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Foreign Affairs, Defence and Trade Legislation Committee
Department of Foreign Affairs and Trade

Department of Foreign Affairs and Trade

Senator WONG: I want to start with some questions about the procurement process in relation to contract CN2798782, which is the contract in relation to the Sierra Leone Ebola response phase 2. Do I address my questions firstly to you, Mr McDonald?

Mr McDonald : Yes.

Senator WONG: When was the decision made to go to an external contract process?

Mr McDonald : The decision to directly source Aspen as the provider was made on 5 November. I'll just confirm that.

Senator WONG: That was a decision of government?

Mr McDonald : In terms of directly sourcing Aspen, it was a decision of the department.

Senator WONG: Sorry. Let's go through from the beginning. Firstly, there must be a series of decisions before the decision to direct source. So, firstly, the government makes a decision that it will engage in this operation. Is that correct? When was that decision made?

Mr McDonald : Mr Exell has that detail.

Mr Exell : The decision by government to support the Ebola treatment centre was in late October.

Senator WONG: Do you have a date?

Mr Exell : I'll take the exact date on notice.

Senator WONG: At the time that this policy decision was made, was there a decision also made in relation to direct sourcing?

Mr Exell : There was a decision around direct sourcing, and that decision was to do a direct source model.

Senator WONG: Sorry, could you listen to the question? I am not asking what happened eventually. I am asking when the decision was made to provide and Ebola treatment centre in late October. At that time, in the same decision, was a decision also made to go to direct source?

Mr Exell : That is correct.

Senator WONG: By government.

Mr Exell : Yes.

Senator WONG: So government made a decision?

Mr Exell : On the method of procurement.

Senator WONG: How does that fit with your response, Mr McDonald?

Mr McDonald : The government decided a direct source. It didn't decide that the company would be Aspen. The direct sourcing by the department was of Aspen as the company to run that centre.

Senator WONG: Can you explain to me what the rationale was for the government's decision in late October to go to direct source?

Mr Exell : Without going into the specific advice given to government, the government considered a range of options about how best to respond to the request to support an Ebola treatment centre. They looked at the range of options around how to do that quickly, given the urgent circumstances. Direct source was the best way to actually do that.

Senator WONG: What do the CPRs say?

Mr McDonald : The Commonwealth procurement rules provide approval for direct source in accordance with procurement rule exemptions. This exemption allowed for procurement for the direct purpose of providing foreign assistance. It allows for limited tenders, 'when, for reasons of extreme urgency brought about by events unforeseen by the relevant entity, the goods and services could not be obtained in time under open tender or prequalified tender'.

Senator WONG: This is not a limited tender, nor was it a prequalified tender. This was a direct source. So it is the least competitive procurement process. It is the procurement process where there is the least competitive tension. It is the closest to a captain's pick. To be fair to you, Mr McDonald, I want firstly to give you time to consider, in relation to the parameters for exemptions under the CPRs, what the assertions are. But I am interested in understanding a little more about the timing first. It was late October, and you will take on notice that date. A decision is made by government—so this is at a political level—that the government will have an Ebola treatment centre but it will go to direct source. So government itself made a decision around the procurement method.

Mr Exell : That is correct.

Senator WONG: On the basis, I think you said, that there were a range of options put before government and this was the option selected.

Mr Exell : And essentially the criteria is genuine urgency.

Senator WONG: I am going to come back to that and understand why you said this justifies an exemption from the Commonwealth procurement rules. If someone could get the date at some point today so we can come back to it. Tell me about the processes there which led to this contract being put in place—so between the decision at a political level that it will be a direct source and not a competitive tender, limited tender or prequalified tender—and the making of the contract.

Mr Exell : Following the decision by government to support an Ebola treatment centre, and to do that by direct source, the department then undertook a process of assessment to look at the range of possible providers, consulted a number of areas within the department, worked through the processes that were are required to under the CPRs, including the appropriate decisions with the appropriate checks that Aspen medical was best placed to provide those services.

Senator WONG: Was anybody else considered or investigated other than Aspen Medical?

Mr Exell : There were a range of other—

Senator WONG: How many others were assessed by the department?

Mr Exell : From memory approximately 6.

Senator WONG: Who undertook that? Was that you, Mr Exell, or someone in your team?

Mr Exell : It was a combination of my team, the Ebola task force, the procurement area, plus we consulted with other parts of the department for experience. I should also add that we talked to the Australian Federal Police and the Australian Defence Force for experience of providers in this area.

Senator WONG: When was the decision made to award the contract to Aspen?

Mr Exell : It was early November.

Senator WONG: Can we have some dates? The contract date is 5 December 2014 for commencement. But I actually want to know when the decision was made to enter the contract. Surely someone can get that? I can come back to it.

Mr Dawson : The approval to conduct a limited tender to select Aspen Medical was also given on 5 November.

Senator WONG: Let's get dates. Let's try and get this process. The government makes a decision, and in fact where was that made? Is it a formal cabinet process or is it some other process in government?

Mr Dawson : The decision to approve and select Aspen Medical is a decision which is made within the department.

Senator WONG: No, the initial decision in late October. Is that a cabinet decision or was it undertaken by some other process?

Senator Brandis: The matter was decided technically by the cabinet, but initially by the National Security Committee of cabinet. That decision was endorsed by cabinet.

Senator WONG: Thank you. So the NSC makes a decision and in late October you then go through this process. A decision to award the contract to Aspen is on 5 November. Is that right?

Mr Dawson : That is correct. Just to clarify, the approval is to conduct a limited tender to select Aspen as the preferred adviser. That itself is not a contract. It is the beginning of a contracting process.

Senator WONG: So essentially enter negotiations when you have already picked who?

Mr Dawson : We have identified—

Senator WONG: Yes. You have picked who you want to contract with and you are just trying to resolve the contract, correct?

Mr Dawson : That is right.

Senator WONG: When was the contract actually entered into?

Mr Dawson : There are two contracts associated with this issue. The phase 1 contract was signed on 17 November.

Senator WONG: What was the value of the phase 1 contract?

Mr Dawson : It was a contract not to exceed $2.2 million, including GST.

Senator WONG: What was the nature of the phase 1 contract?

Mr Dawson : It was a mobilisation contract. So it was fundamentally designed to cover initial recruitment, initial training as well as the planning and preparatory work that would be necessary prior to service delivery in Sierra Leone.

Senator WONG: And the second contract?

Mr Dawson : The second contract, which is phase 2, the service delivery contract, was signed on 10 December.

Senator WONG: How much was that for?

Mr Dawson : That was for an amount not to exceed $26.497,895.01 including GST.

Senator WONG: That is the one that I referenced when I started the questions. Are they the only two contracts with Aspen?

Mr Dawson : That is correct.

Senator WONG: At the time that the government made the decision to go to direct source, I assume government was advised of the options around a competitive tender, et cetera.

Mr Exell : Correct.

Senator WONG: I assume also that the department would have advised which players in the market might reasonably be able to provide this contract?

Mr Exell : There was not a recommendation of advice about the specific providers, because that would go towards the selection of the actual private sector provider.

Senator WONG: Mr Exell—and that is a very good name for someone to do with procurement, isn't it?

CHAIR: I am sure you live up to the name, Mr Exell.

Senator WONG: In answer to a previous question, you said there was a process of consultation within government and within DFAT, and also you referenced the ADF and the Australian Federal police. At any point was there a consultation with the Department of Health?

Mr Exell : There were a range of consultations with the health department.

Senator WONG: I am asking in relation to this matter. We can have a long discussion about the IDC, et cetera, but I am asking precisely in relation to the decision to direct source and the subsequent Pick of Aspen.

Mr Exell : The Department of Health was not involved in contracting or the selection process directly.

Senator WONG: That was not my question. Of course they were not. You made the decision.

Mr Exell : Correct.

Senator WONG: You yourself in your evidence referenced consultations. Were they consulted in the context of the direct source decision of the picking of Aspen?

Mr Exell : The Department of Health was talked to extensively in the lead up to the process of how we would manage the ETC, the options and who the providers were. That was both in the context of thinking about options for what Australia would do more broadly for the Ebola response. That included the option of an ETC. The Department of Health was asked to peer review—

Senator WONG: Sorry, what is the ETC?

Mr Exell : The Ebola treatment centre. The Department of Health was asked to peer review some of the aspects of the contract after we had actually signed an exchange of letters with Aspen. They were not directly involved in the decision to appoint Aspen.

Senator WONG: Were they consulted about the decision to appoint Aspen? I just want to be fair. You say 'not involved'. I want to know if they were consulted?

Mr Exell : They were not specifically consulted.

Senator WONG: Whenever someone says 'specifically', I find it to be one of those words where I never understand what they actually mean.

Mr Exell : I am trying to indicate that we had a lot of conversations with the Department of Health.

Senator WONG: Did you go to the Department of Health and say, 'We are thinking about a direct source to Aspen—

Senator Brandis: Senator Wong, could you have the manners to let the witness finish his answer before you speak across him, please.

Senator WONG: It is interesting that you did not offer that courtesy to Professor Triggs on any occasion.

Senator Brandis: As a matter of fact, Senator Wong, I did not interrupt Professor Triggs once. Not once. But I was constantly interrupted by you. Please have the manners to allow the witness to finish his answer without speaking across him.

Senator WONG: It's true that you did not interrupt Professor Triggs. But you sat there while your bovver boys interrupted her persistently. And you did nothing about it.

Senator Brandis: Senator Wong, please grow up. These are important matters. All I ask is that the officials be treated with an elementary level of courtesy.

Senator WONG: Mr Exell, I appreciate that there is a lot of discussion at various other times about the possibility of an ETC. The question I am asking is this: was the Department of Health consulted in relation to the decision to go to direct source?

Mr Exell : No.

Senator WONG: Thank you. Was the Department of Health consulted in the decision to procure the service from Aspen?

Mr Exell : No, that was a decision for the department.

Senator WONG: Thank you. I indicated to you, Mr McDonald, that I was going to give you some time to gather your thoughts on this. I would like you to explain to me, against the CPRs, the justification for the direct source.

Mr McDonald : As I said earlier, the procurement guidelines do provide for exemptions in certain circumstances from an open tender.

Senator WONG: I am aware of that.

Mr McDonald : In this case, the reason for that was that using a competitive and unqualified tender process would have taken some time. We are talking months—probably up to 3 to 6 months. It is due to the type of service we want to provide for the centre, which is an end to end service. What I mean by that is it is not just the medical provision but also things like security, food and the environmental health of the facility. So we had and wanted one provider to run the whole centre. Aspen was also a company that we had contracted to work previously either through Defence or other government departments. So we had an understanding of their performance in relation to previous contracts. They also had experience in Africa in terms of the work they had done in Liberia. In the end, they also undertook work for the US in relation to their Ebola treatment facility in Liberia. So in order to get something in place as quickly as possible—and you would understand that the Ebola virus was heading towards its peak at that point—we worked as quickly as we could to open that centre, which opened on 14 December in Sierra Leone. So that was the basis for the decision.

Mr Dawson : If I could also add to that one other factor which was taken into account, and that was that Aspen had a well-established track record in delivering health and humanitarian emergency response services in difficult settings for the Australian government, in the Solomon Islands and in Timor Leste, for instance. So they were not an unknown quantity to us.

CHAIR: If I could just interrupt, Senator Wong. The second contract, the delivery contract, was signed on 10 December and the centre opened on 14 December?

Senator WONG: We have not got to the opening, I don't think.

Mr Varghese : Can I just add one point in relation to Senator Wong's question about consultation with the Department of Health? The decision to go to a direct source, which was taken by the NSC, was based on a paper before the NSC in which the Department of Health had been consulted. The Minister for Health and the Chief Medical Officer were also part of the NSC discussions.

Senator WONG: That is probably more information about the content of an NSC discussion than you have ever given, but I appreciate why you wanted to do that. But the paper, as I understand it, given that you have opened it up, provided options.

Mr Varghese : As Mr Exell explained.

Senator WONG: Was there any discussion with the minister's office of the Prime Minister's office about the proposal to directly source Aspen specifically?

Mr Exell : That discussion occurred after the decision. So there was advice to the foreign minister about the outcome of that process to select Aspen.

Senator WONG: Did you make the decision, Mr Exell?

Mr Exell : I was the delegate.

Senator WONG: At the time that you made the decision, were you aware of Aspen's history of donations to the Liberal Party?

Mr Exell : No.

CHAIR: Senator Fawcett.

Senator FAWCETT: Mr Varghese, can you tell me whether Aspen has previously been awarded direct source contracts by the former government? Because it is on the public record that the Labor Party has been the recipient of donations from Aspen, as well as many other companies.

Mr Varghese : I might ask Mr McDonald to field that.

Mr McDonald : Senator Fawcett, we have direct sourced Aspen in the past. I think it was in 2009 for a cholera outbreak in PNG. I think that the point that Mr Dawson was making was that the nature of the work that Aspen does, which is either humanitarian or medical, often requires a very quick response. So yes, we have in the past.

Senator Brandis: I can add to that, Senator Fawcett, if it helps. I can table documents, if you like. There have been numerous contracts awarded to Aspen during the period of the previous Labor government, one of which at least we can establish was a direct source: as the officer has said, the PNG cholera outbreak in 2009 and 2010. In respect of which, there were actually two contracts. Both were at a time, I might say, when Senator Wong was the Minister for Finance. So perhaps I will table that document. That was at a time when the Labor Party was in receipt of extremely generous donations from Aspen, too, I might say.

CHAIR: Thank you, Minister. Senator Wong.

Senator WONG: I think you got a lot more from them than we ever did.

Senator Brandis: No, that is not right.

Senator WONG: When did the centre open?

Mr Exell : The centre was operational on 14 December.

Senator WONG: When did it cease to be operational?

Mr Exell : It hasn't.'

Senator WONG: Can you tell me when it received its first patient?

Mr Exell : I will have to confirm that, but from memory it was on about 17 December.

Senator WONG: I have quite a lot of questions about patient numbers, dates of arrival and those sorts of things. Would it help if we came back to this. Would someone be able to put it together? What I would like to see is, over the period of the contract, how many admissions to the centre there were, when people left and a sense of the patient population.

Mr Exell : I can give you much of that information. The total numbers—

Senator WONG: But I want it longitudinally.

Mr Exell : I won't be able to give you it week by week. Maybe I could put that together, if you like—a week by week detail of the up and downs. There is quite a flow of people in and out as far as confirmed and suspected cases go. So it changes quite regularly. I could put that together for you.

Senator WONG: I would appreciate that. Why don't you give me what you can now and then if you can add to it, I would appreciate it.

Mr McDonald : I think we can certainly give you an understanding. For example, there have been 143 patients through the centre overall. It has had a maximum of 22—

Senator WONG: At any one time?

Mr McDonald : At any one time. It currently has eight in the centre. There have been 30 cases where there has been recovery and there have been 46 cases where, unfortunately, people have passed away. I think there have been about 60 cases that were not actually Ebola cases in the end. They are actually, as you would understand, not confirmed until they go through the centre.

Senator WONG: So 60 out of the 143 were not Ebola.

Mr Exell : To give context of why I paused at the issue of the exact date, at the time of opening there were referrals. There is a system of referrals in Sierra Leone. Some are referred and didn't turn up, there were some people who walked up and there were some people who were referred and went to another centre. So it is actually a fluid picture. At that time, it was not something that was exact. I would like to check that exact date.

Senator WONG: It started on the 14th. Often facilities such as this have what is termed as soft openings. Is that a reasonable phrase to use in relation to this?

Mr McDonald : I don't know that I would call it a soft opening. It is an opening that ensures the safety of the staff and patients. So it is a build up.

Senator WONG: Yes, you are building up. The first patient came on the 14th.

CHAIR: No, the 17th. The centre opened on the 14th and the first patient was on the 17th.

Senator WONG: So a week later did it have one, two, 20 or 30?

Mr Exell : For the first two weeks it increased at a rate of about five per day, and it is consistent with the practice of all of the Ebola treatment centres operating in west Africa. After that it accelerated. Again, I'll get the exact details, but it increased at a rate of about 10 beds per week to when, on 22 January, it peaked at a capacity of 50 beds. That was deemed sufficient at that stage. So that is a process of incrementally building up the capacity of the centre, consistent with practices established by all the providers in west Africa.

Senator WONG: How many are currently in the centre?

Mr Exell : Eight.

Mr McDonald : On the build up, one of the things that was very important to us was the training of staff that were in the centre, particularly around risk. As you could imagine, the centre had different points in it that were high risk, depending on what stage people were up to in the Ebola process. So the training of the staff in the centre was particularly important to us.

Senator WONG: Sure.

CHAIR: From 10 to 14 December, were they people mobilised from Australia?

Mr Exell : There were a number of people mobilised from Australia.

CHAIR: That is a very short period of time to put in skilled people of that level and then have the first patient three days later. There must have been a high degree of existing skill to be able to accept the first high-risk patient three days after. It is incredible.

Mr McDonald : The way that the contract was structured was so that the training could commence early and the recruitment of staff could commence in November. So in our discussions with the UK and when they were going to hand the centre over to us, which was around the middle of December, we had staff ready to go in. Because, of course, at that time we also weren't sure how many patients were going to be referred. But we were working on a small number of beds opening—around five beds or that sort of number.

Senator WONG: I want to just clarify the nomenclature here. When you say 'beds', do the beds have patients in them?

Mr Exell : Correct.

Senator WONG: Thank you.

CHAIR: It is not Sir Humphrey's hospital, Senator Wong.

Senator WONG: I just wanted to check that 50 beds means 50 people.

Mr Exell : There is the potential for 50 people, that is correct.

Senator WONG: No, that is precisely what I am asking. You said that on 22 January it had 50 beds but the maximum number of patients at any one time was 22. So even when there are 50 beds, less than half are filled.

Mr McDonald : Correct. So you could have up to 50 patients. Adding on to that, the good news about the virus is that capacity at the moment in Liberia and Sierra Leone is about 14 per cent occupancy of the beds that are available. I am pretty sure that that is correct.

Mr Exell : Across the board.

Mr McDonald : Yes. So the virus is going the right way, although we are not complacent at all in relation to that.

Senator WONG: I am not an expert in these matters, obviously. But I have heard public discussion of the possibility of AUSMAT being involved. Can you explain to me why that was not taken?

Mr Exell : We considered and looked at the possibility of AUSMAT providing. AUSMAT traditionally focuses on clinical and medical practices. It traditionally deploys for a period of 2 to 3 weeks. At the time we were looking at options, it was the beginning of the Pacific cyclone season, where response capacity in our region is critical. The requirement for the Ebola treatment centre was for the recruitment of a large number of local staff. AUSMAT traditionally does not have the capacity to in any way recruit or contract other staff with them. They go as a stand-alone unit moving in. So there were a range of reasons why AUSMAT was not considered the best fit for this operation.

Senator WONG: That decision was made at the NSC?

Mr Exell : The decision of the NSC was to direct source.

Senator WONG: You have just given me an argument of why AUSMAT was not preferred. I'm trying to ascertain whether that was a matter the government determined or whether that was a matter that the department determined—that is, to exclude AUSMAT as an option.

Mr Exell : I am just thinking of whether I am getting into advice to government here.

Senator Brandis: I think we are also getting into the question of the deliberation of cabinet or a subcommittee of cabinet. I have told you what the decision was. I don't think I really can go beyond that.

Senator WONG: Yes, and you have been very helpful. I'm actually just trying to ascertain whether, for the reasons you have outlined, the department made a decision not to consider that option or whether it was a decision of government.

Mr McDonald : In terms of the decision to direct source Aspen, that was taken by the delegate based on the best provider to provide what we wanted in the short time frame. The comment that Mr Exell made around capacity within Sierra Leone was also a factor for us. Because in our staffing at the moment, from memory, there are about 23 Australians and about 10 international staff, of which six are from New Zealand. But there are 250 staff form Sierra Leone, of which 10 per cent are from a health area. So that was also an important aspect. So I think that the easiest way to answer that question is that in considering the options, the delegate decided that the direct sourcing of Aspen was the best option.

Mr Dawson : If I could also clarify. AUSMAT was considered in that decision. The delegate in the decision looked at the nature of AUSMAT's capability. It was likely that it was a standby capability available for use principally within the region and that it wasn't designed for treating infectious disease outbreaks of this nature. There were some issues in the department's assessment about AUSMAT's ability to source sufficient numbers of personnel through the mechanism. It did not include a way to easily recruit local staff. All those factors were taken into account in the decision.

Senator WONG: So you're reading, obviously, from your estimates brief, but what you are telling me is the reason why the delegate made a decision to directly source Aspen.

Mr Dawson : I am telling you that the suitability and capability of AUSMAT was taken into account in that decision.

Senator WONG: Okay. Sorry, AUSMAT is run out of health; is that right?

Mr Exell : Yes. The Department of Foreign Affairs and Trade works closely with them, but it is principally health who looks after the training and support of AUSMAT.

Senator WONG: In ascertaining the factors that you have just made reference to, Mr Dawson, was there consultation with AUSMAT and the Department of Health? You just read out a range of factors where you say AUSMAT can't do this and can't do that. Was there a discussion with AUSMAT or the Department of Health to confirm the basis of that?

Mr Exell : Yes, there was considerable discussion with the Department of Health about AUSMAT's capabilities.

Senator WONG: Did any member of the AUSMAT team indicate a willingness to serve in the centre to provide this service?

Mr Exell : I am not aware specifically of an offer, Sen?

Senator WONG: You are not personally aware? Is that what specifically means? Has anyone told you that this had been expressed to them?

Mr Exell : I had heard that. AUSMAT is drawn from members of state medical teams and state medical services. They have a standby capacity, but that is not that permanent call.

Senator WONG: But that ramp up is from that cohort.

Mr Exell : I had heard that there was interest from people who had previously deployed onto AUSMAT to undertake this sort of activity.

Senator WONG: Did you hear that before or after the contract was determined?

Mr Exell : That was part of the IDC discussion.

Senator WONG: That wasn't regarded as relevant, the consideration of direct sourcing?

Mr Exell : Sorry, are you asking was the personal interest of individual people who had deployed considered as part of the decision?

Senator WONG: Correct.

Mr Exell : No.

Senator WONG: Can you tell me what the cost of the contract to date is?

Mr Dawson : The contract is one which sets a number of not-to-exceed limits under different categories.

Senator WONG: I understand that.

Mr Dawson : The billing arrangement is generally on a monthly basis. So some costs have already been expensed and paid. A number of other costs, as you would appreciate because the contract is ongoing, are continuing to be expensed.

Senator WONG: Under both contracts, can you tell me what has been billed and what has been paid?

Mr Dawson : I can tell you that under the first contract the amount paid was approximately $700,000. I can get more detail if you require.

Senator WONG: Sorry, this is a little frustrating. This has obviously been a point of controversy and it is been in the media. And you have not got details of how much you have paid under this contract. Surely someone has that?

Mr Dawson : We can get the details.

Mr McDonald : We will get that for you quickly.

CHAIR: It is of the $2.2 million, for the first contract, is it? $700,000 of the $2.2 million has been—

Mr Dawson : That is correct.

Senator WONG: Can we just stop there? Is it expensed and billed?

Mr Dawson : That is correct.

Senator WONG: Is there any billed and not paid as yet under the first contract?

Mr Dawson : Not that I am aware of.

Senator WONG: What about the second contract?

Mr Dawson : Again, we will get the details of the expense for you since you ask. But to give you an order of magnitude, I think the first monthly billing was approximately $2.6 million. We expect that there will be a similar level of billing for the second bill. We obviously are a month further on from that, so during that period of time a further months worth of costs would have been expensed.

Senator WONG: Do you get itemised billing? Do they tell you what they have done or do they just send you in a bill for $2.6 million?

Mr Dawson : It is against a detailed set of costings in the contract.

Senator WONG: Excellent! I would like that documentation provided, please.

Mr Exell : Which document?

Senator WONG: The documentation associated with the billing.

Mr Exell : The payments?

Senator WONG: Correct. What I am interested in is what they have to show you when they send you a bill for $2.6 million, in terms of what they have done.

Mr Dawson : A breakdown?

Senator WONG: A breakdown. How do you want me to describe it?

Mr Dawson : We can give you the breakdown, yes.

Senator WONG: I want what they have to give you.

Mr Dawson : Yes. We can give you what is specified in the contract.

Mr Varghese : The structure of the contract and what the different items are?

Senator WONG: Correct. Thank you.

Mr McDonald : We will do that.

Senator WONG: Can you also tell me, in the contract—and I assume we will be able to ascertain this when we get the documentation—is there a number of beds that is identified or a number of patients?

Mr Exell : The contract sets out a potential for what we call a scale-up rate. It is mapped over per month where we wanted to at least set out a structure of payment against an increase in the number of beds.

Senator WONG: Tell me what those were, month by month.

Mr Exell : From memory, and I will get you the specifics—

Senator WONG: All of this is with the caveat that you are being very helpful in giving me an order of magnitude and you will confirm subsequently.

Mr Exell : On a monthly basis it was structured from an increase from 20 beds to 40 beds, 60 beds and then it went to 100 beds. For contracting purposes, equally from May to June 30 which was the rough date that we expected to finish our role with the ETC, it actually had a downward trajectory. I think it was 80 then 60 for the last two months. But I will confirm that.

Senator WONG: If you could get those. Can I also have a copy of the full contract?

Mr McDonald : The only thing I would mention is that—

Senator WONG: You may need to redact some bits of the commercial in confidence. Just remember what the chair read out at the beginning of estimates. And let's not have an argument about that, okay?

Mr McDonald : We will give you as much as we possibly can.

Senator WONG: Chair, you have been very generous. I appreciate that.

CHAIR: For clarification, if I may: $2.2 million was allocated for the phase 1 contract and $700,000 has been expended. Am I to assume then that there will be no further costs in the phase 1 for mobilisation, recruitment, training and preparation? Is the $700,000 it?

Mr Dawson : That is right. So the second contract extinguished the unexpensed costs from the first contract.

CHAIR: Thank you. Senator Fawcett, do you have any questions?

Senator FAWCETT: I have some general questions on the Ebola area in terms of the positive outcomes and what has been achieved there, as opposed to the contracting side of it.

CHAIR: Senator Wong, won't you finish off the contracting component and then we will go to more general questions on Ebola.

Senator WONG: I have some questions about the relationship with the United Kingdom in relation to the centre. I also have some questions about whether there are any teething problems in terms of equipment at the commencement of the contract. Firstly, in relation to the second issue, were there any issues in terms of equipment—whether the right equipment was provided or supplied at the commencement of the operation of the centre?

Mr Exell : A number of days before the opening of the centre, particularly the masks that were supplied through the medical supply chain at that time were different to what the staff had trained with. However, with a lot of hard work and good cooperation from the UK and other in-country providers, we were able to source the equipment that the staff had trained and were comfortable with in time for the receipt of the first patient.

Senator WONG: Which equipment was problematic?

Mr Exell : It was the face mask. There were some concerns that because they are operating in very hot and humid conditions, under these conditions the mask was collapsing onto people's faces. The reflex action is to pull the mask off your face, which of course is something you do not want to do when you are handling patients. But just to be clear, the appropriate equipment was obtained before any patient was received.

Senator WONG: Why did Aspen make that error?

Mr Exell : That was not an error of Aspen's, to be very clear. You are talking about the relationship with the UK. The United Kingdom is the lead in the operation. They were providing all of the start-up medicines, PPE and equipment for all of the Ebola treatment centres under the UK operations. So there was a supply chain that they had from the UK into west Africa. That was what we were relying on. That was part of the agreement with the UK around us taking over the centre. The equipment that came in was different to what we were actually using. There were six other Ebola treatment centres opening at the same time, so there was a lot of influx of material and it just took time to sort out the right material.

Senator WONG: Was there a formal partnership with the United Kingdom? What is the nature of the relationship?

Mr Exell : There was. There was an MoU was signed on 8 December between Australia and the UK that covered everything from evacuation and in-country treatment for members of the Ebola treatment centre. It also covered the handover of the UK built facility and the process around leaving it in an appropriate state and us taking on the responsibility for it. Equally, for the supply and the logistic supply of medicines and equipment. It covered all of that within that agreement.

Senator WONG: You said the contract had a maximum amount. Does it have a minimum? In other words, you have to treat this many people to get this amount? Those sorts of benchmarks?

Mr Exell : The benchmarks that we set were a minimum scale-up rate, I guess.

Senator WONG: Which was? Have they met the scale up rate?

Mr Exell : They did. In fact they exceeded that.

Mr McDonald : The difficulty with setting a minimum was not knowing how many referrals we would get. So it was trying to allow for a large expansion.

Senator WONG: But the minimum scale-up requirement from the government was not patients. It was beds.

Mr Exell : To have beds to be ready to receive patients.

Senator WONG: I am not making a comment on that at this point. But just to be clear.

Mr McDonald : Because the request that we had was for a 100 bed facility.

Mr Exell : There is a very important balance between the scale-up rate to be able to receive as many patients as possible as soon as possible, balanced against the training, the safety procedures and looking after the staff. So that was something we spent a lot of time with Aspen on. Indeed, we looked at practices within Sierra Leone and experiences of other providers on how to do that best.

Senator WONG: Mr Exell, returning to the list that you or Mr Dawson gave about why AUSMAT could not be utilised. My recollection is that AUSMAT were utilised in relation to Typhoon Haiyan and that it did include a field hospital deployment. Is that correct?

Mr Exell : It did, but it did not include infectious diseases capacity. As I said, the response there and in other places is traditionally around that primary field care type of injury and not infectious diseases.

Senator WONG: So why did you believe that AUSMAT was not capable of training personnel, given that you are talking about personnel who have, for example, been deployed to the Philippines and deployed a field hospital there. Why was there a decision that these people were not capable of being trained to manage an infectious disease?

Mr Exell : I didn't say that they were not capable of doing this. The decision was around who was best placed to provide the end to end services—the full range of facility management, for example. You need to have plumbers and electricians to go into a red zone. It is everything—security, catering, and electricians. It is the full range of services. That was the consideration at the time.

Mr McDonald : The other thing with AUSMAT is that they are on standby for our region. We were also focused on our region. AUSMAT have a couple of teams that can be deployed very quickly out into our region. That was a real concern for us, given the health systems we have and the like. That was another thing we had to balance up as well.

Senator WONG: Which is the primary reason? Is the reason they couldn't do it? Is the reason they could do it but we didn't want them to do it because we want them to be available for our region?

Mr McDonald : The point that I was making is about your earlier comment that we didn't thing AUSMAT were capable. We think they are very capable.

Senator WONG: I did not assert that. What I asserted was that you didn't believe they were capable, as I understood the evidence, to deployed in relation to an infectious disease. Right? Do you disagree with that? I don't agree with you, but you should tell me what you think.

Mr Exell : They do have that capability.

Senator WONG: Oh, they do.

Mr Exell : As you are aware, in other Senate estimates the Department of Health has been asked about their capacity and the number of people they have trained. A lot of people in AUSMAT have been trained and have this capability to actually do it. It is not my statement at all that they do not have that capability.

Senator WONG: Then I misunderstand why you say why they couldn't have done it.

Mr Exell : I talked about on balance.

CHAIR: Is it the case that the AUSMAT personnel would have the medical capacity, albeit possibly not immediately in terms of such a highly contagious virus with such a high degree of mortality, but it is the fact of the overall provision of supply. You were speaking about services in addition to the medical and nursing. In other words, these support services—electrical, plumbing and catering. From my understanding, is it the case that AUSMAT would not have had the capacity to actually provide that full spectrum of services at the time? They would have the medical but not the full spectrum.

Mr Dawson : I think the issue is what is the most efficient and effective way of establishing and maintaining an Ebola treatment centre. The decision that the department took was that the most efficient and effective approach was to engage a suitably qualified contract, because it would have to deal with those full range of functions.

Senator WONG: On the chair's question, because it is a salient one, I put to you that if you are worried about logistics, you couldn't suggest that AUSMAT, having deployed a field hospital into a disaster zone post Typhoon Haiyan, did not have the capacity to manage complex logistics.

CHAIR: I would ask the question particularly in terms of the occupational health and safety of the personnel. A disaster zone is not going to expose people to the level of such a highly contagious virus as Ebola. That would be the concern I would have. But I wasn't associated with the decisions.

Senator WONG: But you are not suggesting that there is not a logistical capacity.

Mr Exell : No. When AUSMAT deploys it is an effort across the whole of government, from the Department of Foreign Affairs and Trade, from the Department of Health and from Emergency Management Australia, which supports that logistics capacity.

Senator WONG: Correct. But you made a decision not to go down that path.

Mr Exell : As my colleague has said, in this case we made a decision that the most effective and efficient method was to deploy Aspen.

Senator WONG: Which would have been cheaper? Did you consider what the cost of deploying AUSMAT would be?

Mr Exell : As part of the process, you do look at value for money and you do look at who is best placed to provide it?

Senator WONG: Did you look at the alternative cost of deploying an AUSMAT team?

Mr Dawson : There was no basis to do a like with like comparison at that stage of the process. But we are very confident that the contract that has been agreed with Aspen gives full value for money.

Senator WONG: With respect, you began that answer by saying that there is no basis for doing a like for like comparison. In other words, you did not do a like for like comparison with an AUSMAT provided service.

Mr Dawson : That is correct.

Senator WONG: Chair, you have been very generous. I appreciate that. There are other questions, but my colleagues Senator Gallacher and Singh can handle them at a later stage.

CHAIR: Thank you, Senator Wong. I'll go to you, Senator Fawcett and then Senator Di Natale I'll go to you.

Senator FAWCETT: Mr McDonald, obviously there has been some concerns raised about the mechanism, but we have seen that Aspen has proven to be a very effective company responding to a whole range of Australian government needs under both sides of politics over a number of years. How has the rest of the world responded to what has been set up in Africa? The World Health Organisation and the UN, for example. What has their response been to the speed and the efficacy of the commitment?

Mr McDonald : They have been very positive. I might ask Mr Exell, who has the detail on that, to run through it. Before he answers that, one thing I did want to emphasise is just to give the committee and update on the number of cases. There have been 22,253 confirmed, probable or suspected cases of Ebola. Of that, unfortunately, 9,300 people have passed away. That is the figures as of 18 February. The good thing is that when you compare December with now, the number of new cases per week around Liberia and Sierra Leone has dropped significantly from around 327 in December to around 74. That is still a lot of cases, but a lot less.

We are now working with the Sierra Leone government, and with the UK as the lead donor, to look at how over time we might be able to move to consolidate the support. As I said, at the moment 14 per cent of beds are occupied. So there is room for optimism and there has been talk, as you are probably aware, from the three governments—Liberia, Sierra Leone and Guinea—that they are moving to focus on eradication over the next six months. That is a big ask. But I think it is a positive sign. We are not complacent at all. We are all conscious of hotspots popping up, et cetera. The other thing I think the crisis has shown as is the importance of health systems and strengthening those as we go forward. But I might hand over to Mr Exell to specifically answer your question.

Mr Exell : The only other aspect that I would add, as part of that measured positive news, is that the focus of the international community is moving in what is being referred to as the second phase—shifting from the slowing of the transmission to actually ending the epidemic. International efforts are moving on from rapidly building health infrastructure—that is, the beds in the centres that we have been talking about—to building community engagement to ensure that people with Ebola continue to be identified and treated, contact tracing occurs and safe and dignified burials are carried out. There is an ambition, recently captured by the presidents of the affected countries who set a timeline and a goal for eradication of this current outbreak of the Ebola virus. I think that is very positive, but we still have some way to go. We remain committed through the support of our centre to be part of that.

Senator FAWCETT: Mr McDonald, coming back to your statement that early action to control the spread of the disease was important. Obviously, with the world's focus there were many people pledging. I have seen some reports indicating that less than half of the pledges that were made have actually been honoured. Can you give us some detail on that?

Mr McDonald : Mr Exell will be able to, but Australia has certainly honoured its pledges. In fact, you might recall that the first $10 million to the trust fund that was set out by the UN, we were one of the first donors to actually have that money in the trust fund, which was very important early on.

Mr Exell : Just a lad, we are concerned that some of those pledges have not yet been committed. The tickly as the focus is on eradicating this outbreak. But as my colleague has said, Australia is certainly not in that category.

Senator FAWCETT: I guess the point I'm trying to make is that a lot of people around the world make commitments, but Australia is one of the few—fewer than 50 per cent—who have actually followed through in a timely manner to commit the resources to help curb the growth of the infection. That is what I'm hearing from your evidence.

