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Senate Legislative and General Purpose Standing Committees Consolidated reports on Budget estimates 2012-2013


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Australian Senate

Senate Legislation Committees

Reports on Budget estimates 2012-13

June 2012

Australian Senate

Senate Legislation Committees

Reports on Budget estimates 2012-13

June 2012

© Parliament of the Commonwealth of Australia 2012

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........................................................ j

Community Affairs Committee

" Budget estimates 2012-13 report, dated June 2012.............................................1

Economics Committee

" Budget estimates 2012-13 report, dated June 2012...........................................51

Education, Employment and Workplace Relations Committee

" Budget estimates 2012-13 report, dated June 2012...........................................95

Environment and Communications Committee

ª Budget estimates 2012-13 report, dated June 2012.........................................121

Finance and Public Administration Committee

" Budget estimates 2012-13 report, dated June 2012.........................................145

Foreign Affairs, Defence and Trade Committee

" Budget estimates 2012-13 report, dated June 2012 ................................... . 173

Legal and Constitutional Affairs Committee

" Budget estimates 2012-13 report, dated June 2012.........................................197

Rural and Regional Affairs and Transport Committee

" Budget estimates 2012-13 report, dated June 2012.........................................229

RESOLUTIONS OF THE SENATE RELATING TO ESTIMATES

4 Pa r t ic ul a r s o f Pr o po se d a nd Ce r t a in Ex pe ndit ur e f o r 2012-13 a nd Pa r t ic ul a r s o f

Pr o po se d a nd Ce r t a in Suppl e me nt a r y Ex pe ndit ur e f o r 2011-12 * do c ume nt s * R e f e r e nc e o f Est ima t e s t o Co mmit t e e s 1

The Minister for Finance and Deregulation (Senator Wong) tabled the following documents: Particulars of proposed expenditure in respect of the year ending on 30 June 2013.

Particulars of certain proposed expenditure in respect of the year ending on 30 June 2013.

Particulars of proposed expenditure in relation to the parliamentary departments in respect of the year ending on 30 June 2013. Particulars of proposed supplementary expenditure in respect of the year ending on 30 June 2012. Particulars of certain proposed supplementary expenditure in respect of the year ending on 30 June 2012.

Senator Wong, by leave, moved *That the particulars documents be referred to legislation committees for consideration of the estimates.

Question put and passed.

3 Leg isl a t io n Co mmit t ees *Est ima t es Hea r in g s1 2 The Minister for Agriculture, Fisheries and Forestry (Senator Ludwig), pursuant to notice, moved government business notice of motion no. 1 * (1) That estimates hearings by legislation committees for 2012 be scheduled as follows:

2011- 12 additional estimates: Monday, 13 February and Tuesday, 14 February ( Group A) Wednesday, 15 February and Thursday, 16 February ( Group B).

2012- 13 Budget estimates: Monday, 21 May to Thursday, 24 May, and, if required, Friday, 25 May ( Group A) Monday, 28 May to Thursday, 31 May, and, if required, Friday, 1 June ( Group B) Monday, 15 October and Tuesday, 16 October (supplementary hearings *Group A) Wednesday, 17 October and Thursday, 18 October ( supplementary 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 and Communications Finance and Public Administration Legal and Constitutional Affairs Rural Affairs and Transport Group B:

Community Affairs Economics Education, Employment and Workplace Relations Foreign Affairs, Defence and Trade.

(4) That the committees report to the Senate on the following dates:

(a) Tuesday, 20 March 2012 in respect of the 2011-12 additional estimates; and (b) Tuesday, 26 June 2012 in respect of the 2012-13 Budget estimates.

Question put and passed.

1 Journals of the Senate, no. 89, 9 May 2012 2 Journals of the Senate, no. 62, 2 November 2011 i

3 St a nding Or de r s *Ame ndme nt *Co mmit t e e s *Al l o c a t io n o f De pa r t me nt s3 The Assistant Treasurer (Senator Arbib), at the request of the Minister for Tertiary Education, Skills, Science and Research (Senator Evans) and pursuant to notice, moved government business notice of motion no. 1 *That the resolution of the Senate of 29 September 2010 be amended as follows:

(1) Paragraph (1), omit *Rural Affairs and Transport *, substitute *Rural and Regional Affairs and Transport *.

(2) Omit paragraph (2), substitute:

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 Human Services Economics

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

Education Employment and Workplace Relations Environment and Communications Broadband, Communications and the Digital Economy

Climate Change and Energy Efficiency Sustainability, Environment, Water, Population and Communities Finance and Public Administration Finance and Deregulation

Parliament Prime Minister and Cabinet Foreign Affairs, Defence and Trade Defence, including Veterans * Affairs

Foreign Affairs and Trade Legal and Constitutional Affairs Attorney-General Immigration and Citizenship Rural and Regional Affairs and Transport

Agriculture, Fisheries and Forestry Infrastructure and Transport Regional Australia, Local Government, Arts and Sport.

Debate ensued.

Question agreed to.

3 Journals of the Senate, no. 74, 8 February 2012 ii

11 STANDING ORDERS * AMENDMENT * COMMITTEES * ALLOCATION OF DEPARTMENTS4

The Minister for Agriculture, Fisheries and Forestry (Senator Ludwig), pursuant to notice of motion not objected to as a formal motion, moved government business notice of motion no. 2 * (1) That standing order 25(1) be amended as follows: Omit: *Environment, Communications and the Arts *

Substitute: *Environment and Communications *. Omit: *Rural and Regional Affairs and Transport * Substitute: *Rural Affairs and Transport *.

(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 Human Services Economics

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

Tertiary Education, Skills, Jobs and Workplace Relations, including School Education, Early Childhood and Youth Environment and Communications Broadband, Communications and the Digital Economy

Climate Change and Energy Efficiency Sustainability, Environment, Water, Population and Communities Finance and Public Administration Finance and Deregulation

Parliament Prime Minister and Cabinet, including Regional Australia, Regional Development and Local Government Foreign Affairs, Defence and Trade Defence, including Veterans * Affairs Foreign Affairs and Trade Legal and Constitutional Affairs Attorney-General Immigration and Citizenship Rural Affairs and Transport Agriculture, Fisheries and Forestry Infrastructure and Transport.

Statements by leave : Senators Fifield and Ludwig, by leave, made statements relating to the motion. Question put and passed.

4 Journals of the Senate, no. 2, 29 September 2010 Hi

13 Educ a t io n, Empl o y me nt a nd W o r k pl a c e Re l a t io ns Le g isl a t io n Co mmit t e e *

Est ima t e s He a r ing s *Wit ne ss5 Senator Fisher, pursuant to notice of motion not objected to as a formal motion, moved general business notice of motion no. 596 *That * (a) when the Education, Employment and Workplace Relations Legislation Committee meets to

consider additional estimates in 2010:

(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.

Senator Siewert, by leave, moved the following amendment:

Omit paragraph (b).

Question *That the amendment be agreed to *put and negatived.

Statements by leave: Senator Fisher, the Leader of the Australian Greens (Senator Bob Brown) and Senator Marshall, by leave, made statements relating to the motion.

Leave refused: Senator Collins sought leave to make a statement, relating to the motion.

An objection was raised and leave was not granted.

Main question put.

Question agreed to.

21 c o mmunit y Af f a ir s *St a nding Co mmit t e e *Re po r t *2008-09 budg e t e st ima t e s * E ndo r se me nt o f Re c o mme nda t io n 6

Senator O *Brien, at the request of the Chair of the Community Affairs Committee (Senator Moore) and pursuant to notice of motion not objected to as a formal motion, moved general business notice of motion no. 144 *That the Senate endorse the recommendation contained in paragraph 1.10 of the Community Affairs Committee report on the 2008-09 Budget estimates that:

Future estimates hearing programs include a separate time to conduct an estimates hearing on Indigenous matters that would include all the portfolios with budget expenditure or responsibility for Indigenous issues.

Question put and passed.

5 Journals of the Senate, no. 95, 28 October 2009 6 Journals of the Senate, no. 22, 26 August 2008 iv

The Senate

Community Affairs

Legislation Committee

Budget estimates 2012-13

June 2012

1

© Commonwealth of Australia 2012

ISBN 978-1-74229-478-0

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

Membership of the Committee

iii

Members Senator Claire Moore, Chair

Senator Rachel Siewert, Deputy Chair

Senator Carol Brown

Senator Mark Fumer

Senator Bridget McKenzie

Senator Dean Smith

ALP, Queensland

AG, Western Australia

ALP, Tasmania

ALP, Queensland

NP, Victoria

LP, Western Australia

Senators in attendance Senator Claire Moore (Chair), Senator Rachel Siewert (Deputy Chair), Senator Chris Back, Senator Cory Bemardi, Senator Catryna Bilyk, Senator the Hon Ron Boswell, Senator the Hon George Brandis, Senator Carol Brown, Senator the Hon Kim Carr,

Senator Michaelia Cash, Senator the Hon Richard Colbeck, Senator the Hon Jacinta Collins, Senator Trish Crossin, Senator Richard Di Natale, Senator Sean Edwards, Senator Concetta Fierravanti-Wells, Senator Mitch Fifield, Senator Mary Jo Fisher,

Senator Mark Fumer, Senator Gary Humphries, Senator Scott Ludlam, Senator John Madigan, Senator Bridget McKenzie, Senator the Hon Jan McLucas, Senator Stephen Parry, Senator Marise Payne, Senator Lee Rhiannon, Senator the Hon Nigel Scullion,

Senator Arthur Sinodinos, Senator Dean Smith, Senator Glenn Sterle, Senator Larissa Waters, Senator John Williams, Senator Penny Wright, Senator Nick Xenophon

Secretariat Dr Ian Holland Ms Toni Matulick Ms Meg Banfield Mr Gerry Mclnally Mr Patrick Hodder Mr Tim Hillman

Committee Secretary Committee Secretary Principal Research Officer Principal Research Officer Research Officer Administration Officer

Suite S1.59 Telephone: (02)6277 3515

Parliament House Fax: (02) 6277 5829

CANBERRA ACT 2600 Email: communitv.affairs.sen@aph.uov.au

>

iv

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Table of Contents

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

Chapter 1

Introduction......................................................... 1

Details of hearings.....................................................................................................1

Questions on Notice.................................................................................................3

Hansard transcripts................................................................................................... 3

Changes to portfolios, agencies or agency structure ............................................... 3

Cross portfolio coordination of programs ............................................................... 4

Procedural issues...................................................................................................... 4

Grounds for not answering questions ................................................................... 4

Adverse Reflections............................................................................................... 5

Corrections to Portfolio Budget Statements ......................................................... 5

National e-Health Transition Authority ............................................................... 5

Chapter 2

Families, Housing, Community Services and Indigenous Affairs Portfolio ...... 7

Department of Families, Housing, Community Services and Indigenous Affairs. 7

Cross Outcomes/Corporate Matters......................................................................7

Seniors....................................................................................................................8

Women...................................................................................................................9

Equal Opportunity for Women in the Workplace Agency (EOWA) .................. 9

Disability and Carers ........................................................................................... 10

Housing.................................................................................................................10

Families and Children.......................................................................................... 11

Australian Institute of Family Studies.................................................................12

Community Capability and the Vulnerable 12

Chapter 3

Human Services Portfolio........................................................................................ 13

Department of Human Services..............................................................................13

Australian Hearing................................................................................................13

Corporate Operations............................................................................................13

Centrelink.............................................................................................................15

Medicare...............................................................................................................15

Chapter 4

Health and Ageing Portfolio ................................................................. 17

Department of Health and Ageing..........................................................................17

Whole of Portfolio/Corporate Matters................................................................19

Australian Organ and Tissue Donation and Transplantation Authority (AOTDTA)...........................................................................................................19

Independent Hospital Pricing Authority..............................................................19

National Health Performance Authority..............................................................19

Acute Care............................................................................................................19

Mental Health...................................................................................................... 20

Aged Care and Population Ageing......................................................................20

National e-Health Transition Authority (NeHTA) ............................................. 21

Health System Capacity and Quality .................................................................. 22

Professional Services Review (PSR) .................................................................. 22

Health Workforce Capacity.................................................................................22

Primary Care........................................................................................................ 23

General Practice Education and Training Ltd (GPET)......................................24

Population Health................................................................................................24

Therapeutic Goods Administration (TGA) ........................................................ 25

Food Standards Australia New Zealand (FSANZ) ............................................. 26

Office of the Gene Technology Regulator (OGTR)...........................................26

Australian Radiation Protection and Nuclear Safety Agency (ARPANSA) .... 26

Cancer Austral ia..................................................................................................26

National Health and Medical Research Council (NHMRC)..............................27

Australian National Preventive Health Agency (ANPHA) ............................... 27

National Industrial Chemicals Notification and Assessment Scheme (NICNAS) ..............................................................................................................................27

Rural Health......................................................................................................... 27

Private Health Insurance Administration Council (PHIAC) ............................. 27

Private Health Insurance Ombudsman (PH 10)..................................................28

Access to Pharmaceutical Services .................................................................... 28

Hearing Services..................................................................................................28

Biosecurity and Emergency Response...............................................................29

Chapter 5

Cross Portfolio Matters ................ 31

Closing the Gap...................................................................................................31

Office of the Coordinator General for Remote Indigenous Services ................ 32

Health.................................................................................................................. 33

Employment and Economic Development.........................................................33

Indigenous Housing.............................................................................................33

Indigenous Business Australia ........................................................................... 34

Office of the Registrar of Indigenous Corporations...........................................34

Appendix 1

Departments and agencies under the Committee's oversight.............................35

Appendix 2

Commonwealth Authorities and Companies under the Committee's oversight ............... 37

Appendix 3

Index to Hansard Transcripts ............... 39

8

Chapter 1

Introduction

1.1 On 9 May 2012 the Senate referred the following documents to the committee for examination and report in relation to its portfolios:

" Particulars of proposed expenditure in respect of the year ending on 30 June 2013.

" Particulars of certain proposed expenditure in respect of the year ending on 30 June 2013.

" Particulars of proposed expenditure in relation to the parliamentary departments in respect of the year ending on 30 June 2013.

" Particulars of proposed supplementary expenditure in respect of the year ending on 30 June 2012.

" Particulars of certain proposed supplementary expenditure in respect of the year ending on 30 June 2012.1

1.2 The committee is responsible for the examination of the following portfolios:

" Health and Ageing;

" Families, Housing, Community Services and Indigenous Affairs; and

" Human Services.

1.3 The committee was required to report to the Senate on its consideration of 2012-2013 budget estimates on Tuesday 26 June 2012.1 2

Details of hearings

1.4 The committee considered the Portfolio Budget Statements (PBS) 2012-2013 for the Families, Housing, Community Services and Indigenous Affairs portfolio, the Human Services portfolio, and the Health and Ageing portfolio, and the Portfolio Supplementary Additional Estimates Statements 2011-12 for the Families, Housing, Community Services and Indigenous Affairs portfolio, at hearings from 28 May 2012 to 1 June 2012 (inclusive). The hearings were conducted in accordance with the agreed agenda outlined as follows:

1 Journals of the Senate , No. 89, 9 May 2012, p. 2396.

2 Journals of the Senate , No. 62, 2 November 2011, p. 1708.

2

" Monday 30 May 2012 - Families, Housing, Community Services and Indigenous Affairs portfolio

" Tuesday 31 May 2012 - Families, Housing, Community Services and Indigenous Affairs portfolio and Human Services portfolio

" Wednesday 1 June - 2012 Health and Ageing portfolio

" Thursday 2 June 2012 - Health and Ageing portfolio

" Friday 3 June 2012 - Cross Portfolio - Indigenous Matters

1.5 The committee heard evidence from the following Senators:

" Senator the Hon Jan McLucas, Parliamentary Secretary for Disabilities and Carers (representing the Minister for Families, Housing, Community Services and Indigenous Affairs and the Minister for Health and Ageing).

" Senator the Hon Kim Carr, Minister for Human Services.

" Senator the Hon Jacinta Collins, Parliamentary Secretary for School Education and Workplace Relations (representing the Minister for Families, Housing, Community Services and Indigenous Affairs and all relevant Ministers for the Cross Portfolio - Indigenous Matters).

1.6 Evidence was also provided by the following:

" Mr Finn Pratt, Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs;

" Ms Kathryn Campbell, Secretary of the Department of Human Services;

" Ms Jane Halton, Secretary of the Department of Health and Ageing;

" Mr David Learmonth, Deputy Secretary of the Department of Health and Ageing;

" Ms Jennifer Taylor, Deputy Secretary of the Department of Education, Employment and Workplace relations; and

" officers representing the departments and agencies covered by the estimates before the committee.

1.7 The committee also considered budget expenditure at a hearing on 1 June 2012 on cross portfolio Indigenous matters pursuant to Resolution of the Senate of 26 August 2008.3 Explanations relating to the estimates were received from Senator the Hon Jacinta Collins. Officers from the following portfolio Departments were in attendance:

" Families, Housing, Community Services and Indigenous Affairs;

" Health and Ageing; and

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

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___________________________________________________________________________________________ 3_

" Education, Employment and Workplace Relations.

1.8 The committee thanks the ministers, departmental secretaries and officers for their assistance and cooperation during the hearings.

Questions on Notice

1.9 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 27 July 2012.

1.10 Answers to questions taken on notice and tabled documents relating to the committee's hearings will be tabled in the Senate. Consolidated volumes of this additional information may be accessed from the committee's website.

Hansard transcripts

1.11 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 28 May 2012 to 1 June 2012 (inclusive), copies of which will be tabled in the Senate. Hansard transcripts of the estimates proceedings are also accessible on the committee's website at http://www.aph.gov.au/senate_ca.

1.12 References to the Hansard transcript are to the proof Hansard; page numbers may vary between the proof and the official Hansard transcript.

Changes to portfolios, agencies or agency structure

1.13 The committee notes that as a result of the Administrative Arrangements Order (AAO) of 14 December 2011, Affordable Housing was transferred to the Department of Families, Housing, Community Services and Indigenous Affairs from the Department of Sustainability, Environment, Water, Population and Communities. Affordable housing is reported under Outcome 2: Housing; Program 2.2, and includes the National Rental Affordability Scheme; Housing Affordability Fund; and Building Better Regional Cities.4 5

1.14 The committee notes the addition of the following programs to the

Department of Families, Housing, Community Services and Indigenous Affairs as a result of the Budget 2012-13:

" Program 5.6: National Disability Insurance Scheme;

" Program 5.7: Early Intervention Services for Children with Disability."

4 Families, Housing, Community Services and Indigenous Affairs, Portfolio Additional Estimates Statements 2011-12, p. 3.

5 Families, Housing, Community Services and Indigenous Affairs, Portfolio Budget Statements 2012-13, pp. 111-115.

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4

1.15 Following the Living Longer, Living Better6 Aged Care reform package, the committee notes revisions to the program structure of Outcome 4: Aged Care and Population Ageing7 in the Department of Health and Ageing:

" Program 4.1: Access and Information

" Program 4.2: Home Support

" Program 4.3: Home Care

" Program 4.4: Residential and Flexible Care

" Program 4.5: Workforce and Quality

" Program 4.6: Ageing and Service Improvement

Cross portfolio coordination of programs

1.16 The committee expresses its ongoing concerns regarding the increasing number of issues with cross portfolio coordination of programs and the effect this is having on estimates processes. The committee has at times found it difficult to ensure accountability during the estimates process. It notes the many occasions on which

Senators asked questions of a witness at estimates hearings and were advised that the matter was being handled by a different department.

Procedural issues

1.17 The following procedural issues during the committee's hearings were noted.

Grounds for not answering questions

1.1S During hearings of the Families, Housing, Community Services and Indigenous Affairs portfolio there were a few disputes regarding not answering questions on the grounds of deliberations of, or advice to, government.8 The committee notes that in her opening statements, the Chair drew particular attention to the order of the Senate of 13 May 20099 which explicitly rejects reliance on such grounds for not providing an answer to a question. The committee also notes that no formal claims were made for public interest immunity. Departments should be aware of and adhere to the order of the Senate of 13 May 2009.

6 Families, Housing, Community Services and Indigenous Affairs, Portfolio Budget Statements 2012-13, pp. 111-115.

7 Health and Ageing, Portfolio Budget Statements2012-13, pp. 119-121.

8 See 'Cross Outcomes/Corporate Matters' at 2.3 for further discussion of the grounds for not answering questions.

9 Journals of the Seriate, No. 68, 13 May 2009, pp. 1941-1942.

12

Adverse Reflections

5

1.19 The committee had one instance of potentially adverse reflections regarding a person involved in programs of the Department of Health and Ageing. The committee provided the person with the Hansard and an opportunity to respond. The date for the receipt of a response to the allegations was 21 June 2012 and no response was received.

Corrections to Portfolio Budget Statements

1.20 On Tuesday 29 May the Department of Health and Ageing tabled, out of sitting, extensive corrections to its Portfolio Budget Statements. The secretariat circulated the corrections to Senators on 29 May.

National e-Health Transition Authority

1.21 The committee summoned the National e-Health Transition Authority to appear during the Health and Ageing hearings on Outcome 10, Health System Capacity and Quality, Program 10:2, e-Health Implementation. The National e-Health Transition Authority carries out Government-sponsored activity, but it is not an agency of the Department of Health and Ageing.

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Chapter 2

Families, Housing, Community Services and Indigenous Affairs Portfolio

Department of Families, Housing, Community Services and Indigenous Affairs

2.1 This chapter outlines key issues discussed during the 2012-2013 budget estimates hearings for the Families, Housing, Community Services and Indigenous Affairs portfolio.

2.2 The committee heard evidence from the department on Monday 28 May and Tuesday 29 May 2012. Areas of the portfolio and agencies were called in the following order:

" Cross Outcomes/Corporate Matters

" Social Security Appeals Tribunal

" Seniors

" Women

" Equal Opportunity for Women in the Workplace Agency (EOWA)

" Disability and Carers

" Housing

" Families and Children

" Australian Institute of Family Studies

" Community Capability and the Vulnerable

2.3 The hearing began with an acknowledgement of the passing of Senator Adams, noting her contributions to this committee's estimates hearings.1

Cross Outcomes/Corporate Matters 1 2

2.4 Proceedings commenced with Senator Fifield asking Mr Finn Pratt, Secretary of the Department of Families, Housing, Community Services and Indigenous Affairs about the existence and transmittal of a charter letter from the Prime Minister to the Minister and whether Mr Pratt had received that letter. Mr Pratt and the Parliamentary

Secretary, Senator the Hon Jan McLucas, both declined to advise whether the Prime Minister had sent a charter letter to Minister Macklin or whether Minister Macklin had

1 Proof Estimates Hansard, 28 May 2012, p. 3.

2 Proof Estimates Hansard, 28 May 2012, pp. 3-28.

8

provided that letter to Mr Pratt.3 Neither Mr Pratt nor the Parliamentary Secretary made any claim for public interest immunity, but Mr Pratt and Parliamentary Secretary McLucas did undertake to provide an answer on notice.4 5 Senator Fifield requested a private meeting to discuss the options available to the committee to ensure that an answer was provided. '1 Back in session, Senator Fifield indicated that he would move a motion in the Senate that the letters be produced.6

2.5 The committee also discussed the following items:

" The content of Government advertising for the Clean Energy Future package;

" Media and social media monitoring by the department;

" Funding for the Communities for Children program

" Whether the department had provided advice to the environment department about the social impacts of major projects;

" The portability of various Government payments following legislative changes due to begin on 1 January 2013.

Seniors7

2.6 Senator Fierravanti-Wells asked about the pension advance payment option and a question was put on notice about the circumstances under which someone may be denied the advance option.8 Proposed changes to the eligibility criteria for the Commonwealth Seniors Health Card were also discussed with further questions taken on notice.9

2.7 Senator Siewert raised the issue of portability (see also 2.4 above) as it related to people of pensionable age. The working life residency budget initiative, grandfathering provisions, exemptions, and the timeframes for the application of the new legislative changes were discussed. There was also discussion about the timing of a person's decision to go overseas for a period of greater than six weeks in light of the legislative changes due to begin on 1 January 2013. Ms Wilson, Deputy Secretary, explained that one of the factors influencing the rule changes was a desire:

3 Proof Estimates Hansard , 28 May 2012, pp. 3-7, 43, 54-56.

4 Proof Estimates Hansard, 28 May 2012, pp. 7, 37, 56.

5 Proof Estimates Hansard, 28 May 2012, p. 55.

6 Proof Estimates Hansard, 28 May 2012, p. 56.

7 Proof Estimates Hansard, 28 May 2012, pp. 28-38.

8 Proof Estimates Hansard, 28 May 2012, pp. 29-30.

9 Proof Estimates Hansard, 28 May 2012, p. 30.

16

9

to bring us into line with other OECD countries, which generally require between 35 and 45 years working life residence to receive full pension

overseas.10 11

2.8 Senator Fumer sought evidence on how recent pension increases compared with the last five years of the Howard government and the relative levels of pensioners living in poverty compared to that period.11

Women 12

2.9 Senator Cash questioned the Office for Women about the policy rationale behind the government's decision to exclude superannuation from the Paid Parental Leave scheme. It emerged that the Productivity Commission report on the Paid Parental Leave scheme recommended that superannuation be included. Mr Pratt would not be drawn on the policy rationale other than to say that:

The government does not always accept every recommendation from the Productivity Commission.13

2.10 The Office for Women took on notice several questions from Senator Cash about the financial literacy and management programs, the timeframes for the Status of Personal Safety Survey, the data tracking The Line campaign, and a breakdown of advertising spending on The Line.

2.11 Senator Rhiannon questioned the Office for Women about their input into affordable housing including the National Affordable Housing Agreement, the National Partnership Agreement, the National Rental Affordability Scheme and the Social Housing Initiative; the Productivity Commission's report Caring for Older Australians ; and both the Rural Women's Alliance and the Empowerment of Rural

Women.

Equal Opportunity for Women in the Workplace Agency (EOWA ) 14

2.12 The agency clarified that the Australian Standard on Gender Inclusive Job Evaluation and Grading is a voluntary standard and that the standard is being promoted and used by EOWA. Senator Cash placed several questions on notice around staff contracts and pay rates. The secretariat received a substantial number of

written questions on notice from Senator Cash for the Office for Women and EOWA.

10 Proof Estimates Hansard, 28 May 2012, p. 32.

11 Proof Estimates Hansard, 28 May 2012, p. 35.

12 Proof Estimates Hansard , 28 May 2012, pp. 38^19.

13 Proof Estimates Hansard , 28 May 2012, p. 42.

14 Proof Estimates Hansard , 28 May 2012, pp. 49-54.

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Disability and Carers *3

2.13 The new National Disability Insurance Scheme was the prime topic of discussion under this outcome.15 16 17 18 Parliamentary Secretary Me Lucas noted that the Government had made a commitment of $ 1 billion over four years to begin a staged roll-out of the scheme with two launch sites ready to begin on 1 July 2013. Senator Fifield pointed out that the Productivity Commission envisaged $3.9 being spent over four years .11

2.14 There was a lengthy discussion about the timeframes for the roll-out and the ongoing negotiations with the states and territories about the financial contributions that are being sought from them and the potential implications of departing from the Productivity Commission funding timeline. At various stages of the discussion, the

Parliamentary Secretary and several departmental officers emphasised that they had been working intensively with the states and territories across numerous issues, but Mr Pratt did not divulge the rationale behind the $1 billion budget figure for stage 18

one.

2.15 The potential need for complementary legislative change across jurisdictions was also traversed. The Department advised that while complementary legislation may well be necessary for the entity, they did not have a definitive answer as to whether it would be required for the launch sites.19

2.16 The committee also sought reassurance that the government was engaging with the full spectrum of disability organisations over the design of the scheme. The Parliamentary Secretary reassured the committee that the government is:

very aware of the need for people with disability, and the range of

disabilities that are existing in our community, to have a place in the

process, not only in expert groups and in the advisory group but in our

engagement strategy. Through the National Disability and Carer Alliance, we will include everything that is absolutely essential.20

Housing21

2.17 Senator Payne sought a progress update on the Social Housing Initiative. Mr Imies, Group Manager, Housing, indicated that the completion rate is above the original program expectations.22

15 Proof Estimates Hansard, 28 May 2012, pp. 54-89.

16 Proof Estimates Hansard, 28 May 2012, pp. 61-89.

17 Proof Estimates Hansard, 28 May 2012, pp. 62 *63.

18 Proof Estimates Hansard, 28 May 2012, p. 83.

19 Proof Estimates Hansard, 28 May 2012, pp. 73-76.

20 Proof Estimates Hansard, 28 May 2012, p. 82.

21 Proof Estimates Hansard, 28 May 2012, pp. 89-110.

18

11

2.18 Senator Ludlam inquired about the schedule for the renegotiation of the National Affordable Housing Agreement (NAHA). The department advised that there was no specific schedule, but that the Minister was negotiating with key stakeholders.22 23

2.19 Senator Ludlam noted that the National Rental Affordability Scheme (NRAS) had 'achieved a pretty high level of energy and water efficiency and other kinds of household sustainability initiatives in the NRAS build'. Senator Ludlam sought to establish, on notice, the magnitude of the energy and water savings for rental tenants under the NAHA and NRAS schemes.24 25

Families and Children 23

2.20 Senator Bemardi questioned officers about the decision to provide early funding to Communities for Children service providers.26 There was also discussion about the decision to bring forward $90 million in funding from the 2012-13 financial year to the 2011-12 financial year.27 The additional funds are contained in the Portfolio Supplementary Additional Estimates Statements 2011-12.28

2.21 The committee discussed changes to Family Tax Benefit and established that an estimated 43,000 young people under the age of 21 who have completed secondary school will no longer be eligible for either Family Tax Benefit or Youth Allowance. The officers explained that the primary income support would be from their families and that details on the income test would be better directed to the Department of Education, Employment and Workplace Relations.

2.22 Senator Bemardi raised concerns about the schoolkids bonus and its relationship to school attendance. Parliamentary Secretary McLucas expressed the view that money given to families to prepare for school would be likely to increase school attendance, particularly amongst vulnerable families.29

22 Proof Estimates Hansard, 28 May 2012, pp. 92 *93.

23 Proof Estimates Hansard, 28 May 2012, pp. 93 *96.

24 Proof Estimates Hansard , 28 May 2012, p. 97.

25 Proof Estimates Hansard , 29 May 2012, pp. 2-38.

26 Proof Estimates Hansard, 29 May 2012, pp. 3-6.

27 Proof Estimates Hansard, 29 May 2012, p. 7.

28 Families, Housing, Community Services and Indigenous Affairs, Portfolio Supplementary Additional Estimates Statements 2011-12, p. 9.

29 Proof Estimates Hansard, 29 May 2012, p. 22.

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12

Australian Institute of Family Studies 30

2.23 The Institute explained key areas of their research including adoption, child support, separation and divorce. Professor Hayes, Director of the Australian Institute of Family Studies undertook to provide on notice research and statistics about the family impacts of mental health problems, substance abuse, family violence, gambling and money management problems.

Community Capability and the Vulnerable 31

2.24 Senator Bernard! queried officers about the proposed mandatory precommitment poker machine trial in the ACT. Questions were raised about the progress of negotiations with ClubsACT.32 The officers also took questions on notice from Senator Di Natale about the relative costs of being precommitment ready compared to making all machines dollar bet ready by 2016.33

2.25 Senator Siewert sought further information on child protection measures and compulsory and non-compulsory income management. Senator Edwards asked for a breakdown of the Play ford income management trial in terms of people referred by child protection, people assessed by Centrelink and people who are volunteers.34

30 Proof Estimates Hansard , 29 May 2012, pp. 35-38.

31 Proof Estimates Hansard, 29 May 2012, pp. 38-51.

32 Proof Estimates Hansard, 29 May 2012, p. 44.

33 Proof Estimates Hansard, 29 May 2012, pp. 45 *46.

34 Proof Estimates Hansard, 29 May 2012, pp. 49-50.

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Chapter 3

Human Services Portfolio

Department of Human Services

3.1 This chapter outlines key issues discussed during the 2012-2013 budget estimates hearings for the Human Services Portfolio.

3.2 The committee heard evidence from the department on Tuesday 29 May 2012. Areas of the portfolio were called in the following order:

" Australian Hearing Services

" Corporate Operations and Enabling Sen-ices

" Child Support

" Centrelink

" Medicare Australia

3.3 Proceedings commenced with an opening statement by Senator the Hon Kim Carr, Minister for Human Services.1 The Minister outlined the scope of the services provided by the department and declared his 'sincere appreciation' for the 'passion and professionalism' of the staff across the country. The Minister also reaffirmed the Government's commitment to closing the Chronic Disease Dental Scheme, declaring it to be 'bad policy' introduced by the previous Government. The Minister noted that the Government is working towards new arrangements and outlined retrospective changes to the Dental Services Determination to 'establish more appropriate compliance

arrangements'. The Minister tabled the Opening Statement.

Australian Hearing 1 2

3.4 The committee asked about the jurisdictional responsibility for the provision of hearing services in prison and the eligibility criteria for access to those services. The committee also probed the departmental advice provided to Australian Hearing and the costs of providing services to prisoners.

Corporate Operations 3

3.5 Minister Carr advised that he had received a charter letter from the Prime Minister, but that he would need to take the date of receipt on notice.4

1 Proof Estimates Hansard , 29 May 2012, pp. 54 *55.

2 Proof Estimates Haiisard, 29 May 2012, pp. 55-58.

3 Proof Estimates Hansard, 29 May 2012, pp. 58-91.

14

3.6 Senator Fifield asked a series of questions about the tasks, membership and costs of various advisory groups including the National Multicultural Advisory Group and the National Place Based Advisory Group.3

3.7 Minister Carr gave 'advice to government' as the reason that advisory group minutes may not be made available to the committee. The Minister made no claim for public interest immunity and the committee did not push the issue, although it did place the request on notice.4 5 6

3.8 Senator Fifield asked about fraud prevention and compliance including both in relation to customers and also practitioners.7 8

3.9 Senator Fifield congratulated Ms Kathryn Campbell, Secretary of the Department of Human Services and Minister Carr about their reference to people as citizens. Minister Carr explained that he had made a statement at the ACOSS conference about the approach he was taking and that describing the Australian public as citizens:

emphasises that the nature of the relationship between this department and the people of this country is inclusive, and that is what the department is doing ... the fact remains that the relationship that the Commonwealth has with its citizens is not necessarily one of a commercial nature, and the

concept of 'customer' relates more often in the literature to the notion of a commercial dialogue. People do not have a lot of choice, quite often, when they deal with the officers of the Commonwealth. We want to ensure that we are treating them in a manner which is consistent with, as I say, their

rights and their responsibilities, not just in terms of some sort of mythical notion of the customer's democracy.

3.10 Senator Fumer put on record that he had received 'highly commendable' feedback about the response of the Department of Human Services to the flood disasters in Queensland.9

3.11 Senator Siewert returned again to the issue of guidelines for the income management referral model for state child protection and housing officers and was informed that this was a matter for the Department of Families, Housing, Community Services and Indigenous Affairs. The Department indicated that it was undertaking

some vulnerable income management referrals through its social workers.10 The

4 Proof Estimates Hansard, 29 May 2012, p. 58.

5 Proof Estimates Hansard, 29 May 2012, pp. 59-65.

6 Proof Estimates Hansard, 29 May 2012, p. 65.

7 Proof Estimates Hansard, 29 May 2012, pp. 70-75.

8 Proof Estimates Hansard, 29 May 2012, p. 76.

9 Proof Estimates Hansard, 29 May 2012, p. 78.

10 Proof Estimates Hansard, 29 May 2012, p. 80.

22

15

Department also pointed out that attendance at Centrelink was only compulsory if the referral was through the Child Protection Agency or through housing.11

Centrelink 11 12

3.12 Minister Carr recommended that the Department of Human Services and the Community Affairs committee meet to discuss the structure of the hearing prior to the next estimates round.13

3.13 Senator Siewert raised a series of questions about the operation of the Centrelink hotline, tip-offline, and online application processes. Minister Carr pointed out there has been a steady take-up of online services and that Centrelink runs education programs on using online technology.14 Mr Tidswell, Deputy Secretary also expected the National Broadband Network would assist access in remote communities.15

3.14 Senator Edwards examined the costs of administering the income recovery subsidy associated with the live cattle ban. Senator Edwards pointed out that the Department of Human Services administered $68,000 worth of payments at a cost of $1.22 million and that this 'is not a good result in anybody's governance terms'. Minister Carr replied 'that the costings were based on an indicative number of claims

and that number was a worst-case scenario.'16 Senator Edwards requested a breakdown of the $1.22 million on notice.

Medicare17

3.15 Following questions from Senator McKenzie about the cessation of cash payments from Medicare, Minister Carr pointed out that:

this was the last remaining program the Commonwealth has that is paying in cash ... Cash payment as a method of transaction is declining right across this society. The officers made it clear to me that, in terms of the provision of security for officers on site, there was actually a better way to proceed.

On that basis we have followed the trials that were established in 17 service centres and we are now rolling out this program across the country.18

11 Proof Estimates Hansard , 29 May 2012, p. 83.

12 Proof Estimates Hansard , 29 May 2012, pp. 91-112.

13 Proof Estimates Hansard , 29 May 2012, p. 96.

14 Proof Estimates Hansard , 29 May 2012, p. 104.

15 Proof Estimates Hansard , 29 May 2012, p. 105.

16 Proof Estimates Hansard , 29 May 2012, pp. 109-110.

17 Proof Estimates Hansard, 29 May 2012, pp. 112-121.

18 Proof Estimates Hansard, 29 May 2012, p. 113.

23

3.16 Senator Di Natale commended Minister Carr for his opening statement on the negotiations over a national dental scheme:

I think it is a really sensible thing to have done. I think it is a really

important step, particularly in terms of the current negotiations going on over a national dental scheme. I know this is not a forum where too many

compliments are paid, but I think it is really sensible decision, so I would like to put that on the record.19

Senator Di Natale questioned the Minister and departmental officers about the audit process into claims made by dentists against the Commonwealth and Minister Can- stated that each case would be reviewed and declared his intention to prosecute should that be deemed necessary. The Minister also pointed out that the Government was negotiating with the dental profession to get an administrative scheme that works

effectively.20

19 Proof Estimates Hansard, 29 May 2012, p. 114.

20 Proof Estimates Hansard, 29 May 2012, pp. 114 *115.

Chapter 4

Health and Ageing Portfolio

Department of Health and Ageing

4.1 This chapter contains key issues discussed during the 2012-2013 budget estimates hearings for the Health and Ageing portfolio.

4.1 The committee heard evidence from the department on Wednesday 30 May 2012 and Thursday 31 May 2012. Areas of the portfolio and agencies were called in the following order:

" Whole of Portfolio/Corporate Matters

" Acute Care

" Independent Hospital Pricing Authority

" National Health Performance Authority

" Australian Organ and Tissue Donation and Transplantation Authority

" Mental Health

" Aged Care and Population Ageing

" Health System Capacity and Quality

" Access to Medical Services

" Professional Services Review

" Health Workforce Capacity

" Health Workforce Australia

" Primary Care

" General Practice Education and Training Ltd

" Population Health

" Australian Commission on Safety and Quality in Health Care

" Therapeutic Goods Administration

" Food Standards Australia New Zealand (FSANZ)

" Office of the Gene Technology Regulator

" Australian Radiation Protection and Nuclear Safety Agency

(ARP ANSA)

" Cancer Australia

" National Health and Medical Research Council

" Australian National Preventive Health Agency

18

" National Industrial Chemicals Notification and Assessment Scheme (NICNAS)

" Rural Health

" Private Health

" Private Health Insurance Administration Council

" Private health Insurance Ombudsman

" Access to Pharmaceutical Services

" Hearing Services

" Bio security and Emergency Response

4.2 The committee also heard evidence from the National e-Health Transition Authority (NeHTA) under the department's "Health System Capacity and Quality" area.

4.3 The Secretary of the Department of Health and Ageing, Ms Jane Halton, noted the passing of Senator Adams and her contribution to the work of the committee:

As you know, we lost Senator Adams, and I think on behalf of the

department it would be appropriate for me to record our condolence to the committee and obviously to her family members. I have written to them, obviously, but I want to acknowledge her as a senator who came to this

committee with particular technical content in terms of her nursing and midwifery background but also her particular passion for rural and remote health. I do not think there was a committee meeting that went past without her asking us about patient assisted travel and some of those other issues that she was so passionate about. I think we have observed in the past that the great strength of this committee is its real concern for the issues that

affect people right across the country. The fact that Senator Adams was such a passionate enquirer for things that she really cared about is

something that I know from the department's perspective. We acknowledge that passion, but also I think the work that she did is something that we very much valued. So, again, I just wanted to put on the record the department's really great sadness at her loss and also our condolence to her friends and

family and also to the committee.1

The committee acknowledged the statement and Senator Smith undertook to convey those thoughts to Senator Adams' family.

1 Proof Estimates Hansard, 30 May 2012, p. 21.

26

19

Whole of Portfolio/Corporate Matters 2

4.2 Senator Fierravanti-Wells questioned at length Secretary Hal ton, Deputy Secretary Rosemary Huxtable and Deputy Secretary Kerry Flanagan about comments made to the media by the Attorney General and former Minister for Health Nicola Roxon regarding a health referendum proposed by the previous Prime Minister, Kevin Rudd. Ms Halton declined to make comments, but undertook to answer matters of fact and to check the record on a number of issues including whether advice provided to COAG was based on proper expert advice and whether any advice had been sought from, or proffered by, the Department. Responding to the suggestion that there appeared to be a lack of cabinet process, the Ms Halton stated that:

I can assure you that the entire package of reform that was put forward at

COAG, that was agreed, was the subject of proper cabinet process.3

Australian Organ and Tissue Donation and Transplantation Authority (AOTDTA ) 4 5

4.3 There was an instructive discussion about the reasons behind the differences in transplant targets and transplant rates across countries. Professor Gillis explained how the Authority aimed to increase donation rates to 23 to 25 per million without relying on 'marginal' organ donations.

Independent Hospital Pricing Authority,s

4.4 Mr Sherbon informed the committee that Health Ministers had been provided with a draft National Official Price Detennination and Pricing Framework on 28 March 2012 and indicated that the Authority would meet the National Health Reform Agreement deadlines for producing an upgraded mental health classification system to be implemented on 1 July 2013.

National Health Performance Authority 6

4.5 The Authority provided an update on its strategic plan, data plan, and performance and accountability framework.

Acute Care7

4.6 Ms Halton clarified clause 7 of the National Partnership Agreement on Improving Public Hospital Services to the states and explained that access to extra

2 Proof Estimates Hansard, 30 May 2012, pp. 7-20.

3 Proof Estimates Hansard, 30 May 2012, p.18.

4 Proof Estimates Hansard, 30 May 2012, pp. 21-27.

5 Proof Estimates Hansard, 30 May 2012, pp. 27-32.

6 Proof Estimates Hansard, 30 May 2012, pp. 32-33.

7 Proof Estimates Hansard, 30 May 2012, pp. 21-40.

27

20

funding is dependent on maintaining effort and hitting performance targets. The committee followed up by asking about the budget cuts to hospital elective surgery and emergency treatment services in Tasmania. Parliamentary Secretary McLucas replied that Minister Plibersek was consulting with stakeholders in Tasmania

including members of the Tasmanian Parliament and Senators.

Mental Health8

4.7 There was a discussion about the funding for the Mental Health Nurse Incentive Program and questions were taken on notice from Senator Wright about the numbers of mental health nurses registered under Medicare with the program and the numbers of general practitioners that have used the program.9

4.8 The Department took several questions on notice after Senator Fierravanti- Wells sought advice about how the Department had responded to published allegations regarding an individual involved in some of their programs.10 11 The individual was named and on 7 June 2012 the committee provided them with the Hansard transcript and an opportunity to respond. The date for the receipt of a response to the allegations was 21 June 2012 and no response was received.

Aged Care and Population Ageing 11

4.9 Following up on the announcement of the 'Living Longer. Living Better.' aged care reform package of 20 April 2012, Senator Fierravanti-Wells began with questions about the Aged Care Funding Authority and stakeholder uncertainty about accessing finance. Ms Halton acknowledged that what the Department needed to do is:

get the consultative arrangements in place very quickly and move to get the fine detail available to people after we have talked to people about them.12

4.10 Senator Fierravanti-Wells also asked about reductions to the current average subsidy for the care of older Australians in hospital, hospice and residential aged-care under the Aged Care Funding Instrument. Departmental officials explained that there was no real reduction, but rather a slowing in the rate of growth. The Department acknowledged that it needs to keep talking with all stakeholders to ensure the correct message gets across.13

4.11 The Home and Community Care (HACC) review was discussed including the progress of negotiations and the opportunities to draw on experiences across state and

8 Proof Estimates Hansard, 30 May 2012, pp. 40-57.

9 Proof Estimates Hansard, 30 May 2012, pp. 40 *42.

10 Proof Estimates Hansard, 30 May 2012, pp. 55-56.

11 Proof Estimates Hansard, 30 May 2012, pp. 57-86.

12 Proof Estimates Hansard, 30 May 2012, p. 59.

13 Proof Estimates Hansard, 30 May 2012, pp. 66-68.

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21

territory jurisdictions. Given the complexity of the issue, Senator Siewert requested a separate briefing on HACC, home care and home support. The Department agreed this would be a good idea.14

National e-Health Transition Authority (NeHTA ) 15

4.12 Following on from previous estimates hearings, Senator Sinodinos requested a progress update and quizzed the Authority about whether the fact that the Personally Controlled Electronic Health Records (PCEHR) Bill had still not passed the Senate would impact on the rollout on 1 July. Ms Halton replied that passage of the

legislation would be preferable but if that did not occur by 1 July it would not be 'terminal'.16

4.13 Dr Chris Mitchell, NeHTA Change and Adoption Lead, explained the resources that NeHTA was making available to promote adoption amongst general practitioners. Dr Mitchell also outlined the strategies for compiling comprehensive health records including identifying priority groups.17

4.14 Mr Peter Fleming, CEO of NeHTA, explained that COAG funds NeHTA for projects such as identifiers and secure messaging, and the Commonwealth funds NeHTA for establishing the PCEHR. Given that some of the funding overlaps, NeHTA undertook to provide on notice exactly how the funding is broken down.18 19

4.15 NeHTA tabled a report by Deloitte that identified the benefits of shared electronic health records.10

4.16 Senator Sinodinos expressed concern about the ongoing costs of obtaining reasonable coverage of the whole population. Ms Halton stated that extrapolating the operating costs as a linear function was incorrect and that infrastructure synergies would lead to scale savings and a reduction in the variable costs of adding people to the system.20

4.17 Issues of safety and liability were also the subject of intense discussion. Dr Mitchell explained that what NeHTA is trying to achieve is a more connected and transparent system than currently exists. Ms Halton concurred and pointed out that there was the opportunity to systematise safety in a way that does not exist under the

14 Proof Estimates Hansard, 30 May 2012, p. 79.

15 Proof Estimates Hansard, 30 May 2012, pp. 87 *97.

16 Proof Estimates Hansard, 30 May 2012, pp. 87-88.

17 Proof Estimates Hansard, 30 May 2012, p. 89.

18 Proof Estimates Hansard, 30 May 2012, p. 90.

19 Proof Estimates Hansard, 30 May 2012, p. 90.

20 Proof Estimates Hansard, 30 May 2012, p. 93.

29

22

current system. Mr Fleming advised that NeHTA takes responsibility for all the steps in the system.21

Health System Capacity and Quality 22

4.18 Senator Fierravanti-Wells raised questions about the decision-making process for the regional priorities round of the health and hospital fund and the electoral location of successful projects. Ms Halton disclosed her interest as an ex officio member of the funding board. She corrected the committee by pointing out that the applications were not ranked, but instead were judged against a set of criteria as

specified in the legislation, and that successful applications had to meet all the criteria.23

Professional Services Review (PSR ) 24

4.19 Senator Back sought an update on the progress towards implementation of the recommendations emanating from the Senate Community Affairs References Committee inquiry into the Professional Services Review in 2011. Dr Coote, Director of the Professional Services Review stated that the Government had accepted all seven recommendations and that PSR has been particularly involved in the first three recommendations around communicating the methodologies in the PSR processes.

4.20 Senator Back expressed particular interest about whether PSR had addressed the irregularity of peer review appointments. Dr Coote stated that PSR had proposed to the Minister a peer review panel containing sixty seven medical practitioners comprising eight per cent from rural practice and nine per cent from regional practice.2"'

Health Workforce Capacity 26

4.21 Ms Shakespeare, Acting First Assistant Secretary, provided a very comprehensive account of the programs aimed at attracting different health professionals to rural areas including the Bonded Medical Places Scheme, Medical Rural Bonded Scholarships, undergraduate medical scholarships for medical students from a rural background, the John Flynn Placement program, a scheme for HECS reimbursement on completion of medical training in rural areas, the Remote Vocational Training Scheme, the General Practice Rural Incentives Program, the Rural and Remote General Practice program, the Rural Procedural Grants Program,

21 Proof Estimates Hansard, 30 May 2012, pp. 94 *95.

22 Proof Estimates Hansard, 30 May 2012, pp. 97 *108.

23 Proof Estimates Hansard, 30 May 2012, p. 101.

24 Proof Estimates Hansard, 30 May 2012, pp. 108-110.

25 Proof Estimates Hansard, 30 May 2012, p. 109.

26 Proof Estimates Hansard, 30 May 2012, pp. 117-121.

30

23

Rural LEAP, the Practice Nurse Incentive Program and the Nursing and Allied Health Rural Locum Scheme.2 '

Primary Care27 28

4.22 Proceedings commenced with the tabling of the updated GP superclinics table by Deputy Secretary David Butt.29 30 31

4.23 Senator Fierravanti-Wells posed a series of questions about the application dates and assessment process for the Sunshine Coast GP superclinic. Parliamentary Secretary McLucas responded that:

this application scored better than other applications for a number of

reasons, including the hub-and-spoke model providing services to the hinterland ... [and] ... to imply that there was any knowledge of or

interference in the process by the minister is absolutely incorrect. '0

4.24 Senator Di Natale sought clarification on the relationship between the Medicare Local network and local hospitals. Ms Halton re-emphasised the point that Medicare Locals are not divisions, but are in fact 'the next phase of the development of integrated primary care'/1 Senator Di Natale agreed, but pressed the point about

what communication was happening at the individual provider level. Mr Butt responded that the Medicare Local has taken responsibility for practice liaison and support.

