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Natural resource management and conservation challenges

CHAIR —Welcome. I remind senators that the Senate has resolved that an officer of a department of the Commonwealth or of a state shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of them to superior officers or a minister. This resolution prohibits only questions asking for opinions on matters of policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. Officers of the department are also reminded that any claim that it would be contrary to the public interest to answer a question must be made by a minister and should be accompanied by a statement setting out the basis for the claim. In case my mother is listening, which I very much doubt she is doing—she would slap me if I dared to go to a male before a female—I would ask, ladies, whether either of you wishes to make a very brief opening statement before we go to questions. If you do not wish to do so, I will ask that question of Mr Thompson.

Ms Colreavy —Thank you, I will do that. Firstly, the departments welcome the opportunity to lodge their submission with the Senate committee. We would just like to remind you that we are representing a unique arrangement, with both the Department of the Environment, Water, Heritage and the Arts and the Department of Agriculture, Fisheries and Forestry sharing responsibility for delivery of the Australian government’s environment and sustainable agriculture programs. Traditionally, these programs have been referred to as NRM, or natural resource management. The particular program on whose delivery we are now focused is Caring for our Country, which commenced just this year on 1 July, with initial funding of $2.25 billion over five years.

The Australian government is committed to protecting Australia’s unique natural environment and improving land management across the country. Caring for our Country is the program for that delivery. It has one clear goal: an environment that is healthy, better protected, well-managed and resilient and that provides essential ecosystem services in a changing climate. There are a number of aspects to the delivery of Caring for our Country. We are in a transition year this first year. Regional NRM groups will continue to receive funding from the Australian government to assist them in delivering on natural resource outcomes. In this model of delivery, we are also pursuing ongoing partnerships with the states and territories.

The Australian government continues to support Landcare activities. Landcare is one of the six national priority is for investment under Caring for our Country under the banner of sustainable farm practices. More than $189 million is available to support Landcare activities in the first five years of Caring for our Country. As I mentioned, this year now, 2008-09 is a transition year. Some of the key features for this year’s delivery are that we have commenced all of the 2007 election commitments that were considered a part of Caring for our Country. Regional bodies are already commencing implementation of investment strategies to contribute to the national priorities under Caring for our Country whilst they move to our new delivery arrangements. Urgent works on national priorities are being funded whilst more comprehensive and strategic decisions about investment are being done during this transition year. We are also developing new program support, administration and evaluation mechanisms for the new program. All of that is being done through the transition year.

Mr Thompson —As we have said, this is a transition year and we are moving into a new program. We are designing this program around delivering on national priorities and agendas that have been identified. A set of national outcomes was recently publicly released and we expect to shortly be releasing a business plan. A business plan will act as a prospectus for all in the community: regions, industries, local governments, states and others to bring forward projects that address our targets. The process will be more streamlined. They will only have to make one application of whatever scale they are proposing. All the proposals will be assessed against the same set of targets. We will be able to look at them in terms of value for money, delivery against the target, suitability and the range of delivery agents they are using.

As we have said, we can still work with regions. The regional model has been in place for some time. They are working towards scientifically based plans. Those plans will still be very valuable resources for informing delivery on the ground at that detailed level and the regional network is still to be supported. Community groups, Landcare groups, Coastcare groups will still be able to participate either as part of consortia in their own right or underneath the aegis of a bigger body. We are working in a complementary way with the states and have been engaged in discussions with them as to some of their priorities and the program shape. Discussions in that area will continue.

The program really only came into effect on 1 July, so we believe it is probably too early to assess changes that may be attributable to the new funding arrangement, particularly as arrangements in this transitional year have been interim and will not all continue into the future. It will only be after a life cycle of change and change in some of the delivery agents and focusing the program onto the targets and outcomes that we will be able to make a full assessment of the program’s effectiveness. Part of our program is a quite comprehensive monitoring evaluation and performance improvement framework which we will be rolling out as part of every project and every program.

Senator HEFFERNAN —Can you tell us what you mean by that statement? That was meaningless bureaucratic jargon. I think that you are engaged upon a bureaucratic nightmare, with great respect. I do not think the average punter will have any idea of what that means. I think Landcare was a great educational operation for blokes like me, for farmers. If in 1950 you had told me what you thought about my paddock I would probably have hunted you off the place with a rock. Now we welcome you onto the place to understand what is happening to the land. What went wrong with Landcare was we ended up like volunteer bushfire fighting, spending too much money on administrators’ cars, forums and computers. You cannot get money for the planting of trees now. It is very difficult. Can you assist the committee by giving us an idea under this new plan what proportion is going to go to fixed administrative overheads?

Mr Thompson —I cannot give you a definitive answer at the present time.

Senator HEFFERNAN —Why not?

Mr Thompson —Because we know how much fixed administrative overheads we have—

Senator HEFFERNAN —I realise how you can—

Mr Thompson —but the way the program will operate is that proposals will come in from regions, committee groups and others and how much is—

Senator HEFFERNAN —This is bullshit.

Mr Thompson —But what we are doing is targeting for the substantial majority of the money to go to projects on the ground. Some of those might be tree planting; some of them might be extension activities; others might be remedial works. There will be a range of things. For example, we are not intending to have new bureaucracies created anywhere; we would like to use the existing structures that are in place.

Senator HEFFERNAN —I am aware of how you can allocate in a bureaucracy costs from one bit of it to another. Surely when you built the plan you said, ‘We will try to get three-quarters of the money out on the ground or we will get a quarter of it out.’ The model that you use to present what I thought was just bureaucratic jargon must have in it an allocation in the business plan of how much money is going to hit the ground.

Ms Colreavy —I could answer there. It does vary a little bit depending on who the delivery agent is as to how much is taken for administrative costs—

Senator HEFFERNAN —When you—

Ms Colreavy —but as a general rule of thumb with our NRM regional bodies it is between six per cent and 12 per cent that is taken for administrative costs.

Senator HEFFERNAN —Can you give us the modelling that you have allowed yourselves to have to present this program to the people of Australia. Can we see the modelling?

Ms Colreavy —I am not quite sure I understand the question, I am sorry.

Senator HEFFERNAN —If the government in its wisdom says, ‘Here is $100 million to go and do this program’, you must have presented some figures to the government that said, ‘We need $100 million.’ If you have done that you must say, ‘We want $10 million for this and $5 million for that.’ Have you thought about it?

Mr Thompson —What we have thought about which we do know about is it is a $2.25 billion program over five years. For administration at the national level we expect that to cost around $196 million.

