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STANDING COMMITTEE ON RURAL AND REGIONAL AFFAIRS AND TRANSPORT
10/10/2008
Natural resource management and conservation challenges

CHAIR —Welcome. Before we go to questions, do you wish to make a brief opening statement?

Mr Hills —If we may, yes. Just to start with, these are just comments from Colin and me and they do not necessarily represent all of the WA regional chairs and NRM CEOs.

I have some general comments about the new caring for our country program. We feel that the major change in direction has been extremely disruptive. It has disenfranchised many community volunteers and groups and has certainly led to an exodus of staff caused by uncertainty and instability. It seems to have discarded, in our opinion, tens of millions of dollars of previous work in developing regional plans, targets and program logic, with five years of target work at least in Western Australia at a regional scale trying to be repeated within six months out of Canberra. We fear that many of the new targets will be too broad, not specific, measurable or time bound. There is a real sense of devolved decision making being removed from regional communities to be replaced by directives coming from Canberra. Rather than being active members of a joint initiative between the states and the Australian government—we term that vertical integration—we feel like we have been demoted somewhat to being service providers only. We are also disappointed that there was little to no consultation on the new program. There was not even a cursory review before it happened. This is unusual compared to some of the other major reviews we have seen in government, including climate change, health, Murray Darling and of course defence.

After saying that, we do want to acknowledge the right of the Australian government to set its priorities and we actually welcome that in particular more clearly. This is something through the WA salinity investment framework that the regions have been comfortable working with the Western Australian government on over the past few years.

We certainly acknowledge the transitional arrangements that the Australian government put in place in 2008-09, which certainly stopped us losing all of our staff, particularly in WA, where there was no guarantee of regional core funding from the state. It was very much appreciated. We also acknowledge the future base funding the Australian government has guaranteed to the regions for the Caring for our Country program, but we do want to point out that issues we may have with the program go beyond just the basic dollars; they are not our entire set of issues. These other issues extend to governance and community involvement in decision making. However, after saying that, we do accept that the new program is here to stay and we want to be active participants in seeking that the Australian government meets its aspirations for the program, because we actually share those aspirations. Thank you.

CHAIR —Thank you, Mr Hills. Mr Heinzman?

Mr Heinzman —No. That was a joint opening statement.

CHAIR —I will go straight to Senator Hutchins.

Senator HUTCHINS —On page 8—I would just like you to expand on this—you have raised some of the issues of concern. There is a statement of concern that this ‘no longer plays a central role in the investment framework of Caring for our Country’. Could you expand for the committee what you have in mind there, what you see as being the difficulties that you highlight and what this emphasis on program logic means?

Mr Heinzman —Yes, certainly. I think one of the issues, from my point of view, has been the fact that all of the regions developed regional strategies, the targets going out to 25 years and the aspirational targets even longer than that, then management action targets and resource condition targets. These were quite substantial bits of work that were put into that from an NHG. It involved many hours of effort and lots of money. It just seems that, with the way the Caring for our Country program was announced, it did not really take those regional strategies into account. We still have those and, in fact, they are still valid. It is just that now there seems to be a mismatch between that work that was invested in in the past and the new direction. It just seems that, in a sense, that work was wasted to some degree.

Mr Hills —Yes, I would certainly concur. While many of the targets that were first developed in our first-round of planning were fairly loose and broad, there was a lot of pressure from both state and Australian governments to tighten those targets in the first instance. Most regions have gone through at least one, if not two, rounds of target improvement, with once again considerable investment, scientific input and nearly always community consultation on those targets. They have become increasingly specific around discrete environmental assets. They are obviously at a regional scale, which has its pros and cons. Obviously, they can be too parochial sometimes, particularly for an Australian government program, but they rely on a lot of local knowledge, including a lot of scientific knowledge, within agencies in the region.

But most importantly, beyond that, was the significant work that started to occur about two and a half years ago around all the regions in Australia. You are probably aware that the regions have a fairly collegiate attitude across Australia and they share information. Collectively, we were all on the same wavelength when it came to developing the program logic. That is simply setting a target and then looking at the steps that you have to take to achieve that target right back to your resourcing. That is probably the most significant effort that the regions were undertaking in the last two years.