4.25 Senator Di Natale raised the prospect of budget reductions mooted by the opposition and the impacts on population planning and primary care integration. Parliamentary Secretary McLucas replied that:

If we were to lose the structure that we have through M edicare Locals I

think all of that good work and effort that has been done for many years by

general practitioners originally and allied health people more recently * and ... by the community more broadly ... we would run the risk o f all of that

effort falling away and starting from scratch in terms of designing the

architecture that would deliver quality preventative health and quality primary health services in our country.32

27 Proof Estimates Hansard, 30 May 2012, p. 119.

28 Proof Estimates Hansard, 31 May 2012, pp. 1-34.

29 Proof Estimates Hansard, 31 May 2012, p. 1.

30 Proof Estimates Hansard, 31 May 2012, p. 10.

31 Proof Estimates Hansard, 31 May 2012, p. 23.

32 Proof Estimates Hansard, 31 May 2012, p. 23.

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24

General Practice Education and Training Ltd (GPET ) 33

4.26 Senator Fierravanti-Wells asked a series of specific questions about applications, training places and whether there were adequate numbers of supervisors. Mr Glasson, Chief Operating Officer of GPET, indicated there was no shortfall in supervisors and took several detailed questions on notice.

Population Health 34

4.27 Population Health was the largest of the Department of Health and Agency outcomes and occupied a significant proportion of the day's hearing.

4.28 The Government's tobacco strategy and efforts to protect the health of its citizens were a major topic of debate. Senator Fumer sought information about the measures in place to protect children and adolescents from environmental tobacco smoke. Ms Halton stated that:

It would be important to put on the record today, from the department's

perspective ... that we are very determined in this country to tackle the

effects of tobacco smoke on individuals. We very much support the efforts of the WHO in this globally.

She further stated that:

the Director-General of the WHO, Dr M argaret Chan, explicitly named Australia and congratulated us on our tobacco control efforts. She has

passed her congratulations obviously also to M inister Roxon, as she was then, but also to Australia more broadly in acknowledging the leadership that has been shown by us, particularly in respect of plain packaging.35

4.29 Ms Halton also pointed out that packaging 'is the last remaining "billboard" ... in this country for the promotion of tobacco smoke in a public place. We believe that these measures will be very important.'36

4.30 In response to a question from Senator Fumer about freedom of information (FOI) requests, Ms Halton declared:

Just so that we can be clear, I have put on record before, and I have to say at

the outset, I am a very big supporter of freedom of information. I think it is

very important in terms of transparency of government, accountability and so on. But what I am not a supporter of is people indulging in abuse of

process, the fact that we can have a series of claims deliberately designed to frustrate the activities of the department and in fact to tie up staff in the

33 Proof Estimates Hansard, 31 May 2012, pp. 32 *33.

34 Proof Estimates Hansard, 31 May 2012, pp. 34 *93.

35 Proof Estimates Hansard, 31 May 2012, p. 36.

36 Proof Estimates Hansard, 31 May 2012, p. 37.

32

processing of FOI requests who should otherwise be working on tobacco control.

I have put on record in the past there are very clear and deliberate tactics.

We get these enormous requests, which we then end up with hours and

hours and hundreds of thousands of dollars spent dealing with debates,

campaigns, legal challenges and all of the rest of it, only to have the request withdrawn. This is very deliberate, and where requests are not withdrawn I can only ask and recoup, in one particular case, 20 per cent of the cost of

this. We all are working in constrained circumstances at the moment, we all understand that is a financial reality. But to have the limited resources I have for public health activity explicitly tied up in what are deliberately orchestrated campaigns to divert us from what is a legitimate public health activity, frankly I find pretty offensive.37

4.31 Senator Fumer also requested information on notice about 'any states or state health departments that are considering reversing the bans in particular on smoking in cars?'38

4.32 In response to the issue of antimicrobial resistance raised by Senator Di Natale, the committee undertook to place outcome 1: Population Health and outcome 14: Biosecurity and Emergency Response after each other on the program.

Therapeutic Goods Administration (TGA ) 39

4.33 Senator Fierravanti-Wells and Senator Boswell asked a series of questions about RU486, in particular adverse effects and treatment protocols. The TGA took most of the questions on notice.40

4.34 Senator Fierravanti-Wells explored the issue of CSL albumin contaminated with ethylene glycol that had had to be quarantined in hospitals. Ms Halton said that Chief Medical Officer Professor Chris Baggoley and she would be meeting with the company and that there 1 is a genuine difference of view between ourselves and the company'. Ms Halton noted that 'regardless of there not being a technical obligation' to report the incident, both she and Professor Baggoley felt that the company should have notified them. Dr Brian Richards, Acting National Manager of the TGA, and Professor Baggoley both confirmed that any potential adverse health effects, if they had occurred, would have been negligible.41

__________________________________________________________________________________25_

37 Proof Estimates Hansard, 31 May 2012, p. 37.

38 Proof Estimates Hansard, 31 May 2012, p. 38.

39 Proof Estimates Hansard, 31 May 2012, pp. 47-55.

40 Proof Estimates Hansard , 31 May 2012, pp. 47 *50.

41 Proof Estimates Hansard, 31 May 2012, pp. 50-54.

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Food Standards Australia New Zealand (FSANZ ) 42

4.35 Senators Boswell, Colbeck, McKenzie and Xenophon raised a series of concerns about food standards and food labelling, particularly with regard to olive oil and sugar. The issue crosses jurisdictional boundaries including state and territory trade description and consumer law, and there was some confusion about which particular aspects of the issue FSANZ is responsible for. Mr Steve McCutcheon, CEO of FSANZ, offered to meet with the Olive Oil Association to discuss their particular issue.43

Office of the Gene Technology Regulator (OGTR ) 44

4.36 Senator Siewert sought to clarify the jurisdictional responsibilities of, and boundaries between, FSANZ and OGTR. Dr Paul Brent, Chief Scientist at FSANZ explained that FSANZ deal with imported foods that have genetically modified content whereas OGTR deal with genetically modified foods grown in Australia.45

Australian Radiation Protection and Nuclear Safety Agency (ARPANSA ) 46

4.37 Dr Carl-Magnus Larsson, CEO of ARPANSA, confirmed that ARPANSA has no statutory role in assessing the safety of civil nuclear power plants in Australia's customer countries.

Cancer A ustralia 47

4.38 Dr Helen Zorbas, CEO of Cancer Australia, outlined their role in coordinating cancer promotion and explained how Cancer Australia interacts with non-profit organisations such as the Cancer Council Australia including through the Priority- driven Collaborative Cancer Research Scheme.

4.39 Dr Zorbas also described the role of Cancer Australia in developing specific training in breast cancer within a health worker training program as part of a train-the- trainer approach. The program was being provide by a female Indigenous staff member who had been 'extraordinarily successful' in connecting 'meaningfully' with Indigenous communities.48

42 Proof Estimates Hansard, 31 May 2012, pp. 59-70.

43 Proof Estimates Hansard, 31 May 2012, pp. 60-61

44 Proof Estimates Hansard, 31 May 2012, pp. 68-73.

45 Proof Estimates Hansard, 31 May 2012, p. 69.

46 Proof Estimates Hansard, 31 May 2012, pp. 70-73.

47 Proof Estimates Hansard, 31 May 2012, pp. 73 *76.

48 Proof Estimates Hansard, 31 May 2012, p. 76.

34

____________________________________________ :_________________________________ ____________ 27_

National Health and Medical Research Council (NHMRC ) 49

4.40 Senator Carol Brown established that the NHMRC does not have any initiatives targeted at lesbian, gay, bisexual, transgender and intersex people.50 51 52

4.41 Senator Madigan and Senator Back both aired concerns about the manner in which some groups were using the NHMRC 2010 review into wind farms. Professor Warwick Anderson, CEO of the NHMRC, noted that this was a new and changing field of research and that the new NHMRC reference group on wind farms would

systematically review all the existing literature.

Australian National Preventive Health Agency (ANPHA ) 31

4.42 Senator Fierravanti-Wells examined the budget allocations, staffing, grants administration, stakeholder consultation processes, communication strategies, and evaluation processes for a range of campaigns including the National Binge Drinking Strategy, the Swap It, Don't Stop It campaign and the National Tobacco campaign.

National Industrial Chemicals Notification and Assessment Scheme (NICNAS ) 32

4.43 Senator Waters questioned NICNAS about their assessment of the chemicals used during the 'fracking' process in non-conventional gas exploration and drilling. Dr Marion Healy, Acting Director of NICNAS, admitted that assessing chemicals in isolation rather than in combination with each other 'is really a methodological

weakness'.53 This particular point was not pursued further.

Rural Health54 55

4.44 The Departmental officers explained that the intention behind establishing Rural and Regional Health Australia was to get rural and remote health into all of the policies across the portfolio and more broadly across Government, and to engage with the Department of Regional Australia, Local Government, Arts and Sport and key rural stakeholders such as the Rural Alliance.

Private Health Insurance Administration Council (PHIAC ) 33

4.45 Senator Fierravanti-Wells sought information on any evidence of anti≠ competitive behaviour in the private health market and the extent of excesses and

49 Proof Estimates Hansard , 31 May 2012, pp. 76-82.

50 Proof Estimates Hansard, 31 May 2012, p. 77.

51 Proof Estimates Hansard, 31 May 2012, pp. 82-88.

52 Proof Estimates Hansard, 31 May 2012, pp. 89-93.

53 Proof Estimates Hansard, 31 May 2012, p. 92.

54 Proof Estimates Hansard, 31 May 2012, pp. 93-95.

55 Proof Estimates Hansard, 31 May 2012, pp. 96 *98.

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28

exclusions. Mr Shaun Gath, CEO of PHIAC, indicated that although the competitive environment may not be as strong as it was, PHIAC had registered new entrants to the market and that the market was 'a moving picture'.2,6

Private Health Insurance Ombudsman (PHIO ) 56 57

4.46 Senator Fierravanti-Wells questioned PHIO over the provision of information and the handling of private health insurance complaints. Ms Samantha Gavel, Ombudsman, noted that there had been a steady increase in complaints and that although PHIO put out customer information and assisted consumers in resolving issues, the Australian Tax Office would still be the main source of information.

Access to Pharmaceutical Services 58 59

4.47 There was a discussion about the effectiveness of exclusive supply arrangements under the new Community Services Obligation (CSO). Responding to Senator Fierravanti-Wells, Ms Halton made the point that the CSO compliance requirements included a requirement to deliver the full range of PBS medicines to anywhere in Australia within 24 hours with the exception of a few very remote locations.29

Hearing Services 60

4.48 Senator Siewert brought up the issue of access to hearing services for prisoners in the criminal justice system, particularly Aboriginal prisoners and asked for an update on notice of the response to the recommendations of the Senate Community Affairs Committee Hear us report. Responding to a question about how to begin screening for hearing problems in the prison system, Ms Halton noted that:

the states and territories have a responsibility to make provision for

appropriate care, including medical and other treatment, for prisoners. So the question is working with the states and territories to clarify how that might be done. I think that, given that the dialogue has literally just started as I understand it, we have a way to go in that conversation.61

56 Proof Estimates Hansard, 31 May 2012, p. 97.

57 Proof Estimates Hansard, 31 May 2012, pp. 98 *99.

58 Proof Estimates Hansard, 31 May 2012, pp. 99-106.

59 Proof Estimates Hansard, 31 May 2012, pp. 101-102.

60 Proof Estimates Hansard, 31 M ay2012,pp. 106 *113.

61 Proof Estimates Hansard, 31 May 2012, p. 108.

36

Biosecurity and Emergency Response 62

4.49 Professor Baggoley provided a progress report on the staged handover of tuberculosis patients by Queensland Health to Papua New Guinea with the handover meeting to occur in July.

62 Proof Estimates Hansard, 31 May 2012, pp. 113-114.

30

38

Chapter 5

Cross Portfolio Matters

5.1 This chapter contains key issues discussed during the 2012-2013 budget estimates hearings for cross portfolio Indigenous matters pursuant to Resolution of the Senate of 26 August 2008.1 The following portfolio departments were in attendance:

" Families, Housing, Community Services and Indigenous Affairs

" Health and Ageing

" Education, Employment and Workplace Relations

5.2 The committee heard evidence from portfolio departments on Friday 1 June 2012. Areas of the portfolios were called in the following order:

" General Financial Matters

" Closing the Gap

" Northern Territory Emergency Response

" Coordinator General for Remote Indigenous Services

" Health Issues

" Employment and Economic Development

" Aboriginals Benefit Account

" Remote Jobs and Communities Program

" Indigenous Housing

" Indigenous Business Australia

" Office of the Registrar of Indigenous Corporations

Closing the Gap

5.3 Proceedings commenced with questions to the Department of Families, Housing, Community Services and Indigenous Affairs related to funding of a range of Indigenous policies and programs, such as Healing Foundation, the Stronger Futures package, and programs targeted at Closing the Gap.1 2

5.4 Officials were reluctant to answer a number of questions about allocation of funds to programs affected by partnership agreements with other governments, as negotiations were still underway. Mr Pratt commented that, 'not to put too fine a point

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

2 Proof Estimates Hansard, 1 June 2012, pp. 3-8.

32

on it, I am sure that our negotiating partners are observing this and it would be unwise of us to go into too much detail about what might happen'."

5.5 Senator Scullion asked a series of questions about arrangements for additional police officers in remote Northern Territory communities. Answers clarified that all Australian Federal Police Officers had now been replaced with Northern Territory police (apart from a very small number in coordination roles), but that the

Commonwealth was continuing to fund the officers. This funding was under the Northern Territory Emergency Response (NTER) and the National Partnership Agreement on Closing the Gap, and would continue under the Stronger Futures package.3 4 5

5.6 Questions were asked about the liquor licences. It emerged that, under the Alice Springs Transformation Plan, Commonwealth funds had been allocated to purchase two takeaway outlet liquor licences, with negotiations underway for a third. These licences were then surrendered and cancelled. However, at a similar time, the There Aitepe Aboriginal Corporation received funds through the Aboriginal benefits Account to contribute to the cost of purchasing three supermarkets, which they now operate. All three had liquor licences attached to them.

5.7 Mr Coffey, the Regional Director South from the Department of Families, Housing, Community Services and Indigenous Affairs Northern Territory State Office, explained that the government was working to strengthen alcohol management plans for the supermarkets. During the questioning, Mr Coffey stated that the amount

for which the liquor licences had been purchased was 'in confidence'. Senator Scullion flagged that he might pursue this matter further, subject to advice."

Office of the Coordinator General for Remote Indigenous Services

5.8 Questions for Mr Gleeson, the Coordinator General for Remote Indigenous Services, began by referring to the recently-release report of the Coordinator General, which contained some figures about child sexual abuse that were widely reported in the media.

5.9 Mr Gleeson provided a statement to the committee about the report, in which he emphasised what he saw as the bigger issue, which was the need for governments to implement all recommendations from the Mullighan inquiry of 2008.6 He identified

six recommendations that he was planning to pursue with the South Australian government.7

3 Proof Estimates Hansard, 1 June 2012, p. 8.

4 Proof Estimates Hansard, 1 June 2012, pp. 10-11.

5 Proof Estimates Hansard, 1 June 2012, p. 15.

6 Proof Estimates Hansard, 1 June 2012, p. 19.

7 Proof Estimates Hansard, 1 June 2012, p. 19. These were numbers 8, 9, 13, 16, 30 and 36.

40

Health

33

5.10 Questions were asked about a range of program funding and administration decisions. Officials indicated that the Australian Nurse-Family Partnership program, Health @ Home Plus, was not going to be extended beyond three trial sites, owing to a range of difficulties with the model. They indicated that the Commonwealth is *not walking out of the nurse home visiting space, [but is] just not going to continue with this particular model'.8

5.11 Committee members continued to pursue the ongoing issue of support for, and supply of, Aboriginal community health workers,9 sought updates on a range of programs such as those for eye and ear health,10 11 and obtained details in relation to recent policy announcements regarding mental health and suicide prevention.11

5.12 Senators asked questions about the roll-out of low aromatic ('Opal') fuel in central Australia, focussing on why a small number of outlets are not making this fuel available.12 The committee is currently conducting an inquiry into a Bill, the Low Aromatic Fuel Bill 2012, which aims to address some of the issues raised both before and during the estimates hearing.

Employment and Economic Development

5.13 Committee members sought explanations of various aspects of the Remote Jobs and Communities Program. There was particular attention to tendering processes, procurement guidelines and the formulation of performance criteria for the program.13

Indigenous Housing

5.14 Committee members have had long-standing concerns about progress in providing new housing and refurbishment of existing housing in Indigenous communities.14 Senators had expressed concern about the cost and quality of some work, and how these related to the scope of works for the projects. The process of

getting information was slowed by the fact that while the program is Commonwealth funded, the scope of works for each project is managed by the Northern Territory government. Following a series of questions in previous hearings, the Commonwealth

8 Ms Powell, Proof Estimates Hansard , 1 June 2012, p. 26.

9 Proof Estimates Hansard, 1 June 2012, pp. 28-30.

10 Proof Estimates Hansard, 1 June 2012, pp. 30-33.

11 Proof Estimates Hansard , 1 June 2012, pp. 35 *37.

12 Proof Estimates Hansard, 1 June 2012, pp. 37 *40.

13 Proof Estimates Hansard, 1 June 2012, pp. 42 *48.

14 See, eg, Supplementary Estimates Hansard, 21 October 2011, pp. 82-83; Additional Estimates Hansard, 17 February 2012, pp. 65-72.

41

34

wrote to the Northern Territory seeking access to the scope of works documentation.13 Officials advised the committee that the scope of works were now going to be made available, but remain concerned to find a way that they can be examined without creating excessive work for both Northern Territory and Commonwealth officials.15 16

As in previous hearings, committee members continued to query the value and effectiveness of aspects of the project.17

5.15 Questions were asked around progress in the area of homeownership, during which officials noted that it was a challenging area, and that they had learned 'we should not underestimate the challenges there are in putting the land tenure system in place'.18

Indigenous Business Australia

5.16 Evidence given by Indigenous Business Australia (IBA) at the committee's hearing in February 2012 is the subject of a separate inquiry by this committee. That evidence related to an IBA conference on the Gold Coast, and IBA's investments in Tjapukai Aboriginal Cultural Park. The committee received anonymous allegations claiming that the evidence given by IBA on these matters had been misleading.

5.17 During the estimates, these allegations were not discussed. Questions were asked however about the Tjapukai investment itself, funding spent to date, planned future investments, and the processes that were used by IBA to support those investments.19

Office of the Registrar of Indigenous Corporations

5.18 There was a short period of questioning of the Office of the Registrar of Indigenous Corporations, particularly in relation to an organisation called Gumala. ORIC advised the committee that a case relating to the organisation was currently before the Administrative Appeals Tribunal, prompting Senator Scullion to indicate that, in those circumstances, he would not pursue access to the document that arose from a review of Gumala.20

Senator Claire Moore Chair

15 Proof Estimates Hansard, 1 June 2012, p. 52.

16 Proof Estimates Hansard, 1 June 2012, pp. 52-53.

17 Proof Estimates Hansard, 1 June 2012, pp. 53-57.

18 Proof Estimates Hansard, 1 June 2012, pp. 60-63.

19 Proof Estimates Hansard, 1 June 2012, pp. 63-67.

20 Proof Estimates Hansard, 1 June 2012, p. 70.

42

Departments and agencies under the Committee *s oversight1

Families, Housing, Community Services and Indigenous Affairs Portfolio

" Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA)

" Australian Institute of Family Studies

" Equal Opportunity for Women in the Workplace Agency (EOWA)

Health and Ageing Portfolio

" Department of Health and Ageing (DoHA)

" Australian National Preventive Health Agency (ANPHA)

" Australian Organ and Tissue Donation and Transplantation Authority

" Australian Radiation Protection and Nuclear Safety Agency (ARPANSA)

" Cancer Australia

" Independent Hospital Pricing Authority

" National Blood Authority

" National Health and Medical Research Council (NHMRC)

" National Health Performance Authority

" Private Health Insurance Ombudsman

" Professional Services Review Scheme

Human Services Portfolio

" Department of Human Services (DHS)

Appendix 1

1 This document has been prepared based on the Department of Finance and Deregulation's Chart of 110 Agencies under the Financial Management and Accountability Act 1997 (FMA Act) as at 1 June 2012, http://www.finance.gov.au/publications/flipchart/docs/FMACACFlipchart.pdf

36

44

Commonwealth Authorities and Companies under the Committee *s oversight1

Families, Housing, Community Services and Indigenous Affairs Portfolio

" Aboriginal Hostels Limited

" Anindilyakwa Land Council

" Central Land Council

" Indigenous Business Australia

" Indigenous Land Corporation

" Northern Land Council

" Outback Stores Pty Ltd

" Tiwi Land Council

" Torres Strait Regional Authority

" Wreck Bay Aboriginal Community Council

Health and Ageing Portfolio

" Aged Care Standards and Accreditation Agency Ltd

" Australian Commission on Safety and Quality in Health Care

" Australian Institute of Health and Welfare

" Food Standards Australia New Zealand

" General Practice Education and Training Limited

" Health Workforce Australia

" Private Health Insurance Administration Council

" Australian Commission on Safety and Quality in Health Care

Human Services Portfolio

" Australian Hearing Sendees (Australian Hearing)

Appendix 2

1 This document has been prepared based on the Department of Finance and Deregulation's Chart of 84 bodies under the Commonwealth Authorities arid Companies Act 1997 (CAC Act) as at 1 June 2012, http://www.fmance.gov.au/publications/flinchart/docs/FMACACFlipchart.pdf

38

46

Index to Hansard Transcripts1 Page no.

Monday, 28 May 2012

Families, Housing, Community Services and Indigenous Affairs Portfolio

Cross Outcomes/ Corporate Matters.........................................................................3

Seniors......................................................................................................................28

Women............................................ 38

Equal Opportunity for Women in the Workplace Agency (EOWA) .................. 49

Disability and Carers ............................................................................................. 54

Housing....................................................................................................................89

Tuesday, 29 May 2012 Families, Housing, Community Services and Indigenous Affairs Portfolio (cont)

Families and Children............................................................................................... 2

Australian Institute of Family Studies ...................................................................35

Community Capability and the Vulnerable ........................................................... 38

Human Sendees Portfolio

Australian Hearing.................................................................................................. 55

Corporate Operations and Enabling Services ....................................................... 58

Centrelink........................... 91

Medicare Australia (cont) .....................................................................................112

Wednesday, 30 May 2012 Health and Ageing Portfolio

Whole of Portfolio/ Corporate Matters....................................................................7

Acute Care ..............................................................................................................21

Australian Organ and Tissue Donation and Transplantation Authority .............. 21

Independent Hospital Pricing Authority ............................................................... 27

Appendix 3

1 Hansard page numbers referred to in this appendix are based on proof Hansards. Page numbers may vary slightly in the final official Hansard transcripts.

40

National Health Performance Authority .......... .....................................................32

Mental Health...........................................................................................................40

Aged Care and Population Ageing ........................................................................57

National e-Health Transition Authority (NEHTA)..............................................87

Health System Capacity and Quality.....................................................................97

Access to Medical Services .................................................................................108

Professional Services Review..............................................................................108

Health Workforce Capacity .................................................................................117

Thursday, 31 May 2012 Health and Ageing Portfolio (cont)

Primary Care .............................................................................................................1

General Practice Education and Training Ltd.......................................................32

Population Health................................................................................................... 34

Food Standards Australia New Zealand (FSANZ)...............................................59

Office of the Gene Technology Regulator ............................................................. 68

Australian Radiation Protection and Nuclear Safety Agency (ARPANSA) ....... 70

Cancer Australia......................................................................................................73

National Health and Medical Research Council ................................................... 76

Australian National Preventive Health Agency (ANPHA) ..................................82

Rural Health............................................................................................................93

Private Health..........................................................................................................95

Private Health Insurance Administration Council ................................................. 96

Private Health Insurance Ombudsman...................................................................98

Access to Pharmaceutical Services........................................................................99

Hearing Services ...................................................................................................106

Bio security and Emergency Response.................................................................113

Friday, 1 June 2012

Cross Portfolio * Indigenous Matters

Closing the Gap.........................................................................................................3

Office of the Coordinator General for Remote Indigenous Services....................18

Health Issues ....................................................................... 24

Employment and Economic Development ........................................................... 42

48

Indigenous Housing ...............................................................................................52

Indigenous Business Australia (IBA) ..... .............................................................63

Office of the Registrar of Indigenous Corporations ............................................70

49

50

The Senate

Economics

Legislation Committee

Budget estimates 2012-13

June 2012

© Commonwealth of Australia 2012

ISBN 978-1-74229-637-1

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

Senate Economics Legislation Committee

Members Senator Mark Bishop, Chair Western Australia, ALP

Senator the Hon. Nick Sherry Tasmania, ALP

(replacing Senator Bishop from 28 to 31 May) Senator David Bushby, Deputy Chair Tasmania, LP

Senator Doug Cameron New South Wales, ALP

Senator Alan Eggleston Western Australia, LP

Senator Anne UrquhartTasmania, ALP Senator Alex Gallacher South Australia, ALP

(replacing Senator Urquhart from 28 to 30 May) Senator Mark Fumer Queensland, ALP

(replacing Senator Urquhart on 31 May) Senator Nick Xenophon South Australia, IND

Other senators in attendance Senator the Hon. Eric Abetz Tasmania, LP

Senator the Hon. Ronald Boswell Queensland, NATS

Senator the Hon. George Brandis SC Queensland, LP

Senator Michaelia Cash Western Australia, LP

Senator the Hon. Richard Colbeck Tasmania, LP

Senator Mathias Cormann Western Australia, LP

Senator Richard Di Natale Victoria, AG

Senator Sean Edwards South Australia, LP

Senator Mitch Fifield Victoria, LP

Senator the Hon. Bill Heffeman New South Wales, LP

Senator Bamaby Joyce Queensland, NATS

Senator Scott Ludlam Western Australia, AG

Senator Anne McEwen South Australia, ALP

Senator Bridget McKenzie Victoria, NAT

Senator the Hon. Brett Mason Queensland, LP

Senator Christine Milne Tasmania, AG

Senator Fiona Nash New South Wales, NP

Senator Louise Pratt Western Australia, ALP

Senator Lee Rhiannon New South Wales, AG

Senator the Hon. Michael Ronaldson Victoria, LP

Senator Scott Ryan Victoria, LP

Senator Rachel Siewert Western Australia, AG

Senator Arthur Sinodinos AO New South Wales, ALP

Senator Glenn Sterle Western Australia, ALP

Senator Larissa Waters Queensland, AG

Senator John Williams New South Wales, NATS

Secretariat Mr Tim Bryant, Secretary Ms Morana Kavgic, Research Officer

PO Box 6100 Parliament House Canberra ACT 2600 Ph: 02 6277 3540

Fax: 02 6277 5719 E-mail: economics.sen@arih.gov.au Internet: http://www.aph.gov.au/senate economics/

iv 54

TABLE OF CONTENTS

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

Budget Estimates 2012-13: Report to the Senate...........................................1

Introduction...............................................................................................................1

Portfolio structures and outcomes............................................................................1

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

Questions on notice..................................................................................................3

Procedural issues......................................................................................................3

Ordinary annual services of the government...........................................................4

Record of proceedings..............................................................................................6

Matters raised - Industry, Innovation, Science, Research and Tertiary Education portfolio............................................................................. 6

Matters raised - Resources, Energy and Tourism portfolio..................................14

Matters raised - Treasury Portfolio........................................................................17

Appendix 1: Abbreviations...............................................................................27

Appendix 2: Index to proof Hansard transcripts........................................... 29

Monday, 28 May 2012...........................................................................................29

Tuesday, 29 May 2012...........................................................................................29

Wednesday, 30 May 2012......................................................................................30

Thursday, 31 May 2012..........................................................................................30

Appendix 3: Tabled documents and additional information ....................... 31

Monday, 28 May 2012...........................................................................................31

Tuesday, 29 May 2012...........................................................................................31

Wednesday, 30 May 2012.............................. .......................................................31

Thursday, 31 May 2012 31

Appendix 4: Industry, Innovation, Science, Research and Tertiary Education portfolio structure and outcomes .......................... 33

Appendix 5: Portfolio structure and outcomes for the Resources, Energy and Tourism Portfolio.....................................................35

Appendix 6: Treasury portfolio structure and outcomes.............................37

vi

56

Budget Estimates 2012-13

Report to the Senate

Introduction

1.1 On 9 May 2012, the Senate referred to the committee for examination and report the following documents in relation to the Industry, Innovation, Science, Research and Tertiary Education; Resources, Energy and Tourism; and Treasury portfolios:

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

30 June 2013 [Appropriation Bill (No. 1) 2012-2013]; and

" Particulars of certain proposed expenditure in respect of the year ending on 30 June 2012 [Appropriation Bill (No. 2) 2012-2013].1

Portfolio structures and outcomes

1.2 The committee notes that changes have been made to the outcomes of three agencies in the above three portfolios since the 2011-12 Additional Estimates round. These changes are summarised below:

Agency under the D1ISRTE portfolio Old outcome (2011-12) New outcome (2012-13)

Tertiary Education Quality and Standards Agency (TEQSA)

Maintain and enhance quality, diversity and innovation in the Australian higher education sector through nationally consistent regulation and quality assurance.

TEQSA commenced operation on 31 July 2011 under the DEEWR portfolio, and its regulatory functions came into effect in

January 2012.

Contribute to a high quality higher education sector through streamlined and nationally consistent higher education regulatory arrangements; registration of higher education providers; accreditation of higher education courses; and investigation, quality assurance and dissemination of higher education standards and performance.

Agency under the RET portfolio Old outcome (2011-12) New outcome (2012-13)

Australian Renewable Energy Agency (ARENA)

ARENA is a new agency, to commence operation on 1 July 2012. It was established under the Australian Renewable Energy

Agency Act 2011. Legislation establishing ARENA as an independent statutory authority

Support improvements in the competitiveness of renewable energy and related technologies and the supply of renewable energy by administering financial assistance, developing analysis and advice about and sharing information and

1 Journals o f the Senate, No. 89, 9 May 2012, p. 2396.

Page 2

was made into law on 4 December knowledge with regard to, 2011. renewable energy and related

technologies.

Agency under the Treasury portfolio Old outcome (2011-12) New outcome (2012-13)

Australian Securities and Investments Commission

Outcome 1: Improved confidence in financial market integrity and protection of investors and consumers through research, policy, education, compliance and deterrence that mitigates emerging risks. Outcome 2: Streamlined and cost- effective interaction and access to information for business and the public, through registry, licensing and business facilitation services.

Improved confidence in Australia *s financial markets through promoting informed investors and financial consumers, facilitating fair and efficient markets and delivering efficient registry systems.

1.3 The complete structure and outcomes for each portfolio are summarised in the appendices as indicated below:

" Industry, Innovation, Science, Research and Tertiary Education (Appendix 4);

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

" Treasury (Appendix 6).

General comments

1.4 The committee received evidence from Senator the Hon. Chris Evans, Minister for Tertiary Education, Skills, Science and Research; Senator the Hon. Kate Lundy, Minister Assisting for Industry and Innovation, the Minister for Sport and the Minister for Multicultural Affairs; Senator the Hon. Penny Wong, Minister for Finance and Deregulation; Senator the Hon. Don Farrell, Parliamentary Secretary for

Sustainability and Urban Water; and officers from the Industry, Innovation, Science, Research and Tertiary Education; 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 four days, from 28 to 31 May 2012. In total, the committee met for 41 hours and 55 minutes, excluding breaks.

Questions on notice

Page 3

1.7 The committee draws the attention of all departments and agencies to the deadline of Friday, 27 July 2012 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/Parliamentary_Business/Committees/Senate_Commi ttees?uri= economics_ctte/estimates/bud_l 213/index.htm.

1.8 For the 2011-12 Additional Estimates round, answers to questions on notice were due to be provided to the committee by Thursday, 29 March 2012.

The committee commends the Resources, Energy and Tourism portfolio for submitting all answers on time. The committee notes that the Industry, Innovation, Science, Research and Tertiary Education portfolio submitted all their answers before the commencement of the 2012-13 Budget Estimates healings, however only one third of the total of 255 questions were answered by the deadline set by the committee. Only 235 (67) out of 1287 (394) questions placed on notice with the Treasury portfolio were answered by the due date.2 Despite the committee secretariat's correspondence to the Treasury about the number of answers outstanding and the time by which these should be received in order to be processed in time for the hearings, answers were still being sent to the committee secretariat during the actual hearings, not allowing sufficient time for the secretariat to process the answers and deliver them to senators. Treasury has 59 (20) answers from the Additional Estimates 2011-12 still outstanding. Furthermore, 4 questions still remain to be answered by Treasury from the Budget Estimates hearings of 2011-12, and 7 from the Supplementary Estimates

hearings of 2011-12.

Procedural issues

Tuesday, 29 May

1.9 Senator Ryan asked officers from the Department of Industry, Innovation, Science, Research and Tertiary Education to provide the date on which a contract had been signed by a state government. The officers indicated that they knew the date but would rather take the question on notice, as this would allow them to speak to the state government before releasing the date. They argued that this would assist them in maintaining cordial relations with the state government department winch would in turn benefit upcoming negotiations with that department. Senator Ryan argued that

2 The allocation of question numbers to Treasury's questions on notice from 2011-12 Additional Estimates differs from that used in previous years. To enable comparison with previous years, this report provides two sets of figures. The format of allocating question numbers used in previous years (reflecting the structure of questions as initially asked) is provided in parentheses; the numbering ultimately used in the tabled responses is provided outside parentheses.

Page 4

this is not how questions on notice should be used and told them he would Freedom of Information process to obtain the information the following day if they didn't provide it. The situation was resolved by the Secretary of the Department volunteering to provide the information later in the session after officers had spoken to the state government department in question.3

1.10 There was some discussion about whether the Department of Industry, Innovation, Science, Research and Tertiary Education could respond to questions from Senator Colbeck that touched on advice the department possibly provided to the Minister regarding the impact of the carbon tax on the viability of Australian business. The information was leaked and discussed in an article in the Australian from 28 May. In this case, the department disputed whether it was advice to a minister, arguing that the draft document referred to in the article had no status. For this reason, and

supported by Senator the Hon. Kate Lundy, officers argued that it was difficult to comment on the article in anything but very general terms. The Chair ruled that the draft document referred to, regardless of its status, fell into the category of advice to a minister and therefore was not to be called on.4 5

1.11 The issue of advice to a minister also arose during ASIC's appearance. It was resolved by ASIC agreeing to take the question on notice.3

Thursday, 31 May

1.12 There was a discussion about whether officials could answer a question about advice to a minister. The discussion stopped short of a formal public immunity claim although this was raised by the Greens Senator who was seeking the answer. The Chair ruled that the officers didn't have to provide the answer.6

Ordinary annual services of the government

1.13 On 17 June 2010, 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

3 Refer to Proof Hansard, 29 May 2012, p. 13-14.

4 Refer to Proof Hansard, 29 May 2012, p. 41 *44.

5 Refer to Proof Hansard, 29 May 2012, p. 87.

6 Refer to Proof Hansard, 31 May 2012, p. 25.

Page 5

for the ordinary annual services of the government and to comply with

section 54.7 8

1.14 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.

1.15 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.'9 The committee therefore resolved that:

...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.10 11

1.16 In light of this, the Economics Legislation Committee draws the attention of the Senate to several measures included in Appropriation Bill (No. 1) 2012-2013, 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 the:

" establishment of the Australian Small Business Commissioner ($8.3 million over four years, including $1.1 million in 2012-13) in the DIISRTE portfolio;11

7 Senate Appropriations and Staffing Committee, 50th Report, Ordinaiy annual services of the government, June 2010, p. 1.

8 Senate Appropriations and Staffing Committee, 50th Report, Ordinaiy annual services of the government, June 2010, p. 1.

9 Senate Appropriations and Staffing Committee, 50lh Report, Ordinary annual services of the government, June 2010, p. 2.

10 Senate Appropriations and Staffing Committee, 50lh Report, Ordinaiy annual services of the government, June 2010, p. 2.

11 2012-13 Budget Paper No. 2, pp 64 and 222.

Page 6

" establishment of the Manufacturing Technology Innovation Centre ($29.8 million over four years, including $3.9 million in 2012-13) in the DIISRTE portfolio;12

" shared PM&C and Treasury program: Australia to host the Group of 20 in 2014 ($372.1 million over four years, including $27.5 million in 2012-13);13

" establishment of the Asia Marketing Fund ($61.0 million over four years, including $8.5 million in 2012-13);14 and

" commencement of the program: Official development assistance - African Development Bank Group membership ($9.3 million over four years, including $375,000 in 2012-13).15

Record of proceedings

1.17 This report does not attempt to analyse the evidence presented over the four days of hearings. However, it does include a brief list of the issues that were traversed by the committee for all portfolios.

1.18 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/ParliamentaryJBusiness/Committees/Senate_Committees?url= economics_ctte/estimates/bud_1213/index.htm. These documents are also tabled with this report for the information of the Senate.

Matters raised - Industry, Innovation, Science, Research and Tertiary Education portfolio

1.19 On 28 May 2012, the committee examined the estimates for the:

" Australian Nuclear Science and Technology Organisation (ANSTO);

" IP Australia;

" Commonwealth Scientific and Industrial Research Organisation (CSIRO);

" Australian Research Council (ARC);

" Office of the Chief Scientist;

" Tertiary Education Quality and Standards Agency (TEQSA);

" Australian Skills Quality Authority (ASQA);

12 2012-13 Budget Paper No. 2 , pp 65 and 229.

13 2012-13 Budget Paper No. 2, pp 67, 72 and 246.

14 2012-13 Budget Paper No. 2, pp 69 and 263.

15 2012-13 Budget Paper No. 2, pp 74 and 162.

Page 7

" Department of Industry, Innovation, Science, Research and Tertiary Education [Tertiary Education]; and

" Department of Industry, Innovation, Science, Research and Tertiary Education [Science and Research].

1.20 Matters examined included the following:

Australian Nuclear Science and Technology Organisation (ANSTO)

" low, intermediate and high level radioactive waste management and

the renegotiation of existing contracts with France and the US for the reprocessing of the high-level waste and spent fuel for the period post-2016; process of seeking a licence for the return of the spent fuel waste from France; the volume, form and safe storage of residual waste material produced by ANSTO's activities in the past 50 years, and a licence for the temporary storage location at Lucas Heights (pp 5-6, 9-11);

" PETNET subsidiary and the Productivity Commission's report discussing issues that have arisen about PETNET's competitive neutrality in the market place and PETNET's ex ante breach of competitive neutrality policy; the Australian Competitive Neutrality Complaints Office investigation following a report filed by Cyclopet, a subsidiary of Cyclopharm in competition with PETNET in New South Wales (pp 7-9); and

" Comcare's recommendations following ANSTO's suspension of workers on the basis of a questionable in-house report and the resulting action plan produced by ANSTO (pp 11-12).

IP Australia '1

" design registrations as opposed to patents; 'evergreen' patents invalidated in the High Court, namely Venlafaxine and Clopidogrel, and their costs to the Pharmaceutical Benefits Scheme; Intellectual Property Laws Amendment (Raising the Bar) Bill 2011 (pp 12-13); and

" Australia's participation in the Anti-Counterfeiting Trade Agreement (ACTA) with regard to patents, its impact on law and potential benefits (pp 14-15). 16 17

16 Transcript page numbers for the Australian Nuclear Science and Technology Organisation (ANSTO), refer to Proof Hansard, 28 May 2012 (see the index at Appendix 2 of this report).

17 Transcript page numbers for IP Australia, refer to Proof Hansard, 28 May 2012 (see the index at Appendix 2 of this report).

Page 8______________________________________________________________________________________

Commonwealth Scientific and Industrial Research Organisation (CSIRO)

" CSIRO's inventions and patents attracting investments in Australia (PP 15-16);

" protecting CSIRO *s patents; settlements of wireless local area licensing WLAN disputes (pp 15-16);

" authority over management and distribution of CSIRO's income from

nongovernment sources (pp 16-17)

" Prime Minister's recent announcement of a parliamentary inquiry into workplace bullying; reports of bullying within CSIRO and senior management's response to allegations made; complaints by a former employee about the practices of a manager and the amount of related interdepartmental correspondence (pp 17-21);

" restructuring of the information management technology division in 2010 resulting in the loss of 30 positions (pp 20-21);

" SAP implementation project as part of the Business Enabling Technology Replacement project (p. 21); and

" CSIRO's membership of organisations, the policy framework as it relates to memberships and sponsorships, and its review (pp 23-26).

Australian Research Council (ARC ) 18 19

" a grant for bionic vision (p. 27);

" results of the 2012 Excellence in Research for Australia exercise, expected to be released around December (pp 27-28, 30);

" Centre of Excellence for the History of Emotions annual report (pp 29-30); and

" risks of generating imbalance between research and teaching activities at universities because of the excessive focus on research and the income generated by research projects as opposed to teaching activities (p. 30).

18 Transcript page numbers for the Commonwealth Scientific and Industrial Research Organisation (CSIRO), refer to Proof Hansard, 28 May 2012 (see the index at Appendix 2 of this report).

19 Transcript page numbers for the Australian Research Council (ARC), refer to Proof Hansard, 28 May 2012 (see the index at Appendix 2 of this report).

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Office of the Chief Scientist 20

" costs of and reasons behind the office location moves (p. 31);

" Professor Ian Chubb's speech to the Australian Science Communicators national conference in February 2012 and a debate on whether he made comments on some politicians' positions on climate change, or merely on the quality of commentary on climate change science (pp 32-33);

" abusive emails received by the Office staff and the action taken by the Chief Scientist to move their physical location (pp 33-34);

" a reform proposed by the Bradley review that money follow student choice; a decline in physics, agricultural science and forestry university enrolments; incentives for students to enter fields of study which record a loss of student interest and are therefore at risk; perception of science among high-school

students; programs designed to meet the demand for graduates in the agricultural and food industry sectors; careers advice in schools (pp 34-38); and

" enhanced future focus of the Australian aid budget on agriculture and health, and attracting international students to work in the industries where there are shortages (pp 37-38).

Tertiaiy Education Quality and Standards Agency (TEOSA ) 21

" progress of the staffing process in this young agency (pp 39-40);

" agency's legislative and regulatory risk framework and scope, its first strategic plan, key role and conceptual framework (pp 40, 42-43);

" barriers or legal constraints on its access to data held by other federal

government agencies, through existing reporting arrangements and requirements, and negotiations under way with DIISRTE; and relevance and extent of data required by the agency to perform its statutory functions (PP 40-42);

" agency's definition of material changes at universities and issues arising from these changes in terms of the threshold standards; current review of threshold and non-threshold standards by an independent body, the Higher Education Standards Panel (pp 42-43);

" agency's regulatory principles and criteria which it administers (p. 44);

" investigation into the University of Queensland enrolment and admission irregularities, and lessons learnt (pp 44-46);

20 Transcript page numbers for the Office of the Chief Scientist, refer to Proof Hansard, 28 May 2012 (see the index at Appendix 2 of this report).

21 Transcript page numbers for the Tertiary Education Quality and Standards Agency (TEQSA), refer to Proof Hansard, 28 May 2012 (see the index at Appendix 2 of this report).

Page 10

" TEQSA's public disclosure policy providing a framework of how they will deal with public comment about their inquiries or regulatory actions and investigations; TEQSA Act and investigative powers (pp 46-47); and

" the importance of data definitions and sourcing when it comes to staff-student ratios, and agency's authority to request and examine data for private higher education providers (pp 48-49);

Australian Skills Quality Authority (ASOA ) 22

" agency's regulatory oversight in the standard of particular industry courses; requirements that need to be met in order to be registered as a training organisation; and average processing timeframes for the approval of applications for RTO registration (pp 50-53);

" referral of states' vocational education and training (VET) powers to ASQA, with Victoria, Queensland and Western Australia still considering their position on this issue; ASQA's cooperation with state regulatory authorities in the cases where there is a split system and developing transitional agreements with those states (pp 52-53);

" dealing with non-compliance, and striking a balance between good regulation and not standing in the way of businesses extending their training; statistics for compliance and grounds for refusal (pp 54, 56-57);

" full fee cost recovery approach approved by COAG; determining a new fee structure in consultation with the sector which would not result in a disincentive for participation of registered training organisations (pp 54-55);

" three main elements to funding: capacity to develop strategic audits; priority to recruit more auditing and regulatory staff; and developing interactive IT systems (p. 55);

" comparison between rural and metropolitan registered training organisations (RTOs) and the aim of increasing provision of quality training in rural and regional areas (pp 55-56); and

" initial registration and registration renewal costs for RTOs (pp 57-58).

Department of Industry, Innovation, Science, Research and Tertiary Education [Tertiaiy Education ] 23

" estimates of the demand for undergraduate places and the scope for expansion under the demand driven system; and estimates of Commonwealth supported places (pp 58-62, 64);

22 Transcript page numbers for the Australian Skills Quality Authority (ASQA), refer to Proof Hansard, 28 May 2012 (see the index at Appendix 2 of this report).

23 Transcript page numbers for the Department of Innovation, Industry, Science, Research and Tertiary Education [Tertiary Education], refer to Proof Hansard, 28 May 2012 (see the index at Appendix 2 of this report).

Page 11

" encouraging higher education and greater participation, and universities' ability to meet large costs of infrastructure and staffing associated with growth in student enrolments; capital investment in the university sector and the base funding review (pp 62-64);

" higher education as the largest services export industry in Australia; impact of the uncapping of university places; Australian Tertiary Admission Rank (ATAR) scores required to enrol and their relevance as a criterion for entering a university; ATARs credibility as a predictor of academic success; level of undergraduate standards; support for students and focus on outcomes, namely lifting the education and skill levels (pp 64-66);

" budget allocation for the Higher Education Participation and Partnerships (HEPP) program, and the policy design around the three to one funding ratio between its two components: participation and partnership (pp 66-71);

" funding support for the Primary Industry Centre for Science Education (PICSE) program (pp 69-70);

" proportion of low-SES students and the rate of their participation compared with the rate of their graduation (p. 71);

" review of Indigenous participation and outcomes in universities (p. 72);

" student amenities fee and universities' consultations about how the money should be distributed (pp 72-74);

" universities' workforce strategies in the teaching area and the government's policy response to the large number of retiring academics; a concern that the competition for prestige and funding is pushing the balance too far in favour of research at the expense of teaching (pp 74-77);

" Office for Learning and Teaching taking over the functions of the former Australian Learning and Teaching Council (p. 76);

" priorities from universities for the expenditure of their fee revenue (pp 77-78);

" funding commitments for the Education Infrastructure Fund; EIF regional priorities round (pp 79, 91);

" expenditure on the independent youth allowance; reasons for rejection of students' applications for independent youth allowance; definition of the term 'parental-like support'; parental income test and the $150,000 cap (pp 80-83);

" advertising costs and reasons for the regional student income support

campaign (pp 83-84);

" assets test for dependent youth allowance (p. 85);

" apprenticeships review and the government decision to defer the standard apprentice commencement incentive from 3 to 6 months for the Australian Apprenticeships Incentive Program (pp 86-87);

" Victorian government cutting $160 million from TAFEs and implications for the national agenda to increase skills needed in industry sectors; the state's

Page 12

COAG commitments and apprenticeship training; course and campus closures (*°*° 87-90);

" state governments' commitments under the National Partnership agreement, and funding of vocational education in the TAPE system (pp 88-92); and

" base handing review - Lomax-Smith review; Bradley review (p. 90).

Department of Industry, Innovation, Science, Research and Tertiaiy Education [Science and Research]2*

" a publicly funded research review paper's recommendations: that there be changes to the national research priorities to better reflect the priority of humanities, arts and social sciences in Australia's research enterprise; that DIISRTE undertake a feasibility study on developing a research impact assessment mechanism (pp 92-94).

" Square Kilometre Array (SKA) project to be constructed between 2020 and 2024 in two locations: in Australia and South Africa (pp 95-97);

" ministerial changes of December 2011 which added Tertiary Education to the portfolio and their effect on the overall staff numbers (pp 97-99);

" Cooperative Research Centres: bushfne CRC and the arrangements for the continuation of its work (p. 99); beef and agricultural CRC programs; funding for agricultural R&D and for transformational research; future of CRCs beyond their life limit of 15 years (pp 100-102);

" funding research infrastructure under the Clean Energy Initiative (p. 102).

Skills Australia 23

" staff wages, including with the expansion of Skills Australia into the National Workforce and Productivity Agency (NWPA) (pp 103-104);

" measuring the agency's success in the uptake of the advice provided to the government, for example on the consistency of quality in the VET sector which is now part of COAG negotiations (p. 104);

" addressing skills shortages in rural and regional markets (p. 105);

" planned industry forum in Darwin on rural and remote skill shortages

(p. 105);

" creation of the national workforce development plan (p. 105); and

" providing advice to the Minister for Immigration on the skills in demand list (p. 106). 24 25

24 Transcript page numbers for the Department of Innovation, Industry, Science, Research and Tertiary Education [Science and Research], refer to Proof Hansard, 28 May 2012 (see the index at Appendix 2 of this report).

25 Transcript page numbers for Skills Australia, refer to Proof Hansard, 28 May 2012 (see the index at Appendix 2 of this report).

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1.21 On 29 May 2012, the committee examined the estimates for the:

" Department of Industry, Innovation, Science, Research and Tertiary Education [Industry and Innovation]; and

" Department of Industry, Innovation, Science, Research and Tertiary Education [Small Business],

1.22 Matters examined included the following:

Department of Industry, Innovation, Science, Research and Tertiary Education [Industry and Innovation ] 26

" organisational changes and associated costs; and activities that will continue to be provided by DEEWR under MOU arrangements (pp 4-5);

" the establishment of the Manufacturing Technology Innovation Centre introduced as a Budget initiative, its work plan, plans for its location, and discussions with the Prime Minister's Taskforce on Manufacturing; ongoing consultations regarding MTIC's commencement date (pp 5-9);

" automotive industry grants; Automotive New Markets Initiative; investment in the future of automotive industry and manufacturing (pp 9-17, 19);

" Mr Beattie's appointment under the Resources Sector Supplier Envoy program (PP 17-18);

" the Green Car Innovation Fund and its evaluation scheduled for the first quarter of 2013 (pp 20-22);

" carbon tax programs; Clean Technology Investment Program, Clean Technology Food and Foundries Investment Program, Clean Technology Innovation Program administered by Auslndustry (pp 22-26, 33-34);

" meetings of innovation councils (pp 26, 36);

" Enterprise Connect funding, grants and staffing (pp 27-28);

" national space and astronomy policy programs (p. 28);

" changes to R&D tax programs; change from the R&D tax concession to the R&D tax incentive and associated legal and marketing costs (pp 29-31);

" venture capital programs, of which the flagship is the Innovation Investment Fund, and partnership between the government and private sector fund managers (pp 31-32);

" National Enabling Technologies Strategy looking at new technologies such as nanotechnology (p. 34);

26 Transcript page numbers for the Department of Innovation, Industry, Science, Research and Tertiary Education [Industry and Innovation], refer to Proof Hansard, 29 May 2012 (see the index at Appendix 2 of this report).

