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Economics Legislation Committee
Australian Research Council

Australian Research Council

CHAIR: Welcome, Professor Byrne. Senator Mason.

Senator MASON: In regard to the Industrial Transformation Research Program, the original announcement was for $250 million—is that right?

Prof. Byrne : A little less than that, but, yes, that is about right.

Senator MASON: I think it has been subsequently reduced to $236 million. Is that right?

Prof. Byrne : I think the correct amount was always the $236 million and the other amount, or the difference, is the appropriation into the department to administer the program.

Senator MASON: Okay. The appropriation to administer the grant itself; I understand. Was that $236 million over the forward estimates or some other time frame?

Prof. Byrne : It was over the forward estimates.

Senator MASON: Can you tell me how that amount was going to be spread over the duration of the program year by year?

Prof. Byrne : I will take that on notice because there is some detail in there and it is over a number of years.

Senator MASON: You cannot give the committee a rough indicator?

Prof. Byrne : A rough indication would be approximately equally over that time.

Senator MASON: Equally?

Prof. Byrne : As a rough indication.

Senator MASON: It has been formed out of the existing ARC Linkage program's funding?

Prof. Byrne : That is correct.

Senator MASON: Therefore, in the ARC budget it was not listed as a line item but the money set aside for it would be included under the overall Linkage budget. Is that right?

Prof. Byrne : I think that would be correct, yes.

Senator MASON: Out of which existing schemes within the Linkage Program was the ITR Program money taken or redirected out of? How much and for what years?

Prof. Byrne : It is an amount that is approximately half of the whole program. There are a number of programs in that Linkage Program and approximately half has gone into the Industrial Transformations Research Program. A compensating part of that is a slight adjustment to the remainder of the Linkage Program.

Senator MASON: Out of what schemes then?

Prof. Byrne : It is out of that one Linkage pool. Do you want the specific programs within that?

Senator MASON: Yes.

Prof. Byrne : The Linkage Program as a whole has the Linkage Projects; the Industrial Transformation Scheme, the Infrastructure Program—so that is the Equipment and Facilities Program—our Centres of Excellence Programs, our Learned Academy Special Projects Programs and the Special Research Initiative. All of those form the Linkage Programs.

Senator MASON: Thank you, Professor. Has any of the money set aside for the Industrial Transformation Research program been spent yet?

Prof. Byrne : No, we have not spent any of that money.

Senator MASON: You have not spent any? You said before that it is about half the total money?

Prof. Byrne : Yes, of that order.

Senator MASON: Have the guidelines been released yet?

Prof. Byrne : No they have not.

Senator MASON: Why haven't they?

Prof. Byrne : It is something that we are still working on. We did announce earlier in the year we would get them out. Since that time there has been a lot of work and a lot of discussion in government, and in other places, about industry connections to research and we were very mindful to make sure that that money was spent most effectively. As a consequence of those discussions we have delayed the program until now.

Senator MASON: You are suggesting to the committee that the guidelines for the program need to be tailored to achieve better outcomes?

Prof. Byrne : That is true with all of our programs and our funding rules. They are adapted almost after every round. We look at them and review them to make sure that they are best suited for the purpose of the grants. It is true with all of our programs.

Senator MASON: Whose decision was it to look at those guidelines again?

Prof. Byrne : As I say, for any of our schemes for which we have not finalised the funding rules we look at that on an ongoing basis.

Senator MASON: So it is a regular review?

Senator Chris Evans: I am happy to say that we have had some input, Senator. I saw an earlier draft and asked to make sure that they were properly focused and that it was not one of those schemes where a lot of money flows out but where we did not get strong results. Certainly, I provided some feedback from my office in developing those guidelines. It is also the case to say, for completeness, that this is one of the programs that have been impacted by the pause on grants programs.

Senator MASON: Let me get to that more fully in a minute.

Senator Chris Evans: You are asking what has happened. I am saying that, in a sense, it is now impacted by that.

Senator MASON: A candid reflection, Minister. Professor, is the ITRP money sitting at the moment effectively quarantined in the ARC Linkages coffers?

Prof. Byrne : It is an allocation to that specific program. So, yes, indeed.

Senator MASON: It would be, wouldn't it. Is there any indication about whether and when the program is going ahead?

Prof. Byrne : I am optimistic that we can progress with that. But of course I do not know when the pause that we are currently affected by is going to be resolved, and until I know that I cannot give you a time frame for that.

Senator MASON: So the pause is not your idea?

Prof. Byrne : No, the pause is not my idea.

Senator Chris Evans: No, the pause is government policy, of course.

Senator MASON: The power of language. Some say 'pause'; some say 'freeze'. Should the government decide that the program will not go ahead, if the pause is indefinite, what will happen to the funding that was set aside?

Prof. Byrne : My understanding is that we would lose the money.

Senator MASON: It would go back into the general revenue?

Prof. Byrne : Consolidated revenue, I believe.

Senator MASON: Thank you. I will move now to more general questions about the pause.

Prof. Byrne : Or the freeze. Which would you rather?

Senator MASON: I would hate to be provocative; you know that, Professor.

Senator Chris Evans: Senator, I am not at all interested in semantics. You can call it whatever you want.

Senator MASON: In the 2011-12 financial year, has there been any underspend on any of the items in the ARC budget?

Prof. Byrne : Maybe I could hand over to Leanne Harvey to specifically address that one.

Ms Harvey : We had a slight underspend at the end of the year. That is with respect to money that is unspent. So we try and do the phasing of our different payments and different things, so we did have a slight underspend at the end of last year.

Senator MASON: How much was that underspend?

Ms Harvey : It was approximately $10 million.

Senator MASON: With that $10 million, what is the standard procedure in these sorts of situations? Is the unspent money rolled over for next financial year for that specific item?

Ms Harvey : No. Any unspent money must go back—that is under our act.

Senator MASON: To where?

Ms Harvey : To consolidated revenue.

Senator MASON: In your budget statements, in the table for program 1.1 expenses, does the line item 'program support' refer to ARC's administrative support delivery of specific subprograms administered under program 1.1, Discovery?

Ms Harvey : I will just take a moment to refer to the PBS.

Senator MASON: I am not a great fan of these portfolio budget statements. However, my staff do look at them for me. The ARC budget statements are at page 239; the line item for 'program support'?

Ms Harvey : Yes.

Senator MASON: Does that line item refer to ARC's administrative support for the delivery of those specific subprograms?

Ms Harvey : Yes.

Senator MASON: With regard to the Discovery Program budget, what is the funding over the forward estimates for each scheme under the program—that is, disaggregated? The Australian Laureate Fellowships, Discovery Early Career Researcher Award, Discovery Indigenous, Discovery Projects and so forth.

Ms Harvey : It will be quite a complicated answer, so I apologise in advance. We split it down in our strategic plan and publish it there. We could table our strategic plan.

Senator MASON: We are short on time, so if you could table that for the committee, I would appreciate that.

Ms Harvey : No problem.

Senator MASON: So that is disaggregated, is it?

Ms Harvey : Yes, it is Discovery Projects, Discovery Early Career Researcher Award, Federation Fellowships, Laureate Fellowships—

Senator MASON: The whole lot?

Ms Harvey : All the way down. It is the same for Linkage. The different Linkage ones are in there as well.

Senator MASON: In regard to the Linkage Program budget, can you tell me what the funding is over the forward estimates for each of the main schemes under the program?

Ms Harvey : When we table the strategic plan, you will see that it has both Discovery and Linkage. It will have both of those.

Senator MASON: Is that in addition to the Industrial Transformation Research Program, which I have already asked about?

Ms Harvey : Yes.

Senator MASON: So the centres of excellence, the linkage infrastructure et cetera is all there?

Prof. Byrne : That is correct.

Senator MASON: You are very helpful. Regarding the grants as reported in the media in the last few weeks, are all the grants programs under discovery and linkages subject to the current grants freeze?

Prof. Byrne : All of the programs are in principle affected by that decision, but the impact is different for every one of the programs because our timing and our sequences are different.

Senator MASON: I understand. It depends on whether it is one year, three years et cetera.

Prof. Byrne : No, it depends on when we run the programs. The freeze has only been in place for a fixed time. Not everyone has been affected but some have been affected.

Senator MASON: If some came in before the freeze?

Prof. Byrne : If we had completed it before the freeze and it has not started that process again then it will not be affected at all.

Senator MASON: I understand. That is fair enough. What is their value?

Prof. Byrne : That is difficult to say because, again, not every program is affected or affected in the same way. To some degree only a couple of our specific programs have been perturbed significantly by the freeze, and for the remainder of the programs we are still doing the preparatory work or we are at the stage where we have completed the assessment process and are awaiting a release of the freeze so we can progress them. It is difficult to say what the impact is for programs in general because it is different for every single program.

Senator MASON: You cannot give a rough estimate for the committee?

Prof. Byrne : At the moment the most significant effect for any of our programs has been on a specific program, which is our linkage program grants. The effect there is that we had anticipated opening that about four weeks ago and closing it in about four weeks. Because of the freeze we were unable to do that, and that has quite a significant effect on the sector because we were by this stage hoping to be getting applications from the sector. We have been unable to do that and as a consequence we are not able to progress that. That does not have a specific financial implication at this stage, but it has an implication on our timing and our sequencing in order to release that money when we normally would have been able to do it.

Senator MASON: You talk about an impact, but can we talk about the financial impact just for the moment? Are there any other programs for which you can inform the committee about the financial impact?

Prof. Byrne : Again, it depends if we hear fairly soon or not that our programs are affected or not. If we hear fairly soon that our programs are not affected then there will be no financial impact. If we hear that our programs are affected, and they are reduced in some way, then that will have an impact. In some ways it is speculation at this stage to say what that is going to be, and it is not a meaningful thing to say what that number is unless we have a bit more of a specific comment there.

Senator MASON: Is it possible to provide the committee with a timetable for the delivery?

Prof. Byrne : We have a timetable that I am happy to table here of all of our grants programs and the sequencing. I am delighted to do that.

Senator MASON: That would assist. Could you include the amounts involved?

Prof. Byrne : I am happy to do that, too.

Senator MASON: That would be very useful. Then we can make some assessment depending upon whether the freeze thaws or not by February, when we come back.

Senator Chris Evans: I think the way to think about it is that there is a pause/freeze in place, the government will make a decision about each program and there will be an announcement about whether the program is fully funded, partially funded or not funded. It will be obvious to the world then that it has occurred. If a program is to be funded at the same rate the only implication would be if the money goes out the door. Professor Byrne has indicated to you the ones that are held up in that sort of application process at the moment, which is a limited number. In the end, the financial impact will be: did we maintain the current funding for that program or did we change it? That will be publicly announced shortly and you will be able to make your judgements then.

Senator MASON: Sure. Minister, you would be aware that in the research sector this is the big issue. Can you give any sort of indication of when the government will make a decision and make that information available?

Senator Chris Evans: I think it is fair to say that the pause has been part of the consideration of the MYEFO process, so I would think at the conclusion of the MYEFO process and the announcement of MYEFO one would get very clear advice about the state of the programs.

Senator MASON: That is another candid reflection, Minister.

Senator Chris Evans: I just hope it meets with the Treasurer's approval. I might have been too candid!

Senator MASON: We all have those problems, Minister, even in opposition.

Senator Chris Evans: I think it is fair to say that when I know, you'll know, Senator.

Senator MASON: Professor, has the government sought the ARC's input and opinion about the performance of specific grants programs and whether specific grants programs are providing value for money for taxpayers?

Prof. Byrne : I have not been involved in specific conversations about the value of programs, because I have only just taken over the job for a few months, but on an ongoing basis we do review all of our programs and we do make the advice from those reviews available to government, yes.

Senator MASON: Professor, you have been at the head since the pause, or the freeze.

Prof. Byrne : Correct.

Senator MASON: Has there been an unusual, extra or particular instruction to the ARC about value for money since the beginning of the pause?

Prof. Byrne : Not a specific one. The advice that we have received is that all grants that the government is responsible for were considered in that process and ours were part of that complete look at all grant programs of government.

Senator MASON: But you have not received a specific instruction?

Prof. Byrne : I have not received a specific instruction on our specific grants.

Senator MASON: Nor has anyone else in the ARC to your knowledge?

Prof. Byrne : Not that I am aware of.

Senator MASON: Professor, I want to ask you about ERA.

Prof. Byrne : Yes, okay.

Senator MASON: Again, it is clearly a big issue within the sector. In the 2012-13 portfolio budget statements for DIISRTE, the section on the ARC indicates, at page 231:

In 2012-13 priorities for the ARC will include:

…   …   …

implementation of the ERA 2012 evaluations. This includes collection of data from institutions, evaluations of research disciplines conducted by Research Evaluation Committees, and publication of the outcomes of the evaluations in the ERA 2012 National Report.

That is what it says, doesn't it?

Prof. Byrne : That is correct.

Senator MASON: As ERA is one of the ARC priorities for 2012-13, can you or the minister indicate whether the ERA 2012 evaluation process will be completed and the results published?

Prof. Byrne : I will take that one. We have undertaken everything that we have described there except for the latter stages. As we speak, the committees are meeting down in Melbourne to do the final stages of the rating process for all of the discipline areas. We are optimistic that we can complete the national report for 2012 by the end of the year and have it available as described in the document. We are on track to do it.

Senator MASON: As described within the PBS?

Prof. Byrne : Absolutely.

Senator MASON: And the results will be published then?

Prof. Byrne : Yes.

Senator MASON: All right. The ERA results for 2010 were used in the calculation of the distribution of the 2012 round of the sustainable research excellence block grants for universities. Do you remember that? It was an important part and there was a lot of discussion within the sector about that.

Prof. Byrne : Yes.

Senator MASON: Will the results of ERA 2012, which will become available later this year, feed into the 2013 SRE distribution or any other funding distributions?

Prof. Byrne : That is my understanding. However, that is not our responsibility in many ways. That is really up to the department and the allocation, because the SRE allocation is not an allocation made through the Australian Research Council. It is an allocation made through the department, so I am probably the wrong person to ask about that.

Senator MASON: What is your understanding, Professor.

Prof. Byrne : As you have indicated, in the past it has been used for the allocation of the SRE. My understanding was that that was to continue. But, again, that is not my responsibility.

Senator RHIANNON: Minister, what has been the impact on research jobs of the freezing of research grants as part of the Mid-Year Economic and Fiscal Outlook process?

Senator Chris Evans: Professor Byrne may be able to help you, Senator, but I do not think there has been any impact yet. It has only been a few weeks and these are for grants that have not been awarded.

Senator RHIANNON: I am interested in the research programs and how you think it is going to play out. Also, in terms of the delays in research, has any research been postponed or gone overseas as a result?

Senator Chris Evans: The first thing to say is that we have just dealt with this issue at some length. If you are asking about the freeze, or pause, on grant rounds of a few weeks, no, that has not sent research overseas. That is a ridiculous proposition. What it means is that the process for the grants that might have been made four weeks ago has been paused and once the outcome of the pause, or freeze, is known, you will be able to quickly assess whether current funding has been maintained or whether the funding has been reprofiled or cut. That sort of announcement, I am sure, will be around the time of the MYEFO, but I think your question really overstates where we are at.

Senator RHIANNON: But, considering that there have been a number of instances where researchers have gone overseas because of the lack of support in Australia, is it something that you are mindful of in terms of at least the perception it might have, irrespective of how it plays out—

Senator Chris Evans: Senator, this perception is created by people like you making these claims, to be frank.

Senator RHIANNON: I am not making baseless claims, Minister.

Senator Chris Evans: Well, they are.

Senator RHIANNON: You could not deny that people working in the solar field, renewable energy being the classic example, did not get support here and went overseas, to both the US and China. That is well documented. It is not a claim.

Senator Chris Evans: But, in the context of the pause on these funding rounds, it is quite an outrageous suggestion and just plain wrong. I also suggest to you, Senator, that if you look at the number of researchers who have come into the country in recent years to be part of flagships, to be part of the SKA project, to just have this one-dimensional view of what is going on in science and research given the record funding under this government and to suggest that there is an outflow of researchers is just wrong.

Senator RHIANNON: I would have thought that a responsible government would be mindful of what has happened in the past and would learn from that to ensure that when you take such actions it does not play out in that way. That is all I am trying to explore here, Minister.

Senator Chris Evans: Senator, no-one apart from you is suggesting that it is playing out in that way. I do not mean to be aggressive, but sometimes you make these statements and they are just plain wrong. We have record investment in higher education research and in science and research. I put to you that that has seen a growth in employment of researchers and an inflow of researchers. No doubt there is an outflow of researchers associated with particular projects, as is always the case. The fact is that international science and research is international, and we have many people from overseas working in our universities and in our science institutions who bring their expertise to projects being conducted here. But to suggest that there is some great net loss occurring is just not right.

Senator RHIANNON: Thank you, Minister. I am also interested in the status of the $500 million regional priorities round of the Education Investment Fund. Is the government committed to the full value of this round, and can we expect an announcement of outcomes in the second half of 2012, as was indicated in the EIF documentation?

Senator Chris Evans: The first thing is that this has got nothing to do with the ARC and officers currently before the chair, but I can indicate to you that consideration of that EIF round is continuing and the government will make an announcement in due course.

Senator RHIANNON: Thank you, Minister, and I am sorry that I put that into the wrong slot. I also wanted to take up issues to do with Excellence in Research. Can you indicate when the ERA 2012 evaluation process will be completed?

Prof. Byrne : Senator, I made the reply to Senator Mason a moment ago that we are on track to complete that process by the end of the year.

Senator RHIANNON: That is good—sorry, I am just bouncing from different estimates at the moment. The ERA 2010 results were used in the calculation of the distribution of the 2012 round of Sustainable Research Excellence block grant for universities. Will the ERA 2012 results feed into the 2013 SRE distribution?

Prof. Byrne : Again, Senator, I answered that question when Senator Mason raised it and the answer is still the same: the 2010 results were used. It is my understanding that the 2012 results will be used in the same way. That is not the responsibility of the Australian Research Council; that decision is made elsewhere. The allocation of the SRE is not made within the SRE.

Senator RHIANNON: I am also interested—and, again, I apologise if I am doubling up; it has just been a bit of a challenge—in whether you can provide any advice as to the level of funding to projects to commence in 2013 under the linkage and discovery schemes and when the announcements on the discovery project round may be expected.

Prof. Byrne : I do not have any information yet on the timing of the announcement of the discovery round. I am an optimistic person and I hope we can get it out under the usual schedule. With regard to the other numbers, we would like to table our strategic plan and the numbers are there for those programs.

Senator RHIANNON: I have got more, but did you want to accept that?

Prof. Byrne : We will provide the time lines to you.

Senator Chris Evans: Senator, earlier Senator Mason asked a set of questions and the ARC said they would table the strategic plan, which is all the detail of each of the funding programs disaggregated from the budget line items. I think you will find all of that is in the strategic plan.

Senator RHIANNON: Minister, I want to go to the issue of the comments that are coming through in some areas about cuts to discretionary grants spending. Is the minister aware of the mounting anecdotal evidence that in the face of rumours internationally mobile researchers are beginning to consider moving to Australia or staying in Australia as a risky career option because of some of the developments in this area?

Senator Chris Evans: Am I aware of mounting anecdotal evidence and rumours? No.

Senator RHIANNON: So you are not aware of any of the discussions going on about how it will play out with cuts to the discretionary grants spending.

Senator Chris Evans: Are these questions directed to the ARC? You are asking me to respond to what you claim is mounting anecdotal evidence—I do not know what that means—and rumours to do with discretionary grants. Are they within the ARC or are we just generally having a chat?

Senator RHIANNON: No, we are not generally having a chat.

Senator Chris Evans: We are in the ARC, Mr Chairman, and if we are not asking questions of the ARC, I cannot help.

CHAIR: Senator Rhiannon, I have been listening to this exchange between you and the minister. We are dealing with the Australian Research Council. Your questions should be directed to that organisation as to grants and the like. If the minister needs to involve himself, he will but really we are talking about the ARC. I would ask you to direct your questions to that agency.

Senator RHIANNON: For the chief executive: we have got the end, I understand, of the Future Fellowships Program and that could remove a generation of researchers from Australia, which is how some people are seeing it. Could you comment on that, please?

Prof. Byrne : The Future Fellowships has one more round to go. When it was announced initially, it was for a fixed period only and that will come to the end after that period.

Senator RHIANNON: Again, doesn't that generate a perception that it is becoming tough for researchers in Australia, particularly—and the minister identified this—in this increasingly mobile development within research across the world?

Senator Chris Evans: If you are asking the officer to give an opinion about an assertion you raise, that is not his role. His role here is to answer questions about the policy.

Prof. Byrne : May I make a comment about that? One of the things that I have been doing as the new CEO of the Australian Research Council is to go around to universities. I think the Future Fellowships program has been a very good program. Senator Mason mentioned before the quality of our programs; this is one that has been very good. I think it was a very good initiative of the government when it was announced and it has had a significant and very positive effect in all institutions and both brought in a lot of researchers within the system in Australia and brought a lot of researchers from overseas back to Australia. So it has been a very positive scheme. Of course it is unfortunate that is was announced for a fixed time only. It would be nice to be able to do this forever, but that is the circumstance we live with. As I said, the impression that I have had from every single university I have talked to is of their strong appreciation of that scheme and the difference it has made in the sector, as I say, as a device to bring people back to Australia and establish people in research careers in Australia. So it has been very positive.

Senator RHIANNON: With regard to the current round of linkage grants, I understand they close on 14 November?

Prof. Byrne : Because of the pause, the freeze, we have not even opened it.

Senator RHIANNON: Yes, that was what my question was—

Prof. Byrne : We have not opened it.

Senator RHIANNON: When do you plan to open it and—

Prof. Byrne : When we get information about whether or not our grants are affected by the government's pause, freeze, arrangement. Then we will have some clarity and be able to determine the consequences for that program. We do not know at the moment. At the moment it is captured. We were not able to open it. We were scheduled to close it, as you said, but of course since we have not opened it it is hard to close it.

Senator RHIANNON: It sounds from the way that you have responded that it could even be after next year, that you really have no idea.

Prof. Byrne : Again, I do not know when the MYEFO process will be completed but, as the minister has indicated, we will know whether, and which of, our grants are affected when that is announced. I am hopeful that is going to be in a short while.

Senator RHIANNON: Would this delay be damaging to the relationship between industry and universities on a number of collaborative research projects and their relationships?

Prof. Byrne : Again, it is hard to know what the consequence will be because we have not had it have an effect yet. At the moment it is captured because we have not been able to open it, but in the background universities are still having conversations with their partner organisations in anticipation of having some clarity about whether our grants will or will not be affected. Those conversations are still going on in universities. When we hear whether the program is affected or not we can progress and hopefully progress quickly with those.

CHAIR: Thank you, Professor Byrne. Thank you to the officers from the Australian Research Council for your assistance today. Minister, did you table the strategic plan?

Senator Chris Evans: They certainly had it here.

CHAIR: I have got it over here.

Senator Chris Evans: I suspect you will find it on their website, but it is tabled.


CHAIR: We are dealing with the Department of Industry, Innovation, Science, Research and Tertiary Education and outcome 1—Industry and Innovation. Dr Russell, do you have any opening comments you want to make.

Dr Russell : I have a very brief statement about changes within the department. In June 2012, I indicated my intention to staff to revisit the structure of the department following the machinery of government changes announced in December 2011. One of the key drivers of this review was to ensure the department is making the best use of its valuable resources and to maximise the synergies that now lie within the new department. As a result of the review I announced changes to the department's structure on Thursday, 27 September which will become effective from Monday, 22 October.

I would like to provide the following summary of the key changes for the information of the committee. A small business division has been created to provide specific focus on small business issues. Early today the Minister for Small Business announced the appointment of Mr Mark Brennan as the Australian Small Business Commissioner. This is an important position which will provide additional support for Australia's two million small businesses. The commissioner will work directly with the Minister for Small Business and will be supported by the Office of the Small Business Commissioner, which will be located within the department.

A new International Education and Science Division has been created with the merger of the international education and international science functions to take advantage of common international activities. The divisions of research and science and infrastructure have been combined to create a Science and Research Division. A separate SK office has been created for the SKA project and I will be looking to fill the role of SKA project director in the coming months.

The renamed Tertiary Quality and Student Support Division will have responsibility for a range of regulatory functions for tertiary education and will include education services for overseas students and the Tuition Protection Service. The renamed Skills Connect Division will focus on the development of simpler and more responsive administration of Commonwealth direct funded skills programs as well as the re-engineering of existing Commonwealth skills programs into the new Skills Connect National Program. I am keen for the department to develop a 'no-wrong door' approach to program delivery in the states and territories across the department's programs. With this in mind, an in principle decision has been taken to explore how best to undertake more of the delivery of skills programs in state and territory office locations. This change potentially involves the relocation of staff and a full consultation process with affected staff will take place before any final decisions are taken on this change.

Finally, I have recently created the position of Chief Economist and appointed Mr Mark Cully. I have asked Mark to work across the department to maximise the opportunities arising from the expanded department, as well as strengthen the strategic focus of our policies and programs from an economic research perspective.

I am personally committed to building one departmental culture, not a replication of existing practices, but rather a new and collaborative culture that reflects the new department and its new purpose. The review appears to have been received positively by staff and the department is now working on its implementation and the delivery of its expanded agenda. With the chairman's agreement, I would like to table a copy of the revised organisation structure for the information of the committee.

CHAIR: Thank you, Dr Russell. I would also like you to table your statement. We will ask the staff to circulate that statement and the attachment to senators at the table. I wish you well in your new endeavours. That sounds like a succinct summary of a big job. I welcome Senator Lundy to the table. We are now going to deal with auto, and Senator Ryan has some questions as does Senator Urquhart in due course.

