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Senate Legislation Committees Reports on estimates 1999-2000


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The Parliament of the Commonwealth of Australia

Senate Legislation Committees

Reports to the Senate on Departmental Estimates

1999-2000

ψ

The Parliament of the Commonwealth of Australia

Senate Legislation Committees

Reports to the Senate on Departmental Estimates 1999-2000

Community Affairs

Economics

Employment, Workplace Relations, Small Business and Education

Environment, Communications, Information Technology and the Arts

Finance and Public Administration

Foreign Affairs, Defence and Trade

Legal and Constitutional

Rural and Regional Affairs and Transport

© Parliament of the Commonwealth of Australia 1999

ISSN 0811—0883

This document was produced from camera-ready copy and printed by the Printing Unit, Department of the Senate, Parliament House, Canberra.

TABLE OF CONTENTS

Resolutions of the Senate agreed to on 26 November 1998 and 11 May 1999

Community Affairs Legislation Committee

• Estimates report, dated June 1999.................................................... 1

Economics Legislation Committee

• 1999/2000 Estimates report, dated June 1999................................. 9

Employment, Workplace Relations, Small Business and Education Legislation Committee

• Estimates report, dated June 1999..................................................21

Environment, Communications, Information Technology and the Arts Legislation Committee

• Report to the Senate, dated June 1999...........................................41

Finance and Public Administration Legislation Committee

• Budget estimates 1999-2000 report, dated June 1999................... 49

Foreign Affairs, Defence and Trade Legislation Committee

• Report to the Senate, dated June 1999...........................................65

Legal and Constitutional Legislation Committee

• Budget estimates 1999-2000 report, dated June 1999................... 83

Rural and Regional Affairs and Transport Legislation Committee

• Consideration of Budget estimates:

Report to the Senate, dated June 1999.................................. 105

Supplementary report, dated June 1999................................. 125

RESOLUTIONS OF THE SENATE AGREED TO ON 26 NOVEMBER 1998

Legislation Committees— Estimates

The Parliamentary Secretary to the Minister for Communications, Information Technology and the Arts (Senator Ian Campbell), at the request of the Parliamentary Secretary to the Minister for Health and Aged Care (Senator Tambling) and pursuant to notice of motion not objected to as a formal motion, moved— (1) That estimates hearings by legislation committees for the first half of 1999 be scheduled as follows:

1998- 99 additional estim ates:

Monday, 8 February, Tuesday, 9 February and, if required, Friday, 19 February (initial hearings - Group A)

Wednesday, 10 February, Thursday, 11 February and, if required, Friday, 12 February (initial hearings - Group B)

Tuesday, 4 May and, if required, Thursday, 6 May (supplementary hearings - Group A) Wednesday, 5 May and, if required, Thursday, 6 May (supplementary hearings - Group B).

1999- 2000 budget estim ates:

Monday, 31 May to Thursday, 3 June (initial hearings - Group A) Monday, 7 June to Thursday, 10 June (initial hearings - Group B).

(2) That the committees m eet in the following groups:

Group A:

Community Affairs Legal and Constitutional Finance and Public Administration Rural and Regional Affairs and Transport.

Group B:

Employment, Workplace Relations, Small Business and Education Environment, Communications, Information Technology and the Arts Economics Foreign Affairs, Defence and Trade.

(3) That the committees report to the Senate by the following dates:

9 March 1999 in respect of the 1998-99 additional estimates 22 June 1999 in respect of the 1999-2000 budget estimates.

(4) That the following documents be referred to committees for examination and report:

Particulars of Proposed Additional Expenditure in relation to the Parliamentary Departments in respect of the year ending on 30 June 1999 Particulars of Proposed Additional Expenditure for the Service of the year ending on 30 June 1999 Particulars of Certain Proposed Additional Expenditure in respect of the year ending on 30 June

1999 Advance to the Minister for Finance - Issues from the Advance to the Minister for Finance as a final charge for the year ended 30 June 1998 Provision for Running Costs Borrowings - Statements and supporting applications of issues,

dated March, April, May and June 1998 (tabled on 23 June, 30 June and 11 November 1998) Final Budget Outcome 1997-98 (presented out of session on 18 September 1998 and tabled on 10 November 1998). '

(5) That the committees consider the proposed expenditure, expenditure under the Advance to the Minister for Finance, the Provisions for Running Costs Borrowings and the Final Budget Outcome 1997-98 in accordance with the allocation of departments to committees agreed to on 11 November 1998.

(6) That consideration of the Advance to the Minister for Finance for the year ended 30 June 1998 in committee of the whole be an order of the day for the day on which legislation committees report on their examination of the Advance.

Question put and passed.

RESOLUTIONS OF THE SENATE AGREED TO ON 11 MAY 1999

P articulars of P ro po sed Expenditure fo r 1999-2000— Documents— R efer e n c e of Estim ates to Legislation C ommittees The Assistant Treasurer (Senator Kemp) tabled the following documents:

Particulars of proposed expenditure in relation to the parliamentary departments in respect of the year ending on 30 June 2000.

Particulars of proposed expenditure for the service of the year ending on 30 June 2000.

Particulars of certain proposed expenditure in respect of the year ending on 30 June 2000.

Senator Kemp, by leave, moved—That— (1) The documents be referred to legislation committees for examination and report in accordance with the provisions of the order of the Senate of 26 November 1998 relating to estimates hearings.

(2) Legislation committees consider the proposed expenditure in accordance with the allocation of departments to committees agreed to on 11 November 1998.

Question put and passed.

SENATE COMMUNITY AFFAIRS LEGISLATION COMMITTEE

ESTIMATES REPORT

JUNE 1999

© Parliament of the Commonwealth of Australia 1999

ISSN 1323-3750

Senate Community Affairs Legislation Committee Secretariat

Mr Elton Humphery Secretary

The Senate Parliament House Canberra ACT 2600

Phone: 02 6277 3515

Fax: 02 6277 5829

E-mail: community, affairs, sen@aph.gov. au Internet: http://www.aph.gov.au/senate

This document was produced from camera-ready copy prepared by the Senate Community Affairs Legislation Committee Secretariat and printed by the Senate Printing Unit, Parliament House, Canberra

M E M B E R S H IP OF T H E C O M M IT TE E

Senator Sue Knowles, Chairman

Senator Andrew Bartlett, Deputy Chair

Senator Kay Denman

Senator Alan Eggleston

Senator Chris Evans

Senator David MacGibbon, Chairman from 29 May to 4 June 1999

Substitute Members

Senator Helen Coonan for Senator Knowles from 31 May to 3 June 1999

Senator Brenda Gibbs for Senator Denman for the consideration of the 1999-2000 Budget estimates

LP, Western Australia

AD, Queensland

ALP, Tasmania

LP, Western Australia

ALP, Western Australia

LP, Queensland

LP, New South Wales

ALP, Queensland

SENATE COMMUNITY AFFAIRS LEGISLATION COMMITTEE

BUDGET ESTIMATES 1999-2000

REPORT

1.1 On 11 May 1999 the Senate referred the following documents to the Committee for examination and report in relation to the portfolios of Health and Aged Care, and Family and Community Services:

• particulars of proposed expenditure for the service of the year ending on 30 June 2000;

• particulars of certain proposed expenditure in. respect of the year ending on 30 June 2000.

1.2 The Committee has considered the expenditure of the portfolios set out in their respective Portfolio Budget Statements 1999-2000 and related documents. Explanations relating to the estimates were received from Senator the Hon John Herron, representing the Minister for Health and Aged Care and Senator the Hon Jocelyn Newman, Minister for Family and Community Services and officers from the portfolio Departments at hearings held on 31 May, 1 and 2 June 1999. The Committee expresses its appreciation for the assistance of the Ministers, the Departmental Secretaries Mr Andrew Podger (DHAC) and Dr David

Rosalky (DFaCS), and the officers who appeared before it.

1.3 In accordance with Standing Order 26, the Committee has agreed that the date for submission to the Committee of written answers or additional information relating to the expenditure is 25 June 1999. The Committee notes that the Senate has yet to determine the dates for supplementary hearings to consider the 1999-2000 budget estimates. The final date for lodgement of notice of matters which Senators wish to raise at the supplementary hearings of the Committee relating to the written answers or additional information, or otherwise relating to the proposed expenditure, will be three working days before the hearing date.

1.4 The Committee discussed many of the budget measures and information contained in the Portfolio Budget Statements and related budgetary documentation. These discussions are detailed in the Committee’s Hansard transcripts of 31 May, 1 and 2 June 1999, copies of which will be tabled in the Senate. Hansard transcripts of estimates proceedings are also available on the Internet. Volumes of Additional Information received by the Committee containing answers to questions taken on notice prior to, and at the Committee’s hearings, will also be tabled separately in the Senate.

1.5 These were the first estimates hearings conducted with the budget documentation in the new accmal budgeting format. The Committee would like to make some observations arising from its examination o f the estimates using the Portfolio Budget Statements.

1.6 The transition to new arrangements is always challenging and it is recognised that it will take a certain period for all parties to adjust to the new arrangements. As the Secretary to DHAC commented ‘the task o f converting cash estimates to accrual estimates for these outcomes and more generally across the portfolio has been difficult and complex and has been a learning process for all involved’.1 The Secretary also acknowledged that ‘given the 1

1 Committee Hansard, 31.5.99, p .5.

1 t j

2

magnitude of these changes, we are concerned that there might be some discrepancies in these estimates and we are therefore devoting an increased level of departmental resources to reviewing and finetuning the estimates prior to the 1999-2000 additional estimates process’.2

1.7 A general criticism of the PBSs voiced by Committee members related to the differing formats adopted across portfolios (not just DHAC and DFaCS). The levels of information and interpretations provided, especially in relation to outcomes and outputs, varied considerably from portfolio to portfolio.3 It was suspected that the decentralisation of responsibility for estimates preparation from the Department of Finance and Administration to individual portfolios could have been a major contributor to this lack of commonality in the preparation of the PBSs.

1.8 Within the Community Affairs Committee’s portfolios there were differences in the approach to the shift from program and sub program structure to outcome and output structure. DHAC adopted a 10-outcome structure for the whole portfolio. The portfolio agencies have money appropriated within these outcomes. Seven categories of output have been developed for use across the 10 outcomes, although some of the outcomes do not have

all of the outputs. The portfolio agencies were given the opportunity to develop independent output groups to define their outputs, though most decided to use the standard groups.

1.9 For DFaCS outputs are clustered under the strategic outcomes. The Department has only three such outcomes, with Centrelink and the Australian Institute of Family Studies having separate outcomes. Other agencies including the Child Support Agency, the Social Security Appeals Tribunal and CRS Australia form part of the Department and are included within the Department’s outcomes.

1.10 The Committee’s examination of the estimates clearly demonstrated that accrual budgeting and accountability requires a great deal more work. Two major areas of concern were with attribution and the need for disaggregation. In relation to attribution, DHAC explained:

The estimated cost of the outputs for the department under each outcome tends to vary from the estimated total departmental expenses attributed to each outcome in the Department of Finance and Administration’s budget management system. This is due to the relatively unrefined attribution across outcomes in that system of revenue from other sources and a loss relating to an adjustment to the notional disposable value of our information technology assets. -It is important to note that the attribution of departmental expenses across outcomes is only notional and is not subject to any controls in the appropriation bills, which appropriate departmental expenses for each agency as one lump sum. As this is only the first year in which we have attributed expenses across outputs

and outcomes, our approach is at an early stage of development and will be subject to further refinement in future budgets. In particular we will be undertaking a review of our funding as either administered expense or departmental expenses. We anticipate that this review may result in changes to the accounting treatment of

some portfolio expenses.4

2 Committee Hansard, 31.5.99, p.5.

3 Committee Hansard, 31.5.99, p.7; 2.6.99, pp.245-6.

4 Committee Hansard, 31.5.99; p.5.

I)

3

1.11 The need for disaggregation of figures was also noted as Committee members continually needed to ask to have very large sums of money broken down into component parts. This was required to understand just what the proposed expenditure was intended to be spent upon and to make comparative judgements.

1.12 In the previous program structure, Departments had budget measures which often crossed over a number of programs. Under the new format, DHAC has described each budget measure under the outcome to which it relates. The Department has no cross-outcome measures and only one major cross-portfolio measure. However, it warned that ‘it will never be possible to categorise outcomes in a way that guarantees that new budget measures always

fit within a particular box’.5

1.13 DFaCS has retained a separate section on budget and non-budget measures, although the number of measures that cross outcomes appear to be considerably less than previously crossed programs. This is to be expected with the Department adopting a structure of only three outcomes.

1.14 Both Departments also provided performance measurement information in their PBSs, although DHAC noted that ‘there is further development to be undertaken, particularly in measuring the departmental outputs and their prices’.6

Senator Sue Knowles Chairman

June 1999

t

5 Committee Hansard, 31.5.99, p .6.

6 Committee Hansard, 31.5.99, p.6.

THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA

SENATE ECONOMICS LEGISLATION COMMITTEE

1999/2000 BUDGET ESTIMATES REPORT

June 1999

© Commonwealth of Australia 1999

This document was produced from camera-ready copy and printed by the Senate Printing Unit, Parliament House, Canberra.

0

SENA TE ECONOMICS LEGISLA TION COMMITTEE

M EM B E R SH IP (as at 24 May 1999)

Core Members

Senator A Ferguson (Chair) (Liberal Party - SA)

Senator S Murphy (Deputy Chair) (Australian Labor Party - TAS) Senator G Campbell (Australian Labor Party - NSW) Senator G Chapman (Liberal Party - SA)

Senator A Murray (Australian Democrats - WA)

Senator J Watson (Liberal Party - TAS)

Substitute Members Senator Gibson to replace Senator Ferguson for 7 June and 8 June 1999.

Senator Parer to replace Senator Ferguson for 9 June and 10 June 1999.

Participating Members Senator E Abetz (Liberal Party - TAS) Senator R Boswell Senator B Brown Senator M Colston Senator S Conroy Senator H Coonan Senator J Faulkner

(National Party - QLD) (Australian Greens - TAS) (Independent - QLD) (Australian Labor Party - VIC) (Liberal Party - NSW) (Australian Labor Party - NSW)

Senator B Harradine (Independent - TAS) Senator K Lundy (Australian Labor Party - ACT) Senator D Margetts (WA Greens - WA) Senator W O’Chee (National Party - QLD) Senator W Parer (Liberal Party - QLD) Senator J Quirke (Australian Labor Party - SA)

Senator C Schacht (Australian Labor Party - SA) Senator N Sherry (Australian Labor Party - TAS)

COMMITTEE SECRETARIAT

Secretary Robert Diamond Estimates Officer Stuart Rendell

Address The Secretary Senate Economics Legislation Committee Parliament House Canberra ACT 2600 Phone: (06) 277 3540, Fax: (06) 277 5719 1

1 iii

Table of Contents

Subject Page

Members of the Committee (iii)

Report to the Senate

Introduction 1

Questions on Notice and Supplementary Hearings 1

Supplementary Hearing 2

Hours of Meeting 2

Portfolio Budget Statements 3

Australian Nuclear Science and Technology Organisation 3

Australian Tourist Commission 4

Australian Sports Commission 4

Australian Sports Drug Agency 4

Australian Competition and Consumer Commission 5

Treasury - Australian Taxation Office 5

ECONOMICS LEGISLATION COMMITTEE REPORT TO THE SENATE

Introduction

On 11 May 1999 the Committee was charged by the Senate with

consideration o f the Particulars o f Proposed Expenditure fo r the Service o f the Year Ending on 30 June 2000, the Particulars o f Certain Proposed Expenditure in Respect o f the Year Ending on 30 June 2000, and the Particulars o f Proposed expenditure in relation to the Parliamentary Departments in respect o f the Year Ending 30 June 2000, in respect o f the

portfolios of:

• Treasury; and

• Industry, Science and Resources

The Committee considered the relevant Portfolio Budget Statements for 1999/2000. The Committee received evidence from the Assistant Treasurer, Senator Kemp and the Minister for Industry, Science and Resources, Senator Minchin and officers of the departments and agencies concerned.

The Committee conducted hearings from 7-9 June 1999, sitting for a total 36:17 hours. This was a slight reduction from 39:59 hours for the committee's examination of the 1998/99 Budget Estimates. The Committee draws to the attention o f the Senate the following matters that arose during those hearings:

Questions on Notice and Supplementary Hearings

As part of its examination of proposed expenditure, the Committee is required by Standing Orders to set dates for the:

• The provision of any written answers to questions on notice or additional information; and

Supplementary Estimates hearing.

2 1999/2000 Budget Estimates

At the outset of the Estimates hearings the Committee resolved that written answers to questions on notice be provided by close of business on Thursday, 15 July 1999.

Supplementary Hearing

At the commencement o f the examination of the 1999/2000 Budget estimates, the Senate had not resolved dates for possible supplementary hearings. As soon as the Senate resolves dates for supplementary hearings, Standing Order 26(10) comes into operation.

Pursuant to Standing Order 26(10), Senators must give notice o f matters they wish to raise at the supplementary hearings not less than three working days before the set hearing date. Therefore as soon as the Senate passes a resolution to allocate sitting days for supplementary estimates, Senators must give notice no later that three working days before the supplementary round is due to commence. The Committee secretariat will notify all Senators o f this deadline as soon a possible.

Hours of Meeting

The Committee notes that time spent in examination o f Estimates is still on the increase. The following table illustrates the increase o f hearing time in relation to the Committee's responsible portfolios Industry, Science and Resources and Treasury.

Ijgggj

7:07 1:04 4:07 6:41 12:08 1 2 :2 6

7:04 9:38 15:04 13:46 11:58 2 3 :5 1

1 4 :1 1 1 0 :4 2 19:11 2 0 :2 7 2 4 :0 6 3 6 : 1 7

I !

Economics Legislation Committee 3

The Committee notes the increase in examination time has approximately doubled for the Treasury portfolio between the 1998/99 and 1999/2000 periods. The Committee also notes a similar trend with the Industry, Science and Resources portfolio over the last two year.

Portfolio Budget Statements

The 1999/2000 financial year was the first that portfolios reported their proposed annual appropriations in an accrual accounting format. The Committee secretariat noted a large increase in inquiries from Senators in relation to the appropriation o f agencies within both portfolios. Under the new accrual accounting format of the Portfolio Budget Statements (PBS), some Senators found it difficult to match particular programs within the portfolio to the program's proposed appropriation inputs and outputs within the PBS's. For example the following question from Senator George

Campbell was indicative o f the issue:

"...is it possible Minister, for the next set o f estimates to have some subheadings under these programs so w e can follow them more consistently" (Senator G Campbell, Hansard, 7 June 1999, pg. E55)

The Committee understands teething problems in the reporting process of the PBS's and reporting portfolios could have been of greater assistance to Senators if a clear distinction was made within PBS's in relation to

appropriations and portfolio programs and sub-programs. The Committee Recommends that in future a table be included in the PBS's to assist in identifying where an agency or program's appropriation is illustrated as an

input and/or output with the PBS's in addition to clear linkages and single line appropriation reporting.

"...I agree; it would probably help me too, so I am happy to say we will accommodate that" (Senator N Minchin, Hansard, 7 June 1999, pg. E55)

4 1999/2000 Budget Estimates

Australian Nuclear Science and Technology Organisation

The Australian Nuclear Science and Technology Organisation, Executive Director, Professor Helen Garnett answered questions relating to the possible replacement of the nuclear reactor at Lucus Heights. The Committee notes the current inquiries o f both this committee and the Parliamentary Standing Committee on Public Works in relation to this issue. The Economics Legislation Committee will forward a copy of the Committee's 1999/2000 Budget Estimates transcript to the Parliamentary Standing Committee on Public Works for their information.

Australian Tourist Commission

The Committee notes evidence given by the Australian Tourist Commission in response to questions by Senator Lundy in relation to forecasts for tourism. The Committee will track the results of both pre and post Olympic games forecasts with interest in order to note the Olympic games impact on Australia's tourism. The committee also waits with anticipation for a list of the successful grants within the Regional Tourism Program.