Page 14

" DIISRTE's response to the NSW Legislative Council's inquiry into

nanotechnology and the Commonwealth review of food labelling that followed from that inquiry; and following up on a recommendation of the inquiry report to create a register of materials containing nanoparticles; problem of definitions of nanoparticles and nanomaterial (pp 34-36);

Department of Industry, Innovation, Science, Research and Tertiary Education [Sm all Busin ess ] 2 7

" departmental websites and ICT arrangements, and savings achieved following the recommendations of the Gershon review (pp 37-41);

" Enterprise Connect's obligations towards the Department of Defence (PP 42-43);

" the Green Building Fund, 318 grants approved under the program and their life expectancy (p. 45);

" the government response to the Book Industry Strategy Group's final report, to be released mid-year (p. 45);

" management training programs in Enterprise Connect (pp 46-47);

" the establishment of the Small Business Commissioner which starts

operations on 2 January 2013; its role, funding and jurisdiction; provisions of the future Commissioner's contract (pp 48-52);

" carbon tax related issues - DIISRTE's input into the design and guidelines of Energy Efficiency Information Grants (pp 52-57);

" Business Enterprise Centres and the small business support line; development and enhancements planned for the small business app released in 2011 on MyBizShield (pp 54-55);

Matters raised - Resources, Energy and Tourism portfolio

1.23 On 28 May 2012, the committee examined the estimates for the:

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

" Geoscience Australia.

1.24 Matters examined included the following:

27 Transcript page numbers for the Department of Innovation, Industry, Science, Research and Tertiary Education [Small Business], refer to Proof Hansard, 29 May 2012 (see the index at Appendix 2 of this report).

Page 15

Department of Resources, Energy and Tourism [Resources and Energy]2*

" collection of data by the Bureau of Resources and Energy Economics about the committed investment in the resource sector (pp 109-110);

" impact of overseas investments on prices of resources; countries that represent competition to Australia for investment (p. Ill);

" funding for the Global Carbon Capture and Storage Institute, governance and levels of remuneration for the executive; the operation of GCCSI under Corporations Law; GCCSI's transitioning from a government funded to a more member focused model; the institute *s travel costs (pp 111-116);

" progress with the Australian Energy Market Operator (AEMO) implementing the climate agreement, and the contract for services negotiations with DCCEE for the release of a scoping document (pp 116-117);

" Hot Rock Limited (HRL) and the final extension to its deadline of 30 June

2012 for meeting its grant conditions (p. 117);

" the Low Emissions Technology Demonstration Fund and reprofiling of funds (P- H7); " engagement between the resource sector and the government's indigenous agenda; the Working in Partnership Program (pp 118-119);

" the proposed national radioactive waste dump at Muckaty, and a potential temporary location in NSW (pp 119-121);

" correspondence from Minister Ferguson to Minister Burke regarding consultation provisions in the proposed approval conditions for the Olympic Dam expansion; and issues around the environmental protection for the Australian giant cuttlefish (pp 121-122);

" Enterprise Migration Agreements and the Roy Hill project as a beneficiary of an EMA (pp 123-124);

" funding for Solar Flagships proposal and projects; ARENA, a new body

to assume responsibility for the Solar Flagships Program effective 1 July 2012 and plans for its taking over the work of the Australian Solar Institute (pp 124-126);

" Clean Energy Finance Corporation due to start in 2013 (p. 126); and

" DRET's projections for the ongoing minerals boom, and related resource commodity price, volumes and investment (p. 127).

28 Transcript page numbers for the Department of Resources, Energy and Tourism [Resources and Energy], refer to Proof Hansard, 28 May 2011 (see the index at Appendix 2 of this report).

Page 16

Geoscience Australia 29

" process of the advice provided for the release of oil and gas acreage; formal acreage release at the Australian Petroleum Production and Exploration Association (APPEA) conference (pp 128-129, 131); and

" the generation of industry interest for exploration activity (pp 130-131).

1.25 On 29 May 2012, the committee examined the estimates for the:

" Department of Resources, Energy and Tourism [Tourism] and Tourism Australia.

1.26 Matters examined included the following:

Department of Resources, Energy and Tourism [Tourism] and Tourism Australia 30

" a proposed new phase for the 'There's nothing like Australia' campaign which started in 2010, and the advertising involved (p. 60);

" staff reduction of about 100 staff as a result of the Budget, and the estimate of its impact on projects and tourism (p. 61);

" Australian Tourism Investment Guide, launched on 2 May 2012 with the purpose of promoting tourism projects to potential investors; tourism investment monitor; airline partnerships (pp 62-64);

" impact of the Passenger Movement Charge on the attractiveness of Australia as a tourist destination and modelling done on the effects of a rise; impact of the strong Australian dollar (pp 65-68);

" priorities of Tourism Research Australia; impacts of the mining boom on staffing in the tourism sector; the Australian cruise market as a tourism success story of recent years and the government response to concerns of the cruise industry (pp 68-71);

" economic value of iconic species and risks of their loss; quantifying the impact of climate change on natural assets; research done on carbon abatement costs in the sector, and policies to support the industry to transition to a low-carbon economy (pp 71-74); and

" the National Online Strategy for Tourism released in 2011; funding for online technologies to support the industry; strategies to address the decline in regional tourism (pp 75-76).

29 Transcript page numbers for Geoscience Australia, refer to Proof Hansard, 28 May 2011 (see the index at Appendix 2 of this report).

30 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, 29 May 2011 (see the index at Appendix 2 of this report).

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Matters raised - Treasury Portfolio

1.27 On 29 May 2012, the committee examined the estimates for the:

" Australian Securities and Investments Commission (ASIC);

" Australian Bureau of Statistics (ABS);

" Australian Competition and Consumer Commission (ACCC); and

" Australian Prudential Regulation Authority (APRA).

1.28 On 30 May 2012, the committee examined the estimates for the:

" Treasury [Fiscal Group];

" Foreign Investment Review Board;

" Commonwealth Grants Commission;

" Inspector-General of Taxation;

" Treasury [Revenue Group]; and

" Australian Taxation Office.

1.29 On 31 May 2012, the committee examined the estimates for the:

" Treasury [Macroeconomics Group];

" Treasury [Markets Group];

" Productivity Commission; and

" Australian Office of Financial Management (AOFM).

Australian Securities and Investments Commission (ASIC)3'

" the collapse of Trio Capital, including findings of the Parliamentary Joint Committee on Corporations and Financial Sevices inquiry into the collapse, and in particular recommendation 5 (pp 83-87);

" opt-in arrangements in the government's Future of Financial Advice reforms (PP 87-89);

" level of operational funding provided in the budget for ASIC in 2012-13 (P- 89);

" ASX listing rules and concern about non-pro-rata issuings in the market (PP 89-91);

" levy fees on financial market operators and participants (p. 9);

" KordaMentha *s liquidation of Ansett Australia and the granting of an

accounting relief order (pp 92-93);

31 Transcript page numbers for ASIC refer to the Proof Hansard, 29 May 2012 (see the index at Appendix 2 of this report).

Page 18

" the liquidation of Mr Stuart Ariff s companies (pp 93-94);

" the HP Mercantile situation (pp 94-95);

" request to ASIC from Altius Mining Limited about possible contraventions of the Corporations Act (pp 95-96);

" ASIC *s data collection in respect of the fees, charges and commissions of superannuation companies (p. 97);

" shadow shopping projects in terms of the financial services industry

(pp 97-99); and

" financial pressure in the Hastie Group (p. 99).

Australian Bureau of Statistics (ABS ) 32

" work program reductions and the discontinuation of labour price indexes resulting from the Budget (pp 99-100);

" measures of Australia *s progress to replace or sit in parallel with GDP as

a measure of economic success (p. 101);

" environmental economic accounts which will analyse greenhouse emissions (p. 101); and

" how the Consumer Price Index (CPI) is calculated (pp 101-102).

Australian Competition and Consumer Commission (ACCC ) 33

" use of the term *carbon price * (p. 102);

" price rises due to the carbon tax and information claims from large and small corporations (pp 102-104);

" complaints by suppliers to supermarkets on misuse of market power

(pp 104-105);

" carbon pricing (p. 106);

" legislative framework and evidentiary thresholds that protect people in the supermarket supply chain coming forward about Coles and Wool worths (pp 106-107);

" the impact of shopper dockets on grocery prices and on fuel discounts

(P- 107);

" price sharing between the big retailers in the petrol market (pp 107-109);

" labelling of imported extra virgin olive oil (pp 109-111);

32 Transcript page numbers for ABS refer to the Proof Hansard, 29 May 2012 (see the index at Appendix 2 of this report).

33 Transcript page numbers for ACCC refer to the Proof Hansard, 29 May 2012 (see the index at Appendix 2 of this report).

Page 19

" electricity price increases as a result of the carbon tax (pp 111-112);

" terms of discounts being prominently displayed (p. 112);

" misrepresentation of eggs as free range (pp 113-114);

" review into default superannuation funds in modem awards (pp 114-115);

" fuel prices in Tasmania (p 115);

" the Metcash-Franklins acquisition case and the reliability of evidence received from ACCC witnesses (pp 115-116);

" the Glencore takeover of Viterra and the issue of dominant market players (pp 116-117);

" the Birdsville amendment (pp 117-118).

Australian Prudential Regulation Authority (APRA ) 34

" opening statement on the Australian banking system (pp 118-119);

" opening statement on the supervision of super funds and APRA *s pmdential reviews of Trio (pp 119-121);

" APRA *s handling of the Trio collapse including early concerns,

communication with ASIC and subsequent changes that APRA has instituted (pp 121-124);

" the failed merger between Equipsuper and Vision Super (pp 124-125);

" APRA *s handling of trustees that did not act in the best interests of members (pp 125-126);

" cash payments to trustee directors (p. 126);

" requirements for Australian banks in respect of Basel III (pp 127-128);

" APRA *s record of judgment and decisions in comparison to other pmdential regulators around the world (pp 128-129);

" APRA *s handling of the Trio collapse (pp 129-130);

" regulation of self-managed super funds (p 130);

" market concentration in the banking sector (pp 130-132);

" International Monetary Fund review of the resilience of Australia *s financial system (p. 132);

" development of new super governance standards (pp 133-134);

" data collected for MySuper (p. 135).

34 Transcript page numbers for APRA refer to the Proof Hansard, 29 May 2012 (see the index at Appendix 2 of this report).

Page 20

Treasury [Fiscal Group ] 35

" printing and delivery of Budget papers to the Opposition Budget lockup (PP 5-6);

" government savings from tax receipt measures compared to other revenue measures; scrapping of standard deductions for work-related expenses (PP 6-7);

" concessional component of loans made by the Clean Energy Finance

Corporation (p. 10);

" modelling of a future carbon price and its effect on the Budget; economic situation in Europe; global GDP as the most relevant statistic for determining the global carbon price; scenarios of the impact on revenue depending on different carbon price levels, and carbon price forecasts (pp 11-16, 20);

" possibility of overcompensating households in case of a lower carbon price (P-18); " economic costs of climate change (pp 23-25);

´ examples of reducing emissions by competitive tendering and their success (PP 27-28);

" explanation of differences in predicted Budget deficit, and a comparison of last year's and this year's forecast (pp 29-30, 32);

" level of government debt; Loan (Temporary Revenue Deficits) Act 1953 (PP 31-32);

" changes in revenue in the 2012-13 Budget, and a spike in revenue from public sector entities; revenue from the sale of non-fmancial assets (pp 33-36);

" schoolkids cash bonus (pp 36, 40);

" bonds and bond rates, and a fall in bond yields (pp 38-39);

" green tape and reducing the regulatory burden on business (p. 39);

" new marine reserve networks, and provisions in the Budget for adjustment assistance to the fishing industry as a consequence of those reserves (p. 41);

" Tasmania's share of GST (pp 41-42);

" purpose of the Future Fund (pp 45-47);

" Commonwealth and state government debt (pp 47-49); and

" the document 'Pre-budget deficit: Tony Abbott and the coalition' (pp 50-53);

35 Transcript page numbers for Treasury [Fiscal Group] refer to the Proof Hansard, 29 May 2012 (see the index at Appendix 2 of this report).

Page 21

Foreign Investment Review Board (FIRB ) 36

" changes in FIRB and in relation to the purchase of agricultural land flowing from the government's policy statement earlier this year; issues around domestic and foreign investments in agricultural land; the example of Cubbie Station (pp 54-56, 58-60);

" approval of a merger deal within the coal industry; criteria applied to

a generic coalmining project (pp 56-57); and

" the current legislative framework providing sufficient safeguards for state owned enterprises (p. 61).

Commonwealth Grants Commission (CGC ) 3

" interaction between revenue from state gambling taxes and GST relativities; how gambling revenue is treated in the CGC horizontal fiscal equalisation calculations; GST revenue sharing relativities update (pp 62-63);

" complexity of the current regime of Australia's horizontal fiscal equalisation; importance of accurate population estimates (pp 64-66); and

" the issue of whether Western Australia is penalised for not raising revenue from pokies (pp 69).

Inspector-General of Taxation 38

" reasons for claims in the IGT's submission to the tax forum in October that additional second commissioners from the private sector would help to diversify the ATO executive committee (pp 69, 71, 73);

" concerns about how the ATO conducts litigation; protections for taxpayers (PP 69-71);

" models in terms of advancing the interests of taxpayers and ensuring that these interests are protected in other countries (p. 73);

" issues related to the collection of superannuation by the ATO (p. 74); and

" previous and future GST reviews (p. 74).

36 Transcript page numbers for the Foreign Investment Review Board refer to the Proof Hansard, 30 May 2012 (see the index at Appendix 2 of this report).

37 Transcript page numbers for the Commonwealth Grants Commission refer to the Proof Hansard, 30 May 2012 (see the index at Appendix 2 of this report).

38 Transcript page numbers for the Inspector-General of Taxation refer to the Proof Hansard, 30 May 2012 (see the index at Appendix 2 of this report).

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Page 22

Treasury [Revenue Group] and the Australian Taxation Office (ATO) 39

" Fair Work Australia report on the Health Services Union national office (p. 74); " reduction in the fuel tax, or the excise rebate (pp 75-76);

" the Charities Maritime and Aviation Support Program (pp 76-78);

" forecasts for capital gains tax revenue in the Budget (pp 78-79, 83);

" feedback received from industry about the effect of the reduced final

withholding tax on managed investment trusts; increase in revenue including assumptions about changes to investment behaviour (pp 80-81);

" mining tax revenue estimates; impact of NSW decision to increase royalties on coal when assessing Mineral Resource Rent Tax (MRRT) revenue estimates (pp 84-88);

" issues about trusts as a means to minimise or avoid tax and evade creditors (PP 90-93);

" laws to stop the shifting of profits offshore; Tax Laws Amendment (Cross≠ Border Transfer Pricing) Bill (No. 1) 2012 and the impact of proposed changes to transfer pricing law on the overall tax paid in Australia by overseas-based companies (pp 95-98);

" internal legal services in the ATO; work undertaken by the Tax Counsel

Network (pp 101-103);

" Resource Super Profits Tax (RSPT) influences on revenue projections for the Minerals Resource Rent Tax (MRRT) (pp 103-105);

" small business tax and the $2 million definitional threshold (pp 106-107);

" the Parliamentary Budget Office (p. 108);

" Henry tax review report recommendations related to stamp duty regimes and impacts on housing affordability (pp 109-110);

" the ATO's funding for improving the Australian Business Register and the quality of data (pp 114-115);

" time and resources of businesses applying for an ABN (pp 115-116);

" ATO tax disputes and their estimated aggregate value of $8.8 billion

(pp 117-119);

" excise duty on tobacco, and tobacco volumes used to determine the total excise and customs duty over the forward estimates; plain packaging legislation (pp 120-121);

" value for money of the Australian Valuation Office (pp 121-123);

39 Transcript page numbers for the Treasury [Revenue Group] and the Australian Taxation Office refer to the Proof Hansard, 30 May 2012 (see the index at Appendix 2 of this report).

Page 23

" current state of compliance with the superannuation guarantee regime; unclaimed super money; Foreign Account Tax Compliance Act introduced in the US (pp 124-126);

" voluntary redundancies in the Treasury (pp 127-129); and

" capital gains tax removal of 50 per cent discount for non-residents

(pp 132-133).

Treasury [Macroeconomic Groupf

" the economic situation in Europe (pp 5-12, 15-18);

" Australia's ability to respond to a global financial crisis (p. 13);

" mining investment (pp 13-14);

" effect of the carbon price on the economy (pp 14-15, 25);

" debt in Australian states (pp 18-20);

" fiscal stimulus (pp 20-25);

" Treasury's well-being framework (pp 25-27);

" the Budget surplus (pp 27-28, 32-34);

" Australia's productivity growth (pp 28-32, 39-44);

" contingency reserve (pp 32, 34-35, 45);

" public final demand forecasts (pp 35-37, 44);

" forecasting in relation to China (pp 37-39); and

" redundancies within Treasury (pp 47-51).

Treasury [Markets Group f 1

" the National Disability Insurance Scheme (pp 51-55);

" collapse of Trio (pp 55-58);

" SuperStream reforms (pp 58-60);

" intra-fund superannuation advice (pp 60-62);

" Future of Financial Advice bills (pp 62-63, 65-67);

" proposed regulations on the standard definition of 'flood' (pp 63-65);

" the Consumer Credit and Corporations Legislation Amendments

(Enhancements) Bill 2011 (pp 67-69); 40 41

40 Transcript page numbers for the Treasury [Macroeconomic Group] refer to the Proof Hansard, 31 May 2012 (see the index at Appendix 2 of this report).

41 Transcript page numbers for the Treasury [Markets Group] refer to the Proof Hansard, 31 May 2012 (see the index at Appendix 2 of this report).

Page 24

" Australia as a financial services centre * the Johnson report (pp 69-70);

" competition and the National Broadband Network (pp 70-75);

" Free Trade Agreements and foreign investment in domestic agricultural land (pp 75-78);

" compensation for APRA regulated funds that lost money from the collapse of Trio (pp 79-80);

" the banking sector, the housing market, ATMs in indigenous communities, credit unions and building societies (pp 80-87);

" the International Monetary Fund review of the financial sector assessment program (pp 88-89); and

" Free Trade Agreements with the US and China (pp 89-90).

Productivity Commission 42

" opening statement (p. 90);

" review into default superannuation funds (pp 91-92);

" review of the Fair Work Act (pp 93-95);

" the Australian Government Competitive Neutrality Complaints Office and PETNET (pp 95-98);

" IMD rankings of international competitiveness (pp 98-99);

" electricity network regulation (pp 99-100);

" the National Disability Insurance Scheme (pp 100-102);

" Australia's productivity growth (pp 103-106);

" the Commission's activities and performance (pp 106-107);

" carbon emission abatement policies (pp 108 *109);

" draft report on the role of local government as a regulator (p. 109)

" report on native vegetation (p. 109);

" report on climate change adaptation (pp 110-111); and

" early childhood development and the workforce (p. 111).

42 Transcript page numbers for the Productivity Commission refer to the Proof Hansard, 31 May 2012 (see the index at Appendix 2 of this report).

80

Australian Office of Financial Management (AOFM ) 43

" bond yields (pp 112, 118-119); and

ª the Commonwealth debt cap (pp 112-118).

Senator Mark Bishop Chair

43 Transcript page numbers for the Australian Office of Financial Management refer to the Proof Hansard, 31 May 2012 (see the index at Appendix 2 of this report).

82

Appendix 1

Abbreviations

ABS

ACCC

ANSTO

AOFM

APPEA

APRA

ARC

ARENA

ASIC

ASQA

ASX

ATAR

ATO

BETR

CGC

COAG

CRC

CSIRO

DCCEE

DEEWR

DIISRTE

EIF

Australian Bureau of Statistics

Australian Competition and Consumer Commission

Australian Nuclear Science and Technology Organisation

Australian Office of Financial Management

Australian Petroleum Production and Exploration Association

Australian Prudential Regulation Authority

Australian Research Council

Australian Renewable Energy Agency

Australian Securities and Investments Commission

Australian Skills Quality Authority

Australian Securities Exchange

Australian Tertiary Admission Rank

Australian Taxation Office

Business Enabling Technology Replacement (project)

Commonwealth Grants Commission

Council of Australian Governments

Cooperative Research Centres

Commonwealth Scientific and Industrial Research Organisation

Department of Climate Change and Energy Efficiency

Department of Education, Employment and Workplace Relations

Department of Industry, Innovation, Science, Research and Tertiary Education

Education Infrastructure Fund

Page 28

EMA Enterprise Migration Agreement

FIRB Foreign Investment Review Board

HEPP Higher Education Participation and Partnerships program

HESP Higher Education Standards Panel

ICT information and communication technology

IMD Imdex Limited

IP intellectual property

MOU Memorandum of Understanding

MRRTMineral Resource Rent Tax

NWPA National Workforce and Productivity Agency

PCProductivity Commission

PICSE Primary Industry Centre for Science Education

PM&C Department of the Prime Minister and Cabinet

R&D research and development

RET Resources, Energy and Tourism (portfolio)

RSPTResource Super Profits Tax

RTO Registered Training Organisation

SES socio-economic status

SME Small and Medium Enterprises

TAPE Technical and Further Education

TEQSA Tertiary Education Quality and Standards Agency

TRA Tourism Research Australia

VET Vocational Education and Training

WLAN wireless local area network

84

Index to proof Hansard transcripts

Appendix 2

Monday, 28 May 2012

Industry, Innovation, Science, Research and Tertiary Education portfolio

Australian Nuclear Science and Technology Organisation (ANSTO) 5

IP Australia 12

Commonwealth Scientific and Industrial Research Organisation (CSIRO) 15

Australian Research Council (ARC) 26

Office of the Chief Scientist 31

Tertiary Education Quality and Standards Agency (TEQSA) 39

Australian Skills Quality Authority (ASQA) 50

Department of Industry, Innovation, Science, Research and Tertiary Education [Tertiary] 58

Department of Industry, Innovation, Science, Research and Tertiary Education [Science and Research] 92

Skills Australia 103

Resources, Energy and Tourism portfolio

Department of Resources, Energy and Tourism [Resources and Energy] 109

Geoscience Australia 12 8

Tuesday, 29 May 2012

Industry, Innovation, Science, Research and Tertiary Education portfolio (continued)

Department of Industry, Innovation, Science, Research and Tertiary Education [Industry and Innovation] 5

85

Department of Industry, Innovation, Science, Research and Tertiary Education [Small Business] 48

Resources, Energy and Tourism portfolio (continued)

Department of Resources, Energy and Tourism [Tourism] and Tourism Australia 60

Treasury portfolio

Australian Securities and Investments Commission (ASIC) 82

Australian Bureau of Statistics (ABS) 99

Australian Competition and Consumer Commission (ACCC) 102

Australian Prudential Regulation Authority (APRA) 118

Wednesday, 30 May 2012

Treasury portfolio (continued)

Treasury [Fiscal Group] 5

Foreign Investment Review Board (FIRB) 53

Commonwealth Grants Commission (CGC) 62

Inspector General of Taxation (IGT) 69

Treasury [Revenue Group] and Australian Taxation Office (ATO) 74

Thursday, 31 May 2012

Treasury portfolio (continued)

Treasury [Macroeconomic Group] 5

Treasury [Markets Group] 51

Productivity Commission (PC) 90

Australian Office of Financial Management (AOFM) 111

Page 30

86

Appendix 3

Tabled documents

Monday, 28 May 2012

1. Received from Mr Mike Whelan, Deputy Chief Executive Operations, Commonwealth Scientific and Industrial Research Organisation: 'CSIRO Memberships where CSIRO officers are nominee directors by category';

2. Received from Mr Mike Whelan, Deputy Chief Executive Operations, Commonwealth Scientific and Industrial Research Organisation: 'Australian Research Council's Centre of Excellence for the History of Emotions Annual Report and Financial Statement'.

Tuesday, 29 May 2012

3. Received from Mr Greg Medcraft, Chairman, Australian Securities and Investments Commission: Opening statement'.

Wednesday, 30 May 2012

4. Received from Senator the Hon. Ronald Boswell on 30 May 2012: 'Fuel tax credits and eligible fuels: Rates from 1 July 2012'; extract from the Australian Taxation Office website dated 30 May 2012;

5. Received from Ms Jennie Granger, Second Commissioner, Australian Taxation Office: 'Your case matters 2012: Tax and superannuation litigation trends', a publication by the Australian Taxation Office.

Thursday, 31 May 2012

6. Received from Senator Doug Cameron: 'Figure 1: Taylor's Evidence that the Economic Stimulus Act of 2008 Didn't Work' and 'Figure 2: Zandi's Version of Taylor's Graph - Adding in Household Wealth';

7. Received from Mr Jim Murphy, Executive Director, Markets Group: 'Voluntary Redundancies in the Treasury, as at 31 May 2012';

8. Received from Mr Rob Nicholl, Chief Executive Officer, Australian Office of Financial Management: 'Treasury Bond Yields, July 2007 - Jan 2012'.

Page 32

Additional information

1. Correction of evidence given at the hearing on 31 May 2012; a letter clarifying the Budget forecast of the contribution of public final demand to GDP growth in 2012-13; received from Dr Steve Morling, General Manager of Domestic Economy Division, Treasury, on 7 June 2012

88

Industry, Innovation, Science, Research and Tertiary Education portfolio structure and outcomes

Appendix 4

Minister for Tertiary Education, Skills, Science and Research* Senator the Hon Chris Evans

Minister for industry and Innovation2 The Hon Greg Combet AM MP

Minister for Small Business3 The Hon Brendan O *Connor MP

Minister Assisting for Industry and Innovation1 Senator the Hon Kate Lundy

Parliamentary Secretary for Industry and Innovation5 The Hon Mark Dreyfus OC MP Parliamentary Secretary for Higher Education and Skills The Hon Sharon Bird MP

Department of Industry, Innovation, Science. Research and Tertiary Education Secretary: Dr Don Russell

Agency - Australian Nuclear Science and Technology Organisation (ANSTOj Chief Executive Officer: Dr Adi Paterson

Agency - Australian Institute of Aboriginal and Torres Strait Islander Studies (AIATSIS) Principal (CEO): Mr Russell Taylor

Agency - Australian Research Council (ARC) A/g Chief Executive Officer: Ms Leanne Harvey

Agency - Australian Skills Quality Authority (ASQA) Chief Commissioner Mr Chris Robinson

Agency - IP Australia Director General: Mr Philip Noonan

Agency - Commonwealth Scientific and Industrial Research Organisation (CS1RO) Chief Executive Officer Dr Megan Clark

Agency - Australian Institute of Marine Science (AIMS) Chief Executive Officer Mr John Gunn

Agencv - Tertiary Education Quality and Standards Agency (TEOSA) Chief Commissioner Dr Carol Nicoli

Source: Portfolio Budget Statements 2012-13, Industry, Innovation, Science, Research and Tertiary Education portfolio, p. 8.

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90

Research, Energy and Tourism portfolio structure and outcomes

Appendix 5

Portfolio Minister Minister for Resources and Energy Minister forTourism The Hon Martin Ferguson AM MP

Department of Resourc Portfolio 5 Mr Drew

O utcome 1: The improved s sustainability of the resources, enhance Australia's prosperit government polic

es, Energy and Tourism Secretary Clarke

trength, competitiveness and energy and tourism industriesto y through implementation of y and programs.

Geoscience Australia Chief Executive Officer Dr Chris Digram

Outcome 1: Informed government, industry and community decisions on the economic, social and environmental management of the nation *s natural resources through enabling

access to geoscientific and spatial information.

National Offshore Petroleum Safety and Environmental Management Authority Chief Executive Officer Ms Jane Cutler

Outcome 1: An Australian oil and gas industry that properly control s the health and safety risks to the workforce at its offshore petroleum operations.

Tourism Australia Managing Director Mr Andrew McEvoy

O utcome 1: Increase demand for Australia as a destination, strengthen the travel distribution system, and contribute to the development of a sustainable tourism industry through consumermarketing, trade

development and research activities.

Australian Solar Institute Executive Director Mr Mark Twidell

Outcome 1: Encourage innovation and cost effective developments in sola" energy technologies to accelerate commercial deployment through knowledge building and

collaborative research, development and support for Australian industries and researc h institutions.

Australian Renewable Energy Agency Chief Executive Officer TBC

Outcome 1: Support improvements in the competitiveness of renewable energy and related technologies and the supply of renewable energy by administeringfinancial assistance, developing analysis and advice about and sharing information and knowledge with regard to,

renewable energy and related technologies.

Source: Portfolio Budget Statements 2012-13, Industry, Innovation, Science, Research and Tertiary Education portfolio, p. 8.

91

92

Treasury portfolio structure and outcomes

Appendix 6

Australian Bureau of Statistics Statistician: Nrtr Brian Pink

Informed decisions, research and discussion within governments and the community by leading the collection, analysis and provision of high quality, objective and relevant statistical information

Australian Securities and Investments Commission Chairman; Mr Greg Medcraft

Improved confidence in Australia's financial markets through promoting informed investors and financial _______ consumers, facilitating fair and efficient markets and delivering efficient registry systems _______

Corporations and Markets Advisory Committee Convenor: Ms Joanne Rees

Informed decisions by Government on issues relating to corporations reguiation and financial __________products, services and markets through independent and expert advice __________

Commonwealth Grants Commission Secretary: Mr John Spaspjeyjc

Informed Government decisions on fiscal equalisation between the States and Territories through advice ___________and recommendations on the distribution of GST revenue and health care grants ___________

Department of the Treasury Secretary: Dr Martin Parkinson

Informed decisions on the development and implementation of policies to improve the wellbeing of the Australian people, including by achieving strong, sustainable economic growth, through the provision of advice _________________to government and the efficient administration of federal financial relations _________________

Australian Competition and Consumer Commission Chairman: fylr Rod Sims

Lawful competition, consumer protection, and regulated national infrastructure markets and services through regulation, including enforcement, education, price monitoring and determining _____________________________ the terms of access to infrastructure services _____________________________

Australian Taxation Office Commissioner: Mr Michael D'Ascenzo AO

Confidence in the administration of aspects of Australia's taxation and superannuation systems through helping people understand their rights and obligations, improving ease of compliance and access ______________________ to benefits, and managing non-compliance with the law' ______________________

Portfolio Minister * Deputy Prime Minister and Treasurer The Hon Wayne Swan MR Assistant Treasurer The Hon David Bradbury MP Minister for Financial Services and Superannuation

The Hon Bill Shorten MP Minister for Housing The Hon Brendan O *Connor MP Parliamentary Secretary to the Treasurer

The Hon Bernie Ripoll MP _____________

Australian Prudential Regulation Authority Chairman: Dr John Laker AO

Enhanced public confidence in Australia *s financial institutions through a framework of prudential regulation which balances financial safety and efficiency, competition, contestability and competitive neutrality

Australian Office of Financial Management Chief Executive Officer: Mr Rob Njchglj

The advancement of macroeconomic growth and stability, and the effective operation of financial markets, through issuing debt, investing in financial assets and managing debt, investments and cash for the Australian Government

93

Page 38

Inspector-General of Taxation Inspector-General: Mr Ali Nproozi

Improved tax administration through community consultation, review and independent advice to Government

Royal Australian Mint Chief Executive Officer: Mr Ross MacDiarmid

The coinage needs of the Australian economy, collectors and foreign countries are met through the manufacture and sale of circulating coins, collector coins and other minted like products

Productivity Commission Chairman: JW Gary Banks AO

Well-informed policy decision-making and public understanding on matters reiating to Australia's productivity and living standards, based on independent and transparent analysis from a community-wide perspective

Office of the Auditing and Assurance Standards Board Chairman: Ms Merran KeteaN

The formulation and making of auditing and assurance standards that are used by auditors of Australian _______________ entity financial reports or for other auditing and assurance engagements ______________

Office of the Australian Accounting Standards Board Chairman: Mr Kevin Stevenson The formulation and making of accounting standards that are used by Australian entities to prepare __________financial reports and enable users of these reports to make informed decisions _________

National Competition Council President: Mr David Crawford

Competition in markets that are dependent on access to nationally significant monopoly infrastructure, through recommendations and decisions promoting the efficient operation of, use of and investment in infrastructure

Source: Portfolio Budget Statements 2012-13, Treasury portfolio, pp 6-7.

94

The Senate

Education, Employment and Workplace Relations Legislation Committee

Budget estimates 2012-13

June 2012

© Commonwealth of Australia 2012 ISBN 978-1-74229-638-8

This document was produced by the Senate Education, Employment and Workplace Relations Secretariat and printed by the Senate Printing Unit, Parliament House, Canberra.

Senate Standing Committee on Education, Employment & Workplace Relations

LEGISLATION COMMITTEE

Membership of the Committee

Senator Gavin Marshall, Chair Senator Chris Back, Deputy Chair Senator Catryna Bilyk Senator Bridget McKenzie Senator Matt Thistlethwaite Senator Lee Rhiannon

New South Wales, ALP New South Wales, AG

Victoria, ALP Western Australia, LP Tasmania, ALP Victoria, Nats

Participating Members

Senators Abetz, C Brown, Cameron, Cash, Crossin, Edwards, Fierravanti-Wells, Fisher, Fumer, Gallacher, Heffeman, Mason, Nash, Ronaldson, Scullion, Siewert, Williams, and Xenophon.

Secretariat Mr Tim Watling, Secretary Ms Bonnie Allan, Principal Research Officer Ms Natasha Rusjakovski, Senior Research Officer Mr Jarrod Baker, Research Officer Mr Ming Li, Research Officer Ms Sarah Bainbridge, Administrative Officer

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://aph.gov.au/Parliamentary_Business/Committees/Senate_Committees7u rl=eet ctte/index.htm

98

TABLE OF CONTENTS

TABLE OF CONTENTS........................................................................................... ..

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

Chapter 1 ........................................................................................................................1

Overview.......................................................................................................................1

Portfolio coverage.....................................................................................................1

Hearings.....................................................................................................................1

Public interest immunity claims .............. 2

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

Note on Hansard page referencing...........................................................................2

Chapter 2 ........................................................................................................................3

Education, Employment and Workplace Relations portfolio...............................3

Fair Work Australia..................................................................................................4

Fair Work Ombudsman............................................................................................5

Australian Building and Construction Commission ................................................ 6

Comcare.....................................................................................................................7

Safe Work Australia................................................................................................. 8

Department of Education, Employment and Workplace Relations - Outcome 3: Enhanced employability and acquisition of labour market skills .......................... 9

Department of Education, Employment and Workplace Relations - Outcome 4: Safer, fairer and more productive workplaces .......................................................10

Australian Curriculum, Assessment and Reporting Authority ............................. 11

Australian Institute for Teaching and School Leadership ..................................... 12

Department of Education, Employment and Workplace Relations - Outcome 1: Early childhood education .....................................................................................13

Department of Education, Employment and Workplace Relations - Outcome 2: Schools and youth ....................................................................................................14

Department of Education, Employment and Workplace Relations -Cross Portfolio.........................................................................................................15

A ppendix 1 .........................................................................................................................................17

Committee oversight of departments and agencies........................................................17

A ppendix 2 .........................................................................................................................................19

Index to Hansard transcripts.................................................................................................19

ioo

Chapter 1

Overview

1.1 The Senate Education, Employment and Workplace Relations Legislation Committee presents its report to the Senate.

1.2 On 9 May 20121 the Senate referred the following documents to the

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 30 June 2013.

" Particulars of certain proposed expenditure in respect of the year ending on 30 June 2013.

" Particulars of proposed expenditure in relation to the parliamentary departments in respect of the year ending on 30 June 2013.

" Particulars of proposed supplementary expenditure in respect of the year ending on 30 June 2012.

" Particulars of certain proposed supplementary expenditure in respect of the year ending on 30 June 2012.

1.3 Standing committees are required to report to the Senate on 26 June 2012. This report of the Education, Employment and Workplace Relations Legislation Committee is provided to the Senate in fulfilment of that requirement.

Portfolio coverage

1.4 The committee has responsibility for examining the expenditure and outcomes of the Education, Employment and Workplace Relations portfolio. Appendix 1 lists the department and agencies under this portfolio.

Hearings

1.5 The committee conducted four days of hearings, examining Employment and Workplace Relations outcomes and agencies on 28 and 29 May 2012 and Education outcomes and agencies on 30 and 31 May 2012. In total the committee met for 34 hours and 45 minutes, excluding breaks.

1.6 The following outcomes and agencies appeared before the committee:

" Outcomes 1 * 4;

* Fair Work Australia;

1 Journals of the Senate No. 89, 9 May 2012, p. 2396.

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2

" Fair Work Ombudsman;

" Australian Building and Construction Commission;

" Comcare;

" Safe Work Australia;

" Australian Curriculum Assessment and Reporting Authority;

" The Australian Institute for Teaching and School Leadership.

1.7 The Additional Budget Estimates 2011-12 report by this committee highlighted the difficulties posed by the tertiary education and skills portfolios having been moved to the Senate Standing Economics Legislation (Economics) committee.2 Some Senators again expressed their concern that the current Allocation of Departments is preventing proper oversight of the tertiary and skills portfolios due to

the lack of time available in the Economics committee.3

Public interest im m unity claim s

1.8 On 13 May 2009, the Senate passed an order relating to public interest immunity claims.4 The order sets out the processes to be followed if a witness declines to answer a question. The full text of this order has previously been provided to departments and agencies and was incorporated in the Chair's opening statement on the first day of the budget estimates hearing.

1.9 The issue of public interest immunity was not raised during the hearings.

Questions on notice

1.10 The committee has drawn the attention of the department and its agencies to the agreed deadline of Friday 27 July 2012 for the receipt of answers to questions taken on notice from this round, in accordance with Standing Order 26.

1.11 For this round, written questions on notice were received from Senators Abetz, Back, Bemardi, Boyce, Cameron, Cash, Colbeck, McKenzie, Nash, Williams and Xenophon.

N ote on Hansard page referencing

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

2 Education, Employment and Workplace Relations Legislation Committee, Additional Estimates 2011-12, March 2012, p. 2.

3 Proof Estimates Hansard, 30 March 2012, p. 4.

4 Journals of the Senate , No. 68, 13 May 2009, p. 1941. The order was moved by Senator Cormann.

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Chapter 2

Education, Employment and Workplace Relations portfolio

2.1 This chapter summarises areas of interest and concern raised during the committee's consideration of budget estimates for the 2012-13 financial year. This section of the report follows the order of proceedings and provides an indicative, but not exhaustive, coverage of issues examined.

2.2 The committee heard evidence on 28 and 29 May from the Parliamentary Secretary for School Education and Workplace Relations, Senator the Hon. Jacinta Collins, and Minister for Agriculture, Fisheries and Forestry, and Manager of Government Business in the Senate, Senator the Hon. Joseph Ludwig, along with officers from areas of the Department of Education, Employment and Workplace Relations (the department) and agencies responsible for employment and workplace relations, including:

" Comcare

" Safe Work Australia

" Fair Work Ombudsman

" Fair Work Australia

" Australian Building and Construction Commission

2.3 On 30 and 31 May the committee heard evidence from Senator the Hon. Kim Carr representing the Minister for School Education, Early Childhood and Youth, and Parliamentary Secretary for School Education and Workplace Relations Senator

the Hon. Jacinta Collins, as well as officers from areas of the department and agencies responsible for administering education policy, including:

" Australian Curriculum, Assessment and Reporting Authority;

" Australian Institute of Teaching and School Leadership.

2.4 Senators present over the course of hearings were Senator Marshall (Chair), Senator Back (Deputy Chair), Senators Abetz, Bilyk, Carol Brown, Cameron, Cash, Crossin, Edwards, Fierravanti-Wells, Fisher, Fumer, Gallacher, Heffeman, Mason, McKenzie, Nash, Ronaldson, Scullion, Siewert, Thistlethwaite, Williams, and Xenophon.

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4

Fair W ork A ustralia

Timely supply of evidence

2.5 Following the appearance of FWA on 28 May, the committee received additional information from FWA in the form of answers to questions on notice from the Additional Budget Estimates 2011-12 hearings held in February 2012. This action was interpreted by some Senators as an effort to avoid scrutiny leading the committee to recall FWA on 29 May. For the benefit of all witnesses appearing before the committee, it is emphasized that all relevant information should be provided to the committee before an appearance at Senate Estimates. Failure to provide information to the committee in a timely manner may be considered by the committee as an attempt to avoid scrutiny.

Senate Resolution regarding appearance of President of Fair Work Australia at Senate Estimates

2.6 The committee examined officers of Fair Work Australia (FWA) on Monday 28 March 2012, and again on Tuesday 29 March 2012. The President of Fair Work Australia appeared before the committee on 28 March in accordance with the Senate Resolution of 28 October 2009 requiring that:

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.3

2.7 The President of FWA did not appear before the committee on 29 March as the committee considered that the order had been satisfied by the President's appearance on 28 May and that his presence was therefore not required.4 5

President of Fair Work Australia

2.8 The new President of FWA, the Hon. Justice Iain Ross, appeared before the committee for the first time.

2.9 The committee explored with the President of FWA what processes and procedures were in place in relation to a judicial officer of FWA who had engaged in inappropriate behaviour. The President informed the committee that if he became

aware of a situation that was sufficiently serious to merit review, the matter would be referred to parliament." As explained to the committee, 'it is a matter for parliament to

3 Journals of the Senate, 2009, p. 2661.

4 Procedural Information Bulletin No. 263, 1 June 2012, p. 4.

5 Proof Estimates Hansard, 28 May 2012, p. 33.

104

5

determine whether the judicial officer has engaged in proven misbehaviour or is incapable of performing their functions.'6

Investigations conducted by Fair Work Australia

2.10 The committee discussed with witnesses from FWA the use of powers under the Fair Work (Registered Organisations) Act 2009. Specifically, the ability of FWA to gather evidence compulsorily, and the remedies available to FWA if witnesses provide false or misleading information.

Fair W ork Om budsm an

2.11 Senators queried why the Education, Employment and Workplace Relations Portfolio Budget Statement (PBS) indicated that the Fair Work Ombudsman (FWO) would reduce their workforce by around 70 full-time equivalent positions by the end

of 2012. The committee heard that no specific areas were being targeted for rationalisation and that the reduction in staffing levels will be achieved by a combination of voluntary redundancies and natural attrition. The reductions represent

around eight per cent of the FWO workforce. Witnesses assured the committee that there is not anticipated to be any reduction in staffing levels in regional areas.7 The committee was informed that the FWO was 'hopeful' of meeting all of the organisation's key performance indicators in light of the declining staffing and funding levels.8

2.12 The committee was informed that there had been a large increase in the number of investigations into sham contracting in the 2011-12 year compared to those prior.9 Mr Wilson, the Fair Work Ombudsman, updated the committee on current

activities in relation to sham contracting:

For 2011-12, there have been 245 inquiries logged about independent

contracting or sham contracting. Those were inquiries to our Fair Work information line. We presently have five active litigations. At 31 M arch 2012, we were actively investigating 147 matters relating to potential misclassification of workers. M isclassification of workers could involve just simply that or it could involve the more significant issue, which is sham

contracting.10

2.13 The committee discussed the best way to represent data in the annual report of FWO. Some Senators expressed concern that the 2010-11 annual report listed the number of accusations of discrimination and the type of discrimination alleged, but

6 Proof Estimates Hansard, 28 May 2012, p. 33.

7 Proof Estimates Hansard, 28 May 2012, pp 47-48.

8 Proof Estimates Hansard, 28 May 2012, p. 66.

9 Proof Estimates Hansard, 28 May 2012, p. 52.

10 Proof Estimates Hansard, 28 May 2012, p. 52.

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6

not the outcome of those accusations. Of the 1171 accusations of discrimination, only 36 were either resolved with the assistance of FWO or are ongoing. It was noted that only reporting the number of accusations, but not the result of the investigations of claims, may create an inaccurate picture of widespread workplace discrimination.11

2.14 Witnesses informed the committee of recent action in the Federal Court in relation to the use of international cabin crew on domestic flights. The FWO elaborated for the committee the scope and objective of the litigation:

The subject of the action is, I believe, in respect of the eight employees, eight foreign workers. Now clearly there have been more - we believe up to about 300 * international cabin crews rostered across Jetstar's domestic

routes. The purpose of taking the court action, if you like, is to test the law in respect of those workers. Depending on what the Federal Court finds, if anything, that will cause us to go back and settle up with the company: 'If this pertains to these eight workers, then what are you doing about the

remainder?'11 12

2.15 The committee discussed with FWO the possibility of collecting data, and providing feedback to employers, on cases of above-award payment during compliance audits. Currently, audits report on the number of instances of non≠

compliance. Some senators suggested that FWO's educative role should include informing industry of above award-level payment, and not be restricted to only identifying non-compliance.13

A ustralian Building and C onstruction C om m ission

2.16 The committee discussed with representatives of the Australian Building and Construction Commission (ABCC) what arrangements had been made for the transition to the Office of the Fair Work Building Inspectorate (Inspectorate).14 15 The committee was informed that the transition from the ABCC to the Inspectorate was being managed as a machinery of government change, and it was anticipated that the current workforce would transition into the new agency.11 As explained by Commissioner Johns:

It is a machinery of government change and in the ordinary course of events positions follow function, and so with like functions in the new agency people who are currently performing them within the ABCC will be moved across to fulfil those functions.16

11 Proof Estimates Hansard, 28 May 2012, pp 54, 56.

12 Proof Estimates Hansard, 28 May 2012, p. 56.

13 Proof Estimates Hansard, 28 May 2012, pp 58-59.

14 Proof Estimates Hansard, 28 May 2012, p. 70.

15 Proof Estimates Hansard, 28 May 2012, p. 74.

16 Proof Estimates Hansard, 28 May 2012, p. 74.

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7

2.17 Witnesses provided the committee with an update on the workload of the ABCC:

[T]wo per cent of our work relates to freedom of association; about five per cent of our work relates to right of entry breaches; 22 per cent of our work relates to unlawful industrial action; and, in terms of the subject of our investigations, 19 per cent of those are in respect of conduct by unions or their organisers. About 28 per cent of our investigations are in relation to subcontractors - those who might be engaged in sham contracting; and 27 per cent of our investigations are in respect of employers most likely in relation to the failure to pay wages and entitlements.17

2.18 During the appearance of the ABCC, Commissioner Johns was unable to comment on any future role he may hold in the Inspectorate. The committee can report to the Senate that on 30 May 2012 the Minister for Employment and Workplace Relations the Hon. Bill Shorten MP announced that then Commissioner Johns would be appointed to head the Inspectorate for a period of 12 months.18 Announcing the government's decision, Minister Shorten noted that: 'Mr Johns' appointment will provide the continuity and leadership required to establish the new Inspectorate during its commencement stage.'19

C om care

2.19 Representative from Comcare provided the committee with an update on the transition to the new work health and safety laws:

It has been a relatively smooth transition in the federal workplace as to the new work health and safety laws. Based on feedback from employers, workers, unions and employer representatives through the self-insured association, we have received very good feedback about the depth and extent of support we have provided federal workplaces in the transition * education programs et cetera... We have continued to support employers and their workers with their particular issues or enquiries about coverage, and understanding what the responsibilities now are of persons conducting business undertakings.20

2.20 Revisiting discussions from its February 2012 estimates hearings, the committee once again raised the matter of long-running cases with representatives from Comcare. Comcare informed the committee that approximately 20 claims of 'longstanding or ongoing concerns that you would say have not yet been fully

17 Proof Estimates Hansard, 28 May 2012, p. 77.

18 The Hon. Bill Shorten MP, New Fair Work building and construction laws to commence, Media Release, 30 May 2012.

19 The Hon. Bill Shorten MP, New Fair Work building and construction laws to commence, Media Release, 30 May 2012.

20 Proof Estimates Hansard, 28 May 2012, pp 82-83.

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resolved' have been identified.21 The committee heard that Comcare had undertaken discussions with its portfolio department, and was exploring options to have an independent agency review the cases.2"

2.21 Comcare clarified for the committee its litigation powers under the new Work Health and Safety Act. Under the previous legislation, Comcare would investigate - and where necessary - prosecute breaches of the occupational health and safety

regime. Under the new legislation, Comcare investigates alleged breaches and 'consistent with the Commonwealth prosecution policy, if we are going to seek a criminal prosecution, we would refer that matter to the Commonwealth Director of

Public Prosecutions.'23

Safe W ork A ustralia

2.22 The committee was updated on the status and progress of the national harmonisation of work health and safety laws:

Five jurisdictions implemented the legislation from 1 January 2012. Tasmania has enacted the legislation, and it will commence 1 January 13.