Senator RYAN: I would like to turn to the freeze on grants. It is sometimes described as a pause, but I note that Senator Evans said he was not being picky about language on this earlier today. We know there has been a freeze recently placed on grants made under a number of government programs. Does that include any of the car industry programs?

Mr Durrant : The automotive program—the ATS—is an entitlement scheme, so that has not been caught up in any type of—

Senator RYAN: Sorry, can you speak up a bit.

Mr Durrant : The ATS is an entitlement scheme so it was not part of that. The other new car plan—the newest program, the Automotive New Markets Initiative—is progressing as usual. Assessment of applications are under way. There has been no change to that process.

Senator RYAN: What about the ATS? Does the entitlement apply to capped? There has been no freeze there?

Mr Durrant : Correct.

Senator RYAN: With the second one, the newest one you just mentioned, you are assessing applications at the moment.

Mr Durrant : That is correct.

Senator RYAN: When do you expect to complete that assessment?

Mr Durrant : In the very near future.

Senator RYAN: Days, weeks or months?

Mr Durrant : Weeks.

Senator RYAN: Could we safely say that it would be done by the end of November?

Mr Durrant : I would expect so.

Senator RYAN: Do you have any information as to whether or not grants under that program can be made following the assessment process, given the grants freeze that is in place?

Mr Durrant : After the assessment process it goes to the delegate, in this case, for his approval. That is the next stage of the process.

Senator RYAN: What I am trying to figure out is whether the grants freeze impacts on this program. Does the delegate have the capacity to start making payments or is it impacted by the freeze on grant programs currently underway?

Mr Durrant : At this stage it has not impacted on the program because we are still in the assessment phase.

Senator RYAN: Have you had any advice as to whether or not this program is impacted by the grants freeze?

Mr Durrant : No. At this stage we are going through the assessment process so it has no impact at this stage.

Senator RYAN: Have you been advised?

Mr Lawson : Perhaps I could assist. I am the delegate.

Senator RYAN: Lucky you!

Mr Lawson : My understanding is that until we are advised about the outcomes of the pause process I will not be in a position to sign anything if it comes to me—but they have not.

Senator RYAN: So, you have been advised that the grants pause means that when they come to you to make decisions you do not have the capacity to make grants.

Mr Lawson : Not specifically. What I said was that the general understanding we have is that all competitive programs are subject to a review process—a process called by various words—and until that process has been concluded by the government I will not be in a position to make any grants.

Senator RYAN: Have you communicated that to the applicants?

Mr Lawson : Not specifically, but there has certainly been a bit of media about the issue.

Senator RYAN: When a decision is made about successful applicants—hopefully by the end of November if it is a matter of weeks—what will be your course of action? Will you advise successful applicants that they have been successful but there is not the capacity to start making grants, or will they not be advised until you have the capacity to start making grants?

Mr Lawson : Until I have the capacity to agree grants, they have not been approved. The delegate approves—

Senator RYAN: The delegate approves the grant and makes the decision about who gets the grant, so to speak.

Mr Lawson : Advice is provided by a committee, but the delegate under the FMA provisions needs to make sure that they have financial resources available to make a decision.

Senator RYAN: Until this review, as you describe it—or as others might say, the grants pause or the grants freeze—is resolved, there will be no communication to the applicants about their success or otherwise?

Mr Lawson : The process has not changed because we are still going through the process—

Senator RYAN: I appreciate that but—

Mr Lawson : If we face the prospect that the process comes to a conclusion and there is a concern for applicants then we would think about that issue and whether people need to be advised. The normal course of events has been continuing. This program is done in conjunction with the Victorian and South Australian state governments. They are also party to the process. They understand the exercise. The normal process of advice being prepared for the delegate has not yet exhausted itself. So the issue has not arisen.

Senator RYAN: I appreciate that. We are not having this hearing again until February. Without meaning to put words in your mouth, I think you said that the process is not complete until you make the decision about who gets what and then you advise successful and unsuccessful applicants. At some point, the process cannot be complete until the grants freeze is lifted because you do not have the financial resources available to make the commitments.

Mr Lawson : Yes. My understanding is that when we get advice from the government that the review of the Competitive Grants Program has come to a conclusion then we will know what the outcome for individual programs is, and we can advise people.

Senator RYAN: Have you been advised about when that potentially might come to a conclusion?

Mr Lawson : Not specifically for this program.

Senator RYAN: You just need general advice that, to use your term, the 'review' of the Competitive Grants Program has concluded in order for you to then have the financial resources available to make the commitments, because it is the review that has frozen your ability to do so. Have you received any advice on when that review, as you describe it, will be completed?

Mr Lawson : I have not received a specific date.

Senator RYAN: A month or a vague time line? A rule of thumb was used by the secretary of the department of finance yesterday to describe something.

Mr Lawson : Senior officers are required to make a judgement call about what is going on. I have made that judgement but it is not for me to announce—

Senator RYAN: You have not received something from the department or a communication from the department of finance or from the minister's office as to when you might expect to make these commitments?

Mr Lawson : We receive regular updates about the process, but I have not received a statement with a date—

Senator RYAN: Yes, I know. Those processes might include a time line. They might include an aspiration to have it finished by mid-November or the end of November—sometime after MYEFO comes out, the cynics might say. In those communications, have you received an indication of when—not a date, maybe even a month—you would expect to be able to make these commitments? Obviously, firms have put a great deal of effort into preparing these submissions. They are not necessarily inexpensive to do. When might they expect to hear from you?

Mr Lawson : The issue has not arisen because the committee are still going through the process of reviewing the applications. We have not come to the situation where we need to consider whether companies' applications are going to be delayed. They just simply have not been delayed at this stage.

Mr Pettifer : As you would appreciate, this is a whole-of-government process and we have not received any advice on when that process might be completed. That is a matter that should be taken up with the relevant agency.

Senator RYAN: You have not received any advice. So you cannot give any time line today as to when you will have the capacity and the resources available to make these determinations, even though the assessments are expected to be completed by the end of November. That is a statement of fact that characterises our discussion—is that right?

Mr Lawson : I do not believe a problem arises unless—

Senator RYAN: I am not saying there is a problem; I am just trying to get the facts. We expect to have the assessments done by the end of November—'A matter of weeks,' was the term that Mr Durrant used. The process cannot complete until you have the resources to make these assessments and commitments, but you do not have any indication as to when you can make those assessments or commitments as yet.

Mr Lawson : I have indications, but the whole-of-government decision has not been made.

Senator RYAN: What are the indications?

Mr Lawson : My own judgement about when I expect this might finish.

Senator RYAN: An indication is not a personal judgement.

Senator Lundy: Senator Ryan, I think you have probably pushed this as far as it can go. As you well know, the department of finance is the right agency to be asking these questions of, and you know very well that we are not going to be engaging in any commentary about the timing of the—

Senator RYAN: What I am asking is: has he received any indication as to when he will be free to make these determinations?

Senator Lundy: It does not matter how many times you ask the question, you are going to get the same answer.

Senator RYAN: I have not had a refusal to answer yet. You have referred to indications. I am not asking for your own judgements; that would be inappropriate.

Senator Lundy: I am hearing sensible answers from this table and the same question from you for about the last five minutes. If that is how you want to spend your time in estimates, that is fine by me.

Senator RYAN: You can stonewall all you want. What we have had is a phrase that you have received indications.

Senator Lundy: It is not stonewalling, Senator Ryan—

Senator RYAN: I am asking about the indications that the officer said he had.

Senator Lundy: it is a reasonable approach to answering questions.

Senator RYAN: The officer has said he has received indications. I am asking if he will give an indication as to what those were. I am not asking for his personal judgement; I clarified that. Here we have an important program which cannot be concluded till your government unfreezes these grants programs. You have not received advice. You said you have made your own judgements. I am not asking for either of those; I am asking if you received an indication and you have said yes.

Mr Lawson : I said that I have received periodic advice about the process that the government is going through in reaching its conclusion, but that process has not come to an end. In the absence of the finalisation of that process, I do not have a specific date.

Senator RYAN: That does not answer the question, but what we are finding here more and more often is that we will actually start using FOI to find documents. You are quite free to say there is no time line—I agree with you—but you are not answering the question I have asked.

Senator Lundy: I think that is a matter of opinion.

Mr Pettifer : I think we did answer it. I think we said it was a whole-of-government process that we have not received to date.

Senator RYAN: I am not asking if you have received it to date.

CHAIR: Senator Ryan, let the official response.

Mr Pettifer : If you wanted to follow it up with the department of finance, that would be the appropriate channel. We are not going to provide you with our opinion on a process and when it might conclude. That would be inappropriate; you have acknowledged that.

Senator RYAN: I am not asking for that. I am not going to be verballed in what I have asked. I am not going to pursue this, but you said you have received an indication. I am asking for that; you are not answering. In answer BI158 to a question on notice, I was provided with some data around committed and uncommitted funds in various programs. It included the ATS and ASIS—there are quite a few programs there. It is possible for you to provide today an update of those funds?

Mr Durrant : Yes.

Senator RYAN: Thank you. There is a lot there, so I will not go through it verbally.

Mr Durrant : Perhaps I could do it by exception, with the information that was provided in the answer on notice and what has changed up to today. Two programs have concluded since the question on notice. One of those is the Automotive Market Access Program. I think there was an indication of the time of the question that there was a small amount of money available, $100,000. That was expended by the time the program concluded. The other program that concluded was the Automotive Industry Structural Adjustment Program. This is the structural adjustment element of that program as opposed to the labour market element of that program. The program has concluded and $11.4 million was uncommitted at the end of the life of that program.

Senator RYAN: Turning to the FOI issue that has been going on with the Australian Financial Review, to date do you have a cost to the department of pursuing through the courts the FOI legal issue with the Financial Review?

Mr Durrant : I will defer to my colleague.

Ms Weston : As at 16 October—just the other day—we have been advised by our lawyers that the total of all costs and disbursements billed to date, and work in progress and disbursements incurred but not billed, including counsel fees, were $156,348.36 inclusive of GST.

Senator RYAN: Is that only legal expenses or is that costs incurred via lawyers—is that a good way to describe it? Or have there been other costs incurred?

Ms Weston : That is my understanding of the totality of the costs.

Senator RYAN: Did you say that is the legal costs?

Ms Weston : It is all our costs in relation to this.

Senator RYAN: Do you have a subset of that which is legal costs—which would be solicitors, solicitors' disbursements and counsel, I would imagine?

Ms Weston : We can take that on notice and provide it.

Senator RYAN: What firm were you using for the legal action?

Ms Weston : We are working with Clayton Utz.

Senator RYAN: How many lawyers did you have working on this? Do you know how many lawyers they had? Do you have any in house?

Ms Weston : I am not sure of the exact total. I can certainly take that on notice. We have some in-house lawyers who have been helping us to progress the litigation.

Senator BUSHBY: How many hours? Have you got an account of the number of hours Clayton Utz have billed you for?

Ms Weston : We would have to take that on notice, but I can certainly aim to provide that for you.

Senator RYAN: Have you shared any legal expenses with any outside parties?

Ms Weston : Not those expenses, no.

Senator RYAN: What other expenses have you shared with outside parties to deal with this case?

Ms Weston : We have not.

Senator RYAN: In terms of legal expenses, there have not been any shared with Holden, Ford, Toyota or anything like that?

Ms Weston : Our costs relate to our own.

Senator RYAN: On what day were Holden, Ford and Toyota informed that the material had been erroneously sent to the AFR—to use, I think, the defence of the department?

Ms Weston : They were advised on Saturday the 22nd of September.

Senator RYAN: Who informed them? Was it by email, telephone?

Ms Weston : There were phone calls made and—

Senator RYAN: Pleasant phone calls? Who placed the calls?

Mr Lawson : It was myself and Mark Durrant.

Senator RYAN: There were 39 documents, I understand?

Ms Weston : Yes.

Senator RYAN: I am going to be careful, and if at any point I cross the line into where you would be uncomfortable answering because of legal action, please feel free to say. I have not been following the case in as much detail as some at the table. How many of the 39 documents contained commercial-in-confidence information?

Ms Weston : We might have to take that on notice. There were a variety of documents covering a variety of areas of exemption under the FOI Act. We can certainly take that on notice and provide you with more detail.

Senator RYAN: What is your definition, for the purposes of this, of 'commercial-in-confidence'? Presumably you have a relatively firm definition around which people in the department can operate for the purposes of questions on notice and FOI.

Ms Weston : The commercial-in-confidence would have related to the FOI Act, because that is what the basis was and what we were using for redacting that information.

Senator RYAN: It requires some judgement. Do you have any advice to people internally? You are dealing with a different sort of commercial-in-confidence information than, for example, the Therapeutic Goods Administration might.

Ms Weston : There is guidance material provided on FOI, including with the Information Commissioner and so forth. We would use that guidance, examples and so forth in that to guide us. Also, as part of these processes where there is third party information, we go out to the third parties as required under the FOI Act and ask for their view. In relation to some of those documents, the third parties will have told us that that is commercial information.

Senator RYAN: Do you take that at face value?

Ms Weston : We take strong consideration of what the third parties say, but we make our own conclusions.

Senator RYAN: Do you have any internal guidance notes on what constitutes commercial-in-confidence and how staff would make judgements on that?

Ms Tregurtha : We do use the Information Commissioner's guidelines for processing FOI requests. That is the main part of the guidance material that we use.

Senator RYAN: I remember seeing those a while ago. There is no specific one for the manufacturing sector or for the department of industry?

Ms Tregurtha : No, there is no specific guidance.

Senator RYAN: Mr Lawson, we discussed a few things before. When do you become personally involved, if at all, in considering or reviewing your division's response to FOI queries? If you do, when do you become involved in considering or reviewing your division's FOI decisions?

Mr Lawson : The process for an FOI request is that, in the first instance, generally a decision is made by the branch head. If the applicant wishes to make a so-called internal review, then that goes up to the next layer. In that circumstance, that review came to me.

Senator RYAN: This might put you in a bit of an awkward situation, not related to any legal action. I have been made aware that several requests have been made of the department, during 2012, for the release of correspondence between you and the minister's office. I think I asked some questions about emails at a previous estimates hearing. Have you been involved in discussion, review or deliberation about responses to those requests?

Ms Tregurtha : Because of the nature of that request, I was actually the decision-maker on that one.

Senator RYAN: Sure. I do not know where that is up to. If that were to go to internal review, where does it go from there?

Ms Tregurtha : We would have to consider who would be an appropriate internal reviewer—

Senator RYAN: You would make an ad hoc decision—

Ms Tregurtha : which is the relevant deputy secretary.

Senator RYAN: I go to question on notice BI-57, which was mine, I asked a question about the number of emails that Mr Lawson had exchanged with the minister's office between August 2011 and March 2012. To that specific question, I received the following response:

Mr Lawson exchanged emails with Ministers’ offices as required, with the result that the numbers were highly variable.

That is all I have received since that question was asked. Is it possible for you to tell me the number of emails that were exchanged between you or someone else on your behalf, Mr Lawson, and the minister's office between August 2011 and March 2012?

Mr Lawson : I, like many people, delete emails as I go through them—

Senator RYAN: Sure.

Mr Lawson : so the exercise of trying to identify the number that would have gone through would have required an enormous amount of work in accessing back-up tapes and things like that. I made a judgement that an appropriate response, which added to my previous comments, that it is a highly variable number, would take a lot of effort and it may not be feasible to give an exact answer about how many were done. So we tried to give you a suggestion. I think you may have told us the wrong number in the question. Could you just repeat it?

Senator RYAN: I have it as BI-57.

Mr Lawson : Thank you. Sorry.

Senator RYAN: I appreciate that. We all delete lots of emails. An FOI request from the member for Mayo—which was slightly broader, I appreciate—was blocked on the grounds that there was a combined total of 1,120 emails exchanged between Mr Lawson and the minister's office and Mr Durrant and the minister's office. Can you explain to me how with a question on notice we just get 'variable' but we get a specific number for an FOI? Presumably to come up with that number of Mr Lawson and Mr Durrant, we needed to know what you had.

Mr Lawson : On that number we did an analysis of the existing things that were still on our systems. We did not go through a process of finding out whether they were deleted emails or those sorts of things. I did not want to in terms of a parliamentary response. Since we had given the answers on those sorts of numbers before, we had indicated that we were trying to make a judgement about how much additional effort we put to it but also provide as accurate data as we can to the relevant—

Senator RYAN: Sure. Can I just respectfully suggest that we do not want to start having profound inconsistencies between what is accessible via FOI, even if it is information that we cannot access because of its call upon resources versus questions on notice. I assume you did this because legally under the FOI Act you had to assess what documents the department held. Can I respectfully suggest that a similar approach should be taken to questions on notice or, if it subsequently becomes available and you have not done it, updates are always appreciated. I would not want to start getting to a situation where we are having to fire off different avenues to get the same information.

Mr Lawson : I understand your point, Senator.

Senator RYAN: Dr Russell, is it true that you told the editor of the Financial Review, Mr Stutchbury, that the government was comfortable about releasing that part of the material that did no relate to the confidential elements of the companies' business plans?

Dr Russell : No. What I said to Michael Stutchbury on that weekend was that the issue was the protection of the confidential information that we had received from the companies. That was the centre of the department's concerns in this inadvertent release of the material. That was the key aspect of what we were concerned about. It was in that nature that we had the discussions on the Saturday and I guess the Sunday as to whether it was possible for us to go through a process where we could be confident that the commercial-in-confidence information was protected. That is why we set off on a process of discussion on the Sunday.

I made the point to Michael Stutchbury on the Sunday that we needed to involve the lawyers. Michael Stutchbury was keen that we just discuss this and negotiate this between ourselves. I said, no; we needed to have the lawyers involved because lawyers are in fact quite useful when it comes to making—

Senator RYAN: There are some people at the table who would be quite happy to hear that.

Dr Russell : This is partly based on my experience of the US where, unless the lawyers are involved, it is not really a serious discussion at all. I said to Michael on the Sunday that the lawyers had to be involved because they were our agents, so to speak, but lawyers are very useful when it comes to being able to clarify exactly what we are talking about. On this occasion what we were trying to come to grips with was whether it was possible to secure the commercial-in-confidence information in a manner that gave the department confidence that this would not become generally available or that it was protected properly. So the lawyers, in good faith, went about that process during the course of the Sunday, to see if this was in fact possible. It became fairly clear that it was not possible to do that on a piecemeal basis. As I think people have indicated, there were 39 documents, and the only way we could be confident that the material was safeguarded—that the commercial in confidence material was safeguarded—was to go through a process which basically made sure that all the material was in effect returned or safeguarded. That was when it became clear that we needed to involve the court.

Senator RYAN: That is when you decided to go to court rather than negotiate?

Dr Russell : No, we discussed it all through the course of the Sunday. Michael Stutchbury was aware, and the AFR were aware, that we already had set in process arrangements with the judge. We had a judge on standby, I think, during the course of that Sunday, to see whether it was possible to arrive at an arrangement that did safeguard the information. So the AFR was aware that if we were not able to achieve this then we could have utilised the judge on a Sunday. By the end of the day, we had agreed that we would safeguard the information. It was clear to their lawyers and our lawyers that we would have to approach the court on the Monday, which is in fact what we did.

Senator RYAN: How much do you expect to spend on this? We are up to $170-odd at the moment, as of earlier in the week.

Dr Russell : I am not sure. We have given you the information as to—

Senator RYAN: How far does it have to go?

Ms Weston : We are sort of waiting for a decision—an interlocutory stage, which may impact on where we go. So we probably really cannot speculate about that at the moment.

Senator RYAN: So this is not a final decision; it is just a decision on the original application?

Ms Weston : It is an interlocutory point that is being discussed at the moment.

Senator RYAN: Is the decision on whether this goes to trial dependent on that first decision?

Ms Weston : Yes.

Senator RYAN: I understand that this FOI procedure has been a longer procedure with the Australian Financial Review. Is it true that things like transcripts of ministerial speeches and speaking notes were redacted when these documents were first released?

Mr Durrant : I was the original decision maker. I do not recall that. I do recall that I released suggested talking points for example.

Senator RYAN: Was a thank-you letter from the minister redacted?

Ms Tregurtha : I think this does start to get into the content of the documents—into that space where there is a matter before the court—and whether or not the documents contain particular classes or categories of information.

Senator RYAN: Is the issue before the court the factual matter of what they contain or is it whether or not—and you can understand I did try and word those questions with as little specificity as possible, and I am trying to do so again. Isn't the question before the court not the issue of the fact of what is contained in the documents but their application to the FOI Act?

Ms Tregurtha : It depends, to an extent, on the way the matter proceeds. It may be that the issue before the court becomes whether or not material contained in the documents is commercial-in-confidence material, so it may get into questions around the substance.

Senator RYAN: All right. I will take a step back. Were any publically available documents redacted in the original release of these documents—not the one that is the subject of the court action, which is where, I understand, there was no—

Ms Tregurtha : Could I answer that generally? It is the case in dealing with FOI that sometimes publicly available material is redacted, because when you look at the documents there may be irrelevant material which does become redacted under section 22 of the FOI Act.

Senator RYAN: Can you fill me in on that particular provision?

Ms Weston : The reason we might do that is that if you are required to go through the documents—some of them are quite long—that are not relevant to the request, it incurs costs for the applicant, which we try to avoid, and it does require a level of analysis. We follow the guidance from the Information Commissioner on section 22 and have had this approach to section 22 tested in the AAT recently and that position was found to be upheld.

Senator RYAN: You redact documents so as to reduce costs to applicants. Did I hear that correctly?

Ms Tregurtha : That is essentially it in some ways because, otherwise you would have the exercise of considering the irrelevant material—irrelevant to the scope of the request—to see whether it contains third party material or personal information or material that may be exempt for other reasons, which could, in effect, increase the cost to the applicant.

Senator RYAN: So you redact documents that are not specifically related to the FOI request in order to save costs to the applicant based on not having to analyse it against other criteria.

Ms Tregurtha : Essentially.

Senator RYAN: Okay. I am trying to use layman's terms here—lay person's terms. According to the Financial Review, one document described a visit by the then minister, Kim Carr, to Detroit in January—for obvious reasons, to meet two of the manufacturers. Every paragraph in the memo was blacked out, including who the minister met and what was said at a press conference. Is that the sort of redacting we are talking about?

Ms Tregurtha : I cannot answer that. It goes to the specific document in question.

Senator RYAN: Sure. You cannot blame me for asking. I will come back to this briefly, I appreciate, after lunch.

Proceedings suspended from 12:41 to 13:26

CHAIR: We will now recommence. We are on outcome 1, industry and innovation. Senator Ryan is going to continue his questions. I can advise you, Senator Ryan, that after some time I will interrupt you and give the call to Senator Urquhart.

Senator RYAN: I appreciate your flexibility, Chair. Thank you. I will not be going near the FOI issues. So those who are dealing with that can take a break. I am going to jump around a bit because I am conscious of time and I am just trying to seek some information on various programs. At the estimates hearing on 15 February this year we discussed the work the department had done to verify the assertion that the then recent $34 million deal with Ford would cause the number of jobs at the company to grow by 300. We discussed that back in February and we had a long discussion about it. The company announced in July that it was shedding 440 jobs rather than creating additional jobs. Has the department sought or has it been provided with revised figures about the company's jobs forecast between now and 2016 and indeed beyond that?

Mr Durrant : No forecast has been requested from or provided by Ford.

Senator RYAN: So back in February when we were discussing the $34 million package, I cannot recall whether you asked for a commitment from Ford or whether they proffered 'This is what the package would be'. So, since the announcement of the loss of 440 jobs—which represents a fairly significant turnaround from what the package was promised and what we discussed—you have not sought any updated figures from Ford about what that $34 million will effectively buy in terms of jobs?

Mr Durrant : As a point of clarification: the $34 million is directed towards the research and development, design and engineering of the next model, that refresh of the Ford. So the jobs that were referred to as securing 300 jobs were in the design and engineering area.

Senator RYAN: So none of them referred to future manufacturing or anything? It was about the creation; it was not about the maintenance, if I recall the language correctly.

Mr Durrant : The language that I recall, Senator, is that it secures 300 jobs in the design and—

Senator RYAN: Secured 300?

Mr Durrant : Yes.

Senator RYAN: I will check the words on that and we may end up discussing that again next February. When we are discussing these special deals for Ford and Holden there have been claims that 200,000 car industry jobs would have been at risk without them. Can someone in the department explain to me the 200,000 job claim in the car industry?

Mr Durrant : There are around 50,000 people directly employed in the manufacturing of cars. That includes the components and service providers. Those are direct numbers that come from the ABS. I think it is around 46,000 for the last quarter. It varies a little bit around that 50,000 mark. There is an international multiplier effect of about 1 to 5 jobs. We have taken a somewhat conservative approach and determined 200,000 jobs, based on the multiplier and the fact that we have 50,000 jobs.

Senator RYAN: You have gone for one in four rather than one in five.

Mr Durrant : Yes.

Senator RYAN: Does that 200,000 include 30,000 people that might work in the after-car support market?

Mr Durrant : No.

Senator RYAN: So this is a multiplier about other manufacturing industry.

Mr Durrant : That is right. It is just the multiplier purely on the manufacturing of motor vehicles.

Senator RYAN: I remember working in an industry that used to talk about multipliers a lot. So you do not have any evidence, you are simply applying a multiplier effect to the just under 50,000 people employed directly manufacturing cars, components and, I think you said, after-car. Did you say after-car or support?

Mr Durrant : It includes service providers to the toolers.

Senator RYAN: In the 50,000, you are not counting those who are after-market support for imported cars. It is only those related to the manufacture.

Mr Durrant : That is correct, it is related to the manufacturing.

Senator RYAN: Have you investigated or undertaken any work investigating the multiplier effect? Some of these multiplier effects—I have done a bit of work on them myself—do not always survive scrutiny.

Mr Durrant : Yes. Like I said, it is a national figure. It is one that is used around the world by various—

Senator RYAN: Car manufacturers?