Australian Sports Commission

The Committee notes evidence given by the Australian Sports Commission (ASC) in relation to the build up to the Olympic games. The ASC covered topics that included:

• Results from the Atlanta Olympic review;

• Olympic Athlete Program (OAP);

• Sports Assistance Scheme (SAS); and

• Sportnet, the ASC Internet site.

Economics Legislation Committee 5

Australian Sports Drug Agency

The Committee notes evidence given by the Australian Sports Drug Agency (ASDA). ASDA covered topics that included:

• Border activities in conjunction with the Australian Customs Service;

• Australian Sports Drug Testing Laboratory's compliance with the IOC;

• GH2000 project (Growth Hormone 2000)

Australian Competition and Consumer Commission

Senators took detailed evidence from officers o f the Australian Competition and Consumer Commission (ACCC) in relation to an additional appropriation for monitoring retail pricing during a possible implementation o f a GST. The ACCC also flagged questions concerning possible price exploitation to consumers, during a GST introduction, and intum the ACCC's ability to confront such issues. On the issue of GST introduction, the ACCC gave evidence on measures it would implement from staffing the ACCC to consumer protection activities.

Treasury - Australian Taxation Office

The ATO answered many questions in relation to a possible GST exemption on products, namely food. The ATO stated that given the developmental nature o f the proposed GST legislation the Committee would be better served if it took a number o f questions on notice to give a more accurate answer.

Senators made various inquiries relating to types of food that would attract a possible GST exemption and the effect on Commonwealth revenue.

6 1999/2000 Budget Estimates

The issue of product rulings was also raised and ATO gave examples of when and in what situations the ATO would offer such a ruling.

Economics Legislation Committee

AUSTRALIAN SENATE

E m p lo y m en t, W orkplace R elation s, S m all B u sin e ss an d E d u cation L e g is la tio n C om m ittee

REPORT TO THE SENATE

Estim ates Report · June 1999

TABLE OF CONTENTS

MEMBERS OF THE COM M ITTEE..................................................................................V

REPORT TO THE SENATE...............................................................................7

INTRODUCTION................................ 7

MATTERS OF INTEREST................................................................................................... 8

Employment, Workplace Relations and Small Business Portfolio...................................9

Australian Industrial Registry............................................. ................ '..........................9

National Occupational Health and Safety Commission..................................................9

Office of the Employment Advocate...............................................................................9

Output group 2.1 Workplace relations framework.........................................................9

Output group 2.2 Workplace relations services.............................................................. 9

Outcome 3 - Small B usiness......................................................................................... 9

Office of Small Business................................................................................................. 9

Outcome 1 - Em ploym ent........................................................................................... 10

Employment National Ltd.............................................................................................10

Outcome 1 - Em ploym ent........................................................................................... 10

Education, Training and Youth Affairs Portfolio.............................................................. 10

General Questions........................................................................................................... 10

Outcome 1 - School systems.......................................................................................11

Output group 1.1 — Infrastructure for the schools system........................................... 11

Output group 1.2 - Assistance for School Students with Special Needs................... 11 Output group 1.3 Quality o f teaching and learning.................................................... 11

Outcome 2 - Post school education and training providers..................................11

Output group 2.1 - Infrastructure funding for the post compulsory education system .........................................................................................................................................11

Output 2.4 - Young people and Community Activities...............................................12

Outcome 4 - Higher Education Division O u tp u ts...................................................12

Output group 3.3 Internationalisation of Australian education................................... 12

Output Group 2.1 - Infrastructure Funding for Post-Compulsory Education System 12 QUESTIONS ON NOTICE AND SUPPLEMENTARY HEARINGS........................... 13

ACKNOWLEDGMENTS...................................................................................................13

HANSARD TABLE OF CONTENTS.............................................................................15

M E M B E R S OF TH E C O M M IT T E E

Chair: Senator John Tierney

Members: Senator K im Carr (D eputy C h air)

Senator Jacinta Collins

Senator Jeannie Ferris*

Senator N atasha Stott Despoja*

Senator K aren Synon*

(New South Wales)

(Victoria)

(Victoria)

(South Australia)

(South Australia)

(Victoria)

Substitute Members: Senator Jeannie Ferris - Senator Ross Lightfoot (Western Australia) Senator Karen Synon - Senator Abetz (Tasmania) - 7-9 June; Senator Coonan (New South Wales) - 10 June For W orkplace Relations & Small Business matters

Senator W inston Crane* (Western Australia)

to substitute for Senator Karen Synon Senator the Hon David Brownhill* ( New South Wales) to substitute for Senator Crane on 7 & 8 June Senator Andrew Murray* (Western Australia)

to substitute for Senator Stott Despoja

Participating:Senator Eric Abetz Members: Senator Lyn Allison Senator Ronald Boswell Senator Bob Brown

Senator D avid Brownhill Senator George Campbell Senator M ai Colston Senator Trish Crossin Senator Rosem ary Crowley

Senator the Hon John Faulkner Senator Brian Harradine Senator Steve Hutchins Senator Kate Lundy

Senator Sue M ackay Senator Dee M argetts Senator Kerry O ’Brien Senator Chris Schacht Senator John W atson

S e c r e ta r ia t

Secretary:

Research Officer:

(Tasmania) (Victoria) (Queensland) (Tasmania)

(New South Wales) (New South Wales) (Queensland) (Northern Territory) (South Australia) (New South Wales) (Tasmania) (New South Wales) (Australian Capital Territory) (Tasmania) (Western Australia) (Tasmania) (South Australia) (Tasmania)

Mr John Carter

Mrs Jan Willis

E m p lo y m e n t, W o r k p la c e R e la tio n s , S m a ll B u s in e s s a n d

E d u c a tio n L e g is la tio n C o m m itte e

R E P O R T T O T H E S E N A T E

1.1 The Employment, W orkplace Relations, Small Business and Education Legislation Committee presents its report to the Senate.

IN T R O D U C TIO N

1.2 On 11 M ay 1999 the Senate referred to the Committee the particulars of proposed expenditure for 1999— 2000 in relation to the Employment, Workplace Relations and Small Business and the Education, Training and Youth Affairs portfolios.

1.3 Senator the Hon John Herron and Senator the Hon Richard Alston were the Ministers representing the M inister for Employment, Workplace Relations and Small Business. The Committee heard evidence from Senators Alston and Herron, the department and related agencies on the proposed estimates for the Employment Workplace Relations and Small Business portfolio. The following agencies appeared before the Committee: Australian Industrial Registry, National Occupational Health

and Safety Commission, and the Office o f the Employment Advocate.

1.4 The Committee heard evidence from Senator the Hon Chris Ellison, the M inister representing the M inister for Education, Training and Youth Affairs. It also heard from officers o f the department and agencies on the proposed estimates for the Employment, Education, Training and Youth Affairs portfolio including the Australian National Training Authority (ANTA).

1.5 The Committee took into account the Portfolio Budget Statements 1999-2000 provided by the departments and also their Annual Reports for 1997-98.

1.6 Review o f the proposed budget expenditure for the portfolios was carried out over four days.

1.7 Senators present at the hearing held on M onday 7 June 1999 were Senator Tierney (Chair), Senators Abetz, Allison, Carr, Lightfoot, O ’Brien, and Schacht.

1.8 Senators present at the hearing held on Tuesday 8 June 1999 were Senator Tierney (Chair), Senators Abetz, Calvert, Carr, Crossin, Hutchins, Lightfoot, Margetts, and O ’Brien.

8

1.9 Senators present at the hearing held on Wednesday 9 June 1999 were Senator Tierney (Chair), Senators Abetz, Carr, Crossin, Hutchins, Lightfoot, Lundy, McGauran.

1.10 Senators present at the hearing held on Thursday 10 June 1999 were Senator Tierney (Chair), Senators Boswell, Carr, Coonan and Lightfoot.

1.11 Written Questions on Notice were received from Senators Stott Despoja, Lundy, Boswell, Crossin, Collins and Carr.

1.12 The Committee tables for the information of the Senate copies of transcripts o f evidence of Committee proceedings o f Monday 7 to Thursday 10 June 1999 and a table o f contents to the transcripts. The answers taken on notice at the Committee's hearings will be tabled in the Senate under separate cover in numbered volumes entitled Additional information relating to the examination o f proposed expenditure fo r 1999-2000. Lengthy documents provided as part o f answers and unsuitable for

inclusion in the Additional Information volumes that are furnished as part o f the answers will be listed in the Additional Information Volumes. They will be tabled separately and available on request.

M ATTERS O F IN TER EST

1.13 The introduction o f accmal accounting and the subsequent re-structuring of programs within the two departments caused a degree o f confusion and difficulty for some senators in finding relevant information within the Portfolio Budget Statements and knowing the appropriate place to ask certain questions. Opposition senators expressed some dissatisfaction with the clarity and detail o f the PBS layout and the absence of forward estimates for each outcome.

1.14 Attention is drawn, in particular, to the absence o f a line item for ten m illion dollars provided for capital works for non-government schools in the DETYA Portfolio Budget Statements. Opposition members expressed concern that no documents were readily available to identify this expenditure.

1.15 The Committee also raises the issue o f determining what are new budget measures where there is a Government decision to continue an existing program. It notes the tabled letter from DOFA explaining the rationale for this determination.

1.16 The following is an indicative, but not exhaustive, list o f issues that received relatively lengthy consideration during the estimates hearings. Full details are provided in the Hansard transcript o f proceedings.

G

Employment, W orkplace Relations and Small Business Portfolio

• Resources used in departmental preparations for accrual accounting

• Internal perform ance indicators

• Attendance at conferences by OEA staff

• Workplace reform secret ballots

Australian Industrial Registry

• Right of entry for union officials

N ational Occupational Health and Safety Commission

• Funding for targeted programs through organisations

Office o f the Employment Advocate

• Building industry matters

• Coercion and certified agreement making

• Section 170NC complaint against OEA

• Pattern bargaining

• Admissibility o f taped evidence

• Research on freedom o f association by Wallis Consulting Group

Output group 2.1 Workplace relations fram ew ork

• Advice to ILO with regard to the Workplace Relations A ct 1996

Output group 2.2 Workplace relations services

• M eat industry dispute in Pakenham in Victoria

• Staff grouping o f W orkplace Reform Group

• Waterfront dispute litigation costs and details

Outcome 3 - Small Business

Office o f Small Business

• Small business research

• GST Business Start-up Package, introduction and compliance costs

• Claims of 50% reduction in red tape for small businesses

10

Outcome 1 - E m ploym ent

Employment National Ltd

• Breakdown of funding

• Selection process for staff transferring from CES

. Eligibility criteria for government subsidy and potential for fraud

Outcome 1 - E m ploym ent

• Proposed GST arrangements for Job Network members

• Evaluation of and job seeker satisfaction with Job Network members

• Feedback phone line

• Members and expenditure o f Area Consultative Committees

• Formal evaluation o f the RAP program

• Extension of W ork for the Dole to 25-35 year olds

• Evaluation o f W ork for the Dole

• Compulsory requirement of Work for the Dole

• Work for the Dole placements in childcare centres

• Jobstart

• Return to work measures

• Funding for indigenous employment

Education, T raining and Youth A ffairs Portfolio

General Questions

• Departmental key performance indicators

• Cost of move to accrual accounting

• ANAO scoping study within DETYA

• Fraud control policy

• General policy on representation o f ministers at project openings

• Impact o f budget cut

» Consultancies

• Victorian parliamentary report itemising discrepancies in states grants

[i

11

Outcome 1 - School systems

Output group 1.1 — Infrastructure fo r the schools system

• Policy on ministerial representations

• Capital grants

• Concern that significant budget measures were not included in the PBS

• Recurrent funding for State governments

• Proportionate share o f indigenous education between government and non­ government sectors

• New schools and approved extension o f existing schools

• New funding mechanism for non-government schools

Output group 1.2 — Assistance f o r School Students with Special Needs

• National education perform ance monitoring task force

• Impact of EBA and reasons for increased buffer

• Funding for literacy and numeracy skills

• Indigenous Education Strategic Initiatives Program

• On costs of Northern Territory Government

• M ajor changes to Abstudy including income testing, away from base study allowances, and living allowances to attend block release programs

• Aboriginal Tutorial A ssistance Scheme

• Cultural awareness and training for Centrelink staff in dealing with indigenous people

Output group 1.3 Quality o f teaching and learning

• Drugs in schools policy

• VET in schools program; the status o f schools as registered training

organisations

Outcome 2 - Post school education and training providers

Output group 2.1 - Infrastructure funding fo r the p o st compulsory education system

• ANT A including funding issues, TAPE funding, I AD, AT SI VET capital expenditure arrangements, Commonwealth Grant’s Commission report on TAPE, tightened eligibility criteria for re-skilling, user choice review, survey o f employer satisfaction, Registered Training Organisations and requirements o f the Australian Registration Framework

i

12

• Evaluation of user choice

. Ministerial press releases

• Split of funding between programs within VET system

. KPMG report on the cost and resourcing o f New Apprenticeships

. Alleged fraudulent abuse of subsidies for traineeships and New Apprenticeships, including recognition o f prior learning and existing worker policy

• Fee-for-service payments to New Apprenticeship Centres

. Correspondence from the Director-General o f Education Queensland

Output 2 .4 - Young people and Community Activities

• National Y outh W eek

• Y outh round table

. Green Corps

. Young offender pilot program

Outcome 4 - Higher Education Division Outputs

Output group 3.3 Internationalisation o f Australian education

• Accreditation and registration issues for higher education institutes

• Collapse of Business Institute o f Victoria, possible breaches o f ESOS A ct and Vanuatu incident

. University o f Asia

• Departmental contacts with Greenwich University

• Role o f the International Education Division of DETYA

. Importance o f Australia’s international reputation for education export services

• Abolition o f equity merit scholarships program

• Attrition rates in universities

• Possible over-enrolments in some institutions

• Relocation of veterinary sciences faculty o f University of Queensland to Gatton

Output Group 2.1 - Infrastructure Funding fo r Post-Compulsory Education System

• Entry cut-off scores for fee paying students

• Request by AVCC for withdrawal o f departmental request for universities to participate in a postgraduate research experience questionnaire

13

• ACCC action in regard to Australian Institute TAI claiming connection with the University o f Ballarat

• Status of the University o f Asia

• Departmental inquiry into the status and accreditation o f Greenwich University

QUESTIONS ON NOTICE AND SUPPLEMENTARY HEARINGS

1.17 The Standing Orders require the Committee, after considering the proposed expenditure and agreeing on its report to the Senate, to fix a date for the submission of any written answers or additional information and for the commencement of supplementary hearings. The Committee has decided that written answers and additional information should be submitted by Tuesday 27 July 1999. The Committee notes that dates for its supplementary hearings have not been determined at the time of tabling o f this report.

ACKNOWLEDGMENTS

1.18 The Committee is grateful for the assistance given by Senator the Hon Christopher Ellison, Senator the Hon Richard Alston, Senator the Hon John Herron and for the assistance given by officers o f the departments and agencies concerned.

Senator John Tierney

Chair

June 1999

.

Employment, W orkplace Relations, Small Business and Education Legislation Committee

HANSARD

TABLE OF CONTENTS

FO R HEARINGS HELD ON

Monday 7 June 1999

Tuesday 8 June 1999

Wednesday 9 June 1999

Thursday 10 June 1999

16

Employment, W orkplace Relations, Small Business and Education Legislation Committee

17

HANSARD INDEX

Employment, W orkplace Relations and Small Business Portfolio

Monday 7 June 1999

Agencies/Output Group page

General questions 3

Australian Industrial Registry 20

National Occupational Health and Safety 22

Office of the Employment Advocate 24

Workplace relations framework 41

Workplace relations services 42

Office of Small Business 52

Employment, Workplace Relations, Small Business and Education Legislation Committee

HANSARD INDEX

Employment, Workplace Relations and Small Business Portfolio

Tuesday 8 June 1999

Agency/Output group page

Employment National 67

Regional Assistance Program 87

Education, Training and Youth Affairs Portfolio

Tuesday 8 June 1999

Agency/ Output group page

General Questions 108

Infrastructure funding for the schools system 128

Assistance for school students with special needs 161

Quality of teaching and learning

_18 _______________________________________________________________________

177

Employment, W orkplace Relations, Small Business and Education Legislation Committee

19

HANSARD INDEX

Education, Training and Youth Affairs Portfolio

Wednesday 9 June 1999

Agency/ Output group

Enhance the quality of teaching and learning

Infrastructure funding for the post compulsory education system

Opportunities for the active engagement of young people with community activities

page

182

190

262

20

Employment, Workplace Relations, Small Business and Education Legislation Committee

HANSARD INDEX

Education, Training and Youth Affairs Portfolio

Thursday 10 June 1999

Agency/ Output group page

Higher Education

Internationalisation of Australian education 291

Infrastructure funding for post school education 320

■ u

SENATE ENVIRONMENT, COMMUNICATIONS INFORMATION TECHNOLOGY AND THE ARTS LEGISLATION COMMITTEE

REPORT TO THE SENATE

JUNE 1999

© Copyright Commonwealth of Australia 1999

ISSN 1326-9259

This document was produced from camera ready copy prepared by the Senate Environment, Communications, Information Technology and the Arts Legislation Committee Secretariat and printed by the Senate Printing Unit, Parliament House, Canberra.

SENATE ENVIRONMENT, COMMUNICATIONS, INFORMATION TECHNOLOGY AND THE ARTS LEGISLATION COMMITTEE

M EM BERSHIP OF THE COMMITTEE

Members

Senator Alan Eggleston, Chair (LP, WA) Senator Mark Bishop, Deputy Chair (ALP, WA) Senator Lyn Allison (AD, VIC) Senator the Hon Nick Bolkus (ALP, SA) Senator Marise Payne (LP, NSW) Senator John Tierney (LP, NSW)

Substitute members

Senator P Calvert to substitute for Senator J Tierney for the consideration of the committee’s Budget estimates hearings on 7 and 8 June 1999.

Senator H Coonan to substitute for Senator J Tierney for the consideration of the committee’s Budget estimates hearings on 9 and 10 June 1999.

Participating Members

Senator E Abetz (LP, TAS) Senator A Bartlett (AD, QLD) Senator R Boswell (NPA, QLD) Senator V Bourne (AD, NSW) Senator B Brown (Aust. Greens, TAS)

Senator the Hon D Brownhill (NPA,NSW) Senator G Campbell (ALP, NSW) Senator K Carr (ALP, VIC)

Senator M Colston (IND, QLD) Senator H Coonan (LP, NSW) Senator the Hon J Faulkner (ALP, NSW) Senator B Harradine (IND, TAS) Senator M Lees (AD, SA) Senator K Lundy (ALP, ACT) Senator D Margetts (GWA, WA) Senator the Hon C Schacht (ALP, SA)

Secretariat

Ms Roxane Le Guen, Secretary - (Communications, IT & the Arts) Mr Richard Selth, Secretary - (Environment) Ms Alison Carson, Estimates Officer

ί

Senate Environm ent, Communications, Information Technology and the Arts Legislation Committee

Report to the Senate

Introduction

On 11 May 1999 the following documents were referred to legislation Committees for examination and report:

a) Particulars of proposed expenditure for the service of the year ending on 30 June 2000,

b) Particulars of certain proposed expenditure in respect of the year ending on 30 June 2000, and

c) The portfolio budget statement for the Department of Environment and Heritage,

d) The portfolio budget statement for the Department of Communications, Information Technology and the Arts.

That the Committee report to the Senate on or before Tuesday 22 June 1999.

General issues

Quality o f Documentation

The Senate Finance and Public Administration is continuing its inquiry into the format of the Portfolio Budget Statements (PBS) and the Portfolio Additional Estimates Statements. Committee Members were asked to comment on the quality of this documentation. There were several comments regarding the Portfolio Budget Statements made by Senators. In particular, Senator Schacht requested that in next year’s PBS the Australia Council “put an output line against the individual board,”1 and that the National Archives and the National

Science and Technology Centre provide more details in their PBS.1 2

Questions on notice - date fo r response

The Committee agreed that the date for replies to questions on notice would be Friday 19 July 1999.