Mr McDonald : Yes. Certainly the feedback we have had from others—and I mean by that the Sierra Leone government, the UK government and other donors involved in this including other agencies—has been very positive around the management of Australia's centre in terms of the things that we have in place. We were able to clear up very quickly to take over that centre, as the UK had requested. It opened on the same day as five other centres in Sierra Leone. I think the staff in that centre—and I mean by that the Australian staff, the New Zealand staff, other international staff and the Sierra Leone staff—have equipped themselves extremely well and should be congratulated for the work they have done in what are really difficult circumstances, as you know. The other thing that has been very pleasing for us is that where there has been some low-level incidences in the centre, and there have only been two that I am aware of, the evacuation procedures that we agreed with the UK worked very well. Because there is a window of about 48 hours to get people out. The UK was extremely good in following through on those arrangements. Thankfully, none of our staff have contracted the Ebola virus.

Senator FAWCETT: Did Australia draw on the emergency humanitarian fund to respond to this outbreak?

Mr McDonald : Yes, we did. Our overall funding for the outbreak is $45.55 million. I can give you a breakdown of that. I mentioned the $10 million earlier. As we talked about earlier, $23 million is for the centre and $2 million is for RedR Australia. You might recall their deployment in nonclinical roles into the response for the UN. There have been nine personnel deployed to date. There has been $10 million to the multi-trust fund, which I talked about earlier, $3.5 million to the WHO, $2.5 million to Australian NGOs for their frontline services, $2 million to the UK for their delivery of frontline services, $250,000 to UNICEF, $2 million to the regional Ebola response—and I talked earlier about how our region was of high concern—and $300,000 to the WHO to specifically undertake some appropriate development of plans and strategies for PNG. That provides the $45.55 million.

Senator FAWCETT: Of that $45.55 million, how much was committed from the emergency humanitarian fund?

Mr McDonald : From memory, if not all, then most. I will double check that. The emergency fund, as you would recall, increased by 30 per cent this year to $120 million. We average out about $10 million a month over that. We have spent around $65 million, so there is still $55 million left. The reason for that is with the cyclones and the like, particularly around this region. We have been, touch wood, lucky. We have had some minor requirements but not the major requirements, as with Typhoon Haiyan.

Senator FAWCETT: Just to clarify, that increase is actually just to catch up. Because this is the fund that was cut by the previous government to pay for their on-shore processing. Is that correct?

Mr McDonald : It has certainly increased from the previous year, yes. From $90 million to $120 million.

Senator FAWCETT: But this is the fund that was cut?

Mr McDonald : The emergency fund; that is correct.

CHAIR: Senator Di Natale.

Senator DI NATALE: I would like to begin by acknowledging the work that is being done by Aspen. While I was concerned about the awarding of the contract, having visited the facility and seen the people involved I do want to put on record that the work that is being done now is of a very high quality. In terms of the level of support being offered, I was satisfied that it was of a very high standard. So I want to put that on the record upfront.

To go back to the context you provided earlier around the progress, and their obviously has been significant progress, which is very encouraging. I was concerned that in February we saw for the first time an increase in the weekly incidences. So while we have been making progress up until that point, week one of February saw the first increase in the number of cases. Can you explain why you think that has occurred?

Mr McDonald : I will ask Mr Exell to add to that. But it is one thing that we are focused on with our partners in Sierra Leone. That is going to occur, for example, where for whatever reason there has not been appropriate tracing of the Ebola or within villages where there is a hot spot that has occurred. I think that is going to make all of us consider our strategy to quickly address those hotspots rather than have a major centre. That is my understanding of why they have occurred.

Mr Exell : There are still some outbreaks occurring. There are still areas in one or two of the countries. Liberia, as you know, is very low. I think it is down to 2 cases in the previous week, where they are not following some of the practices around safe burial, safe handling and isolation or moving of patients to the treatment centre. I think the other factor is that there is a much better system of identifying and tracing where there are outbreaks.

Senator DI NATALE: That does not explain why we saw the increase. I suppose my question is, why did we see the increase in the cases in the first week of February?

Mr Exell : There were outbreaks. There were was one incidence on the coast in Sierra Leone. That was a fishing village that saw a movement of people from one centre out to a range of others. I think there were some incidences like that, which prompted an outbreak in a couple of places.

Senator DI NATALE: I bring that up because it is one thing to make progress, but the most difficult gains come now. Moving from this phase to the eradication phase can prove to be very difficult. I want to ask you about what work we are doing in that space. I have a few questions. Will the government be represented at the European donors conference in Brussels in March?

Mr Exell : We will be.

Senator DI NATALE: Who will be attending?

Mr Exell : At this stage it will be our in country ambassador attending that meeting.

Senator DI NATALE: So no one from DFAT will be attending?

Mr Exell : There will be someone from DFAT, but at this stage not from Canberra.

Senator DI NATALE: Someone in country in Brussels?

Mr Exell : Yes.

Senator DI NATALE: Let me go to what I think you described as the second phase—the post-acute phase. That clearly is where a lot of the attention now is being directed. You said, I think, that through our centre we will be engaged in the post-acute phase. The treatment centre is an acute treatment centre. I am not sure how an acute treatment centre is going to be able to contribute to what is required now, which is building health system capacity and all the things that you mentioned, such as contact tracing, ensuring that there is isolation and so on. Can you explain how what is an acute treatment centre can contribute to what is the post-acute phase? I am a little confused about that.

Mr Exell : If I implied that then I apologise. You are right. The Ebola treatment centre is principally looking after patients that come to the centre. They also have a role in community outreach within the area around the centre. Beyond that, it is probably the support that Australia has provided to the NGOs, who are doing some of those broader activities around contact tracing, safe burials, community awareness and awareness raising.

Senator DI NATALE: That money was committed at the onset of the outbreak. We are now in this post-Ebola phase. We contributed $45 million at the onset of the outbreak to deal with the acute phase. This is a post-acute phase. This is now health system capacity building. That is the only way we will firstly eradicate the disease and secondly put in place infrastructure to prevent further outbreaks. What further work is being done in that phase of the outbreak?

Mr Exell : Australia is part of the discussions that are occurring in country with the Sierra Leone government, which is looking at that current capacity of support that is going into the treatment centres and then thinking about how they go next. At this stage, our focus remains the Ebola treatment centre. As you know, there are still cases. We still have cases in the ward. That remains where we are focusing.

Senator DI NATALE: Your evidence was very clear that we are now in a post-acute Ebola phase. To be successful in eradication and to be successful in terms of preventing further outbreaks, we have to invest in that public health infrastructure. The money that we have committed has been for the acute effort. While it was a little late in the piece, at least we have a presence. I must say that it is a much smaller presence than many other countries. But still, we have a presence there. But what are we doing now beyond this acute phase apart from discussions to ensure that we build that public health infrastructure?

Mr McDonald : I think it is important to note that the Sierra Leone government is the sovereign government that we are dealing with. The UK is another one of our partners. We are in a discussion phase. This has not occurred a long time ago where we are just moving into, as you say, this post-acute phase. We hope it stays that way. As you know better than me, it doesn't always work that way. So we are very focused on that. We have also had the three governments talking about wanting to eradicate over the next six months or so. We are very focused as a result of this—as we have been not only in Africa but in our region—on strengthening the health systems for the reasons you outlined earlier. One of the things that we did with the centre, you might recall, was to ensure that we had local staff recruited into the centre who would be able to stay on when we pull out of the centre at some point. I do not know whether you were here earlier, but we had 250 staff recruited, with about 25 from the health department. So we are training, et cetera. So that is one part.

Senator DI NATALE: And that is really important and positive. Many of the staff are West Africans, and they are doing the grunt work, really. It is some difficult work. For example, the hygienist who are responsible for cleaning out the highly infectious zones. But that doesn't do anything in terms of that public health infrastructure. It is a very different skill set. So what is really required is an investment in those skills like contact tracing, outreach, case identification and isolation. We are not doing anything in that space at the moment and that is where the world's attention is right now. What I'm asking you is, what are you doing to ensure that in this post-acute phase, we are doing what many other countries are doing, which is helping build that public health infrastructure.

Mr McDonald : I think what I am trying to say is that we are in discussions at the moment and no decisions have been taken on that.

Senator DI NATALE: Is the government considering further investment in that area?

Mr Varghese : I think that the case is that the government has not taken any decisions about this next phase. Our focus, as you understand, has been on the acute phase and the role of our Ebola treatment centre. When the government addresses what role Australia can play in the next phase, it will need to take into account a number of considerations. For example, our capacity to do so and the capacity of others, particularly in Europe where I think it is more of a primary region of concern than for us, and where it fits into our broader aid priorities and aid principles. The government will work its way through those principles and make a decision. But at this stage no decision has been taken.

Senator DI NATALE: I am not sure that I understand. We are talking about an infectious diseases outbreak of a highly fatal disease that has the potential to cross borders. I am not sure that it is the domain of Europe versus the domain of Australia.

Mr Varghese : I didn't say that. I said that we would take into account what other countries are doing.

Senator DI NATALE: Well, you said that it was more relevant to the Europeans than it was to Australia.

Mr Varghese : No, you are talking about where we go from here in terms of building public health infrastructure. That is a different set of challenges to the challenges that we have been facing up until now, which has been dealing with Ebola in the acute phase.

Senator DI NATALE: I am asking the question because in the evidence that you provided earlier, you made it very clear that we have now entered a post-acute phase. What I am asking is, what sort of investment, whether it be through people or money, will we contribute in that phase? But I understand that a decision has not been made yet and that you are considering it. And I urge you to consider it carefully. Has any consideration now been given to repurposing the Ebola treatment centre, for example?

Mr Exell : At the moment, the focus is on continuing the operation at the centre. As Mr McDonald and I mentioned before, there are discussions with the Sierra Leone government, the UK and other countries in Sierra Leone about that next stage and how to rationalise the number of beds in the centres to what is an appropriate number going forward.

Senator DI NATALE: I get that. There are lots of centres springing up, and unfortunately the nature of this business is that you build these things, the outbreaks are very dynamic and beds don't necessarily meet the needs at the time. It is difficult to get that balance right. That is why I am asking if there is a potential for this piece of infrastructure we have in Sierra Leone to move from simply a treatment centre. I just wonder if any consideration is being given to that. I accept that you are saying that at the moment the focus is on the acute phase.

I want to ask a couple of questions about travel restrictions. Can you outline to me the travel restrictions that currently exist for people coming from an Ebola affected country?

Mr Exell : That is a question for the department of immigration. They handle that area, primarily.

Senator DI NATALE: So you have nothing to say in terms of the restrictions that are being implemented on students and people seeking to migrate from west Africa?

Mr Varghese : They are all questions that are handled by the immigration department.

Senator DI NATALE: Let me ask you about the scholarship program. Is this a question for you? Correct me if I'm wrong. There was previously an Australia awards scholarship program for people from Liberia and Sierra Leone. I want to get some information on that.

Mr McDonald : I can help you with that.

Senator DI NATALE: One of the things I learnt through my trip was that we had an ongoing relationship with Liberia and Sierra Leone in terms of providing a number of scholarships for students, many of whom now are in public health ministries and areas of government and so on. All have benefited from postgraduate education here in Australia from a number of different universities. What is the status of that program?

Mr McDonald : I'll just give you some background. In relation to the Australia Awards, we do have a masters course and a short course for those countries. There were 11 master degree awardees from Liberia and Sierra Leone.

Senator DI NATALE: What period are we talking about?

Mr McDonald : That is for 2015.

Senator DI NATALE: How does that compare with previous years?

Mr McDonald : I would have to take that on notice.

Senator DI NATALE: That is an ongoing program?

Mr McDonald : Yes, it is.

Senator DI NATALE: I understand that the most recent intake was deferred. Why was it deferred?

Mr McDonald : It was deferred after discussion with the governments of Liberia and Sierra Leone. I think one of the reasons was that the governments wanted to have that capacity within country—particularly for those coming from government—given what was happening with Ebola. So we have deferred it.

Senator DI NATALE: That is not what I was told.

Mr McDonald : I am just going from my notes here. I am sure that would have occurred.

Senator DI NATALE: So you are saying that the scholarship program was deferred to keep people in West Africa and to prevent them from training and skilling up here?

Mr McDonald : No, it is in terms of the capacity of the government. As you can imagine, with the Ebola outbreak—

Senator DI NATALE: No, they are not all government people.

Mr McDonald : They are not all government. I just gave you an example. Some of them are from government.

Senator DI NATALE: Some are, but many of them are not. Many of them are private sector and so on.

Mr McDonald : There are six from Liberia and five from Sierra Leone. That is the number I am talking about. That is the master's degree. Maybe I'll take it on notice.

Senator DI NATALE: Take it on notice, because I think it represents a significant reduction from previous years. The reason I bring this up is simply because the people who have been trained here in a range of disciplines, including health, have made an enormous contribution through this outbreak. The program is being deferred. We are talking about this post-acute effort that is required of building public health infrastructure and so on. I would have thought that if we can contribute in any way, then building capacity through the training that we offer here in Australia is one way to do that. To reduce the numbers and defer the program runs counter to what we should be doing right now.

Mr McDonald : Can I just say that we are deferring. We are not cutting. They will still be able to participate in the awards. I just think that is important.

Senator DI NATALE: On that point, When you say you are not cutting, can you say that based on previous year's numbers?

Mr McDonald : No, I just said that I need to take that on notice. I thought your point was that we were cutting this because—

Senator DI NATALE: It may represent a cut. I suspect that 11 people represents a cut on previous years.

Mr McDonald : It may. I need to check that. But in terms of the numbers for 2015, we have just deferred those and they will take those.

Senator DI NATALE: I will put some questions on notice. Thank you.

CHAIR: You can come back during the day, of course. Senator Sinodinos, I will go to you.

Senator SINODINOS: I want to ask some questions on the aid program. I note that in June 2014 the minister launched our new aid policy—Australian aid: promoting prosperity, reducing poverty and enhancing stability. And that last month she released the inaugural Performance of Australian aid 2013-14 report on the record of the aid program, which benchmarks our progress in implementing the government's new development policy and performance framework. I want to ask about some of the outcomes of that report. For example, was there an increase in programs whose performance was rated as on track in 2013-14?

Mr McDonald : I'll ask Mr Dawson to answer that question.

Mr Dawson : Yes, Senator. There was a 14 per cent increase in the percentage of program objectives whose performance was rated as 'on track' in 2013-14 compared to the previous year.

Senator SINODINOS: An increase in the number of programs meeting objectives, is that how you put it?

Mr Dawson : Each program will have a number of specific objectives. We looked at the overall number of objectives across all programs.

Senator SINODINOS: So there was an increase in the number of objectives, not just an increase in the number of programs?

Mr Dawson : That is correct.

Senator SINODINOS: What does 'on track' mean in this context?

Mr Dawson : It means that they are expected to achieve the objectives set for them.

Senator SINODINOS: Are those objectives qualitative, qualitative or are they a mix?

Mr Dawson : They tend to be high-level objectives. It might be, for example, to build capacity in an education system. It is at a broader level, and then there are a number of specific indicators of performance. Some objectives would be taken into account in determining whether the overall program objective was on track or not.

Senator SINODINOS: And those specific indicators could be qualitative or they could be quantitative?

Mr Dawson : They could be a mix, that is right.

Senator SINODINOS: So when the report comes for judgement that a program is on track, that is really a mixture of objective and subjective factors?

Mr Dawson : That is correct. It is a self-assessment process. But it is a self-assessment process within the department, which is peer reviewed by others who would be expected to know something about the programs in question. For example, on an annual basis we sit down with an annual program performance report that includes a report against each of these objectives. We do a peer review of that where, for example, we have our education sector specialist in the room. When we come to talk about the performance of the program against the education sector, the data, the findings which are in the report would be examined by those in the room—

Senator SINODINOS: Are these peers people from within the department or are they external consultants?

Mr Dawson : For the most part they are from within the department. They are people with particular expertise across relevant areas for each program.

Senator SINODINOS: Do you ever expose these evaluations to outsiders to get that input?

Mr Dawson : There are a number of inputs to this process. During the course of the year, a program—for example the program in Indonesia—will undertake a number of evaluations of different elements of that program. Those valuations can be undertaken internally or they can be taken using external experts. It really depends upon the kind of mix of skills and experience on a team that you need to be able to do that. That is principally the way in which external expertise comes into our evaluation and performance measurement process.

Mr McDonald : We have an independent evaluation committee that looks at the report before it goes out. That is made up of a former vice president of the World Bank, Jim Adams. It is also made up of two external representatives from outside government. They look at it from an evaluation perspective and say, yes, this is rigorous and can be signed off. So there is an assessment of that through that process.

Proceedings suspended from 10:30 to 10:46

CHAIR: Before I go back to Senator Sinodinos, I think Mr McDonald wants to clarify something.

Mr McDonald : Thank you. I just want to clarify for Senator Fawcett in relation to his question on the use of emergency funds for Ebola. Of the $45.5 million, $42 million was from the emergency fund.

Senator SINODINOS: Before I go back to ask about aid, Minister, do you have anything to add to the earlier discussion about Aspen Medical, including this issue of political donations?

Senator Brandis: As a matter of fact, I do. In view of some of the observations that came from Senator Wong, I checked the Australian Electoral Commission's register of political donations, which records that in 2013-14, 2011-12 and 2010-11, Aspen was a donor of significant sums of money to the Australian Labor Party. As well, the returns of the AEC show that in 2004-05, Aspen Medical contributed the princely sum of $33,200 to the Canberra Labor Club Ltd and in 2006-07 Aspen Medical contributed the sum of $67,287.40 to Canberra Labor Club Ltd. It also donated to other political parties, including the Liberal Party. But the innuendo that came from Senator Wong I think needs to be seen in the cold light of the truth.

Senator SINODINOS: They are catholic when it comes to donations. Thank you, Minister. Going back to the aid program, I want to ask again about the report that has been put out on our aid performance in 2013-14. Is Australia on track to achieve the target of 20 per cent aid for trade by 2020?

Mr Dawson : 2020 is a long way away, but we believe that the programming and policy work necessary to achieve that target is in train and we are on track.

Senator SINODINOS: What does that target mean in practice? How does aid for trade work?

Mr McDonald : It is currently at 13.4 per cent. It is expected to be about 14.7 per cent this year. So it is on track to come out. Aid to trade is expenditure within countries to build their capacity to trade and the like. There is an OECD definition that captures that. So we are building it into our program. The focus could be infrastructure—ports and roads et cetera—

Senator SINODINOS: So they are like trade facilitation measures?

Mr McDonald : Yes.

Senator SINODINOS: Anything that helps support potential trade flow.

Mr McDonald : Yes, which then links to economic growth within the country and poverty reduction, which is our overall objective.

Senator SINODINOS: Is there a development assistance committee?

Mr McDonald : That is right. The development assistance committee in the OECD defines what is included in aid for trade. I am sure I can give you that if you are interested.

Senator SINODINOS: No, that is fine. So it is an international definition that we are working to. It is not a definition that we make up.

Mr McDonald : No. Often, as you would appreciate, the private sector capability within these country is limited. There is high risk, et cetera, with some of the activities. So being able to put in place better capability and better infrastructure obviously has a major impact on economic growth and poverty reduction.

Senator SINODINOS: What has DFAT undertaken to ensure that the aid program demonstrates a high standard of value for money?

Mr McDonald : One of the targets is value for money. Mr Dawson will be able to articulate how we capture that. There are various aspects that we include in determining value for money.

Mr Dawson : We have done a good deal of work on this over the last 12 months. We have introduced a range of value for money principles that address the issue of efficient, effective economic and ethical use of aid resources. What we are engaged in at the moment is to ensure that those principles are embedded all of the way through our aid management processes. As well, we are specifically looking at our annual ratings of individual aid investments and what they reveal about the efficiency and the effectiveness of those investments. The government has set a target that 85 per cent of investments should have efficiency and effectiveness ratings better than satisfactory. I think we are well on track in terms of the effectiveness of aid investment. But we still have some work to do on the question of efficiency. The minister has also indicated that she wants to see a much tougher approach to investments that are not performing effectively—those that are not providing value for money. We will be using those measures of effectiveness and efficiency basically to target those investments which are not providing good value for money and putting them on a watch list for senior management attention. After a year, if they have not improved their performance, then we will be looking at winding those investments up.

Senator SINODINOS: In that context, when you look at things like investment in, say, health and education, which have an economic dimension and social dimension, et cetera, how do you measure effectiveness and efficiency of those sorts of investments?

Mr Dawson : There are a range of specific questions that we ask in each case around efficiency and effectiveness. I might be able to run you through those things now.

Mr McDonald : The other emphasis around value for money is obviously the effectiveness of the program. In 2013 we had around 1,300 individual projects. One of the targets the minister put in place by 2016-17 was a 20 per cent reduction in those. That will not only increase in the effectiveness of the delivery of the program but also in terms of the administrative overhead of actually putting those in place. We are trying to ensure that as well.

Mr Dawson : Across all of our portfolio of aid investments, we ask the same basic set of questions. We ask them against eight basic criteria. We ask if the investment is relevant. Is it the right thing to be doing? Is it effective? Are we achieving the results we expected? Is it efficient? Is it making appropriate use of our and our partners time and resources to achieve the objectives? We look at monitoring and evaluation and whether the implementation and progress towards meeting objectives is in fact being measured. We look at the way in which the investment supports sustainability. We look issues of gender equality and whether the investment is making any difference to gender equality. There is also risk management and safeguards. How are we managing risk within the investment? We look at measures of innovation and private sector engagement. So that same set of basic criteria we apply across our entire investment portfolio.

On efficiency and effectiveness, we are asking a set of structured questions in each case. For effectiveness, we are asking whether the investment has clear and realistic outcomes supported by a robust logic and theory of change. We ask whether it is on track towards achieving its expected outcomes; whether the quality of outputs and activities is as expected; whether policy dialogue is used effectively to influence partners; whether the intended beneficiaries are satisfied with the investment results; whether the investment actively involves disabled people's organisations; whether it addresses barriers to inclusion and opportunity for people with disabilities; and whether it identifies and addresses barriers to inclusion and opportunity for participation by indigenous peoples and ethnic minorities. All of those factors go into an overall judgement about whether an investment is performing effectively. Then we have a similar set of individual criteria that go to the issue of efficiency.

Senator SINODINOS: One final question before I throw back to the chair. This is a bit left field. We have an aid program of a certain size, and we can debate the appropriateness of the size of the program, and all that sort of stuff, and funding and whatever. But this is more about processes within government. Do you ever look at the aid program and think, what are the lessons from that program for service delivery here in Australia? I am thinking about indigenous areas, for example, where you might face some similar challenges?

Mr McDonald : I think that that is an excellent point. It is very similar in the disadvantage that you see in Indigenous communities in Australia that we are dealing with in terms of many of our developing countries. I think there is opportunity within government to learn broadly around what has worked and the lessons that are learnt in terms of the effectiveness of that. So I genuinely think that that is a very important point. In terms of our program as a whole, we are trying to develop much more innovation in the program. That innovation we hope will not only apply broadly within the program that we are delivering in DFAT as a whole, but innovation more broadly across the public sector. So how can we join things up better. It does not necessarily have to be something brand new. It can be. How do we better connect partners? That applies equally in Australia as it does overseas. So I think there is great opportunity for us to do more of that.

Mr Dawson : A lot of the opportunity is being taken up at the level of individual officers. We have a number of staff who have experience with Indigenous programs in Australia. One of my former direct reports is now working on Indigenous issues and taking the learnings from the aid program to that. So they are some examples.

Senator SINODINOS: Thank you.

Senator SINGH: Can you enlighten me as to the first date that the Ebola outbreak became an issue?

Mr McDonald : If Mr Exell is here he will be able to help me. I think that the first time that we briefed the minister was early August. But I will ask Mr Exell to confirm my memory.

Mr Exell : That is actually a very broad question. As you are probably aware, the outbreak commenced early in 2014. Indeed, I think it was even late 2013. There has been quite considerable international discussion about the reasons why it may have not been picked up earlier, leading to quite a lot of debate about lessons from that and what can be thought about in the future. As Mr McDonald said, the government IDC commenced meetings in August. The first advice from the first briefings was in August to the foreign minister.

Senator SINGH: Sorry, the government IDC?

Mr Exell : That is the interdepartmental committee that was coordinating our response on Ebola.

Senator SINGH: Right. That was early August?

Mr Exell : Correct.

Senator SINGH: For people who had been in these Ebola affected countries and were returning to Australia, when did that screening process commence?

Mr Varghese : Senator, that is an issue that you would have to take up with the Department of Health and the Department of Immigration and Border Protection. We do not have responsibility for the screening process.

Senator SINGH: Regardless of not having responsibility for the screening process, you are not aware of the date?

Mr Varghese : It is not something that we are responsible for.

Senator SINGH: I just thought that you, perhaps, would have had some consultation with those two agencies and have some idea of the date. No? Okay. When humanitarian workers return to Australia, how are they flagged before they travel? Are their passports tracked, for example?

Mr Varghese : Again, they are all procedures and policies that are the responsibility of other agencies, and not us.

Senator SINGH: Passports are in this agency, aren't they?

Mr Varghese : The screening arrangements are not a factor of a passport. The passport is an identity document that enables people to travel. But the restrictions or reporting requirements that are required of people entering Australia are handled by the Department of Immigration and Border Protection. In the case of health outbreaks, it is with input from the Department of Health.

Senator SINGH: Would this department have made recommendations on that screening process?

Mr Varghese : DFAT?

Senator SINGH: Yes.

Mr Varghese : No.

Senator SINGH: Which are the agencies that would work together on a protocol for flagging passports and travellers checking into a flight bound for Australia?

Mr Varghese : That would be handled by the Department of Health and the Department of Immigration and Border Protection.

Senator SINGH: Has DFAT received any complaints in relation to the Department of Health or the Department of Immigration and Border Protection regarding the handling of these re-entry issues?

Mr Varghese : I am not aware of any complaints. Do you mean complaints about the Department of Health and the department of immigration?

Senator SINGH: I said from the Department of Health or the department of immigration.

Mr Varghese : I am not aware of it. My colleagues may have some information.

Mr Exell : I am aware that our post in Accra relayed some advice through to the Department of Health and immigration about some of the protocols. But I am not aware of the specific details.

Senator SINGH: The post where, sorry?

Mr Exell : It is our post in Ghana. They received some questions around those measures that were introduced. I think they relayed those through to the department of immigration and the Department of Health.

Senator SINGH: Can you provide the committee with some detail as to what those complaints were?

Mr Exell : I would have to take that on notice. I do not have the specifics of the questions that they asked.

Senator SINGH: That is okay. We can take that on notice. Has DFAT received or heard of any complaints regarding the handling of re-entry issues?

Mr Exell : Not aside from what I just referred to.

Senator SINGH: Are you aware of how humanitarian workers are welcomed home? Are they thanked for their service?

Mr Exell : Are you referring to Aspen workers or are you referring to broader NGO workers?

Senator SINGH: We are talking about Ebola, so I am actually focused on particularly Aspen workers. But humanitarian workers that have been working in Ebola affected countries.

Mr Exell : I can refer to Aspen Medical, who are supported on their return back into Australia. They actually remain employed by Aspen for a period of three weeks after they return. They are recognised by Aspen in the work that they do.

Senator SINGH: How specifically are they welcomed home?

Mr Exell : Do you mean if they are met at the airport? What do you mean?

Mr McDonald : We would have to take that on notice. We would need to talk to them about how that actually works.

Senator SINGH: Okay. If you are taking it on notice, can you take on notice other NGO workers who have been working with Ebola?

Mr McDonald : Yes, Senator.

Senator SINGH: Is there a difference between Aspen employees and other humanitarian workers on their re-entry into Australia? How is the re-entry of Aspen medical workers handled? Or is this another question that is only for immigration?

Mr Varghese : I think you are correct that it is a question for Immigration.

Senator SINGH: I have answered my own question.

Mr Exell : But I am not aware of any difference, let me say that. To my knowledge, there is no special or different treatment to any other returning health care worker, if that is what you are asking.

Senator SINGH: I am trying to find out if Aspen employees have had a flag put on their passports.

Mr Varghese : This is not our area, but my understanding is not that this works on a flag or a passport basis. This works on the basis of a questionnaire that you fill in when you enter Australia. Everybody entering into Australia, as you would know from your own recent travels, fills in those forms. Then there are protocols that are attached to how you deal with particular responses. So it doesn't quite work on a passport flag basis.

Mr Exell : I can also add that Aspen provides advice to the Department of Health with advanced notice of travel for their workers. You would have to ask them what they do with that information and how it is provided. But there is that coordination for Aspen workers with the Department of Foreign Affairs and Trade.

Senator SINGH: So they would expect that?

Mr Exell : Sorry, the Department of Health would expect it?

Senator SINGH: No, the Aspen workers.

Mr Exell : The Aspen workers are aware that their travel movement information is conveyed to the Department of Health—both their departure and their expected return dates.

Senator SINGH: So Aspen workers were made aware of that before they travelled?

Mr Exell : That is my understanding, yes.

Mr McDonald : I think I said earlier, that one of the most important things for the government, the department and Aspen has been the welfare of the staff. Whatever we can do to support those staff in the difficult circumstances they are in, we have put in place.

Senator SINGH: That is what I was trying to get out. What kind of support is given to the staff?

Mr McDonald : We talked about the training that they are given. We talked about all of that side of it. Are you talking about re-entry?

Senator SINGH: I am talking about the re-entry.

Mr McDonald : As I said earlier, we will take that on notice and provide you with the details.

Mr Exell : I think I can add that the key point here is that they actually remain employed by Aspen for a period of three weeks after their return. So that provides an opportunity for a range of services, whether that is counselling as required or indeed health procedures as required. The three weeks is around the 21 day period to make sure that there is support for that observation period. That is an important part of the care that Mr McDonald was referring to.

Senator SINGH: Mr Varghese, you talked about the document that all travellers are given on flights inbound to Australia. And yes, I did receive it recently as well. Does DFAT have any involvement with that documentation?

Mr Varghese : The design of the documentation and the questions are not matters for us. We did not get involved in any of that.

Senator SINGH: Is there any part of that that DFAT did get involved in?

Mr Varghese : With that particular document?

Senator SINGH: Yes.

Mr Varghese : To the best of my knowledge, it was a document that was put together by the Department of Health. You would have to ask them who they consulted.

Senator SINGH: So DFAT did not consult the Department of Health about the need for such a document?

Mr Varghese : It would not be our call about the need for such a document because the responsibility for the protection of the public health of Australia is in the hands of the Department of Health. They may work with the Department of Immigration and Border Protection because it is an entry process.

Senator SINGH: Thank you.

Senator RHIANNON: Attorney-General, in commenting on the Aspen political donations to both Labor and Liberal Party branches, you stated that this information provided 'the cold light of truth'. They were your words. What is that truth? Is it that the Labor and Liberal parties have both been caught in the murky world of taking money from companies that benefit from receiving government contracts? Is the truth you refer to that all political parties should work together to bring in national bands or caps on donations from for-profit organisations? What is your truth, Attorney-General?

Senator Brandis: The question, 'What is truth?', is of course a deep philosophical issue. I thought when you asked the question you might have had in mind the story in the gospels of Pontius Pilate as he entered the temple and he asked the same question himself. I am not necessarily comparing you with Pontius Pilate, Senator Rhiannon. I have in the course of a long life, some of which I might say was spent teaching philosophy, often reflected upon the meaning of truth, but I have not arrived at a concluded view.

Senator RHIANNON: Attorney-General, you did use the expression. They were your words. Surely you can elaborate on what you meant? Or are you saying that you were giving answers to the estimates committee that you have not got back up to explain or detail?

Senator Brandis: No, I was reading from an AEC return, that is all. I think you have, if I may say with great respect, Senator Rhiannon, expanded a perfectly quotidian observation that I made about entries on an AEC return into a deep philosophical conundrum at a remarkably rapid speed.

Senator RHIANNON: Well, this is your opportunity to explain that. They are your words. 'The cold light of truth.' And you have not enlightened us. It is quite an easy thing to answer.

Senator Brandis: All right, I will enlighten you, Senator Rhiannon. The cold light of truth is this: according to the Australian Electoral Commission's returns for various years, in the year 2013-14, in the year 2011-12 and in the year 2010-11, Aspen Medical made significant donations to the Australian Labor Party as well as other political parties. In the year 2006-07 it made a very substantial donation of $67,287.40 to the Canberra Labor Club Ltd and in 2004-05 it made a very substantial donation of $33,200 to the Canberra Labor Club Ltd. They were the truths, or perhaps we might say the facts, to which I was directing the committee's attention.

Senator RHIANNON: Would part of the truth be that in that period Aspen also picked up 24 government contracts plus the provision of immunisation to 22 government departments? So we have on the one hand a company that is giving money to political parties who, when in office, are then awarding contracts to that company? Is that part of the truth?

Senator Brandis: I know that you speak with some experience on this matter, Senator Rhiannon, being a member of the political party that is the recipient of the largest corporate donation in Australian history. Notwithstanding that, it is a lawful and common practice for companies to make donations to political parties as long as the disclosure laws are observed, as they have been in this case. It is also the case that Aspen was the recipient of many contracts under the previous Labor government and has been the beneficiary of contracts under the current government. I do not link the two. Senator Wong made an innuendo when you were not here and I merely decided to put all the facts on the table in order to refute the innuendo.

Senator RHIANNON: Thank you very much, Attorney-General. I would like to take up some issues to do with the NGO cooperation program.

Senator FAWCETT: Can I just follow on from that point before we move on?

Senator RHIANNON: Certainly.

Senator FAWCETT: Is it also the fact that an innuendo has just been made about both major political parties and this company, when in actual fact this company has won contracts with state governments, with foreign governments and consistently with the federal government because it is innovative and it provides an effective services to deliver health outcomes for communities both overseas and here in Australia? And the innuendo that has just been made by Senator Rhiannon is completely unfounded on the basis of the performance and the outcomes achieved by this company, which has won awards for its delivery of services overseas. That is completely outside of Australia's political system or any of the inferences made by Senator Rhiannon.

Senator Brandis: Senator Fawcett, I am not an expert in this field, but I have no reason to doubt a word of what you say. I am, from my general knowledge, aware that Aspen Medical is a respected and very skilful company. That is no doubt why governments of both sides of politics have awarded them significant contracts. It certainly is a reason why the government of which I am a member awarded it the contract to provide the Ebola services that we were discussing earlier in the day.

There is absolutely nothing wrong with companies giving donations to political parties. It is the most commonplace thing in the world for that to happen, as long as disclosure rules are met, as they have been in this case. Any innuendo against the good reputation of Aspen Medical that has come from Senator Rhiannon is disgraceful. Any innuendo from Senator Wong is also disgraceful. Although, perhaps in Senator Wong's case it wasn't so much a case of innuendo as a question of hypocrisy in seeking to suggest that there was something irregular about the Liberal Party being the recipient of donations from this company while not acknowledging the fact that she, as a member of the Labor Party federal executive would be aware that the Australian Labor Party is also a recipient of donations from this company. We do not say that there is anything wrong with that. There is nothing wrong with that. There is nothing unusual about it. There is no linkage whatsoever between that and the awarding of contracts under our government and I suspect under the Labor government as well. This is a very respectable and eminent Australian company.

Senator FAWCETT: Her fellow party member just praised the quality of their work.

Senator RHIANNON: Attorney-General, considering that this discussion started off about truth, my question just put out what the donations and the contracts were. What are the innuendos and what are the inferences that you are suggesting were there.? Because there was no innuendo or inference in what I said. I presented the information, which is information that is on the record, and you yourself have quoted it.

Senator Brandis: I thought you were engaged in an innuendo by the manner in which you phrased your question.

Senator RHIANNON: Okay. The Australian NGO cooperation program—

CHAIR: Senator Rhiannon, can we deal with that this afternoon?

Senator RHIANNON: I was told to bring it into this session and I have found my experience in estimates this week that when one is bumped to the end of the program one usually does not get their questions asked. I understand that it is totally relevant to ask it in this session.

CHAIR: Not under my chairmanship, Senator Rhiannon.

Senator IAN MACDONALD: Can I just raise the point that the reason for the situation that Senator Rhiannon describes is because the Greens and the Labor Party prior to the last change of the Senate, when they had a clear majority, changed the rules of Senate estimates committees to allow any questioning to continue for so long as any questioner had a question. I would suggest, Chair—and you do not need my help—that Senator Rhiannon be asked to deal with her matter at the right place.

CHAIR: Senator Rhiannon, I can certainly guarantee you that you will be given adequate time to do that at the appropriate time. Stay with Australian aid if you could.

