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Senate Legislative and General Purpose Standing Committees Consolidated reports on Budget estimates 2010-2011


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Australian Senate

Senate Legislation Committees

Reports on Budget estimates 2010- 11

June 2010

Australian Senate

Senate Legislation Committees

Reports on Budget estimates

2010-11

June 2010

©Parliament of the Commonwealth of Australia 2010

ISSN 1834-4038

This document was printed by the Printing Unit, Department of the Senate, Parliament House, Canberra.

TABLE OF CONTENTS

Resolutions of the Senate relating to estimates ...................................................... i

Community Affairs Committee

• Budget estimates 2010-11 report, dated June 2010 ........................................... 1

Economics Committee

• Budget estimates 2010-11 report, dated June 201 0 ......................................... 17

Education, Employment and Workplace Relations Committee

• Budget estimates 2010-11 report, dated June 2010 ..................... ... ...... ........... 49

Environment, Communications and the Arts Committee

• Budget estimates 2010-11 report, dated June 2010 .......... .. ................. ... ..... .... 75

Finance and Public Administration Committee

• Budget estimates 2010-11 report, dated June 201 0 ....................................... 103

Foreign Affairs, Defence and Trade Committee

• Budget estimates 2010-11 report, dated June 2010 .. .............. ....................... 137

Legal and Constitutional Affairs Committee

• Budget estimates 2010-11 report, dated June 2010 .. ..... .... .. .... ................... .. . 167

Rural and Regional Affairs and Transport Committee

• Budget estimates 2010-11 report, dated June 201 0 .... ............ .. ........ .. ........... 203

RESOLUTIONS OF THE SENATE RELATING TO ESTIMATES

STANDING ORDERS-AMENDMENT--COMMITTEES-ALLOCATION OF DEPARTMENTS'

The Minister for Human Services (Senator Ludwig), pursuant to notice, moved government business notice of motion no. 3-( I) That standing order 25( I) be amended as follows: Omit: ' Employment, Workplace Relations and Education'

Substitute: ' Education, Employment and Workplace Relations' Omit: ' Environment, Communications, Information Technology and the Arts' Substitute: 'Environment, Communications and the Arts'. (2) That departments and agencies be allocated to legislative and general purpose standing committees as

follows: Community Affairs Families , Housing, Community Services and Indigenous Affairs Health and Ageing Economics

Treasury Innovation, Industry, Science and Research Resources, Energy and Tourism Education, Employment and Workplace Relations

Education, Employment and Workplace Relations Environment, Communications and the Arts Environment, Water, Heritage and the Arts Broadband, Communications and the Digital Economy Finance and Public Administration

Parliament Prime Minister and Cabinet (including Climate Change) Finance and Deregulation Human Services Foreign Affairs, Defence and Trade

Foreign Affairs and Trade Defence (including Veterans' Affairs) Legal and Constitutional Affairs Attorney-General

Immigration and Citizenship Rural and Regional Affairs and Transport Infrastructure, Transport, Regional Development and Local Government Agriculture, Fisheries and Forestry. Question put and passed.

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Journals of the Senate, no . 2, 13 February 2008

LEGISLATION COMMITTEEs--EsTIMATES IIEARINGS 2

The Special Minister of State (Senator Ludwig), at the request of the Parliamentary Secretary for Social Inclusion (Senator Stephens) and pursuant to notice, moved government business notice of motion no. 2-( I) That estim ates hearings by leg islation committees for 2010 be scheduled as follows: 2009-10 additional estimates:

Monday, 8 February and Tuesday, 9 February 2010, and, ifrequired, Friday, 12 February 2010 (Group A) Wednesday, I 0 February and Thursday, II February 2010, and, if required, Friday, I 2 February 2010 (Group B) . 2010-11 Budget estimates:

Monday, 24 May to Thursday, 27 May 2010, and, if required, Friday, 28 May 2010 (Group A) Monday, 3 I May to TI1Ursday, 3 June 2010, and, if required, Friday, 4 June 2010 (Group B) Monday, 18 October and Tuesday, 19 October 2010 (supplementary hearings-Group A) Wednesday, 20 October and Thursday, 21 October 2010 (supplementGJy hearings-Group B). (2) That the committees consider the proposed expenditure in accordance with the allocation of

departments and agencies to committees agreed to by the Senate. (3) That committees meet in the following groups: Group A: Environment, Communications and the Arts

Finance and Public Administration Legal and Constitutional Affairs Rural and Reg ional Affairs and Transport Group B:

Community Affairs Economics Education, Employment an d Workplace Relations Foreign Affairs, Defence and Trade. ( 4) That the committees report to the Senate on the following dates:

(a) Tuesday, 23 F ebruary 2010 in respect of the 2009-10 additional estimates; and (b) Tuesday, 22 June 2010 in respect of the 2010-11 Budget estimates.

Question put and passed.

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Journals of the Senate , no. 94, 27 October 2009 ii

PARTICULARS OF PROPOSED AND CERTAIN EXPENDITURE FOR 2010-11-DOCUMENTS-REFERENCE OF ESTIMATES TO COMMITTEES 3

The Assistant Treasurer (Senator Sherry) tabled the following documents: Particulars of proposed expenditure in respect of the year ending on 30 June 2011. Particulars of certain proposed expenditure in respect of the year ending on 30 June 2011. Particulars of proposed expenditure in relation to the parliamentary departments in respect of the year ending on 30 June 2011. Senator Sherry, by leave, moved-That the particulars documents be referred to standing committees for consideration of estimates. Question put and passed.

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Journals of the Senate, no. 120, II May 20 I 0 iii

Education, Employment and Workplace Relations Legislation Committee-Estimates hearings­ Consideration of Fair Work Australia4 That-( a) when the Education, Employment and Workplace Relations Legislation Committee meets to

consider additional estimates in 20 I 0: (i) the committee further examine Fair Work Australia, and (ii) the President of Fair Work Australia appear before the committee to answer questions; and (b) on each subsequent occasion on which the Education, Employment and Workplace Relations

Legislation Committee meets to consider estimates in relation to Fair Work Australia, the President of Fair Work Australia appear before the committee to answer questions. (Agreed to 28 October 2009.)

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Senate Notice Paper, no. 119, 11 May 2010 iv

The Senate

Community Affairs Legislation Committee

Budget estimates 201 0-11

June 2010

© Parliament of the Commonwealth of Australia 2010

ISBN 978-1-74229-317-2

Senate Community Affairs Committee Secretariat

Ms Naomi Bleeser- Committee Secretary Mr Hamish Hansford Committee Secretary Ms Leonie Peake- Research Officer

The Senate

Parliament House

Canberra ACT 2600

Phone:

Fax:

02 6277 3515

02 6277 5829

E-mail:

Internet:

community.affairs.sen@aph.gov.au

http://www .aph.gov .au/senate_ ca

This document was prepared by the Senate Community Affairs Committee Secretariat and printed by the Senate Printing Unit, Parliament House, Canberra

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Membership of the Committee

Members

Senator Claire Moore, Chair

Senator Rachel Siewert, Deputy Chair

Senator Judith Adams

Senator Sue Boyce

Senator Carol Brown

Senator Mark Furner

Substitute Member

Senator the Hon Nigel Scullion to

substitute for Senator Sue Boyce for 4 June 2010

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ALP, Queensland

AG, Western Australia

LP, Western Australia

LP, Queensland

ALP, Tasmania

ALP, Queensland

CLP, Northern Territory

Ill

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Senate Community Affairs Legislation Committee Report on Budget Estimates 2010-2011

1.1 On 11 May 201 0 the Senate referred the following documents to the Committee for examination and report in relation to the portfolios of Families, Housing, Community Services and Indigenous Affairs; and Health and Ageing:

• particulars of proposed expenditure in respect of the year ending on 30 June 2011

• particulars of certain proposed expenditure in respect of the year ending on 30 June 2011.

1.2 The Committee has considered the budget expenditure of the portfolios set out in their respective Portfolio Budget Statements 2010-2011 (PBS). Explanations relating to the estimates were received from Senator the Hon Chris Evans and Senator the Hon Ursula Stephens representing the Minister for Families, Housing, Community

Services and Indigenous Affairs and Senator the Hon Joseph Ludwig representing the Minister for Health and Ageing, and officers from the portfolio Departments at hearings held from 31 May to 3 June 2010.

1.3 The Committee also considered budget expenditure at a hearing on 4 June 20 1 0 on cross portfolio Indigenous matters pursuant to Resolution of the Senate of 26 August 2008. 1 Explanations relating to the estimates were received from Senator the Hon Mark Arbib. Officers from the following portfolio Departments and agency were in attendance:

Education, Employment and Workplace Relations

Families, Housing, Community Services and Indigenous Affairs

Health and Ageing

Centrelink Agency (Human Services portfolio).

1.4 The Committee expresses its appreciation for the assistance of the Ministers, Departmental Secretaries and the officers who appeared before it.

1.5 In accordance with Standing Order 26, the date for submission to the Committee of written answers to questions or additional information relating to the expenditure is 30 July 2010.

1.6 The Committee discussed many of the expenditure proposals and information contained in the PBS. These discussions are detailed in the Committee' s Hansard transcripts of 31 May to 4 June 2010, copies of which will be tabled in the Senate. Hansard transcripts of the estimates proceedings are also accessible on the

Journals of the Senate: No.22 - 26 August 2008, p.683.

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Committee's website at http://www .aph.gov.au/senate_ca. Answers to questions taken on notice and tabled documents relating to the Committee's hearings will be tabled separately in the Senate. Consolidated volumes of this additional information may be accessed from the Committee's website.

Procedural matters

Program and PBS structure

1. 7 During the hearings the Chair called the programs in the order listed under each of the Outcomes and according to the allocated times, which assisted Senators to focus their questioning on matters within the programs. Questions which time did not permit to ask at the hearing were placed on notice. The structure of the PBS also assisted Senators to more easily access information relating to particular programs. The amount of information required to be included in the PBS has greatly expanded the documents, with Health and Ageing (DoHA) PBS totalling 848 pages and Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) PBS with 311 pages.

Public interest immunity claims

1.8 During the hearings the issue of public interest immunity pursuant to Order of the Senate dated 13 May 2009 was not raised.

Questions relating to Bills before Committees

The Chair drew attention to advice from the Clerk of the Senate that, where Bills are before a Senate committee, the Senate has given the committee the task of conducting an inquiry specifically into that Bill and it will not be considered in other discussions such as estimates. 2

Cross portfolio Indigenous matters

1.9 To assist both the Committee and portfolio departments the Committee conducted the cross portfolio Indigenous matters hearing in a similar program format to the previous hearing, with themes and issues listed for consideration across portfolios. This approach has proven to be a satisfactory way for Senators to seek information on cross portfolio matters. The Committee acknowledges and appreciates the assistance of the Department of Families, Housing, Community Services and Indigenous Affairs in coordinating portfolios to enable the hearing to be conducted in this manner.

1.10 Regrettably questions could not be asked of the Indigenous Land Corporation (ILC) at the cross portfolio hearing due to time constraints because Senators who had indicated they had questions were not in attendance at the scheduled commencement

2 Committee Hansard, 4.06.10, p.CA4.

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time for the afternoon session. The Chair apologised to officers from the ILC who had travelled from interstate to attend the hearing, and with the cooperation of the Committee intends to try to prevent this situation occurring at future hearings. 3

Allegation made by a Senator

1.11 Senator Humphries alleged that during the dinner break FaHCSIA officials' conversations were overhead in the cafeteria discussing estimates, as quoted by Senator Humphries:

It has been put to me, however, that a conversation was overheard at your table, and my informant relates to me a conversation along these lines. Secretary: 'You could refer them to page 66 - "Yes, Senator" - page 243, then to appendices.' Other official: 'And take your time.' Secretary: 'And take your time.' Other official: 'Just slow him right down.' 4

Senator Humphries further commented:

I, of course, would be aghast if anybody appearing before the estimates committee saw it as their role to make more difficult the exercise of this committee to actually obtain information. 5

1.12 The Chair responded 'Senator, it is most unusual to actually quote from an overheard conversation in this Senate estimates'. 6

1.13 Dr Harmer, the Departmental Secretary, assured the Committee that:

FaHCSIA has a very good reputation for being helpful. ... We try to be as helpful as we can in answering questions. We do not play games .

. . . And I certainly do not recall any such conversation. 7

1.14 Dr Harmer further commented: 'Can I just say it is very difficult. It places the department and me in a very difficult position when we are asked to deal with allegations such as that. It is not possible to defend yourself against that. To which the Chair replied: 'No, it is not. It is an alleged conversation'.

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Provision of answers relating to Additional Estimates 2009-10

1.15 Departments were required to answer 710 questions on notice relating to the additional estimates (some involving numerous parts to the question), which totalled 1060 pages of answers. The Committee acknowledges the Departments' huge efforts

3 Committee Hansard, 4.06.10, p.CA58.

4 Committee Hansard, 31.05.10, p.CA112.

5 Committee Hansard, 31.05.10, p.CA112.

6 Committee Hansard, 31.05.10, p.CA112.

7 Committee Hansard, 31.05.10, p.CA112.

8 Committee Hansard, 31.05.10, pp.CA112-113 .

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in providing answers to this very large number of questions on notice. Both DoHA and FaHCSIA provided almost half of the answers by the due date. The majority of the remaining answers were progressively provided during the following month, and the remaining few were provided just prior to or at the commencement of the budget hearings.

1.16 At the commencement of the DoHA hearings, in answer to Senator Fierravanti-Wells' questions conceming her few remaining outstanding answers in relation to GP Super Clinics, the Senator was advised that DoHA had 425 questions on notice which involved 938 parts, and over 98 per cent of the answers had been provided. 9 The remaining outstanding answers were provided within two hours of the commencement of the hearing.

Issues

Families, Housing, Community Services and Indigenous Affairs portfolio

1.17 The Committee asked a range of questions covering corporate and cross­ outcome matters which included details of staff numbers, including employment of staff with a disability, funding for advertising campaigns, hospitality spending, protocols in relation to the provision of data requested by the Parliamentary Library, and contracts for services entered into with Australian Disability Enterprises.

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1.18 Quite a number of questions were asked conceming Ms Rein's (the Prime Minister's wife) role, and her possible involvement in assisting in policy development, to bring about improvements for people with disability. The Committee was advised that Ms Rein has a particular interest in this area, such as providing people with better accessibility to buildings by improving design. 11 Further questions on Ms Rein's role were asked during the housing outcome questioning, including the National Dialogue on Universal Housing Design meetings and in what capacity Ms Rein attended.

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1.19 Senators sought information on matters relating to seniors that included cost of living pressures, pension rates, indexation, superannuation and retirement income policy, allowances, the pension bonus scheme, work bonus, concessions and • 13

serv1ces.

1.20 Discussions covering a wide range of housing matters occupied a large amount of the hearing time. The majority of Senators' questions related to the stimulus package; the National Affordable Housing Agreement (NAHA); implementation of

9 Co mmittee Hansard, 2.06. 1 0, pp. CA 7-8.

10 Committee Hansard, 31.05.10, pp .CA4-9. 19-28.

11 Committee Hansard, 31.05.10, pp.CA10-16.

12 Committee Hansard, 31.05.1 0, pp .CA129-134.

13 Committee Hansard, 31.05.10, pp.CA31-66.

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housing programs and projects; progress with social housing initiatives, including sustainability benchmarks; the National Rental Affordability Scheme (NRAS), and homelessness prevention strategies. Some questions were also asked concerning the implementation of the national partnership agreement in the Northern Territory, including the Strategic Indigenous Housing Infrastructure Program (SIHIP). The National Housing Supply Council was also discussed. 14

1.21 Questions relating to family support matters mainly covered early intervention services, including specialised services for particular needs. A number of questions were asked with regard to family relationship services and centres. Family Tax Benefit payments were also included in discussions. Senators also sought detailed information on a wide range of paid parental leave matters. 15

1.22 Information was sought on a number of issues relating to women. The Office for Women informed the Committee of their staffing numbers, funding, including the Respectful Relationships campaign funding and progress with current projects. Support and assistance for victims of people trafficking were discussed, as well as telephone counselling contracts, the interdepartmental committee on women, and national women's alliances. 16

1.23 The Equal Opportunity for Women in the Workplace Agency (EOW A) informed the Committee that recommendations are being developed following the review of the EOW A Act. Funding and staffing were discussed, as well as the number of non-compliant organisations and details of measures being taken and support provided to assist with compliancy. The gender pay gap and difficulties in improving this were also discussed. 17

1.24 Senators asked a number of questions in relation to disability and carer matters, which included grants in support of disabilities and disability program funding. Australian Disability Enterprises projects, contracts and services; the National Disability Strategy; strategies for raising awareness to increase employment

of people with disability; and difficulties faced by people with disability were discussed in some detail. Further matters included in discussions were special disability trusts, the assessment process for eligibility for the disability support pension. The Committee advised FaHCSIA that it had received strong feedback that the Personal Helpers and Mentors Program (PRaMs) had been strongly supported and well liked by the community. With regard to questions relating to funding for PRaMs FaHCSIA advised that round 4 had been finalised and the full rollout of the program

14 Committee Hansard, 31.05.10, pp.CA67-128.

15 Committee Hansard, 1.06.10, pp.CA3-32.

16 Committee Hansard, 1.06.10, pp.CA33-51.

17 Committee Hansard, 1.06.1 0, pp.CA52-56.

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would be completed in 2010-11. In remote regions funding had already been provided for communities in the APY Lands, Yuendumu and the Kimberley. 18

1.25 Matters relating to community capability and the vulnerable included questions on adventure playgrounds, the national compact, volunteering strategy, the Victorian bushfires recovery strategy, income management, and money management and financial counselling services. 19

Health and Ageing portfolio

1.26 The Committee sought information relating to a number of corporate issues and matters which cross outcomes. Health and hospital reform measures were the major topics on which Senators sought detailed information, including the consultation and COAG process, national partnership agreements, and intended outcomes. 20

1.27 Senators asked questions of the Australian Institute of Health and Welfare (AIHW) relating to data collection for alcohol and drug treatment services, national minimum data sets, and collection of health data for Indigenous Australians. AIHW advised the Committee that progress had been made in improving data collection.

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1.28 Acute care matters included details of castings for acute hospital beds, the advertising campaign to inform the public with regard to the Government's health reform plan, and cost shifting. 22 Matters discussed with the National Blood Authority included the impact of climate change on blood supply, and possible impact of viruses on blood supply. 23

1.29 Senators asked questions of the Australian Organ and Tissue Donation and Transplantation Authority with regard to staffing matters, audits, organ donation rates and measures to increase donations, the DonorTrac system., and the public awareness program DonateLife Family. 24

1.30 A wide range of aged care matters were discussed at length and in considerable detail, including complaints involving aged care facilities; reviews undertaken; inconsistency of the ACAT assessment; aged care workforce; community visitors scheme; indexation of accommodation charges; community care and HACC

services; transition care program; aged care approvals round; and unallocated bed

18 Co mmittee Hansard, 1.06.1 0, pp. CA57-86.

19 Committee Hansard, 1.06.10, pp .CA87-117.

20 Committee Hansard, 2.06.1 0, pp .CA 7-27.

21 Committee Hansard, 2.06.10, pp.CA28-30.

22 Committee Hansard, 2.06.1 0, pp.CA31-39.

23 Committee Hansard, 2.06.10, pp .CA31-39.

24 Committee Hansard, 2.06.10, pp.CA31-47.

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licences. The Committee was pleased to hear that the number of young people in permanent residential care had decreased by 32.4 per cent. The Aged Care Standards and Accreditation Agency informed Senators with regard to accreditation standards, unannounced visits to aged care facilities, and accreditation reviews. 25

1.31 Senators questioned DoHA on a number of matters relating to GP Super Clinics, including locations, roll-out, service delivery, and timeframes for particular clinics to become fully operational. Medicare Locals were also discussed and the General Practice Education and Training agency informed the Committee about workforce planning and expected outcomes. 26

1.32 With regard to private health insurance the main topic for discussion related to private health insurance rebates. The Private Healtl;l_Insurance Administration Council and Private Health Insurance Ombudsman also answered Senators questions concerning private health insurance, particularly with regard to membership and complaints. 27

1.33 Senators sought information relating to the Pharmaceutical Benefits Scheme including the market share of Medicines Australia and the Generic Medicines Industry Association, off-patent medicines, generic and non-generic prescribing, savings measures, price disclosure, home medication reviews under community pharmacy, the fifth community pharmacy agreement, and the life saving drugs program. 28

1.34 Questions relating to hearing services included long waiting times involved in obtaining vouchers, telephone delays in contacting hearing services, minimum hearing loss thresholds, and funding availability for early intervention, particularly for children. 29

1.35 In response to Senators' wide-ranging questions relating to vaccines, particularly seasonal and swine flu vaccines and pandemic preparedness; the impact of Hendra and other viruses, the Chief Medical Officer, Professor Bishop, and DoHA officers provided very informative and detailed answers. 30

1.36 Matters were discussed in some detail relating to access to medical services which included professional indemnity insurance for midwives, the teen dental program, chronic disease dental scheme, issuing of magnetic resonance imaging

25 Committee Hansard, 2.06.10, pp.CA48-75.

26 Committee Hansard, 2.06.10, pp.CA48-75.

27 Co mmittee Hansard, 2.06.1 0, pp.CA96-1 04.

28 Committee Hansard, 2.06.10, pp.CA105-126.

29 Committee Hansard, 2.06.10, pp.CA127-130.

30 Committee Hansard, 3.06.10, pp.CAS-22.

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(MRI) licences, positron em1ss1on tomography (PET), uncappmg of pathology collection centres and pathology services. 31

1.37 The Professional Services Review agency informed the Committee with regard to their role in reviewing medical practitioners referred to them by Medicare for possible inappropriate claiming of Medicare items. 32

1.38 Mental health matters were discussed at some length, particularly with regard to funding allocations under COAG, funding for specific programs and new programs and services, changes to existing programs and the concerns of some allied health professionals, evaluation of existing programs, and provision of mental health services in rural areas. 33

1.39 Senators sought information relating to e-health records and the operation and control of a personally controlled electronic health record system, and issue and security of health care identifier numbers. 34

1.40 Cancer Australia agency updated the Committee on their expansion of partnerships and collaborative arrangements with organisations, and the increase in consumer participation to improve cancer outcomes. 35

The National Breast and

Ovarian Cancer Centre also informed Senators, particularly with regard to support provided to women in rural areas diagnosed with breast cancer, measures to increase the know ledge of Indigenous women with breast cancer, and the Breast Cancer Network Australia partnership. The Committee was also updated on the Centre's activities relating to ovarian cancer. 36

1.41 Questions put to the National Health and Medical Research Council (NHMRC) included advice sought from other government departments and key stakeholders when preparing their publication titled 'A new food guidance system for Australia'. Details of medical research projects and funding for cancer centres were also provided.

37

1.42 Food Standards Australia New Zealand answered questions relating to Bisphenol-A (BP A) Australian standards, and food standards in vulnerable population groups such as nursing homes. 38 Questions to the Australian Radiation Protection and Nuclear Safety Agency (ARP ANSA) included report recommendations relating to an

31 Committee Hansard, 3.06.10, pp .CA23-33.

32 Committee Hansard, 3.06.1 0, pp .CA34-37 .

33 Committee Hansard, 3.06.10, pp .CA3 7-56.

34 Committee Hansard, 3.06.1 0, pp .CA61-68.

35 Committee Hansard, 3.06.10, pp .CA69-70.

36 Committee Hansard, 3.06.10, pp.CA70-72.

37 Committee Hansard, 3.06.10, pp.CA72-77.

38 Committee Hansard, 3.06.10, pp.CA77-80.

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incident that occurred at the radioisotope production facility at Lucas Heights, inspection programs, and airport body scanners. 39

1.43 Matters discussed with the Therapeutic Goods Administration included problems with orthopaedic prostheses and breast implants, re-use of single-use heart catheters, and thermal breast scanners used by some complementary medicine providers. 40 Other population health questions included the diabetes initiative, national health survey, bowel cancer screening program, Stephanie Alexander Kitchen Garden Foundation program, monitoring of notification of infectious diseases such as HIV -AIDS and evaluation, and the illicit drugs campaign. 41

1.44 Health workforce matters included details of programs to encourage an increase in nurse numbers, the General Practice rural incentives progr_

1.45 Senators' questions with regard to rural health included funding for the following programs: Royal Flying Doctor Service; rural primary health services program; medical outreach assistance program; and national rural and the remote health infrastructure program. DoHA also explained how these programs would

integrate with the Medicare Local and local hospital networks. The patient assisted travel scheme was also discussed. 44

1.46 Matters relating to sport included security arrangements in relation to the Commonwealth Games in New Delhi, active after-school communities program, FIF A World Cup bid. Questions to the Australian Sports Commission included talent identification and support for the next generation of Australian Olympic champions, advancement of women in sport, support for greater participation in sport with the assistance of scholarships and grants.

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39 Committee Hansard, 3.06.10, pp.CA81-85.

40 Committee Hansard, 3.06.10, pp.CA85-90.

41 Committee Hansard, 3.06.10, pp.CA90-96.

42 Committee Hansard, 3.06 .10, pp.CA97-105.

43 Committee Hansard, 3.06.10, pp.CA106-112.

44 Committee Hansard, 3.06.10, pp.CA113-115 .

45 Committee Hansard, 3.06.10, pp.CA116-127.

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Cross portfolio Indigenous matters

1.47 Senators sought answers to Indigenous issues questions from various portfolio Departments and agencies under the thematic headings detailed on the hearing program. The majority of questions were on a wide range of issues relating to the Closing the Gap initiative and the Northern Territory Emergency Response.

1.48 A range of questions were asked relating to FaHCSIA's response to the paper by researchers from the Menzies School of Medical Research titled Impact of in come management on stores sales in the Northern Territory. Also included in discussions were income management, Outback Stores, the provision of fresh food to improve diets and Indigenous health outcomes. 46

1.49 The Coordinator General for Remote Indigenous Services, Mr Gleeson, informed the Committee with regard to progress on the implementation of the COAG remote service delivery partnership, which encompasses 29 communities across the Northern Territory, Western Australia, Queensland, South Australia and New South Wales. 47

1.50 Questions to Centrelink included the Indigenous Community Volunteers program, the Basics Card, expansion of income quarantining to the remainder of the Northern Territory, and merchant take-up of the new Basics Card. 48

1.51 A wide range of questions were asked by Senators relating to progress under the National Partnership Agreement on Remote Indigenous Housing for new and refurbished houses across jurisdictions. Contract management and Indigenous employment opportunities were also discussed, as well as Indigenous home ownership and tenancy agreements. 49

1.52 Indigenous health matters included funding for provision and further roll-out of Opal fuel and the difficulties encountered with retailers, and petrol sniffmg diversionary programs. Questions were also asked relating to funding for GP clinics and services; optometry services; child health and dental checks and services; the rollout of the trachoma eradication program, and dialysis services. The foetal alcohol spectrum disorder was discussed including prevention strategies and development of a diagnostic screening tool. 50

46 Committee Hansard, 4.06.1 0, pp .CA40-41.

47 Committee Hansard, 4.06.10, pp .CA16-19.

48 Committee Hansard, 4.06.10, pp.CA19-23.

49 Committee Hansard, 4.06.10, pp.CA23-42.

50 Committee Hansard, 4.06.1 0, pp .CA43-54.

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1.53 Indigenous Business Australia informed the Committee of the assets under management; lending, assessment and risk management strategies. 5 1

1.54 A range of Indigenous employment matters were discussed with DEEWR including Indigenous unemployment rates, and the impact on communities resulting from changes to Community Development Employment Projects (CDEP). The Committee was advised that 'the way in which CDEP has changed is that there is a greater focus on work readiness and community development'. The Indigenous Economic Development Strategy was also discussed. 52

1.55 In addition to the above issues a number of administrative and process issues were discussed during the estimates hearings and these are detailed in the Hansard transcripts of evidence.

Senator Claire Moore Chair

June 2010

51 Committee Hansard, 4.06.10, pp.CA55-58.

52 Committee Hansard, 4.06.10, pp.CA58-62.

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The Senate

Economics

Legislation Committee

Budget estimates 201 0-11

June 2010

17

© Commonwealth of Australia 2010

ISBN 978-1-74229-318-9

Printed by the Senate Printing Unit, Parliament House, Canberra.

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Senate Economics Legislation Committee

Members

Senator Annette Hurley, Chair Senator Alan Eggleston, Deputy Chair Senator David Bushby Senator Doug Cameron Senator Louise Pratt Senator Nick Xenophon

Other senators in attendance

Senator the Hon Eric Abetz Senator Guy Barnett Senator Cory Bernardi Senator Simon Birmingham Senator the Hon Ronald Boswell Senator the Hon George Brandis Senator Bob Brown Senator the Hon Richard Colbeck Senator the Hon Bill Heffernan Senator Gary Humphries Senator Barnaby Joyce Senator Scott Ludlam Senator the Hon Ian Macdonald Senator Julian McGauran Senator Christine Milne Senator Stephen Parry Senator Helen Polley Senator the Hon Michael Ronaldson Senator Rachel Siewert Senator Glenn Sterle Senator John Williams

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South Australia, ALP Western Australia, LP Tasmania, LP New South Wales, ALP Western Australia, ALP

South Australia, IND

Tasmania, LP Tasmania, LP South Australia, LP South Australia, LP

Queensland, NATS Queensland, LP Tasmania, AG Tasmania, LP New South Wales, LP Australian Capital Territory, LP

Queensland, NATS Western Australia, AG Queensland, LP Victoria, LP

Tasmania, AG Tasmania, LP Tasmania, ALP Victoria, LP Western Australia, AG Western Australia, ALP New South Wales, NATS

Secretariat Mr John Hawkins, Secretary Mr Glenn Ryall, Senior Research Officer Mr CJ Sautelle, Research Officer Ms Hana Jones, Executive Assistant Mr Joshua See, Executive Assistant

PO Box 6100 Parliament House Canberra ACT 2600 Ph: 02 6277 3540 Fax: 02 6277 5719 E-mail: economics.sen@aph.gov.au Internet: http: //www .aph.gov.au/senate economics/

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TABLE OF CONTENTS

Membership ofCommittee .......................................................................................... ..iii

Budget Estimates 2010-11 ........................................................................... 1

Report to the Senate ......................................................................................................... !

lntrod ucti on ...... ........ ....... ........... ......... .. .... ........ ................................. .. .. .............. .. ......... 1

Portfolio structures and outcomes .... .. .......................... ...................... .......................... !

General comments ......... ... ... .... .................... ....... ......... .... ....................... .. ..... ..... ....... .. .. .2

Questions on notice ........................................................................................................ 2

Procedural issues ............................................................................................................. 2

Ordinary annual services ofthe government.. ............................................................ J

Record of proceedings ................................................................................................... .4

Matters raised- Innovation, Industry, Science and Research pmifolio ................. .4

Matters raised- Resources, Energy and Tourism portfolio ...................................... 8

Matters raised- Treasury portfolio ........................................................................... .! 0

Appendix 1 ................................................................................................. 17

Abbreviations ................................................................................................................... 17

Appendix 2 ................................................................................................. 18

Index to proof Hansard transcripts ............................................................................ 18

Thursday, 27 May 2010 ............................................................................................... 18

Monday, 3 1 May 201 0 ................................................................... .............. ........ ....... .18

Tuesday, 1 June2010 ............................ .... ........................ ...... ........ ........ ............ ........ . 18

Wednesday, 2 June 201 0 .............................................................................................. 19

Thursday, 3 June 2010 ................................................................................................. 19

Appendix 3 ................................................................................................. 20

Documents tabled ............................................................................................................ 20

Monday, 31 May 201 0 ................ ................................................ .................. .............. . 20

21

Tuesday, 1 June 2010 ....................... ... ............................... .......................................... 20

Wednesday, 2 June 2010 ......................................... .............. .......................... ............ .20

Thursday, 3 June 2010 ................................................................................................ .21

Appendix 4 ................................................................................................. 22

Portfolio structure and outcomes for the Innovation, Industry, Science and Research Portfolio ........................................................................................................... 22

Appendix 5 ................................................................................................. 23

Portfolio structure and outcomes for the Resources, Energy and Tourism Portfolio ............................................................................................................................. 23

Appendix 6 ................................................................................................. 24

Portfolio structure and outcomes for the Treasury Portfolio .............................. 24

22

Budget Estimates 2010-11

Report to the Senate

Introduction

1.1 On 11 May 2010 the Senate referred to the committee for examination and

report the following documents in relation to the Innovation, Industry, Science and Research; Resources, Energy and Tourism; and Treasury portfolios:

• Particulars of proposed expenditure in respect of the year ending on

30 June 2011 [Appropriation Bill (No. 1) 2010-2011]; and

• Particulars of certain proposed expenditure in respect of the year ending on 30 June 2011 [Appropriation Bill (No.2) 2010-2011]. 1

Portfolio structures and outcomes

1.2 The committee notes that changes have been made to the outcomes of several

agencies in the above three portfolios since the 2009-10 Additional Estimates round. These changes are summarised below:

Agency Old outcome New outcome

Growth of knowledge and Growth of knowledge and

Australian Research innovation through managing innovation through providing policy Council (ARC) research funding schemes, advice, measuring research

measuring research excellence and excellence and managing research providing advice funding schemes

Encourage innovation and cost effective developments in solar

N/A- new agency (the ASI was energy technologies to accelerate commercial deployment through

Australian Solar incorporated as a wholly-owned knowledge building and Institute (ASI) Commonwealth company in collaborative research, development August 2009) and support for Australian industries and research organisations The advancement of To enhance the Commonwealth's macroeconomic growth and Australian Office of capacity to manage its net debt stability, and the effective operation Financial portfolio, offering the prospect of of financial markets, through Management savings in debt servicing costs and issuing debt, investing in financial (AOFM) an improvement in the net worth of assets and managing debt, the Commonwealth over time investments and cash for the Australian Government Journals of the Senate. No. 120, 11 May 2010, p. 3444. 23

Page2

1.3 The complete structure and outcomes for each portfolio are summarised in the

appendices as indicated below:

• Innovation, Industry, Science and Research (Appendix 4);

• Resources, Energy and Tourism (Appendix 5); and

• Treasury (Appendix 6).

General comments

1.4 The committee received evidence from Senator the Hon Kim Carr, Minister

for Innovation, Industry, Science and Research; Senator the Hon Penny Wong, representing the Minister for Tourism; the Assistant Treasurer, Senator the Hon Nick Sherry; and officers from the Innovation, Industry, Science and Research; Resources, Energy and Tourism; and Treasury portfolios.

1.5 The committee thanks the ministers and officers who attended the hearings for

their assistance.

1.6 The committee conducted hearings over five days, on 27 May 2010 and from

31 May 2010 to 3 June 2010. In total the committee met for 42 hours and 35 minutes, excluding breaks.

Questions on notice

1.7 The committee draws the attention of all departments and agencies to the

deadline of Friday, 30 July 2010 for the receipt of answers to questions taken on notice from this round. As the committee is required to report before responses to questions are due, this report has been prepared without reference to any of these responses. The secretariat is preparing indexes for questions taken on notice during and after the hearings and these will be made available on the following website http: / /www.aph.gov.au/Senate/committee/economics _ ctte/estimates/bud _1 0 11/index.htm.

1.8 For the 2009-1 0 Additional Estimates round answers to questions on notice

were due to be provided to the committee by Thursday, 1 April2010. The committee commends the Innovation, Industry, Science and Research portfolio for submitting all answers on time. However, the committee expresses concern that no questions placed on notice with the Resources, Energy and Tourism portfolio were answered by the due date. For the Treasury portfolio, 105 questions (out of 171 questions placed on notice) remained unanswered at close of business on the due date. Furthermore, the final Treasury portfolio answer was not received until 16 June 2010.

Procedural issues

1.9 After contact from the committee prior to the hearings, Treasury informed the

committee that the Secretary to the Treasury, Dr Ken Henry, would be unavailable to attend this round of estimates hearings. This resulted in the Senate agreeing to an order for Dr Henry to appear at another time, to be mutually agreed between Dr Henry

24

Page]

and the committee but, in any case, not later than 30 June 2010. 2 Dr Henry duly appeared at a specially convened hearing on 27 May 201 0.

1.10 As the estimates schedule is determined well in advance of the hearings the

committee generally expects the senior officer of each agency to appear. If, for some reason, this is not possible agencies should proactively inform the committee well before the relevant estimates hearing.

Ordinary annual services of the government

1.11 On 1 7 June 201 0 the Appropriations and Staffing Committee tabled its

50th Report in the Senate. The report focussed on an ongoing issue relating to the classification of ordinary annual services of the government. In the report, the Appropriations and Staffing Committee highlighted that:

Expenditure for the ordinary annual services of the government has always been contained in a separate bill to preserve the Senate's right under section 53 of the Constitution to amend bills appropriating funds other than for the ordinary annual services of the government and to comply with section 54.3

1.12 In this most recent report, the Appropriations and Staffing Committee restated

concerns it had raised in its 45th Report:

Recent appropriation bills have been based on a mistaken assumption that the committee agreed to abandon the long-standing principle that all new policies would be classified as not part of the ordinary annual services of the government, and that the committee agreed that any expenditure falling within an existing outcome would be classified as ordinary annual services expenditure. On this view, completely new programs and projects may be started up using money appropriated for the ordinary annual services of the government, and the Senate is unable to distinguish between normal ongoing activities of government and new programs and projects or to identify the expenditure on each of those areas. 4

1.13 The Appropriations and Staffing Committee considered correspondence from

the Minister for Finance and Deregulation in relation to the matter and noted 'that the Minister's response has not provided a way forward to resolve this difference of view.'5 The committee therefore resolved that:

2 Journals of the Senate, No. 122, 13 May 2010, p. 3494.

3 Senate Appropriations and Staffing Committee, SO'h Report, Ordinary annual services of the government, June 2010, p. 1.

4 Senate Appropriations and Staffing Committee, SO'h Report, Ordinmy annual services of the government, June 2010, p. 1.

5 Senate Appropriations and Staffing Committee, SO'h Report, Ordinary annual services of the government, June 2010, p. 2.

25

Page 4

... the solution to the problem is to return to the Senate's original determination, so that new policies for which no money has been appropriated in previous years are separately identified in their first year in the appropriation bill which is not for the ordinary annual services of the government. 6

1.14 In light of this, the Economics Legislation Committee draws the attention of

the Senate to several measures included in Appropriation Bill (No. 1) 2010-2011 -that is, the ordinary annual services bill - that appear to be new policies for which no money has been appropriated in previous years. These include:

• Commonwealth Australian National University Strategic Relationship ($112.9 million over four years, starting in 2010-2011) 7;

• Cairns Institute Tropical Innovation Hub- contribution ($19.5 million over two years, stmiing in 2010-2011)8 ;

• National Tourism Accreditation Framework- establishment ($5.5 million over four years, starting in 2010-2011) 9; and

• Population Strategy

($1.25 million in 2010-2011) 10 •

Record of proceedings

1.15 This report does not attempt to analyse the evidence presented over the five

days of hearings. However, it does include a brief list of the issues that were traversed by the committee for all portfolios.

1.16 Copies of the Hansard transcripts and documents tabled at the hearings (see

Appendix 3 for a list of the documents) are available on the internet at

http://www.aph.gov.au/Senate/committee/economics _ ctte/estimates/bud _1 0 11/index.htm. These documents are also tabled with this report for the information of the Senate.

Matters raised -Innovation, Industry, Science and Research portfolio

1.17 On 31 May 2010, the committee examined the estimates for the:

• Australian Nuclear Science and Technology Organisation (ANSTO);

• Commonwealth Scientific and Industrial Research Organisation (CSIRO);

• Australian Research Council (ARC);

6 Senate Appropriations and Staffing Committee, 50'h Report, Ordinmy annual services of the government, June 2010, p. 2.

7 2010- 11 Budget Paper No.2, pp 279- 280.

8 2010- 11 Budget Paper No.2, p. 278.

9 2010- 11 Budget Paper No. 2, p. 291.

10 2010- 11 Budget Paper No.2, p. 293.

26

• IP Australia;

•

•

•

Department of Innovation, [Innovation and Industry];

Office of the Chief Scientist; and

Department of Innovation, [Science and Research]

Industry,

Industry,

1.18 Matters examined included the following:

Science and

Science and

Australian Nuclear Science and Technology Organisation (ANSTO) 11

PageS

Research

Research

• safety incident in ANSTO's radiopharmaceutical production facility in August 2008 and subsequent reviews (pp 4-8 and 11-12);

• nature of the relationship between ANSTO and the Australian Radiation Protection and Nuclear Safety Agency (ARP ANSA) (p. 8);

• repatriation and storage of nuclear waste currently located in Europe (pp 8, 10-11 and 14-16);

• decommissioning of the High Flux Australian Reactor (HIF AR) at Lucas Heights (p. 9);

• impact of the efficiency dividend on ANSTO operations (pp 9-1 0);

• PETNET Cyclotron facility opened in August 2009 (pp 12-13); and

• Open Pool Australian Lightwater (OPAL) reactor and its production output of molybdenum-99 (pp 13-14).

Commonwealth Scientific and Industrial Research Organisation (CSIRO) 12

• closure and subsequent merging of CSIRO facilities in Canberra (pp 16-19 and 33);

• staffing cuts (pp 19 and 24-25);

• CSIRO support of the Women in Climate Change forum series (pp 19-20);

• the State of the Climate report released by CSIRO and the Bureau of

Meteorology (pp 20-22, 23-24 and 28);

• CSIRO survey on housing and sea level rise (pp 22-23);

• bushfire research (pp 25-26);

• CSIRO funding for rural and regional sector projects (p. 26);

11 Transcript page numbers for the Australian Nuclear Science and Technology Organisation (ANSTO), refer to Proof Hansard, 31 May 2010 (see the index at Appendix 2 of this report).

12 Transcript page numbers for the Commonwealth Scientific and Industrial Research Organisation (CSIRO), refer to Proof Hansard, 31 May 2010 (see the index at Appendix 2 of this report).

27

Page 6

• impact of a potential recruitment freeze (pp 26-27);

• Square Kilometre Array (pp 28-30);

• collaboration with the University of Western Australia Oceans Institute (p. 30);

• claims by Dr Garth Parltridge of intimidation of CSIRO scientists (pp 31-33 );

• CSIRO facility at Boggo Road Precinct (pp 33-34);

• global food task modelling (p. 34); and

• CSIRO projects in Northern Australia (p. 35).

Australian Research Co_ l!_ncil (ARC) 13

• Excellence in Research for Australia Initiative (pp 35-38);

• national research priority areas (pp 38-39);

• climate change research (pp 40-41 );

• gene patent research (pp 41-42); and

• impact of a potential recruitment freeze (pp 42-43 ).

IP Australia 14

• proposed research and development legislation changes and IP rights held overseas (pp 43-45);

• current backlog of patent applications (p. 45);

• Resource Management System project (pp 45-46);

• impact of a potential recruitment freeze (p. 46);

• IP Australia Portfolio Budget Statement (pp 47-49); and

• patenting of biological materials (p. 48).

Department of Innovation, Industry, Science and Research

[Innovation and Industry/ 5

• new research and development legislation (pp 49-58, 59 and 63-66);

• small business advisory services (p. 58);

• LPG vehicle scheme (pp 58-59 and 83-84);

13 Transcript page numbers for the Australian Research Council (ARC), refer to Proof Hansard, 31 May 2010 (see the index at Appendix 2 of this report).

14 Transcript page numbers for IP Australia, refer to Proof Hansard, 31 May 2010 (see the index at Appendix 2 of this report).

15 Transcript page numbers for the Department of Innovation, Industry, Science and Research [Innovation and Industry], refer to Proof Hansard, 31 May 2010 (see the index at Appendix 2 of this report).

28

Page 7

• Book Industry Strategy Group (pp 59-63);

• steel industry (p. 63);

• pharmaceutical industry (pp 66-74);

• Commercialisation Australia grant to Allhomes (pp 74-77);

• tenders to supply Defence clothing (pp 77-78, 88-90 and 105-1 06);

• Green Car Innovation Fund (pp 78-82);

• Automotive Industry Structural Adjustment Fund (pp 82-83);

• Green Building Fund (pp 83-88);

• Insulation Industry Assistance Package (pp 90-93);

• Australian Innovation System Report 2010 (pp 93-95);

• industry innovation councils (pp 95-99);

• Enterprise Connect (pp 99-1 00);

• Researchers in Business programme (p. 1 00); and

• small-scale mammalian cell production facility (p. 1 00).

Office of the Chief Scientist 16

• climate science (pp 101 , 102-103 and 104-105);

• funding and staffing issues (pp I 01-1 02); and

• psychology and early child development research (p. 104).

Department of Innovation, Indust1y, Science and Research

[Science and Research/ 7

• collaborative research networks (p. 1 06);

• cooperative research centres (pp 1 06-1 08);

• Square Kilometre Array (p. 1 08);

• International Science Linkages programme (pp 108-1 09);

• Cairns Institute Tropical Innovation Hub (pp 109-11 0);

• Innovation Ambassador Programme (pp 110-111 );

• national networks of research data storage and collaboration (pp 111-112); and

16 Transcript page numbers for the Office of the Chief Scientist, refer to Proof Hansard, 31 May 2010 (see the index at Appendix 2 of this report).

17 Transcript page numbers for the Department of Innovation, Industry, Science and Research [Science and Research], refer to Proof Hansard, 31 May 2010 (see the index at Appendix 2 of this report).

29

Page8

• impact of a potential recruitment freeze (pp 112-113).

Matters raised -Resources, Energy and Tourism portfolio

1.19 On 1 June 2010, the committee examined the estimates for the:

• Department of Resources, Energy and Tourism [Resources and Energy];

• Geoscience Australia;

• National Offshore Petroleum Safety Authority (NOPSA);

• Australian Solar Institute (ASI);

• Department of Resources, Energy and Tourism [Tourism] and

Tourism Australia.

1.20 Matters examined included the following:

Department of Resources, Energy and Tourism [Resources and Energy/ 8

• proposed Resource Super Profits Tax (pp 3-5, 8-14, 17-18, 21-26 and 30-31);

• radioactive waste management (pp 5-8);

• geothermal development programme (pp 14-17);

• Low Emissions Teclmology Demonstration Fund (pp 19-20);

• Renewable Energy Demonstration Programme (pp 20-21 );

• Montara oil spill (pp 26-27);

• disposal of West Atlas oil rig (pp 27-28);

• retail electricity prices (pp 28-29); and

• uranium industry (pp 29-30).

