. We currently have around 2,060 recipients on FHA. As a total since it started, we have had about 7,900 people on FHA. We have around 2,300 people who have exhausted their three years on FHA at the moment.

CHAIR: Just while we are on this point, is my description correct to say that the circumstances have not changed? I get the suspension of their asset test, because they cannot eat or drink that anyway. It is not like other people—it is their primary asset, which is their business. Would you agree that they go to bed on Friday night with their circumstances, and they wake up on Monday morning and their circumstances are still the same?

Ms Svarcas : Our starting point is that farmers coming off FHA are better prepared to engage with either farming or doing something else. FHA, unlike some of the other social security payments, actually is designed to help business improvement activities through a farmer's time on FHA. Also, in the last—

CHAIR: Sorry, that is not my understanding. They go onto this when they are in most desperate circumstances. As I understand it from my interaction with them, this is bread on the table stuff for these people.

Senator KETTER: It is hardship.

CHAIR: Yes. Are you suggesting that, in that period of three years, they have developed themselves now to have some additional capacity? They are incapacitated—many of them—at the time that they reach out for this support.

Ms Svarcas : That is exactly why we have case officers working with them to develop plans and—

CHAIR: Help me to close the gap between Friday night and Monday morning. What have your case officers done that has created a change of environment for these people so that, when they wake up on Monday morning and their support has stopped, they are better off and somehow—I do not know.

Mr Quinlivan : That is not the concept behind the program, really. The idea is that it is a transitional program. People receive support to make decisions about what they want to do at the end of the program. The expectation is not that it changes their circumstances—it is more that it changes their capacity to make a decision, which might be to sell their assets.

Senator KETTER: But if it is still drought declared then their circumstances have not changed.

Mr Quinlivan : I am not saying—the program is not designed to change their circumstances. We are not saying that at all.

CHAIR: No, but are you expecting that one of the options available to them is to sell their drought-affected property that has been destocked for a couple of years? I would not want to be any part of a program that in any way promoted transition off the land as an option for these people. We do not do it to anybody else.

Mr Quinlivan : But that is the program, Senator. That is the concept.

Senator Ruston: I will give a little bit of background to where everything is happening at the moment in discussions with the minister and the minister's office about this particular program. I am advised that this issue has only really come to his attention in very recent times. They are looking at the evidence behind making changes if changes need to be made. They are certainly working very hard with people who are transitioning or coming to the end of the three years of their support and working through ways that individually suit the circumstances of the individual person through their counsellors and the financial counselling service. At the moment they are getting a satisfaction rate of about 85 per cent—that is, people who come up with a satisfactory pathway to move to wherever they want to move at the end of the three years. But they are working with—

CHAIR: By 'move', you do not mean physically leaving the property but moving to some other—

Senator Ruston: Move their circumstances, whether they be—the individual will make a decision as to where they want to go next in their particular circumstances. It is showing that about 85 per cent of people who are coming off farm support are satisfied that the new arrangements about themselves—that they are happy with them.

CHAIR: Do we have any exit interview type data?

Senator Ruston: I do not know about the data.

Ms Svarcas : Yes. We have been conducting these interviews for those farmers coming off FHA.

CHAIR: It would help us to gauge the minister's—that they are satisfied that they are going to a better place or better circumstances.

Senator Ruston: Needless to say, 15 per cent of people who still require further assistance is a significant number and it is not to be diminished. So the minister's office is working through, obviously with the assistance of the agency that is collecting it and the Rural Financial Counselling Service, to try to get a body of evidence behind making a decision about what would be an appropriate thing to do from here.

CHAIR: This might help to settle me. Can you take on notice to provide the committee with the exit interviews—I am happy for you to block out anything that might identify the individuals—just so that we can get a feel for the tenor of their satisfaction?

Ms Cully : We can take that on notice with that in mind. Ms Svarcas has some aggregated figures which she could go through if that is of assistance.

CHAIR: No, I want to see a bit of interactive language, where Fred said, 'Thank you for all you have done for me; my wife and I have decided now that we are going to take a job in town', or whatever it happens to be. That is what I am looking for.

Senator KETTER: Chair, I think it might be good to have both sets of information.

CHAIR: Certainly the aggregated stuff would be useful as well. Do you have that at your disposal now?

Ms Svarcas : I have the aggregated figures with me now.

CHAIR: I think they would be useful if you are able to provide that.

Ms Svarcas : Would you like me to go through them now?

Senator KETTER: Yes, please.

Ms Svarcas : So 89 per cent of the FHA recipients who responded to the survey felt that the FHA had improved their current financial circumstances; 90 per cent felt that the FHA had improved their financial position over the next 12 to 24 months; 81 per cent felt that the FHA had improved their circumstances for long term—so two years and over; 77 per cent felt positive or very positive about their future after their time on the FHA; and about 45 per cent expect that developing skills and business models would be the most relevant thing for improving their future circumstance. That comes back to the mutual obligation activities that the farmers undertake while they are on the FHA. About 52 per cent expect to stay on the farm with greater farm income and/or less debt. About 13 per cent said they expected to stay on the farm with no substantial changes after their time on the FHA.

Senator KETTER: That last one is a concerning figure, isn't it?

Ms Svarcas : That was the 13 per cent?

Senator KETTER: Yes.

Senator Ruston: You need to combine the 13 per cent with the previous 52 per cent though. You need to be a little careful that you are not extrapolating something out of the information you have just been given that is not quite right, because I would have thought that that was not in isolation necessarily a statistic to be concerned about. It may be concerning, but I do not think that in isolation it necessarily is.

CHAIR: As much as it is not a figure that I would like, I try to separate the two. I am interested in those who make a decision to leave the farm, if you like, because they think there is no other pathway and no other decision they can make as a result of coming towards the end of the Farm Household Allowance support. I do not think that plays meaningfully into the viability of being able to—in the longer term, if you have significant debt, the Farm Household Allowance is not going to make a hell of a difference as to whether you can service it and maintain it. I am just interested that it does not feed into them feeling a sense of hopelessness—'If only I could keep bread on the table, I could persist'—and they make a decision that the only thing available to them is to leave the property.

Senator KETTER: Just going back to the 2,300 farmers, do you have a state breakdown of that?

Ms Svarcas : I do not think I have that with me. I would be happy to take that on notice.

Senator KETTER: Would I be right in assuming that the 2,300 farmers either have exhausted the FHA payment and are transitioning out or are no longer in hardship? Is that the case?

Ms Svarcas : Other than repeating the extrapolated figures that I have around how the farmer has ended their time on the FHA, I do not have any other evidence. But they are all at the end of their three years.

Senator KETTER: Of the stakeholder consultation submissions that you have had, are you saying that AgForce Queensland and the National Farmers' Federation did not raise this issue that we have been discussing?

Ms Cully : No, I am not saying that. I am just saying that I need to re-familiarise myself with their submissions. The review was completed some time ago and I am quite focused on the new IGA at the moment. So I just want to double-check. I would be surprised if they did not mention the FHA, because the feedback that was provided was on a range of Commonwealth programs.

Senator KETTER: Can we get a copy of that survey that you were talking about?

Ms Svarcas : The exit survey?

Senator KETTER: Yes.

CHAIR: We have asked for more than that. We have asked for the actual body of work.

Senator KETTER: And the responses—that is right.

Senator CAROL BROWN: Ms Cully, you talked about a summary. Where can we find the summary?

Ms Cully : The summary is in the body of the report in the stakeholders section after the state and territory feedback on the review.

Senator CAROL BROWN: Does the summary mention the farm household assistance program?

Ms Cully : I can check that and come back to the committee.

Senator CAROL BROWN: The financial hardship program—we do not know if it is in the summary either? We will have a look at it. We have run out of time, so—

CHAIR: I am really interested in the mutual obligation arrangements that you are looking at, because, as you know, I have submitted and had meetings with the department to lay down a very similar proposal which has just come out of being costed by the Parliamentary Budget Office. I hope to be in a position to share it now in its final form. I met with AgForce early in the week and both they and the NFF are keen to have input into this root-and-branch policy proposal that I have. But, with the mutual obligation, have you visited upon the fact—this is something I favour. Let us just talk about beef and sheep producers, if you like, for the minute. In the future, pastoralists—it ought to almost be a prequalification on their part before they are able to access future assistance from the Commonwealth or from whatever pathway it comes. Have you thought about that? My point is this: I tell the story—and I think Mr Quinlivan has heard it—about the old fellow at Longreach who said to me, 'I lost 372 head of cattle to this drought'. I said to him, 'Fred, you are not going to be happy with my response to that, but the drought cannot kill your cattle. Only you can kill your cattle. You can keep them until they have nothing to eat or drink or they are too weak to be transported somewhere else'. Fred and Betty—and it is not Fred and Betty, for the public record—are very decent people. They are the second generation on the land. He was born to this place. They are working under practices that—perhaps he should have adopted a different approach to life a lot sooner. Eventually, because of, I suppose, literacy issues around the management of their property, financial literacy and market literacy, they have found themselves in a bad place. They are not bad people—they have just found themselves in a bad place. I am asking whether you are considering this. Before you come along and knock on the door of the transport department and say, 'I am ready to take a driver's licence test—will you help me with this so I will be able to drive on the road', you have to have done a whole series of things. Are you considering that they need to prequalify before they come and get federal assistance? Is that part of your mutual obligation?

Ms Svarcas : The current mutual obligations are in two forms. There is the Farm Financial Assessment, which is an assessment of the financial position of the farm. It helps to develop options to improve their overall financial position. Also, there is the Financial Improvement Agreement. That outlines the goals that the farmer is trying to achieve for themselves and the farm.

CHAIR: But don't you think that we have the chicken before the egg here? Don't you think that at some stage, when it is all raining and the grass is up to their armpits—and I am their champion, I promise you; I live and breathe the best interests of this sector—they ought to be encouraged to say to themselves, 'Well, in three or four years or five years' time, when it is really dry, I might have to go and knock on Mr Quinlivan's door and get him to give me a quid' and that we make them prequalify? It becomes an incentive for them to do it. I have problems with the farm deposits scheme. Well, I do not have problems with the farm deposit scheme, but they get $800,000—I think that is their cap at the moment—and the next thing is they are 500 metres down the road buying another property for the son or the grandson in the same drought zone. It exacerbates their position when they get to tough times. So these are not sensible financial decisions on their part. They are not trying to mitigate their circumstances or make any prudential provision—not because they are bad people but through this ignorance. So shouldn't we create a scheme where they are encouraged—or where it is almost mandated, if you like—to get up to a particular standard to look after themselves for a lot longer and requiring less of our assistance?

Mr Quinlivan : I think the basic concept behind the set of drought measures now at a Commonwealth and state level is improved preparedness, which is exactly the theme that you are talking about here.

CHAIR: Except that I am mandating it. You are talking about—

Mr Quinlivan : You are. You are taking it quite a step further. We are settling a new agreement. Now is the time for policy changes. So if you have your proposition—

CHAIR: I should get my material to you a lot quicker.

Mr Quinlivan : You should, and now would be the time for the government to consider it, because it is likely that we will have settled the new set of arrangements with the states in the next three months, probably. The time is right.

CHAIR: Thank you for that.

Senator BROCKMAN: I think the Farm Household Allowance has been covered in great detail. I have just a couple of quick questions. Do you have the average length of time that farming families have stayed on the Farm Household Allowance?

Ms Svarcas : I do not have that.

Senator BROCKMAN: Is it in blocks? Do you go on it for a year, two years or three years or can you be on it for 12 weeks?

Ms Svarcas : The design of the program is to allow farmers to come on and off it for a total of three years throughout their lifetime when and if they need it. I do not have the numbers on the average time on the FHA.

Senator BROCKMAN: Can you provide that on notice? Can you also—I do not want to put you to too much effort in this regard, but can you give some sense of how many farming families are actually going on and off multiple times since the FHA has been in existence?

Ms Svarcas : I am happy to take that on notice.

Senator BROCKMAN: Can you give us some sense of whether farmers are just tending to go on and stay on—and, obviously, we now have 2,300-odd farmers who have exhausted their three years—or whether farmers are using it, I guess, in the way it was originally intended, which was that they would go on when they needed it and come off as soon as they did not and whether there is anything that can be looked at in a policy sense there? Any information you can give me on that—I accept that that might be difficult to do—but certainly at least the average duration for those who have been on it would be handy.

Ms Svarcas : As I said before, we have had about 7,900 recipients granted on the FHA, so there is at least that 5,000 that have come on and off if you just subtract the numbers. But we will look into it for you.

Senator BROCKMAN: Unlike the concessional loans, where there was actually an issue with state government, with the Farm House Allowance, the reason that the uptake in Western Australia has been relatively low has been purely seasonal?

Ms Svarcas : We understand that is the case.

Senator BROCKMAN: Obviously, that is why the majority has been in Queensland and New South Wales?

Ms Svarcas : Yes.

CHAIR: Although state by state I understand—hence the RIC eventually—that the states were administering this differently. Often the framework was different from state to state. I have reports that in some instances people got into a situation—and they should not have—where they started to self-assess because of what they thought were the obstacles to accessing this. Hence they did not make applications in the first place. Did you get feedback on that?

Ms Svarcas : Farm Household Allowance is a Commonwealth program delivered by the department of—

CHAIR: No, he is not talking about Farm Household Allowance.

Senator BROCKMAN: I was.

CHAIR: Were you? I am sorry—I thought you were talking about the concessional loans.

Senator BROCKMAN: No, I have not moved onto that yet.

CHAIR: You used the words 'concessional loans' somewhere in there. But I will wait till you get there.

Senator BROCKMAN: I did reference it, but the burden of the question, to use your language, was not there.

CHAIR: There we are. Fortunately, we are using up our time and no-one else's.

Senator BROCKMAN: Is there any post-assistance assessment of the farm viability? Have we looked and seen whether the provision of Farm Household Allowance has actually improved this? I understand that we have done the survey. But is there any actual hard data—and I know that you could not analyse everybody—that looks at whether it has actually, on the ground, improved the viability of farming operations?

Ms Svarcas : We do not have any hard data in that regard. But an important component of the Commonwealth's assistance to farmers in hardship is the Rural Financial Counselling Service. The Rural Financial Counselling Service works very closely with farmers to help them to analyse their financial situation and to provide them with information in order for them to make business decisions. So the RFCS does actually work with farmers and gather the financial situation of the farms. Only through that service would we have that sort of information. But there is nothing that is easily mined in terms of information.

Senator COLBECK: And that is a service that will continue—

Ms Svarcas : Absolutely.

Senator COLBECK: for farm households?

Ms Svarcas : Farmers can access the RFCS at any time.

Senator BROCKMAN: Where does the three years or 1,000 days of—does that attach to the business, to the property or to the individual? If a farmer is going through generational transition, does the 1,000 days reset? Where does the 1,000-day limit lie?

Ms Svarcas : The 1,095-day limit applies to the farmer. It is also applicable to their partners, for example. So it is available more broadly.

Senator BROCKMAN: So I guess the reset button would only be pressed if the farm was passed to another generation or a whole new farm business entity entered the scene?

Ms Svarcas : It is attached to the individual, like a normal social security payment.

Senator BROCKMAN: The three years is entrenched in legislation, I take it?

Ms Svarcas : That is correct.

Senator BROCKMAN: So that is set in stone. I will move on to the RIC and the Farm Business Concessional Loans Scheme. In terms of the RIC, when did the legislation actually pass the Senate?

Mr Hutchison : The legislation passed on 6 February this year.

Senator BROCKMAN: Okay, so that is really when the clock started ticking in terms of you being able to—the board being able to be put in place—

Mr Hutchison : Yes, and since that time the board has been appointed by the government.

Senator BROCKMAN: There are four board members currently in place. Is that the full board or is there—

Mr Hutchison : There is provision in the act for up to five board members, but four have been appointed to date.

Senator BROCKMAN: So there could be a fifth one appointed?

Mr Hutchison : That would be a matter for the government.

Senator BROCKMAN: But the board is up and running?

Mr Hutchison : That is correct, Senator.

Senator BROCKMAN: On the Farm Business Concessional Loans Scheme and the difference between the way that operated and the RIC, particularly in relation to Western Australia, no Western Australian farmers have access to the farm business concessional loans. Is that correct?

Ms Cully : In the current financial year, that is correct.

Senator BROCKMAN: When did they lose access?

Ms Cully : The negotiations for this year were unsuccessful. My recollection is that the previous year they were available.

Senator BROCKMAN: So farm business concessional loans were removed or access was lost due to the failure of negotiations. Why did the negotiations fail?

Ms Cully : In brief summary, to make the loans program available within a state there needs to be agreement on the terms of the loans consistent with the guidelines that apply nationally for the Farm Business Concessional Loans Scheme. That agreement was unable to be reached. A number of issues were raised by Western Australia relating to the duration of the loan time and the sorts of circumstances where a loan would be required. So, potentially, they were talking about wanting frost and parameters outside of the scheme, which the national guidelines provide. So there was a series of correspondence and attempts to reach agreement on the scheme, making those loans available in Western Australia—

Senator BROCKMAN: So the Commonwealth could reach agreement with all of the other states and they signed on—Liberal and Labor—but the state government in Western Australia would not sign on?

Ms Cully : That is correct.

CHAIR: Shame on them.

Senator BROCKMAN: So Western Australian farmers have no access to farm business concessional loans for that 12-month period?

Ms Cully : That is correct.

Senator BROCKMAN: In terms of the RIC, how does that change the access to the concessional loans?

Mr Hutchison : The Regional Investment Corporation from 1 July will be the national administrator. So there will not be the requirement for the Australian government to negotiate arrangements with the state and Northern Territory governments to make access available. Once the RIC is up and running the loans will be available nationally. It is one of the advantages of streamlining the access—the Australian government has more direct control over the availability of its loan products.

Senator BROCKMAN: Has the department looked at a question that was raised with me at a previous time with the Pastoralists and Graziers Association—that Western Australia never got reasonable access to the exceptional circumstances arrangements as they were back then because of the different structures of Western Australian farms? They tended to be larger operations, so they tended to not meet certain thresholds. We have the same variability of climate as anywhere else. We certainly have droughts. But we did not seem to have the uptake of or access to previous drought relief measures as other states. Has that been looked at by the Commonwealth government in relation to the provision of services by the RIC?

Mr Hutchison : Not specifically in terms of the RIC. The eligibility criteria for loans that are currently available under the state and territory delivery model will underpin some similar eligibility criteria. I cannot speak for what the RIC board or the RIC organisation might look at itself now that it is established, but I suppose the structure of Western Australian business from my recollection has not been a particular feature of the analysis or something that we have been working on to date. It has more been around the availability of the loans nationally. I understand that some similar business structures in terms of size might also apply to the Northern Territory and to some of the northern pastoral businesses in Queensland as well. So it might not be confined to WA.

Senator BROCKMAN: It might be an artefact of history in terms of WA's interaction with exceptional circumstances, but it certainly was something that was very much front of mind during the bad droughts in the mid-2000s. So it might be something that should be watched at least to see if various arrangements, thresholds and requirements are not limiting access, particularly for growers in Western Australia.