Senator RHIANNON: The performance of Australian aid 2013-14 report on page 12 spells out that private contractors get more and more of the aid budget than NGOs. There is a pie chart in there. It shows 21 per cent versus 15 per cent. Is this a change from previous years?

Mr McDonald : I will ask Mr Dawson to answer that.

Mr Dawson : It may be a slight change. I do not have the previous years figures with me. But it is a consistent pattern year on year that the three largest implementing partners for the Australian aid program usually are, firstly multilateral organisations, secondly; private commercial contractors; and, thirdly, non-government organisations. Those three groups usually account for approximately 75 per cent or thereabouts of aid delivery year by year. But of course there are different programs conducted in different years. Some programs start and some programs end. So the figures will fluctuate year-on-year.

Senator RHIANNON: Could you take it on notice for the previous three years, please?

Mr Dawson : We will do our best, yes.

Senator RHIANNON: In order to operate within the new budgetary limitations, does DFAT have to break contracts it has signed with NGO service providers?

Mr McDonald : The budget allocations for 2015-16 are undergoing consideration.

Senator RHIANNON: So you are saying that you cannot answer that question now. What about previously? Have you had to break contracts?

Mr McDonald : What you are referring to, I think, is whether we have sufficient capacity within the budget to accommodate reductions without the need to break contract. I will ask Mr Wood to talk about what our commitments are at this point.

Mr Wood : There is no reduction in this year's budget. We have at this stage around 77 to 80 per cent of this year's program either expensed or committed. As Mr McDonald said, allocations for the next financial year are under consideration by government.

Senator RHIANNON: When you make those considerations for future budget plans, do you take into account legal implications if agreements had to be broken because of further budgetary implications?

Mr McDonald : The allocations of the budget are made by government, and, as we said, they are under consideration at this time.

Senator RHIANNON: So they are under consideration?

Mr McDonald : They apply to the 2015-16 financial year. As in the past, all the allocations associated with the aid program for the next financial year are announced as part of the budget.

Senator RHIANNON: Can I take from that answer that you are considering the legal implications of terminating agreements with respect to the budget?

Mr Varghese : We would always give consideration to any legal obligations that we have. When the minister goes through the process of making a decision for the 2015-16 budget, which is what she has to do, she would do that as well. We do not take legal commitments lightly and our practice is always to fulfil them to the best extent that we can.

Senator RHIANNON: Thank you. Following the announcement in December 2014 of further reductions in the aid program for 2015-16 to 2017-18, what are the criteria which DFAT is using to determine which elements of the aid program should be maintained and which elements would experience larger reductions? I am after what elements of the aid program. How are you making those decisions?

Mr Varghese : These are decisions that the foreign minister will make. She will go through a process which will include examining how cuts will be handled against the policy framework that she articulated back in June of last year. That sets out the new aid paradigms. She will take into account a range of other consideration.

Senator RHIANNON: So you will give the foreign minister advice when she makes those decisions?

Mr Varghese : We engage in a discussion with the foreign minister about the aid budget on a continuous basis.

Senator RHIANNON: So you are giving advice to the foreign minister. You will be giving advice, therefore, on how to implement these cuts.

Mr Varghese : In the course of making a decision, we would engage in a discussion with the minister, which would include the principles that will apply, the implications of any particular decisions and how they would be implemented. There are a whole range of factors that would go into a final decision on how those cuts will be implemented.

Senator RHIANNON: You said that there are a whole range of factors. That then comes to my question: what is the criteria DFAT is using to decide which element of the aid budget should be maintained? Surely you can share that with us. That is information that you are giving advice on. You have explained that. So what are those criteria? What are those factors? You said that there are factors.

Mr Varghese : The overall framework in regards to government decisions here is the aid policy framework that the minister set out in a major speech in, I think, June last year. I am sure that that will continue to frame her thinking about how to handle cuts.

Senator RHIANNON: Can you provide details of when the successful applicant for the product development partnership announced by the minister in June 2014 will be announced?

Mr McDonald : I think that it will be announced next month.

Senator RHIANNON: In March?

Mr McDonald : Yes.

Senator RHIANNON: Will the details of other medical research spending that is committed thought 2014-15 be announced then as well?

Mr McDonald : In terms of the net expenditure on medical research, that would be aggregated at the end of the financial year, as we do for the total program. So medical research will be part of that. The minister announced, I think, last year $30 million for research. That was her speech with the release of the policy. But I will confirm that for you and ensure that that is correct.

Senator RHIANNON: Thank you. Will the current level of $30 million per year for research spending in 2015-16 to 2017-18 be maintained?

Mr Varghese : That goes to foreshadowing decisions that the minister will need to take about the 2015-16 budget and those decisions have not been taken.

Senator RHIANNON: I would like to move on to some of the issues to do with women and girls with regard to the aid program.

Mr Varghese : I am sorry to interrupt, but I wonder if I could just make one quick point in relation to a question that Senator Singh asked about reception arrangements and gratitude expressed to aid workers. I just wanted to point out a statement that the foreign minister issued on 6 January at the time when our first patient was successfully treated in Sierra Leone. She did make this comment, if you could permit me to read it. It is only three sentences. She said:

I also thank and welcome home the first Australian health workers who have returned to Australia after their deployment. In line with national, state and territory guidelines, the health of returning workers will be closely monitored to ensure their well-being, and that of the broader Australian public. Our best wishes are with the Australian health professionals currently working at the Hastings Airfield clinic.

That is our clinic in Sierra Leone. Thank you.

Senator RHIANNON: The performance of Australian aid 2013-14 shows that the target of having 80 per cent of programs effectively addressing gender equality has been missed. Only 74 per cent of programs reached the criteria. What measures do you have in place in order to reach the target in the coming year?

Mr McDonald : If I could start off on that one. As you know, the foreign minister is very committed to gender equity and female empowerment. The three pillars of that are focused around getting more women into leadership positions, the economic empowerment of women and tackling domestic violence. The target that is provided in the report is deliberately a stretched target. It does two things. The previous percentage was 74 per cent and it has stretched up to 80 per cent. But not only does it address women and female empowerment, gender being included in 80 per cent of our investments, it also talks about how effective that is. So it has a double requirement on that target that we have not had before. The second thing is that those targets came out in the middle of June this year. So what this first report does is set a baseline for us to move forward to achieve that target. We are very focused in the department across the board on this particular priority. As you would know, in the policy itself one of the six key priorities is this. So it is a stretched target. It will force us to focus very clearly on this effort, and we want to see that improve as we go forward.

Senator RHIANNON: You use the term 'stretched target', which does start to sound like public relations speak—it sounds good when you just say it. When you consider that be previous target was actually 79 per cent and it has gone backwards, the stretched target is going backwards.

Mr McDonald : The target is 80 per cent. It is not 74 per cent. What is different in this target is that it is not the same target. The previous target talked about including it in investments. This target talks about including it, but also it talks about whether it is effective. So it is not just what you say you are going to do; it is also whether it is effective in terms of what you do. When I say that it is stretched, it is a target that requires lots of focus and effort. And that is deliberate because it is a key priority.

Mr Dawson : If I could also assist in this. The Performance of Australian aid 2013-14 report measures the performance during the 2013-14 financial year. So this is backwards looking. We have measured the performance of all of our aid investments, in terms of promoting gender equality, for a number of years. So this is nothing new, and the performance has always bumped around in the mid-to high 70s. That is clearly not good enough. We know that this is an area that we need to improve on. The target that the governments has is to get that performance ratio to 80 per cent. The first year that we will be measuring performance against that target is in the 2014-15 financial year. So it is not correct to say that the government has missed the target.

Senator RHIANNON: But, Mr McDonald, am I correct in understanding you to say that you cannot compare 2012-13 to 2013-14?

Mr McDonald : No, I did not say that. I said that the new target is deliberately set at a high benchmark—which is 80 per cent—and includes not only having that in our investments but also looking at how effective it is and whether it is actually doing what it should be doing.

Senator RHIANNON: Considering the consolidation of the aid program by shifting it away from smaller community development projects to largely infrastructure oriented projects, will you be looking at the differences between large infrastructure projects and the small community projects in terms of their impact on gender equality? Wouldn't that be relevant to try to get to 80 per cent?

Mr Dawson : The consolidation target is not a target to shift away from small community development projects to larger infrastructure projects. It is a target to do with the overall number of aid investments which we manage within the aid program. The consolidation target is there to really force a consolidation of the number of investments, because the evidence is clear that when you try to do too many things, you do not do them well. So the aim is to try to reduce the number of individual investments and to therefore get better quality from the investments that are carried out.

CHAIR: Thank you. That is the spot where I will ask Senator Rhiannon to pause, please. I will go to Senator Gallacher now and then to Senator Macdonald.

Senator GALLACHER: Mr Varghese, I have been told that program funding was displayed in a spreadsheet year in, year out. Is that correct? I have about 10 questions on individual programs like whether program level cuts been made to program 1.6, official development assistance, PNG and the Pacific. We used to be able to get this from a spreadsheet. Perhaps Mr Exell can do it. That is no longer visible.

Mr McDonald : The allocations are on our website. So for 2014-15, this year, those allocations are there for each country—so PNG, et cetera. It will also have the allocations for our multilateral spend as well as our NGO spend. That allocation is pretty similar to past years. Mr Wood can confirm that.

Senator GALLACHER: So if I ask these specific questions now, you would be able to give me an answer straightaway?

Mr McDonald : Yes, sure.

Mr Wood : Just to add, we have a document called the 2014-15 development assistant budget that summarises funding by country, major sectors and UN partners. We also have—and I think this is what you were referring to—a disclosure in our portfolio budget statements which is around those programs, so programs 1.1 and 1.2. That aggregates those country totals to a higher level. I am happy to have a go.

Senator GALLACHER: The question is, what program level cuts had been made to program 1.6, 'Official Development Assistance—PNG & Pacific'? Do you have a figure on that?

Mr McDonald : That goes to the earlier point Mr Varghese made around the budget decisions for next year, which are under consideration. This year there has been no reduction. The budget was set on budget night last year.

Senator GALLACHER: So you are waiting for 2015-16, are you?

Mr Wood : In our current portfolio additional estimates statements, there is a footnote under the allocations for each of those programs. The footnote states:

Allocations remain unchanged from the 2014-15 Budget. Programme allocations as a result of the 2014-15 MYEFO decision will be determined in the 2015-16 Budget.

That pretty much reiterates what Mr McDonald said.

Senator GALLACHER: So whatever is up there is allocated.

Mr Varghese : That is right. There is no change for this financial year's budget. There are no cuts.

Senator GALLACHER: The Joint Standing Committee on Foreign Affairs, Defence and Trade, has a subcommittee called foreign aid. That is having an inquiry about the involvement of the private sector in the delivery of foreign aid—on instructions, presumably, of the minister. We were informed on that committee, and it was subsequently reported back to the full committee, that the department of foreign affairs has moved with a position paper if not pre-empting then negating the value of the work that we have been doing. The chair, the Hon. Teresa Gambaro and Nick Champion have raised these issues with the foreign minister. Can you give us a picture of what you are doing there? Do you have some grand plan that is about to be launched in March that is going to trump the deliberation of these other committees?

Mr Varghese : Is this in relation to the innovation hub, as you refer to it?

Senator GALLACHER: Is the innovation hub the work that you are doing?

Mr Varghese : Mr McDonald has oversight of that. We are doing a lot of work on innovation.

Senator GALLACHER: I am sure you are.

Mr Varghese : As you know, the foreign minister has indicated that this is one of her very high priorities, and I expect she will be making a major announcement on its next month. But I will leave it to Mr McDonald to—

Senator GALLACHER: Were you aware of the feedback from the chair of the joint committee on foreign affairs?

Mr Varghese : I personally wasn't, but colleagues may be.

Mr McDonald : In terms of the innovation hub, which is one of my oversight areas, we are coming to talk to the committee next week.

Senator GALLACHER: Is that at our invitation or at your request?

Mr McDonald : I am not sure. But I have been asked to come along so I assume that it is at the committee's request. The work of the committee on the second bit ,on the private sector, will be essential in terms of the consideration of the department's approach, the ministers approach, to the private sector engagement that we have in the agency. One of the important things around your consideration of this is that you have had a lot of broad input into the committee. Everyone is very much looking forward to your report. That report will inform the strategy going forward in terms of our engagement with the private sector.

Senator GALLACHER: Let's go to this innovation hub. What does innovation in foreign affairs, defence and aid look like? What is it? How do you define it?

Mr McDonald : We have defined innovation through six strands that we are looking at. The reason for the innovation hub and the reason it was announced as part of the minister's new policy is that things are just not working in relation to aid in some circumstances. So we need to think about doing things anew. This is not unique to Australia. This is also occurring with our donor partners like the UK and the US. What we are trying to do through the innovation hub is to source new ideas. So, new ideas that could be occurring, say, somewhere else globally that we are unaware of. How do we learn about those things that are working and how can we try them? We are particularly interested in the Pacific in terms of innovation that could occur to try and help remove people from poverty in the Pacific. As you know, it is hard to attract the private sector into the Pacific, and the like. So what can we do differently to encourage more interest in the Pacific? We will be very much looking at new partnerships and collaborations. What has already come forward is not only the private sector but philanthropics, and other governments that can partner together to get a much better outcome than working individually. That would be another focus.

Senator GALLACHER: I am sure you have your head around what you're saying, but I did not get a lot out of that. So is it the social impact and investment in that sort of thing? Is it social impacts and bonds? Is that the sort of thing you are talking about here?

Mr McDonald : Yes, that is right.

Senator GALLACHER: I like to see things I can actually understand. What is it that is innovative that we can use in these areas of failure to do better?

Mr McDonald : Well, we are just starting out. They are the ideas we are trying to draw forward to try. They are usually more high risk. For example, we are going to try things that you might not normally try. We are going to try to learn from them. We want the market to come to us with the ideas and not for the bureaucracy to generate those ideas. It is working in partnership. The hub is just starting; it is just commencing.

Senator GALLACHER: Do you have some idea of what success and failure are going to look like? You know what failure looks like in a lot of areas.

Mr McDonald : Yes, I agree. In terms of success, what we would like to do is try things that, if they are going to fail, they fail quickly so that we learn from those and that we know. But we will not do projects for projects sake. We will do it because they have the ability to be scaled up. So if they are successful, we can scale it up and we can impact more broadly on the countries we have an aid program with. So it will not be just any idea. It will have a criteria to assess it. Then we make those decisions. We expect that some things will fail, as they have elsewhere. That is one of the things that I am hoping to have a discussion with the committee on and get guidance from the committee on as well.

Senator GALLACHER: In private equity terms, there is a term that failing quickly is a good result. Investing in failures for a long time is quite obviously painful. Are you saying that this is almost a move to a private equity approach to aid? You will source entrepreneurial ideas or new innovative issues and you will find some, recognising that some will be unable to succeed?

Mr McDonald : I do not think we are saying that they are unable to succeed at that point. They are likely to be higher risk. As you would know, if we do not try them we are never going to actually make a huge difference, because we have never tried it. If we try it and it actually works then it can make a huge difference. If we try it and it does not work, we want, as you just said, to fail quickly.

Senator GALLACHER: Is it micro-financing women in a village an innovative thing or is that an established practice?

Mr McDonald : Micro-financing is a good example. Technology has been a big thing. Mobile phone use in our region has been a big technological change. So technology will play a big part. But we do not actually have the ideas. We want people to generate ideas that we can then consider and try.

Senator GALLACHER: There is $140 million put into this innovation hub. What level of that will be spent on the normal things that the department needs, such as wages, people and all the trappings of office, so to speak?

Mr McDonald : I would have to take on notice whether anything is spent on the department. I would need to check that.

Senator GALLACHER: So it will not involve setting up a new office with new people, a new director and a first assistant secretary and all that sort of stuff?

Mr McDonald : We have a very small team that will be established of half a dozen people or thereabouts. The key to innovation is not the innovation hub. It is the innovation across the $20 billion of investment that we currently have in the program. We do not want everyone to think that innovation is in the innovation hub. That is just an impetus to try and generate innovation within the organisation. We are very much focusing right across the board. There are many innovative activities already being undertaken in the program that we need to look at scaling across into other areas. So it is a very small team.

Senator SINGH: I think that you said that you are going to take the breakdown of the $140 million on notice.

Mr McDonald : Yes, I'm happy to do that.

Senator SINGH: Can you also provide how much will go on not just staff salaries but staff travel?

Mr McDonald : Yes, sure. I will say that there is very little of that. The focus of the team is working across the organisation and working with our partners and the like. But I will take that on notice.

Senator GALLACHER: To try and get a very clear picture here, you have allocated an amount of money that doesn't seem to be going to attract a lot of administration costs. What is the money for? Is it to develop the project, to get ideas or to talk to people?

Mr McDonald : For example, we want to partner with other countries to generate ideas into something like a challenge fund type of thing. Basically, where ideas come in and you have a group of people that assess them. We also need to look at our financial instruments. We are a grant-based organisation. What does that mean in terms of trying to generate innovation? We need to consider that going forward. We also need to think about how in the organisation itself we generate ideas from our staff as well, in terms of innovation. What sort of a challenge fund will be established there. So there is going to be various projects and ideas—

Senator GALLACHER: I would hardly call it innovative to ask the people doing the work how to do it better. I thought that would be common sense.

Mr McDonald : But being able to encourage people to put forward ideas that, by their nature, are higher risk is not something that people do day to day. I actually think it is important that we do generate that through the work of the innovation hub.

Senator GALLACHER: Can I just get a clear picture of the allocation of the $140 million? What will those dollars actually be spent on? Will they be co-invested with partners or will it be seed funding ventures? What will it be doing?

Mr McDonald : It could be all of those. That has not been decided. So the funding is allocated. As I said, the hub is just commencing. It will be launched in the next month or so.

Senator GALLACHER: Is there a business plan?

Mr McDonald : Yes. As I said, there are six areas of focus.

Senator GALLACHER: Well, you have $140 million, so you must have had some plan somewhere. Someone wouldn't just allocate that, would they, without a detailed analysis of what this organisation is going to do?

Mr McDonald : It is part of the department. It has a remit to generate innovation—to try things. It has an allocation of funding that will be allocated against six streams.

Senator GALLACHER: Can you just tell us what those streams are?

Mr McDonald : Yes, I was starting to. One will be sourcing new ideas. And I just talked to that. The second one will be some sort of encouragement of innovation in the Pacific. As you know, we have great difficulty getting the private sector to go in. New partnerships and collaborations with partners we don't normally collaborate and partner with—philanthropics, private sector and the like all coming together. Can we build partnerships that provide a better outcome in the future? That would include ideas of something that has worked in Africa. Can that be applied to the Pacific and how can we scale that up? Scaling up will be the other stream. Is this idea, if it is successful, going to be scalable and can we make a difference if it is successful? That is the fifth stream. The final stream is what I talked about before, which is about promoting ideas from within the organisation and using the broader program, the whole $16 billion, to think about innovation and doing things differently. One of the impetuses for this is that when you think about the Pacific and PNG specifically, they are not going to meet any of the MDGs, or are very unlikely to. This is about trying to generate something that is a bit different.

Senator GALLACHER: Do you implicitly accept that they will be failure in this?

Mr McDonald : Of course.

Senator GALLACHER: Do you have an accepted rate of failure? Is the minister happy? Have you ticked off that you might get four out of 10 being disasters?

Mr McDonald : As you know, to generate innovation there will be failure. The tolerance of that failure needs to be decided. As I said, we are just getting into the launch of the hub. We are just getting going forward with that. So of course we will have to talk to the minister about the tolerance of that.

Mr Varghese : On this question of failure, I think it does shift us into some relatively uncharted territory. It is not common for a public sector organisation to engage in this sort of calculation. This is closer to a venture capital framework than it is to what we normally do. We will have to do quite a lot of thinking about how we handle, explain and are accountable for projects that do not succeed. As Mr McDonald was saying, you cannot innovate without failure. It is in the nature of the process of innovation.

Senator GALLACHER: Given our performance—and I say 'our performance'—in foreign aid in New Guinea where are all the world health indicators are going the wrong way despite our continued substantial investment, it may be that the innovative strategy is more successful than the current strategy. We have plenty of ground to draw on to improve.

Mr Varghese : We very much hope so. That is the whole point—to get strategies that are more effective than planned current strategies. If it sounds a bit vague at the moment it is because we have not developed this to the point of precision that we would all like—something that, as you said, you can touch and feel and it makes sense. But I think you will see very specific projects emerging from this which will make sense in our own terms. Whether they succeed or not will be part of the process.

Senator GALLACHER: Are any of those projects up and running or are you still developing them?

Mr Varghese : Not yet, no.

Mr McDonald : The only one that has been allocated funding is called the global innovation fund. That is a partnership, which the minister announced, between Australia, the UK, the US and Sweden. That is about generating new ideas. That was that example that I said draws in ideas to a global partner. Our emphasis is on our region for the reasons you just outlined.

Senator GALLACHER: I could go on for a while, Chair, but you're winding me up are you?

CHAIR: Just for a bit of a breather. Senator Macdonald.

Senator IAN MACDONALD: Thank you. I will not keep you terribly long. As part of the portfolio overview, I wonder if Mr Varghese could make a general comment about Australia's relationships with the countries of South America? Along with Senator McEwen, I recently attended the Asia Pacific Parliamentary Forum in Quito in Ecuador on a delegation led by the Speaker, the Hon. Bronwyn Bishop. There is an enormous amount of goodwill to Australia both in Ecuador and Peru, where the delegation visited. Both the foreign minister and the trade minister visited prior to our visit and then, subsequent to our visit, the environment minister visited. There is a lot of excitement in South American countries about Australia. There is a lot of goodwill, as I say, and a wish to be more involved. Can you give a general overview of what the government strategy is, what its approach is and what its desires are with its relationship with South America? In asking that question, I note that most South American countries have diplomatic representations here in Canberra. We have very good diplomatic relations in South American countries. I can vouch for the ones that we visited. Some of them, of course, represent Australia in several South American countries. True enough, those issues were raised with us by a number of delegates we met with at the forum as well. Can you generally, Mr Varghese, let us know where we are going with Australia's relationships in South America and what we want to achieve.

Mr Varghese : Thank you, Senator. I will also ask Dr Hammer if he wants to add anything to this. From our point of view, we think there is significant room for growth in our relationships with Latin America. For entirely understandable reasons, it is not a region that has been a first order priority for Australian governments. But particularly as we put more weight on economic diplomacy, the potential to do more in Latin America, I think, becomes more apparent.

We are investing more diplomatic effort into those relationships. We have economic diplomacy plans for each of our bilateral relationships in Latin America. They focus, fundamentally, on our trade and investment interests. There is, of course, a reasonable amount of history of investment in Latin America, including in the mining sector. So we are not starting here from scratch. The fact that both the foreign and trade ministers have made visits, and you referred to them, is one indication of the increased effort we want to put into it.

It is also the case that there is a lot happening in individual Latin American countries that have put them on a higher growth trajectory, even though at the moment, globally, most countries are struggling with growth numbers. That reflects a change in policies in many of those countries, particularly in relation to opening up the economy and the stronger role for market forces. So I think there is a set of issues that we would want to work more with Latin America on bilaterally, including economic diplomacy, trade and investment.

We have had over many years a good relationship with Latin America on multilateral issues. We do not agree on everything. But we do work closely with them on a number of things in the UN and in other international organisations. We would want to continue that. They are, of course, important players in APEC, and that is a significant part of our overall priorities. Some of them are participants in the Trans-Pacific Partnership Agreement, which we hope will be successful in the course of this year. We are also associated with the Pacific Partnership, which is a grouping in the region that I am sure Dr Hammer would be able to expand on. That is essentially what it looks like from my perspective.

Dr Hammer : Thank you, Secretary. Thank you for the question, Senator. Latin America I think does represent a big opportunity for Australia, particularly in the economic areas. We are doing quite a lot of work in that area. We do and have had some ministerial visits, as Secretary Varghese pointed out.

I think the most important thing to note about Latin America is that it is probably shaping up to be the world's most reliable long-term economic growth centre. The countries of Latin America seem to have managed to overcome the problem of the risk of interstate war, to a large degree. They are managing to get on with one another fairly peacefully. We saw a couple of decades ago Brazil and Argentina give away their development of nuclear weapons and so on. So you have a group of countries that do have quite a bit going for them on that front.

The other thing is that there is increasing integration with the US economy. Mexico and the United States are progressively dropping the barriers between their two countries economically. With the new reformist President in Mexico, President Pena Nieto, Mexico has adopted economic liberalising reforms. They are liberalising their energy sector and they are looking for outside investment in infrastructure development. So their relationship with the United States is starting to mature a lot. It is not just about immigration problems and drug problems. It is actually about developing a partnership. Mexico is part of a four country group called the Pacific Alliance, which includes Chile, Peru and Columbia. That is probably one of the most dynamic trade development blocks in the world at the moment. They are very forward leaning in terms of their trade liberalising policies but also in terms of each of their domestic economic policy settings. They are pro-business and pro-education and so on. So we are engaging with them. We are an observer. I have been to one of their meetings as an observer in Lima last year. They are developing what I would call a new economic paradigm for the countries of Latin America.

I think we will see some of the more sort of rigidly state-controlled economic policies in that region beginning to fall away as the countries realise that they may be able to get better traction on the problem of distribution of wealth by liberalising their economies rather than trying to control them from the centre. I think there is a great deal of prospectivity, and we are looking to doing as much as we can with that part of the world in the context of our need to prioritise mostly in the Indo Pacific region.

Senator IAN MACDONALD: South America is similar climatically to Australia. It has much more natural resources as a continent, I suspect, than Australia. I often wonder what if South America had had a commonwealth of South America back in 1901, such as Australia did. It does seem to me strange that Australia has progressed so much but some of those countries are still very divided between the rich and the poor.

Senator Brandis: Well, we have had coalition governments for slightly more than two-thirds of our history.

Senator IAN MACDONALD: Thanks, Senator Brandis. I appreciate that. I must again congratulate the Speaker, Bronwyn Bishop, on the marvellous job that she did, particularly focusing on the Great Barrier Reef, which is of particular interest to me. She was very good in South America highlighting the lies that are told in Australia about the Great Barrier Reef and seeking the aid of some South American countries who are actually on the World Heritage Committee. Also, we learnt from Peru's experience when, again, lies were trying to shut down Machu Picchu, so we were told. That was saved.

I do not want to get into the area of the budget for diplomatic representation, but is there any thought on increasing Australia's diplomatic relations? I know that there are demands from everywhere. What is the government's broad thinking on that?

Mr Varghese : As you pointed out at the outset, there is an imbalance in representation. The Latin Americans are much more strongly represented in Canberra than Australia is in the region. That is reflective of the way in which they see us. That is certainly very encouraging. It means that we have quite a lot to work with. Given the budgetary circumstances that we are operating in, it would probably be heroic of me to foreshadow that we will be any time soon in a position to open up new posts in Latin America. At least for the medium term, we are going to have to operate on the assumption that what we have there in the region now is about all we will have for at least the medium term. We will just have to do as well as we can. The logic of what Dr Hammer and I have been saying, that there is scope to increase our diplomatic footprint in Latin America when circumstances permit, is obviously quite clear.

Senator IAN MACDONALD: Finally from me, whilst his delegation was there the two ambassadors in the countries we visited had arranged the first meeting of what is called the Australian alumni of South American students, who had been to higher education establishments in Australia. They were enormously well attended. A lot of goodwill was generated amongst young people in those countries, which I think will pay dividends in the future. Is that a broad departmental policy across the world or is it specific to these places in South America? Are they initiatives of the particular ambassadors or is it a government program, as such?

Mr Varghese : I am sure our ambassadors are very active and enthusiastic, but this whole question of strengthening our alumni networks is something we are putting a lot of work into. I think it provides enormous returns for Australia. The number of students from Latin America is a very fast growing aspect of the relationship. If you look at the numbers, they have grown very strongly in the last few years. We are doing more on building alumni networks. We are doing more in terms of coming up with systems that enable us to do that better. We are doing more in terms of finding ways to keep these up to date because, in my experience at least, one of the big challenges with effective alumni networks is keeping your information up to date. Also, seeking to work very closely with educational institutions so that we can, if you like, share information. There are invariably sensitivities on that last area where institutions, for privacy and other reasons, may not be able to share as much information as we would like. But we are doing that through our public diplomacy division.

Senator IAN MACDONALD: I will finish there. I'll just mention to Senator Brandis, in passing, that he would be pleased to hear that a disproportionate number of the alumni in South America seem to have been to the University of Queensland, which I know Senator Brandis has connections with. I am delighted that there was even a number who had been to James Cook University.

Senator Brandis: I am not at all surprised, Senator Macdonald, because as you and Senator Back, who I know is a graduate of the University of Queensland—

Senator GALLACHER: I am sure this is all very relevant to estimates.

Senator Brandis: Well, I am about to say something about higher education in this country, Senator Gallacher. Perhaps you might listen. According to the most recent international ranking table, the University of Queensland was ranked second of all Australia's universities in those standings.

Senator FAWCETT: Could I take you to AUKMIN, the last meeting of which was in Sydney? I am interested in general outcomes with our engagement with the UK, particularly around national security. But I am also interested in the agreement about the sharing of facilities for DFAT.

Mr Varghese : The last AUKMIN meeting reconfirmed a trend that has been apparent now for a number of years, and that is that the relationship with the United Kingdom is acquiring even more depth and breadth. It is an old relationship with a modern agenda. I think the most recent AUKMINs have underlined that fact. The range of issues that we discuss, not just bilateral issues—in fact most of the time was spent discussing regional and international issues—is reflective of the nature of the contemporary partnership. On the question of cooperation, the Department of Foreign Affairs and Trade is doing a lot with the FCO. We have arrangements to assist each other in terms of our diplomatic footprint. We have arrangements to examine where we could physically co-locate, where that make sense. We have arrangements where we share our diplomatic reporting as well. I have certainly found it extraordinarily useful to be able to sit down with my counterpart, as I did in the margins of AUKMIN, and work through our common management challenges and also identify areas where we can do more together. That is showing good returns.

Senator FAWCETT: Is the reciprocal use of facilities something that where, if there were a crisis or a heightened concern around security, we would have a temporary arrangement, or are you envisaging an arrangement where both nations may make use of the one set of facilities for their permanent representation in a country?

Mr Varghese : In terms of crisis management, it will by definition be temporary. For the duration of a crisis we would try to help each other out through sharing facilities. In terms of co-location, that is a more permanent proposition. So where we share a diplomatic premise, we would do so for the long term. We had intended, in fact, to do that in Baghdad. But now with the additional requirements of our deployment, we are going to defer that decision. But that is just one example of what we might have done. We will continue to identify locations where co-location would make sense for each of us. Typically, they will be in areas where they are strong, we are weak and vice versa. An additional aspect to that is where we have non-resident accreditation—when our diplomats were to go to a particular country—the Brits have been very prepared to offer their diplomatic presence by way of office and communications facilities for our officers. We certainly found that during our stint on the Security Council, where the focus is so much on Africa, that that was very helpful to us as our non-accredited diplomats in the region made their travels through there. And we would reciprocate in the South Pacific and in parts of Asia as well.

Senator GALLACHER: Not being university educated, you will forgive me for not having the niceties that some of the people in the room have. I will now go to this statement:

…a mandate to reach out to the best and brightest, inside and outside the Department in Australia and internationally. Using partnerships, personnel exchanges and secondments to make sure we are bringing into our Department ideas and approaches to development from leading innovators…

And it goes on. Why wouldn't this just become a great big travel agency for your best and brightest to go and do exchanges internationally and to wander around the world and waste some more aid dollars? Do you have a set budget for people, travel and exchanges?

Mr Varghese : Sorry, can I firstly ask you what you are quoting from?

Senator GALLACHER: This is the announcement of the hub. I presume it is from the minister.

Mr Varghese : Thank you.

Senator GALLACHER: She states:

Innovation will be the watch word. Innovation will drive the way we deliver aid. We have taken advice from the World Bank and other likeminded aid agencies…

That is a statement of the minister's.

Mr Varghese : We have spent quite a bit of time discussing what the innovation hub will do.

Senator GALLACHER: I understand that. Do you have a budget for travel, exchanges and people in the $140 million?

Mr Varghese : I think Mr McDonald said he would take on notice what the costs are.

Senator GALLACHER: Can we see that budget? Can we actually at this point or later in the process actually look at it and say that there is $10 million spent on travel and $10 million spent on people?

Mr Varghese : We are talking about a forward budget, because it is something that has only been in place for a very short time.

Senator GALLACHER: How much have you spent on travel to date?

Mr Varghese : In the innovation hub? I would have to take advice. It would be a very small amount of money. I can assure you of that.

Senator GALLACHER: Has the minister already made a trip in respect to this?

Mr Varghese : Innovation would be part of her discussions on some of her trips.

Senator GALLACHER: But it is not booked against this fund?

Mr Varghese : Nor should it be. For instance, she did sit down and have a roundtable with USAID, and USAID has been doing a lot of work on innovation. Some of her travel has included discussions on this. I can assure you that this area of the department is not going to be spending its time swanning around the world. I'll get you more details on what we are anticipating.

Senator GALLACHER: Importantly, will we be able to track expenditure in this space—expenditure on staff working for the innovation fund, staff travel associated with the innovation fund, staff travelling to the US or the European Union on trips associated with the innovation fund and how much that spend will be? Will this all be transparent?

Mr Varghese : We are a transparent organisation, Senator. I am sure that we will give you whatever information we can. I am actually not aware of any international travel—but I might be wrong here because I do not look at this 24 hours a day—so far by members of the very small unit in the department.

Senator GALLACHER: But it is part of the initial statement that talks about the best and brightest domestically and internationally, exchanges and professionals from academia or the private sector. So there is going to be expenditure for that. Is there budgeted expenditure in that space? Have you budgeted for these things in a forward sense? Have you allocated $10 million for the first year?

Mr McDonald : I will ask Mr Wood what has been allocated, but some of it is within our departmental expenditure because there is staff already working for us. As Mr Varghese and I said to Senator Singh earlier, there would be very limited travel. I am taking that on notice, but it is a small amount. We will be transparent with the funding associated with the innovation hub, yes.

Senator GALLACHER: The initial statement seems to indicate that there would be exchanges of personnel and the best and brightest internationally. You are saying that that is not going to happen.

Mr McDonald : No, I did not say that.

Senator GALLACHER: Alright ,can someone tell us what the budget to travel is in the first year?

Mr Varghese : We have said we will take that on notice.

Senator GALLACHER: You do not have that figure? You have started out, it has been released and it has no budget to travel.

Senator Brandis: That is not what he said. He will take the question on notice, Senator.

Senator GALLACHER: So no one is sitting here at the table who would be part of the business case—

Senator Brandis: The officer has said that he will take the question on notice.

Senator GALLACHER: I heard what he said.

Senator Brandis: Well, that is the end of the inquiry. Go on to your next question.

Senator GALLACHER: I will ask my questions and you can do whatever you do over that side, Senator Brandis.

Senator Brandis: That is fine. Ask your next question then.

Senator GALLACHER: Is there a budget for the innovation hub?

Mr Wood : Yes, there is a budget for the innovation hub.

Senator GALLACHER: Is there anybody in the room who is aware of the detail of the budget for the innovation hub?

Mr Wood : As we said, we will provide that information to you. I do not have that information with me.

Senator GALLACHER: Okay. You are not aware of the detail of it?

Mr Wood : I am not aware of the detail.

Senator GALLACHER: I can't count that quickly, but there are a lot of people in this room. So there is absolutely no one in this room who is aware of the detail of the innovation hub budget?

Mr Varghese : If we had the information at the table, we would provide it to you. We do not and we will undertake to provide that to you as soon as possible.

Senator GALLACHER: Excellent. We will take that as an answer.

Senator Brandis: You got that answer about 5 minutes ago, actually.

Senator GALLACHER: I do not think I asked you a question, Senator Brandis. You are answering questions that are not asked now.

Senator Brandis: As a matter of fact, strictly speaking all questions in estimates are directed to the minister.

Senator GALLACHER: Well, I am happy with that. I think after 14 hours you might be weary of it yourself. But I would be very happy with that. Can we have a little more detail on the one project that we have under way?

Mr McDonald : That is the global innovation fund that I referred to earlier. Yes, we can.

Senator GALLACHER: Yes. So that is how you tie in internationally?