Senator HEFFERNAN —Sorry, you are not going to get away with that. I am talking about the administration at all levels. What has gone wrong with Landcare is that where there was a region and a whole lot of enthusiastic Landcare groups you ended up with a whole lot of bloody administrators driving around in cars. It is a ruined program. What is actually going to happen from the top to the bottom in the administrative plan of this NRM? There must be a plan.

Ms Colreavy —As I said, generally between six per cent and 12 per cent is taken by NRM bodies for administrative costs from the allocation -

Senator HEFFERNAN —At a local level?

Ms Colreavy —At the NRM regional level, not—

Senator HEFFERNAN —I want to know about from the top to the bottom; surely you must know that?

Ms Colreavy —You do not know that in advance.

Mr Thompson —What we do know is, as I said, there is $196 million at the national level. There has been an indication that will provide guaranteed funding of the order of $711 million over the life of the program to regions. Of that amount, as we said, somewhere between six and 10 or 12 per cent would go to regional administrative costs, so we know that much in advance. What we do not know is the bulk of the funding that will be coming in in response to the business plan; it may go to regions which, again, there would be six or 12 per cent. If it goes directly to some smaller bodies they may have different administrative overheads. They could be lower. But what we do not know with some of the other bodies who might be participants is what level of administrative overhead might be built in.

Senator HEFFERNAN —The whole thing is a ‘pig in the poke’ plan, if you know what I mean, because it is higgledy-piggledy. Some good work happens over there and further up the valley or over there, it is a nightmare. I do not know what the 2007 election commitment was. I have enough to worry about. I am worrying about breast cancer genes at the moment. How much of the future science is in how you are going to allocate the plan? The future science is telling us certain alarming things. Are you allowing for that in the expenditure of this budget? Are you saying, ‘This is going to be a hot area’?

Mr Thompson —I cannot go much further in what we are doing on administration, but in terms of where activity is targeted on the ground, the aim of this program is to be able to look at strategic issues from a national point of view and we have identified some priorities.

Senator HEFFERNAN —Can you give us some details of what you have identified?

Mr Thompson —Not at this stage.

Senator HEFFERNAN —Have you got the details of what you have identified?

Mr Thompson —It will come out—

Senator HEFFERNAN —It is all in someone’s head somewhere but not on paper?

Mr Thompson —No, it is not in our heads. It is being worked on to come forward—

Senator HEFFERNAN —Have you released a prospectus?

Mr Thompson —We have not got it in a finalised state yet.

Senator HEFFERNAN —You have produced a budget for something that you do not know what the plan is for?

Mr Thompson —We have got an indicative budget for next year. What we are doing now is working out the priority areas in which we would like to invest money—

Senator HEFFERNAN —To assist—

Mr Thompson —One example could be where it was identified as an election commitment and it also comes through in our analyses is that things like protecting the Barrier Reef is an issue of national importance, and we want to target those areas in the agricultural hinterland where there are major sources of nutrient and sediment loss to the reef.

Senator IAN MACDONALD —Are you taking money out of the NRM bodies to fund the Barrier Reef?

Ms Colreavy —Those funds are being provided through the NRM bodies relevant to the reef. They are being delivered—

Senator IAN MACDONALD —They have been taken out of their programs and put into GBRMPA’s programs?

Ms Colreavy —No, it is being delivered through the NRM bodies in Queensland.

Mr Thompson —The Reef Rescue proposal was $200 million to go forward with a proposal by the regions and industry bodies.

Senator IAN MACDONALD —I want to go through this in some detail in estimates next week. Now is probably not the right time.

Senator HEFFERNAN —Can I just say with great respect I do not think you blokes have got any idea where you are headed. Have you read the science for the future of the country that this plan is going to apply? Have you read the science or are you just bureaucratic administrators? Do you know what the science is telling us about the future of the land mass of Australia?

Ms Colreavy —I inform myself and I take advice from staff. We have scientific advisers—

Senator HEFFERNAN —What is your snapshot of the change in the landscape over the next 50 years from what you have gleaned from your officers? Tell me what you think is going to happen to Australia? You have got no idea, have you? Mr Thompson, have you got any idea?

CHAIR —If you are going to start personal attacks on Ms Colreavy—

Senator HEFFERNAN —No, this is not a personal attack. This is—

CHAIR —Put your questions towards the inquiry—

Senator HEFFERNAN —We want the people giving advice to the government to know what they are talking about.

CHAIR —I would urge you to target your questions to the inquiry and not make personal attacks on Ms Colreavy.

Senator HEFFERNAN —This is to the inquiry because this is about the future national resource management of—

CHAIR —I have asked you to re-word your question.

Senator HEFFERNAN —Anyhow, the answer is no. You know me. None of this is meant in a bad way, but I would like to display a bit of passion about the thing. I am really concerned—

CHAIR —I am sure you will catch a lot more flies with honey.

Senator HEFFERNAN —All of that. I am really concerned that there is no connection between the future science, the political aspirations, the election commitments and the money that is available. As Senator Macdonald says, we are worried that this is not just a pass the parcel exercise which has got the world into trouble with financial instruments. I want to know where you get your future priority from. You said that you were going to have a priority of the spend. You must have a plan of what the priority is. Can you give us the plan? I want to know whether it is on the declining run-off in the 38 per cent of the landscape from the two per cent of the landscape in the southern Murray-Darling Basin, the encroachment of the desert sand somewhere, or what seems to be the devastation of the Riverina. Is there a plan?

Mr Thompson —There is a plan—

Senator HEFFERNAN —Who has it?

Mr Thompson —It is made up of a combination of activities. We will be releasing our detailed prospectus for Caring for our Country in the coming weeks which will spell out in more detail the priorities, the strategies and the science behind where they have come from. At the present time the priorities that we have identified and the outcomes we want to achieve—

Senator HEFFERNAN —Thank you for being patient, by the way.

Mr Thompson —This is based on an assessment of where some of the most valuable assets for the Australian environment and Australia’s natural resources are and an assessment of the threats to them. The one thing I would need to say is that Caring for our Country has a number of objectives. It does not cover every objective related to the resources or natural environment. Climate change has a major impact which—

Senator HEFFERNAN —To put the thumb on it, how did you do that assessment?

Mr Thompson —The assessment was done in consultation with scientists, including those from—

Senator HEFFERNAN —Could you present us with the modelling for the assessment?

Mr Thompson —We could—

Senator HEFFERNAN —Because that is a bold statement, that you have done the assessment. We would like to know how you actually arrived at the end of the journey, or where you began from, where you think you are going to and what is the modelling on the line of the assessment. How did you do the assessment?