Mr Quinlivan : That is one of the key policy points here. For whatever reason the exceptional circumstances arrangements were not really considered fair because, if you happened to be on one side of the line rather than on the other, you missed out even though your circumstances on the face of it were equivalent and there were differences across—there were geographical differences as well. So I think there was a pretty well universal view that the exceptional circumstances model was not fair because the nature of the exception could not really be fairly measured objectively, hence the movement to hardship, which is a test applied universally, and business tests are both fairer and more relevant to individual circumstances.

Senator BROCKMAN: I will use Western Australia again. There was a group of people who had farm business concessional loans let us say 18 months ago. It was a fairly small group, as I understand it. What happens to those when the RIC takes effect? Do those move on to effectively the loan book of the RIC or do they stay with the state governments?

Mr Hutchison : The arrangement we have with the states and the Northern Territory at the moment is that they will continue to manage the loans they have made under the current and previous schemes to date. The Regional Investment Corporation will take on the administration of the new loans from 1 July this year. So there is not a novation or a transfer of the administration of the existing loans to the RIC. Those arrangements that we have established with the states include the administrative costs that we paid them to manage the loans over their life, so that is a contractual arrangement we have with our delivery agents.

Senator BROCKMAN: Will RIC have access to the information about those loans that are currently in existence though? I would have thought that would be reasonably important.

Mr Hutchison : The RIC, I suppose, through our relationships with the delivery agencies, will be able to understand how many loans are available. We know that one of the policy parameters that the government has set for the RIC is that it will not preclude farmers who have a loan with a state delivery agency from, say, refinancing or deciding of their own volition to bring their business across to the RIC. In those circumstances, the RIC would have access to the required information it would need to assess the eligibility, so it would work with the state agency as it would with a commercial lender if it were assessing a farm business's circumstances and assessing an application.

Senator BROCKMAN: Obviously, that is partly going to depend on the settings that the RIC puts in place. But do we have any sense of—would there be an advantage to refinancing through the RIC?

Mr Hutchison : That would be a commercial decision for the farmer and not one I could speculate on now. The eligibility criteria will not be identical. The RIC will offer from 1 July a different suite of loan products from the ones we deliver through the states now. So we are not comparing like for like necessarily. The eligibility criteria are a matter for the RIC to settle with the government, and those criteria will be published through guidelines. But ultimately it would be a decision for a farmer as to whether they want to refinance with the RIC and could come down to the concessional term of their loan. Once the eligibility criteria and I suppose the loan parameters of the RIC are known, that would then be a decision for the farmer—for the farm business, I am sorry.

Senator BROCKMAN: Do we have any stats or do we know—do you have transparency on how many loans are currently in existence in each state?

Mr Hutchison : Yes, we do have that information about the number of loans on foot in each state and the Northern Territory.

Senator BROCKMAN: Is that publicly available information?

Ms Cully : No, it is not publicly available information, but we could provide it on notice.

Senator BROCKMAN: Yes, if you could please. Again, that skews to Queensland and New South Wales?

Ms Cully : Queensland, New South Wales and Victoria.

Senator BROCKMAN: I guess this is probably not the right place to ask this, but do we have a sense of how much of the eastern seaboard is in an ongoing drought situation?

Ms Cully : We have some tools which assist us to understand. Essentially, that is the Bureau of Meteorology's Australian Rainfall Deficiency Analyser. That tells us, on a map, where areas that are experiencing a one in 20 or fifth percentile rainfall deficiency are located. I have a map that is able to be provided that outlines those areas. Essentially, they are where you would expect—south-west and western Queensland, increasing in New South Wales, the south-east of Victoria, some patches along the Western Australian coastline and the north-eastern tip of Tasmania.

Senator BROCKMAN: Is that publicly available?

Ms Cully : It is publicly available—that is correct.

Mr Quinlivan : We can table this map of Australia which sets all of this out if you like.

Senator BROCKMAN: No, if it is publicly available then I am perfectly happy with that. Thank you.

Senator COLBECK: I have just a couple of quick follow-ons from that. I am just interested if there are any people on FHA in Tasmania at the moment. It is pretty dry in the south-east. I would not mind seeing the map, actually, if you have it.

CHAIR: But it rains every day in Tasmania, Senator.

Senator COLBECK: You wish. So do my growers on the south-east corner on the east coast. It is bloody dry.

Mr Quinlivan : I think a fair bit of the east coast of Tasmania is—

Senator COLBECK: A fair bit of the east coast is very dry. Queenslanders do not understand this stuff.

Ms Svarcas : We currently have 61 farmers in Tasmania on FHA.

Senator COLBECK: Whereabouts are they through the cycle on that?

Ms Svarcas : That I do not have.

Senator COLBECK: Okay. You talked before about the mutual obligation requirements and the work that they do during their three-year cycle on Farm Household Allowance. Who are the providers for those services? Is it their case managers who are working with them or are there other providers such as the Rural Financial Counselling Service that come in and provide that additional assistance that prepares them over those three years? Who are the providers in that space?

Ms Svarcas : Both, Senator. There are FHA case officers that are officials from the Department of Human Services who help them through the process. Throughout their time on FHA, farmers can access up to 13 one-on-one case management discussions with their case officers. That is backed in by the Rural Financial Counselling Service. They can talk to their rural financial counsellor at any time that they need while they are on and outside of the FHA process.

Senator COLBECK: Are there any other provision elements that provide them with some resources to go and access other services?

Ms Svarcas : Yes there are. Farmers are—there is $4,000 in activity supplements in addition to the FHA that farmers can access to help them through their time on FHA, and $1,000 of that is specifically dedicated to that last year so that they can undertake activities in the last year of FHA.

Senator COLBECK: Are they free to choose the providers or are they directed to certain—

Ms Svarcas : It is part of their agreement with their case officer.

Senator COLBECK: Okay, so that is developed as part of their overall program that they work on?

Ms Svarcas : Exactly.

Senator COLBECK: You might have to take this on notice. I am not sure whether you can provide anything. How many go on to other assistance programs at the end of it? About 13 per cent or 15 per cent are in difficulty. How many of those will go on to some other sort of support program? Do you have any sense of that?

Ms Svarcas : No. The other support programs are managed by social services—the human services department, so it is—

Senator COLBECK: We do not have any visibility of that and do not track it?

Ms Svarcas : No, Senator.

Senator COLBECK: I want to go back to the existing concessional loan program. My recollection was that it was a low-interest loan for a period of time—five years. Is that right?

Ms Svarcas : Ten years.

Senator COLBECK: Okay. We have not got to the stage where we are cycling to the end of many of those loans at this stage yet—where they say, 'We must be getting close'?

Ms Cully : We are getting closer. The first generation of farm loans-the farm finance loans—will reach maturity in October of this year.

Senator COLBECK: So how are those who have been recipients and on that additional support—if we are getting to October, you sort of have to be looking pretty closely at how you manage the transition off that support. What is our understanding and learnings from that at this point in the cycle?

Ms Cully : We have regular correspondence with our state delivery agencies on these loans as they are coming to and reaching maturity. At the moment we do not hold any concerns and there has been no impairment recorded. That suggests that the loan amounts or the debt is being serviced and will be paid out when those loans reach maturity.

Senator COLBECK: But servicing the debt and then paying out the loan are two very different things. Some of them are reasonable amounts of money. Obviously we are having conversations about that.

Ms Cully : Yes.

Senator COLBECK: But, in circumstances that Senator O'Sullivan and Senator Brockman have talked about, and even—I am not sure how many there are in my home state at the moment. But, if conditions are bad, that creates its own issues when you are talking about financing or refinancing.

Ms Cully : That is correct. It is one of the reasons that we are in really close contact with our state delivery agencies on those loans.

Senator COLBECK: At this point there are no issues that have been raised around the potential management of that?

Ms Cully : That is correct.

Senator COLBECK: But we will probably have a better sense of that towards the end of this year?

Ms Cully : We will.

Senator COLBECK: Given October is when they start cycling through?

Ms Cully : That is correct.

Senator COLBECK: Okay.

CHAIR: Would it be fair to say that the circumstances of some of those people have improved?

Senator COLBECK: You would hope so.

CHAIR: I can relate geographically as I look at this plan. There are parts of my state now that are not drought affected and where they report to me that their fortunes have shifted a bit. So, assuming that the property asset has not deteriorated and there is upward pressure still in the marketplace there, as long as they do not offend an LVR principle they can transition back to a commercial lender at the end of their term with the Commonwealth? There is nothing that prevents that from happening, is there?

Mr Quinlivan : No.

CHAIR: So, for those in better circumstances, albeit that they are not restored to full capacity, they will have the ability to deal with a commercial lender outside of the government to restore the $1 million if that is the peak that they have taken?

Mr Quinlivan : That is right.

CHAIR: And we just do not have visibility of that at the moment—we will only know as they get to the hard line at the end of their term?

Ms Cully : That is correct.

CHAIR: All right.

Mr Quinlivan : And I think our general impression is that there are the odd individual cases where the service provider and the commercial banks have some concerns. But it is not a generic—it is not a widespread or generic issue at this stage. I know there are pockets in Queensland where that is not the case—

CHAIR: But theoretically, and particularly for those on the longer-term loans, there comes a point where force majeure—there is not much that the Commonwealth can do anymore and they have had plenty of time to consider transition arrangements if that is what they want to do.

Senator COLBECK: Commercial viability as well in the assessment processes—consideration of commercial viability over a long term was one of the considerations of accessing the loans in the first place, wasn't it?

Ms Cully : That is correct.

CHAIR: It is complicated. Thank you for your work in the area.

Senator KETTER: Firstly, Ms Svarcas, the survey you were referring to before, can we find out when that survey was conducted?

Ms Svarcas : It is an ongoing survey of farmers as they are coming off their quota on FHA.

Senator KETTER: So it is a cumulative—

Ms Svarcas : We commenced the survey at the end of last year as we were getting a majority of end-of-three-year farmers coming off.

Senator KETTER: So it commenced at the end of last year?

Ms Svarcas : That is right, but it is an ongoing survey.

Senator KETTER: So the results—those percentages are cumulative and go up and down depending on when you—

Ms Svarcas : That is correct.

Senator KETTER: Just coming back to the concessional loans issue, I am not sure who made the comment but I think there was a comment about state governments being responsible for delaying the issuing of the loans. Is that correct?

Ms Cully : That was in relation to Western Australia and the inability to reach agreement on the parameters of the Farm Business Concessional Loans Scheme in that state for this current financial year.

Senator KETTER: Correct me if I am wrong, but I understood that the main issue with the concessional loans was the complexity and the issue of the interest rate differential not being sufficient to warrant jeopardising existing relationships with lenders. I also understood that there were issues around the viability criteria. Would that summarise the main issues with the concessional loans?

Ms Cully : If you are referring specifically to Western Australia's concerns, the concerns that they communicated also related to the length of rainfall deficiency, the duration of the loan and the offering of a product after one bad season as opposed to two bad seasons.

Senator KETTER: So the statement about the state government delay only related to Western Australia?

Ms Cully : That is correct. The scheme is open in other jurisdictions except for the ACT.

Senator KETTER: Because some of these underlying issues will continue to be experienced by the RIC, as I understand it, because they are using the same delivery agencies—

Mr Hutchison : No, we will not be using the same delivery agencies as the states and territories. An earlier answer to a question of Senator McCarthy's, I think, was around the service delivery component for the RIC. It is a matter for the RIC to determine how it will determine how it will deliver its farm business loans. It is currently going through a procurement process for that. One of the underpinning reasons to develop and establish the RIC is that it will be a single national administrator. It will give the Commonwealth flexibility and I suppose the direct control over the availability of its loan products across the country. We will not be reliant on negotiations with each individual state and the territories to make the assistance available. So issues like we have experienced with Western Australia should not occur because the RIC will be administering nationally.

Mr Quinlivan : Chair, I think we have an answer to an earlier question from Senator McCarthy if we can give that now.

CHAIR: Yes, let us tidy that up.

Mr Hutchison : Senator McCarthy, you asked a question around departmental visits to Orange. I can advise that, since May 2017, when the government announced that Orange was the intended location for the RIC, we have had five visits detailed as follows. We had a visit of three departmental staff on 6 and 7 June in 2017. We had another visit on 25 August 2017 of three staff. We had a visit on 11 October 2017 of five staff. Six staff travelled to Orange on 18 December 2017, and on 11 May this year four staff travelled to Orange. So it is five in total.

Senator McCARTHY: Thank you very much.

CHAIR: Thank you. We will take a break.

Proceedings suspended from 10:29 to 10:48

CHAIR: We will come back to farm support but we are now going to move freely among the categories that remain.

Senator RICE: I want to go to forestry and the RFAs. Minister, I want to take you to the article that appeared on the ABC on 21 March with the headline 'Ministerial documents reveal Commonwealth concerns about "old science" and "validity" of forest agreements'. It says:

A meeting brief prepared for NSW Lands and Forestry Minister Paul Toole for an August 30, 2017 meeting of Commonwealth forestry ministers in Tasmania reads:

'The Commonwealth is concerned that significantly altering existing RFAs may invite challenges to their validity, in the absence of new—and costly—Comprehensive Regional Assessments.

'Its preference is to extend the existing agreements. It is in both parties' interests to avoid the need to revisit the costly CRA process.'

Similarly, it quotes a later brief ahead of a March 2017 phone call with you, Minister, that says:

'In other jurisdictions, for example Tasmania, there are concerns regarding the assessments that underpin the current RFAs and the validity of this science for extended RFA negotiations.'

Then there is another quote from a brief prepared for Mr Toole:

'Legal uncertainty as to whether the now-quite-old Comprehensive Regional Assessments … that underpin the existing RFAs, remain valid for proposed extensions …'

Minister, I would like to ask you about what the legal and other risks are and some information about the challenges to the validity of the RFAs that have been considered by the Commonwealth.

Senator Ruston: First of all, the comments that you are referring to are from a briefing paper that has come out of New South Wales. I can assure you that we are very mindful of the broad community consultation that needs to sit behind these RFAs. You would have been well aware of the process that was undertaken during the renewal of the RFA in Tasmania. We still absolutely stand behind the validity of RFAs. But, as I have often said to you, they are 20 years old and the process of continuous review and renewal is part of making sure that they are fit for purpose for existing conditions in 2018 and going forward. We have never shied away from the fact that the RFAs needed to be reviewed, refreshed and renewed. The comments that have been put in the briefing note and discussions to which you referred are matters that you probably need to take up with the New South Wales government. But the federal government has never and will never, unless some other information comes to hand—we believe that the RFAs remain a fit-for-purpose tool, accepting the fact that it is a process of adaptive management iteration to make sure that, as time goes past and things change, they remain appropriate in their detail.

Senator RICE: Minister, this New South Wales brief is quoting the Commonwealth and the Commonwealth's concerns. Can you please outline for me the Commonwealth's concerns about the legal risk and legal uncertainty of extending the RFAs?

Senator Ruston: These are quotes from the officials in New South Wales. Certainly in any situation we find ourselves in that is legislative it would be absolutely appropriate for us to minimise or reduce legal risk. That is just part of the process of any piece of legislation, regulation or otherwise, outside of the obvious risks that are associated with anything that is legally challengeable. Quite a significant court process in Victoria, which you are well aware of, is currently underway. That is an action that is been taken against the validity of an RFA by the Leadbeater's possum friends. That is a classic case in point, where we need to make sure that we do a thorough risk assessment about any potential risks. But to think that there is some conspiracy behind this, that we think there is something terribly wrong with the RFAs—nothing could be further from the truth. We will continue to defend the RFAs as a fit-for-purpose tool for managing the small part of the forestry sector that operates within our native forests, and the broader environmental concerns that I know you are very concerned about.

Senator RICE: If there is no overwhelming difficulty, can you please articulate those legal concerns that have been identified by the Commonwealth in relation to extending the RFAs?

Senator Ruston: I will let Ms Lauder give you the specific details, but I urge you not to conflate this into something as a tool with which to continue your attack on RFAs. For the record, if I thought that I could have a sensible and constructive conversation with you about working through RFAs so that we could get the best possible tool, so that we could strike the best possible balance between supporting our very valuable native timber forestry industry and the concerns that you raise about protection of endangered species and the natural landscape, I would be. But I do not believe that there is any purpose in this.

Senator RICE: I would like to get to the nub of my question. I would like to have an outline of the legal and other risks that have been identified by the Commonwealth in relation to extending the RFAs.

Ms Lauder : The meeting that Minister Toole's notes and briefs were related to was a forestry ministers meeting where we were discussing the Tasmanian RFA and the risks associated with the extension of that particular case. As the minister talked about, we did a normal risk assessment and looked to mitigate our risks. Giving the community an opportunity to have a say and comment on the RFA was important, which led to our doing things like additional stakeholder consultation. We had originally done stakeholder consultation on the extension and the review, but it ended up being 18 months before we were getting into the extension, so we did additional consultation to ensure that we gave the community a fair opportunity to comment. It was things like that. It was also looking at what the RFA Act said and, when we were looking at extending the Tasmanian RFA, which clauses were frozen in time because of how the wording of the RFA Act is, versus what could be improved. As you know, we did a lot of consultation and we are looking to make improvements to the RFA and the framework as part of the 20-year rolling extension. There were a lot of what I consider administrative risks that we had to be aware of. So we got a lot of legal advice during the process to ensure that we weren't accidentally changing things that we were not legally able to.

Senator RICE: None of the that seems to go to the quote from Minister Paul Toole's document:

'The Commonwealth is concerned that significantly altering existing RFAs may invite challenges to their validity, in the absence of new—and costly—Comprehensive Regional Assessments.

I, as you know, put in an order for production of documents for the documents associated with those meetings. There were two key documents that were not provided to me, one relating to that assessment of legal and other risks identified in the RFA extension process and the other being lessons learned from the Tasmania RFA extension. Would you be able to table those documents for us?

Ms Lauder : I will need to take legal advice on whether I am able to. I am not sure how much legal advice we are allowed to table. But I am absolutely happy to take that on notice.

Senator RICE: Thank you. But if you take it on notice and then I get told in three months' time that you are not able to table the documents, that is not going to be of much value. You have got those documents there.

Senator Ruston: Senator, I will take on that I will review both of those documents within a matter of days. I suggest that legal advice to government is not necessarily something that we would be making publicly available, but I cannot see that the lessons that have been learned from the Tasmanian RFA is a document that I would have to take advice on as to why there was any public interest immunity. Let me take that on. I have not been through them myself.

Senator RICE: The reason that was given when they were not provided to me is that there was information that would affect Commonwealth-state relations. That is why they were redacted.

Senator Ruston: You are saying that that is why they were redacted. You said that you did not receive the document. You received a redacted—

Senator RICE: I received documents with two key attachments to the minutes of the meeting redacted.

Senator Ruston: Okay. Let me have another look at that.

Senator RICE: And those two documents were redacted because of Commonwealth-state relations. If in fact that is the legal advice you get—that they cannot be tabled because of Commonwealth-state relations—I ask the department to request the state's agreement to disclose those documents.

Senator Ruston: I will certainly take that on board.