At the end of the day, when both state and federal treasuries particularly, and governments and expenditure review committees and so on, asked what were the outcomes for an investment, we were of the belief that, while some of our problems are 20 or 30 years in the solving—they have been 100 years in the making—at least with a strong program logic we could go to treasuries and say, ‘Look, these are the steps we’ve taken that are going to get us to that final outcome that you are seeking and we are quite happy for that program logic to be challenged, we’re quite happy for our assumptions to be challenged, but we are investing in the best available science and knowledge to achieve that final outcome.’ In the regions, while there is a sense that program logic still underpins the Australia government’s new program, that previous work done at regional level seems to have been lost.

Senator SIEWERT —Turning to page 2, the second dot point, I thought I knew most NRM acronyms, but what are RCTs?

Mr Hills —And MATs, sorry, yes.

Senator SIEWERT —And MATs?

Mr Hills —It is a bad habit we have fallen into. I apologise. RCTs are resource condition targets and MATs are management action targets. In that program logic we are referring to, we are aiming to make a resource condition change. The most common one that is referred to is the drop in EC at Morgan. That is the most well known resource condition target. A management action target might be a certain number of detention basins that may have been completed over a period or a certain hectarage of farm forestry in a certain catchment. I apologise for that.

Senator SIEWERT —I think you need to tell the committee what you mean when you talk about SIF. We had David Pannell in this morning and we were talking about INFFER. I know what you are talking about, but you may just want to explain what SIF is. Professor Pannell said this morning that the regional groups in WA are now all picking it up to work with it. Could you just tell us how you are doing that?

Mr Hills —How we are doing INFFER or how we have done the investment framework—

Senator SIEWERT —How you have done that, how it is going to INFFER now—

Mr Hills —Yes.

Senator SIEWERT —Then I want to know—because it relates to the question that Senator Hutchins asked you—what interaction are you having with the Commonwealth at the moment about how they set the Commonwealth’s investment framework for the whole of the program for Canberra and country?

Mr Hills —As you said, the salinity investment frame work has been operational in Western Australia now for seven years and most of the regions, particularly those like the southwest that have significant areas of salinity, have been using that framework. Basically the principle is that you need to consider the discrete assets that you have in any given region. You need to prioritise those assets using a value and threat and feasibility assessment—in other words, what is the value of that asset to the public, what are the threatening processes against those values, and what is the feasibility of being able to do something to combat those threats. In other states they tend to refer to this as the asset based approach. I think that is the term they tend to use in Victoria. The regions have been then busily—as well as doing targets—working on prioritising assets and have been working with the state, because the state has also been through that process. As to the only issues—the salinity investment framework, as the name implies, only deals with salinity threat and, because the national action plan was so focused on salinity, that was quite okay for Western Australia for a period of time.

The INFFER process, as Professor Pannell may have explained, goes well beyond that and looks at all threats. It could be water quality, it could be pest, weeds and disease. It could be appropriate land use planning, et cetera. But the principles are the same. It looks at what is the value of the asset, what are the threats and what is the feasibility of doing something in response to that. However, the salinity investment framework had a basic approach of saying, depending on the return to the public, it will very much depend on what action you take whether you actually invest on ground works. The best example of that is that you are going to invest on ground works to try and freshen the Murray because of the public benefit of the water at Morgan. But for other assets it may not be in the best public interest to invest on ground. What you may do is work with farmers through new technology or, indeed, you might even look at what regulation options are open.

The INFFER framework does that in a much more sophisticated way than the salinity investment framework. In fact, I would say, with all due respect to Professor Pannell—he would even admit to it himself, I would hope—that is where the salinity investment work failed in Western Australia, because people got focused on the recovery option of actually investing on ground works and forgot there were a bunch of other policy tools. The INFFER process really puts that at the centre. It says, ‘You need to mark a hard decision.’ One of the policy tools is to do nothing; it is just not in the public interest to actually invest any money in this.

Senator SIEWERT —That was always a possible outcome from SIF as well.

Mr Hills —Yes, that is right. We are all fairly new to it. Some of us have had experience with the salinity investment framework, but all six regions of Western Australia signed on six weeks ago to commence that process. It involves effectively choosing some assets, and we have all done that now, which was difficult. That is a very hard part, because everyone has their pet assets, as you can imagine. Then it is starting to collect the scientific data and the economic data to actually make some of those assessments and decide whether it is feasible.

I suppose the best examples that we have been given is some of the work that has been done in Victoria. We understand that one of the outcomes with ‘do nothing’ is that because the asset may be of extreme value the actual quantum of dollars that you have to invest is beyond reason. It might be in the hundreds of millions of dollars, or $200 million or a billion dollars worth of investment. Given the magnitude of programs in both the state and the Commonwealth that we are dealing with, it is not realistic, so you need to turn to an asset that is realistic to recover, improve or protect.