Mr Durrant : Car manufacturers use it, but academics also use it. We have not done the multiplier effect ourselves.

Senator RYAN: Is this multiplier effect challenged?

Mr Durrant : I think it is a generally accepted one.

Senator RYAN: I am not familiar off the top of my head with the work, but, for example, in reports the Productivity Commission has done into cars, have they challenged it?

Mr Durrant : Not that I am aware of.

Senator RYAN: Can you give me some references for the multiplier effect that the department uses to reference or footnote it, for want of a better way of putting it.

Mr Durrant : I will take that on notice.

Senator Lundy: Can I just say that in applying the multiplier effect there is also the fact that the auto manufacturing industry plays a crucial role in the broader manufacturing sector, which employs up to a million people. You cannot just consider what happens within automotive manufacturing and think that it does not have an impact on the broader manufacturing sector across the Australian economy.

Senator RYAN: That is a different argument.

Senator Lundy: I just think it is important to make that point along with the fact that our co-investment will support some $4.1 billion of investment in capital and innovation, which supports something like $32.3 billion worth of domestic production in the area. These are all big figures in terms of the Australian economy. I just wanted to make that point given your line of questioning.

Senator RYAN: I am quite happy for that. The point I was making is different to your point various interlinkages. I was giving specific consideration to a multiplier effect, where a specific value is being applied to a certain number of jobs, together with the underlying assumptions that go into that multiplier effect, as opposed to broad catchphrases about value to an economy.

Senator Lundy: It is not a catchphrase. It is clearly demonstrable that the automotive manufacturing sector has a role much greater than, if you like, the sum of its parts across Australian industry.

Senator RYAN: The sum of its parts is a catchphrase in this sense, Senator Lundy. All I was asking about was the multiplier, which I think is worth examining. You mentioned co-investment, and I am glad you raised that. It is a term that has been used by the current government and at least one of the manufacturers quite prominently—I am not sure if all three of them do. In terms of the co-investment—a word you would use and I would not—for the car industry, do you believe that that means that the co-investors, to use you language—being the Australian taxpayers—have some sort of right to see the value of their investment?

Senator Lundy: I think they do see the value of that investment.

Senator RYAN: The details of that investment?

Senator Lundy: I think they do see the value of that investment, Senator Ryan.

Senator RYAN: Yet the government is keeping a lot of information from taxpayers, which could go to a direct assessment of the value that that co-investment—to use your phrase—delivers.

Senator Lundy: In what way, Senator Ryan?

Senator RYAN: I refer to the current court case.

Senator Lundy: That is currently in court and the government's interest is that the FOI laws, which we strengthened on coming to government, are applied in the appropriate way.

Senator RYAN: FOI laws are about the rights citizens have to access information. The government can choose to release things that are greater than the ambit of FOI laws, but it is choosing not to. You are not constrained; you can release more than the FOI laws would grant me the legal right to access.

Senator Lundy: These issues are currently the subject of a court case, as you know.

Senator RYAN: I will move on. Prior to the announcement by Ford on 17 July of the 440 job losses, was the government, in this case the minister—I appreciate you will probably have to take this on notice, Senator Lundy—or the department provided with any indication of any kind that Ford was to make an announcement of those job losses?

Mr Durrant : We will have to take it on notice. I believe that Ford notified me of the announcement on the day or the day before.

Senator RYAN: Would you take notice when you were told—I appreciate you might not have that off the top of your head—who was told, if there was someone other than you in the department, and when they were told. Minister, I would ask you to take on notice when the minister's office, if it was, was provided with such notice, by whom, who was told and when they were told.

Senator Lundy: Yes.

Senator RYAN: Is the department or the government aware of any planned future redundancies or redundancy roles at Holden?

Mr Durrant : No. Holden recently announced to its suppliers a number of production down days, which are days that they take off to balance supply and demand. They have announced those out to early March of next year. That is the only information that I am aware of of any change in their production.

Senator RYAN: You are not aware of any recent internal communications within Holden which may have flagged a future round of redundancies or asked employees to start using up leave entitlements?

Mr Durrant : No, I am not.

Senator RYAN: Thank you. Is the Australian Automotive Aftermarket Association correct when it says its members have been given no access to the government's car industry programs and that the only support for component makers is for those who have a relationship with one or more of Toyota, Ford or Holden?

Mr Durrant : To have access to the ATS, which is the largest support assistance program, you need to be supplying or be a motor vehicle producer.

Senator RYAN: So, if you are not in a contractual relationship with Ford, Toyota or Holden manufacturing in Australia, you cannot access the various car industry programs?

Mr Durrant : No, just the ATS. The other programs have more access. For example, under the latest program that we are running, the Automotive New Markets Initiative—

Senator RYAN: Was that the one we discussed earlier?

Mr Durrant : That is correct. A number of aftermarket suppliers have made applications through that program, but recognising that they are aftermarket and suppliers to the motor vehicle producers.

Senator RYAN: Is one of the criteria for the assessment of that program whether or not they have a relationship with one of the three manufacturers?

Mr Durrant : There is a criterion. It is not the three manufacturers per se.

Senator RYAN: Or someone who manufactures for them.

Mr Durrant : If you are a manufacturer for somebody else or another motor vehicle producer outside Australia, for example.

Senator RYAN: So it also works for those who might make brakes, for example, for BMW in South Africa or something?

Mr Durrant : Correct.

Senator RYAN: How do you verify whether components manufacturers supply domestic car manufacturers in this case when I understand that at least one of them, in this case Holden, asks them or requires them to sign non-disclosure agreements and does not generally share information about who supplies them and the specific products they are supplied with?

Mr Durrant : I might refer to my colleague, who administers the program in AusIndustry. He may be in a position to answer that.

Mr Sexton : We are provided with detailed plans from the supply chain participants in the Automotive Transformation Scheme which identify the components that they supply, whether they be to the three car companies or to someone up the supply chain who then in turn sells to one of the three car companies. We also undertake extensive audits of their activities in those areas which include their sales.

Senator RYAN: Effectively, the nondisclosure agreement does not bind them from disclosing to you as a program participant. Has the government ever considered making a condition of participation in the ATS for the people at the top, the major manufacturers, that such nondisclosure agreements are not available to those participants? Let me explain why I ask that. Some components manufacturers have said that the fact that they supply GM could in fact be a very strong advertising feature for their work. As I understand it, they are allowed to say they supply GM but they are not allowed to say what they supply GM. If we are to extract maximum value as taxpayers from this program, it strikes me that we might be able to assist components manufacturers being able, shall we say, advertise their wares, which have partly been supported and developed with this program. Have you ever considered having provisions that strike out or prevent such nondisclosure agreements?

Mr Durrant : We are talking about a commercial contract there. It does surprise me that the supply chain component producers are not able to take advantage of supplying to GM, for example, because GM, Ford and Toyota are quite active in trying to promote their suppliers in the general interglobal supply chain. The idea that—

Senator RYAN: I am told that, externally to their relationship with GM in this case, they can say they supply GM but they cannot say what they supply. It may be obvious if you are a window maker that it is windows, but it does prevent them in some ways from advertising their wares by being able to say, 'We supplied this new cutting edge brake pad.' You have never considered that—okay.

Mr Sexton : This is news to me.

Senator RYAN: In that case, I accept I could be misinformed. I will move on. The department has evaluation and audit areas. Have you conducted formal analyses of any or all of the programs under the New Car Plan for a Greener Future?

Mr Durrant : The programs that are currently under evaluation are: the recently concluded automotive supplier structural adjustment program—the structural adjustment element of that is under review; and the market access program is also currently under review. As we indicated at the last estimates, the Green Car Innovation Fund will also be evaluated in the first quarter of 2013.

Senator RYAN: When do you expect the reviews of the first two to be completed?

Mr Durrant : We hope to do that by the end of this calendar year.

Senator RYAN: Thank you. Can you tell me what has been the change in the average fuel economy of Australian manufactured cars since the start of the New Car Plan for a Greener Future in 2008?

Mr Durrant : I will have to take that one on notice.

Senator RYAN: I thought you might. Has the department or the minister expressed a view, or has there been any kind of reaction, to the comments attributed to the former Reserve Bank governor of Bernie Fraser earlier this year that the high dollar is being used as a convenient excuse by the government and the car industry, and more serious problems are being caused by falling productivity in the car industry itself?

Mr Durrant : I do not think the department has undertaken any work to form a view on that specific statement.

Senator RYAN: Have you undertaken work on rates of productivity growth or otherwise in the sector over the last five years?

Mr Durrant : Each year we collect a number of statistics called key automotive statistics. They are published on the website and do include a measure of productivity. That measure is the number of cars per person. That measure was increased positively up until 2008, and then we had the global financial crisis where employers in general, including the car industry, kept people on. As a consequence of that, the productivity measure went down. Over recent times, that productivity measure is again improving.

Senator RYAN: Has it reached 2007 levels yet?

Mr Durrant : I do not have comparative—

Senator RYAN: That is on the website?

Mr Durrant : It is.

Senator RYAN: I will check. Thank you, Chair, for your patience.

CHAIR: Senator Urquhart, I think you have a few questions on auto.

Senator URQUHART: I know you outlined that there are 50,000 direct employees in the sector and a one-in-four multiplier effect—so about another 200,000. Apart from that, can you outline what the importance of the auto sector is to Australia.

Mr Durrant : Following on from Senator Lundy's statements earlier—

Mr Lawson : While my colleague is collecting his thoughts, I might mention that there was a recent newspaper article on Rio, the mining company—'A Mine of the Future'—on work that they are doing on achieving automation in the mining sector to achieve safety and productivity improvements. The gentleman who was interviewed, who is in charge of that project, was formerly of the automotive industry and said that they shamelessly extracted the information from the automotive industry as the area where issues of automation and lean production technologies and so on are adopted in the wider economy. It was anecdotal but it was in the newspapers just recently. It reflects work that was done for the last review of the automotive industry where we had some academic work done on the so-called externalities where third parties gain from research and development work that is done, and the introduction of new technologies that are done in one particular sector. The automotive industries are well known as the key engineering source for a lot of those sorts of technical developments and that, through early adoption in the automotive industries, then spread through to the rest of the economy. I might pass to my colleague.

Mr Durrant : Just following on that concept, of the flow-on benefits of the skills that accrue in the automotive industry, 15 per cent of automotive employees have bachelor degrees compared to 11 per cent in general manufacturing. In motor vehicle producers, employees are particularly highly skilled with 19 per cent having bachelor degrees and six per cent having postgraduate or graduate diplomas. Around 42 per cent of employees under the motor vehicle producers have certificate I and II qualifications, which is significantly higher than all other industry sectors.

Senator URQUHART: Those skill levels are transferrable to other industries, are they—or are they predominantly specific to that industry?

Mr Durrant : Yes, the point Mr Lawson was making is that they are highly regarded from the shop floor through to their skilled engineers and they are utilised. The production processes that they are trained in and understand can be applied to many different industries.

Senator URQUHART: Has the department quantified the investment made by the auto sector to the Australian economy?

Mr Durrant : In terms of the benefits from the automotive transformation scheme, it will support $4.1 billion in investment in capital and innovation and $32.2 billion in domestic production over the period of 2011 to 2015.

Senator URQUHART: And if that scheme were to cease in 2015, what would be the impact on the sector and more broadly?

Mr Durrant : The department has not done a particular analysis, but I refer to statements by the Federal Chamber of Automotive Industries which indicated it would have a significant impact on its members.

Senator URQUHART: What has the automotive supplier envoy been doing to link Australian firms into the global supply chain?

Mr Durrant : I will just get some information.

Mr Lawson : While my colleague is collecting his data, the two envoys have been doing a number of international trips with leading groups of automotive companies to enter into the global supply chain for the automotive industry

Mr Durrant : We have two automotive envoys, Mr Conomos and Mr Steve Bracks. Mr Conomos has led industry missions to China, India, Thailand and Malaysia. He has also travelled to Korea, Japan, Germany and the Czech Republic. He has supported the Victorian government's supermissions to India and he recently returned from an R&D mission to China where he supported the CSIRO. Mr Bracks has led trade delegations to the US, the Czech Republic, Germany, the United Arab Emirates, Kuwait and Saudi Arabia, and he is planning another trip to the US in the near future.

Senator URQUHART: Is it too early to say what the outcomes of those visits have been?

Mr Durrant : Around $600 million worth of business has been contracted as a result of the efforts of a lot of people. It is hard to say that an envoy's effort related to that, but the industry has indicated that the envoys' efforts supported up to $600 million worth of contracts being written since 2009.

Senator URQUHART: Thank you.

Senator COLBECK: I want to go first to some questions around the current program freeze. I know auto answered some questions about that, but I need to ask some questions more specifically around other industry agency programs.

Senator Lundy: Senator Colbeck, as I reminded Senator Ryan, whole-of-government questions relating to the grants pause were directed to the department of finance—

Senator COLBECK: They are not whole-of-government questions; they are specifically related to this department.

Senator Lundy: No problem. I am just foreshadowing that because I will intervene if you try to ask whole-of-government questions.

Senator COLBECK: Firstly, can I get the number of staff currently employed in AusIndustry?

Ms Butler : The staff number in AusIndustry as at 31 August 2012 was 478.

Senator COLBECK: Roughly how many of them would be involved in or spend most of their time processing or assessing applications for grants?

Ms Butler : The majority.

Senator COLBECK: Can you give me some idea of what percentage that might be—are we talking 50, 60, 70 or 80 per cent?

Ms Butler : As you know, we have a variety of programs. Some of them are competitive granting programs and some of them are entitlement programs. I would say around 80 per cent of our staff would be involved in the administration of the programs within AusIndustry.

Senator COLBECK: What about staff who spend most of their time processing or assessing applications for grants specifically—all of that 80 per cent?

Ms Butler : It would not be all of that 80 per cent. We have a significant number of staff working on the R&D tax incentive. Between 60 and 80 staff are working on that. I could take this on notice for you and give you the breakdown of staff working on the various programs.

Senator COLBECK: I do not want to spend too much time on it but I am trying to get a sense of what percentage of the staff would be working on assessing and processing applications for grants. You cannot give me any?

Mr Sexton : It is difficult to break up the various activities that people in AusIndustry would do. We deliver programs from go to whoa. There is the education role that our staff undertake to assist companies and businesses—

Senator COLBECK: I know but I am asking something quite specific about processing and/or assessing applications for grants.

Ms Butler : I would need to make a bit of an estimate around that but, in terms of processing and assessing grants, of the 478, I would say possibly half of those would be involved in that. I would have to try and confirm that on notice.

Senator COLBECK: That gives me a ballpark. My understanding is that the government has put on hold about 280 programs across whole of government. Can you tell me how many of those 280 programs would fall within this agency?

Ms Butler : Within AusIndustry?

Senator COLBECK: Yes.

Ms Butler : Within AusIndustry, we have eight programs which are impacted by the pause.

Senator COLBECK: From what date did that freeze take effect from your perspective?

Ms Butler : From around early September.

Senator COLBECK: Was there any advice given to you in relation to at what point in time you were to stop the grants process within AusIndustry?

Ms Butler : An estimates memorandum was issued on 28 August indicating that there would be a pause while information was gathered for government.

Senator COLBECK: You told me early September.

Ms Butler : Because I think that might have been a Friday. It takes a little bit of time to make its way through an organisation.

Senator COLBECK: So we are effectively saying at the beginning of September in that context?

Ms Butler : That would be correct.

Senator COLBECK: For that proportion of staff that we have looked at—

Mr Pettifer : Can I just clarify something: the date that you have got there is the date that we provided information for this whole-of-government process. It would be incorrect to assume that staff stopped work at that date, because the normal processes of assessing the grant applications, guideline activities and those sorts of things—

Senator COLBECK: I should have brought my crystal ball back today, because I have not quite got to that question.

Mr Pettifer : The normal processes of looking at the applications that are in the system continued, and so it would be incorrect to assume that from that date work finished on grants.

Senator COLBECK: Are we still continuing to receive grant applications?

Ms Butler : Yes.

Senator COLBECK: How many grant rounds and programs do we have open at the moment?

Ms Butler : I can talk for AusIndustry: we currently have four programs which are continuing to receive applications.

Senator COLBECK: Can you identify those for me?

Ms Butler : Yes. The Clean Technology Innovation Program, the Clean Technology Food and Foundries Investment Program, the Clean Technology Investment Program and Commercialisation Australia.

Senator COLBECK: Clean Technology Innovation was the third one?

Ms Butler : Innovation was first; food and foundries second; investment third; and Commercialisation Australia fourth.

Senator COLBECK: So those programs are still open?

Ms Butler : They are still accepting applications.

Senator COLBECK: What is happening with respect to those applications? Are there assessment processes occurring for those programs?

Ms Butler : Yes.

Senator COLBECK: Mr Pettifer said that the staff did not necessarily stop work as of the 28th or early September when they were advised that the freeze was on.

Ms Butler : I can provide you with some metrics as to those programs and the number of applications that they have accepted and are processing to date. Would that assist you?

Senator COLBECK: I am just trying to get a sense of what activities are going on within those particular programs. Those four programs that you have just mentioned, those clean technology programs, they are part of the freeze? You are still accepting applications but those programs are part of the current freeze.

Ms Butler : Those programs are in the pause, yes.

Senator COLBECK: So the other four programs that you have mentioned—you said there are eight programs that are currently frozen and you have given me four—do those four form part of the broader clean technology program? Are there four more or seven more?

Ms Butler : Your original question was the programs which were impacted by the pause within AusIndustry. Those four are four of the eight programs which are impacted.

Senator COLBECK: Okay. What are the other four?

Ms Butler : The other four are the Illawarra Region Innovation and Investment Fund, the Innovation Investment Fund round 3 tranche 4, the Small Business Advisory Services and the TCF Strategic Capability Program.

Senator COLBECK: And those programs do not have open funding rounds at the moment.

Ms Butler : No.

Senator COLBECK: When were they due to have funding rounds open? Have any proposed funding rounds been affected by the freeze?

Ms Butler : Not within AusIndustry.

Senator COLBECK: So the timetables for the Illawarra innovation program and the TCF small business, was it?

Ms Butler : TCF Strategic Capability Program.

Senator COLBECK: So none of those had funding rounds due within the time frame of the freeze.

Mr Sexton : In the case of the Illawarra Region Innovation Investment Fund and in the case of the TCF Strategic Capability Program, there were rounds almost completed at the beginning of September. So the assessment activity has concluded in those programs.

Ms Butler : The rounds were called, the rounds were closed, AusIndustry is in the process of assessing those programs and running them through the assessment process.

Senator COLBECK: So they are being assessed.

Ms Butler : Yes.

Mr Sexton : They are rounds based and are not open to any further applications.

Senator COLBECK: So the funding of those or otherwise is dependent on the final processes around the freeze.

Mr Sexton : That is correct.

Senator COLBECK: And any decisions the government might make around that process. So effectively everybody is still gainfully employed in either assessing or managing programs. What has been the impact?

Ms Butler : Yes, they are. All the AusIndustry staff are actually very busy and very productively employed. To give you an example, the Clean Technology Investment Program is currently assessing 104 applications with a value of around $87 million and the Clean Technology Food and Foundries Investment Program is currently assessing 111 applications with a value of around $82 million. Our Commercialisation Australia program is currently assessing 70 applications with a grant value requested of $26 million. That is just an example. There is still a lot of activity within AusIndustry. Each one of those would be significant grant applications requiring considerable work.

Senator COLBECK: How many other programs have frozen across the department beyond AusIndustry?

Mr Pettifer : It is very difficult to answer that question directly. What I can say is that we provided information to the Department of Finance and Administration on about 64 programs which go right across the three outcomes in the department. Some of those programs are not impacted at all because, for example, all the money is already committed or, as we were just talking about, is not around happening. So it is difficult to try to take from that broad number a conclusion that there has been an actual impact on the program activity. That is the number that were in the net in terms of competitive granting programs.

Senator COLBECK: Sixty-four in total?

Mr Pettifer : It was about 64.

Senator COLBECK: And that includes the eight we have been talking about in AusIndustry and the car programs that we talked about earlier in the day.

Mr Pettifer : Yes.

Senator COLBECK: So it totals 64 programs. The Australian Science program?

Mr Pettifer : That is in another outcome.

Senator COLBECK: Okay, but that is still within the agency though, is it not?

Mr Pettifer : It is still, yes. I cannot talk about that program exactly. If it is a competitive granting program within the department it would be on the list.

Senator COLBECK: I will run through a number of particular programs and, while I am doing that, to keep us moving quickly could we have some figures available? I want to get a sense of where the numbers are. I am after some information about Commercialisation Australia, the Australian Space Program, top-level figures for Enterprise Connect, as well as figures for each of the two elements of the program Researchers in Business and Remote Enterprise Centres, Clean Energy Initiative and the Cooperative Research Centres program.

Mr Pettifer : Apart from the Cooperative Research Centres program, we can talk about all of those other outcome numbers.

Senator COLBECK: Could you give me how much has been committed, spent and unspent across the forward estimates on those programs?

Mr Pettifer : It is difficult to give you a figure for them in total.

Senator COLBECK: No, individually is fine.

Mr Pettifer : We have officers here who can talk about them individually. What was the first one you mentioned?

Senator COLBECK: Commercialisation Australia. I would like to know how much has been committed, spent and unspent across the forward estimates.

Ms Kennedy : The commitments for Commercialisation Australia in 2012-13 are $34,984,000. Our expenses are $34,987,000 and expenses to date are $16,197,000. In 2013-14, the commitments are $12,050,000 and in 2014-15 it is $771,000. That is the extent of the commitments to date in relation to that program.

Senator COLBECK: Okay.

Ms Kennedy : The uncommitted funds for 2012-13 are $17.7 million in administered funding. That includes both grants and unspent operating expenses. In 2013-14, it is $62.879 million. In 2014-15, it is $74.03, and then, in 2015-16, it is $74,672.

Senator COLBECK: Okay, thank you. What about the Australian Space Science Program?

Dr Green : The $40 million Australian space research program is fully committed. It is not affected in that sense by the grants review.

Senator COLBECK: So that is $40 million. How much has been spent so far?

Dr Green : It is all contracted already to be spent.

Senator COLBECK: That is not how much has actually been spent though. I understand that is fully committed and contracted.

Dr Green : The budget for this year is $12,190,000, of which $1 million has been paid.

Senator COLBECK: So $1 million is spent out and it is twelve?

Dr Green : There is $12,190,000 committed this year.

Senator COLBECK: So there is $11,190,000 unspent so far this year. What about 2013-14?

Dr Green : The program ends in June 2013.

Senator COLBECK: So that $12,190,000 for this financial year is the remaining funds out of the $40 million.

Dr Green : That is correct.

Senator COLBECK: Okay. What about Enterprise Connect?

Mr Pettifer : While we are waiting, Senator, we have someone here from the CRC Program, so if you wanted to ask about that, we could cover that off as well.

Senator COLBECK: They can consider themselves on notice. Thank you.

Ms Zielke : We have a small element of Enterprise Connect that is impacted by the pause. It is the Researchers in Business element of the program. I will just get you those figures in relation to commitments. There is no separate allocation in relation to Researchers in Business. However, at the moment in 2012-13 we have spent $242,000 to date on RIB grants and we have commitments for $669,000. In 2013-14, we have commitments of $170,000.

Senator COLBECK: Thank you. I was after the top level figures for Enterprise Connect. What about the Remote Enterprise Centre Program within that? There are two elements to the program, as I understand it: Researchers in Business—you have given me the numbers for those—and the Remote Enterprise Centre.

Ms Zielke : Enterprise Connect is actually a national network of business advisers and facilitators around Australia that provide business reviews to companies and then provide additional services to support that. Overall, there is about $55 million in the program for the year. The element that I mentioned to you, Researchers in Business, is the only element of the program that is impacted by the pause.

Senator COLBECK: So the annual budget for the whole program is $55 million?

Ms Zielke : In 2012-13, the total program allocation is $51,092,000.

Senator COLBECK: That is the total program?

Ms Zielke : Yes.

Senator COLBECK: So the Remote Enterprise Centre part of the program is not impacted at all?

Ms Zielke : No. We have 12 centres around Australia in various locations. None of those is impacted by the pause.

Senator COLBECK: What about the clean energy initiative?

Ms Butler : Just to clarify, are you referring to the Clean Technology programs, the food and foundries investment and innovation?

Senator COLBECK: The information I have here is the clean energy initiative.

Ms Butler : We will answer for the programs that are within this—

Dr Russell : It is the AusIndustry one.

Ms Butler : The AusIndustry one.

Senator COLBECK: Which would be those four, I think, that you mentioned before.

Ms Butler : They are just classed as AusIndustry ones. Ms Kennedy will give you the figures for the Clean Technology Innovation Program

Ms Kennedy : In terms of the Clean Technology Innovation Program and expenses for 2012-13, it is $20,000 that has been spent to date. There are commitments and expenses of $168,000. There are no commitments that have been made into the out years at this point.

Senator COLBECK: So the committed funds of 2012-13 are, sorry, $168,000?

Ms Butler : Sorry, Senator Colbeck. Are you asking for the budget in each year: what is committed and then what has been spent? Is that what you are looking for, in summary?

Senator COLBECK: Yes.

Ms Butler : The budget for—

Ms Kennedy : The administered budget for the Clean Technology Innovation Program is $11,280,000.

Ms Butler : And against that so far we have committed—

Ms Kennedy : $20,000, and we have expenses of $168,000.

Senator COLBECK: So you have committed $20,000 and you have spent $168,000?

Ms Kennedy : Yes.

Senator COLBECK: And that is for this year?

Ms Kennedy : Correct.

Ms Butler : Noting that the program commenced on 1 July. In the 2013-14 year, we have a budget of—

Ms Kennedy : In 2013-14, it is $54.4 million. In 2014-15 it is $74.35 million, in 2015-16 it is $35.35 million and in 2016-17 it is $6.9 million.