Senator RICE: Thank you. I will go back to the Victorian RFA process. With the rollover of the Victorian RFAs, with the two-year extension, Victoria has said that it will use that time to provide time for extensive consultation with scientific bodies, industry and the community to modernise the state's RFA framework and better manage Victoria's forests. What role is the department going to be playing in terms of that process that is going to be undertaken in Victoria over the next two years?

Ms Lauder : We will be working very closely with them. The regional forests agreement cannot be modernised and extended without both the Australian government and the Victorian government being in agreement. We have just recently put on the web a memorandum of understanding that Minister D'Ambrosio and Minister Ruston both signed about the process and how we would be undertaking the long-term extension of the five Victorian RFAs. We will be working closely with Victoria on the consultation with the community and stakeholders, and also looking at the environmental, social and economic impacts and issues with the RFA—and the benefits—and doing an assessment of that analysis of all recent data, reports and new data that's been collected since the CRA. That will be put together. As well, the independent review has recently been completed, so we are considering the findings of that. All of that we will be doing together with the Victorian government to look at improvements to the Victorian RFAs and at extending them.

Senator RICE: Is there going to be a significant exercise undertaken in that two-year period?

Ms Lauder : The Victorian government is going to be doing some additional data collection and assessments. They have recently received some funding through their budget process to help with the modernisation of the RFAs.

Senator RICE: Is there going to be funding from the Commonwealth towards extra science that needs to be done looking at the validity of the RFAs and the ability to continue to just roll them over?

Ms Lauder : We already are doing some work. Both the department of environment and the department of agriculture have been funding some work that is contributing to the RFAs. Whether we contribute further funding for new studies and assessments, we are still considering.

Senator RICE: What extra work do you think needs to be done to ensure that particularly the federally listed endangered species are not pushed further towards extinction—particularly Leadbeater's possums and the greater gliders, which have now become listed as being vulnerable?

Senator Ruston: For a level of perspective about this, I put on the public record that we are very pleased with—I know that a particular favourite of yours is the Leadbeater's possum.

Senator RICE: I am concerned about all forest species.

Senator Ruston: Indeed, but there is a perspective that needs to be put on this. It is something that seems to have been sadly missed in most of the narrative that has been coming out from your side of the trenches. I draw the attention of the committee to a campaign that was being run by an MP in Victoria, Ms Samantha Dunn. She ran a campaign warning that Reflex paper, which is made by one of Gippsland's biggest businesses, one of Victoria 's biggest businesses, Australian Paper—

Senator RICE: Logging Leadbeater's possum habitat—that's right.

Senator Ruston: It says, 'Reflex paper: five dead Leadbeater's possums in every pack'. Let us extrapolate that out, as somebody on her website has done. It says there are around 400 packs of paper that go on a pallet on every truck. A truck carries 12 pallets of paper, with 400 packs of paper in each of those 12. So, if you extrapolate that out, what the Greens are endorsing as a public statement is that 24,000 dead possums are on every truck of Reflex paper that is leaving Australian Paper. I suggest that if that is the truth, which is absolutely ridiculous, either this possum would be totally extinct by now or there are so many of them that we have got 24,000 of them in every truck.

I raise that only because I think it stands to emphasise the fact that we are not putting the facts at the basis of the argument that we are having. The other thing that I would really love the committee to record is the fact that at the moment harvesting of native timber in Australia is 0.06 per cent of the reserves of native stands. That works out that for every 10,000 native trees that are currently standing in Australia in reserve, six are cut down every year—six trees out of 10,000. I think that it is completely and utterly reasonable that we should be working with an industry that is very profitable and supports thousands of jobs in our regional communities, thousands of families and thousands of communities. It is not unreasonable that we should be having a sensible debate about how this industry continues.

Can we please get back to debating the facts instead of this highly emotional rubbish that we are getting, like this Reflex paper activity of your colleague in Victoria. Let us have a conversation about the facts.

Senator COLBECK: Isn't it true that the more surveys they do for the Leadbeater's possum the more they find?

Senator Ruston: Absolutely.

Senator RICE: No.

Senator COLBECK: Isn't that the outcome of the research that is being done?

Senator Ruston: Absolutely.

Senator COLBECK: So it is true. That is what I have read in the research that I have been reading, rather than the propaganda coming from the Greens.

CHAIR: Senator Colbeck, you will be able to come back to this.

Senator CAROL BROWN: I want to go to on-farm reduction in carbon emissions. Can you provide a list of current government programs that provide funding or incentives for on-farm reduction in carbon emissions?

Ms Cully : The largest headline program is the Emissions Reduction Fund—the methods under that which relate to farm forestry.

Senator CAROL BROWN: Are there any other programs or incentives?

Ms Cully : You have asked specifically in terms of carbon. There are others to do with energy, through the Clean Energy Finance Corporation.

Senator CAROL BROWN: I am particularly interested in carbon emissions. That is the only program you administer?

Mr I Thompson : That, I think, is the only program that is directly targeting on-farm carbon emissions for the reduction in carbon. But the National Landcare Program also has a focus on improving soil, and one of the objectives of improving soil management is to improve stores of soil carbon. It is not trying to turn soil carbon into a measure that can go into carbon credits or the like; it is about storing carbon because of its mitigation potential but also because, or largely because, improving soil carbon is important in improving the quality of soil, reducing erosion and maintaining nutrients on the land.

Senator CAROL BROWN: Ms Cully, how long has that program been running?

Ms Cully : The Emissions Reduction Fund?

Senator CAROL BROWN: Yes.

Ms Cully : That program is managed through the Department of the Environment and Energy. So it is a question probably best directed to them in terms of detail about the program and its framing. It is broader than agriculture.

Senator CAROL BROWN: You have some involvement then?

Ms Cully : Yes, we certainly do in relation to the land sector. One of the things that we routinely monitor is the regular auctions that the ERF has. We have a strong interest in the number of tonnes of abatement contracted to the land sector, because that relates to our key stakeholders, to farmers. There are some quite substantial figures in relation to that. Of the 191.7 million tonnes of abatement contracted, 155.6 million tonnes were contracted to the land sector. Then I can break that land sector total down further to its subcomponents for you: 124 million tonnes of that relate to vegetation projects, 17.8 million tonnes relate to agricultural projects—soil carbon, which my colleague mentioned, beef and piggeries—and 13.8 million tonnes of those relate to savanna burning.

Senator CAROL BROWN: Are those projects that you just talked about projects that you have involvement in?

Ms Cully : Those projects are part of the Climate Energy Regulator's process for applications and approvals prior to auctions. So the project-level information is a question better directed to the CER.

Senator CAROL BROWN: Are you able to provide on notice a list of the projects, or will I have to go and ask somebody else?

Ms Cully : We could liaise with the CER.

Mr Quinlivan : We are happy to follow up with the Clean Energy Regulator and provide whatever material is available.

Senator CAROL BROWN: Could we have a list of the projects and how long each has been running—and funding for these projects?

Ms Cully : The funding relates to the auction price. We can do that also.

Senator CAROL BROWN: And also how many tonnes of emissions abated—are you able to give me that information by project?

Ms Cully : We will check on that and come back to you.

Senator CAROL BROWN: Are they offered funding, or are there other incentives for farm businesses to increase resilience to climate change impacts through climate-smart agriculture?

Ms Cully : The ERF discussion that we had relates to auctions rather than programs. In terms of other incentives within the industry, there are a range of measures at the Commonwealth level: the Clean Energy Finance Corporation makes available funding for reduced energy intensity use on farm and has quite a substantial funding program. The Landcare Program, which Mr Thompson mentioned, also relates to funding.

Senator CAROL BROWN: Could I have that information as well, on notice, and the funding attached to it? And could I get only the information that relates to the Landcare projects in the agricultural sector?

Mr I Thompson : Yes, we can do that. The new National Landcare Program commenced late this financial year. The new projects haven't been announced yet. But we can provide you with the aggregate amount of money. There is a component of that program that does relate straight to agriculture, and better soil management and farm resilience is one of the objectives. We can do that.

Senator CAROL BROWN: When will those projects be announced?

Mr I Thompson : We expect them to be announced shortly. They are still going through their final stages of assessment.

Senator CAROL BROWN: What is the full pot of money?

Mr I Thompson : There are a number of tranches of that program. The Smart Farms Program is $134 million over six years. That relates to agriculture.

Senator CAROL BROWN: To be sure that I get what I need, I will put the question on notice as well. In terms of the projects, I would like a brief outline of what they seek to do. If you could gather that information for the committee, that would be very good.

Senator McCARTHY: Ms Lauder, I want to look at the National Forest Industries Plan. The budget allocated around $20 million towards the plan. When will the plan be released?

Ms Lauder : It will be released later this year. We are aiming for September but it will be in the last part of 2018.

Senator McCARTHY: Will any further funding be announced or allocated as part of the release of this plan?

Ms Lauder : That is the only funding that has been agreed and approved at this stage. There may be future funding but there have been no decisions on that.

Senator McCARTHY: What would that future funding be?

Ms Lauder : It is imaginary at this stage. I am just saying that the plan will have actions for many future years, so I am not discounting that in future budgets there could be additional funding. But there's nothing that's in anything other than people's wish lists at this stage.

Senator McCARTHY: Is the department of agriculture working with any other departments or agencies on the plan?

Ms Lauder : We are meeting and consulting with a number of other departments on actions and funding and support for the forestry industry, with the ERF and on climate change, infrastructure, industry et cetera. We are talking to a whole range of other departments.

Senator McCARTHY: You have obviously got more departments that you are working with. Could you either outline them or, if there are too many, provide those to us?

Ms Lauder : We are still in discussion; there are more discussions coming up. So it might be best that I provide it to you on notice.

Senator McCARTHY: How will the $20 million be allocated across the four objectives identified in BP No. 2?

Ms Lauder : The budget is potentially going to be fine-tuned. As you know, the plan hasn't been completed yet. It is important that the budget is helping implement components of the final plan. The budget is allocated at this stage to further research and development, especially on forest products innovation, for example. It is looking at farm forestry, forestry with Indigenous communities on Indigenous owned and managed land, and private native forestry. It is also looking at regional hubs where there are forestry resources, mills and ports, for example—looking at assessments of whether there are things missing that could benefit the industry and take advantage of growth. They are the range of things and areas that we are looking at to use the $20 million.

Senator McCARTHY: You mentioned Indigenous communities. Who are you working with there?

Ms Lauder : We are still consulting, but people like Richie Ah Mat, who we've had discussions with, and Rob de Fegely—people involved in Cape York Timber. We are getting advice from them on—

Senator McCARTHY: Are they Cape York representatives?

Ms Lauder : Richie is. Rob is not, but he was part of the management of that group. We are seeking guidance and advice on the best ways in which we can help support others who might want to establish forestry operations.

Senator McCARTHY: Is there anyone in the Northern Territory?

Ms Lauder : As I said, we are still going with consultation. We will do further consultation on each of those aspects.

Senator McCARTHY: I will give you a hint: Nhulunbuy in Arnhem Land would be a good place to go.

Senator Ruston: We are quite happy to take any recommendations you might have, because a lot of the time we do not know what we do not know. So please, if you think they are interested, pass their details on.

Senator COLBECK: There are some very good programs up there.

Senator McCARTHY: Very good out at Ski Beach.

CHAIR: I need to go there: Ski Beach. That sounds like the best of—

Senator McCARTHY: It is not what you might imagine, Chair. The PBS says on pages 23 and 47 that $3.6 million of the $20 million is for a national partnership SPP. What national partnership is that?

Ms Lauder : We would like to be providing facilitation, advice and guidance to landowners who want to get into forestry and need assistance. It might Indigenous owners or managers, it could be farm foresters or it could be those who own private native forest. We would deliver that through the states. This would be setting up a national partnership agreement with the state governments to deliver that. That is what it is.

Senator McCARTHY: So it is a new national partnership agreement?

Ms Lauder : Yes.

Senator McCARTHY: What is your time frame?

Ms Lauder : I think the funding for that is in years three and four of the four-year budget, as we would need to do some work identifying where the relevant forests are in those categories and the level of interest from the owners and the communities before we then had people going out and offering assistance.

Senator McCARTHY: Do you want to actually give the year?

Ms Lauder : I can work it out for you. I do not have it in front of me.

Senator Ruston: It would be 2020-21 or 2021-22.

Senator McCARTHY: Will it require matching funding from state and territory governments?

Senator Ruston: We are not at that stage of development yet but certainly with all of this funding we will be seeking to leverage as much as we possibly can, either from state governments or from the private sector. One thing we have already seen is that both Victoria and New South Wales have substantial announcements about supporting their forestry sectors. So we would be very keen to leverage it up. While those decisions have not been made, please be assured that we would be looking to do that.

Senator McCARTHY: So you are expecting state and territory jurisdictions to—

Senator Ruston: Not necessarily, no. What we are saying is that we would be seeking to maximise leveraging up that funding so that our $20 million coexists within a bigger fund of investment into forestry, either from state governments and territories or from the private sector, who we are also speaking to.

Senator McCARTHY: What specific farm forestry policies will this funding support?

Ms Lauder : There aren't specific farm forestry policies that it will support. We have heard from a broad range of industry through our consultation that there are more trees needed, more plantations et cetera. So we are looking at it from a range of perspectives, including farm forestry. There have been a number of farm forestry programs in the past, so there are some farmers who have farm forestry plots on their land. There are others who are thinking about getting into it. So it is looking at what kinds of guidance, advice, support et cetera they need.

Senator McCARTHY: What role has the Forest Industry Advisory Council had in the development of the plan?

Senator Ruston: The necessity for the plan was determined by the Forest Industry Advisory Council's report, which we released in 2016. The FIAC committee has been absolutely integral in the development of the plan at every step of the way. In fact the chair of the FIAC, Rob De Fegely, has probably had as much input into the development of the concepts that are part of the national plan that is yet to be released as anybody else has.

Senator McCARTHY: When did the FIAC last meet?

Senator Ruston: September.

Senator McCARTHY: September last year? And when is the next scheduled meeting?

Senator Ruston: The forestry industry is scheduled to meet on 31 May. The reappointment of the FIAC committee is still currently going through the processes of government for reappointment of a statutory committee. However, all the members of FIAC, the Australian Forest Products Association and the Forest and Wood Products Association, which is the RDC—there is a wider group of people meeting on 31 May, which precedes the next forestry ministers meeting, where further input will be sought from the industry into the proposal that goes to the state forestry ministers on 1 June.

Senator McCARTHY: That is a long time in between: September to May.

Senator Ruston: Yes. That is not to say that we have not been working behind the scenes individually with the various sectors. There is a very broad range of people in the forestry industry. So we have developed different sections of the committee, with Rob de Fegely, as the chair, being integral to the whole process. We have sought to go and speak to the individual groups about the respective areas that relate to them. So we would have spoken, I am quite sure, to every member of the FIAC committee on a number of occasion between September and now. Instead of trying to get them all together and everybody hearing everything, we have been doing mass targeted consultations with all the members of FIAC as well as a broader range of people—not just the FIAC members.

Senator McCARTHY: How many members are there?

Ms Lauder : I think there were 11 on the last FIAC. As the minister mentioned, we are going through a process of renewing FIAC.

Senator McCARTHY: How many are going to be renewed?

Ms Lauder : Until the Prime Minister makes that decision, I really cannot say.

Senator Ruston: Many.

Senator McCARTHY: Minister, you said you were currently undergoing the reappointment of the FIAC. Who is being reappointed?

Senator Ruston: There is a series of names that have been put forward through the senior minister's office and through the appropriate process for appointment of a committee of this type. A number of people have been put forward for reappointment.

Senator McCARTHY: When was their appointment due to end?

Ms Lauder : I just want to correct something. They met last on 23 June. September is when the time of the majority of the members of the last FIAC was up. One of the members ran through until January. But, as the minister said, we have been working with the majority of those members and meeting with them through the consultation on the plan as well as for other things.

Senator McCARTHY: So the FIAC met almost a year ago, and in September was the recognition that their appointment was up. It is May and you still have not clarified the appointment of the 11 members or new members?

Ms Lauder : Yes.

Senator Ruston: And your point is?

Senator McCARTHY: The timing—and the importance that you place on this.

Senator Ruston: The Prime Minister, as I do, places extraordinary importance on this. But we have not stopped or taken our foot off the pedal in any way, shape or form while an administrative process has gone through in terms of reappointment. We have continued to operate as we have always operated, consulting widely with the forestry industry, including the members of FIAC, on this particular plan.

Senator KETTER: Isn't it the case that the council is to meet at least once every six months?

Ms Lauder : No. Under the RFA Act, which is what they are appointed under, I think it is two times every calendar year.

Senator KETTER: I am looking at your website. It says:

The council will meet at least once every six months or as requested by the minister … The council can convene a meeting through written request to the Minister from a majority of members.

Ms Lauder : Those may have been the previous terms of reference for the last FIAC. The terms of reference, as well as the membership, are part of this appointment process, but the act that it is based on states that they must meet at least twice in a calendar year.

Senator KETTER: So those terms of reference no longer apply?

Ms Lauder : They will be updated as part of the process of the new FIAC.

Senator McCARTHY: But do they currently exist? It is an important point. If you have terms of reference that require those meetings to take place within a six-month time frame and there has been a failure to do so, to then say that the terms of reference are not valid—I am trying to understand how that can be.

Senator Ruston: Can we take on notice the particulars of your question in terms of whether it is every six months or twice in a calendar year, when the terms of reference came into effect, and what happens when technically the board expires—despite the fact that it has still been operating in essence, but I take your point—from the legislative instrument? Could we take that on notice and get back to you about the actual details of what's in place and when? As I said, it has made no substantive difference to how we have been operating in terms of the delivery of the forestry outcomes that we seek through the operation of this board.

Senator McCARTHY: Will you provide that information today?

Senator Ruston: I will do my best. I am obviously at the behest of others, but I will do my very best.

Senator KETTER: Could you confirm that the aim of the council is 'to provide timely information and advice from a cross-sector of industry participants on contemporary issues affecting Australia's forestry sector'? It is very hard to provide timely advice if you—

Senator Ruston: You are making the assumption that you cannot get timely advice unless you have a formal meeting. I can assure you that we get much more timely advice by seeking to speak to these people or consult with these people out of session. I shudder to think of the number of non-official meetings I have had with various members of the FIAC and other members of the forestry industry, who are equally important, not just on matters relating to the preparation of the plan but also on matters of forestry more generally.

Senator McCARTHY: How will the plan support any significant expansion in Australia's plantation estate?

Ms Lauder : That is difficult to answer when we have not actually written, completed or agreed the plan at this stage.

Senator Ruston: The options and possibilities in terms of that will be a very strong subject of discussion at the industry meeting on 31 May and the forestry ministers meeting on 1 June.

Senator McCARTHY: Are there any specific changes in the industry which the government can identify which would explain an increase in the logs harvested by such a large amount but not an equivalent correlation in employment growth? For example, exports of round log were 93 per cent higher in 2016-17 compared to 2013-14. Is that correct?

Ms Lauder : I think you are referring to an ABARES report.

Senator McCARTHY: That is correct.