1 Proof Committee Hansard, 9 June 1999, p 120.

2 Proof Committee Hansard, 9 June 1999, pp.157, 160.

2

Portfolio Specific Issues

Communications, the Information Economy and the Arts Portfolio

A number of issues were raised under this portfolio, including

• Ministerial approval, under the Centenary of Federation program for grants to 12 projects that were rated under 15 (10 of which had not been recommended by the National Council for the Centenary of Federation);3 *

• The effect of the proposed GST on performing arts companies and the arts industry generally and how the Australia Council might assist them,

• The use proposed for the Cox Peninsula High Frequency transmission facility5

• Community broadcasting in the digital era;6

• The quality and coverage of SBS broadcast to regional areas and funding for digitisation of television and radio;7

• The Australian Broadcasting Corporation’s response to the report of the Victorian Parliamentary Committee into the organisation and the ABC’s editorial policy and monitoring for bias;8

• The draft digital channels plans being finalised by the Australian Broadcasting Authority;9

• A number of matters in relation to Telstra including the ACCC’s notices, the increase in complaints to the TIO concerning fault repairs, the effect of redundancies (especially in regional centres) and the employment of casual employees;10 *

• The methodology used by the Australian Communications Authority to calculate the cost of providing the USO, the role of the Telecommunications Industry Training Advisory Board and the plans for the further sale of spectrum;11

• Information Technology outsourcing, the cost of the Y2K compliance campaign and the regulation of online content through the online services bill.12

Proof Committee Hansard, 9 June 1999, pp 94-104 and pp 125-142.

Proof Committee Hansard, 9 June 1999, pp 111-119.

Proof Committee Hansard, 9 June 1999, pp 160-161.

Proof Committee Hansard, 9 June 1999, pp 162-163.

Proof Committee Hansard, 9 June 1999, pp 164-167.

Proof Committee Hansard, 9 June 1999, pp 172-176 andpp 178-183.

Proof Committee Hansard, 9 June 1999, pp 183-189.

Proof Committee Hansard, 10 June 1999, pp 192-207.

Proof Committee Hansard, 10 June 1999, pp 219-225.

Proof Committee Hansard, 10 June 1999, pp 228-245.

3

Environment Portfolio

A number of issues were raised under this portfolio, including

• Criticism relating to weather forecasts for the 1998 Sydney - Hobart yacht race;13

• Which areas of environment will be funded by the sale of Telstra;14

• Greenhouse impacts o f the GST package negotiated between the Government and the Australian Democrats;15

• The Government’s unwillingness to produce the BTE Report to the Committee;16

• Forestry issues regarding the register and interim register of the National Estate in WA;17

• The Jabiluka uranium mine and Kakadu National Park.18

Acknowledgments

The Committee expresses its appreciation for the assistance given during its hearings by Senators the Hon Richard Alston and Hon Robert Hill. The Committee also acknowledges the assistance of departmental and agency officers and the services of the parliamentary staff involved in the Estimates process.

Senator Alan Eggleston Chairman

Proof Committee Hansard, 7 June 1999, p 3.

Proof Committee Hansard, 7 June 1999, pp 10-11.

Proof Committee Hansard, 7 June 1999, pp 18-19.

Proof Committee Hansard, 7 June 1999, p 21.

Proof Committee Hansard, 7 June 1999, pp 31-33.

Proof Committee Hansard, 7 June 1999, pp 44-47.

I

The Parliament of the Commonwealth of Australia

SENATE

FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE

BUDGET ESTIMATES 1999-2000 REPORT

JUNE 1999

© Commonwealth of Australia 1999 ISSN: 1326-9275

MEMBERS OF THE COMMITTEE

Senator Brian Gibson (Chairman) Senator David Brownhill Senator Stephen Conroy Senator Andrew Murray (Deputy Chairman) Senator Robert Ray Senator John Watson

Other Senators who attended the public hearings:

Senator Nick Bolkus Senator Trish Crossin Senator John Faulkner Senator Kate Lundy Senator Dee Margetts Senator Shayne Murphy Senator Chris Schacht Senator Margaret Reynolds

Secretariat Parliament House CANBERRA ACT 2600 Tel: 02 6277 3530

email: fpa.seh@aph.gov.au

TABLE OF CONTENTS

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

Matters relating to the Parliamentary departments....................................................1

Matters relating to the Prime Minister and Cabinet portfolio................................... 2

Matters relating to the Finance and Administration portfolio................................... 6

General issues...................................................................................................................... 9

Questions on notice and supplementary hearings 10

B u d g et E stim ates 1999-2000

Introduction

On 11 May 1999 the Senate referred to the committee for examination and report the following documents in accordance with the provisions of the order of the Senate of 26 November 1998 and in accordance with the allocation of departments to committees agreed to on 11 November 1998:

• Particulars of proposed expenditure in relation to the parliamentary departments in respect of the year ending on 30 June 2000; • Particulars of proposed expenditure for the service of the year ending on 30 June 2000; and • Particulars of certain proposed expenditure in respect of the year ending on 30 June 2000.

The committee is required to report to the Senate by 22 June 1999.

The committee received evidence from the President of the Senate, Senator Margaret Reid; Senator Robert Hill and Senator Amanda Vanstone, representing the Prime Minister; Senator John Herron, the Minister for Aboriginal and Torres Strait Islander Affairs; and Senator Chris Ellison, Special Minister of State, and also representing the Minister for Finance and Administration, together with officers of the departments and agencies concerned.

The committee held public hearings on 31 May, 1 and 2 June 1999. Copies of the Hansard transcripts of evidence are tabled, for the information of the Senate. Further written explanations furnished by departments and agencies will be tabled, when received, in volumes entitled Additional Information.

In this report, the committee considers a number of the specific matters raised during its examination of the budget estimates of the portfolios it oversees, along with a few general issues on which it wishes to comment.

Matters relating to the parliamentary departments

Joint House Department - Output 1.2 — Building occupant services

The committee examined the decision by the Joint House Department (JHD) to charge, from 1 July 1999, full commercial rates o f rent to the press gallery for its use of offices within Parliament House. Committee members canvassed the history of the 1990 ‘compact’ between gallery representatives and the Presiding Officers, in which a decision was reached to levy a

service charge and not to charge commercial rent in view of the perception that the gallery was regarded as a part of the political process. The reason for the proposed change was sought. Joint House Department officers indicated that the costs of operating the gallery area had increased substantially: airconditioning loads had increased because of the increases in population density and 24-hour operations; there were higher levels of energy use than in

other parts of the building; and repairs and maintenance costs were also considerably higher.

The commercial rate proposed to be charged for the use of the gallery offices was also explored by the committee, as was the proposal to charge differential and higher rates for smaller suites. The JHD indicated that the advice it had received from the Australian Valuation Office was that, in view of the building’s A-plus classification, an appropriate figure was $375 per square metre. Committee members questioned whether this was not extraordinarily high in the current Canberra climate. Madam President indicated that, while she took the view that taxpayers should not be subsidising the media, discussions were taking place with the gallery on the matter, including the proposed differential rate.1

Matters relating to the Prime Minister and Cabinet portfolio

Department o f the Prime Minister and Cabinet - Output 1.2 — Social policy advice and coordination

Proposed section 67 appointment to head Office of Indigenous Policy

The committee examined a number of matters within the social policy area, including the advertised section 67 position of the head of the Office of Indigenous Policy. The Minister for Aboriginal and Torres Strait Islander Affairs, Senator Herron, provided the committee with

background to the establishment of the Office of Indigenous Policy. He indicated his concern that ATSIC could not effectively discharge a dual role of promoting Aboriginal causes and providing policy advice relating to situations, for example, in which Aboriginal groups were in litigation against the Commonwealth. In consequence, he had established an inquiry under Mr Rae Taylor, whose report identified a range of options: maintenance of the status quo;

strengthening of ATSIC policy resources; strengthening the Office of Indigenous Affairs; the establishment of a separate department; or the establishment of an executive agency, separate from the departmental structure. The decision was taken to pursue the last-named course, an option premised on the passage of the Public Service Bill 1997, s 58 of which provided for executive agencies which were freestanding legal structures. When that legislation failed to pass, the option of an appointment under s 67 of the Constitution to head a revamped office was proposed. Such an appointee would be answerable to the minister, while the staff and resources of the organisation would be attached to and form part of an existing department of state.

In the event, the position was advertised in June 1998, a selection panel was established comprising the Secretary and a Deputy Secretary of the Department of the Prime Minister and Cabinet plus Dr Peter Shergold, a number of interviews were conducted and the panel identified for the minister a number of suitable applicants. The 1998 election then intervened and, following the election, machinery of government changes caused a change to the span of responsibilities o f the Office of Indigenous Policy. The native title function was transferred to the Attorney-General’s portfolio, reconciliation issues became the responsibility of Minister Ruddock and, in the words of Ms Halton, Deputy Secretary of PM&C, ‘the position as it had been anticipated was no longer required’.1 2

The committee recognises the need for corporate forms to evolve. The ‘department’ or ‘statutory authority’ may no longer adequately cover the needs of the 1990s, let alone the new

1 Finance and Public Administration Legislation Committee Hansard, 31 May 1999, p. F&PA 18. 2 Finance and Public Administration Legislation Committee Hansard, 2 June 1999, p. F&PA 213.

millenium and there may be a need for freestanding but non-statutory offices whose heads are not appointed under the Public Service Act and who report directly to a minister. To avoid any suggestion of patronage in such appointments, however, the decision and the process need to be adequately disclosed.

Office of the Status of Women

Senators familiar with the work o f the Office of the Status of Women (OSW) expressed their disappointment at its lack of separate identification in the Portfolio Budget Statements (PBS). Officers of the department explained the situation as follows:

The department made a decision a couple of years ago to treat its financial statements by group. [OSW is] part of the social policy group. I am sure you will not find mention of any specific other division either - for example OIP, social policy, forests and industry, or Olympics - because they are all grouped under those much broader headings.3 and

If you look at the appropriation structure ... under ‘Administered Expenses’, you will see that each of those items relates to a particular function, for example, grants in aid or the reconciliation process. None of those is actually appropriated in terms of a particular subcomponent of the department. Women’s programmes are administered by the Office o f the Status of Women, which is part of the social policy group.4

Senators were eventually able to ascertain that of the $13.4 million administered expenses proposed for 1999-2000 for the social policy group, $8.4 million was intended for women’s programs; and that the departmental outputs appropriation for the same group of $17.5 million had not been divided between the component areas.5

The committee makes no comment at this point on the level of aggregation of matters under outputs, save to note that senators found it difficult to comprehend. It is a matter it will address in its report on the format of the PBS.

Senator Reynolds also raised a matter of ongoing concern to herself and others:

Minister, this is the third year that the minister responsible for the status of women has not been able to attend. You are doing an excellent job, and this is not a vote of no confidence in you, but it is frustrating ... that because the minister has another portfolio, she is not able to be present.6

This committee is in the unique situation at present of having three ministers responsible for different aspects of the one portfolio - that of the Prime Minister and Cabinet. All three have in addition other direct or representative portfolio responsibilities. This creates a scheduling dilemma of considerable proportions and one which the committee may give consideration to

dealing with by means of a separate hearing of OSW under its annual report powers.

3 Finance and Public Administration Legislation Committee, Hansard, 2 June 1999, p. 265. 4 ibid. 5 ibid., p. 268. 6 ibid., p. 271.

3

The Olympics

The costings given in the memorandum of understanding relating to the Olympics between the Commonwealth and the New South Wales governments were explored by the committee. In particular, the decision to quote marginal as opposed to real costs was questioned in relation to the supply of 200 Defence drivers and warehousing facilities. The committee also noted that Defence was to absorb the costs of providing bands and a flypast. While agreeing

that it was appropriate for the Commonwealth to make a contribution to the Olympics, senators suggested that realistic costings should be provided for that contribution so as not to undervalue it.

Department o f the Prime Minister and Cabinet - Output 1.4 Support services fo r government operations

PBS

The department’s contribution to the PBS attracted unfavorable comment for its lack of detail. As Senator Faulkner indicated:

If you look at the equivalent portfolio budget statement for 1998-99 in this particular portfolio, the resource information is set out on page 12 right through to page 39 and obviously includes detailed information on specific programs. For the equivalent resource summary in this PBS, all you get is what appears at page 20 ... it is very

difficult to try and establish what is happening.7

He went on to suggest that, ‘if we find that through the new process there is such a lack of detail, inevitably what we will have are longer estimates hearings and we will get bogged down in more detail than previously was the case’.8 Both Senator Hill and Mr Henderson reiterated that it was a question of trying to move the focus from resource inputs to outputs and outcomes.

Another aspect of the PBS to attract criticism was the department’s ‘promissory note’ to develop performance indicators and to report on outcomes for the coming year, whereas other departments, such as DOFA, had outlined quite precise indicators already. Senators also expressed disappointment that staffing information was not more transparent. While the committee does not disagree with the notion that outcomes and outputs are important, it nevertheless feels that a level of process detail is still required for it to be able properly to assess whether the public is getting value for money.

Outsourcing of corporate services

Given the level of interest in the number and nature of services which have been contracted out by agencies, the committee was pleased to see that the PBS provided a listing and brief information about them on page 16. Senators examined in some detail the corporate services

contract won by CanDeliver. Mr Henderson assured the committee that the contracting out of these services would not affect the department’s talent base as staff would still be responsible for corporate support activities, but at a more strategic level.

7 Finance and Public Administration Legislation Committee, Hansard, 31 May 1999, p. 41. 8 ibid., p. 42.

4

The level of reporting on contracted activities was considered in some detail. Mr Henderson suggested that, in this regard, a distinction needed to be drawn between contracts relating to services to the general public as distinct from services to the department itself and that the department had not been in the habit of reporting in detail on travel, cleaning and security, all of which had been outsourced for some time. Senators suggested that the parliament might well want to know that the taxpayer’s money was being well spent in all types of contract. The committee will monitor carefully how the department reports on its contracts in the

future.

Aspects of the tendering process for the corporate services contract were also questioned, in particular the level of support provided for the in-house proposal.

Government Communications Unit

In view of the fact that the department had indicated that officers from the Government Communications Unit were to be involved in a ministerial council meeting on the day of the estimates hearing, the committee agreed to defer consideration of matters relating to the

operations of the Unit until the supplementary estimates hearing.

Public Service and Merit Protection Commission

The involvement of the Public Service and Merit Protection Commission (PSMPC) in the formulation of the document Policy parameters fo r agreement making in the APS was questioned. Mr Lamond indicated that the commission’s principal involvement was in terms of parameter five, which relates to retrenchment and redeployment. He further clarified that the parameters provided guidance material within which agencies could manage and suggested that the differential outcomes in terms of certified agreements were an indicator that

‘pattern bargaining’ was not being encouraged.9

Office o f the Commonwealth Ombudsman

Following its 1991 review of the Office of the Commonwealth Ombudsman, the committee has taken a particular interest in the operations of the Ombudsman’s Office. On this occasion, the committee examined two issues: the rise in complaint levels; and the reopening of the

Hobart office.

Mr McLeod reported an expected rise in complaint levels for this financial year in comparison to the previous year. He cited two principal reasons as contributing to increased levels: a particular tax ruling by the Commissioner of Taxation; and Centrelink problems, specifically computer and telephone answering system difficulties and the introduction of new

government programs — principally, youth allowance.10 Analysis of the reasons for a rise in complaints is still being undertaken. The committee will explore the issue further in its examination of the Ombudsman’s annual report.

The decision to reopen to Hobart office was also examined. Senators questioned the Ombudsman on the timing and cost of the decision. It was noted that reference to this

9 Finance and Public Administration Legislation Committee, Hansard, 31 May 1999, p. 81. 10 ibid., p. 85.

5

initiative was not included in the PBS; the Ombudsman explained that such a level of detail was not normally provided in budget documents.

Inspector-General o f Intelligence and Security

The committee examined the issue of matters referred to the Inspector-General, not in his capacity as Inspector-General of Intelligence and Security under the provisions of the enabling legislation, but as a suitably qualified and appropriate officer to conduct the inquiries. There

have been four such matters referred over the last four years, the most recent ones under the current Inspector-General being inquiries into the Defence Intelligence Organisation, the relationship between ATSIC and the Registrar of Aboriginal Corporations and the resignation of two officials from the CAA as a result of the McPhee inquiry. Mr Blick outlined the legislative powers in these inquiries. When concerns about the impact of such inquiries on the normal operations of the office were raised, Mr Blick assured the committee that he had only agreed to undertake such inquiries on the condition that they did not impact on existing resources or his capacity to do his official duties and he did not believe they did so at present.

Aboriginal and Torres Strait Islander Commission

On a number of issues, senators had difficulty in determining whether funds alluded to in various documents were additional moneys or reallocations of funds within the portfolio. An example was the $9 million boost to culture and language maintenance programs, part of the government’s response to the Human Rights and Equal Opportunity Commission report, Bringing them home. This was eventually determined to be a reallocation o f funds by ATSIC

and it was conceded ‘There is not a substantial real increase in this portfolio per se. There is across the totality of indigenous specific expenditure.’11

Matters relating to the Finance and Administration portfolio

Department o f Finance and Administration

Human resource issues

Concerns were raised about the hours officers in the budget group were required to work in the period leading up to the budget and whether officers were adequately compensated for such work. Mr Bartos indicated that the department shared the committee’s concerns about the health and safety of its officers and had taken a number of measures to endeavour to lessen the adverse impact of such work demands on family life. He also outlined the two main methods for recompensing staff in this situation: time off in lieu; and access to performance pay provisions under either the certified agreement or Australian workplace agreements. The

department made the point that this first accrual budget had been particularly demanding and it was endeavouring to ensure that this year’s situation was not repeated. The department confirmed that it would canvass this important issue in its annual report.

The move to accrual budgeting

Senator Ellison’s incorporated opening statement outlined succinctly the impact of the government’s move to an accrual budget: 1 1

11 Finance and Public Administration Legislation Committee, Hansard, 2 June 1999, p. 237. | V 6

the Commonwealth now budgets and the Parliament appropriates on the basis of outcomes. In turn, Departments and agencies specify outputs and state how their outputs will contribute to planned outcomes ... for the first time, agencies have budgeted for the full cost of producing outputs, including items such as employee superannuation ... In

addition, there is a full picture of planned financial performance. All four standard financial statements are provided in this year’s Budget documents, both at the General government Sector - or consolidated - level and at the agency level. As a result, the Government’s financial position and capital expenditures as well as the traditional cash flow projections are to be examined.12

In the estimates hearings, the desirability of the move to an accrual budget was not questioned. Perhaps inevitably, however, a number of teething troubles were experienced, despite the extensive preparation and briefings which were provided.

Amongst those raised by Senator Conroy was the accounting treatment of long-term contracts. Mr Prior explained:

It does depend on the nature of the contract. There are specific accounting standards which require contracts, for instance, in some circumstances to be booked in the balance sheet as work in progress type arrangements and then amortised over the life of the contract and booked to the P&L that way. But equally it is often the case that contracts by their nature are booked in the year in which payments are made.13

The lack of information concerning forward estimates was also noted, as was the lack of a final actual outcome from the previous budget.

Senator Schacht queried the lack o f disclosure of the total of the capital use charge across departments and was informed that, as the capital use charge is a payment to the government from itself, at a consolidated level it eliminates and is therefore not disclosed except at the disaggregated level in individual statements. He also explored the possibility that agencies might rationalise their assets and not have to pay all the charge back. Dr Boxall explained:

In the event a department does rationalise its assets, which means that, say, it retains 10 per cent of the CUC as an example, that would show up as an improvement in its net operating surplus or its net operating balance for the year and it would go into the

following year with a stronger balance sheet. No doubt when planning its budget for next year, it would look at the strength of that balance sheet and it may well decide to use some of that money.14

He did not believe that agencies would be penalised in the Expenditure Review Committee for such conduct, given that the idea of the capital use charge was to provide an incentive for departments to manage their assets better.

Another matter which required clarification was the transitional arrangements whereby running cost carryovers were handled by way of an equity injection. As Dr Boxall explained:

12 Finance and Public Administration Legislation Committee, Hansard, 1 June 1999, pp. 91-2. 13 ibid., p. 132. 14 ibid., pp. 133-4.