Mr McDonald : That is a partnership with the US, the UK, Sweden and Australia. That is generating, as I said, new ideas. It is not a body that is up and running already. It is just commencing.

Senator GALLACHER: Has there been any expenditure?

Mr McDonald : I do not think so, no. It has been announced, but I do not think that there has been any expenditure. But I would take that on notice and provide you with that detail.

Senator GALLACHER: Mr Exell is quoted as saying that:

Many of them [new modes of financing] are very new; globally, there is not a whole lot of evidence to say that they are proven, tested and tried. So we will be establishing some capacity in house. Indeed, we will be drawing some capacity externally to assess that activity with the proposed mode of financing. The innovation hub will be piloting some of those. Some of the work they will be doing will be partnering with countries or organisations that are already doing some work in this space. So we can draw on some of that. Equally, we will be looking to pilot some things ourselves…

That seems to be quite a broad description of what you are all about. What I am trying to get to is, how much will actually be effective dollars and how much will be in administration? I accept all of the things that have been said in the opening statement about the best and brightest in the private sector, the professional sector and internally. It seems to be a very innovative—no pun intended—idea for the department to take up. But I am trying to get an idea of what the administration looks like in this. Is it 25 per cent of the budget? If you take it on notice and give it to me in great detail, I would accept that. Does anybody have any idea what it looks like?

Mr McDonald : We have taken that on notice. I can assure you that it won't be 25 per cent of the budget. In terms of exchanges and the like, they are things we will enter in to. Often it is an exchange—one of our people going somewhere and some other people coming into the organisation. But we will take on notice the administrative costs versus the other costs.

Senator GALLACHER: So it is true that Minister Bishop visited the global development lab in January and that was her first visit?

Mr Varghese : I think that was the first time she would have been to that particular place, yes.

Senator GALLACHER: You are assuring us that the minister has been briefed on failure. But do you have an accepted failure rate that you have briefed her on? Did you tell her that there is a bit of money out there and it is politically very sensitive. We are going to accept a failure rate of six out of 10. How do you do that, Mr Varghese?

Mr Varghese : I think that it is inherent in this new process that we are going to have to think about failure in a different way to what we normally do in a public service department. And it is a new process, which is why we are unable to give you the precision that you are understandably seeking Whether we can put a number against failure rates in advance, I do not think we are actually in a position to do that. I think we have to do a lot more analysis of what it is that we want to get back under this innovation scheme. I am just flagging it as new territory that inevitably will take time to work out.

Senator GALLACHER: And the minister is well briefed on that?

Mr Varghese : She is, yes.

Senator GALLACHER: You have an aid investment committee and aid investment plans. Who is on the aid investment committee?

Mr McDonald : I chair that committee and it is made up of a cross departmental division head group where we look at the aid investment plans coming forward for each of our major countries.

Senator GALLACHER: How often do you meet and how many aid investment plans have been completed?

Mr McDonald : I will ask Mr Exell to help me on this. We meet, I would say, bimonthly but, I can be corrected on that. We have considered, I would say, since this financial year, probably seven or eight aid investment plans so far.

Senator GALLACHER: So by July 15, how many will you have completed in your forward program? That is in another four months or so.

Mr McDonald : With the new policy, the geographic areas have been developing their aid investment plans and we have a timetable leading to June on the aid investment plan. I do not have the detail of which ones are coming next, but there is a forward plan of the aid investment plan.

Senator GALLACHER: I would just like to know how many aid investment plans the committee expects to have completed by July 2015. If you could take that on notice.

Mr McDonald : Happy to.

Senator GALLACHER: What happens after the committee approves a project or a spending commitment? Are they the ultimate authority on the spending or does then go to another body for further approval?

Mr McDonald : No, the committee does not approve. The expenditure is approved by the relevant delegate. In some cases they would go to the minister if they were aid investment plans. If they are particular programs or projects, they would be approved by the relevant delegate under the relevant financial management act.

Mr Exell : The committee looks at, in particular, high risk, high value investments. But as Mr McDonald said, it is the delegate in the line area that makes the final decision on proceeding. But the committee needs to provide additional quality processes around those high risk, high value investments under the aid program.

Senator GALLACHER: Can you give us an example of a high risk, high value project that has been approved?

Mr Exell : Part of the definition is if it is over $100 million. Then it is considered a high-value investment. High risk can be if it is politically sensitive, if the outcomes are considered very difficult or if there are multiple factors in terms of the implementation of the agenda. They can be security or they can just be the complexity of the reform agenda. That is up to the area that is bringing forward the proposal to consider the factors that are around what we consider risk.

Senator GALLACHER: I would imagine the department, Mr Varghese, would have a catalogue, for want of a better word, of high risk, high-value projects that have been completed? High risk would be clearly identifiable in those areas. Do you have such a catalogue, so to speak, where you have a high risk, high value assessment made, the project is completed and it either went very well or it fell over absolutely?

Mr Varghese : I imagine that would be part of the reporting matrix that goes through the committee. But since I do not chair the committee, I cannot add any more detail to it.

Mr McDonald : Also, aside from the committee, the aid performance report that Mr Dawson referred to earlier covers the performance of our program overall, which would encompass these high risk projects.

Senator GALLACHER: if I were to try to find a high risk, high value approved project and examine its efficacy, how would I do that?

Mr McDonald : We would be able to provide that from the relevant geographic area that is running that project or from within country. As Mr Dawson said, they have objectives for that program, they have outcomes and performances that we would expect to see. Those things are assessed on an ongoing basis by the program manager and they would report on the success or otherwise of that program.

Senator GALLACHER: Is any of that publicly reported or publicly available? Can a taxpayer say, 'I heard about this $100 million being spent. I thought it was a great idea. I thought it was a fantastic thing to do.' And then two years later go back and see that it achieved 20 per cent of its outcomes?

Mr McDonald : Mr Dawson or Mr Exell will be able to explain that.

Mr Dawson : As I understand it, the question relates to the public availability of information reporting on the performance of individual aid investments. Is that correct?

Senator GALLACHER: That is correct.

Mr Dawson : As I indicated before, programs, for example at the level of an individual country program, will identify a program for evaluation during the course of the year. Under the government's transparency policy, those evaluations are to be publicly available and they are put on the website. That is the principal way in which information about the performance of individual aid investments is put into the public domain. The performance of the portfolio of investments within a particular program is looked at on an annual basis with an annual program performance report. Those reports are also published. I think for the financial year just gone there were 28 of those reports, and they are all publicly available.

Senator GALLACHER: On notice, is there an independent audit of any of your activities in this space?

Mr Varghese : I think we went through this in response to questions from Senator Sinodinos. We have our internal evaluation systems, and Mr Dawson has just explained them. They then go for final review, if you like, to a committee that includes external members.

Senator GALLACHER: Auditors?

Mr Varghese : No, this is an effectiveness evaluation. The auditing is done as part of—

Senator GALLACHER: Is any of your work externally audited in the aid program space?

Mr Varghese : It is externally audited in a financial sense by the Australian National Audit Office, as are all programs in government. Its effectiveness is further evaluated through this very elaborate system that Mr Dawson has been explaining.

Senator GALLACHER: I think that is a very long 'no'.

Mr Varghese : It was a very long 'yes', actually.

Mr McDonald : And we have an internal audit process that looks at the program as well. Our internal auditors also look at the programs.

CHAIR: That is a good spot to stop for lunch.

Proceedings suspended from 12:31 to 13:32

Senator RHIANNON: A Plan International analysis of the federal data from your department shows that, despite stated commitments to reduce poverty and to assist women and girls in low-income countries, the 20 per cent cut in foreign aid in the next financial year could result in as many as 220,000 fewer girls being enrolled in school. How do you analyse this report from Plan International and how does this sit with the government's stated desire to prioritise girls and women in the country's aid program?

Mr Varghese : I will see if any of my colleagues want to add to this, but no decision has been taken on how the announced reduction in aid funding for next financial year will be applied. I do not see how you can make a calculation along the lines that you have outlined if you do not know what your starting point is. We seem to have landed somewhere without knowing where the starting point is.

Senator RHIANNON: Do you dispute their analysis?

Mr Varghese : I am perplexed by their analysis.

Senator RHIANNON: Have you looked at their analysis?

Mr Varghese : I have not looked at their analysis.

Senator RHIANNON: Is there somebody there who has? It would seem that is relevant to your answer.

Mr Varghese : The point is this: they are making a calculation on the implications of the aid cuts. No decisions have been taken on how those aid cuts are actually going to be applied, what will be cut, where and how. I do not see how you can come up with a figure about the number of people that will be affected by a decision that is yet to be taken.

Senator RHIANNON: You said that you have not looked at the Plan International report. Is there somebody there who has?

Mr McDonald : I have seen it. I am sure other people in the department have seen it.

Senator RHIANNON: Have you read it?

Mr McDonald : Of course. As Mr Varghese said, we do not know the starting point on those figures. But, in adding to Mr Varghese's answer, the only other thing I would say is that, as you would well know, there is a lot of variation year to year in factors that can affect the results in a particular country. It could be conflict. It could be disaster. A whole range of factors come into play. As Mr Varghese said, the decisions have not been made on the allocations for next year. We do not know the basis of the calculation that has been put forward by Plan.

Senator RHIANNON: You stated a number of times that the decisions have not been made, but the decision to cut 20 per cent of the aid budget has been made. Is that correct?

Mr Varghese : That is correct.

Senator RHIANNON: When you cut 20 per cent of a budget, will there be an impact?

Mr Varghese : Of course there will be an impact.

Senator RHIANNON: Considering one of the key objectives of the aid budget is to assist women and girls in poverty, do you agree that it will have an impact on that aspect of the program?

Mr Varghese : It depends on how the 20 per cent cuts are actually applied. If the Plan International calculations are that the relevant funding in those areas is cut by 20 per cent, then maybe that figure has some basis to it, but I do not see how you can come up with a conclusion about the impact of aid cuts if you do not know how they are going to be applied.

Senator RHIANNON: On page 67 of the Office of Development Effectiveness it states:

… the 2014 AQC spot-check found that 22 per cent of investments overestimated how effectively they were addressing gender issues. This is an improvement on the previous year's comparable figure of 25 per cent overrated investments; but still places gender equality ratings among the least reliable.

Just to say it again, it is about the 2014 AQC spot check on the ODE's check of DFAT's checks. You would understand that language better than all of us, but it ends with that extraordinary phrase 'ratings among the least reliable'. What is your response to that?

Mr McDonald : I might ask Mr Dawson to come to the table to address that. Can I also add that in terms of the reliability I think there is a comparison on other years on that as well that Mr Dawson might be able to help with.

Mr Dawson : As you all understand, the Performance of Australian Aid report is a departmental product, but it is looked at separately and independently by the Office of Development Effectiveness and also by DFAT's Independent Evaluation Committee. The reason that they do that is to provide some quality control over the reliability of the data which is being used to reach conclusions about development effectiveness and the way in which those conclusions are drawn from that data.

Obviously, because we are using a self-assessment process—and there are good reasons to do that—there is always a built in potential that people will underestimate or overestimate the performance in individual cases. One of the specific things that the Office of Development Effectiveness does is to carry out a spot check to look at the same information those who are making the decisions about rating of individual initiatives look at and to reach their own conclusions about whether those ratings were reliable or not.

It is an important internal check, because of our policy of transparency. It is important for the public to know where judgments about development effectiveness are reliable and where they can be improved. This is clearly a case where we need further improvement. I do not see any particular issue in pointing to a question or an issue which is going to need to receive attention in future years.

Senator RHIANNON: Are you accepting the need to improve? You are not disputing that assessment?

Mr Dawson : Not at all.

Senator RHIANNON: Could you summarise what actions you are taking to improve the reliability of these figures? Improve it so that we do not end up with such a statement again.

Mr Dawson : Part of the issue in improving the reliability of assessments is to get assessments much more closely defined to identify the issues that need to be looked at in reaching an overall conclusion about whether a particular initiative is addressing gender issues in an effective way. What we are doing at the moment—and it is a very important change—is that we are trying to structure our performance measurement arrangements so that we ask quite specific questions about individual aid investments.

In the gender sphere, we are asking questions now about, for example, does the investment properly analyse gender gaps and opportunities and does that inform the design of the investment? Does it look at risks to gender equality and how are they managed? What is the progress of the specific investment in implementing strategies to promote gender equality and women's empowerment? We are looking at the monitoring and evaluation systems in individual investments to make sure that they collect sex disaggregated data and include measures to measure greater gender equality outcomes. We are looking at whether there is specific expertise applied to individual investments to make sure that they are able to achieve intended outputs. We are looking at how delivery partners treat gender equality in their own policies and practices.

There is a range of specific issues which we know from experience are generally ones that are important to ensuring that individual investments do achieve their objectives. We are now going to be asking very specific questions across our entire aid investment portfolio about whether those things are being done, how well they are being done, et cetera. From that we will be able to analyse that data to get a much better sense of where the problems are and therefore to design appropriate solutions to meet them.

Senator RHIANNON: How much money is being taken out of the Australian NGO Cooperation Program budget as a result of the MYEFO cuts to the aid budget and what percentage of the total Australian NGO Cooperation Program budget does that represent?

Mr Varghese : There are no cuts in this year's aid allocations as a result of MYEFO—zero.

Senator RHIANNON: We have some good news.

Senator Brandis: It is all good news from the Abbott government.

Senator RHIANNON: In the week when you need it and they need it.

Senator Brandis: More good news coming from the Abbott government coming every day.

Senator RHIANNON: Hoping for good headlines.

Senator SINGH: I want to go back to Senator Gallacher's questions relating to the innovation hub before we move on, Mr McDonald. I think you said there was a very small team. Can you tell the committee the full-time equivalent of the team?

Mr McDonald : I took that on notice.

Senator SINGH: I thought you said 14?

Mr McDonald : No, I definitely did not say 14.

Senator SINGH: You took it on notice?

Mr McDonald : I think it is around about six or seven—that sort of number.

Senator SINGH: Full time?

Mr McDonald : Full time, yes.

Senator SINGH: Have any external consultants or new hires been brought in to work on this hub?

Mr McDonald : I would like to take that on notice, but we have had someone from USAID come in for a short time who had expertise on financial instruments. That is all I can recall. I would like to take that on notice so that I give you the correct information.

Senator SINGH: You also told Senator Gallacher that there was one innovation project currently announced?

Mr McDonald : Announced, yes.

Senator SINGH: How many are in the pipeline?

Mr McDonald : I would have to take that on notice. There are lots of things going on in the hub. There are lots of ideas coming in.

Senator SINGH: Yes, but I do not mean ideas. I mean specific projects that you see coming to fruition that may be near.

Mr McDonald : Any specific projects would require approval by the minister. We need to go through a proper process before we can say they are going to eventuate as projects. As I said earlier, there are some criteria that we are putting around them. If you do not mind, I will take on notice who is coming from outside. It is very few. It is one or two.

Senator SINGH: If there are any projects that are near completion, could you take that on notice, too?

Mr McDonald : Yes, I am happy to take that on notice.

Senator SINGH: Talking about ideas, could you please explain to the committee the department's Economic Diplomacy Policy?

Mr Varghese : This has been something that the then-incoming Abbott government placed a very high priority on. That was to further strengthen the focus of our overall diplomatic and policy effort on promoting Australia's economic interests. Clearly the promotion of Australia's economic interests has been part and parcel of Australian foreign and trade and investment policy for a very long time. What is different now is that we have structurally embedded the objectives of economic diplomacy in our work processes in a way that had not occurred in the past. By that I mean we now require each post and each division in Canberra and each of our state offices to have a fairly detailed economic diplomacy plan that would include key objectives and also key performance indicators. That material is then used to not only roll out our economic diplomacy strategy but we use it also to assess our progress on achieving those objectives. It is now embedded in both our planning and evaluation systems in a way that it was not before.

Senator SINGH: So, are those objectives measurable? Are there deadlines and targets?

Mr Varghese : It depends on the nature of the objective, but they are intended to have performance indicators that sit beside them so that when you set out an objective you would have a performance indicator. In the nature of these things, some of the objectives are going to be quite broad brush and some of them could be quite specific. It covers not just trade but it also covers investment.

Senator SINGH: I am aware that Minister Bishop referenced 2,000 ideas which were submitted to the department during her speech at the Lowy Institute on 18 August last year. Do you have a copy of those submissions?

Mr Varghese : I am not quite sure which speech you are referring to. Is this in the context of economic diplomacy, when we launched the economic diplomacy policy at Lowy?

Senator SINGH: Yes.

Mr Varghese : I think that was—

Senator SINGH: She waved it around during her speech.

Mr Varghese : If you take all of the Economic Diplomacy Plans that our 95 posts and our divisions in Canberra and our state offices have produced and if you add up the objectives that they have set for themselves, I think that was the number the minister was referring to.

Senator SINGH: She was quite proudly saying 2,000 ideas. I am trying to see how many of these ideas have been implemented.

Mr Varghese : These are not necessarily ideas that would be implemented in the space of several months or even a year. A lot of economic diplomacy also takes time to achieve your objectives. As to whether those economic diplomacy plans can be shared with the committee, can I just take that on notice, if you do not mind?

Senator SINGH: Okay. If they can be, then share them.

Mr Varghese : Yes, I will.

Senator SINGH: Can we look at some of the achievements that have been highlighted by the minister. She particularly highlighted on 25 June the new generation of Australian passports, and on 24 November the New Colombo Plan, mobility grants, the New Colombo Plan again on 2 December, and the 2015 Scholars announced. What else does the department understand to be a signature policy initiative of this current government?

Mr Varghese : Signature policies by definition are usually one. I think if you ask the foreign minister she might—

Senator SINGH: Landmark—how about we go with that adjective.

Mr Varghese : She might often list the New Colombo Plan as a signature policy initiative, because I know she does see it as a very important initiative. Indeed, it is. I am not sure how best to answer your question because there are so many things we are doing in the portfolio that we think are important. You have mentioned just two of them, but if you go through each of the programs in our program structure I am sure the program managers there will be able to give you a list of very important things that they are doing.

Senator SINGH: Let us go to the ones that have actually been developed and announced.

Mr Varghese : Where would you like to start?

Senator SINGH: With all of them. The landmark policy developments that have been developed and announced.

Senator Brandis: I think what the secretary means is that you want to ask a series of questions about a series of programs so you will need to direct the officers to which one and the sequence you want to ask about.

Senator SINGH: I am asking about signature or landmark—

Senator Brandis: There are probably quite a lot of signature and landmark policies.

Senator SINGH: Let us have them. Let us hear them. That is what I am asking. I have given you two of the government's, so you give me some now.

Mr Varghese : Let me start broadly and move more narrowly. On the aid side, the foreign minister outlined in the middle of last year a new aid paradigm that set out a new framework for the Australian Aid Program. I think that was a significant statement. We could go through each of our major bilateral relationships and indicate where we have announced or are working on major initiatives to expand those relationships. We can go to what we are doing in terms of the development of regional institutions, particularly the East Asia Summit. We could go to our contribution to a very successful hosting of the G20. We could talk about where we have added to the APEC agenda. We could talk about the reinvigoration and expansion of the Indian Ocean Rim Association, which Australia currently chairs at ministerial level. We could talk about our term on the UN Security Council over the last two years, where Australia made a very significant contribution, particularly in the areas of peacekeeping, sanctions and on conflict prevention and the small arms trade.

There is a very big agenda on the trade side, with three concluded free trade agreements, a trans-Pacific partnership agreement, which we hope is in its final lap. A commitment to do an FTA with India by the end of this year. Substantial Australian contributions to the Regional Comprehensive Economic Partnership Agreement. The work we are doing in Geneva on trade in services and plurilateral agreements. I do not know where you want me to pause for breath.

Senator SINGH: Keep going, please. I will go into detail in a moment, but I am allowing you to finish.

Mr Varghese : On the investment side, Andrew Robb, as the first Minister for Trade and Investment, has obviously been putting a big effort into promoting Australia as an investment destination, including convening a number of investment roundtables around the world. I have been through what we have done by way of a more structured Economic Diplomacy Plan. We are obviously active in other multilateral institutions in New York, Geneva and Vienna. As always in Australian foreign policy, we have a very busy international security, peace and disarmament agenda, including trying to progress negotiations on the multilateral arms control treaty.

We have done a lot internationally on the counterterrorism front, including through our Ambassador for Counterterrorism. We have made a contribution to the government's broader objectives to stop boats through our Ambassador for People Smuggling. We have acquired responsibility since the election for climate change negotiations. We are running a major campaign to prevent a listing of the Great Barrier Reef as being in danger. I think I will pause there.

Senator SINGH: Thank you very much. Would you say, then, out of all of those things that you just listed, would any of those count, like the New Colombo Plan, as a signature policy?

Mr Varghese : I think that is for others to put a label like that on it. We are a department. We implement what the government asks us to implement.

Senator SINGH: What do you mean 'others'? The minister or—

Mr Varghese : That the government asks us to implement.

Senator SINGH: No, but you said it is for 'others' to put their name on that or the label on that. Who are those others?

Mr Varghese : You could either ask ministers what they consider to be their signature policies or you could ask observers and commentators what they think are our signature policies, but I do not think it is something we would necessarily choose to put a label against.

Senator SINGH: So, you would not call the New Colombo Plan a signature policy?

Mr Varghese : No, I do because I know that the foreign minister sees it as a signature policy. We do lots of things and we think they are very important.

Senator SINGH: Out of the list that you just shared with the committee, has the foreign minister highlighted any of those as being a signature policy other than the New Colombo Plan?

Mr Varghese : I think she would probably see her aid framework in that regard. It is really something you would have to ask the minister.

CHAIR: Senator Bishop and I, during our time on the Security Council, there was a small arms treaty negotiated, which I think the foreign minister actually announced while she was in the presidency. That certainly had a profound impact at UN level, particularly because of the impact on women and on children in the peacekeeping areas. That would be an area that certainly in the international community would have been regarded as being very significant.

Mr Varghese : I think certainly the resolution we were able to shepherd through the Security Council during our month in the presidency in 2013 on small arms trade was a very important step. It built on the very substantial contribution that Australia made as the chair of the process which actually concluded the arms trade treaty.

Senator FAWCETT: Have you had feedback from other regional leaders about the Colombo Plan?

Mr Varghese : The feedback on the New Colombo Plan has been universally enthusiastic and universally positive. Several heads of government, amongst them the President of China, the Prime Minister of India, the Prime Minister of Japan, the President of Indonesia—at least in meetings that I have attended have spontaneously raised the New Colombo Plan, welcomed it and indicated their support for it and their commitment to it.

Senator SINGH: Mr Varghese, would you say that the UN Security Council membership was valuable to Australia?

Mr Varghese : Yes, I think our two years on the UN Security Council enabled Australia to take forward some important issues. I think for a country that is dependent on an effective multilateral system to be able to participate for two years on the peak body of the United Nations was important. I think not only did we make a constructive contribution but I think it enhanced our diplomatic standing very considerably. I think a number of our relationships are the stronger for the consultation and contact we had over the two years that we were on the Security Council.

Senator SINGH: I think before, when you were going through some of the achievements of the department or the government, you listed some during our time on the UN Security Council. Can you share with the committee some of the achievements of our time on the UN Security Council?

Mr Varghese : We have already referred to the Arms Trade Treaty.

Senator SINGH: When was the arms trade treaty?

Mr Varghese : Sorry, the arms trade resolution.

Senator SINGH: When was that process initiated?

Mr Varghese : The resolution was passed during our presidency.

Senator SINGH: When? What year? What month?

Mr Varghese : It would have been November 2013. I might stand to be corrected on the month. September, sorry.

Senator SINGH: Any other achievements?

Mr Varghese : We chaired some of the sanctions committees of the Security Council and we used our position as chair of the sanctions committee to, in my view, strengthen the sanctions process. I think we made an important contribution to this very difficult issue of humanitarian access to situations—Syria is a very good example—where access to conflict zones by humanitarian workers was impeded. I think Australia working with others—I do not claim to have done this all ourselves—was able to move that forward.

Senator SINGH: When did we initiate that?

Mr Varghese : We worked on that throughout our time in the Security Council.

Senator SINGH: Okay.

Mr Varghese : I think the work that we did on MH-17, in getting that resolution through the Security Council, was very important in terms of paving the way for a proper investigation and to fulfil our commitment to bringing our deceased citizens home with the dignity that that demanded. I think the push we have given to the peacekeeping agenda, the role of the police in peacekeeping, the question of violence against women, where we were a very strong backer of William Hague's initiative on violence against women—I think they have all been very important contributions. I do not know if Mr Merrill, who headed up our UN Security Council task force, wants to add anything to that.

Mr Merrill : The secretary has highlighted a number of key achievements. Some of those were presidency initiatives, but as the secretary also pointed out there was a body of work that we did throughout our council term, which will perhaps be our most enduring legacy. That was the work we did in relation to sanctions, including a high-level review, which creates a platform for significant overhaul and reform of the way the UN applies its sanctions regimes. That is probably something that the Permanent Five were disinclined to take on, for obvious reasons. I think the feedback that we had is, as an elected member, we showed a remarkable amount of initiative.

We mentioned the resolution. That was actually targeting illicit trade in small arms. That built off the arms trade treaty. The first ever revolution on policing, which was really a focus on how UN peace operations can better integrate policing functions.

Senator SINGH: When was that initiative?

Mr Merrill : That was in November 2014.

Senator SINGH: Is there some kind of document that lists out these?

Mr Merrill : Yes, there is work being done on that now. It is quite a detailed document and there will be detail on those initiatives but also timelines.

Senator SINGH: Will that be publicly available?

Mr Merrill : Yes, that will be publicly available.

CHAIR: I will just get you to hold it there if you would, Mr Merrill. I will go to you now, Senator Sinodinos.

Senator SINODINOS: I will pursue a similar line of questioning in the sense that you mentioned that one of the benefits of our having been on the Security Council was how it deepened and strengthened some of our relationships. In that vein has it led to further thinking within the government about the benefits of multilateral versus bilateral diplomacy? Do you think it has changed some of our strategies in how we pursue some of our national interests in that regard, through multilateral rather than bilateral channels?

Mr Varghese : I will offer some personal observations. I do not think it has fundamentally shifted the way we think about the balance of bilateral and multilateral. Australia is a country which has always recognised that we need to have a multipronged strategy that is anchored in bilateral relationships, because bilateral relationships are the bedrock of foreign policy, but also which recognises the crucial importance of regional and multilateral institutions.

I think precisely because the global multilateral system is facing enormous challenges now our time on the security council reinforced in our minds, rather than creating anew in our minds, the importance of ensuring that we do everything we can to protect the system of global multilateralism based on the Bretton Woods set of institutions to enable it to survive through a period where the emerging powers in the world may not have the same attachment to concepts of global public goods and international order as we have seen in the post war period. I think that is one of the large challenges of Australian foreign policy, and I think our time on the Security Council just reinforced the fundamental importance of protecting and indeed expanding those concepts of global public goods, global institutions, rule of law and the importance of embedding international norms across-the-board.

Senator SINODINOS: In that context, what do we do to engage emerging powers more in these institutions so that they have a stake in them and feel some ownership of them?

Mr Varghese : I think while we were in the Security Council we were actually able to conduct a dialogue with those emerging powers that were represented on the Security Council while we were there in a depth that we would not otherwise be able to. I think now it is also the case that whenever we sit down with the emerging powers in a bilateral context we do actually have a multilateral agenda to talk about. We use that as an opportunity to reinforce these aspirations.

At a regional level we are still in a formative stage. We use our bilateral relationships with emerging powers and with significant developing countries to encourage them to recognise the value of institution building in our region. Unlike in Europe and other parts in the world, there is a shallower history of regional institutions in this part of the world. The complexities we are going to face into the future will demand reasonably robust institutions, and we have to work as quickly as possible to build them.

Senator SINODINOS: As part of that, are we pursuing a strategy—for example, in the context of the UN—of lobbying about the composition of the Security Council, the P5 and that sort of thing? I know in the IMF context there has been this long-running debate about more voting powers to countries in East Asia.

Mr Varghese : Yes. I think one of the challenges we face is to ensure that the distribution of power in international institutions reflects the world as it is and is becoming rather than the world of 1945, because if we do not do that then we run a higher risk that emerging powers will see very little in the international system for them. As you indicated, we have been a strong supporter of IMF reform and of changing the weights in voting in the IMF. We have been a consistent supporter of reform of the Security Council. We do think the Security Council needs to be expanded. We think it needs to be more representative of the existing power balance rather than the past power balance. That is an enormously complicated issue and I do not expect it to be resolved any time soon. We are committed to Security Council reform and to supporting constructive ideas.

Senator SINODINOS: When it comes to some of the emerging institutions in our own area, like the Infrastructure Bank that is being discussed, how do we resolve those sorts of dilemmas?

Mr Varghese : With the Infrastructure Bank, clearly the infrastructure deficit is very apparent not just in the region but globally. We need much more investment in infrastructure and therefore anything that can facilitate more investment in infrastructure, in principle at least, is welcome. The issue for us with the Asian Infrastructure Bank is the standard of governance that would apply to it. Up to now, we have not been satisfied that the standard of governance meets our thresholds. This is an evolving issue, because discussions are continuing and provisions are still being negotiated. If those governance standards can be met, I think the government would be more than prepared to have another look at it.

Senator SINODINOS: I do not want to take up too much more time, but just briefly we talk in broad terms about governance standards. In practice, what is it that we are looking for in this context?

Mr Varghese : We do have some benchmarks against which we can measure these things, because we have a level of governance in the World Bank, the IMF and the Asian Development Bank and we want fundamentally to see something similar, not necessarily identical, applying in the Asian Infrastructure Bank. They go to questions such as no one country being able to dominate decision making. They go to the role of the board of governors in decision making. They go to so-called safeguards in relation to environmental and other impacts of projects. I think the nature of the governance standards is reasonably well known. It is a question of how we adapt it to a new institution.

Senator SINODINOS: Without disclosing advice, are we engaged in a dialogue with the proponents of the Asian Infrastructure Bank to seek to influence them to improve the prudential governance standards?

Mr Varghese : This is an initiative led by China. We have been in discussions with China for some considerable time on the proposal and in particular on the governance standards. Those discussions continue.

Senator GALLACHER: Just on that, we have until 31 March; is that correct?

Mr Varghese : We have until 31 March to sign the MOU. The MOU is only one aspect of this process.

Senator GALLACHER: But you will get in as a foundation member as at 31 March?

Mr Varghese : If we sign the MOU it will enable us to be a foundation member.

Senator GALLACHER: With governance and all of the other things worked out with the founding members from then on; is that correct?

Mr Varghese : If you sign the MOU, you then participate in the negotiations on the articles of association. The articles of association are, if you like, the foundation document for the Asian Infrastructure Bank.

Senator GALLACHER: So, why are we missing out? Why are we not in on 31 March?

Mr Varghese : Because the MOU itself does address questions of governance. The judgment is whether those questions are addressed sufficiently to meet our requirements.

Senator GALLACHER: A very diplomatic answer.

Mr Varghese : That is the issue that the government will consider.

Senator GALLACHER: I just wanted to proceed on quite a different area. Mr Varghese, I have had the pleasure and good fortune of being at a dinner in the ambassador's residence in Vietnam, Thailand, Singapore and Jakarta—all stunning residences. All of those functions included, apart from the convivial atmosphere and a couple of glasses of wine and fine food, an element of Australia's interests where we were associating and mixing with businesspeople and the like. The ambassador sought to have a function with a visiting delegation. That is all well and good. I just want to turn to the High Commissioner's Stoke Lodge in London. Against that background of quite a normal practice of entertainment occurring in ambassadors' and high commissioners' residences, are there rules and protocols that are set up for this?

Mr Varghese : There is not a formal protocol in the sense of a written document that I could present to you, but they are some basic principles that apply to the use of residences and the use of the chancery.

Senator GALLACHER: Are they publicly available?

Mr Varghese : No, they are not. They are principles that have evolved over time. They are more in the nature of convention than dictat.

Senator GALLACHER: So, there are general principles which the high commissioner or ambassador understands and adheres to?

Mr Varghese : Yes.

Senator GALLACHER: Would it be unusual for a high commissioner not to be at a function in his own residence?

Mr Varghese : No, it would not be unusual for an ambassador or a high commissioner not to be at a function in the residence. The residence is used a lot and often it will be used for a function at which the ambassador or the high commissioner, because of competing commitments, is unable to attend.

Senator GALLACHER: And would a deputy or—

Mr Varghese : Normally someone from the mission would be present, but there may be circumstances where that does not happen.

Senator GALLACHER: In terms of security of the chancellery—and I have had the opportunity of visiting the embassy in Jakarta and in Thailand that is under construction and the current facilities—there is obviously a security aspect to particularly the chancellery, I would have thought. That is the last refuge in the event of anything going untoward. Would there always be security or some responsible DFAT person on the premises?

Mr Varghese : It would vary according to the location and what the security threat was. Obviously, where we have a compound—

Senator GALLACHER: Sorry, I do not want to cut you off, but I am a bit short for time. I am not talking about a threat. I am saying that, as a general principle, would access to the chancellery be by authorised persons only?

Mr Varghese : Chanceries, yes. Residences are different.

Senator GALLACHER: Stoke Lodge?

Mr Varghese : Stoke Lodge is different. It does not have the same security arrangements as Australia House does.

Senator GALLACHER: Have there been any other instances outside the one reported in where Sir Michael Hincks and the former Liberal Party President, Richard Alston, allegedly threw a lavish party at a taxpayer owned property in London? Has that ever occurred or has that ever been reported?

Mr Varghese : Your characterisation of throwing a lavish party—

Senator GALLACHER: I am only regurgitating what was printed in the media.

Mr Varghese : Since you raised it, let me—

Senator Brandis: No, if it was in the newspapers then it must be true.

Senator GALLACHER: If it is about you, Senator Brandis, I am sure it is true.

Senator Brandis: I am sure that is the way you think.

Mr Varghese : Since you raised a specific event, let me go through it. There was a function held at Stoke Lodge in July 2014. It was a function of the global advisory board of CQS, which is an international asset management company. CQS has investments in Australia. We spent a little bit of time with Senator Singh talking about the government's economic diplomacy program. Part of that economic diplomacy program is to do what we can to encourage further investment in Australia.

The permission to use the residence for that global advisory board event was judged at the time to be consistent with our economic diplomacy objectives and consistent with the use of residences to further Australian interests. This is not unusual. When I was High Commissioner in New Delhi I would often have functions involving Australian companies, because I judged that that was in our interests and in the interests of building the relationship with India. Nor is it unusual for those functions to be undertaken on a no-cost basis; in other words, the government does not put money into a function. It depends on the nature of the function. In this instance, it was on a no-cost basis. There was no funding provided to CQS for that function.

Senator GALLACHER: I take your point about when you were the high commissioner, but presumably you were in attendance when you organised those—

Mr Varghese : I have had functions in the high commission where I was not in attendance.

Senator GALLACHER: But you had your deputy?

Mr Varghese : Yes, usually there would have been someone there.

Senator GALLACHER: This assessment of the Stoke Lodge function—was that made prospectively or retrospectively, assessment that you have just made about SQS and the investments in Australia?

Mr Varghese : No, it would have been made before the event.

Senator GALLACHER: So, was it discussed with your office or someone beforehand?

Mr Varghese : No, it does not need to be discussed with Canberra. These are judgments that we leave to our heads of mission. They are all very experienced people. We rely on their judgment. It is not something that needs our approval.

Senator GALLACHER: Are you confirming that it was at no cost to the Australian taxpayer?

Mr Varghese : I can confirm that.

Senator GALLACHER: In terms of security, catering—

Mr Varghese : No cost.

Senator GALLACHER: Can you also confirm that there were no security implications?

Mr Varghese : No, there were no security implications.

Senator GALLACHER: There was no access to any secret telephones to the Prime Minister or anything like that?

Mr Varghese : There were no security implications. I would not go any further than that.

Senator SINGH: Was it a fundraising event?

Mr Varghese : No, it was not. I know some of the media reports suggested that it was a fundraising event, in fact that it was a party fundraising event, but it was not.

Senator Brandis: Senator Singh, you are a lot smarter than Senator Gallacher. You would not make the mistake of assuming that because something is written in a newspaper it must necessarily be true.

Senator GALLACHER: Thank you for that compliment, but we will continue with our questions if we are okay.

CHAIR: Carry on.