Geoscience Australia 19

• publications relating to Australia's oil and gas resources (pp 31-32);

• prospective geological basins (pp 32-33);

• open pit mines and seismic activity (p. 33-34);

• seismic recording stations near Tennant Creek (pp 34-35);

• uranium mining (p. 35);

• geosequestration (pp 3 5-3 6 and 3 7); and

18 Transcript page numbers for the Department of Resources, Energy and Tourism [Resources and Energy], refer to Proof Hansard, 1 June 2010 (see the index at Appendix 2 of this report).

19 Transcript page numbers for Geoscience Australia, refer to Proof Hansard, 1 June 2010 (see the index at Appendix 2 of this report).

30

• impact of a potential recruitment freeze (pp 36-37).

National Offshore Petroleum Safety Authority (NOPSAy2°

• investigation into the Varanus Island incident (p. 37); and

• Montara oil spill (pp 38-39).

Australian Solar Institute (ASiy2 1

• Mildura solar array (p. 39);

• future solar power stations (pp 39-40);

• administration of solar energy programmes (pp 40-41 ); and

• solar energy research (pp 41-42).

Page 9

Department of Resources, Energy and Tourism [Tourism] and Tourism Australia 22

• Tourism Australia expenditure on marketing activities (pp 42-43);

• incorrect map in the Tourism Australia annual report 2008-09 (p. 43);

• impact of the No Leave, No Life campaign (pp 43-44);

• funding of departmental initiatives (pp 44-46 and 51-53);

• effectiveness of the tourism advertising campaign based around the Australia movie (pp 46 and 54-55);

• international tourist numbers and expenditure in Australia for 2009-10 (pp 46-48);

• regional tourism in Australia including Far North Queensland (pp 48-49 and 50-51);

• potential impact of the proposed Resource Super Profits Tax on business events tourism (p. 49);

• Indigenous tourism (pp 49-50);

• response to Airlie Beach cyclone (p. 50);

• Tourism Australia budget for years 2008-09 to 2010-11 (pp 55-56);

• movement of Tourism Research Australia from Tourism Australia into the department and impact of the efficiency dividend (pp 56-57);

20 Transcript page numbers for the National Offshore Petroleum Safety Authority (NOPSA), refer to Proof Hansard, 1 June 2010 (see the index at Appendix 2 of this report).

21 Transcript page numbers for the Australian Solar Institute (AS I), refer to Proof Hansard, 1 June 2010 (see the index at Appendix 2 of this repmi ).

22 The Department of Resources, Energy and Tourism [Tourism] and Tourism Australia were heard together. Transcript page numbers for the Department of Resources, Energy and Tourism [Tourism] and Tourism Australia, refer to Proof Hansard, 1 June 2010 (see the index at Appendix 2 of this report).

31

Page 10

• 'There's nothing like Australia' advertising campaign (pp 57-59);

• Portfolio Budget Statement (p. 59); and

• Tourism Australia and social media advertising (pp 59-60).

Matters raised - Treasury portfolio

1.21 On 27 May 2010, the committee commenced its examination of the estimates

for the:

• Treasury [Macroeconomic Group].

1.22 On 1 June 2010, the committee examined the estimates for the:

• Treasury [Revenue Group] and Australian Taxation Office (ATO); and

• Australian Securities and Investments Commission (ASIC).

1.23 On 2 June 2010, the committee continued its examination of the estimates for

the:

• Treasury [Macroeconomic Group] ; and examined the estimates for the

• Treasury [Fiscal Group] ; and

• Australian Competition and Consumer Commission (ACCC).

1.24 On 3 June 2010, the committee examined the estimates for the:

• Australian Prudential Regulation Authority (APRA);

• Treasury [Markets Group];

• Productivity Commission;

• Australian Office of Financial Management (AOFM); and

• Australian Bureau of Statistics (ABS).

1.25 Matters examined included the following:

Treasury [Macroeconomic Group] (first hearing/3

• overall budgetary position (pp 4-5);

• Australia's Future Tax System review and the proposed Resource Super Profits Tax (pp 5- 11 and 13-22 ); and

• role of the mining industry in the economy (pp 12-13 ).

23 Transcript page numbers for the Treasury [Macroeconomjc Group] (first hearing), refer to Proof Hansard, 27 May 2010 (see the index at Appendix 2 of thi s report).

32

Page 11

TreasUJy [Revenue Group] and the Australian Taxation Office (AT0/4

• tax reform advertisements (pp 64-70);

• proposed increase in the superannuation guarantee (pp 70-74 and 78-79);

• impact of the proposed Resource Super Profits Tax on superannuation (pp 74-78 and 79);

• concessional contribution caps for superannuation (p. 80);

• superannuation clearing house (pp 80-81 );

• ATO change programme (pp 81-90);

• A TO involvement in the implementation of the proposed Resource Super Profits Tax (pp 90-92);

• proposed Resource Super Profits Tax (pp 92-105 and 106-113 );

• analysis of Opposition policies by Treasury (pp I 05-1 06);

• proposed reduction in the company tax rate (pp 113-114 ); and

• proposed instant asset write-off for small businesses (pp 114-115).

Australian Securities and Investments Commission (ASIC/ 5

• investment scams (pp 115-118);

• Westpoint(p. 118-120);

• use of coercive powers (pp 120-122);

• managed investments (pp 122-123);

• staffing (p. 123-125);

• frozen mortgage funds (pp 125-12 7);

• debenture issuing companies (pp 127-129);

• mortgage exit fees (pp 129-131 );

• Storm Financial (p. 131-132)

• market supervision ofthe ASX (pp 132-137);

• use of search warrants (p. 136);

• margin lending (pp 137-138);

• regulation of financial advisers (pp 138-139); and

• short selling (pp 139-141).

24 Treasury [Revenue Group] and the Australian Taxation Office were heard together. Transcript page numbers for the Treasury [Revenue Group] and the ATO, refer to Proof Hansard, 1 June 2010 (see the index at Appendix 2 of this report).

25 Transcript page numbers for the Australian Securities and Investments Commission (ASIC) refer to Proof Hansard, 1 June 2010 (see the index at Appendix 2 of this report).

33

Page 12

Treasury [Macroeconomic Group] (second hearingy26

• budget forecasts to 2012-13 (pp 4-6 and 44-45);

• potential effects of the proposed Resource Super Profits Tax (pp 6, 10-15, 17-18, 23-25 and 3 8);

• unemployment forecasts (pp 7-8);

• Australian labour market performance (pp 8--9);

• fallout from the global financial crisis and European sovereign debt crisis (pp 15 and 42-44 );

• G20 fossil fuel subsidies reform (pp 15-17);

--. Budget Paper No. 1 and the effect of government stimulus spending (pp 18-23 and 26-29);

• fiscal policy and government debt (pp 29-31 );

• carbon emissions modelling and the Carbon Pollution Reduction Scheme (pp 31-37 and 41-42);

• value of the Australian Dollar (pp 37-38); and

• Australia's structural budget balance (pp 38-41).

Treasury [Fiscal Groupf7

• population policy and capacity (pp 45-55 and 57-58);

• impact of a potential recruitment freeze (pp 56-57);

• potential effects of the proposed Resource Super Profits Tax (pp 58-61 and 79-82);

• funding for the Building the Education Revolution (pp 61-62 and 65-67);

• budget forecasts to 2013-2014 (pp 62-65);

• department's involvement in the Home Insulation Program (pp 67-68);

• mistake in portfolio budget statement for the Department of Climate Change and Energy Efficiency (pp 68-70);

• Budget Paper No. 1 and government assets (pp 70-71 );

• funding for the Nation Building Programme (pp 71-73);

• local government funding and deferred spending (pp 73-75);

• treatment of go vernment net debt (pp 7 5-78);

26 Transcript page numbers for the Treasury [Macroeconomic Group] (second hearing), refer to Proof Hansard, 2 June 2010 (see the index at Appendix 2 of thi s report).

27 Transcript page numbers for the Treasury [Fiscal Group], refer to Proof Hansard, 2 June 2010 (see the index at Appendix 2 of thi s report).

34

Page 13

• funding for the Independent Hospital Pricing Authority (p. 78); and

• hiring of a speech writer by Treasury (pp 82-83 ).

Australian Competition and Consumer Commission (ACCC/8

• opening statement by the Chainnan (pp 83-87);

• investigations into franchising matters (pp 87-88);

• predatory pricing (pp 88-92);

• investigations into anticompetitive price discrimination, and the substantial lessening of competition test (pp 92-96);

• investigation into Golden Circle (pp 97-98);

• complaints relating to gambling services (p. 98);

• unit pricing code of conduct (pp 98-99);

• petrol pricing (pp 99-1 00);

• mobile phone contracts (pp 100-101);

• geographic price discrimination (pp 101-1 02);

• phishing, mishing and vishing scams (pp 102-103 );

• procedures for investigating complaints (pp 1 03-104 );

• cartel prosecutions (pp 104-1 05);

• use of coercive powers and penalties (pp 105-1 06);

• investigation into the practice of making new release DVDs available to consumers at sub-wholesale prices (pp 106-1 07);

• telecommunications scams (p. 107);

• North West She1fjoint marketing arrangements (pp 107-1 08);

• restrictive covenants at shopping centres (pp 1 08-1 09);

• complaints from small business (pp 1 09-111 );

• possible inappropriate use of the King Island brand (pp 111-112 ); and

• competition in the diary industry (pp 112-114).

Australian Prudential Regulation Authority (APRAy2 9

• opening statement by the Chainnan (pp 4-6);

• executive remuneration (pp 6-7 and 16-18);

28 Transcript page numbers for the Australian Competition and Consumer Commission (ACCC) refer to Proof Hansard, 2 June 2010 (see the index at Appendix 2 of this report).

29 Transcript page numbers for the Australian Prudential Regulation Authority (APRA) refer to Proof Hansard, 3 June 2010 (see the index at Appendix 2 of this report).

35

Page 14

• Basel Committee proposals to improve banking regulation (pp 7-8);

• self-managed superannuation funds and fraud (pp 8-9);

• use of superannuation members' funds to advertise (pp 9-1 0);

• impact of the global financial crisis on the superannuation industry

(pp 10-12);

• unit pricing (pp 12-16);

• hedge funds and the superannuation industry (pp 18-22);

• regulation of the insurance industry (p. 22);

• APRA's involvement with the Review into the Governance, Efficiency, Structure arto - Operation of Australia's Superannuation System (Cooper Review) (pp 22-24);

• bank deposit guarantee (pp 24-25); and

• impact of a potential recruitment freeze (p. 25).

Treasury [Markets Group/0

• housing market, interest rates and housing affordability (pp 26, 31-32 and 40--41);

• impact of the global financial crisis on financing for small business

(pp 26-27 and 29-30);

• level of debt (pp 27-29);

• government guarantee on retail deposits (pp 30-31 );

• hedge funds and investor protection (pp 32-35);

• impact of a potential recruitment freeze (pp 3 5-3 6);

• OzCar (pp 36-37);

• deregulation of the collection centre scheme for pathology services

(pp 37-38);

• proposed Resource Super Profits Tax (pp 38--40);

• regional growth and infrastructure (pp 41--46);

• changes to interest withholding tax (p. 46);

• foreign investment in the Australian agriculture sector (pp 46--48);

• COAG seamless national economy initiatives (pp 48-53);

• infrastructure and the National Freight Strategy (pp 53-60 and 65-66);

• main sources of foreign investment in Australia (pp 60-62);

30 Transcript page numbers for the Treasury [Markets Group], refer to Proof Hansard, 3 June 2010 (see the index at Appendix 2 of this report).

36

Page 15

• National Broadband Network (pp 62-63);

• radiofrequency spectrum allocations (p. 64);

• free trade agreements (pp 64-65);

• Aussie infrastructure bonds (pp 66-68);

• competition law and the Trade Practices Act (pp 68-71 ); and

• impact of an increasing population on food/water supplies and food inflation (pp 71-77).

P d t . . c . . 3 1 ro uc zvzty ommzsswn

• opening statement by the Chainnan (pp 77-78);

• women's participation in the workforce (pp 78-79);

• potential inquiries (pp 79-80);

• inquiry into bilateral and regional trade agreements (pp 80-81 );

• inquiry into executive remuneration in Australia (pp 81 and 91-94);

• performance benchmarking of Australian business regulation report (pp 81-82);

• productivity growth (pp 82-83 and 94-96);

• future inquiry into the COAG reform agenda (p. 83);

• inquiry into online gamblin g (pp 83 and 90-91);

• report into market mechanisms for recovering water in the Murray-Darling Basin (pp 83-90);

• inquiry into wheat export marketing arrangements (p. 96); and

• water availability (pp 96-97).

Australian Office of Financial Management (AOFM) 32

• management of Australia's debt portfolio, including residential mortgage backed securities (pp 97-111 ).

Australian Bureau of Statistics (ABS;J 3

• staff levels and impact of reduction in funding (pp 111-112);

• immigration statistics (pp 112-113);

31 Transcript page numbers for the Productivity Commission refer to Proof Hansard, 3 June 2010 (see the index at Appendix 2 of thjs report) .

32 Transcript page numbers for the Australian Office of Financial Management (AOFM), refer to Proof Hansard, 3 June 2010 (see the index at Appendix 2 of this report).

33 Transcript page numbers for the Australian Bureau of Statistics (ABS) refer to Proof Hansard, 3 June 2010 (see the index at Appendix 2 of this report).

37

Page 16

• population projections (pp 113 and 114-115);

• calculation of gross operating surplus (pp 113-114 );

• definition of 'person' in business statistics (pp 115-116); and

• mining industry statistics (pp 116-120).

Senator Annette Hurley Chair

38

ABS

ACCC

ANSTO

AOFM

APRA

ARC

ARPANSA

ASI

ASIC

ASX

ATO

CGS

COAG

CSIRO

HIFAR

IP

LPG

NOPSA

OPAL

Appendix 1

Abbreviations

Australian Bureau of Statistics

Australian Competition and Consumer Commission

Australian Nuclear Science and Technology Organisation

Australian Office of Financial Management

Australian Prudential Regulation Authority

Australian Research Council

Australian Radiation Protection and Nuclear Safety Agency

Australian Solar Institute

Australian Securities and Investments Commission

Australian Securities Exchange

Australian Taxation Office

Commonwealth Government Securities

Council of Australian Governments

Commonwealth Scientific and Industrial Research Organisation

High Flux Australian Reactor

intellectual property

liquefied petroleum gas

National Offshore Petroleum Safety Authority

Open Pool Australian Lightwater reactor

39

Appendix 2

Index to proof Hansard transcripts

Thursday, 27 May 2010

Treasury portfolio

The Treasury [Macroeconomic Group] 4

Monday, 31 May 2010

Innovation, Industry, Science and Research portfolio

Australian Nuclear Science and Technology Organisation (ANSTO) 4

Commonwealth Scientific and Industrial Research Organisation (CSIRO) 16

Australian Research Council (ARC) 35

IP Australia 43

Department of Innovation, Industry, Science and Research [Innovation and Industry] 49

Office of the Chief Scientist 101

Department of Innovation, Industry, Science and Research [Science and Research] 1 05

Tuesday, 1 June 2010

Resources, Energy and Tourism portfolio

Department of Resources, Energy and Tourism [Resources and Energy] 3

Geoscience Australia 31

National Offshore Petroleum Safety Authority (NOPSA) 37

Australian Solar Institute (ASI) 39

Department of Resources, Energy and Tourism [Tourism] and Tourism Australia 42

40

Treasury portfolio (continued)

Treasury [Revenue Group] and Australian Taxation Office (ATO)

Australian Securities and Investments Commission (ASIC)

Wednesday, 2 June 2010

Treasury portfolio (continued)

Treasury [Macroeconomic Group] (continued)

Treasury [Fiscal Group]

Australian Competition and Consumer Commission (ACCC)

Thursday, 3 June 2010

Treasury portfolio (continued)

Australian Prudential Regulation Authority (APRA)

Treasury [Markets Group]

Productivity Commission

Australian Office of Financial Management (AOFM)

Australian Bureau of Statistics (ABS)

41

Page 19

64

115

4

45

83

4

26

77

97

111

Monday, 31 May 2010

Appendix3

Documents tabled

1. Received from Senator the Hon Kim Carr, Minister for Innovation, Industry,

Science and Research: 'In defence ofCSIRO', The Australian, 31 May 2010

2. Received from Mr Mark Paterson, Secretary, Department of Innovation, Industry, Science and Research: Book Industry Strategy Group terms of reference, dated 9 April 20 1 0

Tuesday, 1 June 2010

3. Received from Senator Julian McGauran: Tourism Australia media release­ Tourism Australia launches Luhrmann's transformation campaign, dated 8 October 2008

4. Received from Mr Phil Gallagher, Manager, Tax Analysis Division, The Treasury: Reserve Bank of Australia research discussion paper- The effect of the Australian superannuation guarantee on household saving behaviour, Ellis Connolly, dated August 2007

5. Received from Mr Michael D'Ascenzo, Commissioner of Taxation: Opening statement- A TO's change program

6. Received from Senator Barnaby Joyce: Pie charts relating to charges for non-renewable resources as a proportion of mining profits

Wednesday, 2 June 2010

7. Received from Dr David Gruen, Executive Director, Macroeconomic Group, The Treasury: Cross-country analysis of economic growth and fiscal stimulus

8. Received from Senator the Hon Ronald Boswell: Complementary policies for greenhouse gas emission abatement and their national and regional employment consequences- A report for the Australian Conservation Foundation and Australian Council of Trade Unions, dated May 2010

9. Received from Mr Graeme Samuel, Chairman, Australian Competition and Consumer Commission: Senate estimates speaking notes

42

Page 21

Thursday, 3 June 2010

10. Received from Senator Doug Cameron: European School of Management and Technology press release - 'Serious concerns' over hedge fund risks, concludes new research, dated 1 June 2010

11 . Received from Mr Michael Bath, Director, Financial Risk, Australian Office of

Financial Management: Chart- Nominal Commonwealth Government Securities (CGS) yields

43

Appendix 4

Portfolio structure and outcomes for the Innovation, Industry, Science and Research Portfolio 1

Portfolio Minister

Minister for Innovation, Industry, Science and Research Senator the Hon Kim Carr

Minister for Small Business, Independent Contractors and the Service Economy 1

The Han Dr Crai g Emerson MP

Parliamentary Secretary for Innovation and Industry The Han Richard Maries MP

Department of Innovation, In dustry, Science an d ReSearch Portfolio Secretary: Mr Mark I Paterson AO

Outcome 1: Enhanced opportunities for business innovation and growth through national leadership in converting knowledge and ideas into new processes, services, products and marketable devices; fostering business cooperation; delivering advice;

assistance; and business, measurement and online services.

Outcome 2: The generation, utilisation and awareness of science and research knowledge through investment in research, research training and infrastructure, science communication, skill development and collaboration with industry, universities and research in stitutes

domestically and internationally.

I -- -------- -------- -- -- - ' '

--.

' --"

'

'

Agency - IP Australia ' Agency- Australian Nuclear Science and

(ANSTO ) Adl Paters on

Director General: Mr Philip Noonan '

'

' Outcome: Increased innovation, investment and trade ' ' In Australia, and by Australians overseas, through the ' administration of the registrable Intellectual property L ' rights system, promoting public awareness and ' industry engagement, and advising government. ' ' ' ' Agency - A ustralian Instit ute of Aboriginal and ' ' Torres Strait Islander Stud ies (AIATSIS ) ' ' Princi pal (C EO ): Mr Russell Taylor ' ' Outcome: Further understanding of Australian ' ' Indigenous cultures , past and present through ' T- undertaking and publishing research , and provid ing ' access to print and audiovisual collections. ' ' ' ' ' Agency - Comm onwealth Scientific and Indust rial ' ' Research Organisation (CS IRO) ' Chief Executive Officer: Dr Megan Clark ' ' ' Outcome: Innovative scientific and technology ' solutions to national challenges and opportunities to ' ' benefit industry, the environment and the community, ·- through scientific research and capability development, services and advice. Technology Organisation

Chief Executive Officer : Dr

Outcome: Improved knowledge, in novative capacity based facilities, ces and advice to on sector and the on.

and heatthcare through nuclear-research , training, products, servi Govemment, industry, the educati Australian populati

Agency- Australian Research Chief Executive Officer: Profess

OLrtcome: Growth of knowledge through providing policy advice, m

Coun cil (A RC ) or Margaret Sheil

and innovation easuring research arch funding excellence and managing rese schemes.

Agency- Australian Instit ut e of Marine Science (AIMS) Chief Executive Officer : Dr Jan Poi ner

Outcome: Growth of knowledge to support protection ustralia's marine rine science and

and sustainable development of A resources through innovative ma technology.

Portfolio Budget Statements 2010-11, Innovation, Industry, Science and Research portfolio, p. 6.

44

Appendix 5

Portfolio structure and outcomes for the Resources, Energy and Tourism Portfolio 1

Portfolio Minist.er Mnister for Resources and Energy Mnister for Tourism The Hon r..'artin Ferguson'AM

Department of Resources , Energy and Tourism A:xtfolio secretary M· Drew aarke

Outcome 1: The irrproved strength, corrpetitiveness and sustainability of the resources, energy and tourism industries to enhance Australia's prosperity through irrplementation of government policy and progra!TlS.

Geoscience Australia Acting Ohief Executive Officer o- Ohris Rgram

_ Outcome 1: Informed govermnent, industry and comrunity decisions on the econornc, social and environmental management of the nation's natural resources through enabling access to geoscientific and spatial

infornntion.

National Offshore Petroleum Safety Authority Chief Executive Olfice

r/s Jane OJtler

Outcome 1: An A ustralian oil and gas industry that properly controls the health and safety risks to the workforce atits offshore petroleum operations.

Tourism Australia M3naging Drector 1\1" Andrew McEvoy

Outcome 1: Increase dennnd for Australia as a destination, strengthen the travel distribution system and contribute to the develop1nent of a sustainable

tourism industry through consumer marketing. trade development and research activities.

Australian Institute

Executive Director Mr f<"Brk Tw idell

Outcome 1: Encourage innovation and cost effective developments in solar energy technolog ies to accelerate commercial deployment through know ledge buiiding and collaborative research, development and support for

Austra!ian industries and research institutions _

-

1 -

Portfolio Budget Statements 2010- 11, Resources, Energy and Tourism portfolio, p. 6.

45

Appendix 6

Portfolio structure and outcomes for the Treasury Portfolio 1

Portfo lio Minister - Th2 Hon 'W a:;m-e Swan MP As.sis.bnt Treasun:r Senator 1h e J-l

Minister fo r Fin,ancia f Services" Superannuation .and Corporate Law 7m; Hga Cttris Bcw: n MP Minister for Competitio n Poli cy and Consumer Affairs T.n e: Hen Dr C. !"aig EmerS:on MP

Min ister for Pop ul otion Th<> Hon Tony Burke MP

I

Depalliment of the Tre asury Secretary: Or K e-n Her.:ry AC

I 'licrm

p-?op l: . including by $1rong, susta1nab!e economic growth, gh th e provision of to gcve;nment and ;he efficiem administraticn of ieder,;,l financial rE" Iaticn s

Australian Buruu of Statistic s Statis-tid an: M r 3ri.an Pi nk

decisior.s. re:.-:.uch .and discussion and t hll? co m nity b i' leading tile

anaJusis and p_!ovisk.on of hi::rh obj_ e-ct ive and rei>: !! an: information

Australian Competiti-on and Consumer Commissio n Chairman: ... t r Graerne Samu=l' AO

consum::r . . :md regul-ated n.a tion.al m.ark -:ts -and s..-:rvic.e-s

regt.rla'tion, including e-d ucation. pr:-Jce monitoring and determin ing

t"'le terms of to infras-tructure se-:rvic e-s

I

Office of Financial Management

Chi;;f E>. ecut·ve Officer: Mr N eil Hyden

The- of macroeconomic g:ro·M h and s1.ab11i!'j'. and the effe01iv e cpoer.ation of iJla."'l ciai markets. ! rough '•suing debt. inve.sting in fjnancial assets and a;naging debl investmen!s and c.a-sh forth-: Aus:raiT..an Gm·Emment

I

Australian Prud ential Regulation Authority Chairman: Or J ohn

Enhanced public cc,mJden•:.e in finan::i.:J! ins1itutions through a framewor!t of pruden:isl regul..;.fi cn fnanci a.J sa fet ·· and -=tr.ciencv. compe!iton, conte-stabilit" and comoet1h·e neutrahty

I

Austra lian Se-curities and Commi ssion

Mr Tony D'Aloisi o

Oul<:ome 1: !mpro\'ed confid : nce in financial market inlegrity and pnctec1ion

Outcome 2; Strea_rn lin ed and in:eraction and access :o information ior business and ibe nubEcw th ro ug h re.qistry, iice-.nsinq a nd bu-siness fa'Cili ;etioo serv io:-s I

AustTali an Taxation Offic• C"'mmissioner: Mr D'AseEnzo AO

Cc-..-d dence i n sdministratiOfl of asp:-c.'iS of ,4 stra.lie,J-s t:axafic and supemnnu.:;fio t hrc · gh

helping p:opt.e :hell' righ.ts ar.d obfigations. ease o; complia.n'=-e Jnd access

t o ben eiits, and man.aQing non-.oomp!iance wi !h the- law

I

Commonwealth Grants Commission M r Jot-t."'' Sp.;scjEvic

lnform<>d Gcv emmeJOf decisions on tsc equalisation belw;;en the State.s and Territories ihrcugh ,;,d·.rice and on ihe cii s:rroution of GST rE"v em: e and he.alth care Qr.ants

Portfolio Budget Statements 2010- 11 , Treasury portfolio, pp 6- 7.

46

Corpo rations and Markets A dvisory Committee M s J o-an..ne-

lnforrr..ed decision s by iss e.-s rela1i ng to co "poraticms reg1Jiation and finan cial

products. se nlices and m a-rkets throuoh and advice

I

lnspector-Gen::r aJ o f lnspeclor-G-ener al: Ncroozi

Improv ed tax_ communiw cons 'UI'ta tion , review .and advice to Gove.rnme r-d

I

National Competition Council Mr C< av%:1 Crav.fcrd

C.omp etifoo i moJkei s thai are dependent on aoce.s to na;ionally s;gn iO!cant m onopoly infrastructure, through Jl)d decisions ·oromoi in g Use of. u se o f an d i.no." astm.ent in

I

Office o f the A udWng and Standards Board

Cha_;rman: Ms Me-rran Kelsall

Th e formu!a:icn and makin g of aud::t;ng and .:assu ranc-e standards thai are 'U SE-d by au dito rs. o f Aus:raliar.

;;ntitv fi.n or for other auditin_g ''"d assurance enoaqemenls

I

Office of the Australian Accounting Standards B c.ard c: ... airman: K evin .... 1SC< O

The fcrmu!afun and ma1ting cf aooo:u nting standards :ha: are use-d by A ustra.lian :o or.:p ar-: fir.-.3 1'"'1Cia! r-a-p:or::s and of t he.s.e repe:-t s t·o make inf.ol'l"-:.€d

I

Pro ductivity Commiss ion Chairman: Mr Gar.1 B,anks A:')

'/\fei informed d.eciS:on ak1ng .and pub:lfe und.:rsi,;,nding on rnaters r.;.l.=.ting to ia.'s p rod ucti >.i i'l)' and standa .. ds. on indeoend €::'1: and tran s.Cv 3ro:nt an-alv si s f rc m J oom mu:n ftv-·""de- persp e-ctive

l

Roya1 Austr alian Min t

AcE"lg Ch 1e• Cfficer: r,_.lr Graham Sm ith

Th E< coin a9 e:- ne-eds of :he Australta n econom y. col ec{ors a n•::i for e ign .ar;? me-t t nrough the manufac1ure- an d s.:;le- of circuf.a:in g •:oin s. ooPector •: oir s an d oth :-r r-ti nte-d fikE oroo uc:s

47

Page 25

48

The Senate

Education, Employment and Workplace Relations Legislation Committee

Budget estimates 2010-11

June 2010

49

© Commonwealth of Australia 20 I 0

ISBN 978-1-74229-319-6

This document was prepared by the secretariat of the Senate Education, Employment and Workplace Relations Committee. The report was printed by the Senate Printing Unit, Parliament House, Canberra.

50

Membership of the Committee

Members

Senator Gavin Marshall, Chair Senator Michaelia Cash, Deputy Chair Senator Chris Back Senator Catryna Bilyk Senator Jacinta Collins Senator Sarah Hanson-Young

ALP, Victoria LP, Western Australia LP, Western Australia

ALP, Tasmania ALP, Victoria AG, South Australia

Senators participating in the scrutiny of the Budget Estimates

Senator the Hon. Eric Abetz Senator the Hon. Ronald Boswell Senator the Hon. George Brandis Senator Doug Cameron Senator Mathias Cormann Senator Trish Crossin Senator Mitch Fifield Senator Mary Jo Fisher Senator Mark Furner Senator the Hon. Bill Heffernan Senator Gary Humphries Senator the Hon. Brett Mason Senator Stephen Parry Senator Marise Payne Senator the Hon. Michael Ronaldson Senator Nigel Scullion

Senator Rachel Siewert Senator Glenn Sterle Senator John Williams Senator Nick Xenophon

51

LP, Tasmania NAT, Queensland LP, Queensland ALP, New South Wales LP, Western Australia ALP, Northern Territory LP, Victoria LP, South Australia ALP, Queensland LP, New South Wales LP,ACT LP, Queensland LP, Tasmania LP, New South Wales LP, Victoria LP, Northern Territory AG, Western Australia ALP, Western Australia NAT, New South Wales IND, South Australia

iii

Secretariat

Dr Shona Batge, Secretary Mr Glen Howard, Principal Research Officer Ms Sharon Babyack, Research Officer Ms Anna Peterson, Research Officer Ms Ingrid Parker, Executive Assistant

PO Box 6100 Parliament House Canberra ACT 2600 Ph: 02 6277 3521 Fax: 02 6277 5706 E-mail: eewr.sen@aph.gov.au Internet: http://www .aph. gov .au/ senate/ committee/ eet ctte/index.htm

52

Table of Contents

Membership of the Committee ........................................................................ iii

Chapter 1 ................................................................................•............................ 1

Overview .................................................................................................................... !

Chapter 2 ....................................•.........•.............................................................. 5

Education, Employment and Workplace Relations portfolio .............................. 5

Appendix 1 .............................................•........................................................... 15

Departments and agencies for which the committee has oversight ................... 15

Appendix 2 ......................................................................................................... 17

Index to Hansard transcripts ................................................................................ 17

Appendix 3 ......................................................................................................... 19

Senate Standing Order 8- 13 May 2009 ................................................................ 19

53

54

Chapter 1

Overview

Reference

1.1 On II May 20 I 0 the Senate referred the following documents to the Senate Education, Employment and Workplace Relations Legislation Committee for examination and report in relation to the Education, Employment and Workplace Relations portfolio:

• Particulars of proposed expenditure in respect of the year ending on 30June 2011;

• Particulars of certain proposed expenditure in respect of the year ending on 30 June 2011; and

• Particulars of proposed expenditure in relation to the parliamentary departments in respect of the year ending on 30 June 2011. 1

1.2 Standing committees are required to report to the Senate on 22 June 2010. This report of the Education, Employment and Workplace Relations Legislation Committee is provided to the Senate in fulfilment of that requirement.

Portfolio coverage

1.3 The committee has responsibility for examining the expenditure and outcomes of the Education, Employment and Workplace Relations portfolio. Appendix I lists the department and agencies under this portfolio.

1.4 Three agencies that were previously in the portfolio ceased to operate in 2009-10 and accordingly will no longer be examined by the committee. As noted in the Portfolio Budget Statements 2010-11, the Australian Industrial Relations Commission and the Australian Industrial Registrar ceased to operate on 31 December 2009, with all assets and liabilities transferring to Fair Work Australia. Similarly, the Workplace Authority ceased to operate on 31 January 2010, with all assets and liabilities transferring to the Fair Work Ombudsman.

2

Public hearings

1.5 The committee conducted four days of hearings and, in total, met for 41 hours and 29 minutes, excluding breaks.

Journals of the Senate No. 120, 12 May 2010, p. 3444.

2 Portfolio Budget Statements 2010-11-Budget Related Paper no. 1.6 - Education, Employment and Workplace Relations Portfolio, p. 3.

55

Page 2

1.6 The committee heard evidence on 31 May and 1 June 2010 from Senator the Hon. Mark Arbib, as the minister representing the Minister for Employment and Workplace Relations, along with officers from areas of the Department of Education, Employment and Workplace Relations (DEEWR) and from the agencies responsible for administering employment and workplace relations policy:

• Comcare

• Safe Work Australia

• the Fair Work Ombudsman

• Fair Work Australia

• the Australian Building and Construction Commission.

1. 7 On 2 and 3 June the committee heard evidence from Senator the

Hon. Kim Carr, as the minister representing the Minister for Education, and from officers from areas of the department and agencies responsible for administering education policy.

1.8 Appendix 2 of this report provides a brief guide to the contents of the Hansard transcripts. These transcripts are available on the committee's homepage and on the Hansard website: http://www .a ph. gov .au/hansardlsenate/commttee/comsen.asp

Procedural matters arising during the hearings

Public interest immunity claims

1.9 On 13 May 2009, the Senate passed an order relating to public interest immunity claims. 3 The order sets out the processes to be followed if a witness declines to answer a question. The full text of this order has been provided to departments and agencies and was incorporated into the Chair's opening statement on each day of the Budget Estimates hearings. It is also reproduced in Appendix 3 of this report.

1.10 A witness from Fair Work Australia declined to answer a number of questions on the grounds that to do so may prejudice investigations and possible future legal proceedings. This was consistent with the stance taken during the February 2010 Additional Estimates hearings and in responding to questions taken on notice in February.

1.11 When asked how the provision of information that has been on the public record through the media for over a year could be harmful to the public interest, the witness responded:

3 Journals of the Senate, No. 68, 13 May 2009, p. 1941. The motion was moved by Senator Corm ann.

56

I believe it would be harmful on the basis that in the event that my now investigation was to find that there were contraventions of the Fair Work (Registered Organisations) Act, it may well be that some of those prosecutions of the contraventions would be j eopardised. 4

Page 3

1.12 Although the questioning senator expressed some dissatisfaction at the number of questions that went unanswered, the minister made the following point:

There is an investigation underway by Fair Work Australia and I will not be saying anything, nor will the government, which may prejudice it. 5

1.13 The Chair indicated a belief that this was an acceptable public interest immunity ground for refusing to answer the questions, and the questioning senator chose not to press the matter further.

Attendance at estimates by the President of Fair Work Australia

1.14 On 28 October 2009 the Senate passed a resolution of continuing effect requiring the President of Fair Work Australia (FW A) to appear and answer questions at all future estimates hearings held by the Senate Education, Employment and Workplace Relations Legislation Committee. 6

1.15 This resolution was passed despite acceptance by the committee of the view of the current President, Justice Giudice, that the General Manager of FW A is the appropriate representative to attend and answer questions. 7

1.16 In its February 2010 Additional Estimates report, the committee maintained that the General Manager would be an appropriate representative but also acknowledged that the Senate order of 28 October 2009 overrides this view. 8

1.17 Justice Giudice opened his appearance at the Budget Estimates hearings on 1 June 2010 with a request that the Senate reconsider its order. He indicated that he does not agree with the basis on which he is being required to appear and suggested that compelling him to appear compromises the independence of FW A.

9

4 Mr Terry Nassios, Committee Hansard, 1 June 2010, p. EEWR 89.

5 Senator Mark Arbib, Committee Hansard, 1 June 2010, p. EEWR 94.

6 Journals of the Senate, No. 95, 28 October 2009, pp 2661-2662. The motion was moved by Senator Fisher.

7 Senator Gavin Marshall, Senate Hansard, 28 October 2009, p. 7462.

8 Senate Education, Employment and Workplace Relations Legislation Committee, Additional Estimates 2009-10, p. 11 - see paragraphs 2.17 and 2.18.

9 For the full text of Justice Giudice's statement, please see: http://www.aph.gov.au/Senate/committee/eet ctte/estimates/bud lOll/tabled docs/tableddoc 4.pdf(viewed on 7 June 2010).

57

Page4

1.18 The committee has now considered Justice Giudice's statement and the concerns raised within it. The committee does not resile from the view that it is within the authority of the Senate to call the President of FW A to appear at estimates hearings. However, the committee does not believe that the President should automatically be required to attend all such hearings on an ongoing basis. No other officer of the Commonwealth is subject to such a requirement. It would now be appropriate for the Senate to relax the order of 28 October 2009, while maintaining its expectation that the President will appear at future estimates hearings if requested by the committee. Accordingly, the committee will be asking the Senate to reconsider its order of 28 October 2009.

1.19 Coalition Senators note advice provided by the Clerk of the Senate to Senator Fisher (tabled in the Senate on Thursday 17 June), dealing with President Giudice's statement, and oppose any moves to have the Senate reconsider the Senate resolution.

Attendance at estimates by the Chair of the Building the Education Revolution Implementation Task Force

1.20 The committee notes that Mr Brad Orgill, Chair of the Building the Education Revolution (BER) Implementation Taskforce, was not called to appear at the Budget Estimates hearings as he may not fall into the category of an 'officer' under Senate Standing Order 26. However, the committee further notes that Mr Orgill was willing to appear and that the Senate Education, Employment and Workplace Relations References Committee has already taken evidence from, and is likely to take further evidence from, Mr Orgill in the course of its current inquiry into the Primary Schools for the 21 st Century element of the BER program. 10

Questions on notice

1.21 The committee has drawn the attention of the department and its agencies to the agreed deadline of Friday, 30 July 2010 for the receipt of answers to questions taken on notice from this round, in accordance with Standing Order 26.

1.22 Answers will be progressively published on the committee's estimates web h · d II page as t ey are receive .

Note on Hansard page referencing

1.23 Hansard references throughout this report are to proof Hansard page numbers. Please note page numbering may differ between the proof and final Hansard.

10 Further infmmation about this inquiry is available through the following web page: http://www.aph.gov.au/Senate/committee/eet ctte/primary schools/index.htm (viewed on 7 June2010).

11 Please see http://www.aph.gov.au/Senate/committee/eet ctte/estimates/index.h tm

58

Chapter 2

Education, Employment and Workplace Relations portfolio

Introduction

2.1 This chapter summarises areas of interest raised during the committee's consideration of the Budget Estimates for the 2010-11 financial year. It follows the order of proceedings at the estimates hearings and is an indicative, but not exhaustive, list of issues examined.

Outcome 4 (Employment)

Job Services Australia

2.2 As at the last two rounds of estimates hearings, the committee took an interest in the reforms created by the establishment of Job Services Australia (JSA) on 1 July 2009.

2.3 The committee made a thorough examination of JSA's employment providers. There are 111 contracts for JSA, provided by 136 organisations. 1 An additional 120 organisations are subcontracted through commercial arrangements with primary providers. Opposition senators pursued the measures taken to ensure accountability of all subcontractors. The department explained that primary providers are required to

seek approval from the department prior to entering into any subcontracting arrangement. 2

2.4 Opposition senators also questioned the efficiency of subcontracting rather than having direct contracts with providers. Ms Paul, Secretary, DEEWR, explained that it was advantageous for organisations during the tender process to demonstrate local expertise yet still have the reach of a national operation and the ability to target specific client groups. Many of the organisations in the tender process achieved this through the use of subcontractors. 3

2.5 Opposition senators also asked about the financial viability of employment providers. The department outlined that 10 to 12 of the primary providers have informally identified issues with their commercial operations, some as a result of JSA ' s new funding model. The department explained that some providers had not

Some contracts are shared by more than one primary provider.

2 Committee Hansard, 31 May 2010, pp EEWR 6 - 8.

3 Committee Hansard, 31 May 2010, p. EEWR 8.

59

Page 6

adapted readily to the changes and, in particular, had found difficulties with the financial flexibilities provided through the Employment Pathway Fund (EPF). 4

2.6 In these cases, the department has assisted providers to assess fixed costs and make internal restructures. The department outlined that, whilst five providers have transferred business or relinquished contracts, there has been no loss to job seekers. The committee notes that the relinquishment of contracts and the transfer of business has been a consistent occurrence historically. 5

Indigenous Employment

2.7 The Indigenous Employment Program has been allocated $139,460,000 for 201 The department outlined that in the period 1 July 2009 to 31 March 201 0 there have been 12,777 commencements in employment and training under the program; 7,593 of these were employment placements. In addition there have been 25,600 Indigenous job placements through JSA. 7

2.8 The committee examined the allocation of $6 million over the next 3 years to improve Indigenous employment, recruiting and retention practices. This measure supports the National Partnership Agreement on Indigenous Economic Participation across governments to increase Indigenous employment in the public sector by 2.6 per cent by 2015. The department explained that the funding is for resources to support agencies, and agencies are expected to continue to invest in their own strategies. 8

Outcome 5 (Workplaces)

2.9 Following on from questions asked at Additional Estimates in February 2010, senators questioned officers about the application of the Fair Work Act 2009 and, in particular, large-scale changes brought about through the award modernisation process.

2.10 Opposition senators targeted questions towards the impact of the modem awards on new businesses, asking whether transitional provisions would apply consistently to both new and established businesses. The department explained that provisions were consistent for both types of businesses.

9

4 Committee Hansard, 31 May 2010, pp EEWR 9- 14.

5 Co mmittee Hansard, 31 May 2010, pp EEWR 12- 14, 33 and 36.

6 Portfolio Budget Statements 2010-11 , p. EEWR 115 .

7 Co mmittee Hansard, 31 May 2010, pp EEWR 42 - 43.

8 Committee Hansard, 31 May 2010, pp EEWR pp 46 - 47.

9 Committee Hansard, 31 May 2010, pp EEWR 78-79, 82, 84, 86 - 88 and 105

60

Page 7

2.11 Opposition senators also sought clarification on the application of take-home pay orders 10 and questioned officials about the level of education and awareness among employees about the use of these orders. Opposition members flagged the possibility of an employer dropping an employee's pay based on a modem award rate and the employee being unaware of their entitlement to apply to Fair Work Australia

for a take-home pay order. The department explained that employer organisations have been advised to maintain existing rates of pay. Moreover, should an employer choose to decrease an employee's pay, that worker is entitled to a take-home pay order. Extensive education campaigns have been undertaken to ensure take-home pay orders are accessible to workers, including the ability for a union to apply on behalf of a class of employees. 11

2.12 The committee also asked questions about the Fair Work Education and Information Program. The department outlined that 19 organisations received $10.7 million to administer the program. Organisations delivered 3500 activities, of which 2400 were workshops or seminars. The program finished in April 2010 and upon receipt of all reports from providers the evaluation process will begin. The

department explained that future education campaigns are a matter for the Fair Work Ombudsman. 12

General Employee Entitlements and Redundancy Scheme (GEERS)

2.13 The committee pursued questions relating to the $178.4 million allocated to the General Employee Entitlements and Redundancy Scheme (GEERS), an $88 million increase from last year's allocation. Departmental officers explained that GEERS is a demand-driven scheme and the funding appropriated in each budget

fluctuates depending on the number of insolvencies, the award or conditions of employment, outstanding entitlements and years of service for employees in that particular year. The committee also queried the measurement of GEERS' performance against the outcomes listed in the Portfolio Budget Statement and heard that this was

done through client surveys. 13

2.14 The department reported that in the period 1 July 2009 to 30 April 2010 GEERS received 15,622 claims and the average amount of assistance per claim was $9926.57. Opposition senators highlighted the lengthy waiting period that some workers experience due to the requirement for a business to be in liquidation before GEERS can process a claim. They also queried whether a mechanism could be

10 A take-home pay order ensures that workers are not disadvantaged under the Fair Work changes. An employer must comply with the order, which will have effect so long as the employee remains in the same job and that job is covered by the modem award. See Fair Work Australia website, http://www. fwa.gov .au/index .cfm?pagename=resourcefactstakehome (accessed 9 June 2010).

11 Committee Hansard, 31 May 2010, pp EEWR 84, 86-88, 105-118.

12 Committee Hansard, 31 May 2010, pp EEWR 134-135.

13 Committee Hansard, 31 May 2010, pp EEWR 90-91 and 94.

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Page8

introduced to the scheme to allow the worker to be paid from government resources, with the money to be reimbursed by the liquidated company at a later date. The Minister undertook to pass on this suggestion. 14

Cross Portfolio

2.15 Opposition senators sought clarification about funding allocated to the National Green Jobs Corp. DEEWR's website shows a $79.6 million investment over two years, and the Portfolio Budget Statements show there is $77.2 million allocated over three years. 15 The department explained that $79.6 million is the total cost of the budget measure, which includes the cost of departmental expenses to administer the measure. The $77.2 million over three years is the actual cost of the program. 16

2.16 Opposition senators asked about the Trade Training Centres in Schools program. They placed on notice a number of questions pertaining to exit clauses in the contracts and indicated a desire to replace the Trade Training Centres with alternative arrangements. 17

Comcare

2.17 Opposition senators asked whether regulatory complexity would increase for non-government licensees in moving to the national occupational health and safety system. Officers explained that the issue has been discussed in workshops with the licensees. Additionally, Comcare, with the department, has consulted with senior officials in states and territories to determine possible consequences of the transfer. 18

2.18 Opposition senators referred to an article in the Public Service News, 'Comcare calculations add up to problemso1 9 , and asked how Comcare has overcome the issues identified by the Acting Commonwealth Ombudsman. Officers responded that they welcomed the scrutiny and a number of responses have been implemented, including changes to Com care's information technology and training systems.

20

Safe Work Australia

2.19 Officers from Safe Work Australia stated that they are well advanced in their development of the model work health and safety regulations and priority codes of

14 Committee Hansard, 31 May 2010, pp EEWR 91 and 96.

15 Portfolio Budget Statements, p. 112.

16 Committee Hansard, 1 June 2010, pp EEWR 9 and 13 .

17 Committee Hansard, 1 June 2010, pp EEWR 24-26.

18 Committee Hansard, 1 June 2010, p. EEWR 32.

19 Available online at http://www .psnews.corn.au/Page_psn2104.html (accessed o n15 June 2010).

20 Committee Hansard, 1 June 2010, p. EEWR 38.

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practice. The time line for completion is October-November 2010, which will be followed by a four-month public consultation period and an agreement from the Workplace Relations Ministers' Council during early 2011. 21

2.20 Opposition senators expressed concerns that the jurisdictional notes contained in the Model Work Health and Safety Bill could produce fundamental jurisdictional differences. 22 Officers confirmed that jurisdictional notes allow individual jurisdictions to amend and sometimes delete entire provisions of the model bill, but

explained that in most cases this would only occur when there was duplication with an existing law. 23 Officers noted that Safe Work Australia is developing a model explanatory memorandum to aid in consistent interpretation. 24

Fair Work Ombudsman

2.21 Senators inquired about the progress of the Shared Industry Assistance Project (SlAP). Grants from this program will be used to develop modem award guidance material in partnership with the Fair Work Ombudsman. Applications close on 15 June and decisions will be made by 30 June 2010.