Ms Butler : And in those years we have no commitments and obviously no spends. It is currently all uncommitted.

Senator COLBECK: Okay. I just need to go back to the clean energy initiative, which is listed as a line item in the PBS.

Ms Butler : I think that might be the RET one that you are referring to, from the Department of Resources, Energy and Tourism. Ours is the Clean Technology Program, which has three elements: the Clean Technology Investment, the Clean Technology Food and Foundries and the Clean Technology Innovation programs.

Senator COLBECK: It is on page 69 of the PBS, which I do not have in front of me.

Mr Pettifer : I am advised that is in outcome 2, so I think you would need to ask questions about that in the next session.

Senator COLBECK: Are we talking about small business?

Mr Pettifer : No, after that session.

Senator COLBECK: Oh, in—

Ms Butler : Science and research.

Senator COLBECK: Science and research, okay. Do we have the numbers? Someone is sitting there. Let's take the numbers if we can get them to save pestering you again later.

Ms Graham : Senator, all I can tell you is the budget. I cannot tell you the spend associated with those. It would be the line area from outcome 2 who would need to provide that.

Senator COLBECK: Okay. The key stuff that I am after is committed and spent. Having been distracted on that, let's go back to the programs that we were running through. So there are no commitments beyond this year in the Clean Technology Innovation program. You have an $11 million budget this year, $20,000 is committed and you have spent $168,000.

Ms Butler : Yes.

Senator COLBECK: Is that $20,000 committed over and above the $168,000 spent? How does that work out? I would have thought the committed number should be higher than the spent number.

Ms Kennedy : The expenses are what has been expended to date and then the commitments are what is in the system in addition to that.

Senator COLBECK: So that $20,000 is over and above the $168,000.

Ms Butler : Which has been spent, that is correct.

Senator COLBECK: So your total commitments are, effectively, $188,000, of which you have spent $168,000.

Ms Butler : Yes.

Senator COLBECK: And so far there are no commitments out of the program beyond this financial year?

Ms Butler : No.

Senator COLBECK: Food and Foundries?

Dr Edwards : The budget for 2012-13 for Food and Foundries is $36.6 million, commitments $8,430,000, expenses in the year to date as of the end of September are $961,000. The budget for 2013-14 is $50.6 million, commitments $8,886,000. In 2014-15 the budget is $55.5 million, commitments $3,680,000. The budget in 2015-16 is $25,650,000 with no commitments or expenses. The budget in 2016-17 is $3,468,000.

Senator COLBECK: And no commitments?

Dr Edwards : No.

Senator COLBECK: Clean Technology Investment?

Dr Edwards : The budget for 2012-13 is $81,215,000. We have commitments of $2,105,000 and expenses in the year to date 30 September of $990,000. In 2013-14 the budget is $116,146,000, commitments $652,000. The budget in 2014-15 is $155,900,000, no commitments. For 2015-16 the budget is $220,100,000, the budget for 2016-17 is $121,600,000 and the budget for 2016-17 is $22,973,000.

Senator COLBECK: Finally, the CRC program.

Mr Murfett : For 2012-13 the budget is $154.5 million and commitments are $154 million. The budget for 2013-14 is $145.8 million and the commitments are $131.9 million. The budget for 2014-15 is $157 million and the commitments are $93.7 million. For 2015-16 the budget is $167.9 million and the commitments $66 million. The total spend for 2012-13 to date is $37.8 million.

Senator URQUHART: I have one question on Senator Colbeck's questioning on AusIndustry. I want to clarify that I heard correctly that the applications are still being taken and that those applications are continuing to be assessed. Did I hear that correctly?

Ms Butler : That is correct.

Senator BUSHBY: I notice the minister has a nice cup of coffee in front of her. It is good to see people enjoy nice coffee. I would just like to draw your attention to an article that was in the media about the department buying coffee machines worth $75,000. Firstly, is the article correct?

Ms Graham : Can I just ask you to confirm your question, please?

Senator BUSHBY: There was a media article that indicated that the department had bought $75,000 worth of coffee machines. I just want to clarify whether that is correct before I ask any further questions.

Ms Graham : Yes; that is correct.

Senator BUSHBY: What kind of cost analysis was undertaken prior to the purchase of those machines?

Ms Graham : Cost analysis?

Senator BUSHBY: Was there any cost benefit analysis done to ensure that you were getting value for money in terms of the spend?

Ms Graham : There was certainly analysis undertaken of the nature of the machine which was purchased and the costs associated with the different types of machines.

Senator BUSHBY: How many coffee machines did $75,000 purchase?

Ms Graham : There were five purchased.

Senator BUSHBY: So they were $15,000 each.

Ms Graham : That is right.

Senator BUSHBY: Where were they purchased from? Who was the supplier?

Ms Graham : I will have to take that on notice.

Senator BUSHBY: Do you know what type of machines they are?

Ms Graham : I believe that is in here somewhere. They are Melitta machines and they were purchased from Cosmorex.

Senator BUSHBY: Is that an Italian machine?

Ms Graham : I am sorry, I am not an expert on—

Senator NASH: Do they come with a barista?

Ms Graham : They do not come with a barista.

Senator BUSHBY: What was the department's justification for buying $15,000 coffee machines. We are in a constrained fiscal environment. We have been hearing questions today about freezes on very worthwhile grants programs. How do you justify spending $15,000 on a coffee machine and then doing that five times over?

Ms Graham : Since 2006 we have had, in Industry House where we have most of our staff, coffee machines in the building. They generate value for employees and, we believe, increased productivity. When the machinery of government change happened and we had 800 staff in Mort Street in Canberra we chose to put coffee machines into that building because it made sense to provide the same amenity to all staff based in Canberra. The machines are fully automated. They have to cope with a fairly large number of staff using them. There is one per floor. The nature of the machine is such that it is heavy duty and it can cope with that load. That therefore reduces maintenance costs.

Senator BUSHBY: That may well justify, to some extent, the type of machine but it does not really fully explain—you mentioned productivity—the need to have a coffee machine in the first place. I am quite sure there are very good coffee shops nearby. I am quite sure that a kettle, in most workplaces, seems to suffice and ensure that most people can make themselves a coffee in the breaks that they have. That does not really explain the need to have a coffee machine that presumably makes all sorts of varieties of coffee.

Ms Graham : There was certainly an analysis undertaken, when they were first put into Industry House, on the benefits associated with having coffee machines in the building.

Senator BUSHBY: Was that a formal analysis that was undertaken or—

Ms Graham : My understanding is that there was a review undertaken—

Senator BUSHBY: Is that something that we can get a copy of?

Ms Graham : I will have to take that on notice.

Senator URQUHART: I just want to clarify on this point that they were they first installed in 2006, which is what I understood you said.

Ms Graham : In Industry House, that is right.

Senator URQUHART: My understanding is that the purchase of these machines was to ensure that new employees to that area had access to the same amenities that existing employees had. So, if you like, it was about equality in the workplace.

Ms Graham : That is correct.

Senator NASH: I have a couple of questions around manufacturing and renewables. Mr Lawson are you aware of a wind farm at Gullen Range, north-west of Goulburn?

Mr Lawson : I am.

Senator NASH: I am of the understanding that a company, Goldwind global, is going to import 56 wind towers from China for that wind farm. Are you aware of that? Is that correct?

Mr Lawson : I am aware of the broad issue. It sounds correct.

Senator NASH: So we are fairly sure that is correct. Excellent.

Mr Lawson : It was that order of magnitude. I remember the number of 57—most of them imported and some domestic, but I am not sure of that.

Senator NASH: That is okay. I just wanted to make sure I was in the ballpark before I continued on with the question. My understanding is that only about 17 of the wind towers would be constructed in Australia. Can I take you to the 2012-13 budget papers. I will read this into the Hansard. It says:

The department will work to improve social and economic viability, competitive advantage and international engagement of Australian industries, reduce impediments to doing business and increase competition and sustainability, with a particular focus on the manufacturing, small business and services sectors.

For Hansard, I will also refer to a Prime Minister's comment back in July 2010:

Under a Labor government, there is a future for manufacturing jobs, a future for manufacturing businesses, a future for manufacturing regions in this country. A future we will build not by looking backwards to our past, but by moving forwards to the future … first-hand …

She said that this would include 'manufacturers in areas like renewable energy technologies'. How does the department reconcile the government's very strong push for green jobs with the fact that we have now got a wind farm that is going to import a great percentage of their wind towers from overseas, and not support domestic manufacturing?

Senator Edwards interjecting

Senator NASH: Thank you, Senator Edwards, we will take that.

Mr Lawson : The private sector projects determine where they get their supplies from. It is up to them. The government works strongly with the Australian Steel Institute and the suppliers, to try and assist them to improve their competitiveness. And there has been a range of outcomes. My understanding is that in the AGL Macarthur project, which was a $2 billion wind farm project, there was a very high content of local production of the wind farms. I do understand on this particular occasion the local developers did not win the tenders and that those tenders went to overseas suppliers.

Senator NASH: Doesn't that make it a bit of a furphy, or even an unrealistic goal for the government to be talking about green jobs in the renewable industry and supporting the manufacturing industry when they have got no control over where the private sector are going to purchase from?

Mr Lawson : I would not agree with the articulation of the point.

Senator NASH: Why not?

Mr Lawson : The nature of the government—

Senator Lundy: You are making a political comment, Senator Nash, and you are asking the officer to comment on it. That is just not in order—

Senator NASH: You are quite correct. I am sorry, that was very inadvertent of me. I will direct it to you, Minister. What is the answer?

Senator Lundy: What is the question?

Senator NASH: Weren't you listening?

Senator Lundy: I was listening, but tell me what the question was, because you need to express it again.

Senator NASH: I am happy to express it again at length so you can hear it this time, Minister. My question was: given the government's 'commitment' to creating green jobs in the renewable energy sector and given that Mr Lawson has just outlined—and quite rightly—that the private sector, particularly in this instance, is at their own liberty to source from wherever they want, doesn't it make it a furphy for the government to say that they are supporting manufacturing and green jobs in the renewable sector when there is nothing you can do to change this particular circumstance and we are going to look to import a great percentage of these wind towers from overseas? How is that supporting Australian manufacturing and Australian jobs?

Senator Lundy: I do not think it is a furphy, because we have activities on a number of fronts. We are supporting the production of renewable energy and we are supporting manufacturing. It is a shame that the opposition is not.

Senator NASH: Nice try. I am talking specifically about the Gullen Range Wind Farm.

Senator Lundy: You can link as many policies as you like across the spectrum of the industries we support. The fact is that the government has a comprehensive plan to support not only renewable energy but also manufacturing. The same cannot be said for the opposition.

Senator NASH: So what is it doing to support renewable energy in this area, and in the region of Goulburn, and the manufacturers that could supply to this region when it is predominantly being sourced from overseas?

Mr Lawson : I might ask my colleague to talk a little bit about that. We have a steel supplier advocate and we have been working with the industry—both the supplying industry and the purchasers of, in this case, windmills—to try and get the parties together to consider the barriers for Australian industry winning in those projects. We have had workshops and we have the supplier advocate engaging with Australian industry to understand and to help them think through whether they can improve their tendering processes or adopt lean technologies to reduce their cost structures so that they can be competitive on a greater number of occasions. For some large projects, where there is the issue of whether the small metal fabricators can achieve scale, the steel supplier advocate is working with them on models for joint ventures. We are working through a whole range of facilitation processes with the industry to try to assist them to become competitive. There is a series of programs, like Australian Industry Participation, for relevant projects if they have over $20 million of government support or they have applied for the Enhanced Project By-law Scheme where they are required to do Australian industry participation plans to explain how they will provide opportunities. Normal government activities assist but they do not determine an outcome.

Senator NASH: Is the department aware that this is potentially going to put 500 skilled manufacturing jobs at risk?

Mr Lawson : I am not aware of the specifics. I have seen some media about the companies that lost the tenders. In the fabricated metal products area, there is, in a sense, excess capacity. There have been recent closures. Against that, in other sectors, some people are doing well and are moving to achieving the competitiveness that enables them to win work.

Senator NASH: Is it not alarming that 500 jobs will potentially be lost because we will have these towers sourced from overseas, in terms of the support that the government has purported for manufacturing?

Mr Lawson : It is certainly always a personal issue for the people affected. In a broader sense, we have a relatively low unemployment rate and there are relatively good chances for people to move to other areas where they can get work. That is an economist sort of answer, but—

Senator NASH: So there is an expectation that they should be moving? I am sure that half the department would not like to go to Darwin to get a job. Actually, I would like to go to Darwin. Darwin is a fabulous place.

Mr Lawson : No, Senator. Sometimes it can be about moving to another employer—moving from a particular company, not necessarily moving regions. We have a large number of programs where we try to assist in regional areas.

Senator NASH: Does 'moving employer' mean going and getting another job?

Mr Lawson : I do not want to be taken in to doing this apparently harsh economist's analysis. We have a range of programs that assist people to become competitive. We have a range of programs from the other side of the portfolio that attempt to help people gain skills. We have a range of programs to try to ensure that firms get opportunities to bid for those projects. But, in the end, a commercial decision has to be made about who wins the work.

Senator NASH: Finally, would you expect that the industry might be extremely upset by this? I certainly would expect that, given the government's commitment to green manufacturing jobs and, as I understand it, the original RET was negotiated with industry and unions based on generating local green manufacturing jobs.

Mr Lawson : I know that the members of the steel industry have expressed strong support for the RET because it can help to provide those opportunities but, under our international trade obligations, there would never have been a requirement that that local content be required for commercial outcomes.

Senator NASH: It certainly seems in direct contrast to the government's promise to provide green jobs in the manufacturing sector.

Senator Lundy: Your line of questioning is completely hypocritical given the opposition walked away from steel manufacturing by opposing Labor's $300 million Steel Transformation Plan.

Senator NASH: Minister, you were not even listening to the question before.

Senator Lundy: So you cannot have it both ways.

Senator NASH: I would not put in a political comment now, Minister.

CHAIR: We have come to the end of this outcome.


CHAIR: We now turn to industry and innovation, outcome 1 and small business. Senator Whish-Wilson.

Senator WHISH-WILSON: I had wanted an update about when the federal Small Business Commissioner would occur, but I understand that occurred this morning and we have received some detail. Could you comment on the major roles for the federal Small Business Commissioner?

Mr Schwager : As Minister O'Connor has said, the major role of the Small Business Commissioner is going to be as an advocate for small business, working with the small business community and talking with them about their concerns and then acting as a conduit of that to the minister directly. Also, we envisage the office will be providing a portal which will act as a one-stop shop to a various range of information on small business programs and what is available for small business. We also expect that website to provide a portal to dispute resolution services that already exist around the country at the state level and in the private sector. We are also looking to the Small Business Commissioner to have responsibility for the small business support line and for the mediation services that exist under the industry codes of the Competition and Consumer Act.

Senator WHISH-WILSON: Will there be any formal role in dispute resolution?

Mr Schwager : No, there will not be a formal role. There is no legislative backing for the commissioner. It is about involving the commissioner. The commissioner is involved in disputes through referral to existing services.

Senator WHISH-WILSON: The Greens support a similar role in Tasmania. We do not have a Small Business Commissioner at the moment and it is my understanding that nor does Queensland. Do you see that as an issue that all states do not have this role at the moment to feed into the national office? Do you see that something may occur now that we do have a national commissioner? It would certainly be easier to get all states to have one now that we have a national commissioner.

Mr Schwager : Small businesses from Tasmania and Queensland will be able to access the services provided by the Small Business Commissioner and access the information provided. The Australian Small Business Commissioner will advocate for Queensland and Tasmanian small businesses as he will for other small businesses across the country.

Senator WHISH-WILSON: Could you give us an outline of the budget for this position in the forward estimates?

Mr Schwager : The funding that has been allocated is $8.3 million over four years.

Senator WHISH-WILSON: Thank you.

Senator RYAN: I want to talk about the Small Business Advisory Services funding and because I have discussed it before I want to clarify the context. The 2012-13 budget allocates $27.5 million over the forward estimates for the Small Business Advisory Services?

Mr Schwager : That is correct.

Senator RYAN: In question on notice BI100 I asked about the breakdown of this funding. The answer was $24.2 million is allocated to grant funding for eligible applicants, half a million is operating expenses and $2.8 million is allocated to the department funding for staff involved in delivery of the program. Is that still correct?

Ms Launder : Yes, that is correct.

Senator RYAN: In May I asked about the tender process and when this funding would be made available to BSEs. The answer provided by Mr Cicchini was, 'We're working to get the service continued post 1 July as soon as possible.' When I asked when you thought that process would commence, I believe Ms Launder responded, 'If we are able to launch in the next couple of weeks then, factoring in an open period of around four weeks and an assessment period of around four weeks, you would hope that it would go into plan by late August.' In answer to the same question, BI100, I was told the process will commence at the minister's discretion. Is that all still correct and I have not misrepresented anything, or nothing has changed subsequently?

Ms Launder : I could give you an update on what has happened since then.

Senator RYAN: Please give me an update and I will follow up with some questions.

Ms Launder : The program was launched and opened for applications on 27 June. The application period closed on 25 July. AusIndustry proceeded with assessing applications through August. The assessment of the applications concluded towards the end of August and we are currently holding, as a result of the pause, to conclude that process.

Senator RYAN: In the month of August you concluded your assessment of the applications?

Ms Launder : That is correct.

Senator RYAN: That included recommendations as to decisions to be made?

Ms Launder : No, the recommendation is the final step which has yet to be completed.

Senator RYAN: When in the normal course do you require some sort of trigger to be passed to go from finishing your assessment to making the recommendation? I had a discussion on this topic earlier and I appreciate this is a similar situation, is it?

Ms Launder : It normally would just continue progressing through the full assessment phase.

Senator RYAN: When were you advised not to continue?

Ms Launder : Following on from Ms Butler's answer earlier in the session, it was around the end of August when the directive came through.

Senator RYAN: Can you take on notice the date on which you were directed to pause, freeze, not continue your assessment recommendation work.

Ms Launder : Someone could probably help me on the date. Our program would have been on exactly the same date as the rest of the department.

Senator RYAN: I did not get a date before.

Ms Butler : To clarify, it would have been somewhere in the week around the beginning of September when we started to provide information on the impact of the pause to government. Based on that we would have taken some decisions about where we would finish the assessment process and the application process prior to those applications being presented to the delegates for their consideration. I would say it was around the first week of September, but a directive was not issued via an email or something to that effect.

Senator RYAN: Because this is across the department—and we have the same discussion earlier and in other portfolios—if it is not done by email or written directive, how is it done?

Ms Butler : As I indicated to you, there was a memorandum issued and the memorandum did indicate there was a pause. It was applied differently depending on impact in programs and where a program was up to in its cycle.

Senator RYAN: I was informed—and I do not mean to put words in anyone's mouth—in the department of finance estimates yesterday that where commitments had not been made, which I am going to interpret for the sake of this discussion as the delegate having not made a decision because that is when a commitment is made and someone is notified, anything before that point was subject to the freeze/pause. Is that a fair characterisation of how your department interpreted it?

Ms Butler : Yes.

Senator RYAN: This is why am asking for the date of the memo. I have not seen a copy of the memo and I am not sure if it is in the public domain. Are you aware whether the memo you are referring to is in the public domain?

Ms Butler : The memorandum which I referred to earlier is a memorandum which would not normally be put into the public domain, but based on the memorandum we did receive advice from our corporate colleagues as to the pause and as to the requirement for information to be collected and as to when the pause would apply.

Senator RYAN: The timings are important to me and how it runs through the machinery of government. Can you take on notice whether you can provide a copy of that memorandum. The fact that it is not normally in the public domain is not necessarily a reason it should not be, but I am open to an explanation as to why it would not be in the public domain.

Mr Pettifer : We will take that on notice but we will also undertake to provide you dates. I have just been advised that question should be directed to the department of finance as to whether they would be prepared to make that memorandum available. What I can give you is the date on which the corporate area in our department provided advice to divisions about the process that we were talking about in terms of collecting information. That is as much as I can do.

Senator RYAN: I would appreciate the date on which you received the memorandum and how long it took the department to action it. I do not think that is an illegitimate question, because when you provide the dates that you have actioned it, the dates would be important for this discussion.

Ms Butler : My understanding is that we actioned the decision on the pause on 28 August.

Senator RYAN: On what date did you receive the memorandum? I am assuming, from what Mr Pettifer said, it is from the department of finance.

Mr Pettifer : It would be. I do not know if we have that information available.

Ms Graham : Estimates memorandums are issued by the department of finance. There are regular releases in relation to a range of things which is why we cannot take on notice that we can provide you with a copy, because it is a department of finance document.

Senator Lundy: As I have said several times, Senator Ryan, these questions about the government character of this issue should have been directed to the department of finance.

Senator RYAN: Thank you for your advice. I did direct a lot of questions to the department of finance, but I am now specifically directing these to the Department of Industry, Innovation, Science, Research and Tertiary Education about their interaction with this. The fact that the memorandum comes from the department of finance and you receive it does not in any way, as far as I am aware, mean that it is off limits for me to ask you for a copy of it. The fact that you are a recipient of it rather than the sender of it does not mean that I have to go to the department that sent it.

Mr Pettifer : I would not agree with that. I think it is a document that is issued by the department of finance and it would be up to them to make the judgement call on whether to make it available. I do not think it is up to us to decide whether or not we would be prepared to make that available.

Senator RYAN: You would not?

Mr Pettifer : No, that is a question that rightly goes to the department of finance.

Senator RYAN: I appreciate that and I am not going to labour this point.

Mr Pettifer : And we have told you the date on which we actioned the memorandum.

Senator RYAN: I do not have the date it has received yet, but I appreciate your taking that on notice.

Mr Pettifer : No, we said we actioned it on the same day.

Senator RYAN: The 28th is when you actioned it; I am sorry.

Ms Graham : We were advised on 28 August and that is when we advised the rest of the department.

Senator RYAN: On the same day. Sorry, I missed that earlier. Mr Pettifer, I am not going to press the point. I disagree with your view that, because you received it and some mail or correspondence from another document, that in some way means that it is only up to that other department whether to take on notice to release that document. I think that is a precedent that has not been set, and I will probably pursue that further. Can I also remind you that we did have a brief discussion earlier that there does appear to be an increasing inconsistency between documents obtainable under FOI and documents that are being provided for questions on notice.

Ms Graham : First of all, Senator, I think we need to make it clear that it was a document that was provided through a cabinet process. It contains cabinet information and largely because these estimates memorandums relate to budget related information they are cabinet in confidence.

Senator RYAN: Well, we could have avoided the whole conversation. I appreciate that there is an exemption for cabinet documents.

Ms Graham : But I would continue to maintain Mr Pettifer's point, which is that we would not normally release documentations that come from another department without at least discussing it with that department first.

Senator RYAN: That was not Mr Pettifer's point. His point was that he would not release a document sent by another department. You have put on record your view and I have put very strongly and politely on the record my view, pointing out again that we do not want to see profound inconsistencies coming between FOIable documents and questions on notice documents. I think Senator Humphries has a couple of follow-ups on the same issue.

Senator HUMPHRIES: I assume that the questions Senator Ryan has just been asking were in response to the SBAS round of grants that have been paused.

Senator Lundy: Senator Humphries, we have been traversing this issue about the grants pause for most of this session of the industry department. So there has been ground well and truly canvassed.

Senator HUMPHRIES: Hopefully, I will not go back over that. I assume that the department has had some adverse comment from applicants for those grants about the position that the failure to proceed with the grants has placed some of them in. Is that the case?

Ms Launder : Maybe I can answer that question for you. Can I just clarify, Sir: are you referring to the recipients who may have already been in receipt of funding through previous rounds of the program?

Senator HUMPHRIES: I am talking about anybody who has made an application under this round that has been paused—which, presumably, includes some who received funding before and some who have not received funding.

Ms Launder : In terms of the contact that we might have had with applicants since they submitted their application back on 25 June, we have had in the order of around 75 inquiries. It is not unusual for us to receive inquiries from applicants getting anxious and wanting to know about how the assessment process is going.

Senator HUMPHRIES: Sure.

Ms Launder : In general, none of the questions that have been asked of us have been in relation to the pause or anything like that; they have just been normal inquiries that they would make like, 'How's it going?' and 'When might I expect to hear?'

Senator HUMPHRIES: Have they been told that the program has paused such that they will not get a grant? It is not a question of the grant not being considered; it is a question of the government not making any grants under this pause for some period of time. Have they been told that? Do they know what the situation is?

Ms Launder : No, they would not have been. The advice that we would have provided to the applicants is that the assessment process is progressing.

Senator HUMPHRIES: Given that in fact this pause is public knowledge—if it is being discussed here it is public knowledge—would it not be more appropriate to tell these people what has happened rather than assume that somebody is still examining the merits of their application within the department?

Ms Butler : Can I just clarify something. Across the whole of AusIndustry if we have had inquiries around programs which are currently paused we have been saying that to those customers.

Senator HUMPHRIES: But the people that Ms Launder was talking about have not been told that, we have been told. Are you saying different things to the people that Ms Butler is talking to?

Ms Launder : No, Senator. I guess in terms of the longer term and the completion of the process we have no reason to say to them that the assessment would not continue, that the process would not come to an end.

Senator HUMPHRIES: No, I am not suggesting that you say that. I am suggesting that you tell them what is actually happening, which is that the government has decided to pause a large number of grant programs—that there is nothing wrong necessarily with their applications; it is just that the government is not proceeding to make any grants while this pause is in place. Wouldn't that be a reasonable thing to tell people, rather than leave them wondering whether they have put in a poor grant application?

Ms Launder : I accept that view.

Senator HUMPHRIES: Would you consider changing the policy in light of that reflection?

Ms Launder : I accept that we should take on how we are conveying this information to our customers.