Senator GALLACHER: I just really want to get to the point that I accept what you are saying about Australian business, Australian interests and international interests quite often using our premises all over the world, and they are really places money cannot buy. They are usually very stunning, architecturally significant and very impressive places, and for very good reason. I do struggle with it being handed over to a group of people for their use with no high commission staff and no deputy head of mission. I cannot come to terms with that. Has that happened before, where, 'There is the premises. Bring a couple of people in and pay for your own catering and it's all okay'?

Mr Varghese : That sounds like an invitation to have a party. This is not what we are dealing with in this particular case. This was a function associated with a meeting of the global advisory board of a significant international asset management company that already had investments in Australia and that were considering more investments in Australia. The focus here is on the potential for that company to lift its investment in Australia and whether a function around its international advisory board meeting would be of assistance for that objective. That is the reason why they were given access to Stoke Lodge. I am sure if the high commissioner did not have a competing commitment he would have been there, but he was not able to be there on that occasion.

Senator GALLACHER: Where did they meet last time they were in London? Did they meet—

Mr Varghese : I do not know.

Senator SINGH: Get the invite list.

Senator GALLACHER: Do any other equity managers or significant financial groups meet in Australian residences on a regular basis without the high commissioner or the ambassador?

Mr Varghese : No, I do not think it would be a regular occurrence.

Senator GALLACHER: Would this be a one-off?

Mr Varghese : I do not know whether it is a one-off. We do not centrally approve these things.

Senator GALLACHER: Your assessment, though, that was done prospectively, you said, by the high commissioner?

Mr Varghese : Yes.

Senator GALLACHER: Did you seek that information from him in order to relay it to us today?

Mr Varghese : When the article appeared in the media we did ask the post for an explanation as to what happened. What I have told you is consistent with what the post told us.

Senator GALLACHER: How do you do that? Do you send him a cable or ring him up? How do you ask a high commissioner to explain a newspaper article? Do you just give him a call and say, 'Hello'?

Mr Varghese : I would have to check precisely how the communication was undertaken, but it was probably either an email or a telephone call. The point is we wanted information and we got it.

Senator GALLACHER: There have also been reports that there has been a fashion show at Stoke Lodge.

Senator Brandis: Good.

Senator GALLACHER: Hopefully the former foreign minister did not take up his previous role in high heels and fishnet stockings.

CHAIR: Senator Gallacher.

Senator GALLACHER: Did that also go with—

Senator Brandis: It is the role, you know, of our overseas posts to promote Australian commerce and to promote Australian arts and culture. That includes fashion. I assume that you are happy that we hosted a fashion show just as you would be happy that our posts host Australian cultural organisations.

CHAIR: I think Senator Singh wants to jump in there if she can.

Senator SINGH: I have some questions in a different area.

CHAIR: I am sorry, I did not realise.

Senator SINGH: We are still in the portfolio overview.

CHAIR: We are roaming through the agenda, so do not be concerned.

Senator SINGH: I wanted to ask some questions in relation to the DFAT restructure. As of 1 October, 13 out of 16 SES band redundancies were premerger AusAID staff; is that correct?

Mr Varghese : I can take you through—

Senator SINGH: If I could get an update on the numbers of premerger AusAID staff at each APS level.

Mr Varghese : Who have taken—

Senator SINGH: Who have taken voluntary redundancies, yes.

Mr Varghese : Sure. There has been a total of 374 departmental officials who have ceased employment as a result of a voluntary redundancy. These are figures as at the end of January 2015. Of those 374, 18 were SES officers. Technically that is not a VR, that is an inducement to retire, but let us call it a VR. Some 55 were executive level 2 officers. That is a section head in our system. Some 155 were executive level 1 officers, 70 were APS6 officers, 68 were what we call broadband 2 officers, and 8 were broadband 1 officers.

Senator SINGH: Of those 374, what were the numbers that were premerger AusAID and premerger DFAT?

Mr Varghese : About 221 of the 374 were premerger AusAID, and 153 were premerger DFAT.

Senator SINGH: What is being done to retain the expertise and that corporate knowledge that the senior AusAID staff had?

Mr Varghese : I know there has been a bit of reporting that we have lost a huge amount of expertise. It is true that when people leave the department expertise goes out with them, but what I would say is that we still have a very substantial amount of development assistance expertise in the department. We still have 1,336 staff members from the former AusAID who remain with us. We still have specialist divisions dealing with development issues. We have a specialist Development Policy Division. You have also heard today from a contracting division. We have specialist areas dealing with evaluation.

We now incorporate the nurturing of development assistance skills as one of the core skills of the department. There are training programs that deal with it. When we take in graduates we will put them through some exposure to development assistance issues. Our forward workforce planning will work on the basis that we are obviously a merged department now and we need to ensure that those skills are both retained and deepened. I think there is still an enormous depth of expertise in the department.

Clearly, our numbers are different, but that should not be surprising, because the numbers on the date of integration reflected the numbers you needed to run an aid program of $8 billion and now we are running an aid program of $5 billion moving to $4 billion next financial year.

Senator SINGH: You have not reached, though, the 500 redundancies figure yet. You said 374.

Mr Varghese : The 500 is not a redundancy figure. The 500 is the number of staff we have to have reduced by at the end of this financial year.

Senator SINGH: So, have you reduced by 500?

Mr Varghese : We can reduce through redundancies and we can reduce through natural attrition and we can reduce through people moving to other parts of the Public Service. We will reach the 500 figure by the end of the year. I am absolutely confident of that.

Senator SINGH: End of the financial year? Okay. Are there further redundancies expected between now and the end of the financial year?

Mr Varghese : We will have some further redundancies between now and the end of the financial year. Of course, we always have a natural attrition process as well. I will not be making more offers of redundancy this financial year, but there are still some in the pipeline who have accepted a voluntary redundancy but have not yet exited the department.

Senator SINGH: You have lost one in eight staff members. That is a massive layoff and loss of employees and workforce. There must be things that have stopped happening in the department as a result.

Mr Varghese : As I said, 500 is a large number to lose, but bear in mind that we are running a smaller aid program than what we were initially structured for, or at least what AusAID was initially structured for, before they came to DFAT in a merged department.

Senator SINGH: Therein lies the loss, in a sense. It is the halving of the aid program.

Mr Varghese : Plus the economies of scale that you get from no longer having two corporate services areas. The economies of scale you get across-the-board when you merge two reasonably large organisations across corporate, management, security, property—all of those areas.

Senator SINGH: Can you describe an assessment of your department under this new leaner environment?

Mr Varghese : Could you elaborate on what you mean by an assessment of the department?

Senator SINGH: With this overall departmental restructure and downsizing how would you assess your department in its structure or makeup?

Mr Varghese : Do you mean how has the process of integration gone?

Senator SINGH: No. You could highlight that to the committee. How do you now assess this leaner DFAT into the future? Obviously the aid component of DFAT is minimally reduced, but what about the rest of it?

Mr Varghese : It is not necessarily a leaner DFAT. In fact, the size of DFAT post integration is much larger than the size of DFAT pre integration, which is not surprising because we are now responsible for the aid program and we have also taken on some additional functions like climate change. It is not a leaner department than what it was before integration. We have structured the department to maximise integration across foreign policy, trade and aid policy. That means our geographic divisions now deal with all three of those policy areas in an integrated way. If you are looking at what we are doing in Indonesia, the geographic division will deal with the foreign policy, trade, investment and the aid aspects of Indonesia. We have very deliberately gone for an integration model at the high end of the spectrum, not at the low end of the spectrum, while also maintaining functional specialisation along the lines that I have mentioned.

It is a more complex department now than it was before integration. It has more divisions in it than it had before integration and it means that the skillset that we will need in the department is much broader than it was pre integration, because we need to have people now with development assistance skills and not just foreign policy and trade skills.

Senator SINGH: What is DFAT morale like now?

Mr Varghese : As you would expect, if you go through a merger this big and this complicated you are going to have an unsettled period. Unsettled periods in my experience usually mean a certain cost in morale. We have been doing regular surveys of staff opinion. Those surveys confirmed what I think you would intuitively expect, which is that there has been a period of uncertainty, and that is reflected in the way that people think about the department and their work. I think we are now moving out of that. We will keep doing these surveys so that we can chart just how much progress we are making, but I do not think you can do something this big and this complicated without unsettling people.

Senator WATERS: I am hoping that we are currently dealing with America, in the DFAT session? Is that correct? That is the folk I am going to ask questions of. Do we have those people at the table? I do not see any movement so shall I proceed?

CHAIR: Proceed.

Senator WATERS: It has been reported that former Howard government Minister Nick Minchin, who is now the consul-general in New York, has been lobbying foreign banks, who have ruled out financing the Abbot Point coal port. The names of the financial institutions that he met with have been redacted in the FOI documents. Can you tell us which ones they were?

Mr Varghese : I can start answering that and Dr Hammer may wish to add to it. The background to the representations that Mr Minchin has made—and he is not the only one—is that there is currently, as I am sure you are very well aware, a campaign to list the Great Barrier Reef as in danger.

Senator WATERS: Yes.

Mr Varghese : We are doing all that we can to ensure that that campaign does not succeed.

Senator WATERS: Can I suggest that you might fix the management of the reef to ensure that that campaign does not succeed. However, I am keen to—

Mr Varghese : We can have a discussion about that, but I am trying to answer the background to the representations that our consul-general in New York has been making. In the course of that campaign we think that there have been a number of assertions made about the management of the Great Barrier Reef and about its vulnerability that are not grounded in fact and which need to be rebutted. We have tasked several of our heads of mission—and in the case of Mr Minchin, our head of post—to make that clear to the investment community. Those representations are not representations seeking banks or asking banks to endorse any particular project. They are setting out the views of the Australian government on the question of whether the Great Barrier Reef is in danger and on what the government's approach to the effective management of the Great Barrier Reef is.

Senator WATERS: I have a few follow-up questions. Firstly, I refute your notion that there are incorrect assertions, but I am not here to discuss that with you so I will take that up with the relevant personnel. Firstly, who are the other folk that have been similarly instructed to have those discussions with members of the embassy community?

Mr Varghese : We have essentially asked our ambassadors who are in countries that are on the World Heritage Committee.

Senator WATERS: Just those folk? Anybody else?

Mr Varghese : This is a whole-of-government effort, and so we will use our diplomatic resources to best effect.

Senator WATERS: Can you take on notice for me precisely who has been instructed to have discussions with financial institutions about investment in developments around the Great Barrier Reef?

Mr Varghese : I am happy to do that.

Senator WATERS: Just coming back to my original question about which institutions former Minister Minchin met with, are we able to get that detail today?

Mr Varghese : I am not sure it is appropriate for me to give you a list of the institutions that our consul-general has spoken to, but I will have a look at it and if I can I shall provide you with information.

Senator WATERS: Are you able to do that now?

Senator Brandis: Surely, Senator Waters, you are not suggesting that it is not the role of Australian consuls-general or DFAT employees generally to promote the interests of Australian business?

Senator WATERS: I am going to come to precisely what the role is, but I am firstly trying to establish whom Minister Minchin met with.

Senator Brandis: I understand and respect the fact that you have a particular view about this development, which is not widely shared I might say.

Senator WATERS: Except by the World Heritage Committee.

Senator Brandis: It is not widely shared and certainly not shared by the Queensland public.

Senator WATERS: I think the recent election result might indicate differently.

Senator Brandis: In which your party received eight per cent of the vote.

Senator WATERS: In which your party lost.

CHAIR: If we can just stick to questions and answers.

Senator Brandis: It is a core role of our representatives overseas to promote the interests of Australian business and I see no reason at all why promoting the interests of Australian business might not, in an appropriate case, extend to assisting them in securing project financing.

Senator WATERS: When you mention Australian business, do you mean overseas multinationals that are proposing to develop the Gallilee Basin?

Senator Brandis: I mean businesses that bring jobs and employment to the Queenslanders you were meant to be representing.

Senator WATERS: So, when you say Australian business you do not really mean Australian business?

Senator Brandis: I mean both Australian and overseas owned businesses carrying on business in Australia.

Senator WATERS: Coming back to those financial institutions that former Minister Minchin met with.

Mr Varghese : The discussions that the consul-general had with financial institutions are discussions that I think should be treated as in-confidence. I do not think the parties to those discussions would necessarily appreciate being publicly identified and I do not think it is appropriate to publicly identify them.

Senator WATERS: I beg to differ with your assessment and I believe that under the standing orders I am entitled to ask for and to be provided with that information.

Mr Varghese : I will take that on notice.

Senator WATERS: Thank you. I will certainly look forward to your detailed response. Moving now to the appropriateness of the role of our consuls-general, is it usual for consuls-general to personally speak with senior investment bankers to discuss the bank's position on particular projects?

Mr Varghese : Our consul-general in New York plays a very important role in terms of the American financial system and has regular dealings with investors, bankers and financial institutions. That is a key part of his job.

Senator WATERS: So, is it usual for particular projects to be discussed?

Mr Varghese : I indicated that Mr Minchin was not seeking financing for any particular project.

Senator WATERS: No, but he was seeking to discuss particular projects.

Mr Varghese : He was correcting misinformation which has been put into the public discussion about the management of the Great Barrier Reef.

Senator WATERS: Can you table for me precisely how you contend that the former minister corrected what you contend is misinformation, because clearly I have a different view about that?

Mr Varghese : How we—

Senator WATERS: Yes. What information did he supply? If you are able to provide that to me that would be of great interest to both myself and the World Heritage Committee.

Mr Varghese : I do not know if Ambassador Woolcott is able to answer that on the spot. If not, I will take it on notice.

Mr Woolcott : I am happy to answer that. Mr Minchin provided to the people that he spoke to information about what Australia was doing in terms of the reef. A lot of the information is set out in detail in the state report, which was available on the DoE website as of 1 February and submitted to the World Heritage Committee. Essentially he just set out Australia's arguments—they are quite detailed—as to what we are doing in regard to the reef, how we are looking to meet the recommendations of the World Heritage Committee and all the steps that we are taking to conserve the reef as a national icon.

Senator WATERS: I have two follow-ups on that. Firstly, can you supply for me any information that was not in the State Party Report, which is clearly a public document that I have read and I am sure many others have also read. Is there anything that was not just in the State Party Report? Can you supply a list of those documents and the documents themselves? Secondly, you say the information was about how Australia is looking to meet the recommendations. Is that simply information that was on the public record in the State Party Report or is there additional information that Mr Minchin was able to tell those bankers that perhaps the Australian public would like to hear as well?

Mr Woolcott : I would need to take that on notice to see exactly what Mr Minchin said in his report.

Senator WATERS: That would be greatly appreciated. Again, I am interested in whether it is usual for particular projects to be focused on in this kind of conversation between our consuls-general and financiers. I understand that they are meant to promote Australia's interests and clearly we have a different view on what they are. But is that usual for particular projects?

Mr Varghese : The consul-general was not lobbying for any particular project. The consul-general was explaining what Australia does in terms of its management framework for the Great Barrier Reef and seeking to refute some of the inaccuracies that have been circulated about our record in relation to the Great Barrier Reef. He was not lobbying for any particular project and nor was he asked to lobby for any particular project.

Senator WATERS: That is important. Again, I look forward to the documents so that we can confirm that that is entirely accurate. Thank you very much. Given that there is a lot of discussions about stranded assets and the dwindling coal price, what should the position of the consul-general be in regard to discussing projects that may, in fact, be against Australia's interests?

Mr Varghese : I am trying to work out an answer to something that is very much an abstract proposition. Could I ask you to elaborate on what it is that you are seeking a response on?

Senator WATERS: In the context of the Abbot Point coal terminal, which is what I understand was the focus of Mr Minchin's discussions, but I stand to be corrected once we have the documents.

Mr Varghese : I am sorry if I have not made myself clear, but I thought I said it quite a few times. Mr Minchin did not discuss the investment proposals around Abbot Point. That was not the purpose of his discussions and it certainly was not the purpose of the instructions that he received.

Senator WATERS: Why was he meeting with investment bankers if not to discuss investment proposals?

Mr Varghese : He was meeting with investment bankers to make the point that the misinformation which was being circulated about the government's approach to the management of the Great Barrier Reef was inaccurate and that they should be aware of it to the extent that investors are taking that information into account in making judgments about projects. He was not going out there saying, 'You have got to support this particular project or that particular project.'

Senator WATERS: So, to the extent that he was discussing Australia's responses to the recommendations of the World Heritage Committee, they have specific recommendations about the Abbot Point coal terminal, hence my line of questioning about discussions regarding that project. So, you are saying they did not discuss investment about the Abbot Point coal terminal even though they discussed Australia's response to the World Heritage Committee's concerns, which include that precise development?

Mr Varghese : His discussions did not include investment of any particular project.

Senator WATERS: I look forward to receiving the record to make sure that is, as I say, entirely the case. Do you know whether there were any other folk present at those meetings?

Mr Varghese : No, I do not.

Senator WATERS: Do we have any documentary trail to hand to establish who else was present at those meetings?

Mr Woolcott : I am not aware if Mr Minchin was accompanied by any other officers but, again, we can take that on notice.

Senator WATERS: I am particularly interested, of course, if any of the actual companies that have an interest in this regard were present either at the meetings or indeed were informed of the meetings either before or after the meeting actually occurred. So, if you could take that on notice as well? That is all the questions I have.

Senator SINGH: The opposition has done the portfolio and budget overview, so we are happy to move to outcome 1.

CHAIR: I think others have certainly well and truly moved in there as well, so just keep going and we will continue our trip around the world.

Senator SINGH: If we can go north to China. I understand there will be a new ambassador to China at some point.

Mr Varghese : Not that I am aware of.

CHAIR: I do not think the Ambassador of China is aware of this.

Mr Varghese : I suspect not that our Ambassador to China is aware of.

Senator SINGH: So, there is no speculation of there being a new ambassador to China?

Mr Varghese : I would never engage in speculation.

Senator Brandis: Only from you, Senator Singh.

Senator SINGH: Perhaps Senator Brandis can answer whether there is any speculation of a new ambassador to China?

Senator Brandis: I am not aware of any speculation at all. I think you are barking up the wrong tree there.

Senator SINGH: Is it next August that the incumbent ambassador's posting is up?

Mr Varghese : I think her four years is probably up in July-August, but there is no—

Senator SINGH: What is the usual timeframe?

Mr Varghese : There is no hard and fast rule on this, but normally head of mission appointments are for three years, and it is not unusual for an extension of a year or so to be given. That is all subject to the foreign minister.

Senator SINGH: Perhaps you could provide the committee with a list of posts that are up for renewal this year. Do you have that list with you? Would it be a fairly standard list?

Mr Varghese : I will take that on notice.

Senator SINGH: I obviously gave you one that I was aware of, which is China. Are there any others that you could give me? It is called sharing.

Mr Varghese : Postings are always coming up. They are constantly coming up.

Senator Brandis: We will take it on notice.

Senator SINGH: Let us go back to the upcoming Ambassador to China post, which is the only one we can talk about in full knowledge of its renewal date, being around July-August.

Mr Varghese : If it is not further extended.

Senator SINGH: Who is being considered for this role?

Mr Varghese : I am not going to get into the details of the process for the appointment of ambassadors. That is a matter for the foreign minister and the Prime Minister, and I would not go into any of those details.

Senator SINGH: What skills would be needed for the most senior diplomatic role in China?

Mr Varghese : Exceptionally good diplomatic skills.

Senator SINGH: That is a very good answer. We are aware of a number of blunders or embarrassing coverage by this government in relation to China in recent times, so I think that is a very good answer.

Senator Brandis: Was that a comment or a question? That is a comment.

Senator SINGH: I think there have been a number of comments.

Senator Brandis: It is at variance with the views of virtually every commentator.

Senator SINGH: It is a comment, but there have been a number of comments on your side as well. I think that has probably been my first comment today.

Senator Brandis: It varies with the views of virtually every diplomatic commentator that has written about the Australia-China relationship, which is in excellent shape.

Senator SINGH: In acknowledging your answer, Mr Varghese, that it requires the skills of someone with very good diplomacy and diplomatic skills, what are the consequences if the candidate does not have those skills?

Mr Varghese : They would not be able to do the job as well as someone who did have the skills.

Senator SINGH: That is fair enough. On the week of 5 December 2014 the Trade and Investment Minister, Andrew Robb, visited China for a high-level dialogue in Beijing. Who were the members of the Australian delegation?

Mr Varghese : This is the meeting in December last year?

Senator SINGH: Yes.

Mr Varghese : I would have to take on notice the full details. I participated in it and I am just trying to think who the other members of the delegation were. It was a delegation that comprised not just people in government but people in academia and in civil society and former political leaders. Peter Costello led it for Australia. It included some journalists—for example, Rowan Callick and Tony Walker were there. It included people from think-tanks such as Michael Fullilove and Jenny McGregor, the head of Asialink. It included some academics such as Peter Hoj, the Vice-Chancellor of Queensland University. I do not know if Mr Meehan has the full list, but I am just going on my memory.

Senator SINGH: That is a fairly good memory, so perhaps we will take it on notice to have the full list.

Mr Varghese : Yes.

Senator SINGH: What is the cost associated with each delegate's participation? How is that cost covered?

Mr Varghese : I would have to take on notice what the cost arrangements were. I think they paid their own way to and from. I would need to take advice on whether we picked up any costs. I am happy to do that.

Senator SINGH: So, they paid their own way?

Mr Varghese : I think they did.

Senator SINGH: I will just move on to aid. I understand that the East Asian programs performed incredibly well in the recent performance report on Australian aid. I think that is very good. Congratulations.

Mr Varghese : Thank you.

Senator SINGH: Why do you think the performance and effectiveness rate was so high? What were some of the results? What was being achieved with aid investment in East Asia?

Mr McDonald : It depends on whether you are talking about East Asia generally or the East Asian regional program. We will ask Mr Dawson, who was responsible for the Performance of Australian Aid report and also the relevant division head for that area to come up, because they will be able to answer your question.

Mr Dawson : I understand you are looking for indicators of why performance is going very well in the East Asia area?

Senator SINGH: Yes.

Mr Dawson : When you look at any particular region you see a vast diversity of countries and development challenges and responses to them so it is very hard to generalise as to why performance in one region might be better than another, but there are perhaps a few obvious candidates to look for. The East Asia area compared to the Pacific, for example, has a much deeper set of skills. The people that you find in government or you find in civil society organisations are those that have the most deep involvement in development issues. There are more of them, they are better qualified and they are better experienced so they make things work in ways that often do not happen to the same extent in the Pacific.

Senator SINGH: I am sorry. I do not think that you quite understood my question. I asked about some of the results that were being achieved from the aid investment in East Asia and in those East Asia programs. Rather than just the differences between the East Asia region and the Pacific on skills I am actually looking at some of the outcomes.

Mr McDonald : The relevant division head who runs that area will be able to talk about that.

Mr Chittick : The department runs or has responsibility for aid programs in East Asia in a number of different ways. There is a significant number of bilateral programs that we have that are managed by a number of divisions and there is also a regional East Asia program which looks at the transboundary issues that are not necessarily focused on any one country. You are right that just on that particular program, which we call Regional East Asia, which is not a specific country but very much focused on those South East Asian programs, there have been some very good programs there. As Mr Dawson mentioned, there are some good reasons behind that. I will go to some of the outcomes shortly, but there are some very good reasons for that. They go to the relationships that we have developed both through our aid program and through our foreign and trade policy engagement in South East Asia over decades. In terms of some of the examples of things that we have achieved through our regional East Asia program, this is about $100 million a year and is part of our broader East Asia program. We supported over 50 activities promoting liberalisation of goods, services and investment within the ASEAN region. That is an excellent program which seeks to do a number of things. At the end of the day it seeks to promote economic growth and thereby reduce poverty. We work very closely with our ASEAN partners. We leverage off our existing free trade agreement with ASEAN and that allows us very good reach into a number of regulatory authorities within South East Asia. That is an excellent one. We also have a really outstanding counter-human trafficking program, which is about $50 million over four years. That is very much focused on the Mekong and very much focused on promoting the human security of those who are at risk of trafficking in the region.

Senator SINGH: Given those success stories, those programs that you have outlined as part of this regional East Asian program area, have you been given any guiding principles on how to go about cutting such successful programs?

Mr Chittick : These are programs that would have characteristics of many of our programs. As the secretary and others have mentioned on a number of occasions, the government is considering the make-up of the aid program for next year and beyond, and we will await those instructions.

Senator SINGH: So, you have not been given any guiding principles at this stage?

Mr Chittick : We do not have a budget for next year.

Mr McDonald : As we said earlier, the budget is under consideration. Those allocations will come out on budget night and apply next year.

Senator SINGH: The aid budget?

Mr McDonald : Yes. The guidance that would be provided would be in relation to the new aid paradigm that the secretary referred to earlier. The policy that was put out will guide our program going forward as it does now.

Senator SINGH: Let us look at the 2013-14 federal budget cuts. Which programs have been already impacted by that budget?

Mr McDonald : In relation to the 2013-14 reductions—

Senator SINGH: I am only talking in relation to the East Asian region.

Mr McDonald : I do not think we would have that information handy, but we certainly put it on the website at the time and we provided it to the committee. There was a discussion here about it. We can certainly provide it to you on notice, but we would not have it here.

Senator SINGH: Is it a list? Mr Chittick just mentioned these particular programs. Does it actually highlight the programs and what has been cut against them?

Mr McDonald : It is more complex than it sounds on the surface, because some programs were deferred in time, so they continued. It is just when the payments are made on those programs. They are detailed where there are deferrals. In other cases programs were ending or they were not continued. That detail for each of our countries and each of our regions at the time was put on our website. We can provide that to you. It does provide the sort of detail that you just talked about.

Senator SINGH: Mr Chittick, with the programs that you highlighted to me—and you gave some figures associated with them, for example, the counter-human trafficking program of $50 million over four years—is that including the cut that has been made in this current budget?

Mr McDonald : There has been no reduction for 2014-15. The allocations that were announced at the start of this year are still the allocations in place at this time. The reduction in 2014-15 is nil. The allocation that started the year for the program and the conduct of the program is still ongoing. Where the budget will reduce is in 2015-16, and that will be known on budget night.

Senator SINGH: I will have a look at the list that you referred to. What would the impact of a 20 per cent cut on some of the successful programs that we have just been talking about look like for these programs?

Mr Varghese : That would depend on how the foreign minister in the end decided to apply the cuts. It is very difficult. It is impossible to give you an answer on what the impact would be until we know just where the cuts will fall.

CHAIR: Mr Varghese, would it not be the case that when you move to effectiveness indicators rather than workload indicators in fact the outcome may indeed be equal or superior? Is that not the context of the discussion you were having earlier in the day with the committee?

Mr Varghese : It certainly could be the case that there is not just a direct relationship to the quantum of money and effectiveness. To that extent trying to work through what a dollar cut on a particular program might mean for effectiveness is not a linear relationship necessarily.

Senator SINGH: I might move on. I understand this was canvassed at the last Senate estimates and excuse me for not having been here. Was it the case that Prime Minister Abbott attended the inauguration of President Widodo without an invitation?

Mr Varghese : The way the Indonesians do this is they do not typically extend any formal invitations to foreign leaders.

Senator SINGH: So, no foreign leaders received formal invitations?

Mr Varghese : To attend an inauguration because it is essentially a domestic celebration but they also welcome interest shown by foreign leaders in attending and obviously accommodate that.

Senator SINGH: Just to make this clear, no foreign leaders were sent invitations to attend?

Mr Varghese : Received formal invitations.

Senator SINGH: What did they receive? You said it was not a formal invitation.

Mr Varghese : There is an expectation that certainly the senior ASEAN leaders would turn up for the inauguration, but beyond that it is usually a case of those countries that express an interest in attending this very important occasion do so and the Indonesians welcome it.

Senator SINGH: I understand there was a meeting between the Prime Minister and President Widodo on Monday, 20 October. On what date was a cable regarding that meeting received by you?

Mr Varghese : I would have to take that on notice.

Senator SINGH: Could you also answer or take on notice a summary of the Monday, 20 October meeting between the Prime Minister and President Widodo?

Mr Varghese : I am much less inclined to take that one on notice, because it goes to the content of discussions between heads of government, which is not something we would normally go into publicly.

Senator SINGH: Are you aware of the content of that meeting, as the secretary of DFAT?

Mr Varghese : I am aware of the content of that meeting.

CHAIR: We will just hold it there, if we can.

Senator LUDLAM: I have a couple of questions, if we are dodging around the program a little bit, for people who would deal with South-East Asia. I have questions on the elections in Burma later this year and then questions for Dr Floyd on ASNO. Can you provide us with an update of what your understanding is? There do not appear to be dates set down yet. This is obviously quite an important election. What is your view? Is it going to go ahead and, if so, when do you think it is likely to happen?

Mr Chittick : I think the issue of the specific date for the election is still, at this stage, unknown. We are working closely with a number of authorities in Burma to provide support in the lead-up to the election. That includes the work that needs to be done on voter registration and to build the capacity of the Union Election Commission.

Senator LUDLAM: I have some idea of a window of when the election is likely to occur. What is your best guess?

Mr Chittick : I would not provide a best guess. We are monitoring it closely. The Burmese authorities will announce the time for the election.

Senator LUDLAM: Do you have an expected timing for that announcement?

Mr Chittick : No. They have indicated in the past that they would be looking for an election in 2015.

Senator LUDLAM: And that is all?

Mr Chittick : Yes.

Senator LUDLAM: Can you give any detail around what kind of assistance we are providing and whom it is being provided through?

Mr Chittick : I might have to take some of the detail of that on notice. The two key elements, as I mentioned earlier, of our support for the preparation for the elections are to provide support to improve voter registration and to build the capacity of the Union Election Commission. Both of those elements are designed to help Burma deliver inclusive and credible parliamentary elections this year.

Senator LUDLAM: Are there other countries that have a stake in that electoral reform? I do not know if calling it an electoral form is a bit strong, but those areas that we are operating in?

Mr Chittick : I am aware that there is a multilateral—'multilateral' is the wrong word—effort from a number of donors in support of this area. I imagine each donor will look at different opportunities to build capacity, but certainly in Australia's case it has been with those two objectives in focus.

Senator LUDLAM: Does Australia have the lead? Are we coordinating with other countries on those two specific areas?

Mr Chittick : I would not say that we necessarily have the lead, but we coordinate very closely. It is important that we do not duplicate our aid effort. I know that our staff and our embassy in Rangoon have very regular meetings with counterparts in the aid community.

Senator LUDLAM: What is your evaluation of areas in the country? My information is that the last week of October or first week of November, but I will not hold you to that because you were not willing to be that specific. But if that is the approximate window that we are looking at, what is your assessment of the areas in the country where it may still be quite unsafe or where the election may not even occur, where it may not be possible to hold an election?

Mr Chittick : I think it is well known that there are a number of security challenges in Burma. There are a range of peace processes going on with a significant number generally on the border area. There have been some positive developments recently and some negative developments. On 12 February this year there was a pledge for peace that was signed by the Burmese government and four of the armed ethnic groups. Against that there has been some recent violence in Kachin state and northern Shan state. That is of concern. These are issues that are not new ones and that will continue to need to be progressed, and we will be monitoring those.

Senator LUDLAM: That is helpful. If there is a bit more detail that you would like to provide on notice that would be useful. What about in the western part of the country, where in some parts of the country there has been quite systematic violence against the Rohingya people?

Mr Chittick : We continue to be concerned about the security environment in Rahkine state, particularly the plight of the Rohingya people. It is a very complex issue. I have visited there myself and seen the very complex community relations on the ground. There are no easy answers there. Or if there were there probably would be a resolution.

Senator LUDLAM: They would have resolved that.

Mr Chittick : There are continuing areas of concern there.

Senator LUDLAM: Are the Rohingya people entitled to vote as of right?

Mr Chittick : That is one of the issues that will need to be worked out over the course of this year. The holders of the so-called white cards were envisaged to be able to vote. There have been changes to some of that system. The implications of those changes are not fully evident at this point, so we are monitoring those issues carefully, both in terms of the security situation in Rahkine state but also the election laws and policies that apply to the enfranchisement of the Rohingya people.

Senator LUDLAM: Just finally on this topic, have we been invited or have we proposed to send anybody into the country as election observers or to assist in conducting the election itself?

Mr Chittick : I am not aware of that. I can take that on notice.

Senator LUDLAM: Yes, if you can, with either side as to whether we have made that proposition to Burmese authorities or whether it has come back the other way and, if so, the scope of what that might look like. I know there is a reasonably solid tradition here of MPs or other people travelling into parts of the world like that. I will leave it at that. If there is any more definition that you are happy to provide us with on notice on the kind of assistance that we are offering, that would be useful.

Mr Chittick : I would be very happy to provide some detailed information in terms of the support for the electoral sector and which of our other partners and Burma's other partners are supporting them in that area.

Senator LUDLAM: Thank you for your assistance. If we could call forward Dr Floyd from ASNO.

Mr Varghese : Just while Dr Floyd comes forward, can I go back to the question that Senator Singh asked about when the mission in Jakarta reported on the Prime Minister's visit. We did in fact provide this information in a question on notice following estimates last October. The answer is that a cable was sent on the Prime Minister's program as completed on 21 October.

CHAIR: Thank you.

Senator LUDLAM: Dr Floyd, thank you for joining us. I am glad we managed to get to you this time. I have a couple of questions on Russia and the Ukraine and then I might take you to India, which I understand is a fairly serious preoccupation at the moment. Firstly—and maybe in order of simple to more complex—on the Prime Minister's announcement of 12 December that we were in talks with the government of the Ukraine about the possibility of initiating uranium exports there, can you provide us with an update of what that looks like from the non-proliferation and security side of the world?

Dr Floyd : Thank you for your question about the state of play with the Ukraine and possible nuclear cooperation. As you noted, when President Poroshenko visited Australia and met with Prime Minister Abbott there was a discussion there about the possibility of selling Australian uranium to the Ukraine. The context of that clearly is wishing to diversify the source of uranium to the Ukraine at this time where a large amount of their uranium and fuel for their nuclear reactors, of which they have 15, comes from the Russian Federation. There was an interest from President Poroshenko in this possibility. The step from there is that we need to go into the formal processes of establishing a mandate to negotiate a treaty, the nuclear cooperation agreement that we would have with the Ukraine. Those are processes that we are moving into at this point in time, so in terms of an update we are at those very early stages.

Senator LUDLAM: So, the Ukraine is a signatory to the NPT subsequent to the breakup of the USSR? Those republics signed up?

CHAIR: There is a nodding of the head.

Senator LUDLAM: There was a nod of the head.

Dr Floyd : Yes, that is correct. They are a party to the Nuclear Non-Proliferation Treaty, and following the dissolution of the USSR the nuclear weapons that were on Ukrainian soil have since been removed in their entirety.

Senator LUDLAM: That is a very interesting case study of a nuclear weapons state voluntarily surrendering those weapons. It would be good if there was a bit more of that. When you say we are at the very early stages, has a formal treaty been initiated or is it underway or where are we in the procedural pipeline?

Dr Floyd : The procedure starts with officials seeking a mandate to negotiate a treaty, and that is a cabinet process. That is the stage that we are preparing for—that cabinet process. That is right at the very start before we engage with Ukraine directly on this matter.

Senator LUDLAM: One of the consequences of the violence in the Ukraine was the Australian government, I think through Foreign Minister Bishop, making the quite welcome announcement that uranium exports to Russia would be suspended for a period of time. How was that undertaken? How was that communicated to the Russian government?

Dr Floyd : I am not sure how it was communicated to the Russian government. Maybe somebody else can answer that question. I can tell you how it was implemented.

Senator LUDLAM: Let us go to that.

Dr Floyd : That is probably the important issue. As you are aware, we have a set of nuclear cooperation agreements with a range of countries. It is over 40 countries that we have cooperation with and, therefore, Australian uranium can go to those countries. We provide that list to all countries that we cooperate with so that they know that it is possible to retransfer uranium to those particular countries. One of the mechanisms that we have used to implement the sanction on the export of uranium to Russia has been to modify that list. So, we were able to give effect to that sanction very quickly after the decision by changing our notice to partner countries and removing Russia from that so that then stops retransfer. In terms of direct sale from Australia to Russia, there are other approval processes that we can use to give effect to that.

Senator LUDLAM: Did we have any direct sales afoot at the time that that decision was made?

Dr Floyd : Not at that time, no. That is correct.

Senator LUDLAM: My understanding—and it might have been your office that provided this information—was that there has only been a relatively trivial amount of this material traded with Russia since the agreement was signed? Is that correct? In the hundreds of tonnes rather than the thousands?

Dr Floyd : Your recollection is quite accurate that there was one trial shipment. We prefer to refer to it as a trial shipment than a trivial amount.