Mr Thompson —There is not such a detailed assessment that leads from, ‘Here is a national threat and here is the answers at point X.’ We have had discussions with a range of scientists in the field, come to a consensus about the broad nature of the threats and then translated that into things that might be able to be done by way of a project.

Senator SIEWERT —What modelling did you use for that? What process did you use? You will be aware that we have taken evidence from David Pannell. The INFFER project, which is built on the SIF project, is actually a systematic approach to making these decisions. Did you actually use that process? What process did you use that you can show us that takes us through the steps of your decision making process?

Mr Thompson —We have had discussions with David Pannell and a range of other scientists in this process. We have not implied INFFER or something like that at the national scale.

Senator SIEWERT —Why not? Where can you show us the steps that demonstrate that you are actually doing this now in a better way than it has been done previously, because at the moment I can see nothing?

Mr Thompson —The sort of approach that David Pannell proposes will be built into how we are going to assess the actual projects on which we spend money. What I was saying was that in terms of identifying the priorities at a national level to say that biodiversity is an area that we would like to achieve some outcomes in; we want to create some national reserves; there are Ramsar wetlands we want to protect and there are areas of Australia threatened by dust, wind or soil erosion from water, that sort of macro-scale priority setting was based on a review of where we had national responsibilities or national priorities. For example, we have undertaken international obligations to protect Ramsar wetlands. We have got some international obligations under the EPBC Act relating to endangered species or endangered communities, and we focused attention on them with stewardship, or whatever. The Great Barrier Reef stands out as a world heritage site. At that level we have based it on national priorities and responsibilities. When we come down to the level of where we will spend money the sort of process that Dr Pannell promotes is something we would be building into the assessment process, looking at what is the asset that this proposal might be able to protect, how valuable it is, compare it to others; is the mechanism that is being applied something that may or may not work; that sort of thing. It is a slightly different scale.

Senator SIEWERT —As I understand it from talking to Professor Pannell last week you can actually apply this INFFER at all levels. Where I am at now is how do you make the decision then about the level of investment across these outcomes? How are you going to make a decision about what proportion of the money is put in for biodiversity and what is put into Ramsar, which might fit under biodiversity anyway, for example? How is it envisaged that you will be making those decisions?

Mr Thompson —At the highest level quite a number of those decisions were made by government. For example, the minimum amount of money to be spent on sustainable agriculture derives from funding that has been moved into Caring for our Country from the old Landcare program.

Senator SIEWERT —I must admit I cannot remember. I did not bring the piece of paper in with me with the old figures on Landcare funding. Sustainable agriculture is all the Landcare funding base—

Mr Thompson —No. Sustainable agriculture is for Landcare part funding plus perhaps a little more where sustainable agriculture might be something that can contribute to outcomes that go beyond the farm. For example, sustainable agricultural practice is going to be very important for contributing to outcomes on the Barrier Reef, and that is not Landcare funding.

Senator SIEWERT —Wasn’t it $200 million that was promised as additional money for GBR?

Mr Thompson —Yes.

Senator SIEWERT —Is some of that money going to be held under a special GBR line item because that is one of the government promises which I understand you said earlier you have started spending on?

Mr Thompson —The $200 million for the Barrier Reef will be an item that will be separately tracked.

Senator SIEWERT —That does not go into the $189 million that is being spent on sustainable agriculture?

Mr Thompson —The $189 million on sustainable agriculture is the money that has come from Landcare for sustainable agriculture. Money that might go through the Barrier Reef for sustainable agriculture would make that $189 million bigger.

Senator SIEWERT —This is where I am really having trouble tracking where you are spending money which, as I understand it, you cannot answer. Please correct me if I am wrong, when Senator Heffernan was asking you a question about the budget you said there that the indicative budget you have got for this financial year, which as I understand it is the transition year, or is it for next year?

Mr Thompson —The transition year is this financial year, the one we are currently in.

Senator SIEWERT —Could you please go through and tell us the financials that you actually can? Through the various estimates processes we have not been able to get a good handle on where the money is going and for what outcomes money is being allocated.

Mr Thompson —Ms Colreavy will do that. One point I would make is that one of the complications is that certain sorts of activities can lead to multiple outcomes. If we use the Barrier Reef for example, if you do some work on a farm that is a good, sustainable agricultural practice it can reduce nutrients in the reef, so it is a good water quality outcome but it is also contributing to the overall health of the reef so it is a good world heritage outcome. One of the complications is whether you look at it from the funding source perspective, or the outcome perspective. We are trying to keep track of it both ways.

Senator SIEWERT —I accept that but what it is doing at the moment is making it impossible for us to actually get a good handle on where money is actually being specifically spent under which program.

Ms Colreavy —For 2008-09, the current year, we have an allocation of $30.74 million against the national reserve system and Indigenous protected areas combined, so that is the comprehensive adequate and representative reserve system.

Senator SIEWERT —How much is going into IPAs?

Ms Colreavy —Five million dollars and $25.74 million into the NRS. The allocation under the broad heading of biodiversity and natural icons is just under $29.5 million. The allocation for coastal environments and critical aquatic habitats is $65.1 million. The sustainable farm practices budget is just over $37 million. That includes Landcare and some other related sustainable farm practice activities.

Senator SIEWERT —This is where I start getting confused.

Ms Colreavy —The Landcare component of that is $31.23 million and then we have an additional budget of $5.8 million for some other related supporting activities.

Senator SIEWERT —What does that mean?

Ms Colreavy —There is a variety of things that can be done. We are trying not to be really prescriptive because some of these funds are going to people against applications through open grants, so it has not actually been determined yet exactly what they will be spent on, but they are things that will be considered to be contributing to the overall priority for sustainable farm practices. It will be about best practice farm management and land protection. It might be weed control. It might be pest control. It might be fencing riparian areas on properties. It could be a variety of things.

Senator SIEWERT —I do not want to distract from getting the other figures, but that leads me to the open grant funds. Can you remind me how much has gone into the open grant funds, which I understand are currently being assessed?

Ms Colreavy —Yes, $25 million.

Senator SIEWERT —Where does that money come out of?

Ms Colreavy —It comes out of the overall budget so it will come from various parts of this. I am giving you the broad breakdown by programs by type. I will finish that and then we can talk about open grants if you like. We have allocated $20 million to community skills, knowledge and engagement as another broad national priority area. There is $159 million which has gone to support NRM bodies. I am sorry, not to support them but to fund their activities on the ground. That is a base level funding. They are also able to apply for other funds.