The legislation is before the South Australian parliament. The Western Australian government has announced it will introduce the legislation some time in 2012. Victoria has announced that it will not be introducing the

model legislation in its current form.24

2.23 It was reported to the committee that Western Australia will not be adopting certain areas of the model legislation, namely:

They will not adopt the same penalty levels. They will not adopt the union right of entry provisions, because union right of entry is dealt with under their industrial relations act for occupational health and safety purposes, so it will remain there. They will not adopt the health and safety

representative's capacity to direct that unsafe work ceases, but there will be the right of the worker to cease unsafe work. They will not be adopting the

reverse onus of proof in discrimination matters.25

21 Proof Estimates Hansard, 28 May 2012, p. 87.

22 Proof Estimates Hansard, 28 May 2012, p. 88.

23 Proof Estimates Hansard, 28 May 2012, p. 88.

24 Proof Estimates Hansard, 28 May 2012, p. 92.

25 Proof Estimates Hansard, 28 May 2012, pp 92-93.

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D epartm ent o f Education, Em ploym ent and W orkplace R elations -

Outcom e 3: Enhanced employability and acquisition of labour market skills

Enterprise Migration Agreements

2.24 The committee discussed with witnesses of the Department the objectives and functions of enterprise migration agreements (EMA). Senators sough details regarding the EMA relating to the Roy Hill iron ore proposal in Western Australia.26

2.25 The Department was able to confirm for the committee that as part of the Roy Hill EMA a 'jobs board' would be established. The jobs board will be

administered by the Department. The committee was enlightened as to the purpose of a jobs board:

The objective of the jobs board is that projects such as EM A projects will be required to use the jobs board and ensure that qualified Australians are provided job opportunities before overseas workers. We would expect that foreign workers would only be recruited after genuine efforts to first

employ Australians.27

2.26 The committee heard that there remain a number of areas related to EMA which are yet to be finalised. The committee was informed that the

Department of Immigration and Citizenship (DIAC) was primarily responsible for the development and administration of EMA.28 The committee also learned that compliance mechanisms to ensure that employers sufficient explore the domestic labour pool will be developed in consultation with DIAC, as will procedures to ensure

that workers engaged under the EMA process will receive the same pay and conditions as domestic workers.29

Assistance for mature age workers

2.27 The committee discussed with witnesses the $1000 jobs bonus available to businesses that employ a job seeker over 50 years of age who has been unemployed for at least 13 weeks.30 Witnesses provided the rationale for the policy to the

committee:

What we are tlying to do is ensure that mature age job seekers get a go in

the labour market. What we know about mature age job seekers is that once they become unemployed they remain unemployed for much longer than the average job seeker does. So this incentive is about providing a bit of a

bonus to employers. It is not in the nature of a wage subsidy, it is more

26 Proof Estimates Hansard, 29 May 2012, pp 18-24.

27 Proof Estimates Hansard, 29 May 2012, p. 21.

28 Proof Estimates Hansard, 29 May 2012, p. 19.

29 Proof Estimates Hansard, 29 May 2012, pp 20-21.

30 Proof Estimates Hansard, 29 May 2012, p. 33.

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about acknowledging that when you take on a worker, particularly someone who has been out of touch with the labour market for a while, there are

induction or training sign-on related costs. The $1,000 was developed in that context.31

2.28 The committee also heard that $26 million was set aside in the

2012-13 Budget to trial mature-age worker specific employment support programs, which the committee heard would encourage a more collaborative, group based support environment.32

Jobs, education and training child care fee assistance

2.29 The committee discussed with witnesses the Jobs, Education and Training child care fee assistance (JET program). The committee heard that changes to the JET program announced in the 2012-13 Budget are in response to a doubling of demand for the program over the last year.33 Some senators raised concerns that the JET program only subsidises parents for up to 24 months with the effect that access to higher-education is limited as almost all degrees are at least three years in duration.34

Other matters discussed in Outcome 3

2.30 The committee also discussed with witnesses the following matters during its consideration of Outcome 3:

" The Pacific Island Workers Scheme;

" Disability Employment Services;

" Employment Support Services; and

" Changes to Youth Allowance (Other).

D epartm ent o f Education, Em ploym ent and W orkplace R elations -

Outcom e 4: Safer, fairer and more productive workplaces

2.31 The committee discussed with witnesses the review of the

Fair Work Act 2009 (Act) that is currently in progress. The committee discussed the formation of the terms of reference for the review, and the individuals who were consulted on prospective changes to the Act.35 The committee heard that the final report would be delayed by short period of time. The Department provided some insight into the cause of the delay:

31 Proof Estimates Hansard, 29 May 2012, p. 33.

32 Proof Estimates Hansard, 29 May 2012, pp 33-34.

33 Proof Estimates Hansard, 29 May 2012, p. 64.

34 Proof Estimates Hansard, 29 May 2012, p. 64.

35 Proof Estimates Hansard, 29 May 2012, p. 80.

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The extensiveness of the panel's work and the requirement to spend a lot of time going over the extraordinarily large number of submissions that were presented to the panel *probably higher than one might expect *some 250 odd submissions, which is certainly higher than what was received on the initial bill. The panel did a very extensive round of consultations and made sure that anyone who wished to participate in a hearing with the panel got that opportunity, which took up basically a good four weeks. The need also for the panel's report to meet the requirements of a post-implementation review... And the high-quality of work that the three members of the panel

insist on producing has meant that yes, they have asked for a few more days.36

2.32 The committee heard that submissions into the review of the Act have been received from individuals and organisations from across the business, community and government sector. It was reported to the committee that the submissions include a number of suggestions to improve the operation of the Act/7

2.33 The committee was informed that the Department has been working with the Department of Prime Minister and Cabinet and the

Department of Finance and Deregulation to accurately cost the Commonwealth's fiscal liability arising from the 1 February 2012 ruling by FWA in the social and community services equal remuneration case. The committee raised concerns expressed by some stakeholders that the government had underestimated its liability and as a result some services may miss out on funding. The committee was assured that: 'The Commonwealth has committed to...fund its share, so its share will be funded.'38

A ustralian C urriculum , A ssessm ent and R eporting A uthority

2.34 Witnesses updated the committee on progress in developing the national curriculum:

[I]n March we released two Shape papers, which is part of our curriculum development work, for public consultation. That consultation closes early next week. Those papers are the Shape of the Australian Curriculum: Technologies, and Shape of the Australian Curriculum: Health and Physical Education. We are in the middle of getting feedback on those.

Early this month we released Draft Senior Secondary Australian Curriculum for 14 subjects across the areas of English, mathematics, science and history. They are out for wide public consultation through to 20 July.39

36 Proof Estimates Hansard, 29 May 2012, p. 83.

37 Proof Estimates Hansard, 29 May 2012, p. 84.

38 Proof Estimates Hansard, 29 May 2012, p. 114.

39 Proof Estimates Hansard, 30 May 2012, p. 4.

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2.35 The committee discussed with witnesses the National Assessment Program - Literacy and Numeracy (NAPLAN). It was reported to the committee that:

[Ejarlier this month we saw the conduct of NAPLAN tests across the

countiy. They were sat by just over a million students in years 3, 5, 7 and 9.

It is the fifth year of NAPLAN being conducted and just under 10,000

schools across the country have students participating in those...It is worth noting that anecdotally we have heard of no significant shifts in

participation or issues around breaches of test protocols or anything there.40

2.36 Senators asked witnesses about student participation in the NAPLAN tests and queried how attendance was monitored. Witnesses informed the committee that over the course of NAPLAN testing there have not been any significant changes in participation levels, and that these generally correlate with normal levels of school attendance. Furthermore, individual school attendance statistics are included with the results from that school.41

A ustralian Institute for Teaching and School Leadership

2.37 Representatives from the Australian Institute for Teaching and

School Leadership (AITSL) updated the committee on progress in developing the Australian Teacher Performance and Development Framework (Framework).42 The committee heard that:

That framework seeks to create a culture focused on improving teaching in all schools. It describes the factors that research shows are critical for creating such a culture and, therefore, describes some essential elements that we believe should be in place in all schools for an effective

performance and development cycle, and that includes things like teachers having a formal review at least annually and the fact that a range of types of evidence are mandatory for that review.43

2.38 It was reported to the committee that under the Framework teachers would be provided feedback related to their performance against personal development goals which would enable them to develop professionally. When assessing teachers the feedback must include evidence of impact on student achievement and performance.44

40 Proof Estimates Hansard, 30 May 2012, p. 4.

41 Proof Estimates Hansard, 30 May 2012, pp 6-4.

42 Proof Estimates Hansard, 30 May 2012, p. 19.

43 Proof Estimates Hansard, 30 May 2012, p. 20.

44 Proof Estimates Hansard, 30 May 2012, p. 22.

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D epartm ent o f Education, Em ploym ent and W orkplace R elations -

Outcom e 1: Early childhood education

2.39 The committee discussed with witnesses problems experienced by childcare service providers using the Child Care Management System (CCMS). Some providers experienced difficulties inputting data and as such their government-funded reimbursements were delayed. In order to prevent hardship, the Department provided nine affected services with continuity payments45 The committee heard that the problem was caused by very high peak demand, that that subsequently additional server capacity had been installed which should prevent any repeat occurrences.46

2.40 Witnesses reported to the committee the changing profile and uptake of the Jobs, Education and Training Child Care Fee Assistance (JET) program:

In 2007 the scheme supported 18,364 parents and the total number of

children was around 30,000. Going into this 2011-12 financial year, we are looking at 30,200 parents * remembering of course that we have not yet

finished this year * and over 45,000 children. We are expecting growth next year...Across the spectrum we are seeing a change in the profile, the

numbers and the type of care. Previously, it had been largely outside school hours care and older children. We are now seeing parents with younger

children, in the three to five age ranges, as opposed to school age. And we

are seeing parents accessing long day care as opposed to outside school

hours care. That it is for the range of things the program supports * training, study and work. The growth has been in that younger age range * it reflects preparation for work given the obligations that come in under the current parenting payment w hen children reach certain ages.47

2.41 Witnesses also provided an update to the committee in relation to the construction of Indigenous early childhood education centres. The committee heard that four projects had been completed at: West Belconnen, Whittlesea, Halls Creek and Bridgewater. Construction had commenced at a further seven sites at: Baimsdale, Fitzroy Crossing, Pukatja, Doomadgee, Mareeba and Momington Island. It was anticipated that construction would commence at a further 20 sites by the end of July 2012 including centres at: Kununurra, Ballina, Mount Druitt, Campbelltown, Blacktown 2, Brewarrina, Gunnedah, Lightning Ridge, Nowra, Toronto, Ceduna, Whyalla, Christies Beach, Ipswich, Cairns, Mount Isa, Palm Island, Mackay, Logan

and Rockhampton. It was reported to the committee that interim services were currently being provided to the community from 16 locations.48

45 Proof Estimates Hansard, 30 May 2012. p. 34.

46 Proof Estimates Hansard, 30 May 2012, pp 30-31.

47 Proof Estimates Hansard, 30 May 2012, pp 36-37, 45.

48 Proof Estimates Hansard, 30 May 2012, pp 65-68.

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D epartm ent o f Education, Em ploym ent and W orkplace R elations -

Outcom e 2: Schools and youth

2.42 The committee discussed with witnesses the Review of School Funding prepared by a panel of experts chaired by David Gonski AC (Gonski Review). Discussion covered the methodology used in the report, the impact of the

recommendation on various schools, the benefits of various models, recent research regarding class sizes, and improving outcomes for children from disadvantaged backgrounds.49 50 51 52

2.43 The committee received an update on the progress on developing

Indigenous Boarding Facilities in the Northern Territory. Witnesses reported to the committee that construction had been completed at the Wad eye facility, and a smoking ceremony was scheduled by the community to be held on 13 June 2012. The smoking ceremony, the committee heard, was a first step for the community in taking cultural ownership over the facility.30 The committee learnt that the Department was still in the preparatory and infrastructure stage of the Garrthalala facility as the officials worked to overcome the unique challenges around ownership, infrastructure and access.31

2.44 Witnesses updated the committee on the administration of the

National School Chaplaincy and Student Welfare Program (NSCSW Program). The committee heard that as of 25 May 2012 the Department had funding agreements in place with service providers in 2464 of 2555 schools that had existing or continuing services under the NSCSW Program. Of those existing and continuing schools,

88.6 per cent utilised a chaplain, 8.6 per cent employed a student welfare workers, and 2.8 per cent were undecided. The committee also heard that 1000 new schools had recently joined the NSCSW Program. Of the new schools 61.4 per cent had chosen to use a chaplain, 30.6 per cent had employed student welfare workers, and

eight per cent remained undecided.32

2.45 The committee heard about the

National Aboriginal Sporting Chance Academy (Academy). Witnesses from the Department explained that the Academy was not principally about sport, but providing students with an atmosphere of academic support:

[Students] get tested on their willingness to participate and sign up to

regular school attendance, their willingness to try and undertake academic endeavours. And, if you like, the reward and incentive is that they get

49 Proof Estimates Hansard, 31 May 2012, pp 10-19.

50 Proof Estimates Hansard, 31 May 2012, p. 25.

51 Proof Estimates Hansard, 31 May 2012, pp 25-26.

52 Proof Estimates Hansard, 31 May 2012, p. 32.

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supported in a highly sought after environment where there are sporting legends and good support.53

2.46 It was reported to the committee that the 2012-13 Budget provided

$4.8 million over three years, 2012-13 to 2014-15, to expand the Academy program to support an additional 700 young Aboriginal and Torres Strait Islander secondary students.34

D epartm ent of Education, Em ploym ent and W orkplace R elations -

C ross Portfolio

2.47 The Department reported to the committee that it was actively managing a declining workforce. The committee heard that the Department has:

...implemented a process across every branch and state office in the

department which is entirely democratic brainstorming methodology for people to basically come up with their own ideas of what work could stop

or change locally, as well as what work could stop or change across the

whole department. Nine thousand ideas have come out of that process and I give full tribute to our people in being part of that process in a positive way, in seeing a tough time as a time to take an opportunity, if we can, and do

things better, if we can.53

Senator Gavin Marshall

Chair

53 Proof Estimates Hansard, 31 May 2012, p. 49.

54 Proof Estimates Hansard, 31 May 2012, p. 49.

55 Proof Estimates Hansard, 31 May 2012, p. 9.

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Appendix 1

Committee oversight of departments and agencies

Education, Em ploym ent and W orkplace R elations portfolio

" Department of Education, Employment and Workplace Relations;

" Australian Curriculum, Assessment and Reporting Authority;

" Australian Institute for Teaching and School Leadership Ltd;

" ComCare;

" Fair Work Australia;

" The Fair Work Ombudsman;

" Office of the Australian Building and Construction Commissioner; and

" Safe Work Australia.

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118

Appendix 2

Index to Hansard transcripts Education, Em ploym ent and W orkplace R elations portfolio

Monday, 28 May 2012 Page no

Fair Work Australia 4

Fair Work Ombudsman 46

Australian Building and Construction Commission 70

Comcare 82

Safe Work Australia 90

Tuesday, 29 May 2012

Outcome 3 - Enhanced employability and acquisition of labour market 4 skills

Fair Work Australia 88

Outcome 4- Safer, fairer and more productive work places 66, 104

Wednesday, 30 May 2012

Australian Curriculum Assessment and Reporting Authority 4

Australian Institute of Teaching and School Leadership 19

Outcome 1- Early childhood education 31

Outcome 2- Schools and youth 70

Thursday, 31 May 2012

Cross Portfolio 3

Outcome 2- Schools and youth 10

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The Senate

Environment and Communications Legislation Committee

Budget estimates 2012-13

June 2012

© Commonwealth of Australia 2012

ISBN 978-1-74229-639-5

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

122

Membership of the Committee

Members:

Senator Doug Cameron (ALP, NSW) (Chair) Senator Mary Jo Fisher (LP, SA) (Deputy Chair) Senator Catryna Bilyk (ALP, TAS) Senator Bridget McKenzie (NATS, VIC) Senator the Hon Lisa Singh (ALP, TAS) Senator Larissa Waters (AG, QLD)

Committee Secretariat

Ms Sophie Dunstone, Acting Secretary Ms Jacquie Hawkins, Research Officer

Committee Address

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

Tel: 02 6277 3526

Fax: 02 6277 5818

Email: ec.sen@aph.gov.au

Internet: www.aph.gov.au/senate/committee/ec_ctte/index.htm

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Contents

Membership of the Committee iii

Report to the Senate

Introduction 1

Hearings 1

Questions on notice - date for response 1

Portfolio specific issues 2

Climate Change and Energy Efficiency 2

Sustainability, Environment, Water, Population and Communities 4

Broadband, Communications and the Digital Economy 9

Acknowledgements 12

Appendix 1 - Public hearings agenda 13

Appendix 2 - Documents tabled 17 V

V

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126

Budget estimates 2011-12

Introduction

1.1 On 9 May 2012 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 2013 [Appropriation Bill (No. 1) 2012-13]; and

" Particulars of certain proposed expenditure in respect of the year ending on 30 June 2013 [Appropriation Bill (No. 2) 2012-13],1

1.2 Standing committees were required to report to the Senate on 26 June 2012.1 2

Hearings

1.3 The committee conducted public hearings with the Climate Change and Energy Efficiency portfolio on 21 May 2012, the Sustainability, Environment, Water, Population and Communities portfolio on 22 and 23 May 2012 and the Broadband, Communications and the Digital Economy portfolio on 23 and 24 May 2012. The committee's public hearings program is at Appendix 1. Documents tabled during the hearings are listed at Appendix 2.

1.4 Written answers and information provided to the committee in response to questions on notice arising from the hearings are tabled in the Senate and posted on the committee *s web page.

1.5 Links to the transcripts of these public hearings and to answers and additional information are available on the Internet at:

www.aph.gov.au/Parliamentary_Business/Committees/Senate_Committees7urNec_ctte/ estimates/budl 213/index.htm.

Questions on notice - date for response

1.6 In accordance with Standing Order 26(9)(a), the committee agreed that the date for the return of written answers or additional information in response to questions placed on notice during the 21-24 May hearings, be Friday, 20 July 2012.

1.7 As in previous estimates reports, the committee again expresses its concern about the time taken to receive answers to questions taken on notice.

1.8 The committee notes that it had set Friday, 30 March 2012 as the date for the return of answers to questions taken on notice during the Additional Estimates held in

1 Journals of the Senate, No. 89, 9 May 2012, p. 2396.

2 Journals of the Senate, No. 62, 2 November 2011, pp 1707-1708.

2

February 2012. However, at that date there was a total of 624 answers outstanding to 807 questions on notice across the three portfolios, as follows:

" Broadband, Communications and the Digital Economy portfolio, 354 of 354;

" Climate Change and Energy Efficiency portfolio, 96 of 181; and

" Sustainability, Environment, Water, Population and Communities portfolio, 174 of 272.

1.9 The last of these late answers were submitted in the days prior to and during the Budget Estimates hearings.

1.10 The committee reiterates its expectation that answers to questions on notice should be provided to the committee by the due date.

Portfolio specific issues

1.11 On the first day of its examination of the 2012-13 Budget Estimates, the committee called and examined officers from the Climate Change and Energy Efficiency (CCEE) portfolios.

1.12 The committee welcomed Senator the Hon Penny Wong, Minister for Finance and Deregulation, representing the Minister for Climate Change and Energy Efficiency, the Hon Greg Combet MP.

1.13 The committee raised a range of matters which are noted below. The page references be side each matter refer to the proof transcript for Monday, 21 May 2012.

Climate Change and Energy Efficiency portfolio

1.14 General questions were asked of the department about:

" separation of portfolio duties between the Minister and the

Parliamentary Secretary (pp 3-5)

" portfolio staff numbers (pp 6-7)

" establishment of the Clean Energy Regulator (p. 6)

" procedures for administering travel arrangements (pp 7-8)

´ staff turnover during the current financial year (pp 8-9)

" the effect of the carbon price on council tips/landfill operations (PP 9-12).

1.15 At the conclusion of general questions, the committee called departmental officers in relation to Program 1.1: Reducing Australia's greenhouse gas emissions together with officers from the Clean Energy Regulator. Ms Munro, CEO of the Clean Energy Regulator (CER), made an opening statement, noting this was the first appearance at estimates for the agency. Matters raised included:

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" consultations with local councils/landfill operators providing information on liability under the carbon pricing mechanism (pp 14-27, 40-41)

" renewable energy targets (pp 27-31, 34-35)

" estimates of fugitive emissions from coal seam gas (pp 32-34)

" costs of establishing the CER (pp 35-37)

" audit program under the National Greenhouse and Energy Reporting System (NGERS) (pp 37-39)

" the Liable Entities Public Information Database (LEPID) (pp 39^43, 46-49)

" operation of and assistance through the Jobs and Competitiveness Program (pp 49-51)

" advertising expenditure relating to the carbon tax and associated information campaigns (pp 51-57, 58)

" the Energy Security Fund (pp 57-58)

" the Climate Change Grant program (pp 63-66)

" operation of the floor price beyond the fixed price period (pp 66-67).

1.16 Officers from Low Carbon Australia Ltd were called and examined. Matters raised included:

" impact on Low Carbon Australia (LCAL) of the Clean Energy Future package (p. 68)

" appointments to the Board (pp 68-69)

" the status of funds provided by LCAL (pp 70-71).

1.17 Officers were called and examined in relation to Program 1.2: Improving Australia's Energy Efficiency. Matters raised included:

" the Energy Efficiency Information Grants scheme: membership of the independent program advisory committee, and the monitoring and evaluation framework (pp 72-74)

" the Tax Breaks for Green Buildings program (pp 74-75, 83-85, 90-92)

" update on the Home Insulation Program (pp 75-80)

" claims under the Compensation for Detriment Caused by Defective Administration scheme (pp 80-81)

" Nationwide House Energy Rating Scheme (NatHERS), assessor training (pp 81-82)

" closure of the Solar Hot Water Rebate program (pp 86-87)

" funding for low carbon communities within the Community Energy Efficiency Program (p. 88)

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" eligibility for the Charities Maritime and Aviation Support Program (pp 89-90).

1.18 Officers were called and examined in relation to Program 1.3: Adapting to Climate Change. Matters raised included:

" material on the department's mapping sea level rise web site (pp 92-97)

" cost estimates of damage from extreme weather events under low-, medium- and high-risk scenarios (pp 97-98)

" the Climate Commission budget (p. 99)

" Professor Flannery's attendance at estimates hearings (p. 100).

1.19 Officers were called and examined in relation to Program 1.4: Helping to shape a global climate change solution. Matters raised included:

" Australian contribution for fast-start financing as agreed at Copenhagen (pp 100-102)

" the status of the Kalimantan Forests and Climate Partnership (p. 102)

" impact of the carbon price on the Timor gas fields (p. 103)

" achievement by China of its energy intensity targets as set out in its five- year plans (pp 104-106).

Sustainability, Environment, Water, Population and Communities (SEWPaC) portfolio

1.20 On the second day of hearings, the committee called and examined officers from the Sustainability, Environment, Water, Population and Communities portfolio.

1.21 The committee welcomed Senator the Hon Don Farrell, Parliamentary Secretary for Sustainability and Water, representing the Minister for Sustainability, Environment, Water, Population and Communities, the Hon Tony Burke MP.

1.22 The committee raised a range of matters which are noted below. The page references beside each matter refer to the proof transcript for Tuesday, 22 May 2012.

1.23 Dr Grimes, Department Secretary, made a statement noting some changes in the department's outcomes structure. General questions were asked of the department about:

" machinery of government changes affecting the department (pp 4-5)

" staffing numbers (pp 5-6)

" release of FOI information on websites (p. 8)

" Auditor-General's report on the award of grants (pp 9-10).

4 ____________________________ _______ ______ ________________________________

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1.24 The committee called agencies and departmental officers in relation to Outcome 1 commencing with the Bureau of Meteorology which was called and examined. Matters raised included:

" installation of a Doppler weather radar at Mt Koonya (pp 11-12)

" the one-year trial of advertising on the BoM website, costs (pp 13-16, 23)

" costs of BoM offices across Australia (pp 17-18)

" Climate Commission report about heat sinks in Western Sydney (pp 20-21)

" meteorology trainee program (p. 22)

" review of the bureau's capacity to deliver severe and extreme weather services (pp 22-23).

1.25 The Great Barrier Reef Marine Park Authority was called and examined. Matters raised included:

" impact of the reduction in the reef tax (pp 23-24)

" health of the reef (p. 23)

" grant to the Great Barrier Reef Foundation (pp 25-26)

" the role of the Authority in the incident of the ship Integrity adrift near the reef (pp 26, 30)

" UNESCO visit to the World Heritage site (pp 28, 30-32)

" funding for Reef Rescue (p. 27)

" the next Great Barrier Reef Outlook Report (pp 32-34).

1.26 The Director of National Parks was called and examined. Matters raised included:

" visitor numbers to Uluru and Kakadu national parks (pp 34-36)

" camel numbers within the Uluru park (p.37)

" the eradication program of the yellow crazy ant on Christmas Island (pp 38, 41)

" the Parks Australia Climate Change Strategic Overview 2009-2014 (pp 38-41)

" funding for the National Reserve System (NRS) program (p. 42).

1.27 Officers were called and examined in relation to Program 1.1: Sustainable Management of Natural Resources and the Environment. Matters raised included:

" purpose of the corridors plan in conservation (pp 45 *46)

" consultations with state governments and the Department of Agriculture, Fisheries and Forestry (DAFF) in relation to marine parks (pp 46-47)

6

" monitoring and management of dugong populations (pp 47-51)

" progress of the bioregional marine planning process (pp 51-56, 65-68)

" funding for the Reef Rescue program (pp 56-57, 58)

" mercury contamination in water ways (p. 59)

" National Partnership Caring for Country grants (pp 60-61)

" funding for the NRS (pp 62-63, 69)

" funding for Natural Resource Management (NRM) bodies (p. 64).

1.28 Officers were called and examined in relation to Program 1.2: Environmental Information and Research. Matters raised included:

" monitoring of biodiversity in the Desert Uplands bioregion in

Queensland (p. 70)

" Japanese whaling (pp 71-72)

" assessing whale populations (pp 73-74)

" the State of the Environment Report 2011 (pp74-76)

" status of the Cumberland Plain project (pp 76-77).

1.29 The committee welcomed Senator the Hon Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, representing the Hon Tony Burke MP, Minister for Sustainability, Environment, Water, Population and Communities.

1.30 Officers were called and examined in relation to Program 1.3: Carbon Pollution Reduction - Land Sector Initiatives. Matters raised included:

" the Land Sector Carbon and Biodiversity Board; membership and fees paid to members (p. 77)

" grants from the Biodiversity Fund (pp 77-83)

" the Regional Natural Resources Management Planning for Climate Change Fund (pp 83-89).

1.31 Officers were called and examined in relation to Outcome 2, Program 2.1: Management of Hazardous Wastes, Substances and Pollutants. Matters raised included:

" pollution in World Heritage areas (pp 92)

" a national deposit scheme (pp 92-93)

" the national e-waste scheme (pp 94-95)

" national ban on single-use plastic bags (pp 95-96)

" impacts of the application of the equivalent carbon price to the import and manufacture of synthetic greenhouse gases (pp 96-97).

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1.32 Officers were called and examined in relation to Program 2.2: Sustainable Communities. Matters raised included:

" the suburban jobs program (pp 97-100)

" development of sustainability indicators (pp 99-100, 102)

" the development of a sustainable population strategy (p. 101).

1.33 Officers were called and examined in relation to Outcome 3, Program 3.1: Antarctica: Science, Policy and Presence. Matters raised included:

" continuation of shipping and air support and air services (pp 102-104, 105-106)

" proposed marine reserve in the Ross Sea area (pp 104-105)

" asbestos removal at Mawson, Casey and Davis stations (p. 107).

1.34 On the third day of hearings, the committee continued its examination of the Sustainability, Environment, Water, Population and Communities portfolio, commencing with Outcome 5.

1.35 The page references beside each matter below refer to the proof transcript for Wednesday, 23 May 2012.

1.36 The committee welcomed Senator the Hon Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, representing the Minister for Sustainability, Environment, Water, Population and Communities and officers.

1.37 Officers were called and examined in relation to Outcome 5, Program 5.1: Conservation of Australia's Heritage and Environment. Matters raised included:

" chemical discharges from a closed mine within the Blue Mountains World Heritage area (pp 4-6)

" grant to the Royal Exhibition Building, Melbourne (pp 6-8)

" funding and staff reductions for the heritage division (pp 8-10)

" World Heritage listing of the Cascades Female Factory, Hobart (pp 10-11)

" consultations on the proposed heritage listing in Cape York (pp 11-13)

" UNESCO visit to the Great Bander Reef World Heritage area (pp 13-14).

1.38 Officers were called and examined in relation to Program 5.2: Environmental Regulation, commencing with the Office of Supervising Scientist (OSS). Matters raised included:

" role of the Supervising Scientist (pp 15-16)

" construction of the Ranger 3 Deeps decline (pp 17-18, 20-21)

" installation of retention ponds (pp 18-19)

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status of the Jabiluka pond and site works (pp 21-22)

publicly available material on the OSS web site (p. 23).

*

1.39 Departmental officers were then called in relation to Program 5.2. Matters raised included:

" control of feral animals (pp 24-25)

" listing of Koalas as vulnerable (pp 25-32, 40 *41)

" appointments to the Independent Expert Scientific Committee on Coal Seam Gas and Large Coal Mining Development (pp 32-34)

" South of Embley bauxite project (pp 34-36, 45 *46)

" fast tracking of the approvals and assessment bilaterals (pp 38-39, 41 *43, 46-49, 74)

" status of drafting and finalisation of amendments to the EPBC Act (P-41).

1.40 Officers were called and examined in relation to Outcome 4, together with officers from the Murray-Darling Basin Authority and the National Water Commission. Matters raised included:

" release of the revised Basin Plan; revised economic modelling; job losses; use of river flow data (pp 51-61)

" water buybacks (pp 61-62, 78-79)

" surface water and groundwater sustainable diversion limits (SDLs) (pp 62 *64)

" salinity levels in Lake Albert (pp 64-65)

" legal advice sought in relation to the basin plan (pp 65-67, 77, 81)

" modelling for water purchases (pp 6-70)

" setting of baseline diversion limits (p. 71)

" the On-Farm Irrigation Efficiency program (p. 72)

" deferral of funds for the rollout of environmental efficiency programs (P-3)

" groundwater impacts of coal seam gas (pp 73-74)

" reporting of adverse changes to listed Ramsar wetlands (p. 74)

" implications of the sunset clause in the National Water Commission legislation (p. 83).

1.41 Officers were called and examined in relation to Outcome 6, Program 6.1 together with officers from the Commonwealth Environmental Water Office.

" reduction of funding for the Commonwealth Environmental Water Holder (p. 84)

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" appointment of a new Water Holder (p. 85)

" allocation of water for environmental watering (pp 85-87)

" amount of carryover water currently held (pp87-90)

" the role of the Environmental Water Scientific Advisory Group (pp 90-92).

Broadband, Communications and the Digital Economy portfolio

1.42 At the conclusion of its examination of the Sustainability, Environment, Water, Population and Communities portfolio, the committee called and examined officers from the Broadband, Communications and the Digital Economy portfolio.

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

1.44 Officers from the Special Broadcasting Sendee were called and examined. Mr Michael Ebeid, Managing Director, made an opening statement after which questioning commenced. Matters raised included:

" new ffee-to-air Indigenous television service (pp 96-99, 101)

" impact of reduced advertising revenue on operations (p 101).

1.45 Questioning commenced of the Australian Broadcasting Corporation. Matters raised included:

" programming decisions in Tasmania (pp 10 *105, 112)

" progress on negotiations regarding the Australia Network contract (pp 106-108)

" social media policy and its application (pp 109-110)

" percentage of Australian content broadcast (p. 113)

" appointment of Mr Spigelman as Chair (p. 115)

" funding for purchase of spectrum space (p. 116)

" the continued rollout of digital radio (p. 117)

" corrections to information provided on the coal seam gas web page (pp 118-119)

" selection of panel members for ABC programs (pp 121-123).

1.46 Questioning commenced of the Australian Communications and Media Authority. Matters raised included:

" suitability of complaint handling processes (pp 125-127)

" the number of media incidents currently under investigation (pp 127 * 128)

" monitoring of online content and child protection measures (p. 129)

135

" review into the cost of mobile calls to 1300, 13, and 1800 numbers

(P- 131)

" funding for cybersafety projects (p. 132).

1.47 On the fourth day of hearings, the committee continued its examination of the Broadband, Communications and the Digital Economy portfolio.

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

1.49 The committee raised a range of matters which are noted below. The page references beside each matter refer to the proof transcript for Thursday, 24 May 2012.

1.50 General questions were asked of the department. Matters raised included:

" cost of stationery requirements (p. 3)

" Cyber Security Awareness Week (p. 4)

" application of the competitive neutrality principles (pp 5-8)

" the impact of the increased efficiency dividend on the department (pp 9, 11) " press reports referring to the potential liberalisation of online gambling, especially in-play gambling (pp 12-13)

" funding for the Australia Music Radio Airplay Project (pp 13-15).

1.51 Officers from Australia Post were called and examined. Mr Ahmed Fahour, Managing Director and Chief Executive Officer, made an opening statement. Matters raised included:

" details of any bonuses paid during the current financial year (p. 16)

" the use of sign-on payments (pp 17-18)

" the current number of licensed post offices (p. 19)

" procedures for handling parcels (pp 19-20)

" the use of clause 22, termination without cause (pp 20-21

" the rollout of superstores across the country (p. 23)

" proposed new digital mailbox system (pp 23-24)

" growth of the small parcels business and decrease in letters volume (PP 25-29).

1.52 Officers from the department were called and examined in relation to Program 1.2: Digital Economy and Postal Services. Matters raised included:

" the promotion of cybersafety and cyber security during Cyber Security Awareness Week in June (pp 35-36)

\ 0__________________________________________________________ ___________________ ___________

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" services providing material for children with hearing and vision loss (P- 36)

" the role of the department in the establishment of the Finkelstein media inquiry (pp 36-43)

" the Digital Regions Initiative (pp 44-45).

1.53 Officers from the department were called and examined in relation to Program 1.3: Broadcasting and Digital Television. Matters raised included:

" input of The Greens to the media inquiry (p. 46)

" amounts paid to the Convergence Review committee members (p. 49)

" amounts paid to Mr Finkelstein and Professor Ricketson for the media inquiry (p. 51)

" the rollout of the Viewer Access Satellite Television (VAST) (pp 53-59, 61-62, 63, 66)

" the number of satellite subsidy installations where asbestos has been uncovered (pp 59-60)

" the number of installations completed under the Household Assistance Scheme (HAS) (pp 60-61).

1.54 Officers from the department were called and examined in relation to Program 1.1: Broadband and Communications Infrastructure. Matters raised included:

" extension of the eligibility rules for access to NBN Co *s interim satellite service (ISS) (pp 66-67)

" details of the advertising campaign about the National Broadband Network (pp 70-76)

" review of telecommunications retail price controls (p. 80)

" the Voice over Internet Protocol (VoIP) review (pp 80-81)

" the provision of battery and battery back up, cost of installation and replacement (pp 81-83)

" departmental input to NBN Co *s special access undertaking (SAU) (pp 84-86).

1.55 The NBN Co was then called and examined. After the Chief Executive Officer, Mr Mike Quigley made an opening statement and provided answers to questions provided to it prior to the hearing by Coalition senators. Questioning then commenced. Matters raised included:

" finalisation of the revised corporate plan by the board (pp 101-105)

" number of Greenfield sites awaiting connection (pp 107-110)

" installation of towers at Daruka, NSW (pp 111-112)

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" the use of local suppliers (p. 114)

" redundancy provisions for senior staff (p. 117)

" installation of ribbon fibre or stranded fibre (pp 119-123)

" the total spend on advertising this financial year (pp 124-128)

" retrofitting of NEC boxes in Tasmania (pp 129-130).

Acknowledgements

1.56 The committee thanks Senator the Hon Penny Wong, Minister for Finance and Deregulation; Senator the Hon Don Farrell, Parliamentary Secretary for Sustainability and Urban Water, and Senator the Hon Stephen Conroy, Minister for Broadband, Communications and the Digital Economy, along with officers from the three portfolio departments and agencies, for their assistance during this Budget estimates process. The committee also thanks Hansard, Broadcasting and the committee secretariat.

Senator Doug Cameron 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.

SEN A TE EN V IR ON MEN T A N D C OMMU N IC A TION S LEGISLA TION

C OMMITTEE

Public Hearings: Budget Estimates 2012 *13 Monday, 21 to Thursday, 24 May 2012

and, if required, Friday, 25 May 2012

Committee Room 2S3 Parliament House Canberra ACT

To be televised on Channel 11 and broadcast on Radio 91.1 http://www.avh.sov.au/News and Events/Watch Parliament

A GEN D A

Monday, 21 May 2012 9.00 am Climate Change and Energy Efficiency Portfolio

D epartm ent o f C lim ate C hange and Energy Efficiency (D C C EE)

9.00 am General questions of the Department

Outcome 1: Reduction of Australia's greenhouse gas emissions, 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

10.00 am Program 1.1: Reducing Australia's greenhouse gas emissions

Clean Energy Regulator

Morning Tea: 10.45-11.00 am

Lunch: 1.00-2.00 pm

Afternoon Tea: 3.45-4.00 pm

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5.00 pm Low Carbon Australia Limited

Dinner: 6.00-7.00 pm

7.00 pm Program 1.2: Improving Australia's Energy Efficiency

Tea break: 9.00-9.15 pm

9.15 pm Program 1.3: Adapting to Climate Change

10.00 pm Program 1.4: Helping to shape a global climate change solution

11.00 pm Adjournment

Tuesday, 22 May 2012 9.00 am Sustainability, Environment, Water, Population and Communities Portfolio D epartm ent o f Sustainability, Environm ent, W ater, Population

and C om m unities (D SEW PaC )

9.00 am General questions of the Departm ent

Outcome 1: The conservation and protection of Australia's terrestrial and marine biodiversity and ecosystems through supporting research, developing inform ation, supporting natural resource m anagement, and establishing and managing Comm onwealth protected areas

9.45 am Bureau of Meteorology

Morning Tea: 10.45-11.00 am

11.00 am Great Barrier R eef Marine Park Authority

12.00 pm Director of National Parks

Lunch: 1.00-2.00 pm

2.00 pm Program 1.1: Sustainable Management o f Natural Resources and the Environment

Afternoon Tea: 3.45-4.00 pm

5.00 pm Program 1.2: Environmental Information and Research

Dinner: 6.00-7.00 pm

7.00 pm Program 1.3: Carbon Pollution Reduction - Land Sector Initiatives

Land Sector Taskforce

8.15 pm Outcome 2: Improved sustainability of Australia's population, comm unities and environment through coordination and development of sustainable population and comm unities policies, and the reduction and regulation of waste, pollutants and hazardous substances

8.15 pm Program 2.1: Management o f Hazardous Wastes, Substances and Pollutants

Tea break: 9.00-9.15 pm

9.15 pm Program 2.2: Sustainable Communities

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10.00 pm Outcome 3: Advancem ent of Australia's strategic, scientific, environmental and economic interests in the Antarctic by protecting, adm inistering and researching the region

Program 3.1: Antarctica: Science, Policy and Presence

11.00 pm Adjournment

Wednesday, 23 May 2012 9.00 am Sustainability, Environment, Water, Population and Communities Portfolio D epartm ent o f Sustainability, Environm ent, W ater, Population

and C om m unities (D SEW PaC )

Outcome 5: Increased protection, awareness and appreciation of Australia's environment and heritage through regulating matters of national environm ental significance and the identification, conservation and celebration of natural, Indigenous and historic places of national and W orld Heritage significance

9.00 am Program 5.1: Conservation o f Australia's Heritage and Environment

10.00 am Office of Supervising Scientist

Morning Tea: 10.45-11.00 am

11.00 am Program 5.2: Environmental Regulation

Lunch: 1.00-2.00 pm

2.00 pm 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 reform ing the m anagem ent and use of water resources

Murray-Darling Basin Authority

Program 4.1: Water Reform

National W ater Com mission

Afternoon Tea: 3.45-4.00 pm

5.15 pm Outcome 6: Protection and restoration of environmental assets through the management and use of Commonwealth environmental water

Comm onwealth Environm ental W ater Office

Program 6.1: Commonwealth Environmental Water

Dinner: 6.00-7.00 pm

7.00 pm Broadband, Communications and the Digital Economy Portfolio D epartm ent o f Broadband, C om m unications and the D igital Econom y (D BC D E)

Outcom e 1 * Develop a vibrant, sustainable and internationally competitive

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broadband, broadcasting and communications sector, through policy development, advice and program delivery, which promotes the digital economy for all Australians

7.00 pm Special Broadcasting Service

8:00 pm Australian Broadcasting Corporation

Tea break: 9.00-9.15 pm

10.00 pm Australian Communications and Media Authority

11.00 pm Adjournment

Thursday, 24 May 2012 9.00 am Broadband, Communications and the Digital Economy Portfolio D epartm ent o f Broadband, C om m unications and the D igital

Econom y (D BC D E)

9.00 am 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

10.00 am Australia Post

Morning Tea: 10.45-11.00 am

12.00 pm Program 1.2: Digital Economy and Postal Services

Lunch: 1.00-2.00 pm

2.00 pm Program 1.3: Broadcasting and Digital Television

Afternoon Tea: 3.45-4.00 pm

4.00 pm Program 1.1: Broadband and Communications Infrastructure

Dinner: 6.00-7.00 pm

7.00 pm NBN Co

Tea break: 9.00-9.15 pm

11.00 pm Adjournment

17

Appendix 2

Tabled documents

Monday, 21 May 2012

Clean Energy Regulator, List of 104 Councils written to by the Clean Energy Regulator to assist them in determining their liability under the Carbon Pricing Mechanism

DCCEE, International Air Fares, 1 July 2011 - 30 April 2012

W ednesday, 23 May 2012

Senator Cameron, Chair, copy of correspondence sent by Senators Birmingham and Fisher, dated 14 May 2012 and received by the committee 21 May 2012, concerning the estimates process and outlining a range of NBN-specific questions to be raised at the estimates hearing.

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144

The Senate

Finance and Public Administration

Legislation Committee

Budget estimates 2012-13

June 2012

© Commonwealth of Australia 2011

ISBN 978-1-74229-640-1

The Senate PO Box 6100 Parliament House Canberra ACT 2600 Ph: 02 6277 3530 Fax: 02 6277 5809

E-mail: fpa.sen@aph.gov.au Internet: www.aph.gov.au/senate fpa

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

ii

146

Membership of the Committee

Senator Helen Polley (Chair) ALP, TAS

Senator Scott Ryan (Deputy Chair) LP, VIC

Senator Richard Di Natale AG, VIC

Senator the Hon. John Faulkner ALP, NSW

Senator Arthur Sinodinos LP, NSW

Senator the Hon. Ursula Stephens ALP, NSW

Senators in attendance

Senators Polley (Chair), Ryan, Di Natale, Faulkner, Sinodinos, Stephens, Abetz, Bemardi, Bilyk, Birmingham, Brandis, C Brown, Cameron, Cormann, Fierravanti- Wells, Fifield, Humphries, Johnston, Kroger, Ludlam, Marshall, Mason, Milne, Moore, Nash, Parry, Payne, Rhiannon, Ronaldson, Siewert, Singh, Smith, Thistlewaite, Wright and Xenophon.

Secretariat

Ms Christine McDonald

Dr Jon Bell

Ms Leonie Lam

Ms Diana Harris

Committee Secretary

Principal Research Officer

Research Officer

Administrative Officer

iii

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148

TABLE OF CONTENTS

Mem bership o f the C om m ittee .............................................................................................. iii

C hapter 1 ..............................................................................................................................................1

Budget Estimates 2012-13..........................................................................................................1

Portfolio coverage.....................................................................................................1

Hearings..................................................................................................................... 1

Procedural and other matters....................................................................................2

C hapter 2 ..............................................................................................................................................3

C onsideration of portfolios, departm ents and agen cies ............................................ 3

Department of the Senate.........................................................................................3

Parliamentary Budget Office....................................................................................4

Department of Parliamentary Services.....................................................................5

Prime Minister and Cabinet Portfolio......................................................................7

Finance and Deregulation Portfolio........................................................................13

A ppendix 1 .........................................................................................................................................19

Departments and agencies under the Committee *s oversight .................................. 19

A ppendix 2 .........................................................................................................................................21

Index to Hansard Transcripts ................................................................................................21

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Chapter 1

Budget Estimates 2012-13

1.1 On 30 May 2012, the Senate referred to the Finance and Public

Administration Legislation Committee (the Committee), the following documents for examination and report:

" particulars of proposed expenditure in respect of the year ending on 30 June 2013;

" particulars of certain proposed expenditure in respect of the year ending on 30 June 2013; and

" particulars of proposed expenditure in relation to the parliamentary

departments in respect of the year ending on 30 June 2013.

Portfolio coverage

1.2 The Committee has responsibility for examining the expenditure and outcomes of the:

" Parliament1;

" Prime Minister and Cabinet portfolio; and

" Finance and Deregulation portfolio.

1.3 Appendix 1 lists the departments, agencies, authorities and companies under the portfolios mentioned above.

Hearings

1.4 The Committee held public hearings on Monday, 21 May through to

Thursday, 24 May 2012. Over the course of the four days of hearings *totalling over 33 hours *the Committee took evidence from the President of the Senate, Senator the Hon. John Hogg; Senator the Hon. Chris Evans, Minister for Tertiary Education, Skills, Science and Research; and Senator the Hon. Penny Wong, Minister for Finance and Deregulation, together with officers of the departments and agencies concerned.

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

1.5 The Independent National Security Legislation Monitor; the National Australia Day Council; the Albury-Wodonga Development Corporation; and the Australian River Co Ltd were not called by the Committee.

1 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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1.6 The Hansard transcripts of evidence are available on the internet at: http://www.aph.gov.au/hansard/index.htm

1.7 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, 6 July 2012.

1.8 Further written information from departments and agencies will be tabled, as received, in the Senate. This information is available on the Committee's website: http://www.aph.gov.au/Parliamentarv Business/Committees/Senate Committees?url= fapa ctte/index.htm

Procedural and other matters

Provision of answers to questions on notice

1.9 At the commencement of the estimates hearings a number of answers to questions on notice remained outstanding from the Additional Estimates hearings of February 2012. The final two answers from the Department of Finance and Deregulation portfolio were provided to the Committee on Wednesday, 23 May. The Committee acknowledges the speed with which some answers were provided following the Additional Estimates hearing, however the Committee notes that the estimates process is an important accountability mechanism and committees expect timely responses to the questions put to departments and agencies.

Office of the Official Secretary to the Governor-General

1.10 During its examination of the Office of the Official Secretary to the Governor- General, Mr Brady, Official secretary provided evidence that the Governor-General had not engaged Mr Bob Ellis as a speechwriter. The Official Secretary provided a clarification of this evidence following information from the Governor-General that the Governor-General had on one occasion informally sought ideas from Mr Ellis for her 2011 Melbourne Cup speech. There was no payment from the Office for Mr Ellis's

services and the information had not been previously communicated to any staff member at Government House, including the Official Secretary. In light of Mr Brady's prompt correction and the above information, the Committee accepted the evidence and clarification provided.

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Chapter 2

Consideration of portfolios, departments and agencies

2.1 The following discussion provides an overview of the issues canvassed during the estimates hearings. The order is not based on hierarchy but rather on the order in which the portfolio issues arose during the hearings.

Department of the Senate

2.2 The Committee hearings commenced with the President of the Senate, Senator the Hon. John Hogg providing information on the progress of the review of the information and communication technology services for the Parliament. The President stated that Mr Michael Roche, a former public servant, had been selected to conduct the review. The President advised the Committee that Mr Roche is meeting with all interested stakeholders including the Presiding Officers, senators, members, the parliamentary information technology advisory group, parliamentary departments and other relevant Commonwealth agencies.1

2.3 The Clerk of the Senate provided a brief review of the department's

appropriations for the 2012-13 year and informed the Committee that the appropriation was $428,000 less than that for 2011-12. The Clerk went on to note that the application for the 2012-13 year of the increased efficiency dividend of four per cent for the departmental appropriation and 20 per cent on capital will have a significant impact on the department's total budget. The reduction of funding has occurred concurrently with an expansion in responsibilities, including the support of additional committees. The Clerk noted the limited funds approved in 2011-12 to support new committees have not been commensurate with the department's requests.

2.4 The Committee was informed that the department has made a number of internal savings, including an incremental reduction in staff from the current number of 160 to 150 by 2014-2015. The Clerk advised the Committee that while the small reduction in staff numbers will have an effect on the services the department provides, the work of the Senate will continue at the highest possible level within available resources.1 2

2.5 The Committee canvassed issues in relation to the new parliamentary website including user feedback, problems with the Dynamic Red, compatibility with committee website information including the system to handle public submissions electronically and the CommDocs system.3 The Committee was informed that, with

1 Estimates Hansard, 21 May 2012, p. F&PA 2.

2 Estimates Hansard, 21 May 2012, p. F&PA 3.

3 Estimates Hansard, 21 May 2012, p. F&PA 4.

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the exception of the staff costs involved in enhancing the electronic submission system, no additional costs for the Department of the Senate have arisen.4

2.6 Other issues canvassed by the Committee included accessibility of online material for vision-impaired people;5 and updates to Odgers' Australian Senate Practice, with the Clerk reporting the 13 th edition has gone to print. The Committee also sought information on making the website and the core material more accessible

across a range of electronic devices;6 the disturbance on Australia Day 2012; committee room bookings and cancellations; newspaper allocation to Senators;7 and membership of the new Parliament House Heritage Advisory Board.8

Parliamentary Budget Office

2.7 The President of the Senate provided an update of the Parliamentary Budget Officer selection process. The President noted that appointment of the Parliamentary Budget Officer is subject to the approval of the Joint Committee of Public Accounts and Audit with the Parliamentary Budget Officer expected to commence duty early in

the 2012-13 financial year.9 In the interim, a working group comprising of the Deputy Clerks of the chamber departments and the Deputy Secretary of DPS has been created to support the establishment of the Parliamentary Budget Office (PBO).10 11 The working group is supported by an interim executive officer, Mr Matthew Fox, who is on a six-month secondment from the Department of Finance and Deregulation.11

2.8 The Committee was advised that the PBO has an approximate budget of $6 million per annum, with the majority of the cost expected to be staffing costs. Decisions related to accommodation are yet to be finalised.12 13 Matters related to the level at which the PBO will be employed, the structure of the PBO, and the number of staff for the PBO were also canvassed.1J

2.9 Mr Fox advised the Committee that his involvement was to undertake scoping work in order to present a series of options to the Parliamentary Budget Officer. This will cover a range of areas including accommodation; governance; the Parliamentaiy Budget Officer's responsibilities under the Parliamentary Service Act and the Financial Management and Accountability Act; and corporate matters. Although the PBO is a 'stand-alone fourth parliamentary department', it is expected that the

4 Estimates Hansard, 21 May 2012, pp F&PA 3^4.

5 Estimates Hansard, 21 May 2012, pp F&PA 4-5.

6 Estimates Hansard, 21 May 2012, pp F&PA 5-6.

7 Estimates Hansard, 21 May 2012, p. F&PA 7.

8 Estimates Hansard, 21 May 2012, p. F&PA 8.

9 Estimates Hansard, 21 May 2012, p. F&PA 13.

10 Estimates Hansard, 21 May 2012, p. F&PA 13.

11 Estimates Hansard, 21 May 2012, p. F&PA 13.

12 Estimates Hansard, 21 May 2012, p. F&PA 17.

13 Estimates Hansard, 21 May 2012, p. F&PA 14.

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department will take advantage of existing resources where there are 'obvious synergies and to avoid unnecessary duplication or set off in a manner which would be inconsistent with the broader approaches taken by Finance and Treasury on the areas of work where there is overlap between the organisations1.14

Department of Parliamentary Services

2.10 The President of the Senate opened the hearing for the Department of Parliamentary Services (DPS) with an update of the recruitment process for the positions of Secretary and Parliamentary Librarian. The President indicated that the new Secretary, Ms Carol Mills, will take up the position on 28 May 2012 and that Dr Dianne Heriot had been appointed as Parliamentary Librarian on 11 May 2012. The President also took the opportunity to thank and acknowledge the outgoing

secretary, Mr Alan Thompson, for his service to the Parliament and wished him well in his retirement.15

2.11 Some of the main areas the Committee discussed with DPS included Parliament House visitor numbers and tour groups; issues with the visitor guides including the number and foreign language expertise of guides; and the lack of a Parliament House open day in 2012.16 In relation to questions relating to the language expertise of staff, the Committee was advised that DPS does not advertise that foreign language tours are available due to the lack of language expertise and limited resources.17 The Acting Secretary, Mr Russell Grove, also stated that the open day for 2012 had been postponed until next year to coordinate with Parliament House's 25th

anniversary. He also commented that 2013 was the 100-year celebration of the Australian Capital Territory and that holding the open day next year would therefore be more significant.18

2.12 In relation to the issue of visitor numbers to Parliament House, the Committee asked questions regarding the general decline in visitors and tour groups and what actions have been taken to reverse this trend and to promote Parliament House. DPS advised that a review of visitor services has been undertaken which will enable DPS to

adopt a more proactive approach to marketing tours. In addition, DPS plans to spend $16,000 on promoting Parliament House in regional newsletters to target visitors from regional and rural Australia.19

2.13 The Committee questioned DPS on current work to improve disability access to Parliament House and advice DPS had received from the Disability Discrimination Commissioner, Mr Graeme Innes, on his experience in the Parliament House car park.