Senator SIEWERT —What dialogue have you had with the Commonwealth? I am interested to know how much they have taken on your existing investment plans, the planning that you are doing into the future and the dialogue that is happening with where they are prepared to invest.

Mr Hills —At this stage, we have had no dollars.

Mr Heinzman —No.

Mr Hills —We do understand that Professor Pannell has spoken to departmental heads and ministerial advisers about INFFER but not to us directly, no.

Mr Heinzman —Perhaps I could just add one thing about the INFFER process. From the point of view of Perth’s vision and our own, we do have some reservations mainly because it is an asset based approach. Within the Perth metropolitan region, obviously the assets are not as numerous there as elsewhere. However, the pressures on those assets are much greater in terms of development and along the coastline clearing of native habitat. In fact, I think it is probably true to say that in WA, although there is a clearing ban, most of the clearing now happening in the Perth region is simply for housing development and infrastructure development. It does concern us that a strictly asset based approach may leave us a little bit deficient, because we simply do not have a large number of assets. Obviously the Swan River is one and we have several threatened species on the coastline. But in terms of numbers of assets, I guess our greatest asset, if you like, is the community members who work with NRM within the region. One of the things that we would like to point out basically is that, in the plan that the Commonwealth has produced so far, we have not seen a lot of emphasis on capacity building with community. I know for a fact that many small community groups have been very disillusioned over the last two years with the stop-start nature of investment in NRM. We have not been able to fund as many groups as we have in the past. Going forward, it is not clear how that funding will occur. If you are talking mostly about an asset based approach, how do you deal with capacity building? How do you fund community groups for doing work in their local area? That is our major worry with INFFER. Apart from that, we recognise that it has that scientific rigour and it is a very solid well grounded approach. Also, we recognise that, if the Commonwealth, state and regions were all using the INFFER process, it would be a big step forward. But we just have those. I guess the other high population areas in Sydney, Melbourne and Adelaide would probably have similar reservations.

Senator SIEWERT —If you have not talked about INFFER specifically, what level of discussions have regional groups had with the Commonwealth about the program itself and the new outcomes that were published last week? Was it six outcomes that were published last week?

Mr Hills —Yes.

Senator SIEWERT —What input did you have in developing those, and then perhaps we could have your comments on the outcomes?

Mr Heinzman —Very little input into the development. There was an opportunity in I think April of this year when there was a regional chairs annual meeting.

Senator SIEWERT —Is that the usual one?

Mr Heinzman —The usual one. That was held in Melbourne and the Commonwealth did outline the plans and there was an opportunity to comment, but I would not regard that as being input into the actual design of any targets or anything like that.

Mr Hills —I think the CEOs and general managers around Australia had a couple of opportunities. I think there have been two workshops this year, and we are grateful for that. However, there is a big difference between a bunch of managers, for want of a better term, and executives having input and involving regional communities. That is the big difference. We can do our best. We have a grounding in the situation in our regions, but I would say that that is a very distant second to actually having regional communities involved in some sort of consultation. I think the other CEOs and general managers may not be unanimous but a majority would agree that we have no problems with the Australian government from a policy perspective saying, ‘Look, these are the big things for Australia that we think we should be investing in. These are the priorities for the next 10 to 20 years.’ In fact, that has probably been something that may have been increasing, and we are encouraged by that. The problem in doing that is that the states also set their direction, and we encourage that, and the regions, and there does not seem to be any point in the process where there is a negotiation. We have Australian priorities and state priorities and then regional community priorities, and they come together and there is some natural tension and it is resolved. That seems to be missing from the process. That is of some frustration to my community members on my council.

Senator SIEWERT —Should that happen through the bilaterals? I think you were here when we were talking about the bilaterals a bit earlier, or had we already got on to—

Mr Hills —No, I missed that.

Senator SIEWERT —We were talking about the bilaterals a bit earlier and Mr Giles was expressing the perennial concern about lack of community involvement in the discussion over the bilaterals. I am going to ask this of everybody: firstly, have you been involved in any discussions on the bilateral this time; and, secondly, would the bilateral be a natural place where that tension was discussed or is there some other forum where it should be discussed?