25

2.22 Opposition senators questioned the ambiguity surrounding the model transitional provisions to the modem awards. Officers explained that submissions received through the public consultation process indicated a number of contrary views on certain aspects of the transitional provisions. The Ombudsman stated that these matters would be resolved through Fair Work Australia. 26

Fair Work Australia

2.23 The committee asked about the progress of the telephone conciliation trial. Officers replied that the trial has been very satisfactory and has had good settlement rates. 27 Since 1 July 2009, more than 90 per cent of conciliations have taken place over the telephone. In addition, of the 6871 matters that have been conciliated, 81 per cent of those have been settled at the conciliation stage. Officers noted that they have received a lot of positive feedback about the process.

28

2.24 The committee inquired about the outages in, and efficiencies of, the Case Management System (CMS). Officers explained that the system provides a uniform

21 Committee Hansard, 1 June 2010, pp EEWR 40-41.

22 Committee Hansard, 1 June 2010, pp EEWR 45-46.

23 Committee Hansard, 1 June 2010, pp EEWR 45-46.

24 Committee Hansard, 1 June 2010, p. EEWR 47.

25 Committee Hansard, 1 June 2010, p. EEWR 57.

26 Committee Hansard, 1 June 2010, p. EEWR 59.

27 Committee Hansard, 1 June 2010, pp EEWR 95-96

28 Committee Hansard, 1 June 2010, p. EEWR 96.

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database by which material can be entered and tracked as it moves through the organisation. Officers said that, from general observation, periods of outage have not been excessive, and offered to provide more detail on notice. 29

Australian Building and Construction Commission

2.25 The committee noted the pending conclusion of the Hon John Lloyd's term as Commissioner of the Australian Building and Construction Commission (ABCC) on 28 September 2010. 30 Senators sought details on the process of both his resignation and the advertisement of the position of commissioner. The department had earlier tabled a letter from the Hon Julia Gillard MP, Minister for Employment and Workplace Relations, outlining that the position was due for advertisement, that Mr Lloyd was welcome to apply and that the appointment would be based on merit. 31

2.26 Senators asked for an update on active investigations. Officers stated that as at 1 May 2010 the ABCC had 59 active investigations and took further detail on notice. 32

2.27 Senators also asked about arrangements between the ABCC and the Fair Work Ombudsman in relation to sham contracting. 33 Officers explained sham contracting incidents can be allocated to either organisation. This is on a case-by-case basis, according to the broader context surrounding the incident and which organisation has the relevant expertise. 34

Outcome 1 (Child care)

2.28 Opposition Senators called for an explanation of the government's decision to not build 222 child care centres. Officers responded that the centres were never a firm commitment, but were subject to monitoring the child care market in the wake of the collapse of ABC Learning. Opposition Senators acknowledged that they were aware that this was the Government's position. 35 Data from the first quarter of 2010 showed that 91 per cent of long day care centres across all regions reported having vacancies each day. On the basis of these vacancies, numbering some 65,000 long day care

29 Committee Hansard, 1 June 2010, pp EEWR 102-103.

30 Committee Hansard, 1 June 2010, p. EEWR 112.

31 Letter from the Hon Julia Gillard l\1P, Deputy Prime Minister, to the Hon John Lloyd PSM, Australian Building and Construction Commissioner- tabled by Mr Kovacic on 31 May 20 I 0.

32 Committee Hansard, 1 June2010,p.EEWR 115.

33 'Sham contracting is where an employer tries to disguise an employment relationship as an independent contracting relationship. This may be done to avoid having to give the employee their proper entitlements.' See Fair Work Online, http ://www.fairwork.gov.au/Sham­ contracts/Pages/default.aspx (accessed 11 June 2010).

34 Committee Hansard, 1 June 2010, p. EEWR 124.

35 Senator Marise Payne, Committee Hansard, 2 June 2010, p. EEWR 7.

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places each day, the government decided that further supply of child care centres was not warranted. 36

2.29 Committee members queried the impact of the government's proposed capping at $7500 and temporary four year indexation pause of the child care rebate. Officers explained the measure was expected to impact on only three per cent of families in its first year, and that the $86.3 million savings generated by the measure would partially offset the cost of implementing a National Quality Framework for the child care sector. 37

Outcome 3 (Higher education and VET)

Tertiary Education Quality and Standards Agency

2.30 Senators were interested in progress with establishing the Tertiary Education Quality and Standards Agency (TEQSA). The minister representing the Minister for Education indicated that the relevant legislation could be introduced in the spring session of parliament. Senators were told that consultations were occurring with an expert reference group, which included some vice-chancellors, and that while there is some apprehension about the yet-to-be-revealed details of the proposed standards, there is broad support for the general concept of introducing common standards. 38

Education Investment Fund

2.31 There was also considerable interest shown in the Education Investment Fund (ElF). The committee heard that the ElF is targeted toward substantial infrastructure projects that have a 'transformative potential for higher education, VET and research systems' 39 . It was established that two payments of $3 billion each had been made to the fund, and that its current balance was $5.868 billion. Of that sum $3.95 billion was committed to projects, with $0.941 billion actually paid out as at 31 March 2010. 40

Productivity Places Program

2.32 Opposition Senators asked questions about changes that have been made to the Productivity Places Program since its commencement on 1 April 2008. Officers explained that, in response to the global recession, funding was brought forward from future program years to be deployed in areas of high need. States received additional resources and improved flexibility to enable them to respond quickly to local training needs. It was explained that funding was brought forward from the 2013-14 financial

36 Committee Hansard, 2 June 2010, pp EEWR 6-7.

37 Committee Hansard, 2 June 2010, pp EEWR 27-29.

38 Committee Hansard, 2 June 2010, pp EEWR 57- 59.

39 Committee Hansard, 2 June 2010, p. EEWR 78.

40 Committee Hansard, 2 June 2010, pp EEWR 49-50.

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year for this purpose, and that the government would decide in future years whether to replace that funding in 2013-14. 41

Outcome 2 (Schools)

Schools funding review expert panel

2.33 The committee opened its examination of outcome 2 by asking about the expert panel which has been engaged to oversee the review of school funding from late 2010. Officers informed the committee that the panel was selected by the Deputy Prime Minister and that DEEWR offered advice on membership. The committee was told the panel will be fair and open-minded in its deliberations, and that the expectation is that the review process will be 'very open and robust'. 42 The- panel will report its findings in 2011, which will allow enough time to implement changes and for schools to make adjustments before the new funding period starting in 2013. 43

Indigenous Boarding Facilities

2.34 Committee members wanted to know what progress had been made on the construction of three Indigenous Boarding Facilities in the Northern Territory. The committee was informed that, a site has been confirmed in W adeye and negotiations are continuing on sites for facilities in the W arlpiri Triangle and East Arnhem Land. 44

2.35 Some Senators remarked that progress seemed to be slow for the Indigenous Boarding facilities, which were announced in the 2008-09 Budget. In response, officers described the extensive consultation process that has been undertaken, to ensure that chosen sites are appropriate and that community and family needs are met.45

Smarter Schools - Low Socio-Economic Status (SES) School Communities National Partnership

2.36 The committee was interested to hear about progress rolling out the Smarter Schools - Low Socio-Economic Status (SES) School Communities National Partnership. The Commonwealth is contributing $1.5 million over seven years, with states and territories matching that contribution in their jurisdiction in either new funding or redirected resources.

46 The object of the partnership is to initiate reforms in

41 Committee Hansard, 2 June 2010, pp EEWR 98-102.

42 Committee Hansard, 3 June 2010, pp EEWR 6-7.

43 Committee Hansard, 3 June 2010, p. EEWR 9.

44 Committee Hansard, 3 June 2010, p. EEWR 22.

45 Committee Hansard, 3 June 2010, p. EEWR 22.

46 Committee Hansard, 3 June 2010, p. EEWR 46.

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schools and communities which will support the education and wellbeing of students in low SES communities. 47

2.37 Senators were told that $120 million has been paid under the partnership to date and that by the end of 2010, 975 out of the 1683 schools which will ultimately receive support will be actively participating in the partnership. Officers informed the committee that the department's state office network has extensive relationships with schools, school communities and other education stakeholder groups, and that these relationships are central to the department's monitoring and evaluation of the Smarter

Schools- Low SES School Communities National Partnership.48

Building the Education Revolution -Primary Schools for the 2[ 1

Century

2.38 Senators showed considerable interest in the Building the Education Revolution- Primary Schools for the 21st Century (BER- P21) program.

2.39 The committee was told that as at 30 April 2010, 98 per cent (or 10,376 of 1 0,697) of all P2 )_ projects had commenced. 49 Senators were also told that as at 7 May 2010, $7.8 billion has been paid out by the commonwealth to the 22 education authorities 50 , and a further $2.2 billion is expected to be paid out by the end of July 2010. 51 Of this amount some $6.16 billion has been committed for expenditure in contracts between education authorities and builders. 52

2.40 There was also discussion about the processes that the Commonwealth has in place to ensure that it achieves value for money under the BER program. Officers explained that there were several assurance steps built in to the process: appropriate documentary frameworks were established at the outset of the program; discussions were held with education authorities to discuss value for money in the context of the

stimulus prior to establishing agreements; agreement documentation specifically referred to value for money principles in contracting and tendering; and there is a requirement to adhere to government procurement regulations, including ensuring value for money. 53 The BER Implementation Taskforce has been established as an 'additional measure of assurance'.

54

47 Council of Australian Governments, Smarter Schools- Low SES School Communities National Partnership- Fact Sheet, p. 1, http://www.coag.gov.au/coag meeting outcomes/2008-11-29/docs/20081129 smarter schools factsheet.pdf (accessed 10 June 201 0).

48 Committee Hansard, 3 June 2010, pp EEWR 46-4 7.

49 Committee Hansard, 3 June 2010, p. EEWR 89.

50 Committee Hansard, 3 June 2010, p. EEWR 93.

51 Committee Hansard, 3 June 2010, p. EEWR 94.

52 Committee Hansard, 3 June 2010, p. EEWR 93.

53 Committee Hansard, 3 June 2010, pp EEWR 105-106.

54 Committee Hansard, 3 June 2010, p. EEWR 99.

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2.41 Opposition Senators noted that at the recent Finance and Public

Administration estimates the Australian National Audit Office (ANAO) had been critical of value for money assurance mechanisms DEEWR had built into the BER. 55 Officers from DEEWR commented that the Auditor-General did not make those remarks in the BER Audit Report, and added that they do not agree with the ANAO's remarks and do not accept them. 56

Senator Gavin Marshall

Chair

55 Finance and Public Administration Committee, Committee Hansard, 25 May 2010, p. EEWR 31.

56 Committee Hansard, 3 June 2010, p. EEWR 106.

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Appendix 1

Departments and agencies for which the committee has oversight

Education, Employment and Workplace Relations portfolio

• Department of Education, Employment and Workplace Relations

• Australian Curriculum, Assessment and Reporting Authority

• Australian Institute for Teaching and School Leadership 1

• Australian Learning and Teaching Council

• Comcare, the Safety, Rehabilitation and Compensation Commission,

and the Seafarers' Safety, Rehabilitation and Compensation Authority

•

•

•

•

Fair Work Australia

Fair Work Ombudsman

Office of the Australian Building and Construction Commissioner

Safe Work Australia

Previously reported as Teaching Australia- Australian Institute for Teaching and School Leadership Limited, prior to being renamed in January 2010.

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Appendix 2

Index to Hansard transcripts Education, Employment and Workplace Relations portfolio

Monday, 31 May 2010 Page no

Outcome 4 (Employment) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . ...... 6

Outcome 5 (Workplaces) ... ... . .. . .. . .. .. . ... .. ..... ... ... ... ... ...... .. . .. . ... . ..... 68

Tuesday, 1 June 2010

Cross Portfolio.......................... ... ............................................. 6

Comcare... ... ... ...... ... ... ...... .. ... ... . .... .. .. ....... . ... ... ... ...... ... ... ......... 28

Safe Work Australia.......................................... .......................... 40

Fair Work Ombudsman............................................................... 53

Fair Work Australia.................................................................... 85

Australian Building and Construction Commission.................... ....... ... 112

Wednesday, 2 June 2010

Outcome 1 (Early childhood leaming and care)................................. 6

Outcome 3 (Higher education and VET).......................................... 37

Thursday, 4 June 2009

Outcome 2 (Schooling) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . 6

71

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Appendix 3

Senate Standing Order 8- 13 May 2009

Accountability

8 Public interest immunity claims

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

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

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

(1) If:

(a) a Senate committee, or a senator in the course of

proceedings of a committee, requests information or a document from a Commonwealth department or agency; and

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

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

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

result from the disclosure of the information or document.

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

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

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

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

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

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

(13 May 2009 J.l941)

74

The Senate

Environment, Communications and the Arts Legislation Committee

Budget estimates 2010-11

June 2010

75

© Commonwealth of Australia 2010

ISBN 978-1-7 4229-320-2

This document was printed by the Senate Printing Unit, Parliament House, Canberra

76

Membership of the Committee

Members:

Senator Anne McEwen (ALP, SA) (Chair) Senator Mary Jo Fisher (LP, SA) (Deputy Chair) Senator Scott Ludlam (AG;W A) Senator Kate Lundy (ALP, ACT) Senator the Hon Judith Troeth (LP, VIC) Senator Dana Wortley (ALP, SA)

Committee Secretariat

Mr Stephen Palethorpe, Secretary Ms Jacquie Hawkins, Research Officer

Committee Address

Senate Standing Committee on Environment, Communications and the Arts PO Box 6100 Parliament House Canberra ACT 2600

Tel: 02 6277 3526

Fax: 02 6277 5818

Email: eca.sen@aph.gov.au

Internet: www .aph.gov .au/senate/committee/eca _ cttelindex.htm

iii

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IV

78

Contents

Membership of the Committee

Chapter 1 - Introduction

Reference

Hearings

Questions on notice- date for response

Procedural and other matters

Changes to portfolios

Late return of responses to questions on notice

Comprehensiveness of Budget Estimates process

Attendance of agency chief executive officers

Acknowledgements

Chapter 2- Examination of portfolios

Broadband, Communications and the Digital Economy

Environment, Water, Heritage and the Arts

Climate Change and Energy Efficiency

Appendix 1 -Agenda

Appendix 2- Tabled documents

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111

1

1

2

2

2

2

3

3

5

8

13

15

21

VI

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Chapter 1

Introduction

Reference

1.1 On 11 May 2010 the Senate referred the following documents to standing committees for examination and report:

• Particulars of proposed expenditure in respect of the year ending on 30 June 2011; and

• Particulars of certain proposed expenditure in respect of the year ending on 30 June 2011. 1

1.2 The committee was required to report to the Senate by 22 June 2010. 2

Hearings

1.3 The committee conducted public hearings involving the Broadband, Communications and the Digital Economy portfolio on 24 and 25 May 2010; the Environment, Water, Heritage and the Arts portfolio on 25 and 26 May 2010 and the Climate Change and Energy Efficiency portfolio on 27 May 2010. The agenda is at Appendix 1.

1.4 Links to the transcripts of the public hearings, and to answers to questions on notice and additional information, are available on the Internet at:

www .aph.gov.au/senate/committee/eca _ ctte/estimates/bud _1 0 11/index.htm

1.5 Answers to questions on notice and additional information provided to the committee arising from the hearings are tabled in the Senate and also compiled as volumes of Additional Information. The answers and other information are also posted on the committee's web pages.

Questions on notice- date for response

1.6 In accordance with Standing Order 26(9)(a), the committee has fixed Friday, 30 July 2010 as the date for the return of written answers or additional information in response to questions placed on notice.

Journals of the Senate, No. 120, 11 May 2010, p. 3444.

2 Journals of the Senate, No. 94, 27 October 2009, p. 2633 .

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2

Procedural and other matters

Changes to portfolios

1.7 Under changes to the machinery of government of March 2010 a new portfolio, Climate Change and Energy Efficiency, was established. The revised Administrative Arrangements Order transferred responsibility for a range of matters which were previously dealt with in the Environment, Water, Heritage and the Arts Portfolio to the new Climate Change and Energy Efficiency Portfolio.

1.8 These matters included renewable energy programs, energy efficiency, greenhouse gas abatement programs and community and household climate action programs.

1.9 On 12 May 2010, the Senate allocated responsibility for the Climate Change and Energy Efficiency Portfolio to the Environment, Communications and the Arts Committee. 3

Late return of responses to questions on notice

1.10 In previous reports the committee has expressed its concern about past failures to provide responses in a timely manner and its expectation that responses to questions on notice should be provided to it by the due date.

1.11 The committee notes that answers were still being provided to the secretariat during this round ofhearings.4

1.12 In setting 30 July 2010 as the deadline for answers to questions on notice from the current round of hearings, the committee believes that it is allowing ample opportunity for answers to be carefully considered and submitted in a timely manner.

Comprehensiveness of Budget Estimates process

1.13 As the then Chair noted in previous estimates, the committee expects that all Agencies will be available for the main round of Budget Estimates, unless notified otherwise. 5 This is unlike Supplementary Estimates where senators nominate agencies they wish to examine.

3 Journals of the Senate, No. 121 , 12 May 2010, p. 3462.

4 There were 29 BCDE answer provided on 24 May 2010 and 19 EWHA answers provided on 24 and 25 May 2010. There are two EWHA answers outstanding from the 2010 Additional Estimates hearings of February 2010.

5 Committee Hansard, 25 May 2005, p. 77.

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3

1.14 The committee believes that, by including all relevant portfolio bodies in the hearing program, senators are made aware of the opportunity to question them.6

1.15 It is left to the discretion of officials to determine whether company representatives need to attend the hearings in person or whether departmental officers are sufficiently knowledgeable to respond to the committee's inquiries on their behalf.

1.16 For this Budget Estimates round the committee called all government agencies and companies with the exception of:

• Australia Business Arts Foundation

• Bundanon Trust

• Sydney Harbour Federation Trust

• Outcome 3 ofDEWHA, including the Antarctic Division

1.17 During the hearings two agencies, the National Water Commission and the Office of the Renewable Energy Regulator, were released without questioning.

Attendance of agency chief executive officers

1.18 There were several instances where agency CEOs did not appear at the hearings. For example, despite expressly committing in February 2010 to appear at all future Estimates hearings, Mr Fahour, Australia Post's relatively new CEO, wrote to the committee in April 2010 indicating that he would not attend the Budget Estimates hearings. Mr Fahour's absence was noted by officials in an opening statement.

7

1.19 Similarly, just prior to the hearings the committee received separate correspondence from the CEOs of the National Gallery of Australia and Screen Australia indicating that they would not be available.

1.20 The committee is of the view that CEOs of these and other significant national government organisations should make themselves available for future Estimates hearings.

Acknowledgements

1.21 The committee thanks Senator Conroy and Senator Wong, officers from portfolio departments and agencies, and Broadcasting, Hansard and the Secretariat for their assistance during this Budget Estimates process.

6 Budget Estimates 2004- 05, Report of the Environment, Communications, Information Technology and the Arts Legislation Committee, June 2004, p. 13.

7 Proof Committee Hansard, 24 May 2010, p. 44.

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4

84

Chapter 2

Examination of portfolios

Broadband, Communications and the Digital Economy portfolio

2.1 The committee welcomed Senator the Ron Stephen Conroy, Minister for Broadband, Communications and the Digital Economy.

2.2 During its examination, the committee raised a variety of issues which are noted below. The page numbers beside each issue refer to the proof transcript for Monday, 24 May 2010 : -2.3 Questioning commenced of portfolio agencies:

Special Broadcasting Service Corporation

• advertising during SBS programs (pp 5-6)

• review of the subtitling activities (pp 6-7)

• upgrade of some analog terrestrial self-help transmitters to digital and available services resulting from the digital switchover (pp 7-10, 15)

• 3D broadcast of certain World Cup matches (p . 11)

• progress on the SBS strategic review (p. 12)

• online streaming service and audience share (pp 12-13).

Australian Broadcasting Corporation

• proposal for Q&A to travel to different state and territory capitals and regional centres (p. 14)

• number of digital transmitters to be funded (pp 15 , 20-21)

• proposed 24 hour TV news channel: staffing and funding arrangements (pp 15-19, 30)

• strategic review of ABC Radio (pp 19- 20)

• progress report on ABC Open program (pp 21-22)

• progress report on ABC3 (p. 22)

• Proj ect Bluebird program (pp 24-25)

• funding of ABC rural radio network (pp 25-26, 28-31)

• provision oflocal news services on HD channels (pp 26-27)

• capital funding for new digital equipment (pp 31-32)

• review of the Asia Pacific Television Service (p . 33)

• technical trial of audio description for hearing and vision impaired (pp 33-34)

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6

• broadcasting of the documentary Hope in a Slingshot (p. 34)

• ABC employees in receipt of a buyout for overtime and penalties (p . 38)

• access to ABC on iPads (p. 39)

• former ABC journalists' access to superannuation (p. 40)

• role of the Manager of Emergency Services and Community Development (pp 41-42)

• use of'hashtags' on Twitter (pp 42-43).

Australia Post

• attendance of the Managing Director, Mr Fahour, at Estimates hearings (p. 44)

• financial loss resulting from industrial action (p. 45)

• evaluation results of 'CubeCalc' (p. 45)

• lost letters and parcels (pp 45-46)

• Australia Post sponsorships (p. 47)

• costs of AQIS quarantine checks (pp 48-49)

• membership of the stakeholder council, the former Postal Services Consultative Council (pp 49-50)

• status of price notification lodged with ACCC for increase in postage for standard letters (pp 51-53)

• facility nominated doctors (p. 54)

• use of Mercedes vans (pp 54-55)

• possible introduction of mail hubs (pp 55-56)

• clearance of mail boxes over long weekends (pp 56-57)

• new business opportunity to provide secured digital communications with the related establishment of four strategic business units and appointment of staff (pp 57-58).

Australian Communications and Media Authority

• results of the signal coverage checks and surveys for regional Australia as part of the digital switchover (pp 58-60, 74-75)

• compliance of free-to-air television with local content rules (pp 60-62)

• impact of technical advances on regulatory processes (pp 62-63)

• the 'Reconnecting the Customer' initiative (pp 63-64)

• ACMA's role in internet filtering (pp 66-68)

• Cybernet bullying (pp 68-69)

• prohibited content list (pp 69-72)

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• allocation of spectrum in the rollout of digital radio to rural and regional Australia (pp 73-74).

2.4 At the conclusion of questioning of the agencies, general questions were asked of the department, including such issues as:

• review of anti-siphoning rules (pp 76- 80)

• the TV licence fee rebate (pp 80-86, 109-111 ).

2.5 The committee then called and examined officers in relation to:

Program 1.3: Broadcasting and Digital Television

• review of the technologies suitable fQr..digital radio (p. 86)

• Digital Tracker Survey to test people's awareness of the forthcoming digital switch over (pp 87 , 92)

• broadcast of all commercial stations terrestrially or via satellite (pp 87-93)

• funding for the digital switchover program (pp 93, 99-10 I, I 05-1 08)

• timetable for the switchover (pp 93-96)

• provision of the VAST satellite service (pp 97-99)

• the digital switchover Household Assistance Scheme (pp I 02-104, I II).

Program 1.2: Telecommunications, Online and Postal Services

• unauthorised collection ofwi-fi data by Google (pp 111-114, 118-I19, 126-I27)

• consultation with ISPs about implementing the internet filter (pp 114-116)

• high-traffic sites (pp 116-119)

• refused classification black! ist (pp 121-123)

• impact on the mandatory filter on law enforcement agencies as a result of increased encrypted traffic and global roaming arrangements (pp 123-124)

• impact on complaint numbers since the introduction of the Mobile Premium Services Code (pp 125-126).

2.6 On Tuesday, 25 May the committee continued its examination of the Broadband, Communications and the Digital Economy portfolio, commencing with the NBN Co Limited. The page numbers beside each issue below refer to the proof transcript for Tuesday, 25 May 2010.

2.7 Prior to the commencement of questioning, Mr Quigley, CEO of the NBN Co Limited, made an opening statement about the current status of NBN and its activities. Issues raised during questioning included:

• late provision of answers to questions on notice (pp 1 O-Il)

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8

• number of equity injections provided to the NBN Co to date (pp 11-12, 19-24)

• breakdown of the estimated $50 million spent to date (pp 12-14)

• nature of exit clauses in NBN Co contracts (pp 15-19)

• NBN Co's business case (pp 26-29, 39--40)

• rollout of the NBN network in greenfields sites (pp 29-36, 38)

• skills shortages and anticipated local training (pp 36-3 7)

• progress of the Tasmanian rollout (pp 40-44, 46, 51-54)

• work safety incidents in Tasmania (pp 4 7-49)

• provision of satellite capacity (pp 55-56)

• aerial or underground cabling (pp 55-59).

2.8 Questioning followed of officers in relation to Program 1.1: Broadband and Communications Infrastructure. Issues included:

• $4.7 billion investment into the NBN network (pp 60-62)

• cost of an information campaign about the NBN network (pp 64-67)

• satellite solutions for broadband (pp 68-72)

• late provision of answers to questions on notice (pp 72-74, 117)

• complaints about the use of aerial cabling (pp 74-78)

• release ofthe implementation study (pp 80-82)

• costs of service in Tasmania (pp 83-90)

• take-up rate of the NBN network (pp 93-97)

• future use of the copper network (pp 97-1 00)

• download speeds for rural and regional customers who are outside the fibre to the home footprint (pp I 02-1 05)

• return on government equity investment in NBN network (pp 111-116).

Environment, Water, Heritage and the Arts portfolio

2.9 On Tuesday, 25 May the committee commenced its examination of the Enviromnent, Water, Heritage and the Arts portfolio and welcomed Senator the Hon Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, representing the Minister for the Enviromnent Protection, Heritage and the Arts, the Hon Peter Garrett MP, and portfolio officers.

2.10 The chair called officers in relation to Outcome 5: Participation in, and access to Australia's culture and heritage through developing and supporting cultural expression, and protecting and conserving Australia's heritage. The page numbers listed below refer to the proof transcript for 25 May 2010.

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2.11 Before questioning commenced of portfolio agencies, the Department tabled replacement tables of cash flows for the National Maritime Museum and the Australian Film, Television and Radio School, Issues raised included:

Australian National Maritime Museum

• impact of the ongoing efficiency dividend on operations (p. 122)

• provision of advice about preservation of the City of Adelaide clipper ship (pp 122-123)

• performance against key performance indicators (p. 123)

Australia Council

• performance against key performance indicators (p. 123)

• vacancies on the Council and its boards (pp 124-125)

• financial performance of the orchestras (pp 125-126, 127-128)

• impact of the efficiency dividend on operations (pp 126-12 7)

• impact of the global financial crisis on philanthropic donations (p. 127)

• performance against key performance indicators (p. 128)

Screen Australia

• absence of Screen Australia's CEO, Dr Harley, who was attending the Cannes Film Festival (pp 128-129)

• update of box office results for Screen Australia productions (p. 129)

• perfom1ance against key performance indicators (p. 129)

• impact of the efficiency dividend on operations (p. 130)

• current state of the postproduction sector (pp 131-32)

Australian Film, Television and Radio School

• performance against key performance indicators (p. 13 3)

• impact of the efficiency dividend on operations (p. 134)

• role of the school in student transition from education to paid work (p. 135)

National Film and Sound Archive

• performance against key performance indicators (p. 135)

• collection management (p. 136)

• visitor numbers during the Masterpieces fi'om Paris exhibition (p. 136)

• use of Twitter and Facebook by the organisation (p. 137)

National Gallery of Australia

• statistics from the Maste1pieces from Paris exhibition (pp 13 7-139)

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• performance against key performance indicators (p. 139)

• the Gallery's membership numbers (p. 139)

• update on the refurbishment and extensions at the Gallery (p. 140)

• use of Twitter and Facebook by the organisation (pp 140-141)

National Library of Australia

• performance against key performance indicators (p. 141)

• impact of the efficiency dividend on operations (p. 141)

• progress of the digitisation program (p. 141)

National Museum of Australia

• Council vacancies (p. 142)

• proposed expansion of office accommodation (p. 142)

• performance against key performance indicators (p. 142)

• progress of The Forgotten Australians exhibition (pp 142-143)

Program 5.1: Arts and Cultural Development

• resale royalty scheme (pp 143-145, 148, 151-152)

• update on the Richmond Bridge Conservation Management Plan (pp 145-147)

• proposed buffer zones around Port Arthur (pp 147-148)

Program 5.2: Conservation and Protection of Australia's Heritage

• possible World Heritage listing for parts of the Lake Eyre Basin and Cape York Peninsula (pp 149-150)

• update on the Kokoda Track safety package (p. 150).

2.12 On Wednesday, 26 May the committee continued its examination of the Environment, Water, Heritage and the Arts Portfolio, calling officers in relation to Outcome 1: The conservation and protection of Australia's terrestrial and marine biodiversity and ecosystems through supporting research, developing information, supporting natural resource management, regulating matters of national environmental significance and managing Commonwealth protected areas.

2.13 The chair welcomed Senator the Hon Penny Wong, Minister for Climate Change, Energy Efficiency and Water.

2.14 The Minister made a statement concerning the transfer of responsibility for a range of matters from the Environment, Water, Heritage and Arts (EWHA) portfolio to the newly established Climate Change and Energy Efficiency (CCEE) portfolio. These matters include renewable energy programs, energy efficiency, greenhouse gas abatement programs and community and household climate action.

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2.15 The page numbers listed below refer to the prooftranscript for 26 May 2010.

2.16 General questions were asked of DEWHA and included issues such as:

• extent to which the department can answer questions related to those matters which have been transferred to the CCEE portfolio (pp 5-7)

• appointment of departmental secretaries (pp 9, 15)

• matters concerned with the home insulation package program (pp 10-14, 22-28, 29-33)

• issues surrounding the Gunns pulp mill announcement (pp 16-19, 2 8-29)

• impact of the machinery of government changes on DEWHA (pp 20-22).

2.17 Questioning of portfolio agencies commenced:

Bureau of Meteorology

• use of raw data temperatures from the weather station in Darwin (pp 35-36)

• funding for the National Plan for Environmental Information Program (pp 36-40)

• Bureau's role in improving data and information on Australia's water resources (pp 43-45)

Great Barrier Reef Marine Park Authority

• update on the Reef Guard ian program (pp 46-4 7)

• impact of green zones on fish numbers and recreational fishing (p. 47)

• impact of the coal tanker, Shen Neng I running aground on the Reef (pp 48-51 , 52-53)

• effect of the efficiency dividend on operations (p. 51)

• environmental manage charge collections (pp 51-52)

Office of the Supervising Scientist

• possible expansion of the role of the Office of the Supervising Scientist (pp 53-54)

• restoration and rehabilitation of former uranium mines in the Alligator Rivers region and the Rum Jungle site (pp 54-55, 61)

• update of the issue of the plume of process water leaking out from under the main tailings dam at Ranger (pp 55-60)

• salinity levels in the Magel a Creek (pp 60-61 , 62)

Director of National Parks

• funding for the Caring for our Country program (pp 62-63)

• acquisitions for the National Reserve System (pp 63-64)

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• fox baiting program in Booderee National Park (p. 64)

• pest control program on Macquarie Island (p. 64)

• pipistrelle bat monitoring (pp 64-65)

• aerial baiting of crazy ants on Christmas Island (pp 65-66).

2.18 Officers were called and examined in relation to:

Program 1.1: Sustainable Management of Natural Resources and the Environment

• funding for Caring for our Country (pp 66-68, 71-72, 77-78)

• role of Indigenous people in the Caring for our Country program (pp 68-69) -- ·

• update on the Indigenous Protected Areas program (pp 69-70)

• Mount Lyell remediation program (pp 72-76)

• update on the Environmental Stewardship Program (p. 80).

Program 1.2: Environmental Regulation, Information and Research

• circumstances surround allegations about Ta sair aiding and abetting whaling in the Southern Ocean (pp 80- 83)

• compensation for structural adjustment to fishers and other business affected by the expansion of marine protected areas (pp 83-84)

• monitoring of the Coral Sea conservation zone (pp 85-87)

• DEWHA's involvement in the Australian Maritime Safety Authority's re sponse arising from the Montara oil spill (pp 90- 91, 1 00)

• importation of bumblebees (pp 94-95)

• funding of the Commonwealth Environment Research Facility and its replacement program (pp 95-1 00)

• possible legal action against Japan's whaling activities (p. 101 ).

2.19 At the conclusion of Program 1.2, officers were called in relation to Outcome 2: Improved capacity of Australian communities and industry to protect th e environment by promoting waste reduction and regulating hazardous substances, wastes, pollutants, ozone depleting substances and sy nthetic greenhouse gases.

Program 2.1: Reduction and management of wastes, hazardous substances, pollutants, ozone depleting substances and synthetic greenhouse gases

• progress of the national container deposit scheme (pp 104-1 06).

2.20 At the conclusion of Program 2.1, the committee called officers in relation to Outcome 4: Adaptation to climate change, wise water use, secure water supplies and improved health of rivers, waterways and freshwater ecosystems by supporting research, and reforming th e management and use of water resources:

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Murray-Darling Basin Authority

• release of the draft Basin Plan (pp I 08-II 0)

• identification of key environmental assets and the key ecosystem functions of the basin (pp II2-I15)

• socioeconomic analysis of potential impact of the plan (pp 1I5-118)

• water flows after the March 20 I 0 rainfall event (pp 118-II9)

• consultations about the draft plan (pp 123-I24, I27-I28)

• water flows into Menindee Lakes (pp I29-13I)

Program 4.1: Water Reform

• uptake of recommendations in the Productivity Commission's report: Market mechanisms for recovering water in the Murray-Darling Basin (pp I33-134)

• infrastructure works at Menindee Lakes (pp 134-I35).

Climate Change and Energy Efficiency Portfolio

2.21 On Thursday, 27 May the committee commenced its examination of the Climate Change and Energy Efficiency Portfolio, calling officers in relation to Outcome 1: Reduction of Australia's greenhouse gas emissions including by promoting energy efficiency, adaptation to the impacts of climate change, and

negotiation of an effective global solution, through the development and implementation of a national response to climate change; and bilateral, regional and multilateral engagement internationally.

2.22 The secretary of the department, Dr Parkinson, made an opening statement detailing changes to the department following the machinery of government changes which took effect on 8 March 2010.

2.23 Officers were called and examined in relation to Program 1.1: Reducing Australia's greenhouse gas emissions. Issues included:

• expanded Renewable Energy Target modelling (pp 6-25)

• deferral of the Carbon Pollution Reduction Scheme (CPRS) (pp 25-35, 43, 46-47)

• impacts of the deferral of the CPRS on the department (pp 35-42, 46)

• impact of the deferral of the CPRS on carbon sinks and carbon forests (p. 47)

• Australian Carbon Trust and the Climate Change Foundation Campaign (pp 47-48)

• establishment of the Renewable Energy Future Fund (p. 48).

2.24 General questioning of the department commenced:

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• delays in answers questions on notice from the previous estimate round (pp 49-52)

• organisational structure of the new department (pp 52-54)

• department budget and staffing levels (pp 57-61 , 71-72)

• US National Academy of Science reports examining climate change science (pp 61-62)

• Intergovernmental Panel on Climate Change reports (pp 62-65)

• Home Insulation Safety Program inspections (pp 70-71)

• new coal-fired power stations in Australia (pp 74-76)

• purpose of the National Carbon Accounting System (pp 78-80).

2.25 Questioning followed in relation to:

Program 1.3: Adapting to climate change

• funding for the national Climate Change Adaptation Research Facility (p. 82)

• role of the Australian Climate Change Science Program (pp 82-83)

• budget funding for the Adapting to Climate Change program (p . 83)

Program 1.4: Helping to shape a global climate change solution

• costs related to the Australian delegation to Copenhagen (p. 84)

• follow-up discussions and activities since the Copenhagen Accord (pp 84- 87)

• substance of the US climate bill and the status of Japan's climate bill (pp 87-88)

• overseas development assistance (pp 89-93)

Program 1.2: Improving Australia's energy efficiency

• Home Insulation Program, including funding, use of consultants, investigations by the AFP, double payments, recouping moneys, possible instances of fraud, Insulation Industry Assistance Package, training (pp 94-111 , 113 , 119-120)

• update to the Building Code of Australia (pp 111-113)

• Foil Inspection Safety Program (pp 114-119, 120- 121)

• Green Loans program and the Green Reward cards (pp 122-123)

• Prime Minister's Task Group on Energy Efficiency (pp 123-124 ).

Senator Anne McEwen Chair

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Appendix 1

The Senate BUSINESS OF COMMITTEES

This document is issued as a guide to Senators Business listed is subject to change

It should be noted that times allocated for the consideration of outcomes, items and agencies within portfolios are indicative only.

Senators, staff and departments should liaise with secretariats on the progress of portfolios during the estimates process.

SENATE ENVIRONMENT, COMMUNICATIONS AND THE ARTS LEGISLATION COMMITTEE

Public Hearings: Budget Estimates 2010-2011 Monday, 24 to Thursday, 27 May 2010 and if required, Friday, 28 May 2010

Committee Room 2S3 Parliament Bouse Canberra ACT

To be televised on Channel 11 and broadcast on Radio 91.1 http://webcast.aph.gov.au

AGENDA

MONDAY, 24 May 2010 Broadband, Communications and the Digital Economy Portfolio 9.00 am Special Broadcasting Service

Outcome]: Provide multilingual and multicultural services that inform, educate and entertain all Australians and in so doing reflect Australia's multicultural society Program 1.1: Television Program 1.2: Radio Program 1.3: Analogue Transmission and Distribution Program 1.4: Digital Television Transmission and Distrib ution Program 1.5: Digital Radio Transmission and Distribution

Australian Broadcasting Corporation Outcome 1: Informed, educated and entertained audiences-throughout Australia and overseas-through innovative and comprehensive media and related services P roJZram 1.1: Radio

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Program 1.2: ABC Television Program 1.3: Online

Outcome 2: Audience access to ABC satellite and analog terrestrial radio and television transmission services is, at a minimum, maintained year-on-year through the management of Transmission Service Agreements Program 2.1: ABC Analog Transmission

Program 3: Audience access to ABC digital television services is provided, in accordance with Government approved implementation policy, through the roll-out and maintenance of the associated distribution and transmission infrastructure Program 3.1: Digital Television Services

Outcome 4: Audience access to ABC digital radio services is provided, in accordance with Government approved implementation policy, through the rollout and maintenance of the associated distribution and transmission infrastructure Program 4.1: Access to Digital Radio Services

Australia Post

Australian Communications and Media Authority Outcome 1: A communications and media environment that balances the needs of the industry and the Australian community through regulation, education and advice Program 1.1 : Communications regulation, planning and licensing Program 1.2: Consumer safeguards, education and information

!Department of Broadband, Communications and the Digital (DBCDE)

General questions of the Department

Outcome 1-Develop a vibrant, sustainable and internationally competitive broadband, broadcasting and communications sector, through policy development, advice and program delivery, which promotes the digital economy for all Australians

Program 1.3: Broadcasting and Digital Television

Program 1.2: Telecommunications, Online and Postal Services

11.00 pm Adjournment

TUESDAY, 25 MAY 2010 Broadband, Communications and the Digital Economy Portfolio Department of Broadband, Communications and the Digital Economy (DBCDE) Outcome 1-Develop a vibrant, sustainable and internationally competitive broadband, broadcasting and communications sector, through policy development, advice and program delivery, which promotes the digital economy for all Australians

9.00 am NBNCo

Program 1.1: Broadband and Communications Infrastructure

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Environment, Water, Heritage and the Arts Portfolio 4.00 pm Australian National Maritime Museum Outcome 1: Increased knowledge, appreciation and enjoyment of Australia's maritime heritage by managing the National Maritime Collection and staging

programs, exhibitions and events Program 1.1: Management of maritime heritage

Australia Council Outcome 1: The creation, presentation and appreciation of distinctive cultural works by providing assistance to Australian artists and making their works accessible to the public Program 1: Investment in the arts

Screen Australia

--- Outcome 1: Enhancement to Australia's screen culture, nationally and internationally, by supporting the development of the Australian screen production industry and by developing, producing, promoting and providing access to diverse Australian programs Program 1.1: Foster the Australian screen indust1y through strengthening the skills of screen content practitioners and developing, investing in producing Australian screen

content, and promoting it to audiences

Australian Film, Television and Radio School Outcome 1: A more sustainable screen and broadcasting industry through advanced industry-focused education and training for talented students, professionals and organisations Program 1: D elive1y of advanced education to meet the diverse creative needs of students and the skill requirements of industry by means of award courses and th e Op en Program courses

National Film and Sound Archive Outcome 1: Increased understanding and appreciation of Australia's audiovisual history by developing, preserving, maintaining and promoting the national audiovisual collection and providing access to audiovisual material of historic and cultural significance Program 1.1: Develop, preserve and present Australia's national collection and other

related collections and make them available to all Australians

National Gallery of Australia Outcome 1: Increased understanding, knowledge and enjoyment of the visual arts by providing access to, and information about, works of art locally, nationally and internationally Program 1.1: Collection development, management, access and promotion

National Library of Australia Outcome 1: Enhanced learning, knowledge creation, enjoyment and understanding of Australian life and society by providing access to a national collection of library material Program 1.1 : T7le National Library of Australia

National Museum of Australia Outcome 1: Increased awareness and understanding of Australia's history and culture by managing the National Museum's collections and providing access through public programs and exhibitions Program 1.1: Collection Management, Research, Exhibitions and Programs

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!Department of the Environment, Water, Heritage and the Arts :(DEWHA) Outcome 5: Participation in, and access to, Australia's culture and heritage through developing and supporting cultural expression, and protecting and

conserving Australia's heritage

Program 5.1: Arts and Cultural Development, including National Portrait Gallery Program 5.2: Conservation and Protection of Australia's Heritage

11.00 pm Adjournment

\VEDNESDAY, 26 MAY 2010

Environment, Water, Heritage and the Arts Portfolio Department of the Environment, Water, Heritage and the Arts (DEWHA)

9.00 am General questions of the Department

Outcome 1: The conservation and protection of Australia's terrestrial and marine biodiversity and ecosystems through supporting research, developing information, supporting natural resource management, regulating matters of national environmental significance and managing Commonwealth protected areas

Office of Supervising Scientist

Bureau of Meteorology Outcome 1: Informed safety, security, and economic decisions y Governments, industry, and the community through the provision of information, forecasts, services and r esearch relating to weather, climate and water Program 1.1: Bureau of Meteorology Program 1.2: Modernisation and Extension of Hydrological Monitoring Systems

Great Barrier Reef Marine Park Authority Outcome 1: The long-term protection, ecologically sustainable use, understanding and enjoyment ofthe Great Barrier Reeffor all Australians and the international community, through the care and development of the Marine Park Program 1.1 : Improving th e outlook f or th e Great Barrier Reef

Director of National Parks Outcome I: Conservation and appreciation of Commonwealth reserves through the provision of safe visitor access, the control of invasive species and working with stakeholders and neighbours Program: Parks and Reserves

Program 1.1: Sustainable Management of Natural Resources and the Environment

Program 1.2: Environmental Regulation, Information and Research

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Outcome 2: Improved capacity of Australian communities and industry to protect the environment by promoting waste reduction and regulating hazardous substances, wastes, pollutants, ozone depleting substances and synthetic

Program 2.1: Reduction and management of wastes, hazardous substances, pollutants, ozone depleting substances and synthetic greenhouse gases

Outcome 4: Adaptation to climate change, wise water use, secure water supplies and improved health of rivers, waterways and freshwater ecosystems by supporting research, and reforming the management and use of water resources

Murray-Darling Basin Authority Outcome 1: Equitable and sustainable use ofthe Murray-Darling Basin by governments and the community including through development and implementation of a Basin Plan, operation of the River Murray system, shared natural resource management programs, research, information and advice Program 1.1: Equitable and sustainable use of the Murray-Darling Basin

National Water Commission Outcome 1: Informed decisions by governments on national water issues, and improved management of Australia's water resources, through advocacy, facilitation and independent advice Program 1.1: Water Reform

Program 4.1: Water Reform

11.00 pm Adjournment

THURSDAY, 27 MAY 2010

Climate Change and Energy Efficiency Portfolio Department of Climate Change and Energy Efficiency (DCCEE)

9.00 am General questions of the Department Outcome 1: Reduction of Australia's greenhouse gas emissions including by promoting energy efficiency, adaptation to the impacts of climate change, and negotiation of an effective global solution, through the development and implementation of a national response to climate change; and bilateral, regional and multilateral internationally

Program 1.1: Reducing Australia's greenhouse gas emissions

Program 1.2: Improving Australia's Energy Efficiency

Program 1.3: Adapting to Climate Change

Program 1.4: Helping to shape a global climate change solution

Office of the Renewable Energy Regulator Outcome 1: Administer and regulate the national Renewable Energy Target scheme to encourage increased renewable electricity generation Program 1.1: Renewable Energy Certificate Management Program 1.2: ManaRinR Compliance with LeRisla tion.

11.00 pm Adjournment

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Appendix 2

Documents tabled

Tuesday, 25 May 2010

Ms Kruk, Secretary, amended statements of cash flows for the National Maritime Museum and the Australian Film, Television and Radio School.

Wednesday, 26 May 2010

Senator Ludlam, graph indicating water quality monitoring data at Ranger mine.

Minister Wong, Australia's Biodiversity and Climate Change, Summary for policy makers 2009.

Mr Early, Deputy Secretary Speech by Minister Garrett to the Centre for International & Public Law, ANU, 28 April2010, Australia's ambition for the worldwide conservation of whales Position paper: The Future of the International Whaling Commission: An Australian Proposal.

Mr Freeman, Chief Executive, Murray-Darling Basin Authority, Opening Statement­ The Basin Plan.

Thursday, 27 May 2010

Dr Parkinson, Secretary, Secretary's Opening Statement.

Minister Wong, Impacts of Changes to the Design of the Expanded Renewable Energy Target, May 2010.