14 Estimates Hansard, 21 May 2012, pp F&PA 14 *15.

15 Estimates Hansard, 21 May 2012, p. F&PA 18.

16 Estimates Hansard, 21 May 2012, pp F&PA 20-25.

17 Estimates Hansard, 21 May 2012, pp F&PA 24 *25.

18 Estimates Hansard, 21 May 2012, p. F&PA 25.

19 Estimates Hansard, 21 May 2012, pp F&PA 20-24.

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DPS indicated that $2.6 million has been set aside over four years for new capital works to improve accessibility to Parliament House. This work includes an upgrade to disability access to Parliament House including access in the public car park undertaken as part of a wider project on security. DPS stated that it has incorporated some of the issues raised by the Disability Discrimination Commissioner.20 DPS tabled a list of projects it plans to undertake.21

2.14 The Committee also canvassed Wi-Fi access in electorate offices. In the previous Estimates hearings, DPS indicated there would be a decision made in relation to Wi-Fi access. DPS advised the Committee that while there is no technical barrier to providing Wi-Fi access, security of the connection to the parliamentary computing network could not be guaranteed. DPS undertook to advise senators on the availability

of Wi-Fi in their electorate office.22

2.15 Following on from the Committee's questions on IT issues, the Committee's focus turned to the installation of security gates to the Parliament House car parks. DPS indicated that eight gates, costing a total of $2.8 million, had been installed. Other security issues canvassed included the BAE system and separation of the CCTV system from the parliamentary computer network.23 24 25

2.16 The Committee also discussed the flawed mugs in the Parliament House gift shop which contained the incorrect spelling of President Barack Obama's name. The Committee was advised the initiative for the mugs emanated from a junior staff

member and their production had not been authorised. Due to the 'sensitivity associated with the mistake', DPS made the decision to destroy the mugs (except for two mugs which had already been sold) and disposed of them in a concrete pour."4

2.17 Other issues canvassed included feedback on the new website; enhancements made to the House of Representatives Chamber; the costs of changes to the Speaker's chair and desk; the location of a screen designed by Mr Romaldo Giurgola previously installed in the staff dining area; refurbishment to the kitchen and staff dining area;

and 2020 help desk services.23

20 Estimates Hansard, 21 February 2012, p. F&PA 32.

21 Department of Parliamentary Services, Disability Access Proposal - Projects Funded to Proceed, tabled 21 May 2012, Estimates Hansard, 21 May 2012, p. F&PA 32; tabled document available at http://www.aph.gov.au/Parliamentarv Business/Committees/Senate Committees?url=fapa ctte /estimates/bud 1213/parliamentary/index.htm

22 Estimates Hansard, 21 February 2012, pp F&PA 28-30.

23 Estimates Hansard, 21 February 2012, pp F&PA 36-39.

24 Estimates Hansard, 21 February 2012, p. F&PA 48.

25 Estimates Hansard, 21 February 2012, pp F&PA 41-44.

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Prime Minister and Cabinet Portfolio

Office of the Official Secretary to the Governor-General

2.18 Mr Stephen Brady, the Official Secretary to the Governor-General, provided a general overview of the Governor-General's activities during the three years and eight months of her term. He noted that the Governor-General had taken part in 2,700 official engagements, attended 934 separate events throughout Australia, hosted

502 official functions, delivered 618 speeches, presented 473 honours at 30 investiture ceremonies, received 662 individuals on official calls, received the credentials of 101 ambassadors and high commissioners to Australia, is patron of 317 organisations, presided over 82 meetings of the Federal Executive Council that has considered 2,402 agenda items, and assented to 563 pieces of legislation.26

2.19 As noted in chapter 1, the Official Secretary was questioned about the Governor-General's use of speech writers and in particular whether she had employed Mr Bob Ellis.27

2.20 The Committee discussed the delay in the gazettal of changes to ministerial appointments, to which Mr Brady offered to check on the details. In additional information provided to clarify the matter, it was noted that the appointment of Senator the Hon. Bob Carr as Minister for Foreign Affairs and changes to the Ministry

have not yet been gazetted. However, this would occur at the earliest opportunity.28

Department of the Prime Minister and Cabinet

2.21 The Committee discussed the involvement of the Department of the Prime Minister and Cabinet (PM&C) in the process of selection and appointment of Mr Ray Finkelstein QC as chair of the Independent Inquiry into the Media and Media Regulation. PM&C officers indicated they had not been aware of the process and they had no involvement in the short-listing or in any of the discussions. PM&C suggested

that the matter be brought up with Department of Broadband, Communications and the Digital Economy.29

26 Estimates Hansard, 21 February 2012, p. F&PA 55.

27 Estimates Hansard, 21 February 2012, p. F&PA 56; Office of the Official Secretary to the Governor-General, Letter clarifying the Governor-General's Melbourne Cup speech, received 21 May 2012; letter available on the Senate Finance and Public Administration Legislation Committee's website at http://www.aph.gov.au/Parliamentaiv Business/Committees/Senate Committees?url=fapa ctte /estimates/bud 1213/pmc/index.htm .

28 Estimates Hansard, 21 February 2012, pp F&PA 57-58; Office of the Official Secretary to the Governor-General, Letter clarifying the Governor-General's Melbourne Cup speech, received 21 May 2012; letter available on the Senate Finance and Public Administration Legislation Committee's website at http://www.aph.gov.au/Parliamentary Business/Committees/Senate Committees?url=fapa ctte /estimates/bud 1213/pmc/index.htm .

29 Estimates Hansard, 21 February 2012, pp F&PA 61-62.

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2.22 As the Queen's Diamond Jubilee commemorations are to occur in 2012, information was sought on the Government's suite of events to commemorate the occasion and the process which led to the determination of these events. PM&C advised the Committee that it had engaged in a long consultation process, including with its counterparts in New Zealand and Canada and with all state governors and the Northern Territory Administrator, in order to canvass a range of options to put to the Prime Minister.30 In response to a Committee question on why, unlike Canada, no

commemorative jubilee medal had been issued by the Australian Government, PM&C informed the Committee that this decision was in line with past decisions to not issue medals for similar royal occasions.31

2.23 Among other issues discussed with PM&C were:

" the Queen's official Diamond Jubilee portraits provided through the

Constituents' Request Program;32

" the status and costs of the State Coach Britannia built by Mr Frecklington and Mr Frecklington's suggestion that the Commonwealth provide a further financial contribution of $5 million so that the Commonwealth could provide the coach as a gift to Her Majesty the Queen from the people of Australia for her Diamond Jubilee;33

" attendance of community cabinet meetings;

" the leaking of the video footage of the former Prime Minister in February doing out takes;34 35 and

" Council of Australian Governments (COAG) role in relation to the National Disability Insurance Scheme.33

2.24 The Committee sought information from the COAG Reform Council secretariat on the report of the Review of Capital City Strategic Planning Systems released in April 2012. PM&C clarified that the report had been completed in 2011 and that COAG had considered the report briefly at the last meeting. COAG then

referred it to the Standing Council on Transport and Infrastructure for further consideration. COAG has not formally responded to the report but PM&C understood that COAG has committed to do so within six months of receipt of the report.36

2.25 Other issues raised by the Committee with PM&C included:

30 Estimates Hansard, 21 February 2012, p. F&PA 64,

31 Estimates Hansard, 21 February 2012, p. F&PA 64.

32 Estimates Hansard, 21 February 2012, pp F&PA 67-70.

33 Estimates Hansard, 21 February 2012, p. F&PA 70.

34 Estimates Hansard, 21 February 2012, p. F&PA 104.

35 Estimates Hansard, 21 February 2012, p. F&PA 78.

36 Estimates Hansard, 21 February 2012, p. F&PA 91.

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" the in-country situation of Sri Lanka and that government's treatment of its own Tamil population;

" WikiLeaks and the treatment of Mr Julian Assange;

" the agreement signed between Australia and the United States on cyber≠ security (PM&C indicated questions were best directed to the Attorney- General's Department); and

" the extent to which the National Security and International Policy Group also assist the Domestic Policy Group with monitoring international economic conditions.

2.26 In relation to the discussion on the national security and international policy, the Committee discussed monitoring of economic conditions overseas. PM&C indicated that it has:

...a very interactive approach to developing and synthesising policy taking into account developments internationally, which we glean also through diplomatic reporting. As you may be aware, there is also analytical capability in Treasury, the Department of Foreign Affairs and Trade, Prime Minister and Cabinet and the Office of National Assessments, which from time to time we can draw upon as well as open source information.37

Australian National Audit Office

2.27 The Australian National Audit Office (ANAO) provided information to the Committee on issues relating to the Commonwealth Grant Guidelines; and the audit of the tender and procurement processes in relation to the Australia Network. The ANAO went through the chronology of events for the Australia Network tender process. In response to the Committee's questions on why the Department of Finance and Deregulation were not given the opportunity to comment on the ANAO's full audit report, Mr McPhee, Auditor-General, noted:

Very broadly, the responsibility for running this process was, in the first place, that of the Department of Foreign Affairs and Trade. They had the management responsibility for progressing this matter. So the audit was focused on the Department of Foreign Affairs and Trade in the main but the

roles of other departments were also considered. It is normal for us when we put out our proposed reports or our draft reports for comment to be selective in what we give particular participants in the audit and to have

regard to our policies on information security too *that is, there is no reason at that stage for the department of finance to see our commentary about the perfonnance of the Department of Foreign Affairs and Trade. It was more focused on what Finance's roles and responsibilities in this process were at the time.38

37 Estimates Hansard, 22 February 2012, p. F&PA 10.

38 Estimates Hansard, 22 February 2012, p. F&PA 40.

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2.28 Other issues canvassed by the Committee included the information campaign about assistance to households in relation to the carbon tax/9

National Mental Health Commission

2.29 The Budget Estimates hearing with the National Mental Health Commission (NMHC) opened with questioning and discussion on the NMHC's report card and strategic plan which is due in June. The NMHC also provided the Committee with a brief introduction to the road map. The road map is jointly produced by a group of

senior officials supporting CO AG, with the Department of Health and Ageing as the key Commonwealth agency responsible for the management of the road map. It was noted that development of the road map is still progressing with the expectation that the NMHC will have an ongoing monitoring role in relation to the road map. However, this is subject to CO AG agreement as it is jointly sponsored by the Commonwealth and states and territories.39 40

2.30 In relation to the questions on the report card and how that is addressed in terms of the Budget announcements of the national mental health reform program, the NMHC indicated:

...that access will continually come up in terms of being a key measure * not surprisingly *but it is not the only measure; it is actually the extent to which, if the services are available, they are responsive to the needs of the

community and it is the profile of the workforce that actually supports those services as well. So as for the budgetary component, 1 can honestly say there is not a discussion in which budget does not come up, but in most instances the discussions actually have far more granularity in terms of

looking at the complexity of making a whole raft of programs actually intersect more effectively. Budget is one component. It is certainly not the only component that is coming up for people to push first in a report card.41

2.31 Other issues canvassed included scrutiny of programs by the NMHC; suicide prevention; data on suicides; the Mental Health Nurse Incentives Program; consultation with stakeholders; and allocation of funding for the NMHC.

Australian Public Service Commission

2.32 In his opening statement, the Australian Public Service Commissioner, Mr Peter Sedgwick, made three points:

" that the Minister for the Public Service and Integrity, the Hon. Gary Gray MP, had announced a new strategy to address the decline in the representation of people who have a disability in the public service;

39 Estimates Hansard, 22 May 2012, pp F&PA 47-48.

40 Estimates Hansard, 22 May 2012, p. F&PA 49.

41 Estimates Hansard, 22 February 2012, p. F&PA 50.

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" the need to restore relativity between the pay of secretaries and those who report to them and pointed to recommendations by the Remuneration Tribunal that there should be limits placed on the extent to which that relativity could be eroded by subsequent pay rises from other APS employees; and

" that there had been 'ill-informed' press commentary in relation to how

allegations that an agency head has breached the code of conduct were handled. The Commissioner noted that any formal investigation that he might initiate 'needed to give the accused person procedural fairness and the opportunity to respond to any potentially adverse matters under consideration

even if, on its face, the matter seems straightforward'.42

2.33 The Committee again sought information on absenteeism in the public sector. Aboriginal and Torres Strait Islander employment was also canvassed. The Commissioner acknowledged the trends for Indigenous employment are 'appalling'

and employment levels have consistently declined over a period of time. This trend is anticipated to continue given the fiscal constraints agencies are experiencing and the general higher exit rate of Indigenous people from the public sector. To order to reverse this trend, a new Indigenous employment strategy will be implemented from

1 July 2012. The Pathways to Employment program will also continue. The APSC noted that the programs would be expanded to incorporate regional placements.43 44 45

Office of the Commonwealth Ombudsman

2.34 The Committee welcomed the Acting Commonwealth Ombudsman, Ms Alison Larkins, to the hearing. The Committee noted that funding for the Ombudsman's office has decreased and sought more details. In her response, the Acting Ombudsman indicated that the decrease resulted from both the efficiency dividend and two terminating programs. One of the programs was for Christmas Island oversight and the other for oversight of the Northern Territory Emergency

44

Response.

2.35 The Committee also discussed the investigation of a complaint against Australian Federal Police (AFP) officers in the International Deployment Group. The Acting Ombudsman stated that there were two roles: oversight of the AFP's own complaints handling process; and consideration of the complaints themselves. The Committee also canvassed the number of complaints received; and the level of resources available to investigate complaints.43

2.36 The Committee canvassed the issue of the CSIRO's membership of the Australian Forest Products Association (AFPA). A discussion was undertaken as to the appropriateness of CSIRO's membership and the perception of partiality or lack of

42 Estimates Hansard, 22 February 2012, p. F&PA 56.

43 Estimates Hansard, 22 February 2012, p. F&PA 66.

44 Estimates Hansard, 22 February 2012, p. F&PA 69.

45 Estimates Hansard, 22 February 2012, p. F&PA 70.

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transparency that may arise. The Acting Ombudsman advised that an investigation had taken place as a result of a complaint and noted that CSIRO indicated its intention to terminate its association with the AFP A.46

Office of the Inspector-General of Intelligence and Security

2.37 The Office of the Inspector-General of Intelligence and Security (OIGIS) answered questions in relation to the public version of OIGIS's 2011 report into Mr Mamdouh Habib's case, which was released in March 2012. The implementation of the OIGIS's recommendations was discussed, particularly with regards to the AFP and ASIO. The Inspector-General advised the Committee that the agencies will report,

by 30 June 2012, on their implementation, together with any updated policies. This information will be included in the OIGIS's annual report.47

2.38 Other issues canvassed by the Committee included staff numbers and work priorities.

Office of National Assessments

2.39 The Office of National Assessments (ONA) was questioned on staffing levels, the reallocation of analytical responsibilities, and the assessment of Australia's role in Afghanistan.

2.40 Mr Allan Gynell, the Director-General, informed the Committee that:

...in the light of our budgetary situation, ONA decided to do away with the

Atlantic branch, which covered the United States, Europe, Africa and Latin America. It was the smallest of all the branches and, with the retirement of the head of the branch, I decided to reallocate the analytical responsibilities within the rest of the organisation.48

2.41 In relation to the reallocation of analytical responsibilities, the Committee that was informed that responsibilities for Europe had been moved to the branch covering the international economy; responsibility for the United States had been moved to the branch covering strategic issues and Africa was transferred the branch covering transnational issues. It was explained that the rationale for the reallocation was 'partly

financial but it is also because one of our objectives in ONA is to drive an integrated analytical approach1.49

46 Estimates Hansard, 22 February 2012, pp F&PA 70-71.

47 Estimates Hansard, 22 February 2012, p. F&PA 74.

48 Estimates Hansard, 22 February 2012, p. F&PA 79.

49 Estimates Hansai'd, 22 February 2012, p. F&PA 79.

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___________________________________________________________________________ ________________T3_

Finance and Deregulation Portfolio

Department of Finance and Deregulation

2.42 The Committee opened questioning of the Department of Finance and Deregulation (Finance) on the Government's planned savings measures provided in the Budget Papers 2012-13; the total stock of Commonwealth Government Securities; the definition of savings over the forward estimates; and the role of the Joint Economic Forecasting Group.

2.43 The forecast of job losses in the Public Service was canvassed. The Minister for Finance and Deregulation, Senator the Hon. Penny Wong, noted that it had been a very difficult decision, in the context of a very tight budget, to impose a significant efficiency dividend and a supplementary efficiency dividend on the Public Service. Job losses are a result of voluntary redundancies and natural attrition.30

2.44 Following from previous Estimates hearings, the Committee returned to questions on the Public Sector Superannuation accumulation plan (PSSap), and the balances and expenditure of the Building Australia Fund (BAF); the Nation Building Program; the Education Investment Fund (EIF); and the Health and Hospitals Fund. 50 51

2.45 The Committee examined the Moorebank Intermodal Terminal project. Matters discussed included the process undertaken to identify sites for the Intermodal Terminal; the feasibility study; consultation process; estimated movements to and from the Terminal; issues with the use of the School of Engineering site; issues with

the use of the SIMTA site and preparation of the business case for consideration by the Government.52

2.46 The Committee also discussed:

" the appointment of Mr David Gonski as chair of the Future Fund;

" the funding arrangement and implementation of the National Disability Insurance Scheme;

" superannuation schemes of politicians, Commonwealth public servants and members of the Australian Defence Force;

" the Australian Government Information Management Office's (AGIMO) work related to the number and turnover of Commonwealth and states and territories government websites;

" the status of the NBN Co corporate plan and the current equity investment in the NBN Co;

50 Estimates Hansard, 23 February 2012, p. F&PA 23.

51 Estimates Hansard, 24 February 2012, p. F&PA 41.

52 Estimates Hansard, 24 February 2012, pp F&PA 55-59.

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" audits of the allowances and entitlements of members and senators undertaken by Finance; and

" use of the TelePresence system and the availability of the network to Senate committees.

2.47 The Department of Finance provided answers to questions about its role in the advertising campaign related to household payments under the carbon tax package. The Department noted that a working group had been established to coordinate the campaign with the Department of Families, Housing, Community Services and Indigenous Affairs (FaHCSIA) taking the lead role in coordination as it has policy responsibility. The Department of Finance's role was to coordinate meetings of the Independent Communications Committee (ICC) and to provide a brief on the advertising campaigns. The Department went on to provide the dates of ICC meetings and information on the use of language in the campaign.53

2.48 The Committee also canvassed issues relating to Senator the Hon. Bob Carr's Sydney electorate office. The Department noted that arrangements were in place with the New South Wales Government to take over the lease arrangements for the office previously provided to Senator Carr as former Premier of New South Wales. The

Committee sought information on the date of transfer of the lease arrangements. The Department also noted that it provides offices for parliamentary, electorate and official business, not for commercial puiposes and took on notice questions concerning dates

of finalisation of use of the office for business purposes. 54

2.49 The Committee also questioned the Department of Finance on ministerial and parliamentarians' staff numbers and costs, including the Caucus Communications Team. Lastly, the Committee discussed the transfer of all members and senators

information technology support matters to DPS and the management report requirements for parliamentarians.

Medibank Private Limited

2.50 The Committee again questioned Medibank Private on the payment of the special dividend and ordinary dividends to the Government. Other questions covered the value of Medibank, the lower than average premium increase and the total reserves of the company.

2.51 The Committee also canvassed the issue of changes to the private health insurance rebate. The Committee sought information on when the changes to the rebate would flow through to members with Medibank noting that the changes are effective from 1 July 2012. Mr George Sawides, Managing Director, informed the Committee:

53 Estimates Hansard, 23 February 2012, pp F&PA 81-83.

54 Estimates Hansard, 24 February 2012, pp F&PA 7-9.

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We have communicated now to all members about introduction of the

changes and informing them of the impact of that for them and how they

can talk to us about considering other ways of dealing with the costs that

come that way for those who have the full increase of the premium, also

noting that the M edicare levy surcharge is a consequential impact if they choose to leave the products. We do not want people leaving and then

finding they have to pay more tax. I know the tax office has just given out some communication * that is helpful because it means the advisers and others who play in that sector in advisory roles in income tax returns are

now better informed. Websites, retail branches and whatever are out there to help customers. We do not know the income of our customers, but

around 20 per cent will have some impact as a result of the rebate changes, and we will be working with them to help them understand that and help

them with choices that they need to make.33

ComSuper

2.52 The Committee commented on the decrease in staffing numbers in ComSuper and was informed that despite reducing staff more slowly than expected, this would not have an impact on the targeted $5.3 million savings.55 56

2.53 Other issues discussed included progress on the outsourcing of the administration of the PSSap as well as IT. The targeted savings of $5.3 million from the outsourcing from last budget estimates remain. As with other agencies, the Committee also discussed the effect of the efficiency dividend.

Commonwealth Superannuation Corporation

2.54 The Committee discussed staff allocation, efficiencies and returned to the discussion of the conflict of interest policy currently under review. The Chief Executive Officer provided information to the Committee on progress of the review and also indicated that the CSC Board has approved a board operations policy that

deals with the establishment of the board and committees, functions, delegations, decision making, record keeping, code of conduct, remuneration, insurance and those sorts of things. The policies will become public in mid-June 2012.57

2.55 The Committee discussed staff numbers prior to, and following, the merger of the Australian Reward Investment Alliance and Military Super.

Future Fund Management Agency

2.56 The Managing Director, Mr Mark Burgess, commenced the hearing with an update of the Future Fund's investment situation (the returns for the March quarter

55 Estimates Hansard, 24 February 2012, p. F&PA 27.

56 Estimates Hansard, 24 February 2012, pp F&PA 38-39.

57 Estimates Hansard, 24 February 2012, pp F&PA 39-40.

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were plus 5.4 per cent) and noted that financial markets are very volatile which made it very important to have a 'medium-term view in the investment environment'.38

2.57 The Committee discussed the new governance arrangements for the Future Fund with Mr Burgess noting that the governance framework is highly regarded internationally. The Committee also discussed the Fund's investment policy in relation to tobacco stocks and companies on a list provided by the International Campaign to Abolish Nuclear Weapons (ICAN).

2.58 The Committee also returned to topics covered at previous estimates with the Future Fund including the sale of non-financial assets, the current balance of the Fund and its investment strategy. In addition, the Committee discussed the Fund's foreign currency exposure, including a breakdown of its investments in developed and emerging market currencies, the extent of Government oversight of the Fund and the factors taken into account with international investments.

Australian Electoral Commission

2.59 The AEC commenced its evidence with an opening statement by the Australian Electoral Commissioner, Mr Ed Killesteyn, which provided both an overview and timeline of the AEC's analysis of the implications the Fair Work Australia report into the Health Services Union (HSU) national office for obligations arising from the disclosure provisions of Part XX of the Commonwealth Electoral Act

1918. Both the opening statement and timeline of events and actions taken by the agency were tabled. The Committee went on to explore in depth issues related to the analysis.58 59

2.60 The Committee noted an extra $48 million has been provided to the AEC in 2012-13 in addition to an extra $10 million provided in the 2011-12 financial year. The Commissioner informed the Committee that the additional appropriation provided to the AEC was based on the outcome of a review that was announced by the

Government prior to the last budget. The funds cover base funding, non-election funding, and the stabilisation of staffing for the AEC.60 In relation to staffing, the AEC noted that there had been fluctuations of staff numbers over a number of elections. As a consequence, appropriations would build up for an election and then dramatically drop away post-election. The fluctuation in staffing levels created an

unstable workforce within the AEC and was an inefficient way of managing the organisation and left little capacity for long-term planning. The Department of Finance and Deregulation had conducted a review which was taken into account by the Government when the extra appropriation was agreed to. The Commissioner noted

58 Estimates Hansard, 23 February 2012, p. F&PA 41.

59 Estimates Hansard, 23 February 2012, p. F&PA 85.

60 Estimates Hansard, 23 February 2012, p. F&PA 102.

166

that the extra funding does not provide extra staff but only covers the existing staff within the organisation.61

ASC Pty Ltd

2.61 The Managing Director provided an overview of the challenges faced by the ASC and its achievements. The Committee was also informed of progress in several areas since the Additional Estimates.62

2.62 Much of the Committee's questions and discussions revolved around the issues of revenue, profit and dividends from the ASC's operations. Discussions covered sustainment work on submarines undertaken by ASC, a critical analysis of the

ASC's budget conducted by the Australian Strategic Policy Institute from a defence perspective and the Coles review which is jointly sponsored by the Department of Defence and the Department of Finance and Deregulation.63

______________________________________________________________________ _______________ 17_

Senator Helen Polley C hair

61 Estimates Hansard, 23 February 2012, p. F&PA 102.

62 Estimates Hansard, 23 February 2012, p. F&PA 68.

63 Estimates Hansard, 23 February 2012, pp F&PA 69-72.

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Appendix 1

Departments and agencies under the Committee *s oversight

Parliament

" Department of the Senate

" Department of Parliamentary Services

Prime Minister and Cabinet Portfolio

" Department of the Prime Minister and Cabinet

" Australian National Audit Office

" Australian Public Service Commission

" Independent National Security Legislation Monitor

" National Mental Health Commission

" National Australia Day Council

" Office of National Assessments

" Office of the Commonwealth Ombudsman

" Office of the Inspector-General of Intelligence and Security

" Office of the Official Secretary to the Governor-General

Finance and Deregulation Portfolio

" Department of Finance and Deregulation

" Albury-Wodonga Development Corporation

" ASC Pty Ltd (formerly the Australian Submarine Corporation)

" Australian Electoral Commission

" Australian River Co. Limited

" ComSuper

" Commonwealth Superannuation Corporation

" Future Fund Management Agency

" Medibank Private Limited

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170

Appendix 2

Index to Hansard Transcripts1 Page no.

Monday, 21 May 2012

Parliament

Department of the Senate...........................................................................................1

Parliamentary Budget Office..................................................................................13

Department of Parliamentary Services...................................................................18

Prime Minister and Cabinet Portfolio

Office of the Official Secretary to the Governor-General .................................... 55

Department of the Prime Minister and Cabinet ..................................................... 61

Tuesday, 22 May 2012

Prime Minister and Cabinet Portfolio

Department of the Prime Minister and Cabinet........................................................1

Australian National Audit Office............................................................................31

National Mental Health Commission.....................................................................48

Australian Public Service Commission..................................................................56

Office of the Commonwealth Ombudsman ........................................................... 69

Office of the Inspector-General of Intelligence and Security ............................... 74

Office of National Assessments..............................................................................79

Wednesday, 23 May 2012

Finance and Deregulation Portfolio

Department of Finance and Deregulation.................................................................1

Future Fund Management Agency.........................................................................41

Australian Electoral Commission...........................................................................85

1 Hansard page numbers referred to in this appendix are based on proof Hansards. Page numbers may vary slightly in the final Official Hansard transcripts.

22

Thursday, 24 May 2012

Finance and Deregulation Portfolio

Department of Finance and Deregulation ................................................... 1, 33, 40

Medibank Private....................................................................................................22

ComSuper............................................................................................................... 37

Commonwealth Superannuation Corporation.......................................................39

ASC Pty Ltd............................................................................................................68

172

The Senate

Foreign Affairs, Defence and Trade

Legislation Committee

Budget estimates 2012-13

June 2012

© Commonwealth of Australia

ISBN 978-1-74229-641-8

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.

ii

174

Membership of the Committee

Members

Senator the Hon. Ursula Stephens, ALP, NSW (Chair)

Senator Alan Eggleston, LP, WA (Deputy Chair)

Senator Mark Bishop, ALP, WA

Senator David Fawcett, LP, SA

Senator Scott Ludlam, GRN, WA

Senator Anne McEwen, ALP, SA

Committee Chair

Senator Anne McEwen was Chair of the committee for the committee's consideration of the 2012-13 Budget estimates, 28 May to 31 May 2012.

Substitute members

Senator Doug Cameron replaced Senator the Hon Ursula Stephens for the consideration of the 2012-13 Budget estimates from 28 May to 31 May 2012.

Senator Lisa Singh replaced Senator Mark Bishop for the consideration of the 2012-13 Budget estimates from 28 May to 31 May 2012.

Committee secretariat

Dr Kathleen Dermody, Secretary

Miss Jedidiah Reardon, Senior Research Officer

Ms Penny Bear, Research Officer

Ms Jo-Anne Holmes, Administrative Officer

Parliament House, Canberra ACT 2600

Phone: (02) 6277 3535, fax: (02) 6277 5818

e-mail: fadt.sen@aph.gov.au:

Internet: http://aph. gov.au/Parliamentarv Business/Committees/Senate Committees?url=fadt ctte/index.htm

176

TABLE OF CONTENTS

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

Report to the Senate.....................................................................................................1

Introduction...............................................................................................................1

Questions on notice...................................................................................................1

Defence portfolio...................................................................................................... 2

Department of Defence..........................................................................................2

Defence Materiel Organisation..............................................................................9

Defence Housing Australia....................................................................................9

Department of Veterans' Affairs............................................................................9

Australian War Memorial....................................................................................10

Foreign Affairs and Trade portfolio.......................................................................10

Department of Foreign Affairs and Trade (DFAT) ............................................ 10

Australian Agency for International Development ............................................ 14

Australian Centre for International Agricultural Research ................................ 15

Trade portfolio.........................................................................................................16

DFAT trade programs and Australian Trade Commission ................................ 16

Acknowledgements.................................................................................................16

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

Tabled documents......................................................................................................17

Defence portfolio ................................................................................................. 17

Foreign Affairs and Trade portfolio....................................................................18

178

Senate Foreign Affairs, Defence and Trade Legislation Committee

Report to the Senate

Introduction

1.1 On 9 May 2012, 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 2013;

" Particulars of certain proposed expenditure in respect of the year ending on 30 June 2013; and

" Particulars of proposed expenditure in relation to the parliamentary

departments in respect of the year ending on 30 June 2013.1

1.2 The committee conducted public hearings with the Defence portfolio on 28 and 29 May 2012 and the Foreign Affairs and Trade portfolio on 30 and 31 May 2012. The committee received evidence from the Parliamentary Secretary for Defence, Senator the Hon David Feeney, representing the Minister for Defence and the Minister for Veterans' Affairs, and from officers from the relevant departments and agencies. It also received evidence from Senator the Hon Bob Carr, the Minister for Foreign Affairs, also representing the Minister for Trade, and from officers from the portfolio departments and agencies.

1.3 Links to the transcripts of these public hearings and to answers and additional information are available on the committee's internet site at:

http://aph.gov.au/Parliamentary Business/Committees/Senate Committees?url=fadt ctte/estimates/bud 1213/index.htm

Questions on notice

1.4 In accordance with Standing Order 26(9) (a), the committee agreed that the date for the return of written answers and additional information in response to questions placed on notice would be Friday 27 July 2012.

1 Journals of the Senate , No. 89, 9 May 2012, p. 2396.

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2

Defence portfolio

Department of Defence

1.5 The committee acknowledged the attendance of General David Hurley, AC, DSC, Chief of the Defence Force, and Mr Duncan Lewis, AO, DSC, CSC, Secretary of the Department of Defence, and officers of the Defence organisation.2

Chief of the Defence Force's initial statement to the committee

1.6 The Chief of the Defence Force (CDF) made two opening statements. His first statement dealt with serious allegations appearing that morning in the newspapers about the repatriation of remains of Australian soldiers killed in Afghanistan. He said:

The articles this morning did not prompt the serious investigations, as the articles suggest. The issue of the orientation of caskets was raised in mid- 2011 and is the subject of an Inspector-General of the Australian Defence Force [ADF] inquiry initiated in January 2012. However, I felt so strongly about the allegations being made and the potential to cause undue distress to the soldiers' families and members of the ADF that I ensured that the

department's responses to the journalist's questions last week were drawn from the inquiry outcomes to date, and they were quite detailed. I spoke to the journalist at length on two occasions and I also spoke to the paper's

editor yesterday in an effort to ensure that the facts were accurately

reflected in the story.3

1.7 In his first statement, the CDF also dealt with other allegations raised in media reports relating to the death of a local Afghan insurgent who was wounded in action, treated, transported to a health facility but subsequently died. His body was then transported to his home *via taxi. In response to this allegation the CDF stated that:

The vehicle used to transport the man's body may have also been used as a

taxi, and, while the practicalities of handling local national human remains in Afghanistan may not accord with Australian norms, the handling of the remains in this instance was in accordance with the ISAF Role 2 practice at the time.4

1.8 The CDF then referred to a third allegation involving the son of the dead Afghan insurgent who was detained as a suspected insurgent. He was 16 years old and was not mistreated.

1.9 The CDF spoke of the complex circumstances in war and expressed deep disappointment with the articles. The CDF stated:

2 Proof Committee Hansard, 28 May 2012, p. 3.

3 Proof Committee Hansard, 28 May 2012, p. 4.

4 Proof Committee Hansard, 28 May 2012, p. 5.

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3

The Australian Defence Force is fighting a war in a complex operating

environment. Australian forces are highly trained and very professional. However, in the complexity of these operations, there may be instances where some conduct may be alleged to be unlawful or inappropriate. Any attempts to compare these claims to events at Abu Ghraib in 2006 in my

view are vexatious and a gross misrepresentation of the facts.5

1.10 In his second statement, the CDF reported on Defence's contribution to the government's overall budget savings and the consequent effects on current capability. The CDF also reported on Australia's operations in Afghanistan, including the transition to Afghan led security responsibility in mid-2013, and the Prime Minister's

statement regarding the role of Australian Special Forces in Afghanistan after 2014. The CDF also reported on Defence activities in East Timor, the Solomon Islands and Papua New Guinea.6

Secretary's opening statement

1.11 Mr Duncan Lewis made a statement to the committee, which focused on the effects of the 2012-13 Defence budget, including Defence's contributions across the forward estimates to support the government's fiscal policy. Mr Lewis explained that this would result in:

...a defence contribution of $5,454 billion back to government across the forward estimates, starting with $971 million in 2012-13. In addition, the committee would be aware that we have had to reprioritise and reallocate approximately $2.9 billion across the portfolio to offset internal cost pressures in areas o f concern, including the Collins class sustainment activity, information technology remediation activity and improved housing

for ADF personnel. These savings have been found from the Defence

Capability Plan, from the approved major capital investment program, the M ajor Capital Facilities program and from our operating budget. 7

1.12 In his statement, Mr Lewis emphasised that:

These savings will not impact on current operations in Afghanistan, East Timor or the Solomon Islands. They will not impact upon the equipment that our men and women need to do their jobs on these operations. It has

been a challenging exercise to find these savings. We are still working

through the detail, particularly when it comes to deferred, altered or

cancelled projects. We will answer all of your questions to the extent that we can today and tomorrow, but there may be some aspects that we will

have to take on notice. We are, as you can imagine, still undertaking

discussions with the affected contractors and companies involved and there are obviously some sensitivities that we have to consider in protecting the Commonwealth's position.

5 Proof Committee Hansard, 28 May 2012, p. 5.

6 Proof Committee Hansard, 28 May 2012, pp. 8-9.

7 Proof Committee Hansard, 28 May 2012, p. 6.

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4

Another area where we have undertaken to make further savings is in our

civilian workforce. We will be reducing the number of Australian Public Servants in Defence by another 1,000 over the forward estimates, beginning with a target of 666 in the new financial year and 334 in the financial year

2013-14. This comes in addition to the reductions we have made to the

civilian workforce through shared services reform under the Strategic Reform Program in the current financial year. We aim to achieve these reductions largely through natural attrition, recruiting adjustments and the

cessation of non-ongoing employee arrangements.8

1.13 Mr Lewis reported on the new Defence White paper to be delivered in the first half of 2013:

The new white paper will allow us to factor in a number of significant

developments domestically and internationally that affect our defence posture, our force structure and our budget. Within the department, the development of the white paper is being led by Mr Brendan Sargent, the

Deputy Secretary Strategy. The M inister for Defence has appointed a

ministerial advisory group, consisting of Allan Hawke, Paul Rizzo and Ric Smith, and he may add others. This group will provide advice both during the white paper drafting process and independently to the minister.

We have been asked to deliver this new white paper in the first half of

2013. We will not be setting up a separate white paper team. This white

paper is going to be prepared in a way that is a core daily business for

Defence. We will also be seeking direct involvement from other agencies, such as the Department of Foreign Affairs and Trade, the Department of Finance and Deregulation and the Department of the Prime M inister and Cabinet. While the white paper is a Defence product, prepared by the

department for the M inistry of Defence, it will very much be a whole-of- govemment product. We will also be drawing on the recently completed force posture review report, overseen by Dr Hawke and Ric Smith, the

defence capability plan review, which was completed as part of the budget process, and the force structure review that is currently underway. The white paper will be built from all of this work.9

1.14 With respect to the review of Defence culture, Mr Lewis reported:

The M inister for Defence took possession on 17 April of the final report of phase 1 of the review of allegations of sexual and other abuse in Defence

which was conducted by the law firm DLA Piper. Phase 1 consisted of two

volumes * volume 1, which contained general findings and

recommendations, and volume 2, which contained individual allegations.

The phase 1 report has provided an initial assessment of 1,095 allegations from 775 people, as the minister, the CDF and I announced on 7 March. I

wish to emphasise to the committee that volume 2 has not been provided to Defence and so we have an incomplete understanding of the allegations at

8 Proof Committee Hansard, 28 May 2012, p. 6.

9 Proof Committee Hansard, 28 May 2012, pp. 6-7.

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5

this stage. M uch of the information in volume 2 contains highly sensitive personal information which was provided to the review on the strict

condition of confidentiality.

All of the allegations made will need to be tested and examined. Phase 2 of this review will consider how to deal with the allegations, including

appropriate mechanisms for further assessment. This will not be quick and it will require a further investigative and legal process to address each of the allegations. The bulk of this work will need to be carried out through

arrangements outside and beyond the Defence department. On 7 M arch the Chief of the Defence Force and I jointly announced the release of Pathway to change: evolving defence culture. This document is Defence's response to the recent cultural reviews and it outlines the actions that we must take to

ensure that our working environment is safe, equitable and inclusive for all.

It marks the start of a five-year program of integrated and far-reaching

effort to tackle our cultural challenges at their source. We have had

identified six areas which will serve as our reform streams and we have

assigned senior officers who will lead the implementation of each of these streams. The streams are leadership and accountability; values and

behaviours; right from the start, which means starting at the point of

induction; corrective processes; practical measures; and structural and support.10 11

In his opening statement, Mr Lewis also advised the committee of new appointments in the Defence senior leadership group since additional estimates in February 2012, including Dr Alex Zelinsky as Chief Defence Scientist, Ms Carmel McGregor as Deputy Secretary People Strategies and Policy, Mr Steve Meekin as Deputy Secretary Intelligence and Security and Mr David Gould as the General Manager of Submarines. Mr Lewis noted that the new Defence Collective agreement became operational on

19 April 2012. He also advised the committee that for the first time in 13 years, there were no Category A findings for its financial statements from the Australian National Audit Office. 11

1.15 Other topics examined during the hearing on 28 May 2012 included:

Questions arising from opening statements, Portfolio overview and budget summary

" The size and dimension of Budget cuts. The ground rules for making savings, including that they not impact on current operations or support to operations (pp. 9-10).

" 2009 Defence White Paper and comments from Dr Mark Thomson of the

Australian Strategic Policy Institute (ASP1) (pp. 10-12).

" The allocation of $550 million to Information and Communication

Technology remediation (pp. 12-14).

10 Proof Committee Hansard, 28 May 2012, p. 7.

11 Proof Committee Hansard, 28 May 2012, p. 7.

183

" Budget measures and the planned reduction in staff numbers *1,000 APS Defence personnel (366 positions this year and 634 positions the following year) (pp. 14-16, 18-19).

" The media reports which the CDF addressed in his initial opening statement (pp. 16-18, 29-30,41).

" Deferral of lower priority elements of the Major Capital Facilities Program (pp. 19-20).

" Defence Force culture and Pathway to Change report and initiatives

(pp. 21-22).

" Gender breakdown in the Defence workforce and the implementation plan for women in combat positions (p. 23).

" The Australian Defence Force Investigative Service (ADFIS) disciplinary investigation of Sapper Louis (pp. 24, 29).

" 2013 Defence White Paper and community engagement *in contrast to the 2009 White Paper process, consultation will be more focused on involving think tanks, peak bodies and discussions within government (pp. 25-27).

" 2013 Defence White Paper process and the consideration of Defence policy on nuclear weapons (pp. 27-28).

" The process for the Australian Defence Force's withdrawal from Afghanistan (pp. 28-29).

" Total value of absorbed measures or 'reinvestment' in this year's budget (pp. 30-32).

" The creation of the Associate Secretary Capability position (pp. 32-33).

" DLA Piper Review into complaints about unacceptable behaviour in Defence (pp. 33-38).

" Changes to remote locality leave travel entitlements for ADF personnel who are single, over 21 years of age and not undergoing training (pp. 38-40).

1.16 Other topics examined during the hearing on 28 May 2012 included:

Program 1.1 Office of the Secretary and the Chief of the Defence Force

" Defence speaking as one voice and process for achieving consensus

(pp. 42 *43).

" The efficiency dividend, staff reductions and redundancies (p. 43).

" General Defence of the north-west coast of Australia and the presence of naval patrol boats off the north-west coast (pp. 44-47).

" Joint force posture initiative and the US Marine Corps deployment in Darwin (pp. 47 *49).

" Simpson Assistance Program and the ADF Paralympics Sports Program (pp. 50-51, 52).

184

_________________________________________________________________________________________________________ _*ä_

" Costs of relocation of Moorebank facility to Holsworthy site (pp. 52-59).

" Fraud detection and control in Defence (pp. 59-60).

Program 1.2 Navy capabilities

" Future Submarine Program (pp. 60-61).

" Maintenance of surface vessels; HMAS Manoora, HMAS Kanimbla, HMAS Tobruk, HMAS Sirius, HMAS Success (pp. 61-64).

" Future submarines and Collins class sustainment (pp. 66-76).

" Coles review (pp. 76-77).

" Future submarine capability (pp. 78-80).

" The National Broadband Network (NBN) and the Navy (pp. 80-81).

" Australian industry involvement in the Acquisition Program Baseline (pp. 82-83).

. SEA 1000 (pp. 83-91).

" Future unmanned underwater vehicles (pp. 91-92).

" Patrol boats (pp. 93-96).

" Intellectual property (IP) issues (pp. 96-97).

" Issues with rigid-hulled inflatable boats (RHIBs) rolling over (pp. 99-100).

" Mine warfare (p. 100).

Program 1.3 Army capabilities

" Soles separating from dress boots during public ADF parades (pp. 101-107).

" Ml 13 upgrade program (pp. 107-111).

. NORFORCE (pp. 111-112).

1.17 The committee continued hearings on areas under outcome 1 on

29 May 2012. Topics examined included:

Program 1.2 Navy capabilities

" Follow up on questions asked on 28 May 2012 relating to RHIBs capsizing (PP- 5-7, 19).

Program 1.3 Army capabilities

" Self-propelled howitzer (pp. 3-5).

" Indigenous soldiers and NORFORCE (pp. 7-10).

" Rising sun badge no longer to be worn on slouch hats (pp. 11-12, 33).

Program 1.3 Air Force capabilities

" Super Hornets *electronic warfare system (pp. 12-13, 19).

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8

" Caribou replacement aircraft contract (pp. 13-14).

" AIR 8000 Phase 2 project, C-27J Foreign Military Sales acquisition

(pp. 14-24, 26-28).

" C-27J and reports of counterfeit chips (pp. 25-26).

" Pilot numbers (p. 29).

" Hard landing of an aircraft in Darwin in February 2012 (p. 30).

" Joint Strike Fighter program (pp. 31-32).

" Pilot training (p. 32).

Program 1.6 Defence Support

" Relocation of Moorebank facility to Holsworthy site (pp. 34, 38, 39-40, 49-51,55-56).

" Afghan training facility at Cultana (pp. 35-38).

" Defence Science and Technology site at Scottsdale, Tasmania (pp. 46-47).

" Proposed wave energy facility at Garden Island, Western Australia

(pp. 51-52).

Program 1.7 Defence Science and Technology

" Budget pressures (pp. 56-57).

Program 1.8 Chief Information Officer

" Defence's contribution to the Cyber White Paper process (pp. 57-59).

Program 1.9 Vice-Chief of the Defence Force

" Media report titled 'ADF jobs requiring sex tests' (pp. 44-46).

" Risk management and the 2008 Test and Evaluation roadmap (pp. 60-62).

" Cadet policy (pp. 62-64).

Program 1.11 Capability development

" The Rapid Protoyping Development and Evaluation (RPD&E) program (pp. 65-67).

Program 1.13 People Strategies and Policy

" Strategies for retention of Defence personnel (pp. 67-69).

" ADF health services (pp. 68-69).

Outcome 2

" Detainee management protocols in Afghanistan (pp. 70-72).

" Provincial reconstruction team projects and Overseas Development assistance (pp. 73-76).

186

9

Defence Materiel Organisation

1.18 Topics examined on 29 May 2012 included:

" Outlook for the Australian defence industry (pp. 76-78).

" Staff reductions in DMO (pp. 79-81).

" Projects of concern (pp. 81-85).

Defence Housing Australia

1.19 The committee acknowledged the attendance of Mr Peter Howman, Chief Operating Officer, Mr Jon Brocklehurst, Chief Financial Officer, and Mr Brett Jorgensen, General Manager from Defence Housing Australia (DHA).12

1.20 Matters raised by the committee on 29 May 2012 included:

" Defence owned townhouses in Fremantle, Western Australia (pp. 85-87).

Department of Veterans' Affairs

1.21 The committee acknowledged the attendance of Mr Ian Campbell PSM, Secretary, and officers of the Department of Veterans' Affairs (DVA).13

1.22 Matters raised by the committee during the hearing on 29 May 2012 included:

" The selection process for members of the Prime Ministerial Advisory Council on Ex-Service Matters and the appointment of the Chair of the Australian War Memorial (pp. 91-99).

" The appointment of the new director of the Australian War Memorial and the Faulkner protocols (pp. 99-102).

" Mental health programs for veterans (pp. 102-106).

" Veterans' Children Education Scheme (VCES) (pp. 106-108).

" Military Rehabilitation and Compensation Act 2004 (MRCA) review (pp. 108-115, 117-120).

" Assistance for careers of veterans with physical or mental problems

(pp. 115-116).

" Proposed Anzac centre for the study of peace, conflict and war (pp. 116-117).

" Albany Interpretive Centre (pp. 121-122).

" Anzac Centenary (pp. 122-123).

" Efficiency dividend and its effect on the department, including staff

reductions (pp. 123-124)

12 Proof Committee Hansard, 29 May 2012, p. 85.

13 Proof Committee Hansard, 29 May 2012, p. 90.

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10

Australian War Memorial

1.23 The committee acknowledged the officers of the Australian War Memorial (AWM).14 15 On behalf of the committee, Senator Ronaldson, noted that this would have been Major General Steve Gower's last Senate estimates prior to retirement and acknowledged his *ä6 years of very significant service to the War Memorial'.13 The committee thanked the representatives of the Australian War Memorial for their time, but as there were no questions they were excused.16

Foreign A ffairs and Trade portfolio

Department of Foreign Affairs and Trade

1.24 On 30 May 2012 the committee took evidence from the Department of Foreign Affairs and Trade (DFAT). The committee acknowledged the attendance at the hearings of Mr Dennis Richardson, Secretary, and officers of the DFAT and welcomed the Hon Bob Carr to his 'very first estimates in the Senate, as Minister for Foreign Affairs'.17

1.25 Matters raised by the committee during the day's hearings included:

Portfolio overview

" The resignation of the previous Minister for Foreign Affairs *Mr Rudd's announcement in Washington in February, the reasons for his trip and schedule, accommodation arrangements, the late night/early morning press conference *costs, resources and arrangements for the press conference (pp. 5-8).

" Minister Carr's activities following his appointment as Foreign Minister (PP∑ 9-10).

" The department's role in the Budget process (pp. 10-11).

" Budget *Red book (following 2010 election), which noted shortfalls in the department's capabilities *in consular work; adequacy of global representation including the degree or absence of representation overseas (pp. 11-12).

" Areas affected by the current budget, the efficiency dividend and requirement to find savings of between $25 and $30 million (pp. 12-13).

14 Proof Committee Hansard, 29 May 2012, p. 90.

15 Proof Committee Hansard, 29 May 2012, p. 91.

16 Proof Committee Hansard, 29 May 2012, p. 102.

17 Proof Committee Hansard, 30 May 2012, p. 4.

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11

" Professional development in the department including courses for senior executive service (SES) at Harvard University and professional development courses in Australia on leadership (pp. 14-16).