Senator HUMPHRIES: Okay. I have just a couple more. I understand that there are other grants which the minister has asked the department to give him advice about concerning public servants in Queensland—people affected by decisions of the Queensland government to reduce the size of its public service. Is it true that the department has been asked for advice from the minister on possible programs to assist those people under a program that he might operate?

Mr Cicchini : What the minister's office has asked us is for options around things that could be done. We have not provided any formal advice, other than some general advice around what programs are available in the department that could be used for their purposes.

Senator HUMPHRIES: What could be done for whom—people who were formerly public servants in Queensland?

Mr Cicchini : No; what programs are available to assist people in Queensland and in other parts of the country who may wish to be involved in businesses and what options are available.

Senator HUMPHRIES: So this is not targeted just at Queenslanders? This was advice for the minister on what programs are available for people who might want to be involved in business? Isn't that core business for your department anyway?

Mr Cicchini : Our advice is general, yes.

Senator HUMPHRIES: My question originally was whether there was some specific request from the minister for advice about people who were formerly or becoming former public servants in Queensland. Is that or is that not the case? Is advice being put together for that category of person, or is the advice general which applies to anybody in any part of the country?

Mr Cicchini : The advice provided complied generally and the advice was provided to minister's staff.

Senator HUMPHRIES: So you have not been asked specifically for programs to be operated in Queensland alone?

Mr Cicchini : In the context of Queensland, we have been asked questions and we have provided general advice.

Senator RYAN: Following on from Senator Humphries, so policy was not to communicate the freeze, pause or the ongoing assessment—which is similar to the discussion we had about cars. Was there any instruction from either senior officials in the department or from the minister's office to not communicate the freeze or the pause to grant recipients who might otherwise have a longer process?

Mr Cicchini : Sorry, could you repeat that question, please?

Senator RYAN: Was there any instruction from either senior officials within the department or from the minister or his office to not communicate the pause to people who are in the application process and consideration stage for whom that process was going to be longer, because we now have delays in it? I think that is a fair way to describe it. Was there an instruction for you to not communicate that pause and that delay to those applicants or indeed any applicants?

Ms Butler : I am happy to take that question. No, there was not.

Senator RYAN: No, there was not?

Ms Butler : No. What we did in AusIndustry was we provided information to our call centres and hotlines on the basis that, if customers or stakeholders rang and inquired as to the status of their program, they would be advised that there was a brief pause while the government was collecting information on programs.

Senator RYAN: Presumably we have had a script for your call centre?

Ms Butler : Yes.

Senator RYAN: Could you provide that on notice, please?

Ms Butler : Yes.

Senator RYAN: It was described as a brief pause, that took place on 28 August. We are now on 17 October. When are you changing the words so it is no longer a 'brief pause'? We are now at seven weeks. The point I am trying to make, Ms Butler, is that I think it is fair to say it is no longer brief. Do you still consider this to be a brief pause?

Ms Butler : We certainly consider it still to be a pause.

Senator RYAN: Are you still telling people it is a brief pause?

Ms Butler : I would have to check the scripting on that. I would suggest that we may have changed it to 'paused'. I will check that and get the paperwork to you on notice.

Senator RYAN: Going to back to the SBAS applicants in particular, when we talked about this in May estimates, I was told that no transitional Commonwealth funding arrangements had been put in place. Is that still the case? There have been no transitional elements put in place?

Ms Butler : That is correct.

Senator RYAN: We were hoping to have them underway by August, even though the old scheme finished on 30 June. It is now 17 October. Have you been advised yet, at any point, when you can finalise this process by making recommendations to the delegate to make decisions?

Ms Butler : No, I haven't been advised.

Senator RYAN: So there is no advice within the department. It is not just this one.

Ms Butler : No.

Senator RYAN: Have you received any contact from recipients of the previous program indicating financial stress—that they might be at risk of falling over, for lack of a better way of putting it? I think it was probably a legitimate expectation of theirs that they would have had an answer by now.

Ms Launder : We have had contact with the recipients through the previous program through their final reporting processes that have been taking place over the last couple of months. Through that process some of them have indicated to us that they are winding back some of the services that they are delivering, or changing the nature of the delivery of some of those services. Some of them are looking at losing some of their staff. We have had communication from one particular BEC that they were looking into some alternate restructuring processes for their organisation, and through that process they were referring some of their calls to a neighbouring BEC.

Senator RYAN: Have the group that oversees this program and the previous program been keeping records of the feedback you have been getting from previous grant recipients and grant applicants about the impact of this delay when they contact you—you have not contacted them, I appreciate—saying, 'We're looking at restructuring, we're looking at sacking a few people, we're looking at changing our service profile', have you kept records of that?

Ms Launder : That was a particular question that was on the final reporting template, so in that respect we do have a record.

Senator RYAN: What was the question?

Ms Launder : It was just to advise us of the process going forward for them as a BEC. I would like to take on notice the exact question.

Senator RYAN: Sure. It was basically asking about the going forward. When were those reports due?

Ms Launder : Those reports have been processed and have come in over the end of July through to August, we have been assessing them.

Senator RYAN: I appreciate that was the end of that particular program. This pause took place on 28 August. They were probably hoping to have had some news by then—given our last estimates discussion. Have you been contacted by any of those grant applicants or previous grant recipients, since the pause was announced, indicating that they are suffering financial stress as a result of the delay in the program?

Ms Launder : To the best of my knowledge, no, Senator. I would have to look at my records first of all to clarify if any of them had rung up as a general inquiry about the status of their current application, but certainly to the best of my knowledge there has been no suggestion from any of them that they are suffering.

Senator RYAN: Okay. I might put some more questions on notice about that.

CHAIR: Before you do, we will hand over to Senator Whish-Wilson for a couple of ticks.

Senator WHISH-WILSON: I have a quick follow-up question on the federal small business commissioner—perhaps to the minister, if it is possible. I am wondering if any thought was given to a legislative process for this position.

Senator LUNDY: A legislative process?

Senator WHISH-WILSON: In terms of an act of parliament?

Senator LUNDY: I would have to ask the minister what his thinking was about it.

Senator WHISH-WILSON: We were just concerned that with the allocation and the role—we support it—how it may potentially be cancelled in the future without having gone through this process, whether you see that as being an issue.

Senator Lundy: If the opposition were in government, you mean.

Senator WHISH-WILSON: Yes.

Senator Lundy: It is a fair point to be worried.

Senator RYAN: I do not think Senator Whish-Wilson asked these questions about the Small Business Commission earlier. It is correct to say, is it not, that the office of the Small Business Commissioner will have no dispute resolution powers.

Senator WHISH-WILSON: I did ask that question.

Senator RYAN: I will check the Hansard. What do you foresee as the relationship between the Small Business Commissioner announced today and the small business commissioner within the ACCC?

Mr Schwager : A number of partnerships and collaborations that you would expect.

Senator RYAN: I love those phrases.

Mr Schwager : I am glad you do, Senator, because you heard them when you asked this question last estimates. The collaborative partnership we expect will exist. Obviously the Small Business Commissioner is an independent position and I am sure he will undertake consultations with key stakeholders like the commissioner in the ACCC with responsibility for small business issues and will develop an appropriate working relationship with the ACCC.

Senator RYAN: So other than those quite productive phrases of partnership and collaboration and appropriate working relationship, do you envisage any formal relationship, perhaps through an MOU, between the Small Business Commissioner and the ACCC small business commissioner?

Mr Schwager : I expect that that is something the two commissioners will want to work through themselves and as independent officers that is something that they undoubtedly will do once the commission is in place from 2 January.

Senator RYAN: I remember last time we had a chat we had a chat also about the relationship between the commissioner and the division. I believe that was also one of partnership and collaboration. So I was wondering whether you will be advising whether the department has a view on the relationship between those two, the Small Business Commissioner and the ACCC small business commissioner.

Mr Schwager : As you recollect, the department will be working closely with the Small Business Commissioner and we will continue to provide advice to the minister for small business.

Senator RYAN: Can you tell me who was on the decision making panel, the appointment panel for the Small Business Commissioner, or if there was a panel?

Mr Pettifer : The selection process involved advertising the position. We received expressions of interest. Then there was an interview process.

Senator RYAN: Conducted by?

Mr Pettifer : Dr Russell, myself and Jim Murphy from the Department of the Treasury were the interview panel for that process.

Senator RYAN: Take me through the process from that point forward.

Mr Pettifer : We provided advice to the minister on the candidates that we thought best met the selection criteria. The final decision then was one for the minister.

Senator Lundy: It is appropriate, given that it was announced this morning, that the Small Business Commissioner is Mr Mark Brennan. He will be beginning his employment formally on 2 January 2013. We have been talking about it for a while now and I thought it was important to congratulate him on the record on his appointment.

Senator RYAN: Fair enough too. Did the minister then interview or meet with the various people you recommended?

Mr Pettifer : The minister certainly had a discussion with the preferred candidate.

Senator RYAN: So you recommended one, not many.

Mr Pettifer : No, there was more than one, but in the sense of making up his mind about his preferred outcome I know he spoke to the preferred candidate. I do not know whether he had discussions with the others.

Senator RYAN: Without using names—and I do not know how many people made expressions of interest—how many did you recommend to the minister as meeting the selection criteria?

Mr Pettifer : We recommended three as strongly meeting the selection criteria.

Senator RYAN: Can I take it from what you said earlier that Mr Brennan was one of the three?

Mr Pettifer : Yes.

Senator RYAN: Senator Lundy, can you take this on notice: we know that Mr Pettifer said that the minister spoke with the successful nominee, but did he speak with or meet with the other two who were strongly recommended? I do not have any idea who they are, for that matter. Mr Pettifer, you only know that he spoke to one?

Mr Pettifer : Yes. We did our part of the process. We provided advice to the minister and that was a matter for him to consider. The other candidates would be people who the minister would meet with from time to time. It was not like they were people that he had no awareness of whatsoever.

Senator RYAN: Senator, can you take on notice whether the minister spoke with the other two strongly recommended candidates about the role, as he obviously did with Mr Brennan, at any point after he received advice from the department?

Senator Lundy: I will pass that on to the minister—yes.

Senator RYAN: Does that qualify as taking it on notice?

Senator Lundy: I think it does.

Senator RYAN: I just thought I would check. Will the Office of the Small Business Commissioner be geographical—

Senator Lundy: Sorry, Senator Ryan—I am not sure what you are trying to ascertain here, but I would also like to place on the record that Mr Brennan, Australia's first Small Business Commissioner, has a very impressive record of achievement in the area of small business, including serving for seven years as the inaugural Victorian Small Business Commissioner. So he comes to the job with substantial experience.

Senator RYAN: Your paranoia might be getting to you, Senator Lundy. I was literally just asking: did the minister speak to all three people? If he did not, there may well be good reason, but it was a simple, factual query. I do not know Mr Brennan. I make no judgement whatsoever and was not implying anything, I hasten to add.

Senator Lundy: I am pleased to hear that.

Dr Russell : I might just add that we are not aware of the process that the minister went through once the minister had the recommendations or the advice from the department on that process that the panel went through. As Mr Pettifer said, there were three very strong candidates that were put to him. The process that he used in coming to a view about which of the three candidates would be successful we are not aware of, but he did speak to the candidate that has been appointed. I would imagine that any minister appointing someone would like to talk to them before they put their name forward in a press release.

Senator RYAN: I appreciate that. That is why I wanted to make it clear . There were selection criteria for the position initially. Were they developed or changed at all through the recruitment process or were they static? Were the selection criteria at the beginning the same as they were upon appointment?

Mr Pettifer : We interviewed against the sorts of criteria that were advertised. That is my recollection.

Senator RYAN: And there were no separate internal selection criteria? It was simply what was in the add and it did not change from that point?

Mr Pettifer : I cannot recall exactly what was in the ad, but that is what we would have done. There was no reason to change that.

Senator RYAN: For these positions internally within the APS, there are the lovely decision matrixes. There is a list of selection criteria and various competencies, often available with a larger job description. I was just wondering whether there were any changes through the process?

Mr Pettifer : The focus would have been on those sorts of characteristics that we were looking for in the small business commissioner. Our questions would have gone to those issues.

Senator RYAN: The Office of the Small Business Commissioner will be geographically located in the Small Business Division. Is that true?

Mr Pettifer : It is located in the department.

Senator RYAN: Will it be with the Small Business Division? I do not have the chart with me—the one that was announced in Mr Russell's opening statement earlier.

Mr Pettifer : I am not quite sure what—

Senator RYAN: A division might have a corner of the building or a corner of one floor. Will it be adjacent to that or will it be on different floors?

Mr Pettifer : I do not think we have sorted it out yet, other than to say that I would expect that the staff in the Office of the Small Business Commissioner would be working closely to him, and we will try and do that when we look at accommodation in the department.

Senator Lundy: Senator Ryan, I just noted that Mr Brennan was also named the Council of Small Business of Australia's National Small Business Champion for 2011.

Senator RYAN: I could have corrected you earlier, Minister, because the first small business commissioner was actually named by Peter Reith many years ago, but I did not want to start throwing around awards.

Senator Lundy: At the ACCC—a different concept, though.


CHAIR: We will now move to science and research, outcome 2. Senator Mason.

Senator MASON: Senator Lundy?

Senator Lundy: Hello. We are expecting Senator Evans back.

Senator MASON: I nearly miss Senator Evans, but I am delighted that you, Senator Lundy, and Dr Russell are here. Dr Russell, I will kick off with my examination of the Australian Research Council on the issue of the freeze—or, as the minister referred to it, the pause. I have some questions about the grants freeze, about the research impact, about ERA 2012—which the ARC referred to and suggested I asked the department about—and about the cooperative research centres. They are the four areas I will touch on.

Which programs, if any, administered by the science and research division of the department are currently the subject of a freeze or a pause to ensure taxpayers are getting value for money, or is it just the ARC, the NHMRC and such other independent bodies?

Ms Baly : In Research Division there are two programs that are included in the pause. One of those is the cooperative research centres program, which you have already mentioned, and the other is the Collaborative Research Networks program, which is in fact fully expended anyway so is not impacted by the pause.

Senator MASON: Okay. You call it the pause and I call it the freeze.

Ms Baly : Did you also want the ones in Science and Infrastructure Division?

Senator MASON: Yes.

Ms Baly : I can give you those as well. There are five in Science and Infrastructure Division. There is the Australia-China strategic research fund group missions, the Australia-China research fund joint research centres, the Indo-Australian science and technology fund, the Indo-Australia biotechnology fund round 7, the Australia-India strategic research grand challenge component round 2 and the Education Investment Fund Clean Energy Future Carbon Capture And Storage Flagships program.

Senator MASON: All those are frozen for the moment?

Ms Baly : That is right.

Senator MASON: How much money is involved? Can we firstly go to the cooperative research centres.

Ms Baly : I think this question may have been answered this morning. There is up $150 million that could be allocated in the current cooperative research centres round.

Ms Baly : The collaborative research networks—there is no money left to be allocated.

Senator MASON: That has been expended. I understand that. With respect, can I ask about those other five or six funds that are frozen. Do you know how much that is?

Ms Baly : Yes, I can tell you that. The first China one, the group missions one, is $1.4 million. The second joint research centres one is $5 million. The Indo-Australian Biotechnology Fund round 7 is $4 million. The India grand challenge one is $12.6 million. That was the fourth one. The Education Investment Fund, Clean Energy Future is $51.6 million.

Senator MASON: Minister, we discussed earlier, in the context of the ARC, when the government might be making a decision. It will come in due course?

Senator Chris Evans: My advice is that everyone will have a cold shower, take a Bex and have a good lie down. It is perfectly appropriate thing for a government to do. We are making that review and the announcements to the outcomes will be made shortly.

Senator MASON: I have to ask you this: you will not give a guarantee that all the money will be retained? 'It is a matter for government'?

Senator Chris Evans: If I were going to give you that, I would have announced the decision, wouldn't I?

Senator MASON: You would. I am doing my best. You were quoted minister in the Australian, I think—sorry, no it was the Melbourne Age, so I am on much stronger ground now.

Senator CHRIS EVANS: Not having read their articles on the Prime Minister recently I am not sure you are but anyway.

Senator MASON: Is it your opinion that universities have the capacity to make up or meet any shortfalls in Commonwealth funding of their research projects by using their own budgets? You were quoted saying that. I don't want to mislead you: that suggestion was made.

Senator Chris Evans: By whom?

Senator MASON: 'Now there are suggestions the government will tell universities they should meet any funding shortfall from their own budgets.'

Senator Chris Evans: 'There are suggestions' from unknown sources that the government 'might'—do you really expect me to respond to that?

Senator MASON: Well I can ask for your point of view: do you think it is appropriate that universities fund those research projects with their own budgets?

Senator MASON: As I understand the way universities fund research, they rely on government funding and funding they seek from other sources, either through their mainstream university funding or through collaborations or donations, so they already have a mix of funding for research, including ongoing partnerships, and many of them have become quite entrepreneurial in that regard. But that is not a suggestion that even the Age is attributing to me.

Senator MASON: It is not the Australian.

Senator Chris Evans: I am not criticising the Age. Your suggestion was that there was a comment attributed to me.

Senator MASON: I did not mean to mislead you. It was: 'There are suggestions.'

Senator Chris Evans: I have already dealt with anecdotal evidence and rumours from Senator Rhiannon and I do not really think you expect me to respond to those.

Senator MASON: I just want to flag that, if we get time, depending on how we go, I might come back to a letter from Professor Hilmer, who, as you know, is the Vice Chancellor of the University of New South Wales and the chairman of the Group of Eight. He wrote a letter to the Prime Minister and made certain assumptions. But can we just hold off on that—

Senator Chris Evans: About what?

Senator MASON: About what the cost of frozen budgets would mean, and if it goes beyond frozen budgets and becomes a cut what that will mean.

Senator Chris Evans: I suspect, as with other communications, we probably read about that in the paper first.

Senator MASON: Let's come back to it if we have time. Is that alright?

Senator Chris Evans: Yes.

Senator MASON: Can I go now to research impact. Can anyone advise me on the progress of the feasibility study being conducted by DIISRTE into an Australian research impact mechanism—separate from Excellence in Research for Australia—to evaluate the wider benefits of publically funded research. This is an ongoing issue; it has been going on for years.

Senator Chris Evans: No, no. There is some good work happening.

Senator MASON: I am just saying this is an ongoing thing.

Senator Chris Evans: Actually, there is some serious work being done now.

Ms Baly : I am happy to provide an update. We have been talking about it for years, but it has not been going for years. It has been going since about last year—

Senator MASON: I enjoy it for what it is worth, Ms Baly. I do enjoy the discussion; I am not sure everyone else does, but I do.

Ms Baly : And we do too, so this is a piece of work that we enjoy doing very much.

Senator Cameron interjecting

Senator MASON: Senator Cameron is not quite so keen as you and I, Ms Baly, but anyway.

Ms Baly : I might give you a bit of an overview and then ask my colleague Ms Schofield to fill you in on some of the details. As we reported to you at the last Senate estimates, there are a number of streams of work that are being undertaken in relation to a feasibility study. One of them is that we are working with a group of universities that have commenced a process to do a pilot of a measure of research impact—that is the ATN and the Group of Eight process. As we understand it, it is progressing well. It is due to report about the end of November in what they are calling a symposium

Senator MASON: That is research impact, which is a contentious area of course.

Ms Baly : It is, and the approach that is being taken in that particular exercise is a case study approach. A number of universities are participating in that trial and it is well down the track. All the case studies have been written and I think probably, for the most part, the panels that are assessing those case studies have met and made some judgements. That is due to come to an end towards the end of November. So that is one stream of—

Senator MASON: That is on research impact.

Ms Baly : All of these pieces of work that we are going to refer to go to various aspects of impact. There are a couple of other strands. One of them is that we have commenced some work in conjunction with the Melbourne institute, ANU and Professor Julia Lane from the US to undertake a study—and it is called ASTRA; I cannot remember what it stands for—

Ms Schofield : ASTRA is the Australian Science and Technology Research Assessment project.

Ms Baly : It is based on an exercise that was done in the US called STAR METRICS and it aims to bring together a whole lot of existing datasets so you can form a view about the impact of research funding through a number of different aspects. It is early days for that project here, but there has been some work done on looking at the data that is available and how that might be used in a sensible, coherent way. That would give us a more metric based approach to looking at impact, were that to be successful.

Senator MASON: Any others?

Ms Baly : There are another couple of pieces of work, which I will ask Ms Schofield to talk to.

Senator MASON: Just briefly, if that is all right. In a sense, is it fair to say, Ms Baly or Minister, that this is about driving for value for money.

Ms Baly : They are all aimed at trying to demonstrate to both the taxpayer and other interested people of the value of expenditure in research.

Senator MASON: And members of parliament that vote the money to the Executive, Ms Baly.

Ms Baly : Indeed.

Senator MASON: Ms Schofield, there are a couple of others, are there?

Ms Schofield : Yes. There is a project that IP Australia are running at the moment looking at the analytics across their patents. We are doing a small subcomponent of that project with them to, again, have a look at the dataset and what that can tell us about how that flows from the various research funding and the companies that are looking at those patents and licences on the other side.

Senator MASON: That is creative.

Ms Schofield : Of course we have been closely watching and talking to our colleagues in the UK and the US who are looking at this as well.

Senator MASON: Because in the UK they have done this, haven't they, in the past. They would have quite sophisticated mechanisms, wouldn't they?

Ms Schofield : Yes, they have piloted a new system over there—their research evaluation framework, the REF—that is, in simple terms to compare to Australia, a combination of ERA plus impact.. It has been piloted and I think is due to start rolling out across their entire sector for all of their research funding councils from 2014. They have not been through the full cycle yet but they have learnt many lessons through their pilot that we have been lucky to learn from as well.

Senator MASON: It was November when this was due, Ms Baly?

Ms Baly : The ATN Group of Eight project is due to be reported at a symposium. I am not sure if that will be the end of it but there will certainly be information made public in that process.

Senator MASON: For what it is worth, it is valuable policy work no matter who is in government because trying to, at times, convince the public or indeed one's party room how important this is requires evidence, and you are putting together evidence, I think, which is very good public policy. It makes the life of the minister much easier.

Senator Chris Evans: Also Senator, it supports—

Senator MASON: With the bean counters, isn't that right.

Senator Chris Evans: With limited funds it is important we only fund the stuff that is actually delivering too.

Senator MASON: Absolutely.

Senator Chris Evans: Because it is very hard for us otherwise. It all sounds great, research propositions, and they are usually about questions I would like to solve, as it were, but there is limited money to do that and so impacts are important.

Ms Schofield : To add briefly to what the minister was just saying, one of the other things that will come out, particularly looking at the case study approach and from what we have seen in the UK, is examples of where connections have been made with industry so that industry will be able to see real-life narratives and examples of how they can engage with and benefit from the research that is happening in the universities.

Senator MASON: Again, that is contentious because many people in industry tell me the indicia or the standards by which research is assessed is too academic or too university oriented. What you are talking about here is making sure it actually has a commercial or other aspect.

Ms Schofield : Yes, it has that engagement and collaboration side of it.

Senator MASON: That is important.

Senator Chris Evans: But that is not to say they would object to the pure and non-commercial research centre.

Senator MASON: I am not suggesting that but you have to have a bit of both.

Senator Chris Evans: If you go around the universities and see Cochlea's huge centres on university campuses—there are a lot of keen people. The SKA is a classic case in its development starting now. We have the IT companies falling over themselves to be involved in the computing side of the project because they know that we will have to create the largest super computer ever to support the data we are collecting. There is no shortage of interest from computer companies in being part of that project because they can see the potential. There are really interesting partnerships developing.

Senator MASON: Before I go on to the Cooperative Research Centres, I will just go back to an issue that was raised by the Australian Research Council in earlier testimony. I asked a professor about ERA 2010 results that were used in a calculation of the distribution of the 2012 round of the sustainable research excellence bulk grants for universities. That is what happened; that is how they were used. Will the ERA 2012 results be in the 2013 SRE distribution or any other funding distributions? That really is a question for the department—and he is right—rather than a question to the Australian Research Council.

Ms Baly : It is our intention to use the 2012 ERA results in the calculation of the SRE if they are available in time for us to do so.

Senator MASON: Okay, so this is the intention.

Ms Baly : Yes.

Senator MASON: What is the time line, Ms Baly?

Ms Baly : Those preparations would normally be advised to universities in December.

Senator MASON: And if you do not have the results by then?

Ms Baly : If we do not have the results in time for us to do those calculations then we will have to make a decision about whether we use the 2010 results for ERA. We will probably talk to some people in the sector.

Senator MASON: They would be a bit outdated by now.

Ms Baly : And that may well be the view. That would probably be the subject of some consultation nearer the time, once it became apparent whether or not it was going to be available. But we are working on the basis that we will have that. The other alternative is that we might advise the allocations a little later than normal.

Senator MASON: Okay, it may not be by the end of the year.

Ms Baly : I mean, we have not made a decision about what would be the best way to take that forward. Our intention at this stage is to use 2012 if they are available.

Senator MASON: I move now to Cooperative Research Centres. How much lower will the 2013-14 CRC program budget be than the program's budget in 2007-08? What is the difference?

Mr Murfett : I am just checking the folder to see if we go back to 2007.

Ms Baly : If not, we might have to take it on notice. We have got from 2012 on, if that is any—

Senator Chris Evans: Perhaps we could take it on notice.

Ms Baly : I think we might have to take that one on notice.

Senator Chris Evans: There was a save a couple of years ago. We could probably give you more recent figures, but I don't know whether we could go back to 2007. We will get that for you this afternoon.

Senator MASON: That is fine.

Senator Chris Evans: That is just so we get it right; I hate this stuff on the run because we might get it wrong.

Senator MASON: Yes.

Senator Chris Evans: There is no reason why we cannot give it to you this afternoon.

Senator MASON: Ms Baly, can you tell the committee how many operational CRCs there are currently. How many are there?

Ms Baly : There are 37.