Dr Parkinson, Secretary, StaffNotice 2010/21, Delay in the introduction of the CPRS, dated 28 April2010.

Mr Thompson, Deputy Secretary, Insulation Indus tTy Assistance Package, Application Form, May 2010.

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The Senate

Finance and Public Administration Legislation Committee

Budget estimates 201 0-11

June2010

103

© Commonwealth of Australia 2010

ISBN 978-1-74229-321-9

The Senate

Parliament House

Canberra ACT 2600

Phone:

Fax:

E-mail:

02 6277 3439

02 6277 5809

fpa.sen@aph.gov.au

Internet: http://www .aph.gov .au/senate/committee/fapa ctte!index.htm

This document was produced by the Senate Finance and Public Administration Secretariat and printed by the Senate Printing Unit, Parliament House, Canberra.

104

Membership of the Committee 42"d Parliament

Senator Helen Polley (Chair) ALP, Tasmania

Senator Scott Ryan (Deputy Chair) LP, Victoria

Senator Doug Cameron ALP, New South Wales

Senator Jacinta Collins ALP, Victoria

Senator Helen Kroger LP, Victoria

Senator Rachel Siewert AG, Western Australia

Other Senators in Attendance

Senator the Hon Eric Abetz, Senator Chris Back, Senator the Hon George Brandis, Senator Mathias Cormann, Senator Concetta Fierravanti-Wells, Senator Mitch Fifield, Senator Michael Forshaw, Senator the Hon Bill Heffernan, Senator Gary Humphries, Senator Barnaby Joyce, Senator Scott Ludlam, Senator the Hon Ian Macdonald, Senator the Hon Brett Mason, Senator Claire Moore, Senator Stephen Parry, Senator Marise Payne, Senator the Hon Michael Ronaldson, Senator Russell Trood, Senator John Williams and Senator Nick Xenophon.

Secretariat

Ms Christine McDonald

Ms Sophia Fernandes

Ms Tegan Gaha

Committee Secretary

Research Officer

Executive Assistant

iii

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iv 106

Table of Contents

Membership of the Committee ........................................................................ iii

Table of Contents ................................................................................................ v

Chapter 1 ............................................................................................................. 1

Budget Estimates 2010-11 ................................................................................. --.. 1

Portfolio coverage .................... .............. .. .. ..... ... ....................... ............................. 1

Variation of portfolios ...................................... ..... ................................................. 1

Portfolio Budget Statements ............................... .. ... ............................................... 2

Hearings ................................... .. ................ ... .......................................................... 2

Procedural matters .................... .... ...................................................................... .... 3

Chapter 2 ............................................................................................................. 7

Consideration of portfolios and agencies ............................................................... 7

Department of the Senate ... ..................................................................................... 7

Department of Parliamentary Services ......... ............ .......................................... .... 8

Prime Minister and Cabinet Portfolio .................................................................... 9

Finance and Deregulation Portfolio .............................................. .. ...................... 16

Human Services Portfolio ..................................................................................... 20

Coalition Senators' Additional Comments ..................................................... 23

'National Emergency' withheld from Estimates .................................... ............... 23

Answers to Questions on Notice ........................................................ .. ................ 23

Appendix 1 ......................................................................................................... 25

Departments and agencies under the Committee's oversight ............................ 25

Appendix 3 ......................................................................................................... 27

Index to Hansard Transcripts ............................................................................... 27

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VI

108

Chapter 1

Budget Estimates 2010-11

1.1 On 11 May 2010, the Senate referred to the Finance and Public

Administration Legislation Committee (the committee) for examination and report the following documents:

•

•

•

particulars of proposed expenditure in respect of the year ending on 30 June 2011;

of certain proposed expenditure in respect of the year ending on

30 June 2011; and

particulars of proposed expenditure in relation to parliamentary departments in respect of the year ending on 30 June 2011. 1

Portfolio coverage

I .2 The committee has responsibility for examining the expenditure and outcomes of the:

• Parliamentary departments;2

• Prime Minister and Cabinet portfolio;

• Finance and Deregulation portfolio; and

• Human Services portfolio.

1.3 Appendix I lists the departments, agencies, authorities and companies under the portfolios mentioned above.

Variation of portfolios I.4 On 12 May 20 I 0, the Senate agreed to amend the order of the Senate of 13 February 2008 relating to the allocation of departments and agencies to legislative and general purpose standing committees. As a result, the Climate Change and Energy Efficiency portfolio was transferred from the committee's oversight to that of the Environment, Communications and the Arts Committee. The amendment of the allocation reflected the establishment of a new Department of Climate Change and Energy Efficiency (DCCEE) on 8 March 2010.

I .S The Finance and Public Administration Legislation Committee continued to receive answers to questions on notice for the former Department of Climate Change in relation to the additional estimates held in February 2010.

Journals of the Senate, 11 May 2010, p. 3444.

2 As a matter of comity between the Houses, neither House inquires into the operations of the other House. For this reason, neither the annual report of, nor the proposed expenditure for , the Department of the House of Representatives is referred to a Senate committee for review.

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2

Portfolio Budget Statements

1.6 There were a number of changes to the outcomes and programs for

departments and agencies. The Australian Electoral Commission (AEC) moved from a three outcome structure to a single outcome structure supported by three programs.3 The resources information and tables within the Portfolio Budget Statement (PBS) reflected this change, listing programs under a single outcome.

1. 7 As a result of Ahead of the Game: Blueprint for the Reform of Australian Government Administration (the Blueprint or the Moran Review), the Australian Public Service Commission (APSC) will implement reform of the Australian Public Service (APS). To order to implement the reform agenda, responsibilities including agreement-making, classification structures, APS pay and employment conditions, work level standards and workplace relations advice have been transferred from the Department of Education, Employment and Workplace Relations to the APSC.

4

Whilst the PBS for the APSC notes this additional expense measure, the

commencement date for the reforms are yet to be agreed by officials.

Hearings

1.8 The committee held public hearings on Monday 24, through to Thursday, 27 May 2010. An additional hearing was held on Thursday, 17 June to further examine Department of Finance and Deregulation, Outcome 2, Program 2.1 relating to government advertising. The committee Hansard may accessed at:

http://www .aph.gov .au/senate/committee/fapa _ ctte/estimates/bud _1 011 /index.htm 5

1.9 In accordance with Standing Order 26, the committee is required to set a date for the lodgement of written answers and additional information. The committee resolved that written answers and additional information be submitted by Friday, 9 July 2010.

1.10 Further written explanations furnished by departments and agencies will be tabled, as received, in the Senate. That information is also available on the committee's web page: www.aph.gov.au!Senate/committedfapa ctte/estimates/index.htm.

1.11 The committee notes its appreciation that the majority of agencies submitted their responses to Questions on Notice from Additional Estimates 2009-10 (February 2010), by the specified deadline of 26 March 2010. However, only 33 of the 94 questions on notice directed to the Department of Climate Change were answered before the commencement of the committee's Budget estimates with 42 provided during estimates hearing week.

1.12 Over the course of the five days' hearings-totalling over 40 hours-the committee took evidence from: the President of the Senate, Senator the Hon John

3 Finance and Deregulation Portfolio, Porifolio Budget Statements 2010- 11, Budget related paper No. 1.9, p. 83.

4 Prime Minister and Cabinet Portfolio, Porifolio Budget Statements 2010- 11, Budget related paper No. 1.16, pp. 111-2.

5 Appendix 2 provides an index to the Hansard transcripts.

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3

Hogg; Special Minister of State, Senator the Hon Joe Ludwig; Assistant Treasurer, Senator the Hon Nick Sherry, representing the Finance Minister; and Senator the Hon John Faulkner, Minister for Defence, together with officers of the departments and agencies concemed.6

1.13 The following agencies were released from the hearings without examination: National Archives of Australia, National Australia Day Council Limited, Albury­ W odonga Development Corporation, Australian Industry Development Corporation, Australi an River Co Ltd, ASC Pty Ltd, Australian Technology Group Ltd, Tuggeranong Office Park Pty Ltd and Australian Hearing.

Programming

1.14 In order to enable all senators who wished to attend the hearing to ask questions under particular programs, the committee's programs included a guide to timings for outcomes and agencies. While only a guide, the inclusion of timings assisted with the smooth running of the hearings. During the hearings the committee Chair called the programs within outcomes which assisted Senators to focus their questioning on m atters within the programs.

1.15 On Thursday, 27 May, the committee's hearing commenced at 10.00 am. Under Standing Order 26(3) no more than four estimates committees may meet at one time. However, the Secretary to the Treasury was required, pursuant to an order of the Senate, to appear at the estimates hearing of the Economics Legislation Committee. The Secretary was only available on the morning of Thursday, 27 May, outside the time scheduled for the Economics Legislation Committee estimates hearing. The committee agreed to accede to the Economics Legislation Committee request to commence at 10.00 am, thus complying with SO 26(3).

Procedural matters

Meaning of officer- Independent Communications Committee

1.16 During the hearing the committee canvassed issues relating to government advertising. It was noted that the Government has established a new body, the Independent Communications Committee (ICC), to report to chief executives on compliance with government advertising guidelines. The role undertaken by the ICC in relation to government advertising replaces the role previously undertaken by the Auditor-General. The committee asked whether the ICC would be available to answer questions during the estimates process.

7

1.17 The Special Minister of State, Senator Ludwig, while commenting that 'the committee is independent from us and, from what I understand, they could be called. I would not object to that', took the request on notice.

6 Senator the Hon John Faulkner briefly replaced Special Minister of State, Senator the Hon Joseph Ludwig as minister at the table during the committee's consideration of the Australian Electoral Commission. Estimates Hansard, 27 May 2010, pp. 73- 80.

7 Committee Hansard, 25 May 2010, p. F&PA 7.

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1.18 The committee also sought the advice of the Clerk of the Senate in relation to the appearance of the ICC. The Clerk advised that Standing Order 26(5) empowers the legislation committees, when considering estimates, to ask for explanations from ministers in the Senate and officers. Further:

This has been interpreted in the past as covering the officers of any Commonwealth department or agency, including any Commonwealth statutory body, and any Commonwealth-owned company, regardless of whether they receive funds directly through the appropriation bills. Persons who do not fall into the category of officers technically may not be examined in an estimates hearing (although this rule has not been strictly adhered to on occasion when consultants or contractors have appeared) .8

1.19 Following clarification that the members of the ICC are employed on a contractual basis and renumerated on a per diem basis, the Clerk concluded that:

This suggests to me that there is not an employment relationship between the committee members and the Commonwealth and that the committee members are therefore not "officers" within the meaning of standing order 26(5).9

1.20 While the committee could not question members of the ICC during the estimates process, it is open to the committee to examine the ICC through a non­ estimates inquiry such as that in relation to the performance of departments and agencies or under an inquiry by the references committee after referral by the Senate.

1.21 During its examination of the Department of Finance and Deregulation, members of the committee were able to seek explanations in relation to the work of the ICC from departmental officers.

1.22 The committee made public the Clerk's advices and copies are available on the committee's website.

Public interest immunity

1.23 During questioning on the Building the Education Revolution (BER) performance audit report, the Auditor-General raised a claim of public interest immunity in declining to provide comments made by departments and others in relation to the draft BER performance audit report. While indicating that he would be able to provide an overview of the type of comments received, the Auditor-General claimed that disclosing the actual comments would impact on his relationships with departments and agencies. In addition, he commented that it may impact on his ability to gather open and comprehensive information. The Auditor-General added 'there

8 Dr R Laing, Clerk of the Senate, Advice regarding th e appearance of members of th e Indep endent Communications Committee at Estimates Hearings, 25 May 2010.

9 Dr R Laing Clerk of the Senate, Furth er advice regarding the appearance of members of th e Indep endent Communications Committee at Estimates H earings, 25 May 2010.

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is ... a public interest in departments feeling free to provide me with what we call audit-in-confidence information so that I can form my own view'. 10

1.24 The committee's questioning established that the Auditor-General had raised a public interest immunity claim. The minister, Senator Ludwig, commented, in relation to the Auditor-General's public interest immunity claim, 'it is an interesting position because of course the Auditor-General reports to the parliament and is not a departmental officer in that sense'. 11

10 Mr Ian McPhee, Auditor-General , Australian National Audit Office, Estimates Hansard, 25

May 2010, p. 49.

11 Committee Hansard, 25.5.10, p. F&PA 50.

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Chapter 2

Consideration of portfolios and agencies 2.1 The following discussion provides an overview of the issues raised during the estimates hearings.

Department of the Senate

2.2 The Clerk of the Senate advised the committee that the department of the Senate continues to face a tight budgetary situation and noted the continued application of the efficiency dividend on the department. Following a number of years of surplus, the department is expecting a deficit of around $20,000 for this financial year, following from last year's recorded deficit of $1.43 million. The deficits were attributed to the increase in committee activity in the current Parliament and a higher level of select committee activity than compared to previous years. 1 The Clerk also noted that over the last two years there has been a record number of references to committees.

2.3 The committee sought information on the degree of complexity and nature of legislation being referred to committees. The Clerk indicated that there is a tendency for complex legislation to be referred to committees, but commented that 'I do not think the legislation we have experienced this year or last year is any more complex than what has gone before'.2

2.4 The Clerk also responded to questions concerning the need to increase the level of resourcing of committees and commented that:

... it is fairly difficult to increase your baseline funding. What we do have in place are various strategies to cope with peak demands. We have a very flexible workforce in the committee office so there is a lot of lending of resources to assist with peaks in other committees. We also have on our books a number of very valuable former officers with a great deal of experience in the work of the Senate and its committees who are available to come back and do temporary assignments as the need arises. So we have a very highly skilled temporary and quick-acting workforce when required.

3

2.5 The committee discussed the cost and timely production of daily press clippings by the Senate, in comparison to the House of Representatives. In the course of questioning, the committee was remi:1ded that matters relating to the House of Representatives could not be canvassed. However, departmental officers indicated that preliminary discussions had already taken place between the three parliamentary

departments in relation to the provision of press clippings to senators and members. 4

Committee Hansard, 24 .5.10, p. F&PA 3.

2 Committee Hansard, 24.5.10, p. F&PA 7.

3 Committee Hansard, 24.5.10, p. F&PA 7.

4 Committee Hansard, 24.5.10, pp F&PA 4-5.

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2.6 The committee also questioned officers in relation to the recent recruitment rounds within the committee office and the establishment of select committees including capping of the number of select committees and establishment of a select committee contingent on the completion of the work of an existing select committee.

Department of Parliamentary Services

2.7 The committee questioned the Department of Parliamentary Services (DPS) in relation to implementing provisions of Operation Sunlight which will see the Parliamentary Library providing extra information and advice to non-government parliamentarians in election years. Under the arrangements, the library will receive

$5 00 000 in additional funding to augment its resources for the 20 1 0-11 and 2013-14 election years. It was indicated that the Parliamentary Librarian is currently discussing the implementation of the program with the Joint Standing Committee on the Parliamentary Library, including the equitable distribution of the service.5 The Library Committee will be convening to undertake a detailed decision. The committee requested on notice, that details of the final agreement reached by the Library Committee be provided. 6

2.8 Access to data from Centrelink by the Parliamentary Library was discussed at length. The Librarian indicated that a parliamentary researcher had requested data from Centrelink in order to provide information to a member. Centrelink had responded that the data would not be made available unless the library divulged the name of the member requiring this information and the reasons for the request. The committee sought information on the sequence of events and the response of the Librarian. The President indicated that he would seek investigation of and advice in relation to the matters raised. 7 This matter was canvassed further during questioning ofCentrelink (see para 2.70 below).

2.9 The committee revisited questions from additional estimates in February 20 I 0 regarding security arrangements at Parliament House. Specifically, removing security screening for members and senators entering Parliament House who have already been issued with security passes. Mr Alan Thompson, Secretary, informed the committee that while consideration had been given to 'the concept of an electronic gateway', where pass holders would 'simply tag through rather than having to have an officer control the door', the Security Management Board are still considering the feasibility of such an initiative. 8

2.10 The committee also discussed changes made to security rosters which directly affect the supervision of cleaners in ministerial suites. DPS assured the committee that

5 Committee Hansard, 24.5.10, p. F&PA 11.

6 Committee Hansard, 24 .5.10, p. F&PA 13.

7 Committee Hansard, 24 .5.10, pp F&PA 16-29.

8 Committee Hansard, 24.5.10, pp F&PA 31-32.

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this is taken into full consideration in the creation of rosters and that cleaners are in fact, supervised while within ministerial suites.9 '

2.11 Other matters raised included the costs of the media monitoring service; the use of publications on the Library's website by external websites; staff recruitment processes; the new mail screening facility; and parliamentary IT services.

2.12 During the discussion on staff recruitment processes, matters were raised relating to the appointments of a non-ongoing employee to undertake a structural review and the manager of the parliamentary gym and shop, the husband and son respectively of the DPS Chief Financial Officer (CFO). DPS indicated that the appointment of the officer to undertake the structural review had been made on the basis of his area of expertise. In relation to the manager's position, the Secretary

indicated that proper recruitment procedures had been followed and that the CFO had info rmed the Secretary that her son was an applicant for the position. 10 The matter was reported in the Canberra Times on 25 May 2010. On 10 June, the Canberra Tim es printed a correction indicating that the article on 25 May contained an inaccurately paraphrased report of committee evidence.

Prime Minister and Cabinet Portfolio

Office of the Official Secreta1y to the Governor-General

2.13 The Official Secretary to the Governor-General informed the committee that the Governor-General since taking office, had visited 78 locations in Australia, including remote locations, as part of her engagement with the community. The Offi cial Secretary noted that the visits to remote Western Australian were the first by a Governor-General.11

2.14 The committee discussed the level of staff turnover within the Office of the Official Secretary to the Governor-General (OOSGG). The Official Secretary informed the committee that since the last estimates hearing in February 2010 there has been 'five separations, of which four were retirements and one was a person who moved to the private sector'. 12 All five of these positions have now been refilled and all were advertised as merit-based appointments, apart from the position of speech writer.

2.15 This led to a more detailed discussion regarding the position of the Governor­ General's speechwriter. The Official Secretary indicated that the speechwriter was a direct appointment in a consultancy capacity. While acknowledging that this was 'a very personal appointment', the Official Secretary noted that 'we are fortunate to

9 Committee Hansard, 24.5.10, p. F&PA 44.

10 Committee Hansard, 24.5.1 0, pp F &PA 38- 42.

11 Committee Hansard, 24.5.10, p. F&PA 57 .

12 Committee Hansard, 24.5.10, p. F&PA 57 .

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employ one of, perhaps, Australia's finest speechwriters'. The speechwriter worked on major speeches with others in the office contributing to other speeches. 13

2.16 Other matters discussed included the Governor General's wine cellar; government representation at investitures during 2009; and the dismissal of the former Official Secretary, Mr Malcolm Hazel.

Department of the Prime Minister and Cabinet

2.17 The committee noted the funding allocation to the Department of the Prime Minister and Cabinet of $12 million in the 2010-11 Budget and queried its use as it was not tied to a specific program. The department clarified that it was appropriated across three years at $4 million per annum to be utilised to support work on reform advice within the department and will be primarily focused on the health reforms, the APS reforms and work linked to the G20. 14

2.18 The committee also discussed the allocation of $1.5 million to assist the department with meeting the operational requirements of the COAG agenda; the cost of hosting COAG meetings in state locations; and various national initiatives including the national health and hospitals framework and the national partnership agreement on remote indigenous housing.

2.19 Other issues discussed with the department included:

• the establishment of the Victorian Bushfire Reconstruction and Recovery Authority;

• a freedom of infonnation application in relation to the Fitzgibbon matter and whether the communication between Minister Gillard and Slater and Gordon was undertaken in her capacity as Deputy Prime Minister;

• the COAG health reform and the need to change the Inter Governmental Agreement in light of the non-inclusion of Western Australia; and

• the Prime Minister's Twitter account.

Australian Institute of Family Studies

2.20 In evidence, the Australian Institute of Family Studies (AIFS) indicated that it was making savings through a greater use of online electronic publishing and also seeking to reduce travel costs through teleconferencing and videoconferencing. The AIFS indicated that savings of$47,000 had been made in the 2009-10 with projected savings for the forward years. In addition, the AIFS is seeking to expand its revenue through contracts and commissions. 15

2.21 Considerable time was spent in discussion of family violence and its mediation through the Magistrates Court compared to mediation through family relationship centres. The committee also discussed the issue of better screening for

13 Committee Hansard, 24.5.10, pp F&PA 58-60.

14 Committee Hansard, 25.5.10, p. F&PA 55.

15 Committee Hansard, 24.5.10, p. F&PA 71.

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family violence by the Magistrates Court. Professor Alan Hayes, Director, advised that the Federal Magistrates Court is considering improvements to identification procedures and the need for 'uniformly applied screening instruments'. 16

2.22 Other matters discussed included the AIFS's recent review of adoption practices between 1940 and 1970.

Office of the Privacy Commissioner

2.23 The committee investigated a directive from the government to the Office of the Privacy Commissioner (OPC) to provide media and political briefs. The Commissioner clarified that the majority of these communications were short comments providing updates such as the release of a report and, on occasion, additional material for estimates hearings. The Commissioner emphasised that the

independence of the OPC is not in any way compromised by the provision of this infom1ation to the government. The Commissioner stated:

We provide briefing to the Department of Prime Minister and Cabinet as we are part of the portfolio. We are independent in the exercise of our functions under the act- that is, in handling complaints and conducting audits and providing some policy advice. That is why we provide submissions to many government inquiries and many parliamentary inquiries. That is the way we exercise the independence that comes with being the statutory authority that we are.17

2.24 The committee also sought information on the scrutiny of any privacy breaches associated with Google and their Street View service.

Old Parliament House

2.25 Old Parliament House was questioned about the invitation list for the opening of the opposition party room exhibition. 18

Australian Public Service Commission

2.26 The committee questioned officers on staffing levels within the Australian Public Service, and in particular! a noted rise in staff from the 2,750 originally predicted in the 2009-10 Budget, to the current prediction of 5,003 in the 2010-11 Budget. 19 Mr Steve Sedgwick, the Australian Public Service Commissioner, explained:

There has been a long-term decline in the proportion of the Public Service that is trainees and a long-term ir,.crease in the proportion of the Public Service that is SES. 20

16 Committee Hansard, 24.5.10, p. F&PA 75.

17 Committee Hansard, 24.5.10, p. F&PA 84.

18 Committee Hansard, 24.5.10, pp F&PA 86-89.

19 Committee Hansard, 24.5.10, p. F&PA 89.

20 Committee Hansard, 24.5.10, p. F&PA 90.

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2.27 The committee pursued matters arising from the report, Ahead of the Game: Blueprint for Reform of Australian Government Administration (the Blueprint or the Moran review). On 8 May 2010, the Government advised that it had accepted all the recommendations contained in the report. The Australian Public Service Commission

(APSC) will implement some of the reforms.

2.28 The committee drew attention to the Moran review's examination of efficiency, particularly in relation to the efficiency dividend and the potential re­ examination or abolition of the dividend; a citizen survey as a feedback mechanism; and the movement of staff from the Department of Education, Employment and Workplace Relations to the APSC.

2.29 The committee sought clarification of comments made in the Moran review relating to the structure of the SES and whether there is an over-proliferation of staffing as this level. The Commissioner commented:

.. . over a period of time there has been a steady increase in the average classification level in the Public Service ... at a time when over the last 15 years the Public Service at large grew by about 15 per cent, the size of the SES grew by about 50 per cent plus in each band. That has just raised the question as to what has been driving that. Is it a function of the growing complexity of the work and the nature of the representational duties that are now performed by senior officers or is it other things like classification creep, which is a less than rigorous application of the work level standards? We do not know the answer to that. 21

2.30 Continuing the discussion on the SES, the committee queried the level of responsibilities allocated to the new Secretaries Board arising from recommendations of the Moran review. Concerns were expressed about the accountability of the Board to Parliament. The Commissioner put the view that:

Each of the members of the Secretaries Board reports to a minister and, in the context of whole-of-government issues, there are the standard questions around the authority of cabinet, the responsibilities of ministers ... none of that has changed. I cannot see that there is anything different about this set of relationships compared to portfolio secretaries in terms of the accountability of each member of that group to their minister and to the government. 22

2.31 The committee also discussed the Moran review's reliance on the Australian National University as a source of training and research for the APS. Matters raised included the concentration of the APS and its advising bodies within the ACT. The Commissioner responded:

It [the Moran review] actually places quite an emphasis on the Public Service developing networks and relationships with a broad range of thinkers and expertise. It puts as strong an emphasis on those academic

21 Committee Hansard, 24.5.10, p. F&PA 97.

22 Committee Hansard, 24.5.10, p. F&PA 93 .

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networks, whether they are in Canberra or anywhere else, as it does on the ANU.23

13

2.32 Other matters discussed include whistleblower protections; work-life balance in the APS; separation and engagement data; and the impact of a freeze on recruiting on the APS .

Office of the Commonwealth Ombudsman

2.33 The Office of the Commonwealth Ombudsman was briefly examined on the directive to provide briefings to the government. Mr Ronald Brent, Acting Ombudsman stated:

We have not been instructed to provide any reports. We have been asked, where we consider it appropriate, to provide briefing on matters that might be relevant to the Prime Minister's office.24

2.34 When questioned about the independence of the office, the Acting Ombudsman reiterated:

The ombudsman's office is not subject to direction from the minister. We are protected statutorily from undue interference and we make our decisions based on what is in the interests of the effective and proper functioning of the ombudsman's office.25

Office of the Inspector-General of Intelligence and Security

2.35 The committee questioned the Office of the Inspector General of Intelligence and Security on the marked increase in complaints against the Australian Security Intelligence Organisation (ASIO) in relation to security assessment processes. It was indicated that complaints rose from 193 in last financial year to 850 to date for this financial year.

2.36 Dr Vivienne Thorn, Acting Inspector-General of Intelligence and Security, explained that 842 of these complaints were about the timeliness of security assessments undertaken by ASIO. The OIGIS stated that it did not investigate all complaints as they largely concerned delays and had similar characteristics and allegations regarding ASIO's efficiency.26

2.37 Senators also sought information on proposed legislation which will require the OIGIS to assess whistleblower complaints concerning intelligence and security agencies; progress of the recruitment of a new Inspector-General; and the capacity of the office to meet their increased workload.

23 Committee Hansard, 24.5.10, p. F&PA 93 .

24 Committee Hansard, 24.5.10, p. F&PA 102.

25 Committee Hansard, 24 .5.10, p. F&PA 103.

26 Committee Hansard, 24.5.10, p. F&PA 107.

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Office of National Assessments

2.38 The Office of National Assessments responded to questions relating to the recruitment of staff and the length oftime taken to fill vacancies.

Australian National Audit Office

2.39 The committee spent a considerable amount of time examining the Australian National Audit Office (ANAO). The main issues considered included the establishment of the Independent Communications Committee (ICC) and its impact on the role of the Auditor-General in his assessment of campaign advertising; and auditing of the economic stimulus project, Building the Education Revolution (BER).

2.40 Since 2008, the Auditor-General has undertaken the scrutiny of government advertising campaigns valued over $250,000. The Special Minister of State, Senator the Hon Joseph Ludwig, explained that the Government had requested that a review (the Hawke review) be undertaken of advertising arrangements and that as a result, the Independent Communications Committee had been established:

Dr Allan Hawke was appointed on 27 January 2010 to conduct a review of government advertising arrangements, and he commenced on 8 February and a final report was provided ... on 26 February 2010. Dr Hawke ' s report was released by me on 31 March 20 1 0.

Dr Hawke's recommendations included establishing and Independent Communications Committee to report to chief executives on compliance with government advertising guidelines in place of the role formerly played by the Auditor-General. The Independent Communications Committee is chaired by Dr Allan Hawke, with former public servants, Ms Barbara Belcher and Ms Helen Williams .27

2.41 The minister informed the committee that the Hawke review had

recommended that the Auditor-General was not the most suitable person to conduct performance audits of campaign advertising, as the Auditor-General has been responsible for providing a report regarding proposed campaign advertising activity within the advertising guidelines. The minister went on to comment 'it was a challenge, in our view and in Dr Hawke's view, for the position of the Auditor­ General to then conduct performance audits on campaign advertising'.

28

2.42 In regards to the powers of the Auditor-General, the Minister added:

... the Auditor-General is free to undertake an audit of any campaign or aspect of the government's advertising framework. In addition, the $250,000 remains. 29

2.43 The committee noted the Auditor-General's comments in a letter to the Special Minister of State on 29 March 2010 voicing his disappointment at the lack of

27 Committee Hansard, 25 .5.10, p. F&PA 5.

28 Committee Hansard, 25.5.1 0, p. F&PA 6.

29 Committee Hansard, 25.5.10, p. F&PA 5.

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consultation with his office in the finalisation of the Hawke review. Mr McPhee stated:

.. .in my letter to Senator Ludwig I was contrasting the processes employed following the Hawke review, whereby I was not consulted on the completed review report nor did I have the opportunity to directly inform government of my views before government took their decision to change the arrangements with respect to the review of advertising campaigns.30

2.44 Mr McPhee noted that the new guidelines removed the need for an explicit cost-benefit analysis to be undertaken prior to campaigning. Minister Ludwig clarified:

.. . the role of the cost-benefit analysis is to ensure that the effectiveness of the advertising and information campaign is maximised within the available campaign budget provided by government. The guidelines now reflect that intent, requiring that advertising campaigns should be cost-effective and justified within the budget allocated to the campaign. The cost-effectiveness

measure was introduced to remove complexity and deliver better information for assessment, as has been the case with the cost-benefit analysis. 3 1

2.45 The Auditor-General also noted that under the new arrangements, the ANAO's view would not be given before the campaign commenced.32

2.46 There was extensive discussion in relation to the Auditor-General's powers in auditing the Building the Education Revolution (BER), specifically, the inability of the ANAO to consider whether the Commonwealth received 'value for money'. The Auditor-General indicated that as the audit had been undertaken at the request of the

Senate, he had provided advice to the former Clerk of the Senate, Mr Harry Evans, outlining the scope of the audit.

2.47 The Auditor-General explained that he did not have the mandate under the Auditor-General Act 1997 to consider whether the 22 implementing education authorities were achieving value for money. 33 The Auditor-General went on to comment that he could audit the administration of Commonwealth agencies, however

the performance of state government entities would fall under the purview of state auditors-general. 34

2.48 The committee expressed concern about the limitation to the Auditor­ General's mandate and suggested to the Auditor-General that it would facilitate the work of the Parliament if the Senate could be informed of instances when the ANAO saw itself being precluded from undertaking examinations because of jurisdictional

30 Committee Hansard, 25 .5.10, p. F&PA 8.

31 Committee Hansard, 25 .5 .1 0, p. F &P A 11.

32 Committee Hansard, 25 .5.10, p. F&PA 16.

33 Committee Hansard, 25.5.10, p. F&PA 28.

34 Committee Hansard, 25 .5.10, p. F&PA 28.

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issues. 35 The Auditor-General noted, in relation to issues raised in the conduct of the BER audit, that this 'is a very contemporary issue in public administration' particularly given recent developments in public administration under the umbrella of the Council of Australian Governments.36

2.49 In relation to the BER audit, the committee also examined the methodology employed by the ANAO in the school principal survey for the BER audit, and whether an accurate representation could be drawn from the number of surveys returned.

Finance and Deregulation Portfolio

Department of Finance and Deregulation

2.50 The committee commenced questioning of officers by seeking clarification of the policy under the Government's fiscal strategy which required the government to offset all new spending with savings in order to bring the budget back into surplus. Assistant Treasurer, Senator the Hon Nick Sherry, explained that a disciplined approach to spending, with offsets to new spending proposals and a cap on expenditure to two per cent growth, will in part, contribute to the delivery of a budget surplus in three years time. 37

2.51 The committee briefly discussed the change of commencement date of the Carbon Pollution Reduction Scheme (CPRS) and its implications for the Budget. The department reiterated information provided in Budget Paper No. 1, that funding of the CPRS has been removed from forward estimates due to the delay in the implementation of the scheme.38 Senators also discussed the expenditure of the $652 million, previously allocated under the CPRS, to renewable energy and efficiency measures. 39 The minister commented:

I think we have well outlined the rationale for both measures, for their treatment in the budget forward estimates. It is totally consistent with past practice, not just under this government but under your government. 40

2.52 Senators also raised the BER with officers and addressed matters including the costing of the BER and the subsequent appropriation of $1.7 billion in additional funds due a shortfall in funding and the limited time in which the department had undertaken the original costing of the initiative. Mr Tune indicated that the timing did not have an impact on the costing of the program, and that costings are made on

0 h h 0 41

assumptiOns t at may c ange over time.

35 Committee Hansard, 25.5.10, p. F&PA 29.

36 Committee Hansard, 25.5.10, p. F&PA 28.

37 Committee Hansard, 26.5.1 0, p. F&PA 3.

38 Committee Hansard, 26.5.10, p. F&PA 5.

39 Committee Hansard, 26.5.10, p. F&PA 7.

40 Committee Hansard, 26.5.10, p. F&PA 7.

41 Committee Hansard, 26.5.10, p. F&PA 11.

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2.53 The committee expressed interest in the mechanisms utilised for the additional appropriation for the BER. Departmental officers explained that the additional spending was approved on 1 7 March 2009 through a regulation 10 approval. Mr Tune commented:

What was given by the minister for finance was a regulation 10 approval under the FMA Act, and that is a theoretical amount. The reason that regulation 1 0 approval is required by the Minister for Finance and Deregulation is that spending is to proceed across a number of years, and that is covered under that act ... It does not actually approve spending in a sense that there is a cabinet decision or a government decision to spend that amount. It is just a technical thing that is done under this regulation I 0- to give you some coverage down the track. 42

2.54 The committee briefly discussed Commonwealth liability arising from the Home Insulation program. The department informed the committee that there has been some claims for compensation through the Comcover scheme (the Commonwealth's insurance scheme) of which none have been accepted.43

2.55 The committee revisited discussions from additional estimates in February 2010 , regarding the Operation Sunlight recommendation in relation to the provision of policy and costing advice to non-government parties prior to an election. It was indicated that funding had been allocated to the Parliamentary Library to provide this service. Further, discussions had been conducted with the Parliamentary Library to outline that the appropriations of these funds as an outcome of Operation Sunlight and are available for their use.44

2.56 The committee also continued to canvass issues in relation to the ICC. The committee was interested in the support provided to the ICC by Finance and Deregulation staff and details of the operations of the ICC. Specifically, the committee discussed the methods by which exemptions from scrutiny under the clause of 'compelling reasons' could be undertaken. Mr John Grant, First Assistant Secretary, Procurement Division, explained:

I suppose the process is that-and it is based on experience- before the campaign has even been brought before the ICC a request for exemption might be made and is considered by the minister. The minister takes the decision and then informs the chair of the ICC and the parliament.

45

2.57 Other issues discussed included:

• health agreements and funding between different levels of government;

• assumptions underpinning the health agreement funding;

• examination of regulatory decisions across the Commonwealth;

42 Committee Hansard, 26.5 .10, p. F&PA 12.

43 Committee Hansard, 26.5.10, p. F&PA 25 .

44 Committee Hansard, 26.5.10, p. F&PA 28.

45 Committee Hansard, 27.5.10, p. F&PA 11.

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• new travel arrangements including frequent flyer points;

• ministerial staffing;

• monitoring of payment of accounts by government agencies and the payment of penalty interest for late payment; and

• Google advertisements.

Future Fund Management Agency

2.58 The committee discussed the Future Fund's Telstra shareholding. Mr Paul Costello, General Manager, informed the committee that while the Future Fund has, 'a mandated position to reduce its Telstra shareholding over time', comments regarding the shares and speculation on various outcomes have impacts on the share value.

46

2.59 The committee moved on to discuss the Future Fund's international shareholding and expressed concerns about investments in markets made risky by the financial crisis. Mr Costello commented:

We have been concerned about the events which have coalesced and arrived in a very significant way in a very short period of time, so we have been trying to de-risk the program, whilst not giving up our obligation to try and achieve a return on it. We have been both changing the composition of what we hold, to make it less exposed to these sorts of risks, and managing and rotating within programs to try and avoid exposures to these sorts of

. . k 47 systemic ns s.

ComSuper

2.60 The committee questioned ComSuper on quality improvements to the compilation of data held by ComSuper. Mr Leo Baxtor, Chief Executive Officer, clarified:

That is true, there is a contract out to find somebody to examine the ways that data is held in ComSuper and the quality of that data. Having said that, there is no evidence that the data holdings are in any way causing any incorrect benefits to be paid to members. 48

2.61 The committee also discussed the indexation of superannuation in relation to recommendations made in the Matthews review into Commonwealth civilian and military superannuation schemes. 49

Australian Reward Investment Alliance

2.62 The committee briefly questioned the Australian Reward Investment Alliance (ARIA) on its resource sector shareholdings particularly as ARIA has significant investments in BHP Billiton Ltd. The committee expressed concern about the fall in

46 Committee Hansard, 26.5.10, p. F&PA 75.

47 Committee Hansard, 26.5.10, p. F&PA 78.

48 Committee Hansard, 26.5.10, p. F&PA 86.

49 Committee Hansard, 26.5.10, p. F&PA 80- 85.

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BHP's share prices and sought to determine if the proposed mining tax could be a causal factor. However, Mr Lochiel Crafter, Chief Executive Officer, stated:

... I simply cannot tell you what the impact of the discussion regarding the tax is ; there is simply too much other activity in the marketplace to define what the impact of this tax is versus all the other things that have happened in the market in six weeks. 5°

Medibank Private

2.63 The committee questioning of Medibank Private focused on changes to products offered which responded to customer feedback on the need for more clarity in the range of products offered. 5 1

2.64 The committee also queried Medibank's lack of presence on the private health insurance comparative website, iSelect. Officers informed the committee that Medibank Private does not have an interest in being branded through that channel, and has recorded growth in membership without needing to be marketed on iSelect.

52

Australian Electoral Commission

2.65 The committee questioned the Australian Electoral Commission (AEC) on methods employed to increase voter enrolments. Officers reiterated comments made at the last round of estimates, that there is no penalty for failing to enrol. Officers did note that current figures show a growth in the number of people who are registered ti vote. 53 Mr Ed Killesteyn, Electoral Commissioner, added:

The Commonwealth Electoral Act is quite unique in that it is one of the few pieces of legislation, in fact I cannot recall any other similar piece of legislation that I have ever had to administer, where the issue that we are talking about, which is enrolment, is both an entitlement for an Australian

citizen and an obligation ... Under that bases, as an administrator I have to both pursue strategies which encourage people to get on the roll and use their entitlement .. . and at the same time use whatever tools I have at my disposal to enforce that enrolment. 54

2.66 The committee also expressed interested in the number of organisational ballots for which the AEC runs elections, funding of protected action ballots and potential technological improvements to the conduct of ballots.

50 Committee Hansard, 26.5.10, p. F&PA 89.

51 Committee Hansard, 26 .5.10, p. F&PA 94.

52 Committee Hansard, 26.5 .10, p. F&PA 96.

53 Committee Hansard. 27 .5.10, pp F&PA 71- 72.

54 Committee Hansard, 27.5.10 p F&PA 73 .

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Human Services Portfolio

Department of Human Services

2.67 The committee sought information on staffing matters including staff levels, retirements and redundancies and staff travel. 55 The committee then proceeded to explore the co-location of Centrelink, Medicare, CSA and CRS offices. The department indicated that 21 additional offices would be co-located by September and another 20 by the end of 2011. Talks are being held with the Community and Public Sector Union (CPSU) in relation to staffing matters arising from the co-locations. 56

2.68 Matters canvassed with the Child Support Agency (CSA) included the number of paying parents, the number of children supported through the arrangements and the total ameunt of support paid ($949 billion in 2008-09). 250 000 parents are in arrears with a total outstanding debt of $1.151 as at April 2010. Officers indicated that even though a child may have reached the age of 18 years and no longer fall within the child support arrangements, if there are outstanding arrears, the case remains active. If the CSA has been unsuccessful over a number of attempts and over a period of time to collect the arrears, the case may be marked for non-pursuit. However, the cases marked for non-pursuit are continually reviewed to ascertain if they should be reactivated for example, if a new collection opportunity arises. 57

CRS Australia

2.69 Questions directed to CRS included staffing levels and turnover, advertising expenditure and travel. CRS also provided information on client numbers.

Centre/ink

2. 70 Centre link provided information in relation to the request by the

Parliamentary Library for data on the family tax benefit. Officers indicated that Centrelink worked under a protocol with policy departments as a custodian of data that they collect or that Centrelink collects on their behalf. Further, 'that protocol says that Centrelink needs to seek permission for the release of data' from the policy department. Ms Hogg, CEO Centrelink, stated that:

When we received the request, under the protocol from 2006, we then approached FaHCSIA to seek permission to release the data, but the FaHCSIA decision maker denied that request. But I do understand now that a senior FaHCSIA officer has reviewed that decision and the data was, I understand, being released to the Parliamentary Library this morning. 58

55 Committee Hansard, 27.5.10, pp F&PA 86-87.

56 Committee Hansard, 27.5 .1 0, pp F &P A 89- 91.

57 Committee Hansard, 27.5 .10, pp F&PA 93-94.

58 Committee Hansard, 27.5.10, p. F&PA 100.

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21

2.71 The committee also discussed the 2006 protocol for the provision of information. 59

2.72 Officers also explained the processes by which policy changes are

implemented by Centrelink, in particular the announcement that the Government will strengthen job seeker engagement. Centrelink indicated that there are two areas where changes will be made: first, job seekers will be able to report their income by ringing a call centre or over the internet; and secondly, selected customers -those job seekers who are most vulnerable to longer term unemployment - will have intensive participation contact interviews on a regular basis. 60

2.7 3 Other matters raised with Centrelink included conduct of job seeker interviews; staffmg resources; development of evaluation processes for the new approach to interviews; the work of employment service providers; fraudulent activity; media analysis; and rural service officers.

Medicare Australia

2.74 The committee discussed the underlying assumptions in relation to the costs for the new hospital network. Medicare explained:

The procedures are similar for when we design and cost any new piece of work that we are asked to perform. What typically happens is that we are approached by the policy agency, who would give us some policy outcomes they are looking to deliver. They might talk to us about the types of delivery mechanisms they would like and we would talk about the assumptions: the types of customers, the number of transactions et cetera. We would then work to design what that solution might look like. It might involve the development of an information technology system; it might involve us talking about how much time our staff out in the network might require to undertake particular transactions. We design what this service

model will look like and then we go through a process to cost how much it will be to build and implement that service model. 6 1

2.75 Other matters raised with Medicare included the home insulation project; development of the Unique Health Identifier; aged-care forms; and Medicare fraud.

Senator Helen Polley

Chair

59 Co mmittee Hansard, 27 .5.10, pp F&PA 102- -04.

60 Committee Hansard, 27.5.10, p. F&PA 109.

61 Committee Hansard, 27.5.10, p. F&PA 122.

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Coalition Senators' Additional Comments

'National Emergency' withheld from Estimates

1.1 Coalition Senators express their deep disappointment in the government's contemptuous treatment of the Senate Estimates process. In particular, the deliberate decision of the Special Minister of State to delay the announcement of his exemption to the government's advertising guidelines until the day after the committee's Estimates hearing had concluded.

1.2 This act exposes the hypocrisy of the government over the issue of 'openness and accountability' and is in poor form , given the committee acceded tG the Minister's request to reschedule its proceedings to fit in with the Minister's timetable.

1.3 Coalition Senators believe that the Minister's deliberate attempt to avoid scrutiny warranted the recalling of Estimates to reconsider Outcome 2.

1.4 The Minister's announcement on 28 May 2010 of the exemption of the Mining Tax campaign from its advertising Guidelines took place four days after its granting. Claims from the Minister that it took him four days to draft the parliamentary statement simply do not ring true, given that he had been provided with a draft statement ten days beforehand.

1.5 Moreover, the Minister was able to amend the final letter to the Treasurer by 24 May 2010. The substantive reasons in both documents are word-for-word identical, which would indicate that the claim of subsequent revision of the parliamentary statement over the next four days is, at best, an evasion.

1.6 During this period, the Minister could easily have tabled his statement out-of­ session, publicly announced it, or had it tabled in the House of Representatives. It was also open to him to simply table the 24 May 2010 letter to the Treasurer, with a short explanatory statement attached.

1. 7 Coalition Senators believe that the Minister's refusal to take any of these steps, choosing instead to withhold tabling his statement until the completion of Estimates, puts paid to the claim that the Rudd Government would put an end to the so-called 'sick cancer within our system' in the form of political advertising.

Answers to Questions on Notice

1.8 Coalition Senators note the further disrespect of the Estimates process evidenced in the government's lacklustre record of response to Questions on Notice.

1.9 Notwithstanding the ample time allocated for written and verbal questions taken on notice, many questions from Additional Estimates in February remained unanswered even while the present Budget Estimates were being considered, far later than the date of26 March 2010 which was set for their response.

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24

1.10 The failure to answer Questions on Notice by the agreed time is not only disrespectful to the Senate, but severely impedes the scrutiny of Budget Estimates when senators are required to ask unanswered questions on multiple occasions.

1.1 In particular, the poor performance of the Department of Climate Change and Energy Efficiency should be singled out for comment.

Senator Scott Ryan Liberal Party of Australia Senator for Victoria

132

Senator Helen Kroger Liberal Party of Australia Senator for Victoria

Appendix 1

Departments and agencies under the Committee's oversight

Parliamentary departments

Department of the Senate; and

• Department ofParliamentary Services.

Prime Minister and Cabinet Portfolio

• Department of the Prime Minister and Cabinet;

• Australian Institute of Family Studies;

Australian National Audit Office;

• Australian Public Service Commission;

• National Archives of Australia;

• National Australia Day Council

• Office of the Commonwealth Ombudsman;

• Office of the Inspector-General of Intelligence and Security;

Office ofNational Assessments;

• Office of the Official Secretary to the Governor-General;

• Office of the Privacy Commissioner; and

• Old Parliament House.

Finance and Deregulation Portfolio

• Department ofFinance and Deregulation;

• Albury-W odonga Development Corporation;

• Australian Electoral Commission;

• Australian Industry Development Corporation;

• Australian Reward Investment Alliance;

• Australian River Co Ltd;

• Australian Technology Group Ltd;

• ComSuper;

• Future Fund Management Agency;

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26

• Medibank Private Ltd; and

• Tuggeranong Office Park Pty Ltd.

Human Services Portfolio

• Department of Human Services (includes Child Support Agency and CRS Australia)

• Centrelink;

• Medicare Australia; and

• Australian Hearing.