Mr Heinzman —I look upon the bilateral as being more of a working arrangement for the distribution of funding and so on. The discussion about common targets between regions, federal and state governments would be separate from that. It seems to us that it is unfortunate that we have a federal government that has produced a series of targets nationally, we have a state government that is in the process of developing targets of its own—not very far advanced with that, but getting there—and the regions already did have targets within their own regions. It is just a missed opportunity to coordinate all three levels, if you like—regional, state and federal—so that we can agree on a set of common targets. Obviously it needs to operate at different levels. You do need national targets, but you also need state targets and regional targets. But those targets should be coordinated and they should be melded together. It is a question of scale. Obviously there are some things that only the Commonwealth can deal with because they are on such a large scale and this require huge investments, but I think, when targets are produced by both the Commonwealth and state governments, they should not really be in conflict with the targets the regions have produced. Personally, I feel it is a missed opportunity to have those targets synchronised and working.

Senator SIEWERT —There were two questions. There was one that was in my mind and another one that came to my mind and that is: are there targets that conflict? Then I will go to my next question.

Mr Heinzman —It is hard to say because the state government has not really produced any definite targets. The Commonwealth targets at this stage are still fairly broad and generic, not specific. I guess we will need to wait for the business plan before we find out how detailed those targets are. The targets that we have are very specific. We have had those for a number of years. Again, I think it is unfortunate that there was not more consultation on the targets that the regions had before putting into place broader targets.

Senator SIEWERT —That takes me to my next question around the investment plans. As I understand the process, each regional group now has a quite specific investment plan. In fact, some regions will be up to the second or third iteration, I expect.

Mr Heinzman —Yes.

Senator SIEWERT —What is your understanding of what happens to those investment plans now with Caring for our Country? Are they built on with the new process and you incorporate the new outcomes, or do you start again?

Mr Heinzman —I think when we see the business plan we are hoping that we will be able to still use part of our investment plan if they fit with the Commonwealth targets. But if there is a mismatch between those two, I would say that our investment plans are probably not of great value any longer. It just depends on how close a match-up there is, and we do not know that just yet.

Mr Hills —It would probably be a bit more circumspect. I think investment plans produce at the end of the day a series of plans and projects that you invest in as ongoing activities. As Colin said, we would hope that we have enough alignment that we can use those to move over against the new Caring for our Country national business plan. But it was the process that was as important, if not more important, than the final product of the investment plan. The process involved for us decisions on indicative allocations being made jointly by the Commonwealth and the state, us being informed, and we made indicative allocations to certain investment areas against matters for targets, as they were called then. Then there was a process of consultation and involvement and then scientific analysis. That process is now up in the air. We are not quite sure. As I think we said in our opening remarks, we have a feeling that we have gone from having some involvement in that and then that went up through an assessment process that could then be challenged and negotiated with some rigour to that. We now feel like we are waiting for a tender document to come out and we are responding to the tender. We are not sure how all that process that we did with both our community and other local scientists fits in.

Senator SIEWERT —That you are just service providers now; is that right?

Mr Hills —Yes, I suppose that is how we feel; we will just be responding saying, ‘Yes, we can do that. We can do that bit and that bit and that bit’, rather than being an active player in saying what it is that we should be doing.

Senator SIEWERT —Is it your understanding that you will need to put up matching funds still?

Mr Hills —That is not our understanding, no.

Senator SIEWERT —So no matching funds anymore?

Mr Heinzman —From the state government?

Senator SIEWERT —From the state government or from regional groups?

Mr Heinzman —From my understanding, there is not any requirement for that.

Senator SIEWERT —From anybody?

Mr Heinzman —No.

Mr Hills —No, we have not heard that.

Senator SIEWERT —One of the fundamentals of NHT was matching funds.

Mr Heinzman —Yes, NHT was matching.

Senator SIEWERT —My understanding is that you do not have to do that anymore; is that correct?

Mr Hills —Yes, that is our understanding.

Senator SIEWERT —What do you think that means for leverage of funds out of the state governments—and you lot as well? I am sorry, I should not just pick on the state governments.

Mr Heinzman —I think it has meant it is quite difficult. In the state budget the state government did allocate—drawing this from memory—I think over five years $125 million for NRM. That was the previous state government. We have a new state government. They did allocate in the current financial year $21 million and then for each subsequent year beyond that $26 million for the following four years. When the Commonwealth program was announced, and there were no matching dollars required, that $21 million was then open to regions to apply for and it was also open to government agencies. Government agencies have, in fact, made bids for quite large parts of that money. After all, it is state money, so you would expect government agencies to be involved in that. But I guess it was just a little disappointing to us because I think we had been led to believe originally that there would be funding for the regions. It has not yet materialised. There is a process currently in place for assessing a number of projects, and all of the regions have put in bids for those projects—for some of the state money.