Senator MASON: And how does this compare with the number of operational CRCs at the end of the final full year of the previous, coalition government—the year 2006, I suppose.

Ms Baly : The numbers have bounced around a bit. In 2006-07 there were 58 and in 2007-08 there were 58. In 2008-09 there were 48; in 2009-10 there were 50; in 2010-11, 42; and in 2011-12, 44.

Senator MASON: Can I ask what proportion of the government's total—

Senator Chris Evans: They are funded differentially, aren't they?

Ms Baly : They are funded differentially, so the number is not necessarily the whole story.

Senator Chris Evans: You cannot divide the budget by the number of—

Senator MASON: I am moving there, Minister. No, I accept that they are funded differentially. What proportion of the government's total expenditure on R&D does the CRC program now comprise? Do you know that? And what would it be for 2006?

Ms Baly : We would have to take that one on notice.

Senator MASON: How many applications or bids have there been in the period 2007 to 2012? How many have been successful and how many have been declined?

Ms Baly : Sorry, can you say the starting year again.

Senator MASON: How many applications or 'bids'—if that is the right word—have there been in the period 2007 to 2012? How many have been successful and how many have been declined?

Ms Baly : In 2006, which was round 10 of the program, there were 36 applications and 14 were successful—that is 38.8 per cent. There was not a round in 2007; the 11th round was in 2008 and there were 24 applications and 10 were successful—41.6 per cent. In 2009, there were 18 applications and seven were successful, and that is 38.8 per cent. In 2010, which is the 13th round, there were 30 applications and four were successful—that is 13.3 per cent.

Senator MASON: Yes.

Ms Baly : In 2011 there were 26 applications and six were successful.

Senator MASON: Which is a quarter—

Ms Baly : That is 23 per cent.

Senator MASON: What costs are incurred or acquired of applicants? What is the average cost to apply for a CRC grant or bid?

Ms Baly : I do not think we have hard and fast data on that. We have some anecdotal information from what bidding parties tell us, and some of them tell us that a bid is upwards of $100,000. That is not something that we are able to validate.

Senator MASON: You have not done any research on that or tried to validate that anecdote, I suppose?

Ms Baly : No.

Senator MASON: You mentioned this program is subject to the current government review, or pause of uncommitted expenditure. Is that right?

Ms Baly : That is right.

Senator MASON: How much of the 2012-13 budget has been spent and how much remains unspent?

Ms Baly : I think we answered that question this morning. We will get the numbers out again for you.

Senator Chris Evans: You do not mean on this round; you mean the annual expenditure on existing CRCs?

Senator MASON: Yes.

Ms Baly : You mean this current financial year's commitment?

Senator MASON: This current financial year.

Senator Chris Evans: On existing CRCs.

Senator MASON: Yes.

Mr Murfett : This financial year $37.9 million has been spent.

Senator MASON: How much remains unspent?

Senator Chris Evans: This is not subject to the pause; this is ongoing funding of existing CRCs. This is like recurrent funding which they have been committed to.

Senator MASON: So this has been committed already—

Ms Baly : This has been committed from previous rounds.

Senator MASON: This might be a CRC that has been in existence for 14 years who is getting its annual funding, which is different from the new round, which has been paused.

Ms Baly : And the round that has been paused would not commit funding until next financial year.

Senator MASON: In any case.

Senator Chris Evans: So there is no financial impact at all currently from the CRC being impacted by the pause.

Senator MASON: It is paused but there is no impact?

CHAIR: Senator Mason, I am going to interrupt you here and give the floor to Senator Urquhart.

Senator URQUHART: Could you give me some information about the ABS statistics that were released in relation to R&D expenditure in Australia?

Ms Baly : I think the officers that put those tables together have probably gone.

Senator URQUHART: You could take that one on notice then.

Ms Baly : We will take that one on notice.

Senator URQUHART: In relation to that too, could you add to that information on notice how much R&D expenditure has been in manufacturing in particular, and how that is expected to assist innovation and industry in the pharmaceutical industry? A breakdown of that would be great.

Ms Baly : Certainly.

Senator URQUHART: The registration for the new incentive opened for 2011-12 on 1 July, I understand. How is that registration going and are many companies applying?

Ms Baly : I think the officers that look after that program have gone as well.

CHAIR: Why have the officers gone?

Ms Baly : Because that is part of outcome 1, not outcome 2.

CHAIR: We were advised it was part of outcome 2.

Ms Baly : Apologies for that.

Senator URQUHART: All the questions I have are in relation to that so I may need to put them all on notice.

Senator Chris Evans: Maybe we can move on, Chair, and I will see if the officers are out the back. They were allowed to go.

CHAIR: See if the officers are available. We would like to have them brought back for this.

Senator Chris Evans: We will see if that is easy within the time frame and if it is not we will have to take that on notice; I am sorry.

CHAIR: In that case, we will go back to Senator Mason.

Senator MASON: Ms Baly, have there been any underspends in the program in the past five financial years?

Ms Baly : In the CRC program?

Senator MASON: Yes.

Mr Murfett : I cannot answer all the way back for the five years, but I know that in the last couple of years we have been fully committed and allocated all our funding each year. We allocate a year in advance and we usually allocate the full budget.

Senator MASON: Could you check that for the last five years?

Mr Murfett : Yes, I will take it on notice.

Senator MASON: What is the process, Ms Baly, in terms of next year? Can you just explain that to the committee? There is a pause but it has not effect—that is in effect which you are saying.

Ms Baly : There is a round that has been opened. There are applications that have come in and—

Senator MASON: It is the 15th funding round. Is that right?

Ms Baly : Yes, it is the 15th funding round. Those applications would be in respect of funding that would commence at the beginning of the next financial year.

Senator MASON: How much is committed to that?

Ms Baly : There is up to $150 million that could be committed in that round over a period of up to 10 years.

Senator MASON: What is the usual timetable for that?

Ms Baly : The usual timetable would be that applications would be called for in February, close in the middle of the year and be assessed by the committee. There is a two-stage application process. There is a first-round application process, followed by a short-listing process. Successful applicants would be asked to submit a second-round application and then be invited for an interview.

Senator MASON: In any case, the process would not even commence for applications until February.

Ms Baly : Another process would commence in February.

Senator MASON: That is the minister's point that in fact—

Ms Baly : Yes, but there is a current round that is open. First-round applications are in for that current round—the 15th round. In February next year, the 16th round would open.

Senator MASON: For the current round that is open, have those funds been frozen?

Ms Baly : I do not think saying the funds are frozen is correct. The funds are not available to be committed until the beginning of the next financial year. The funds themselves are not frozen.

Senator MASON: In any case, they would not be committed until the next financial year, in the normal course of events.

Ms Baly : Yes, in the normal course of events.

Senator MASON: I have other questions relating to—

Senator CHRIS EVANS: Can I just interrupt and say that unfortunately the officers have left the building because their program was over. I apologise to Senator Urquhart and indicate we are happy to take those questions on notice. If there is anything else you need, please let us know.

CHAIR: We will do that, Minister. Thank you for that advice. Senator Mason, do you have further questions?

Senator MASON: I do, but I am happy to yield to Senator Urquhart.

CHAIR: No, Senator Urquhart's question is on notice.

Ms Baly : Could I give the information you asked for about the CRC budget?

CHAIR: Yes, of course.

Ms Baly : The budget for the 07-08 financial year was $212.3 million.

Senator MASON: It was $212.3 million for 07-08.

Ms Baly : Yes, and for 13-14 it was $145.8 million.

Senator MASON: If I still have the call, Chair, I might go back

CHAIR: You have the call, Senator Mason.

Senator MASON: Professor Hilmer wrote to the Prime Minister and he made, I think, certain assumptions. The assumptions are these and I just want to know whether you agree with this, Minister: that a freeze on funding would lead to a loss of 950 positions supported by the ARC, 450 positions supported by the NHMRC and 300 positions supported by the CRC, for a total of 1,700 jobs.

Senator CHRIS EVANS: I do not accept that at all, Senator. The evidence, for instance, from the ARC today confirmed that that is not based in fact. Clearly that sort of claim—I could not comment on the numbers—would be true if the pause was to go for a year, or what have you. It has gone for a matter of weeks. I expect it to be resolved around the time of the MYEFO. If there are any changes to funding in any of those programs, they will be announced publicly. I think the pause has been in place about seven weeks, and as the ARC indicated, they actually have not stopped any funding. On a couple, the announcements or the applications have not been called, but to suggest that somehow as a result of what has occurred at the moment, 950 jobs will be lost is—as I understand it—not based on any evidence or advice I have received.

Senator MASON: Another assumption made by Professor Hilmer in his letter to the Prime Minister is that a halt to funding of any new projects next year would slash about $230 million from universities and research institute budgets. That is a halt for a year. Is that about right?

Senator Chris Evans: I have no idea. Professor Hilmer has no idea.

Senator MASON: He is giving it a go!

Senator Chris Evans: I know. Professor Hilmer is thinking up a proposition and then seeking to cost it. It is not based on any advice from me or from the government of what might be contained in MYEFO or considerations of grants programs. So whether, based on the premises which he has thought of, the outcomes he suggests are right or not, I do not know. It is certainly not something that we have bothered costing, because the premises are not sound.

Senator MASON: You say it is unrealistic and a little bit over the top?

Senator Chris Evans: Professor Hilmer is, on behalf of the Group of Eight universities, making the case as to why they should not have their funding impacted upon by any financial decisions taken by the government. They are like every other interest group who might be impacted. I do not criticise them for that. They clearly would like all of their funding to be continued, and preferably increased. In these budgetary circumstances I suspect they understand that the government will have to make some tough choices, but Professor Hilmer and the Group of Eight have not been briefed on the government's decisions in regard to these matters. When we announce those decisions they will be briefed, and they can assess the impact on them then.

Senator MASON: I am going back to the cooperative research centres just for a second. In the normal cycle of research announcement—in the normal course—I understand that news on the CRC shortlist would have been made public in August. Is that right?

Ms Baly : That is correct. That would be the normal process.

Senator MASON: I understand there has been no response to the nine proposals for new centres from the department. Is that right?

Ms Baly : That is correct.

Senator MASON: Do you know when the CRC can expect an answer?

Ms Baly : As the minister has said, when there is a resolution to the pause then we will be able to go back to the applicants and advise them.

Senator COLBECK: My question was something we looked at a little bit earlier in the day. The question is: how long does the uncertainty continue?

Ms Baly : We do not know.

Senator Chris Evans: As I indicated earlier, the government announced the pause. I expect it will be resolved in conjunction with the MYEFO process. It is not the same process—I suppose I have to be careful in terms of what the Treasurer says about these things—but it has acted in parallel and the government expects that the MYEFO will be released in the normal course of events. We expect to be able to advise people about the impact of the review of grants programs in the near future.

Senator MASON: I do not think the connection is coincidental, Minister!

Senator Chris Evans: I never said that, though!

Senator MASON: Indeed.

Senator COLBECK: We will not attribute it to you, Minister.

Senator Chris Evans: I bet!

Senator COLBECK: It is just between you and us!

Senator Chris Evans: Yes, and the televised audience.

Senator COLBECK: I am sure someone might be watching!

Senator MASON: My next set of questions relates to universities and higher education.

CHAIR: Senator Colbeck, do you have questions on outcome 2?

Senator COLBECK: The only question I have is the one that I put the department on notice about earlier. It was in terms of some advice around committed, spent funding for the Clean Energy Initiative.

Ms Campbell : The $300 million Clean Energy Initiative is over four years, with $16.9 million spent last year, in year 1. In 2012-13 total funds allocated are $100 million; $57.089 has been committed, with $42.9 million unallocated. In 2013-14, a total of $100 million is in the forward estimates; $47.04 million has been allocated. And $57.955 million is uncommitted.

Senator COLBECK: Thank you.

Ms Campbell : In the final year, 2014-15, a total of $83.034 million is available in the forward estimates; $28 million has been allocated, with $55.34 million yet to be allocated.

Senator COLBECK: So this year you have committed $57 million and unallocated is $42.9 million.

Ms Campbell : Correct.

Senator COLBECK: How much is actually spent this year?

Ms Campbell : There is currently no expenditure against—

Senator COLBECK: No expenditure.

Senator MASON: I am trying to be helpful for the department. I will be addressing at least these issues in higher education. I will flag them for the department: Higher Education Participation and Partnerships Program, the Education Investment Fund regional priorities round, the MyUniversity website, international students, ATAR scores. We will see how we go.

Senator Chris Evans: They all come as a complete surprise to us, but we will quickly swot up!

CHAIR: We will take a break now.

Proceedings suspended from 16:02 to 16:24

CHAIR: We will recommence.

Senator RYAN: Senator Evans, thank you for referring me here when we spoke on Monday at the other committee hearing. I would like to look at the National Occupational Licensing Authority—in particular, the national licensing for property occupations. I will progress from where we were the other day. After the consultation regulation impact statement, were set information sessions for stakeholders held following the release of the RIS?

Ms Borthwick : Yes, consultations were held in all capital cities.

Senator RYAN: Did you invite people, or was it advertised for people to turn up?

Ms Borthwick : It was advertised, and we had a very strong turnout in all capitals.

Senator RYAN: Did you invite any specific groups or organisations as well?

Mr Luckhurst : Yes. Through the NOLA website we have a registration process where people register for information. We sent out invitations to the around 2,000 people who have registered—

Senator RYAN: So it is people who have registered.

Mr Luckhurst : That is right. They are obviously people who are interested in the reforms.

Senator RYAN: Sure. Did you choose groups like the real estate institutes in the various states as well, or did you depend upon them registering to come along to these consultations?

Ms Borthwick : It was a combination, but certainly we made it very widely known when and where the consultations would be.

Senator RYAN: I might put some more questions on notice. I will just go to the substance of the issue. Various stakeholders, including the Real Institute of Australia and some others, have voiced serious concerns regarding proposals contained in the RIS. Several issues were identified: the drop in standards that mutual recognition may facilitate in the sense that some states have effectively a weekend course—others have a more rigorous process to get a real estate agent licence—and that this could lead to increased consumer risk through lowering professional standards. Ethics are all the same; I am actually talking about the training that they are provided with. I understand that another concern is that commercial and rural real estate will be deregulated so that there will not be the same qualification standard for people working in that area and that ongoing professional development will not be a requirement for licensing, which will result in many practitioners maybe not being as up to date with legislative change. Are you aware of those concerns?

Ms Borthwick : Yes, we are.

Senator RYAN: What are you doing to address those concerns?

Ms Borthwick : The process that we are engaged in at the moment is obviously a consultative one, where we have put out a number of proposals to the wider community, including the property industry. The process that we are going through at the moment is to take feedback from that through the submission process and additionally through discussions between the National Occupational Licensing Authority and industry groups. Following the input from that process a final decision will be made, obviously taking into account if there is new evidence presented through that process.

Senator RYAN: Who makes the final decision about what these national minimum standards will be?

Ms Borthwick : The final decision will go to the Standing Committee on Federal Financial Relations through the COAG single national economy reform process.

Senator RYAN: Is that the Treasurer's committee?

Ms Borthwick : Yes.

Senator RYAN: It is due to come online in the first half of next year. Is that supposed to be 1 January?

Ms Borthwick : There has been no firm decision made about a start date at this point.

Senator RYAN: So would it not be fair to say it is due to come online in the first half of next year, or it is but no date in the first half has been decided?

Ms Borthwick : At the moment the aim is to introduce it in the first half of next year.

Senator RYAN: Do you know when the next meeting of the Council of Federal Financial Relations is?

Ms Borthwick : I do not know. I will just check with Mr Luckhurst.

Mr Luckhurst : I am not sure. It is obviously something that is handled through the Treasury portfolio, but we could take that on notice and get you some further information on that.

Senator RYAN: The final issue I would like to raise about this is that some insurers have said that if unlicensed people are permitted to act as agents in commercial and rural real estate, they will not be able to obtain professional indemnity insurance. That obviously poses a risk to small businesses and others operating in this space and leaves them potentially with less protection, even in the case of innocents rather than all these malfeasants. Is that something you plan to address through this process?

Ms Borthwick : All of the issues that people raise with us will be considered and reviewed as part of this consultation process. Mr Luckhurst might have more detail.

Mr Luckhurst : No, it is certainly tied up in some of the issues that you raised earlier. If my memory is correct, it was in relation to the commercial agents' work?

Senator RYAN: Yes.

Mr Luckhurst : Obviously that is one of the broader issues we are looking at. Some of the feedback we are getting around those sorts of issues will be assessed.

Senator RYAN: Is the decision made by your recommendation to Senator Evans? Who makes the decision on what the Commonwealth position will be? Which minister? Which organisation? Or is it potentially a cabinet decision?

Mr de Carvalho : It would be a decision of government.

Senator Chris Evans: In the end, it is a COAG decision.

Senator RYAN: Yes. I am just thinking that the Commonwealth will take a position to COAG, and that will come out of a decision of government. Senator Evans, do you take a position on this? Who has carriage of it within the government?

Senator Chris Evans: I have responsibility. One of the complications, I suppose, is that the Treasury ministers will be at the meeting where these issues come to a head, but inside government I am responsible for the NOLA process.

Senator RYAN: COAG has murdered more trees than virtually anything else! I appreciate that the processes are complex. One suggestion from one stakeholder has been that one licence—for example, a licence held in one state—might mean that someone operating nationally might end up with more than one licence to operate in different spaces. Is this true or will it be a single licence that they end up with?

Ms Borthwick : The aim of the national licensing proposal is that there is a single national licence which can operate in all jurisdictions.

Senator Chris Evans: Which is different to the proposition that a couple of states have suggested, which is mutual recognition. If you have mutual recognition that means you have more than one licence required and recognition of each other's licences. The objective of this is to have a national licence system.

Senator RYAN: When does the Commonwealth envisage making a decision on what its position will be to take to the Council on Federal Financial Relations?

Senator Chris Evans: We are going through the RIS process now, so it will be at the end of that process, when we have had all the feedback and we get to the next stage of the RIS process.

Mr Griew : It would be accurate if not terribly informing to say that it will be before that.

Senator RYAN: I just want a rough timeline. Are we looking at before the end of the year? Are we looking at November, October? There are three months left.

Ms Borthwick : At the moment we are aiming to conclude the process, at least from the Commonwealth point of view, by the end of the year. Obviously that depends a little bit on the level of stakeholder input that we have had. I think Prime Minister and Cabinet advised you on Monday that there were over 2,700 submissions which had just arrived. That is a considerable body of work.

Mr Griew : But the government's aim is by the end of the year.

Senator RYAN: Thank you.

Senator NASH: Firstly, can I get a clarification on something which I did not get a chance to ask about last estimates. I am not sure if this is the appropriate place but I cannot see where else to go. There was a Senate committee report on the inquiry into regional and rural access to secondary and tertiary education opportunities that was tabled in 2009. The government response was earlier this year, in March 2012. Can you give me any indication of why it took over two years to get a response to that report?

Mr Griew : I think this might be a question for DEEWR; I am not sure. It is not something I happen to know about. We can take it on notice, if you like, and find the right—

Senator NASH: I would prefer to know today or tomorrow.

Mr de Carvalho : We can find out today who the right person is to ask that question of.

Senator NASH: If you could. Maybe there is some point tomorrow at which we could—

Senator CHRIS EVANS: I think that the trouble that we will have is that, if DEEWR are responsible for leading the response, we will have to get the answer from them. But we will get you what information we can. Your interest is in the reason for the delay?

Senator NASH: Yes, and given it is only eight pages there must be some reason for that.

Mr Griew : Sorry, I missed the name.

Senator NASH: It is the inquiry into rural and regional access to secondary and tertiary education opportunities, and it was tabled on 18 December 2009.

Senator Chris Evans: We will see what we can find out for you, Senator.

Senator NASH: That is fine. If it assists, the government response was 13 March 2012, which does seem like an inordinately long period of time.

Senator Chris Evans: Does it say who it was tabled by? Was it me or Minister Garrett?

Senator NASH: I have not got that information with me, sorry, Minister.

Senator Chris Evans: That is all right.

Senator NASH: That would be useful. I have a number of questions around youth allowance figures. If you do not have the information here, I will put them on notice. Obviously it is more useful if we can do it as we go, but they are quite detailed, so if you would prefer to take them on notice I can do it that way.

Senator Chris Evans: Ms Sakkara is a wealth of information and statistics.

Senator NASH: Fantastic! In answer to question on notice 166, is it possible to give the committee the number of students from regional areas accessing independent youth allowance by year in any given year?

Ms Sakkara : What I do have is the number accessing independent youth allowance in March 2010.

Senator NASH: Sorry, I am not being very clear. In any given year, is it possible to give me the figures of whether the student is in year one, two, three, four or five or whatever of their course?

Ms Sakkara : I do not think that is readily available.

Senator NASH: Could you have a look at that for me.

Ms Sakkara : Sure. What we will know now that people are receiving a relocation scholarship—and there are different rates for different years—is how many students have received the particular rates. That will give some part of that information but it will not give you the information for all students.

Mr Griew : That would tell you if they are a first year or a subsequent year.

Senator Chris Evans: But only for those who are eligible for the relocation allowance.

Senator NASH: Yes, which is not independent youth allowance, is it?

Ms Sakkara : No.

Senator NASH: No, so in fact we have just gone in a big circle. I appreciate the information but it does not actually relate. Looking at the detail in these, I will put these questions on notice, because I think you will be able to give us a more fulsome answer if we do it that way.

Ms Sakkara : Okay.

Senator NASH: I take you to an answer to one of the questions on notice, B141. I was asking about the cost of living away from home for tertiary students. I understand that the work that has been done to date suggests around $20,000 per year, but I was concerned that was an old figure and so asked if you could provide any further work that gives an more timely assessment of what that cost was. You referred me to a website, the ASG website, which, if you were in the infrastructure and transport department, you would know really annoys me, because I can go to the website but I prefer an answer. You sent me to two-minute noodles. What you did was flick me to the website which says 'ASG's how to survive university and TAFE 2012 without living on two-minute noodles', and then, after those masses of pages which come with how to not live on two-minute noodles—which I did at university, along with many others—there is a stack of figures, none of which you bothered to collate for me for an average updated figure, and I do not think that is appropriate. Is there any reason why you would just flick me to a website?

Ms Sakkara : I understood the question was, 'Is there any research about this topic?' so we referred you to the publication which is the only source that we are aware of. We have not conducted research ourselves. This is a publication that comes out annually and is available for students to look at: estimates of costs given types of living circumstances and some suggestions about how to budget et cetera. It is the only publication we were aware of that seemed to fit the bill of your request, Senator.

Senator NASH: I appreciate that you tried very hard. Did it not occur to you to perhaps tabulate that into some sort of form that the committee might have been able to look at a little more usefully?

Ms Sakkara : No.

Senator Chris Evans: It is not our information. We are not the source of it.

Senator NASH: I understand that, Minister—thank you.

Mr Griew : I would say there was just a misunderstanding about the nature of the question.

Senator NASH: It could well have been. I ask you, then, to take on notice—because I imagine the department would want to know—an average cost for a regional student to have to relocate and whether or not the previously used figure of $20,000 is still accurate? I would imagine that is something you would want to know as well. Could I be a little more clear in my question perhaps and ask: could you give me an average figure for the relocation costs of regional students who have to move away from home to attend university or further education—I am putting that as clearly as I can—relative to the $20,000 figure that is often used in evidence to the inquiry?

Senator Chris Evans: I think the answer to that would be no, given what Ms Sakkara said to you before, in that we do not have that information.

Ms Sakkara : We do not hold the information. Page 10 of that publication does include some ranges of costs for students based on different circumstances.

Senator NASH: So at no time does the department look to, or are you are aware of, any evidence that anybody else has done in coming up with an average cost for students to move away from home?

Ms Sakkara : This is the only evidence that we are aware of.

Senator Chris Evans: We are not trying to be unhelpful, Senator. We just do not have the information that answers your question.

Senator NASH: I understand that. I am not being difficult; I simply think it is something that—

Senator Chris Evans: I understand the interest in the issue, but the reality is that we will not be able to go away and get you the answer to that, because we do not have the basis for making the calculation.

Senator NASH: Okay. Are you aware of others in this field who have perhaps come up with a figure? I would think that this is something that the department would really want to know: for a regional student, what is the average cost of having to move away from home?

Ms Sakkara : When we researched the answer to your question, this was the only publication that we could find that had more recent than the 2007 data that you quoted in your question. We looked extensively to see whether there was anything else available and this was the only source we thought was relevant to your question.

Senator NASH: So there has been no reporting at all—something like Naomi Godden's Regional young people and youth allowance: access to tertiary education, the work that was done around 2007? Nothing has been done since then to update that figure?

Ms Sakkara : Not that has been completed. Universities Australia are currently doing some research on the costs for students. I understand that will be completed by the end of the year. That is something they will release, I would imagine, early next year.

Senator NASH: Then, if you would not mind, in the 'two-minute noodles' part of the website, could you go through the figures for me and calculate, in your determination as the department, what you think the likely cost is?

Senator Chris Evans: I think the answer to that will be no. Firstly, the department is not here as a research capability for you; and, secondly, there is no way the department could provide authority to those figures. We have not done the work. It is not our information. You can take that information and treat it with caution and make your own judgement about its value, but the department will not be saying that this is accurate or the average of someone else's work, or what have you. I am just trying to make the point that this is not our information. You have to make a judgement yourself about how valuable you think that is. You are quite right to say that this is something we would all be interested in, but we do not actually hold the information that gives us the answer. We are certainly not going to try and interpret stuff where we cannot vouch for the authenticity or accuracy of the information.

Senator NASH: So the entire department cannot come up with some sort of methodology to work this out through things like course costs, accommodation costs and the cost of feeding oneself? No-one in the department can come up with the methodology to figure that out and come up with an estimate of what it costs a regional student to move away from home?

Mr Griew : I will answer that question.

Senator NASH: Yes or no.