134

Appendix 3

Index to Hansard Transcripts 1

Monday, 24 May 2010

Parliamentary Departments

Page no.

Department of the Senate ........................................................................................ 3

Department of Parliamentary Services ................................................................... 8

Prime Minister and Cabinet Portfolio

Office of the Official Secretary to the Governor-General .................................... 56

Australian Institute of Family Studies .............................. .... ...... ........ .......... .. ...... 71

Office of the Privacy Commissioner .. .................................. ........ ........................ 80

0 ld Parliament House .. ............................ .. .. ................ ...... ................................... 86

Australian Public Service Commission ................................................................ 89

Office of the Commonwealth Ombudsman ........................................................ 102

Office of the Inspector-General oflntelligence and Security ............................. 105

Office of National Assessments .......................................................................... 1 09

Tuesday, 25 May 2010

Prime Minister and Cabinet Portfolio

Australian National Audit Office ............................................................................ 3

Department of Prime Minister and Cabinet.. ........................................................ 52

Wednesday, 26 May 2010

Finance and Deregulation Portfolio

Department of Finance and Deregulation ......................................................... 2, 98

Future Fund Management Agency ....................................................................... 73

Australian Reward Investment Alliance . ............................................................ .. 80

Com super. ............................................................................................................. 80

Medibank Private Ltd ........................................................................................... 94

Page numbers corresponds to the proof Hansards. Occasionally there are slight variations with the final version.

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28

Thursday, 27 May 2009

Finance and Deregulation Portfolio

Department of Finance and Deregulation (Procurement framework) .................... 2

Australian Electoral Commission ................................................................... ... .. . 60

Human Services Portfolio

Department of Human Services .. ... ...... .... .... ............ ..... ... .............................. ... .... 86

CRS Australian .... .................... ......... .. ......... ......... ............. ............ .. ............ ......... 98

Centrelink ............................................................................................................ 100

Medicare Australia .......... ............. .. .......... ...... ........ .. .. ....... ......... ...... .. .... ............. 121

136

The Senate

Foreign Affairs, Defence and Trade Legislation Committee

Budget estimates 2010-11

137

June 2010

@ Commonwealth of Australia

ISBN 978- 1-74229-322- 6

This document is produced by the Senate Standing Committee on Foreign Affairs, Defence and Trade Secretariat, and printed by the Senate Printing Unit, Parliament House, Canberra.

138

Senate Foreign Affairs, Defence and Trade Legislation Committee

Membership

Senator Mark Bishop. ALP, W A (Chair) Senator Russell Trood, LP, Qld (Deputy Chair) Senator Don Farrell, ALP, SA Senator Michael Forshaw, ALP, NSW Senator Helen Kroger, LP, Vic Senator Scott Ludlam, GRN, W A

Oth er senators who participated

Senator Hon Eric Abetz, LP, Tas Senator Guy Barnett, LP, Tas Senator Simon Birmingham, LP, SA Senator Hon Ron Boswell, NP, Qld Senator Hon George Brandis, LP, Qld Senator David Bushby, LP, Tas Senator Hon Richard Colbeck, LP, Tas Senator Sarah Hanson-Young, GRN, SA Senator Steve Hutchins, ALP, NSW Senator Hon David Johnston, LP, WA Senator Kate Lundy, ALP, ACT Senator Hon Ian Macdonald, LP, Qld Senator Anne McEwen, ALP, SA Senator Julian McGauran, LP, Vic Senator Christine Milne, GRN, Tas Senator Kerry O'Brien, ALP, Tas Senator Stephen Parry, LP, Tas Senator Glenn Sterle, ALP, WA Senator Nick Xenophon, Ind, SA

111

139

Committee secretariat Dr Kathleen Dermody, Secretary Ms Pamela Corrigan, Research Officer Dr Tim Kendall, Principal Research Officer Ms Erja Stephenson, Senior Research Officer

Parliament House, Canberra ACT 2600 Phone: (02) 6277 3535, fax: (02) 6277 5818

e-mail: fadt.sen@aph.gov.au; Internet: http://www.aph.gov.au/senate fadt

140

Table of contents

Page

Membership .. 00 00 00 00 00 .. .. .. 00 .00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00 00. 00 . 00 00 00 00 00 00 00 00 00 00 00 00 00 00 .. 00 00.00 . 00 00 00 00 .. 00 00 00 iii Report to the Senate

Introduction .. ... 0000000000 0000 00 00 00. oooooooo · .. 000000 0000 00. 00 00 0 00 0000 00 00 00 000 000 00 .... 0000 00 00 00 00 00 0000 00 00 .. 0000 00 00 oo .. 00 00.000 7

Questions on notice 0000000 00 00 ... 00000 0000 00 00 000000 0000.00000000000 00 0000 000.00 000 ... 0000 000000 .. 00 0000 00 0000.000 00 00 0000 00 00.000 7 Late return of answers to questions on notice 00 00 00 00 0000 00 00 00 00 00 00 0000 0000 00 0000 00 .. oooooo .. 00 .... 00 00 .. 00 00 0 7 Reason for prompt return of answers .. .. oooooooooooooooooooo oo oooo .. .. ........ ...... 00000000 000000000000 000000000 8 Defence portfolio 00 00.00 00 .... 00 00 00 00 .. .. 00 00 .... 00 .... 00 .. 00 00 .. 00 .00 . 00 .. 00 00 .. .. .. 00 00 00 00 00 00 ...... 00 00 00 .. .. 00 00 ........ 00 9

Department of Defence 0000 .... 00 .. 00 00 .... ...... 00 0000 ...... 00 00 .... 00 000 ..... 00 00 00 0000 ...... 000000 .... 00 00 00 ........ 00 9

Defence Materiel Organisation (DMO) oooo oo ooooooooOOOOoooooooooooooooooooo .. .... oo .. oooooooooooooooooooo ... 12 Defence Housing Australia (DHA) .... oooooo oo ... ... oo oooo ...... oooooooo ...... oooo o ooooooooooooooooooooo oooooooo 12 Department of Veterans' Affairs .oo .... oo .. oooo o ooooooooooooo .... .... oooooo o ooooooo oooooo oo oo oo oo oo oo .... oo oooooo. 13 Australian War Memorial (A WM) OOOOOOOOOOOO oooo oooooo oo 0000 .. 00 00 00 00 00 00 000000 0000 00 0000000000 00 .... 00 00 00 .. 14 Foreign Affairs and Trade portfolio ooOOOO OOoooooo oooooooooo oooooooooooooooo oo OOooooooooooOO oooo oooooooooooooooooo. 14

Department of Foreign Affairs and Trade oo oooo oooooo oooooooooooooooooooooooooo oo 00000000 oo oo oooooo oooo oooo.14 Australian Centre for International Agricultural Research (ACIAR)oooooooooo oooo oooooooo oooo l8 Australian Agency for International Development (AusAID)oo .. ooooooooOOooOOoooooooooo oooo oooo. 18 Australian Trade Commission (Austrade) oooooooooooooooooooooooooooooooooooo oo oooooooooooooo oooooooooooooo.20 Acknowledgements 0000 0 00 00 .. 00 000 ... 00 00 00 00 0000 00 00 00 00 00 00 00 .... oo 000. 00 .. oo 00 ... ... 00 .... 0000 000000 .. .. 000.0000 00 0000 ...... 21

Index to proof transcripts. 00 .. .. 00 0 .. . 00000.00 0000 .. 00 00 ... 0000 ... oooo· .... 00 .. 00 00 0000 00000000 .. ... 000 .. 00 .. 00 .. 00 oo· .. 00 23 Defence portfolio .. .. ........... ...... ... .... .. ....... ... ...... .... ..... .... .... .. ...... .. .. .... .......... .. ..... ..... ........ 25

Department of Defence . 00 .00 00 00 00 00 ...... .. 00 00 00 00 00 00 00 .. 00 00 00 00 00 00 ... .. 00 ... .. 00 00 00 00 00.00 .. 00 00 ... 00.00 . 00 00 00 25 Defence Materiel Organisation (DMO) .oo .. oo oooooo OOOOoooo oo· ··oooo o oooooo oo oooooo oooo•· ·ooooooooo oo ····oooo 25 Defence Housing Australia (DHA) oooooooooooooooo oooo oooo oo oo ····oo oooo oooo oooooooooooooooooo ·· oooo oooo o ooo oo oo25 Department of Veterans' Affairs ... .. ooooooooooooooo·····oooooooo oooo .... .. oooooooooooo ..... oo.oo oo ...... oooo ··oo ·26 Australian War Memorial (A WM) 00000000 000000 00 00000000 00 .. 00 00 00 00 00 00 00 00 ... 0000 .. 00 0000 .. oo 00 00000000 ..... 27 Foreign Affairs and Trade portfolio oooooooooooooooooo oo oooo oo ...... .. oooooo oo ........ oooooo oooo oooooooooooo oo oo oo.28

Department of Foreign Affairs and Trade oo oooooooooooo oooooooooooo oooooooo oooo oo oooo oooo oo oooooooo oooo oo oo. 28 Australian Centre for International Agricultural Research (ACIAR)oooo oo oooooooooooooooooooo29 Australian Agency for International Development (AusAID)oooooo oooooooooo oooooooooooooooooooo.29 Australian Trade Commission (Austrade) oooooooooo oo oooooooooooooooooooooooooooooo oooooooo oo oooooooooo oo oo .30

v

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Senate Foreign Affairs, Defence and Trade Legislation Committee

Report to the Senate

Introduction

1.1 On 11 May 2010, the Senate referred to the committee for examination and report the following documents:

• Particulars of certain proposed budget expenditure in respect of the year ending 30 June 2011 relating to the Defence portfolio and the Foreign Affairs and Trade portfolio, and

• Particulars of proposed budget expenditure in respect of the year ending 30 June 2011.

1.2 The committee has considered the proposed budget expenditure for the year ending 30 June 2011. It has received evidence from the Minister for Defence representing the following ministers: the Minister for Veterans' Affairs; the Minister for Foreign Affairs and the Minister for Trade and officers of the departments and ag encies concerned.

1.3 The committee met in public session on 31 May and 1, 2, and 3 June 2010. Further written explanations provided by departments and agencies will be presented separately in volumes of additional information. This information will also be placed on the committee' s internet site (www.aph.gov.au/senate_fadt).

Questions on notice

1.4 The committee resolved, under Standing Order 26, that written answers and additional information should be submitted to the committee by close of business on Friday, 30 July 2010.

Late return of answers to questions on notice

1.5 During the hearings the committee commented on the late return of answers to questions on notice from the additional round. In particular, the committee questioned the Department of Veterans' Affairs and the Department of Foreign Affairs as to why their answers were not received by the due date of 1 April2010.

1

1.6 The committee received the last of the additional estimates answers from both departments, just before, and during, the budget estimates hearings.

1.7 DVA's most recent performance shows that of the 51 answers, 50 were received on Friday 28 May and one on Monday 1 June; the very day that DV A were to appear before the committee and 8 weeks past the due date of return.

Department ofVeteran's Affairs, Proof Committee Hansard, 1 June 2010, pp. 96-97. Department of foreign Affairs and Trade, Proof Committee Hansard, 2 June 2010, p. 5.

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8 Report on Budget estimates 2010--2011

1.8 The Secretary apologised for the tardiness and asked the committee to have a look at the department's record. He explained that the department's workload had caused the delay in providing answers to the questions. It should be noted, however, the DV A has a recent history of delay.

1.9 In the last three financial years of estimates, across eight rounds, DV A has been late with answers on seven occasions, with delays ranging from 14 days to several months. The average time delay was approximately 5 weeks.

1.10 The committee also raised the matter of late return of answers to question on notice with the Department of Foreign Affairs and Trade. It was noted that not one answer was received by the due date of 1 April and two answers were 62 days late. late lodgement of answers is not new. To make this point about the late

responses, the committee produced the following statistics for previous rounds of estimates:

• Supplementary 2009-10 12 days late

• 8 udget 2009- 1 0 13 days late

• Additional 2008- 09 8 days late

• Supplementary 2008-09 50 days late

• Budget 2008- 09 35 days late.

The Secretary apologised for the delays, stating that the department would deliver in time this current round. The committee notes that both secretaries have undertaken to provide the questions to the budget round within the timeframe set down by the committee.

Reason for prompt return of answers

1.11 It should be noted that after the conclusion of the estimates hearings, the committee allows approximately seven weeks for departments and agencies to return their answers. This time frame is intended to provide sufficient time for departments to prepare and lodge their answers and for committee members to then consider these responses in time for the following round of estimates hearings. Committee members are unable to give answers due consideration if they are received just before the commencement of the next round.

1.12 The committee understands the work that goes into preparing the answers to questions on notice and is particularly appreciative of the departments and agencies that endeavour to meet the date set for the return of answers.

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Report on Budget estimates 2010-2011

Defence portfolio

Department of Defence

9

1.13 The committee acknowledged the attendance of Air Chief Marshal Angus Houston AC, AFC, Chief of the Defence Force (CDF), Dr Ian Watt AO , Secretary of the Department of Defence, and officers of the Defence organisation. 2

Secretmy's opening statement

1.14 Dr Ian Watt made a statement to the committee, which focused on the 2010-11 Defence budget. Other topics covered included the strategic reform program, Defence workforce numbers, Defence payroll remediation task force, and, the ANAO report on the lightweight torpedoes project, JP 2070. 3

1.15 Dr Watt stated that in the 2009-1 0 budget, the government implemented a new funding model for Defence, which resulted in an additional $146 billion over the 21-year period to 2029-30:

This model funds the cost of delivering Force 2030, provided those funds are managed efficiently and effectively, and the Strategic Reform Program cost reductions and reinvestments are achieved ... ln the 2010-1 I budget, the government's commitment to Defence's new funding model and the funds needed to deliver Force 2030 has been maintained.

4

1.16 With regard to the Defence payroll processes and the attention it sometimes attracts, Dr Watt stated:

Since February 2010, the Vice Chief of the Defence Force and the Deputy Secretary of Defence Support have been co-chairing the Defence Payroll Remediation Task Force, which was established by the government to improve the management of the ADF pay and allowances system, particularly for troops deployed. The CDF and I issued a joint directive on

15 February this year to give the task force executive authority within the department ... With a salary and allowance structure as complex as this, enors arise from time to time; it would be unexpected and unlikely if they did not.

... The Defence payroll Remediation Task Force is addressing these issues. Over the coming 12 to 18 months, the task force will concentrate on the root causes of the problems: poor administration, poor execution of delegated authority, process and procedural weaknesses and inconsistent record keeping. To that end, a payroll assurance framework is being developed, which will ultimately lead to a more robust set of controls, greater visibility and better accountability. The task force, via the central

2 Transcript page numbers for the Defence portfolio refer to proof Committee Hansards, 31 May and I June 2010. (See the transcript index at the back of thi s report.) 3 Proof Committee Hansard, 31 May 2010, pp. 5-9. 4 Proof Committee Hansard, 31 May 2010 , p. 6.

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10 Report on Budget estimates 2010-2011

Defence service contact centre, has also facilitated increased access for ADF members' families and dependants to members' pay details to allow them to better monitor and understand the fortnightly payments that they . 5

recetve.

Chief of the Defence Force's opening statement

1.17 Air Chief Marshal Houston addressed the committee about Australia's progress in Afghanistan, giving particular detail to our military strategy, engineering projects, the mentoring task force and force protection for Australian troops. 6

1.18 In terms of general progress in Afghanistan, Air Chief Marshal Houston commented that he had some pleasing statistics:

You are aware that I think the tide is turning in Afghanistan and these statistics reinforce that belief. In a recent ISAF nationwide survey 59 percent of Afghans polled believed their country was 'heading in the right direction'. Across Oruzgan, in the last three years the number of schools has more than doubled. There are approximately 43,000 children registered in school, including 4,100 girls, with a further 7,000 students attending secondary or higher education.

In 2006, there was no provincial hospital, surgeons or specialists. Presently, these positions are filled and the Tarin Kowt district hospital has been upgraded to a provincial hospital with a separate women's ward, a new outpatient clinic, a mortuary and blood bank, and a cholera ward. The women's hospital currently assesses and treats 200 patients a day. The number of basic health centres across the province has increase from one to six, and immunisation for children under the age of one has increased from 37 percent in 2006 to 91 percent in 2009. 7

1.19 A copy of both statements and accompanying documentation were provided to the committee at the hearing.

1.20 Other topics examined during the hearing included:

Portfolio oven;iew and budget summmy

• Anticipated ADF scheduled commitment for the deployments in Afghanistan, Solomon Islands and East Timor. (pp. 13-14, 56).

• Remote locality leave travel entitlements (pp. 14-18).

• East Timor (pp. 13 , 18-19, 56).

• Reservists (pp. 19-20, 56, 77-82).

5 Proof Committee Hansard, 31 May 2010, pp. 8-9.

6 Proof Committee Hansard, 31 May 2010, pp. 10-13, 56. 7 Proof Committee Hansard, 31 May 2010, p. 10.

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Report on Budget estimates 2010-2011 ]]

• Integrated approach to Australia's approach in Afghanistan (pp. 14, 20-23).

• Australia' s contribution to the leadership role in Afghanistan and the future of national and coalition forces (pp. 23-28).

• Australian Defence Force on patrol in Afghanistan and building community projects (pp. 28-29, 87. Also OlJunlO, p. 81).

• Defence personnel welfare and communication with families (pp. 29-30).

• Recognition of the service of elite personnel (pp. 30-31 ).

• Defence budget (pp. 31-41 ).

• Strategic reform program (SRP) and the white paper (pp. 31-33, 34, 35-38); and submarines (pp. 31-33, 34, 35-38, 57-59); SRP and the Rand report (pp. 34-35); and the Pappas report (p. 38).

• Force protection for Australian troops (pp. 41-46, 56-57. Also, OlJunlO, pp. 6-7).

• New funding measures (pp. 45-46).

• Capital equipment program (pp. 46-50).

• Consolidated budget for Defence and DMO-DMO special account (pp. 50-53).

• Strategic reform program (SRP) and delivery of 'Force 2030' (pp. 53-56, 59-69).

• Civilian personnel travel allowance (pp. 69-71, 80).

• Military and civilian positions (pp. 72-73, 77 . Also OlJunlO, p. 103).

• Removal entitlements (pp. 73-77. Also OlJunlO, pp. 80-81).

• Use of Army vehicles for Anzac Day parades (p. 82).

• Defence pay arrangements and the international campaign allowance overpayments (pp. 82-87' 117).

• Joint Logistics Command at Victoria Barracks-non-deployable contractors (pp. 87-91, 103, 104. Also OlJunlO, p. 64-65).

• Acquisition and cross-service agreement (ACSA) with Japan (pp. 91-92).

• Proposed new military court of Australia (pp. 92-95, 103 , 117; and OlJunlO, p. 6).

• VIP, No 34 Squadron (pp. 95-104, 117. Also OlJunlO, pp. 6, 41).

• Death of Mrs da Costa in East Timor (pp. 104-106, 117 . Also OlJunlO, pp. 82-83).

• Activities of operational analysts in East Timor (pp. 106. Also OlJunlO, pp. 5-6).

• HMAS Success and the commission of inquiry (pp. 107, 117).

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12 Report on Budget estimates 2010-2011

• Health studies-ADF personnel and the SIEV36 (p. I 09).

• Mental health funding (pp. 110-113 ).

• Freedom of infonnation activities (pp. 113-117. Also 0 !Junl 0, p. 82).

Defence Materiel Organisation (heard OlJunlO)

• Ammunition pouches, intellectual property rights and controlled exports (pp . 7-9, 51).

• Contracts to manufacture equipment and ADF combat equipment (pp. 9-13).

• Defence Export Control Office (DECO), intellectual property and export controlled products (pp. 13-17, 51).

• Contracts for manufacture ofuniform fabrics (pp. 15-27; 49, 51, 80).

• Priority industry capabilities (pp . 21-22, 25).

• Harding review recommendations (pp. 27-31).

• Restructuring of Clothing SPO in Victoria (pp. 32, 51).

• Issued and non-issued equipment: webbing and ammunition pouches, boots and parade shoes, backpacks and protective equipment, combat fleece jackets, backpack fi·ames and related health issues, helmets (pp. 33-50, 57-64, 65-68, 79).

• Modular load carriage tender process (pp. 52-57, 68-77) . Reports relating to the process (pp. 57).

• Report of defects (RODUM) (pp. 67, 78-79).

• Capability projects update (pp . 83-85).

• Echidna program (p. 85).

• Collins submarines (pp. 85-86).

• Land 121 phase 4 (pp. 86-87).

• Cyber Security Operations Centre (pp. 87-88).

Defence Housing Australia (heard 01Jun10)

1.21 The committee acknowledged the attendance of Mr Peter Howman, Chief Operating Officer and Mr Robert Groom, Chief Financial Officer, from Defence Housing Australia (DHA).

1.22 Matters raised by the committee included:

• Housing stock numbers in Darwin (pp. 88-89).

• Housing in Townsville (pp. 90-91).

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Report on Budget estimates 2010-2011 13

• Housing in Cairns, Adelaide and Western Australia (pp. 91-92).

• Housing in Victoria (pp. 92-93, 95).

• Construction costs in each state (pp. 93-94).

Department of Veterans' Affairs (heard OlJunlO)

1.23 The committee acknowledged the attendance of Mr Ian Campbell PSM, Secretary, and officers of the Department ofVeterans' Affairs (DVA).

1.24 Matters raised by the committee during the hearing included:

Portfolio overview/Corporate and general matters

• Possible freeze on public service positions and the effect on DV A servtce delivery · (pp. 95-96).

• The questions-on-notice process and timeliness (pp. 96-97).

• Dunt review- single claim form trial; claims relating to chronic mental conditions (pp. 97-98).

• Board members on the Veteran's Review Board (pp. 98).

• Dunt review- primary application process and supporting documentation (pp. 98-99).

• DV A staff and various DV A administered acts (pp. 99-1 00).

• Expected decline in the number of claims (pp. 100-101).

• Expected claims under the deseallreseal scheme (pp. 101-102, 107-1 08). Use of statutory declarations in applications for tier classification (pp.l 08-111 ).

• Claims assisted by ex-services organisation (ESOs) (pp. 102-103 ).

• Widow/widower entitlements legislation as part of the Harmer review (pp. 103-105).

• British Nuclear test Program- lump sum compensation to veterans (pp. 105-1 06).

• Removal of war widow status and de facto relationships (pp. 106-1 07).

• Building excellence in support of training (BEST) (p. 107).

• Veterans' children education scheme (p. Ill).

• Processing times under SRCA and MRCA schemes (p . Ill).

• White card and gold card entitlements (pp. 111-112).

• Veterans health week (p. 112).

• CentenaryofGallipoliactivities(pp.113-115).

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14 Report on Budget estimates 2010-2011

• Creation of a commission on the Centenary of Anzac (p . 113 ).

• Possibility of the discovery of remains of WWI Australian solders (pp. 115-116).

Australian War Memorial

1.25 The committee acknowledged the attendance of Ms Nola Anderson, Acting Director, and officers of the Australian War Memorial (A WM). Matters raised by the committee included:

• Final volume of the hi story of the Vietnam war (p. 116).

• Gallipoli Victoria Cross medals tour (pp. 116-117).

• Staffmg at the A WM (p . 117).

• Corporate and private funding (p. 117).

Foreign Affairs and Trade portfolio

Department of Foreign Affairs and Trade

1.26 The committee acknowledged the attendance at the hearings of Mr Dennis Richardson, Secretary, and officers ofthe Department ofForeign Affairs and Trade. 8

1.27 The committee questioned the Secretary about an additional $212 million over the next four years, and a projected increase in staff. Mr Richardson explained:

Essentially in the areas where we have additional funding we have received $73 million over four years or $101 million over six years for improving passports integrity, in other words, enhancing the passport system. We have received $85 million over two years for the enhanced civilian engagement

in Afghanistan and $52 million over two years to accommodate the transitional security arrangements for the Australian Embassy in Baghdad moving from ADF provided security to our own security contractors. We have received $14 million over four years for a continuation of the Smartraveller information program. There are a couple of other very minor matters , but they are the four major contributors to that overall increase in

funding .9

1.28 The committee acknowledged that these allocations are for important specific purposes, but sought information on funding in relation to program 1.1, where the activity of policy-making and representation is undertaken.

1.29 In particular, the committee noted that program 1.1 deliverables 'are essentially maintaining an existing level of activity', but there are also in these

8 Transcript page numbers for the Foreign Affairs and Trade portfolio refer to proof Committee Hansards, 2 and 3 June 2010. (See the transcript index at the back of this report .)

9 Proof Committee Hansard, 2 June 2010, pp . 6-7.

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Report on Budget estimates 2010- 2011 15

deliverables 'a large numbers of references to activities which suggest a dynamic and expanding agenda'. It cited a number of examples: promoting non-proliferation and di sarmament, an advanced role in the Asia-Pacific, further deepening our relationship with New Zealand, and, expanding activity in areas such as the Gulf, the Middle East and Latin America. 10

1.30 The Secretary responded that in a number of those areas there are some specific increases in funding. He also stated that:

In other areas where you are doing more, you can sometimes do more without it costing any more, you can enhance a relationship without spending more money on that relationship by the level of attention that you devote to it and the like. You mentioned Latin America. You will be aware

it has been previously announced that this year we will be opening a mission in Lima; that has already been funded and factored in. But, in some of these areas where we are talking about enhanced engagement and doing more, sometimes it is the level at which we are doing it that we are referring to , and not all of these matters cost money. You can also move your priorities around. Organisations do that all the time. 11

1.31 Other matters raised by the committee during the hearings included:

Portfolio overview

• Timeliness of answers to questions on notice from the previous round (p. 5).

• Budget funding increase for the department-use of the additional resources and areas where there is no additional funding (pp. 5-1 0).

• Future funding pressures (p. 1 0).

• Consular services and consular staff numbers (pp. 10-11 ). Consular services in South Africa during the World Cup (pp. 11-12).

• Passport demand and the new passport security system (pp. 12-14 ).

• Security arrangements for the Commonwealth Games (pp. 14-16).

• Answers to questions on notice from the previous round of estimates about staffing matters (pp. 16-18).

• Staffing : DFAT staff waiting on security clearances (pp. 18-19); departures from the department (p. 19); new staffing allocations (pp . 19-20).

• Smartraveller program (pp. 20-21 ).

10 Proof Committee Hansard, 2 June 2010, pp. 6-7.

11 Proof Committee Hansard, 2 June 2010, pp. 6-7.

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• Terrorism white paper (pp. 21-22).

• National Security Committee (pp. 22-25).

Outcome 1

North Asia

• China, the Uygur activists, and Tibet (pp. 26-28).

• The trial ofMr Stem Hu (pp. 27, 35-44).

• The visit to Australia by the Dalai Lama (pp. 27, 28-34).

• Australia-China human rights dialogue (pp. 34-35, 47). Sentencing of Chinese dissident, Mr Sun Xiaodi and his daughter (pp. 4 7, 48). Tibetan filmmaker, Mr Dhondup Wangchen (pp. 47-48).

• Australian government visits to Taiwan (p. 45).

• Google's withdrawal from mainland China (p. 45).

• Autonomous Regional People's Congress (pp. 46-47).

• Ms Giddens in Yemen (p. 48).

• Sinking of South Korean Navy vessel (pp. 48-50).

South East Asia

• Update on the situation in Bangkok, Thailand, and the currency of travel advice (pp. 50-53, 63).

• Burma and the proposed election (pp. 53-57).

• Indonesia and the Sri Lankan asylum seekers from the vessel, Jaya Lestari (pp. 57-60, 63).

• Australian-Indonesian memorandum of understanding on people smuggling (pp. 60-63).

Americas

• Australian Prime minister's proposed visit to summit on non-proliferation (pp. 65-66).

• Australian relations with Latin America (pp. 63-65).

Africa

• Australia's relations with Africa (pp. 67-69).

• Australia's aid contribution to Africa (pp. 69-71).

• United Nations Security Council votes in Africa (pp. 69-71).

• Australia Africa Mining Industry Group and mining interests (pp. 71-72).

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• Mr Brennan and his release from Somalia (pp. 72-73).

Europe

• Appointment of Mr Ritchie as Australian Ambassador to Italy (pp. 81 -85).

South and West Asia, the Middle East

• Update on the blockade of Gaza and the flotilla in international waters (pp. 76-79).

• Israeli use of Australian passports and the relevant protocols (pp. 79-81, 85-87).

• Ejection of an Israeli official from Australia (pp. 85 -87, 89-91 ).

• Afghanistan and funding of the upgrade of the embassy (p. 87). Security arrangements in Kabul for DFAT personnel (pp. 88-89).

• Detention ofMr Langdon in Afghanistan (pp. 91-92).

• Australia's Ambassador to the Holy See and the new chancery project (pp. 74-75).

International organisations, legal and environment

• Australian initiation of proceedings in the international court of justice in relation to Japanese whaling (pp. 93-105).

• Asia-Pacific community (pp. 105-107).

• Australian government statement on the NPT conference (p. 108).

• Future of the ICND (pp. 108-109).

• Australian government's policy on uranium sales to India or other NPT signatories (p. 109).

• ASNO and discussions with its international counterparts (pp. 109-11 0).

• Renewal of the Australia-US nuclear safeguard agreement (pp. 110-111).

• Sanctions against North Korea (p. 111).

National security, nuclear disarmament and non-proliferation

• Australian government statement on the NPT conference (p. 1 08).

•

•

•

•

•

Future of the ICND (pp. 108-109) .

Australian government's policy on uranium sales to India or other NPT signatories (pp. 109).

ASNO and discussions with its international counterparts (pp. 109-11 0) .

Renewal of the Australia-US nuclear safeguard agreement (pp. 110-111 ) .

Sanctions against North Korea (p. 111) .

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Bilateral, regional and multi- lateral trade negotiations

Trade development/policy coordination (heard 03Junl0)

• Status of the New Zealand WTO challenge to Australia's biosecurity arrangements for apples (pp. 76-77).

• ACT A treaty negotiations and the TRIPS agreement (pp. 77 -78).

• Update on the progress on free trade agreements with South Korea, China, Japan and India (pp. 79-82).

Outcome 2

Consular and passp_Q.rt services (heard 03Jun 1 0)

• Passport demand and the new passport security system (pp. 12-14).

Outcome 3

Overseas property

• ANAO report on DFA T's property management (pp. 112 -114).

Australian Centre for International Agricultural Research (ACIAR) (heard 03Jun10)

1.32 The committee acknowledged the attendance of ACIAR officials, Dr Nick Austin, Chief Executive Officer and Dr Simon Ahearn, Principal Adviser, Strategy and Policy. The matters raised by the committee during the hearing included:

• Research collaborations in Papua New Guinea and the Torres Strait (pp. 5-6).

• Challenges working in PNG, and pminerships in the community (p. 6).

• Scholarships for further study to PNG nationals (pp. 6-7).

• Aquaculture and smallholder livelihoods (p. 7).

• Land settlement activities (pp. 7-8).

• Implications of climate change on food security (p. 8).

AusAID (heard 03Jun10)

1.33 The committee acknowledged the attendance of Mr Peter Baxter, Director General, and officers representing AusAID. The matters of most significance raised by the committee during the hearing included:

• Agenda for the 41st Pacific Islands Forum in August, 2010 (pp. 8-9) .

• China and aid to the Pacific region (p. 9).

• Australia's participants in the forum (p. 1 0).

• AusAID contracts and the tendering process (pp. 10-11 ).

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• Contracts over $500,000 (p. 11 ).

• Former AusAID staff members who have won contracts (p. 11).

• Mr Peter Kelly and road works in Vanuatu (pp. 11-13, 35-36).

• Cost-effectiveness of the technical assistance in the aid program and an ANAO report (pp. 13-14).

• Highest average monthly salary of a technical adviser and salaries of advisers in general (pp. 14-15 , 35-36).

• Number of technical advisers employed by AusAID (pp. 15-16).

• Review of technical advisers (pp. 39-42).

• International funding for climate mitigation and adaptation initiatives (pp. 16-17).

• Australia' s climate change budget and its commitment to reducing emissions from deforestation and degradation (REDD) (p. 17).

• Revision in the methodology used to calculate GNI (pp. 17 -18).

• Aid budget money allocated to managing irregular migration flows in Indonesia (p. 18).

• Health expenditure (pp. 18-19).

• ' Call to Action' pilot program and Millennium Development Goals (MDGs) (pp. 19-20).

• Recipients of grants from the 'Call to Action' program (pp. 20-30).

• Accountability mechanisms for use of the 'Call to Action' grant money (pp. 23, 25-26, 33).

• ACTU Organising, Education and Campaign Centre (pp. 22-24, 29-30).

• Addressing gender equality in the aid program, (pp. 30-31 ).

• Progress to meet specific targets within the MDGs by 2015 (pp. 31-32).

• Allocation of funding for family planning and womens' health in the out years (pp. 32-33).

• Fraud prevention program and any current investigation of suspected fraud (pp. 33-34, 55).

• PNG-Australia targeted training facility (PATTAF) (p. 35).

• Independent assessments and evaluations of programs (pp. 36-37, 39).

• New family planning activities by non-government organisations (pp. 37-39).

• Tides Advocacy Fund (pp. 42, 55-57).

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• Framework in relation to government departments applying to AusAID for the delivery of programs overseas: the Development Effectiveness Steering Committee (pp. 42-43).

• Global Fund to Fight AIDS, Tuberculosis and Malaria (p. 43).

• Swine flu vaccinations in Pacific Island countries (p. 44).

• Projected increase in the Australian aid budget to Burma and where it will be spent (pp. 44-45).

• Australia-Indonesia Partnership for Reconstruction (pp . 45-46).

• Update on AusAID staff working in Afghanistan (pp. 47-50, 57).

• Aid budget for Afghanistan and planned activities (pp . 51-52).

• Australia Africa Mining Industry Group and mining interests (02Jun10, pp. 71-72. Also, 03Jun10, pp. 52-53).

• Humanitarian aid program in Africa (pp. 54-55).

Austrade (heard 03Jun10)

1.34 The committee acknowledged the attendance of Mr Peter Grey, Chief Executive Officer, and officers representing Austrade.

1.35 Matters raised by the committee at the hearing included:

• Austrade's relationship with Securency and Note Printing Australia (pp. 58-66).

• Government response to the Mortimer review: EMDG, Brand Australia and the TradeS tart program (p. 66).

• TradeS tart program (pp. 66-70).

• Brand Australia (p. 70).

• EMDG (pp . 70-74).

• Austrade customers who have invested in Australia (pp. 74-75).

• Staff who have recent foreign direct investment attraction experience (pp. 75-76) .

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Acknowledgements

1.36 For their assistance during its hearings, the committee thanks Senator the Ron John Faulkner, Senator the Ron Ursula Stephens and Senator the Ron Stephen Conroy. The committee also acknowledges the attendance and cooperation of the many departmental and agency officers and the services of various parliamentary staff

involved in the estimates process.

Senator Mark Bishop

Chair

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158

Senate Foreign Affairs, Defence and Trade Legislation Committee

Index to proof transcripts

Budget estimates 2010-2011

Defence portfolio

Monday 31 May and Tuesday 1 June 2011

Foreign Affairs and Trade portfolio

Wednesday 2 June and Thursday 3 June 2010

159

160

DEFENCE PORTFOLIO

Monday, 31 May and Tuesday, 1 June, 2010

Department of Defence

Monday, 31 May 2010

Page no

In attendance ......... .. .. ................ .. .. ....... ......... ........ .... ................ .................. .. ........ .. ............ .... .. 1

Portfolio overview and budget summary ................................... ................ ..................... 13-30

Defence budget .... .. ..... .... ........ .. ....... ...... ..... ............. .. .............. ... .. ... ............... .. .. .. .... ......... . .31-41 , 45-46

Strategic reform program and white paper .................................................... .. .. ...... . 31-69, 72-81

Program 1.13: People strategies and policy ............................................. 29-30, 82-87, 109, 110-113

Military Court of Australia .. .. ........ .. ....... ...... .... .............. .... ............. .. ... .. ... ................ .... ..... .... ..... . 92-95

VIP Squadron ...... ...... .. ......................................... .... .. .............. . 95-103, 117. Also 01Jun10, 6, 41

Tuesday, 1 June, 2010

Defence Materiel Organisation

DMO Outcome 1: Contributing to the preparedness of the Australian Defence Force Organisation through acquisition and through-life support of military equipment and supplies.

DMO program 1.1: Management of capability acquisition .............. ..................... ..................... 7-88

DMO program 1.2: Management of capability sustainment ...................... .... .. ... ...................... . 7-88

DMO program 1.3: Provision of policy advice and management services ................................ .. 7-88

Defence Housing Australia

To deliver total housing and relocation services that meet Defence operational and client needs through a strong customer and business focus.

In attendance ...... ..... ....... .. ........ .... ... ..... .. ............. .................. · ......... ...... ...... .. .... .... .. .... .... ............ 2

General questions ... .... ....... ............ ............... .... ... ...... ... .... ............ ... ....... .......... .. .... ... ....... .. . 88-95

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Tuesday, 1 June 2010

Department of Veterans' Affairs

Page no

In attendance ........... .. .. ............... .. ...... ........ ... ................. ..... .. .. .. .......... ............. ..................... ..... 2

Portfolio overview and budget summary .................................. .. ... .............................. .. 95-100

Outcome 1: Compensation and support Maintain and enhance the fmancial wellbeing and self-sufficiency of eligible persons and their dependants through access to income support, compensation, and other support services, including advice and information about entitlements. Program 1.1: Veterans' income support and allowances .. ...... ..... .... ... ...... .... .. ..... ........... .. ... ... ... 100-111

Program 1.2: disability support ...... .... .. .... .... .. .. .. .. .......... .. .. ...... ... ...... .. ... .. ... ... .. .......... l00-111

Program 1.3: Assistance to Defence widow( er)s and dependants ........... .. .................. ............... ! 00-111

Program 1.4: Assistance and other compensation for veterans and dependants .. ......... ... .. ... ... .. ! 00-111

Program 1.5: Veterans' children education scheme ................... ........ .... ... .. ....... ...................... .. l00-111

Program 1.6: Rehabilitation compensation acts payments- income support and compensation ..... .......... ... .... ...... ..... ...... ........ .... ....................... .. ............. ...... ......... ............ .. ......... ! 00-111

Program 1. 7: Adjustments to the rehabilitation compensation acts liability provisions-income support and compensation .... ..... .......... .. .. .... ...... ... .... ..... ...... ... ..... .... .................... ..... .. .... . 100-111

Outcome 2: Health Maintain and enhance the physical wellbeing and quality of the life of eligible persons and their dependents through health and other care services that promote early intervention, prevention and treatment, including advice and information about health service entitlements.

Program 2.1: General medical consultations and services ........ ............... .. .. ......... ... ...... ......... .. . 111-113

Program 2.2: Veterans' hospital services .......... .... ..... .. .............. .. .. ... ...... .... .. ........................... .. 111-113

Program 2.3: Veterans' pharmaceutical benefits ..................... ... ............... ..... .. ... ...................... 111-113

Program 2.4: Veterans ' community care and support.. .. ................. .... ...... ............... ...... ........ ... . 111-113

Program 2.5: Veterans' counselling and other health services .. ............ .... ...... .. .. ... ... .... ... ....... .. 111-113

Program 2.6: Rehabilitation compensation acts-health and counselling and other health services ... .................................. ....................... .... .......... .................. ................... ...... .. .................. l11-113

Program 2.7: Adjustment to the rehabilitation compensation acts liability provisions-health and counselling and other health services .............. ................ .... ....................................... 111-113

Outcome 3: Commemorations Acknowledgement and commemoration of those who served Australia and its allies in wars, conflicts and peace operations through promoting recognition of service and sacrifice, preservation of Australia's wartime heritage, and official commemorations.

Program 3.1: War graves and commemorations .................... ... ... .... .. ..... ................................... 113-11 6

Program 3.2: Gallipoli related activities ..... ... ..... ..... .. ..... ... .. ... .... ...... .. ........... .. .......... ..... .. .... .... . 11 3-11 6

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Tuesday, 1 June 2010

Australian War Memorial

Page no

In attendance ................... ........ ....... .............. ... .. ....... .......... ................ ...... .. ... ................ ..... .... .. .. 2

Outcome 1: Australians remembering, interpreting and understanding the Australian experience of war and its enduring impact through maintaining and developing the national memorial, its collection exhibition of historical material, commemorative ceremonies and research.

Program 1.1: Commemorative ceremonies ...................... .... ............. ............... .. ... ..... ........ ... .... . 116-118

Program 1.2: National memorial and grounds ....................................... ......................... ........... 116-118

Program 1.3: National collection ..... ... .... ............ ... .......... ........... ... ............................ .......... .... .. 116-118

Program 1.4: Exhibitions ......... ......... .. .. ............ .. ... ......... .... .. ......... ................. ....... ........... ... ...... 116-118

Program 1.5: Interpretive services ... ...... ....... ... ................... ... .... .. .... .. ...................... .. ........... ..... 116-118

Program 1.6: Promotion and community services ...... .... .................. ................. .. ... ... ............ .... 116-118

Program 1.7: Research and information dissemination ....... ................................. .... .................. 116-118

Program 1.8: Visitor services ....... .. .... ....... .. ........ .. .. ... .. .. .... ... ..................... ......... ..... ...... ..... ..... .. 116-118

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FOREIGN AFFAIRS AND TRADE PORTFOLIO

Wednesday, 2 June and Thursday, 3 June 2010

Department of Foreign Affairs and Trade

Wednesday, 2 June and Thursday, 3 June 2010

Page no

In attendance ..... ...... ... .. ............................ ... ..................... .. .... .. ..... ............... ... .. .. .. ........... ......... . 1

Portfolio overview .. ..... .................................................................................................... ... .. ... ... .. .... 5-25

Outcome 1: The advancement of Austrlllia's international strategic, security and economic interests including through bilateral, regional and multilateral engagement on Australian Govemment foreign and trade policies priorities. Program 1.1: Other departmental

North Asia ................. .... ................................................. ... ..... ................... ...... .... ........ .......... ........... 26-50

South-East Asia .... ......................... .. .. ..... ..... .... ... ... ....... .... ......................................... .... .................. 50-63

Americas ...................... ...... .... ......... ..... ................ .... ............... .... .. ............................. .... ...... ... ......... 65 -66

Africa ..... ......................................................... .................. ............. .. ................... ........................... .. 67-73

Europe ................... .. .............. ... ... ............... .. ..................... .................. ............ .. .... ... .. ...... ................ 81-85

South and West Asia, Middle East and Africa .... .................... .. ..... ............................ ...................... 76-92

International organisations and legal iss ues .................................. .. ................... .. .. .............. .... .... .. 93-111

Bilateral, regional and multilateral trade negotiations .. ................................................... 03Jun10, 76-82

Trade development/policy coordination & Asia-Pacific Economic Cooperation ........... 03Jun 10, 76-82

Outcome 2: The protection and welfare of Australians abroad and access to secure international travel documentation through timely and responsive travel advice and consular and passport services overseas in Australia and overseas

Consular and passport services .............. .. .. ............ .. .. .. .......................... .................... .. . 03Jun 10, 12-14

Outcome 3: A secure Australian Government presence overseas through the provision of security services and information and communications technology infrastructure, and the management of the Commonwealth's overseas owned estate.

Program 3.2: Overseas property ................................. ........ ........................................ 03Jun10, 112-114

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Thursday, 3 June 2010

Australian Centre for International Agricultural Research (ACIAR)

Page no

In attendance ........... .. .. .... ........ ........ ... ...... ..... .. .. .. .... ...... ........................................ ..................... 3

Outcome 1: To achieve more productive and sustainable agricultural systems for the benefits of developing countries and Australia international agricultural research and training partnerships.

Program 1: International agricultural research for development for more productive and sustainable agriculture . .... .......... ........ .. ............. .. .... .... .... .... ... ... .... .................................. ... ... ...... 5-8

Australian Agency for International Development (AusAID)

In attendance .. .... ... ......... .. .................................................................................... ... ... ....... ......... 3

Outcome 1: To assist developing countries to reduce poverty and achieve sustainable development, in line with Australia's national interest.

Program 1.1: Official development assistance-PNG and Pacific ............. ... ..... .. ... .. .................... 8- 57

Program 1.2: Official development assistance- East As ia .............. ...... ...................................... 8-57

Program 1.3: Official development assistance- Africa, South and Central Asia, Middle East and other ...................................... ... ................................................. 02Jun I 0, 71 -72. 03Jun I 0, 8-57

Program 1.4: Official development assistance- Emergency, humanitatian and refugee program s .. 8-57

Program 1.5: Official development assistance- Multilateral rep leni shments .................... .. .......... 8-57

Program 1.6: Official development assistance- UN, Commonwealth and ot her internationa l organisations .. .......................................................... ... ... ; ... .. ........ ..... .. ....... ...... .... ................... 8-57

Program 1.7: Official development assistance-NGO , vo lunteer and communi ty programs .......... 8-57

Outcome 2: Australia's national interest advanced by implementing a partnership between Australia and Indonesia for reconstruction and development.

Program 2.1: East Asia ....... ...... .... ....... .. ....... ....... ... .. ..... .. ... ...... ..... ...... ...... .. .......... ...... .. .......... 8-57

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Thursday, 3 June 2010

Australian Trade Commission (Austrade)

In attendance .. ....... .... ..... .... ......... ..... .. .. ...... .... ............ ... .. ...... ....... .. ... ..... ..... ... .... ... .. .. .. ... ...... .... . 4

Outcome 1: Advance Australia' s trade and investment interests through information, advice and services to businesses, industry and govermnents.

Program 1.1: Trade and investment development.. ...... ............ ... ... ..... ... .... ..... .. .. .. .... .. ... .. .... .. ... 58-76

Program 1.2: Trade development schemes (Export Market Development Grants) ... .... .... ...... .... .. 58- 76

Outcome 2: The protection and welfare of Australians abroad through timely and responsive consular and passport services in specific locations overseas. Program 2.1: Consular, passport services .... .. .. ... ..................... ...... ... ........ ... .... ..... ... .. ... ..... .. 58- 76

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The Senate

Legal and Constitutional Affairs

Legislation Committee

Budget estimates 2010-11

June 2010

167

Commonwealth of Australia ISBN 978-1-74229-323-3

This document was prepared by the Senate Legal and Constitutional Affairs Legislation Committee and printed by the Senate Printing Unit, Parliament House, Canberra.