Senator SIEWERT —This is for state money?

Mr Heinzman —Yes. So far that has not been allocated, because with the calling of the state government election that was all put on hold. We were very close to signing off on a number of projects for the regions, but that was put on hold and as yet we have not been notified of when that process will restart because I guess the new government is just working out how it wishes to spend that money.

Mr Hills —If I can choose my words very carefully, I think my experience is that some state government jurisdictions have a reasonably strong commitment to both natural resource management—the Murray-Darling Basin states obviously have that very strong focus—and some states have also a strong focus for regional delivery of their programs, not just NRM but others, health, et cetera. Other states do not necessarily have that strong commitment to NRM and they certainly do not have that strong commitment to regional delivery or involving regional communities. I suppose one concern is that, in moving to a more unilateral approach in the Caring for our Country, certainly in Western Australia, we certainly appreciated the pressure the Australian government brought to bear on the state government in bringing it to the table. I think if the Australian government had not brought the state government to the table we would not have been anywhere near as advanced as we are now in Western Australia. With that pressure off, it just feels like it is more a struggle for us to maintain both the commitment to natural resource management investment and to a regional focus.

Senator SIEWERT —In fact, that leads me into my next question. Having been involved in negotiations with NHT1 and 2 at both the state and regional level, one of the sticks that the regions had with the state and the state agencies was, ‘You have to talk to us to enable you to deliver these programs.’ It was a pretty big stick. Some agencies came, in my experience, to the table more willingly than others—and I will not name them. But it seems to me that regions have now lost some of their ability to talk to the states and to the regions to enter into partnerships but, secondly, to actually commit to NRM outcomes. Would that be a fair assessment?

Mr Heinzman —I would have to say that I think in the last 12 months there is a very good dialogue between the regions in WA and the state agencies because a number of things have happened. One was the re-establishment of a state NRM council. It is an 11-member body and it is chaired by Wayne Cox. Of those 11 members, the regional chairs make up six of those members, so they have the majority. There was another body set up as well after the Hicks report, and that is CONRACE, which is the Council of Natural Resource Agency Chief Executives. It has all of the key NRM agencies’ membership of that, which is about six altogether, and I think it is widening because other agencies want to join. The regional chairs meet quite regularly with CONRACE, but CONRACE always come along to attend the NRM council meetings. They cannot vote. They are just there as observers, but they do talk part in discussion. So it is ironic in that I think our relationship and our dialogue with the state agencies has probably never been better. There are personal relationships now with directors-general and we talk about all of these issues. But unfortunately it has not come through in the flow of funding. As I say, we did get close to that, but—

Mr Hills —I would say that we have seen improvements. I think partly it was the former government’s arrangements that brought us to that state. As senators probably know, the government is a quagmire of different cultures. You go from one department to another department and you will get a completely different culture. Some of the cultures will continue to work with regions, as they always have; some will see the opportunity as being fantastic, ‘We don’t have to engage with regions and community anymore. We’ll get back into our silos and our bunkers and do what we were doing before.’ That is probably a little disappointing, seeing, as Colin said, how far we had gotten.

Senator SIEWERT —I need to get to the inevitable question. There are all sorts of stories all over Australia about how many staff regional groups have lost and what the new management arrangements mean. I am actually keen to establish what the facts are.

Mr Heinzman —Speaking for the Perth region NRM, I think the period leading up to 1 July this year was a very worrying time because we were not sure when the funding would be announced. I think that we were in danger of losing staff. But with the Commonwealth funding being provided for this interim year that has solved that problem in the short term; in fact, we did not lose any. We did lose some staff but they were replaced, so in fact we have managed to maintain our core functions, which I will give credit to the Commonwealth for. That really did save our situation in that regard. But before that was announced it was looking rather dire. I think it is just a consequence of the stop-start nature of the funding in NRM. People tend to be on short-term contracts. Those contracts are coming near to their end and we just have to wait until we have the next round of funding announced before we can continue with the next round of contracts. I think it is a little ironic that several years ago we were promised at the federal level there would be no more transition years. At the Sydney regional chairs meeting of 2006 that was the No. 1 thing that came out of that meeting, that would be no more transition years. But we ended up with a transition year the following year. It is just the nature of the business.

Senator SIEWERT —To be fair to government, it is a bit hard for a previous government to actually commit a new government to that. That is probably not a promise that the government could keep.

Mr Heinzman —That is correct, yes.