Senator LUDLAM: I cannot believe that word came out of my mouth. Thank you for correcting me.

Dr Floyd : The trial shipment was the intention of the Russian administration to look at how they fulfil the commitments required in the nuclear cooperation treaty. It was a very useful exercise and the Russian regulators did a very fine job in administering their part of the deal.

Senator LUDLAM: Was that a quality assurance exercise?

Dr Floyd : It was more to test that they fully understood what was required of them, as to what the reporting to my office was and when it would be required. They even took the next step of transferring it on to another country, which happened to be the UK, and to go through those procedures as well. The Russians took a very diligent approach to the trial.

Senator LUDLAM: So, the system has been tested, but needless to say that even if that suspension of trade had not been put into place it is not like this was the panacea for jobs and export revenue that it was set out to be. I am sorry. That is more editorial than a question. Going back to your original comment, a lot of the uranium we do not trade with Russia but it actually is enriched in Russian plants and then onsold to other countries, which is what you were referring to earlier. Has that ceased as well?

Dr Floyd : There have been no provisions of uranium to Russia since the sanction was put on.

Senator LUDLAM: How does that impact on customer countries whose sales of uranium from Australia are enriched in Russian plants? How do we work around that without disrupting sales to other countries that are not impacted by that embargo?

Dr Floyd : As you rightly say, there are two different uses of uranium or destinations that you can have for the purposes of uranium in Russia. One is for domestic use, for Russian use, for their own purposes, and the second is for third-party processing.

Senator LUDLAM: Could you provide us, on notice, with a list of countries whose uranium fuel comes to us through Russian enrichment facilities?

Dr Floyd : I would be happy to take that on notice.

Senator LUDLAM: So, none of that is afoot at the moment? That has all been suspended?

Dr Floyd : The suspension is not affecting retrospective contracts but only prospective contracts.

Senator LUDLAM: So, we are actually still transferring uranium to Russia for enrichment to third parties?

Dr Floyd : To be accurate, no, we are not, but it is possible that that could happen, yes.

Senator LUDLAM: That sounds complicated.

Dr Floyd : It is, but we can manage it.

Senator LUDLAM: I have the utmost confidence. If you can provide on notice a list of exactly who this has impacted and who could, by way of legacy agreements, still receive material through Russian enrichment plants and presumably everybody else would be prevented.

Dr Floyd : I cannot take the last part of that on notice, because we are not provided with all of the contracts that would happen between different countries and Russia. The way it is implemented, those countries that would transfer uranium to Russia are checking against our list as to whether it is permissible for them to do that or not. We are not aware of all contracts that may already be in place, so I cannot give you that list. We do not have that information.

Senator LUDLAM: Is it Australian obligated uranium that we are talking about?

Dr Floyd : Yes, it is.

Senator LUDLAM: Is it ASNO's role to know the nature of those contracts even between third parties?

Dr Floyd : No, not to know the nature of the contracts but to approve transfers, that those transfers are consistent with our network of agreements. There is a slight difference. Therefore, I cannot take that last piece on notice. We do not have that information.

Senator LUDLAM: If you could provide us with some information on the balance of those questions. Just finally, I know you have recently given evidence to JSCOT. Unfortunately I am no longer on that committee. Could you provide us with an update of negotiations with Indian authorities on a uranium deal with India?

Dr Floyd : Yes. It is correct that JSCOT is part-way through its deliberations on the nuclear cooperation agreement with India. There have been two hearings of JSCOT, and we expect there will be a couple more to come probably in April. That is to do with the treaty-level agreement, the Nuclear Cooperation Agreement. Supporting every nuclear cooperation agreement we have administrative arrangements. These are MOU level, so less than treaty level arrangements, that are about how you implement and abide by the commitments that are made in the treaty-level agreement. We have had a couple of negotiation sessions with the Indian officials on the administrative arrangements. Those negotiations are still ongoing at this stage.

Senator LUDLAM: Is JSCOT in a position to have looked at those? I am not going to traverse ground that you have already covered in detail on the record. Is the MOU up for discussion or is that all happening behind the scenes?

Dr Floyd : The JSCOT responsibility is a review process of treaties that Australia enters into. The administrative arrangement is not a treaty-level agreement. It is an MOU-level agreement so in that sense does not fall within the purview of JSCOT and its consideration.

Senator LUDLAM: It has been reported that Indian authorities are refusing to provide Australia with detailed reports accounting for the whereabouts and the categories of material under this agreement. For example, how much separated enriched uranium or how much separate plutonium would result from trade with Australia. I am presuming that is not a negotiable article as far as the Australian government is concerned?

Dr Floyd : The requirements of the safeguards act are quite clear. Part of our negotiating mandate for the administrative arrangements with India is to see that effect can be given to those legislated requirements in the safeguards act.

CHAIR: That is a good spot to stop. I thank you very much, Senator Ludlam. We will resume at 3.45. Senator Sinodinos will be asking questions. We will break for 15 minutes.

Proceedings suspended from 15:30 to 15:47

Senator FAWCETT: Referring to the visit to the US earlier this year, what were the outcomes of the meeting in the US, particularly as to Australia's cooperation on security issues and counterterrorism, but also on our engagement with the US in terms of development as it not only impacts on traditional aid but also as we look at trying to address the underlying issues that have caused some of the instability from a security perspective? Religious intolerance and things like that come to mind.

Mr Varghese : I think the Washington visit by the foreign minister was very timely, particularly in relation to the counter-terrorism agenda, because we are all now even more intensely focused on what is happening in Iraq and Syria, and in particular the reach back to Australia through the large number of Australians who are engaged on the wrong side in this conflict. It was an opportunity for the foreign minister to discuss at the highest levels of the US administration how to approach the challenge from Daesh in Iraq and Syria, but more broadly how to strengthen our counterterrorism efforts. In particular, to what extent is the establishment of the caliphate a game changer in relation to the nature of the terrorist threat. Having spent most of the post 9/11 decade dealing with the likes of al-Qaeda and its ideology and its methodology, are we now facing something very different and what does that mean for our policy settings, both domestic and international. Of course, we are very likeminded with the United States on these issues. We are working very closely with them in Iraq and we have also been very closely engaged with them on their global efforts through the Global Counterterrorism Forum, which Australia is an active participant in, and which our Ambassador for Counterterrorism is closely involved in.

On the development side, there are a number of elements that are important in terms of our dialogue. Firstly, I think we share with USAID and the US administration a focus on economic growth as the key to poverty reduction and ultimately elimination. We share with them the importance of a much closer engagement by the private sector in creating economic growth. We share with them an interest in ensuring that we can find innovative ways to address longstanding aid challenges. We talked about that in relation to the innovation hub.

I think it is fair to say that the Americans have been at this longer than we have. I think the foreign minister found the roundtable on innovation particularly useful. Beyond all of that, in terms of our alliance relationship with the United States it was an opportunity to talk about the deepening of the already very strong alliance relationship but also our respective policy settings in relation to developments in the Asian region. In particular, how we deal with some of the security challenges in the region and how we deal with territorial disputes and for us, very importantly, how we work together to build and strengthen regional institutions which could have some capacity to define and reinforce norms of acceptable strategic behaviour. I think in the broad that was the focus of discussions in Washington. Dr Hammer may want to add.

Dr Hammer : I think the secretary's answer was fairly comprehensive. I would not choose to add to it.

Senator FAWCETT: I am interested to know whether there has been any dialogue or learning from what is happening in North America. I use that to include both the United States and Canada. Clearly, they have recognised the religious element to a lot of the conflict that is occurring in the world, both in the Middle East but even in our region with, say, the Rohingya people and other minorities within Burma and the conflict that is arising there.

The US has invested a fair bit in its Commission for International Religious Freedom to engage in almost an ambassadorial role, but also to inform the Congress and the executive. The Canadians have created a role within their Foreign Affairs Department to look specifically at these issues to try and work with other nations to understand and, where possible, influence religious freedom so those minorities actually enjoy the same plurality that is the basis of our democracy. Have we engaged with them at all around those things and does Australia have any plans to develop that kind of a focus in our region so that we can boost the foundation of a liberal plural democratic approach to governance and hence reduce conflict and lift economic performance?

Mr Varghese : I am not sure if our Ambassador for Counterterrorism is in the room. If he is, he may want to address this question. We have certainly been actively engaged in those issues. Of course, there is a domestic element to this which the Attorney-General leads in terms of our countering violent extremism and the way in which we work with communities here. I think Mr Armitage, our Ambassador for Counterterrorism, may be able to give you more detail.

Mr Armitage : We have certainly engaged in some detail with the US, and to a lesser extent with Canada, in terms of how they are trying to grapple with this particular issue. In terms of the specifics, we are obviously trying to feed that back into the work that the Attorney-General's Department is driving, both in terms of countering violent extremism in the community through community engagement programs but also in terms of the announcement that the government has just made about developing a countering terrorism propaganda program. In terms of feeding that into that broader work of interfaith dialogue, that is something else that continues on. We have a number of activities in relation to that.

Senator FAWCETT: So, just in terms of practical measures, I think, for example, the parliament in Pakistan has very bravely recently announced that they will seek to defend a number of people who are on death row for blasphemy crimes. Given the history in that country of a lot of violence around that issue, I think this has been a very brave decision by them to do that. Is there any engagement regionally to support and encourage moves like that by countries to allow minorities to have a more full and free role in society?

Mr Armitage : We certainly provide political support to those types of efforts in Pakistan and in other countries. In terms of support for various minority groups, it starts to fall outside my particular area of responsibility.

Senator SINGH: Mr Varghese, on 12 October last year Fairfax Media published a story about Australia's bid for the UN Human Rights Council. I would just like to read a few sentences of the story for you:

Foreign Minister Julie Bishop says Australia is a leading contender to win a seat on the United Nations' pre-eminent human rights body despite scathing recent criticism from the UN of the government's asylum seeker policies.

Ms Bishop told Fairfax Media that Australia's bid is 'consistent with our nation's history of promoting and protecting human rights. Our strong and principled stand on numerous human rights issues in our role as a temporary member of the Security Council will form part of our campaign,' she said.

''We abide by our international obligations and we are confident that our experience and our commitment to human rights protection and promotion makes us a strong contender for the UNHRC.'

Can I confirm Australia is still pursuing a seat on the UN Human Rights Council?

Mr Varghese : Yes, we are.

Senator SINGH: It continues:

Earlier this month, in response to the Abbott government's [disgraceful attack on the President of the Australia Human Rights Commission] Professor Triggs, a UN working group [on arbitrary detention] urged Australia to 'respect the rule of law and the international system for the protection of human rights by according the Australian Human Rights Commission and its President the respect that its role as the national human rights institution and her personal authority and high reputation require.'

Earlier this week now, the International Coordinating Committee of National Institutions for the Promotion and Protection of Human Rights, which is the UN recognised umbrella body of national human rights institutions, also raised concerns about the Australian government's behaviour in a letter sent to Prime Minister Abbott on 23 February. That was this Monday. It stated:

These public attacks seek to call into question the independence of the office which Professor Triggs holds and cause harm to her professional integrity. It furthermore undermines and intimidates the statutorily granted independence that is provided to the country's principal human rights body.

It states:

These actions also take place against the background in which just last year, Australia was the lead sponsor of Human Rights Council resolution 25/27 on NHRIs. This resolution '(e)ncourages NHRIs to continue to play an active role in preventing and combating all violations and abuses of human rights,' and 'recognises that NHRIs and their respective members and staff should not face any form of reprisal or intimidation, including political pressure, physical intimidation, harassment or unjustifiable budgetary limitations, as a result of activities undertaken in accordance with their respective mandates, including when taking up individual cases or when reporting on serious or systematic violations in their countries.

CHAIR: Have you got a question, Senator?

Senator SINGH: I am getting to the question. I just want to fully brief the secretary before I put the question to him. Finally, it just says:

In a healthy democracy an NHRI report should be received within the spirit that the contents and recommendations contained therein is to further the adherence to international human rights norms and standards and ensure the promotion and protection of human rights.

Finally and with the greatest respect, we request that you take note of our deep concerns and that you address the matter. In the interim, my office will be sharing our concerns with the Office of the High Commissioner for Human Rights and with our ICC members.

In light of that letter being sent to Prime Minister Abbott just this week, how do these statements impact on Australia's international reputation?

Mr Varghese : Our bid for a seat on the Human Rights Committee will be determined in 2017 at an election in the UN General Assembly and we take all of these sorts of campaigns seriously. We do not assume anything and we will be doing our best to ensure that we are elected for the first time to sit on this body. We will build our campaign around what I believe is a very respectable and indeed robust reputation for support for human rights internationally that goes back a very long time and which has had bipartisan support in Australia for very many decades.

We are a country that has always been a strong advocate of the rule of law. We are a country that has been a very strong advocate for strengthening international law and international rules and for giving effect to international norms through treaties and other legal frameworks. I think, on any measure in an international context, our human rights credentials are very strong and we think that they are certainly strong enough to merit election to the Human Rights Committee in 2017.

You read out some views and I am sure there will be a number of views expressed over time about this issue, but I do not think that will detract from the overall contribution we have already made and which we want to continue to make particularly through a seat on a human rights committee.

Senator SINGH: Are you aware of that letter from which I read parts out?

Mr Varghese : Yes, I am.

Senator SINGH: You are aware that that letter was sent to the Office of the High Commissioner for Human Rights. You did not really answer my question, Mr Varghese. I asked how you see these statements impacting on Australia's international reputation.

Mr Varghese : I think our international reputation on human rights still stands strong, as it ought to.

Senator SINGH: I mean particularly relating to this letter. You are aware of the letter.

Mr Varghese : I do not think that letter, in and of itself, has a substantive impact on Australia's long-built international reputation in support of human rights.

Senator SINGH: It is not the letter; it is the substance that the letter relates to. Specifically, would you agree that the Abbott government's disgraceful attack on the President of the Australian Human Rights Commission—

CHAIR: Senator Singh, you must just ask the question. You cannot expect the official to answer the question in a way that you might hope the official would.

Senator SINGH: I will take the word 'disgraceful' out, even though it was.

CHAIR: You might have that view but the secretary has responded to your question. Can I respectfully suggest that you continue on with a new tack.

Senator SINGH: I will conclude with this question. Mr Varghese, would you agree that the Abbott government's attack on the president of the Australian Human Rights Commission will have a negative impact on Australia's bid for a seat on the UN Human Rights Council?

CHAIR: With respect, that is an opinion. The secretary can answer it how he likes, but it is an opinion.

Mr Varghese : I am not going to offer an opinion one way or another on the debate that has occurred over the Human Rights Commission. I will say that we go into this campaign for a seat on the Human Rights Committee with very strong credentials, with every intention of winning and I do not believe anything that has happened in the last couple of days is going to diminish our prospects in any substantial manner.

Senator SINGH: Can you at least provide the committee with how DFAT will respond to issues that have arisen out of this week and the last couple of months in relation to this government's response to the president of the Australian Human Rights Commission's report into children in detention and how it will affect our bid on the UN Human Rights Council?

Mr Varghese : To the extent that we are requested to provide an input to any reply that the Prime Minister may choose to send to that letter we will do so and we will use that as an opportunity to make clear what Australia's position on human rights is. If I may also say, to make it clear, that nothing that has occurred in the debate of the last few days in any way changes the longstanding support that Australian governments, of both persuasions, have given to the importance of national human rights machinery.

Senator GALLACHER: Could you provide some background to the Elizabeth O'Neill Journalism Scholarship? What is that? Does anyone have any information on that?

Mr Varghese : It is a scholarship, as I recall, that was set up to commemorate Liz O'Neill, who was a colleague in the department who tragically died in Indonesia. She was a very effective public affairs officer, someone who came to the department with a background in journalism and for the most part spent her time in the department as a public affairs specialist. We have set up this particular scholarship to commemorate her contribution and her very untimely passing. Does your question go to the details of selection?

Senator GALLACHER: Yes. We would like to know the background on previous candidates and the selection criteria. I gather this is a very important scholarship for your organisation, given that it commemorates one of your former employee's service.

Mr Varghese : I do not have all the details with me. It is actually a scholarship which is administered by the Australia-Indonesia Institute. The Australia-Indonesia Institute has an independent advisory board which makes the selections. I do not know what the field was for the most recent round. I am happy to take on notice any questions that relate specifically to the department's role.

Senator GALLACHER: Presumably the Australia-Indonesia Institute advertises, or is it just a regular thing that is there for applicants to know about and source?

Mr Varghese : I am sorry, you are asking for details that I do not have. Mr Cox may be able to help you.

Mr Cox : The award invites nominations from Indonesian journalists to come to Australia and for Australian journalists to go to Indonesia. One journalist per country is chosen per year. A program is arranged for them to come to Indonesia and Australia. They, themselves, nominate the sort of program and focus they would like to have. We can provide a list for you on notice of the winners over the last years.

Senator GALLACHER: Excuse my ignorance, but how long has it been going?

Mr Cox : I believe it has been going since 2008.

Senator GALLACHER: Is it a successful program?

Mr Cox : Yes, it is a very successful program.

Senator GALLACHER: Do you know who the last successful Australian journalist was?

Mr Cox : I would have to take that on notice. From the Australian side there have been journalists from ABC, Fairfax and News Limited, so a wide range of Australian news organisations have had nominees that have gone up to Indonesia and there have been a number of Indonesian journalists from a range of agencies, from newspapers like Kompas, Jakarta Post and others, to television stations in Indonesia that have come to Australia.

Senator GALLACHER: How much would a program like this cost?

Mr Cox : It is a very low-cost program. It would not be more than $10,000 and probably substantially less to fund. It is usually about a week to 10-day visit program in each direction.

Senator GALLACHER: But it is something that has been operating successfully and there is a sufficient interest from candidates?

Mr Cox : Yes. Usually there is a good range of candidates who apply. A committee deliberates in Jakarta through our embassy on the Indonesian candidates and it is deliberated upon by the Australia-Indonesia Institute here in Australia.

Senator GALLACHER: If we were to go to this year's candidacy, is it true that the due date for applications was extended until 24 November due to the limited number initially received?

Mr Cox : I would have to take that on notice. I am not sure about that. Sometimes there does have to be an extension to make sure that everyone gets an opportunity to nominate for it. Sometimes the news does not get out. That is possible but I will take that on notice.

Senator GALLACHER: Do we know who the successful candidate is this year?

Mr Cox : In which direction?

Senator GALLACHER: The Australian journalist?

Mr Cox : No. I will take that on notice.

Senator GALLACHER: When is the scholarship due to commence?

Mr Cox : It is basically in the year it is given. It can take place at any time that is convenient to the journalist concerned. Once the winner is selected the institute works with the journalist to determine the time of when it is convenient to the journalist.

Senator GALLACHER: I appreciate that you are probably operating second hand here, but are you saying that no decision has been made about the journalist?

Mr Cox : I think that you are right that there has been a selection. I just do not know the name of that person off the top of my head but I will check that for you.

Senator GALLACHER: Would it be unusual or normal for the foreign minister to have some input into this process?

Mr Cox : No. Usually it would be a matter purely for the Australia-Indonesia Institute. I have just received some advice. The 2015 winner is Latika Bourke of Fairfax. The 2014 winner was Bernard Lane from The Australian, so that is Fairfax and News Limited. In 2013 the winner was Amy Bainbridge of the ABC. It is a decision that is made by the committee of the Australia-Indonesia Institute and I think on this occasion they chose Latika Bourke.

Senator GALLACHER: But you are going to check whether there were enough applications in before the deadline this year for the board to make the decision—or whether it was extended?

Mr Cox : As I said, I think matters of deadlines and so forth are just administrative matters depending on who has applied. There is usually no mystery about that.

Senator GALLACHER: So if someone were to allege there was a captain's pick here by the foreign minister for Latika Bourke, that the foreign minister travelled with Ms Bourke to New York and other places—

Mr Cox : It would not be true.

Senator GALLACHER: That is totally brought out?

Mr Cox : That would not be true.

Senator GALLACHER: If it were also stated by someone that the embassy staff were under pressure to try to arrange an itinerary due to the failure of the journalist to actually forward her areas of interest, that would be out of the ballpark too?

Mr Cox : Usually the embassy would work with the journalist concerned to arrange a program. Journalists are very busy people and sometimes it might not be possible for them to get back to the institute. I do not know the individual circumstances of these administrative arrangements. That is really a matter between the journalist and our public affairs unit in Jakarta.

Senator GALLACHER: But it has not raised its head?

Mr Cox : No. It is not an issue.

Senator WHISH-WILSON: While Mr Cox is at the table it might be pertinent to ask him a question. I wanted to know if DFAT were involved at all in the seizing of a boat called Thunder, an illegal fishing boat in a Malaysian port.

Mr Cox : A boat that was—

Senator WHISH-WILSON: The seizure of a fishing boat called Thunder. My understanding is that the Australian authorities were involved in impounding that boat. They were fined and the boat was released.

Mr Cox : I am not aware of that. I do not know that that is a matter for the Department of Foreign Affairs and Trade.

Senator WHISH-WILSON: I was just checking if you had any knowledge of that.

Mr Cox : I have no information on that.

Senator WHISH-WILSON: I would like to ask the Attorney-General a couple of simple questions on whaling. Are you taking any action in the IWC or in Japan's proposal to return to the Southern Ocean this summer?

Senator Brandis: This is a bipartisan position, as you know. Australia has been very active in this area. I do not believe there are any current proceedings and I do not have a brief on the matter here, but I will take that on notice.

Senator WHISH-WILSON: Could you take on notice where you sought any legal advice?

Senator Brandis: When you say 'sought any legal advice', there is, within the Attorney-General's Department a unit called the Office of International Law which frequently advises, as you would expect, on international legal matters. This issue of whaling has been on the agenda of governments of both political persuasions for some years so there is regular advice, certainly, from OIL. I have also seen advice from the Solicitor-General some time ago. Whether any other external legal advice has lately been taken, I will come back to you.

Senator WHISH-WILSON: I would appreciate that, and specifically whether you are preparing to lodge a case in the International Court of Justice.

I am not sure who the appropriate person would be but I just had a question about public vessel status and also more broadly to do with whaling. This obviously changed yesterday because I understand you notified Sea Shepherd that their public vessel status had not been approved. I was just wondering on what grounds DFAT rejected the Sea Shepherd's application for the Sam Simon.

Ms Cooper : We have been in touch with Sam Simon and we have responded to their request for public vessel status. That request has been denied. The criteria for public vessel status for foreign vessels is they must be owned, chartered, temporarily employed, contracted or commissioned by a foreign state and not engaged in commercial activity.

Senator WHISH-WILSON: It is my understanding that the vessel Sam Simon fits those criteria. It is flagged overseas and it does not engage in commercial activity. I was specifically interested in the grounds relating to marine scientific research and whether that was an issue.

Ms Cooper : I think there is a bit of confusion about owned and flagged. Ships are flagged by countries generally. That does not mean they are owned or operated by a state.

Senator WHISH-WILSON: A state?

Ms Cooper : Yes. It has to be a nation state, a foreign state.

Senator WHISH-WILSON: Thank you. That is all I required.

Senator WONG: I have some questions about the UNFCCC conference.

Mr Varghese : Is that the Lima meeting?

Senator WONG: Yes. Can you tell me the size of the delegation?

Mr Varghese : I will see if Mr Woolcott can answer that.

Mr Woolcott : I am sorry, I missed the first part. Was it Lima?

Senator WONG: Lima. It was about the size of the delegation.

Mr Woolcott : There were 14 members of the official delegation which was led by me.

Senator WONG: They are officers?

Mr Woolcott : Officers.

Senator WONG: For the ministerial and staff for the high level segment, can you tell me who was on the delegation?

Mr Woolcott : Minister Bishop, Minister for Foreign Affairs, was there and she was accompanied by one staff member. The Minister for Trade and Investment, Mr Robb, was there and he was accompanied by one staff member. There was also the embassy in Peru, which provided logistical support. There were also a couple of people who came from our embassies in the region, which I think were Argentina and Mexico, who provided note taking and other logistical support for the various bilaterals.

Senator WONG: Was 14 the peak, or the total?

Mr Woolcott : That was the total.

Senator WONG: I presume for the high-level segment you had 14 officials plus ministers plus embassy staff?

Mr Woolcott : Yes.

Senator WONG: When did you start preparing? I know there are ongoing negotiations at officer level, but when did you start making the arrangements for the delegation for the high-level segment?

Mr Woolcott : I will ask Mr Lee to answer that. He was handling this side of things largely at the Canberra end and I was involved overseas on other business.

Mr Lee : I think we would need to take on notice the exact date for when we started making preparations for the delegation.

Senator WONG: Can you give me an approximate indication?

Mr Lee : In what aspect of the preparation, because there was a lot of preparation?

Senator WONG: Who would be going, logistical arrangements for the minister's travel, logistical arrangements, presumably a lot of accommodation would be booked ahead of time. When did you, for example, make arrangements for the minister's accommodation?

Mr Lee : I would have to take that on notice.

Senator WONG: Somebody is moving, so we will see what he can tell me.

Mr Lee : I just wanted to indicate that there is a range of preparations that are made. Some bookings are made in advance before decisions are made in terms of what the final delegation may be.

Senator WONG: Contingencies.

Mr Lee : Contingencies are made in advance.

Senator WONG: I know DFAT is a very good department and I am sure you would not allow a situation where your minister did not have somewhere to stay, so when did you first start preparing, for example, the logistics around the foreign minister's attendance.

Mr Varghese : I could help you on this one.

Senator WONG: Will someone let this fellow answer?

Senator Birmingham: It is the secretary speaking.

Senator WONG: I know.

Mr Varghese : I am actually trying to be helpful here, which may come as a surprise.

Senator WONG: No, it is never a surprise.

Mr Varghese : On 20 May the foreign minister wrote to the Prime Minister canvassing her travel for the period July 2014 to June 2015, including foreshadowing participation in Lima, so you can assume some preparation before that letter was dispatched.

Senator WONG: Those letters are obviously prepared on departmental advice. Is it one of those letters that says, 'This is my travel for the next period of time'?

Mr Varghese : That is right.

Senator WONG: 'I might come back to you on these other issues but this is what I would like approval for'?

Mr Varghese : Yes.

Senator WONG: That was in May?

Mr Varghese : 20 May.

Senator WONG: Presumably at that time you had already put in arrangements for holding a hotel room or something similar; would that be right?

Mr Roach : That is correct. We would have started to think through logistics from that point on.

Senator WONG: Can I have a copy of that letter of 20 May?

Mr Roach : No, you cannot.

Senator WONG: If you are making a claim you have to do a bit better than that.

Mr Roach : That letter is between ministerial offices.

Senator WONG: Firstly, you do not make a claim of public interest immunity; the minister does. If you are wanting to, you should refer it to him.

Mr Varghese : Can we take that request on notice?

Senator WONG: Thank you. Does the official need me to ask the chair to read out the Senate order again? Would you like to listen to it?

Senator Birmingham: Senator Wong, the secretary has taken the question on notice.

Senator WONG: There is no question. 'The Senate has resolved ...' Would you like us to read it to you?

Senator Birmingham: The secretary has taken the question on notice.

Senator WONG: When was the reply received?

Mr Varghese : Let me double check. On 18 June there was a response from the Prime Minister's office in relation to these various travel proposals and in that response it indicated that the travel to Lima was not supported.

Senator WONG: When you said the Prime Minister's office, I assume that means it was not signed off by the Prime Minister but by a staff member.

Mr Varghese : No. It was chief of staff to chief of staff.

Senator WONG: So, Lima was not supported. Was there a reason given?

Mr Varghese : I would have to check. I do not think there was, but I will check before I confirm that.

Senator WONG: I assume that you will take on notice so I ask for a copy of that letter, too.

Mr Varghese : I will certainly take it on notice. As you would appreciate, a letter from the minister to the Prime Minister, I would at the very least need to check with the principals.

Senator WONG: I appreciate that. When was the next letter?

Mr Varghese : On 9 September the foreign minister wrote again to the Prime Minister renewing the request to go to Lima.

Senator WONG: On what basis? I assume this is the most significant international environmental conference.

Mr Varghese : The foreign minister's view was that this was an important meeting. She has responsibility for international climate change negotiations and she thought it was appropriate for Australia to be represented at a ministerial level.

Senator WONG: I agree with her. When was the response provided to the 9 September letter?

Mr Varghese : We have a response on 28 November, office to office, approving the travel.

Senator WONG: I also request a copy of that letter. I can ask in Trade estimates if you would like, but for ease, given I assume you will be—

Mr Varghese : We are an integrated department.

Senator WONG: Quick as a flash. Was a similar letter requesting the Minister for Trade's attendance at the UNFCCC conference written and, if so, what was the date of that letter?

Mr Varghese : Let me just make sure I have this right. I think the request for Mr Robb to travel to the meeting we became aware of on 28 November.

Senator WONG: At whose request? You are the department, so presumably that means a Prime Minister's office request and not your request.

Mr Varghese : We became aware on 28 November that the Prime Minister had asked Mr Robb to attend the meeting.

Senator WONG: So that was not something DFAT proposed or initiated?

Mr Varghese : No, it was not a DFAT initiated process.

Senator WONG: How did you become aware?

Mr Varghese : A telephone call from the trade and investment minister's office.

Senator WONG: To whom?

Mr Varghese : I do not know who in the department.

Mr Roach : That would have come to my branch.

Senator WONG: So the minister's office rang the department to advise them of this fact?

Mr Roach : We were being asked to assist with the—

Senator WONG: No. I will come to that. I want to be clear about the information. I will ask you about the content. I will give you the opportunity to respond to that but I am just trying to be clear. The way in which the department was advised that Minister Robb had been asked by the Prime Minister or his office to attend was through a phone call from the trade and investment minister's office to the department; is that correct?

Mr Roach : That is correct.

Senator WONG: So it was not from the foreign minister's office?

Mr Roach : That is correct.

Senator WONG: Who took that call?

Mr Roach : It would have been one of the officers in my branch.

Senator WONG: I always get nervous when the word 'would' is used, because that tense sounds hypothetical.

Mr Roach : I am sorry, but we have a group pick-up system within the branch. Any call from a ministerial office is always answered, so it would have been a small group of three who would have received that.

Senator WONG: Are the three here?

Mr Roach : No, they are not.

Senator Birmingham: Just for clarity, because you asked the question before whether Mr Robb advised direct and you said not through the foreign minister's office, I was just clarifying with the officials that, of course, Mr Robb, as the Minister for Trade, would normally liaise directly with the Department of Foreign Affairs and Trade as his department on his overseas travel.

Senator WONG: That is true but, with respect, not in relation to a conference that I do not think the Minister for Trade has ever attended and that it is not really within the remit of the trade portfolio.

Senator Birmingham: It is normal practice for Mr Robb to liaise with his department about his travel.

Senator WONG: You can work hard on that. So, the telephone call was from the trade and investment minister's office to your branch?

Mr Roach : That is correct.

Senator WONG: Was that on the same day, on the 28th?

Mr Roach : On the 28th.

Senator WONG: What was the understanding of the department as a result of that telephone call?

Mr Roach : The understanding was that Mr Robb would be attending the UNFCCC in Lima and travel logistics, hotels and what have you, would naturally need to be put into place.

Senator WONG: When the ministers' offices call that branch or that section how are the instructions or the content of the telephone call recorded? Is that logged?

Mr Roach : We do not maintain a telephone log.

Senator WONG: Is there a note?

Mr Roach : It triggers a series of steps. Generally the first one would be, for example it could be an emailed message sent to the geographic division to advise—

Senator WONG: What documents were generated as a result of that phone call?

Mr Roach : I would need to take that on notice.

Senator WONG: I will request those as well.

Mr Roach : We will look into that. One of the things that it would have triggered would have been a cable to the relevant post to advise that we had a portfolio minister proposing to visit.

Senator WONG: Mr Varghese, when did you become aware that the trade minister was attending?

Mr Varghese : I cannot remember when I became aware. It was very late in the piece.

Senator WONG: Presumably after the 28th?

Mr Varghese : Yes.

Senator WONG: Did you attend or was it Mr Woolcott?

Mr Varghese : Both Mr Woolcott and Mr Lee attended.

Senator WONG: So, some point between the 28th and the departure date; is that right?

Mr Varghese : Correct.

Senator WONG: When was the departure date?

Mr Lee : For the high-level segment I believe they arrived on the second Monday of the conference. I cannot be specific about that. I think it was around about 6 December, but I would need to take that on notice.

Mr Roach : Mr Robb arrived in Lima on 8 December.

Senator WONG: And Ms Bishop?

Mr Roach : Ms Bishop arrived on the eighth as well.

Senator WONG: Were you advised as to why Mr Robb was attending?

Mr Varghese : I do not think we received any advice as to why Mr Robb was attending. The foreign minister has subsequently indicated in a number of public comments that Mr Robb's attendance reflected, firstly, the seriousness with which the government took the meeting and, secondly, a recognition of the very important economic issues that were engaged in the UNFCCC negotiations.

Senator WONG: I was not aware that it was the Abbott government's position that climate change was an economic issue.

Mr Varghese : I do not think the government has ever denied that there are economic aspects to climate change and, indeed, the whole question of our trade competitiveness and our climate change strategy has been quite centrally linked.

Senator WONG: This I know. Mr Roach, did your branch organise accommodation for Mr Robb?

Mr Roach : The post would have done that.

Senator WONG: Where was I?

Mr Roach : You asked who would have organised the hotel.

Senator WONG: And you said the post?

Mr Roach : I said the post.

Senator WONG: Are you aware of where he stayed? I am interested because for those sorts of conferences there is obviously a lot of pressure on hotel accommodation, particularly with the appropriate facilities for ministerial level. You are waving at me so I should just let you answer.

Mr Woolcott : I was just going to be helpful. I know where they stayed. They stayed at the Miraflores Hotel in Lima.

Senator WONG: Were there any challenges in obtaining Mr Robb a room?

Mr Woolcott : I cannot answer that. I was not involved in the reservation of rooms.

Senator WONG: Do you have the costs associated with Mr Robb's visit?

Mr Roach : No, we do not.

Senator WONG: How can that be the case? It is February.

Mr Roach : That is the case because all ministerial travel is paid for by the Department of Finance and Deregulation.

Senator WONG: Yes, I know, but you remit it.

Mr Roach : The bills go directly back to the Department of Finance.

Senator WONG: That is not right. The department bears the minister's travel costs.

Mr Roach : No. The Department of Finance does.

Mr Varghese : That has always been my understanding, but I do not actually—

Mr Roach : The Department of Finance publishes—

Senator WONG: That is a different point. It is a different point who publishes them in the six monthly report. If you did not pay it you still must have remitted the cost, so who did that?

Mr Roach : That is done directly by the post to the Department of Finance.

Senator WONG: You do not keep a record?

Mr Roach : No, I do not keep a duplicate set of records.

Senator WONG: Not you. Are you telling me that DFAT, at any point in time, does not know how much it would cost to put their minister into a hotel?

Mr Roach : There are very strict rules administered by the Department of Finance about the costs and the bills. I do not maintain a duplicate set of costs around the expenses.

Senator WONG: I am going to ask you a very direct question. Are you telling me that neither you nor anyone in the department has any knowledge of the cost of Mr Robb's visit?

Mr Varghese : I think the post would certainly have known what the cost of Mr Robb's accommodation was. The point that Mr Roach was making was that the acquittal of expenses is done directly from post to Finance, so it is not something that—

Senator WONG: You do not track that at all?

Mr Roach : That is tracked very carefully by a unit within the Department of Finance. I do not.

Senator WONG: Do you hear the subject? I said you.

Senator Birmingham: And when you interrupted Mr Roach he was saying, 'I do not.' He was addressing your question before you interrupted him, Senator Wong. Would you let him finish it, please?

Senator WONG: I am sorry, I thought he had finished.

Mr Roach : It is tracked by the Department of Finance. If they have a query about an acquittal they go back to the post. There are exchanges going backwards and forwards. That is their responsibility; I leave it to them.

Senator WONG: The hotel invoice is DFAT. Does that go to the post or centrally?

Mr Roach : The way that the bills would have been done, for instance, if there were delegation members there of officials—

Senator WONG: I am asking about the minister.

Mr Roach : In terms of the ministers' individual bills for their hotel rooms?

Senator WONG: Correct.

Mr Roach : That would be remitted back to the Department of Finance. In terms of what transaction happened on the ground, I would take that on notice.

Senator WONG: You do not know? The hotel is Miraflores?

Mr Varghese : Miraflores, yes.