Senator SIEWERT —This is the 60 per cent?

Ms Colreavy —Yes; it is more than 60 per cent. It works out to about 88 per cent.

Senator SIEWERT —Does it not vary for various groups, as I understood it when you explained it?

Ms Colreavy —Yes, an average of over 70 per cent has gone to regional bodies, an average of more than 70 per cent of what their average funding was previously.

Senator IAN MACDONALD —The $159 million goes directly to the NRM body but you are also saying, for example, they would be eligible to apply for the $65 million that you have mentioned previously for some coastal work?

Ms Colreavy —Yes. Some of them are getting initial money through Reef Rescue and through other bits. There is a bit less than $54.5 million is going to administration. That includes the overall program implementation as well as monitoring and evaluation.

Senator SIEWERT —Okay, $54.5 million is going to the overall administration?

Ms Colreavy —Yes.

Senator SIEWERT —Is it possible to get a breakdown on what that is being spent on? For example, I am aware that under NHT there was a lot of departmental work over the years that was put into NHT funding. What I am keen to know is how much of that has been continued on and how much has now gone back into CRF, or whatever you call it these days, but you know what I mean? How do we know what that $54.5 million is being spent on?

Ms Colreavy —That is paying for the cost of running our division of our joint team.

Senator SIEWERT —It purely pays for the cost of running the joint NRM team between the two departments?

Ms Colreavy —That is right. And our IT and our communications work which is part of the joint team, yes, and for launching an evaluation program.

Senator IAN MACDONALD —Is that an increase or a decrease?

Ms Colreavy —That is a decrease.

Senator SIEWERT —How much of a decrease is it?

Ms Colreavy —I would have to come back to you. I remember when we did the original budget I knew that but, I am sorry, I do not have that figure. I could provide it.

Senator IAN MACDONALD —You might gather from this that this will be raised next week at estimates, too, so if you are coming back here please have it for estimates.

Ms Colreavy —Okay.

Senator IAN MACDONALD —I assume we will have more time then to try to work out what all these figures mean.

Ms Colreavy —I have one more budget line. We have a range of other costs. You referred to some costs that were spent elsewhere in the department before. Again, that has continued through this transition year so we have some other program delivery costs through the department of $32.4 million, which includes costs of EPBC and some other biodiversity and support costs within the department.

Senator SIEWERT —I think you should take on notice similar to what Senator Macdonald has just said; I want to know what specific programs are being funded under this program. Also, were they continuing on from programs under NHT?

Mr Thompson —We can take that on notice.

Senator IAN MACDONALD —You said $32.4 million?

Ms Colreavy —That is right.

Senator IAN MACDONALD —I was talking. Is that part of the $54.5 million, or—

Ms Colreavy —It is additional to.

Senator IAN MACDONALD —It is a total of $86 million that is really for administration?

Ms Colreavy —It is not just administration. It is program delivery as well and support—

Senator IAN MACDONALD —What is program delivery if it is not administration?

Mr Thompson —Some of the projects are things like some of the money goes to consultancies, some of it goes to—

Senator IAN MACDONALD —What are consultancies if not—

Mr Thompson —particular pieces of analysis designing monitoring programs—

CHAIR —Sorry to interrupt. Senator Macdonald, you will get your turn. Can we go to Senator Siewert and then you can have an unfettered run?

Senator IAN MACDONALD —Sorry, I just missed that.

Senator SIEWERT —We are all trying to find out the same info. In relation to the NRM bodies, one of the issues that you are obviously aware of is that there is a great concern by NRM bodies about their future and what role they are going to be playing.

Senator IAN MACDONALD —Absolutely.

Senator SIEWERT —In your submission you quote on page 7 the ANAO report. In that you say:

The departments accepted the ANAO’s four recommendations, as outlined in its report and these recommendations have been taken into account in the design, and implementation of Caring for our Country.

Then it says:

The rationale for regional delivery was to be more strategic and results focused at a regional scale.

It goes on  to say:

Given the scale of the NRM challenge across Australia and past experiences, it was a reasonable model in the circumstances.

You are saying you support those recommendations. How are you implementing those recommendations? Does that mean you think regional bodies have had their day?

Ms Colreavy —I think it needs to be remembered that the ANAO report was undertaken last year, when the work was being done under the previous government in the light of the NHT. The review was undertaken in 2006 and the department’s responses were developed throughout 2007. The decision to develop a new program was a decision of the new government. The departments together were charged with the responsibility to develop a new program and provide that for a new government. In designing the new program we looked at the lessons learned from the previous program and sought to ensure that the best features—the learnings, all the positives and strengths—of the previous programs were retained but in designing a new program the opportunity was taken to try to address some of these criticisms and flaws that we have had through not just the most recent ANAO report but a number of evaluations and reports that have been conducted over the last several years. I think you must remember that the timing of these things has been—

Senator SIEWERT —I understand very well, having been very involved in NRM for a very long time. But the fact is your submission has just been written and given to us. Your submission saying that you support these recommendations was just written to us.

Ms Colreavy —Our report was advising on our response to the ANAO. On page 7 it says that the department accepted the ANAO’s four recommendations. That was the department’s response to the ANAO report. Do you understand the distinction I am making?

Senator SIEWERT —You do not support it any more?

Ms Colreavy —We do. I am sorry, I—

Mr Thompson —The recommendation from the ANAO said that the regional model was reasonable in the circumstances. Then they identified some things about the regional model that they believe were not working as effectively as they could or where things could be improved. When we say we accept the recommendation, we mean that we broadly accept that the recommendation of the regional model was good in the circumstances. Of course, we did; we put that in place. But when people point out problems with the regional model we seek to address those. We do not believe the regional model is no longer relevant, but we have tried to adapt it and modify it to meet the new challenges and to address some of the concerns of the past. Some of them have been that some people felt, as the ANAO pointed out, that they were not able to access funds. We would like to have a process, as we will go through with the business plan, of allowing people other than regions to have easier access to the program to encourage people to go beyond regions and have regions joining together to deliver things that cut across catchments, for example.

Senator SIEWERT —I still want to explore the regional model aspect and how you think that the new system actually addresses those concerns and still maintains a viable regional model, because I am concerned that we are going to see some of them go under. Also, how do you see that the new approach is going to be strategic and systematic, what process are you going to use to ensure that, and how does the open grant process fit into that?