Ms Lauder : I am very confident that the ABARES figures are correct. The employment figures have increased. I cannot tell you whether it is since 2013-14 but I do know that ABARES told me that, with this report that was released this morning, employment in the forestry industry is over 70,000 now whereas before this report it was 67,000. So employment figures are increasing in the forestry industry. That is just in the direct forestry industry; it doesn't take into account haulage, manufacturing and other related components. But whether it is keeping pace with the level of harvesting I would really need to take on notice.

Mr I Thompson : One important thing there is to distinguish between exports and domestic consumption. There has been a spike in exports due to some high prices overseas. But there's also a substantive consumption of logs in Australia. Logs in Australia is where a lot of the jobs are, and that has continued.

Senator KETTER: Ms Lauder, I think you might have those stats around the wrong way. According to my information, there were 70,000 jobs in 2013-14 and they have contracted to 67,000.

Ms Lauder : We have popped back up. The person who is responsible for the forestry side of ABARES was telling me just yesterday that we are over 70,000. So it must have gone back up.

Senator KETTER: Okay. The burden of the question is that the exports have gone up 93 per cent but there has either been a contraction of or level employment over the past four or five years. How do you explain that?

Ms Lauder : As Mr Thompson was talking about, we know there are more exports happening at the moment. There is a great demand in other countries for our logs. I know that some companies are making decisions on what is happening in the domestic market versus the export market. Going back to the question of there being more logs harvested versus employment, I would have to take that on notice and consult with ABARES.

Senator Ruston: One of the things that the forestry industry has gone through over the last little while is quite a transition in who it is and what it is. As part of that transition, it has sought to increase efficiencies and productivity. If you look at where the industry is now, you will see that its productivity and efficiency have significantly improved. That could possibly account for the increase in activity without necessarily a commensurate increase in employment. Equally, as Ms Lauder points out, exporting sawlogs is not necessarily going to be generating massive numbers of jobs. But one of the things that we would be very keen to do as part of our forestry plan is to provide the incentives and the infrastructure to do more value add on our wood products in Australia instead of exporting sawlog.

Senator McCARTHY: Exports of woodchip in 2016-17 were 54 per cent higher compared to 2013-14. Is that correct, Ms Lauder?

Ms Lauder : That is an ABARES report. If you are quoting from ABARES, I would take that as being accurate.

Senator McCARTHY: ABARES's next report with these figures is due imminently, which is obviously what we are talking about now. Record of logs harvested also records round log and woodchip exports?

Ms Lauder : Yes—sorry?

Senator McCARTHY: In relation to ABARES's next report on the Australian forest and wood products statistics, which is what we are referring to—have you had a chance to have a good look at that?

Ms Lauder : I have had a brief look at it. I understand that it was released at 10 this morning. I have not had a good look at it.

Senator McCARTHY: Okay. We will move on to the next area.

CHAIR: We will come back to that.

Senator COLBECK: I want to go back to the demand side of the industry at the moment, and Senator Ketter's and Senator McCarthy's questions about exports and employment. There is a fair bit going on in the context of productivity gains and mechanisation in the sector as well at this point in time, which I suspect is having some impact on employment, because it is a global industry and quite competitive. Do you have any figures on that, or is that something that would have come through in the ABARES report that was released this morning?

Ms Lauder : I do not have something on that. ABARES would have some information on that. I do not know for sure whether it is in the report that was released this morning. I can't remember specifically.

Senator COLBECK: Are there any formal productivity measurements that go through this? I would have thought there would be some across government. Where would I go to find those? That is an important context for Senator Ketter's question.

Senator Ruston: I have an embargoed copy. The premise of your question is absolutely correct. Have you had a chance to look at this?

Senator COLBECK: I am not on the approved embargo list.

Senator Ruston: If it would assist the committee we can certainly make available this report that has just been released half an hour ago which is the subject we are currently discussing.

CHAIR: Sure. If we could get a copy—

Senator COLBECK: It would be useful to have current numbers. That would be great. Particularly in the local market, do we have any work on demand projections?

Mr I Thompson : ABARES has done some work on demand projections. I do not think we have the details here but the general story is that demand exceeds supply.

Senator COLBECK: We are seeing pretty consistent growth in the development of new technologies with the Hermal plant that was announced in Tassie last week, the world's first hardwood-based cross-laminated timber plant, which was great news and a step-change in that technology, potentially; the change in building regulations for construction to at least eight storeys for timber-construction buildings; and of course CLT starting to come through quite significantly. There is a plant in Albury—is that right?

Ms Lauder : Yes, that is right.

Senator COLBECK: Has that created any change in the demand profile that is visible in the figures at this stage?

Senator Ruston: One would have thought so. I have not had a chance to look at the figures that have come out from ABARES this morning. Certainly I will. But I would be very surprised if we haven't seen a substantial change in the demand profile. As you rightly point out, Senator, there is a global shortage of timber. With increased use and, as you mentioned, the change in building regulations which enables higher buildings and more buildings to move towards timber, and the Lend Lease policy of moving towards timber as a substantial—

Senator COLBECK: Up to 30 per cent of their commercial residential in CLT—

Senator Ruston: Yes. I would be extremely surprised if we haven't seen a shift in demand. The excess of demand is causing some pinch points in the marketplace. It is a great thing if you've got the timber but, in the case of Australia, we've got to try to make sure that we remove the barriers that are currently being seen by industry so that we can get those trees in the ground, whether it be through Indigenous forestry, farm forestry or encouraging our plantation owners to put trees back in the ground.

Senator COLBECK: And of course one of the great benefits of timber in a carbon-constrained economy, compared to steel and concrete, is that you are effectively building a carbon store as part of your construction and embedding carbon into the built economy.

Ms Lauder : That is correct.

Senator Ruston: A fantastic analysis would be to look at what the carbon footprint of using trees was, as opposed to the carbon footprint of using other building materials. I am sure we'd all be very pleasantly surprised that the greatest product that God ever made is timber.

Senator COLBECK: It is certainly something that has been promoted as perhaps the construction material of the 21st century, with all of the attributes that it brings to the construction industry from a range of perspectives, including wellness, which is great. Can I get an update on where you are at with the Tasmanian RFA?

Ms Lauder : As you know, we signed the 20-year rolling extension on the Tasmanian RFA last year. I think it was 30 August last year.

Senator COLBECK: Great news.

Ms Lauder : It was great news. One of the improvements that were included in that RFA is that we will have formal annual meetings in between the five-yearly reviews. We are at the moment in discussion with Tasmania about having that annual meeting in the coming months and what sorts of things both parties are interested in talking about and updating each other on.

Senator COLBECK: So the change in the process to generate the review cycle based on the five-yearly reviews is actually starting to do what we hoped it might do, which is create a bit more momentum around the relationship and ensure that the cycles and the processes of the five-yearly review were met as an incentive to get the next extension of the RFA?

Ms Lauder : That is correct, yes.

Senator COLBECK: So that is continuing with the continuous improvement process of the frameworks and the attributes of the RFAs?

Ms Lauder : Yes. We formalised these annual meetings to ensure that we are regularly talking about the RFA itself and what's happening in that jurisdiction. We are in contact with the Tasmanian government regularly, but this is formal to make sure that we are looking at what issues might be coming up and what changes Tasmania might be making to different policies et cetera that could impact on the RFA. So we are, as you say, continually in contact and looking at improvement all the way through the process.

Senator COLBECK: Where are we at with New South Wales?

Ms Lauder : In New South Wales we have undertaken the third five-yearly review and we are in the process of looking at the findings and developing a joint government response. We have also undertaken significant consultation in New South Wales in preparation for the 20-year extension of the three RFAs there, and we have had many meetings and discussions with the New South Wales government. So we are well along the process of extending the New South Wales RFAs and improving them.

Senator COLBECK: What is the due cycle on those?

Ms Lauder : The first New South Wales RFA, which I think is Eden, expires next year in August. We are well ahead of its expiry date. We are doing the three together as one process. We did significant consultation. Our aim is to look at renewing them in the coming months so that we are not getting too close to the expiry date, which has impacts, as you would be aware, on the forestry industry and their ability to have surety about whether they will have access to the resource.

Senator COLBECK: The thing about this industry is that the life cycles are long. So if you are getting a plantation product that has a 15-year cycle, something you plant today you do not get till the 2030s. If it is a long rotation like a pine, something you plant today you do not get till the 2050s. When you are looking at trying to develop product to meet demand, you have to be thinking in those sorts of life cycles—and native is even 90 to 100. So that has to be the time frame of thinking when managing the development of these.

Ms Lauder : Yes. And industry looking at investing in their processes, machinery, plants et cetera need a long lead time as well.

Senator COLBECK: I was looking at a plant in Smithton last week where they are talking about yield improvements: different methods of drying to increase the yield of the log. Is there any other work that is being done, and research? I know that through the current plan the three R&D centres have been set up. Is there any other work outside that that is being done on trying to increase yield out of the resource that is there as a way of trying to improve supply?

Senator Ruston: We would probably have to check. Obviously FWPA invests in all the R&D for the industry outside those specific ones that you just referred to. I'd be more than happy to get you a summary breakdown of what FWPA has been doing in that space. Also, one of the things that the plan needs to look at is to make sure that we are getting the best value for our investment in R&D so that we can continue with those efficiency and productivity gains that you were referring to earlier in your questions.

Senator COLBECK: What is the status of the R&D hub at UTAS in Launceston at this stage?

Ms Lauder : The committee is just finalising what its priorities are for the call for projects. The paperwork for what will be in the call is just being finalised as well. I am expecting the call to happen in the coming month-ish. That will be seeking projects from either industry or researchers, hopefully in partnership with each other. It is going well. The committee has met and it is been in contact since the official meeting, by phone and email, regularly. The call will happen soon. From that, the committee will then assess all the bids that come forward and make some decisions on what projects are seen as higher priorities for funding. We are looking for industry matching as part of that process.

Senator COLBECK: So you are again trying to leverage up the government spend to get—

Ms Lauder : Absolutely. The Tasmania government has already met the Commonwealth government's funding, and we are seeking matching funding from industry as part of that.

Senator COLBECK: Federal $3 million?

Senator Ruston: $2 million.

Senator COLBECK: And you are looking for $2 million from industry as well?

Ms Lauder : Yes.

Senator COLBECK: I understand that the university is looking at utilising some of what might come out of the newest CLT plan in the construction of the new facility as part of that process. That potentially forms part of that partnership?

Ms Lauder : Yes, it could, absolutely.

Senator COLBECK: That is a very exciting prospect. What about the other R&D sites?

Ms Lauder : The other hub is in Mount Gambier. It is at a similar stage. It is funny how it is worked out. They are slightly behind but they are finalising their priorities and the details of the call. Again, I expect theirs to be out in the coming weeks, within the coming month.

Senator COLBECK: What is the situation at the moment with Western Australia and the relationship on forestry over there? They don't have an RFA.

Ms Lauder : They do have an RFA; it is Queensland that does not have one. With them, we have completed the third five-yearly review and it is been tabled. We are doing the joint government response with them at the moment. We have initiated discussions on the long-term extension of the RFA. That one expires on 4 May next year. We are working with them on what things we need to look at to improve and extend the south-west RFA in WA.

Senator BROCKMAN: What happens if it expires?

Senator Ruston: You don't want to know.

Senator COLBECK: You don't want it to expire.

Ms Lauder : One of the things that the RFA provides is what's considered an exemption from the EPBC Act. A whole range of work has been done, and the forest management system of that state for that area has agreed that it considers all the things it needs to for the matters of national environmental significance, for example. It might be that they put certain proscriptions in place if they come across a certain threatened species et cetera. All of those things are part of the process. Part of it is red-tape reduction. They also do not need an export licence to export from that RFA region. If the RFA expired then those things would no longer be in place. They would need to go through those extended processes again.

Senator COLBECK: So it effectively would reduce the efficiency and cost-effectiveness of the industry—

Ms Lauder : Completely.

Senator COLBECK: which would be a disaster for the industry in Western Australia.

Senator BROCKMAN: I had to duck out of the room earlier, so if you've gone over this already I am happy to move on quickly. The budget measure on the National Forestry Industry Plan—have you covered that already?

Ms Lauder : Yes, we did talk about that.

Senator BROCKMAN: In particular, I want to get an idea of how that money is being distributed, particularly whether Western Australia has access to that pool of money. Has that been covered?

Ms Lauder : Not that specifically, no.

Senator Ruston: Only because it cannot be at this stage. To give you a bit of a background, the federal government made a policy decision that we were going to support the forestry industry into the future by the development of this plan, which signalled to the marketplace that we were deadly serious about the future of this industry. That was in September last year. As part of backing that measure in, we went through a budget process, which is the subject you are discussing. We are just in the final stages of a very rigorous consultation program that we have taken over the last nine months to put back to the industry collective at the end of next week and also the forestry ministers from each of the states at the end of next week, which will give us the final sign-off to proceed to what that plan is going to look like and what it is going to incorporate. But—

Senator BROCKMAN: So the negotiations currently underway will feed into—

Senator Ruston: Absolutely. But one of the things I mentioned to Senator Rice or Senator McCarthy is that we are seeking very much to leverage this money as much as we possibly can, either with state governments or with the industry, because $20 million can go a long way when you are leveraging and it does not go very far when you do not. So certainly we would be looking to the state governments around the country, Western Australia included, to see what opportunities we have to work with the state government and with the industry to maximise the output of the plan, particularly getting more trees in the ground, because that seems to be the fundamental issue at the moment. We have a global industry that is going absolutely gangbusters, with huge demand, but we have to get the economics right so that we get the trees in the ground.

Senator BROCKMAN: So this pool of money could potentially see a co-investment type model to leverage private sector investment in the forestry sector?

Senator Ruston: The elephant in the room, and one of the things we do not really like, is the learned experience of MIS schemes. We are certainly looking to come up with much more sophisticated and less market-damaging mechanisms by which we would encourage industry to invest. That is the process. The body of work we are doing at the moment is to work out how we can genuinely give the signal to the marketplace that we are serious, without creating a distortion that may have unintended consequences.

Senator BROCKMAN: Absolutely. Western Australia went through, as many other states did—

Senator Ruston: We all did.

Senator BROCKMAN: the aftermath of that situation.

Senator Ruston: One thing that has been very clearly stated to us as part of the consultation is that it is about not just having the right trees and the right quantity but also making sure they are in the right place. A call will go out to industry—it already has gone out to industry—saying, 'You need to decide where it is that you want forestry to occur', because there's such a lot of infrastructure that supports the forestry sector, particularly if we want to do value-add forestry products and innovation. There is so much infrastructure that supports it. You cannot just put trees anywhere. We had an experience in South Australia where, through a previous scheme, we ended up with trees on Kangaroo Island but no possible way of getting the things off Kangaroo Island. We have this asset that, if it were able to be realised, would be worth millions and millions of dollars but, in the absence of being able to get them effectively, efficiently or environmentally soundly off Kangaroo Island, is of no value whatsoever apart from there being a lot of happy koalas over there. So we are very keen to make sure not only that we have the right number of trees and the right trees but also that they are in the right place.

Senator COLBECK: The concept of hubs is what drives it.

Ms Lauder : That is right.

Senator COLBECK: I think there was an experience similar to that in south-west Western Australia, where there were some stranded assets that logistically became problematic to harvest.

Ms Lauder : That is right.

Senator BROCKMAN: I am looking at the description of the budget measure. It talks about small-forest growers. What is a small-forest grower? What's the boundary there? Is this private plantations?

Ms Lauder : Yes, and farm forestry.

Senator Ruston: One of the things we have seen, particularly in Tasmania, is using farm forestry as a supplement to your farming business, almost like a growing superannuation. The opportunity for our farmers to have more products than just running their cows or their sheep by planting trees is obviously good, and carbon sequestration et cetera. It gives them another potential long-term source of income or superannuation—send the kids to school or whatever it happens to be. Part of the plan is to make sure that we are not just saying to the big guys, 'Put lots of trees in the ground' but also giving the broader opportunity for the farming sector and the Indigenous sector to participate in this. Meat and Livestock Australia, through their relationship with the National Farmers' Federation, have come up with a goal that by 2050 the meat and livestock industry in Australia will be carbon neutral. While they're going through a lot of genetic work with the animals themselves, one way in which they can make their industry carbon neutral is obviously to embrace forestry as part of the suite of tools that the agricultural sector can use so that they can meet their targets. There's a whole heap of things that are playing into not just going into big plantations but also seeing the farming sector embrace forestry as part of their business plan.

Senator BROCKMAN: It is not necessarily an industry that would lend itself to significant consolidation, particularly that farm-based sub-enterprise. Do we have a good sense of the stocks and flows? In the grains industry there's at least a reasonable sense of how much is being produced every year, how much is sitting in storage and how much is being exported. Livestock is tracked to some degree. Do we have a sense of what the industry base on the ground actually is?

Senator Ruston: Ms Lauder obviously will have a more detailed understanding. My understanding is that more broadly when you are talking about the commercial side of the industry we have a pretty good handle, and that is where we get reports like the ABARES report. But when it comes to underutilised and non-used farm forestry one of the bodies of work we have to do is to get out there and get a handle on what it looks like. Anecdotally it is been suggested by industry that anything up to a quarter of the new trees that we need could be found through this source. So it is pretty significant. We are talking about 100,000 hectares of potential forestry that could be found through this means. It is quite a big bit, but we do need to do some work to get a better handle on it.

Ms Lauder : I completely agree with the minister.

Senator Ruston: That's a very wise thing to do.

Ms Lauder : We have a good handle on the commercial plantations. ABARES reports regularly on those. Again, we know the native forestry that the states and state agencies undertake very well. But as far as forest resources that are either on farmland or other private land go, we don't know those very well at this stage. One of the things we're looking at through the plan and through this funding is to try to get a better handle on that.

Senator BROCKMAN: And do we have—through ABARES, I guess—a reasonably good handle on where the international market is going in terms of demand? Is it woodchip? What's the balance of the requirement from the international players?

Ms Lauder : They do track that and they report on that regularly. In fact, the report that was released this morning does talk about our export markets—what products they're looking for, which are increasing and which countries they are for. As I said before, I'll have to ask ABARES to attend our session in future. Those things would be in the report that would have just been handed out to you.

Senator BROCKMAN: Yes, okay. So we do have a pretty good handle on it.

Ms Lauder : Absolutely, yes.

Senator BROCKMAN: We're trying to match the production capacity of Australia with future demand trends internationally.

Ms Lauder : The companies themselves are trying to do that, yes.

Senator BROCKMAN: Okay. But—sorry—is the government taking an interest in that through this investment?

Senator Ruston: Absolutely.

Senator BROCKMAN: I assume that's where we're driving towards.

Senator Ruston: Absolutely. And a lot of this has come on the back of a massive increase in demand for timber in just about every area of timber use. With construction timber, there's a serious shortage of structural timber out there at the moment. As you would realise, obviously, the lag times that are involved in planting to production are significant and so we are trying to get ahead of the curve as best we can by this plan. But it's still going to mean that the world is short of timber, and so the industry will remain fairly healthy for quite some time.

Senator BROCKMAN: Is that being reflected in the demand for pulp, or is it timber?

Ms Lauder : I think it's both actually—yes.

Senator BROCKMAN: Okay.

Ms Lauder : Pulp is needed for a range of products, and timber, as the minister talked about, is needed for construction, furniture and a whole range of other things too. So there's increasing demand in both areas.