Mr Griew : Let me answer the question. This data, as Ms Sakkara has said, is not our data. If we were to give you further analysis of this data, we would have to look into its validity ourselves. The team has looked for you at what else is around and who has published it. Universities Australia is doing a subsequent study and that will be the next source.

Senator NASH: I appreciate the effort you have made, but what you are telling me is that the department has no idea what it costs a regional student to relocate away from home to attend university.

Mr Griew : With respect, what we are telling you is what is available in the published literature on that question.

Senator NASH: No, you are telling me that this is not your work, and you are not going to give me the collation of this because it is not your work. Therefore, you are telling me you cannot give me a figure.

Senator Chris Evans: No, I am telling you that, because I would not authorise the department to do that for you. The answer to your question is: we have no more recent work than the 2007 advice given—end of story. The officer tried to refer you to the only thing we had seen more recently, of which you have a copy. It may be unsatisfactory, but that is it. The officers have advised you that Universities Australia is doing some more work which will be available, but the department has nothing else to help you with in updating that 2007 advice.

Senator NASH: It is less than optimum.

Senator CAMERON: Minister, I am not sure who I need to ask these questions of, but they are about TAFE cuts in New South Wales, Victoria and Queensland.

Senator Chris Evans: We are getting the right officers to the table now.

Senator CAMERON: There have been announcements of significant TAFE cuts around the country. This is at a time when the business community is crying about low productivity and lack of skills. Can someone outline to me the implications of the TAFE cuts in New South Wales, Queensland and Western Australia in terms of productivity, skills and any social consequences arising from these cuts?

Mr Griew : The more accessible answer is to tell you what we know about what is happening in those states in terms of the impact on the TAFE system, not all of which is in a final form yet. To extrapolate from that particular impacts on productivity probably stretches the material immediately before us. In Victoria the state of play is that there was significant reduction in the per-hour funding of courses in TAFEs, a change which varied across different kinds of courses and providers in the Victorian system. This led to significant reductions for all the TAFEs, and a result of that is that there has been a process going on in Victoria of looking at the structure of TAFE course provision and TAFE organisations in that state. There has been public coverage of that as a result of the supposed leaking of a report of the group that has been doing that work. We await the Victorian government's final announcement of the structure of courses and TAFE provision that will follow from their decision on the basis of that analysis that is going on.

In New South Wales, in the context of the New South Wales government's budget, there has been a reduction in funding for TAFEs, a reduction in the number of staff members for TAFEs and an increase in both course fees and student concession fees. The New South Wales department and ourselves are discussing that in the context of the agreement that we are jointly implementing so that we can understand the implications of those reductions. In Queensland there is a review group commissioned by the Queensland government looking at the future of the structure of TAFE provision in that state, which has made a report but to which the Queensland has not responded. So, again, there is not a final state of play on the shape of TAFE provision in that state.

Senator CAMERON: That must be of significant concern. It is not just Victoria where Liberal and National governments are cutting funding to TAFE; it is New South Wales and Queensland as well. Let me put to you some comments that have been made and see whether you can respond to them. This is an on-line site called The Conversation. I think it is pretty well known; it has a high reputation. There was an interview with Associate Professor Leesa Wheelahan from the University of Melbourne and Professor Steve Dinham, the Chair of Teacher Education and Director of Learning and Teaching at the University of Melbourne. They are saying that state governments are wrecking the TAFE system and that cuts to TAFE institutions in regional areas will have a major social and economic consequence. Is that a reasonable analysis of what is happening?

Senator Chris Evans: As minister I am very concerned about these things. I am on the public record on this, particularly in terms of Victoria, where the cutbacks are savage and where we have seen closure of courses, potential closure of campuses and a huge impact on TAFE. We expect another round to occur on 1 January. A number of TAFEs made decisions immediately for the second half of the year when they were advised of those cuts. There was no transition arrangements in place but obviously they are about to announce the impact on them for next year. It is anticipated there will be closure of more courses and further increases in fees et cetera. Obviously, we are very concerned about that and we have taken that issue up with the Victorian government.

What the officers have indicated is that they are in dialogue with the departments and TAFEs in all three states. There is still a process in Victoria, which really seems to go, as I understand it, to how they make regional provision work, given the fact that they have already slashed the funding. I have been to places like Geelong, where there are huge impacts occurring to those regional TAFEs. But we await that to see whether they will provide any comfort, if you like, to the impact that these changes are having.

It also impacts on us in terms of university operation in Victoria because we are going to see fewer students at TAFE and therefore, potentially, fewer students flowing through to universities. Many of the universities have partnerships with these TAFEs which are currently reducing their activity.

It is equally the case that there has been a huge impact on the four dual-sector universities in Victoria. So universities like the University of Ballarat, Victoria University, RMIT and Swinburne University of Technology have all been impacted by this. There have been revenue cuts of $15 million, $20 million or $25 million to each of those institutions as well. In terms of the final outcome in Victoria we are not clear yet, and the officers were referring to that.

In New South Wales we are already seeing the impact of those funding cut-backs, and I think there have been around 800 staff been let go out of TAFEs. In Queensland there has been an initial report of a review that they have commissioned but the final report is not yet available. We are awaiting that to determine what the real impact in Queensland will be. But as you are probably aware, the initial report recommended the closure of, I think, 20-odd TAFE campuses in Queensland. So clearly that, if enacted, would be a very significant impact on TAFEs as well.

I suppose I am indicating that the officers, as public servants, cannot really provide commentary on the impacts. Clearly it has severe impacts in those states and also is impacting on how we can work with those states given that we have got record investment in their systems. I made it clear to Victoria that I am not going to be played for a mug by putting more money into their system as they pull it out the other end. We are happy to continue our strong contribution to Victoria and to all the states, but the Commonwealth cannot be in a position where we are increasing our funding and they are decreasing theirs when these are state-run systems. They are always very keen to tell me that these are their systems and the Commonwealth ought to keep its nose out of trying to manage them, but the Commonwealth is not going to be left in the position where we are, if you like, filling up the bucket as they drain it.

Senator CAMERON: Minister, have you seen reports about government cabinet documents in Victoria? In the Age it says that an 86-page cabinet document says that Lilydale, Prahran in Victoria, Castlemaine, Yallourn, Moreland, and Ararat could all be closed down and that automotive, building, cooking, food processing, government and public safety courses could go. Has your department or have you seen those reports?

Senator Chris Evans: We have, and we have been trying to engage strongly with the TAFEs and others on these issues. I think the reality is that the funding changes mean many courses are no longer economic for those TAFEs and so whole areas will close down. One of the areas raised with me the other day, for instance, was fire safety plumbers. RMIT, as I understand it, are getting out of the business because they think it is uneconomic, and they provide a large part of the national training effort for providing licensed plumbers expert in fire sprinkler systems.

Senator CAMERON: Minister, I accept that you are engaging with these TAFE colleges, but surely the federal government must engage directly with these Liberal and National governments who are engaging in economic vandalism against the TAFE system. This is an act of political stupidity and economic vandalism. Surely we must be engaging directly with these governments that are destroying the basis of productivity and skill development in this country?

Senator Chris Evans: I think it would be fair to say the Victorian government are aware of my and the Gillard government's views on this matter, and we have been corresponding with them and making our views known. I am very concerned about what this means for training and education in this country. We are in a position where we are trying to apply pressure to reverse some of these cutbacks. One of the really disappointing things about the Victorian government's actions is that they try to present it as reform, but they provided no transition arrangements; they just cut $300 million out of TAFE and said, 'Get on with it.' That is why you are seeing the dire consequences of this action.

Senator CAMERON: Last time I looked in the dictionary, 'reform' means to make things better. I do not think this is reform in the true sense. Professor Dinham, in the Age article, says that every year you can keep people in education reduces things like antisocial behaviour, and there are a number of US states that make their predictions for prison cells on the basis of high school dropout rates. This is not just an education issue, it is a social issue as well. I have heard what you have said about not engaging in the debate about why this is being done. If the federal government is injecting money into the TAFE system, but doing it for a reason and to project a better opportunity for young Australians predominantly in the TAFE system, surely we have a view as to whether there are social consequences for not having a TAFE system. The Liberal-National governments in New South Wales, Queensland and Victoria are engaging in an act of vandalism against young people in this country. You must have a view.

Senator Chris Evans: We do have a very strong view. All I was trying to do was indicate that public servants were not going to engage in that sort of commentary. But the Gillard government has been very clear about this. We are very concerned about the impact. As well as the impact on the number of people being trained and the opportunities for young people in particular, you are right to highlight the social impacts. It is particularly true in the regional centres, where there are no options to the TAFE for many people. To be frank, in addition to those training and education needs, the reality of TAFE has been that it has often been a place where kids who have dropped out of the system go to reconnect socially, and with education more broadly.

Senator CAMERON: What Professor Wheelahan says is that it is a second chance.

Senator Chris Evans: That is very much the case. Quite frankly, for kids who have dropped out of high school, or who have had issues of drugs, family dislocation, disability, what have you, often TAFE is the place where they reconnect. In addition to the straight educational training role, I think particularly in regional areas, but more broadly, there is a real social impact if we lose that capacity for TAFE to reconnect with young people. The evidence about education and antisocial behaviour or criminal incidence is well established now.

Senator CAMERON: In this article, Prof Wheelahan notes that these course reductions come despite the OECD reporting that as many as 85 per cent of 25- to 64-year-old Australians who have attended vocational education were employed in 2010. If you manage to get to TAFE, you have got a huge potential of getting employed. Prof Wheelahan said that this is the second highest level amongst OECD countries. Has anyone from the Liberal-National governments in Queensland, Victoria and New South Wales actually explained why they are engaging in this full frontal attack on young Australians? I thought you would have been asking these questions, Senator Nash, about TAFEs being cut in regional areas. You set yourself up as the champion of regional Australia, unless it is the coalition that is attacking regional Australia.

CHAIR: Order! We are not going to have a discussion across the table. Senator Cameron will ask questions to the minister or the officers, and they will respond.

Senator CAMERON: Do I have one more question?

CHAIR: You have one more question.

Senator Chris Evans: Can I just say that there is no satisfactory reason being given to me or, I think, to the public. The general point that you make is the right one. Unskilled jobs are disappearing from the Australian economy. Young people without strong literacy and numeracy and skills do not get work. If they do not get work, their life chances are severely diminished. The reality of Australia's future is as a skilled workforce. Investing in those young people in developing skills and having competent levels of numeracy and literacy, and being able to socially interact and exist in the workplace, is a core part of the future of this country. If we do not do that, we will not be able to stay competitive and those people will be lost, and become, in the end, a drain on society.

Senator CAMERON: I will put my last question in these terms. Could you provide this committee with an analysis of what you think the implications are both in productivity terms and economic terms and in social terms of the economic vandalism being perpetrated on the TAFE system by Liberal and National governments in Queensland, New South Wales and Victoria? Can you also advise the committee as to the implications of having some of these courses done by private providers who do not provide the appropriate levels of quality assurance that the TAFE system provides?

Senator Chris Evans: I will see what we have got. Obviously this is a bit of a moving feast at the moment, particularly somewhere like Queensland where we have not yet had implementation of the draft report's recommendations. We will see what we can get the committee of what we have been able to collect so far. We will provide that to the committee.

Senator CAMERON: If Senator Nash is not interested, I certainly am.

Senator NASH: I am very interested.

Senator MASON: You would agree, would you not, Minister, that some private TAFE providers and vocational educators are high quality?

Senator Chris Evans: I am on the record as saying that I do not have any problem with the competition in the sector or that there are very strong private providers. I would also make the point, though, is that we have seen the development of some practices, particularly in Victoria and New South Wales, similar to what we saw in the international education market where I have quality concerns and I am pleased to say that ASQA, the new regulator, is very much focused on those issues. You might have seen that they have recently given two colleges notices that they do not intend to renew their accreditation. ASQA appear later on, anyway. But I think there is increasingly a focus to make sure that the quality providers survive and those that do not provide quality are not tolerated.

Senator MASON: I flagged before the break, Minister, the issues I would raise. Out of caution with respect to time, can I move you to the Education Investment Fund first of all. I will just change the order around, if that is okay.

Senator CAMERON: You have no questions on TAFE, Senator Mason?

Senator MASON: TAFE is not my area, as you should be aware, Senator Cameron. Universities and research is my area. What is the current balance of the Education Investment Fund?

Dr Hart : The current balance, as at 30 June 2012, was $4.298 billion.

Senator MASON: What is the total interest earned so far by the fund and its predecessor?

Dr Hart : $922 million from EIF and, from its predecessor HEEF, $456 million.

Senator MASON: How much of the funds have been committed?

Dr Hart : In total, $4.554 billion.

Senator MASON: How much has been spent?

Dr Hart : The sum of $3.108 billion has been spent. So there is $1.446 billion in future commitments.

Senator MASON: Committed but not spent?

Dr Hart : That is correct.

Senator NASH: Can I ask you to take on notice exactly what the commitment is to and what has been spent?

Dr Hart : Absolutely.

Senator MASON: And the current uncommitted balance of the fund?

Dr Hart : $2.852 billion.

Senator MASON: Are there any additional capital injections to the fund which have been planned by the government for each of the forward years?

Dr Hart : No, not that I am aware of.

Senator MASON: I did flag before the regional priorities round before the break, so thank you for that background, Dr Hart. The big announcement for universities in last year's federal budget was the announcement that $500 million from the Education and Investment Fund would be committed to funding projects at regional universities or other regional education providers. Of the 152 expressions of interest received, 40 applicants—that is 13 universities and 27 VET providers—were invited, I understand, to proceed to stage 2. Is that right, Dr Hart?

Dr Hart : There were actually 41 invited but only 40 submitted applications. That is correct; it was 27 VET and 13 higher education.

Senator MASON: We agree so far; I think that is broadly accepted. Have all 40 applicants who made an expression of interest, in fact, submitted a stage 2 bid by the relevant closing date?

Dr Hart : Yes, they did.

Senator MASON: Can you provide a list showing the federal electorate in which each of the shortlisted applicants and projects under the regional priorities round are located? Can you do that?

Dr Hart : I would have to provide that on notice.

Senator MASON: This is a very difficult question, but I will ask it anyway. I often ask difficult questions.

Senator Chris Evans: I want to make it very clear that the HEEF board is an independent board chaired by Mr Phil Clark and with many eminent Australians on it. It is not one that the government has any influence over. I think it is fair to say the board guard their independence fiercely.

Senator MASON: I think that is fair.

Senator Chris Evans: Their recommendations, just for your information, are with government in terms of the regional priorities round.

Senator MASON: Minister, this may be a difficult question, but I would be grateful if you could have a stab at it. How many of the 40 applicants are you expecting to be successful? Is there any limit?

Senator Chris Evans: The board rank bids in priority, but potentially there are more assessed as being suitable than funding available. They seek to provide us with advice on ranking and priority, but the decision in the end is for the government.

Senator MASON: You draw the line in effect, or is that too crude metaphor?

Senator Chris Evans: The government will make a decision about successful projects, but the board provide us with a fulsome assessment of all bids and a priority ranking of projects that they think ought to be supported. As I said, there is always the potential for the board to say, 'All of the bids are being supported, but that would take $1.8 billion and there is $500 million to the allocated.' I have indicated that their finding a bid to be suitable is not the same thing as it being funded, even under their recommendation.

Senator MASON: I understand in the end it is a decision for government.

Senator Chris Evans: Yes, but obviously it is limited by the funds available.

Senator MASON: I understand that. Is the regional priorities round part of the government's current pause on spending grants?

Senator Chris Evans: That is probably technically right, but the decision about this is with government in any event. It is not held up by that process. I think technically it is caught by the direction, but if you are asking me whether that is holding it up, it is not really. We are at the point where government has to make the decision based on the board's recommendations.

Senator MASON: Do you have any timeline in respect to when that decision will be made? I understand it is with government.

Senator Chris Evans: I think the answer to that is no. You ought not to read that in any other way than no decision has been made.

Senator MASON: Okay. I go back to the issues I flagged before the break, starting with the Higher Education Participation and Partnership Program. The HEPP webpage states:

The Government announced in the 2012-13 budget that the partnerships component will be expanded to redirect $50 million within HEPP to support innovative approaches to help disadvantaged students aspire to and complete a university qualification, with a particular focus on Aboriginal and Torres Strait Islander students.

That is what the webpage states, isn't it?

Mr de Carvalho : Yes, that is correct.

Senator MASON: What was the motivation for that shift of resources between the participation and the partnership components? Is partnership seen as more effective in achieving those outcomes?

Mr de Carvalho : If we talk about the participation amount, that is money that is paid to universities to support students from disadvantaged backgrounds once they are actually enrolled in courses. That money does nothing to build aspiration and desire. It is consequent upon a decision by a potential student from those backgrounds actually to enrol in a university.

Mr Griew : There was also another component to that decision which was to tag the amount for the participation funding per place, so that as the number of lower-SES background students enter university there is a reward element for universities. There is a double benefit in that.

Senator MASON: It is not just a matter of providing scholarships, there is also a reward component, isn't there?

Mr Griew : Over time universities could do well in this space and get a reward from it.

Mr de Carvalho : The reward money is a separate program for meeting the universities' targets for low-SES participation.

Senator MASON: Is all that money from the participation component?

Mr Griew : No, we do not want to confuse you: they are two different things.

Mr de Carvalho : If we stick with the participation amount, that is an amount that universities get for every student that comes in from a low-SES background. The partnerships money is designed so that universities can work with local schools and local communities to build aspiration from those communities in the first place. In a sense the decision reflects a desire on the government's part to continue to build on the intention of the demand driven system to build aspiration amongst low-SES communities.

Senator MASON: I am not quibbling so much with the policy direction, it is more that I am asking whether the idea of building aspiration is more important than giving universities something for each low-SES student that they attracted.

Mr de Carvalho : I would not say it is more important. It is a question of trying to strike the right balance.

Senator MASON: And this is seen as a better balance, or rejigging the balance?

Mr de Carvalho : It is seen as rebalancing the way the money is spent.

Mr Griew : If you take into account the fact that if they spend the money they get out of the participation the component goes up, many universities are not just building aspiration. For example, they are working with schools in low-SES areas to build numeracy skills, science capacity and literacy—

Senator MASON: Improving pathways.

Mr Griew : Yes, and some use it to scaffold numeracy, literacy and extra support.

Senator Chris Evans: I want to make the broad point that while I sometimes tease universities that they only ever discuss with the minister a dollar and where the next one is coming from, to be fair to the universities in this regard they have taken on the agenda of increased participation, both from low-SES and Indigenous people, with great gusto. Many were doing good work already and they are not motivated purely by the funds available. I think the commitment has been very real and greeted enthusiastically both by vice-chancellors and by staff. We are looking to support that with funding, but I think there is a real commitment more broadly in the sector to that agenda that has been driven by a commitment which I am very pleased to see.

Mr de Carvalho : Could I clarify the point I was trying to make about the reward funding. That is a separate bucket of money that attaches or is paid to universities if they meet their targets in terms of the proportion of their enrolments. It is not part of HEPP.

Senator MASON: I understand that. In regards to the participation component, institutional allocations have been increasing very rapidly over the past few years. I understand that they doubled between 2010 and 2011 and then increased again by half between 2011 and 2012. I would call that pretty rapid. Has that increase been due solely to the increase in numbers of low-SES students or has there been an increase in the baseline funding for low-SES students? In other words, what accounts for the growth?

Mr de Carvalho : Two things, essentially. There is growth in the numbers, but then there are also the new indexation arrangements that came into place as well.

Senator MASON: Both the amount being paid and the numbers of low-SES students.

Mr de Carvalho : The indexation on the amount has changed.

Senator MASON: Yes.

Mr de Carvalho : But the numbers have also increased. I might ask Mr Ritchie if he has got any further details on growth in numbers. Sorry, he does not.

Senator MASON: Can you disaggregate those two amounts?

Mr de Carvalho : Not right now, but we can make an attempt—

Senator MASON: Could you take it on notice.

Senator Chris Evans: Is it actually driven by the budget allocation?

Mr de Carvalho : Yes.

Senator Chris Evans: So when the senator points to increased expenditures because of increased budget allocations—

Mr de Carvalho : Yes, Senator. there is more in this program. It is not fully demand driven, if you like. There is a budget allocation for HEPP.

Senator MASON: But the mix is due to those two factors, isn't it?

Mr Griew : The allocations to the universities are driven by the numbers of students.

Mr de Carvalho : The allocations to the individual universities are driven by their numbers and the indexation, but there is also the actual budget allocation of the money in the program.

Senator MASON: I want to know, with respect to the budget allocation and those two factors, how it divides up. That is what I want to know.

Mr de Carvalho : All right. We will see what we can provide.

Senator MASON: What is the current amount paid per low-SES student, per year?

Mr Griew : It is $1,828.

Senator MASON: How is it allocated? Is the per-student given to the university?

Mr de Carvalho : Yes, to the university per student.

Senator MASON: Okay.

Mr de Carvalho : But, Senator, you would be aware that in the budget this year a decision was made to change the amount per student to essentially drop that amount, and that was going to deliver us a certain saving to the HEPP participation element. Part of that money was redirected to the partnership element and part of that money was redirected to fund additional enabling places.

Senator MASON: You have anticipated my next question. How is the transfer of $50 million to the partnership component, which we discussed earlier, affected or going to affect institutional allocations?

Mr de Carvalho : It would vary from institution to institution. For example, those universities that have a higher number of enabling places relative to other universities will benefit from the funding change because the amount per student for enabling has been boosted or is in the process of being boosted, while, at the same time, the amount per student for participation is going down. It depends. What you lose on the swings, you might pick up on the roundabout.

Senator MASON: You may, and you may not.

Mr de Carvalho : You may, or you may not.

Mr Griew : The bottom line out of that set of decisions was a net increase in the global allocation across those three equity programs. Universities that use the partnership funding well and have good enabling places will get a disproportionate share, because they will do well on the participation amounts as well. That is the policy design hedge that you were driving for earlier.

Senator MASON: The rate per low-SES student has been adjusted down for—

Mr Griew : But in order to fund those other elements which would drive the whole thing up.

Senator Chris Evans: Basically, you are on a more sustainable basis.

Senator MASON: I can follow that. All right.

Senator Chris Evans: Do not tell Finance.

Senator MASON: Comparing the spreadsheet on the webpage which details the spending between 2010 and 2012 with the table on the same webpage which details the spending between 2012 and 2015, after $50 million is taken out, the rate of growth slows down considerably in the future when compared with the past. It is double.

Mr de Carvalho : Is that for HEPP?

Senator MASON: Yes. Does that signify—this is quite complicated but it is important—that the government believes that most of the increase in the number of low-SES students has already taken place over the past three years and that the increase over the next three years will be quite small? They are quite dramatically different.

Mr de Carvalho : It reflects the budget allocation to HEPP. I presume you are talking about the participation amount—the spreadsheet.

Senator MASON: Yes.

Mr de Carvalho : That money and participation going forward, that is where the saving is coming from for the additional money in partnerships and enabling loading.

Senator Chris Evans: I think the answer to your question is no, Senator. You ought not over-read whatever you are trying to—

Mr Griew : This is just one element.

Senator Chris Evans: If you ask me, I think the numbers will continue to grow strongly. But if you talk to universities like Deakin and the University of Western Sydney, which are in regions where there is a low-socioeconomic population with under-representation, if you like, they seem to have plans to grow quite strongly and are confident in the growth. I just would not want you to think that there is some sort of policy or analysis that has been taken that says we do not expect there to be continuing growth in low-socioeconomic participation.

Senator MASON: I raised it because it doubled between 2010 and 2011 and it increased by half between 2011 and 2012.

Senator Chris Evans: You mean the budget?

Senator MASON: No, the institution allocations.

Mr Griew : Which is to do with the shift of the per-place rate so that we could fund the partnership and enabling. I think the minister's point is: you have got to look at the three together, and the proof of the pudding is in the numbers. There is building capacity for low-SES students before they come to university and it is also building better support.

Senator MASON: Let me put the question simply. Has the rate in growth of low-SES students—just the numbers, without going into any funding—slowed in the last couple of years?

Mr de Carvalho : I do not think so. We can find it—

Mr Griew : It has actually been tracking well against the targets.

Senator MASON: That is a different answer.

Mr Griew : It is the number of low-SES students as a proportion. The denominators have been going up significantly, so—

Senator MASON: Have the raw numbers of low-SES students gone up or down over the last couple of years?

Mr de Carvalho : Up. The other thing to say, Senator—

Senator MASON: Hold on. As a percentage of total students has it gone up or down?

Mr de Carvalho : It has gone up.

Senator MASON: So it has gone up both as raw numbers, absolute numbers—

Mr de Carvalho : Yes.

Senator MASON: And also as a proportion of all students.

Mr de Carvalho : Yes, that is right.

Senator MASON: Can you give me—on notice, if you like—

Mr de Carvalho : I have those figures here. It has now gone to 16.8 per cent of enrolments—

Senator MASON: The target is 20—

Mr de Carvalho : The target is 20, so that has gone up since 2010, when it was 16.5. It has gone up from 16.5 in 2010 to 16.8 in 2011—

Senator Chris Evans: Which is not very impressive in one sense, Senator, but you have got to remember that this is at a time of huge growth in the system.

Senator MASON: Yes, the absolute numbers are growing as well. I understand that.

Mr de Carvalho : The other thing to say is that it was flatlining at about 16.1 for some years and now it is—

Senator MASON: It has gone up more than half a per cent in any case. Okay. This is very complicated, so thank you for that. That is very helpful. With regard to the partnership component, the web page states that under this component each eligible university received baseline funding of $250,000 in 2012. That is the same for every university.

Mr de Carvalho : Yes.

Senator MASON: And the eligible universities are the table A providers. That is right, isn't it?

Mr de Carvalho : Yes.

Senator MASON: So that baseline funding for all eligible universities adds up to under, what, $10 million a year?