Mr Hills —In answer to your question, for us, once again, due to a significant carryover from the national action plan and the Caring for our Country transitional arrangements, we have not lost any positions this year. However, I have 25 per cent vacancies at the moment. We are getting significant turnover because of the same reasons. Ironically, we need the experienced staff to help us wrap up the old program, do the monitoring and evaluation, the audits, et cetera. They are all leaving and I am getting new, young, fresh faced staff, which is good at the beginning of a program, and so that is having some significant problems for us. However, after saying that, in our forward estimates—and we are still waiting for core funding and indicative allocations from the ministers, this month hopefully—we are expecting somewhere between a 40 per cent and 75 per cent reduction in cash flow to our regional group, which would accordingly lead to somewhere between a 50 per cent and 75 per cent reduction in staff.

Senator SIEWERT —That is next financial year?

Mr Hills —That is next financial year.

Senator SIEWERT —I am sorry, what per cent reduction in staff?

Mr Hills —Somewhere between 50 per cent and 75 per cent.

Senator SIEWERT —Is it okay if I keep going, Chair?

CHAIR —Senator Adams, do you have any questions?

Senator ADAMS —Yes, I have lots.

CHAIR —I think your colleague might want to some of the time that is left.

Senator SIEWERT —Yes, okay.

Senator ADAMS —I will just continue along that vein. I come from Kojonup, so I am fully aware of how the south west council works. So I will continue on that. How many staff do you have at the moment?

Mr Hills —We have 21 positions, of which 17 are full at the moment.

Senator ADAMS —As far as your subregional groups go, there has been quite a lot of criticism about your council really not providing the role it should be providing. Earlier with the professor I raised the grassroots input into these projects or any of the programs being successful. You would be aware that there are a number of groups that are very disillusioned with what is going on.

Mr Hills —Yes.

Senator ADAMS —Farmers of course, with farms getting bigger, everything is just becoming a critical component of trying to keep your head above water. This whole program seems to be concentrating more on regions rather than the subregions and going further up, and these people are being left behind. Community goodwill is going to disappear. Could you comment on that?

Mr Hills —Yes, that is quite true. I think, just by way of history, one thing that the committee may need to understand is that, at least for my region, it is quite clear that we were a construct of the state and the Australian government, so we were not a natural region like many of the regions in the eastern states nor Swan and other regions. We were a conglomerate of smaller groups to start with and then along came NAPP and NHT2, and so the Swan catchment council was born. We have operated within that framework that was given to us. But it is interesting you should raise these comments, because just at the full council meeting last week the council commissioned a review to look at the future of the South West Catchment Council and its subregions and to look at all of the options available to it, which may mean restructure. At the very least it will probably mean a restructure of the way the council and the council office works. In its largest sense, it may mean restructuring the subregions or we may see the whole region restructured. There has not really ever been an opportunity, as far as we have seen, for the actual community to have its say in terms of the regional structure for the southwest. It has been something, it is felt, that has been imposed from the top. We really see this as our first opportunity. Ironically it is the chaos of the interim transition year. We do not believe that Australian government officials or state government officials would ever have considered a restructure in the southwest under the old NAPP NHT arrangements, because our region was actually in the intergovernmental agreement and the bilateral. There is a bit of a window of opportunity for us to have a really good look. The subregions are obviously the major groups involved in that. But at the other end of the extreme we also acknowledge we have some very small subregional groups that probably would not have the capacity or size to operate to the level of governance that is now required by state and Australian governments in NRM. That is the other end of the thing that we are trying to balance. So, yes, it is probably an opportune statement, because it was just Monday that we decided to do this major review.

Senator ADAMS —That is great. Later on, when the review is finished, would you be able to forward it to the committee?

Mr Hills —Yes, absolutely. In fact, we are leaving comments and suggestions open to the entire community, particularly those local land care farming groups. I will be honest and say that I think there has been a level of disenfranchisement in our region because of the size and complexity of our region. That is one of the issues we will look at.

Senator ADAMS —The next question is: how would you feel if the regions were actually expanded?

Mr Hills —Made larger?

Senator ADAMS —Yes.

Mr Hills —So that the total number in WA would be reduced?

Senator ADAMS —Yes.