168

Membership of the Committee

Members Senator Patricia Crossin, Chair, ALP, NT Senator Guy Barnett, Deputy Chair, LP, TAS Senator David Feeney, ALP, VIC Senator Stephen Parry, LP, VIC Senator Scott Ludlam, AG, WA Senator Gavin Marshall, ALP, VIC

Substitute Member

Senator the Hon Jan McLucas, ALP, QLD, replaced Senator Marshall for consideration of the Budget Estimates 2010-11 (24 , 25 and 26 May 2010)

Senators in attendance

Senator Patricia Crossin, (Chair), Senator Guy Barnett (Deputy Chair), Senator David Feeney, Senator Scott Ludlam, Senator Gavin Marshall, Senator Stephen Parry, Senator the Hon Eric Abetz, Senator Catryna Bilyk, Senator Simon Birmingham,

Senator the Hon Ron Boswell, Senator the Hon George Brandis, Senator Bob Brown, Senator Sarah Hanson-Young, Senator Gary Humphries, Senator Steve Hutchins, Senator Julian McGauran, Senator the Hon Jan McLucas, Senator Scott Ryan, Senator Rachel Siewert, Senator Russell Trood, Senator Nick Xenophon

Secretariat Ms Julie Dennett Ms Margaret Cahill Ms Kate Middleton

Suite Sl. 61 Parliament House CANBERRA ACT 2600

Secretary Research Officer Executive Assistant

Telephone: (02) 6277 3560 Fax: (02) 6277 5794

Email: legcon.sen@aph.gov.au

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170

TABLE OF CONTENTS

Membership of the Committee ........................................................................ iii

PREFACE ......................................................................................................... vii

Reference of documents ... ..... ......................... .. ....................... ... ............. .... .. ....... vii

Estimates hearings ................................................................................................ vii

Ministers ..... ... ... ........... .. .. ................ ... ........ .. ...... ................................................ . viii

uestlons on notice ... .............. ............. .. ....... ..... ..... ............. ...... ........... .............. viii Q . .

CHAPTER 1 ........................................................................................................ 1

ATTORNEY-GENERAL'S PORTFOLIO ............................................................ l

Introduction ............. ... ..... ...... .. ... ......... .......... .... ...... .. ... ............ ... .. .. .... ............. ...... 1

Classification Board and Classification Review Board ..................... ........... .... ..... 1

Family Court of Australia and Federal Magistrates Court of Australia ................. 2

Australian Security Intelligence Organisation (ASIO) .................... ........... .......... .4

Australian Customs and Border Protection Service (Customs) ............................. 5

Australian Federal Police (AFP) ............................................................................ 6

Attorney-General's Department ...... .......................................... .... ................. .... ..... 8

Procedural issues ................................ ..... ....... .... .................................................... 8

CHAPTER 2 ...................................................................................................... 11

IMMIGRATION AND CITIZENSHIP PORTFOLIO ...................................... 11

Introduction .......... ... .......................... .............. ...... .. ...................... .. .................... . 11

Migration Review Tribunal (MR T) and Refugee Review Tribunal (RR T) .... ... .. 11

Department oflmmigration and Citizenship ........................................................ 11

APPENDIX 1 ..................................................................................................... 17

DEPARTMENTS AND AGENCIES UNDER THE TWO PORTFOLIOS FOR WHICH THE COMMITTEE HAS OVERSIGHT ............................................. 17

Attorney-General's Portfolio ................ ........... .. .... ... ..... .................................. ... .. 17

171

Immigration and Citizenship Portfolio oooo ooo oooooooooooooooooooo oo oooo ooo ooooooo ooooooo oo ooo o oooo ooo .. 18

APPENDIX 2 ..................................................................................................... 19

INDEX OF PROOF HANSARD AND TABLED DOCUMENTS FOR THE ATTORNEY-GENERAL'S PORTFOLI0 .......................................................... 19

TABLED DOCUMENTS ooo ooooooooooo oo oooo o oooooo ooooooo oo o oo oo oo ooooo ooooooooooooo oooooooooooooooooo oo ooo20

APPENDIX 3 ..................................................................................................... 21

INDEX OF PROOF HANSARD AND TABLED DOCUMENTS FOR THE IMMIGRATION AND CITIZENSHIP PORTFOLIO ...................................... 21

TABLED DOCUMENTS oooooooooooooooooooo oooooooooooooooooooooooo ooo oooooooooo 00000 0000000000000000 000 000 21

APPENDIX 4 ..................................................................................................... 23

CHANGES TO THE OUTCOME/PROGRAM STRUCTURE FOR THE ATTORNEY-GENERAL'S DEPARTMENT ..................................................... 23

APPENDIX 5 ..................................................................................................... 27

TABLED DOCUMENT NO. 7 - ADVICE FROM THE CLERK OF THE SENATE REGARDING QUESTIONS ABOUT PROVISIONS OF BILLS AT ESTIMATES HEARINGS .................................................................................... 27

VI

172

PREFACE

On 11 May 2010, the Senate referred to the committee the examination of estimates of proposed budget expenditure for the financial year 2010-11. The committee is responsible for the examination of the Attorney-General's Portfolio and the Immigration and Citizenship Portfolio. The portfolio budget estimates statements were tabled on 11 May 2010.

Reference of documents

The Senate referred to the committee, for examination and report, the following documents:

• Particulars of proposed expenditure in respect of the year ending on 30 June 2011 [Appropriation Bill (No. 1) 2010-2011]; and

• Particulars of certain proposed expenditure in respect of the year ending on 30 June 2011 (Appropriation Bill (No.2) 2010-2011].

The committee was required to report on its consideration of the budget estimates on or before 22 June 2010.

Estimates hearings

The committee met in public session on 24, 25, 26 and 27 May 2010.

Over the course of the four days' hearings, totalling over 38 hours, the committee took evidence from the following departments and agencies:

•

•

•

•

•

•

•

•

•

•

•

•

•

•

Administrative Appeals Tribunal;

Attorney-General's Department;

Australian Commission for Law Enforcement Integrity;

Australian Crime Commission;

Australian Customs and Border Protection Service;

Australian Federal Police;

Australian Human Rights Commission;

Australian Institute of Criminology and Criminology Research Council

Australian Law Reform Commission;

Australian Security Intelligence Organisation;

Australian Transaction Reports and Analysis Centre;

Classification Board and Classification Review Board;

CrimTrac Agency;

Department of Immigration and Citizenship (including the Office of the Migration Agents' Registration Authority);

Vll

173

• Family Court of Australia;

• Federal Court of Australia;

• Federal Magistrates Court of Australia;

• High Court of Australia;

• Migration Review Tribunal;

• National Capital Authority;

• National Native Title Tribunal; and

• Refugee Review Tribunal.

Copies of the Hansard are available on the internet at the following address: http://www.aph.gov.au/hansard/index.htm.

An index of the Hansard for each portfolio appears at Appendix 2 and Appendix 3.

Ministers

On 24 and 25 May 2010, the committee heard evidence from Senator the Hon Penny Wong, Minister for Climate Change, Energy Efficiency and Water; and Senator the Hon Ursula Stephens, Parliamentary Secretary for Social Inclusion and Parliamentary Secretary for the Voluntary Sector, representing the Attorney-General and the Minister for Home Affairs. On 26 and 27 May 2010, the committee heard evidence from Senator the Hon Chris Evans, Minister for Immigration and Citizenship.

Officers from both departments and associated agencies also appeared. The committee thanks the ministers and parliamentary secretary, and officers for their assistance.

Questions on notice

Further written explanations, and answers to questions on notice, will be tabled as soon as possible after they are received. That information is also available on the committee's internet page at the following address :

http://www .aph.gov .au/Senate/committee/legcon _ ctte/estimates/index.

The committee has resolved that the due date for submitting responses to questions on notice from the Budget Estimates round is 9 July 2010.

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CHAPTER!

ATTORNEY-GENERAL'S PORTFOLIO

Introduction

1.1 This chapter summarises some areas of interest and concern raised during the committee's consideration of the budget estimates for the Attorney-General's portfolio for the 201 0-11 financial year.

Classification Board and Classification Review Board

1.2 The committee takes a continuing interest in the work of the Classification Board and Classification Review Board. On this occasion, the committee pursued areas of ongoing concern, including classification compliance levels and enforcement.

1.3 The Director of the Classification Board, Mr Donald McDonald AC, updated the committee on the monitoring of classification compliance levels of adult publications and films:

I can advise the committee that I have called in for classification 440 adult films and 40 adult magazines since July last year. As I advised last time , none of these notices has been complied with.

Failure to comply with a call-in notice is a breach of classification laws. I can assure senators that these breaches have all been referred to the relevant state and tenitory law enforcement agencies for appropriate attention and action. 1

1.4 Senators expressed concern with the continuing failure of relevant distributors to comply with call in notices. While Mr McDonald conceded that he was not satisfied with the current situation he advised that '(a)ny shortcomings in the legislation are not the fault of the Classification Board. Powers that belong elsewhere are for people in other places to exercise'.

2

1.5 Following the additional estimates hearings in February, the committee wrote to the Minister for Home Affairs on 21 April 201 0 to express its concern in relation to the non-compliance by certain publishers with call in notices.

1.6 The committee sought an update on the initiatives flowing from the Standing Committee of Attorneys-General compliance and enforcement working party to improve the current enforcement regime. The Secretary of the Attorney-General's Department, Mr Roger Wilkins AO, advised the committee:

Censorship ministers received an update on the work done by this working group in developing options to improve compliance with and enforcement

Committee Hansard, 24 May 2010, p. 51.

2 Committee Hansard, 24 May 2010, p. 55.

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of classification laws and other initiatives. Ministers requested that the working group continue its identification assessment of options.

Six issues in particular were identified for further work: reforms to the serial declaration scheme for publications; wrapping requirements for publications, principally adult magazines, and labelling provisions; staged penalties for selling submittable publications depending on how they are

later classified; prosecution strategies; alternative penalties; and reviewing the costs and availability of enforcement applications. They are things which the working party is taking forward.

I would expect progress to be made on some of those things at a different rate. In fairness, we are looking at different strategies around prosecution and enforcement. The current processes are too time consuming. It may be one of the reasons why states and territories are reluctant to enforce at the rate we would like to see them doing so. But there are also issues of priorities. Maybe we can find some more summary processes that could be used where there are offences or failure to comply with the law. The working group is looking at that. 3

1 . 7 Some senators also questioned the Board and Review Board on the recent R18+ classification decision for a modified DVD version of a previously banned and controversial 1970s film, Salo. 4

Family Court of Australia and Federal Magistrates Court of Australia

1.8 The committee sought an update on the delayed restructure of the federal courts, an issue that has been the subject of extensive examination at recent rounds of estimates. It was advised that the government had announced, on 24 May, the new arrangements following resolution of the Military Court of Australia issue. The Attorney-General's Department tabled the Joint Media Release of the Attorney­ General and the Minister of Defence which described the new structure:

Federal Magistrates Court

• The Federal Magistrates Court will be retained to hear general federal law matters and will continue to exercise general federal law jurisdiction.

• The Court will provide an appropriate pool of judicial officers (with the requisite military background or familiarity) who may be offered dual commissions to the lower Division of the new military court.

• The Federal Court will be responsible for the administration of the Federal Magistrates Court.

Family Court

•

•

The Family Court will be the single court dealing with all family law matters .

The restructured court will have two divisions:

3 Committee Hansard, 24 May 2010, p. 56.

4 Committee Hansard, 24 May 2010, pp 59-70.

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The Appellate and Superior Division will hear complex first instance family law and child support cases as well as appeals. It will comprise the existing Family Court judges.

The General Division will hear all but the most complex family law cases (as the Federal Magistrates Court does now). It will comprise those Federal magistrates who undertake mainly family law work and accept commissions.

• Matters will be able to be transferred between the two Divisions where appropriate.

Federal Court

• The Federal Court will continue to exercise its jurisdiction in its current form .

• Judges of the Federal Comt with the requisite military background or familiarity may be offered dual commissions to the upper Division of the new Military Court. 5

1.9 The new structure was described by the Secretary of the Attorney-General's Department as being able to 'achieve a more integrated and efficient system in order to effectively deliver legal and justice services both to the civilian and defence community'. 6

1.10 In further questioning on the difference between the announced restructure and the recommendations in the Semple review, Mr Wilkins described the key difference as being the 'retention of the federal magistrates to hear general federal law matters'. 7

1.11 Questioning then turned to the role of Mr Richard Foster as Chief Executive Officer of the Family Court as well as the Acting Chief Executive Officer of the Federal Magistrates Court. One Senator asserted that there was a potential for a conflict of interest in Mr Foster's advice to government about the role of the two courts, in light of the government's proposed restructure of the federal courts.

1.12 Under extensive questioning about his advice to government, and following the Chair's reference to Privilege Resolution 1 (16) regarding the giving of opinions by public servants, Mr Foster advised the committee:

I think I can best answer that by saying that I am not quite sure that I would say that I argued or was an advocate for one position or another. The courts were asked for their views. The Federal Magistrates Court's view had not changed. The Federal Magistrates Court's view was the same as it was when the Semple report was released. All I did was say, 'That is the view of the court suppmted by the Chief Federal Magistrate and the court.' The view of the Family Comt was basically that it preferred to have family law

5 Tabled document No. 5, 24 May 2010, Joint Media Release - Attorney-General and Minister for Defence, 24 May 2010, entitled Establishment of the MilitaJy Court of Australia.

6 Committee Hansard, 24 May 2010, p. 73.

7 Committee Hansard, 24 May 2010, p. 74.

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jurisdiction under the umbrella of the Family Court and that the court had two divisions or two tiers. That was basically the extent of what was put to the department when we were consulted. It was really nothing different from the Semple report, except that-Senator BRANDIS-Except whether the Federal Magistrates Court, of which you are the acting CEO, should continue to exist or not.

Mr Foster- Whether the Federal Magistrates Court should be retained.

Mr Foster-... The court's view in relation to whether the Federal Magistrates Court would be abolished or not was purely left as a matter of a government decision. It was not a matter that the Family Court thought it had any view to put in any way. It was a decision that once family law was put into the Family Court, that was what the Family Court thought was the best thing for the litigants of family law in this country.

The question about whether the Federal Magistrates Court was to become a division of the Federal Court or not was really a question on which I cetiainly did not put a view on behalf of the Family Court because the Chief Justice had not expressed a strong view about that in any event. It was really a matter that was subsequent to getting family law into the one court-that is, having one court exercising that highly specialised jurisdiction. That is what was trying to be achieved. 8

Australian Security Intelligence Organisation (ASIO)

1.13 The committee began examination of ASIO with questions concerning the savings of $15.1 million over four years outlined in the budget, 9 and the likely impact on its operations and ability to maintain the current recruitment program. It was explained that savings have been achieved through a variety of internal efficiency measures and there would be no cuts to programs. 10 The Deputy Director-General of

Security provided some further detail:

What we have done is achieved some operational efficiencies by rationalising our management structures, by introducing some business process reforms across the organisation and by rolling out some of the new IT facilities and information sharing systems that we have. Other improvements in our IT are virtualising servers and rationalising storage systems et cetera. All of these things assist in achieving efficiencies off our budget. 11

1.14 The committee heard that the agency was maintaining a growth plan with staff numbers increasing from 1, 700 to 1,860 by next financial year. 12

8 Committee Hansard, 24 May 2010, p. 78.

9 Budget Measures, Budget Paper No . 2 2010-11, p. 95 .

10 Committee Hansard, 24 May 2010, p. 105.

11 Committee Hansard, 24 May 2010, p. 105.

12 Committee Hansard, 24 May 2010, p. 105.

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1.15 The increase in security assessments of irregular maritime arrivals and the agency's capacity to deal with the increased demand on resources was an area that was also pursued by the committee. ASIO advised that security assessments had increased approximately 10-fold from the 2008-09 year. There were 207 irregular maritime arrival security assessments for the 2008-09 year and 2,028 from July 2009 to 31 March 2010. 13

1.16 While the Director-General of Security was reluctant to go into detail about resource allocation for security reasons, he assured the committee that ASIO has been able to adequately respond to this increased demand without a derogatory effect:

We are responding to DIAC priorities. We have had a lot of people working very hard. We have had to rationalise some of our activities in other areas. I do not say we are detracting from our security assessment activities in other areas, but there has been a drop in the number of security assessments completed in some other areas. For example, the number of protection visas or other visa classes has fallen by about 40 per cent. Part of that has been achieved through a much more sensible and rational process that we have agreed on with the department of immigration as to when they are referred to us in what circumstances. A lot of what you might call unnecessary checking has in fact been eliminated. 14

1.1 7 The Deputy Director-General further added:

.... might I add that technology has played a large part in the efficiency gains made in this area as well. Together with the department of immigration we have invested quite a bit in IT systems, automated connectivity between our agencies, data standardisation and levels of automation in the process. They have delivered significant productivity

gains as well, which has helped both agencies meet this challenge. 15

1.18 The committee also sought background on the establishment of the National Intelligence Coordination Committee (NICC). The Director-General of Security advised that this is proceeding on schedule and that he would have responsibility for the NICC's management.

16

Australian Customs and Border Protection Service (Customs)

1.19 Customs was questioned extensively by the committee on a range of matters: the program to replace the Bay Class vessels; Customs' involvement with recent unauthorised maritime arrivals; interception processes for boats found in distress in Australian waters; the seizure of a shipment of 326 seahorses in the United States

from a Tasmanian company due to a bureaucratic error; SmartGate (self-processing through passport control); shipping arrival processes; and the reduction of vessel surveillance in the Southern Ocean.

13 Committee Hansard, 24 May 2010, p. 108.

14 Committee Hansard, 24 May 2010, p. 109.

15 Committee Hansard, 24 May 2010, p. 109.

16 Committee Hansard, 24 May 2010, p. 116.

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1.20 Senators sought details on the gross savings of $146.3 million over four years proposed in the budget and questioned officials about whether this would result in staff reductions of 250. The Chief Executive Officer, Mr Michael Carmody, advised the committee that the proposed figure for staff reductions is about 180 full-time equivalent staff and explained the difference to the higher figure:

At the time of the preparation of the budget that was our estimate of the impact. Since then we have done further work and we have found ways to achieve further efficiencies in supply figures. 17

1.21 He assured the committee that:

The bottom line for me is that I believe none of this impacts on our ability to provide an appropriate management of the border, and none of it is adversely impacting on our ability to do that. 18

Australian Federal Police (AFP)

1.22 Senators sought detail from the AFP on the $23.5 million of savings identified over four years through efficiencies resulting from the implementation of the recommendations of the Federal Audit of Police Capabilities. 19 The Commissioner, Mr Tony Negus APM, explained that:

Most of those savings are as a result of the ali-in model moving into aviation, where the AFP would take over responsibility for community policing at airports, from what is the current position where states and territories second officers to the AFP for a period of two years. There are substantial costs associated with that which we pay to the states and territories in training and turnover of staff. In Mr Beale's review he has identified savings. Those savings are to be retained by the AFP and reinvested into other components-that is, increasing our staffing numbers.20

1.23 Questioning then turned to the AFP's recruitment target of 500 new officers by 20 12 and the funding required to meet this target:

Mr Negus- Senator, perhaps I could give you some context. As part ofMr Beale's review we also looked at the government's pledge of 500 new officers for the AFP over five years .

. . . What he did was identify that there was a shortfall in the money that had been provided to get to the 500 officers.

Senator BRANDIS- Just pausing there, when you say 'he identified a shortfall ' you mean that less money was allocated than was expected to be received. Is that right?

17 Committee Hansard, 25 May 2010, p. 22.

18 Committee Hansard, 25 May 2010, p. 22.

19 Budget Measures, Budget Paper No . 2 2010-11, p. 106.

20 Committee Hansard, 25 May 2010, p. 61-62.

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Mr Negus-For the AFP to make the target of 500, they required additional money.

Senator BRANDis-How much additional money?

Mr Negus-It was around $30 million.

Senator BRANDIS- And in what year, or across what years, did the shmtfall emerge?

Mr Negus- It was since the pledge was made, which is three years ago. We are on track and in fact in front of those targets in our recruitment. But to get to the 500 number he identified that there were higher costs associated with that, and we would require supplementation to reach that.

Senator BRANDIS-So you were $30 million short, according to Mr Beale, in reaching the 500 promised by the Prime Minister, or then opposition leader Rudd in 2007. So that $30 million is being found elsewhere in the AFP budget.

Mr Negus- Mr Beale recommended that the $23 million in savings from the airports would be reinvested into the AFP to allow us to substantially reach that target.

Senator BRANDIS-So we are taking this money away from airports through what are described as efficiencies in order to fund a promise that was not being delivered on because there was, to use your words, a shortfall of $30 million. Is that right?

Mr Negus- Efficiencies that had been realised through better practice were being reinvested in the AFP. 21

Page 7

1.24 The Commissioner confirmed that the AFP is currently meeting planned recruitment targets to achieve the 500 figure by 2012. 22

1.25 The committee also raised the Securency case during its examination of the AFP. This case concerns allegations of bribery of the banknote supplier company, Securency. Under questioning, the Commissioner confirmed that a complainant did go to the AFP in April 2008 with allegations relating to Securency, and it was decided at that time that there was insufficient material to launch an investigation.

23

The

Commissioner then conceded that:

... Obviously, with the benefit of hindsight, looking back, more could have been done at that time to look further and deeper into the issue. At a later stage, more material was provided to the Australian Crime Commission, which was again provided to the AFP. Another assessment was done at about that time and the matter was formally referred to us by the RBA

[Reserve Bank of Australia] , after the matter was featured in the Age newspaper.

21 Committee Hansard, 25 May 20 I 0, p. 66.

22 Committee Hansard, 25 May 2010, p. 70.

23 Committee Hansard, 25 May 2010, p. 78.

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Senator BOB BROWN-Just going back to the hindsight situation, what evidence was sought by the AFP in the wake of the very serious accusations being made to corroborate or to enable the AFP to make an independent assessment that those claims were not correct?

Mr Negus-1 do not have the details of all the inquiries, but certainly over a number of months an assessment was done of the material that was provided. Certain checks were done but, again, in the context of what we now know, I think that could have gone further at the time. I have had that reviewed to have a look at how that process was undertaken. As you have said, it is a very serious matter. Currently, we have up to 20 investigators working on this full time now in a number of countries around the world. What I would not want to do is discuss in any detail the context of what material was assessed and what evidence has been gleaned at this stage because it may well impact upon the ongoing investigation. 24

1.26 The Commissioner later responded to concerns raised by Senators that the delay in launching the investigation may have compromised evidence in the case:

... Given that some of these issues go back 10 years, as you have already identified, my best advice to you is that I do not think it has. I think that we certainly got onto the trail quickly enough. There have been a range of things that have now been captured, and we have seen no indication that anything had been destroyed or tampered with during that period in which the material gained momentum to then be accepted for an investigation by the AFP. 25

Attorney-General's Department

1.27 The Depmtment implemented changes to the outcomes and programs structure for 2010-11 and these are outlined in Appendix 4.

1.28 Examination of the Department was spread over the first two days of the hearings. Senators pursued a range of issues, including Australia's claim to an extended exclusive economic zone in the context of the use of Elizabeth and Middleton islands, regulation of the legal profession, Family Relationship Centres, legal aid and access to justice funding, and the Administrative Review Council.

Procedural issues 1.29 During examination of the National Native Title Tribunal, some Senators attempted to question the Tribunal and officers of the Attorney-General's Department, about the Queensland Wild Rivers Act 2005 and its consistency with the Native Title Act 1993. As the Legal and Constitutional Affairs Legislation Committee was at the time inquiring into the Wild Rivers (Environmental Management) Bill 2010 [No.2], the Chair ruled this line of questioning out of order on the basis that the Senate had

24 Committee Hansard, 25 May 2010, p. 78.

25 Committee Hansard, 25 May 2010, p. 80.

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given the committee the task of conducting an inquiry specifically into that bill and that any questions about the bill should be directed through that inquiry process. 26

1.30 Senators pursued the question of the relationship of the Native Title Act with the Queensland legislation and departmental officers advised:

.. . in our view the Queensland Wild Rivers Act 2005 does not affect a person's native title rights or interests. There is a provision in that act­ section 44(2)-that explicitly indicates that it cannot directly or indirectly limit a person's native title rights or interests. I would further add that

section 13A of Queensland's Acts Interpretation Act provides that future legislation only affects native title if it expressly provides. The Wild Rivers Act does not make this express provision. That leads to our view that it does not affect native title rights and interests. 27

1.31 When Senators subsequently returned to this line of questioning, the Chair tabled advice from the former Clerk (provided during the hearing by the current Clerk) which supported her earlier ruling (see Appendix 5).

26 Committee Hansard, 24 May 2010, p. 94.

27 Committee Hansard, 24 May 2010. p. 95.

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184

CHAPTER2

IMMIGRATION AND CITIZENSHIP PORTFOLIO

Introduction

2.1 This chapter summarises some areas of interest and concern raised during the committee's consideration of the budget estimates for the Immigration and Citizenship portfolio for the 201 0-11 fmancial year.

Migration Review Tribunal (MRT) and Refugee Review Tribunal (RRT)

2.2 -!he committee questioned representatives from the RRT and officers from the Department of Immigration and Citizenship about the recent recruitment processes for members of the RRT. Senators referred to media reports 1 regarding the selection process of members to the RRT, asserting that the recent processes were politicised because, among other things, applicants were questioned about 'set aside' rates at interview.

2.3 The Secretary of the Department, Mr Andrew Metcalfe, refuted these allegations in absolute terms. The committee was informed that the recruitment of members to the MR T and RR T follows the guidelines set out by the Australian Public Service Commission for recruitment of members of tribunals and other statutory appointments. Mr Metcalfe then described in some detail the recruitment processes for recent selection rounds. 2

2.4 The Department subsequently tabled the interview questions for MRT-RRT member recruitment in July 2009 and July 2010, in addition to a document outlining the process for appointment ofMRT-RRT members for the July 2010 round.

Department of Immigration and Citizenship

Suspension of asylum claim processing for Sri Lanka and Afghanistan

2.5 The committee raised the issue of the Australian Government's decision on 9 April 2010 to suspend the processing of refugee claims for arrivals from Sri Lanka and Afghanistan.

2.6 The Minister explained that, in relation to the Sri Lankan processing 'pause', the Cabinet decided that it would review this decision no later than three months after the date of the announcement. 3 The Minister was then questioned about the impact of the expected delay of the UNHCR country report on Sri Lanka on this review. While the Minister acknowledged that such reports are an important factor in the decision­ making processes, he advised:

See Financial Review, 7 May; Herald Sun, 13, 14 and 26 May 2010.

2 Committee Hansard, 26 May 2010, p. 9.

3 Committee Hansard, 26 May 2010, p. 81.

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Th[ e] UNHCR report will not be critical in the sense of affecting the government's timing or policy decision. But clearly it is an important piece of advice that if it is issued we will take into consideration. 4

2. 7 The Minister was then questioned about publicly reported legal opinions commissioned by the Human Rights Law Resource Centre about the suspension decision and the claim that it breaches international conventions and domestic law. The Minister confirmed that legal advice was sought before making the decision on the suspension policy and stated his belief that it does not breach the refugee convention and Australian law, and that he did not accept the legal advice to the contrary. 5

2.8 Mr Peter Hughes PSM, Deputy Secretary, confirmed the Department's view that the processing suspension does not breach any Australian or international law: 6

I think it is worth remembering that under the refugee convention the principal responsibility for a state that is party to the refugee convention is not to have an act of refoulement-not to send any person back to a place where they will be persecuted. Of course, nothing about the suspension would result in that happening. The convention does not actually lay down any particular procedure or timing of looking at persons with regard to the obligations that apply to a state under the convention. Therefore, a suspension is not prohibited by the convention. As the minister said, many other countries do take periods of time to assess refugee claims much in excess of what the time would be, even for people who are suspended.

Equally, we do not think that there is any difficulty with the Racial Discrimination Act, because the suspension is not based on race or ethnicity. It is based on people of a particular nationality making claims against either the government of the country of origin or non-state actors in the country of origin. So we do not think there is a breach of the Racial Discrimination Act. Equally on the detention point, detention is authorised by the Migration Act, and equally under international conventions pe1iods of detention authorised by law for legitimate purposes are considered acceptable. Our legal advice is that we do not accept the views that were prepared in that report originating in Melbourne. 7

2.9 When asked about the release of the government's legal advice on the policy, the Minister advised that, 'in accordance with normal government practice in this regard', it would not be released. 8

4 Committee Hansard, 26 May 2010, p. 82.

5 Committee Hansard, 26 May 2010, p. 82.

6 Committee Hansard, 26 May 2010, pp 82-84.

7 Committee Hansard, 26 May 2010, p. 83.

8 Committee Hansard, 26 May 2010, p. 87.

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Extent budget estimates based on projected figures for irregular maritime arrivals

2.10 The Department was questioned in depth about the budget appropriations for community and detention services under Program 4.3: Offshore Asylum Seeker Management. In particular, Senators questioned officers about the significant increase in the revised 2009-10 budget figure and the 2010-11 budget appropriations, and the extent to which these figures are based on the projected number of irregular maritime arrivals in detention.

2.11 The committee heard that the revised 2009-10 budget figure of $149,412,000 (an increase from the original provision of $40.8 million) is based upon the estimated number of 4,500 in detention by 30 June 2010. 9 Senators then sought the estimated number of arrivals in detention which the 2010-11 appropriation figure of $327.5 million was based on:

Mr Metcalfe-The figure that has been put into the budget for estimation purposes is 2,000.

Senator HUMPHRIES-You are spending $149 million for 4,500 arrivals and more than double that for 2,000 arrivals. Can you explain that?

Senator Chris Evans-The cost is not in the arrivals, the cost is in the detention.

Mr Metcalfe--Because people will stay across the program year, and as we have been indicating some of those people will be in detention for a longer period of time, it is the number of people in detention for a number of days that becomes important. The arrival figure is one factor, but the length of detention is another factor that goes into these figures. 10

2.12 Mr Metcalfe emphasised that the appropriation figure for detention costs was based on three factors: 'how many people arrive, how long they stay for and then what happens to them'. 11

2.13 It was explained that there were indications that there is an increasing refusal rate for refugee status for irregular maritime arrivals, particularly in light of the recently announced decision to suspend the processing of asylum seeker claims from Afghanistan and Sri Lanka. As a result, it is expected that people will stay longer in detention:

Even though it may sound a strange thing to say, that increasing cost reflects the fact that the department is now refusing more cases and we therefore expect those people to do as they are entitled to do-that is, to pursue review rights. But that wiii lead to an increase[ d] length of

detention. It is not a commentary upon the arrival numbers. That is one

9 Committee Hansard, 27 May 2010, p. 13.

10 Committee Hansard, 27 May 2010, p. 14.

11 Committee Hansard, 27 May 2010, p. 17.

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factor, but it is an important factor- actual length of stay in detention. That is where a significant part of those costs are coming from. 12

2.14 The Minister summed up the evidence presented by the Department m relation to the cost estimates in the Portfolio Budget Statements:

What Mr Correll has done is take you through the projection for how many people are likely to be in detention. That is telling you how many people will be a cost to the Commonwealth and the basis on which those calculations have been done. He has indicated that they have started from a higher base, as you would expect, so therefore they have a higher cost across the year. He has indicated the judgments about people being in detention longer due to a couple of factors. He has told you what he thinks the estimated population will be which underpins the costs. That is the basis for the calculation of the costs. 13

2.15 The Department also outlined the individual cost drivers used in the

calculation of the $327 million figure:

There are many factors that we agree on with Finance over increasing the estimate for IMAs [irregular maritime arrivals]. The key part is understanding the number of beds required at the various facilities and then the costs of servicing those centres. The types of costs that we incorporate are: charter costs; escorts paid to Serco, the detention service provider operating additional facilities for a full 12-month period; health service provider costs; interpreting costs; DIAC staff travel allowances; DIAC staff

airfares; rental R&M [repairs and maintenance] utilities- so staff accommodation; accommodation for Serco officers; IAAAS [Immigration Advice and Assistance Scheme], which is one of the programs the department runs; transport to CI [Christmas Island]; maintenance of infrastructure plus utility costs ; communications, including satellite costs for various facilities ; minor plant and equipment and miscellaneous office expenses; health services provided by Christmas Island hospital; estimated costs for Community Detention, run by the Australian Red Cross and Life without Barriers; IHMS [International Health and Medical Services] pass through costs; DIAC IMA-specific training costs; community liaison offi cer costs; contract audit costs; and allocation of corporate overheads.

14

2.16 Senators then sought details of the increase in some of these costs for the 2010-11 financial year. The committee heard that the following larger cost lines would increase by the following amounts indicated: the Serco provider contract, $56.8 million; interpreting costs $22.3 million; DIAC staff travel, approximately $5 million; maintenance of infrastructure plus utility costs, $14 million; minor plant and equipment, $2 .5 million; IHMS pass-through costs, $5.9 million; allocation of corporate overheads, estimates at $24.8 million (for a mixture of Christmas Island and onshore); estimated charter costs, $8.1 million; health costs, $12 million;

12 Committee Hansard, 27 May 2010, pp 14-15.

13 Committee Hansard, 27 May 2010, p. 28 .

14 Committee Hansard, 27 May 2010, p. 39.

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accommodation for Serco $1.5 million; accommodation for departmental staff, $3.7 million; transport around Christmas Island, just under $900,000; and communications $2.4 million. 15

Visa processing at 'high risk' posts

2.17 The committee also raised the issue of visa processing of 'high risk'

applicants, including those more likely to overstay. It was advised that there was a number of developing countries, including those in Africa, parts of South America, the Middle East, and Asia, which the Department considered were medium- to high­ risk and where the posts may use a range of measures in visa application processes to counter the incidence of fraud. For example, applicants may be required to submit paper applications and be interviewed. The committee was advised that the risk at a particular post may vary with different visa categories. 16

2.18 The committee heard that the higher risk posts generally correspond to the higher deployment of Australian officers. Mr Metcalfe advised:

... our biggest overseas post now, due to volume and risk and fraud issues, is New Delhi. There is a big source of high quality migrants and workers and students from India, but there are a lot of non-genuine applicants as well. Our second biggest post is Shanghai, again because we have many high quality applicants but we have a lot of fraud as well. So we undertake a whole range of different measures.

Earlier I indicated that we had created a division ... to focus in a

concentrated way on risk, fraud and integrity issues and a global manager in South Australia to focus on these is sues. I expect that we will continue to pursue ways to identify and to overcome fraud. The minister has made it very clear that he has expectations that we do this in a more timely manner, that we understand what is happening with the business and understand where trends are developing or issues are concerning far more quickly than we have now. We have a range of measures as to how we will meet that requirement. That is part of the overall sort of search for efficiencies in how we can in fact identify the easy cases more quickly and let those people through with minimum trouble but to focus in quite quickly and deal with those more difficult cases.

Finally ... there are a range of other devices and arrangements. For example, we have the opportunity for some visitor visas. Where our post has a concern that a person coming to visit family members may not abide by the conditions of their visa, there is the opportunity for a so-called sponsored family visitor visa. A performance bond is taken from the family, which is returned if in fact the person departs Australia. So that is one of a whole range of tools that we have to manage these sorts of immigration risks.

17

15 Committee Hansard, 27 May 2010, pp 39-41.

16 Committee Hansard, 26 May 2010, pp 104-105.

17 Committee Hansard, 26 May 2010, p. 105 .

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2.19 The committee also took evidence from the Department on a range of other issues over the two days of hearings, including immigration detention centres, staffing levels, FOI processes, revenue from visa applications, 457 visa changes, VET ASSESS practical assessment tests, and international student visas.

Senator Trish Crossin Chair

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APPENDIX 1

DEPARTMENTS AND AGENCIES UNDER THE TWO PORTFOLIOS FOR WHICH THE COMMITTEE HAS OVERSIGHT

Attorney-General's Portfolio

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•

•

•

•

•

•

•

•

•

•

•

•

•

•

Attorney General's Department;

Administrative Appeals Tribunal;

Australian Federal Police;

Australian Customs and Border Protection Service;

Australian Commission for Law Enforcement Integrity;

Australian Crime Commission;

Australian Government Solicitor;

Australian Human Rights Commission;

Australian Institute of Criminology and Criminology Research Council;

Australian Law Reform Commission;

Australian Security Intelligence Organisation;

Australian Transaction Reports and Analysis Centre;

Classification Board;

Classification Review Board;

CrimTrac;

Commonwealth Director of Public Prosecutions;

Family Court of Australia;

Family Law Council;

Federal Court of Australia;

Federal Magistrates Court of Australia;

High Court of Australia;

Insolvency and Trustee Service Australia;

National Capital Authority;

National Native Title Tribunal; and

Office of Parliamentary Counsel.

191

Page l8

Immigration and Citizenship Portfolio

• Department of Immigration and Citizenship;

• Migration Review Tribunal; and

• Refugee Review Tribunal.

192

APPENDIX2

INDEX OF PROOF HANSARD AND TABLED DOCUMENTS FOR THE ATTORNEY-GENERAL'S PORTFOLIO Monday, 24 May 2010 Pages

Attorney-General's Department (cross portfolio questions) 6-16

Administrative Appeals Tribunal 16-18

• Australian Human Rights Commission 18-29

Australian Law Reform Commission 29-36

Australian Transaction Reports and Analysis Centre 36-51

• Classification Board and Classification Review Board 51-70

• High Court of Australia 70-72

• Family Court of Australia 72-89

Federal Magistrates Court 89

Federal Court of Australia 89-93

National Native Title Tribunal 93-104

Australian Security Intelligence Organisation 104-120

• Attorney-General's Department 120-132

Tuesday, 25 May 2010

• Australian Commission for Law Enforcement Integrity 7-11

• Australian Crime Commission 11-20

• Australian Customs and Border Protection Service 20-60

• Australian Federal Police 60-102

• Australian Institute of Criminology and Criminology Research Council 102-105

• CrimTrac Agency 105-106

• National Capital Authority 107-110

• Attorney-General's Department 110-127

193

Page 20

TABLED DOCUMENTS

Monday, 24 May 2010 Item Tabled by: I

no 1 J Senator Barnett

I I

1 Senator Barnett

!Topic

I

!correspondence from the Law Society of Tasmania to J Senator Barnett, 21 May 2010, regarding national legal ·

1profession reform

Correspondence from the President of the Judicial

1

Conference of Australia to Senator Barnett, 31 March 2010, J with attached reports concerning the issue of procedures for j , determining complaints against judicial officers ___ G_ e_ n-er_a_ l'_ s ,. Secretary's opening statement

1

Department

fReport of the Review of Legal Services

1

Department 1 Procurement I

rs I Attorney-General's J oint Media Release - Attorney-General and Minister for I ; Department Defence, 24 May 2010, entitled Establishment of the

1

:Military Court of Australia I

Fa mily .. Court o .. f .. Fa . mily Law Workload Trend I

1

1

Australia J

,7--: Senato; Crossin from the Clerk of the Senate - Estimates Hearings i 1 Questions about Provisions of Bills ---------------- ----------

Tuesday, 25 May 2010 .----,--------------,-------------------------------------------

Item 1Tabled by: /Topic

no i 1

Humphrie< Media Release - Australian Customs and Border Protection

I

1 Service, 19 May 2010, entitled Vessel Intercepted by !Border Protection Command l j9·--Wtomey-Generai;;- rFinance circular No. 2009-09 - Discretionary

1

/Department /compensation and Waiver of Debt Mechanisms

:1 -0--

1

lsenator Parry !Correspondence from the Minister for Home Affairs to I I jSenator Parry, 23 November 2009 and correspondence to

!the Attorney-General from Senator Parry, 10 September 2009 concerning a government funded and managed !television program targeting specific crime and missing cases

194

APPENDIX3

INDEX OF PROOF HANSARD AND TABLED DOCUMENTS FOR THE IMMIGRATION AND CITIZENSHIP PORTFOLIO

Wednesday, 26 May 2010

•

•

Migration Review Tribunal and Refugee Review Tribunal

Department of and Citizenship

Thursday, 27 May 2010

• Department of Immigration and Citizenship

TABLED DOCUMENTS

Wednesday, 26 May 2010

Pages

3-25

25-114

3-86

.-------------------------------------------------1

Item Tabled 'Topic I

no by: I 1

1---'DIAC iMRT-RRT Member Recruitment- i

! 1Appointment · I I

2 mAC

1 PBS Estimates for Administered Revenue through Visa Application ,, 1 Charges (VAC) and Sponsorship Fees -. --------·-----------------

I

3 ;mAC l Ol Requests

Thursday, 27 May 2010

Item no

4

!Tabled :by: I

'mAC i

I

Update to the answer provided to QON 49 from Additional Estimates 2009-10 -Irregular Maritime Arrivals from 1 July 2008 to 18 May 2010

mAC

I

Update to the an, wee pcov;ded to QON 59 from AddiHonal E'Hmat" 10 - Charter Aircrafts

- 6--:mAC Jmegal Workers Located by Industry - 1 July 2009 to 31 March 2010

195

196

APPENDIX4

CHANGES TO THE OUTCOME/PROGRAM STRUCTURE FOR THE ATTORNEY-GENERAL'S DEPARTMENT (Source: provided by the Attorney-General's Department, 19 May 201 0)

Attorney-General's Department

Changes in agency outcomes and programs

For 2010-11, the Department has ama1gamatea the previous Outcomes 1 and 2 into one outcome-Outcome l-and the previous Outcome 3 is now Outcome 2. In addition, the Department's program structure has been revised to more clearly separate departmental and administered programs. The Department' s new outcome and program structure is set below.

Structure of Attorney-General's Department's outcomes and programs

Attorney-Ge n eral' s D ep artment

,---·-·····----·

Outcome 1

! A just ana secure society lhrough the I ma1nte nance and improvement of Australia's !aw and justice.framework l and 1ts nabonal secunty and emergency management system

I

I Departmental I programs I Administ&red programs Program 1. 1 Program Program 1.5

Attorney- 1.3 Indigenous

General's Justice Law and

Department Services Justice

Operating Expenses-Civil Justice and Lagal

Service s

Pro gram 1.2 Pro gra m Program 1.6

Attorney- 1..4 National

General's Family Security and

Department Relationships Criminal

Operating Justice

Expenses -National Security and Criminal

Justice

Outcome 2

Good governance tn the Australian Territories through the maintenance and improvement of ttle overarchtng legislai1Ve framework for

self-governing territories , and taws and services for non-self-govemtng territories

Program 2.1 Attomey­ Generars Department

Operating Expenses­ Terri tories

197

Program 2.2

Services to Territories

Page 24

Outcome 1: A just and secure society through the maintenance and improvement of Australia's law and justice framework and its national security and emergency management system

Program 1.1: Attorney-General's Department Operating Expenses-Civil Justice and Legal Services

Maps to 2009-10 programs:

All programs in Outcome 1 -departmental funding only

Program 1.2: Attorney-General's Department Operating Expenses-National Security and Criminal Justice

Maps to 2009-10 programs:

All programs in Outcome 2 -departmental funding only

Program 1.3: Justice Services

Maps to 2009-10 programs:

1.1.1 Access to justice:

Payments for Services Under Family law Act 1975 and the Child Support Scheme Legislation

Payments for membership to International Bodies

High Court Justices (Long Leave Payments) Act (special approp)

Payments for grants to Australian Organisations - outcome 1

1.2 Social Inclusion

Payments for the provision of legal aid - Legal Aid commissions

Payments for the provision of community legal services

Financial Assistance towards legal costs and related expenses

National consultation into human rights and responsibilities

1.2 .1 Civil Law

Parliamentary Entitlements Act 1990

Personal Property Securities- public awareness campaign

Law Officers Act 1964

1.2.3 Legislative drafting and publishing

Publications of Acts and select legislative instruments

Program 1.4: Family Relationships

Maps to 2009-10 programs:

1.1.1 Access to justice:

Family Relationships Services Program

Program 1.5: Indigenous Law and Justice

Maps to 2009-10 programs:

1.1.2 Social Inclusion

Indigenous Legal Aid and Policy Reform Program (Payments for the Provision of legal aid for indigenous Australians and Payments for the Provision of law and justice advocacy services for Indigenous Australians)

Payments for the provision of preventative, diversion, rehabilitation and restorative justice services for Indigenous Australians

Payments for the provision of family violence prevention legal services for Indigenous Australians

Payments for Indigenous interpreter services in the Northern Territory

NTER Law and Order measures

Native Title System

198

Program 1.6: National Security and Criminal Justice

Maps to 2009-10 programs:

2.1.2 Emergency management

Em ergency Management Austra lia- Volunteers su pport fund

2.1.3 National security capability development

National Counter-terrorism committee - special fund and operating expenses

Counter-terrorism exercises

National Security public information campaign

National Crisis Coordina tio n Capability (parli ament House)

Disaster Resilience Australia - Early Warning System

Disaster Resilience Austra lia Package

National Aerial Firefighting

2.2.1 Criminal justice

National Community Crime Prevention program

Payments for membership of international bodies- FATF

Payments for grants to Australian Orga nisations Crime Stoppers

Schools Security Program

Safer Suburbs

National Handgun Buyback Act 2003 (special approp)

National Firearms Programs Implementation Act 1996

2.2.2 International crime cooperation

Austra lia's contribution to the International Criminal Court

Anti-m oney laundering and cou nter-terro rism financing - information and public awareness campaign

Pa cific Police Deve lopment

Page 25

Outcome 2: Good governance in the Australian Territories through the maintenance and improvement of the overarching legislative framework for self-governing territories, and laws and services for non-self-governing territories

Maps to 2009-10 Outcome 3

199

200

APPENDIXS

TABLED DOCUMENT NO. 7- ADVICE FROM THE CLERK OF THE SENATE REGARDING QUESTIONS ABOUT PROVISIONS OF BILLS AT ESTIMATES HEARINGS

This is the advice provided by the former ClErk.

ESTIMATES HEARJNGS- QUESTIONS ABOUT PROVJS!Ol"S OF BILLS

It might be useful to set d own the substance of the acvice I gave yesterday on whether questions could be asked at estimates hearings about the provisions of a bill which is before a Senate committee.

Under a resolution passed by the Senate in 1999 (adopting a report of the Procedure Committee), the Senate delineated the scope of questions at estirr.ates hearings as "any questions going to the operations or financial positions of departments and agencies". While this is a very widt: ambit, I do nut titiuk that it extends to questions about provisions of bills, for example, yuestions about the meaning, purpose, intention or of clauses in bills. Questions about dt:parlim:ntal operations connected with bills would be relevant, for t:xample, whether a department engaged consultants to assist in the preparation of a bill, at what cost it was

prepared, and how it is to be administered.