Mr Thompson —Perhaps I will start with the last one. The open grant process was something that was put in place in this transitional year only to enable some money to flow out to regions, community groups and others during this year. It is not something that we would see as being a future part of the program.

Senator SIEWERT —Is this the only year that the open grant process is happening?

Mr Thompson —I could never say that it is the only year, but it is the only year we have planned to have an open grants round. As for the regions themselves, we look at the regions as key partners in delivering on resource management outcomes because they are very important at that scale for planning and identifying local scale activities, for monitoring and for developing up or brokering consortiums between other people with a guaranteed level of funding for regional bodies which gives them both some certainty over base funding and some capacity to implement projects at a range of scales direct. With that money we would expect them—and we have had discussions with them—that they would be in a box seat to be one of the key players in building the sorts of projects that we see in Reef Rescue where two or three regions get together with one or two industry groups and some community groups to deliver a strategic project that joins together those comprehensive regional scale plans into something that sits at a higher level as in how we joined together the Fitzroy, the Burdekin, the Mackay/Whitsunday and the Wet Tropics plans for nutrient management to come up with one that will address the Barrier Reef’s issues. We are hoping with the business plan that we can call for areas under tighter targets and we hope that people will come forward with something that might be able to address, say, sustainable grazing and biodiversity management and management of some wetlands or some reserves in Northern Australia or something, so you would see some of the Queensland and Northern Territory groups coming together.

Senator SIEWERT —With all due respect to my colleagues and the Great Barrier Reef—I would not like to go on record saying that I do not care about the Great Barrier Reef—but being from Western Australia we look after one third of Australia’s land mass, so I am interested in Western Australia and some of the other areas. Some of the evidence that we took last week seemed to indicate to me that some of the regional groups felt they were not going to be viable into the future—and we are not just talking about transition here—to be on equal footing with others—for example, state agencies—to be able to participate and compete with state agencies to get this additional project funding. They also say that they were given the money in the transition year and given little direction in how to spend that.

Ms Colreavy —First of all, we have said repeatedly to the various groups—and really I am surprised if there are regions in WA who are still saying that to you because I have actually been with them and talked to them about this already—that the way the arrangements that we have in place this year and the decisions that were made for funding initiatives for this year, the things that we agreed with the regions that they could spend their allocations on, were arrived at is not the way that we intend to deliver the program in future years.

Senator SIEWERT —I do understand that, yes.

Ms Colreavy —That is absolutely—

Senator SIEWERT —Yes, I understand. That is the area of concern, I might add.

Ms Colreavy —One of the things that regions, not just in Western Australia but all over Australia, have repeatedly asked us, over a number of years of working in this area myself, is for greater clarity from the Commonwealth on what our priorities are. That was a question that we were repeatedly asked by the regions in past years. We were also criticised by the regions in particular about the complexity of our program arrangements and about the complexity of the funding decision models that were made because of the various hierarchies of program delivery through national, regional and local; there were competitive streams and national competitive streams and regional competitive, a whole gamut of all sorts of—

Senator HEFFERNAN —A bureaucratic nightmare.

Ms Colreavy —And, quite rightly, regions criticised us for that because they found it very difficult to work with and they found that each of those programs had their own reporting arrangements and therefore it created a very heavy workload for them in terms of reporting. One of the things that have been doing this year that is not in place yet so it is very hard to demonstrate that it is better at this point, but it will be in place after the transition year so that we will have a much, much more targeted program. That is the whole point of bringing out, first of all, the outcomes booklet and then, when our business plan is released, we will have very clear targeted activities that we are seeking to invest in. Our priorities for investment will be made patently clear to everyone and everyone, not just regions, will know what the Australian government’s priorities are.

We are also investing a lot of effort this year in streamlining our arrangements so that it is less complex. For instance, regions will only have to apply once to us in a given year for any of the component parts of the program. Within the business plan we will capture all of the underlying component parts. This year there have been separate calls for the NRS, for Working on Country, for IPAs and for Coastcare grants. We had the open grants, which we will not have again. That was another grants model. We had a separate call for Landcare earlier in the year. In future all of those component parts will be captured within the business plan and a body such as the south west region, or whatever, will have first of all from us a guaranteed baseline sum of money that they will have for their ongoing future investment work on which they will be able to take out a small proportion for their administrative overheads. Most of their funds will have to be spent on targeted, on-ground work but we will accept a proportion of their funds to be spent on their administration overheads.

Senator SIEWERT —How much?

Ms Colreavy —We are talking with them about that. We are still settling that.

Senator SIEWERT —Does that include staff overheads?

Ms Colreavy —Yes. This is the normal way that they cost a project. Let’s just invent a project. They might be going to do a river protection program. They might cost a project officer against it as well as material cost, perhaps contractors, and monitoring and evaluation. They would build all those costs in to their project. We expect them to be able to show us budgetary outlines for how they will do this and we accept those delivery costs are a legitimate part of getting the thing to happen on the ground. It cannot be done otherwise. They need to build those costs in. We are quite open about that and we have discussed that with them. We would obviously look at their threshold costs to make sure that we do not think they are overblown, but we do accept those costs. Every region will have a guaranteed baseline budget from the Australian government which they will be given before the end of this year, so they will know what their future budgets will be for the next four years. They will have a four-year budget. That is not the only funding that they can access. When they submit their proposal in response to the business plan for how they would like to spend their guaranteed baseline funding, we welcome them to put in bids for additional projects over and above that at the same time. They only need to submit once and we will assess—

Senator SIEWERT —Sorry to interrupt. They are guaranteed a baseline which will be a certain amount of dollars or a percentage of what they get now?

Ms Colreavy —Yes. They will be guaranteed—

Senator SIEWERT —That will be for implementation of their investment plan against the business plan, or do they have to re-do their investment plans again?

Mr Thompson —They do not have to re-do their investment plans. It will be done in dollars; it will be a certain amount of money for investing in projects from within their business plan that address the targets or the priorities that they—

Senator SIEWERT —So that they are probably going to have to tinker with their investment plans—

Ms Colreavy —Some of them might, but we have actually talked about this with them and most of them recognise that in relation to our national priorities there are very few regions that cannot directly map or align their investment plans to the national priorities. Some of them may want to re-work them a bit to make that cross-mapping clearer, but we are not asking them to do that. We recognise that that is a costly and time-consuming exercise and most of those plans are good. We think they are really good. We have worked with them on them. We have commented on them all and we think they are very good—

Senator IAN MACDONALD —You should; you approved them.

Ms Colreavy —In most cases we did, not in all cases, because some of these are statutory plans that are developed in response to state government requirements—

Senator IAN MACDONALD —That is true.