7

if we did not convert it into an equity and we somehow said it was an expense, it would basically cloud the measure of the net operating surplus because it would have expenses greater than would otherwise be the case ... It was judged to be the neatest way to take the carryover and allow the departments to keep it.15 1 6

The classification of assets as ‘administered’ or ‘departmental’, that is, within the control or otherwise of the agency, was raised. Examples discussed were the Australian War Memorial and Parliament House. The checks and balances on the use of depreciation money were also questioned, with Dr Boxall assuring the committee that the only way an agency could expend depreciation on something inappropriate would be to run an operating loss which it could only do with the permission of the Minister for Finance and Administration.

The committee will consider these and other issues in more detail in its forthcoming report on the format of the PBS.

Outsourcing contracts

Senators considered a number of matters associated with outsourcing by DOFA. One example was the department’s human resource management contract with PricewaterhouseCoopers (PwC). Senator Faulkner sought assurances that accountability arrangements were adequate. Mr Fisher outlined the monitoring process:

We would expect that the arrangements would operate in similar ways to the existing contracts we have with, for example, KFPW for our property and facilities management and Outsource Australia for our office services. We report to management every month on services provided, costs of the contract and customer satisfaction. In previous estimates hearings, we have often been asked for information on performance against contracts, and we would be ready to do that ... Our experience has been that we get a better handle on cost and service under the outsourced arrangements than we did before outsourcing.'6

It was later clarified that the service level agreement was considered to be commercially confidential and would not be disclosed because it included information about how the business would undertake the activity, and such information was regarded as valuable in the marketplace. It was conceded that some reported performance information would be identical to that in the service level agreement, while others would be abstractions.

Outcome 3 - Efficiently functioning Parliament

The committee noted that the certified agreement for staff engaged under the Members of Parliament (Staff) Act had been approved by the Industrial Relations Commission on the afternoon of the estimates hearing, after a lengthy gestation. Questions were asked about the handling of the process, its implementation and the costs of legal advice. Amongst other matters, the committee questioned the cost of advertising members’ and senators’ staff vacancies and whether the advertising framework was appropriate. The minister indicated that the matter was under examination.

15 Finance and Public Administration Legislation Committee, Hansard, 1 June 1999, p. 135. 16 ibid., p. 105.

8

Australian Electoral Commission

Amongst other matters, senators questioned the Commission’s information technology contract with CSC and the extent to which service levels were being met.

Office o f Asset Sales and Information Technology Outsourcing

The committee examined aspects o f the DASFLEET sale, including the implications of the use of an operating versus a financial lease and the residual reserve account; and the current dispute concerning the completion accounts. Senators continued to question aspects of the Office’s contract with Shaw Pittman Potts Trowbridge, and in particular the role of the four

consultants, their remuneration and the manner in which the contract extensions were handled. Mr Hutchinson asserted that the firm was at the leading edge of IT outsourcing globally and that if the Office was not satisfied with the quality of strategic advice it was being provided, it would not continue the relationship.

General issues

Annual reports fo r 1998-99

One of the advantages suggested for accrual budgeting in an outputs/outcomes reporting framework is that a ‘clear read’ is provided from the PBS to the annual report. This may be the case for the coming year but, as Mr Henderson pointed out, ‘In this current'calendar year we have moved to an accruals framework for our PBS but we are in the midst of preparing an

annual report that is still under the old framework’.17 The committee recognises that this is a transitional problem but one likely to cause considerable confusion. For those agencies which have comparable program and outcome structures, the committee believes it would be reasonable for them to report under the new framework. It hopes that the annual reporting

guidelines issued by the Department of the Prime Minister and Cabinet will be reissued to accommodate this possibility.

Responses to questions on notice

With the budget estimates round beginning less than four weeks after the supplementary additional estimates hearing on 4 May, departments and agencies had a more limited time than usual to provide answers to questions taken on notice. Although the committee does not set a date for receipt of answers after a supplementary hearing, it expects that answers be provided as soon as possible and before the next round of hearings. This was achieved in

most cases but by the most narrow of margins: in the cases of DOF A and ATSIC, one day before their scheduled estimates appearance; and in the case of PM&C, approximately two hours beforehand. When the bulk of answers is received in the course of the committee’s examination of another portfolio, it makes it impossible for senators involved in those

hearings to examine the answers thoroughly. The committee actually suspended proceedings for half an hour on Monday 31 May 1999 before it called on the Prime Minister’s portfolio, to allow senators time to read through answers received that morning. As Senator Ray pointed out to PM&C,

17 Finance and Public Administration Legislation Committee, Hansard, 31 May 1999, p. 41.

we appreciate your efforts in trying to get the questions answered. We understand your busy time with other matters. I hope you understand from our point of view that getting them in the middle of... Senate estimates committees does not really give us enough time to peruse them.18

The committee notes that departments and agencies have undertaken to make every effort to provide responses by the set date of 16 July 1999 on this occasion. It further notes that timeliness of responses to senate committees has been identified by many as a quantitative performance indicator to be reported on as part of the departments performance information under the accrual framework.19

Cross-portfolio issues

Senators examining both women’s and indigenous issues had difficulty reconciling figures in the cross-portfolio budget statements with those in the individual PBS. In its forthcoming report on the format of the PBS, the committee will consider this matter in more detail.

Pre-hearing briefings

To assist it to understand the PBS in their new format, the committee sought and received informal briefings from the Departments of Finance and Administration, and Prime Minister and Cabinet. Both briefings were particularly helpful. The committee thanks the officers concerned and commends the practice.

Questions on notice and supplementary hearings

The committee has set 16 July 1999 as the date by which responses to questions on notice should be received. No date has been set for a supplementary hearing, if required.

Senator the Hon Brian Gibson Chairman

18 Finance and Public Administration Legislation Committee, Hansard, 31 May 1999, p. 29. 19 Finance and Public Administration Legislation Committee, Hansard, 31 May 1999, p. 29.

■ Ί

10

Se n a t e Fo r e i g n A f f a i r s, De f e n c e a n d Tr a d e Le g i s l a t i o n Co m m i t t e e

R e p o r t t o t h e S e n a t e

J u n e 1999

Senate Foreign Affairs, Defence and Trade Legislation Committee

Membership

Chairman Deputy Chairman Members

Senator Sandy Macdonald (NPA, NSW) Senator John Hogg (ALP, Qld) Senator Vicki Bourne (AD, NSW) Senator Jeannie Ferris (LP, SA) Senator Marise Payne (LP, NSW) Senator the Hon Chris Schacht (ALP, SA)

Substitute members Senator Brownhill replaced Senator Sandy Macdonald on 7 and 8 June 1999. Senator McGauran replaced Senator Sandy Macdonald on 9 and 10 June 1999.

Other attending Senators Senator the Hon Peter Cook (ALP, WA) Senator Eric Abetz (LP, Tas) Senator the Hon David Brownhill (NPA, NSW) Senator Paul Calvert (LP, Tas) Senator the Hon John Faulkner (ALP, NSW) Senator Brian Harradine (Ind, Tas) Senator Stephen Hutchins (ALP, NSW) Senator Dee Margetts (Greens, WA) Senator David MacGibbon (LP, Qld) Senator Kerry O'Brien (ALP, Tas) Senator John Quirke (ALP, SA) Senator Sue West (ALP, NSW)

Committee secretariat Mr Paul Barsdell (Secretary) Ms Pamela Corrigan Ms Laurie Cassidy

T able o f contents

Page

Members of the Com m ittee................................................................................. i

Table of contents.................................................................................................. iii

R eport to the S enate..............................................................................................1

In tro d u ctio n .................................................................................................................................1

Q uestions on notice and su p p lem en tary h e a rin g s ......................................................... 1

G eneral com m ents Defence portfolio D ep artm en t o f D e fe n c e ............................................................................ 2

D ep artm en t o f V e te ra n s’ A ffa irs........................................................... 4

Foreign Affairs and Trade portfolio D ep artm en t o f Foreign A ffairs and Trade in clu d in g A ustrade an d A u sA ID ......................................................5

A ck n o w led g em en ts..................................................................................................................6

Index to Hansard tran scrip ts for 7, 8 and 9 June 1999 D e p artm en t o f D e fe n c e ............................................................................ 8

D e p artm en t o f V eteran s’ A ffairs......................................................... 10

D ep artm en t o f Foreign A ffairs and Trade in clu d in g A ustrade and A u sA ID .....................................................11

Senate Foreign Affairs, Defence and Trade Legislation Committee

R eport to the Senate

Introduction

1. On 11 May 1999, the Senate referred to the Committee for examination and report the following documents:

• Particulars of proposed expenditure for the service of the year ending 30 June 2000; and • Particulars of certain proposed expenditure in respect of the year ending 30 June 2000 relating to the Foreign Affairs and Trade portfolio and the Defence portfolio.

2. The Committee has considered the proposed expenditure for the year ending 30 June 2000 and has received evidence from Ministers representing the Minister for Veterans' Affairs, the Minister for Defence, the Minister for Foreign Affairs and the Minister for Trade, and officers of the departments and agencies concerned.

3. The Committee met in public session on Monday 7, Tuesday 8 and Wednesday 9 June 1999. Further written explanations provided by departments and agencies will be presented separately in volumes of additional information.

Questions on notice and supplementary hearings

4. The Committee notes that the Standing Orders require the Committee to set dates for:

• the lodgement o f written answers or additional information; and • supplementary hearings.

5. The Committee has resolved that written answers and additional information should be submitted by close of business on Friday, 16 July 1999. The Committee further notes that dates have not yet been scheduled for supplementary hearings.

6. For the first time, the Portfolio Budget Statements. (PBS) of departments and authorities for the year 1999-2000 were based on accrual accounting rather than on a cash accounting system. In preparation for the estimates hearings, the Committee held long briefing sessions with each o f the three departments within the defence and foreign affairs and trade portfolios. The Committee appreciates the assistance given by departmental and some statutory authority officers in helping Committee members to understand accrual accounting concepts, new nomenclature and the approach taken by departments and authorities in the PBS. These briefings undoubtedly saved considerable time during the hearings.

1

7. Inevitably, when a system is changed as radically as this change from cash to accrual accounting across the whole Commonwealth Public Service, it will take time to fine tune the new system. The Committee hopes that its comments during the hearings and in this report will help the three departments and the Department of Finance to continue the development of the PBS to meet the needs of all interested parties.

8. Members of the Committee, who had examined the three departmental PBS associated with the two portfolios allocated to this Committee as well as the PBS of other departments, noted the lack of uniformity among the PBS, which hindered understanding of the new system and the content of the PBS. Apart from differences in format, there were also confusing differences noted in terminology. For example, Defence used concepts and terms like ‘goals’, ‘preparedness’, ‘performance targets’ and capability enhancement initiatives’ while Foreign Affairs and Trade used ‘effectiveness indicators’ and ‘milestones’. Although

some flexibility is necessary to cope with the significant differences in the nature, size and operations of departments, more consistency would help understanding, particularly in this formative period of accrual accounting.

9. The Committee believes that more explanatory material, a ‘Guide to the Galaxy’, should be prepared and distributed to Legislation Committees to help them understand the PBS.

10. The Committee asked the three departments whether the outputs would stay much the same from year to year or whether the Committee could expect to see major changes in the output structure in the future. All three departments expected the output structure to remain largely as it is in this year’s PBS although some refinement could take place. The Committee appreciates the possibility of minor changes being made to outputs over the next year or so to take account of experience gained under this new accounting system. However, the Committee would be concerned if major changes took place because it would make it difficult to keep track of expenditure from year to year.

General comments

Defence portfolio (including Veterans’ Affairs)

Department of Defence

11. The Department of Defence provided one outcome and 22 outputs in its PBS. This compares with the 14 groups (i.e. programs) under the previous system. The Department pointed out that although it had included information for each of the 14 groups as well as the 22 outputs, it was not obliged to do so under guidelines of the Department of Finance and Administration. It believed that the Committee would find this additional information useful in its consideration of the PBS.

12. The Committee agrees that inclusion of the groups was helpful to the Committee’s understanding of the Defence budget and that this information, in one form or another, should continue to be presented in the PBS. In fact, the Committee considered the groups as well as the outputs during the estimates hearings. If the groups had not been included, much greater

2

confusion would have occurred, particularly as to where questions, which did not sit comfortably with any specific output, should have been asked.

13. Although emphasis is being placed on outputs, financial figures under outputs were aggregated to the point where they were virtually meaningless to the Committee. Disaggregation of the figures is essential if the Committee is to focus on outputs.

14. The Committee expresses concern about the transparency and readability of the Defence PBS. Even after a long briefing session, areas of it were not clear to the Committee and, undoubtedly, even less so to other readers who had not had the benefit of departmental briefings on the structure and content of the document. In the interests of accountability, transparency and legibility should be key elements of the PBS and annual report. The

Committee appreciates that the Department and the Defence Force have also been trying to master the complexities of the new accounting system and that this initial experience should help in the refining of next year’s PBS.

15. The Committee also expresses some disquiet about the nature and appropriateness of the performance indicators for the 22 outputs. However, the Committee will wait to see how Defence applies these indicators in the annual report for the period 1999-2000 and, as a result, whether Defence achieves an appropriate level of accountability.

16. The section on goals in the PBS prompted considerable discussion in both the briefing session and in the estimates hearing. Essentially, the Committee had some difficulty relating the six goals to the 22 outputs. Defence agreed that there was a cross-referencing problem between ‘the output performance indicators and these specific issues that have identified as

objectives that will be achieved in 1999-2000’.

17. The Committee spent some time establishing the basis on which a contract for concrete was let at RAAF Base Scherger, Northern Queensland. Department officers answered questions and provided the Committee with the procurement procedures and paperwork associated with the process. (Hansard, pp.140-141, 220-229)

18. Officers from the Department were questioned about the Collins class submarine endurance trials and safety concerns relating to the use of the V31 valve in the submarine. The Department described to the Committee the process of testing and assessment it undertook to determine the viability and subsequent safety of the Collins class submarine.

(Hansard, pp. 167-172)

19. Other matters raised by the Committee included:

• Defence Reform Program, including re-investment; • post delivery modification program to bring equipment to 'operational readiness'; • environmental impact of bombing practice conducted in Halifax Bay on the Great Barrier Reef;

• impact on residents of Fisherman's Village Resort of RAAF aircraft flights over the Salt Ash Weapons Range; • the conduct of Crocodile '99 Exercise; • the Army community assistance project;

3

• ADF supply of services to SOCOG for the Sydney 2000 Olympic Games; • criteria and process for choosing a submarine; • refit and modernisation of Navy ships; • tactical engagement simulation system 'Rapier 2000'; • competency standards for personnel in the Australian Defence Force; • Australian and British forces involvement in 'Exercise Longlook'; • fast jet pilot health recovery program and the recruitment of tighter pilots; • recruitment and retention of air traffic controllers; • international standards for quality of manufacture for supply o f products to ADF; • year 2000 compliance of products supplied to the ADF; • Jindalee radar system; • arrangements for marine surveillance cooperation in the East Timor Gap and the

waters between the archipeligo and Australia; • strategic intelligence issues-breaches of security and codes o f conduct; • security matters relating to East Timor; • defence study of civilians in operational zones; and • drug abuse in the ADF.

Department of Veterans’ Affairs

20. The Committee questioned the Department on whether there exists in the Department a consolidated list of medals and decorations awarded to Australians for gallantry and valour. The Department informed the Committee that in the last budget the Government announced funding 'for nominal rolls in databases of all who served in Australia's defence forces this century, particularly wars and conflicts'. The database will be developed over the next four years.

21. The Committee also sought information from the Department on the Align Invalidity Service Pension Assessments program. The Committee was given information about the program and was told that veterans rejected under this scheme would transfer to Centrelink to be tested for either the disability support pension or Newstart.

22. The Committee also questioned the Department about a letter sent to veterans who hold gold cards concerning new arrangements for private health insurance before the federal election in 1998. A copy of the letter was tabled.

23. Other issues that were discussed included:

• the Department's information technology support provider; • the timing of the announcement of funding to grants programs; • debt recovery and obtaining greater administrative efficiency by the Department; • private health care insurance for Gold Card recipients; e financial assistance to veterans and war widows for home modification and

maintenance; • Gulf War, or Persian Gulf syndrome, and health issues related to British and Commonwealth overseas forces;

4

• the Compensation for Non-economic Loss (Social Security and Veterans Entitlements Legislation Amendment) Bill; • new commemorative site at Anzac Cove, Gallipoli; • national and community war memorials; in particular, the unveiling of a memorial to

service women from all wars; and • the upgrade of Australian War Memorial exhibition facilities.

Foreign Affairs and Trade portfolio (including AusAID and Austrade)

24. The Committee noted the emphasis placed on accountability through both the innovative milestones and performance information based on quality, quantity and price for departmental outputs. The Department told the Committee that it would be reporting on all these accountability processes in its annual report.

25. The Committee sought information on the accrual budget arrangements for the Export Market Development Scheme (EMDS) and the resulting increased costs to administer the scheme. Austrade officers answered questions on administration costs for the year 1999-2000

and past years. They also responded to questions about the current account deficit and 'the extent to which public expenditure facilitates export growth and is reflected in better current account outcomes'.

26. The Committee sought the views o f the Department on a range of matters relating to Indonesia and East Timor. The Department answered questions on the political situation in 'post-election' Indonesia, the implications of these elections for East Timor, the East Timor tripartite agreement of 5 May and the proposed ballot in East Timor on 8 August.

27. The Committee sought further advice from the Department on East Timor on the numbers of Indonesian troops and police in East Timor, the arming of the militias and the establishment of an Australian Consulate in Dili.

28. Other matters raised by the Committee included:

• the delay in take-up by Austrade of the option of a computer system to link local exports with overseas buyers; • demand in Asia for Australian mineral commodities and agricultural exports; • population control in the Peoples' Republic of China; • Australia's broad foreign policy approach to a new Indonesian government; • use of Australian Federal Police and ADF personnel as military liaison officers in East

Timor;

• World Trade Organisation issues relating to the Uruguay Round and the proposed 2000 Round, WTO rules and the now collapsed negotiations towards a Multilateral Agreement on Investment;

• oil-for-food program for the people of Iraq; • Nuclear Non-Proliferation Treaty and Australia's ratification of the Ottawa Convention banning landmines; and • supplementary budget support for services by DFAT to the Sydney 2000 Olympics.

δ

Acknowledgments

29. The Committee expresses its appreciation of the assistance given during its hearings by Senator the Hon Jocelyn Newman and Senator the Hon Robert Hill. The Committee also acknowledges the attendance and cooperation o f departmental and agency officers and the services of parliamentary staff involved in the estimates process.

30. Finally, I would like to express my appreciation to Senator Jeannie Ferris who acted as chair, and Senators Brownhill and McGauran who substituted for me at the budget estimates hearings during my absence as an observer in Indonesia.