Where a bill is before a Senate committee, this means that the Senate has given that committee the task of conducting an inquiry specifieally into that bill. T his indicates an intention that any inquiry into the provisions of the hill he conducted at hearings and meetings of the corrnnillee specifically designated for that inquiry, and not pursued at estimates hearings which interested senators might not be able to attend and for which tl1ere is usually no notification of such specific subject matters of inquiries.

Please let me knew if I can be of any f urther assistance .

'Rosemary Laing Clerk of the Senate

201

202

The Senate

Rural and Regional Affairs and Transport Legislation Committee

Budget estimates 201 0-11

June 2010

203

© Commonwealth of Australia

ISBN 978-1-74229-324-0

This document was produced from camera-ready copy prepared by the Senate Rural and Regional Affairs and Transport Legislation Committee and printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.

11

204

Membership of the Committee

Members

Senator Glenn Sterle ALP, Western Australia Chair

Senator Fiona Nash NPA, New South Wales Deputy Chair

Senator the Hon. Bill Heffernan LP, New South Wales

Senator Steve Hutchins ALP, New South Wales

Senator Kerry O'Brien ALP, Tasmania

Senator Rachel Siewert AG, tern Australia

Participating Members

Senator Abetz Senator Cash Senator Furner Senator Milne

Senator Adams Senator Colbeck Senator Hanson- Senator Minchin Senator Back Senator Collins Young Senator Moore

Senator Barnett Senator Coonan Senator Humphries Senator Parry Senator Bernardi Senator Cormann Senator Hurley Senator Payne Senator Bilyk Senator Crossin Senator Johnston Senator Polley Senator Senator Eggleston Senator Joyce Senator Pratt

Birmingham Senator Farrell Senator Kroger Senator Ronaldson

Senator Bishop Senator Feeney Senator Ludlam Senator Ryan

Senator Boswell Senator Ferguson Senator Lundy Senator Scullion Senator Boyce Senator Fielding Senator Macdonald Senator Troeth Senator Brandis Senator Senator McEwen Senator Trood

Senator B Brown Fierravanti-Wells Senator McGauran Senator Williams Senator C Brown Senator Fifield Senator McLucas Senator Wortley Senator Bushby Senator Fisher Senator Marshall Senator Xenophon Senator Cameron Senator Forshaw Senator Mason

iii

205

Committee Secretariat

Ms Jeanette Radcliffe, Secretary Ms Jenene James, Research Officer Ms Cassimah Mackay, Research Officer

PO Box 6100 Parliament House Canbena ACT 2600

phone: (02) 6277 3511 fax: (02) 6277 5811 e-mail: rrat.sen@aph.gov.au internet: www.aph.gov.au/senate rrat

lV

206

Table of Contents

Membership of the Committee ........................................................................ iii

List of Abbreviations ...................................................................................... viii

Chapter 1 .............................................................................................................. 1

Introduction .............................................................................. ............................ 1

Changes to departmental structures ........................................................................ 2

Questions on Notice ............................................................................................... 2

Additional information ........ ......................... ... ..... .................. .. ...... ........................ 2

Note on references ......................................................................................... ......... 2

Chapter 2 .............................................................................................................. 3

Agriculture, Fisheries and Forestry portfolio ........................................................ 3

Department of Agriculture, Fisheries and Forestry ...................... ...................... .. .. 3

Corporate Services/Corporate Finance/Corporate Policy ................................... ... 3

Climate Change .......................................................................... ............................ 4

Australian Bureau of Agricultural and Resource Economics (ABARE); and Bureau of Rural Sciences (BRS) ............................................................................ 6

Sustainable Resource Management ........................................................................ 7

Australian Fisheries Management Authority (AFMA) .......................................... 9

Australian Pesticides and Veterinary Medicines Authority (APVMA) ............... 1 0

Trade and Market Access ...... ......... ........ ............. .... .............. ........ .......... .... ......... 1 0

B iosecurity Services Group .................................................................................. 11

Rural Industries Research and Development Corporation (RIRDC) .............. ..... 13

Wheat Exports Australia (WEA) ........ ....... ... ... ............. ........... ... ...... .. ... ... ..... ....... 14

Agricultural Productivity ...................................................................................... 15

Australian Wool Innovation (A WI) ................... .... ... ..... ... ... .......................... .. ..... 16

v

207

Chapter 3 ............................................................................................................ 19

Infrastructure, Transport, Regional Development and Local Government portfolio ................................................................................................................... 19

Department of Infrastructure, Transport, Regional Development and Local Government ....... ..... ...................... .. ............ ... ....... .. ... .......... ........................... ... .. . 19

Corporate Services ..... ..... ......................... ............ ... ...... ... .. ......................... ..... .... . 19

Infrastructure Australia ... ........... .... .... ......... ........... .. ................................... .... ...... 20

Nation Building-Infrastructure Investment.. ................................ ...................... 22

Infrastructure and Surface Transport Policy ........................................................ 23

Australian Maritime Safety Authority (AMSA) ....................... ........................... 25

Policy and Research (incorporating the Bureau of Infrastructure, Transport and Regional Economics) ... ................ .......................................................... ...... ... .. .... 25

Local Government and Regional Development.. ................................................. 26

Office ofNorthern Australia ..... ........ .... .... .. ........ ... .............................................. 27

Aviation and Airports ............. .................... .......................................................... 28

Airservices Australia .. ......... .. ...... .................... ... .................................................. 28

Civil Aviation Safety Authority (CASA) .................................................... ........ . 29

Office of Transport Security ................................................................................ . 3 1

Australian Transport Safety Bureau (ATSB) ....................................................... 32

Appendix 1 ......................................................................................................... 35

Table of contents to proof Hansard transcripts .................................................. 35

Monday 24 May 2010 ............................................................................................. 36

Agriculture, Fisheries and Forestry portfolio ....................................................... 36

Tuesday 25 May 2010 ............................................................................................. 37

Agriculture, Fisheries and Forestry portfolio ....................................................... 3 7

Wednesday 26 May 2010 ........................................................................................ 38

Infrastructure, Transport, Regional Development and Local Government portfolio ............................................................................................................... . 38

VI

208

Thursday 27 May 2010 ........................................................................................... 39

In frastructure, Transport, Regional Development and Local Government portfolio ....... .......................... ...... ..... ........... ... .... ........ ............... .... ........ .......... ... .. 39

Appendix 2 ......................................................................................................... 41

Tabled Documents .................................................................................................. 41

Agriculture, Fisheries and Forestry portfolio ....... .. ...... .... ... ... .... ............ .. ... ......... 41

Infrastructure, Transport, Regional Development and Local Government portfolio ... ........ ... ............ .... ... ... ... ..... ... ...... .... ...... .... ... ............ ............. ..... ... .... .... . 41

Appendix 3 ......................................................................................................... 43

Topic list- Agriculture, Fisheries and Forestry portfolio .................................. 43

Appendix 4 ......................................................................................................... 49

Topic list - Infrastructure, Transport, Regional Development and Local Government portfolio ............................................................................................. 49

Vll

209

List of Abbreviations

ABARE Australian Bureau of Agricultural and Resource Economics

AFMA Australian Fisheries Management Authority

AMSA Australian Maritime Safety Authority

ANAO Australian National Audit Office

APVMA Australian Pesticides and Veterinary Medicines Authority

AQIS Australian Quarantine and Inspection Service - - ·

ARTC Australian Rail Track Corporation

ATSB Australian Transport Safety Bureau

AWl Australian Wool Innovation

BRS Bureau ofRural Sciences

CASA Civil Aviation Safety Authority

CBD Central business district

CEO Chief Executive Officer

CCAMLR Convention for the Conservation of Antarctic Marine Living Resources

CCSBT Commission for the Conservation of Southern Bluefin Tuna

CITES Convention on International Trade in Endangered Species of Wild Fauna and Flora

COAG Council of Australian Governments

CSIRO Commonwealth Scientific and Industrial Research Organisation

DAFF Department of Agriculture, Fisheries and Forestry

DEWHA Department of the Environment, Water, Heritage and the Arts

DITRDLG Department of Infrastructure, Transport, Regional Development and Local Government

EC Exceptional Circumstances

EPBC Act Environment Protection and Biodiversity Conservation Act 1999

ETS Emissions Trading Scheme

FSANZ Food Standards Australia New Zealand

FTA Free trade agreement

GDP Gross domestic product

V111

210

GVP

IOTC

IRA

IVA

LGRD

MERI

MOU

MSIC

NHT -

NRM

OTS

PAES

PBS

PIAPH

PIMC

R&D

RDA

RIRDC

RLCIP

RPT

SRM

TFES

US/USA

WEA

WTO

Gross value of product

Indian Ocean Tuna Commission

Import Risk Analysis

Independent Viability Assessment

Local Government and Regional Development

Monitoring, evaluation, reporting and improvement

Memorandum of Understanding

Maritime Safety Identification Card

National Heritage Trust

Natural resource management

Office of Transport Security

Portfolio Additional Estimates Statements

Portfolio Budget Statements

Product Integrity, Animal and Plant Health

Primary Industries Ministerial Council

Research and development

Regional Development Australia

Rural Industries Research and Development Corporation

Regional and Local Community Infrastructure program

Regular public transport

Sustainable resource management

Tasmanian Freight Equalisation Scheme

United States/United States of America

Wheat Exports Australia

World Trade Organization

ix 211

212

Chapter 1

Introduction

1.1 On 11 May 2010, the Senate referred the following documents to the Rural and Regional Affairs and Transport Legislation Committee (the committee) for examination and report in relation to the Agriculture, Fisheries and Forestry portfolio and the Infrastructure, Transport, Regional Development and Local Government portfolio:

• Particulars of proposed expenditure in respect of the year ending on 30 June 2011;

• Particulars of certain proposed expenditure in respect of the year ending on 30 June 2011; and

• Particulars of proposed expenditure in relation to the parliamentary departments in respect of the year ending on 30 June 2011. 1

1.2 The committee was required to report to the Senate on its consideration of 2010-2011 budget estimates on 22 June 2010.

1.3 The committee considered the Portfolio Budget Statements 2010-2011 for both portfolios at hearings on 24, 25, 26 and 27 May 2010. The hearings were conducted in accordance with the agreed agenda as follows:

• Monday 24 May 2010- Agriculture, Fisheries and Forestry portfolio.

• Tuesday 25 May 2010- Agriculture, Fisheries and Forestry portfolio.

• Wednesday 26 May 2010 - Infrastructure, Transport, Regional Development and Local Government portfolio.

• Thursday 27 May 2010 - Infrastructure, Transport, Regional

Development and Local Government portfolio.

1.4 The committee heard evidence from Senator the Hon Nick Sherry, Assistant Treasurer, representing the Minister for Agriculture, Fisheries and Forestry, 2 and Senator the Hon Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, representing the Minister for Infrastructure, Transport, Regional Development and Local Government. Evidence was also provided by Dr Conall O'Connell, Secretary of the Department of Agriculture, Fisheries and Forestry, Mr Mike Mrdak, Secretary of the Department of Infrastructure, Transport, Regional

Journals of the Senate, No. 120, 11 May 2010, p. 3444.

2 Senator the Hon John Faulkner, Minister for Defence, and Senator the Hon Ursula Stephens, Parliamentary Secretary for Social Inclusion and Parliamentary Secretary for the Voluntary Sector, also represented the Minister for Agriculture, Fisheries and Forestry for short periods.

213

2

Development and Local Government, and officers representing the departments and agencies covered by the estimates before the committee.

1.5 The committee thanks the ministers, departmental secretaries and officers for their assistance and cooperation during the hearings.

Changes to departmental structures

1.6 The committee notes that a change has been made to the departmental structure of the Department of Infrastructure, Transport, Regional Development and Local Government since the 2009-10 Additional Estimates in February 2010. As at 15 February 2010, the Bureau of Infrastructure, Transport and Regional Economics was incorporated into a new Policy and Research division.

1. 7 The committee notes that no changes have been made to the departmental structure for the Department of Agriculture, Fisheries and Forestry since the 2009-10 Additional Estimates.

Questions on Notice

1.8 In accordance with Standing Order 26, the committee is required to set a date for the lodgement of written answers and additional information. The committee requested that written answers and additional information be submitted by Wednesday 21 July 2010.

Additional information

1.9 Answers to questions taken on notice at the committee's budget estimates hearings will be tabled in the Senate in separate volumes entitled 'Additional information relating to the examination of budget estimates 2010-2011, May 2010, Senate Rural and Regional Affairs and Transport Legislation Committee'. Documents not suitable for inclusion in the additional information volumes will be available on request from the committee secretariat.

1.10 Answers to questions on notice received from the departments will also be posted on the committee's website at a later date.

Note on references

1.11 References to the Hansard transcript are to the proof Hansard; page numbers may vary between the proof and the official Hansard transcript.

214

Chapter 2

Agriculture, Fisheries and Forestry portfolio

Department of Agriculture, Fisheries and Forestry

2.1 This chapter contains the key issues discussed during the 2010-2011 budget estimates hearings for the Agriculture, Fisheries and Forestry portfolio. A complete list of all the topics discussed, and relevant page numbers, can be found at appendix 3.

2.2 The committee heard evidence from the department on Monday 24 May and Tuesday 25 May 2010. The hearing was conducted in the following order:

• Corporate Services/Corporate Finance/Corporate Policy

• Climate Change

• Australian Bureau of Agricultural and Resource Economics & Bureau of Rural Sciences

• Sustainable Resource Management

• Australian Fisheries Management Authority

• Australian Pesticides and Veterinary Medicines Authority

• Trade and Market Access

• Biosecurity Services Group

• Rural Industries Research and Development Corporation

• Wheat Exports Australia

• Agricultural Productivity

• Australian Wool Innovation

Corporate Services/Corporate Finance/Corporate Policy

2.3 Once again, the committee raised concerns about the impact of the efficiency dividend on the department. The Secretary indicated that the budget is distributed across the department and the efficiency dividend is managed as part of the normal planning process coming into the new financial year. Last year, in addition to freezing the graduate program, the department gained efficiencies in travel and use of contractors and consultants. A number of corporate activities, including human resources, finance and media were restructured to provide centralised services. In the human resources area, this led to a reduction in the number of staff by 12 to 13.

1

Proof Estimates Hansard, 24 May 2010, pp 4-5 and 6-7.

215

4

2.4 The committee was particularly interested in the department's graduate program and the costs associated with its resumption. The department explained that the additional cost of restarting the program is approximately $1.7 million this financial year. This is a part-year cost as the graduates do not commence until the end of January 2011. The program will resume at its previous level, which includes around 60 graduates, plus trainees and Indigenous graduates. The department is looking at a total of 70 to 72, depending on how many suitable candidates it can attract. 2

2.5 The committee raised the issue of answers to questions on notice from Additional Estimates in February 2010, as 15 answers remain outstanding. The committee noted that 'it makes it very difficult for us to follow things along when three months later we do not have the material' and asked about the source of the delay. The department advised that it has provided drafts for the Minister's consideration in relation to all of these answers. 3 The secretary added that:

It is a question, I think, of whether or not the minister has found that infonnation sufficient for him to be able to provide an answer, and that is a question for the minister.4

Climate Change

2.6 The committee expressed interest in the government's recent announcement of plans to conduct a pilot of drought reform measures in Western Australia, in partnership with the West Australian government. The department informed the committee that the pilot will run from 1 July 2010 to 30 June 2011, with payments under one component, Building Farm Businesses, to continue until June 2013. The department explained further:

The pilot will be testing seven measures in response to the national drought policy review, and the measures are designed to move from a crisis management approach to risk management. The total cost of the pilot is $22 .9 million. The Australian government has allocated $17.9 million and the West Australian government is contributing $5 million. The pilot will not-and I think is an important point-affect regions in other parts of Australia that are currently exceptional circumstance declared, and the intention is that the pilot will inform ongoing work on drought policy reform. It will be reviewed in 2011 and will provide the basis for future consideration of a new national drought policy, including measures, implementation and discussion with state and territory governments. 5

2. 7 The committee heard that one of the measures in the pilot, Farm Planning, will provide state funding of up to $7,500 each for farmers to undertake training to

2 Proof Estimates Hansard, 24 May 2010, p. 5.

3 Proof Estimates Hansard, 24 May 2010, pp 11-12.

4 Proof Estimates Hansard, 24 May 2010, p. 12.

5 Proof Estimates Hansard, 24 May 2010, p. 23.

216

5

develop or update a strategic plan for their farm business. The plan will identify priority activities to help improve the management and preparedness of their farm business to respond to future challenges. Farmers who have completed this step can then apply for a grant of up to $60,000 under the Building Farm Businesses program,

subject to meeting eligibility criteria. 6

2.8 The committee expressed concern about the department's estimate of around 140 to 150 farmers taking up the Farm Planning option and moving on to apply for Building Farm Businesses, given that there are some 6,000 farmers in the region. The department explained that:

There is no expectation that all 6,000 of those will undertake planning processes during this period or that they will get to the stage where they are applying for grants ... The expectation is that probably there will be a few hundred farmers who will produce strategic plans during this 12-month trial period-and it is a trial, obviously-and then the expectation is that perhaps

150 of those might get to the level of applying for grants. That is the basis, I guess, on which these numbers are in front of us. This is just obviously a trial of a future approach and what we want to make sure of is that this can work through. The minister has been quite clear that he wants to see this happen in a measured way so that we do not inadvertently create new problems having come out of a system which people have agreed is not

adequate. 7

2.9 The department added that it will be monitoring the program and keeping the government informed about the uptake. 8

2.10 The committee raised concerns about the Tasmanian Community Forest Agreement grants, in view of a number of grant recipients going into administration or facing other financial difficulties. The committee was particularly interested in the following issues:

• due diligence exercised by the government in disbursing the grants, including legal advice sought;

• current advice about legal mechanisms available to the Commonwealth to recover grant monies from recipient companies in administration;

• the asset retention period;

• oversight, including field visits and milestone reporting;

• the evaluation process;

• current problems facing the forestry industry in Tasmania; and

6 Proof Estimates Hansard, 24 May 2010, pp 24-25.

7 Proof Estimates Hansard, 24 May 2010, p. 31.

8 Proof Estimates Hansard, 24 May 2010, p. 31.

217

6

• recent requests from the Tasmanian forest industry for assistance from the Commonwealth government. 9

2.11 One member of the committee observed that:

The reason it becomes critical now, apart from verifying how Commonwealth money was spent, is that we have a situation where there is a discussion about another round of compensation in the Tasmanian forest industry. I think it is important that we find out that the money was spent as it was supposed to have been spent and, if companies have been onsold, that the asset value is returned to the Commonwealth before we go into another round. 10

2.12 The department indicated that in order to provide the committee with comprehensive answers, it would have to take most of the questions on notice. 11

Australian Bureau of Agricultural and Resource Economics (ABARE); and Bureau of Rural Sciences (BRS)

2.13 The committee sought information about ABARE's report on the Murray­ Darling Basin which assessed the future impact of the Australian government's environmental water purchase program. ABARE advised that the report was commissioned by the Department of the Environment, Water, Heritage and the Arts (DEWHA) at a cost of $300,000. 12

2.14 Some members of the committee were critical of a number of aspects of the repo1i, including the limited number of field visits made to the area by ABARE officers and the type of modelling used which does not reflect what actually happens at the town and farm level. In response, ABARE officers indicated that they have done detailed surveys of irrigators throughout the Murray-Darling Basin over the last three years and have built up a good picture of the industry. 13 ABARE explained that the modelling was not designed to look at the impacts on particular towns:

That was not the job we were asked to do. We were asked to look at what the basin level and catchment level impacts would be-and when I say ' catchment' I am talking about the CSIRO sustainable yield region impacts-of the first part of the water buyback program. Looking at what the impacts are on a particular town is a separate exercise and I would suggest that we would not have approached it using a general equilibrium model. 14

9 Proof Estimates Hansard, 24 May 2010, pp 48-56.

10 Proof Estimates Hansard, 24 May 2010, p. 50.

11 Proof Estimates Hansard, 24 May 2010, pp 48-56.

12 Proof Estimates Hansard, 24 May 2010, pp 63 and 71.

13 Proof Estimates Hansard, 24 May 2010, pp 63-65.

14 Proof Estimates Hansard, 24 May 2010, p. 65 .

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2.15 In conclusion, the secretary emphasised that:

We stand by the report. The report had a certain purpose and was within certain limitations. We have provided that report and we stand by that report. The report did not pretend to be a report that would give you highly localised impact assessment of buybacks at the level that you have been talking about. 15

Sustainable Resource Management

7

2.16 The committee sought detailed information on budget cuts to the Caring for our Country program. The department advised that funding for Landcare has been reduced by $10.9 million over four years. This is made up of $6.4 million from indexation co.si:s and $4.4 million from administration costs, to reduce duplication. The number of staff administering the program will be reduced by around seven.

16

The department explained further:

... in the early years of any program it takes more resources to set a program up, put in place assessment processes, establish communications with and get information from people about what sorts of projects should be funded and those sorts of things. Landcare projects and Caring for our Country projects are being rolled out together. What we are planning to do is make more effective use of our staff in terms of things like monitoring projects, visiting projects, undertaking audits of compliance, making better use of

automated contracting systems and automated acquittal systems and those sorts of things to reduce the administrative overhead on the program. 17

2.1 7 Some members of the committee expressed concern about reduced funding for the National Heritage Trust (NHT), another component of Caring for our Country program. The department indicated that NHT funding has been cut by $70 million over four years. Savings are being phased in so that they are smallest in the first year and larger in latter years, when there is more uncommitted money. The department continued:

In the first year of the program, they were obtained largely by efficiencies in implementation costs, costs associated with monitoring and evaluation, project management and communications. In the latter years, they will have some effects on programs. The areas where it is cunently estimated that there will be some reduction are areas like national reserves , World Heritage, Coastcare-excluding the Banier Reef, as I mentioned-and

some of the implementation costs associated with facilitators , largely looking at savings in travel and overhead costs. 18

15 Proof Estimates Hansard, 24 May 2010, p. 69.

16 Proof Estimates Hansard, 24 May 2010, p. 78.

17 Proof Estimates Hansard, 24 May 2010, p. 78.

18 Proof Estimates Hansard, 24 May 2010, pp 86-87.

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2.18 The committee was particularly concerned about $5 million in reduced funding for NHT monitoring and evaluation, given recurring criticism from the Auditor-General about the department's monitoring and evaluation processes for natural resource management projects. The department observed that $8 million per year will be spent on monitoring and evaluation, 'which is still a significant amount of money'. The department was unable to provide further information about reductions in specific monitoring and evaluation activities as the details are still being finalised. 19

2.19 Continuing its interest from Additional Estimates, the committee sought an update on the department's involvement in the marine bioregional planning process. The department explained that its portfolio is involved in three areas:

• the Bureau of Rural Sciences (BRS) is conducting an analysis of fisheries data for each bioregion, aimed at estimating the gross value of product (GVP) of commercial fishing displaced by proposed reserve networks. The BRS will also undertake a limited qualitative assessment of the impacts on recreational, Indigenous and charter fishers and fishing communities. Opportunities will be provided for industry and public consultation;

• the department is part of a displaced activities working group at the Commonwealth level, which includes representatives from the fishing industry. This is developing a draft policy on the government's approach to activities displaced as a result ofbioregional marine planning; and

• the Australian Fisheries Management Authority (AFMA) attends stakeholder consultation workshops held by DEWHA. AFMA also discusses marine bioregional planning at its management advisory committees and provides regular updates on the marine bioregional planning process through its circulars to industry.

20

2.20 The committee was interested in the feedback received on the consultation process. The department indicated that the process has been extended a number of times in order to provide for additional consultation with industry and to allow industry time to consider and develop its advice back to government. The department added that:

It would probably be fair to say that the process, from an industry

perspective, was too tight earlier in the process, but additional time has been granted in response to those concerns that industry has raised and the consultation periods that have been talked about have been extended beyond the statutory period, as provided under the environmental 1 . I . 21 egis atwn.

19 Proof Estimates Hansard, 24 May 2010, pp 91-92.

20 Proof Estimates Hansard, 24 May 2010, p. 100.

21 Proof Estimates Hansard, 24 May 2010, p. 102.

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2.21 The department advised that the draft plans for the south-west, north-west and north bioregions are estimated to be released in the second half of 2010, with the east bioregion to follow in early 2011. 22

Australian Fisheries Management Authority (AFMA)

2.22 The committee asked about the impact on the fishing community of the reduced quotas set by the Commission for the Conservation of Southern Bluefin Tuna (CCSBT), down from 5,265 tonnes to 4,015 tonnes per year. AFMA advised that while it has not conducted any analysis of the impact, its officers are in regular contact with the industry in Port Lincoln through their management group. AFMA informed the committee that:

There was initially some redm::tion in staffing numbers that were needed, but how that has transpired through the season, I am unsure. The message we are getting from them is that the fish are good, they have caught them quite quickly out in the Bight and there is some potential for the price to be up a bit. So the market might move reasonably well, but they are still doing it reasonably tough. 23

2.23 The committee requested an update on patrols by the Oceanic Viking in the Southern Ocean. AFMA indicated that three patrols were conducted this financial year, instead of the four scheduled patrols in the budget. The final patrol was rescheduled for use in northern waters as a matter of priority. AFMA officers were also deployed as observers on three patrols conducted by French authorities. The French rescheduled a fourth patrol to work on piracy in the Indian Ocean. 24

2.24 The committee was interested in AFMA's view on the impact of the reduced patrols. AFMA observed that 'there has been little impact on the deterrent effect', adding that 'we have not had a vessel sighted in Australian jurisdiction since June 2005'. However, there are a number of vessels of concern that operate outside Australian waters in Convention for the Conservation of Antarctic Marine Living Resources (CCAMLR) waters. These unregulated vessels run flags of convenience and are not party to the CCAMLR convention.25 AFMA indicated that:

Over the last probably 10 years we have had a significant impact on the number of vessels that are operating illegally down there. Both we and the French have arrested a number and we have both destroyed quite a number of vessels. Us patrolling down there on a fairly regular basis I think keeps the process reasonably honest. 26

22 Proof Estimates Hansard, 24 May 2010, p. 100.

23 Proof Estimates Hansard, 24 May 2010, p. 117.

24 Proof Estimates Hansard, 24 May 2010, pp 118-119.

25 Proof Estimates Hansard, 24 May 2010, pp 119-120.

26 Proof Estimates Hansard, 24 May 2010, p. 120.

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Australian Pesticides and Veterinary Medicines Authority (APVMA)

2.25 The committee sought an update on the investigation into two-headed fish at a Queensland hatchery. The APVMA advised that the Noosa Fish Health Investigation Taskforce, established by the Queensland government, is about to publish its final report into the fish, fingerling and larval deaths and larval deformities at a single hatchery. To date, interim reports have indicated that, while it is plausible that chemicals could have been a cause, they have not been able to establish a direct linlc The APVMA is awaiting the final report to see if any regulatory action is needed in terms of chemicals. The APVMA emphasised that 'we are in a difficult situation to take regulatory action unless there is a proven link'. 27

2.26 The committee discussed significant reforn1 processes that are underway, including the new single national regulatory framework for agricultural and veterinary chemicals, an initiative of the Council of Australian Governments (COAG). Officers advised that a framework document has been produced and endorsed by the Primary Industries Ministerial Council (PIMC):

What has to be developed then is a development and implementation plan. That will look at a series of options about how the single national framework can be implemented. We are due to go back to COAG by about the middle of June 2011 for COAG's acceptance or otherwise of that implementation plan and it will not be until that plan is implemented, sometime in 2012-13, depending upon the legislative requirements, that you will see any changes on the ground. 28

2.27 The committee asked about the Minister's decision to increase cost recovery fees by 10 per cent. Officers explained:

That is an interim decision pending the significant reform processes that are happening-we have mentioned two of them here-with a view that there will be another review of costs once the functions, format and structure of the APVMA are better clarified, around this time next year.

29

2.28 The committee heard that the regulations to give effect to this decision are currently being finalised. The additional revenue from the increase is around $600,000 per year. 30

Trade and Market Access

2.29 The committee sought an update on the World Trade Organization (WTO) dispute with New Zealand in relation to apples. The department indicated that the draft report of the WTO panel has been released in confidence to the parties. The final

27 Proof Estimates Hansard, 24 May 2010, pp 129-130.

28 Proof Estimates Hansard, 24 May 20 I 0, p. 129.

29 Proof Estimates Hansard, 24 May 2010, p. 132.

30 Proof Estimates Hansard, 24 May 2010, p. 132.

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report is expected to be released in confidence on 27 May 2010, with public release to follow in early July. Officers explained that the government will have a right of appeal against the WTO decision and 'there is still the avenue open to us to try and reach a bilateral solution with New Zealand, should we choose to do that'. 31

2.30 The committee requested an update on negotiations with the Russian Federation to resolve suspensions of red meat exports from Australia. The department indicated that of the 19 plants suspended at various times, 16 have now been relisted, with one remaining suspended. Another two have decided not to reapply, as they are unlikely to meet the requirements. 32

2.31 In relation to kangaroo meat exports, the department advised that since the trade was suspended in August 2009, officers have been working with 'Australian industry and state regulatory authorities to develop a comprehensive submission back to Russia, addressing their concerns more holistically'. 33 This submission was lodged in April 2010 and the next step is for a Russian audit team to come to Australia to review the systems operating within the establishments seeking relisting. 34

2.32 The committee raised concerns about the quality of documentation for Australian exports into international markets. Specifically, the committee referred to the recent seizure of a shipment of seahorses from Tasmania by US authorities due to poor quality documentation. The department advised that it is an issue for the Australian Customs Service and DEWHA, as Customs certifies Convention on International Trade in Endangered Species of Wild Fauna and Flora (CITES) permitted exports on behalf of DEWHA. The committee was interested to know why DAFF officers do not play a role in the final certification process at the border, given their expertise in plant and animal matters. The department informed the committee that it is an issue between the US authorities and Customs in Tasmania, who are seeking to resolve the matter with assistance from the Australian embassy in the US. The committee heard that the seahorses will be donated to zoological schools. 35

Biosecurity Services Group

2.33 The committee expressed concern about the increase in charges for providing quarantine clearance services to Australia Post. The committee was interested to know whether there was any consultation between the department and Australia Post in determining the $5 million increase. The Secretary indicated that he was not aware of any consultation between the department and Australia Post:

36

31 Proof Estimates Hansard, 25 May 2010, pp 8-9.

32 Proof Estimates Hansard, 25 May 2010, p. 16.

33 Proof Estimates Hansard, 25 May 2010, p. 15.

34 Proof Estimates Hansard, 25 May 2010, pp 15 and 16-17.

35 Proof Estimates Hansard, 25 May 2010, pp 6-8 and 24.

36 Proof Estimates Hansard, 25 May 2010, p. 28.

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The reduction in the subsidy to Australia Post was something that took place in the normal budgetary processes. The normal budgetary processes, as you know, often do not involve prior notice of budgetary decisions. 37

2.34 The department informed the committee that the current estimate for providing quarantine clearance services to Australia Post is approximately $22 million per year. 38

2.35 The committee was interested in the work of the Expert Review Panel on Equine Influenza, which proposed four primary scenarios in relation to a national eradication response, for the consideration of the PIMC. The committee noted that following on from the panel's work, the department had put a fifth scenario to the horse industry, a limited form of voluntary vaccination against equine influenza. The department explained that:

... it was just to test a scenario which had not really been fleshed out in the work by the panel but which was quite relevant because we did not have a national response agreement in place. 39

2.36 The committee asked about industry support for a voluntary vaccination. The department indicated that there were a range of views on the issue, with the standardbred industry and the harness-racing industry opposed, while the Australian Racing Board was more positive. The PIMC is waiting to see whether an agreement can be reached across the different horse sectors by December, to accept a funding mechanism for an emergency response to eradicate the disease. If there is no agreement by that date, the PIMC has decided that steps should be taken to allow

1

. . 40

vo untary vaccmatwn.

2.37 The committee discussed the export certification reform process in some detail, seeking an update on the ministerial taskforces for each of the six industry sectors. The department advised that each taskforce has completed a detailed project plan which has gone to the Minister. The Minister has responded and asked them to proceed. The committee heard that a cost recovery impact statement has been done as part of the planning process for each sector. 41

2.38 Once again, the committee was interested in the import risk analysis (IRA) for the importation of apples from China. The committee asked whether Drosophila suzukii, a soft fruit crop pest, is being considered as part of the current IRA, given its recent identification as a newly occurring pest in the United States. The department indicated that while Drosophila suzukii exists in China, it has never been shown to be

37 Proof Estimates Hansard, 25 May 2010, p. 29.

38 Proof Estimates Hansard, 25 May 2010, p. 29.

39 Proof Estimates Hansard, 25 May 2010, p. 35.

40 Proof Estimates Hansard, 25 May 2010, pp 36 and 37.

41 Proof Estimates Hansard, 25 May 2010, pp 42-49.

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on the pathway for harvest-ready apples. It is a pest that affects soft fruits such as strawberries, not hard skinned fruits such as apples and pears, unless they are rotten. In view of this, it is not being taken into account as part of the current IRA process. 42

2.39 The committee sought details of the process for ensuring that rotting fruit is not contained in a consignment. The department advised that:

We expect and make sure that the regimes that we implement are only for harvest-ready and export quality fruit. ..

There is going to be a preinspection before the fruit leaves. There is going to be competent authority certification of the quality of the fruit, and at this end there will be an inspection as well on the arrival of the fruit. This is a risk-based system. It is not an absolute certainty, but under those circumstances we have put in place a complete system to ensure that the -- · apples will arrive here in good condition. The fact is that these pests are not known to attack to the fruit unless there is severely damaged or rotting fruit. 43

2.40 The committee requested an update on the IRA for beef. The department indicated that the IRA process for Canada and the United States started on 8 April, but the clock has stopped on Japan because of the recent foot and mouth disease outbreak. An expert panel to undertake the IRA has been announced, however, planning for in­ country inspections has not yet been determined, as they are awaiting details of specific export locations within the two countries.

44

Rural Industries Research and Development Corporation (RIRDC)

2.41 The committee followed up on the impact of the RIRDC's reduced funding announced in last year's budget. The RIRDC confirmed that its budget was reduced by $3 million per year over four years from 2009-10. The committee heard that the Minister had provided some guidance for the process:

The areas where we were asked to avoid cutbacks were in the areas of farm health and safety, emerging rural issues and the programs for which we receive a matched levy. During the year the board took the decision to try to build revenue by looking for other sources of revenue, for instance, the possibility of voluntary levies from some of the emerging industries and other sources. Over the course of the year, although we had the three million cut, which was met, we did secure additional income of $3.2 million, which built our budget up.

45

2.42 The committee was interested in the ongm of the additional income. The RIRDC explained that it came from a range of sources, including the DAFF portfolio,

42 Proof Estimates Hansard, 25 May 2010, pp 52-53.

43 Proof Estimates Hansard, 25 May 2010, p. 53.

44 Proof Estimates Hansard, 25 May 2010, pp 67--68.

45 Proof Estimates Hansard, 25 May 2010, p. 71.

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some programs from Land and Water Australia, and a pastures program. The committee asked the RIRDC to provide, on notice, more detail about the individual projects and a breakdown of the funding. 46

2.43 The committee discussed a number of the RIRDC's research projects, including initiatives to help farmers reduce their carbon footprint. The RIRDC advised that the new Rural Industries portfolio will be focussed on developing alternative crops, such as native foods, wildflowers, olives and quinoa, which are more suitable for growing in areas of lower rainfall. 47

Wheat Exports Australia (WEA)

2.44 The committee was interested in the Productivity Commission review of wheat export marketing arrangements. In particular, the committee asked about WEA's reaction to the recommendation in the Productivity Commission's draft report that WEA should be dismantled. WEA stated:

Our position is: it is business as usual; it is business as usual until and if the govemment makes changes to the act and to our responsibilities. 48

2.45 WEA indicated that it has lodged a public submission in response to the draft report to clarify issues relating to the accreditation scheme and suggest areas for further investigation. 49

WEA tabled a copy of this submission during the hearing. 50

2.46 The committee raised concerns about access arrangements at ports, including complaints about the providers of export port terminal services and lack of fairness and transparency. WEA told the committee that:

I think it is fair to say that this issue is probably the biggest issue that the industry is discussing at the present time ... There have been a number of articles about these issues. The Productivity Commission themselves have indicated that they believe that is the biggest issue that they are addressing in their review. Clearly these sorts of issues are subject to their review, as it was in the draft report, and I am sure they will be coming out with a little bit more information in their final report. 51

2.4 7 At the same time, WEA indicated that there has been a significant change since access undertakings were put in place on 1 October 2009, with general industry acknowledgment that there is greater transparency. 52

46 Proof Estimates Hansard, 25 May 2010, pp 71 and 77.

47 Proof Estimates Hansard, 25 May 2010, p. 71.

48 Proof Estimates Hansard, 25 May 2010, p. 78.

49 Proof Estimates Hansard, 25 May 2010, pp 78-79.

50 Tabled document no. 2: available on the committee's budget estimates 2010-11 web page

51 Proof Estimates Hansard, 25 May 2010, p. 83.

52 Proof Estimates Hansard, 25 May 2010, p. 83.

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Agricultural Productivity

2.48 The committee sought information about reduced funding for the Regional Food Producers Innovation and Productivity Program. The department advised that the savings will be made over two years: $1.5 million in 2010-11 and $4 million in 2011-12. The savings have been redirected into two other initiatives, namely, Pacific Islands fisheries planning and a streamlined dispute resolution service for industry. 53

2.49 The department is currently considering:

whether a third round of grants is the best option to deliver the program or whether the remaining funds could be delivered in some other way that might equally benefit the industry, but would be in a different sort of format. 54

2.50 The committee asked about the consultation process with industry. The department advised that initial consultations have been held with the Australian Food and Grocery Council, a major industry representative. No further formal consultations have been planned until a decision is taken about the delivery of the program. 55

2.51 The committee was interested in the department's involvement in the intergovernmental review of food labelling law and policy. The department indicated that it is funding half of the Commonwealth share of the review, which amounts to $250,000. While the Department of Health and Ageing is the lead department with responsibility for formal oversight of the process, DAFF is part of the Food Regulation Standing Committee which set the terms of reference for the review, provides guidance to the review panel and will receive the review report. 56

2.52 The committee heard that over 6,000 submissions were received in the first round, followed by a second round of consultations and submissions. The department outlined the timetable for the review panel:

They will prepare a draft report that they plan, as I understand it, to road test with a small focus group. They will discuss their draft report with the Food Regulation Standing Committee and then present the final report to the Food Regulation Ministerial Council in December this year. 57

2.53 The review panel is due to report to COAG in early 2011. 58

53 Proof Estimates Hansard, 25 May 2010, p. 87.

54 Proof Estimates Hansard, 25 May 2010, p. 89.

55 Proof Estimates Hansard, 25 May 2010, p. 89.

56 Proof Estimates Hansard, 25 May 2010, pp 90-91.

57 Proof Estimates Hansard, 25 May 2010, p. 91.

58 Proof Estimates Hansard, 25 May 2010, p. 91.

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2.54 The committee asked about the negotiation of a new statutory funding agreement between the government and Australian Wool Innovation (A WI). The department advised that the current agreement with A WI expires on 30 June 2010 and it has been in discussions with A WI for the last six to eight months since the public release of an independent three year review of AWl's performance.59

2.55 The department emphasised that while the performance review indicated a number of problems with the governance and management of A WI:

including that it did not consult well and did not plan its operations well, it concluded that A WI was not in breach of its obligations under that statutory funding agreement. From the regular six-monthly formal meetings that the department has with A WI under the provisions of the statutory funding agreement, it is our judgement as well that A WI has not formally breached the obligations under the statutory funding agreement. 60

2.56 The department explained that the intent of the new statutory funding agreement with A WI is to reflect all of the recommendations made by the independent reviewer, including the recommendation that A WI undertake a 12-month review of its progress in implementing all of the other recommendations.

61

2.57 The department indicated that while it is trying to make statutory funding agreements as consistent as possible across the board, given the history of A WI, the outcomes of the performance review and representations from stakeholders:

there will be a much stronger focus in the next iteration of the statutory funding agreement from A WI on accountability, governance arrangements and the ability of the government to more closely play an active role within the operations of A WI. 62

Australian Wool Innovation (AWl)

2.58 The committee discussed a number of governance issues with A WI. The committee was particularly interested to know whether A WI would present three reports on its performance to the Minister, if he were to request them. The Chairman of A WI indicated that he would take legal advice and advice from the board before considering their release. The committee then asked whether the Minister would agree to request these documents. The Minister agreed to take this question on notice and refer it to the Minister for Agriculture, Fisheries and Forestry for a response.

63

59 Proof Estimates Hansard, 25 May 2010, p. 97.

60 Proof Estimates Hansard, 25 May 2010, p. 98.

61 Proof Estimates Hansard, 25 May 2010, p. 98.

62 Proof Estimates Hansard, 25 May 2010, p. 99.

63 Proof Estimates Hansard, 25 May 2010, pp 101 - 102.

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2.59 The committee sought A WI's response to correspondence from a group of Italian companies to the Chairman of A WI which was leaked to the press. In the letter, they expressed disappointment about a recent visit of three A WI board members to Italy, claiming that the delegation did not express official A WI thinking. While A WI acknowledged that there was some 'in-house criticism' in this first letter, the Chairman indicated that it had been followed by a second letter in which these same Italian companies offered to do a joint marketing venture.

64

2.60 The committee asked if the board knew how the letter was leaked. A WI informed the committee that:

It is fair to say that we are doing an investigation. There have been a series of leaks from the company and the infonnation that is being leaked is biased, inaccurate and mig reading. 65

2.61 The committee sought an update on the development of alternatives to mulesing. A WI indicated that this is at the top of its research and development priorities, with $3 million allocated in its operating budget. A WI observed that:

We have a commercial product in the market-the clips. We have another product, intradermals, which is getting very close, with registration at the APVMA at the moment, and towards the end of this year or early next year we might be doing some commercial trials . And, of course, the genetic work continues in the background: ultimately that is going to be our solution I think, but it takes time .66

64 Proof Estimates Hansard, 25 May 2010, pp 103-104, 107-109 and 111.

65 Proof Estimates Hansard, 25 May 2010, p. 109.

66 Proof Estimates Hansard, 25 May 2010, p. 112.

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Chapter 3

Infrastructure, Transport, Regional Development and Local Government portfolio

Department of Infrastructure, Transport, Regional Development and Local Government

3.1 This chapter contains the key issues discussed during the 2010-2011 budget estimates hearings for the Infrastructure, Transport, Regional Development and Local Government portfolio. A complete list of all the top!<;.s discussed, and relevant page numbers, can be found at appendix 4 .

3.2 The committee heard evidence from the department on Wednesday 26 May and Thursday 27 May 2010. The hearing was conducted in the following order:

• Corporate Services

• Infrastructure Australia

• Nation Building-Infrastructure Investment

• Infrastructure and Surface Transport Policy

• Australian Maritime Safety Authority

• Policy and Research (incorporating the Bureau of Infrastructure, Transport and Regional Economics)

• Local Government and Regional Development

• Office ofNorthern Australia

• Aviation and Airports

• Airservices Australia

• Office of Transport Security

• Civil Aviation Safety Authority

• Australian Transport Safety Bureau

Corporate Services

3.3 The committee began by discussing key initiatives of the department set out in the budget. The department Secretary, Mr Mike Mrdak, outlined these initiatives in three main areas:

• infrastructure investment and long term infrastructure planning;

• regulatory reform for a single national market reform; and

• single national regulatory arrangements in transport.

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These initiatives were discussed throughout budget estimates.

3.4 The Council of Australian Governments (COAG) has confirmed that the national regulators for maritime, heavy vehicles and rail safety will be fully operational by January 2013. 1

3.5 New government measures were discussed, including the $996 million additional funding provided to the Australian Rail Track Corporation (ARTC).

3.6 The late receipt of answers to questions on notice was revisited, with the committee expressing its dissatisfaction as to delays in responses from the Additional Estimates round in February this year. The Minister suggested that answers may be delayed to ensure they are as complete and up to date as possible. 2

3.7 The committee was informed that funding has been brought forward on a number of projects, to facilitate and speed their completion. A majority of Nation Building Economic Stimulus Plan projects are well advanced and will be completed by the end of the next financial year. 3

3.8 The committee queried the amount of funding brought forward to this financial year under the Nation Building Program and Local Government and Regional Development (LGRD) projects. The Secretary emphasised that the funding brought forward was not necessarily the full amount to complete the projects but that it simply reflects the progress of the projects. 4 The Secretary also detailed arrangements in place that enable the department to track the expenditure of the

. 5

proJects.

Infrastructure Australia

3.9 The committee revisited the cost and location of Infrastructure Australia's Major Cities Unit office in Sydney's CBD and compared this with the department's Sydney office in Rosebery. Infrastructure Australia indicated that the CBD location is an important factor in being able to deal effectively with its clients. Whereas the Secretary explained that the department's Rosebery office is an operational location that is shared with the Australian Quarantine and Inspection Service (AQIS) and other Commonwealth agencies and is convenient for Office of Transport Security (OTS) staff when required at the airport. 6

Proof Estimates Hansard, 26 May 2010, p. 4.

2 Proof Estimates Hansard, 26 May 2010, p. 6.

3 Proof Estimates Hansard, 26 May 2010, p. 4.

4 Proof Estimates Hansard, 26 May 2010, p. 12.

5 Proof Estimates Hansard, 26 May 2010, p. 12.

6 Proof Estimates Hansard, 26 May 2010, pp 24--25.

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3.10 The committee questioned officers on projects relating to specific ports and rail networks, including their current progress, allocated funding and likely completion dates. 7 The draft National Ports Policy was discussed: the principal element of the draft policy, while subject to final government consideration, is to encourage long term planning around port precincts. 8 The Infrastructure Australia Council has also identified the development of international competitive gateways as one of its major themes. The work on these gateways is considered the first step towards the national freight network. The work on freight networks is well advanced and the ports and freight strategy will become one document. 9 Infrastructure Australia hopes to release a draft National Freight Strategy in two to three months for public consultation, with a view to finalising it this calendar year. 10

3.11 The committee discussed the Aviation White Paper and whether it had achieved its original objectives. The Secretary explained that, in line with aviation industry needs, the Aviation White Paper contains, for the first time, long term objectives for the industry:

... it contains long-term objectives such as creating an investment climate for continuing aeronautical investment in aviation infrastructure. It contains long-term objectives in relation to continuing liberalisation and also long­ term objectives in terms of safety regulation and the like, which are, for the first time, actually encapsulating what an Australian govemment objective

. II

IS.