Senator Ruston: One of the things that we're really keen to look at as part of this whole process is that a tree is not just a tree; there's bits of the tree that get used for various things. What we're seeking to do is to maximise the value of the use of every part of the tree. Obviously, everyone thinks about the bit that goes into a piece of furniture or goes into a timber truss, but they don't realise that there's so much more of the tree that can be used for pulping. There are some really exciting new bioproducts that we can be looking at with the residues we're getting either from forest management or from the off-cuts when we process the log. We're thinking that one of the most important things is that we maximise the value of every piece of the tree and that we make sure that we have a use for every piece of the tree, because not only does that maximise the economic return but it also deals with the issue of, 'What do you do with this stuff if it's not being used?' There's been a lot of research into possible uses for things that in the past have just been wasted.

Senator BROCKMAN: For example, there's been work for a number of years towards a biomass electricity plant in my home town of Manjimup in the south-west of WA. Would that have the potential to be a part of the National Forestry Industry Plan going forward?

Senator Ruston: Yes, absolutely. In fact, there has already been a body of work done about what kind of critical mass of product you would require to create an efficient energy generation through wood. But one of the things that we need to be really clear about here is that we're talking about offcuts and we're talking about thinnings and the like. There is quite a body of work that's already been done on that, and we're happy to make it available.

Senator BROCKMAN: Thank you, Minister.

Senator RICE: I will just ask a few questions, continuing on the discussion about the industry plan. With the $20 million, the ABARES statistics this morning reinforced the fact that we've got 87 per cent of our wood production coming from plantations. Is that $20 million being spent reflective of the importance of the plantation industry compared with the native forest based industry? What proportion of that $20 million will be supporting plantation based industry?

Senator Ruston: I can't give you that breakdown off the top of my head, because some of the details that would inform that answer have yet to be decided. But what I would say is that, quite clearly, the No. 1 issue that the industry have identified as a barrier to growth has been the number of trees that they've got access to. So fundamentally underpinning this plan will be providing the incentive for people to plant more trees.

Senator RICE: Can you take on notice doing more of a breakdown of how it's expected that that $20 million is going to be spent?

Senator Ruston: If, like me, on 12 September, you'd like to come to the Press Club, I'm quite sure that you would be delighted to be one of the first people to see what it is. But, until such time as we have developed through the absolute detailed specifics and we've finished our consultation, I can't give that. I can't say—I can take it on notice—because the decisions that surround that have not been made. The decisions around what the priority areas of development are—as I said, it's about getting more trees, with the right trees in the right place. That is our objective here. How that plays out will be determined.

Senator RICE: We've got $1.5 million being spent in the next financial year; $5.4 million in 2019-20. You're saying there's not a specific allocation or suggested projects that that money will be going toward? There must be some basis for why there's that breakdown.

Senator Ruston: Yes, there's obviously been some broader work done to inform the budget process to make sure that we had as much detail as we could, but the actual detail, the kind of detail that you're obviously asking for, is not available, because it's still a work in progress and there's still a lot of consultation that needs to occur.

Senator RICE: What are the sorts of projects in broad areas that are informing that allocation of $1.5 million in the next financial year and then $5.4 million in the financial year after that?

Ms Lauder : General information was provided for that $20 million with the agreement that the plan was yet to be written and completed, so how that funding would be used could be tweaked based on the outcomes of the plan.

Senator RICE: But there must be some basis for that level of allocation.

Ms Lauder : Absolutely. I answered earlier, when we talked about the research and development and the regional hubs et cetera. That was the level of information we have on how the $20 million would be allocated.

Senator RICE: So that 5.4 is reflecting—what—establishing the regional hubs, is it?

Ms Lauder : No. You're looking at the breakdown per year; is that right?

Senator RICE: Yes, that's right.

Ms Lauder : No, we aren't doing the regional hubs just in one year. These things are spread over multiple years. We're looking at work in the farm forestry, Indigenous forestry and private native forestry space; the research and development with potentially additional hubs of the National Institute for Forest Products Innovation; and the regional hub work we talked about earlier, looking at what infrastructure and plantations and forestry assets are in a region and doing an assessment of what is missing or what other opportunities need to be considered to enable that region to grow.

Senator RICE: Going to farm forestry in particular: what proportion of that funding is going to be put towards farm forestry?

Ms Lauder : Again, that will be determined once we have the final plan. So I—

Senator RICE: But there must be some estimates. Again, you've got a particularly specific 1.5, 5.4, 4.9 and 4.7 over the forwards. So I'm interested to know what proportion will be going to farm forestry and what sorts of activities are envisaged in the farm forestry space.

Mr I Thompson : For budget forecasting we are required to put numbers in the budget that add up to the total amount. When I look at the figures, which is how we do most of the budget planning, when the forestry plan's not going to be announced until September, that's a quarter of the way through the financial year. Clearly we're not going to spend a lot of the money in the first year, so there's a smaller amount there. In the second year, when things kick off, there'll be a peak in expenditure, then it levels off. The level of sophistication, as Ms Lauder has said, is roughly at that level at the moment: spend a little bit, then more; spend a lot more. How that's split up will depend on the consultation between now and September. So, while the numbers look precise because they have to add up to the total amount of money, the work underneath it will take place, and there might even need to be some tweaking of that as the budget rules allow.

Senator RICE: What sorts of projects are envisaged in the farm forestry sector? Where is the money going to be spent?

Ms Lauder : Some of the things we've been thinking about are that—as with the earlier questions—we don't know where all the existing farm forestry assets are, so looking at an inventory or a stocktake of that might be part of it. We have feedback from a number of farmers that they have established farm forestry plots on their land, but they don't know what to do next. For example, how do they get it harvested? How do they get it into the market? So we're also thinking about what kind of information and guidance they need and whether there's a need for actual facilitation and advice, which is what I was talking about when we talked about funding through the states to help provide some of that. They're the sorts of things we're thinking about at this stage, but it will be locked in once we actually have the final plan.

Senator RICE: It's excellent to see it there, to see that allocation, having asked about farm forestry in previous estimates. I'm looking forward to seeing some good results.

Senator COLBECK: Can I just ask a question about farm forestry. It's sympathetic to what you're talking about—seriously! Is any work being done on methodologies in that space by you guys to facilitate it? I'm not trying to be subversive.

CHAIR: Senator Colbeck, there's a general reluctance about the qualifying questions.

Senator COLBECK: Ignore my question.

Senator Chisholm interjecting

CHAIR: Sorry? Except for me!

Senator RICE: Exactly.

CHAIR: So, unless it's particularly pertinent, we might go through and then come to you.

Senator RICE: I then want to return to my questions from earlier on, particularly about critically endangered Leadbeater's possums, and your statements just prior, during my previous questions, Minister. Minister, do you stand by the comment you just made previously, and I've heard you say before, that the more you look for Leadbeater's possums, the more you find?

Senator Ruston: Yes.

Senator RICE: You stand by that? So you stand by the non-peer-reviewed internal VicForests reports as opposed to the extensively peer-reviewed science that's been undertaken over a period of 30 years by the world experts in mountain ash ecosystems and the critically endangered Leadbeater's possums?

Senator Ruston: I stand by the research that has been provided to me that tells me that there are increasing numbers of Leadbeater's possums. What I'd ask you is this. You come from Victoria. You're telling me that you don't believe that the information that I have is correct?

Senator RICE: I stand by the peer-reviewed science by the experts who have been researching these forests and the mountain ash ecosystems for the last 30 years.

Senator Ruston: Okay. There are couple of things I'd say to that. One is that certainly, yes, I do stand by the advice—sorry?

Senator Colbeck interjecting

Senator RICE: No, they have actually.

Senator Colbeck interjecting

Senator Ruston: The other thing too is that I think one of the other skews in this argument that we've been having for some time on the Leadbeater's possum and more generally in native species that are coming under varied levels of threat is that there seems to be this belief that, if you immediately stopped native forestry, all of a sudden there would be no further issue in terms of endangerment of any of the species to which you refer. I would point to an equal body of scientific work that suggests that fire is a much, much more significant impactor on the survival of various species, followed probably by feral animals and a number of other things—urban encroachment et cetera et cetera. To make the suggestion, as you are obviously trying to do, to draw the correlation, that cutting down six trees out of every 10,000 is somehow the major contributing—

Senator RICE: Minister, you are misleading, because you know—

Senator Ruston: I'm not sure that—

Senator RICE: the situation of the mountain ash forests—

CHAIR: Order, Senator! You don't have to agree with—

Senator RICE: and the ongoing logging.

CHAIR: Order! You don't have to agree with what the minister says, but let's allow her to answer the question. Then you have all the chance in the world to examine her on it.

Senator Ruston: Thank you, Chair. Also there is the fact that the previous Threatened Species Commissioner came out and has said that no Australian mammal has become extinct as a result of forestry. I think if we're talking about being misleading and disingenuous, I'm not sure it's me that's doing that. Yes, I do stand by the evidence that has been provided to me on numerous occasions and from numerous sources that the recovery plan that's in place for the Leadbeater's possum is working.

Senator RICE: Minister, isn't holding such a view prejudicial of the assessment that's currently being undertaken by the Threatened Species Scientific Committee who are assessing all of the evidence?

Senator Ruston: Exactly and rightly they should do it. I don't know why—

Senator RICE: You are clearly saying that you are supporting the evidence from the internal documents—non-peer-reviewed science, non-peer-reviewed reports—of VicForests as opposed to the extensively peer-reviewed science. For you to be holding that view is very much a prejudicial view while we have currently got the Threatened Species Scientific Committee assessing the validity of these two bodies of evidence.

Senator Ruston: I find it a little rich I should be lectured about prejudicial views by you. Nonetheless, I'm quite happy to say that the evidence that's been provided to me indicates that the recovery plan for the Leadbeater's possum, which is the animal we're talking about, is showing that we are seeing constantly increasing sightings of this particular animal. I'm quite sure that the people who are on the scientific review panel to which you refer are not sitting here, watching estimates and making their decisions on the basis of what I'm saying. They will undertake it on the basis of their own scientific view, and that's how it should be. I really do take objection to you telling me that I am in some way prejudicing things by my view.

Senator RICE: I'll move on to the New South Wales regional forest agreements process, about which there's been some discussion this morning as well. Do you have a view on the consultation that's currently happening in New South Wales? I understand that many stakeholders have been frustrated by it. In fact, it was reported in February this year:

Environmental groups have dropped out of consultations … saying the Berejiklian government has already decided to roll over 20-year old agreements—

CHAIR: Senator, consistent with practice, if you're going to ask one of the officials to comment on excepts from a document, we make copies and circulate them so that they have the benefit of seeing it in context. The secretariat will provide the copies.

Senator RICE: 'It's a predetermined outcome,' the chief executive of the National Parks Association said.

CHAIR: Let the official see it in the context of the document and they'll be able to respond to you. In the meantime, do you have another line you could do?

Senator RICE: Can we ask whether they are willing to comment on this without having seen the document? I'm sure they've seen these media reports.

CHAIR: You should have—

Senator COLBECK: A point of order, Chair. You're either going to comply with the practice or you're not.

CHAIR: Correct.

Senator COLBECK: You've got a newspaper report that quotes an anti-forestry interest group.

CHAIR: Firstly, Senator, if you can establish that the official has seen and has an independent memory of the contents of the media and is comfortable enough to respond to your questions, that's fine. But we're not just going to take a line out of something that's wedged in between other paragraphs. So you should examine Ms Lauder to see if she's happy enough on that particular point.

Senator RICE: I just asked her the question.

Ms Lauder : I am happy to respond because I am aware roughly of the contents of that article.

Senator COLBECK: Is it possible for the rest of the committee to see the document?

CHAIR: It's being copied.

Ms Lauder : We did quite a lot of consultation, which is now completed, for both the review and the extension of the New South Wales RFAs. A number of environmental groups refused to take part in the consultation. We invited them to face-to-face meetings as well as the public consultation. Some did take part, and we have taken their comments into consideration. Those that didn't felt that both the Australian government and the New South Wales government had already announced that we were looking to extend the RFAs, and they felt that the decision had already been made. Their aim was to stop the RFAs and stop logging in the native forests. They didn't feel that they could influence a decision that had already been made public.

Senator COLBECK: They had a predetermined position.

Ms Lauder : They did.

Senator RICE: But the government does have a predetermined decision that the RFAs are going to be extended?

Ms Lauder : That is true. They could—

Senator COLBECK: Which we took to the election.

CHAIR: Senator Colbeck, Senator Rice is nearly out of time.

Senator RICE: Whether or not the science actually supports that?

Ms Lauder : They could have influenced the contents of the RFA and the improvements, but you are right: both governments had already announced that we were looking to extend.

Senator RICE: How do you respond to their view that the new and evolving science that has evolved over the last 20 years, that has shown the impact of forestry on threatened species and on climate stores, is not being sufficiently taken into account in the government's decision to extend these logging laws?

Senator Ruston: I fundamentally don't accept the premise of what you've just said.

Senator RICE: I'm not surprised.

Senator COLBECK: If you've read the science—

Senator RICE: I've read lots of science.

Senator Colbeck interjecting

CHAIR: Right, so hold on—

Senator RICE: We've got the only climate science at the table—

Senator COLBECK: You'd actually do more—

CHAIR: Senators, please respond to the chair. These side debates are not helpful. That document's been circulated and we'll all get an opportunity as we go around to respond. Can I make a point before I give the call to Senator McCarthy and her team. In the event that a senator knows that they're going to refer to a document or press release, would you be kind enough to provide it to the secretariat so that they've got it in store here to be distributed in the event that you choose to use that as a tool or a reference point in your examination. Senator Ketter.

Senator KETTER: My next questions go to illegal logging, in relation to the disallowance of the government regulation back in February of this year. Did the department update key stakeholders of this disallowance directly?

Ms Lauder : Yes, we did.

Senator KETTER: Can you tell us how you did that.

Ms Lauder : We have a registration process where industry can register on the internet to get updates, so we provide updates out through that process. An industry notice also went out to let them know, as well as information on our website and in some media articles.

Senator KETTER: What about the illegal logging working group, would they have been specifically targeted?

Ms Lauder : They weren't specifically targeted, no, but we did get in contact with everybody that put a submission in through the public consultation we did on the review to look at reforms for illegal logging. All of those people were contacted, and a number of those people from the committee you're talking about, which doesn't exist any longer but was used in developing the act in the first place, provided comment through our consultation and so were contacted in that way.

Senator KETTER: Just so I'm clear, were FSC Australia and Responsible Wood Australia informed by the department that their certification and their systems no longer provided the automatic deemed-to-comply pathway?

Ms Lauder : I'll answer two parts to that. Yes, they were informed, but their certification never provided automatic approval through the process. There was a due diligence requirement for it. What we were seeking through the changes we were making was to allow certification to replace, I guess, the need for due diligence. That was disallowed. So that didn't come into place.

Senator KETTER: Would it surprise you then, that the Forest Stewardship Council Australia website still says, I'm reliably informed, in its section on the Australian illegal logging act:

Suppliers who already FSC certified can rest assured that the relevant due diligence requirements have been met. As such, FSC certification ensures that the organisation is compliant with the relevant laws.

Ms Lauder : Yes, that does surprise me.

Senator Ruston: It never was the case, so it's not like we made a change when those regulations came through, because we were actually seeking to make the change so that they would comply. The fact that it never was the case is doubly surprising, but we'll certainly follow that up.

Ms Lauder : We'll look into that, yes.

Senator KETTER: All right. On the Responsible Wood website, it says:

Controlled source materials were formally recognised as a "deemed to comply wood product" under the Australian Illegal Logging Act in October 2017. This provides confidence to consumers of the legal status of products and, in purchasing the Controlled Source material consumers are not inadvertently supporting illegal activities.

Senator Ruston: That is equally surprising.

Ms Lauder : We need to follow up both of those. Thank you for that.

Senator Ruston: Yes, we'll certainly follow those up, because they're both misleading comments.

Senator KETTER: Okay, so you agree they are potentially misleading?

Senator Ruston: They are.

Ms Lauder : Yes.

Senator KETTER: All right. Certified product represents 37 per cent of imports. Should the certification schemes inform importers and exporters, by updating their websites, of the decision of the Senate to ensure they're not providing misleading advice?

Senator Ruston: I think that's a fair comment.

Ms Lauder : Yes, they should, and we will follow up with them to make sure that happens.

Senator KETTER: Okay, thank you.

CHAIR: Your work here is done!

Senator KETTER: I've just got a few more minutes. I just refer to an answer on notice following the supplementary estimates. The department stated:

The 2017/18 staffing allocation for illegal logging compliance is 2.8 FTE. This FTE level is expected to continue for the forward estimates.

The 2017/2018 budget allocation for illegal logging compliance is $434,615. This funding level is expected to continue for the forward estimates.

Was this confirmed on budget night?

Ms Lauder : Mr Mackay's responsible for this area in the Compliance Division.

Mr Mackay : Not on budget night. It is, to my knowledge, ongoing funding within the department budget.

Senator KETTER: Okay. Just explain how that's different to what advice you provided to us at the supplementary estimates or in answers to questions on notice.

Mr Mackay : The budget advice that was provided in the answer to the question on notice was in the knowledge of what the internal departmental budget was at that point in time. The budget that was announced a couple of weeks ago in May is for the overall departmental budget. As a department we're still going through the internal budgeting process, and so we're not in the same position to be able to say, 'This much has been allocated internally at this point in time.'

Senator KETTER: All right. In terms of the officers that we're talking about here, can you tell us about the activities of those officers?

Mr Mackay : Yes. Those officers are currently involved in a range of activities related to compliance activities in support of the illegal logging legislation. Part of that activity involves community or ongoing industry engagement and education. We've recently run—working in particular with some of the industry organisations—further information sessions in relation to legal logging import requirements. We recently, in approximately April, published our compliance plan for the following year, which sets out a range of focus areas that we would be focusing on in terms of looking for areas of noncompliance. We currently have a range of activities underway in relation to that. We're also conducting other activities to identify how we might look to find product that is likely to have been illegally logged and has entered the Australian marketplace. So we do what we call trace-back activities based upon identification of wood of concern or timber of concern. That makes up the bulk of their activities.

Senator KETTER: Okay. Would they have checked the due diligence system of Bunnings, for example?

Mr Mackay : We have done a range of due diligence activities, checking or audit activity over the last several years. As to Bunnings, I can't say offhand whether Bunnings is one of those. As per our compliance plan, our focus is risk based, and we are focusing on a number of areas in particular to address where there's a greater likelihood of noncompliance or illegal logging activity having to occur. So, as per our plan, our focus is very much around: areas or products related to fragile and conflict affected regions; CITES listed species; complex supply chains—this is where wood moves through various countries and companies and so the origin of the timber can often get obscured; tip-offs and recommendations from various areas; environmental and non-government organisations and reports; as well as where we have, through the soft-start period, identified issues of previous non-compliance. That's the scope of what we're doing. As to whether Bunnings—it's a very large, regulated market—is one of those, I'm not in a position to say at this time.

Senator KETTER: Can you take that on notice?

CHAIR: We'll suspend the hearing now.