Sandy Macdonald Chairman

F oreign A ffairs, D efence and Trade L egislation Com m ittee

Index to transcripts o f evidence for

consideration o f budget estim ates 1 9 9 9 -2 0 0 0

June 1999

Monday 7 June 1999 Tuesday 8 June 1999 W ednesday 9 June 1999

7

Index to H ansard transcripts for 7, 8 and 9 June 1999

DEFENCE PORTFOLIO (including Department of Veterans' Affairs)

Department o f Defence

Page no

In attendance 01

Portfolio overview 04

Defence Reform Program 04

Budget summary 57

Capital budget: major capital equipment projects and major capital

facilities projects 79

Output 3-Capability for major surface combatant operations 65

Output 4-Capability for patrol boat operations 77

Output 5-Capability for submarine operations 82

Output 7-Capability for afloat support 82

Output 5-Capability for mine countermeasures and mining 83

Output 9-Capability for amphibious lift 83

Group 2-Navy 86

Output 29-Capability for special forces operations 95

Output 22-Capability for land task forces operation 95

Output 22-Capability for logistics support of land operations 95

Output 25-Capability for ground-based air defence 95

Group 3-Army 95

8 '

Defence portfolio-Department o f Defence (continued)

Page no

Output 73-Capability for air strike/reconnaissance 122

Output 74-Capability for tactical fighter operations 122

Output 16-Capability for strategic surveillance 122

Output 1 7-Capability for maritime patrol aircraft operations 122

Output 73-Capability for airlift 122

Output 79-Capability for combat support of air operations 122

Group 4-Air Force · 122

Output 27-Effective contribution to national support tasks 158

Output 20-Effective international defence relationships and contribution

to international activities 189

Output 22-Strategic policy and direction 189

Group 7-Defence Headquarters 189

Output 2-Strategic intelligence 204

Group 5-Intelligence 204

Group 6-Support Command 207

Group 7-Joint Education and training 209

Group δ-Defence personnel executive 209

Group 10-Science and technology 218

Group 77-Defence estate 220

Group 74-Finance and Inspector-General 232

Defence portfolio-Department o f Veterans' Affairs

Department o f Veterans 'Affairs

Page no

In attendance 237,257

Portfolio overview 239, 259

Outcome 1— Eligible veterans, their war widows and widowers and dependents

have access to appropriate compensation and income support in recognition of

the effects of war service. 264

Outcome 3-The achievements and sacrifice of those men and women who served

Australia and its allies in war, defence and peacekeeping services are acknowledged

and commemorated. 239,288

Outcome 4-The needs of the veteran community are identified, they are well informed

of community and specific services and they are able to access such services. 242

• t

10

In d e x to H ansard transcript for 9 June 1999

FOREIGN AFFAIRS AND TRADE PORTFOLIO (including AusAID and Austrade)

Department o f Foreign Affairs and Trade

Page no

In attendance 294

Portfolio overview 299

Output 1.1-protection and advancement of Australia's international interests

through the diplomatic network and Canberra-based diplomatic activity. 306

Outputs 1.1.2 and 1.2.2-Interests in South and South East Asia 314

Outputs 1.2.3 and 1.2.3— Interests in Americas and Europe 329

Outputs 1.1.4 and 1.2.4— Interests in South Pacific, Africa and the Middle East 335

Outputs 1.1.5 and 1.2.5-Multilateral trade negotiations 339

Outputs 1.1.6 and 1.2.6— Trade development/coordination and APEC 352

Outputs 1.1.7 and 1.2.7-Intemational organisations, legal and environment 354

Outputs 1.1.8 and 1.2.8— Security, nuclear, disarmament and non-proliferation 360

Output 3.1-Public information services and public diplomacy 361

Output 3.1,3-Olympics 363

Australia Trade Commission (Austrade) 301

11

The Parliam ent of the Commonwealth of Australia

SE N A T E L E G A L A N D C O N ST ITU T IO N A L

L E G ISL A T IO N C O M M ITTEE

BUDGET ESTIMATES 1999-2000

REPORT

June 1999

© Commonwealth of Australia 1999

ISSN 1326-9283

This document was produced from camera-ready copy prepared by the Senate Legal and Constitutional Legislation Committee, and printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.

M E M B E R S O F T H E L E G ISLA T IO N C O M M IT T E E

Members ,

Senator M Payne, New South Wales, Chair Senator J McKieman, Western Australia, Deputy Chair Senator H Coonan, New South Wales Senator B Cooney, Victoria Senator J McGauran, Victoria Senator N Stott Despoja, South Australia

Other Senators who attended the public hearings:

Senator the Hon. N Bolkus, South Australia Senator K Lundy, Australian Capital Territory Senator D Margetts, Western Australia Senator J Quirke, South Australia Senator the Hon. C Schacht, South Australia

Secretariat

Dr Pauline Moore (Secretary to the Committee) Mr Jonathan Curtis (Principal Research Officer) Ms Sonia Hailes (Research Officer)

The Senate Parliament House CANBERRA ACT 2600

Tel: (02) 6277 3560 Fax: (02) 6277 5794

TABLE OF CONTENTS

Page

Preface i

Chapter 1 Issues arising from the examination of the portfolios . 1

Appendices

Appendix 1 Index of Hansards for Attorney-General’s Portfolio: 7

31 May & 1 June 1999

Appendix 2 Index of Hansards for Immigration and Multicultural 13

Affairs Portfolio: 1 & 2 June 1999

PR EFA C E

BACKGROUND

On 11 May 1999, the Senate referred to the Committee the following documents relating to the Attorney-General’s portfolio and the Immigration and Multicultural Affairs portfolio in accordance with the provisions o f the order of the Senate of 26 November 1998 relating to estimates hearings:

• Particulars of proposed expenditure for the service of year ending on 30 June 2000; and

• Particulars of certain proposed expenditure in respect of the year ending on 30 June 2000.

The Committee is required to report on its consideration of the estimates on or before 22 June 1999.

The Committee considered the Portfolio Budget Statements for 1999-2000 for both portfolios.

Estimates hearings

The Committee met in public session on 31 May, 1 June and 2 June 1999. The Attorney- General’s portfolio was considered on the 31 May and 1 June 1999. The Immigration and Multicultural Affairs portfolio was considered on the 1 and 2 June 1999.

Record of Proceedings

The Hansard of the proceedings records this examination and may be accessed through the Internet on:

• http://www.aph.gov.au/hansard.

The Hansard is also available on the Parliamentary Data Base.

An index of the Hansard for each portfolio appears at Appendix 1 and Appendix 2.

Minister

The Committee heard evidence from the Minister representing the Attorney-General and Minister representing the Minister for Immigration and Multicultural Affairs, Senator the Hon. Amanda Vanstone (Minister for Justice and Customs), and from officers of the departments and agencies concerned. The Committee thanks the Minister and the officers for

their assistance.

Questions on notice and supplementary hearings

The Committee notes that the Standing Orders require the Committee to set a date for the lodgment of any written answers or additional information. The Committee resolved that written answers and additional information are to be submitted by close of business on

Monday 12 July 1999.

ii

Timeliness o f responses to Questions on Notice

The Committee appreciates the efforts made by the Departments to meet1 the deadline for responses from the Supplementary Estimates hearing in May. The Deputy Chair acknowledged that given there were only six weeks between the supplementary and budget hearings, the efforts made in providing the responses in the significantly shorter than usual time span, were particularly appreciated.

Report

In this report the Committee raises a number of issues that continue to draw the attention of the Senate. These include:

• The use of 1 commercial-in-confidence’ claims to decline to provide information to estimates committees;

• The commercialisation of the Australian Public Service; and

·, Responses to Committee reports.

Senator Marise Payne

Chair 22 June 1999

1 Except for one or two responses provided at the hearing

C H A P T E R 1

Accrual Accounting

1.1 The change in the Portfolio Budget Statements from a cash accounting system to the accrual budgeting format raised a number of issues for the Committee, arising from the lack of familiarity with the documentation as this was a transitional year1.

1.2 The Committee identified a lack of consistency in the statements across agencies and departments, which led to difficulty when attempts were made to apply universal measurements of effectiveness.

1.3 The Committee also noted the problem inherent in testing the performance of budgetary outcomes that related to the provision of policy advice to ministers and government, since most of this information will be claimed to be cabinet-in-confidence or privileged on the basis of a client-lawyer relationship.1 2

1.4 In order to resolve these difficulties, the Committee has requested a copy of the Department of Finance and Administration’s guidelines to departments and agencies, as well as additional information from individual agencies and departments. The Committee will also consider the option of a post-estimates briefing on accrual accounting offered by the Department of Finance and Public Administration, which would address particular issues that caused confusion during the examination of the Budget Estimates (such as cash equity carry­ overs).

1.5 The Committee notes that the annual reports of certain agencies will have an important role in the next eighteen months, providing the performance measurement for those agencies that did not allocate amounts of money to outputs in the Portfolio Budget Statements.

1.6 The Committee also recommends that departments and agencies take steps to maximise consistency in the format and content of documents, which would greatly facilitate examination of the documents, and improve their usefulness as instruments of accountability.

1.7 The Committee thanks the Attorney-General’s Department and the Immigration and Multicultural Affairs Department for the briefing they provided prior to the Budget Estimate hearings, on the new accrual accounting format of the Portfolio Budget Statements. The Committee appreciates the assistance provided by officers to Senators during their

consideration of the Portfolio Budget Statements.

1 ‘ Some of the confusion in understanding this [the Portfolio Budget Statements] also applies because of the transitional arrangements that apply when moving from a cash accounting system to an accrual accounting system. Some of these complexities will disappear once we move into a full accrual accounting system year on year’, Mr Christopher Hayward , Department of Finance and Administration, Transcript of evidence, p. 119

2 See Transcript of evidence, p. 188

I

2

Recent Appointments

1.8 The Committee acknowledged the recent appointment of Dr Bill Jonas as the Aboriginal and Torres Strait Islander Social Justice Commissioner.

1.9 The appointment of Mr Malcolm Crompton as the Commonwealth Privacy Commissioner was also noted. An update of the legislation proposing the separation of the Privacy function of the Human Rights and Equal Opportunity Commission revealed that the bill (Human Rights Legislation Amendment Bill No.2 1999) is currently before the House of

Representatives.

Accountability and the contracting out of government services

1.10 The Committee expressed concerns over the accountability to Parliament of government services contracted out to private sector providers, since the government frequently claims that the details of the services and the adequacy of performance are subject to commercial-in-confidence privilege. The claim of commercial-in-confidence frequently frustrate the Committees' capacity to scrutinise budget expenditure, and during this round of estimates the issue arose in relation to contracts for the engagement of counsel by AGS on behalf of PM&C;3 the mediation services;4 language tuition5 (under the Adult Migrant English Program) and information technology services.6

1.11 The Committee notes that, while it does not necessarily accept the argument of 'commercial-in-confidence', sensitive material may be requested and examined by a Legislation Committee outside of the estimates process, and that evidence may be taken in camera by such committees.

1.12 Senator Cooney also sought information on the accountability o f private contractors running gaols, and the capacity of Parliament to check that contractual obligations are fulfilled and that conditions in the gaols are adequate. Although recognising that under existing constitutional arrangements the management of gaols is a state responsibility, the

Committee noted that prisoners incarcerated for breaches of Commonwealth law are within the jurisdiction of the Commonwealth Parliament.

Australian Government Solicitor

1.13 The Committee sought information on the accountability arrangements for the Australian Government Solicitor as it becomes a Commonwealth statutory agency by 1 October 1999. Under the new arrangements the AGS will account under the Commonwealth Authorities and Companies Act.

1.14 The commercialisation of AGS raises issues that have been discussed in earlier estimate hearings relating to the salary arrangements and working conditions for staff, and the fee schedule for providing legal services.

3 See Transcript of evidence, p.47-52

4 See Transcript of evidence, p. 191

5 See Transcript of evidence, p. 276

6 See Transcript of evidence, p. 282

The Goods and Services Tax (GST) and the Australian Customs Service

1.15 The Committee questioned how the arrangements for a goods and services tax would be administered on imported and exported goods. Concern was expressed over the ability to ensure that a 10% tax was properly complied with. The Australian Customs Service indicated that the final detail had not yet been decided and negotiations continued, including

with the Treasury Department and the Australian Taxation Office.

1.16 The costing of the ANTS (A New Tax System) and the provisions for a Tourist Refund Scheme were also raised. Information on the administration of the United Kingdom's VAT scheme was requested.

Preparations for the Olympics

1.17 The Committee sought information on the preparations by the Australian Customs Service to ensure they are able to maintain their current level of service to industry, while coping with additional traffic caused by the Olympics. The response to this question suggested that there would be no substantial problem experienced.7

Information Techonology

1.18 The Committee questioned the Department of Immigration and Multicultural Affairs over the outsourcing of their information technology contract. The opposition questioned whether projected savings had been realised, and perhaps that costs had grown. Mr Ed Killesteyn, Chief Information Officer, Business Solutions Group, DIMA responded:

It is a substantially different infrastructure we now have in place. I know it does not make it easier in term s o f getting benchmarks but when you think about what we had before 1 July last year - very old, non-compliant infrastructure - and compare that with what w e have now, any benchmarks in terms o f saying that the

savings have been realised are extremely difficult to calculate. The fact is that the savings have been realised, we are living within budget, we do the best we can within budget to deliver applications and infrastructure that m eet the requirements

o f our people, and w e w ill continue to do so.8

Appointment of members to the Migration Review Tribunal

1.19 The Committee raised the appointment of the first ten members to the Migration Review Tribunal (MRT), and noted that despite the identified need for at least one tribunal member to be appointed in Perth, no such appointments have yet been made.

1.20 Following the closure of the Migration Internal Review Office and the Immigration Review Tribunal (IRT), the new MRT received a flood of applications, which combined with

7 ‘... with the funding that we have got here, we can adequately handle the Olympics.... we are converting part-time staff to full-time. There will be less leave taken. We have the ability to move commercial transactions around the country and we would expect other states to take up some of the slack. We also have the availability of overtime to be worked in commercial as well as in the border areas. We believe

that there will not be a reduction in service to any of our clients’. Mr Mick Roche, Australian Customs Service, Transcript of evidence, p.123

8 Transcipt of evidence, p.285(

4

the current backlog, creates an urgent requirement to appoint the remaining members of the MRT.

1.21 The Committee explored the MRT’s procedures for training new members while continuing to make decisions on applications.

1.22 The Committee also discussed the selection process for new members. Senator McKieman expressed concern that Ms Susanne Tongue, Principal Member of the MRT, acted as both a referee for some applicants, and as a member of the selection committee. Ms Tongue assured the Committee that this was entirely consistent with public service practice,

and was inevitable since she was the only available referee for applicants who had previously been senior members of the IRT, of which Ms Tongue was the Principal Member.

Visas for Chinese students

1.23 The Committee raised with DIMA the time taken by the department to grant student visas to Chinese students seeking to study at Australian tertiary institutions. Such institutions are finding their marketing efforts frustrated because by the time visas are granted, the academic year has already begun.

1.24 DIMA responded that it is aware of the problem and is trialing several solutions.

Asylum Seekers Fee and the Asylum Seekers Assistance Scheme

1.25 The Committee commented that the Asylum Seekers Fee was under review by the Parliament. When questioned if the disallowance of this fee would have implications for the Asylum Seekers Assistance Scheme, the Departmental Secretary, Mr Farmer, commented:

The answ er is no. As I said last night, there is no linkage betw een the Asylum Seekers A ssistance Scheme, its continuation and extra funds for that, and the passing, or not, o f the continuation o f the fee. As part o f the budget process, the Asylum Seekers Assistance Scheme extension was put up and considered on its merits and a decision was taken on its merits to provide funds for that purpose. As part o f the budget process, as you know, portfolios are required in many cases to provide offsets-either revenue offsets or other expenditure offsets. In this case, the

offset was the continuation o f the fee, because that was not m oney that was until now figured into the budget estimates. That is a factual account o f the budget process. In the - I assume - highly hypothetical instance you are talking about, if the fee were not continued, then that would be a loss to consolidated revenue.9

Assistance to the Kosovars in Australia

1.26 The Department of Immigration and Multicultural Affairs provided the Committee with an update on the assistance being provided to the Kosovars in Australia. Departmental officials discussed the arrangements for counselling, security and cash allowances, and handling of issues of cultural sensitivity. Having made a recent visit to the East Hills camp, the Chair of the Legal and Constitutional Committee commented that:

9 Transcript of evidence, p.240

5

There is no substitute for a discreet on-site visit to ... see how effectively the process is being addressed by all departments involved.10 1 1

Unauthorised arrivals

1.27 In light of a number o f highly publicised recent unauthorised boat arrivals on the Australian coast, the Australian Customs Service were questioned on the current practices of Coastwatch. Officers explained that the techniques of the groups operating some of the boats are becoming more sophisticated, and the routes used to enter Australian water are more diverse, which has prompted Coastwatch to reappraise their surveillance procedures.

1.28 Another current issue is whether Australian Customs Service staff should be equipped with firearms, to lessen the potential danger to personnel. Mr Woodward explained that although Customs officers are not currently armed:

we have been increasingly aware of the possibility, although not fact so far, that the people on board some of these vessels could be armed. You will recall and it is public knowledge that one of the shore party involved in this was armed and has been charged with an offence in relation to arms.11

Current inquiries

1.29 The Committee noted that both the Senate Legal and Constitutional References Committee (within the context of its inquiry into the operation of Australia’s refugee and humanitarian program), and Mr Tony Ayres, have been directed to inquire into the return to China of Ms Zhu Ping. It has been alleged that Ms Zhu Ping was 8 Vi months pregnant at the time of her return and also alleged that she was forced by Chinese authorities to have an

abortion upon her return.

1.30 The Senate Legal and Constitutional References Committee is due to report on this matter on 18 October 1999, however, at this time a reporting date has not been set for the Ayres inquiry.

1.31 The Committee sought information on Mr Ayres’ terms of reference and the way in which the inquiry would be pursued, including the resources available to the inquiry. The Committee raised concern at the ability of the Ayres inquiry to provide protection for witnesses. If the inquiry is to be conducted in public, witnesses may be reluctant to speak

openly in the absence of any guarantees of privilege or confidentiality.

1.32 The Committee noted the appointment of the Reference Group to the Review on Illegal Workers in Australia. The reference group is being chaired by Mr Noel Hicks, and will examine the problem of illegal workers in Australia. Again, the Committee expressed concern over the ability of some inquiries to provide protection to witnesses giving evidence,

and has sought additional information on the arrangements for this inquiry.

10 Transcript of evidence, p.228

11 Transcript of evidence, p. 95

6

Outstanding responses to parliamentary inquiries

1.33 The Committee noted that there are five parliamentary reports awaiting response by the Minister for Immigration and Multicultural Affairs. In view of the importance and urgency of the issues addressed in the parliamentary inquiries, the Committee stressed the desirability of timely responses.

1.34 Information was sought on the number of reports in the Attorney-General’s portfolio that are still awaiting a response.

1.35 The Committee recommends that both departments seriously address this issue, and ensure that government responses are tabled in the Parliament within the recommended three months.

End

A P P E N D IX 1

INDEX OF HANSARDS FOR THE ATTORNEY-GENERAL’S PORTFOLIO

31 MAY - 1 JUNE 1999

Page

General overview questions L&C3

(Agencies and department listed in alphabetical order)

Administrative Appeals Tribunal L&C14

Outcome 1: To provide aggrieved persons and agencies with timely, fair and independent merits review of administrative decisions over which the Tribunal has jurisdiction.

Output 1.1: Completed reviews of decisions

Attorney-General’s Department L&C105

Outcome 1 An equitable and accessible system of federal law and justice

Output Group 1.1 Policy advice and development

Output Group 1.2 Support for the Attorney-General as the First Law Officer

Output Group 1.3 Program delivery

Output Group 1.4 Performance of statutory obligations

Output Group 1.5 Provision of services to Commonwealth departments and agencies

Output Group 1.6 Provision of services to the community

Output Group 1.7 Ministerial and parliamentary services -Outcome 2 Coordinated security, crime prevention and law

enforcement arrangements

Output Group 2.1 Policy advice and development

Output Group 2.2 Program delivery

8

Output Group 2.3 Provision of services to Commonwealth office holders, Commonwealth, state and territory departments and agencies, contractors and international representatives

Output Group 2.4 Ministerial and parliamentary services

Australian Customs Service L&C105

Outcome 1 Effective border management that, with minimal disruption to legitimate trade and travel, prevents illegal movement across the border, raises revenue and provides trade statistics

Output Group 1.1 Facilitation of the legitimate movement o f goods across the border, while intercepting prohibited and restricted imports and exports

Output Group 1.2 Facilitation of the legitimate movement of people across the border, while identifying illegal movements

Output Group 1.3 Coastal and offshore surveillance and response

Output Group 1.4 Administration of customs duty and sales tax, other border-related revenue collections, and import/export statistics

Output Group 1.5 Anti-dumping and countervailing administration

Australian Federal Police L&C65

Outcome 1 Criminal activity is deterred in areas impacting on the Commonwealth’s interests

Output Group 1.1 Illicit drugs investigations

Output Group 1.2 Economic crime investigations

Output Group 1.3 Corruption investigation

Output Group 1.4 Import/export investigations

Output Group 1.5 General crime investigations

Output Group 1.6 Special reference investigations

Output Group 1.7 External agency support services

Output Group 1.8 Criminal assets recovery services

Output Group 1.9 Policy advice

<

9

Outcome 2 Those individuals and interests identified by the

Commonwealth Government of the AFP as being at risk are kept safe and secure as a result of AFP protective services

Output Group 2.1 Security and protection of individuals at risk

Output Group 2.2 Protection of interests identified as potential security risks

Output Group 2.3 Planning and managing of security and law enforcement for special events .