Senator WONG: They are not going to send an invoice to the John Gorton Building, so presumably they invoice DFAT. I am asking: is the invoice to the post or is there a central process in DFAT?

Mr Roach : It can be settled by a credit card held by the head of mission. It can be paid for by the post. It could be paid for by the minister using an official credit card. There is a range of different ways in which that bill could be settled.

Senator WONG: Can you tell me on this occasion how it was paid? Was it paid by credit card of the minister or was it paid by the credit card of the head of mission? Are you the head of mission, Mr Woolcott?

Senator Birmingham: Mr Woolcott is the ambassador.

Mr Woolcott : I am the Ambassador for the Environment.

Senator WONG: You mean the head of the mission?

Mr Roach : Yes.

Mr Varghese : It is our resident ambassador.

Senator WONG: Do you know?

Mr Roach : No, I do not. I will have to take that on notice.

Senator WONG: Did you have to go through, in accordance with the guidelines, even though it was truncated, the usual process of writing to the Prime Minister's office to get permission to attend and an estimated cost for Mr Robb?

Mr Roach : That is correct.

Senator WONG: So you prepared the letter that sought approval of the minister's travel and submitted it to the Prime Minister's office?

Mr Roach : With the approximate costs.

Senator WONG: Tell me what that was.

Mr Roach : I would have to take that on notice.

Senator WONG: You do not have that?

Mr Roach : No, I do not.

Senator WONG: Do you have anything?

Mr Roach : There are a lot of overseas trips that are undertaken. I do not have that information with me.

Senator WONG: I will make a request in future. Can we please bring someone to these estimates who has knowledge of the cost of ministerial travel, at least of the estimated costs which you are in charge of. I am going to be here until 11 o'clock tonight. Is there any possibility we could get at least the estimated cost prepared by DFAT before 11 o'clock tonight, given that you are an integrated department?

Senator Birmingham: We will look at that.

Senator WONG: I would like the estimated cost of travel including the cost of accommodation, which I assume was in the letter. Is that right?

Senator Birmingham: Mr Roach has said he does not have a copy of the letter here.

Senator WONG: As a matter of course, Mr Roach, when you write these letters seeking approval you have an estimated cost of travel of both accommodation and travel. Correct?

Mr Roach : That is correct.

Senator WONG: That is what I am asking for. On notice can I have a list of the persons on the delegation?

Mr Woolcott : Absolutely.

Senator WONG: Including their APS level. I will move now to January and travel to the United States. I understand the foreign minister travelled to the United States in January of this year?

Mr Varghese : That is correct.

Senator WONG: Can you give me the dates of that travel?

Mr Roach : The foreign minister's trip to the United States was from 19 to 24 January.

Senator WONG: Who was responsible for putting that together? Mr Varghese, did you travel with the foreign minister?

Mr Varghese : No, I did not. I think Dr Hammer was the senior official accompanying.

Senator WONG: Dr Hammer, how are you?

Dr Hammer : I am well.

Senator WONG: So you travelled with her?

Dr Hammer : I did.

Senator WONG: Can you give me which cities the minister travelled to over that period?

Dr Hammer : Certainly. She travelled to Washington from 19 to 22 January and to New York on 22 to 24 January.

Senator WONG: Was there a Brookings Institution visit as part of that?

Dr Hammer : Yes, there was.

Senator WONG: Was that on the 21st?

Dr Hammer : That probably was.

Senator WONG: If you want to check that, then that is fine. When was the State of the Union address?

Dr Hammer : I think that was on the evening of 20 January.

Senator WONG: I assume it included a visit to the UN?

Dr Hammer : I do not think that there was a visit to the UN on this occasion.

Senator WONG: Dr Hammer, did Mr Shearer, the Prime Minister's staffer, attend? Were you engaged with the foreign minister while they were both over there?

Dr Hammer : My recollection is that Mr Shearer was at least in Washington. There was no formal engagement between the foreign minister and Mr Shearer.

Senator WONG: So they did not travel together?

Dr Hammer : They did not travel together. I understand Mr Shearer travelled independently to participate in a session in the conference that was taking place at the Brookings Institution which was the venue where the foreign minister gave her address, but that was a different session that Mr Shearer participated in.

Senator WONG: What was the conference?

Dr Hammer : I understand it was meeting on the US-Australian Alliance.

Senator WONG: Did the foreign minister speak at that or participate in a session?

Dr Hammer : Yes, she did.

Senator WONG: Is it right that you do not have the date of that?

Dr Hammer : I think that was 21 January.

Senator WONG: I am sorry, you did have the date.

Dr Hammer : Yes.

Senator WONG: Did this meeting or conference occur over more than one day?

Dr Hammer : I am not sure about the full extent of the conference. I think it was one day. It may have been one and a half days. I was travelling with the foreign minister and the foreign minister was at the conference only for the period of her address. I think she might have had a meeting with some of the organisers just ahead of the address.

Senator WONG: Were you present at meetings with the foreign minister in which Mr Shearer was in attendance?

Dr Hammer : No. There were no formal meetings that the foreign minister undertook where Mr Shearer was present.

Senator WONG: I think you said previously that Mr Shearer participated in a different session.

Dr Hammer : That is correct.

Senator WONG: Can you tell me what you know about that?

Dr Hammer : I believe it was a session where he participated with a senior member of the US Administration. I gather it was a discussion around the US-Australia relationship, but I do not have a clear recollection. I was not present for that. The party was somewhere else when that session was taking place.

Senator GALLACHER: Was that the Brookings institute?

Dr Hammer : The Brookings Institution.

Senator WONG: It is sort of counterintuitive but it is 'institution'. Is that right?

Mr Varghese : It is.

Senator WONG: Did the department provide any briefings to Mr Shearer prior to his travel to the US on this occasion?

Dr Hammer : No, we did not. My understanding is that Mr Shearer travelled to the United States entirely independently and may even have travelled privately. I know Mr Shearer, so I did have a conversation with him in Washington, but his trip was quite independent of the foreign minister's trip.

Senator WONG: So, there was no aspect of his visit which DFAT facilitated?

Dr Hammer : There was not.

Senator WONG: And no cost of his visit that DFAT met?

Dr Hammer : There was no cost.

Senator WONG: I understand Mr Shearer held a press conference.

CHAIR: Mr Shearer?

Senator WONG: That is what I was asking.

CHAIR: He held a press conference.

Senator WONG: Is that correct? Are you aware of that?

Dr Hammer : I am not aware of Mr Shearer having held a press conference.

Senator WONG: Are you aware of Mr Shearer providing any comment to the media?

Dr Hammer : I have no direct information concerning Mr Shearer's interactions with the media, although I dimly recall having seen a newspaper article which mentioned a comment.

Senator WONG: A direct quote from him. I do not have it here. I raised it in Prime Minister and Cabinet estimates. All I want to know is, before Mr Shearer made a comment to the media or engaged with the media, was that advised to DFAT?

Dr Hammer : Not to my knowledge and I think it would be quite unusual if he had given us any advice. His activities, as I pointed out before, are entirely independent to the operations of the department and of the foreign minister.

Senator WONG: But if he is going to make a comment to the press on foreign policy I am interested in knowing whether or not the department, as charged with foreign policy, was aware of that before that occurred?

Dr Hammer : Not to my knowledge. There may be some other part of the department that did have awareness of it, but I certainly did not.

Senator WONG: So, you are not aware of him speaking to the media as part of the Brookings event?

Dr Hammer : No, I am not.

Senator WONG: Just to confirm; no-one from DFAT briefed him prior to going?

Dr Hammer : No.

Senator WONG: I have been reminded that there is a Financial Review article by John Kehoe of Saturday, 24 January 2015. Mr Shearer is directly quoted: 'Andrew Shearer, Mr Abbott's top international adviser, said there was a huge demand for infrastructure'. He is talking about the Asian Infrastructure Investment Bank. 'I don't think there is a massive gulf here between our positions,' and then, 'He profoundly rejected the idea from some at least that the US Alliance disadvantages Australia and Asia.' 'A strong alliance with the United States is a powerful reinforcer of our engagement with Asia.' Prior to Mr Shearer making these comments directly to the media, on any occasion was DFAT advised?

Dr Hammer : Not to my knowledge. I think it is unlikely that we were advised.

Senator Brandis: You used the phrase 'press conference' before. Mr Shearer obviously gave that journalist an interview, but that does not mean that there was a press conference.

Senator WONG: I was advised that there was a possibility that there was a press conference, but if this official has no knowledge of that then I am not pressing it.

Senator SINODINOS: It may be—

Senator Brandis: As Senator Sinodinos rightly says, it may not be the case that he spoke to the journalist. It may be that that is a report of remarks he made at the conference, but I do not know.

Senator WONG: Senator Brandis, if that is the case, rather than hypothesising I would invite you to refer that question to the Prime Minister because I asked that question in Prime Minister and Cabinet estimates—

Senator Brandis: If you would like me to take your question on notice then I will take it on notice.

Senator WONG: Can I finish?

Senator Brandis: Yes. I am just letting you know that we will take it on notice.

Senator WONG: I would request that you refer to the Prime Minister the question of the details around Mr Shearer's public comments which were reported in the press, the circumstances of them and how he was authorised to make them. It may be, as Senator Sinodinos rightly says, that he has made them in the context of the Brookings Institution event. That is one thing. I would make the point that I have also asked whether he was travelling abroad at public expense and, if so, what exemption was granted by the Prime Minister, as is required, because the guidelines do not permit a staff member to travel independently. I look forward to that response as well.

Senator Brandis: Senator Wong, as you know, I am a bit fussy about precision. Let me put the questions that I understand you are asking me to take on notice. First of all, it is whether Mr Shearer was travelling at public expense. Secondly, if he was, whether an appropriate exemption had been given to him.

Senator WONG: And the basis of that.

Senator Brandis: And the basis of any such exemption. Thirdly, the circumstances in which the remarks from which you have quoted, attributed to Mr Shearer by the journalist, John Kehoe, were made and, fourthly, how—by which I assume you mean by whom—they were authorised. Are those the matters that you want me to take on notice?

Senator WONG: Yes. I will add to that there was another article on 23 January 2015 in which Mr Shearer may not be directly reported. Yes, he is. He is directly quoted as saying, 'The main thing that keeps me awake at night is domestic terrorism and the new manifestation'—

Senator Brandis: I have said that myself.

Senator WONG: Yes, but you are elected and you are a cabinet minister.

Senator Brandis: I will take the same questions on notice in relation to that second attribution as well.

Senator WONG: That would be good because I did not get much help from Senator Abetz, so thank you for being so helpful.

Senator Brandis: If you ask the appropriate questions, you will always get an appropriate response from me.

Senator WONG: Perhaps I can clarify the third point. We had two articles. The third point is Mr Shearer is reported in the media as 'speaking alongside PM Tony Abbott's national security adviser in Washington, Mr Medeiros', who is the US administration's representative. Then there is a further discussion, so I would like to know the circumstances of that discussion. Is that reported in the media as a press conference or is it, as Senator Sinodinos said, simply that someone attended the meeting?

Dr Hammer : I do not have—

Senator WONG: You will not. You do not know this. I am asking the Attorney.

Senator Brandis: I will take that on notice.

Senator WONG: He is taking that on notice. If you could add that to the list, thank you.

Senator RHIANNON: I would like to start with Sri Lanka. Have there been any discussions with the former or the current Sri Lankan government on James Packer's Crown Resort interest in establishing a casino in Sri Lanka?

Ms Klugman : I would need to take the detail on notice. The Australian representatives in our High Commission in Colombo characteristically, as they are in embassies around the world, are active in support of Australia's broader interests including our trade, commercial and investment interests, but the interaction on that particular project I will have to take on notice.

Senator RHIANNON: The question in the first instance was: have there been any discussions? I suggest it would come down to a yes or no answer. Mr Varghese, in response to some issues asked by Senator Waters, gave emphasis to the assistance that our overseas embassies and high commissions give, so it is just a straight answer that I need to get this going.

Mr Varghese : I think the point Ms Klugman is trying to make is we do not know whether there have been any actual discussions. We will take that on notice. If there had been it would be completely unsurprising, given the brief that our heads of mission have to promote Australia's economic trade and investment interests.

Senator RHIANNON: So, you cannot say yes or no to whether it happened?

Mr Varghese : We will take that on notice and let you know what the answer is.

Senator RHIANNON: In taking it on notice could you also include: was the Sri Lankan government's decision to grant Mr Packer's company the five per cent tax rate discussed?

Mr Varghese : We will take that on notice.

Senator RHIANNON: Was this issue about the tax rate discussed before it was granted by the previous government?

Mr Varghese : I am happy to take that on notice as well.

Senator RHIANNON: Staying with Sri Lanka, can you confirm that the Sri Lankan Ambassador to Australia, Thisara Samarasinghe, has been recalled?

Ms Klugman : Yes, I can.

Senator RHIANNON: What other Australian based Sri Lankan embassy officials have been recalled?

Ms Klugman : My understanding from the high commissioner is that there are three individuals who have served at the Sri Lankan High Commission here in Canberra and at the Sri Lankan Consulate in Sydney who are being recalled.

Senator RHIANNON: Was it two from Canberra and one from Sydney?

Ms Klugman : That is correct.

Senator RHIANNON: What were their positions?

Ms Klugman : The high commissioner that you have mentioned and the other one in Canberra was the deputy high commissioner who is in the process of disengaging and returning to Colombo. With the Consul-General in Sydney, I am not sure on the chapter, verse and legality of it. He was named as one to be recalled but my understanding is he may well have resigned before he was recalled.

Senator RHIANNON: Are you referring to the Consul-General?

Ms Klugman : That is correct.

Senator RHIANNON: When was this information communicated to the Australian government and what reasons were given for the recall?

Ms Klugman : There was no information communicated directly to the Australian government on the reasons for the recall. The normal protocol was observed in terms of official notification of the withdrawal of the high commissioner but, when it comes to individuals below that head of mission level, it is normally an operational matter for the sending government and we were not officially informed.

Senator RHIANNON: When does the government expect a new appointment to be made?

Ms Klugman : A new high commissioner?

Senator RHIANNON: Yes.

Ms Klugman : An appointment has not been made yet. I expect it in the next little while, but that is entirely a matter for the Sri Lankan government.

Senator RHIANNON: So, you have not had any communication about when or about who?

Ms Klugman : That is correct.

Senator RHIANNON: Who is currently the acting senior person?

Ms Klugman : Thisara Samarasinghe, His Excellency, the high commissioner is still here. My understanding is that he departs the country on Monday, or at least early next week. Following that my understanding is that the current deputy high commissioner will stay on for a short additional time and, following that, the next most senior officer in the high commission in Canberra will act as charge d'affaires until the appointment of a new high commissioner.

Senator RHIANNON: What is the name of that person?

Ms Klugman : His name is Mr Selvaraj.

Senator RHIANNON: Is it an issue that has been considered that such a high proportion of highly ranked Sri Lankan officials working in Australia were recalled? What has been our response to that?

Ms Klugman : What has been our response to the recall?

Senator RHIANNON: Yes.

Ms Klugman : We have no response to the recall. That is a matter for the Sri Lankan government to decide who its representatives in Australia should be.

Senator RHIANNON: Considering it has come up at estimates and it has come up in different aspects of the government's interaction on the issue of Sri Lankan diplomatic representation in Australia with regard to the history of those people within their own country with regards to human rights abuses, are there diplomatic interactions between our respective countries about how to resolve these problems?

Ms Klugman : The interactions between our two countries follow precisely the same route they would follow in any country when it comes to the appointment of high commissioners and ambassadors. It is for the sending government to nominate an individual and provide certain details about that individual and it is then for the receiving government to consider and to grant agreement or otherwise to that nomination.

Senator RHIANNON: In late January The Australian reported that Rajiva Wijesinha, former presidential adviser to Rajapaksa said it was:

Plausible that some senior individuals close to the family-run regime were involved in the people smuggling trade. It followed up with allegations from the new prime minister that said, 'It is being done by people with Rajapaksa connections.' This follows on from former allegations regarding Lieutenant-Commander Sanjeewa Annatugoda that arose in 2013.

We have gone over some of that before. Is the department aware of the allegations put forward by the adviser and Prime Minister about senior individuals close to the regime being involved in people smuggling activities?

Ms Klugman : I am not sure of the individual whom you referred to first in relation to the now Sri Lankan Prime Minister. I have read a media article just in the last few days which has Sri Lankan media speculation that there may have been a level of official involvement in the people smuggling trade. That is a matter of media speculation in Sri Lanka and I have seen nothing else of it.

Senator RHIANNON: When you see such media speculation—and obviously these bilateral relations are important—do you investigate further? Is it something that the high commissioner in Colombo would be requested to supply a brief on? How does this play out?

Ms Klugman : As you know, addressing the problem of people smuggling from Sri Lanka is a key government priority. It has been a priority of successive governments over recent years in Australia. Through our high commission in Colombo and otherwise, because of that priority, we are keenly interested to have as full an understanding as we possibly can of the settings and circumstances surrounding the people smuggling trade in that country. If we heard allegations that individuals, no matter what their background, may have some involvement, that would be of interest to us and we would seek, as far as we possibly could, to come to our own conclusions about the veracity of that information.

Senator RHIANNON: Considering there are AFP people stationed at our high commission in Colombo, is this something that you have requested that they investigate?

Ms Klugman : Specifically what?

Senator RHIANNON: It has been widely reported now about people connected to the previous government being involved in people smuggling operations. We have an extraordinary situation that we have a government that you have gone out of your way to cooperate with and now there are these allegations that people in that government are involved in people smuggling that we have put all this money into stopping. Surely this should be a top priority, even if it is only in the media. It would seem that it would be a priority for you to investigate.

Ms Klugman : Indeed, it is a very prominent priority. We have seen nothing to substantiate the sort of claims that come up periodically in the Sri Lankan media when it comes to claims of official complicity.

Senator RHIANNON: So, is the answer to that question about being referred to the AFP that the AFP person in the high commission in Colombo has not been requested to look into this further and report back?

Ms Klugman : I cannot answer for the Australian Federal Police.

Senator RHIANNON: It is also linked to DFAT. We know that the AFP obviously do not operate on their own. I am always told, when I ask these questions, about the role of DFAT and how integrated it is, so I am asking DFAT if there has been any interaction with the AFP or anybody at the high commission about investigating this further. Can you take that on notice?

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

Mr Varghese : I will just make the point that the AFP has no power to investigate something in Sri Lanka.

Senator RHIANNON: I will move onto Palestine. How many projects funded by Australian aid were destroyed by the Israeli army during the 2014 war in Gaza?

Mr McDonald : We will need Mr Innes-Brown for that?

CHAIR: Did you hear the question?

Mr Innes-Brown : I think I heard the question. It was about how many Australian projects were destroyed. I think we went through this in the last estimates hearing. There was some damage to Australian funded projects. I can give you the amounts of that.

Senator RHIANNON: While you are looking for that, I am also interested to understand what the process is for Australia responding to this, as well as understanding what the projects are and what the amount is. I am happy for you to table that because I do not have that much time. I am interested in what is the process for Australia responding when Australian projects funded by public money from this country are destroyed.

Mr Innes-Brown : I will take that on notice. As I said, there was damage. In Gaza, through our AMENCA program, we fund two NGOs, World Vision and Union Aid Abroad—APHEDA. World Vision estimated that the value of the assets that were lost in the communities that it works with was around $1.8 million and Union Aid Abroad—APHEDA's estimate was about $1.4 million.

Senator RHIANNON: Recognising Australia's contribution to the Gaza Reconstruction Fund, what is the projection for when the 96,000 homes that were demolished when Israel invaded Gaza will be rebuilt?

Mr Innes-Brown : I do not have that information before me.

Senator RHIANNON: Can you take that on notice?

Mr Innes-Brown : Yes.

Senator RHIANNON: You would be aware that the Paris Protocol of the Oslo Accords gives Israel the role of collecting taxes on behalf of the Palestinian Authority and then passing on that money. You would also know that since 3 January Israel has been illegally withholding those taxes and that the US State Department has condemned Israel's action on that. What representations has DFAT or the foreign minister's office made to Israel to fulfil its obligations under the Paris Protocol?

Mr Innes-Brown : As a general principle we are concerned about unilateral actions by either party which damages the prospects of returning to negotiations so there can be an enduring solution to this particular issue. That is one of the steps that has been taken in recent times that has not helped the situation and has not been conducive to a resumption of the negotiations.

Senator RHIANNON: When you said the word 'steps', you were referring to Israel's action in withholding the money?

Mr Innes-Brown : That and there have been others as well. There has been a series of events and incidents over the past six to nine months by both sides that have led to an escalation and a cessation of the prospects, for the time being, of returning to negotiations.

Senator RHIANNON: I will ask the question again. What representations has DFAT or the Prime Minister's office made to Israel to fulfil its obligations under the Paris Protocol? It is not just the US State Department and the United Nations. Many countries in the European Union have also taken up this issue so the question is: what have we done?

Mr Innes-Brown : We have not made any specific representations on that issue.

CHAIR: I will ask you to hold it there and I will go to Senator Fawcett.

Senator FAWCETT: I have a follow-up question. If Australia is committing funding to this reconstruction fund, given the evidence of previous international funding and supplies that were intended for construction of housing have gone to constructing the tunnels that were aimed to facilitate attacks on Israel, what measures have been put in place to ensure that funding that we are providing is actually going to the intended purpose and not to actually facilitate any further attacks on Israel?

Mr Innes-Brown : There was a conference that established this particular fund after the conflict. Australia did not make a pledge at that particular conference. In the aftermath of the conflict we provided $15 million in humanitarian assistance as well as reprioritising some funding for the NGO partners who were at Gaza. That money was devoted to relief activities. We gave $120,000 to a new initiative which was a materials monitoring unit which was set up to try to address the issue that you are alluding to in terms of the entry of materials and making sure that they went to the right purposes. That is what we have done. We think that is a particularly good initiative, to give donors confidence that materials that are funded are being used for the right purposes. We thought we would play a constructive role to try to address that issue.

Senator FAWCETT: Who runs that monitoring unit?

Mr Innes-Brown : I will have to take that on notice.

Senator FAWCETT: I am happy for you to take that on notice.

Mr Innes-Brown : It is an international arrangement. I think it might also have UN involvement, but let me check into it and get back to you.

Senator SINODINOS: I wanted to go back to climate change. Can you confirm that the trade minister was already scheduled to be in South America during this time?

Mr Varghese : That is correct. He had a planned visit to South America at that time. He went to Lima and then he went on to his other bilateral visits.

Senator SINODINOS: He went to Lima first?

Mr Varghese : I think that was the sequence. I think Dr Hammer was accompanying him on the bilateral visits.

Dr Hammer : If you could put the question again.

Senator SINODINOS: I was just wanting to confirm that the trade minister was already scheduled to be in South America during this time?

Dr Hammer : Yes, he was.

Senator SINODINOS: Did he do Lima first and then other countries?

Dr Hammer : He was in Brazil before he went to Lima and then he went on to Chile.

Senator SINODINOS: That was a trip that had been scheduled for some time.

Dr Hammer : That is correct.

Senator SINODINOS: In respect to climate change more generally, I think it was at the conference that we pledged $200 million over four years to the Green Climate Fund. Is that right?

Mr Woolcott : That is correct. Minister Bishop announced that during the ministerial segment on climate financing.

Senator SINODINOS: And before that we had provided a further $6 million to the Coral Triangle Initiative. Is that your area?

Mr Woolcott : Yes, that is correct.

Senator SINODINOS: What is that about?

Mr Woolcott : Coral Triangle initially involves work with a number of regional countries in terms of working on reef preservation. It involves Solomon Islands, Papua New Guinea, Australia, Philippines and East Timor.

Senator SINODINOS: It says it is a further $6 million, so how much have we provided to date?

Mr Woolcott : I would have to take that on notice.

Senator SINODINOS: In relation to China, in November the foreign minister signed an Australia-China memorandum of understanding on climate change cooperation. What are the practical climate change outcomes that will be delivered under the MOU?

Mr Woolcott : There is a ministerial dialogue with China. We look at cooperation on a range of activities, essentially helping China to gain expertise in relation to accounting on emissions and basically working on the inventory and providing technical know-how in relation to things which help them address their own emissions issues.

Senator SINODINOS: This is helping them to determine how to measure greenhouse gas emissions?

Mr Woolcott : Exactly. There is also some work we do with them in relation to clean coal technology.

Senator SINODINOS: Is the clean coal technology a big component of this MOU?

Mr Woolcott : It is a component. It is not a large sum of money but it is a component.

Senator SINODINOS: What is the idea of that? Is it to test ideas on clean coal or is it to commercialise something?

Mr Woolcott : It is more on the ideas side.

Senator SINODINOS: On this latter aspect, are we engaging Australian resource companies in this sort of dialogue?

Mr Woolcott : That would be a question better directed to the Minister for Industry and Science. It is more in their portfolio.

Senator SINODINOS: It is more in their area?

Mr Woolcott : Exactly.

Senator SINODINOS: I would like to ask about Singapore. This year is the 50th anniversary of the establishment of diplomatic relations with Singapore.

Mr Varghese : That is right. It is their anniversary of independence.

Senator SINODINOS: In that context, I was in Singapore before Christmas and saw quite a few government people. They expressed appreciation, first of all, for the fact that the Prime Minister had talked about ways to enhance the relationship. I think there was some expectation that there would be announcements about an enhanced partnership this year in the context of this 50th anniversary. Can you tell us about progress in that regard?

Mr Varghese : I will ask Mr Cox to add to this. It certainly is the case that we are looking to take the relationship with Singapore to a new level and we hope to be in a position to make some announcements on that in the course of this year, possibly in the context of a visit by the Prime Minister to Singapore. I think the Prime Minister has spoken publicly about lifting the relationship with Singapore to the level of the kind of relationship that we have with New Zealand. I think the breadth of that aspiration will be reflected in what we are working on with the Singaporeans.

Mr Cox : Last year at the Singapore-Australia Joint Ministerial Committee in August, Minister Robb and Ms Bishop, together with the acting defence minister or the Assistant Defence Minister Robert, announced with their Singapore counterparts that we would enter into a comprehensive strategic partnership with Singapore and that that would then be the subject of a further announcement at the time of a proposed prime ministerial visit to Singapore during 2015.

Senator SINODINOS: Are we talking about economics, trade and defence?

Mr Cox : Yes. We are talking about economics, trade, defence and politics, people to people relations, as the secretary says, with a view, at least certainly in the economics sphere, to raise our relationship to the kind of level that we have with New Zealand.

Senator SINODINOS: Although we are not quite single market aspirations.

Mr Cox : No, that is right.

Mr Varghese : I do not think that we will be going towards a single market but this is certainly a post-Singapore FTA agenda.

Senator SINODINOS: They are very keen on it.

Senator WONG: I would like to follow up on the question that Senator Sinodinos was asking about Mr Robb's travel to South America. Prior to the request by the Prime Minister that he attend the Lima conference with the foreign minister, can you tell me what his program was and the dates of the bilateral visits to whichever capitals?

Dr Hammer : The travel which the trade and investment minister undertook—

Senator WONG: No.

Mr Varghese : You want before and after?

Senator WONG: Correct. What was planned before he was advised?

Dr Hammer : What was planned before he was advised was a visit to Brazil, then to Colombia and then to Chile.

Senator WONG: What were the dates of those visits as planned prior to the advice?

Dr Hammer : I do not have the tentative program that the minister had before him. Often these things can change at the last minute as well. It was pretty much a direct substitution of the Colombia component of the visit as it had been planned, a substitution of the Colombia component which took him to Peru.

Senator WONG: Can you advise on notice what the tentative itinerary was or the itinerary that was planned prior to the Prime Minister's request to attend Peru? I think you said you would need to take that on notice.

Dr Hammer : Yes, I would.

Senator WONG: Secondly, are you able to give me the actual travel undertaken, including the dates?

Dr Hammer : Yes, I am. The trade and investment minister was in Brazil.

Senator WONG: Brasilia or Rio de Janeiro?

Dr Hammer : He was in Rio de Janeiro in Brazil from 6 to 8 December, he was in Lima from 8 to 11 December and he was in Santiago de Chile from 11 to 12 December.

Senator WONG: You said that originally the trip was Brazil, Colombia and Chile?

Dr Hammer : Correct.

Senator WONG: When did he seek and when did he obtain agreement from the Prime Minister or his office for that trip?

Dr Hammer : I would have to take that on notice. It may, in fact, be another part of the department which actually processes that.

Senator WONG: That is probably Mr Roach, and he is coming back.

Mr Roach : Mr Robb's travel was approved on 1 December from the Prime Minister's office. In terms of the date in which that letter was dispatched to the PM, I need to take that on notice.

Senator WONG: Do you usually send out a letter indicating at least indicatively the proposed travel prior to the commencement of a financial year?

Mr Roach : That is correct, the forward travel bid.

Senator WONG: So, when was the forward travel bid for Mr Robb sent to the PMO.

Mr Roach : I would have to take that on notice. We were doing that around about May, to give you a sense of the month.

Senator WONG: Was this on that?

Mr Roach : I do not believe it was.

Senator WONG: Let us be clear.

Mr Varghese : By 'this' you mean the Latin American trip?

Senator WONG: Yes.

Mr Roach : The whole Latin American trip or the Lima trip?

Senator WONG: No. We know Lima was not. You have already given that evidence. We have established that. I am asking whether the Brazil, Colombia, Chile proposal was on the forward travel bid in May?

Mr Roach : I will need to take that on notice.

Senator WONG: There is no-one that can obtain that?

Mr Roach : We can obtain that for you.

Dr Hammer : I could add that the trip was planned fairly well in advance, so it would have been months in advance.

Senator WONG: What had to be cancelled in Colombia that was previously on the itinerary?

Dr Hammer : There was a series of meetings with senior government people and possibly with the President of Colombia. It is always difficult to tell with these things right up until a few days beforehand, because the very senior people in any country always have flexibility in their schedules.

Senator WONG: But you think that it is likely or possible that, in fact, one of the people that Mr Robb was intending to meet was the President of Colombia?

Dr Hammer : It is possible. There was a plan; that is all that I can say.

Senator WONG: When was the post advised that the Colombia component would be cancelled?

Dr Hammer : I am not sure. We would have to take that on notice.

Senator WONG: Can you tell me who else had the post arranged to meet, with the understanding that this is obviously subject to people's availability? What was the planned itinerary for the Colombia portion of the trip?

Dr Hammer : From memory, we would have been seeking meetings for Mr Robb with his counterpart and also probably with any of the ministers involved with mining and possibly agriculture, but also the Minister for Foreign Affairs. He probably would have been involved in some additional activities to do with food, water and energy, which proceeded anyway. There were activities taking place in Colombia that he would have been involved in which proceeded anyway.

Senator WONG: That is fine. You have answered a lot with 'would have', so on notice you can clarify what did or did not happen rather than what might or might not have happened. Can you also take on notice the itinerary request?

Dr Hammer : To clarify, you would like to know what happened in Colombia even though the minister was not able to visit?

Senator WONG: Perhaps we can clarify what events you were referencing when you say 'would have proceeded anyway'. Do you see what I am saying?

Mr Varghese : Would you like to see the draft program?

Senator WONG: I would like to see the draft program. You were referencing that some events would have proceeded anyway. I assume, for example, there is an Australia-Columbia something or other?

Dr Hammer : Yes, that is correct.

Senator WONG: Did that occur anyway and who attended in lieu of him? It would be those sorts of things. Is that possible?

Dr Hammer : Yes, it is.

Senator WONG: I would like to ask a couple of other questions. Mr Varghese, in relation to the US Alliance and the bipartisan support for it, is it the case that both parties of government have avoided making partisan comments about domestic political arrangements or domestic political circumstances in the United States?

Mr Varghese : There is a general convention in diplomacy that you try to avoid making comments on domestic affairs. I think that probably applies to an even greater extent with a relationship such as the alliance relationship.

Senator WONG: That is a good answer; that is much more eloquently put than I would have. Are you aware of a report in The Australian on 21 February relating to comments made by the Prime Minister's chief of staff? She is reported as standing next to the Prime Minister and telling a group of Australian journalists that Barack Obama was 'the lamest of lame ducks'. Were you aware of that?

Mr Varghese : I have only seen references to that in subsequent media reporting.

Senator WONG: To your knowledge, was anyone in DFAT ever advised that such comments had been made to the journalist?

Mr Varghese : Not to my knowledge, no.

Senator WONG: I am suggesting to you that such a comment patently contravenes the general convention you were describing.

Mr Varghese : I am not going to comment on alleged comments by the Prime Minister's chief of staff.

Senator WONG: Saying that the President of the United States is 'the lamest of lame ducks' clearly is commenting on the domestic politics of the United States, isn't it?

Mr Varghese : I will repeat the answer I just gave you.

Senator WONG: Do you think the comment could be damaging?

Mr Varghese : I do not know whether the comments are accurate. I was not aware of them, if they were accurate, and to the best of my knowledge it has never been raised with us at a government-to-government level.

Senator WONG: That was my next question. Subsequent to the article in The Australian on 21 February has any comment about these reported comments of the Prime Minister's chief of staff been raised with the post or any other part of DFAT?

Mr Varghese : I am not aware of it being raised with either the post or with the department here in Canberra.

Senator WONG: As a result of becoming aware of the comments, have you taken any action?

Mr Varghese : No. I did not think there was any need for me to take any action.

Senator WONG: I am going to be very careful in how I ask this and try to reference things that are on the public record. Are you aware of an incident in which an Australian soldier is alleged to have threatened a female ASIS agent with a gun in Afghanistan?

Mr Varghese : The only knowledge I have of that is some references to it in the media. I do not have any other knowledge.

Senator WONG: It was also discussed in the Defence estimates. Are you aware of that?

Mr Varghese : No, I am not.

Senator WONG: CDF said that there had been an inquiry into the allegation. Are you or anyone at DFAT aware of the inquiry?

Mr Varghese : I am not. I do not know whether any of my colleagues who are here might be aware of that.

Senator FAWCETT: Chair, can I just make a clarifying point?

CHAIR: Senator Fawcett.

Senator FAWCETT: Did you hear the CDF's subsequent clarification later that evening where he indicated that the incident with ISIS did not actually lead to a charge of a member?

Senator WONG: I know that.

Senator FAWCETT: You do?

Senator WONG: It is ASIS, not ISIS. Let us be clear.

Senator FAWCETT: There are too many acronyms here. He made the point later that his initial comment had been taken that that incident that you are referring to had led to a charge and he said that was not the case.

Senator WONG: I am aware of that. That was not my question. My question was: did DFAT have, firstly, any knowledge of the incident and, secondly, any knowledge or involvement in the inquiry process?

Mr Varghese : I have no knowledge of the incident, except to the extent that it was reported in the press, and no involvement in or knowledge of the details of the inquiry. By that I mean I have also read in the press that there was an inquiry into it.

Senator WONG: Can you provide this committee with any information about this incident?

Mr Varghese : No. It does not involve a departmental officer. I assume that the inquiry was addressed to the relevant agencies.

Senator WONG: ASIS and—

Mr Varghese : And Defence.

Senator WONG: Has the government of Afghanistan or any Afghan officials raised concerns over this incident with the ambassador, the Minister for Foreign Affairs or any other part of the government?

Mr Varghese : I am not aware of any such concerns being raised. I am happy to take that on notice.

Senator WONG: Someone is moving.

Mr Varghese : We happen to have the former Ambassador to Afghanistan, Jon Philp, here. He is now in a different capacity but he may be able to shed some light on this.

Mr Philp : I am the Assistant Secretary, Parliamentary and Media Branch and former Ambassador to Afghanistan.

Senator WONG: That is a change in role.

Mr Philp : Yes, it is. It is a lot quieter.

Senator WONG: Parliamentary and Media Branch after Afghanistan. What are they suggesting about how difficult our parliament is to deal with?

Mr Philp : I think they feel I like a bit of noise and adrenalin.

Senator WONG: Please go ahead.

Mr Philp : At no time did the government of Afghanistan raise the incident with me.

Senator WONG: Has it been raised with the Minister for Foreign Affairs, to the department's knowledge?

Mr Varghese : Not to my knowledge, no.

Senator WONG: Has the minister taken advice from the department in relation to this matter?

Mr Varghese : No.

Senator WONG: I am happy to yield to Senator Gallacher.

Senator GALLACHER: The question about potential posts and ambassador vacancies has been raised. Can you point me down the path of what the protocol is? The department obviously has a list of candidates that goes to the foreign minister. Is that logical?