Mr Hills —No, I do not think we would support that. If you look at Western Australia, Victoria has 10 regions with about one quarter of the landmass, I think New South Wales has 16 regions, Queensland has 17 plus one or is it 16 plus one, including Cape York, and we have six and Rangelands is larger than any other state. While Western Australia’s population obviously is an issue, if you get to a size where you disenfranchise the community totally you may as well just get rid of regions and have agencies run the show, I think, if you get too large. That is part of our issue. We have such a diverse community of interest from the Peel-Mandurah strip, which can be seen as an extension of the Perth-Mandurah area, to the Augusta, Blackwood, Warren, Karri Forest out to Kojonup and further out to Coolan and Dumbleyung. Trying to bring together those disparate communities, as government would know, is difficult. I do not think from our perspective that we could—

Senator ADAMS —The reason I asked is that area consultative committees now are being looked at. We have nine. Obviously with the latest work that is being done, they are going to be reduced. That was the reason I asked the question. Once again, regional input is going to be cut down.

Mr Hills —That may work, because I know we have two major area consultative committees and parts of three that cover our area to date. They are a lot smaller than us. The SWACC, South West Area Consultative Committee, just covers the—

Senator ADAMS —I know where they go. But when you look at the great southern being combined with the southwest, those are the sorts of things could happen. I just wanted your opinion on whether you think that there would be any flexibility in making them larger rather than smaller.

Mr Hills —I think that would be very difficult for us. I do not know about for others.

Mr Heinzman —I think it would end up creating more tension within a region because you would have the same issue but magnified with subregions. Speaking for our region, I think that our region is geographically very small but obviously has a very large population. We do have subregions. They are all very different. But we have established a system of reference groups. Each of our subregions is a member of a reference group that advises our board, and the reference group is made up of community groups within the subregion together with local governments, and we meet on a regular basis, usually about once every six weeks. There is good dialogue between our board and with the subgroupings.

Senator ADAMS —We had a number of Nyungar groups earlier as witnesses. Do you have anyone from those groups on the south west council?

Mr Hills —We do not have a representative, we have a community member who has knowledge of Nyungar issues. That is the wording in the constitution. Because representation becomes a difficult issue with groups.

CHAIR —But not a Nyungar? I am sorry to interrupt.

Mr Hills —No, he or she does not have to be a Nyungar. In this case it is. It is Ted Hart, who is the chairman of the South West Aboriginal Land and Sea Council. I am the interim member until the process resolves who that will be. So we do, yes. We have a reference group. Unfortunately we have only managed to get membership from two of the four working groups at this stage on that reference group, but we do have a really good working relationship with the local working parties.

Senator ADAMS —Just coming back to these subregional groups, what do you see your role with the new Caring for our Country being with those groups at the moment?

Mr Heinzman —Do you want me to start?

Mr Hills —Why don’t you go, because I am a very complicated region.

Senator ADAMS —That is why I am asking. Mr Heinz can speak first, but you are still right in the firing line there.

Mr Heinzman —As I mentioned before, we do have subregional reference groups. We use them to provide strategic advice to the board on NRM issues in their particular subregion. We keep them up to date with all of the information we receive for Caring for our Country and we discuss what the significance of those targets is for their subregion and they provide advice to the council, to the board of the NRM region, to advise us on where the money should be invested and strategic places to invest it.

Mr Hills —Our six subregional groups actually are wholly independent from the South West Catchment Council. We are probably a unique model in Australia in what is often referred to as the federated model. But I think recently we have realised that is not a good description. The way I have described it recently is that we are a wholly owned subsidiary of seven independent organisations. The South West Catchment Council was created as an overarching body for those six independent groups.

The theory is that the role of those groups is to engage community at the coalface, the local land care groups, et cetera, and the South West Catchment Council was the strategic investment planner, the conduit to Commonwealth and state funding, et cetera. I think reality has dawned on us over the last few years that the new demands of governance, particularly coming from treasuries and finance, are well beyond what we thought. Basically, if you accept one dollar from government now you have to have all the accountability mechanisms that government requires. It is very hard to do things on the cheap in terms of funding. Then we have the subregions. Now we also have those same governance levels requirements to us, because it flows down the chain. That is part of what has triggered this review. We are certainly looking at the new funding environment, which is going to be drastically reduced for the South West. We have no doubt about that. We are saying, ‘How do we manage this?’ Effectively, we have seven independent groups with seven governance structures and seven accountability and corporate structures. Is that the best model for delivering NRM in the southwest, because it may no longer be the best model for delivery. I am not going to pre-empt my council or the review in terms of what the options are, but basically both I and my chairman made it very clear to our council, which is 21 people, the majority of which are subregions, that we have to go through some major structural change because we do not believe the current structure will work into the future.

Senator ADAMS —How are you working with local governments? Are you keeping them in the consultation line? What are you doing there?