Mr de Carvalho : Yes, that is right. About $9 million.

Senator MASON: Thank you. Will the baseline funding increase in 2013, in future years?

Mr Ritchie : No, it will not. It is the same amount.

Senator MASON: Of the remainder of the partnership component—not just the base grant—how is that spent? Is it all in competitive grants?

Mr Ritchie : The majority of it is in competitive grants. There is a proportion of it that funds the National Centre for Student Equity in Higher Education—

Senator MASON: Could you say that again?

Mr Ritchie : The majority of the remainder is in competitive grants and there is a proportion of that funding that goes to the National Centre for Student Equity in Higher Education, which is based at the University of South Australia.

Senator MASON: What is the proportion to that later program?

Mr de Carvalho : It is quite a small proportion. Over 2011 through to 2015 it is $5 million.

Senator MASON: Out of what?

Mr de Carvalho : Out of a total for partnerships of $267 million.

Senator Chris Evans: I think it is about $700,000 or $800,000 a year or something—which is to fund that centre. It is a very small component of it.

Senator MASON: The web page states that the Australian government announced on 15 December last year funding of approximately $67 million for 11 projects under the first round of the Partnerships Competitive Grants Process. I understand that funding is for 2011 to 2014—

Mr de Carvalho : Correct.

Senator MASON: so that presumably draws on the partnership budget for the next full-calendar or academic years?

Mr de Carvalho : Calendar years.

Senator MASON: In terms of round 2, how advanced are you in the planning for that?

Mr de Carvalho : Round 2 applications have not yet been called—

Senator MASON: When will they be called?

Mr de Carvalho : That is subject to government decision as well.

Senator MASON: Is this part of their—

Mr de Carvalho : Because they are in the competitive grants round they are technically captured by the—

Senator MASON: The pause raises its little fingers again.

Senator Chris Evans: I think it is technical—I had not yet approved anything, Senator. The pause is not a big influence on—

Mr Griew : We have a strong sense some of the universities are more than thinking about this. They are very aware that another round is coming.

Senator MASON: Okay. I was going to ask.

Mr Griew : I doubt they have stopped work on the proposals—

Senator MASON: So they would be developing their—

Senator Chris Evans: There is some quite innovative stuff done and some good combined applications, so universities coming together. As you would understand, Senator, building aspiration in, say, Western Sydney: the person impacted by that may well want to go to Sydney University or University of Western Sydney or Melbourne University or Queensland University. So there is no direct linkage, if you like, but they have come together well in a whole range of interesting initiatives.

Senator MASON: It will be interesting to have a look at that. Thank you. How much money will be available for this round—round 2?

Mr de Carvalho : There will be $54 million.

Senator MASON: How much of the partnership budget over the forward estimates remains uncommitted and unspent at the moment?

Mr de Carvalho : there is that 54 and then there is the additional 50 that was announced in the budget. And there is another 48 in 2015.

Senator MASON: So that is 54—

Mr de Carvalho : Fifty-four, 50 and 48. It comes out at, uncommitted is $152.6 million.

Senator MASON: Could I move on to my next area? I think I flagged the MyUniversity web site. The MyUniversity web site was launched in early April 2012. I think it is fair to say there has been some criticism about the web sit—

Senator Chris Evans: That is the trouble with democracy, Senator.

Senator MASON: It is. There has been concern expressed by certain stakeholders about it. The updated web site went online on 9 September—just a few weeks ago.

Mr de Carvalho : That is right.

Senator MASON: What is the total funding that has been provided to date in developing the My University website?

Mr da Carvalho : $3.1 million.

Senator MASON: Of that funding, how much has already been spent?

Mr de Carvalho : That is the expenditure to date.

Senator MASON: Is any unspent or uncommitted?

Dr Taylor : For 2012-13 there is $1.411 million allocated and we have spent $228,822 to date. That leaves about $1.2 million.

Senator MASON: I am not a great user of the portfolio budget statements, however my staff do look at them. They have pointed out page 92 under program expenses, 3.1, higher education support and the My University website. Do you have that gentlemen?

Mr de Carvalho : Page 92 of the DIISRTE of portfolio budget statements?

Senator MASON: Yes.

Mr de Carvalho : Yes.

Senator MASON: The revised budget for 2011-12 is $1.241 million.

Dr Taylor : 2012-13 is $1.411 million.

Senator MASON: Why does it go down? In 2014-15 it is $2.55 million—is that right? In forward year 3, 2015-16 it is zero. Why is that?

Dr Taylor : In 2014-15 zero?

Senator MASON: No, 2015-16. Why is it zero?

Mr de Carvalho : Are you on page 92?

Senator MASON: Yes. Do you see that?

Mr de Carvalho : Yes.

Senator MASON: Why is it zero?

Dr Taylor : There has just been no funding allocated in 2015-16.

Senator MASON: Is there any reason for that?

Mr de Carvalho : When you think about the development of these websites, they are mainly front-end loaded for the development work that needs to be done. Once they are up and running, they do not take too much. I would expect that this is probably something that we will have to ask for further funding for at the time.

Mr Griew : The line that you are pointing to on page 92 is an administered expense item. The total cost of this project would include more than administered expenses; it would include some of Mr da Carvalho's staff time as well and they may well be using data from other sources. If you want a breakdown, I suggest we take that on notice.

Mr de Carvalho : It may well have been that at the time the government made the decision, it just said that it would fund it for three years and then fund it again when the time comes.

Senator Chris Evans: Senator Mason, we will get you an answer on notice. I can assure you there is no lack of resolve to continue the site and improve it, and it will continue to be funded and supported because—

Senator MASON: You have not been dissuaded from the My University website?

Senator Chris Evans: No.

Senator MASON: I know there is criticism; I am not saying I agree with it all.

Senator Chris Evans: I think the criticism has dampened.

Senator MASON: Is that right?

Senator Chris Evans: And the legitimate criticism is about accuracy of information and more information, and that is fine. But if we waited for everyone to be happy before we put up the site, you and I would be long retired.

Senator MASON: I agree with that.

Senator Chris Evans: So we got on with it and there was some criticism but most people got in behind it. We said we would address those concerns and we have been. I think it will be a very useful addition to information for students and my experience with students is that they like it. It is about transparency and providing information to students in the form where are they now gather their information. Producing little booklets and distributing them around offices will not help them at all.

Senator MASON: It is complementing the My School website, in a sense.

Senator Chris Evans: Yes.

Senator MASON: Could you take that on notice?

Senator Chris Evans: We will get back to you about the finances. I just wanted to be clear with you that if I am minister we will continue to fund whatever needs to be funded to keep it going.

Senator MASON: How much do you think it will cost each year to run?

Dr Taylor : As David mentioned, these things are front-loaded. Early on and even in September, we have had to build extra elements onto My University. So it is no bad thing that we have to go away and cost it again for ongoing funding when you do not have to do so much of the upfront build.

Senator MASON: It is going to cost something, that is my point.

Dr Taylor : Indeed.

Mr de Carvalho : In relation to the criticisms, it is also important for you to note that they were loud and legion early on but, since then, we have worked very closely with Universities Australia to address a number of the more urgent concerns that providers had around the website. Version 1.1 which was released in September is the fruit of that collaboration. You would probably be very hard pressed to find any public statement from any university after the launch of 1.1 that repeats those criticisms because of the collaborative nature of the revised website.

Senator MASON: All right. How successful has it been? How many views has the website had since the launch?

Mr Griew : One million.

Mr de Carvalho : Yes, lots.

Senator MASON: How many!

Senator Chris Evans: Heaps and mobs, to use technical jargon.

Senator MASON: Lots.

Dr Taylor : The number of page views since the release on 9 September was 81,242.

Mr de Carvalho : In total since the launch, over a million.

Senator Chris Evans: We still need to promote the site. I have a 16-year-old who is doing his matriculation this year and I had to physically log into it for him. He had not heard about it. I think we still have a job to do. He is exactly the market, so we still have work to do to make sure the message spreads about it being there, as always with new sites. But we have had a large number of people access it.

Senator MASON: How many unique visitors?

Mr de Carvalho : Of the one million page views, that is more than 184,000 visits. So each time someone is visiting, they are looking at a lot of pages. They are looking at around five pages.

Senator MASON: Is it possible to provide me with information on visits and unique visitors for each month since the launch?

Mr de Carvalho : We can certainly do page views and visits. I have that for you. I am not sure about unique visitors. In April when it was launched, of course you would expect a spike.

Senator MASON: Give it to me on notice, just to save time.

Mr de Carvalho : Okay. We do have it by page view and visit by month.

Senator MASON: Thank you. Has the any consideration given to merging all the related websites into one? Study Assist is one. Has that been considered?

Mr de Carvalho : Study Assist has a slightly different purpose.

Senator MASON: You could say it is all related. But I am not the expert.

Dr Taylor : Our feedback is that the more you try to put on the website, the more clunky it gets and the less user-friendly it gets. I think there is an issue about how we can join up websites to get it better. We have done that with Job Outlook, for example.

Senator MASON: You could link them?

Mr de Carvalho : They are currently linked.

Senator MASON: Okay. I will now move on to international students. At the international education conference in Melbourne earlier this month, the International Education Association presented its new modelling on the future of international education in Australia. Everyone here would agree it is a very important industry for this country. Among its key findings are these: international student enrolments will continue to decline and reach a low of 485,000 next year before creeping up to 600,000 by 2020. This is what they said. Also, the sector's value to the economy will bottom out at about $14 million from a high of $18 billion in 2009. At the same time 27,000 jobs will go, including 7,300 in educational institutions and college collapses. The top to bottom drop of 23 per cent in numbers of students between 2009 and 2013 will account for a 22 per cent drop in the value of education as an export. Are you aware of this modelling concerning the international student market and do you agree with its conclusions?

Mr Walters : We are aware of the figures presented at that conference. We are aware of the paper. We have not tried to replicate the modelling but I would have to say figures have been quite volatile recently, as you know. One of the great unknowns is the value of the dollar, which has appreciated a great deal against some of the source countries. But the good news is that if you look at the lead indicator, which is offshore grants of student visas, the DIAC statistics for the June quarter show that the grants are up 5.4 per cent, and that includes an increase of offshore grants of 19.1 per cent from India and 16.2 per cent from China. That is quite a big jump and that probably suggests that some of the students have been delaying their applications because of the changes in streamlining of student visas and the additional work rates. Nevertheless, they are quite good science and for that quarter, while the total increase in offshore visa grants was 5.4 per cent, it was 15.1 per cent for the higher education sector. So I would say it is a bit too early to call the sort of problems that are described in the paper. But, as I say, we have not attempted to replicate that effect.

Senator MASON: You have not attempted to replicate that modelling.

Mr Walters : No.

Senator Chris Evans: I can also say that some of the doom and gloom predictions that were made about two years ago have not come to pass either. I am not criticising the particular paper but you might recall there were a few people running around like headless chooks saying the world is coming to an end. Given what has happened with the dollar, given what has happened with the aggressive push by American universities into China and the changes made particularly in relation to VET and the tightening of immigration requirements there, which I drove and remain very supportive of, I think we have found a level that is not unexpected. But there are some encouraging signs. And even that report goes to us seeing continuing growth.

Senator MASON: Correct me if I am wrong but in fact universities flatlined, they did not drop, a slight increase but nothing virtually, flatlined and other higher education institutions fell. I think it is right, isn't it?

Mr Griew : The figures which Mr Walters quoted, which are for the lead indicator, the offshore grants, show that universities are coming back strongly and there is, if you like, a rebalancing of the sector from VET and the other parts to higher education, which is from a product point of view—

Senator MASON: Mr Walters mentioned the Knight review and the legislation.

Mr Griew : That is a policy position.

Senator MASON: I understand that.

Senator Chris Evans: I think there was some suggestion, and Mr Walters might be able to provide more information, that some might have been holding off to get advantage of the new work rights. Is that right?

Mr Walters : It is only speculation but it is possible because we have seen such a large spike. But hopefully these are the first indications that the Knight review reforms have made a significant difference and helped turn the corner.

Senator MASON: Given that we would all agree how important this is to our economy, our largest services export industry, one that is even more important potentially in the future for our country, I wonder whether we should be doing some modelling. I mean that quite seriously. Whatever we think of the modelling from the Melbourne conference, we might think that is overblown or whatever, but perhaps we should be looking at it.

Senator Chris Evans: The first point is that I have a group chaired by Mr Michael Chaney looking at this question of the future of international education not so much focused on the modelling but about what that sector ought to look like, what factors are going to influence its growth and sustainability. I am very keen for them to focus on things like sustainability. How many international students can Australia cope with? What is a desirable level? We have seen the social problems that occurred in Melbourne with the living conditions et cetera. I think there are big issues here. I am not suggesting we ought to cap them.

Senator MASON: It is complex, I agree with that.

Senator Chris Evans: There are huge interactions. How large should international student numbers be on any Australian university campus—20 per cent, 50 per cent, 80 per cent? There are big questions here about: do they remain Australian universities or are they universities catering to overseas students? There is a broader set of issues. If you throw in then the question of competition, the development of online learning and links and what-have-you, this is a rapidly changing world. It is a trade-exposed industry with big players now like the United States of America really pushing hard, given their position in the university sector and China itself becoming a competitor as well as a supplier of students. So far be it for me to reject modelling. But there are a lot of moving parts here and modelling can only give you a best estimate. There are so many moving parts that one of the things we have to do, and which I am very keen to do, is make sure we drive a quality product and a quality student experience. It is fair to say we have not focussed enough on the student experience and, now that competition is toughening, we have to make sure we provide a quality student experience as well as a good education.

Senator MASON: I accept that. Clearly it is a matter for government but I wonder if good public policy might be better informed by some modelling.

Senator Chris Evans: I do not disagree with you but all modelling has its limitations.

Senator MASON: Stephen Connolly, who is the outgoing head of International Education Association of Australia, said, particularly in respect of the visa reforms that Mr Waller and you alluded to before:

These reforms are likely to have a positive impact on numbers of commencing international students. It's essential that post-study work rights are legislated as quickly as possible. If all recommended reforms are implemented, IEAA has modelled that from 2013 numbers of commencing international students across most education sectors will grow by 5 per cent annually.

I understand that the new post-study work arrangements are proposed for introduction, is it early next year?

Mr Walters : There were clients coming for students who commenced last November so they have to have done at least two years before they qualify for those.

Senator MASON: Right, so when will the process commence? November next year?

Mr Walters : Yes, exactly.

Senator MASON: Do you have any idea of how many students will take this up?

Mr Walters : No, we do not.

Senator MASON: It is still a bit early to determine that?

Mr Walters : We have not estimated that.

Senator MASON: Do you have any estimate of how the existence of this option might affect the interest in Australia as a study destination?

Mr Walters : I can simply point to these DIAC figures for the June quarter which seem to suggest there are two main changes—that and the streamlining of the visa application system. Those seem to be the main factors which might indicate a trend.

Senator Chris Evans: The other aspect is that behaviour and policy changes by our competitors also influence those decisions. For instance, Britain has tightened its visa and work rights because, to be frank, some of the trade that was coming here in the lower end of the education spectrum went to Great Britain. I read a report the other day that focussed on the fact that they had poor quality VET providers having large numbers of students and issues around that that the British government was looking to tighten. This is an international market. It was with some, I must say, quiet pleasure that I read this, given some of the attitudes being expressed in here before. If Canada makes a move or we make a move, that does impact on behaviour as well. We are in a global market and a competitive place. I think these changes have been well received but also behaviour has had an influence. Britain has really clamped down on work rights more broadly and I gather that is starting to have an impact on its student applications. Mr Walters, correct me if I am wrong.

Mr Walters : In addition, Minister, I would add that one of the London universities has recently been struck off the list from being able to take international students. While that matter is still before the British courts I think that has also had quite an impact.

Senator MASON: That is very contentious—I have read about that. It does not seem to be as simple as it looks.

Mr Walters : I have heard the vice-chancellor's views and it certainly is contentious.

Senator MASON: I have as well and, without going there, the politicians are getting a bit of a bagging as well. Suffice to say that the new arrangements seem to have made us more competitive with respect to our international competitors.

Mr Walters : You will have the second quarter within a few weeks, which will give a better indication of how that is going. But certainly a 5.4 per cent increase on the June quarter in offshore grants, which is the lead indicator, is a good sign.

Senator MASON: I have further questions on ATAR scores and so forth.

Senator Chris Evans: Have you finished international education?

Senator MASON: We could have a further chat, if you would really like one, Mr Walters, but I think—

Senator Chris Evans: I would note that Mr Walters is throwing a party this evening because it is his last estimates appearance. He has announced his retirement after, I think, 40 years of public service both in Great Britain and here. He will be a great loss to the department, but one of the pleasures of his decision will be that he will not have to appear at estimates over again!

Mr Walters : I will get withdrawal symptoms! Thank you, Minister.

Senator MASON: On behalf of the opposition: congratulations. I have always enjoyed your contributions, Mr Walters.

Mr Walters : Thank you very much, Senator.

Senator MASON: I might move to ATAR scores, which I flagged before the break. Again, this is a highly contentious matter.

Senator Chris Evans: Not here, senator!

Senator MASON: No, but within the broader community. It is clear that, over the past few years, there has been an increase in admissions of students with an ATAR score below 50. While it is significant in a sense that there are now twice as many students on 40 or less, and 2½ as many between 40 and 50—and I do not want to mislead anyone—in absolute terms these numbers represent only 3.2 per cent of all students, with another 8.6 per cent, though, between 50 and 60 increasing. So they have doubled, but it is from a very low base. I just want to give that as background. In relation to data you provided me in answer BI-233, do we have the information as to what courses students with ATAR scores of 50 or less are being admitted into?

Mr de Carvalho : I am sorry, I missed that.

Senator MASON: In relation to the data you provided me in answer to a question on notice, do we have the information about what courses students, with ATAR scores of 50 or below, are being admitted into?

Mr de Carvalho : We do not have that information with us.

Dr Taylor : I do not have enrolments; I do have offers.

Senator MASON: Offers—that is the start. If you could provide full information on notice, if you have it. If you have offers, I would be interested in that.

Dr Taylor : The highest percentage is for information technology, which is 3.4 per cent of all offers for ATAR scores of 50 and below. That is the highest, followed by agriculture at 2.4 per cent and nursing at 2.2 per cent.

Senator MASON: That as an indicator.

Senator Chris Evans: Can I also make the point that 50 per cent of students entering into university do not enter based on an ATAR score—

Senator MASON: I was going to ask you about that.

Senator Chris Evans: So its relevance has been declining, if you like, as a tool used for determining entrance—

Senator MASON: Selection of students—I understand and I will come to that. Is there any data available on the graduation outcomes of low-ATAR score students—in other words, is the attrition rate of students that have ATAR scores below 50 a lot higher than students with ATAR scores of 70?

Mr de Carvalho : What the research has shown here is that, if you have an ATAR of 80 and above, it is a fairly good indicator of your university success. But, once you go below 80, as a predictor of your ability to complete a university degree ATAR is a very poor indicator.

Senator MASON: What proportion of students get an ATAR of 80 or above?

Mr de Carvalho : Students who are enrolled, because clearly 20 per cent of students get an ATAR—

Senator Chris Evans: That is exactly the point. Senator, in a sense, it is a mistake in the way you approach the question. I am not trying to correct you, but ATAR is not a score.

Senator MASON: I understand what you are saying.

Senator Chris Evans: Therefore, if you have more people entering university, the average ATAR of those entering should be lower.

Senator MASON: Because it means you are dipping further down.

Senator Chris Evans: Yes, but it is not a mark; it is a percentage of the total taking the examination.

Senator MASON: It is a list; I understand.

Senator Chris Evans: People get fixated on 50, as though it were a pass mark when, in fact, it is a proportion. I am sure the average ATAR in 1901 would have been 99—and with no women. Now it will be whatever it is, but that reflects the greater access to university education.

Senator MASON: This is an important question. What is the correlation between low ATAR scores and low SES status or being a rural or Indigenous student?

Mr de Carvalho : There is a correlation. We can get you some figures on that, if you like.

Senator MASON: Could you do that?

Mr de Carvalho : It is not necessarily a predictor of academic success. So if you come from—

Senator MASON: I accept that.

Mr de Carvalho : If you come from a disadvantaged background or a regional area, for example, that is not necessarily an indicator of your ability to achieve.

Mr Griew : It is also an incredibly complicated issue because of attempts to scale the ranking across different schools and different socio-economic and geographical areas. You would really want to get an expert piece of input on that from the school education people.

Senator MASON: Can I put the rest on notice?

CHAIR: You may.

Senator NASH: Can I have 30 seconds at the end?

CHAIR: I will come back to you, Senator Nash.

Senator RHIANNON: Minister, with the controversy of TAFE funding in Victoria, what lessons has the government learnt from how that has played out and what changes do you plan to make to your funding and relationships with TAFE on vocational and educational policy?

Senator Chris Evans: The first and primary lesson I have learnt is that if a state government takes $300 million out of its TAFE budget, TAFEs find it very hard to manage the same level of service and service the same number of students. That is the major lesson. The Victorian government took $300 million out of the budget. There is nothing complex about this and, by reducing their funding, they gave less funding per course, less funding per student in many areas and we are seeing the impacts of that. That is the major, fairly uncomplicated lesson you take from it. While there have been attempts to defend what has occurred in terms of policy, it is a $300 million save from the TAFE budget and it is having its impact. I know that people want to read all sorts of things into policy and influences but, if the $300 million had been left in the budget, these things would not have been happening.

Senator RHIANNON: I note you did not expand on the shift to the private sector and private providers. Hasn't that been a big factor? Isn't that something that you would have drawn some lessons from?

Senator Chris Evans: That is the sort of defence that the Victorian government uses. I do not accept it. There has been growth in the private sector in Victoria. There are new products offered, greater flexibility offered and some of that growth has been beneficial. Some of it has not been beneficial in the sense that there have been providers enter the market who, I think, have not been as high quality as I would like. But, fundamentally, the inescapable basis of the problems in Victoria is the withdrawal of $300 million from the budget for TAFEs and that is what is driving the cutbacks, the closures of courses and campuses and the reduced access for students. This is often in areas where the private sector is not currently active in skills and trades and where it has not been necessarily a competitor. That is the major lesson I draw from it.

Senator RHIANNON: You identified in your response that some of the providers were not as high quality as you would have liked. Considering much of this is federal money, isn't there a responsibility for the federal government to put conditions on some of this money that is handed over, considering it is clear the state coalition governments will be looking to further weaken the public TAFE system?

Senator Chris Evans: Mr Griew might like to make some remarks about the agreement with the states and the requirement for them to continue to support a strong TAFE sector. The question of quality is one we have sought to address with the creation of ASQA, the national regulator. We have sought to create one national regulator, given the fact that so many of these TAFEs and private providers operate across state borders. We have created ASQA, and it has now been operating for about a year and is starting to hit its straps. It is the case that Victoria and Western Australia have refused to participate in handing over their responsibilities, and therefore in Victoria we have both a state regulator and a national regulator, and a less than ideal outcome. I would still hope that Victoria and Western Australia would see the sense in conferring those regulator powers to the national regulator. In terms of the agreement, Mr Griew might be able to help you a bit more.

Mr Griew : The agreement that was entered into through COAG for reform of the training system has a number of specific conditions in it that require jurisdictions to take steps that would address some of the concerns being raised about what is happening in TAFEs. These are of course issues that are now therefore the subject of negotiations between us and officials in those governments prior to final resolution of those agreements. These include, for example, implementation of criteria specific to each state for access to public subsidy funding and complementary strategies to take account of competition and local training markets; and specific requirements for development and implementation of strategies which enable public providers to operate effectively in this environment of greater competition, recognising their important functions and servicing the training needs of industry, regions and local communities. Their role spans high-level training and workforce development for industries and improves skills and job outcomes for disadvantaged learners in communities. Those are quite specific requirements which the states to receive their payments have to make good in their implementation plans.

Senator RHIANNON: Thank you for setting that out. Minister, I wish to go back to some of your comments where you spoke about the national regulator. I remember from earlier estimates it was, obviously, still finding its feet. You did go on to say how some of the states are refusing to participate. Doesn't this further underline the need for you to at least be considering if those guidelines that we have just heard need to be tightened up? The problem is happening right now as we speak; it is enormous.

Senator Chris Evans: Senator, we have established a national regulator and the other states and territories, under the Constitutional arrangements, have given us that responsibility. It is the case, though, that increasingly the ASQA is, particularly in Victoria, gaining, if you like, a greater share of the market as a result of more and more institutions enrolling international students who are operating across state boundaries. Those are the requirements that, if you like, bring in the national regulator even if there is still a state regulator in place. So, increasingly, the national regulator's role in Victoria will be increasing—though less so in Western Australia.

As I say, this is a decision for the Victorian and Western Australian governments about whether they cooperate with the national regulatory arrangements we put in place. But I have encouraged them to take a very firm view about ensuring quality in this market. I think it is the case that there are very good private providers, but there have also been some developments or practices that I think need to be addressed, and I am pleased to see ASQA is taking that very seriously. We certainly in the national agreements with the states have focused very much on the issue of quality.

CHAIR: Thank you very much. The time has expired for this session. Senator Nash, you wanted to put something on notice?

Senator NASH: Two very quickly. Thank you very much, Chair. In an answer to a question on notice, which was B137, you very kindly gave me some comparative numbers on dependant youth allowance student numbers. Would you mind taking on notice, if it is possible, to get a regional-metro breakdown of those numbers?

The second is an answer to a question on notice on the amount of funding that was allocated to the campaign to advertise the government's reverse on the independent youth allowance changes for regional students, which was $642,000 for a backflip on something that should never have happened in the first place. The media buy was $487,209. Could you break that media buy down for me into where and when that was?

CHAIR: Thank you. We will now turn to officers of TEQSA, the Tertiary Education Quality and Standards Agency.