Outcome 3 . Policing activity creates a safer and more secure

environment in the ACT, Jervis Bay and Australia’s external territories

Output Group 3.1 Community services

Output Group 3.2 Investigations

Output Group 3.3 Road safety and traffic enforcement

Output Group 3.4 Prosecution and court services

Output Group 3.5 Commonwealth services

Outcome 4 The Commonwealth Government contributes

effectively to international law enforcement interests

Output Group 4.1 International services

Outcome 5 Community confidence in the honesty, effectiveness and accountability of the AFP is high

Output Group 5.1 Integrity Program

Australian Government Solicitor L&C43

Australian Institute of Criminology L&C33

Outcome 1 To inform government activities which aim to

promote justice and reduce crime

Output Group 1 A wide range of information products and services

Australian Law Reform Commission L&C26

Outcome 1 Effective, independent and timely advice of the

highest quality to the Attorney-General and Parliament

10

Output Group 1 Reports on matters, referred by the Attorney-General and other activities necessary to enable the Commission to carry out its functions under Part 3 of the Australian Law Reform Commission Act 1996

Australian Security Intelligence Organisation L&C38

Outcome 1 A secure Australia for people and property, for

Output Group 1.1

government business and national infrastructure, and for special events of a national and international significance

Security intelligence

Australian Transaction Reports and Analysis Centre - were not examined as the Committee did not require further information from this agency

Outcome 1 Group A financial environment hostile to money laundering, major crime and tax evasion

Output 1.1 Group Deterring money laundering, major crime and tax evasion

Output 1.2 Group Targeting money laundering, major crime and tax evasion

Output 1.3 Group Advice on effectiveness of the FTR Act

Output Group 1.4 Contribution to international efforts directed at the suppression of money laundering, major crime and tax evasion

Output Group 1.5 Privacy and security

Commonwealth Director of Public Prosecutions L&C15

Outcome 1 To contribute to the safety and well being of the

people of Australia and to help protect the resources of the Commonwealth through the maintenance of law and order and by combating crime

Output 1.1 An independent service to prosecute alleged offences against the criminal law of the Commonwealth, in appropriate matters, in a manner which is fair and just and to ensure that offenders, where appropriate,

are deprived of the proceeds and benefits of criminal activity

Criminology Research Council - were not examined as the Committee did not require further information from this agency

1 /

11

Outcome 1 Criminological research which informs the

Commonwealth and the States

Output Group 1.1 Funded research

Family Court of Australia L&C8

Outcome 1 Serving the interest.of the Australian community by ensuring families and children in need can access effective high quality services

Output 1.1 Litigation

Output 1.2 Primary Dispute Litigation

Output 1.3 Public information

Federal Court of Australia L&C24

Outcome 1 Through its jurisdiction, the Court will apply and uphold the mle of law to deliver remedies and enforce rights and in so doing, contribute to the social and economic well-being of all Australians

Output Group 1.1 Management of cases and deciding disputes according to law - Federal Court

Output Group 1.2 Management of cases and deciding disputes according to law - Tribunals

Output Group 1.3 Service to Government

Output Group 1.4 Services provided to international jurisdictions

Output Group 1.5 Ensuring the quality of, and access to the system of .

justice

High Court of Australia L&C33

Outcome 1 Interpreting and upholding the Australian

Constitution and performing the functions of the ultimate appellate court in Australia

Output Group 1.1 High Court business .

Human Rights and Equal Opportunity Commission L&C144

Outcome 1 An Australian society in which the human rights of

Output Group 1

all are respected, protected and promoted

Australians have access to independent human rights complaint handling and public inquiries processes

12

and benefit from human rights education, promotion and monitoring and compliance activities

National Crime Authority L&C23

Outcome 1 An integrated and national response to organised crime

Output Group 1 Understanding the criminal environment

Output Group 2 Investigating organised criminal activity

Native Title Tribunal L&C5

Outcome 1 Recognition and protection of Native Title

Output 1.1 Registration

Output 1.2 Agreements

Output 1.3 Arbitration

Output 1.4 Assistance and information

Office of Film and Literature Classification L&C18

Outcome 1 Australians make informed decisions about films, publications and computer games which they, or those in their care, may view, read or play

Output 1.1 Operation of the National Classification Scheme

Ouput 1.2 Provision of services ancillary to the operation of the National Classification Scheme including certain research, the community liaison officer scheme, policy development and ministerial support.

Office of Parliamentary Counsel - were not examined as the Committee did not require further information from this agency

Outcome 1 Parliamentary democracy and an effective statute book

Output Group 1.1 Legislation

Output Group 1.2 Program and project management

Output Group 1.3 Legislative drafting capability

Output Group 1.4 Standardisation and quality control of legislation

A PP E N D IX 2

INDEX OF HANSARDS FOR THE IMMIGRATION AND MULTICULTURAL AFFAIRS PORTFOLIO

1 - 2 JUNE 1999

Page

General overview questions L&C225

(Agencies and department listed in alphabetical order)

Department of Immigration and Multicultural Affairs L&C225

Outcome 1 Lawful and orderly entry and stay of people

Output 1.1 Non-humanitarian entry and stay

Output 1.2 Refugee and humanitarian entry and stay

Output 1.3 Enforcement of immigration law

Outcome 2 A society which values Australian citizenship, appreciates cultural diversity and enables migrants to participate equitably

Output 2.1 Settlement Services

Output 2.2 Translating and Interpreting Services

Output 2.3 Australian Citizenship

Output 2.4 Appreciation of cultural

Migration Review Tribunal L&C209

Outcome 1 Contribute to ensuring that the administrative decisions of Government are correct and preferable in relation to non-humanitarian entrants

Output 1.1 Independent merits review of certain decisions concerning applicants for non-humanitarian entry and stay

Refugee Review Tribunal L&C194

Outcome 1 Contribute to ensuring that Australia meets its obligations pursuant to the convention relating to the status of refugees

Output 1.1 Independent merits review of decisions concerning onshore applicants for refugee status

RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE

CONSIDERATION OF BUDGET ESTIMATES 1999-2000

R E P O R T TO T H E SEN A TE

JUNE 1999

© Commonwealth of Australia 1997 ISSN 1326—9291

This document was produced from camera-ready copy prepared by the Senate Rural and Regional Affairs and Transport Legislation Committee, and printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.

M E M B E R S OF TH E C O M M IT TE E

Members

Senator Winston Crane, L P , Western A u stralia— (Chairman)

Senator Michael Forshaw, ALP, NSW—(Deputy Chairman)

Senator Paul Calvert, LP, Tasmania

Senator Sue Mackay, ALP, Tasmania

Senator Julian McGauran, NP, Victoria

Senator John Woodley, AD, Queensland

Participating Members

Senator Abetz

Senator Brown

Senator Colston

Senator Harradine

Senator McKieman

Senator Schacht

Senator Bartlett

Senator Brownhill

Senator Faulkner

Senator Sandy Macdonald

Senator Murphy

Senator Watson

Senator Boswell

Senator Chapman

Senator Ferris

Senator Margetts

Senator O’Brien

Committee Secretariat

Mr Andrew Snedden (Secretary to the Committee)

Ms Trish Carling (Estimates Officer)

T A B L E OF C O N T E N T S

Page

Members o f the Committee i

Table of Contents iii

Report to the Senate 1

Hansard Table o f Contents 9-13

iii

RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE

REPORT TO THE SENATE

Introduction

1. On 11 May 1999, the Senate referred to the Committee the particulars of proposed expenditure for the year ending 30 June 2000 in relation to the following portfolio areas:

• Transport and Regional Services; and • Agriculture, Fisheries and Forestry.

2. The Committee considered the Portfolio Budget Statements 1999—2000 for each portfolio at hearings on 31 May and 1, 2 and 3 June 1999. It heard evidence from Senator the Hon. Ian Macdonald, Minister for Regional Services, Territories and Local Government,

representing both the Minister for Agriculture Fisheries and Forestry, and the Minister for Transport and Regional Services.

3. The Committee also heard from officers of the relevant departments and agencies. The Committee thanks the relevant ministers and officers for their assistance. Senators in attendance at the hearings were: Senator Crane (Chairman), Senator Forshaw (Deputy Chairman) and Senators Alison, Calvert, Can, Chapman, Hutchins, Mackay, Margetts, McGauran, Murphy, O’Brien, Schacht and West.

4. The Committee attaches to this report and tables the Hansard record of evidence taken at each of the estimates hearings.

5. Answers to questions taken on notice at the Committee’s hearings will be tabled in the Senate in separate volumes entitled Additional Information — Rural and Regional Affairs and Transport Legislation Committee's Examination o f Budget Estimates for 1999—2000. Documents not suitable for inclusion in these volumes are available on request from the Committee secretariat.

Specific Issues

Relevance of questions asked at estimates hearings

6. In the course of the Committee's examination of the Budget Estimates, there was discussion between the Minister, Senator the Hon. Ian Macdonald, and Senators as to whether or not a number of questions asked came within the scope of the estimates procedures, or, in fact can and should be asked through other means of accountability and scrutiny provided by the Standing Orders.

7. The Committee intends presenting a supplementary report to the Senate on this matter canvassing issues of concern to the Committee.

2

Accrual accounting format

8. On Tuesday, 25 May, officers from the Department of Transport and Regional Services and the Department of Agriculture, Fisheries and Forestry (AFFA) provided the Committee with separate briefings on changes to the Portfolio Budget Statements.

9. At the beginning of each hearing, officers from both departments also provided Senators with a detailed explanation of the new system of accrual accounting and the layout of their department’s Portfolio Budget Statements for 1999—2000. Committee members were reminded that the Senate Committee on Finance and Public Administration were undertaking an inquiry into the format of the Portfolio Budget Statements and were encouraged to ask questions of the departments and place any comments they may have on the record.

10. To assist in the process of questioning during the hearings the Department of Agriculture, Fisheries and Forestry provided the Committee with a comprehensive guide and suggested the most efficient running order for the hearing.

11. The office of the Minister for Regional Services, Territories and Local Government also provided a useful running sheet which listed both administered items and outputs under each departmental grouping.

12. The Committee did identify a number of issues and problems, particularly with regard to the type of information which is not provided in the Portfolio Budget Statements under the new accrual accounting system. For instance, the Committee noted that AFFA’s Portfolio Budget Statements did not contain aggregated information on important agencies and programs

(such as AQIS), yet this information was provided for a large number of the research and development corporations which do not appear before the Estimates Committee. The Committee has received assurances from both departments that difficulties identified by the Committee this year will be addressed in Portfolio Budget Statements for future years.

Transport and Regional Services Portfolio

13. Since the budget estimates hearings which were held in June 1998, a number of changes have been made to the Transport and Regional Services portfolio, including:

® the Maritime program was transferred back to the Department of Transport and Regional Services from the former Workplace Relations and Small Business portfolio; and e a number of programs addressing rural and regional services have been transferred

into the Transport and Regional Services portfolio.

14. The Transport and Regional Services portfolio was heard in the following order:

1. Executive and Corporate Management and Strategic Transport, Trade and Infrastructure 2. Regional Services, Territories and Local Government - including National Capital Authority 3. Maritime Transport - including Australian Maritime Safety Authority 4. Road Transport .

5. Rail Transport 6. Air Transport - including Civil Aviation Safety Authority and Airservices Australia

15. A summary, in dot point format, of the main issues raised during the hearings is set out below. Please refer to the Hansard for a full account.

1. Executive and Corporate Management and Strategic Transport Trade and Infrastructure • Changes to, and information provided in Portfolio Budget Statements (p 6) • Cost to the department of the move to accrual accounting (p 14) • Departmental funding for Ministers’ offices (p 22) • Use of departmental credit cards (p 28) • Departmental business plans (p 30) • A New Tax System Package (ANTS Package) (p 39) • Y2K compliance - testing and certification (p 42)

2. Regional Services, Territories and Local Government - including National Capital Authority • Departmental resources devoted to preparing for the new tax package (p 45) • Regional impact statement in relation to diesel fuel rebate initiative (p 57) • Regional Flood Mitigation Program (p 60) • Regional Communications Strategy (p 65) • Newcastle Structural Adjustment Program (p 66) • Rural Transaction Centres (p 69)

• Rural Communities Program (p 71) • Operations of the University of Greenwich - Norfolk Island (p 76) • Cascade Cliff safety project - Norfolk Island (p 89) • Operations of the Christmas Island Casino (p 93) • Closure of airport on Christmas Island (p 96) • Public Housing on Christmas Island (p 98) • Cocos-Keeling Island - maintenance of Clunies Ross House (p 104) • Rural Transaction Centres (p 156) • Staffing in relation to Office of Local Government (p 166) • Local Government Incentive Program (p 181) • Local Government Ministers’ Conference (p 188)

National Capital Authority • Lease of land to Canberra International Dragway (p 108) • Renewal of licence to ACT Hospice (p 110)

3. Maritime Transport - including Australian Maritime Safety Authority • Number of departmental officers involved in maritime reform (p 120) • Shipping Reform Group (p 125) • Stevedoring charges (p 127) • Administration of MIFCo (p 130) • Number of redundancies proposed in stevedoring industry (pi 3 7) • Funding provided to MIFCo by Commonwealth (p 138) • Bass Strait Passenger Vehicle Equalisation Scheme (p 142)

Australian Maritime Safety Authority • Training of search and rescue practitioners (p 150)

4

• Vessel inspections - compliance with standards (p 150) • Co-ordination role played by AMS A in large search and rescue operations (p 152) • Process of updating National Search and Rescue Manual (p 155)

4. Road Transport • Federal Road Safety Black Spot Program (p 191) and (p (210) • Removal of barriers for competition between modes of transport (p 192)

• National Road Transport Commission (p 195) • Roads of National Importance (p 199) • Albury-Wodonga bypass (p 201) • Heavy vehicle charges (p 213) • Heavy vehicle driver fatigue (p 215) • Road funding announcements made by Ministers (p 217) • F3 Freeway (p 219) • Upgrading of bridges to take account of proposed increase in mass limits (p 227) • Funding for road safety programs (p 229)

5. Rail Transport e Privatisation of Rail Track in Victoria and in Western Australia ( p 230) • Sale of the National Rail Corporation (p 231) e Government response to House of Representatives Tracking Australia report (p 232) e Upgrading of the main interstate rail track (p 233) « Cancellation of concessional rail travel for retired Australian National employees (p 237) » Sydney-Canberra very fast train route (p 239)

6. Air Transport — including Civil Aviation Safety Authority and Airservices Australia ® Departmental advice provided on integrated transport options (p 369) » Pricing policy arrangements for airports (p 371) » Role of Airservices Australia and Civil Aviation Safety Authority in reiaiion to the

development of air traffic control, rescue and fire-fighting sendees (p 373) » Changes to aviation security regulatory framework (p 377) • Departmental resources involved in the provision of advice on strategies and measures to minimise the impact of aircraft noise (p 379) • Australia’s international airlines designation requirements (p 383) « Proposed changes to foreign ownership rules (p 388) ® Safety issues as they relate to crosswinds and the use of KSA’s east-west runway (p 390) o CASA - organisational review, staffing issues and numbers of redundancies (p 392) • Privatisation of air traffic control (p 399) « Position of Assistant Director, Aviation Safety Compliance (p 404) and (p 418)

• Details of Incident No. 9900344 (p 410) • Number of CASA officers who have Authority credit cards (p 413) • Operations of Kentia Link airline (p 414) • Airservices Australia’s involvement in contract bid - upgrade of air traffic control in the

United States (p 423) « Precision radar monitoring system - Sydney Airport ( p 425) • Trial of certified air-ground operator arrangements ( p 429) ® Firefighters at remote airports - Port Hedland and Karratha ( p 430)

5

A g ric u ltu re , F ish e rie s a n d F o re s try P o rtfo lio

16. Since the June 1998 budget estimates, the Department of Agriculture, Fisheries and Forestry portfolio has undergone a restructure. The restructure" took effect from December 1998. In addition to the divisional restructure, a number of resource and energy functions, as well as associated scientific and research programs have been transferred to the Department of Industry Science and Resources (DISK). A number of food industry related functions were transferred into the portfolio from DISK.

17. The Agriculture, Fisheries and Forestry portfolio was heard in the following order:

A. Management Secretariat and Executive Secretariat B. Australian Quarantine Inspection Service (AQIS) C. National Offices - including Australian Plague and Locust Commission D. Agricultural Industries ,

E. Fisheries and Forestry Industries - including Australian Fisheries Management Authority F. Food and Agribusiness Industries - including National Registration Authority G. Rural Policy and Communications - including Centrelink representative H. Natural Resource Management Policy I. Portfolio Policy and International J. Australian Bureau of Agricultural and Resource Economics (ABARE) K. Bureau of Rural Sciences (BRS)

18. A summary, in dot point format, of the main issues raised during the hearings is set out below. Please refer to the Hansard for a full account.

A. Management Secretariat and Executive Secretariat • Clarification of Portfolio Budget Statements (p 245) • Reduction in government revenue over the four years through to 2002-03 (p 249) • Impact of reduction of government funding on AFFA staffing (p 249) • Competitive tendering and contracting and outsourcing ( p 251) • Information Services Centre (p 252)

B. Australian Quarantine Inspection Service (AOIS) • Import risk analysis - salmon (p 254) and (p 277) • Resources required to deal with outbreaks of disease across all primary industry (p 256)

• Meat Safety Enhancement Program (MSEP) (p 259) • Outstanding meat inspection fees (p 265) . .

• Property owned by AQIS on Cocos (Keeling) Island (p 281) • Northern Australian Quarantine Strategy (p 284) • Papaya fruit fly interception (p 286)

C. National Offices — including Australian Plague and Locust Commission • Compensation arrangements to salmon industry in the event of disease outbreak (p 288) • Newcastle disease (p 289) • Implementation of Naim Report recommendations (p 300) • Preparedness for exotic diseases (p 301) • National Ovine Johne’s Disease Control and Evaluation Program (p 303)

6

D. Agricultural Industries • Meat processors - payment of voluntary levies (p 291) • Citrus Industry Market Diversification Grant (p 293) • Funding for NSW Sugar Export Industry Program (p 294) . • Tasmanian Wheat Freight Subsidy Scheme (p 296) • Assistance programs for the pork industry (p 299)

E. Fisheries and Forestry Industries - including Australian Fisheries Management Authority • Breaches of Regional Forest Agreements (p 308) • Funding for Forest Industry Structural Adjustment Package (p 312) • T asmanian Regional F orest Agreement (p 314) • Western Australian Regional Forest Agreement (p 317) • Pantagonian toothfish found aboard the Salvora (p 320) • Sale of Salvora and Eliza Glacial (p 320) • Proposed endangered species amendments (p 322) • ouumem bluetin tuna (p 325)

F. Food and Agribusiness Industries - including National Registration A uthority • Supermarket to Asia Strategy (p 329) • Food and fibre supply chain program (p 333)

G. Rural Policy and Communications - including Centrehnk representative • Agriculture - Advancing Australia (AAA) package (p 336) o Victorian Farmers’ Federation disaster relief fund (p 339) « Loxton Irrigation Scheme (p 340) ® Farm business and community programs (p 341) • Rural Adjustment Scheme (p 344) e Retirement assistance for farmers (p 351) « Administration of exceptional circumstances payments (p 353)

H. Natural Resource Management Policy « COAG water reforms (p 357) • National Landcare Program (p 361) • Rehabilitation of the Great Artesian Basin (p 361)

I. Portfolio Policy and International • Subsidisation of agriculture in Australia (p 363)

/, Australian Bureau o f Agricultural and Resource Economics (ABARE) • Funding for ABARE for 1999-2000 and outyears (p 365) • Impact of funding on staffing levels (p 366) » Current situation in the wool market (p 366)

K. Bureau o f Rural Sciences (BUS) » National Feral Animal Control Program (p 368) « Disease problem with the Malaysian pig herd (p 368)

7

Questions on notice and supplementary hearings

19. The Standing Orders require the Committee, after considering the proposed expenditure and agreeing on its report to the Senate, to set dates for

• the lodgement of any written answers or additional information; and • supplementary hearings.