" Language training and cultural diversity in the department (pp. 16-19).

" Consular assistance to Julian Assange (pp. 19-22).

" Potential conflict of interest *Secretary *s membership of the Secretaries Committee on National Security, his position on the Canberra Raiders Board and its decision to accept Huawei's sponsorship of the club (pp. 23-28).

" Adherence to the Ministerial Code of Conduct, which requires ministers to divest themselves of interest, including shareholdings, in private companies (pp. 28-31).

" The Foreign Minister's travel arrangements and schedule (pp. 31-34).

" Australia in the Asian Centwy White Paper process (p. 34).

" United Nations Framework Convention on Climate Change and the outcomes of the Durban conference (pp. 34-35).

1.26 The committee then moved on to the geographical areas under outcome 1.

Outcome 1

North Asia

" China-Australia strategic and economic dialogue (pp. 35-37).

. Tibet (pp. 37-40).

" China *emissions trading scheme, free trade agreements, change in

leadership, and the Boao Forum (pp. 40^42).

" Long-range missile launched by North Korea (p. 43).

" Indonesian minors in detention in Australia and Schapelle Corby's reduction in sentence (pp. 44-46).

" 10lh anniversary of the Bali bombing (pp. 46-47).

" Australia's political relationship with Indonesia (pp. 47-48).

" Lifting of Australian trade sanctions on Burma (pp. 48-52).

" Freedom of Information request for the release of cables written by Australian diplomats in Indonesia possibly relating to the Balibo Five murders in East Timor (pp. 52-54).

" Human rights concerns in West Papua (pp. 54-55).

" Karen refugees on the Thai-Burma border (pp. 55-56).

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12

Americas

" The Brazilian student, Roberto Laudisio Curti, who died after being tasered by New South Wales police (pp. 56-57).

Africa

" Morocco's announcement that it will no longer cooperate with the UN

Secretary-General's Special Envoy for Western Sahara (pp. 57-59).

Europe

" The appointment of the Australian Ambassador to the Vatican (p. 59).

" The European economy, the eurozone and the Greek elections (pp. 59-61).

South and West Asia and the Middle East

" The detainment by Sri Lankan authorities of Tamil asylum seekers seeking refuge in Australia (pp. 61-62).

" Sri Lanka's Lessons Learnt and Reconciliation Commission report

(pp. 63-64).

" Possible military intervention in Syria (p. 64).

" United Nations sanctions on Iran (pp. 64-65).

" Human rights in Egypt and the safety of the Coptic population (pp. 65-66).

" Australia's current engagement with Pakistan with regards to Australian operations in Afghanistan (pp. 67-67).

" Negotiations with India regarding the sale of Australian uranium (pp. 67-68).

" Consular assistance to two Victorians being detained in Dubai (pp. 73-74).

Pacific

" Fiji's invitation to the Pacific Alliance Leaders Meeting (PALM) Forum of Pacific leaders (pp. 68-69).

" Australia's role in the upcoming elections in Papua New Guinea (pp. 69-73).

" Presence of East European countries in the Pacific and the attempt to buy recognition stemming from competition and disputation between Georgia and Russia (p. 79).

1.27 The committee then examined International organisations and legal issues.

International organisation and legal issues

" The International Court of Justice's jurisdiction in maritime disputes (p. 75).

" Antarctic Treaty consultative meeting (pp. 75-76).

190

13

" The UN Commission on the Status of Women and Australia's Global

Ambassador for Women and Girls (pp. 76-77).

" UN Conference on Sustainable Development Rio +20 (pp. 77-78).

" UN Commission on Population and Development (pp. 78-79).

" Recent appointment of a new Ambassador for Climate Change (p. 80).

National security, nuclear disarmament and non-proliferation

" The department's contribution to the Defence White Paper process

(pp. 80-81).

" Australian Safeguards and Non-Proliferation Office (pp. 97-100).

Services to diplomatic /consular representatives

" Cooks and chefs in Australian embassies (pp. 81-83).

" Cars and drivers at overseas posts (pp. 83-84).

" Refurbishment of the Paris embassy residence (p. 84).

Program 1.2 Payments to international organisations

" Intergovernmental Panel on Climate Change (IPCC) Trust Fund (p. 85).

Program 1.3 Public information services and public diplomacy

" Australian network contract (pp. 86-92.).

" The Australia International Cultural Council's focus on India in 2012

(pp. 92-93).

Program 2.1 Consular services

" Australia's consular representations overseas, including two new diplomatic posts in China and Senegal (pp. 93-95).

" Consular services in China (pp. 95-96).

" Consular services in Iran and Syria (p. 96).

" Smartraveller website (pp. 101-102).

Program 2.2 Passport services

" Emergency passports for children travelling overseas (pp. 102-103).

" Update on the design of the P series of ePassport (pp. 103-104).

Outcome 3 Foreign Affairs and Trade operates and properties

" Schedule for works and refurbishments (p. 104).

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Australian Agency for International Development

1.28 The committee acknowledged the attendance of Mr Peter Baxter, Director General, and officials representing Australian Agency for International Development (AusAID).18

1.29 Matters raised by the committee at the hearing on 31 May 2012 included:

Outcome 1 Overview

" The importance of relationships that are built through foreign aid and other countries (p. 5).

" Contracts awarded to foreign firms for provision of aid programs and research (p. 6).

" The effects of the freeze in budget increases (pp. 7-10).

" Response to food crisis in the Horn of Africa (pp. 10-12).

" Transparency and anti-corruption measures (p. 12).

" Scholarship programs for East Timorese and eastern Indonesian students (pp. 12-14).

" The establishment of the Independent Evaluation Committee, its role and the appointment of the chair and committee members (pp. 16-19).

" Funding for sexual and reproductive health (pp. 20-22).

" Review of the Indonesia-Australia Forest Caron Partnership (p. 23).

" Scoreboard system for evaluation (pp. 23-24).

" Funding allocations for protracted crises such as in Sudan and Somalia

(P- 24).

" The non-government organisation (NGO) Cooperation Program (pp. 24-25, 28-29).

" Pacific Climate Change Science and Adaptation Planning Program

(pp. 26-28).

Program 1.1 Official development assistance *PNG and Pacific

" Access to safe water and basic sanitation combined with good hygiene

behaviours (WASH) programs (pp. 29-30).

" Extension of the Pacific seasonal worker pilot scheme (pp. 30-31).

" Tuberculosis (TB) clinic in Daru (pp. 31-36).

18 Proof Committee Hansard, 31 May 2012, p. 5.

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15

Program 1.2 Official development assistance *East Asia

" Assistance to refuges residing in camps on the Thai-Burma border

(pp. 36-37).

" Development of democratic institutions in Burma (p. 37).

" Australia's aid relationship with Burma (pp. 38-39).

" Asian Development Bank and the Cambodian railways project (pp. 40-41).

" Developments in the Mekong (pp. 41-42).

Program 1.3 Official development assistance *Africa, South and Central Asia, Middle East and other

" The relationship between Union of Agricultural Works Committees and Popular Front for the Liberation of Palestine, allegations made by Shurat HaDin and the investigations by AusAID and World Vision (pp. 42-51).

" Agreement to terminate AusAID *s contract with international consultant The Liaison Office and its report on Uruzgan province (pp. 51-54).

" Projects in Afghanistan funded through the Defence Cooperation Program and the impact of the planned withdrawal of the ADF from Afghanistan on these programs (pp. 54-56).

" Funding for United Nations Relief and Works Agency for Palestine Refugees in the Near East (pp. 56-57).

" AusAID and the Africa-Australia Partnership Facility's joint support for the Africa Mining Vision (pp. 58-59).

Outcome 2

" Australian Civilian Corps (pp. 59-61).

" G8 L'Aquila pledge on food security (p. 61).

Australian Centre for International Agricultural Research

1.30 The committee welcomed Dr Nick Austin and Mr Dave Shearer from the Australian Centre for International Agricultural Research (ACIAR).19 The matters raised by the committee at the hearing on 31 May 2012 included:

" Grant for supporting beef cattle in Indonesia (pp. 62-63).

" Agribusiness program (pp. 63-64).

" Work with women in agriculture (pp. 64-665).

" The Australian International Food Security Centre (pp. 65-66).

19 Proof Committee Hansard, 31 May 2012, p. 62.

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Trade portfolio

DFA T trade programs and Australian Trade Commission

1.31 The committee welcomed officers of the Australian Trade Commission (Austrade), Export Finance and Insurance Corporation (EFIC) and the DFAT and welcomed back Mr Richardson.20

1.32 Matters raised by the committee at the hearing on 31 May 2012 included:

" The Export Supply Chain Assurance Scheme (pp. 68-69).

" Live cattle trade to Indonesia (pp. 69-71).

" Australia-Korea free trade agreement (pp. 71-72).

" Opportunities for Australia in Latin America (p. 72).

" Trans-Pacific Partnership Agreement (pp. 72-73, 80-82).

" Embedding staff from state government trade offices in Austrade offices overseas (pp. 73-74).

" PACER Plus agreement (p. 75).

" Links between a fatal mudslide in the Papua New Guinea highlands and the Australian backed Papua New Guinea liquefied natural gas project Esso Highlands (pp. 75-77).

" Tenix vessels in the Philippines and allegations of bribery (pp. 77-79).

A cknow ledgem ents

1.33 For their assistance during its hearings, the committee thanks Senator the Hon David Feeney, and Senator the Hon Bob Carr. 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 the Hon Ursula Stephens Chair

20 Proof Committee Hansard, 31 May 2012, p. 62.

194

Appendix 1

Tabled documents

Budget estim ates 2012-2013

Defence portfolio

Monday, 28 May 2012

Received from General David Hurley, AC, DSC, Chief of the Defence Force, 'Statement to the 2012-13 Budget estimates Hearing'.

Received from Mr Duncan Lewis, AO, DSC, CSC, Secretary of Defence, Opening statement to Senate estimates'.

Received from General David Hurley, AC, DSC, Chief of the Defence Force, 'Opening Statement'.

Received from General David Hurley, AC, DSC, Chief of the Defence Force, 'Response of 25 May 2012 provided to Ian McPhedran, News Ltd, to questions asked about the Australian Defence Force Investigative Service (ADFIS)', Department of Defence on the record, 28 May 2012.

Received from Senator Eggleston, Information on Major Resource Projects in Northern Australia from the Kimberley Economic Forum.

Tuesday, 29 May 2012

Received from Senator Ronaldson, Canberra Times articles relating to the appointment of the Chair of the Australian War Memorial Council, press clippings dated 19 and 20 April 2012.

Received from Senator the Hon Feeney, Letter from Minister for Veterans' Affairs, the Hon Warren Snowdon to General Peter Cosgrove AC MC, dated 6 March 2012.

195

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Foreign Affairs and Trade portfolio

Thursday, 31 May 2012

Received from Senator Kroger, photographs of hospital in Daru.

Received from Mr Peter Baxter, Director General AusAID, photographs of Daru X-ray unit launch and an interim isolation ward.

Received from Senator Ronaldson, correspondence from Shurat HaDin Israel Law Centre to World Vision Australia, dated 15 February 2012.

Received from Senator Ronaldson, 'Palestinian Institutional Configurations in the West Bank and Gaza under four autonomy scenarios', Democratic Institutions Support Projects, May 1993.

Received from Senator Kroger, 'Uruzgan: 18 months after the Dutch/Australian Leadership Handover', The Liaison Office, April 2012.

196

The Senate

Legal and Constitutional Affairs

Legislation Committee

Budget estimates 2012-13

June 2012

Commonwealth of Australia ISBN 978-1-74229-642-5

This document was prepared by the Senate Legal and Constitutional Affairs Legislation Committee and printed by the Senate Printing Unit, Parliament House, Canberra.

198

Membership of the Committee

Members Senator Patricia Crossin, Chair, ALP, NT

Senator Gary Humphries, Deputy Chair, LP, ACT

Senator Sue Boyce, LP, QLD

Senator Mark Fumer, ALP, QLD

Senator Louise Pratt, ALP, WA

Senator Penny Wright, AG, S A

Senators in attendance

Senator Patricia Crossin (Chair), Senator Gary Humphries (Deputy Chair), Senator Mark Fumer, Senator Louise Pratt, Senator Penny Wright, Senator the Hon Eric Abetz, Senator Cory Bemardi, Senator Simon Birmingham, Senator Mark Bishop, Senator the Hon George Brandis, Senator Michaelia Cash, Senator Richard Di Natale, Senator Mitch Fifield, Senator Sarah Hanson-Young, Senator Scott Ludlam, Senator Bamaby Joyce, Senator Helen Kroger, Senator Stephen Parry, Senator Lee Rhiannon, Senator Rachel Siewert, Senator Dean Smith, Senator Larissa Waters, Senator John Williams, Senator Nick Xenophon

Secretariat

Ms Julie Dennett

Ms Margaret Cahill

Ms Hannah Dibley

Ms Elise Williamson

Committee Secretary

Research Officer

Administrative Officer

Administrative Officer

SuiteS 1.61 Telephone: (02) 6277 3560

Parliament House Fax: (02) 6277 5794

CANBERRA ACT 2600 Email: legcon.sen@aph.gov.au

iii

199

200

TABLE OF CONTENTS

Membership of the Committee 111

PREFACE....................................................................................................................vii

Reference of documents.........................................................................................vii

Estimates hearings..................................................................................................vii

Ministers and Parliamentary Secretaries..............................................................viii

Questions on notice...............................................................................................viii

CHAPTER 1 ...................................................................................................................1

IMMIGRATION AND CITIZENSHIP PORTFOLIO ......................................... 1

Migration Review Tribunal and Refugee Review Tribunal (MRT-RRT) ............. 1

Department of Immigration and Citizenship ........................................................... 2

CHAPTER 2 .................................................................................................................. 9

ATTORNEY-GENERAL'S PORTFOLIO ............................................................. 9

Family Court of Australia and Federal Magistrates Court of Australia ................. 9

Federal Court of Australia...................................................................................... 11

National Native Title Tribunal...............................................................................13

Office of the Australian Information Commissioner ............................................ 13

Australian Customs and Border Protection Service .............................................. 14

Australian Federal Police (APP) ...................... 14

Attorney-General's Department..............................................................................15

APPENDIX 1...............................................................................................................19

DEPARTMENTS AND AGENCIES FOR WHICH THE COMMITTEE HAS OVERSIGHT....................................................................................................19

Attorney-General's Portfolio.................................................................................. 19

Immigration and Citizenship Portfolio .................................................................. 20

201

A PPEN D IX 2 21

INDEX OF PROOF HANSARDS.....................................................................21

Immigration and Citizenship Portfolio..................................................................21

Attorney-General's Portfolio ................................................................................. 22

A PPEN D IX 3 ...................................................................................................................................23

TABLED DOCUMENTS..................................................................................23

Immigration and Citizenship Portfolio, 21 and 22 May 2012 .............................. 23

Attorney-General's Portfolio, 23 and 24 May 2012..............................................24

202

PREFACE

On 9 May 2012, the Senate referred to the committee for examination the estimates of proposed expenditure for the financial year 2012-13. The committee is responsible for the examination of the Attorney-General's Portfolio and the Immigration and

Citizenship Portfolio. The portfolio budget statements for 2012-13 were tabled on 9 February 2012.

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 2013 [Appropriation Bill (No. 3) 2012-2013];

" Particulars of certain proposed expenditure in respect of the year ending on 30 June 2013 [Appropriation Bill (No. 4) 2012-2013];

" Particulars of proposed supplementary expenditure in respect of the year ending on 30 June 2012 [Appropriation Bill (No. 5) 2011-12]; and

" Particulars of certain proposed supplementary expenditure in respect of the year ending on 30 June 2012 [Appropriation Bill (No. 6) 2011-12],

The committee was required to report on its consideration of the budget estimates on or before 26 June 2012.

Estimates hearings

The committee met in public session on 21, 22, 23 and 24 May 2012.

Over the course of the four days of hearings, totalling over 40 hours, the committee took evidence from the following departments and agencies:

Immigration and Citizenship Portfolio

" Department of Immigration and Citizenship

" Migration Review Tribunal and Refugee Review Tribunal

Attorney-General *s Portfolio

" Attorney-General's Department

" Australian Crime Commission

" Australian Customs and Border Protection Service

" Australian Federal Police

" Australian Government Solicitor

" Australian Human Rights Commission

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" Australian Law Reform Commission

" Australian Security Intelligence Organisation

" Australian Transaction Reports and Analysis Centre

" CrimTrac Agency

" Family Court of Australia

" Federal Court of Australia

" Federal Magistrates Court of Australia

" Insolvency and Trustee Service Australia

" National Native Title Tribunal

" Office of the Australian Information Commissioner

" Office of the Director of Public Prosecutions

Copies of the transcripts of Hansard are available from the committee's internet page at: www.aph.gov.au/senate legalcon.

An index of the Hansard for each portfolio appears at Appendix 2.

Ministers and Parliamentary Secretaries

On 21 and 22 May 2012, the committee heard evidence from Senator the Hon Kate Lundy, the Minister for Multicultural Affairs, and Senator the Hon Don Farrell, Parliamentary Secretary for Sustainability and Urban Water, representing the Minister

for Immigration and Citizenship.

On 23 and 24 May 2012, the committee heard evidence from Senator the Hon Joseph Ludwig, Minister for Agriculture, Fisheries and Forestry and Minister Assisting on Queensland Floods Recovery, and Senator the Hon Jacinta Collins, Parliamentary Secretary for School Education and Workplace Relations, representing the Attorney-

General and the Minister for Home Affairs.

Officers from both departments and associated agencies also appeared. The committee thanks the Ministers, Parliamentary Secretaries and officers for their assistance.

Questions on notice

The committee detennined that the due date for submitting responses to questions on notice from the budget estimates round is 6 July 2012.

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 above address.

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CHAPTER 1

IMMIGRATION AND CITIZENSHIP PORTFOLIO

1.1 This chapter summarises some of the matters raised during the committee's consideration of the budget estimates for the Immigration and Citizenship Portfolio for the 2012-13 financial year.

Migration Review Tribunal and Refugee Review Tribunal (MRT-RRT)

1.2 The Principal Member of the MRT-RRT, Mr Denis O *Brien, updated the committee on significant developments within the organisation since his last appearance before the committee. He covered workload statistics and strategies to deal with an increased workload, member recruitment and performance indicators.

1.3 The committee heard that for the financial year up to 30 April 2012

lodgements continued to increase for both the MRT and RRT compared to 2010-11, 30 per cent and 11 per cent respectively. Active cases also increased significantly over this period, 47 per cent for the MRT and 59 per cent for the RRT. Mr O'Brien advised the committee that he expected the total number of decisions across both tribunals for 2011- 12 would be close to 10,800, which compares to 9,181 for the previous year.1

1.4 The MRT-RRT was questioned about the impact of the transfer of reviews for irregular maritime arrivals (IMAs) to the RRT following Minister Bowen's announcement in November 2011 that the government would be moving to a single protection visa process for both boat and air arrivals, using the current onshore arrangements for application and independent review through the RRT system.1 2 The Minister announced on 19 March 2012 that '[tjhe new system will apply to asylum

seekers who arrive in Australia from 24 March as well as those who arrived prior to that date but had not yet had a primary assessment interview'.3

1.5 Mr O'Brien advised that additional funds of $8.6 million were provided in the 2012- 13 budget to fund the increasing workload as a result of the new IMA caseload.4 He also noted that there would be a return of some tribunal members from the

1 Committee Hansard, 21 May 2012, pp 3-4.

2 Minister for Immigration and Citizenship, 'Bridging visas to be issued for boat arrivals', Media Release, 25 November 2011, http://www.minister.immi.gov.au/media/cb/2011/cbl 80599.htm (accessed 5 June 2012).

3 Minister for Immigration and Citizenship, New single protection visa process set to commence', 19 March 2012, http://www.minister.immi.gov.au/media/cb/2012/cb 184344.htm (accessed 5 June 2012).

4 Mr Martin Bowles PSM, Acting Secretary of the Department of Immigration and Citizenship, confirmed that these funds had been redirected in full from the Independent Protection Assessment Office, see Committee Hansard, 21 May 2012, p. 12.

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Independent Protection Assessment Office in the coming months as a result of the changed arrangements." In response to questioning, Mr Colin Plowman, Registrar, elaborated on the arrangements that have been implemented to manage the new

caseload:

Mr Plow m an:... We have also got in place two working parties within the organisation, one on case load management to ensure we have the appropriate policies and processes in place. We have been liaising with the department around that in terms of making sure we can manage that. Part of that new principal member direction was part of the consideration of that and a few other things. We also have a staffing infrastructure working party within the tribunals to also manage those other matters to do with the new case load.5 6

1.6 On request, Mr O'Brien tabled the Principal Member Direction 2/2012: Applications for review made by offshore entry persons , to assist the committee.7

1.7 The committee was informed that, at the time of the hearing, five applications from IMAs for review of negative decisions had been received and all had been allocated to members. Mr O'Brien explained that, while detention cases would receive priority, not every IMA application is expected to be a detention case.8

1.8 With the expiration of Mr O'Brien's appointment as Principal Member on 30 June 2012, the Minister and the committee acknowledged his service and assistance to the committee, particularly through the estimates process, over the previous five years.9

Department of Immigration and Citizenship

Irregular maritime arrivals and budget implications

1.9 Senators again questioned the Department of Immigration and Citizenship and Minister on the budgetary implications of the number of IMAs. The Minister, Senator the Hon Kate Lundy, provided an opening statement to the committee regarding IMAs and the impact on the budget. The Minister outlined the sequence of events since the High Court of Australia's decision on 31 August 2011 in relation to the Malaysia Arrangement. She also provided the details of arrivals since this time and noted that, in 2012, there have been peaks and troughs in the number of arrivals.10

5 Committee Hansard, 21 May 2012, p. 4.

6 Committee Hansard, 21 May 2012, p. 11.

7 Committee Hansard, 21 May 2012, p. 6.

8 Committee Hansard, 21 May 2012, p. 6.

9 Committee Hansard, 21 May 2012, pp 5 and 14.

10 Committee Hansard, 21 May 2012, pp 14-15,

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1.10 Senators sought an explanation of the revised budget figure of approximately $840 million over the forward estimates for offshore asylum seeker management since the additional estimates process. The Acting Secretary, Mr Martin Bowles PSM, informed the committee:

If you have a look at the arrival numbers late last year, they were very high. Then we had some quite low numbers in January and March. Things were bouncing around quite a bit. We take every opportunity that arises in the budget-setting process to look at our numbers and to feed in the latest numbers and policy positions. The first opportunity, really, to get into the 2012-13 PBS is in the May budget, obviously. We have to factor in a range of those issues. At the additional estimates process *the MYEFO process * we had got so far. We now have another opportunity, nearly, what is it, AVi or five months past the additional estimates and MYEFO processes."

1.11 Officers confirmed that the 2012-13 budget figure is based on a rate of 450 IMAs a month as a budget projection, but noted that this is only one component.

Senator CASH: Can you then take me through from February to May?

What constitutes the [$839.9] million? Can you take me through where the increases have actually been, given that the increase in IMAs is only part of that?

Mr Bowles: It is an exceptionally complex formula that we work out with the Department of Finance and Deregulation.

Senator CASH: All I am interested in is the 840-odd million. What is encapsulated in that? How can we get a breakdown of what is encapsulated in that? Where have the increases been?

Mr Bowles: It tries to factor in the cohorts of people we have *their nationality, whether they are family groups, whether they are accompanied or unaccompanied children, whether they are single adult males and where they actually are. It is cheaper to have them in certain places than other places, no doubt, through the system *

Senator CASH: More expensive, based on this figure.

Mr Bowles: As I said, we have adjusted for the change in policy and we have progressively done that from MYEFO to the PBS of 2012. Factoring all of those things in *

Senator CASH: Except the IMAs, because the IMAs have not changed. That has to be put to one side because you state that that remains at 450.

Mr Bowles: That is correct.11 12

11 Committee Hansard, 21 May 2012, p. 18.

12 Committee Hansard, 21 May 2012, p. 23.

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Community Placement Network (Homestay)

1.12 The new Community Placement Network, which commenced on

26 March 2012, was the subject of extensive questioning. The program will provide accommodation for clients released from detention on bridging visas and will be delivered through the Australian Homestay Network. The department advised the committee that, at the time of the hearings, 1400 potential hosts had registered for the program, eight clients had been placed with a host family, with a further 12 clients to be placed that day, and a group of 20 clients to be placed by 5 June 2012.13

1.13 One area of questioning concerned the risk of placing a potentially vulnerable client into a homestay arrangement. Officers explained to the committee that, although people at risk are eligible for the homestay program, more vulnerable people would be placed in community detention rather than on bridging visas. Mr John Moorhouse, Deputy Secretary, provided further context on the client group accessing homestay:

There is probably some other contextual information that is useful to take into account as well, and that is that the people who are going on to

bridging visas in recent times are people who are not as institutionalised from being in detention for an extended period of time. Some of the early bridging visa releases were people who had been in detention for two or

three years. Now the people who are coming out and are likely to flow into the Homestay Network are people who have only been in detention for a

relatively short period of time∑ *five or six months.14

1.14 The committee also explored a number of other aspects of the program, including the timeline for the development of the program, departmental liability, host insurance, screening processes, training for hosts, income support for clients on the program and media coverage.15

Enterprise Migration Agreements and Regional Migration Agreements

1.15 Senators requested an update on the Enterprise Migration Agreements (EMA) scheme which had been announced in the previous budget. The department advised that, at the time of the hearing, one application was before the Minister for consideration and three other applications had been received by the department but had not yet been submitted to the Minister. Officers estimated that another 20 projects may be eligible. While acknowledging that commercial-in-confidence considerations are not grounds for a claim of public interest immunity, Mr Kruno Kukoc was reluctant to provide detailed information on the final application before the Minister and senators did not pursue that line of questioning. He did advise in more general terms that EM As could include multiyear projects, spanning the lifetime of the

13 Committee Hansard, 21 May 2012, pp 98-99.

14 Committee Hansard, 21 May 2012, p. 110.

15 Committee Hansard, 21 May 2012, pp 100-112.

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project, and there would be provision within each agreement for regular review of arrangements every six to 12 months.16

1.16 In response to questions on the issue of workplace rights for EMA employees, the committee was informed that foreign workers under the scheme would be employed under the 457 visa program, and would therefore have all the rights and obligations extended to them under that program. It was also noted the English language requirement would be that of the 457 visa program, but may be subject to some concessions if there are alternative risk mitigation strategies in place to ensure workers have information about their rights.17 18

1.17 Another area of interest to senators concerned the monitoring of sponsor compliance with regards to conditions and salaries. The committee was assured that the current sponsor monitoring program for the 457 visa program will be fully extended to EMAs. When the issue of whether there were sufficient resources to adequately extend the monitoring program to projects under the EMA scheme, Mr Kukoc advised:

...There is no issue about the level of resources. I think the issue is about

the intelligent use of resources. We are implementing the risk management strategy. We have developed the risk management strategy in the 457

sponsor regime, where we clearly identify the sponsors or employees, the characteristics and who may be of high risk and we target our sponsorship activities to the high rick areas.

Senator W ATERS: Does that mean that low-risk projects are not

monitored?

Mr Kukoc: They are monitored but, like with any risk-management

strategy, you have more resources devoted to high-risk areas.

Senator W ATERS: Will the EMAs be considered high risk or low risk?

Mr Kukoc: It all depends on the employers and the type of employees

they employ under the EMA. So every EMA will be different * because a

EM A is just a deed of agreement that covers the project on a range of

employers under that deed of agreement. So all these employers will have a separate labour agreement and will enter into sponsorship obligations with the government under those labour agreements. So it will vary from

employer to employer or the type of employees they bring onshore.1 u

1.18 The committee was advised that the March 2012 release of the Regional Migration Agreement (RMA) submission guidelines had been delayed due to an extended consultative period with the states and territories, and were now expected to be released in June 2012. Despite the delay in publication of the guidelines, Mr Kukoc

______________________________________________________________________________ Page 5

16 Committee Hansard, 22 May 2012, p. 46.

17 Committee Hansard, 22 May 2012, p. 47.

18 Committee Hansard, 22 May 2012, p. 48.

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confirmed that one RMA was currently being negotiated with the Northern Territory Government.19

Security assessment processes for bridging visas

1.19 Senators sought details of the processes for the grant of bridging visas, which at the time of the hearing, totalled 1780 visas, with 190 moved to permanent residency. The committee heard that bridging visas had been granted to persons at various stages of processing, with priority given to those who had been in detention

the longest or considered most vulnerable. The department indicated that the criteria included people who had been assessed as *ä*ë met' status (a positive refugee status assessment) but had not completed the remainder of their processing, including the final Australian Security Intelligence Organisation security check. It was also confirmed that the grant of bridging visas may include persons who had not attained

*ä*ë met1 status:

Senator CASH: Does that mean that there are some people on bridging

visas who may not have received a positive assessment * they might be

either pending an assessment or on a negative RS A assessment?

Mr Kelly: There certainly are people who as the processing continues * so those people who may have been released, who were not through the initial process and who have subsequently been found not to be a refugee either at the primary stage or at the review stage * would still be in the community on bridging visas. So, yes, that is absolutely the case.20

1.20 The department addressed concerns raised about the identity and security checks of persons on bridging visas released into the community:

Senator CASH: The question that I think arises is: these individuals are not subject to surveillance whilst they are in the community on bridging visas; why is there a lower bar for people on bridging visas that are all out in the

community than, say, for people who are on a protection visa?

Mr McCairns: A protection visa is a permanent visa, so we would want to

be much more sure of the facts, if I can put it that way, before the grant of a permanent visa.

Senator CASH: But these people are still out in the community.

Mr Bowles: Bridging visa holders have to report in, so they are not like a

permanent protection visa holder.

Senator CASH: At the discretion of the minister, though. The minister, under the bridging visa conditions *

Mr Bowles: Under the bridging visa arrangements we have in place,

bridging visa holders report.

19 Committee Hansard, 22 May 2012, p. 65.

20 Committee Hansard, 21 May 2012, p. 89.

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Mr Bowles: ...We are not talking about identity as a singular issue. We are talking about identity. We are getting an initial assessment from ASIO and we have already done at least that first part of our entry interview process and well into, probably, the second part of that particular stage. So there are a whole series of things that we go to, not just one particular issue.

Senator CASH: I think what we have established at the moment is that, in terms of the identity checks, we know who they claim to be but we do not

know who they are w hen we are releasing them into the community.

Mr Bowles: In some cases that could be correct, but we still go very

quickly into the detailed checking. As I said, we are not just going by one

single thing being an identity check. There are a series of these checks * the security assessment and others.21

Other matters of interest

1.21 The committee also questioned the department about a wide range of other matters, including costs of international charter flights, details of an irregular entry vessel off the Cocos (Keeling Islands), visa arrangements for overseas-based flight crews, incidents of self-harm in immigration detention centres, alleged fraud in the migration program raised by the ABC program 7.30, the migration program for 2012-13, costs of Northam Immigration Detention Centre and Pontville Immigration Detention Centre, the Adult Migrant English Program, the cap on the Humanitarian

Settlement Services, and the funding decrease for the National Accreditation Authority for Translators and Interpreters.

Answers to questions on notice

1.22 The committee acknowledges a slight improvement in the timeliness of the provision of some of the answers to questions on notice for the Immigration and Citizenship Portfolio for the additional estimates 2011-12 round. The committee set 30 March 2012 as the due date for answers to questions on notice and received 214 answers in response to a total of 5 1 922 questions by that date. As noted by the committee in its previous report on estimates, no answers to questions on notice have been provided by the due date over the five previous estimates rounds for the Immigration and Citizenship Portfolio.23

1.23 The Acting Secretary in his opening statement remarked on the large volume of questions on notice in recent estimates rounds, as well as the burden placed upon

21 Committee Hansard, 21 May 2012, p. 92.

22 One question on notice out of the total of 519 was transferred to the Australian Federal Police for response.

23 Legal and Constitutional Affairs Legislation Committee, Additional estimates 2011-12, March 2012, p.7, available at: http://www.aph.gov.au/Parliamentarv Business/Committees/Senate Committees?urHegcon c tte/estimates/add 1112/index.htm.

Page 8

the department by its participation in other parliamentary committee inquiries, most notably the recent Joint Select Committee on Australia's Immigration Detention Network, which tabled its final report on 30 March 2012:

...This was a very extensive inquiry into what is a complex and challenging area of public policy and administration. Throughout the inquiry, the

department worked with the committee in an open and transparent manner.

To this end, the department answered over 1,300 questions, provided 4,000 pages of written material, responded to 306 questions on notice, provided 16 supplementary responses, facilitated site visits across the immigration

detention network and appeared before the committee on 10 occasions.

The department continues to respond productively, openly and

transparently to the various reviews, oversight bodies and a number of other parliamentary committees. M any questions to the department seek detailed information on a range of complex and sensitive issues. All responses are

carefully checked to ensure that all information provided is accurate, current and addresses the matters raised. This takes time.

This also carries with it a significant workload. For instance, in the budget estimates hearing in M ay 2011, 794 questions were taken on notice. This compares with only 136 questions on notice being asked at the 2010 budget estimates hearing. At the additional estimates hearing in February this year, the department received 519 questions on notice. It is also a challenge for us to deal with the many questions between estimates hearings. However, I want to stress that we try our best given the level of complexity we are

working with.24

1.24 While the committee is encouraged by the recent improvement in providing at least some answers by the due date, it notes that the majority of answers remained outstanding as at this date. The committee hopes to see a continuing improvement in the timeliness of answers in future estimates rounds.

24 Committee Hansard, 21 May 2012, p. 17.

CHAPTER 2

ATTORNEY-GENERAL *S PORTFOLIO

2.1 This chapter summarises some of the matters raised during the committee's consideration of the budget estimates for the Attorney-General's Portfolio for the 2012-13 financial year.

Fam ily C ourt o f A ustralia and Federal Magistrates C ourt of A ustralia

2.2 The committee questioned officers on the processes leading to the discovery and correction of the proclamation error concerning legislation which transferred jurisdiction for de facto property and maintenance matters from the states and territories (except Western Australia) to the Commonwealth.

2.3 De facto property and maintenance matters were transferred to the

Commonwealth following the passage of the Family Law Amendment (De Facto Financial Matters and Other Measures) Act 2008. Due to a departmental oversight, a proclamation was not made at the time to set a date from which the Family Court of Australia can exercise the de facto property jurisdiction, resulting in uncertainty

around the status of certain family law court orders. The Family Law Amendment (Validation of Certain Orders and Other Measures) Act 2012 received Royal Assent on 10 April 2012 and retrospectively validates affected orders.1

2.4 The committee sought details on the timeline of events which led to the discovery of the error and invited officers from the Attorney-General's Department to assist in providing a response. It was explained that the matter was first identified by

the department in the first week of December, following a due diligence exercise. This exercise was undertaken after the notification of a similar issue concerning some appeals from Family Law Magistrates in Western Australia affecting orders made by the federal family courts between 1 July 2006 and 20 October 2011, as a result of the Jurisdiction of Courts (Family Law) Act 2006? The Secretary of the department, Mr Roger Wilkins AO, explained to the committee:

Mr W ilkins: It is a very unusual type of provision. You would not

necessarily expect to find it in an act of parliament, actually. It is a

provision that says the functions of the court are those which are prescribed, essentially * which is something that we no longer do and no longer have.

So, yes, there should be due diligence, and there is due diligence * and that does occur in the department. I am satisfied that, in 99.9 per cent of cases there is not a problem; this one was a slip-up. 1 2

1 Attorney-General's Department, Status of various family court orders, http://www.ag.gov.au/Families/CuiTentissuesinthefamilylawsvstemyPages/Status-of-various- familv-court-orders.aspx (accessed 12 June 2012).

2 Committee Hansard, 23 May 2012, p. 38.

Page 10

Senator BRANDIS: So the officer responsible simply through oversight, omitted to have the matter placed on the Executive Council agenda back in 2009 and that oversight was never noticed until the first week of December last year?

Mr W ilkins: It was not about the commencement of the provision * that was not the problem. The problem was that there needed to be an extra bit

conferring jurisdiction formally on the court, and there is a provision in the legislation prescribing that * which, as I say, is unusual and which recent legislation, as you know, which has come before the House has actually

altered to get rid of, on the advice of parliamentary counsel that we should not have that in the legislation.3

2.5 The committee was advised that the Chief Justice of the Family Court was notified about the issue by the department on 22 December 2011. The evidence indicated that the Attorney-General was notified of the issue on 9 January 2012; however, the Minister undertook on notice to confirm that date.4 5

2.6 In reply to a question about the number of affected orders, officers of the Family Court indicated that it would be a 'significant number' and undertook to provide details to the committee on notice.

Budget

2.7 The committee heard that the Federal Magistrates Court (FMC) has run a deficit for the last five years. To turn around this budgetary shortfall, the FMC expected to take steps that may result in the reduction of services and staff numbers. Mr Richard Foster PSM, Acting Chief Executive Officer of the FMC, indicated that the provision of some regional services would also be reviewed.3 He conceded that inevitably there would be some reduction in court services and potential for greater delays in the system.6

2.8 Mr Foster further advised that the number of filings within the FMC has increased steadily in recent years and resourcing levels have not been adequate to cover services:

Mr R Foster: The Chief Justice has authorised me to say, as she was the

Chief Federal M agistrate when the court was established, that quite frankly the court was never resourced properly from day one. It was her view that

there was to be a review of the court's resourcing four or five years after the court commenced, and that has never occurred. So the Federal M agistrates Court has had to live on the goodwill and cooperation of the Family Court

3 Committee Hansard, 23 May 2012, p. 39.

4 Committee Hansard, 23 May 2012, p. 41.

5 Committee Hansard, 23 May 2012, pp 45-46.

6 Committee Hansard, 23 May 2012, pp 45-46.

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of Australia and to a lesser extent the Federal Court of Australia, and it has grown to such an extent that there has never been sufficient funding to

cover the court. That is consequently why we are running at such

significant deficits.

Senator BRANDIS: And since 2008 until April of this year * for four

years, effectively * under the shadow of uncertainty as to its very future?

Mr R Foster: Yes, that is right.

Senator BRANDIS: You have told me in previous estimates that at the

time that had a terrible effect on the morale of the federal magistrates.

Mr R Foster: That is unquestionable.7

2.9 Like the FMC, the Family Court is exempt from the additional efficiency dividend; however, the committee sought the agency's response to the impact of the existing 1.5 per cent dividend which applies for the 2011-12 and 2012-13 fmancial

years. Mr Foster, as Chief Executive Officer of the Family Court, outlined a number of areas which are being considered to meet the efficiency dividend and to bring the budget back into surplus. He advised that there will be a reduction in travel, use of consultants, supply costs and a reduction in leased premises in rural and regional areas. He also indicated that there will be a significant reduction in staff.8

Federal C ourt o f A ustralia

2.10 The committee questioned officers about the budget measure which involves the transfer of the National Native Title Tribunal functions of native title claims mediations to the Federal Court, with the aim of increasing efficiencies within the tribunal. The Chief Executive Officer/Registrar, Mr Warwick Soden, clarified the current arrangements following the 2009 amendments to the Native Title Act 1993, which removed the requirement for all matters to be referred from the Federal Court to the tribunal for mediation:

...since that time, as a result of those amendments, there has been a much

greater clarity of the responsibility of all of the proceedings. In essence, it shifted from the tribunal to the Federal Court, keeping in mind they were always proceedings in the court. There has been an increase in the case

management and related mediation activity and probably ILUA [Indigenous land use agreements] oversight activity by the court in relation to matters that had previously been the responsibility of the tribunal. In one

sense...there is a transfer of mediation and related ILUA responsibility from the tribunal to the court, but I would like to make that qualification that it is not happening in an environment where the court has not been

involved increasingly in the last couple of years.9

7 Committee Hansard, 23 May 2012, p. 47.

8 Committee Hansard, 23 May 2012, p. 62.

9 Committee Hansard, 23 May 2012, p. 52.

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2.11 In response to concerns that this budget measure would result in the removal of mediation of native title disputes from a specialist tribunal to a court with limited specialist experience in the development of Indigenous land use agreements, Mr Soden advised:

...there is a great depth of experience in the Federal Court amongst those

judges who have taken a special interest and become, I believe, highly

specialised in the native title jurisdiction. And it does not only go to issues concerning the trial; those judges manage the cases from beginning to end and those cases were commenced before the tribunal undertook mediation or work concerning ILUAs associated with a consent determination. So the judges managing those cases had to understand and be on top of what was

happening with the case. In that sense, I think they all would have a very

deep understanding of the relationship between the case and the ILUA and the issues involved. It was the judges in more recent times with the ability to take control to a greater extent, after the 2009 amendments, that have been able to focus upon the issues in an active case management sense,

including, most probably, issues relating to what might need to be done in the ILUA environment, which has led, I believe, to that great acceleration in the consent determinations, w hich...often involve an ILU A .10 11 12

I cannot speak for policy matters, but I can certainly make a comment from my perspective on what has happened in recent times...I think that a decade or so ago there was a clear policy view that the mediation should be

separate from the court and undertaken in an environment that was outside of the court. However, I believe in the last decade there has been a shift in a phenomenon that I would describe as being the realisation that a very

effective mediation can take place under the auspices of a judge managing the case, where the judge manages the case and makes orders in relation to the kind of mediation, the timeframe for things to be done and the issues

that might be dealt with in the mediation.11

2.12 Mr Wilkins added:

...I think this is a move in the right direction as a matter of public policy.

Forget about the efficiency aspects of this * which are not unimportant in terms of public policy * if you want a system that actually delivers, as you say, in a more timely and proficient way, consent determinations

underpinned by ILUAs, I think this is the right way to go...[S]ome of those

functions from the Native Title Tribunal are not just going to disappear; they will be incorporated into the native title functions in relation to ILUA negotiations not related to native title claims mediation. The arbitral

functions regarding future acts will stay; they will come across and remain badged under this concept of a National Native Title Tribunal.'2

10 Committee Hansard, 23 May 2012, p. 55.

11 Committee Hansard, 23 May 2012, p. 66.

12 Committee Hansard, 23 May 2012, p. 55.

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N ational N ative Title Tribunal

2.13 The committee pursued this line of questioning during examination of the National Native Title Tribunal. The Registrar, Ms Stephanie Fryer-Smith, described the mediation role as a core function of the tribunal to which it has 'devoted

considerable care and time and resources to developing...a multidisciplinary approach'.13 Ms Fryer-Smith elaborated on the difference in the mediation model of the two bodies:

Obviously my observation of the Federal Court's mediation practice is very much an external one. It is well known that the court has its own priority

list of matters * that is, native title cases which are seen as being well

within a point of being determined * and the tribunal has quite a number of those matters currently in mediation with it. M any of the cases on the

priority list are, I understand, mediated by a deputy district-registrar. Sometimes I understand the court uses external consultants. The court also engages in case management of cases in a way that would certainly not be the same as the tribunal's.

[T]he tribunal has adopted a multi-disciplinary approach to dealing with native title mediations. We have a number of Indigenous employees who are involved in the mediation process. There is a high degree of awareness of the complexity of native title claims and proceedings. There are often veiy many parties. Their interests and priorities are not necessarily aligned.

Over the years we think that the practice we have developed is one that is

well suited to determining native title proceedings in a way in which

typically there will be Indigenous land use agreements forming part of a packaged settlement of a particular determination. So, in a sense, all the parties' interests can be satisfied in the one outcome. So, it would appear that they are different styles.14

2.14 Of interest to the committee was the amount of consultation and the tribunal's position on this budget measure. Ms Fryer-Smith advised that the tribunal was informed of the proposed changes on 27 March 2012 and subsequently had a series of

meetings with the department. Mr Fryer-Smith also confirmed that the tribunal had participated in the Skehill review from August until December 2011.15

Office of the A ustralian Inform ation C om m issioner

2.15 This is the second occasion that the Office of the Australian Information Commissioner has appeared before the committee for examination of estimates since that office's transfer from the Prime Minister and Cabinet Portfolio on 19 October 2011.

13 Committee Hansard, 23 May 2012, p. 72.

14 Committee Hansard, 23 May 2012, p. 74.

15 Committee Hansard, 23 May 2012, p. 73.

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2.16 One area of interest to the committee was the implementation of a disclosure log under section 11C of the reformed Freedom of Information Act 1982 which requires an agency to publish online the details of information that has been released under the Act (subject to exemptions for some personal and business privacy reasons).16

2.17 The committee examined a range of other topics with the office, including the power to investigate systemic problems relating to FOI processing within agencies; monitoring of compliance of the Information Publication Scheme; and the Review of charges under the Freedom of Information Act 1982, in particular, the recommendation that an agency or minister would have the discretion to refuse to process an FOI request for personal or non-personal information that it estimates to

take more than 40 hours.

A ustralian C ustom s and Border Protection Service

2.18 Committee members spent considerable time questioning officials from Customs about the impact of budget cuts and additional efficiency dividend on operations in a range of areas within the agency. For example, details were sought on the impact of the budget cut of $7.2 million from civil maritime surveillance and response, the reduction of $10.4 million for passenger facilitation and the redirection of capital works totalling $19.5 million over the forward estimates to other border protection initiatives.

2.19 While still in the process of finalising budgeting decisions, the Chief Executive Officer of Customs, Mr Michael Carmody, assured the committee that the areas of the passenger clearance, border security, air and waterfront control, people smuggling, vessel clearance and offshore maritime response would not be subject to

any staffing reductions as a result of the additional efficiency dividend. The agency would also be looking at achieving efficiencies in supplier expenses, including licensing arrangements and legal expenses.17

A ustralian Federal Police (AFP)

2.20 The committee pursued detailed questioning on the AFP's budgetary position and the impact of cuts. It heard that the AFP's operating appropriation is reduced by $67 million for the next financial year, which includes $24.54 million as a result of the additional efficiency dividend. The committee was advised that the resulting impact in terms of staffing numbers was expected to be a net reduction in staff of 10 across the organisation.18 Mr Andrew Wood, Chief Operating Officer, elaborated on the issue of the efficiency dividend:

16 Committee Hansard, 23 May 2012, p. 77.

17 Committee Hansard, 24 May 2012, pp 7-8.

18 Committee Hansard, 24 May 2012, pp 48-49.

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...as an executive team we then take the available resources and look at the priorities of the organisation for the coming financial year. We look at where within the organisation we can pursue efficiencies, reduce duplication, ensure that we are leveraging as best we can off whole-of- govemment initiatives around ICT purchasing and those sorts of things, so as to minimise the effect on ASL numbers.

So, whilst the PBS does reflect that those resourcing changes *if there is no intervention from the executive of the organisation *would result in a reduction of 10. That is not necessarily the trajectory we intend following once we have an opportunity to look at the budget in the light of our priorities in 1213 and assign it accordingly. So each estimates we tend to, in response to questions, give you an update on just what our staffing numbers are. That will give you a true indication, as estimates processes progress through the year, of the actual staffing levels we are achieving *and then comparing those to the performance of the organisation.19 20

2.21 The AFP was also questioned on a range of issues, including the National Open Source Intelligence Centre (NOSIC) contract, complaints about AFP personnel overseas, the AFP's role in training Indonesian security forces, AFP involvement in the interception of an illegal entry vessel off Cocos (Keeling) Islands, recent seizures of illicit drugs, the closure of the Robina facility, and the new forensics facility announced in the 2012-13 budget.

A ttorney-General *s D epartm ent

2.22 The department updated the committee on its response to the increased efficiency dividend, particularly in terms of staff reductions. The committee heard that a business planning process has begun which will determine the workforce structure, and officers reported that almost half of the additional efficiency dividend will be achieved by reductions in supplier expenditure and the remainder in staff reductions (through natural attrition, discontinuance of non-ongoing contracts and voluntary redundancies). The department reported finding savings through reductions in supplier expenses, use of consultants, travel expenses, printing and publication costs, and legal

20

expenses.

2.23 The committee also questioned officers about the 2012-13 budget expense measure which will defer payments from the Confiscated Assets Account made under section 298 of the Proceeds of Crime Act 2002. Budget paper No. 2 indicates that this measure will achieve savings of $13.5 million in 2012-13 and $58.3 million over the forward estimates, and will be redirected to support other government priorities.21 Concerns were raised about the impact of this measure on the programs of expenditure

19 Committee Hansard, 24 May 2012, p. 49.

20 Committee Hansard, 23 May 2012, p. 83.

21 Budget measures: Budget paper no. 2 2012-13, pp 83-84.

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under the Act relating to crime prevention activities which are managed by the department.

2.24 It was explained to the committee that the amounts identified are actually a quarantine of the funds, and that they will remain in the account and become available in later years. Mr Iain Anderson advised that a number of programs will continue to run over the coming years:

There are currently over 200 community based projects funded through the proceeds of crime account that will be running for a period of

approximately 18 months to two years, I believe. The government has recently committed to projects that involve funding for women's refuges, for example, to assist them to incorporate new security measures. There is a

suite of projects which involve police citizens youth clubs and youth diversionary projects. The terms of an agreement are being negotiated with Neighbourhood Watch for a three-year package of funding for them. So there will still continue to be a considerable body of projects over the next

few years.22

2.25 Given the department's advice that the funds concerned are quarantined, the committee queried the statement in Budget Paper No. 2 in relation to this measure which indicates that savings will be redirected to support other government priorities:

Senator W R IGHT:... Can you provide details about what those priorities and programs will be, or is that at odds with what you are saying, which is that it will actually be remaining quarantined in the fund?

Mr W ilkins: There are no identifiable hypothecated things that we can point to, if that is what you are after.

Senator W RIGHT: If that was what was stated to be the objective of having that amount as a saving, it is a bit dissonant with what I am hearing now, which is that in fact it is to sit there and be quarantined and not directed to priorities.

Mr W ilkins: No, it has the effect of coming off the bottom line of the budget. In accounting terms, it is a saving.

Senator W RIGHT: Yes, I understand that. So essentially that might be the priority that was being referred to.