3.12 These long term objectives apply to regional, as well as metropolitan, areas and officers noted additional funding in the budget for airport infrastructure in remote communities, stating:

... the govemment has clarified its position in relation to supporting in particular aviation to remote and rural areas through the way it has redesigned its program funding. 12

3.13 The policy platform includes provisions to support future growth in regional aviation. The government response to growth in these areas has been to:

... provide for that through removing unnecessary economic regulation, strengthening safety regulation and, as necessary, putting funding into aerodromes which would not be supported by RPT passengers to ensure

7 Proof Estimates Hansard, 26 May 2010, pp 38-42.

8 Proof Estimates Hansard, 26 May 2010, p. 29.

9 Proof Estimates Hansard, 26 May 2010, p. 40.

10 Proof Estimates Hansard, 26 May 2010, p. 40.

11 Proof Estimates Hansard, 26 May 2010, p. 33.

12 Proof Estimates Hansard, 26 May 2010, p. 33.

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essential service delivery. I think that is clearly encapsulated in the policy direction. 13

3.14 The committee questioned Infrastructure Australia on the issue of water supply. Officers said they are undertaking work to ensure there is a national framework for a national water plan but noted that progress was slow due to Infrastructure Australia's relatively small size. Officers were unable to give a timetable for the development of the plan but noted that community and industry consultation was planned and that officers are 'working towards producing material for the Infrastructure Australia Council this year'. 14 Officers highlighted a need to understand the water security, supply and quality issues associated with regional Australia. 15

Nation Building-Infrastructure Investment

3.15 The committee sought an update on 17 rail projects funded under the Nation Building Economic Stimulus Plan. Seven of these are now complete, and officers listed the remaining projects and likely completion dates. 16

3.16 The committee questioned the viability of allocating funding toward future projects that are reliant upon the mining industry, and in some cases, are not yet established mining areas. Officers explained that in the absence of this funding, the government would not have been in a position to have discussions with the specific coal producers because the ARTC would not have been in a position to commence the preliminary work with the businesses. This funding gave ARTC the opportunity to start those negotiations, which otherwise would not have been available. 17

3.17 The committee asked officers to explain how the Commonwealth monitors projects. The department indicated that the States provide Nation Building -Infrastructure Investment with monthly reports in accordance with the national partnership agreement. The reports detail the progress of projects and any difficulties encountered or risks that have been identified. States are also in weekly and sometimes daily contact with project managers and as a result officers describe the Commonwealth as being well apprised ofprogress. 18

3.18 The committee asked about the department's response to the Australian National Audit Office's Audit report No. 31 2009-10: Performance audit: management of the AusLink Roads to Recove1y Program which commented

13 Proof Estimates Hansard, 26 May 2010, p. 33.

14 Proof Estimates Hansard, 26 May 2010, pp 34-35.

15 Proof Estimates Hansard, 26 May 2010, p. 35.

16 Proof Estimates Hansard, 26 May 2010, pp 50-51.

17 Proof Estimates Hansard, 26 May 2010, p. 55.

18 Proof Estimates Hansard, 26 May 2010, p. 57.

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specifically on the advancement of funding for Local Government Authorities. The department advised that it has accepted all of the ANAO's recommendations. Officers emphasised that the report found:

... overall that the programs, which had funded 20,000 individual projects through Australia at a cost of $1.537 billion, were effectively administered and there is no evidence in the report to suggest systemic problems on the part of the department or local government authorities. 19

3.19 Officers clarified that the report was not critical of the advancement of funds for the national projects mentioned earlier, as they are funds based on milestones as opposed to a set quarterly payment such as the Roads to Recovery Program. 20

3.20 The committee asked officers to detail the progress of particular road projects, specifically the pre-construction stages, funding allocated to sections of road and future plans for partially complete work.21 Officers also provided the committee with similar information, such as studies conducted and likely completion dates, for dedicated freight rail tracks. 22

3.21 Officers expressed difficulty responding to the committee's request to identify a standard cost per kilometre formula for rail and road projects. The department advised that this is because every project is different; some are completely new, others are upgrades or duplications and each project contains its own complexities.

23

Infrastructure and Surface Transport Policy

3.22 Officers outlined three national surface transport regulators currently m development:

• Maritime safety;

• Proposed Heavy Vehicle Regulator; and

• Rail Safety Regulator. 24

3.23 Queensland will be the host jurisdiction for the Proposed Heavy Vehicle Regulator and South Australia will be the host jurisdiction for the Rail Safety 1

?5

Regu ator.-

19 Proof Estimates Hansard, 26 May 2010, p. 64.

20 Proof Estimates Hansard, 26 May 2010, p. 64.

21 Proof Estimates Hansard, 26 May 2010, pp 78-88.

22 Proof Estimates Hansard, 26 May 2010, pp 78-88.

23 Proof Estimates Hansard, 26 May 2010, p. 95.

24 Proof Estimates Hansard, 26 May 2010, pp 109-110.

25 Proof Estimates Hansard, 26 May 2010, pp 109-110.

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3.24 Officers described the move towards national regulators as a move beyond harmonisation across the States. The term 'harmonisation' was used to describe the previous process where a model law was developed and each jurisdiction implemented it within the context of its own jurisdiction, which allowed the States to have variations on the same model law. The national regulator will not allow that to happen in the future, as the template law model says the host jurisdiction passes an agreed body of national law, which means the host law becomes the jurisdictions law as well. As a result, there will be no opportunities for variations to exist. 26 This is expected to be finalised and implemented by 2013.

3.25 The Secretary referred to a Productivity Commission report which estimated the productivity benefit to the national economy from a nationalised scheme would be approximately $2.4 billion per annum contribution to GDP. 27

3.26 The committee discussed complexities involved in heavy vehicle driver fatigue laws, noting they were designed to improve safety but do not allow for flexibility.28 Officers explained the difficulty in allowing for flexibility when designing a national regulatory system:

... there is a real issue in relation to how in a regulatory system you can create flexibilities, particularly where there are compliance and enforcement issues that have to go with it. One of the things that needs to be

contemplated is, if you are going to allow what might, for example, in some cases be constituted as a reasonable steps defence-that is, it was only a another 45 minutes-how long is the only? Is it only another 15 minutes that you are allowed or is it another 45 minutes or is it another hour and 15 minutes? Does that mean that the limits for driving hours under that regime are now 16 hours and 15 minutes rather than 15 hours? I think there are some very real issues in compliance and enforcement regimes. Whether it is about fatigue or the loaded weight of a truck or many other dimensions, there are very real questions about how you build judgment into compliance and enforcement regimes.29

3.27 The committee revisited the Tasmanian Freight Equalisation Scheme, discussing the different bodies responsible and complexities in their differing requirements. A review of this scheme is scheduled for 2011-12. Officers advised that there has been a general improvement in the backlog of claims:

... [in] the latter part of last 3 6'ear the numbers were more in the order of

1,500 ... We are down to 200.

26 Proof Estimates Hansard, 26 May 2010, p. 110.

27 Proof Estimates Hansard, 26 May 2010, p. 110.

28 Proof Estimates Hansard, 26 May 2010, pp 115- 116.

29 Proof Estimates Hansard, 26 May 2010, p. 116.

30 Proof Estimates Hansard, 26 May 2010, p. 122.

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Officers emphasised that Centrelink is responsible for the processing of this backlog.

Australian Maritime Safety Authority (AMSA)

3.28 The committee questioned AMSA about new protocols that create a supplementary fund to compensate victims of oil pollution. The committee was informed that this does not replace the existing fund but makes an additional compensation fund available. 31

3.29 Officers detailed the use of dispersants in oil spills. Tests are done to establish toxicity levels of dispersants, which must meet the nationally agreed standard. The type of dispersant used is an evolving science. As further research and product development is carried out, AMSA will continue to monitor toxicity limits and improvements in available products. 32

3.30 The committee asked about the current staffing levels at AMSA and the possible impact of any freeze on recruitment. AMSA officers expressed a deep reliance on their staff, stating that a recruitment freeze would likely:

... severely curtail our ability to deliver national safety programs and to deliver an effective search and rescue effort. 33

3.31 Officers then went on to give details of AMSA's workload over the last 12 months, including the 619 lives saved by the search and rescue team. Officers described AMSA as a

.. . very, very busy organisation dep,endent on its people to deliver high­ quality but very technical activities . 4

Policy and Research (incorporating the Bureau of Infrastructure, Transport and Regional Economics)

3.32 The committee asked officers to provide a general overview of current research projects. Officers described the main areas of interest as:

• Infrastructure investment;

• Regulatory reform and pricing;

• Road safety; and

• City and corridor planning and forecasting.

3.33 In particular, the road safety research is currently evaluating how successful the Black Spot Program has been. The criteria for evaluating this looks at a number of

31 Proof Estimates Hansard, 26 May 2010, p. 123.

32 Proof Estimates Hansard, 26 May 2010, pp 124-126.

33 Proof Estimates Hansard, 26 May 2010, p. 131.

34 Proof Estimates Hansard, 26 May 20 I 0, p. 131.

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projects to see what types of treatments have been the most successful, identifying the number of accidents and fatalities before and after. 35

3.34 Officers also informed the committee of the published monthly updates they produce on road deaths in Australia. These monthly reports provide a breakdown by age, gender and the types of vehicles involved. 36

Local Government and Regional Development

3.35 The committee questioned officers on the assessment procedure for election commitments. Officers explained they followed '[T]he normal process for election commitments-and this is the recommendation of the ANAO officers'. This meant combining . the election commitments into their own program, providing draft guidelines for approval, then undertaking an assessment of each of those projects. 37

3.36 The committee asked officers to detail the projects and whether or not Independent Viability Assessments (IV As) were performed for each of these. Officers explained that IV As were performed on a small number but not on all 92 projects. The vast majority were undertaken by State or local government entities and as such, a decision was made early on in the program that the projects did not require an IV A. Those selected to undergo an IV A were chosen on the basis of a risk assessment, which is essentially an examination of the viability of the project, its future viability and the organisation's capacity to deliver the project. The committee was informed that all IV As were done by an external contractor. 38

3.37 Officers provided the committee with a list of specific projects by name and updated the committee on their completion dates and allocated funding. 39

3.38 The committee sought information on funding arrangements for Regional Development Australia (RDA). Officers explained that while the Commonwealth and States both contribute funding, in some instances the States provide office accommodation and support as well as cash funding. 40

3.39 The roles of RDA committees were discussed, with officers summarising them into five key areas :

• engaging with the local community;

• regional planning;

35 Proof Estimates Hansard, 26 May 2010, p. 132.

36 Proof Estimates Hansard, 26 May 2010, p. 133.

37 Proof Estimates Hansard, 27 May 2010, p. 5.

38 Proof Estimates Hansard, 27 May 2010, p. 6.

39 Proof Estimates Hansard, 27 May 2010, pp 7-9.

40 Proof Estimates Hansard, 27 M ay 2010, pp 13-14.

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• coordination of whole of government activities;

• promotion of government programs; and

• community and economic development.

3.40 It was explained that while RDAs have specific requirements on which to report, their activities are not monitored on a day-to-day basis. 41

3.41 The committee also asked about specific funding and organisational structures for the following:

• Better Regions Program;

• Australian Council of Local Government;

• Australian Centre of Excellence for Local Government; and

• Local Government Reform Fund.

Office of Northern Australia

3.42 The committee welcomed Ms Robyn Fleming, recently appointed as the General Manager of the Office of Northern Australia. Ms Fleming updated the committee on staffing structure and funding allocations. 42

3.43 The committee was informed of the 29 projects undertaken by the Office of Northern Australia, which fall broadly into four areas: education, health, housing and community services.

3.44 Officers explained in detail the East Kimberley Development Package and listed both current and completed projects:

• Wyndham Memorial Swimming Pool Upgrade

• Hostel oval in Kununurra

• Wyndham Picture Gardens

• Public accessible all-tides jetty upgrade

• Kununurra Airport Terminal upgrade

• Kununurra Airport Patient Transfer Facility

• Warmun Early Learning Centre

• Wyndham health facilities refurbishment

• Occupiable housing stock for health staff

• Kununurra Hospital Expansion Pack

41 Proof Estimates Hansard, 27 May 2010, p. 15.

42 Proof Estimates Hansard, 27 May 2010, pp 24-27.

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• Residential rehabilitation facility in Wyndham

3.45 Officers emphasised that a high level of coordination between the Western Australian Government, the Commonwealth Government and local communities was required to achieve these results. 43 While both the Commonwealth and State contribute funding, amounts vary from project to project. 44

3.46 Officers also noted that contractors are required to demonstrate what they are doing to encourage, support and deliver Indigenous employment. 45

Aviation and Airports

3.47 The committee was informed of legal obligations in place for privatised airports, which include how they consult in terms of their strategic planning documents.

3.48 Officers discussed the Aviation White Paper, as the government has proposed further significant amendments, including improved planning and consultation processes with the community and local and state and teiTitory governments. The White Paper also sets out key expectations for improving the relationship between airport operators and the community. 46 These proposed measures will build upon aiTangements that some airports already have in place. In addition to the proposed measures, officers noted that the Airports Act 1996 requires statutory periods of public consultation on master plans for a 60 day period. 47

3.49 Officers provided the committee with information on the Remote Aviation Infrastructure Fund program, detailing funding allocated and explaining their processes. This program has allocated $8.1 million to rectify deficiencies in facilities in aerodromes in remote Aboriginal areas. Technical reports are being assessed and funding over the next two and a half years will seek to ensure that remote airstrips meet regulatory requirements. Officers advised that 68 remote airstrips will benefit from this project.

48

Airservices Australia

3.50 Officers informed the committee of a new procedure being implemented at Sydney airport that allows for more precise flight paths, which then reduces fuel bum and aircraft flying time. This has the potential to reduce aircraft noise and distribute

43 Proof Estimates Hansard, 27 May 2010, p. 36.

44 Proof Estimates Hansard, 27 May 2010, p. 35.

45 Proof Estimates Hansard, 27 May 2010, pp 36-37.

46 Proof Estimates Hansard, 27 May 2010, pp 50--51.

47 Proof Estimates Hansard, 27 May 2010, p. 52.

48 Proof Estimates Hansard, 27 May 2010, p. 54.

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noise more evenly over areas. The committee was informed that Australia is regarded as a leader in this area.49

3.51 Officers outlined the technicalities involved in implementing this new procedure, explaining that it is a satellite based system. Officers also emphasised Australia's safety record and attributed it to the extensive trialling and testing performed prior to the implementation of new procedures. The technology 1s de scribed as 'still in its early days' and the implementation will occur in stages. 5°

3.52 The committee requested an update on the harmonisation of civil and military air traffic management. Officers informed the committee that an in-principle agreement has been reached with the Royal Australian Air Force. 51

3.53 Officers also updated the committee on the use of Wide Area Multilateration in Tasmania. This technology computes aircraft positions in three dimensions, making it possible to track the position of every aircraft that is fitted with a transponder. Officers explained that this raises surveillance technology to a level Australia has not had before. 52

3.54 The appointment of a Noise Ombudsman was discussed in detail, with officers highlighting the qualities and experience needed for the position but emphasising that the details of the position are currently being worked out. The committee asked about the ombudsman's specific responsibilities. Officers explained the position will oversee the handling of aircraft noise complaints, conduct independent reviews of noise complaint handling and make recommendations for improvement where necessary. Officers emphasised the need for transparency and independence within the role.

53

Civil Aviation Safety Authority (CASA)

3.55 The committee raised concerns about aircraft noise and safety expressed by community groups. CASA officers responded by providing pilot training statistics and preparation for future growth in this area with regards to safety. 54

3.56 Officers explained that CASA understands the air safety implications of growing airports and is well equipped to make reforms now and in the future. Officers informed the committee of steps taken recently to prevent the likelihood of mid-air collisions and accidents at airfields in Australia. These steps include limiting the

49 Proof Estimates Hansard, 27 May 2010, pp 64-65.

50 Proof Estimates Hansard, 27 May 2010, pp 64-66.

51 Proof Estimates Hansard, 27 May 2010, p. 66.

52 Proof Estimates Hansard, 27 May 2010, pp 66-67.

53 Proof Estimates Hansard, 27 May 2010, p. 69.

54 Proof Estimates Hansard, 27 May 2010, pp 76-77.

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number of aircrafts under the control of a single air traffic controller and spreading the scheduled training flight times evenly throughout the day to eliminate peak periods of traffic.55

3.57 To better understand these conditions, officers explained the different classes of airspace and what each class requires of the pilot and air traffic controllers. Officers noted some training aerodromes are now located on the outer edges of cities as a result of urban encroachment and highlighted the need for future airport development and planning to work closely with the government. 56

3.58 The committee asked about CASA's staffing levels and the likely effect of a recruitment freeze. Officers indicated that a recruitment freeze would make it difficult to complete the program which is currently outlined in their corporate plan. 57

3.59 The committee questioned officers on the legality of charter flights operating in certain areas and what CASA deemed unsafe for these particular flights . Officers explained air operator certificates need to comply with legislative requirements. Officers outlined concerns of a specific charter flight operating out of Tasmania, stating that:

Our concern was twofold around these operations. One was whether they were conducted with the right level of safety. In other words, to operate that far over the water, were the aircraft suitably equipped with survival equipment? Were the pilots suitably qualified? Were the right sort of precautions taken around the planning of that operation and what they intended to do?

We had concerns about two parts of this operation. One was going outside of the 12-nautical mile limit. We had another concern about one particular operator where it would appear that the chief pilot, who is a named person within the air operator certificate system, had been bypassed by the directors of one of the companies and a flight had been authorised without his knowledge. That caused us to conduct an investigation in much more depth and to see what the probity was around that. We have since established that that organisation has many diverse pilot bases. The chief pilot has senior pilots at each of these bases. He does not necessarily know all of these flights. 58

3.60 Officers clarified that if an operator is not authorised to conduct international operations, 12 nautical miles is the extent of the distance from the coastline they can travel lawfully. 59

55 Proof Estimates Hansard, 27 May 2010, pp 76-77.

56 Proof Estimates Hansard, 27 May 2010, pp 78- 79 .

57 Proof Estimates Hansard, 27 May 2010, p. 91.

58 Proof Estimates Hansard, 27 May 2010, p. 99 .

59 Proof Estimates Hansard, 27 May 2010, p. 101.

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Office of Transport Security

3.61 The committee began questioning the Office of Transport Security about the introduction of compulsory passenger and baggage screening for aircrafts with a maximum take-off weight of 20,000 kilos by July 2012. Officers informed the committee that they were working with regional aviation industry and individual airports affected by this decision on the operational requirements of these security measures. Officers explained the consultation process and reported that overall, the responses to these measures were positive. 60

3.62 Officers explained that the cost to implement this measure varies and depends on factors such as passenger numbers and airport size and location. Officers reiterated that the government will provide budget funding for these measures in regional airports in order to minimise the cost which would otherwise be absorbed by individual travellers. 61

3.63 Officers emphasised that many decisions involving price for consumers are:

.. . airline decisions based upon their analysis of the sensitivity of the market and the supply and demand issues that pertain to those individual airports. It is very hard to make a determination. At the moment, what costs they absorb and what costs are passed on are decisions made airlines, and they do that in conjunction with the airports that are affected. 2

3.64 The committee questioned officers on the methodology used for airport security risk assessments. It was explained that assessments are very much driven by:

... the fact that the types of aircraft being used, the distance they can travel, the weights of those aircraft and the numbers of passengers carried goes to the heart of the issue of the likelihood of them being potentially a target themselves-in other words, the aircraft is blown up in some way, shape or form--or being used as a weapon, a Ia 9-11. 63

3.65 The committee discussed the legal regulation of access to cockpits. Officers advised that previous regulations allowed the pilot in command to control access to the cockpit. The regulations currently before parliament make it a strict liability offence for the pilot in command to ensure that the cockpit door is locked. However, the defence provisions of the legislation provide that if the pilot is protecting the safety, security and operations of the aircraft, the crew, the cargo, the passengers or an airport, the pilot is not committing an offence.

64 Officers explained strict liability

offences:

60 Proof Estimates Hansard, 27 May 2010, p. 104.

61 Proof Estimates Hansard, 27 May 2010, pp 105-106.

62 Proof Estimates Hansard, 27 May 2010, p. 106.

63 Proof Estimates Hansard, 27 May 2010, pp 106-107.

64 Proof Estimates Hansard, 27 May 2010, p. 108.

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In the criminal law it is necessary to prove two things to establish an offence. One is the mental element of the offence, the intention to do so. The other element is the act of doing so. What strict liability does is take away such as the necessity to prove the mental element of defence. It is like if you get into your car and do not put your seatbelt on. 65

3.66 The committee questioned officers about the Maritime Safety Identification Card (MSIC). Officers explained that 137 offences have been added to the scheme which will preclude people from holding these cards. These include:

... offences such as murder, the use of prohibited explosives, making of a bomb hoax, kidnapping, and bribing a government official. 66

3.67 Officers advised that the additional offences only apply when the current MSIC holders renew their MSIC cards. The appeal process for someone who is rejected remains the same. 67

3.68 The committee revisited the use of body scanners. Officers informed the committee that the department is having ongoing discussions with the Privacy Commissioner regarding the use of body scanners. Officers explained that the Privacy Commissioner will play an integral role in finalising the program guidelines and in the roll out of equipment. 68 Officers stated that while there are likely to be delays due to the slower facilitation rates through body scanners than through a walk-through metal detector:

The experience overseas has been that, as passengers become more used to going through body scanners, the time does actually reduce. Quite often a communications campaign is effective with that. That is something we are k .

0

.c h d 0 69

ta mg mto account LOr t e program es1gn.

Australian Transport Safety Bureau (A TSB)

3.69 The committee questioned officers on the development of a national investigation framework for rail and maritime safety which has been allocated funding in the budget. Officers explained that the national investigation framework is part of a broader package of transport reforms, with the creation of a single regulatory regime for rail safety. There are a number of operational issues to be resolved before it can be implemented including:

• coming to an arrangement that makes the existing state jurisdictions comfortable that there is the appropriate selection of rigour and investigation;

65 Proof Estimates Hansard, 27 May 2010, p. 108.

66 Proof Estimates Hansard, 27 May 2010, p. 114.

67 Proof Estimates Hansard, 27 May 2010, p. 115.

68 Proof Estimates Hansard, 27 May 2010, p. 117.

69 Proof Estimates Hansard, 27 May 2010, p. 118.

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• managing the transitional arrangements; and

• getting people with appropriate skills and background to deal with the likely growth that is expected to come with this framework.

3.70 The committee questioned officers on the likely completion date, considering these challenges. The Secretary provided an insight into the progress so far:

Over the last year or so we have seen levels of cooperation and

commitment to this process which I have not seen before in a reform process. I think that is a credit to all the officers, including a large number of officials in my department who I think have done an excellent job in leading this work, and Mr Dolan's organisation as well ... There are some very hard issues here in terms of regulatory standardisation and perfmmance of these functions. We meet regularly; we have working groups. We are now setting up these project officers for the rail and heavy vehicle regulators. 70

3.71 The committee questioned officers on current staffing numbers and staff turnover for previous years. Officers informed the committee that once full agreement from the States on growth in surface transport is reached, the ATSB would be looking at considerable growth in staffmg. A recruitment freeze would have a gradual effect on the organisation and ATSB would:

... probably find that, over time, we would either have to slow down some of our investigation work or not undertake one or two investigations we would otherwise have looked at. 7 1

Senator Glenn Sterle Chair

70 Proof Estimates Hansard, 27 May 2010, p. 120.

71 Proof Estimates Hansard, 27 May 2010, p. 122.

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Appendix 1

Table of contents to proof Hansard transcripts

Budget estimates 2010-2011

Agriculture, Fisheries and Forestry portfolio

Monday 24 May 2010

Tuesday 25 May 2010

Infrastructure, Transport, Regional Development and Local Government portfolio

Wednesday 26 May 2010

Thursday 27 May 2010

247

36

Monday 24 May 2010

Agriculture, Fisheries and Forestry portfolio

Hansard page

In attendance

Corporate Services/Corporate Finance/Corporate Policy 4

Climate Change 19

Australian Bureau of Agricultural and Resource Economics & Bureau of Rural Sciences 63

Sustainable Resource Management 76

Australian Fisheries Management Authority 113

Australian Pesticides and Veterinary Medicines Authority 128

248

Tuesday 25 May 2010

Agriculture, Fisheries and Forestry portfolio

In attendance

Trade and Market Access

Biosecurity Services Group

Rural Industries Research and Development Corporation

Wheat Exports Australia

Agricultural Productivity

Australian Wool Innovation

249

37

Hansard page

1

4

24

70

77

85

101

38

Wednesday 26 May 2010

Infrastructure, Transport, Regional Development and Local Government portfolio

Hansard page

In attendance

Corporate Services 3

Infrastructure Australia 24

Nation Building-Infrastructure Investment 47

Infrastructure and Surface Transport Policy 107

Australian Maritime Safety Authority 124

Policy and Research 132

250

39

Thursday 27 May 2010

Infrastructure, Transport, Regional Development and Local Government portfolio

Hansard page

In attendance 1

Local Government and Regional Development 3

Office of Northern Australia 24

Aviation and Airports 50

Airservices Australia 64

Civil Aviation Safety Authority 75

Office of Transport Security 102

Australian Transport Safety Bureau 119

251

252

Appendix 2

Tabled Documents

Agriculture, Fisheries and Forestry portfolio

Documents tabled at hearing on Monday, 24 May 2010

1. Copy of email sent to Senators re Basa fish imported from Vietnam, dated 2 April 201 0 - tabled by Senator the Hon Ian Macdonald

2. Wheat Exports Australia, Submission to the Productivity Commission's Draft Report on the Wheat Export Marketing Act 2008 and the Wheat Export Accreditation Scheme 2008- tabled by Mr Peter Woods, CEO, Wheat Exports Australia

Documents tabled at hearing on Tuesday, 25 May 2010

3. Answers to questions taken on notice during the hearing on 24 May 2010, in relation to Corporate Finance, Corporate Services and Climate Change Division -tabled by Dr Conall O'Connell, Secretary, DAFF

4. Correspondence to Australian Wool Innovation from Italian manufacturer, Paolo Zegna, dated 25 March 2010 - tabled by Mr Walter Merriman, Chairman, Australian Wool Innovation

Infrastructure, Transport, Regional Development and Local Government portfolio

Documents tabled at hearing on Wednesday, 26 May 2010

1. Media release 005/2010 by the Hon Andrew Robb AO MP, 'Tanner's numbers in tatters', dated 20 May 2010- tabled by Senator the Hon Stephen Conroy

Documents tabled at hearing on Thursday, 27 May 2010

2. Twelve media statements by the Hon Anthony Albanese MP, dated 21 May and 26 May 2010- tabled by Senator the Hon Stephen Conroy

253

254

Appendix 3

Topic list

Agriculture, Fisheries and Forestry portfolio

Monday 24 May 2010

Division/Agency and Topic Proof Hansard page

reference

Corporate Services/Corporate Finance/Corporate Policy 4-19 Effi ciency dividend 4-5, 6-10

Graduate recruitment program 5-6

Staffing 7-10, 14-16

Resourcing for biosecurity 11

Outstanding answers to questions on notice from additional 11-13, 14 estimates Contingency planning for locust plague 13

Campaigns and advertising 16-18

Supplier-related expenses 18

Discretionary grants programs 19

Climate Change 19-62

Exceptional Circumstances applications and disaster relief 19-23 Pilot of drought reform measures in Western Australia 23-40,41-42 Exit grants 40-41

Emissions accounting/Domestic Offsets Integrity 42-43 , 45-46, 47 Committee/National Carbon Offset Standard Research into soil carbon; biochar; nitrous oxide; and 43-44, 46,47-48 livestock emissions Interaction within DAFF between work on climate change 44-45 and food security Tasmanian Community Forest Agreement grants 48-50,55-56

Current problems impacting on the forestry industry in 50-55

Tasmania; industry requests for assistance from the Commonwealth government Proposal for World Heritage nomination of Tasmanian forests 55 including the Upper Florentine, the Weld, parts of the Upper Tiers and the Tarkine Forest industry database 56

Forest Industries Climate Change Research Fund 56-57

Illegal logging 57-60

Interaction with DEWHA on the review of the EPBC Act 60-61 Australian Forestry Standard/Forest Stewardship Council 61-62 accreditation

255

44

Australian Bureau of Agricultural and Resource 62-76

Economics and Bureau of Rural Sciences Report on the Murray-Darling Basin assessing the future 62-69, 71 impact of the Australian government's environmental water purchase program ABARE's projections on the use of solar energy in Australia 69 Oil market forecasts 69-70

Forestry projections and trends in the global demand for 70-75 timber products Consolidation of the beef market 75-76

Sustainable Resource Management (SRM) 76-113

Caring for our Country,jncluding Landcare and the National 76-98, 106-108 Heritage Trust Environmental Stewardship Program 87-90,97

Staffing and budget for the fisheries unit 98-99, 104

Marine bioregional planning process 100-104

Statutory fishing rights 102-103, 113

Marine Protected Areas Program 104, 105-106, 112-

113

Recfish 108

Recreational Fishing Advisory Committee 108-109

Project to collect recreational fishing data; Recreational 109-110 Fishing Industry Development Strategy 2010 aerial survey results for southern bluefin tuna 110-111

Email sent to Senators about Basa fish imported from Ill

Vietnam Indian Ocean Tuna Commission (IOTC) 111-112

Australian Fisheries Management Authority 114-128

Bycatch of Australian sealions 114-115

Staffing 115, 125

Documentary The End of the Line 115-117

Work done by Dr Worm and Professor Hilborn on global fish 116 stocks and resources Status of Commission for the Conservation of Southern 117-118 Bluefin Tuna (CCSBT) quotas Appointment of new members to the Southern Blue fin Tuna 118 Management Advisory Committee Patrols by the Oceanic Viking 118-121 , 126-127

Prosecution of illegal fishermen 121-122

Eastern Tuna and Billfish Fishery 122

Impact of Coral Sea Conservation Zone 123-124

Trials with industry using cameras to gather observer data 124 Impact of trawl fishing and warp cables on albatross 124-125, 127 Illegal foreign fishing 125- 126

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45

Australian Pesticides and Veterinary Medicines Authority 128 133 Budget, staffing and workload 128

Single national regulatory framework 128-129, 132, 133

Legal costs 129

Update on the investigation into two-headed fish at a 129-130

Queensland hatchery APVMA's role in conducting investigations and auditing state 130-131 authorities Review of carbendazim 131

Review of APVMA 131-133

Cost recovery increase and reform 132-133

Tuesday 25 May 2010

Division/Agency and Topic Proof Hansard page

reference

Trade and Market Access 4-24

Trans-Pacific Free Trade Agreement 4-6

Quality of documentation for Australian exports into 6-8

international markets, including the seizure of a shipment of Tasmanian seahorses in the US due to inaccurate certification WTO dispute with New Zealand in relation to apples 8-12

Negotiation of free trade agreements with China and Japan 12-15 Red meat exports to the Russian Federation and negotiations 15-17 to resolve suspensions of kangaroo meat exports Live export trade, including negotiation ofMOUs with 18-19,21-22,23-24 Indonesia and Middle Eastern countries; Live Trade Animal Welfare Partnership Projects under Agriculture Advancing Australia and 19-20

International Agricultural Cooperation Initiatives to increase Australia's domestic and export 20-21

agricultural markets Impact of the proposed changes to R&D tax laws 21

Negotiations with Korea to gain market access for Tasmanian 22-23 cherries Negotiations with India to regain market access for live 23

seafood products Biosecurity Services Group 24-70

Seizure of a shipment of Tasmanian seahorses in the US due 24 to inaccurate certification Groper die-off in Queensland and possible link to bacterial 24-25 infection from imported frozen bait

257

46

Bees: Asian honeybee outbreak around Cairns; small hive 25-26,61-64 beetle; Varroa destructor mite; colony collapse disorder; suspension of bee imports; bumblebees (Bombus terrestris) Myrtle rust outbreak in NSW 26-27

Increased charges for providing quarantine clearance services 27-30,49-50 to Australia Post Banana imports 30

AQIS certification of meat exports 30-33

Chemical residue testing of prepackaged imported honey 33-34 Imported olive oil 34-35

Equine influenza vaccination

- - ·

35-37

Imported uncooked marinated green prawns 37-39

Raw milk cheese 40-41

Update on response to the Beale review 41-42

Export certification reform process 42-49

Import Risk Analyses (IRA) for freshwater ornamental fish; 50-51 stonefruit from USA; prawns from Asia; apples from USA Impact of Drosophila suzukii on soft fruit in USA; impact on 51-54, 70 apples in China IRA for apples from China 54-61

Eastern Creek and Spotswood quarantine stations 65,66,68

Horse quarantine fees 65-66

Hendra virus vaccine 66

Impmiation of bovine semen and embryos 66-67

IRA for beef 67-68

Locust control 69-70

Rural Industries Research and Development Corporation 70-77 Funding and impact of budget cuts 70-71 , 74, 77

Research projects 71-73, 74

Staffing 71, 74

Rural Women's Mentoring Program 74-75

Plant gene patents and intellectual property issues 75-77

Wheat Exports Australia 77-85

Accreditation 77-78, 79-80

Productivity Commission review and draft report 78-79

Impact of deregulation on wheat prices 80-82

Access arrangements at ports 82-83, 84

Grain being stored on farms 84

Agricultural Productivity 85-101

Horticulture Code of Conduct 85-86

ABARE's work on resource rent taxation 86-87

Regional Food Producers Innovation and Productivity 87-90 Program

258

47

Intergovernmental review of food labelling; 'Grown in 90-93

Australia' labelling; country of origin labelling Labelling of King Island beef; recommendations of Senate 93-95 Select Committee's report into meat marketing Murray Darling Basin Plan and impact of water buybacks 95-97 Negotiation of new statutory funding agreement with 97-99, 100

Australian Wool Innovation (A WI) National Wool Declaration and mulesing 99-100

Australian Wool Innovation 101-113

Governance issues 101-103, 106-107,

109-110

Productivity Commission review of R&D corporations 103

Correspondence to A WI from Italian companies 103-104, 107-109,

110,111

Strategic plan and operating plan 104-105

Marketing 105-106

National Wool Declaration and mulesing 111 ,112

North American market for Australian wool 112

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Appendix 4

Topic list

Infrastructure, Transport, Regional Development and Local Government portfolio

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Corporate Services 4-24

Secretary's opening statement 4

Staffmg numbers 5

Receipt of answers to questions on notice 5-6

Accelerated projects 7

Funding brought forward for local government 7-11,19,21-23

Funding under the Nation Building Program 7-12,23

Untied financial assistance grants 10, 19-21

Discussions with Treasury, Finance and Prime Minister & 12-13 Cabinet Accelerated commencement of the Douglas Arterial road 14-16 Project milestones 14-15

Status update of the Ipswich Motorway 15-18

Pot plants in the Minister's office 24

Infrastructure Australia 24--47

Major Cities Unit office; comparison with the Rosebery office 24-26,28 Oakagee Port 26-29, 31

Draft bankable feasibility study produced for the government 28 of Western Australia Draft National Ports Policy and specific port _p_rojects 28-40

Aviation White Paper 32-34

Barraba water supply 34-35

Infrastructure Australia's progress on long-term water 34-35, 37-38 security, supply and quality Staffing numbers 35-36

Development of the national infrastructure pipeline 36

Infrastructure Australia Fund 36

Building Australia Fund 36

Seven major themes for Infrastructure Australia Council 38

Issues of port capacity 38,41

Updates on specific rail projects 38-42,44

National access regimes 38

National Freight Strategy 38-39

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Infrastructure needs for regional Australia 42

Water policy - security, supply and quality 42

Publication restrictions for State and Territories' submissions 42-43 Procedures involved in processing submissions 43

Analysis of equity contributions compared to conditional 44 grants Commonwealth and State funding for public transport 44

projects Modelling of future oil costs 44-45

Perth airport transport master plan 46

Major road projects around Perth 46-47

Upgrade of the Great Eastern Highway from Kooyong Road 47 to the Tonkin Nation Buildin2 - Infrastructure Investment 47-107

Outback Highway 47-50, 78

Plenty Highway 49, 80

Roads to Recovery projects 49

17 rail projects within the National Building Economic 50-52

Stimulus Plan Variations in original plans for projects and criteria involved 52 in changing them Commonwealth funding for ARTC projects 53-54

Funding for the rail economic stimulus plan & detailed 53-54

expenditure Hunter Valley-Liverpool Range new rail alignment 54,88-89

Hunter Valley-Minimbah Bank third rail line 54

Rail production within mining-de.Q_endent areas 54-55

Staffing numbers 55

Total funding for: the Nation Building Program, Nation 55

Building Black Spot projects, Nation Building heavy Vehicle Safety and Productivity, Nation Building Roads to Recovery, Nation Building Off-Network Projects and Nation Building Plan for the Future. Commonwealth contributions for Building Australia Fund 56,60-61,72-73 projects Monitoring of expenditure within projects 57

West Metro project in Sydney 57-59

Gold Coast light rail project 59-60

Commonwealth conditional grants 60

New England Highway 61

Access issues for emergency services 61-62

Black Spot Program 62-63, 74, 84

ANAO Audit report No. 31 2009-10: Pe1formance audit: 63-64 Management of the AusLink Roads to Recove1y Program Procedure of payments for Roads to Recovery 63-64

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Project milestones 64-65

Commonwealth funding to the ARTC 66, 73

Costing calculations for specific projects 67 68

Resource state infrastructure fund 68-70

Moorebank intermodal terminal 71

National infrastructure pipeline 71

Organisational structure of the Major Cities Unit 72

Road projects in regional Australia & relevant funding 74--76, 78-80 The Kings Road/Calder Highway interchange in Victoria 74

The Princes Highway from Waurn Ponds to Winchelsea, 74

Victoria The Dampier Highway duplication between Balmoral Road 74,81 West in Karratha and Burrup Road in Dampier The Great Eastern Highway and Roe Highway interchange 74

programs north-east of Perth The Great Northern Highway realignment at Port Hedland 74

Work on the Cardwell Range crossing 74-75

The Cooroy to Curra major project 74--75

Funding commitments for the Bruce Highway 75- 76

The Gairloch Floodway 75

The Townsville Port Access Road 76

Bruce Highway improvements from Benaraby to 79

Rockhampton and from Rockhampton to St Lawrence The accelerated Victoria Highway upgrade package 80

The AusLink network widening and rehabilitation 80

Tiger Brennan Drive 80

Improved flood immunity, road safety and productivity on the 80 Northern Territory highways Overtaking lanes on the Stuart Highway between Katherine 80

and Darwin The Buntine Highway 80

Upgrade of the Tanami Road 80, 99

Upgrade of the Maryvale Road and Hugh River Stock Route 80- 81 AECOM study addressing flood immunity, road capacity and 80 freight movement High-level bridge over the McArthur River at Borroloola 81

Improving flood immunity on the Port Keats Road 81

Upgrade of the Central Arnhem Road 81

Katherine heavy vehicle bypass 81

Stuart Highway- new high-level bridges over the Cullen 81

River and King River; rail overpass south of Alice Springs Northern Territory Program 80-81

Queensland Program 81 - 83

Western Australia Program 81 - 82

Queensland Main Roads 83

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Queensland Motorways Ltd 83

Single national rail regulator 83

Location of host jurisdictions for regulatory reforms 83

Jubilee Bridge 83-87

National Highway 84

Bruce Highway 81 , 84

Funding for emergency infrastructure 87-88

Commonwealth funding for transport in 2010-11 and 89-90

following years Pacific Highway 90-92

Hunter Expressway 92-93

The Princes east from Traralgon to Sale 93

The Red Centre Way in the Northern Territory 93

Northern Sydney Rail Freight Corridor/Northern Sydney 94-95 Freight Corridor Hawkesbury River National Park 95

Clyde Road, Berwick upgrade 96-97

Criteria needed to redirect project funding 97

North West Roads/Investment Coordination 98-100

Great Northern Highway 99-100

Stretch of road between Kalgoorlie and the Pilbara 100

Bunbury Port Access Road stage 1 and 2 101-102

Adelaide Hills rail alignment & rail freight movement study 102-103 Public transport in Canberra for public servants operating 103-105 within the Parliamentary triangle Closure ofBroadmeadow facility near Newcastle 105-106

M5 expansion 106-107

Infrastructure and Surface Transport Policy 107-124

Vehicle design standards 108-109

Importation of electric vehicles 108-109

Assessment of oil price vulnerability 109

National transport regulator 109-110

Australian Transport Council 110, 112-113

Heavy vehicle driver fatigue laws 110-112

National strategy on energy efficiency 112-113

Casual and attribution data on heavy vehicle accidents and 113-114 fatalities Young driver education initiatives 114-115

Flexibility of driving hours for truck drivers 115-116

Driving instruction in comparison to the aviation industry 116-117 Shipping policy 117-118

Tasmanian Freig_ht Equalisation Scheme 118-123

Importation of vehicles under the pre-1989 vehicle import 123 scheme

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Australian Maritime Safety Authority 124-132

Compensation scheme for victims of oil pollution 124

Montara oil spill 124--125

Dispersants used in oil spills and their toxicity levels 124--127, 129 Update on a vessel grounding in the Torres Strait 124-125

Satellite imagery used to determine extent of oil spills 127-128

Samples taken to determine origin of oil in spills 127

Issuance of new marine orders part 54, M054 127-128

Vessel tracking system 128

National plan and role of environment science coordinator 128-129 and appointment of environmental liaison officer Antifouling paint regulations 129-130

National Maritime Safety Plan 130-131

Staffing levels 131-132

Policy and Research 132-134

Staffing levels 132

Research projects 132

Black Spot Program 132-133

Transport and greenhouse gas emissions 133

Figures on road death causes 133-134

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Local Government and Regional 3-24

Better Regions Program and specific projects 3-12, 16

Handling of election commitments 5, 8-10

Independent viability assessments for projects 6

Alternative arrangements for projects not viable under the 11-12 Better Regions Program Regional Development Australia 13-16

Department support for the Minister for 16-17

Australian Council of Local Government 17

Australian Centre of Excellence for Local Government 18

Local Government Reform Fund 18-19

Australian Local Government Association 19-20

Financial Assistance Grants 20-23

Regional and Local Community Infrastructure Program 23-24 Office of Northern Australia 24-50

Staffing and organisational structure 24-25, 27-30

Specific projects of the East Kimberley Development Package 25-27, 30-38 Initiatives of the Office of Northern Australia 25-27

Northern Australia Land and Water Taskforce 29 , 40-42

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Cairns development plan 29-30

ABARE conferences 30

Commonwealth and State funding contributions 32-35

Tender process for housing and other projects 36-37

Regional Development Australia committees 38-39

Wild Rivers Legislation 42

Sitting fees for taskforce members 43

Recommendations from the Land and Water Taskforce report 43-44 Leak of the report to the Australian 45

Feasibility study on the Mount Isa railway line 47

Modelling on the impact of a mining super tax 47-48

North Australia council -- 49

Aviation and Airports 50- 64

Compulsory passenger and baggage screening 50- 51 , 54

Consultation processes and requirements for airports 51-53

Sydney Airport Community Forum funding and staffing 53

arrangements Communication between operators of privately owned 53-54

airstrips Remote Aviation Infrastructure Fund 54

Brisbane airport steering committee 54-55

Possibilities of a curfew at Brisbane Airport 55-56

Community submissions regarding airport curfews 57

Res idential areas and their distance from airports 58

Guidelines administering the dispensations for curfew 58- 59

movements Landing details of the Prime Minister's VIP plane 59

Sydney Airport Master Plan 60-61

Study into the expansion of the M5 61

Public transport access to airports 61

Possibilities of a fast rail connection 61-62

Health study of residents affected by aircraft noise 63

Future aviation needs and the possibility of a replacement 63

airport in Sydney Airservices Australia 64-75

New satellite-based system for arrival and departure flight 64-66 paths Joint operational concept between Airservices Australia and 66-68 RAAF

Co stings of Wide Area Multilateration 67

Rebuilding process of communications systems 68

Development of and duties for the Noise Ombudsman 69- 72, 74- 75 Statistics on noise complaints and comparison of airports 72-73 Aircraft operated by the defence department 74

Air Traffic Management progress 75

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Civil Aviation Safety Authority 75-102

Community concerns of air traffic noise 75

Steps taken to improve air safety 75-78

Future planning for strategic transport 79

Urban encroachment around airports 79

Categories of different airfields 81

Regulatory requirements around the operation of historic 81

aircraft Flying neighbourly program 82

Industry Complaints Commissioner 82-84

Ethics and Conduct Committee 83-84,97

Possibility of an investigation into MacAir 84-85

Recommendations in relation to OzJet 85-86

Air operators certificate requirements 85-86

Procedures of investigation of complaints 87

Commonwealth Ombudsman 87-88

Administrative Appeals Tribunal merits reviews 88

Investigation processes of near misses 88-89

Aviation security identity card 89-91

Maritime security identification card 90-91

Apj)lication of regulations currently before Parliament 90-91 Staffing levels 91

Flight deck duty times 92-95, 97

Fatigue risk management systems 93-95

Requirements under civil aviation orders 95

Safety regulations for charter flights and investigation process 97-102 for possible breaches of these regulations Access to cock pits 102

Office of Transport Security 102-119

Compulsory passenger and baggage screening and 102-107

consultation process Funding for security upgrades to airports 103-107

Security risk assessments 106-107

Aviation Transport Security Amendment Regulations 107-108 Access to cockpits under proposed security regulations 108-110, 112-113, 116 Australian Federal Police investigation into a security 110-112 company Maritime safety identification cards 113-114

Aviation security identification cards 115-116

Privacy Commissioner's involvement in body scanners roll- 117 out Overseas experience in using body scanners 118-119

Australian Transport Safety Bureau 119-123

Funding for national investigation framework for rail and 119

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maritime safety Progress on transport reforms 119-120

Vehicle regulations 120-121

Difference between Australian Design Rules and what can be 121 done to a vehicle after the first compliance point Safety of a passenger getting on and off a bus 121

Updates on flights that have lost altitude 121-122

Staffing levels 122-123

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THE PARLIAMENT OF THE COMMONWEALTH OF AU STRALIA

PARLIAMENTARY PAPER No. 164 of 2010 ORDERED TO BE PRINTED

ISSN 0727-4181