Proceedings suspended from 12:31 to 13 : 31

CHAIR: Welcome back to this budget estimates hearing for the Rural and Regional Affairs and Transport Legislation Committee.

Senator KETTER: Mr Mackay, just before lunch we were talking about whether or not Bunnings had changed what due diligence system applies at Bunnings. Could you take on notice whether or not you have checked the due diligence system at Bunnings? If you have, can you tell us whether Bunnings have made any changes to their approach to the due diligence system due to the disallowance vote by the Senate on 8 February?

Mr Mackay : As a result of the disallowance, there was no change to the legislative requirements around due diligence that Bunnings were operating under. There should not have been a change in any form of behaviour for any importer.

Senator KETTER: Should not?

Mr Mackay : Yes, as result of—

Senator KETTER: I'm asking if you could—

Senator Ruston: Senator Ketter, just so we're really clear here: the regulations came into effect; we did a review and came back with a recommendation that, to be fair, we thought you supported and that's why we proceeded with it. When we got to the 11th hour of seeking to enable these very expensive certifications systems like FSC, which people invest a lot of money in, and when we sought to have them recognised as being suitably deeming to comply under our timber legality framework, you chose to disallow our instrument of amendment. In effect, nothing changed. We went through a purely academic exercise within the political sphere, took a whole heap of consultation, did a whole heap of reviews and invested a whole heap of time and money in something that we genuinely thought you wanted us to do, and then you threw it out. Basically, all of your questions are, in a sense, irrelevant because nothing happened.

Senator KETTER: Save for the fact, Minister, that you'll know from our previous line of questioning that there is misleading information out there on the internet about the situation.

Senator Ruston: Yes, absolutely. But I'm saying that nothing has changed. The disallowance should have had no impact whatsoever on anything. If there was going to be an impact, it would have been a couple of years ago.

Senator KETTER: Yes. Nevertheless, I understand the context you're putting this in—

Senator Ruston: Sure. Thank you.

Senator KETTER: but I'm still asking the question to check whether you've done a check on their due diligence system and whether that has changed since 8 February. Since the soft start compliance period ended on 1 January this year, how many companies have been found to have been non-compliant with their due diligence systems?

Mr Mackay : Under the process that we have in train, we have a number of requests. The system operates in that we request information from the importer in terms of their due diligence system. We have a number of those currently out where we've requested that information. We'll be going through a process of assessing those. So, essentially, as I described earlier, we have a risk based focus on a number of different types of importers and we're currently waiting for their responses to our requests for information to come in to assess their due diligence systems.

Senator KETTER: So some sort of review is going to take place once you get those responses?

Mr Mackay : Yes, that's part of our risk based approach. We'll then be conducting compliance of the due diligence systems and the degree to which they meet the requirements and then we will decide, based upon that, what further action, if any, is required.

Senator KETTER: And when are you expected to receive all the responses?

Mr Mackay : The responses are due back on 1 June this year and then we will commence the process to review those.

Senator KETTER: How soon do you think you'll be able to work out whether companies have been non-compliant?

Mr Mackay : We'll start making those assessments. That's a process we'll go through and then we'll determine whether any further action will flow from that. I would expect that that process will occur through essentially June and July.

Senator KETTER: I take it that there have been no infringements or penalties issued, if you haven't found any non-compliance.

Mr Mackay : No, no infringements have been issued.

Senator KETTER: I want to go to the issue of wine, unless somebody else has issues about forestry. When did the department counsellors become aware of certificate-of-origin issues with Australian wine exports to China?

Mr Quinlivan : That's an issue for the Trade and Market Access group, which we're bringing on a little bit later.

Senator KETTER: Okay. Is it possible at this point to have some follow-up questions in relation to the APVMA? I have some questions for the department.

Mr Quinlivan : Yes, I think we can. We'll let you know obviously if you exceed our current capacity, but we'll see how we go.

CHAIR: Can you give the secretary some sense of the category?

Senator KETTER: Mainly around the governance board issue.

Mr Quinlivan : That should be fine.

Senator KETTER: Thank you. I think it has now been clarified that the governance board under the bill would be established by 1 July 2019. That's correct?

Mr Quinlivan : That's right, yes.

Senator Ruston: It says the middle of 2019. I think that is the correct term.

Senator KETTER: So there is time to allow for that. I guess my line of questioning is about the haste with which this bill is being put through. I think there is some concern in the industry that there hasn't been consultation in respect of a governance board and the impact of it.

Mr Quinlivan : I think yesterday we went through a pretty extensive list of meetings and discussions with all of the various people. It may be that they didn't, in the end, agree with the proposition, but I thought it was pretty well established from the list of contacts that we'd had that there had been extensive consultation. There just may not have been a shared agreement at the end of it. That would be my assessment of the conversation.

CHAIR: Are you referring to the board of RIC?

Senator KETTER: No, this is the APVMA.

Mr Quinlivan : You might remember Ms Gaglia went through dates and stakeholders. It was quite a long list.

Senator KETTER: When was the bill prepared in relation to the governance board?

Ms Gaglia : We're developing a second bill at the moment. We have a bill before the Senate. It was being developed as part of that second bill, and then the government decided that they wanted to put it in as government amendments to the first bill in order to ensure that it would pass and that the extensive consultation process that would have to happen for the recruitment could occur so that the board would be in place in July 2019.

Senator KETTER: So this issue of the governance board is being done as a variation to the Agricultural and Veterinary Chemicals Legislation Amendment (Operational Efficiency) Bill 2017?

Ms Gaglia : Correct, Senator.

Senator KETTER: My question is in relation to that governance board issue. I could be wrong on this, I might not be correct, but I understood that that was a matter that is of some surprise to the industry—that this governance board is being looked at without the opportunity to explore the potential repercussions of it.

Ms Gaglia : As I explained yesterday, we've had quite a number of meetings with stakeholders on the detail of the board. They didn't see the actual amendments prior to them being submitted to parliament, but we definitely went through the extensive detail of what those amendments would deliver. So we went through and explained to them what the functions of the board would be, what the functions of the CEO would be, the structure of the board, how many members it would have, how they would be appointed, how they could be terminated and how the meetings would be structured. So they understood, and we worked through all of the detail contained in those amendments.

Senator KETTER: There seems to be pressure to have the bill rushed through prior to 1 July 2018. Is that correct? Is there an imperative for that occur to?

Ms Gaglia : There's an imperative for it to get through in time to allow the recruitment process, which takes approximately six to eight months, for the board to be in place in July in 2019.

Senator KETTER: Is it also correct that one of the implications, if the bill does not receive assent prior to 1 July, is that, essentially, relevant persons might be required to report twice under their annual reporting obligations?

Ms Gaglia : The government amendments that include the board also include an adjustment to the annual reporting time frame to ensure that doesn't occur if the bill doesn't receive royal assent before 30 June.

Senator KETTER: I'm sorry?

Ms Gaglia : The government amendments that include the board also include a change to the reporting requirements in the new bill so that they won't come into effect until the next financial year if the bill doesn't receive royal assent by 30 June. Therefore, they'll only be required to undertake the current reporting requirements, not both of them.

Senator KETTER: My question was: if the bill didn't receive assent prior to the end of this financial year, they might be required to report twice. So you're saying that's—

Ms Gaglia : The government amendments will fix it so that won't occur.

Senator KETTER: And that's irrespective of whether it receives assent by 1 July this year or not?

Ms Gaglia : Correct.

CHAIR: Surely we'll get assent to the bill before 1 July. We can sort it out here and now.

Senator KETTER: Well, there's still some concern that the legislation has been perceived to be rushed through. I know that you feel that you've given adequate consultation, but feedback that we're getting is that that's not necessarily the case. Mr Quinlivan, you identified yesterday and your report identifies policy capability issues and trust issues that you have identified as part of the area that you're looking at. Can you just explain to us why the establishment of the board was not put to parliament as standalone legislation rather than put through this other bill, the Agricultural and Veterinary Chemicals Legislation Amendment (Operational Efficiency) Bill 2017. Doesn't it warrant having its own bill, rather than being part of this other bill?

Ms Gaglia : Because we've currently got a bill before parliament that has already been through the House and is currently before the Senate, it was considered more efficient to do government amendments to that bill than to create a new bill and have that introduced into the House.

Mr I Thompson : And the creation of the board aligns in broad purpose with the other amendments, which are about improving efficiency and improving the operations of the APVMA. It's within that same broad framework.

Senator KETTER: Okay.

CHAIR: Before we go into the next phase of the afternoon, I'd ask staff members of senators who are showing an interest in examining officials through the balance of outcome 1 and outcome 2 to listen up and get reports to their respective senators. We are expecting a significant contingent of senators to arrive during the course of the afternoon, and many of them are quite exercised over the subject of live sheep export, so I just want to lay some ground rules. Firstly, I'm urging all colleagues that we approach this in a methodical way. But, in order that all of these senators will get a go, I'm going to tighten up very strongly on the area of questions asked and answered—not on whether there's any ambiguity about it, but, if a question has been asked and answer, I think the committee should be careful that we don't spend the afternoon listening to five different people asking the same questions to solicit the same answer. There'll be quite a deal of latitude around that, but where it becomes persistent and problematic then I will enforce the standing orders around that.

Also, we should be very careful this afternoon about seeking opinion on matters from officials. There's a lot happening in this space, and I don't think it will be helpful for all of the stakeholders to be confronted with having to express various opinions, some that might not be consistent with each other. I know there's going to be a lot of media attention, and we'll be front and centre for that, so I just urge that we operate in a very professional manner, and I'd ask that you respect the call of the Chair as and when.

There is only one final thing procedurally. The crossbench staff can convey this. In the order that a crossbencher comes in and registers their interest with the Chair or the secretariat, they'll be given precedence when the call comes for the crossbench. The next crossbencher that comes in and registers will be given the next call, assuming they're here at the committee at the time the call becomes available. It will move on to the third, fourth or fifth crossbencher who's showing some interest. Are there any questions from colleagues about how we're going to manage that? I'm happy to answer them. Otherwise, let the examinations begin.

Senator RICE: Chair, I still have some more questions on outcome 1.

CHAIR: Okay.

Senator KETTER: I just had a quick follow-up question on whether or not the department has received any feedback from industry stakeholders about the bill to establish the governance board.

Ms Gaglia : Through our consultations with industry, they've obviously made their views very clear about the board. All of the stakeholders that we've consulted obviously don't support the board and don't want to pay for it. Some of them have relented and said they can see the benefits of the board; they obviously don't want to pay for it. So, yes, they've made their views quite clear.

Senator KETTER: So it was overwhelmingly a negative response.

Ms Gaglia : Correct, Senator.

Senator KETTER: Okay, thank you.

CHAIR: Senator Rice.

Senator RICE: I wanted to continue asking some questions about the renewal of the regional forest agreement in New South Wales. I've been referred to statements from the New South Wales chief scientist, who stated that, in a report into the decline of koala populations in New South Wales, there was insufficient data to assess whether logging prescriptions to protect koalas work. So I want to know what steps the Commonwealth is going to take or has taken to investigate the impacts of logging on koalas, which, as we know, are an EPBC listed species, and to determine whether the EPBC accreditation is warranted prior to rolling over the regional forest agreements.

Ms Lauder : I heard you ask this at the environment estimates, and I think it was taken on notice by—

Mr I Thompson : Kylie Jonasson.

Ms Lauder : She took that question on notice, because the Department of the Environment and Energy are responsible in this area. She was going to look at what investigations had taken place and what they had funded, and answer your other questions related to the EPBC Act and koalas.

Senator RICE: So you aren't able to answer them. The other repeated refrain through my questions of the environment department was that it was the department of agriculture's responsibility to look at issues related to the regional forest agreements.

Ms Lauder : I did hear them say that very regularly, yes. But, on the koala front, they're working on the recovery plan and have funded some research and some analysis, and so she did take this one on notice.

Senator RICE: Given there is so much evidence that koalas prefer large trees and intact mature forests and given the steep population declines in the northern forests of New South Wales and the lack of data—

CHAIR: Senator, again, you have just made some statements that may well be contested by these officials and many people. I think you need to establish that. I think you need to ask the official what her knowledge is of the decline of koalas.

Senator Rice interjecting

CHAIR: No, Senator, I'm making a ruling for you to follow. So establish the basis and then ask the question.

Senator COLBECK: Where's the paper? Quote some research.

CHAIR: Yes, whatever.

Senator RICE: I can quote the research.

Senator Colbeck interjecting

CHAIR: Hold on. I don't need any assistance in this regard. Senator, establish the basis for the question and then you can ask the questions.

Senator RICE: Chair, I can ask my questions and I am sure in the manner which I wish to ask my questions.

CHAIR: You can and I can rule them out one after the other, and I will. So ask the question of Ms Lauder to establish the basis of her knowledge.

Senator RICE: Ms Lauder, do you agree with the evidence that koalas prefer large trees and intact mature forests?

CHAIR: Which evidence would that be?

Ms Lauder : I must admit I haven't really looked into what koalas prefer, so I'm not aware of it.

Senator RICE: There is significant scientific evidence, which, if the chair would like me to table, I would be able to do that.


Senator RICE: But I don't have that with me this afternoon.

CHAIR: You didn't know that you were going to require into this at estimates, Senator?

Senator RICE: I don't usually have to have the backing of all of my scientific evidence with me at my side in order to ask a question. I will bring it next time if that is what you are insisting.

CHAIR: I look forward to that.

Senator RICE: I look forward to bringing it. I can bring you a whole library of the scientific evidence on the impact of logging on threatened species, whether it be Leadbeater's possums, greater gliders, western ringtail possums or koalas. The evidence is sky high.

CHAIR: Fortunately, it's your time you're taking up, so you can continue as long as you like and then I'll speak to you, Senator.

Senator Colbeck interjecting

CHAIR: Senator, please!

Senator Ruston interjecting

CHAIR: And minister! Senator, if you want to ask a witness a question, you can't go on with this introduction of your view of the planet and then ask them if they agree with it.

Senator RICE: You do it all the time. You do it all the time, Chair.

CHAIR: When you're ready.

Senator Ruston interjecting

CHAIR: No, Minister. Please. No.

Senator Ruston: You don't want me to answer the question?

CHAIR: No, I don't at this stage.

Senator Ruston: Okay.

CHAIR: Senator, all I'm asking you to do is, if you're asking the witness to agree with some scientific study that you particularise the study, provide it, if you have it, so that they can assess it and then make an answer to your question. You can't just go and say the whole world—

Senator RICE: Chair, I can refer you to considerable scientific study—

CHAIR: Then let's do that—

Senator RICE: that I do not have with me at this moment. I'm sure I could table it later on today.

CHAIR: Anyway, that question is out of order. Don't answer that question. You're incapable. Senator, you have the call.

Senator Ruston: He called you 'incapable'.

CHAIR: Well, it would be nice to know if they were aware of it, and the senator could clear that up but she's declined to do that.

Senator RICE: I was asking whether they agreed there was evidence that koalas prefer large trees and mature forests. Are you aware of that evidence, Ms Lauder?

Senator Ruston: Neither of us are.

Ms Lauder : No.

Senator RICE: Are you aware of the evidence of sharp declines in koala populations on the North Coast of New South Wales?

Senator Ruston: It certainly has been the subject of much media discussion.

Senator RICE: So do you agree there have been sharp declines in koala populations on the North Coast of New South Wales?

Senator Ruston: I don't have the evidence before me. As I said, I have seen significant media coverage of the issue.

Senator RICE: What's your view of the evidence that the New South Wales chief scientist has indicated in her report states that there is insufficient data to assess the efficacy of logging prescriptions?

Senator Ruston: What I would say is that since the RFAs have come into effect we have seen nearly a doubling of the size of the amount of reserves that are now prescribed. And we only saw a couple of weeks ago the New South Wales government move to put another 25,000 hectares of native forest under reserves, particularly citing the specifics of the koala issue that's been publicly reported. So, I think, as the chair rightly points out, we need to be very careful we don't go on making wild and outlandish statements. But suffice to say—

Senator RICE: They are not wild and outlandish statements—please, minister.

CHAIR: Let the minister answer the question and then you can disagree with it when you respond.

Senator Ruston: What I'm putting on the public record is a matter of fact: since the RFAs came into effect in New South Wales there has been a 95 per cent increase in the amount of area that's under reserve. So, the extrapolation of that is that they have been very responsive to concerns and actions and, as I said last week, another 25,000 hectares was put under reserve with the express purpose of assisting in the recovery of the koala which you are referring to.

Senator RICE: Do you agree that, those new reserves notwithstanding, there is a lack of data available to assess the efficacy of logging operations and logging prescriptions?

Senator Ruston: That wouldn't be our view. Our view, very strongly, is that there is evidence and that the broader consultation that's been undertaken would support the renewing of the RFA.

Senator RICE: Given that what the chief scientist has said about the lack of data. and despite the Commonwealth's view that you can proceed with the RFA, will the Commonwealth comply with the precautionary principle by not signing a new or extended RFA until the data gaps identified by the chief scientist are filled?

Senator Ruston: First of all I'd like to have the opportunity of looking at what the chief scientist has actually said, because, as we all know, selective reporting of data in science sometimes has the direct opposite impact of actually greater uncertainty and lack of surety in the environment. So if you would do me the service of allowing me the opportunity to have a look at the information that has been published by the chief scientist that you're referring to, then I'm more than happy to make a comment once I have informed myself.

Senator RICE: So you are questioning the New South Wales chief scientist?

CHAIR: No, that's outrageous.

Senator Ruston: Chair, I take offence to the comment because that is a complete misrepresentation of what I said. What I said was: I would like the opportunity to have a look at what the chief scientist has said, in full, because obviously you are selectively picking out pieces of the report—you couldn't possibly have time to read it all into Hansard. I'd like to read the report and her comments in their entirety, and then I'll pass my judgement as to whether there is other impacting information that needs to be taken into account. At the moment, I think my view is uninformed, because I haven't read it.

Senator RICE: As far back as 1980 the then Forestry Commission of New South Wales found that in the Eden area 'clear-felling eliminates arboreal animals from the logged area'. There are proposed new logging laws in the coastal forests in northern New South Wales—the Integrated Forestry Operations Approvals—which propose to legalise clear-felling where it hasn't previously occurred. What steps has the Commonwealth government taken to satisfy itself that the New South Wales Integrated Forestry Operations Approvals will not impact upon EPBC listed arboreal mammals, including koalas and greater gliders?

Ms Lauder : We're still in the process of working with New South Wales on the extension of the RFA. They are bringing up a range of people to Canberra in very early June to brief both me and my team and also the Department of the Environment and Energy on what is looking like coming out of the Integrated Forestry Operations Approvals as well as their whole forestry management system. We have a range of questions on everything from threatened species to compliance to sustainable yields of timber et cetera. That's one of the key things we're doing to make sure that we clearly understand and have the opportunity to question it or get confirmations, and that will be done while they're still consulting on the IFOAs so that we have the ability to potentially influence that. But we won't be agreeing to extending the New South Wales RFAs until we are comfortable with what the changes will be through these processes.

Senator RICE: At this stage you're asking questions of the IFOAs?

Ms Lauder : Yes.