Ms Colreavy —In fact, many of them are. These plans are often much broader than investment plans just for the Australian government. They have been developed for a potential suite of investors. It varies from jurisdiction to jurisdiction how that was done. From our point of view, all the regions are well placed to draw from their regional plans to identify suitable investment activities to address our national priorities.

Senator IAN MACDONALD —Can I just make it clear that I am not blaming you three people. I know the situation; I have been there and done that. You had a plan which we all worked on. We had these investment strategies and they were all approved by you subject to those that were state government statutory plans in my state of Queensland. They were all approved. They took into account all the national priorities. Now you have a new government; and this is the way the system works. I am not blaming you guys. Under different circumstances you work to whoever your political masters are, but what concerns me and others at this inquiry is that all of those plans which took so long to put in place, and with well founded criticism of the delay, now we are going through it all over again. When will we ever learn? That is us; not you guys, I guess. I do not know if you can comment on that—

Ms Colreavy —No.

Senator IAN MACDONALD —Every NRM group has told all of us on this side that now, because they have got funding only to 30 June, they are all sacking staff. All the teams that they have painstakingly built up over the years suddenly their jobs are in jeopardy. And they can apply for these top-ups—you say 70 or 80, but I am being told it is 60 on the ground—but they may not get it.

Ms Colreavy —No. Every region was given just one year’s budget for this year.

Senator IAN MACDONALD —They have been told they have to spend it by 30 June.

Ms Colreavy —Yes. Last October they were given their budgets for the 2008-09 financial year and we promised them, and will give them, their forward budgets for the next four years this year. They will be told by no later than early November what their forward budget will be for the next four years.

Senator IAN MACDONALD —This is the announcement that Mr Garrett is going to make on 1 November, is it? I should not ask you that.

CHAIR —No, you should not. Would you please carry on with your questioning? I think you are waxing a little.

Senator IAN MACDONALD —I am on the same track as Senator Siewert and Senator Siewert has had more than half an hour—

CHAIR —And she is not arguing.

Senator IAN MACDONALD —No, we will keep working together because we are on the same track.

Senator HEFFERNAN —Can I—

CHAIR —Two is company, three is a crowd, Senator Heffernan.

Senator IAN MACDONALD —You are saying by the end of November all of these NRM bodies will have their four-year forward plan money, the money they are going to get?

Ms Colreavy —I did not say by 1 November. I said—

Senator IAN MACDONALD —By the end of November?

Ms Colreavy —Yes. They will be told by no later than that. It may even be earlier.

Senator IAN MACDONALD —That is fine.

Mr Thompson —It is a guaranteed level of funding. They still have capacity—

Senator IAN MACDONALD —It is a 60, 70, or 80 per cent.

Ms Colreavy —It will vary from region to region. It will be drawn from an overall budget. The overall budget for the regions will be 60 per cent of the average funding to the regions in the life of the previous two programs plus some transitional funding, so $10.8 million a year to continue to assist them.

Senator IAN MACDONALD —That is good to know. The global budget is 60 per cent plus some?

Ms Colreavy —Yes.

Senator IAN MACDONALD —And if some people are getting 80 per cent then some are going to get 40 per cent?

Senator SIEWERT —This is for the life of the program, is it?

Ms Colreavy —Yes. But as I said, the regions can apply for other funds as well, and we would expect most of them to be successful in doing that.

Senator SIEWERT —I just wanted to finish off on getting an understanding of how the regional groups then fit into this competitive funding process. They will get 60 per cent plus some ongoing over the five years of the program—

Ms Colreavy —Plus more, yes.

Senator SIEWERT —The ‘plus more’ is the transition moneys for this year. For each of the other years are they going to get transition funding as well?

Ms Colreavy —Yes. There is an ongoing allocation to assist with transition costs. In this first year, 15 per cent of the overall budget was made available to assist with transition costs. That reduces down to about five or six per cent. This year it was $31.9 million and for the remaining four years it will be $10.8 million.

Senator IAN MACDONALD —To clarify this absolutely, you gave us a figure of $159 million—

Ms Colreavy —For this year.

Senator IAN MACDONALD —to support the NRM.

Ms Colreavy —This year.

Senator IAN MACDONALD —Is that the 60 per cent you are talking about?

Ms Colreavy —I will break it down for you. In 2008-09, $127.2 million was allocated to the regional bodies. Every regional body got 60 per cent of their average funding. That is the 60 per cent—it is $127.2 million—plus they were each given a share of $31.9 million, which was 15 per cent of the previous regional allocation. They were each given a share of $31.9 million which was termed assistance for the transitional costs.

Senator IAN MACDONALD —And that is the $159 million?

Ms Colreavy —That adds up to $159.1 million. For 2009 through to 2013, we will be allocating the $127.2 million, which is the 60 per cent—they will each receive a four-year budget and they will get that in the next few weeks—plus there will be transitional funding of $10.8 million.

Senator IAN MACDONALD —For the next four years the global figure is $127 million plus $10 million?

Ms Colreavy —Yes, so it is $138 million. The global figure for the next four years will be $138 million.

Senator IAN MACDONALD —Per year?

Ms Colreavy —Per year.

Senator IAN MACDONALD —Will it be indexed? Will it go up with inflation?

Ms Colreavy —No.

Senator HEFFERNAN —Built into the 60 per cent—it is a cutback of 40 per cent—is there a statutory requirement by the department in the allocation of those funds for whoever receives the money to prune their administrative costs, the fixed overheads, as opposed to the on-ground work? You could get a position where all the jobs are still there, people driving around having coffee, and the work in the paddock diminishes?

Ms Colreavy —We do not have that—

Senator HEFFERNAN —You do not have a thing for that? So what could happen?

Ms Colreavy —There is not a statutory arrangement but we have made it clear that the majority of these funds need to be delivering on-ground outcomes—

Senator HEFFERNAN —With the cheque is there an obligation? This is why I am pretty agro about some of this because you guys are obviously not across it. We are going to go to 18-inch rainfall over the next few years from 21 inches, which is going to absolutely alter the way we have to manage the district. If you say we are going to reduce by 40 per cent, that is just a bureaucratic statement, as good as gold. Do you really think that the administrators—and I will not name them because I do not want to embarrass them—are going to want to give away their jobs? Who says, ‘I am sorry, you have got to go. You have got to go,’ because we have to maintain the proportion for the work against the decrease in the fund so you are going to have lop the administration off, send that car back and get rid of that computer?