Mr W ilkins: You may like to think of it this way: it frees up the capacity to use funds out of the consolidated fund. It offsets, if you like, it going to the bottom line of the budget. So, indirectly, it does allow the government to spend or redirect that funding, if you like, but it is done through the artifice

of holding this money and not expending it.23

2.26 Other areas of interest to the committee during examination of the department included: progress in the consolidation review of anti-discrimination legislation; the

22 Committee Hansard, 24 May 2012, p. 106.

23 Committee Hansard, 24 May 2012, p. 107.

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Review of the National Partnership Agreement on Legal Assistance Services and Legal Aid; court fee increases; meetings with the Indonesian government in relation to the release of Indonesian minors held in Australian prisons; the intercountry adoption program between Australia and Ethiopia and termination of a contract with the Tesfa/Abdi Waq orphanage; Australian contract law reform; a federal charter of victims' rights; the United States-Australia Joint Statement on Countering Transnational Crime, Terrorism and Violent Extremism; the updated alert location system; the DisasterWatch phone app; and the Crisis Coordination Centre.

Senator Trish Crossin Chair

221

222

APPENDIX 1

DEPARTMENTS AND AGENCIES FOR WHICH THE

COMMITTEE HAS OVERSIGHT

A ttorney-General *s Portfolio

" 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 and Classification Review Board;

" CrimTrac;

" 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 Native Title Tribunal;

" Office of the Australian Information Commissioner;

" Office of the Commonwealth Director of Public Prosecutions; and

" Office of Parliamentary Counsel.

Page 20

Im m igration and C itizenship Portfolio

" Department of Immigration and Citizenship (including the Office of the Migration Agents Registration Authority); and

" Migration Review Tribunal and Refugee Review Tribunal.

224

APPENDIX 2

INDEX OF PROOF HANSARDS

Im m igration and C itizenship Portfolio

21 May 2012 Pages

Migration Review Tribunal - Refugee Review Tribunal 3-14

Department of Immigration and Citizenship

Cross portfolio/corporate/general 14-34

Outcome 2 34-45

Outcome 3 45-57

Outcome 4 57-122

22 May 2012

Department of Immigration and Citizenship (in continuation )

Outcome 4 (in continuation) 3-30

Office of Migration Agents Registration Authority (sub-program 1.1.3) 30-35

Outcome 1 35-72

Outcome 4 (in continuation) 72-84

Outcome 5 85-99

Outcome 6 99-103

Page 22

A ttorney-General's Portfolio

23 May 2012 Pages

Australian Human Rights Commission 6-30

Australian Law Reform Commission 30-35

Australian Transaction Reports and Analysis Centre 35-37

Family Court of Australia and Federal Magistrates Court of Australia 37-51

Federal Court of Australia 51-57

Attorney-General's Department 57-62

Family Court of Australia and Federal Magistrates Court of Australia (in continuation ) 62-65

Federal Court of Australia (in continuation ) 65-68

National Native Title Tribunal 69-75

Office of Australian Information Commissioner 75-82

Attorney-General's Department (in continuation ) 82-111

24 May 2012

Australian Customs and Border Protection Service 6-36

Australian Federal Police 36-67

Australian Security Intelligence Organisation 67-78

Australian Government Solicitor 78-83

Australian Crime Commission 83-85

Insolvency and Trustee Service Australia 85-89

CrimTrac Agency 89-93

Office of the Commonwealth Director of Public Prosecutions 93-96

Attorney-General's Department (in continuation) 97-121

226

APPENDIX 3

TABLED DOCUMENTS

Im m igration and C itizenship Portfolio, 21 and 22 May 2012

No. DateTabled by:Topic

1 21 M ay 2012 M r Denis O'Brien, Principal

M ember, M igration Review Tribunal and Refugee Review Tribunal

Opening statement

2 21 M ay 2012 M r Denis O'Brien, Principal

M ember, M igration Review Tribunal and Refugee Review Tribunal

Principal M ember Direction 2/2012 * Applications for review made by offshore entry persons

3 21 M ay 2012 M r M artin Bowles PSM, Acting

Secretary, Department of Immigration and Citizenship

Opening statement

4 21 M ay 2012 Senator the Hon Kate Lundy,

M inister for M ulticultural Affairs Opening statement

5 21 M ay 2012 Senator M ichaelia Cash Legal and Constitutional Affairs

Legislation Committee Hansard, 24 M ay 201 l,pp 47-54

6 22 M ay 2012 Ms Christine Sykes, Chief

Executive Officer, Office of the M igration Agents Registration Authority

Opening statement

7 22 M ay 2012 M r Peter Vardos PSM, Deputy

Secretary, Department of Immigration and Citizenship

Visa subclasses with benchmarked base VAC increase/decrease

227

Page 24

A ttorney-General's Portfolio, 23 and 24 May 2012

No. Date Tabled by: Topic

1 23 M ay 2012 Senator the Hon George Brandis SC Australian Human Rights

Commission publication * Effectively preventing and responding to sexual harassment: A Quick Guide

2 23 May 2012 M r David Fredericks, Deputy

Secretary, Civil Justice and Legal Services, Attorney-General's Department

Attorney-General's speech to Federal M agistrates Plenary * Australia *s essential trial court: How the Federal Magistrates Court can fulfil its potential

3 24 M ay 2012 M r Andrew Wood, Chief Operating

Officer, Australian Federal Police Australian Federal Police Security Initiatives

4 24 May 2012 Senator the Hon George Brandis SC Correspondence concerning the

NSW Coronial recommendations following the inquest into the death of Ms Dianne Brimble

5 24 M ay 2012 Ms Jamie Lowe, Assistant Secretaiy,

National Security Policy and Programs Branch, Attorney- General's Department

US-Australia Joint Statement on Countering Transnational Crime, Terrorism and Violent Extremism

228

The Senate

Rural and Regional Affairs and Transport Legislation Committee

Budget estimates 2012-13

June 2012

229

© Commonwealth of Australia

ISBN 978-1-74229-643-2

This document was produced from camera-ready copy prepared by the Senate Rural Affairs and Transport Legislation Committee and printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra. ii

ii

230

Membership of the Committee

Members

Senator Glenn Sterle ALP, Western Australia Chair

Senator the Hon. Bill Heffeman LP, New South Wales Deputy Chair

Senator Alex Gallacher ALP, South Australia

Senator Fiona Nash NPA, New South Wales

Senator Anne McEwen* ALP, South Australia

Senator Rachel SiewertAG, Western Australia

* Senator McEwen was a substitute member for Senator Urquhart from 9 May 2012 to 30 June 2012

Participating Members

Senator Abetz Senator Back Senator Bemardi Senator Bilyk

Senator Birmingham Senator Bishop

Senator Boswell Senator Boyce Senator Brandis Senator B Brown

Senator C Brown Senator Bushby Senator Cameron

Senator Cash Senator Colbeck Senator Cormann Senator Crossin

Senator Di Natale Senator Edwards Senator Eggleston Senator Faulkner Senator Fawcett Senator Fierravanti-Wells

Senator Fifield Senator Fisher Senator Fumer Senator Hanson- Young

Senator Humphries Senator Johnston Senator Joyce Senator Kroger Senator Ludlam Senator Macdonald Senator Madigan Senator McEwen Senator McKenzie Senator Marshall Senator Mason Senator Milne Senator Moore Senator Parry Senator Payne

Senator Polley Senator Pratt Senator Rhiamion Senator Ronaldson Senator Ryan Senator Scullion Senator Singh Senator Smith Senator Stephens Senator Thistlethwaite Senator Waters

Senator Williams Senator Wright Senator Xenophon

iii

231

Committee Secretariat

M r Stephen Palethorpe, Secretary M s Cassimah M ackay, Research Officer

PO Box 6100

Parliament House Canberra ACT 2600

phone: (02) 6277 3511 fax: (02) 6277 5811

e-mail: rrat.sen@aph.gov.au internet: www.aoh.gov.au/senate rrat

232

Table of Contents

Committee M embership ......................................... iii

List of Abbreviations..................................................................................................ix

Chapter 1......................................................................................................................... 1

Introduction.................................................................................................................1

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

Finance and Business Support, Government, Information Services, and People and Service Delivery................................................................................................ 4

Interim Inspector-General of Biosecurity ................................................................ 5

Biosecurity *Animal Division.................................................................................6

Biosecurity *Quarantine Division...........................................................................6

Biosecurity *Plant Division.....................................................................................7

Biosecurity *Food Division.....................................................................................7

Biosecurity *Policy Division...................................................................................8

Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES).................................................................................................................8

Australian Fisheries Management Authority (AFMA) ........................................... 8

Sustainable Resource Management (SRM)............................................................10

Climate Change.......................................................................................................11

Agricultural Productivity........................................................................................ 12

Forest and Wood Products Australia, Australian Pork Limited and Australian Egg Corporation Limited........................................................................................ 12

v

233

Meat and Livestock Australia (MLA) and Australian Livestock Export Corporation Limited (LiveCorp)............................................................................13

Trade and Market Access.......................................................................................13

Australian Pesticides and Veterinary Medicines Authority (APVMA) ............... 14

Chapter 3.......................................................................................................................15

Infrastructure and Transport portfolio.................................................................15

Department of Infrastructure and Transport...........................................................15

Corporate Services.................................................................................................. 15

Office of the Inspector of Transport Security (OITS) ........................................... 17

Office of Transport Security...................................................................................17

Aviation and Airports..............................................................................................17

Airservices Australia.............................................................................................. 18

Civil Aviation Safety Authority (CASA)...............................................................18

Australian Transport Safety Bureau (ATSB).........................................................18

Infrastructure Australia........................................................................................... 19

Nation Building *Infrastructure Investment ......................................................... 20

Australian Maritime Safety Authority (AMSA) ................................................... 20

Surface Transport Policy .................. 20

Policy and Research...............................................................................................21

Chapter 4.......................................................................................................................23

Regional Australia, Local Government, Arts and Sport portfolio......................23

Department of Regional Australia, Local Government, Arts and Sport .............. 23

Dissenting Report by Coalition Senators ............................................................. 27

Appendix 1................................................................................................................... 35

Tabled of contents to proof Hansard transcripts ................................................. 35

Budget estimates 2012-2013 ..................................................................................35

Agriculture, Fisheries and Forestiyportfolio ....................................................... 35

vi

234

Infrastructure and Transport portfolio ...................................................................35

Regional Australia, Local Government, Arts and Sport portfolio ........................35

Monday 21 May 2012................................................................................................36

Agriculture, Fisheries and Forestry portfolio ........................................................ 36

Tuesday 22 May 2012............................................................................................... 37

Agriculture, Fisheries and Forestry portfolio ........................................................ 37

Wednesday 23 May 2012..........................................................................................38

Infrastructure and Transport portfolio....................................................................38

Thursday 24 May 2012............................................................................................. 39

Regional Australia, Local Government, Arts and Sport portfolio........................39

Appendix 2 ................................................................................................................... 41

Tabled Documents.....................................................................................................41

Agriculture, Fisheries and Forestry portfolio ........................................................ 41

Infrastructure and Transport portfolio....................................................................41

Regional Australia, Local Government, Arts and Sport portfolio ....................... 41

Appendix 3 ....................................................................................................................43

Topic list.....................................................................................................................43

Agriculture, Fisheries and Forestry portfolio ....................................................... 43

Appendix 4 ................................................................................................................... 49

Topic list.....................................................................................................................49

Infrastructure and Transport portfolio.................................................................49

Appendix 5 ....................................................................................................................55

Topic list.....................................................................................................................55

Regional Australia, Local Government, Arts and Sport portfolio .................... 55

Appendix 6 ....................................................................................................................59

Advice from the Clerk of the Senate.......................................................................59

vii

235

'

236

List of Abbreviations

ABARES Australian Bureau of Agricultural and Resource Economics and Sciences

ABS Australian Bureau of Statistics

ACCCAustralian Competition and Consumer Commission

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

ARTCAustralian Rail Track Corporation

ATSBAustralian Transport Safety Bureau

CASA Civil Aviation Safety Authority

CBD Central Business District

CEO Chief Executive Officer

COAG Council of Australian Governments

CSIRO Commonwealth Scientific and Industrial Research Organisation

DAEF Department of Agriculture, Fisheries and Forestry

DRALGAS Department of Regional Australia, Local Government, Arts and Sport

ESCAS Exporter Supply Chain Assurance System

ITInformation Technology

LiveCorp Australian Livestock Export Corporation Limited

MCU Major Cities Unit

MLA Meat and Livestock Australia

MSIC Maritime Safety Identification Card

NRM Natural resource management

OITS Office of the Inspector of Transport Security

OTS Office of Transport Security

RDA Regional Development Australia

RIRDC Rural Industries Research and Development Corporation

ix

237

SEWPaC Department of Sustainability, Environment, Water, Population and Communities

SRM Sustainable resource management

TEES Tasmanian Freight Equalisation Scheme

TMAD Trade and Market Access Division

X

238

Chapter 1

Introduction

1.1 On 9 May 2012, 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, the Infrastructure and Transport portfolio, and the Regional Australia, Local Government, Arts and Sport portfolio:

" particulars of proposed expenditure in respect of the year ending on 30 June 2013;

" particulars of certain proposed expenditure in respect of the year ending on 30 June 2013; and

" particulars of proposed supplementary expenditure for 2011-12.1

1.2 The committee was required to report to the Senate on its consideration of 2012-2013 budget estimates on 26 June 2012.

1.3 The committee considered the Portfolio Budget Statements 2012-2013 for the three portfolios at hearings on 21, 22, 23 and 24 May 2012. The hearings were conducted in accordance with the agreed agenda as follows:

" Monday 21 May - Agriculture, Fisheries and Forestry portfolio.

" Tuesday 22 May - Agriculture, Fisheries and Forestry portfolio.

" Wednesday 23 May * Infrastructure and Transport portfolio.

" Thursday 24 May - Regional Australia, Local Government, Arts and Sport portfolio.

1.4 The committee heard evidence from:

" Senator the Hon Joe Ludwig, Minister for Agriculture, Fisheries and Forestry;

" Senator the Hon Kim Carr, Minister for Human Services representing the Minister for Infrastructure and Transport; and

" Senator the Hon Kate Lundy, Minister for Sport, Minister for

Multicultural Affairs and Minister Assisting for Industry and Innovation, representing the Minister for Regional Australia, Regional Development and Local Government, and Minister for the Arts.

1.5 Evidence was also provided by:

1 Journals of the Senate, No. 89, 9 May 2012, p. 2396.

239

Page 2

" Dr Conall O'Connell, Secretary of the Department of Agriculture, Fisheries and Forestry;

" Mr Mike Mrdak, Secretary of the Department of Infrastructure and Transport;

" Mrs Glenys Beauchamp, Secretary for the Department of Regional Australia, Local Government, Arts and Sport; and

" officers representing the departments and agencies covered by the estimates before the committee.

1.6 The committee thanks the ministers, departmental secretaries and officers for their assistance and cooperation during the hearings.

Questions on notice

1.7 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 20 July 2012.

A dditional inform ation

1.8 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 2012-2013, May 2012, 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.

1.9 Answers to questions on notice received from the departments will also be posted on the committee's website at a later date.2

N ote on references

1.10 References to the Hansard transcript are to the proof Hansard; page numbers may vary between the proof and the official Hansard transcript.

2 Answers to questions on notice, once received, will be published at the following website address: http://www.aph.gov.au/Parliamentary Business/Committees/Senate Committees?url=rrat ctte/ esti mates/index .htm

240

Chapter 2

Agriculture, Fisheries and Forestry portfolio

D epartm ent of A griculture, Fisheries and Forestry

2.1 This chapter contains the key issues discussed during the 2012-2013 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 and agencies on Monday 21 and Tuesday 22 May 2012. The hearing was conducted in the following order:

" Finance and Business Support, Government, Information Services, and People and Service Delivery

" Interim Inspector-General of Biosecurity

" Biosecurity *Animal Division

" Biosecurity *Quarantine Division

" Biosecurity *Plant Division

" Biosecurity *Food Division

" Biosecurity *Policy Division

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

" Australian Fisheries Management Authority (AFMA)

" Sustainable Resource Management (SRM)

" Climate Change

" Agricultural Productivity

" Forest and Wood Products Australia

" Australian Pork Limited

" Australian Egg Corporation Limited

" Meat and Livestock Australia

" Australian Livestock Export Corporation Limited (LiveCorp)

" Trade and Market Access

" Australian Pesticides and Veterinary Medicines Authority (APVMA)

Page 4

Finance and Business Support, Governm ent, Inform ation Services, and

People and Service D elivery

2.3 The committee began proceedings by asking the Secretary, Dr Conall O'Connell, to outline the department's key priorities for the 2012-13 financial year. Dr O'Connell explained that the department's key priorities are to deliver the government's policy agenda and the government's budget initiatives, and that the policy agenda outlined for 2012-13 includes delivering on biosecurity initiatives,

including post-entry quarantine, as well as the new budget measure, Reforming Australia's Biosecurity System, which has been allocated $144.3 million over four years.1

2.4 Dr O'Connell outlined the key reforms in Biosecurity as the department's main priority. This includes the development of the new post-entry quarantine station, implementation of the risk return policy, upgrading of IT systems, and amending the Quarantine Act 1908. The quarantine station will be located in Victoria, and has been allocated $375.9 million over seven years. The risk return policy involves assessing how to best approach matters of higher risk, versus other risk.1 2

2.5 Work on improving IT systems has been allocated $19.8 million over three years, and is a measured step towards a recommendation in the Beale review regarding an upgrade on the current IT systems. Officers explained that currently, the department is one of the last paper-based operations systems within the Commonwealth Government. Officers listed several systems within the department

that have moved to an electronic base, and the benefits that have arrived as a result of that move. The committee heard that improving the current system to allow for electronic dealings with exporters and importers will be one of the benefits of this work.3

2.6 Officers told the committee that the broader agency priorities include the National Food Plan, agvet chemicals reform, illegal logging legislation, reviews of fisheries policies, carbon programs to assist delivering on carbon farming initiatives, and the research and development review process.4 5

2.7 As discussed in previous estimates hearings, the committee sought further information on the efficiency dividend's impact on the department. Officers informed the committee that the department will have a total savings package of $131.2 million over four years/" This will be achieved by reductions in: consultancy services,

1 Proof Estimates Hansard, 21 May 2012, p. 4.

2 Proof Estimates Hansard, 21 May 2012, pp 4 *5.

3 Proof Estimates Hansard, 21 May 2012, pp 4 *5.

4 Proof Estimates Hansard, 21 May 2012, p. 8.

5 Proof Estimates Hansard, 21 May 2012, p. 10.

Page 5

temporary and contract staff, travel, official hospitality, and media advertising.6 Officers noted that reductions in staff will also play a part, and tabled a document comparing the average staffing level and full-time equivalent staffing level for the 2011-12 and 2012-13 financial years.7 Officers explained that by centralising a number of functions, including finance reporting and cost recovery arrangements, the department was able to reduce duplication, and therefore staffing, in some areas.8

Interim Inspector-General o f Biosecurity

2.8 The committee sought further information on the legislative status of the Interim Inspector-General of Biosecurity. Officers informed the committee that the formal position of Inspector-General of Biosecurity as a statutory role will be proposed within draft legislation, which is yet to be introduced to Parliament.

2.9 Dr Kevin Dunn, Interim Inspector-General of Biosecurity, informed the committee of three matters referred to the Interim Inspector-General of Biosecurity, by the Minister, for independent review:

" the importation of consignments of fertiliser from China;

" consignments of abalone exported to China and Hong Kong; and

" the importation of undeclared meat products from the Republic of Korea.

2.10 When asked if the position is a 'reflective or prospective' role, Dr Dunn told the committee that the role is more of a reflective position, as it does not play a part in the development of importation policy, and that the majority of the role is described as an audit and review of risk management systems currently in place. Dr Dunn also informed the committee that along with referrals from the Minister, the position has the capacity to self-refer matters, in its role as:

...an independent position that is able to look at and make strategic choices about areas for audit or review of the entirety of the DAFF Biosecurity management system9

6 Proof Estimates Hansard, 21 May 2012, p. 18; tabled document no. 5. This document can be accessed at: http://www.aph.gov.au/Parliamentary Business/Committees/Senate Committees?url=rrat ctte/ estimates/index, htm

7 Document can be found at:

http://www.aph.gov.au/Parliamentarv Business/Committees/Senate Committees?url=rrat ctte/ estimates/index.htm

8 Proof Estimates Hansard, 21 May 2012, pp 11-12 and 15.

9 Proof Estimates Hansard, 21 May 2012, p. 27.

Page 6

Biosecurity * A nim al D ivision

2.11 The committee discussed live animal exports regulations, in particular, the Exporter Supply Chain Assurance System (ESCAS). The Minister detailed the compliance system now in place, stating that:

Where a mistake, issue or problem arises there is * as we now have

released * an investigation, an examination of that individual supply chain, and appropriate action taken against the individual supply chain itself...10 11

2.12 Officers explained to the committee that there are three avenues in monitoring performance information:

" third-party information;

" independent audit reports; and

" exporters reporting any non-compliances observed

2.13 The committee heard that exporters are obligated to report any instances of non-compliance within 5 days, and that there have been five instances of self-reported non-compliance to date.11

2.14 The committee sought further information on audits of two specific exporters, where non-compliance was found, and how those instances are being managed. Officers told the committee that multiple breaches of ESCAS were found in both

cases and that three regulatory actions were taking place as a result. These were:

" removing the two abattoirs where there were animal welfare breaches;

" placing additional conditions on the licence of the two exporters in relation to the use of a mark four box; and

" increasing the frequency of auditing of the two exporters in their other supply chains.12

2.15 The committee also sought an update on the number of cattle exported to Indonesia through ESCAS. Officers told the committee that from August to December 2011, 186 000 cattle were exported, and from January to 21 May 2012, 125 000 cattle had been exported.

Biosecurity * Quarantine D ivision

2.16 The committee discussed funding in the budget for the post-entry quarantine station in Victoria. Officers told the committee that it will involve a transition from five government operated facilities to one, and that the importation cost will be borne

10 Proof Estimates Hansard, 21 May 2012, p. 33.

11 Proof Estimates Hansard, 21 May 2012, p. 34.

12 Proof Estimates Hansard, 21 May 2012, p. 48.

Page 7

by the importer. Officers also noted that there are privately run quarantine facilities that are approved and managed by the department and that the department remains open to the possibility of new applications to do so.13

2.17 In continuing its interest from previous estimates hearings, the committee sought an update on the investigations into deliberately misclassified imported food products from Korea. Officers told the committee that the recovery action involved staff attending approximately 300 premises, with approximately 100 tonnes of product recovered.14 15

2.18 Officers informed the committee that it is not possible to account for a 'minute by minute' cost to the department, but explained that it is largely a cost-recovery process, where the importer will be fined.13

Biosecurity * Plant D ivision

2.19 The committee asked officers to provide an update on the import risk assessment process for ginger from Fiji. Officers informed the committee that in April 2012 a draft risk assessment had been released for public comment, and that public comment to the draft closed on 15 June 2012. The department found three potential risks, and detailed the technical nature of each to the committee, as well as the mitigating measures proposed as a result.16 The department offered to provide a copy of the draft risk assessment, as well as a copy of the Fiji field visit report from 2007.17

Biosecurity * Food D ivision

2.20 The committee asked officers to provide an update on several bio security food product issues, including the importation of apples from the United States of America and China, the importation of pineapples from Malaysia, and stone fruit exports to

Thailand.18

2.21 The committee also sought an update on the status of Asian honey bees. Officers told the committee that in the 2011-12 financial year, $2 million was

13 Proof Estimates Hansard, 21 May 2012, p. 53.

14 Proof Estimates Hansard, 21 May 2012, p. 57.

15 Proof Estimates Hansard, 21 May 2012, pp 55 and 58.

16 Proof Estimates Hansard, 21 May 2012, pp 70-71.

17 Copies of these documents can be found at: http://www.aph.gov.au/Parliamentarv Business/Committees/Senate Committees?url=n~at ctte/ estimates/index.htm

18 Proof Estimates Hansard, 21 May 2012, pp 91, 93 and 96.

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allocated over two years to Plant Health Australia to administer a suite of projects in Queensland. The Queensland Government also contributed $600 000.19

Biosecurity * Policy D ivision

2.22 The committee asked officers to describe the role of the Biosecurity *Policy Division. Officers explained that the division has four branches, with three key responsibilities:

" To coordinate activities with states and territories under the

Intergovernmental Agreement on Bio security and the National Environmental Biosecurity Response Agreement;

" To develop the draft legislation for biosecurity; and

" To focus on a range of biosecurity policy issues.20

A ustralian Bureau of A gricultural and R esource Econom ics and Sciences

(A BA R ES)

2.23 The committee asked officers if ABARES plays any role in live animal exports. Officers told the committee that ABARES has, through its farm survey, been able to provide information and figures on farm income performance of cattle producers in Northern Australia, and those who are dependent on the live export trade.21

2.24 The committee sought further information on several areas, including money allocated to the wine grape growers survey, projections in relation to the Tasmanian forests Intergovernmental Agreement, short-run effects of carbon pricing on agriculture, and the socioeconomic implications of commercial and charter fishing.22

A ustralian Fisheries Managem ent A uthority (A FMA )

2.25 Following up issues raised in previous estimates hearings, the committee sought further information on AFMA's fees and charges. Officers told the committee that consultation with industry has not yet been completed.23

2.26 The committee asked for an update on the number of concessions surrendered in the southern eastern scalefish and shark fishery in 2012. Officers told the committee that as at 3 May 2012, 19 concessions were surrendered. Officers informed the committee that AFMA does not specifically ask why the concessions are being

19 Proof Estimates Hansard, 21 May 2012, p. 95.

20 Proof Estimates Hansard, 21 May 2012, p. 96.

21 Proof Estimates Hansard, 21 May 2012, p. 109.

22 Proof Estimates Hansard, 22 May 2012, pp 107-109, 110-111 and 112-116.

23 Proof Estimates Hansard, 22 May 2012, pp 4 *5.

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surrendered, however, generally the reasons for surrendering a concession are choosing not to fish in a particular fishery anymore, a restructuring of the business, or the price of the levy for a particular sector.24

2.27 Officers told the committee that AFMA is looking at amending the formula that applies to levy increases, noting that the current formula was developed in 2004≠ 05, and that circumstances have changed since then. Officers explained further that:

At the moment, those costs are quite weighted towards what are known as boat strategy fishing rights. It is less so to quota statutory fishing rights. They are the two main types of fishing rights in the fishery. There has been an in-principle recommendation from the management advisory committee

that we should be changing the weightings of some of those allocations of levy to better reflect where we are with the fishery now, which is largely a quota managed fishery. Historically, over the last decade or two, it has moved from being an input controlled fishery to an output controlled fishery *that is, under quota. That has meant that the nature of the rights in the fishery has changed. Therefore, it is appropriate that we look at a redistribution of costs reflecting those changes in the nature of the rights.25

2.28 The committee sought clarification on the process that occurs after a concession has been surrendered, and whether or not parties are able to use the concessions if they decide rejoin the industry at a later date.26 Dr James Findlay, Chief Executive Officer, explained that there are two components to entering a fishery in the south-east trawl: one is a boat statutory fishing right and the other is quota statutory fishing rights. He explained that:

People have been handing in their right to put a boat into the fishery. At the moment, the number of boats is not limiting. So if someone wanted to re≠ enter the fishery at a later stage with the existing or other quota, they would need to enter the market and lease or buy a boat statutory fishing right.27

2.29 Dr Findlay also told the committee that is was important to note that a lot of the concessions surrendered in the southern eastern scalefish and shark fishery are for boat statutory fishing rights, for boats that have not been active in the fishery, and that only a small number were for quota.28

2.30 The committee discussed the operation of observers on fishing boats, and sought further information on the numbers of observers, as well as the cost of having

24 Proof Estimates Hansard, 22 May 2012, pp 5 and 9.

25 Proof Estimates Hansard, 22 May 2012, p. 6.

26 Proof Estimates Hansard, 22 May 2012, p. 6.

27 Proof Estimates Hansard, 22 May 2012, pp 7 and 8.

28 Proof Estimates Hansard, 22 May 2012, p. 7.

Page 10

them onboard. Officers told the committee that in the 2012-13 budget, approximately 25 per cent of levies charged is attributed to observers.29

2.31 The committee discussed the closure of fisheries as a result of sea lion mortalities within a fishing season. Officers explained that there is a 'trigger level' of mortalities, and that if operators go into an area and catch sea lions, it triggers a closure. The area is then closed for approximately 18 months, which officers told the

committee, is the breeding cycle of the Australian sea lion.30

2.32 Officers also told the committee that AFMA is conducting a hook trial with industry, to try and avoid further catches and closures, and expects to have formal results from this trial in July 2012.31 Dr Findlay emphasised to the committee that in the last two years, 10 sea lions have been killed, when the scientific estimates said that

500 would be killed. He went on to say that:

We have done reasonably well. The industry has done very well. In

combination with the management arrangements, it is performing very, very well. These additional closures really are getting the incentive in the right place...32

Sustainable R esource Managem ent (SR M)

2.33 The committee discussed the Caring for Our Country program, and asked officers to detail the breakdown of funding, particularly the division of funds between DAFF and the Department of Sustainability, Environment, Water, Population and Communities (SEWPaC), and the Tasmanian component in the program.

2.34 Officers informed the committee that presently, the program has been allocated $2.2 billion over five years, and that the funding can be divided into two streams, an environment stream, and a sustainable agriculture stream. Funding for the

Tasmanian component was taken out prior to the $2.2 billion announcement.33

2.35 The committee sought further information on the funding available that has not yet been allocated to programs. Officers told the committee that $444 million is expected to be spent on Caring for Our Country in the 2012-13 financial year, which leaves $54 million currently uncontracted.

2.36 Of this $54 million, officers told the committee that the department expects to spend '$5 million on community action grants and around $24 million on the open

29 Proof Estimates Hansard, 22 May 2012, pp 14-15.

30 Proof Estimates Hansard, 22 May 2012, pp 17-18.

31 Proof Estimates Hansard, 22 May 2012, p. 18.

32 Proof Estimates Hansard, 22 May 2012, p. 19.

33 Proof Estimates Hansard, 22 May 2012, p. 27.

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call', and that another large element is to be managed by SEWPaC for national reserves and Indigenous protected areas.34

2.37 The committee discussed the review of Caring for Our Country, and sought further information on how the consultation processes will now occur, taking the results of that review into account. Officers told the committee that the review results are now public, and that a further discussion paper is expected to go out. Consultative meetings with national stakeholders are then expected take place, to seek feedback on the issues identified by the review. Some of these issues include:

" handling community skills, knowledge and engagement;

" engaging in Indigenous natural resource management;

" alignment of natural resource management planning and investment priorities from regional, state and national levels;

" investment priorities, including the better alignment of calling for priorities;

" better assessment of projects to ensure consistency in the prioritisation;

" efficient management of regional delivery; and

" encouragement of innovative projects.

2.38 Dr O'Connell emphasised that the consultation process still requires confirmation by the relevant Ministers, as it had been announced shortly before the estimates hearings.35

C lim ate C hange

2.39 The committee sought further information on the Carbon Farming Initiative, particularly the utilisation of land for carbon capture, compared to use for agriculture. Officers explained that ABARES has done a number of reports into this, noting that its most recent report looked at land use change as a result of the carbon price, and

what kind of carbon price would be needed to result in significant changes in land use.36

2.40 When discussing the material output of the Carbon Farming Initiative, Dr O'Connell reminded the committee that the initiative is not yet underway, and that there will be a register of carbon farming credits, maintained by the Clean Energy Regulator, which will provide a geographical spread of the impacts.37

34 Proof Estimates Hansard, 22 May 2012, p. 28.

35 Proof Estimates Hansard, 22 May 2012, p. 29.

36 Proof Estimates Hansard, 22 May 2012, p. 55.

37 Proof Estimates Hansard, 22 May 2012, pp 56 and 57.

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2.41 Officers further detailed the approved research methodologies and informed the committee that, while the measuring of soil carbon has been taking place for years, the department is looking at developing an inexpensive methodology for use by farmers.38

2.42 The committee discussed the departmental costs of the live cattle suspension, particularly the processes involved in administering the income recovery subsidy program. Officers told the committee that the delivery costs are fixed costs set by the

Department of Human Services. The committee heard that there is a standard process for setting up these programs including a standard set of costing arrangements agreed by the Department of Finance and Deregulation, and the Department of Human Services.39

A gricultural Productivity

2.43 The committee sought further information on the cessation of the FaimReady program. Officers told the committee that FarmReady was allocated a total budget of $34.3 million, over four years. The FarmReady Reimbursement Grants allowed farmers to receive training and have the costs reimbursed. The program, to date, has received 27 000 applications, noting that the repeat rate is approximately 6000 participants.40

2.44 The committee discussed the National Food Plan and asked officers to describe the process to date. Officers informed the committee that the issues paper for the National Food Plan was released in late 2011, with a 10 week consultation period. The department has been working since then to formulate the green paper, which the government has announced will be released in mid-2012. After the green paper, there will be a further consultation period, and then a white paper will be released.41

2.45 Officers informed the committee that the total cost for the consultations that took place as part of the National Food Plan, at 23 April 2012, was $471 586. This includes the cost of an external consultant that assisted in the process.42

Forest and W ood Products A ustralia, A ustralian Pork Lim ited and

A ustralian Egg C orporation Lim ited

2.46 The committee heard from five non-government, industry-owned companies which receive funds through statutory levies and/or Australian government funds for the purposes of research and development. The committee notes that Forest and

38 Proof Estimates Hansard, 22 May 2012, pp 58-59.

39 Proof Estimates Hansard, 22 May 2012, p. 68.

40 Proof Estimates Hansard, 22 May 2012, pp 77-78.

41 Proof Estimates Hansard, 22 May 2012, p. 81.

42 Proof Estimates Hansard, 22 May 2012, p. 82.

250

Wood Products Australia Ltd, Australian Pork Ltd, and Australian Egg Corp Ltd do not regularly appear before the committee for senate estimates.

2.47 The committee explored a range of issues, such as:

" the appointment process for new independent directors to Forest and Wood Products Australia Ltd;

" the move to ban sow stalls by 2015 in Australia; and

" Australian Egg Corporation's recent advocacy for a change to the definition of free-range eggs from stocking rates of 1500 to 20 000 hens per hectare.43

Meat and Livestock A ustralia (MLA ) and A ustralian Livestock Export

C orporation Lim ited (LiveC orp)

2.48 Meat and Livestock Australia (MLA) and Australian Livestock Export Corporation Limited (LiveCorp) are also non-government, industry-owned companies, however, both have appeared at previous senate estimates hearings.

2.49 The committee discussed MLA's training of workers in approved abattoirs, its purchasing of domain names, and how it responds to criticisms of its Research and Development reports. Officers informed the committee that after consulting with

industry groups, MLA is moving to a process where it will upload all final reports onto its website. Officers told the committee that this process will provide further transparency into where its research dollars are spent.44 45

2.50 The committee discussed LiveCorp's animal welfare provisions, the qualifications of the members of its board, and sought further information on the proportion of funding allocated to animal welfare. Officers told the committee that approximately 57 per cent of financial resources will be devoted to program activities that directly relate to animal welfare.43

Trade and Market A ccess

2.51 The committee sought further information on the Trade and Market Access Division's (TMAD) work with Austrade, and the differences between their roles. Officers explained to the committee that TMAD works directly on the shape of the market, such as looking at tariffs and quotas, and the technical framework under which goods are traded, describing it as a 'government to government role'. Whereas Austrade focuses on the business relationship with the country, which looks at opportunities for Australian exporters and facilitates their relationships with potential

________________________________________________________________________________ Page 13

43 Proof Estimates Hansard, 22 May 2012, pp 93, 94 and 97-99.

44 Proof Estimates Hansard, 22 May 2012, pp 102-103.

45 Proof Estimates Hansard, 22 May 2012, pp ] 04 *106.

Page 14

importers in the country. Austrade also looks at markets with a whole-of-economy approach, whereas TMAD focuses on agriculture, fisheries and forestry.46

2.52 The committee sought further information on the processes behind free trade agreements. Officers detailed the arrangements that take place, stating that it is important to have an Australian based person in the high priority countries. Officers informed the committee that there are currently two counsellors in Beijing, and two

counsellors in Tokyo, where two of the main free trade agreements are still under negotiation.47

A ustralian Pesticides and V eterinary Medicines A uthority (A PV MA )

2.53 The committee sought further information on the cost recovery discussion paper and the status of a final cost recovery impact statement. Dr Eva Bennett- Jenkins, Chief Executive Officer, told the committee that after releasing its cost recovery discussion paper in late 2011, the APVMA met with industry stakeholders in April 2012 to provide feedback on the submissions received to that discussion paper.

2.54 Dr Bennett-Jenkins also informed the committee that a supplementary discussion paper relating to the manufacturing licensing scheme was released on Friday 18 May 2012. The supplementary paper discusses an alternative model which was developed in consultation with industry stakeholders.48

2.55 The committee asked officers to provide details on an application to allow the use of dimethoate on tomatoes that are exported to New Zealand. Officers informed the committee that the application was refused, based on concerns about public health

and residues, and that the applicant has sought a reconsideration of the decision to refuse it. The committee queried the legality of the use dimethoate on tomatoes that are not for consumption in Australia, where the chemical has been suspended for most uses, when the tomatoes are to be exported to a country where the use of it is not suspended. Dr Bennett-Jenkins told the committee that the APVMA, when looking at

applications, is required by its legislation to look at the use of the product, and the safety of the use of that product, regardless of which country the product will go to.49

46 Proof Estimates Hansard, 22 May 2012, pp 107-108.

47 Proof Estimates Hansard, 22 May 2012, pp 110-111.

48 Proof Estimates Hansard, 22 May 2012, pp 116-117.

49 Proof Estimates Hansard, 22 May 2012, pp 119.

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Chapter 3

Infrastructure and Transport portfolio

D epartm ent o f Infrastructure and Transport

3.1 This chapter contains the key issues discussed during the 2012-13 budget estimates hearings for the Infrastructure and Transport portfolio. A complete list of all the topics discussed, and relevant page numbers, can be found at appendix 4.

3.2 The committee heard evidence from the department on Wednesday 23 May 2012. The hearing was conducted in the following order:

" Corporate Services

" Office of the Inspector of Transport Security

" Office of Transport Security

" Aviation and Airports

" Airservices Australia

" Civil Aviation Safety Authority

" Australian Transport Safety Bureau

" Infrastructure Australia

" Nation Building *Infrastructure Investment

" Australian Rail Track Corporation

" Australian Maritime Safety Authority

" Surface Transport Policy

" Policy and Research

" Major Cities Unit

C orporate Services

3.3 The committee began by discussing the department's key initiatives for the next 12 months. In his opening statement, the Secretary, Mi* Mike Mrdak, noted that one of the major initiatives is the development of the Moorebank Intemiodal facility

in Sydney. Mr Mrdak described this initiative as a longstanding commitment of governments to provide an opportunity for freight growth.1

3.4 Mr Mrdak also detailed funding for the Pacific Highway, explaining that an additional $3.56 billion has been provided in the budget, to complete the duplication of the highway by 2016. The funding will be split between Commonwealth and State

1 Proof Estimates Hansard, 23 May 2012, p. 3.

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Governments and is contingent on the New South Wales Government matching that amount.2

3.5 Officers informed the committee that a fifty-fifty split has been a consistent position by successive Australian governments, dating back to the Memorandum of Understanding established for the AusLink program, and that some of the more recent projects have had the split at varied amounts, particularly due to the fiscal stimulus package.3

3.6 Mr Mrdak detailed several other items of funding outlined in the budget, including:

" $20 million to continue work on high-speed rail and national transport planning;

" $60 million per annum for the continuation of the Black Spot Program; and

" $350 million per annum to continue the Roads to Recovery Program.4

3.7 The budget also provides $34.9 million to establish national regulators in relation to maritime transport, heavy vehicles and rail safety. $15.6 million will go towards the national heavy vehicle regulator based in Brisbane, $9.2 million for a national rail safety regulator based in Adelaide, and $10.1 million for the national maritime regulator, based in Canberra.

3.8 Mr Mrdak also informed the committee that the budget provides $140 million over the next six years for the heavy vehicle safety package. Officers told the committee that the $140 million continues the program that has been running since 2008, and will involve further construction of rest stops, improvements to physical

infrastructure (such as strengthening pavement), and technology trials that address speed and fatigue.5

3.9 The committee sought further information on the work done so far on the high-speed rail. Mr Mrdak told the committee that Stage 2 of the study is now underway, with the report expected to be available in December 2012. The report is

looking at costing an east coast network, travelling from Brisbane CBD, to Sydney CBD, through Canberra and finishing in Melbourne CBD.6

3.10 The committee discussed the impact of the efficiency dividend on the department. Mr Mrdak told the committee that the efficiency dividend for 2011-12

2 Proof Estimates Hansard, 23 May 2012, pp 3-4.

3 Proof Estimates Hansard, 23 May 2012, p. 5.

4 Proof Estimates Hansard, 23 May 2012, p. 4.

5 Proof Estimates Hansard, 23 May 2012, pp 4-5.

6 Proof Estimates Hansard, 23 May 2012, pp 8-9.

was reached by a small reduction in staff, but largely it was achieved by reducing expenditure on consultancies, travel and corporate expenses.7

Office o f the Inspector o f Transport Security (OITS)

3.11 The Inspector of Transport Security, Mr Mick Palmer, began by infonning the committee that on 7 June 2012 Mr Andy Hughes will take over as Inspector of Transport Security. The committee thanked Mr Palmer for his service and welcomed Mr Hughes to his upcoming role.

3.12 The committee sought further information on the role of the Office of the Inspector of Transport Security (OITS) in relation to its oversight of the effectiveness and enforcement of security. Mr Palmer told the committee that inquiries are only conducted as directed by the Minister, and that the position does not have any 'own- motion oversight capacity', but that part of the brief from the Minister is to give advice

on areas that the OITS considers warrant an external audit or assessment process.8

Office o f Transport Security

3.13 The committee asked officers to explain the funding allocated to security upgrades at regional airports. Officers informed the committee that 21 airports are required to have upgraded their security by 1 July 2012, and that of the 21, three have commenced screening. Of the remaining 18, officers told the committee they are confident 16 are on track to commence by 1 July 2012, and that the department is working closely with the remaining two, to ensure that the commencement date is met.9

3.14 The committee heard that the capital expenditure for the screening equipment has been provided by the Commonwealth, but that any ongoing maintenances costs will be the responsibility of the airport.10

A viation and A irports

3.15 The committee asked officers to explain the department's approach to responding to the joint study on aviation capacity for the Sydney region. Officers informed the committee that, following the Government's consideration of the joint

study, the Government announced three courses of action.

3.16 The first is to address some of the immediate priorities of road and rail access to Sydney Airport. This has been identified as one of the major issues in the next decade in terms of capacity for growth. Secondly, Australian transport ministers have

_____________________________________________________________________________Page 17

7 Proof Estimates Hansard, 23 May 2012, p. 11.

8 Proof Estimates Hansard, 23 May 2012, p. 17.

9 Proof Estimates Hansard, 23 May 2012, pp 20-21.

10 Proof Estimates Hansard, 23 May 2012, p. 21.

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announced that guidelines for the protection of aerodrome assets from inappropriate development around those airports will be developed. Thirdly, further investigations are taking place into the use of Richmond airbase for civilian traffic, as well as investigations into the possibility of a supplementary airport for the Sydney region.

A irservices A ustralia

3.17 The committee discussed the resignation of the Chief Executive Officer, Mr Greg Russell, shortly prior to the estimates hearings. In its questioning, the committee sought responses to allegations made in the Sunday Telegraph in relation to Mr Russell's credit card expenditure.

3.18 Mr Andrew Clark, Acting Chief Executive Officer, informed the committee that Airservices Australia has a number of guidelines in relation to credit cards, including a series of procedures and management instructions. Mr Clark also informed the committee that there were occasions where Mr Russell was questioned on his credit card statement, but that the responses received were satisfactory."

3.19 The committee discussed a range of issues, including performance bonuses for senior management, staffing levels of air traffic controllers, and training costs.11 12

C ivil A viation Safety A uthority (C A SA )

3.20 The committee sought further information on CASA's involvement in instances of breakdown of separation (where aircrafts breach the defined standards of separation) and loss of separation ('separation assurance' is the process to try and keep the aircraft away from that situation). Officers told the committee that CASA takes these instances very seriously, and is currently awaiting reports from both Airservices Australia and the Australian Transport Safety Bureau in relation to these matters.13 Officers also explained that breakdown of separation incidents are reported to CASA under the electronic safety incident reporting scheme, however, CASA relies on Airservices Australia's internal investigation report on the matter.14

A ustralian Transport Safety Bureau (A TSB)

3.21 Following up questions asked in previous estimates hearing, the committee asked the ATSB to detail the changes required for its planned expansion to incorporate investigations into rail and maritime safety occurrences. Officers told the

committee that the ATSB will take on more staff. It has also entered into agreements

11 Proof Estimates Hansard, 23 May 2012, pp 34-35.

12 Proof Estimates Hansard, 23 May 2012, pp 40 and 41 *43.

13 Proof Estimates Hansard, 23 May 2012, p. 46.

14 Proof Estimates Hansard, 23 May 2012, p. 50.

256

with the existing state based investigative organisations in New South Wales and Victoria, to help with investigative capability.13

3.22 The committee discussed ATSB's reporting, and asked officers to respond to comments that its reports are delayed by seeking comments from interested parties. Officers explained its reporting process to the committee, stating that consultation is only done once a draft report is prepared, which means all facts have been examined

and the ATSB has formed provisional views. When draft reports are sent out for feedback from the relevant parties, comments are expected to be returned within one month, noting that the feedback should be only provide corrections on factual inaccuracies. Officers further noted that:

The focus is on getting something done in response to our findings. That process normally takes a month plus another week or two to make sure that the relevant concerns that may have been raised with us are integrated into the final report. I do not see it as a major constraint on our timeliness.15 16

Infrastructure A ustralia

3.23 The committee sought further information on the progress of the National Port Strategy. Officers told the committee that there is an out-of-session approval process underway within the Council of Australian Governments, and that a number of jurisdictions have proceeded with both individual state port plans and individual port

plans, which are recommendations of the National Port Strategy.17

3.24 The committee asked how Infrastructure Australia evaluates its projects. Mr Michael Deegan, Infrastructure Coordinator, told the committee that there is a seven- step assessment phase. Infrastructure Australia seeks a clear identification of the problem that the applicant is trying to resolve, and then a range of options that might

best meet that, followed by an economic assessment of a cost-benefit analysis of the preferred option.18

3.25 The committee discussed Infrastructure Australia's report into export freight issues in Tasmania. Mr Deegan informed the committee that the report has not yet been given to the Minister, but that it was 'imminent'. Export freight issues in Tasmania were discussed further with officers from Surface Transport Policy, details

of this can be found in paragraphs 3.32-3.34.

N ation Building * Infrastructure Investm ent

3.26 The committee sought further information on an answer to a question on notice which detailed funding for remote roads in Northern Australia. Specifically,

______________________________________________________________________________Page 19

15 Proof Estimates Hansard, 23 May 2012, p. 54.

16 Proof Estimates Hansard, 23 May 2012, p. 56.

17 Proof Estimates Hansard, 23 May 2012, p. 62.

18 Proof Estimates Hansard, 23 May 2012, p. 70.

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the answer referred to $52 million for the upgrading of Northern Territory roads, and $30 million for upgrading roads in Cape York and north-west Queensland.

3.27 Officers told the committee that part of the allocations for the Northern Territory included funding for a beef and mining roads package had expenditure of $37 million in 2011-12, but the funding for 2012-13 is yet to be finalised.19

3.28 The committee sought an update on the number rest stops constructed as part of the heavy vehicle safety package. Officers told the committee that in round one of projects, there were 19 new rest areas, 44 upgrades of existing rest areas, 10 parking and decoupling bays, 27 existing parking and decoupling bays, and some strengthening works. In round two, there were 11 new rest areas, 17 upgrades of existing rest areas, one new parking and decoupling bay, upgrades to seven existing parking and decoupling bays, and nine bridge strengthening works.20

A ustralian Maritim e Safety A uthority (AMSA )

3.29 The committee asked officers to detail the processes involved in applying to transport livestock by vessel. Officers informed the committee that AMSA approves ships to carry livestock from Australian ports, under Marine Orders Part 43. These

Orders specify the holding conditions required to transport livestock onboard. These conditions include:

" pen strengths;

" pen sizes;

" emergency lighting;

" ventilation capacities;

" freshwater supply systems; and

" food supply systems.21

Surface Transport Policy

3.30 The committee requested an update on the progress of the national regulators for heavy vehicles, rail and maritime. Officers informed the committee that in August 2011, the Council of Australian Government Ministers signed off on the national partnership agreements, which underpin the three national transport regulators.

3.31 The law for the national rail regulator has been introduced and passed in the South Australian Parliament, and each jurisdiction will be required to pass an applicable law. Two bills need to be passed in the Queensland Parliament for the

19 Proof Estimates Hansard, 23 May 2012, p. 76.

20 Proof Estimates Hansard, 23 May 2012, p. 84.

21 Proof Estimates Hansard, 23 May 2012, p. 112.

258

National Heavy Vehicle Regulator, as Queensland is the host jurisdiction for this legislation.22

3.32 As mentioned in paragraph 3.25, the committee sought information in relation to a $20 million package to assist freight out of Tasmania. Officers told the committee that the department is in the process of discussing the details of the funding agreement, with the Tasmanian Department of Transport, on behalf of the Tasmanian Government. Officers stated that:

...we anticipate that over the coming weeks the minister and the Tasmanian government will announce the details of the arrangements.23

3.33 This appeared to conflict with a media release the following day from the Minister. As a result, the committee wrote to the Minister, Mr Mrdak, and Mr Deegan seeking to clarify this matter.24 25 Senator Colbeck also sought advice from the Clerk of the Senate and provided this to the committee, a copy can be found in appendix 6.

3.34 The committee reminds officers that providing misleading evidence to the committee is potentially a contempt of the Senate, and that officers of all departments must be scrupulous in ensuring the accuracy of their evidence. Nevertheless, in this

instance, the committee is satisfied with the clarification provided by the Minister and officers.

3.35 The committee discussed freight rates in relation to the Tasmanian Freight Equalisation Scheme (TFES). Officers informed the committee that the department will be conducting a parameter review which will inform what the rate should be. Officers also explained that the rate of assistance under the TFES has remained unaltered since 1998, notwithstanding the change in relativities between the freight rates and what is happening with road freight rates.23

Policy and R esearch

3.36 The committee sought further information on the seatbelts for school buses scheme. Officers told the committee that there was a budget amiouncement of $4 million over four years beginning in 2013-14. This was a lapsing terminating program, which the Government has decided to extend. The program has upgraded 267 school buses around Australia.