Senator RICE: You are not providing assessment as to what the Commonwealth feels the impact may be on the basis of the scientific advice that you have—

Ms Lauder : At this stage we're trying to get a better understanding of what their plans are.

Senator RICE: Would you be able to table the list of those questions you're asking of the New South Wales IFOA?

Ms Lauder : We are working with Environment to agree what they are right now, but I can't see why we couldn't. I can't table them right now, though, because we don't have them right now. Would you like us to provide them on notice?

Senator RICE: Yes, please. Minister, the whole regional forest agreement process, and the accreditation of it under the EPBC Act, is based on the idea of ecologically sustainable forest management. Is that correct?

Senator RUSTON: Correct.

Senator RICE: An ecological sustainable forest management is defined, as I understand it, as 'managing forests so that they are sustained in perpetuity for the benefit of society by ensuring that the values of forests are not degraded for current and future generations'. Do you accept that definition?

Senator RUSTON: Yes.

Senator RICE: It is from Commonwealth documents. Given the evidence that we have about what the impacts of logging have been on forest species like koalas, greater gliders, and the large forest owls, given the reduction in carbon stores that logging of old forests in particular causes, the reduction in carbon sequestration, and the negative impacts on water supplies and quality, what steps has the Commonwealth taken to investigate whether the New South Wales logging regime is actually ecologically sustainable forest management?

Senator RUSTON: Obviously, you know that I'm about to say that I don't accept the basis or the premise on what you have just said, and that you are once again quoting from the so-called mountain of science that supports your position, which is contrary to much of the evidence and information that is before me. The federal government is undertaking a series of actions, which Ms Lauder has just run through with you, to satisfy ourselves that we're meeting the conditions we are obliged to under the rules of the RFA. So, I can't support your comments, because I don't think that they reflect the existing situation.

Senator RICE: Do you disagree that the logging that's occurred under the Regional Forest Agreement has impacted on forest species like koalas, greater gliders and large forest owls?

Senator RUSTON: If you want to take it to the impact, forestry by its very nature interacts with things. What I am saying is that I don't believe that I have before me science that supports the fact that forestry has had the major impact on these particular animals that you are purporting it does. Unquestionably, forestry impacts. But whether the long-term sustainability of things is impacted on by it, I would question that. Don't try to put words into my mouth.

CHAIR: Thank you, Senator Rice. Senator Colbeck.

Senator COLBECK: I want to go back to a question I asked earlier, and I'll ask you to take it on notice. It concerned the development of methodologies for the Emissions Reduction Fund—whether you're doing any work on that. Senator Rice talked about the impact on carbon storages of the forest industry. Have you seen any of the research that's come out of the CSIRO, in particular, and also from some of the world's leading carbon and forestry scientists? Ximenes is one, working out of New South Wales, and there is a Canadian chap who has been working out of Tasmania who talks about the management of forests. In fact, even the IPCC has said that a managed forest will store more carbon over time. Are you aware of those elements of research that are part of the broader forestry debate?

Senator Ruston: Absolutely. A lot of the new narrative around forestry is about the fact that, sitting here right now, we're sitting on a carbon sink; it's right in front of us. The argument that, immediately you cut a tree down, you have somehow removed all of its capacity to be of benefit to the environment is not correct—with the body of science that I have available to me. So, yes, there's a lot of great work that has been going into what the overall landscape impact is of the management of our forest products—what our trees are able to achieve. So there are some great news stories out there, and I think we do need to learn how we can better manage it so that we can continue to enjoy the benefits that trees and wood deliver to us, as well as continuing with a sustainable environment.

Senator COLBECK: In the context of koalas and their interaction with forests, I'm aware of some initial claims and of some initial work that was done in the early days of eucalypt plantations that indicated that they wouldn't be suitable as koala habitat. Are you aware of the habitation of koalas into the native plantation industry?

Senator Ruston: Yes.

Senator COLBECK: I wouldn't call it a mature forest. And I also have seen some science that puts forward the theory—I won't place it as a fact—that koalas, in fact, do enjoy a mixed forest, with a range of age classes; it provides a variety of food sources for them and a healthy environment.

Senator Ruston: Yes, absolutely.

Senator COLBECK: In a broader perspective, a disturbance to the forest—whether it be through mechanical harvesting, of whatever form, or some other catastrophic event like a bushfire, landslide or something like that—is part of the actual cycle of the renewal of the forest. In fact, it maintains a range of age classes within a forest and, therefore, the overall forest health.

Senator Ruston: There is a definitely a view that the integration of all those various aspects makes for a better and more sustainable environment, but, equally, I don't have that evidence to put before you today, so I won't be passing judgement on it. But certainly I'm very well aware that that has been the changing view of recent times.

Senator COLBECK: Are you aware of any regrowth forest that might be, say, of an age class of 30 to 60 years that has been presented publicly as old-growth forest?

Senator Ruston: Yes.

Senator COLBECK: I will put on the record—because this is fact—that recently harvested forest, in fact clear-felled forest, has been nominated and accepted to be part of our wilderness world heritage areas?

Senator Ruston: That is my understanding.

Senator RICE: As linkage forest—as you well know, Senator Colbeck.

CHAIR: Senator—

Senator RICE: Not for its own value but in between—it is connecting up other areas of intact forest.

CHAIR: Senator Rice—

Senator COLBECK: Actually—

CHAIR: Hold, please, for a second. Senator Rice, you will start to show this committee the courtesy of adhering to the rules we've laid down this afternoon. You weren't here, but we've asked that everybody stop this cross-engagement at the table. Your business is in front of you. So, please, pay respect to others.

Senator COLBECK: Can I say, Chair: I am going to, perhaps unsurprisingly, disagree with Senator Rice because, given that it's in my home state and I participated as part of the process—

CHAIR: I wouldn't reflect on interjections, or they'll invite more, Senator Colbeck. Please direct yourself—

Senator COLBECK: I do want to correct the record, because what Senator Rice said simply isn't true. They are integral parts of those forests, and I'm not going to attribute motive for the process, but I have my thoughts on it. But there are recently clear-felled forests that have been incorporated into our wilderness World Heritage Areas as part of their broader land mass. That is a simple fact. I might leave it there.

CHAIR: I want to ask some questions in relation to the Farming Together pilot program that was run out of Southern Cross University with some support. Firstly, can you advise the committee on what funding was available or provided to get the program up and running initially.

Mr Blong : The funding profile was $700,000 in the first financial year, which was 2015-16. The rest of the funding followed in the 2016-17 and 2017-18 years.

CHAIR: What were those funding tranches?

Mr Blong : They were $16.88 million in 2016-17 and $6.18 million in 2017-18.

CHAIR: So this is a very substantial program.

Mr Blong : It's about $13.8 million in total.

CHAIR: So could you share with the committee a profile of the architecture of it and what you think is the intention or the intended outcomes.

Mr Blong : The program's essentially aimed at improving the knowledge base of how cooperatives and collaborative business practices can offer new, innovative farming models for farmers and farm groups.

CHAIR: Is that it?

Mr Blong : The program has been developed and designed by Southern Cross Uni, which is charged with running the day-to-day management of the program.

CHAIR: Yes, but is it going any further? What will we see at the other end? Will we see a spectrum of structures where they might be able to take this knowledge and put it into play, or strategies, or how they might get funding?

Mr Blong : Certainly over the last couple of years there have been quite a range of sort of on-the-ground activities, workshops and education modules developed by Southern Cross Uni to grow the knowledge base and to share information about how cooperatives might provide an avenue or business model that some farm groups might like to pursue. There'll be fact sheets and tools and those kinds of information. That will continue to be available to farmers and the public beyond the program.

CHAIR: Have individuals or groups taken advantage of the work to date that's been funded?

Mr Blong : Certainly the reports from Southern Cross Uni suggest that there's been quite strong interest in the program. There are certainly several hundred farming groups who have benefited from expert support that's been given to them—tailored support from lawyers and accountants and other experts that might be relevant.

CHAIR: Do they get the benefit of that for free, or is it a cost recovery basis?

Mr Blong : No, it was funded from the pool of the $13.8 million. So it was free, and they were entitled to, I think, in the first instance several hours worth of on-the-spot expert advice. Then, based on their needs, they can come back for more tailored, more specific and more elaborate advice, if you like, depending on their individual needs.

CHAIR: What plans do we have to, I suppose, measure the efficacy of the investment of the Commonwealth in this, either progressively or at the end?

Mr Blong : The evaluation of the program will take place when the program concludes at the end of this financial year. Part of the funding deed with Southern Cross Uni that the Commonwealth has in place requires them to conduct independent evaluation that reflects on performance against intended goals, level of participation, feedback from participants and lessons learned from the program.

CHAIR: Are there any terms of reference for that?

Mr Blong : I don't believe they've been developed yet, because the Southern Cross Uni project team are still in the midst of delivering the program as is, and then—

CHAIR: Yes, but from our end—from the government's end?

Mr Blong : We'll be involved in the development of those terms of reference with Southern Cross Uni, but Southern Cross Uni is responsible for undertaking the evaluation. Part of the funding package they have is a component dedicated to monitoring and evaluation.

CHAIR: So, at the end of this, who owns the legacy resources to come out of this? Is it the government?

Mr Blong : Yes, the funding deed gives rights to some of the IP to the Commonwealth. I should point out that many of the legacy items are now publicly available information in terms of fact sheets, tools and educational modules.

CHAIR: How have they been delivered? Is it through the university?

Mr Blong : That's right. They have a Farming Together website that the university manages. As the project winds down and moves into that final transition phase post-June, the department will work with Southern Cross Uni to look at options for making sure some of those tools and resources continue to be available.

CHAIR: You'll inherit them in the department. How do you then shopfront them? How does it become available to a farming group to access that? It will have the legacy material obviously?

Mr Blong : Yes.

CHAIR: But then if they want to get further advice or—I don't know—need guidance, will the department be equipped to do that and engage with them?

Mr Blong : The program in its current form won't continue beyond June this year; it's a terminating white-paper measure. In terms of some of the resources, documents, fact sheets and tools, we, with Southern Cross University, will look at what the best home for some of that material is. Some of it might come into the department's fold, but that's something to be worked out with Southern Cross Uni.

CHAIR: What would be the alternative? What didn't come into the department? Where will that go?

Mr Blong : We can house a lot of that information, but I'm conscious that some of the information can get out of date, and then you have the issue of documents being made available on co-ops and business structures and constitutional requirements around setting up a co-op. That does need to be maintained over time.

CHAIR: You think these legacy resources have a declining life, even from when we first receive them?

Mr Blong : Certainly, yes. They'll need to be updated and maintained in some form. I know Southern Cross Uni has a strong interest in continuing some form of interest in co-ops and innovative business models. That's part of their broader university strategy.

CHAIR: But how will that be funded? If I'm a farmer and I go down to Macquarie—it is Macquarie, isn't it?

Mr Blong : Lismore.

CHAIR: If I say to them: 'I need some help here. Can I look at this material? Can I choose something from it? Can you guide me?'—is that going to happen at the university?

Mr Blong : So—

CHAIR: You might be able to sort me out in one or two answers. We're spending $23 million.

Mr Blong : It's 13.8 million.

CHAIR: It's $13.8 million—that's a hell of a lot of money. We ought to get some very good legacy resources out of that investment. But, in the conversation so far, you're not filling me with confidence that we'll get a return on our investment for our farmers, farming communities and people in primary production. I'm looking to hear you say, 'Listen, when this truck comes in and tips up the load into the department of agriculture, we're going to turbo it for the benefit of all Australian farmers.'

Mr Blong : I understand what you're saying. I think it's important to note, though, that part of the merit of the program was building a broad knowledge base, not just within Southern Cross Uni or the department or individual current program participants. It's lifting up the broader community understanding among farming groups, consultants, lawyers, accountants, agronomists and other parties that are involved in farming supply chains so that they have an enduring better knowledge of co-ops as a potential—

CHAIR: Your suggestion is it's been more an education objective?

Mr Blong : That was the primary focus of the program. There is a component of the program that is grants based, where individual farmer groups could apply on a merit based approach for small grants. They were very much targeted at specific needs of those farmer groups. They might have been doing feasibility study or market research, but they were very much targeted at the individual needs of a farming group that might be looking at starting up a co-op.

CHAIR: What about extension services? Sadly, I'm old enough to remember when departments of agriculture in the states and federally had extension services where they'd come out into the world and join with groups in their natural habitats—I shouldn't use the word 'habitat' at the moment, I suppose—or in their natural environment to help them build a capacity. Are there no plans to do that?

Mr Blong : Not from the departmental perspective, but Southern Cross Uni through its work, and other participants in the program, now have a stronger base to take forward in their own right. The department itself, with the closure of the program this financial year, won't have a specific tailored program with respect to co-ops, but certainly those that have been involved in the program will have an enduring benefit that they can leverage to the benefit of others as well.

CHAIR: There are a number of organisations who represent these collectives or mutuals. What would be the attitude if they were to apply to take away and manage some of the artefacts of this effort? It wouldn't matter to the Commonwealth, obviously, but, if they want to take it on board and drive some education programs using some of the legal or accounting knowledge, the architecture of structure and the strategy ideas, do you think it would be received favourably if they were to come and try to take away what they could of these legacy items?

Mr Blong : Most of the legacy items are in the public domain, and they're freely available. They're not behind any paywall or anything like that. So any interested party that has an interest in building on these could leverage the information that's introduced.

CHAIR: But you talked about the university actually working with people and tailoring legal advice to the circumstance in front of them. That will end with this.

Mr Blong : That's true.

CHAIR: How would someone access that block of legal knowledge in relation to what they may or may not do?

Mr Blong : The short answer is that they'll probably need to pay for it, as most businesses have to do, in terms of a fee for service with accountants and lawyers and other business advisory services. But I know Southern Cross Uni, for instance, is looking at partnering with some private sector partners. There's an option to continue some aspects of the program just as part of a broader university strategy, but that's a matter for them. I can't go into much detail on that.

CHAIR: But why would the university do that? Will they be taking a commercial pathway out the other end of this?

Mr Blong : All I can really say is that the university is exploring this as an option. I'm not too sure how firm their plans are, but I think they have a broader strategy at the university in Lismore to become, if you like, a national centre of excellence for these types of innovative business models that might be relevant to the farming community.

CHAIR: Would it be user pays if you wanted to—

Mr Blong : I think their model is still in development, so I can't go into much detail.

CHAIR: Again, it would disturb me if they've developed their capacity through a $13 million investment by the Commonwealth and then farmers have to go to them and pay for an outcome of a commodity that they'd otherwise finance. I could spend all day.

Senator Rice, you have the call now and, in the absence of another senator arriving in this space, you can go till midnight.

Senator RICE: Thanks, Chair. I won't go till midnight.

Senator BROCKMAN: Eleven o'clock at least, Chair!

Senator RICE: I now wish to move us to WA—so Senator Brockman might be interested—and the western ringtail possum, which has recently been uplisted to critically endangered.

CHAIR: Just when you thought it was safe!

Senator Ruston: No, we never know it's safe as long as Senator Rice is here!

Senator RICE: Noting that the western ringtail possum has recently been uplisted to critically endangered, I'm wondering how the department, in the negotiation over the extension of the regional forest agreement—given the WA Regional Forest Agreement is up to be extended or rolled over next year—is taking this into account.

Ms Lauder : We haven't really taken it into account yet—only because we are in very early stages of discussion. The discussions have really been focusing on the process, timing, accessing information, data and consultation. We haven't got into the actual content yet. That's the only reason why.

Senator RICE: Can I confirm there is logging occurring within the areas that have been identified as western ringtail possum habitat?

Ms Lauder : I'm sorry, I don't know that off the top of my head. Would you like me to take it on notice?

Senator RICE: You could take it on notice, but I'm pretty sure that that's the case.

CHAIR: Well, you didn't need to ask the question.

Senator RICE: Well, you wish me to ask questions rather than just note information.

CHAIR: Of course, and you're doing just fine, Senator.

Senator RICE: Given that the information in the conservation advice that led to the uplisting of the western ringtail possum notes logging as one of the threatening processes, will the Commonwealth be calling upon the WA government to immediately cease logging in the areas that are identified habitat of western ringtail possums?

Ms Lauder : I don't know very much about this possum and would need to talk to my colleagues in Environment, but they haven't expressed to me at all that we would be doing anything like that. I'm not sure if a recovery plan is being developed or what the conservation advice says. So, I do have to admit I don't know very much background about this species. But it wouldn't be my expectation that we would be demanding that, no.

Senator Ruston: We will follow the appropriate process that's relevant to the requirements under the EPBC Act, the RFA and the commensurate state legislation.

Senator RICE: Just reading through the conservation advice, the two recommendations related to logging that I have identified are that this conservation advice should:

… inform timber harvesting activities so as to ensure key habitat areas are maintained.

and that there should be:

… implementation of forest management practices that ensure the maintenance and protection of high quality western ringtail possum habitat …

CHAIR: For the assistance of everybody, are you making reference to a document or a paragraph of—

Senator RICE: I'm making reference to a document that I have online here, which is conservation advice leading to the uplisting of the possum to be critically endangered.

CHAIR: At the very least, could you identify—

Senator RICE: I'm pretty sure I already did that, Chair.

CHAIR: Sorry. So you have identified the IP address for that to this committee, since I've been sitting here?

Senator RICE: I have identified the document that I'm referring to: the conservation advice leading to the uplisting of the western ringtail possum to be critically endangered.

Senator Ruston: What you just read out did not say 'cease logging'; it said there were actions that needed to be taken.

Senator RICE: Yes, to 'ensure the maintenance and protection of high-quality western ringtail possum habitat'.

Senator Ruston: You can't—

Senator RICE: And to 'ensure key habitat areas are maintained'.

Senator Ruston: Indeed, but you cannot extrapolate what you have just read to mean requiring the cessation of logging. That is just a bridge too far.

Senator RICE: No, it's to ensure the protection.

CHAIR: That's right.

Senator Ruston: Okay. I'm just saying that I agree with your statement in terms of meeting our obligations under the necessary legislation. However, I don't believe that what you have just read out says that logging needs to be ceased.

Senator RICE: Ms Lauder, what is the period—

CHAIR: So that we can clear this up, does the document recommend that logging cease?

Senator RICE: The document recommends that 'key habitat areas are maintained', and that we need to have 'forest management practices that ensure the maintenance and protection of high-quality western ringtail possum habitat.'

CHAIR: That's good. But your reference earlier to a recommendation to cease logging, is that—

Senator RICE: I did not make that recommendation. I asked whether the Commonwealth was going to be requesting that of the Western Australian government.

Senator Ruston: I think you can take—

Senator RICE: And the answer was no. So I now wish to move on and ask: what's the period of time that the decision-making is likely to take place in before the forest management practices will be informed? How long is the period of time that's likely to take place?

Ms Lauder : Between the uplisting of the species and the prescriptions et cetera?

Senator RICE: Yes.

Ms Lauder : I don't know. I would imagine Department of the Environment and Energy colleagues are working very closely with the environment and forestry departments in Western Australia about the prescriptions that would need to be considered to action that conservation advice. I will need to follow up with them and get an update on how long that process would be and where they're up to.

Senator RICE: Will it be within a year, would you expect?