Mr Thompson —Those sorts of decisions are made by the regional bodies themselves, but they do have to provide us with the projects or the investment plan for how they are going to use our money and we have to assess it on value for money. We do use benchmarks about costs of administration and those sorts of things—

Senator HEFFERNAN —Can you show us the benchmarks?

Ms Colreavy —Yes, we probably can.

Mr Thompson —They are the comparisons across—

Senator HEFFERNAN —No. I want to see the benchmarks. That could be just a whole lot of bureaucratic poo poo.

Senator IAN MACDONALD —I am going to override my colleague here. Again, I mention that these officers are doing the program that the government of the day has given them and they have got to try to make it balance. In the figures you gave Senator Siewert before, we have established there is $127 million plus $10 million for the NRM body. You told us that there was $54.5 million for administration, which is the departmental administration, plus $32.4 million for the EPBC Act and other things you had which I did not record that I said to you, ‘That is $86 million on administrative things as opposed to $127 million for the NRM body.’ Can you, perhaps on notice, identify in dot point headings where the $54.5 million and $32.4 million go and compare it with what it was? I know all governments have used as part of their environmental plans the costs of departments, which is wrong perhaps but everyone does it. But I would like to see that.

I do want to talk a little bit about the Great Barrier Reef. Some of it you will not be able to answer now but it will prepare you for estimates. I applauded the current government for doing this Reef Rescue plan. I was trying to get our government to do it and we were a bit slow on it. It is $200 million. I am told by everybody concerned that there has been no on-the-ground action in the last 10 months. Everyone thinks it is a good idea but nothing is happening. Can you tell me I am wrong? Could you point out where I am wrong?

Mr Thompson —Depending on what you mean by ‘on-the-ground action’, there has been a small amount of expenditure on maintaining some monitoring and evaluation, but it is true that we have not yet announced the projects. What we have been doing over the last few months is, in discussions with each of the regions there and all of the industry bodies, they have been putting together a suite of projects to invest money this year and into the future for on-the-ground action. We have now received all of those projects and they are under final consideration.

Senator IAN MACDONALD —Is it true that the NRM regional groups have been given this money for 2008-09 and have been told it has to be spent by 30 June? Is that true?

Mr Thompson —They have been told that we would like the money to be spent at the end of the financial year and they have come back to us and said they can spend it this year.

Senator IAN MACDONALD —This program starts on 1 December, so they have seven months to spend the money. Half of them have put off staff. Half of them have to go and negotiate with landowners and they are going to do all of this in seven months and spend all the money or lose it; is that right?

Mr Thompson —I cannot comment on whether they have had to put off staff or not. Our understanding is that they have been able to maintain their staff by and large with the money that has come through from elsewhere—

Senator IAN MACDONALD —No, that is not right.

Mr Thompson —The projects that they have put forward to us are projects that they have indicated can be undertaken in the seven-month period that they have.

Senator HEFFERNAN —If that were me I would spend the money too, but not wisely.

Senator IAN MACDONALD —To pursue that further, the government’s program before the election—and you have confirmed this—is $146 million for the Great Barrier Reef Water Quality Grants Program. The announcement said:

The majority of these funds are to be provided for matching grants to landowners and managers who commit to implementing proven practices to reduce the amount of nutrients and sediment run-off on the land.

I am told that there have been no matching grants made. This is perhaps a criticism of you people rather than your various governments, our government also had a similar program three or four years ago but I am also told that very little of the money ever got to farmers to buy back riparian areas or to plant trees. Let us forget about the past government. We have had 10 months of operation of this government. I am told that the problem with the Great Barrier Reef is not climate change, not water warming, but the persistent nutrient run-off into the barrier reef. There have been plans four years ago, and again in the Labor Party’s document, to fix it and yet there is no work being done on the ground. Please convince me I am wrong.

Mr Thompson —I am not able to comment on past programs, although I am aware that there were projects relating to wetlands and farm practices up and down the coast but, as per the statement you are reading from, the projects to be developed under this current program do involve grants to farm groups. As I said, the discussions we have been implementing since the funding for the program was announced and confirmed by ministers has been with the various industry bodies and the regions to develop these programs to work out which partners they are going to work with so that they are ready to go as soon as they are approved.

Senator IAN MACDONALD —But you have done all this. Again you can only do what you can do but in one form or another, or under one title or another, or under one glossy brochure or another, you have been doing all this work for 10 years. Canegrowers came on board; AgForce came on board; Queensland Farmers Federation came on board; GBRMPA came on board. It was a coordinated approach with $200 million, which was great. They had plans but I understand not one cane farmer has been given any assistance to plant trees along the riverbank; not one cane farmer has got money to get out of marginal land where he should never have been anyhow, and the sediment keeps running out on the reef and the coral keeps bleaching and dying. Do you disagree with that or don’t you know?

Mr Thompson —I do not disagree with—

Senator HEFFERNAN —If you do not, just say so.

Mr Thompson —What I am saying is that, yes, we have got a new program which will build on all those partnerships and practices and everything else but we are implementing Reef Rescue as it is now and, like any program, it needs new contracts. Whilst, yes, we can work with the partnerships that are there, aside from some monitoring and evaluation money which we provided early in the year, Reef Rescue is not yet at the stage of making payments to individual farmers but we expect that to happen very soon.

Senator IAN MACDONALD —You will not have this now but we want to encourage your group to work a bit harder, although I know you have reduced staff and are working longer hours—

Senator HEFFERNAN —We all feel sorry for you.

Senator IAN MACDONALD —But whilst we are saying this to you we want Senator Sterle as part of our group to take it to the minister and say, ‘Let’s not do what the other government did. Let’s make sure we actually get something done.’ Because the reef is dying as we speak and it is not because of global climate change. It is not—it is crown of thorns but the crown of thorns are there because of the nutrient run-off. You know all this. The farmers are ready to join forces with you. They need to—

Senator HEFFERNAN —You know what to do.

CHAIR —Senator Macdonald has the call.

Senator IAN MACDONALD —Hopefully within the next week tell the minister that we have got an unholy alliance here of Senator Sterle, Senator Siewert, Senator Heffernan and me and we need to know in the next week really what is going to happen. I know he is making an announcement on 1 September, I think. Let’s hope it is not just—

Senator SIEWERT —I assume you mean November.

Senator IAN MACDONALD —Yes, it is a bit late for 1 September. But we do not just want a colour brochure. We actually want an agreement—

Senator HEFFERNAN —Farmers know how to solve—

CHAIR —Sorry Senator Heffernan, Senator Macdonald still has the call.