20. The Committee resolved that written answers and additional information should be submitted by Thursday 1 July 1999.

21. The Senate is yet to determine the dates for supplementary budget hearings.

Winston Crane Chairman Rural and Regional Affairs and Transport Legislation Committee

24 June 1999

R ural and R egional A ffairs and T ransport L egislation C om m ittee

T A B L E O F C O N T E N T S

OF

H A N SA R D

FO R

C O N SID E R A T IO N O F B U D G E T E ST IM A T E S

M onday 31 M ay, 1999 T uesday 1 June, 1999 W ednesday 2 J u n e,1999 T hursday 3 June, 1999

INDEX

11

31 May and 1, 2 and 3 June

DEPARTMENT OF TRANSPORT AND REGIONAL SERVICES

Hansard Page

General In attendance . 1

Executive and Corporate Management and Strategic Transport, Trade and Infrastructure 4

Regional Services, Territories and Local Government - including National 43 Capital Authority

• National Capital Authority 108

• Local Government 156

Maritime Transport - including Australian Maritime Safety Authority 120

• Australian Maritime Safety Authority 149

Road Transport 190

Rail Transport 230

Air Transport - including Civil Aviation Safety Authority and Airservices 369 Australia

DEPARTMENT OF AGRICULTURE, FISHERIES AND FORESTRY

Hansard Page

General

DEPARTMENT OF AGRICULTURE, FISHERIES AND FORESTRY

Hansard Page

General In attendance 241 and 327

A. Management Secretariat and Executive Secretariat 245

B. AQIS 254

C. National Offices - including Australian Plague and Locust Commission 288

D. Agricultural Industries 291

E. Fisheries and Forestry Industries - including Australian Fisheries 308

Management Authority

F. Food and Agribusiness Industries - including National 329

Registration Authority

G. Rural Policy and Communications - including Centrelink representative 336

H. Natural Resource Management Policy 357

I. Portfolio Policy and International 363

J. Australian Bureau of Agricultural and Resource Economics (ABARE) 365

K. Bureau of Rural Sciences (BRS) 368

_______________________ ___________ __________________________________ 13

RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE

CONSIDERATION OF BUDGET ESTIMATES 1999-2000

SU P P L E M E N T A R Y R E PO R T TO TH E SEN A TE

JUNE 1999

© Commonwealth of Australia 1997 ISSN 1326—9291

This document was produced from camera-ready copy prepared by the Senate Rural and Regional Affairs and Transport Legislation Committee, and printed by the Senate Printing Unit, Department of the Senate, Parliament House, Canberra.

M E M B E R S OF THE C O M M IT T E E

Members

Senator Winston Crane, LP, Western Australia—(Chairman)

Senator Michael Forshaw, ALP, NSW—(Deputy Chairman)

Senator Paul Calvert, LP, Tasmania

Senator Sue Mackay, ALP, Tasmania

Senator Julian M cGauran, NP, Victoria

Senator John Woodley, AD, Queensland

Participating Members

Senator Abetz

Senator Brown

Senator Colston

Senator Harradine

Senator McKieman

Senator Schacht

Senator Bartlett

Senator Brownhill

Senator Faulkner

Senator Sandy Macdonald

Senator Murphy

Senator Watson

Senator Boswell

Senator Chapman

Senator Ferris

Senator Margetts

Senator O’Brien

Committee Secretariat

Mr Andrew Snedden (Secretary to the Committee)

Ms Trish Carling (Estimates Officer)

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T A B L E OF C O N TEN TS

P a g e

M em bers of the C om m ittee i

Table of C ontents iii

S upplem entary R e p o rt to the Senate _ 1

A ttachm ent A - 7

Letter from Clerk o f the Senate to Chair dated 31 M ay 1999- Estimates Hearings - Relevance

A ttachm ent B - 9

Letter from Clerk o f the Senate to Senator Mackay dated 31 May 1999 - Estimates Hearing

A ttachm ent C - 11

Letter from Clerk o f the Senate to Chair dated 31 May 1999 - Estimates Hearing (2)

A ddendum to C om m ittee R ep o rt 13

(Senators M ackay, Forshavv and O ’B rien)

A ttachm ent 1 25

Letter from Clerk o f the Senate to Secretary o f Committee dated 2 M arch 1999 - Estimates Hearings and Briefings

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RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE

SUPPLEMENTARY REPORT TO THE SENATE

1. In the course of the Committee's examination of the estimates there was dispute between the Minister and Opposition Senators regarding the scope of questions allowable during the examination of estimates.

2. Early during the hearings, this exchange took place which highlights the substance of the debate:

CHAIR—On your question, standing orders provide quite clearly that these estimates are about the estimates which we have before us now in terms of the new year and the latest decisions. The position is that if, in fact, in asking a question related to these estimates it does follow back to the other estimates, it

can be asked. But you cannot ask questions directly of last year’s estimates separate from the process we have before us now.

Senator Ian M acdonald—I think the question is about the process. It is the process of answering a question relating to 1996-97, 1997-98 and 1998-99. We have been through all those things and we have answered them, I think, very fully. Now we are going back into querying, in this year’s estimates, answers given in relation to last year’s estimates. They are not related to any expenditure in this year’s estimates.

CHAIR—I will listen to the question very carefully. I was not listening carefully enough then to make a ruling on this particular question. But the standing orders are quite clear; they must emanate from the estimates in front of us. You cannot go directly back to estimates last year or the year before if there is no connection to the current estimates before us.

Senator MACKAY—But if there is a connection you can.

CHAIR—It has to be directly related and emanate from—

Senator O’BRIEN—It just follows estimates, following the line of questioning relating to the performance standards and performance measures on questions on notice. I think we are following that track. I have referred to some answers to questions on notice in the Senate and answers to questions on notice in the last estimates process to track that matter through. After all, the PBS is based on estimations which hypothesise from last year’s expenditure. That is what you told us this morning.

CHAIR—So long as they emanate from these estimates, they are in order. If they do not, they are not.

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Senator Ian Macdonald—Mr Chairman, what we are being asked is the process that was followed in answering questions at last year’s Senate estimates. Perhaps you and the secretary might have to provide some advice for us but my understanding is that you have original estimates, you have a supplementary to the original, you have an additional estimate, you have a supplementary to the additional, and then it goes to parliament in the committee stage of the appropriation bill and you finish with that year. You move on to the next year. Is that how it works, or not? Or are we going to continue going back to previous years’ estimates, following up issues and processes yet again?

CHAIR—My understanding of the process is that questions asked in this estimates have to be relevant to the estimates in front o f us. If there is a linkage back, the question can be asked. If there is no linkage back, they cannot. I will take advice on that at morning tea time. I will listen carefully to the questions now and if they come from these estimates, it is fine, but they

cannot be a historical rerun of the estimates we had before.

3. The issues raised by Senators related directly to (a) what matters may be raised at estimates hearings by Senators as being relevant to the examination of estimates and (b) what material and documents are not available to Committees during estimates consideration.

4. In particular, Opposition Senators were concerned to press questions on the Minister regarding the extent of proposed expenditure on providing advice to government on the effect of the proposed new tax system on areas of administration covered by departments.

5. These matters gave rise to a considerable amount of discussion and disagreement between the Minister and Opposition members of the Committee during the Committee's hearings.

6. It has been Senate practice observed, albeit with resistance, by successive governments, that the annual estimates examination process provides the principal opportunity for the Senate, as the House of review, to carefully assess the performance of the public service and the administration of government policy and programs emanating from each annual budget.

7. The accepted role of estimates hearings in any given year - particularly at Budget hearings - is the examination of all basic information about government expenditure, with an increasing focus on the performance of program administration and achievement.

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8. Odgers, A ustralian Senate Practice notes in this regard:

It [ie, the estimates examination process] is cumulative, in that an individual question may not have any significant impact, but the sum of questions and the process as a whole, as it has developed, help to keep the government accountable and place a great deal of information on the public record on which judgments may be based. (Odgers 8th edn, Committees, 16.9).

9. The aim of questioning at estimates has always been to elicit as much relevant information - and documents - to allow maximum information to be provided to Senators. It has always been the case, however, that questions must relate to the proposed expenditure referred to the Committee, or otherwise to a department's

annual report, though the wide range of questions either answered at hearings or taken on notice has indicated that all aspects of a department's administration, if relevant to current programs of government, can be subject to query and examination.

10. During the Committee's hearing, Minister Macdonald several times indicated he would not accept particular questions from Senators on the basis that matters sought were either not within the departments’ current estimates, or that the information sought was contained in material reasonably considered as internal working documents of government.

11. The advice of the Clerk of the Senate was sought on the scope of the Committee's powers to ask questions at estimates, and the Committee's powers to - if it so decided - to press a matter with a Minister.

12. Correspondence to the Committee Chairman, Senator Crane, and to Senator Mackay is included as an attachment to the Committee's report.

13. The Clerk's advice was provided in two parts.In an initial letter to Senator Crane, the Clerk noted as follows (quote):

“You asked for a note on the rule of relevance as it applies to estimates hearings of legislation committees.

The matter referred by the Senate to the committees is the estimates of expenditure of departments and agencies allocated to the committees. Questions asked in the hearings must be relevant to the expenditure of the

departments and agencies. Any questions going to matters which affect that expenditure are relevant.

It is for the Chair of a committee to determine in the first instance, subject to any decision by the whole committee, whether any particular questions is relevant to the expenditure of the department or agency concerned. If there is any doubt as to relevance, the senator seeking to ask the question should be

given the opportunity to demonstrate the relevance of the question to the expenditure of the department or agency.

If the Chair allows a question as relevant but the minister declines to answer it, the minister must take responsibility for that course."

14. In further advice to Senator Mackay, particularly addressing the issue of whether the Committee could press a question on a Minister, the Clerk noted in his second letter (quote):

“.....M inister declining to answer questions

The note to the Chair of the committee stated:

If the Chair allows a question as relevant but the minister declines to answer it, the minister must take responsibility for that course.

This does not indicate that a minister has a discretion to decline to answer a relevant question. Ministers do not simply decline to answer questions, they indicate that there is a ground for claiming that it would not be in the public interest to provide the information sought by the questions, in other words, they raise a claim of public interest immunity.

If such a claim is raised it is open to a committee to determine that the claim is not justified and that a question should be pressed, and if the question is pressed and the minister still declines to answer the matter may be reported to the Senate.”

15. Following these opinions and consideration by the Committee, the Chair made the following statement:

CHAIR —I said I would go away and get a ruling on what was allowable and not allowable. I just want to report to the committee and those present that the ruling that I gave prior to morning tea is absolutely correct. Questions have to be related to or come from the current estimates process in front of us if they are to go back and examine things or have direct linkage to things that may have happened in the past. They cannot be questions that are taken in isolation from it.

16. When examining estimates, the Chair of this Committee has allowed as much latitude on questioning of government programs as possible to ensure a proper level of accountability for current and proposed expenditure is provided.

17. The Committee, through the Chairman, questioned the Minister closely on all aspects of the budget statements presented to the Senate and referred to the Committee.

18. The fact that the Minister would not provide answers to a number of questions put by Opposition Senators, which they claimed came within the Minister's discretion, led to them claiming that they could not examine the estimates as thoroughly as possible.

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19. The Committee considers continuing dispute as to a Committee's powers to elicit information - particularly during the course of an estimates hearing - is distracting and a counter-productive to Committee proceedings; such issues can and should be pressed in the Senate, or through examination of the scope and relevance of the estimates process by the Procedure Committee.

20. The Committee also considers that, under the accrual accounting system introduced with the 1999-2000 budget, the reliance is on budget outcomes. The result is that specific sums are not appropriated, has created a new financial management system for senators and Committees to come to terms with.

21. Accordingly, the Committee believes that the matters it raises, and that are raised by the Clerk's advice provided during the hearings, should be carefully considered.

22. The Committee is of the view that three fundamental issues need to be determined: firstly, in terms of examining estimates for previous years, a determination of what the connection has to be to current estimates.

23. Second, relative to forward estimates, which are 'guesstimates' of possible future expenditure, what questioning is allowable. There should be a distinction drawn between forward finite programs, which may run over two or three years, as

against general forward estimates which have not yet been appropriated, and could only raise questions of a very general nature.

24. Third, as a result of the advice provided to the Committee Chair, it appears that the general provisions of Senate Standing Orders do not apply to estimates proceedings, in particular Standing Order 73 (Rules for Questions). The Committee considers that this matter should be referred to the Procedure Committee to detemiine what is an appropriate scope for Standing Order 73, and whether it, or other provisions, should apply to estimates proceedings.

Recommendation

Issues raised in this report be referred to the Procedure Committee for consideration.

Winston Crane Chairman Rural and Regional Affairs and Transport Legislation Committee

29 June 1999

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A t t a c h m e n t A

A U S T R A L I A N S E N A T E

---------------------- PARLIAMENT HOUSE

C A N B E R R A A .C .T . 2 6 0 0 TE L : (02) 6 2 7 7 3 3 5 0 FAX: (02) 6 2 7 7 31 S9

CLERK OF THE SENATE E-m ail: c le rk .sen © ap h .g o v .s

hc/let/12426

31 May 1999

Senator W. Crane Chair Rural and Regional Affairs and Transport Legislation Committee

The Senate Parliament House CANBERRA ACT 2600

Dear Senator Crane

E s t i m a t e s h e a r i n g s — r e l e v a n c e

You asked for a note on the rule o f relevance as it applies to estimates hearings of legislation committees.

The matter referred by the Senate to the committees is the estimates of expenditure of departments and agencies allocated to the committees. Questions asked in the hearings must be relevant to the expenditure o f the departments and agencies. Any questions going to matters which affect that expenditure are relevant.

It is for the Chair of a committee to determine in the first instance, subject to any decision by the whole committee, whether any particular question is relevant to the expenditure of the department or agency concerned. If there is any doubt as to relevance, the senator seeking to

ask the question should be given the opportunity to demonstrate the relevance of the question to the expenditure of the department or agency.

If the Chair allows a question as relevant but the minister declines to answer it, the minister must take responsibility for that course.

Please let me know if I can be of any further assistance.

Yours sincerely

(Harry Evans)

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A t t a c h m e n t B

A U S T R A L I A N S E N A T E

LEnK OF THE SENATE

PA R LIA M EN T H O U S E C A N B E R R A A .C .T. 2 5 0 0 T E L : (0 2 ) 6 2 7 7 3 3 5 0 FAX: (0 2 ) 6 2 7 7 3 1 5 9

E -m ail: c le rk .s e n <§?a p h .g o v .a u

hc/let/12428

31 May 1999

Senator S. Mackay The Senate Parliament House CANBERRA ACT 2600

Dear Senator Mackay

Estimates hearing

You asked for advice on matters arising during this morning’s estimate's hearing of the Rural and Regional and Transport Legislation Committee.

You indicated that you have the note headed Estimates Hearings — Relevance, which I provided to the Chair of the committee this morning.

Minister declining to answer questions

The note to the Chair of the committee stated:

If the Chair allows a question as relevant but the minister declines to answer it, the minister must take responsibility for that course.

This does not indicate that a minister has a discretion to decline to answer a relevant question. Ministers do not simply decline to answer questions, they indicate that there is a ground for claiming that it would not be in the public interest to provide the information sought by the questions, in other words, they raise a claim of public interest immunity. -

If such a claim is raised it is open to a committee to determine that the claim is not justified and that a question should be pressed, and if the question is pressed and the minister still declines to answer the matter may be reported to the Senate.

During the hearing reference was made to subparagraph 2.15(c) of the Government Guidelines for Official Witnesses before Parliamentary Committees. This subparagraph indicates that written submissions prepared by departments for committees “should not identify considerations leading to government decisions or possible decisions, in areas of any sensitivity, unless those considerations have already been made public or the Minister authorises the department to identify them". This relates to the preparation of written departmental submissions and has nothing to do with answering questions at estimates hearings. It certainly provides no basis for questions to be ruled out of order under the rules of the Senate. The same document in paragraph 2.28 makes it clear that public interest immunity claims should be made only by ministers, normally the responsible minister in

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consultation with the Attorney-General and the Prime Minister. The guidelines provide no basis for any notion that a minister has a general discretion to decline to answer questions without stating a ground of public interest immunity.

The fact that information consists of advice to government is not in itself a ground for a claim of public interest immunity. Governments regularly disclose advice, and have been forced to disclose even high level advice in legal proceedings. The claim must be that the disclosure of particular advice would be damaging to the public interest, and the validity of this claim may be assessed having regard to the nature of the particular advice.

GST implementation

You asked whether questions relating to GST implementation would be relevant questions. Given that the budget statements of the Transport and Regional Services portfolio state at page 53 that one of the activities of the department funded by appropriations is “assistance in relation to necessary implementation costs incurred in complying with the requirements of the GST legislation”, any questions relating to the cost of that activity are clearly relevant to the expenditure of the department.

Please let me know if I can be of any further assistance.

Yours sincerely

(Harry Evans)

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A t t a c h m e n t C

A U S T R A L I A N S E N A T E

LERK OF THE SENATE

PA RLIAM EN T H O U S E C A N B E R R A A .C .T. 2 6 0 0 T E L : (0 2 ) 6 2 7 7 3 3 5 0 FAX: (02) 6 2 7 7 31 59

E-mail: derk.sen@aph.gov.au

hc/let/12429

31 May 1999

Senator W. Crane Chair Rural and Regional Affairs and Transport Legislation Committee

The Senate Parliament House CANBERRA ACT 2600

Dear Senator Crane

Estimates hearing (2)

Following the quotation during the hearing of my advice to Senator Mackay, you referred to paragraph 2.21 of the Government Guidelines fo r Official Witnesses before Parliamentary Committee, which states:

So far as relevant [emphasis added], the guidelines in paras 2.12 and 2.18 above relating to written material apply also to oral evidence.

I stated in the note to Senator Mackay that this has nothing to do with answering questions at estimates hearings.

Paragraph 2.21 does not alter the tenor of my note to Senator Mackay, to the effect that if a question is asked a refusal to answer can be made only in the context of a claim of public interest immunity, and the fact that information is in the nature of advice is not in itself a ground for such a claim. This is made clear by paragraph 2.32(d) of the same document, which indicates that material in the nature of advice or information about deliberative

processes of government may not be disclosed “where disclosure would be contrary to the public interest [emphasis in original]".

I have sent a copy of this note to Senator Mackay.

Yours sincerely

(Harry Evans)

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ADDENDUM TO COMMITTEE REPORT SENATORS MACKAY, FORSHAW AND O'BRIEN

Introduction

1. Opposition Senators members of the Rural and Regional Affairs and Transport Legislation Committee - Senators Forshaw, Mackay and O'Brien - support the Committee's decision to make a supplementary report to the Senate on the Committee's examination of the Budget Estimates for 1999-2000.

2. Opposition Senators do not, however, agree with the conclusions of the Report supported by other members of the Committee, Senators Crane, Calvert and MacGauran. .

3. Opposition Senators consider that the approach taken at the Committee's hearings by the Minister for Regional Services and Local Government, Senator the Hon. Ian Macdonald (the minister representing the government at the hearings) was counter-productive and contrary to the practice and usual procedures adopted by Estimates Committees and government ministers.

Estimates Committees' Approach - Committee's Rights to Examine Proposed Expenditure and Administration

4. Opposition Senators endorse the description of the estimates process which is set out in paragraphs 6 to 10 in the Committee's report, and quote them again here to emphasise the general concern they raise about Minister Macdonald's approach to these estimates and estimates in general.

It has been Senate practice observed, albeit with resistance, by successive governments, that the annual estimates examination process provides the principal opportunity for the Senate, as the House of review, to carefully assess the performance of the public service and the administration of government policy and programs emanating from each annual budget.

The accepted role of estimates hearings in any given year - particularly at Budget hearings - is the examination of all basic information about government expenditure, with an increasing focus on the performance of program administration and achievement.

Odgers' Australian Senate Practice notes in this regard:

It [ie, the estimates examination process] is cumulative, in that an individual question may not have any significant impact, but the sum of questions and the process as a whole, as it has developed, help to keep the government accountable and place a great deal of information on the public record on which judgments may be based. ( See Odgers 8th edn, Committees, 16.9).