Mr Hills —We attempt to. We have 33 local governments in our region. Relatively, we are a small organisation. We have a dedicated officer, who is not full time, to local government. We do have a relationship usually at the CEO level or sometimes at the environment officer level from our office. Then the more formalised means of engagement with local government is through WALGA. We have four local government representatives appointed by WALGA on our full association. Through things such as the zone meetings—they are the larger collections, as you would be aware—we try to get regular updates to the local governments.

As to the other major mechanism we have used, predominantly in the past our local land care facilitators have been employed by the local land care groups, and one of our major changes we moved to about two and a half to three years ago now was to try to encourage local government to employ those. It has a two-fold effect. It gives those local land care coordinators more stability, but it was a mechanism for us to try to improve our engagement with local government, at least at the staff level. In some areas it has been really successful.

Senator ADAMS —Are they still employed, most of them?

Mr Hills —Yes. My councils know that the No. 1 priority for employment, and above even our staff, in our office is our local land care coordinators. We call them local NRM officers. That is the No. 1 priority for ongoing investment.

Senator ADAMS —With the new model, some of these subregions decide that they have a project that they really want to push forward and your council disagrees; it says, ‘No, this is more important and that’s more important.’

Mr Hills —Yes.

Senator ADAMS —We know that their accountabilities become far more difficult and also that they do not have project officers or do not have any funding to employ project officers to get submissions up.

Mr Hills —That is correct.

Senator ADAMS —Is there any way that your organisation helps them or is that not part of your role?

Mr Hills —That is still to be determined. We are not sure. That is really up for my council to make a decision about what it wants to do in the competitive area. They are keen for us to not internally between the seven of us start competing against each other, but there is nothing in the new system that prevents that. In fact, it encourages competition.

Senator ADAMS —It does.

Mr Hills —We provide direct core funding to our subregions. There is a bit over half a million dollars across the six of them. At this stage that will not be changing. There is capacity there to use those funds to attract other funds. What happens when the whole council, which includes the collective, disagrees with an investment I am not sure. I am actually dreading the day. I really do not know. It is part of one of the other reasons for agreeing to this review for us. We are unique in that way. No other region would probably have that occur. That could possibly occur with us and we could be at cross-purposes or doubling investment. It is a concern for us.

CHAIR —Senator Adams, do you have some questions that you wish to put on notice?

Senator ADAMS —No, that is all right. It is the review that I am really looking at.

CHAIR —Senator Siewert, do you want to put some questions on notice?

Senator SIEWERT —What I am particularly keen to look at is whether you could give some thought to what happens if your region or any region is non-competitive if they put up a bid for Caring for our Country funds? Does that mean a region is then operating with core staff with no project funding? Is that an issue? Has it been discussed with the Commonwealth? Has each of the regions looked at what happens if it is not competitive? In particular I am thinking about your having to compete with a government agency. As I understand it, that is a very real possibility, if the state agencies will be competing for those funds. What does that then mean for what we have all been working on for the last how many decades in terms of community development, community engagement, et cetera?

Mr Heinzman —That is an important issue. As to the Caring for our Country program, when it was announced there would be a competitive bidding process, one of our concerns was that we would not have sufficient funding to employ sufficient staff to apply for the competitive bidding. It is a catch-22 really. If you lose your funding, you lose capacity to apply for funding and therefore you enter into a spiral downwards. We could foresee that. In fact, the regions as a group discussed that on a number of occasions. We have been criticised in some quarters for maintaining staff, and that has been possible with the interim transition year funding for Caring for our Country. If we had not had that funding, then we would have had to reduce drastically and therefore we would not have been in a position to apply for the competitive bidding. Your question is asking what happens in the future if we are not successful. We lose funding and we lose staff. Are we to hope that the relationship with the state government is sufficiently good now that, if there were bids being put up by government agencies it would be in cooperation with the regions? It is a difficult question. One thing that I guess all of the regions would like to see is that a larger amount of that funding does come through the regions rather than government agencies or other bodies. But in an open and competitive process and where anyone can apply I guess that is asking a bit too much. But certainly one thing that we see as a danger is that we would lose capacity quite quickly without the funding and then in a competitive environment, once you lose capacity, you are not able to get yourself back up to apply for funding in the future. There is a danger for us. I recognise that.

CHAIR —Senator Siewert, do you want to put anything on notice?

Senator SIEWERT —No, that is fine.

CHAIR —Mr Heinzman and Mr Hills, thank you very much for your time.

[12.55 pm]