Ms Lauder : Because it's a different department, I would be guessing if I told you a time frame, so it's probably better that I take it on notice and follow it up with the Department of the Environment and Energy.

Senator RICE: Certainly, from the experience in following other species at this stage, it seems that the period is usually more than a year. In fact, once a species, as we discussed last estimates, is listed—the greater glider, for example—there are three years before a recovery plan is required.

Ms Lauder : Yes.

Senator RICE: Is this a concern to you given that this conservation advice also indicates that the estimated population of the western ringtail possums is 3,400 animals and the estimated population decline under current practices is greater than 10 per cent over the next 10 years? So do you have a concern about the time that's going to be taken before—

Senator Ruston: What I have a concern about, Senator Rice, is the fact that we have all these statements that are made in isolation. You've got 3,400 animals that, it is suggested, remain in existence. You've got an area of reserve that is obviously the habitat that these animals live in. There is a small percentage of that reserve that relates to forestry practices. So we just need to be careful we're not conflating one with the other. I don't have all of the information, and I certainly don't have sufficient information to connect all the various parts of what you're saying to come up with a collective sum. You just plonk these things out there. I would like the opportunity, if I could, to have you maybe give me the entire chain of events and give me the opportunity to be able to assess what you're saying, because any response that I give to you now will be a response on only part of the information that I would need to make an informed response. I'm finding it very difficult to follow your chain of questioning here, because I don't know how many of those 3,400 animals are living in the area that potentially could be logged. I have no idea how much of the pristine high-value habitat that you're referring to exists within that area. I don't know the recovery plan objectives, if there are any, in relation to ensuring that there is a recovery plan for this particular animal. You really are just throwing things around with no capacity for any of us to really respond.

Senator RICE: Given the estimated population of 3,400 animals and that population decline, does the Commonwealth think that it would be urgent to review forest management practices to ensure the protection of the habitat?

Senator Ruston: If we accept the premise in the original part of your comment, which at this stage I don't have the evidence to do, then I could make an informed comment. But I need all of the information. You're saying hypothetically 'if this were the case' or 'on the basis of this piece of information I've thrown out there'—

Senator RICE: No, it's not hypothetical, Minister. It's the conservation advice from the Commonwealth.

Senator Ruston: Can I finish, please. You have not told me how many of these supposed 3,400 animals are living in the area that potentially has the possibility to be logged. You haven't told me what amount of that area is logged annually and therefore what the level of exposure to this animal is. You haven't told me what amount of the so-called high-value habitat exists within the area that could potentially be logged. You are asking me to make an informed decision, which I'm sure you'll report in the media, on the basis of you just throwing one piece of information over there without any context or any substantiation. With the greatest amount of respect, I am more than happy to have to have this conversation with you. I'm more than happy to find all the information that you're asking me to, but I'm not going to sit here and allow to keep on trying to get a gotcha moment on me when you know that you aren't providing me with enough information to give you an informed response.

Senator RICE: What, Minister, do you think would be a reasonable time frame, given the circumstances of this possum, for you to make such an informed decision?

Senator Ruston: I'm more than happy to work with you with the greatest amount of haste.

Senator RICE: No, that wasn't my question. What would you expect to be a reasonable time frame, given the circumstances—a critically endangered possum, 3,400 animals and 10 per cent population decline at least over 10 years—to make such an informed decision?

Senator Ruston: Well, as long as it—

CHAIR: Minister, please hold. There are a lot of people who have a lot of interest in affairs this afternoon. Senator, if we were to ask these witnesses to remain, notwithstanding that we're coming to the end of outcome 1, to allow you time to—will you just please let me get to the end of the sentence before you shake your head?

We could allow you time to go back to your office and collect this research, these documents, this body of work that you want these witnesses, these officials, to comment on, and bring it back. We'll give them some time. We've got nine hours before the end of the day. When they've had a chance, we'll bring them back and you can have open slather to continue your examination. You don't want—

Senator RICE: Chair, I am approaching this research. I'm sure they very well know what this conservation advice is.

CHAIR: Well, you'll have a job when you leave politics.

Senator RICE: I can quote from the threatening processes. There are a range of threatening processes, not just logging. There's climate change. There's groundwater depletion. There's increasing temperature, land clearing and habitat fragmentation, feral predators, fire, tree-declining insect outbreaks, competition for tree hollows, and then logging.

CHAIR: And drunken leprechauns!

Senator RICE: Then you've got domestic dogs, rodents and myrtle rust. Western ringtail possums are more abundant in unlogged forests or where logging—

CHAIR: We'll all just sit quietly until the senator has finished.

Senator RICE: You wanted me to quote some research, Chair.

CHAIR: No, I didn't.

Senator Ruston: You just gave a great long list of things that impact—

CHAIR: No, let it go.

Senator RICE: Western ringtail possums are more abundant in unlogged forests or where logging has been least intense. Logging leads to local mortality, including via increased feral cat predation. Ongoing regulation of logging activities is required in multiple use areas to manage this potential threat. And the impact of logging is described as 'high'. It can halve the productive output of females. So clearly there needs to be a process—

CHAIR: Hold on, Senator. The conversation is with me. I've just waited very politely for you to finish. Here's what's going to happen. From this point forward, for every question you ask where you state some scientific position and you don't have the documents provided to the witnesses, I'm going to rule your question out of order. And you can go until you're pink in the face; I won't blink. That's what we're going to do. And then we going to move on, so that we can get on to other parts of estimates. So, Senator, you have the floor.

Senator RICE: What is the time frame that the department expects to be in place in order to assess the impact of logging and to implement regulation of forest management practices, given that logging is impacting upon the populations of the critically endangered Western ringtail possum?

Senator Ruston: As you listed before, there was a very long list of things that were impacting on this particular animal, and many of the actions would come under either the department of environment or Western Australian agencies. Whilst we will play our part in the process, there will be other agencies that have to be involved. So I can only say that I will work at an expedient rate to ensure that we play our part in the overall assessment of what you are proposing needs to be done, but it's not totally within my control. So it isn't just the federal Department of Agriculture and Water Resources that will be required to assist in what you are putting forward—and, as I say, we're only hearing you talk about it—as an issue.

Senator RICE: Minister, do you have an estimate of how long this process is likely to take?

Senator Ruston: I can only say that I will work as expediently as possible to get you a resolution as soon as possible. But, as you well know, there is a very long process that's associated with dealing with these situations.

Senator RICE: We've got a very long process—indeed. That's what I'm concerned about.

Senator Ruston: Because we have to build a body of science and evidence. We have to make sure that all of the facts are considered and all of the impacts. We need to do the research. A lot of things need to be done, as you well know. So, as I say, trying to get some gotcha moment where I say I'm going to give you the answer next Tuesday fortnight is serving no purpose. All I can assure you is that there are very rigorous processes in place to deal with the situation such as you are referring to, and we, as the federal government, will ensure that we meet the requirements of the law, as we are required to do.

Senator RICE: In the meantime, Minister, the Commonwealth won't be asking for any change in logging practices until that assessment is completed?

CHAIR: Hold on. That question has been asked and answered. Move to another question.

Senator RICE: The Commonwealth won't be requesting any change in logging practices in the meantime until that research is completed?

Senator Ruston: Once again you're verballing me. I have said that there is so much information that's missing from this conversation that I am not in a position to be able to make any informed response.

Senator RICE: Yes, I understand that.

Senator Ruston: When I have all that information and when I have spoken to my counterparts in other agencies—there may be other agencies that have imperatives that override what we're proposing to do because of EPBC requirements. Whatever it happens to be, you are asking me to make definitive comments without all the information before me. I am not going to do that, so please just give up on it, because I am not going to give you an answer to something when I have not got the information within my realm to be able to give you that answer.

Senator RICE: Thank you, Minister. I'd now like to ask some questions about the proposed paper for the agriculture ministers on climate change adaptation in agriculture. In the release from Minister Littleproud, it was mentioned that the paper would deal with the following matters, so can I confirm each of them. One was 'potential climate change scenarios and impacts over time.'

Ms Cully : Correct.

Senator RICE: 'Analysis of risks and opportunities presented by climate change to agricultural industries. A description of current work'—

CHAIR: Sorry, Ms Cully. The Hansard doesn't record silence.

Ms Cully : Yes. I think we're reading from the same release.

CHAIR: But the senator has decided to read something that you've all got. You'll need to confirm it line by line for her.

Senator RICE: 'A description of current work on managing emissions in the agricultural sector.'

Ms Cully : Yes.

Senator RICE: 'A stocktake of approaches to adaptation across jurisdictions.'

Ms Cully : Yes.

Senator RICE: 'Proposed actions and a work program for a national approach supporting the sector to adapt to climate change.'

Ms Cully : That's correct.

Senator RICE: When will this paper be presented to the agricultural ministers?

Ms Cully : That will depend on the scheduling of the next agriculture ministers meeting, but we're working along with Victoria to those time frames.

Senator RICE: Is there going to be a stakeholder consultation process on the paper?

Ms Cully : Victoria is leading the drafting of the piece of work, and that issue hasn't been canvassed between us and them yet.

Senator RICE: So you don't know whether there will be submissions or whether it's open or closed to the public to have input into it?

Ms Cully : No.

Senator RICE: Would the Commonwealth like to see the public be able to have input into this paper?

Ms Cully : I think it would be reasonable to expect that, in providing Commonwealth input, we would be consulting our stakeholders.

Senator RICE: Okay. Who's going to sign off on the final paper before it's presented back to the ag ministers?

Ms Cully : It is a paper that's led by Victoria, and it's a paper that would be presented to agriculture ministers, but if it's collectively drafted then you would expect sign-off by jurisdictions.

Senator RICE: By all jurisdictions?

Ms Cully : Yes.

Senator RICE: Is it planned that it would be released, after it's presented to the ag ministers, to the public?

Senator Ruston: That would be a matter for the ag ministers to decide at the time, I would imagine.

Senator RICE: Okay. What's the time line of its development?

Ms Cully : I don't have much to add to the release other than that it's a paper for agriculture ministers, and we would expect it would time in with the next agriculture ministers meeting when that is scheduled.

Senator Ruston: Certainly there was an expectation at AGMIN—the next AGMIN. Whether it's the final document I would doubt. I would think it probably would be reporting in draft format at the next AGMIN.

Senator RICE: I note that includes 'a description of current work on managing emissions in the sector' as a matter to be considered. Would this mean that the proposed actions and recommendations that come out of it will also relate to reduction in carbon emissions as well as adaptation?

Ms Cully : I think, based on the scope of what's just described there, the answer would potentially be yes.

Senator RICE: Right. Either through this process or through the work that's been done by the Department of the Environment and Energy, what's the work that's going on regarding agricultural sector greenhouse gas reductions in line with Australia's commitment to the Paris targets of reducing our overall carbon emissions by 26 to 28 per cent.

Ms Cully : In relation to this particular agriculture minister's piece of work or more broadly?

Senator RICE: Either through this or more broadly.

Ms Cully : This is one strand of work that will bring together a range of work underway in government. In terms of the commitment to reach the Paris commitment, the responsible policy agency is the Department of the Environment and Energy—I know they've appeared separately—but obviously we have a strong interest in agriculture's contribution as part of—

Senator RICE: What work is going on in the department at the moment with regard to reducing emissions from agriculture?

Ms Cully : We have a range of work underway in terms of climate more broadly. It includes working with the Clean Energy Regulator and the Clean Energy Finance Corporation and also with the Department of the Environment and Energy on methodology related to methods under the ERF.

Senator RICE: Is the department responsible for coming up with strategies for reducing greenhouse gas emissions? Is it the Department of Agriculture and Water Resource's responsibility or are there discussions with the Department of the Environment and Energy to do this work?

Mr Quinlivan : It's a shared enterprise. We've talked about the two main areas of activity in this committee, mostly yesterday: the contribution the land sector is making through the Emissions Reduction Fund, which is the main policy instrument that the government has in this area, and the work being done by the various R&D corporations in this area. We talked with MLA yesterday about their carbon-neutral aspirations by 2030, but most of the R&D corporations have got some kind of activity underway in this area. It's a shared enterprise, both across the government and across the portfolio.

Senator RICE: Isn't there a desire to set a target for greenhouse gas emission reductions across the agricultural sector?

Mr Quinlivan : The government doesn't have any such policy at the moment, no.

Senator RICE: No intention of setting a target?

Mr Quinlivan : That would be a matter for the government.

Senator RICE: We know that the stationary energy sector has been given a 26 to 28 per cent reduction target, and we know that's the Paris target. The implication of that is that all other sectors are also going to have to have a similar target. Do you feel that the work that's being undertaken within the department in terms of planning for greenhouse gas reductions from agriculture is going to lead to that sort of level of reductions?

Mr Quinlivan : I couldn't say that with any confidence, but I'm pretty sure, as a result of this work that we were talking about earlier, we'll have a credible answer to that question in the not too distant future.

Senator RICE: And then it would be your department that would be responsible for both designing what a policy would be—

Mr Quinlivan : At a national level—most of the policy instruments that we're talking about are actually more in the hands of state governments. One of the key points that emerged from this conversation at the ministerial council and this paper is that this is really a shared responsibility between the Commonwealth and the states, and that's why we're doing it together.

Senator RICE: Do you agree that agriculture is a harder sector to decarbonise than the energy sector?

Mr Quinlivan : I do.

Senator RICE: Has the department done any modelling on what a 26 to 28 per cent CO2-equivalent reduction target in the agricultural sector would look like?

Mr Quinlivan : Given current technologies and production systems, it would probably result in a similarly large reduction in production.

Senator RICE: Given that would seem to be an unacceptable outcome, to reduce production by that much, I presume that wouldn't be a strategic direction that the department would be recommending.

Mr Quinlivan : No, of course not, hence the need for R&D and new technologies and methods.

Senator RICE: What other areas, other than reducing production, is the department looking at in terms of having a reduction of that level within agriculture?

Mr Quinlivan : Land-use change and new technologies and production methods arising from R&D investments.

Senator RICE: What do you mean by land-use change?

Mr Quinlivan : I talked about the Emissions Reduction Fund, which is the government's main policy instrument in this area, and, as you heard from the evidence earlier today—I forget the proportion, but a significant majority of the emission reductions from the ERF have been achieved through land-use change; they've come from the land sector. As we talked about earlier, the livestock production sector, through MLA, is making quite significant investments in potential emission-reduction technologies and feeding regimes and so on.

Senator RICE: You mentioned the work of the Emissions Reduction Fund, but isn't it winding up? There are no further allocations being made to it.

Mr Quinlivan : There are funds remaining. I forget how much it is, but I think it's a couple of hundred million. We may be able to give you the number. My understanding is there's probably sufficient funds for two more auction rounds.

Ms Cully : That's correct, and the next auction is on 6 and 7 June.

Senator RICE: So, you'd be looking at that rather than reducing the number of sheep or cattle, given the methane production from sheep and cattle?

Mr Quinlivan : The point I was trying to make was: without the development of new technologies—and I'm not saying what they will be, but Mr Norton talked about feeding regimes and possible development of vaccines and that kind of thing. In the absence of those in the livestock sector, the main tool for reducing emissions at the moment is reduced production, and obviously that's highly undesirable in a world that has increasing appetite for food. There's a global priority for the development of technologies which manage methane from livestock production, and we're part of that.

Senator RICE: My understanding is: at the moment, methane production—enteric fermentation—is roughly two-thirds of our agricultural emissions.

Mr Quinlivan : I think that's right, yes.

Senator RICE: Are you hoping that new technologies will have that level of substantial impact or are we going to be needing to look at reducing stocking rates to reduce our agricultural emissions?

Mr Quinlivan : I think the world is aiming for reduced emissions without reduced production. We'll have a conversation in the future about the success of the current investments, but certainly MLA are putting a lot of effort into it, as are a lot of other countries. Most of these problems can be solved with enough effort.

Senator RICE: The other big emitter is agricultural soils, I understand. What steps is the government looking at to reduce NO2 emissions from soils?

Mr Quinlivan : The main vehicle there would be research being done by GRDC. I know they have a program, but I'd have to take on notice the contents of it.

Senator RICE: It's clear from this discussion that it's going to be very difficult. You're depending upon R&D to hopefully be able to reduce the enteric fermentation. Given, as you acknowledge, that agriculture is much more difficult to reduce emissions from than stationary energy, do you think, from an agricultural perspective, that in order for Australia to meet its target it would be a more appropriate thing for stationary energy to have a larger target and for agriculture to have a lesser target?

Mr Quinlivan : That would be a policy matter for the government.

Senator RICE: How confident are you that agriculture will be able to reduce its emissions by 26 to 28 per cent by 2030, which is what's implied by energy only having that 26 to 28 per cent target?

Mr Quinlivan : I'm not willing to speculate on that, but what I can offer is: the next time the committee convenes, I can provide the relevant people in ABARES to give the committee a briefing on exactly that question you've asked. It is an important question, there's no doubt about that.

Senator RICE: Thank you, Mr Quinlivan.

CHAIR: Do you have any questions in this area, Senator Stoker? Welcome to the committee.

Senator STOKER: No, thank you.

CHAIR: That's the end of outcome 1.

Mr Quinlivan : Chair, can I just clarify how we're going to proceed from here? Obviously the main interest is in the live export program, but I know there are biosecurity issues and also trade and market access questions. I don't mind how we do it, but it would be good to have a common understanding of that, partly because we've got an opening statement we would like to make on the live export program. It's got a lot of information in it. We'd like to distribute that to senators, before we start the live export program examination.

CHAIR: I might take an early break for afternoon tea. It's five to three, so we might stop at three o'clock, before we get into it—and I can go and take my Valium! From the next witness group on, Animal Health Australia, I suspect—at least in part—there will be discussions in relation to the topic of the live sheep transfer. Where the elbow's joined to the wrist and joined to the shoulder, I don't want to deny a senator during their term the ability to tie a couple of things together if that's their area of interest. So we may have a bit of to-and-fro. I would urge senators to stay within the category of the question so that we don't have witnesses wearing themselves out. But I think we're just going to have to go forward and see.

Mr Quinlivan : That's fine.

CHAIR: But in the couple of minutes I want to reaffirm—more so for the senators who aren't here—that we need to approach this responsibly, not talking over each other, respecting the chair's calls if we get to that point. I want to reiterate—because you weren't here, Senator Rice—that I'm going to be very firm on questions asked and answered. If a question has been asked and answered—by another senator, even—unless it's important to the structure of that senator's examination of the witness and they want to reaffirm something as they lead into another point, that's not going to happen. We're not going to spend any time trying to extract the opinions of all of these officials in relation to their views of this event. I've got some spare Valium in my pocket! If you think you're going to need one, I'm happy to share! But in the meantime, let's take a break and drink lots of coffee, and we'll return here at a quarter past the hour and commence with Animal Health.

Mr Quinlivan : On that basis, what might be sensible is if we table and make copies of this opening statement during the break, and they're distributed. Then we can commence after the break with the statement, and things will flow from there.

CHAIR: That would work perfectly. Thank you for that. Do you intend to read your statement in?

Mr Quinlivan : I think so.

CHAIR: I would expect that.

Proceedings suspended from 14:57 to 15:12