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5. Opposition Senators - as Senators in the present Government were in Opposition - are responsible for eliciting as much relevant information - and documents - as possible and permissible within the reasonable requirements of government, to allow detailed examination by the Committee, and maximum information to be provided to the Senate.

Minister Macdonald's Approach to Opposition Senators' Questioning

6. Opposition Senators have had concerns regarding the approach taken by Minister Macdonald to their questioning since he has appeared before this Committee.

7. At the hearings of additional estimates for 1998-9 in February 1999, Minister Macdonald insisted to the Committee that matters not directly related to items for which additional funding for the 1998-9 year was sought would not be answered.

8. At Opposition Senators' request, the advice of the Clerk of the Senate was sought on the approach taken by Minister Macdonald. In a letter dated 2 March 1999, the Clerk advised the Committee Secretary that:

The only substantive rule of the Senate relating to the scope of questions is that questions must be relevant to the matters referred to the committees, namely the additional estimates of expenditure. As the additional estimates represent departments' and agencies claims on the Commonwealth for

additional funds, any questions going to the operations or financial positions of the departments and agencies which shape those claims must be relevant.

9. A copy of this letter is attached to this addendum for Senators' information.

10. Opposition Senators attempted vigorously to press Minister Macdonald, both at additional estimates hearings in February, and during the budget estimates for 1999-2000 for answers and information on relevant and important information regarding the administration of programs.

11. This questioning, on a number of issues, was met with complete refusal by Minister Macdonald to provide assistance or allow officials to provide the information to the Committee.

12. The net result of Minister Macdonald's intransigence when compared with other Ministers, was that Opposition Senators were forced to spend an inordinate amount of time pressing what should have been straight forward issues. The Committee, as a result sat for a total period of 52 hours, far longer than other Committees required to complete their hearings.

13. An example of Minister's intransigence (given in the following quote) was his refusal to answer questions and his threat to leave the Committee during the early part of the hearings when Opposition Senators pressed him for proper answers.

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Senator Ian M acdonald—Mr Chairman, I am simply not going to answer. I have answered this question about five times. If the committee wants to waste its time, that is fine, but I am not going to contribute to that by entering into a pedantic, petty argument over why one does things and why one does not do things. If you have questions on the current year’s budget, I am very happy to try to answer them, but if you want to enter into a debating thing, I have got a . lot better things to do and so have my departmental officials. If you are just

going to keep asking that for the rest of the time, we might as well go home now.

Senator MACKAY— Why were you prepared to answer questions in relation to GST in the last two rounds and you are not prepared to answer them now? Why?

Senator Ian M acdonald—if there are no other questions, Mr Chairman, we might as well leave.

Senator MACKAY—Are you prepared to answer any questions on the GST?

CHAIR—That question has been asked.

Senator Ian M acdonald—I have answered that question.

Senator MACKAY— Are you prepared to answer questions on the GST, minister?

Senator Ian Macdonald—Mr Chairman, if there are no other questions on this year’s budget, I and the whole department might as well go and do something productive. I am not going to sit here answering the same question ten times over.

Senator MACKAY— Minister, are you prepared to answer any questions on the GST?

Senator Ian Macdonald—I have answered that question before.

CHAIR—The question has been answered. Can we proceed to another question.

Senator MACKAY— I did not get an answer.

Senator Ian M acdonald—You have got an answer before.

Senator MACKAY— I will ask it again, you give me the answer again: are you prepared to answer any questions on the GST?

Senator Ian Macdonald— M r Chairman, I have answered that—

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Senator Ian Macdonald—At least five times before and I am not going to play the games of this committee. Now, if there are no other questions on the current budget and estimates, we might as well all go home. If there are no other questions, that is what I intend to do. (RRA&THansard, 31 May 1999, p

49)

14. Additionally, the Committee required several adjournments to meet privately both to consider its position - and to consider advice form the Clerk of the Senate - in order to ensure that the Committee's proper role in estimates examination was protected.

Principal M atters of Concern to Opposition Senators

15. There are several matters arising from the Committee's budget estimates hearings which must be drawn to the attention of the Senate. These are as follows:

(a) Refusal to answer legitimate questions, or allow officials to answer legitimate questions.

16. Opposition Senators consistently sought information regarding major programs for the Department of Transport and Regional Services. On two issues in particular, Minister Macdonald would not provide the Committee with information, or allow officials to assist the Committee.

17. On the proposed ANTS (Ά New Taxation System') package, Minister Macdonald denied Opposition Senators information on the basic funding and program for the DOTARS on the implementation of the ANTS, particularly the GST.

Senator Ian Macdonald—Senator, I can save you a lot of time. I am simply not going into that. It should be patently obvious to you that the estimates we worked on all the way through in relation to a new tax system were on the basis of certain things happening. As you and I know very graphically,

because your party was not interested in tax reform, the whole arrangements we had for local government are now going to be quite different. But we have always had to work on the basis of our properly endorsed mandate at the last election. It has simply transpired in the last couple of weeks that that is not going to happen. That is why it was not in this year’s budget, that is why it is a question for next year’s budget.

Senator MACKAY—I could understand, Minister— and I think this would be a more reasonable response— if you were to say that there was a question that we asked that you were unable to answer as a result o f the events of last Friday; that would be a reasonable response. What is not a reasonable response is to refuse to answer any questions at all on ANTS, including GST, particularly when your own budget mentions GST consistently and you have

actually got programs in there for the implementation of GST.

S e n a to r M A C K A Y — Can you answer it again?

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Senator Ian M acdonald—I appreciate your opinion on reasonableness or otherwise but it does not alter my position that neither I nor any of the officers will be talking about the new tax system which comes into operation in the next year’s budget.(RRA&T Hansard, 31 May 1999, p 44)

18. Senator Mackay sought the advice of the Clerk of the Senate on the Minister's approach. The Clerk advised that:

... GST implementation

You asked whether questions relating to GST implementation would be relevant questions. Given that the budget statements of the Transport and Regional Services portfolio state at page 53 that one of the activities of the

department funded by appropriations is “assistance in relation to necessary implementation costs incurred in complying with the requirements of the GST legislation”, any questions relating to the cost of that activity are clearly relevant to the expenditure of the department.

19. Opposition Senators consider that the ANTS legislation and its implications for all parts of government is a central issue for the Senate's scrutiny. The fact that Minister Macdonald attempted to evade the issue by telling the Committee that expenditure had not taken place on the applicable program is refusal to allow proper examination of basic government expenditure and administration.

20. In relation to another issue, the administration of Norfolk Island, and the setting up and role of the 'Greenwich University' under legislation of Norfolk Island, Minister Macdonald would not allow officials to answer opposition Senators' reasonable questions (see RRA&T Hansard, 31 May 1999, pp. 76-88).

21. The matter of greatest concern to Opposition Senators is that these matters have been made public by the Minister himself and have involved continuing expenditure of Commonwealth funds. The issue of the Greenwich University has been, and is, the subject of considerable public debate, and involves possible

legislative change. Minister Macdonald's refusal to answer questions demonstrates an apparent strategy of frustrating proper inquiry by the Parliament.

22. The flawed logic of the Minister’s position in relation to Estimates hearings was also highlighted on pages 46 and 47 of the RRA&T Hansard of 31 May 1999.

23. Senator O’Brien asked a question in relation to a specific reference in the 1999/00 Portfolio Budget Statement contained on page 53 of the RRA&T Hansard of 31 May 1999.

24. The activity referred to was ‘the provision of assistance in relation to necessary implementation costs incurred in complying with the requirements of the GST legislation’.

25. Senator Macdonald said he did not know what advice he was going to seek.

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Senator O ’BRIEN—It seems to me that is a logical conclusion of what you are saying. The point that arises is that next year when we come to examine this issue, if the position that you are putting now is consistently put then, we will not be able to ask questions about this item, the very questions that you cannot answer now.

Senator Ian Macdonald— Senator, you have supplementary estimates, you have additional estimates, you have supplementary to the additional estimates. By that time we may be able to give you some advice on what the department has done.

Senator O ’BRIEN—You may?

Senator Ian Macdonald—But even then I still will not be able to answer your questions—and strictly speaking you should not ask them—about next year’s budget which will implement the tax reform proposals in the year 2000­ 01 budget.

Senator O ’BRIEN—If I were asking about the following year’s budget, I know what you would say to me, but if I am asking in relation to this year’s budget, what you are saying is you will not really know what expenditure has been allocated to this item until some time near the end of the financial year, if then. The point I am making, Minister, is that if this line is consistently followed, it will be impossible to pursue this matter next financial year because it will be in the previous year’s budget.

Senator Ian Macdonald—Which matter?

Senator O ’BRIEN—This particular issue, the question that I have asked you.

Senator Ian Macdonald—You have just asked it.

Senator O ’BRIEN—I have asked the question that has been asked a number of times about the expenditure that will arise in relation to the activity in the first dot point under the first box on page 53. '

Senator Ian Macdonald—My advisers tell me they would be able to break down the cost of advising on policy generally but there is no way in the world they would be able to tell me what part of that relates to the GST requirements or otherwise; it is simply not possible. By the time we get to additional

estimates we may be able to say that in the last six months we have spent about half of our time on this; I do not know.

Senator O ’BRIEN—There is no actual financial lump of money, as it were, set aside for GST?

Senator Ian Macdonald— Set aside for GST policy advising, no.

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Senator O ’BRIEN— And there may not be for the whole financial year?

Senator Ian M acdonald—No. That is right.

Senator O ’BRIEN— We cannot ask any meaningful questions now and the point I am making is that next financial year, consistent with what you are saying, we will not be able to examine that issue in retrospect.

(RRA&THansard, 31 May 1999, p 47)

(b) Provision of global allocation of appropriations to specific programs

26. The Opposition encountered great difficulty in obtaining information, easily available in previous years Budget Paper, about the breakdown of appropriations between Divisions.

Senator MACKAY—I know it is a business planning issue. It does not mean I cannot have the information. The information I want is the ballpark figure for each agency or each division, as of today, for this forthcoming budget. That is what I want.

M r M artin—Yes, and we have been debating that, as far as the business planning issue—

Senator MACKAY— Are you telling me I cannot have that information?

. M r M artin—No. I am deferring to the minister and the chair.

Senator Ian M acdonald—I have made that determination, Senator. Browbeating the witness is not going to change it.

Senator MACKAY·—I would like you to provide me with an answer, then.

Senator Ian M acdonald—I have given you that answer before.

Senator MACKAY—Let me get this absolutely clear. I am asking—

’ Senator Ian M acdonald—This is the third time you have got it absolutely clear.

Senator MACKAY—No, this is a completely different question. I am asking what the ballpark figure is for each of the divisions in your department for this budget which we are debating now, and you are refusing to give me that information. Is that correct?

Senator Ian Macdonald— I thought the answer was we had not done it yet.

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Senator MACKAY—No. The officer has already indicated that they are aware of ballpark figures. I asked for the ballpark figures.

Senator Ian Macdonald—We are not into giving'you hypotheticals, Senator.

Senator MACKAY—It is not hypothetical, Minister.

Senator Ian Macdonald—It is a ballpark. What is a ballpark if it is not a hypothetical?

Senator MACKAY—What are your divisions currently operating under in the appropriation of their moneys?

Senator Ian Macdonald—They are operating under sufficient money to achieve what the government wants them to achieve. (RRA&THansard, 31 May 1999, p 36)

(c) Inconsistency in answering questions between departm ents appearing before the Committee and programs

27. It was a feature of Minister Macdonald's approach and attitude to the Committee that, notwithstanding his intransigence with Opposition Senators on issues which may be fairly described as politically controversial, he allowed questioning of officials to go on uninterrupted contrary to his stated position that questions could not be raised which were outside the appropriation for 1999-2000.

28. Minister Macdonald was inconsistent in his answers to questions — refusing to answer questions dealing with anything outside 1999-2000 appropriations on some programs, but going to great lengths answering a series of questions related to the Rural Transaction Centres; The scope of the RTC program and questions answered by the Minister extended not only beyond the 1999/2000 Budget but was also predicated on the further 16% sale of Telstra, a matter which at that point of the Estimates Hearing had not even been determined by the Senate.

29. The Minister did not exercise the same degree of obstruction outside of his specific area of responsibility.

Senator O ’BRIEN—So that is a total overview of the coming and the out years—$ 195 million?

M r M artin—Plus 18 for the bridges.

Senator O ’BRIEN—Were there out year figures for all of those years upon which those increases are built?

M r M artin—Yes, Senator. As you mentioned yourself before, last year’s PBS published forward estimates for each of those.

Senator O ’BRIEN—Up to and including the year 2002-2003?

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M r M artin—There was an unpublished estimate, yes, from last year, keeping in mind that it was not a formal out year at that stage. Similarly, the Minister appeared to have no objection to Committee members asking questions about programs which ran over several years, or were not funded in 1999-2000.

(RRA&THansard, 1 June 1999, p 200)

(d) Questions on forw ard estimates involving current year programs

30. Opposition Senators were frustrated by Minister Macdonald's inconsistency in seeking information about programs funded in 1999-2000 and allocated forward funding in forward estimates for years following 1999-2000 (Out years').

31. The reason advanced by Minister Macdonald, given in the following quote, would - if enforced by all ministers - mean that the Senate, through estimates process, could legitimately ask questions about programs of considerable proposed length and expenditure for the financial year under scrutiny, but could not be given even the most basic information for following years.

Senator Ian Macdonald—I have not sought advice on the out years. I am not interested in discussing them; I am here to discuss the 1999-2000 budget. (RRA&THansard, 1 June 1999, p 177)

Approach taken by the Committee C hair During Hearings

32. Opposition members concerned about the repeated refusal of the Minister to answer questions or allow Departmental Officials to answer questions raised their concern with the Chair of the Committee. Opposition Members are concerned that the Chair did not take appropriate action to ensure that the Committee could gain relevant information from the Minister and the Department.

33. The Chair did not seek to require the Minister to answer reasonable questions.

Senator MACKAY—I will get the standing order and we will get some advice. That is the first question I have, Chair. The second question I have was in relation to a ruling that you just made earlier where you said it is up to the minister—and please correct my summation if necessary—to determine what will be answered and what will not be answered within the provisions of the standing orders.

CHAIR—Earlier on when we came back?

Senator MACKAY— Yes.

CHAIR—When we spoke to the Clerk of the Senate, I asked him a specific question as to what the position was if a minister decided not to answer a question, for whatever reason, or instructed the officers not to answer a question. I would say across the full spectrum of estimates—when we were in opposition and now we are in government—that was a matter that should and

' 1

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could be dealt with in the parliament itself. It was not a matter for debate in this committee, or any other committee for that matter.

Senator MACKAY— So what was the advice of the Clerk?

CHAIR—That was his advice.

Senator MACKAY—No, you just said you asked him and he said it was not a question for debate.

CHAIR—Yes.

Senator MACKAY—But what was his advice in relation to the substantive question?

CHAIR—I will repeat myself. What he said was beyond that—

Senator MACKAY—Beyond what?

CHAIR—If the minister says, Ί will not answer,’ or he instructs one of his officers not to answer a particular question, it is a not a matter of debate for this committee. It is a matter which can be taken up in the chamber itself.

Senator MACKAY—So did the Clerk say whether or not the minister was required to answer the question?

CHAIR—No, it is not required.

Senator MACKAY—Not required. Did the Clerk indicate to you which standing order? -

CHAIR—No, I did not go into that sort of thing. I raced down there at morning tea and I asked two specific questions. He gave me that. I asked him to give me a written answer as a follow-up to the questions we had asked.

Senator MACKAY—Just to summarise, the advice you received from the Clerk was that the minister can choose not to answer any question and can direct a public servant not to answer any question?

CHAIR—Correct. .

Senator MACKAY— Can you please provide me with the standing order?

CHAIR—I have answered it three times. I have asked the—

Senator MACKAY—No, I want the standing order.

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CHAIR—I have asked the Clerk to provide me with the written information. When I check it I will have a look at it.

Senator MACKAY—I want the two standing orders that you are quoting from there, thank you. (RRA&THansard, 31 May 1999, p 32)

34. Whilst the Chair attempted to keep order under difficult circumstances imposed on him by the Minister, it is axiomatic that Standing Orders for Estimates are different to those that operate in the Senate Chamber.

35. Opposition Senators believe that referring this matter to the Procedures Committee is unnecessary, given the concern is not about the Estimates process itself, but the behaviour of the Minister. As such this is not a matter for the Procedures Committee, but one that could be resolved by improved cooperation by the Minister and the use of appropriate Standing Orders.

29 June 1999

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A tta c h m e n t 1

A U S T R A L I A N S E N A T E

T E L : (02) 6 2 7 7 3 3 5 0 FAX: (02) 6 2 7 7 3 1 S9

PA R LIA M EN T H O U S E C A N B E R R A A .C .T. 2 6 0 0

CLERK OF THE SENATE E -m a il: c le r k .s e n @ a p h .g o v .a u

hc/let/12251

Mr Andrew Snedden Secretary Rural and Regional Affairs and Transport Legislation Committee The Senate Parliament House CANBERRA ACT 2600

2 March 1999

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Estimates hearings and breifings

Thank you for your letter o f 1 March 1999, in which you seek advice on briefings as an alternative to hearings in relation to estimates.

Before proceeding to the matter of briefings, I should make some observations about the context in which your request for advice arose, as disclosed by the transcript attached to your letter, in particular, the scope o f questions at additional estimates hearings.

The only substantive rule of the Senate relating to the scope of questions is that questions must be relevant to the matters referred to the committees, namely the additional estimates of expenditure. As the additional estimates represent departments’ and agencies’ claims on the

Commonwealth for additional funds, any questions going to the operations or financial positions of the departments and agencies which shape those claims must be relevant. The question of reference to annual reports was raised. Annual reports are statements to Parliament of the manner in which departments use the resources made available to them, and it is difficult to see how a reference to an annual report would not be relevant. When the budget cycle was changed so that the main estimates were presented in May instead of

August, this necessarily involved the most relevant annual reports not being available at the time of the main estimates hearings but becoming available at the time of the additional estimates hearings. It was therefore accepted that annual reports would be referred to during the additional estimates hearings. In effect, annual reports disclose the financial positions of departments and their activities leading to their financial positions at the very time when departments are seeking additional funds as a result of their financial positions.

This approach to the scope of questions has generally been followed in estimates hearings in the past.

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The Minister for Regional Services, Territories and Local Government, Senator Ian Macdonald, suggested that briefings should be used as an alternative to written and oral questions at estimates hearings, and made this suggestion partly on the basis that such

questions divert departmental resources from delivering the services of the department. Two preliminary observations should be made. Any scrutiny or accountability process diverts departmental resources from the delivery of services, but this does not mean that public departments should be free of scrutiny and accountability processes. It is not clear why the minister thought that there was anything inappropriate about any of the questions asked, or whether any particular questions were regarded as unduly diverting resources. Secondly, it is not clear how the provision of briefings would involve any lesser use of resources than answering questions at estimates hearings. It would appear that both processes would equally occupy departmental resources.

Turning to briefings, this term is used to describe two different arrangements. If a briefing takes place at a meeting of a committee, this is simply an in camera hearing in another guise. Legislation committees are prevented from hearing evidence in camera on estimates (standing order 26(2)), so that kind of briefing is not available to committees in relation to estimates. If a briefing occurs at a gathering which is not a committee meeting but simply an informal gathering of senators who happen also to be members of a committee, the standing orders do not authorise any of the processes available to a committee, such as taking a transcript, receiving documents or citing the information provided in a report. I think that this

effectively answers the questions you have posed.

You mention the possibility of the committee receiving the proposed briefing as part of an inquiry into the performance of a department under standing order 25(2)(b). The standing orders do not authorise pursuit of an inquiry under that provision by way of informal briefings. In any event, if questions are relevant to the performance o f a department they must be relevant to that department’s estimates.

Please let me know if I can be of any further assistance in relation to this matter.

Yours sincerely

(Harry Evans)

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THE PARLIAMENT O F THE COMMONWEALTH O F AUSTRALIA

PARLIAMENTARY PAPER No. 154 of 1999 ORDERED TO BE PRINTED

ISSN 0727-4181