________________________________________________________________________________ Page 21

22 Proof Estimates Hansard * 23 May 2012, pp 114 *115.

23 Proof Estimates Hansard, 23 May 2012, p. 117.

24 Copies of this correspondence can be found at the following link: http://www.aph .gov.au/Parliamentarv Business/Committees/Senate Committees?url=rrat ctte/ estimates/index.htm

25 Proof Estimates Hansard, 23 May 2012, p. 120.

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260

Chapter 4

Regional Australia, Local Government, Arts and Sport portfolio

D epartm ent o f R egional A ustralia, Local Governm ent, A rts and Sport

4.1 This chapter contains the key issues discussed during the 2012-13 budget estimates hearings for the Regional Australia, Local Government, Arts and Sport portfolio. A complete list of all the topics discussed, and relevant page numbers, can be found at appendix 5.

4.2 The committee heard evidence from the department on Thursday 24 May 2012 from the following outcomes and agencies:

" Corporate Services

" Regional Development

" Local Government

" Services to Territories

" Office for the Arts

" Australia Council

" Screen Australia

" National Gallery of Australia

" National Library of Australia

" National Museum of Australia

" Australian National Maritime Museum

" National Film and Sound Archive of Australia

" Australian Film, Television and Radio School

" Office for Sport

" Australian Sports Commission

" Australian Sports Anti-Doping Authority

4.3 The committee began its proceedings by seeking clarification on an internal department document that stated that the department had an overallocation of $2.2 million. The Secretary, Mrs Glenys Beauchamp, explained to the committee that

the internal document was developed for the department prior to the machinery of government changes in December 2011, which affected the department's portfolio

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Page 24

responsibilities. Mrs Beauchamp informed the committee that the department is now set to run on budget.1

4.4 The committee sought further information on the number of voluntary redundancies that have been offered in the department. Mrs Beauchamp told the committee that there has been a budget reduction from 2011-12 to 2012-13, for several reasons, including a number of concluding one-off programs. Mrs Beauchamp

further added that due to the machinery of government changes, and the acquisition of the Office for the Arts and the Office for Sport, the department is able to consolidate its corporate functions, declaring some positions excess.1 2

4.5 Officers told the committee that the department is aiming for a reduction of approximately 110 employees. Of the 90 employees that expressed an interest in a voluntary redundancy, 86 have been offered by the department. However, officers told the committee that they expect that a significant proportion will not take the voluntary redundancy after receiving financial advice. The committee heard that it is likely that about 60 voluntary redundancies will take place.3

4.6 The committee discussed the economic diversification package for Tasmania. Officers explained to the committee that it is being delivered through multiple departments, but that the Department of Regional Australia, Local Government, Arts and Sport is responsible for a $16 million package that has been committed to 10 projects through a joint decision-making process between the Tasmanian and Commonwealth Governments.4

4.7 The committee sought an update on the Community Infrastructure Grants Program. Officers informed the committee that of the 87 projects, 61 are approved with funding. Of the projects that remain unapproved, two have had assessments completed and are with the Minister for consideration, four are under assessment, 12

are providing additional information to the department, and eight are in the process of finalising their costings.5

4.8 The committee discussed the Regional Development Australia (RDA) Fund Round 1 and asked the department if it had received any feedback on the program. Officers told the committee that the department sought feedback for Round 1 in

1 Proof Estimates Hansard, 24 May 2012, pp 5-6; tabled document no. 1 can be found at: http://www.aph.gov.au/Parliamentarv Business/Committees/Senate Committees?url=rrat ctte/ estimates/index.htm

2 Proof Estimates Hansard, 24 May 2012, pp 6, 8 and 13.

3 Proof Estimates Hansard, 24 May 2012, pp 11 and 25.

4 Proof Estimates Hansard, 24 May 2012, p. 16; the list of projects was tabled and can be found at: http://www.aph.gov.au/Parliamentaiv Business/Committees/Senate Committees?ur1=rrat ctte/ estimates/index.htm

5 Proof Estimates Hansard, 24 May 2012, p. 23.

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Page 25

sessions conducted by the chair of the independent panel and at the national RDA forum. Officers told the committee that 'vast improvements' have been made to RDA Fund Round 2 as a result.6

4.9 The committee sought an update on the progress of the myregion website. Officers told the committee that phase 2 of the website was delivered and launched on 18 May 2012, and that on average, the website has 10 000 visits per month. During

the phase 2 development, the website project had employed up to five staff in that process, however, officers noted that this will be reduced to two ongoing staff.

4.10 The committee sought an update on the National Disaster Recovery Taskforce. Officers told the committee that the taskforce remains engaged with Queensland in particular, with over $5 billion worth of reconstruction works either completed, underway or about to take place. The budget for the 2010-11 financial year was $1,427 million, for 2011-12 it was $6,934 million, and for 2012-13 it is

$4,733 million.7

4.11 The committee discussed the North Queensland Irrigated Agriculture Strategy. Officers informed the committee that $10 million has been allocated for 2012-13, and that a steering committee and a governance board have been established for the project. Officers provided the names of each member of the committee and the board, and undertook to provide on notice the money spent on the strategy to date, as well as the work plan for the $10 million allocated.8

4.12 The committee sought further information on Financial Assistance Grants, noting that the funding allocated for 2012-13 to local governments had been brought forward to 2011-12. Mrs Beauchamp emphasised to the committee that the decision to bring funding forward was a decision for government. Mrs Beauchamp did, however, note that 369 of the total of 566 local government areas had been affected by natural disasters in recent years.9

4.13 The committee sought further information on the Minister's announcement of $2.9 million for the second stage of the Norfolk Island Reform Package. Officers detailed several projects, including $1.5 million over two years to complete the pest and disease survey, which will give further consideration to including Norfolk Island in the Australian quarantine zone. A review of services provided by the Norfolk Island hospital has been allocated $100 000, with another $100 000 allocated to improve the tourist experience in Kingston and Arthur's Vale. The development of a waste management strategy has also been allocated $200 000.10

6 Proof Estimates Hansard, 24 May 2012, pp 26-27.

7 Proof Estimates Hansard, 24 May 2012, pp 29-30.

8 Proof Estimates Hansard, 24 May 2012, pp 43-44.

9 Proof Estimates Hansard, 24 May 2012, pp 57-58.

10 Proof Estimates Hansard, 24 May 2012, p. 69.

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Page 26

4.14 The committee asked the Office for the Arts and the Australia Council about a review into the Australia Council, which the Minister announced would contribute to the National Cultural Policy. Officers informed the committee that while the review into the Australia Council had been released, the date for release of the National Cultural Policy had not been announced yet.11

4.15 The committee noted the additional funding for several of the Arts agencies and sought further information on what proportion of that funding would alleviate the efficiency dividend.11 12

Senator Glenn Sterle Committee Chair

11 Proof Estimates Hansard, 24 May 2012, pp 72-73.

12 Proof Estimates Hansard, 24 May 2012, pp 73, 74, 75, 76, 92-93 and 94 *95.

264

Dissenting Report by Coalition Senators

1.1 The Coalition cannot support the committee report as it relates to evidence provided by Surface Transport Policy on 23 May 2012, relating to the $20 million Tasmanian freight assistance package.

1.2 The matter is dealt with in paragraphs 3.32-3.34 of the committee report.

1.3 On the afternoon on 23 May 2012 the committee heard evidence from Mr Deegan of Infrastructure Australia:

Senator COLBECK: I want to ask some questions about the work that you

are doing in Tasmania around the export freight issues that they have been dealing with. My understanding is that you were going to hand a report to

the government by early May; is that correct?

Mr Deegan: That is correct. I am hoping that it will be released shortly.

The federal minister asked that I undertake some further consultation after a discussion I had with him towards the end of April, which made a lot of

sense.

Senator COLBECK: That is fine. So you have handed him the initial

report?

Mr Deegan: I have had a discussion with him about the report. I have not yet handed in my report. That is imminent.1

1.4 Later that evening the committee took evidence from Surface Transport Policy regarding the allocation of the funding.

1.5 The committee was again told that the Infrastructure Australia report was not completed and that the finalisation of that report would be an input into finalising the assistance package.

Mr Mrdak: That will contribute some further thinking in relation to the terms of the arrangements, and we anticipate that over the coming weeks the minister and the Tasmanian government will announce the details of the arrangements.

Senator COLBECK: So we will not see a final answer on the allocation of

that funding until the report from Infrastructure Australia is released?

Mr Mrdak: Certainly the finalisation of M r D eegan *s report will be one of the inputs into finalising the program.1 2

1 Committee Hansard, 23 May 2012, p. 72.

2 Committee Hansard, 23 May 2012, pp 117-118.

265

Page 28

1.6 The Committee was further advised that the detail of how the funding package was to be allocated was yet to be finalised.

Ms Gosling: That is right. As M r M rdak said, it will be a payment to the Tasmanian government. Once we have settled the exact detail of how that money would be allocated, then the allocation of the funds would be a

question for the Tasmanian government.3

1.7 It is the Coalition *s view that the evidence provided to the committee regarding the allocation of the funding indicated that decisions had not been made and it would be perhaps weeks before announcements would be made, and that the decision would be made by the Tasmanian government.

1.8 On the morning of 24 May 2012 articles appeared in The Advocate and the Examiner newspapers announcing the allocation of funding from the package (see pages 30 and 31).

1.9 It subsequently became evident that an embargoed media release had been issued on 23 May 2012 by Minister Albanese and two colleagues announcing the funding (see pages 32-33).

1.10 As indicated in a letter from Mr Deegan to the committee, the report from Infrastructure Australia was not handed to Minister Albanese until after the embargo time on the media release and the media articles had appeared in the two Tasmanian papers.

1.11 It is clear that the prerequisites for finalising the details of the funding, as outlined in evidence to the committee, had not been met when the amiouncement was made by Minister Albanese.

1.12 During debate on the matter at the commencement of business on the morning of 24 May 2012, the Chair, Senator Sterle said:

CH A IR: Thank you. Now, with all due respect, I know I sat here as you

did ask those questions of the officers last night and I certainly share that you have some form of reason to be upset. The officers are big enough to

look after themselves * and I am happy to facilitate a private meeting, should we need that * but I think the committee should write to the

appropriate department and perhaps seek a briefing4

1.13 It is the view of the Coalition that Minister Albanese was attempting to avoid the scrutiny of the committee in the allocation of the Tasmanian freight assistance package.

1.14 It is this action that the Coalition contests saw the committee misled by the evidence provided.

3 Committee Hansard, 23 May 2012, p. 118.

4 Committee Hansard, 24 May 2012, p. 5.

266

Page 29

Senator the Hon Richard Colbeck Senator the Hon Bill Heffernan

Deputy Chair

Page 30

_________________ne w s ______________

Welcome boost for exporters

Burnie receives $4m for port A $4 MU-LION' infrasirncture upgrade tot the Burnie port is part of 3 $20 federally

funded assistance package for Tasmanian exporters. The funding. which was oi- Htially announced yesterday, is a welcome "boos∑, for local ex porters to enable them to reach tmeinational markets.

Ideas for the package were first rsistid after Tasmania's Eok shipping container∑ oper≠ ator AAA ceased its operations last year.

The package has three key aspects * immediate assist≠ ance to exporters via a one-off payment to assist them to stay competitive, the infrastructure

Picture: Kelly

BOOST: The Bunve port win receive fun d ing for an infrastructure upgrade.

at the Burnie port and the estubliylirnent of a freight logistics ptordinauon team.

Parliamentary Secretary for Agr.icylcurc, F tshencs and For≠ estry and Federal Member for Bradrion Sid Sldeboitom said the Burnie port upgrade was an important part of the package.

"These infrastructure im≠

provements at the port of

Burnie are crucial and recog≠ nise its Importance as the m ajor freig h t p ort in

Tasmania.'* he said.

*This S-j million in federal infrastructure funding will in≠ crease container handling ca≠ pacity and im prove the

movement of goods within the port, boosting efficiency and helping low er costs for

Tasmanian exixirtcrsf' Mr Sick bottom the pack∑ age. combined with the existing Tasmanian Freight Equalis≠ ation Scheme, would help

further support local exporters acd consequently 'fssmanlns economic growth.

Quality, not quantity key to fishing industry sustainability By CAtTUN HEATHCOTE

COMM EliCLAL fishermen are our to challenge a widely held stereotype.

Fishermen from across the state converged on Barclay Motor Inn m Devonport y esterday to learn about sustainable fishing and mtirketing practice*∑-.

Shane Rose, of Launceston, and Peter Smith, of Wynyard. said fishermen were stereotyped as "uaeducated

However, this was far from the truth. Tighter quota regulations and susmirotic

rough men who raped and pillaged the *ø*ø*∫*∑*Æ’*ø*Ø itsfish

iishins-prsetior; are at the forefront of the industry.

Mi Rose and Mr Smith both fish commercially for gummy shark, while Mr Smith widens his net to include king crab a.nd. crayfish.

They said they were attending the two-day seminar to help learn am re about marketing the ir product to a mass consumer audience and to promote quality over ' quantity.

Mr Smith said the culture of the fishing industry had changed from a cul cure of quantity, to quality.

Mr Rose agreed saying it was important to let the consumer

know that Australian-cauj-ht fish was bettor quality than imported fish, although the Import might he cheaper .

*Wo are try tag to jeam how≠ to market sustainability to thr- general public," Mr Rot/v r-aid. Both Mr Rose and Mr Smith lauded the program and said they would recommend all Coastal fishermen took the opporcunltyio further educate themselves. *

Mr Strath said u was important to the- mdustry that fishermen had a* minimal impact sty possible OR the mar me environment and sustained the industry for future generations.

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268

Page 31

I

I

!

Councils to get in early on carbon taxBy PATRICK BILLINGS LOCAL government will bv pvefi *Õ yx-ar's head *∫tart to cover tlut cost of the carbon tax levied on landfill einiision's.Tlic Laujiccston City Council it- looking to raise $75,000 in *012-13 to pay for carbon, vmirstons, which won *t attract a bill until 2014.This is because emissions from waste occur over a number of years after the waste is placed in the landfill. *Vi you are accruing the liab- iiity. your charges should reflect that liability. Yeti don t wait until tin∑ 2015-1-3 year xr,d then hit every one with the tax for the previous two years," rx-uncil gen≠ eral manager Robert lkibrzyn$ki

said.

All IflndfilU, ;t!eluding omror-Ll landfill*. that produL∑* more than 26.000 tonws a year of carbon dioxide

Mr Dohrxyncki said l hat thv toss would be paiwfid on to tip users and residents through the waste levy rather than living absorbed in general r.iUw.

" *Thir- would be roouter- productive to the intro; by the federal government tv use carbon taxing U a price sigon 1 to change behaviour." 1st said.

The cor.ncU will spend about $25,000 of its carbon, budget on research and analysis on the cost

of the c-arbim tux at thv Launeca- tor. Waste Centre. It will Slav be able to reduce its carbon tax liability by capturing emission*, and converting it. to renewable energy.

The carbon price will have otltvr impact* on the council *s bottom line but it dots not have enough infpnnaucn to accurately acsci:. tt. Tbo Launceston City Council is one of srven

Tasmanian councils that have been written to by the govern - ment *s carbon cop to h´lp them determine if ihvv are liable

Mr Dobrxynski said that he had not yvt received s letter from the Clear. Energy Regulator but said that he was. anticipating one given the ´until run* u large regional tip, .

Grades project supervisor Rodney Grace, Dale Luck, ol JMG Engin-oora. Launceston City Council Inttostracturedirector Harry Galea, council grad unto enniwer Josh Coates and Mayor Albert van Zettcn at th* Mount Pleasant Dam site.

Dam work to boost protection THE Lreuisi-A'-siou City Co anvil lu *iS started work on. a $1.4 million expansion of the Maurlt

l *;c;jssnt Dam designed to protect parts of Kings Meadows from u one-in- 100-year flood.

The Mount Pleasant Slanmvater Detention Dam ediivets water from the Kingª Meadow? rivukL

It w´s Jlrgr built, between lS

At that time the dam provided a traditionalEaffUrh

kike find gardens for the Li nd owner*. The countil'fl nedevebpment of the dam ir designed to , protect lungs Meadowy * iind

particularly the Ernest Street arcª * from flooding. If will protect the commercial ana uf Kings .Mvnuowr- to a one- in-50-yoar standard, and (ho ErnestStreet,-lren tun oric-in- l;X>-y*ar standard.

Iamnemtoo Mayor Albert van Zfittva ´´id it bail not conn- about because of tin∑ proporved discount department r,tore on Hobart Road but. the dam would help protect ic

The mlcwloptrd dam is much larger titan the existing data, with additimial capacity to accept water during heavy rain, and to control discharge so that downstream areas do nut flood

The ´until has negotiated with thv liindomier to vlluw construction. The uriyiml concrete dam hoe hevn demolished and is being replaced with an earth Arid clay wail six mvlrcti tall.

The dam *s total capacity will be oxpeir.ded from lest1 than one niegalitre to 7.3 megaliire-s.

Cfui struct ion is expected to beexpectet complete by tlse end of August.

Bumie port gets federal financial boost By CARLY DOLAN

The Sum it port will racei** $4 mdlion from, the federal govern≠ ment to >hrred.-K * etintoiner hand≠ ling capacity a:: part, of a one-fifi" $20 million package t,- TntmsmoTi exporter* rcc ternatiemai markets.

Federal Infrastructure and Transport Minister Anthony AihiuieMf. Bmddty; Ltior MHP Sid Sidebettom and Lyons Labor MIIR Dick Adams will amsouncc thv fund tug package today.

L was first flagged is March, in response to a docisian last year try the state *s only international

shipping AAA, ti> cccontainer operator, cease operations, then, the stale and fed∑ goveenmer-ts have been nra-wT -T;i|1 *'a£ tk-r package to address 3 help Pr,fr--vm* lor Tasmanian ex∑ich m- l5i>li£rj*∑ . , . , The package contains run**∑ kvv measures, iritinding direct istiuxcnª to exporters tltrough -off payment to help the*ì payment tv help them to stay competitive, improving in∑ fnuil nurture at the Bumie port Iziblnthlng a freight lo?" parity and im prove the

movement of goods within the port, boosting efficiency and helping to lower cnutx inr T iistsaniiin exporters, * Mr Sidi-botiam said.

Mr Adams said the package was o much-needed investment in the state *s export mb u´ tries.

and estsbbsiung i lies cu-oniiiuiiiori team. _ This $i million in federal infrastructure fundiug will in≠ crease container handling cn∑

* *This is *∑ blueprint for

mainland a; the∑ needs of the state now and

itoSS the need for

hotter co-ordination of cur road, rail and shipping sectors and te≠ en::! to morv efficient links to the tin land and cvcRteas to inset

into the futuro, * * he said.

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269

Page 32

**UNDER EMBARGO TO 5AM THURSDAY 24 MAY 2012**

THE HON ANTHONY ALBANESE MP Minister for Infrastructure and Transport Leader of the House

THE HON SID SIDEBOTTOM IVP Parliamentary Secretary for Agriculture, Fisheries and Forestry Federal Member for Braddon

THE HON DICK ADAMS IVP Federal Member for Bass

A NEW DEAL FOR TASMANIAN EXPORTERS

The Gillard Labor Government has announced details of a one-off $20 million funding package to help Tasmania's exporters reach international markets.

The package was first flagged in March in response to the decision last year by Tasmania's sole international shipping container operator AAA to cease operations

Since March, Commonwealth and Tasmanian Governments have worked together to craft the package which will ensure the State's exports can continue to reach world markets.

These practical measures address the complex commercial realities facing Tasmanian exporters.

They also address deficiencies in the State's supply lines and transport infrastructure, providing a better environment for Tasmanian exporters to compete internationally,

The funding package contains three key measures.

1. Direct and immediate assistance to Tasmanian exporters through a one-off payment to help them stay competitive in the new shipping environment.

2. Investing in infrastructure improvements at the Port of Burnie to increase container handling capacity and enhance the efficiency of movements within the port.

3. Establish a freight logistics coordination team with an industry leadership.

270

Page 33

Parliamentary Secretary for Agriculture, Fisheries and Forestry and Federal Member for Braddon Sid Sidebottom says the package will be welcome news for Tasmania *s exporters.

"My Federal Tasmanian Labor colleagues and I listened to the concerns of our local exporters and have worked very closely with the Prime Minister and Minister Albanese to provide this much needed $20 million package," Mr Sidebottom said.

*These infrastructure improvements at the Port of Burnie are crucial, and recognise its importance as the major freight port in Tasmania.

*This $4 million in Federal infrastructure funding will increase container handling capacity and improve the movement of goods within the port, boosting efficiency and helping to lower costs for Tasmanian exporters.

*Combined with the Tasmanian Freight Equalisation Scheme which was first announced by Gough Whitlam, the package supports exports which are so crucial to Tasmania's economic growth."

Federal Member for Lyons Dick Adams said the package is a much needed investment in Tasmania *s export industries.

*This is a blueprint for Tasmania to address the need for better coordination of our road, rail and shipping sectors and to create more efficient links to the mainland and overseas to meet the needs of the State both now, and well into the future," Mr Adams said.

*! am delighted we have been able to secure this vital funding for Tasmania."

Media inquiries : Vivienne Skinner

271

272

Appendix 1

Tabled of contents to proof Hansard transcripts

Budget estim ates 2012-2013

Agriculture, Fisheries and Forestry portfolio

Monday 21 May 2012

Tuesday 22 May 2012

Infrastructure and Transport portfolio

W ednesday 23 May 2012

Regional Australia, Local Government, Arts and Sport portfolio

Thursday 24 May 2012

Monday 21 May 2012

A griculture, Fisheries and Forestry portfolio

Hansard page

In attendance 1

Finance and Business Support, Government, Information Services and People and Service Delivery Divisions 4

Interim Inspector-General of Biosecurity 26

Biosecurity *Animal 29

Biosecurity *Quarantine 53

Biosecurity *Plant 70

Biosecurity *Food 85

Biosecurity *Policy 96

Australian Bureau of Agricultural and Resource Economics and Sciences

Page 36_____________________________________________________________________________

106

Tuesday 22 May 2012

A griculture, Fisheries and Forestry portfolio

Page 3 7

Hansard page

In attendance 1

Australian Fisheries Management Authority 5

Sustainable Resource Management 26

Climate Change 54

Agricultural Productivity 75

Forest and Wood Products Australia 91

Australian Pork Limited 94

Australian Egg Corporation Limited 97

Meat and Livestock Australia 100

Australian Livestock Export Corporation Limited 104

Trade and Market Access 107

Australian Pesticides and Veterinary Medicines Authority 116

Page 38

Wednesday 23 May 2012

Infrastructure and Transport portfolio

In attendance

Hansard page

1

Corporate Services 3

Inspector of Transport Security 17

Office of Transport Security 19

Aviation and Airports 27

Airservices Australia 34

Civil Aviation Safety Authority 44

Australian Transport Safety Bureau 54

Infrastructure Australia 62

Nation Building *Infrastructure Investment 75

Australian Rail Track Corporation 100

Australian Maritime Safety Authority 110

Surface Transport Policy 114

Policy and Research 121

Major Cities Unit125

276

Thursday 24 May 2012

R egional A ustralia, Local Governm ent, A rts and Sport portfolio

Page 39

Hansard page

In attendance 1

Corporate Services; Outcome 1 3

Outcome 2 63

Outcome 3 71,82

Screen Australia 71,90

Australia Council 73, 77

National Gallery of Australia 74, 92

National Library of Australian 75

National Museum of Australia 76, 92

National Film and Sound Archive of Australia 76, 91

Australian National Maritime Museum 94

Australian Film, Television and Radio School 94

Outcome 4 95

Australian Sports Commission 95

Australian Sports Anti-Doping Authority 95

277

278

Appendix 2

Tabled Documents

A griculture, Fisheries and Forestry portfolio

Documents tabled at hearing on Monday 21 and Tuesday, 22 May 2012

1. Staffing figures from 2009-10 to 2012-13, tabled by Dr Conall O'Connell, 21 May 2012.

2. "Rising fees hurt small exporters" Northern Star, tabled by Senator McKenzie, 21 May 2012.

3. "Non-invasive assessment of stress in commercial housing systems", tabled by Mr James Kellaway, Managing Director, Australian Egg Corporation Limited, 22 May 2012.

4. "Qualitative research to determine consumer perceptions of free-range stocking densities", tabled by Mr James Kellaway, Managing Director, Australian Egg Corporation Limited, 22 May 2012.

5. "Welfare issues and housing for laying hens: international developments and perspectives", tabled by Mr James Kellaway, Managing Director, Australian Egg Corporation Limited, 22 May 2012.

6. Answers to questions taken on notice during the hearings on 21 and 22 May 2012, in relation to quarantine, budget supplier savings, and apple and pear research, development and extension investment plan, tabled by Dr Conall O'Connell, 22 May 2012.

Infrastructure and Transport portfolio

Document tabled the day after the Wednesday, 23 May 2012 hearing

1. "Bumie receives $4m for port" The Advocate, tabled by Senator Colbeck, 24 May 2012.

R egional A ustralia, Local Governm ent, A rts and Sport portfolio

Documents tabled at hearing on Thursday, 24 May 2012

1. Department of Regional Australia, Local Government, Arts and Sport, Financial Insights, August 2011, tabled by Senator Joyce, 24 May 2012.

2. Regional Development Australia Media Alert, tabled by Senator Macdonald, 24 May 2012.

279

Page 42

3. Finance Circular No. 2004/14, Department of Finance and Administration, tabled by Senator Joyce, 24 May 2012.

280

Appendix 3

Topic list

Agriculture, Fisheries and Forestry portfolio

Monday, 21 May 2012

Division/Agency and Topic Proof Hansard

page reference

Finance and Business Support, Government, Information Services and People and Service Delivery Divisions 4-26 1

Strategic direction statement 4,8

Reforming Australia *s biosecurity system4 Post-entry quarantine station 4

Remediation work of IT 4-7, 16

Export certification 7

Exporter Supply Chain Assurance System (ESCAS) 8

National Food Plan 8

Agvet chemicals reform 8

Illegal logging 8

Research and development review 8-10

Efficiency dividend 10, 17-18,21

Staffing numbers 10-13, 16-17, 20

Caring for Our Country 13-15

Reef Rescue 13-15

Voluntary redundancies 16

Australian Year of the Farmer 16-17

Detector dogs 18-20

Mobile phones, blackberries and iPads 21-22

Ministerial visits 22-23

Training for department and agencies 23-24

Legal costs 24-25

Departmental reports 25

Discussion paper on ecosystems 25-26

Interim Inspector-General of Biosecurity 26-29

Formal establishment of the Inspector-General of Biosecurity 26 Importation of ornamental finflsh 26

Consignments of fertiliser from China 26-27

Consignments of abalone exported to China and Hong Kong 26, 27, 28 Undeclared meat products from the Republic of Korea 26, 27-28 Work plan 26, 29

Myrtle rust 27

Self-referral of audits 27

281

Page 44

Budget allocations and staffing 28

Australian Animal Health Laboratory facility in Geelong 29 CSIRO 29

Biosecurity Animal Division 29-53

Live animal export ban 29-31

Freedom of Information documents 30-31

Legal advice 30-31

Claim for compensation 31,49-50

E Cams 31-32

Importation of fresh shell eggs 32-33

ESCAS 33-37, 39-42,

43^46, 47, 48.51

Boarding of the Al Shuwaikh 37-39, 52-53

Competition for live export markets 40, 42

Numbers for sheep exports 42

Companies found to be non-compliant 42-46, 48^49

Assistance packages 46-47

Foot and mouth disease 47-48

Proposal to export live cattle through Mourilyan to the Solomons 50-51 Kangaroo meat export to Russia 51-52

Biosecurity Quarantine Division 53-70

Post-entry quarantine facility 53-54, 60-61, 66

Reforming Australia's Biosecurity System *maintaining core biosecurity operations 54

Undeclared meat products from the Republic of Korea 54-60, 69-70 Cost recovery process and guidelines 55-57

AQIS Inspectors in abattoirs 61-63

International flights checked for biosecurity risks and contamination 63-66 Transportation to the post-entry quarantine facility 66

Snail infestation, threat assessments of grain 66-67

Broomrape67 Inspection of containers portside67-69 Possibility of an importer supply chain assurance scheme69

Biosecurity Plant Division 70-96

Incident of a fruit fly found in New Zealand 70

Fresh ginger from Fiji, import risk analysis 70-78, 96

Myrtle rust76-77 Removal of dimethoate as a treatment for tomatoes 78-81

Eminent Scientists Group, apple and pear producers 81-83

Export fees and charges for nurseries 83-84

Biosecurity issues as a result of flooding 84

Horticulture Ministerial Task Force 85-87, 89-90

Meat Ministerial Task Force 87

Paper based systems 87-88

282

Page 45

Food standards of imported food 90-91

Imported Food Inspection Scheme 91-92

Applications for the importation of bananas 92

Export of duck and chicken meat to New Zealand 92-94

Export of stone fruit into Thailand 94

Chinese apples 94-95

Asian Honey Bees 95-96

Proposal to import pineapples from Malaysia96 Biosecurity Policy 96-106

Core functions of division 96

Business audit process of export approved premises 96-99 Certification schemes 99

Trade access and the Malaysia free trade agreement 99-102 External inspection for containers 102

Aquatic Animal Health Training Scheme 102-102

Postgraduate curriculum in plant biodiversity 103-104 Threat Abatement Plan for dieback 105-106

Centre of Excellence for Biosecurity Risk Analysis 106 Australian Bureau of Agricultural aud Resource Economics and Sciences 107-117 Wine grape growers survey, wine industry and phylloxera 107-109, 116≠

117

FarmReady 108, 109

ESCAS 109-110

Tasmanian Forest Intergovernmental Agreement 110-112 Managed Investment Scheme Plantations 111-112

Potential storage of carbon 111-113

Short-run effects of carbon pricing on agriculture 113-115 Socioeconomic implications of commercial and charter fishing on the proposed South-West Marine Bioregional Plan 115

Factors contributing to employment changes in Agriculture, Fisheries and Forestry in 2010-11 to 2009-10 115-116 Foreign investment in agricultural land 116

Tuesday 22 May 2012

Division/Agency and Topic Proof Hansard page

reference

Australian Fisheries Management Authority 4-26 Fees and charges 4-9, 10

Number of fisheries 4-9, 10

Disallowance motion 9, 10-11,22-23

Cost recoveiy budget 10-11, 12-13, 15≠

16, 17-18

283

Page 46

Staffing 11

Cost of observers 13-15,23-24

Drivers for overspends in fisheries 16-17

Fisheries independent surveys 17

Fishery closures, sea lion mortalities 18-19

Marine bioregional planning process and marine protected areas 19-22 200-metre isobar from the Western Australian government24-26

Seismic testing in Bass Strait26 Sustainable Resource Management 26-54

Caring for Our Country 26-32, 33, 34, 36≠

37, 40-41,42, 43 *45

Landcare 27-28,31,32, 39, 42

Reef Rescue 28, 30, 44M6

Community action grants 28, 40 *41

Natural Resource Management32-36, 40, 42-44 Environmental stewardship program33 National Action Plan for Salinity and Water Quality 33-35

Monitoring and evaluation 35-36

Feral camel management project 37-38

Dingo wild dog populations 37-38

Border Rivers Gwydir Catchment Management Authority 38-39 National Weeds and Productivity Research program 41-42 Indian Ocean Tuna Commission 46

Western and Central Pacific Fisheries 46

Commission for the Conservation of Southern Bluefin Tuna46^17, 53, 75 Assistance with capacity building for other countries 47-48

Illegal fishing near Heard, McDonald and Macquarie Island 48 Budget initiatives specifically supporting the fishing sector 48 *49 Bycatch Initiative49-51 Harbour Policy 49-51

Work done by the Fisheries Research and Development Corporation (FRDC) and ABARES 51 Seabird and shark abatement plans 51-52

Departmental contribution for the FRDC52 Reporting of catch rates 53

Recreational industry development strategy 53

Climate Change Division 54-75

Carbon Farming Initiative 54-61, 66-67

ABARES report on the impact of alternative carbon prices on the likely area of land that would be put into forestation for carbon plantings

55-56

Domestic Offsets Integrity Committee57-58 Soil Carbon Research Program 59, 61

Intergovernmental Agreement 61-63, 66, 74

284

Page 47

Regional Forestry Agreements 63, 64-66, 71, 74-75

Five yearly reviews 63

Changes to the Flora and Fauna Guarantee Act 63-64

The Hawke review 65

Natural Resource Management 67

Income recovery subsidy for the live cattle suspension 68-70

Compensation for live exports suspension 70-71

Voluntary exit grants 71-74

Agricultural Productivity Division 75-91

Sale of dairy heifers 75-76

Livestock industry's agricultural and veterinary chemicals 76-77 FarmReady 77-81

Cassava industry in North Queensland 81

National Food Plan 81-83, 88

National Strategic Rural R&D Investment Plan 82-83

Australian Year of the Farmer 83-85

Regional Food Producers program 85-87

New Industries Development Program 87-88

Food Processing Industry Strategy Group; Prime Minister's Taskforce on Manufacturing 88 Training of Meat and Livestock staff 88-89

Sow stalls 89

Matched funding for research and development 89

Aussie Apple Accord package90 Horticulture Australia Ltd research and development extension plan for the apple industry 90-91

Forest and Wood products Australia 91-94

Expenditure for research and development on climate variability and climate change 91

R&D Investment plan 91

Strategies and priorities 91-93

Process to appoint board members 93

Fund agreement 93

Life cycle assessments 94

Green Building Council of Australia94 Australian Pork Limited 94-97

Move to ban sow stalls by 2015 94-95

Labelling laws 95

Free-range pig farming 95-96

Increase in the pig slaughter levy 96

Importation of sow stall produced pork 96-97

Australian Egg Corporation 97-100

Importation of fresh shell eggs 97-98

Definition of 'free-range' 97-100

Proportion of R&D funding invested in animal welfare100

285

Page 48

Meat and Livestock Australia 100-104

Training of workers in approved abattoirs 100-101

Purchasing of web domain names 101-102

R&D program 102-103

How members of the board deal with potential conflicts of interest 103-104 Australian Livestock Export Corporation Limited 104-107 Strategic plan and annual operating plan 104-105

Animal welfare provisions 104-105

Management structure 105

Board membership 106

Funding allocated to animal welfare 106

Countries that receive Australian live exports 106-107 Trade and Market Access 107-116

Export market for goats 107

Relationship with Austrade107-108 Table grapes into China 108

Work with Wine Australia 108-109

Wine exported to Malaysia 109-110, 111

Free Trade Agreements 110-111

Malaysian Free Trade Agreement 111-113

Tropical fruit exported to Malaysia 112

United Nations Food and Agriculture Organisation 113-114

Access through Indonesian ports 114-115

Cattle numbers to Indonesia115 Price pressures in the Indonesian market115-116 Australian Pesticides and Veterinary Medicines Authority 116-126 Cost recovery discussion paper 116-117

New legislation 117-118

International Federation for Animal Health survey 118 Agricultural chemicals and spray drift 118-119

The use of dimethoate on tomatoes 119-126

Maximum residue limits 123-125

286

Appendix 4

Topic list

Infrastructure and Transport portfolio

Wednesday, 23 May 2012

Division/Agency and Topic Proof Hansard page

reference

Corporate Services 3-17

Key initiatives for 2012-13 3-4

Moorebank Intermodal facility 3

Duplication of the Pacific Highway 3, 5-6, 14, 53-54

High-speed rail and national transport planning 4, 8-9 Nation Building 2 4

Black Spot Program 4

Roads to Recovery Program 4

National regulators 4

Heavy vehicle safety package 4-5

Seatbelts on regional buses 4

Amendments to regional airports 4

Sydney's aviation capacity needs 4

New England Highway 6-7

Building leases and building locations for the Department 9-15 Efficiency dividend 11-12, 15-16

Contingency reserve for Nation Building 2 15

Legal costs 16

Training for staff 16

Inspector of Transport Security 17-19

Retirement of current Inspector, Mr Mick Palmer 17

Appointment of Mr Andy Hughes as Inspector 17

Security at airports 17-18

Air marshals 18-19

Offshore oil and gas security 19

Office of Transport Security 19-27

Air cargo supply chain 19-20

Regulated Shipper Scheme 20

Security upgrades at regional airports 20-22

Screening at regional airports 22-23

Back-up plan for mechanical security failure 23-24

Screening passengers onboard aircrafts 24

Maritime security identification cards 25,27

Boarding of the Al-Shuwaikh 25-26, 27

287

Page 50

Activists boarding vessels 26-27

Aviation and Airports 27-34

Joint study on aviation capacity for the Sydney region 27-29, 31 Low-noise jet aircraft permitted to operate during curfews 29 Traffic through Perth airport 29-30

Airport crash risk assessment for Sydney airport 30-31 National Airports Safeguarding Advisory Group (NASAG) 31-33 National airport safeguarding framework 31-33

Request to extend building heights in Adelaide 33

Aviation White Paper 33

Flight path in Tralee 33

Airservices Australia 34 *44

Resignation of Mr Greg Russell, former CEO of Airservices 34 Allegations of credit card expenditure 34-35, 36

Staffing numbers, senior staff turnover 35-36

Overseas travel 36

Air traffic controllers - staffing numbers and overtime 37,41 Euro cat system 37

Refurbishment project for the Alan Woods Building 37-38 Instrument Landing System (ILS) and Required Navigation Performance (RNP) 38^10

Traffic information broadcast by aircraft procedure 40 Air traffic control procedures 40-41

Training for air traffic controllers 41, 42-43

Pricing issues 41 *42

Fatigue management systems 43,44

ATSB reporting on air traffic control issues 43^14

Perth airport 44

Civil Aviation Safety Authority 44-54

Legal action with Polar Aviation 45

Air traffic control - breakdown of separation, loss of separation 45-46 Allegations of bullying and harassment 47

Development at Archerfield 47

Different classifications of airfield 47 *48

Aviation safety of private operations 48 *49

Separation of Qantas domestic and international 49-50 Aircrash at Moree airport 50

Breakdown of separation incident over Tamworth 50-51 Auditing of the operations of Airservices Australia 51 Review of Airservices 51-52

Breaks for air traffic controllers 52

Whistleblowers 52

Variation of regulatory requirements 52-53

Availability of testing officers to do renewal tests 53

288

Page 51

Consultation where proposed developments may infringe on the obstacle limitation surface 53 Australian Transport Safety Bureau 54-62

Expanding role of rail and maritime safety investigator 54 Additional funding for 2012-13 54

Response to recommendations in reports 54

Breakdown of separation 55

Single-engine failures and reduced power after take-off 55-56 Timing and influence of ATSB reports 56-57

Investigations into derailments 57-60

Relationship between the ATSB and coroner when a fatality occurs in an aircraft accident 60-61 Departmental engagement with coroner 61

Fatigue issues 62

Infrastructure Australia 62-75

National Ports Strategy 62

Abbot Point proposal 62-63

Moorebank intermodal 63-67

Oil prices, IMF report The Future of Oil: Geology versus Technology 67-68 Assessment of infrastructure proposals in relation to time taken for project and advances in technology

68

Great Eastern Highway 68-69

Oakajee port 69

COAG Reform Council's Review of capital city strategic planning systems report 70 Australian Green Infrastructure Council 71

Australian Rural Road Group 71-72

Western Australian port-to-port intermodal program 72 Export freight issues in Tasmania 72-74

Tasmanian Freight Equalisation Scheme 73-74

Goodwood and Torrens junctions in Adelaide 74-75

Nation Building *Infrastructure Investment 75-100 Yeppen Crossing 75, 77

Yeppen flood plain study 75, 77

Queensland road recovery program 75,78

Harm Highway 76

Outback Way 76, 78

Beef and mining roads package, Northern Territory 76-77 Upgrade of remote community access roads in Cape York 77 Moorebank intermodal 78-79, 80-84

Redevelopment of Holsworthy Barracks 80

Contingency reserve for Nation Building 1 81

Truck stop rest areas 84, 95

Heavy vehicle safety package 84, 95-96

289

Page 52

Muswellbrook bypass 85

Pacific Highway 85-87

Western Highway, Victoria 87-88

Perth light rail system 88-89

Cycling infrastructure 89-91

Road congestion 91-93

Gold Coast light rail 92

Traffic projections 92-93

Great Eastern Highway 92-93

Liveable Cities Program 93-94

Goodwood-Torrens project 94-96

Road user charge95-96 Dukes Highway 95, 96-99

Inland rail proposal99 F3 to M2 Sydney orbital99-100 M5 upgrade100 Australian Rail Track Corporation 100-110

Staffing numbers 100

Location of offices 100

Building leases 100

Budget for 2012-13 100-101

Length of trains 101

Speed restrictions 101

Inland rail 101-102, 105, 106 *

107, 108-110

Southern Sydney freight line 102

Moorebank intermodal102, 103-104 Priority upgrades for 2012-13 102-103

Equity injections 103

Rail upgrades that allow an increase in the movement of coal103 Air quality and emissions 104-105

Noise barriers 104

High speed rail 105-106, 108

Ballast rehabilitation program 107

Australian Maritime Safety Authority 110-114

Marine Orders Part 3, consultation process 110-111

Marine electricians and electrical engineers 111-112 People - smuggling operations and boats in distress 112 Livestock transportation by vessel 112-113

Hong Kong flagged bulk carrier 113

Gladstone Port Authority 113

OH&S Guidelines 113

Establishment of a single jurisdiction 113-114

Surface Transport Policy 114-121

National transport regulators 114-116

290

Page 53

CEO for the National Heavy Vehicle Regulator 115-116

Energy efficient vehicles 117, 121

Tasmanian freight exports 117-121

Tasmanian Freight Equalisation Scheme 119,120

Policy and Research 121-125

Seatbelts for regional school buses 121-123

Electric bicycles 123-124

Peak oil 124-125

Major Cities Unit 125-129

Staffing level 125

Budget for 2012-13 125-126

Major tasks for 2012-13 126

State of the Cities 2012 126

Active Travel discussion paper 126

Congestion 126-127

Urban Design Protocol and Reform Council 127-128

National Urban Policy 128

291

292

Appendix 5

Topic list

Regional Australia, Local Government, Arts and Sport portfolio

Thursday, 24 May 2012

Division/Agency and Topic Proof Hansard page

reference

Corporate Services; Outcome 1 3-63

Financial inSights: Department o f Regional Australia, Regional Development and Local Government 5-7 Departmental meeting 7

Delivery of outcomes 7-8

Regional Development Australia Fund 7-8, 26-28, 29, 38≠

42, 43

Voluntary redundancies 8-9, 10-11, 13, 23≠

26

Capital budget fond 9-10

Latrobe Valley Transition Committee 11-13

238 regional centres 13-16

Economic diversification package for Tasmania 16-19, 20-22 Intergovernmental Agreement 20

Definition of 'regional' 22

Spatial accounting 22-23, 28-29, 31

Community Infrastructure Grants Program 23,40

Burdekin Road upgrade23 Regional and Local Infrastructure Program24 My region website28 National Disaster Recovery Taskforce 30

Regional Australia Institute31-38 Priority Regional Infrastructure Program 39

Erosion of sea walls 42-43

North Queensland Irrigated Agriculture Strategy 43-45, 49 Northern Australia Ministerial Forum45 Tanami Road 46

Office of Northern Australia personnel 46

Foreign investment of agricultural land 46

Promoting Regional Living program 46-49

Expert Panel on Constitutional Recognition of Local Government 54-55 Clean Energy Regulator 55, 56

293

Page 56

Community Energy Efficiency Program 56

Financial Assistance Grants 57-62

Outcome 2 63-71

Management and self-sufficiency of Norfolk Island 63

Commonwealth financial assistance for Norfolk Island 64, 67-68, 70 Freight rationalisation for Norfolk Island 64-65

Tourism in Norfolk Island 65-66, 68

Norfolk Island and the Australian GST system66-67 Commonwealth Grants Commission 68

Norfolk Island Reform Package 69

Norfolk Island hospital 69

Parks Australia70 Waste management strategy 69, 70-71

Outcome 3 71, 82-

National Cultural Policy 81-84, 88

National Cultural Policy Reference Group 84-86, 90

Screen Australia 71-73,90-91

South Australian Film Corporation, Wolf Creek 2 72

National Cultural Policy 72-73

Funding for Wolverine and The Great Gatsby 90-91

Australia Council 73-74,77-89

Review of Australia Council73, 77-81, 88 National Cultural Policy 73

Efficiency dividend 73-74

Funding for 2012-13 81

De-funding of Melba Recordings 86-88

Funding for buildings in Melbourne88-89 Funding for Wolverine 89

National Gallery of Australia 74-75,92

Efficiency dividend 74

Additional funding for 2012-13 74-75

Credit card misuse92 Appointment of Director 92

National Library of Australia 75-76

Efficiency dividend 75

Additional funding for 2012-13 75

National Museum of Australia; National Film and Sound 76-77,91-92, 92-Archive 93

Efficiency dividend 76, 93

Additional funding for 2012-13 76-77, 92-93

Impact of the carbon tax 91, 92

Staffing levels 91

National Cultural Policy 91-92

Australian National Maritime Museum 94

Additional funding 94

294

Page 5 7

Digitisation of documents 94

Australian Film, Television and Radio School94-5 Efficiency dividend 94-95

Number of students 95

Online activities 95

Outcome 4; Australian Sports Commission, Australian Sports Anti-Doping Authority 95-115 Expectations for the Australian Olympic team96 Upgrade of Olympic Park 96-100

Funding for FFA 100-101

Active After-School Communities Program101-103 Sports scholarship programs 103-104

Research program104,109-110 Illicit drugs in sport105 Illicit Drugs in Sport Program 105-109

Lingerie football110-112 Chiropractors in the Australian Sports Commission and Australian Institute of Sport 112-113

The Paralympics 113-114

Australian Defence Force paralympic association 114-115

295

296

Appendix 6

AUSTRALIAN SENATE

CLERK OF THE SENATE

PARLIAMENT HOUSE CANBERRA ACT 2600 TEL: (02 ) 6277 3350 FAX: (02) 6277 3199

E-mail: clerk.sen@aph.gov.au

cladvsenrc 18081

24 May 2012

Senator the Hon Richard Colbeck Suite SI 47 The Senate Parliament House

Canberra ACT 2600

Dear Senator Colbeck

Possible false or misleading evidence given to the Rural and Regional Affairs and Transport Legislation Committee

You have asked for advice on options available to you under the procedures of the Senate to deal with a

possible case of misleading evidence given to the Rural and Regional Affairs and Transport Legislation

Committee on 23 May 2012 in relation to expenditure under the Government's $20 million Tasmanian

Exporters Assistance package.

Privilege Resolution 6 sets out matters which the Senate may treat as contempts. These include the

giving of false or misleading evidence to a committee. Paragraph (12)(c) of the resolution provides that a

witness before the Senate or a committee shall not give any evidence which the witness knows to be

false or misleading in a material particular, or which the witness does not believe on reasonable grounds

to be true or substantially true in every material particular.

The Senate Committee of Privileges has investigated numerous allegations of possible false or

misleading evidence before committees although it has not found a contempt in any of those cases. It

has, however, been highly critical of the lack of knowledge by public servants of their obligations and

responsibilities to the parliament and was instrumental in having this recognised as a training priority

for senior officers. An essential element of a finding of contempt is that there should be evidence of an

intention to mislead a committee. In several cases, the Privileges Committee found that the effect of

certain evidence was to mislead the committee concerned, but that the witness did not intend to do so.

In these circumstances, no contempt was found.

297

Page 60

In your comments to the Rural and Regional Affairs and Transport Legislation Committee this morning,

you indicated that you did not think this was a case of officers intentionally misleading the committee,

but that events outside the committee overtook the evidence that was given, suggesting a political

dimension to the situation.

Senate committees are entitled to expect that the evidence given to them will be comprehensive and

accurate and that ministers will take responsibility for ensuring that their officers are fully prepared in

order to assist committees. Given that the evidence provided by officers to the committee yesterday

does not accord with announcements that appeared in today's press, and witnesses are expected to

provide committees with any corrections to their evidence as soon as practicable, the committee could

reasonably expect to be provided with a further explanation. In the meantime, however, it would be

advisable for the committee to seek an explanation for the discrepancy, both from the departmental

officers and from the minister at the table who I understand was Senator Kim Carr, representing the

Minister for Infrastructure and Transport, Mr Albanese.

Having received the explanations, the committee should then consider whether it wishes to raise as a

matter of privilege a possible case of misleading evidence. A decision by the committee not to proceed

in raising a matter of privilege does not prevent you as an individual senator doing so and I can provide

further advice on this matter if you so wish.

It would be appropriate for the committee to include an account of this matter in its report on the

estimates and you may wish to comment on the matter in a motion to take note of the committee's

report on its presentation to the Senate (a motion for which leave would be required). Alternatively,

you may wish to speak to the second reading of the appropriation bills and indicate your concerns using

that opportunity.

There are numerous other procedures of the Senate that are available to you to either obtain further

information about this matter or to voice your concerns about it. These include:

" following up immediately with questions on notice through the estimates process;

" asking a question without notice in relation to the minister's role in the events (and following

this up with commentary in debate on a motion to take note of the answer);

" lodging questions on notice in the Senate (which, if they remained unanswered for more than

30 days after they were asked, would give you earlier access to the provisions under

standing order 74 for raising these matters in the chamber than your estimates questions

on notice * because the clock does not start ticking on these until 30 days after the date

set by the committee for submission of answers);

" raising the matter in debate on relevant document, committee report or Auditor-General's

report;

" speaking to a matter of public importance under standing order 75 on a topic relating to

government performance and integrity;

" raising the matter in matters of public interest (Wednesdays from 12.45 pm) or an adjournment

debate;

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* framing a motion expressing your views on the management of the process and the

arrangements for the announcements of particular expenditures under the fund.

There may also be scope for an order for production of documents if any likely documents can be

identified.

If it appears that there is insufficient evidence to support an allegation of deliberate misleading of the

committee by the witnesses at the table, there remains the issue of serious discourtesy by the

responsible minister to the estimates process, which can be raised using any of the above procedures.

Please let me know if I can provide any further assistance in relation to this matter.

Yours sincerely

'Rosemary Laing Clerk of the Senate

299

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

PARLIAMENTARY

PAPER

No. 467 of 2012 ORDERED TO BE PRINTED ISSN 0727-4181