Mr Varghese : What happens here is we put out a forward list within the department of forthcoming vacancies. That can look forward quite a long way if, for instance, language training is required for the position. We invite expressions of interest from departmental officers. We consider those expressions of interest. I make a recommendation to the foreign minister. The foreign minister considers the recommendation. The foreign minister then makes a decision and consults the Prime Minister before the decision is finalised.

Senator GALLACHER: So, with all the professional advice, the information gathering, the skills assessment and with all the due diligence that you do, the foreign minister then selects a candidate, goes to the Prime Minister's office and you come out with a decision?

Mr Varghese : Correct.

Senator GALLACHER: Does the PMO get the same benefit as your department?

Mr Varghese : No.

Senator GALLACHER: Are there two streams going on here?

Mr Varghese : The contact is between the foreign minister and the Prime Minister. I do not have any input into the Prime Minister's consideration.

Senator GALLACHER: Who would?

Mr Varghese : You would have to address that to the Prime Minister.

Senator GALLACHER: The process is quite clear from your perspective. I understand that the foreign minister goes to the Prime Minister with a candidate. Is the OECD posting in the pipeline at the moment?

Mr Varghese : It is in the pipeline.

Senator GALLACHER: Has the process that you described been completed yet?

Mr Varghese : No, it has not been completed yet, and when it is completed I expect the government would make an announcement.

Senator GALLACHER: Do we have a time frame on that?

Mr Varghese : I think it would be quite soon.

Senator GALLACHER: What I am trying to get at is if there is an allegation of a contest between the Prime Minister's office and the foreign minister's office about a selection, is that a captain's call? Would it be up to the Prime Minister to make the decision? Is that how our system works?

Mr Varghese : I would put it differently. I would say that the foreign minister consults the Prime Minister on these appointment.

Senator GALLACHER: Do we have any precedents of all of the due diligence that you have done having a different call?

Mr Varghese : I am not going to go into examples or details of decisions, either individual decisions or even illustrative decisions.

Senator GALLACHER: Would a person called Brian Pontifex be amongst the candidates that your department has considered?

Mr Varghese : I am not going to get into names of individuals. The process I indicated to you relates to departmental officers. I only canvass the field of departmental officers.

Senator GALLACHER: How many candidates would you have in that field for such an important posting? Is there a short list? I am not asking about the people. Can you tell me roughly how many people? Does the foreign minister pick from two, three, four or is it only one?

Mr Varghese : I would indicate to the foreign minister who in the department had expressed an interest and I would offer a view on who I thought was the most suitable.

Senator GALLACHER: You put your executive neck on the line, so to speak, with a pick of a person and express a view to the foreign minister. The foreign minister then makes her decision and, ultimately, the Prime Minister either accepts the advice of two of his most senior people or he does something else. Is that correct?

Mr Varghese : As I said, you would have to ask the Prime Minister or the Prime Minister's office how the issue is handled at that point. As I have said, I only provide advice to the foreign minister on departmental candidates.

Senator GALLACHER: Is there a history of candidates coming out of the Prime Minister's office to be tested in your process?

Mr Varghese : Appointments of non-career officers are taken at the political level and the department is not involved in it, except to the extent that we diligently carry out the processes required to put the appointment into effect.

Senator GALLACHER: So, if all of your work is not acted upon and there is another candidate, do you simply vet the person?

Mr Varghese : We are advised when a political appointment is made and then we proceed to give effect to the appointment.

Senator GALLACHER: Do we have 29 ambassadors?

Mr Varghese : We have 95 posts. Some of them are consulates-general.

Senator GALLACHER: How often do you do this sort of work?

Mr Varghese : We put lists up to the foreign minister two or three times a year at least, and sometimes we have to do it ad hoc. Sometimes a position would come up unexpectedly and we would go up with a recommendation just for that particular position.

Senator GALLACHER: There would be some posts, I presume, where the skills and qualifications predetermine a very select group of people.

Mr Varghese : We always seek to recommend the most suitable person for the job. I should add the caveat, the most suitable person who is available for the job.

Senator Brandis: Sometimes the most suitable person for the job is a political appointee. If I may be permitted to say so, I think your former colleague, Mr Kim Beazley, is doing an absolutely magnificent job in Washington. I had the benefit of his company at the end of last week when I went to the White House Summit on Countering Violent Extremism. He is doing a magnificent job. I cannot think of a better person. That is why he has been extended by this government not once but twice. That is an example, if I may say so, and there are examples available on both sides of politics of how former senior political figures make extremely suitable and capable ambassadors.

Senator GALLACHER: I cannot argue. I would like to but it is not possible to argue against that. Is there a breakdown of the political appointees to the 95 positions?

Mr Varghese : I think at the moment we have six whom I would call non-career appointments; in other words, staffed by people who are not from the Department of Foreign Affairs and Trade.

Senator GALLACHER: So, you would be pretty happy with your strike rate.

Mr Varghese : I am the Secretary of the Department of Foreign Affairs and Trade and I take the view that diplomacy is a profession.

Senator GALLACHER: I will have to move on. The New Colombo Plan has been launched with a great deal of fanfare and I might say interest. I attended a launch in Adelaide with Senator Fawcett and also a gathering of Colombo Plan people in Tokyo, so I have seen the positive energy, the power and all of the good stuff that is coming out of that. How much is it costing us?

Mr Varghese : I will ask Ms Duff to take you through the budget.

Ms Duff : In terms of the budget for the New Colombo Plan, when the program was initiated there was an announcement of a commitment of $100 million over five years for the program. That funding is in place. Since that funding has been put in place there has also been some further funding from relevant programs incorporated into the New Colombo Plan.

Senator GALLACHER: So, there is further funding in addition to the $100 million. Was that for five years?

Ms Duff : Yes. The $100 million is over five years.

Senator GALLACHER: Did you say that there was further funding?

Ms Duff : We have been discussing with universities and other stakeholders and what we have done is made the New Colombo Plan the program for undergraduate Australian university students studying in the region. We have ensured that other relevant programs for undergraduates are now also implemented through the New Colombo Plan.

Senator GALLACHER: Are you aware of feedback which says:

'As nice as it is to receive $67,000 to study in Indonesia, it is ridiculously high', said one of the Australian-Indonesia Youth Association members in their annual survey. If the intent is to build on prestige with significant value it is possible to do so without spending so much money.'

Are you aware of feedback like that?

Ms Duff : As I understand it, that was a comment from an Indonesian member of the relevant group that you mentioned who was talking about the maximums of headline value of a scholarship under the program. That amount would be for an 18-month period of study which includes 12 months in a university, six months of an internship, fees paid to a relevant Indonesian or other institution as necessary as our maximum cost. In fact, what we are seeing with the program, depending on the mix of the study arrangements, the scholarships themselves are on average considerably less than that so, indeed, depending on the study arrangements for an individual student, it can be—

Senator GALLACHER: Can I just interrupt you there?

Ms Duff : Yes.

Senator GALLACHER: That is as an Australian student attending an Indonesian university for a period of 18 months?

Ms Duff : Correct.

Senator GALLACHER: So, it is their accommodation, living allowances, student fees and all of that?

Ms Duff : Indeed. It is the cost of covering insurance and other elements of the program.

Senator GALLACHER: They are not all for 18 months, are they?

Ms Duff : No. That amount that you just mentioned is if a student were to do the maximum possible under the program but, in fact, we are seeing students going into programs that are of varying amounts. On average I think the Indonesia students are coming in at just under $40,000, so the cost of those experiences is not that maximum amount. I was certainly aware of that piece of media but, in fact, the value that we are able to get for students is turning out to be less than that amount.

Senator GALLACHER: What are our economic objectives under the New Colombo Plan? I have seen the results on the other side where you cannot meet a person in Vietnam or Malaysia or Indonesia who has not studied in Australia. I think the former vice-president of Indonesia studied at ANU. I have seen the other side of it. What are we trying to get out of this?

Ms Duff : When the program was first initiated and our foreign minister was working on the concept of the program, as she told me and I think others have made a number of public comments, in her time in engaging with the region she is very conscious from ministerial and other counterparts that there was a desire to see more Australian students in the region. I think also the idea of people-to-people links is an important ballast to our various engagements and relationships in the region. That was something that needed to be promoted. That is something that over time we have talked about as an important part of our engagement with the region, so in that sense it was an element of trying to ensure we had a greater two-way flow of students with the region. To that extent, the program is very much engaged around getting more and more young Australians to particularly spend time in the Indo-Pacific with a period of study as part of an Australian degree, so a intra-degree experience in the region.

Internships, as well, are an important part of that, to build linkages at an individual level with universities and with business across a range of different stakeholders in the different locations and for that purpose we have set up a program which has scholarships and a range of other mobility grants that universities can access to the extent that they have a range of different interests in different locations.

Senator GALLACHER: So, it would be hard to measure economic objectives?

Ms Duff : What we are looking to do through the internships is, as I said, build those connections with business in the region, engaging with alumni in the region, the very large groups that you mentioned in various locations that have been studying in Australia and have a good connection with Australia. There is a great effort under the New Colombo Plan to connect our students with those students. For example, in Singapore, we are seeing a great effort on the part of the Australia-Singapore Alumni Association to engage with New Colombo Plan students. It is quite purposely around building those connections.

Clearly it is part of an effort to build the skills and literacy around the region of Australia's future graduates. That is seen as something that is very important to stimulate the way in which the Australian economy works and grows. That is a spectrum of the things we want to get out of it but there are some important elements around upskilling graduates in the region.

Senator GALLACHER: What have we learned from the 2014 pilot? What are the findings of the pilot phase in Indonesia, Japan, Singapore and Hong Kong? Has an evaluation taken place?

Ms Duff : There is an evaluation that is ongoing.

Senator GALLACHER: Ongoing as we speak?

Ms Duff : Ongoing as we speak. In the initial phase of that we were talking to universities around the process and how we might shape the program as it evolved.

Senator GALLACHER: Who would be doing the evaluation?

Ms Duff : A company called ACIL Allen has been retained by government and they are doing an evaluation of the pilot phase, in particular. There is a range of elements that they are looking into there.

Senator GALLACHER: That is an Australian company.

Ms Duff : It is an Australian company.

Senator GALLACHER: Do they do the evaluation after the students have returned here?

Ms Duff : The evaluation commenced as we commenced having students go offshore, so in terms of the various experiences they were having. We obviously had a selection process with universities, so those elements were looked into, and the way in which we had structured the various grants and the student experiences. All of those elements are being looked to as part of the evaluation. We have just had some feedback very recently from the mobility students, of which there are around 1,300. Now, 700 of those have already been on their programs. The feedback from the students so far is that they have really found the program beneficial. I think 97 per cent said that they would recommend it to other students.

Senator GALLACHER: I am sure it is hard to find it attractive but we do have to look at the funding for these things. How does the New Colombo Plan 2014 pilot perform against each of its four key performance indicators listed in the budget statement, or are you not there yet?

Ms Duff : In terms of?

Senator GALLACHER: The key performance indicators.

Ms Duff : I do apologise that I do not have the budget statement with me here. In terms of the numbers of students, if I recall, we committed to having a range of grants and a range of scholarships in place, which we have done. We have selected 40 students in the scholarship stream and we have also selected, as I said, those 1,300 grant recipients through universities, so that process has been completed.

We have, as I recall, committed to setting up an alumni process, which is something that is ongoing work. We are looking at ways in which to engage alumni. We have some systems and other elements of that which we are still developing. In terms of the other elements of the program, we have a public diplomacy agenda as well.

Senator GALLACHER: I am being called to order by the chair. I would appreciate if you could take on notice the performance against the performance indicators. If it is ongoing that is fine, or if it is completed that is fine.

Ms Duff : Yes. The pilot, itself, is still ongoing. In terms of the 2013-14 elements, certainly I can get the elements of that as set out in the annual report in terms of our performance against those KPIs for that financial year, but the pilot phase evaluation itself is still ongoing.

Senator GALLACHER: On notice, how are the findings of the pilot evaluation being applied to the wider role out of the New Colombo Plan and what are the key performance indicators for 2015?

Ms Duff : I am certainly happy to take that on notice.

CHAIR: I would like to ask some questions with regard to the government's contribution to Gavi, the Vaccine Alliance. I am aware that the minister has committed funding in 2014-15 up to 2016-20—I am wondering if that is confirmed—for the work that the vaccines alliance does in terms of developing countries in which we have this association?

Mr McDonald : There was a pledging conference in Berlin in January. The foreign minister announced that there would be a pledge of $250 million from the Australian government for the period 2016 to 2020. That is consistent with the pledge that was given over the previous five years.

CHAIR: So, for the period up to 2015-16 and including 2015-16, is that a figure of $50 million?

Mr McDonald : Yes.

CHAIR: I am just wondering if that has been confirmed?

Mr McDonald : Yes. There was an announcement last year of $50 million. I will just go back slightly. With the previous pledging period of five years, the previous government pledged $200 million for the first three years. I will check that, but it is something like that. The extra $50 million meant that our pledge was $250 million over the five years, because of the way the calendar years and financial years work. Then in January there was a new pledging conference to take for the period 2016 onwards, so there is no gap in our funding at all and it is a continuation of the same quantum over the five-year period.

CHAIR: Now, it is my understanding—and perhaps you can correct me if I am wrong—that the Australian pledge may be channelled through the International Financing Facility for Immunisation. I was wondering if that is the case and how that pledge is likely to be honoured?

Mr McDonald : I will ask Ms Walsh to answer your more technical questions.

Ms Walsh : In relation to the pledge that the government made in January of this year, the $250 million that Mr McDonald has referred to, as part of that replenishment the Gavi alliance, itself, indicated that it would like countries to direct a proportion of their finance to IFFIm. The government has indicated that if that is the preference of Gavi that that would be considered, but that is not a decision that has been taken absolutely. It is really where that Gavi alliance is asking it wants funding to be allocated based on the forward agenda for the alliance.

CHAIR: In terms of priorities and needs for the Global Polio Eradication Initiative which is underway this year, can you confirm to me if the government is delivering an instalment, and if it is $20 million, towards that initiative and is that actually within the funding that you are describing to us?

Ms Walsh : The way that Gavi structures its finance there are a couple of different windows, if you like. The polio one is one. Australia has not directed any funding to that in the past and it is not the intention to do that with this particular replenishment pledge. That is also consistent with what Gavi is saying, that they do not necessarily need more money into that particular window.

CHAIR: I do have one or two other questions in this area which I will put on notice.

Senator XENOPHON: Can you tell me if this is in the wrong segment? In terms of Anwar Ibrahim, the Malaysian opposition leader who is now serving a five-year jail term on charges that many international groups including Human Rights Watch, the Inter-Parliamentary Union and I think the International Commission of Jurists have said are trumped up, I just wanted to know whether the high commission's office has visited him in prison, in custody, or whether they have sought to do so?

Mr Varghese : I will ask Mr Cox.

Senator XENOPHON: I am not sure if I amused the Attorney then or somebody else amused him. Hopefully it was not my question.

Senator Brandis: No, it was not.

Mr Cox : My understanding is that the high commission has met with the family of Anwar Ibrahim.

Senator XENOPHON: Will there be any attempt to at least visit him in custody?

Mr Cox : I am not aware of that at this stage but they certainly have met with the family of Anwar.

Senator XENOPHON: Can you take on notice whether there will be any representations made to the Malaysian government or the prison authorities to meet with him?

Mr Cox : There have been representations made about the outcome of the Federal Court decision in the wake of Foreign Minister Bishop's statement. The high commission has also expressed our disappointment at the outcome of the Federal Court case.

Senator XENOPHON: It is also the conditions, because I met with a senior Malaysian opposition MP in Jakarta last week. The conditions where he is currently in custody are apparently quite appalling, particularly given his back injury after being beaten by a senior police officer a number of years ago.

There is an issue that I raised informally with the foreign minister of whether we have taken any initiatives beyond bilateral ones; in other words, for instance, the Commonwealth Secretariat, to have it raised there formally as an issue with some urgency.

Mr Cox : I am not aware that we have done so.

Senator XENOPHON: Is it within the purview of the government to raise it with the Commonwealth Secretariat?

Mr Cox : I will take that on notice.

Senator XENOPHON: Are there any others—the United Nations, for instance?

Mr Cox : I am not aware of that.

Senator XENOPHON: The Inter-Parliamentary Union? That is really for MPs. If you could let me know on notice whether there are any other international bodies that the government may consider to make representations.

Mr Cox : I am aware that certain UN bodies, rapporteurs and others, have made comments about the conviction, or the upholding of the conviction, of Anwar Ibrahim by the Federal Court of Malaysia. They have made statements.

Senator XENOPHON: Since the jailing of Anwar Ibrahim there has been a dramatic increase in the number of arrests. You may be aware of a case of a Malaysian cartoonist who has been charged with sedition and faces a 12-month jail term. The way that sedition laws are interpreted in Malaysia is incredibly disturbing. Can you indicate whether the government is looking at that and looking at making any representations, given that journalists and even a cartoonist are facing lengthy jail terms?

Mr Cox : The high commission in Kuala Lumpur has raised concern about the application of the Sedition Act in discussion with the Malaysian authorities on a number of occasions.

Senator XENOPHON: If I can just go to the issue of Palestine; I want to frame my questions very carefully. Is it appropriate, Mr Varghese?

Mr Varghese : Yes.

Senator XENOPHON: As you may be aware, since 3 January 2015 the government of Israel has stopped passing on the Palestinian tax revenues.

CHAIR: That has been dealt with.

Senator XENOPHON: That has been dealt with?

Mr Varghese : Yes. It was raised earlier and Mr Innes-Brown has given an answer.

Senator XENOPHON: I will pick it up in Hansard. I am glad that it has been raised.

Senator RHIANNON: I would like to move on to Bougainville. How many advisers or contracted personnel has the Australian government funded on Bougainville during 2013-14 and 2014-15?

Mr Varghese : We would probably have to take that on notice, unless there is someone in the room who has that information at hand.

Senator RHIANNON: Could you check if there is somebody in the room, because it is one of our near neighbours? There was a war there. There is great poverty and hardship. It is in the region where the government said it wanted to concentrate.

Mr Varghese : I am not taking issue with the importance of Bougainville; it is whether we have that level of detail with us.

Mr Sloper : If you could repeat the question please?

Senator RHIANNON: How many advisers or contracted personnel has the Australian government funded on Bougainville during 2013-14 and 2014-15?

Mr Sloper : I think you have asked questions on this in questions on notice. I may not have the detail, though, for that financial year. I will need to check it against the information provided to you.

Senator RHIANNON: I was interested in their roles and the amount of funding provided to each.

Mr Sloper : In response to question No. 83 that you submitted to us we provided a table that listed all the current advisers and contractors, listing 56 advisers and individual contractors which work in a combination of full-time and part-time roles. We also provided the financial details for each contractor but not the names of the individuals for privacy reasons.

Senator RHIANNON: Do you also have the funding that has been provided to experts other than advisers to the Autonomous Bougainville Government? I wanted to separate out the funding that you have provided to individuals, institutions and other organisations other than those advising the ABG.

Mr Sloper : Just to confirm, do you mean funding we provide to others who are providing services within Bougainville in support of the aid program?

Senator RHIANNON: Yes.

Mr Sloper : We would need to take the detail on notice but I can tell you that in terms of Bougainville as a whole we provided $37.7 million last year through a range of providers and services. In terms of the breakdown funding is provided not only directly to advisers but, as we provided to you on notice, which was part 7 of question No 82, we broke down a range of groups we also provided funding to largely around human rights, peacemaking, women's rights, agriculture and so on. We also provided some information on the purposes, outcomes and the amount expended.

Senator RHIANNON: I would like to understand some of the programs that are being run on Bougainville. You would obviously be aware of the emphasis given to small-scale farmers improving agricultural productivity.

Mr Sloper : Yes.

Senator RHIANNON: How is this aim being achieved through aid expenditure on Bougainville? If you could give the amount of money and the proportion of the money that goes on such projects.

Mr Sloper : I would need to take that on notice. I am happy to do that in terms of the breakdown by sector. You are right. We have a range of projects relating to agriculture, service delivery, law and justice, and health and education. Some of them are delivered through PNG-wide programs that also have an impact in Bougainville and others are directly delivered on the ground with the Autonomous Bougainville Government.

Senator RHIANNON: I am interested in the total expenditure and the expenditure on small-scale agricultural projects, and if you could give us that percentage.

Mr Sloper : We would be happy to do so.

Senator RHIANNON: In the same period what specific mining related advice, consultation events or other assistance has been provided on Bougainville by the Australian government?

Mr Sloper : I think we have provided you with a breakdown in our answers to questions on notice on the range of mining activities funded directly through advisers to the Autonomous Bougainville Government and also through the Mining for Development Initiative. We can provide them again if you wish, or are there specific advisers?

Senator RHIANNON: Is that up to date?

Mr Sloper : That was as of October last year. I do not have more recent information available here.

Senator RHIANNON: I was asking for the 2014-15 period, to the end of this financial year.

Mr Sloper : We do not have to the end of this financial year yet.

Senator RHIANNON: You do not have what is projected?

Mr Sloper : Not in terms of final expenditure, no. We can check if since October there have been any further contracting out of services, but that covers all activity until now and it includes current advisers.

Senator RHIANNON: Can you update us on your meetings with the land-owning communities in the Panguna mine area?

Mr Sloper : I would need to take that on notice in terms of the most recent meetings. There are ongoing consultations with that group and others.

Senator RHIANNON: Do you have some information there for the past year?

Mr Sloper : Not in terms of specifics for that community, but I can take that on notice.

Senator RHIANNON: Can you advise for the 2014-15 period the event, the purpose of that event, the dates, the location, government staff and other personnel involved and the outcomes?

Mr Sloper : Yes. I am happy to do that.

Senator RHIANNON: I would like to move on to an issue that we partly covered before. Mr McDonald covered this with regard to consolidation. Is consolidation reducing the number of projects achieved by shifting away from the smaller community development projects to larger infrastructure oriented projects?

Mr McDonald : I think this was answered before by Mr Dawson. No, that is not the objective. The objective is to reduce the fragmentation in the program. At the moment we have around about 1,300 from my last look at the projects. We need to reduce that fragmentation and, in fact, in the government's new policy one of the targets is to reduce that fragmentation by 20 per cent by 2016-17.

Senator RHIANNON: Thank you for providing those figures. I wanted to take it back to the stated commitment with regard to improving the situation for women and girls. There has been a long association that women and girls, considering the disadvantage that they face, often benefit more from the smaller projects. I wanted to understand, in moving what you call reducing the fragmentation—and that is obviously in terms of moving to fewer, larger projects—how that will work in delivering on the objective to improve the situation for women and girls.

Mr McDonald : As I said earlier today, the new aid policy has gender equity as one of its key planks, so the focus on women empowerment, domestic violence and leadership for women is a key priority. That priority will mean that we are doing those projects you have just talked about in the community which are incredibly important. It is also those in relation to education and as you well know, in health and the like. We will be actively taking action against that priority at multiple levels. You know we have the large Pacific gender initiative but we also have quite a number of small community based projects.

Senator RHIANNON: Have you made an assessment that you can do it just as successfully with the larger projects rather than the smaller projects that are often more village based? Are there any studies that you can point us to or have you just decided that that will work better? How evidence based is this?

Mr McDonald : I did not say that we would be moving to larger projects. That is what you said. I said that we are reducing the fragmentation of our activities. Those activities around women and gender equality are still a key priority of the government's new policy, so that will be continuing. In fact, last time I looked, in relation to the program over $2 billion was spent on gender and equity programs, so this is a major priority for the government. The fragmentation will not affect the priority that we have for gender equity and women empowerment.

Senator RHIANNON: I would like to move on to the Mekong. The Mekong River Commission Council, held in January this year, issued a statement that was relevant to the Don Sahong project, one of the latest dam projects there. This is obviously very relevant because of the large amounts of aid money that we spend in the Mekong area. Emphasis was given to the need to strengthen the prior consultation process. I understand that Thailand, Cambodia and Vietnam have all requested an extension of the prior consultation process, whereas Laos wishes to continue to push ahead with this dam project. Has the department requested that the Laos government carry out a trans boundary impact assessment of the project, as I understand has been requested by those other South East Asian countries?

Mr Chittick : I do not have any specific briefing in my papers on that issue. I know that there is some difference of opinion in terms of the prior consultation process. Australia's focus is very much on building the capacity of the Mekong River Commission to ensure that the prior consultation process is undertaken effectively. The decisions about the commencement of building work on dams is a sovereign decision of the countries involved and, from media articles this week, there is a significant number of dams being built on the main river and the tributaries of the Mekong by a large number of countries. The specifics about that January release I will have to take on notice.

Senator SINGH: I wanted to ask some questions about DFAT's consular services review following the ANAO's audit. Firstly, how much did the review cost?

Mr Brown : Just a point of clarification, if I could. When you refer to the review, do you mean the consular strategy that was published last December?

Senator SINGH: Yes. There were previous reviews as well. Yes, I do mean DFAT's Consular Strategy 2014-16.

Mr Brown : It was handled within the division so there were no costs, per se, attached to the preparation of the strategy.

Senator SINGH: Was there another review that came out other than the Consular Strategy review that specifically looked at what the ANAO criticised DFAT for, which was the consular management information system being outdated?

Mr Brown : The ANAO issued a report on its external audit of the consular function; that is true. As is typical for such external audits the audit, including its recommendations and the department's response from the secretary, were tabled in the parliament.

Senator SINGH: Was there a DFAT Consular Services review?

Mr Brown : No.

Senator SINGH: There is only the DFAT Consular Strategy 2014-16?

Mr Brown : Correct, and the response to the ANAO audit.

Senator SINGH: Let us talk about the response to the ANAO audit. I know there was criticism about the low uptake of the department's Smartraveller program. What was the response to that? What is the form of the response to the ANAO audit?

Mr Brown : It takes the form of a letter from the secretary of the department to the Auditor-General.

Senator SINGH: Addressing the issues in the report of the ANAO?

Mr Brown : Correct.

Senator SINGH: So, Smartraveller take up, for example?

Mr Brown : There were three recommendations made by the auditors. The issue that you have just touched on, which is the traveller registration system, was not actually the subject of one of the recommendations from the audit. It was the subject of some commentary, however, in the audit. The commentary was, in summary form, that the traveller registration system was not as user friendly as it could be.

From a departmental viewpoint, we are working to address some of the functionality issues with the existing system for traveller registration. This year we are rolling out a new consular information system; that is the IT framework that governs the consular functions within the division and within our overseas network, and we are hopeful that will improve some of the current clumsiness in the traveller registration system.

I will just add that I think, although the system for traveller registration is not as user friendly as we would like it to be, there are a number of other factors which have contributed to the current rate of registration.

Senator SINGH: How many Australians are currently incarcerated overseas?

Mr Brown : You will appreciate that the number of Australians detained or imprisoned overseas tends to change rapidly, so the number I am about to give you is a snapshot that is current as of 31 January 2015. On that date there were 541 Australians detained overseas. That includes those who have been arrested, as well as those that have been sentenced, imprisoned and those that have been granted bail.

Senator SINGH: What date was that from?

Mr Brown : 31 January.

Senator SINGH: That would be potentially less now?

CHAIR: It could be more.

Senator SINGH: It could be more. I was just thinking of Peter Greste.

Mr Brown : That is one.

Senator SINGH: Yes, that is one. Thank goodness. Will the changes to consular services that we were just talking about affect the degree of assistance for those that are incarcerated overseas?

Mr Brown : Are you referring to the recommendations in the ANAO report or the Consular Strategy?

Senator SINGH: The response to the ANAO report that you just referred to; you talked about the clunkiness in the system and how this year you are going to upgrade the consular information system. With these changes that are going on to consular services affect the degree of assistance to those that are currently incarcerated overseas?

Mr Brown : They will have no impact whatsoever on the standard of service we provide to those detained overseas. I can encapsulate the changes. They are essentially to try to improve the efficiency of our information technology systems. You will appreciate that the flow of information between our staff officers in the field and the DFAT headquarters is critical to our effectiveness.

Senator SINGH: I will finish on this question. Phuket-based Australian journalist, Alan Morison, is facing defamation charges brought by the Royal Thai Navy after his local newspaper, Phuketwan, reprinted sections of a Reuter story alleging Thai navy forces were complicit in the mistreatment of Rohingya refugees along the Andaman Coast. In press reports of his case he has been very critical of the support he has received from the Australian government. What consular services have been provided to Mr Morrisson?

Mr Brown : We have been providing Mr Morison with very extensive consular assistance since December 2013. That has included a number of representations which have been made by the Australian ambassador in Thailand in relation to his particular case. I can advise you that those representations have numbered seven in total and they have been made at a very senior level of the Thai government.

We have also assisted Mr Morrisson with regard to the retrieval of his passport on a temporary basis so that he could return to Australia to visit his aging father and we have also attended his various court sessions, assisted him with liaison with various Thai authorities and met with him and his lawyer.

As you would appreciate, the Australian government cannot intervene in the private defamation proceedings that are underway, but we are hopeful that it may be possible for a resolution of this case to be achieved prior to the case going to trial.

Senator GALLACHER: I am going to talk about passport services. What is the total cost of development of the P series passport? While that officer is coming forward, given the new passport surcharge what is the new fee structure of obtaining passports? Does anyone have that? If you do not get through it in the next three minutes you will get it as homework.

Mr Nash : Would you mind repeating the question?

Senator GALLACHER: What is the total cost of the development of the P series passport?

Mr Nash : It is very difficult to give an exact response to that question.

Senator GALLACHER: You can take that on notice.

Mr Nash : I am not sure I could do much better. It was developed internally using existing staff.

Senator GALLACHER: Given the new passport surcharge, what is the new fee structure of obtaining passports?

Mr Nash : Do you mean how much they cost?

Senator GALLACHER: Yes. What is the cost?

Mr Nash : It is $250.

Senator GALLACHER: How much has that gone up? I just renewed mine.

Mr Nash : That is for 10 years. It goes up according to CPI each year.

Senator GALLACHER: What is the cost to DFAT of procuring a passport?

Mr Nash : That would be in the area of about $125. I do not have the exact figure with me.

Senator GALLACHER: So, what are the profits directed to? Is it the new gates? Who does that?

Mr Nash : Passport fees are returned to Consolidated Revenue. Passport fees are a tax.

Senator GALLACHER: Can you give me any information about the surcharge? What is the difference between what was charged for each passport type and the real cost to DFAT of procuring that passport prior to the surcharge being introduced?

Mr Nash : I am not sure that I completely understand the question.

Senator GALLACHER: Have you had a surcharge introduced?

Mr Nash : There is a surcharge that has been introduced.

Senator GALLACHER: How much is that?

Mr Nash : It is $100 for passport applications lodged overseas.

Senator GALLACHER: I will pause there.

CHAIR: Mr Varghese, I think we have the undeniable pleasure of your company after dinner, do we not?

Mr Varghese : You do, indeed.

CHAIR: I would like to thank you, Minister, and also particularly Mr Varghese and your officers from the department for the work that you have done today. Minister, would you like to make a comment?

Senator Brandis: I think I am joining you at 7.30 for Trade, or at least for the first part of Trade.

CHAIR: At 7.30 we will resume with the Trade portfolio.

Proceedings suspended from 18:31 to 19:32

CHAIR: This evening the committee will examine the additional budget estimates for the Trade Portfolio in the following order: DFAT programs, followed by Efic, Austrade and Tourism Australia. The committee has set Friday, 17 April 2015 as the date by which answers to questions on notice are to be returned. The committee has also decided that senators should provide their written questions on notice to the secretariat by the close of business next Friday, 6 March. I welcome again the Hon. Senator George Brandis, representing the Minister for Trade. I welcome again the Secretary of the Department of Foreign Affairs and Trade, Mr Varghese, and officers from the Department of Foreign Affairs and Trade. I also welcome Mr Bruce Gosper, the Chief Executive Officer of Austrade; Mr Andrew Hunter, the Managing Director and CEO of the Export Finance and Insurance Corporation; Mr John O'Sullivan, the Managing Director of Tourism Australia; and officers of the agencies. Mr Varghese, I understand that you wish to make some comments of clarification.

Mr Varghese : Thank you, Chair. I just wanted to get back to the committee with answers to some questions asked earlier today which we took on notice. In relation to the Aspen contract, Senator Wong asked about the date the government took the decision about direct sourcing. The answer is 3 November. Senator Wong asked about the amount of money that had already been spent on the two Ebola contracts. The answer is that, under the phase 1 contract, $709,900 has been paid, as of today. No further payments will be made under phase 1, which was the preparatory phase. Under phase 2, as of today we have paid $2,594,150. We have invoices outstanding that only arrived two days ago of $3,259,819. We expect that those outstanding invoices will be paid shortly. Senator Gallacher asked why the application date for the Liz O'Neill Scholarship had been extended. The answer is that the due date was extended until 24 November due to the limited number of applications initially received. Senator Sinodinos asked about funding to the Coral Triangle Initiative. To date, DFAT has provided $9 million to the Department of the Environment for the Coral Triangle Initiative. We will provide a further $2 million on approval of the activity plan and, of this funding, some $6.7 million has been contractually committed. Finally, Senator Wong asked when the Foreign Minister visited the Brookings Institution. The date was 21 January this year.

CHAIR: Minister, do you have an opening statement?

Senator Brandis: No.

CHAIR: Secretary?

Mr Varghese : No, Chair.

CHAIR: Then we will go to questions. Senator Wong.

Senator WONG: Ms Adams, can you tell me where you have got to in terms of the finalisation of the China-Australia FTA?

Ms Adams : We are currently working with the Chinese side on the legal scrub and translation and finalisation of the treaty text.

Senator WONG: How many meetings have been held since the announced conclusion of negotiations?

Ms Adams : We have had two face-to-face meetings—one just before Christmas and one about two weeks ago—and, of course, a lot of other ongoing emails and interaction.

Senator WONG: Where were those two meetings?

Ms Adams : They were both in Beijing.

Senator WONG: Can you provide on notice the attendees and the departmental costs in relation to each of those meetings. The agreement is not signed yet?

Ms Adams : That is correct.

Senator WONG: Can you tell us when it is likely to be signed?

Ms Adams : Our expectation is that it will be another two to three months before the work has been done to allow for signature.

Senator WONG: So what we had with much fanfare in November last year was a declaration of intent towards an agreement, was it?

Ms Adams : It was a declaration of intent to sign. It marked the conclusion of the negotiations. The work since then has been to do the legal scrub on the treaty text as well as the translation and the verification of the translation.

Senator WONG: I have got some detailed questions about the MNP. In relation to temporary foreign workers, under the FTA was any flexibility retained to change the categories of workers who may enter on temporary work arrangements under Australia's existing temporary skilled migration arrangements?

Ms Adams : Did we retain any flexibility to change—

Senator WONG: The categories of workers.

Ms Adams : Do you mean the list of occupations?

Senator WONG: Correct.

Ms Adams : We do not bind the list of occupations as such—although we did make specific commitments with respect to four occupations. With respect to China, that means we have committed that those four occupations would remain.

Senator WONG: On the list?

Ms Adams : On the list.

Senator WONG: I am asking about MNP, not the IFA provisions. I assume, for the purposes of these discussions, that a legal scrub will not change the substantive policy agreement.

Ms Adams : That is right.

Senator WONG: Under the MNP provisions—and this is completely unrelated to whether there is any Chinese investment or Chinese company involved—Chinese nationals can be sponsored by an employer in Australia to enter Australia under various categories without any labour market testing obligations?

Ms Adams : Yes, for those categories that are included.

Senator WONG: We will come to that.

Ms Adams : You know what they are—and we can come to that. The effect of the treaty, as in all the other FTAs and the GATTs, is to guarantee entry for the nationals that fit into those categories—as you say, complete with all of the requirements of our visa system, including 457 requirements, skills et cetera.

Senator WONG: But not any requirement under 457 which may require labour market testing?

Ms Adams : In those categories—that is right.

Senator WONG: And the categories are contractual service suppliers; installers and servicers; executive—what is the executive category called?

Ms Adams : Intracorporate transferees.

Senator WONG: That is it. And what is the last one?

Ms Adams : Independent executives.

Senator WONG: Under the arrangements is there any flexibility for Australia to change other migration requirements such as minimum salary thresholds; skills and occupational procedures; English language requirements; and character tests or anything else?

Ms Adams : Yes. They are not frozen in time by the treaty.

Senator WONG: Can you explain that in a little more detail.

Ms Adams : The commitments we made in the treaty are that we would allow temporary entry for people in those categories consistent with our immigration and temporary worker legislation.