Ms Colreavy —Could I just make one comment in response? That is that it is 10 months in which these funds have not yet reached the farmers, but the program only commenced on 1 July; it has not been running for 10 months.

Senator HEFFERNAN —It has been going on for 10 years.

Ms Colreavy —I appreciate that the issues have been around and there have been other programs, but I am just commenting that the Reef Rescue plan commenced on 1 July.

Senator IAN MACDONALD —I am told that something like $22 million—I think that is the figure—has been taken from the NRM bodies and given to GBRMPA to replace funds that GBRMPA have lost in the last budget cuts to do reef work. Am I right or wrong on that?

Mr Thompson —I do not think we could say that the money has come from the regions to do it. It is a $200 million program and it has under it a number of elements. Some of the water quality monitoring reporting will be undertaken by GBRMPA because they have the skills and the long-term records and capacity to monitor reef water quality. But they are not the only people who will be monitoring the outcomes of this program.

Senator IAN MACDONALD —I am told—and I am not sure what my sources are—that NRM groups report that, of the $22 million that has been allocated for monitoring and evaluation under Reef Rescue, $14 million has already been taken from them and given to GBRMPA.

Ms Colreavy —That does not sound right that it has been taken from regions, no. But perhaps—

CHAIR —Would you be able to get back to Senator Macdonald before close of business today on that?

Ms Colreavy —We will try to look at that separately.

Senator HEFFERNAN —Can I just ask Mr Thompson: in the planning for these resources is there a plan by the department to protect not only the actual resource management side of it but future production? Is there a priority or a thinking in the department in the allocation of all the moneys? It seems to me that 50 per cent of it is administration and that it is just a bureaucratic tangle. I feel very sorry for you for the job you have been given. You have my full sympathy. But the thing that troubles me is that, for instance, over in Carnarvon they need a little bit of money. They have a wonderful little spot with two or three thousand acres of production worth $60 million and the side aquifers to the upside-down river, the Gascoyne, are very saline and a place like that has to be very careful about the way they manage the resource, the 11 gigs they take out of the Gascoyne. It is a pressurised system. In the allocation do you cover the whole land mass or are there bits that you do not cover? Are there bits of Australia that are not covered?

Mr Thompson —There is a priority under the Caring for our Country for sustainable agricultural practices, and that is about sustaining the productive capacity of the resource base. It is also a priority of working with farmers so that they can manage that productive resource base to not only maintain and improve productivity but also to contribute to other outcomes. The sustainment of agriculture occurs across the whole of Australia but, as you are aware, you could spend any amount of money—

Senator HEFFERNAN —Yes, I am aware of that.

Mr Thompson —so we have had to prioritise. What we do intend to do is to focus on the issues that at a national level are most significant in relation to agriculture. For example, in parts of Western Australia we might be looking at problems of wind erosion and soil structure and go to some other areas that might be—

Senator HEFFERNAN —The base—

Mr Thompson —I did mention earlier that this program does not cover everything. We will not be getting involved in a big way in irrigation infrastructure improvement and those sorts of things. The whole issue about water management is the responsibility of the water programs.

Senator HEFFERNAN —My problem with that is that if you do not link one to the other you could do a whole lot of good work. For instance the channel that takes the water from Narrandera to Leeton leaks a huge amount. It goes through some sand country. It has been doing that for bloody ages, but the water eventually goes back to the river anyhow. But if you do not link programs you get outcomes that do not really maximise the dollar spend. That is my problem.

Mr Thompson —We would agree with you there. While it is not something that is apparent to date, we are holding discussions with the people who run those other programs so that we can align the activities that we encourage to be done at the same time or in the same locations where other programs are operating, and water is one of the critical ones.

Senator HEFFERNAN —One of the great examples of it is the Ord, which is one of the untidiest irrigation set-ups that places no value on water. If we are going to develop it to 80,000 hectares we really need to understand the natural resource management implications of that as well as getting the food production because the food task is going to double in the next 30 years globally. I would just like to think that we can somehow link the programs and not spend it all on redundancy. It seems to me that there is more than 2½ per cent in administration costs from what you told Senator Macdonald; and you can disguise administration. But have you planned in those figures the 40 per cent cut-back? Are people going to get a redundancy out of that?

Ms Colreavy —No.

Senator HEFFERNAN —You are just going to sack them and say, ‘No, that is it. See you.’

Ms Colreavy —They are not our employees so we are not—

Senator HEFFERNAN —I appreciate that but it is your money and you are beholden to the person who—

CHAIR —With respect you did ask the question. Could you allow Ms Colreavy to answer it? Senator Siewert has a couple of questions.

Senator SIEWERT —I do have a number of questions that I want to put on notice because we are running out of time, but I want to go back to the issue of these regional groups, which is where I was before we were diverted. I want to clarify the role of the regions and the role of the states in this competitive bids process. We have been through in a fair amount of detail the baseline funding and all those sorts of things. They can then apply for additional funding on top of that. My understanding is that will be a competitive bid process. On what basis are they going to be able to compete with the states, as the states now do not have to put up matching funding? Even though you have now reassured me that each of the regions will on an ongoing basis get this base level of funding, from what I understand you have just said, a lot of that is committed to the investment plan and project development so it seems to me there is going to be a reduced core capacity in each of the regional groups. How are they going to have the capacity to compete with the states for delivery of the other funding sources?

Ms Colreavy —Some of this is hard for me to speculate on, I have to say. But we have talked with representatives of both the regions and the states about this very issue. It is very much our preference that both the regions and the states and other applicants as well, such as the big NGOs, will work cooperatively or collaboratively rather than competitively on these sorts of projects. We are trying to encourage to the extent possible that many of these projects are done as large, landscape scale projects in the same way that Senator Heffernan was referring to earlier, that we recognise that the many activities are linked up and to get the best value out of those activities it is better that they are planned in an integrated landscape scale fashion.

We are encouraging the regions and the states and where it is appropriate, if there are NGOs or others in the vicinity that have an interest in a particular set of activities or a particular precinct, that they actually join together as collaborators for funding and for project delivery because in many cases it would be to their own advantage to play to their own strengths. They each have different levels of expertise and different things that they do best. I believe it is in their interests to work together so that they each do have a role and we get the best outcome on the ground. They have actually really agreed with us on that, that that would be their preferred way of operating as well. I think we have to recognise that we are entering a new way of doing business. This is a new approach, a new design. They are learning with us and over the period of the next four years as we roll this program out I think that everyone is going to have to adjust the way that they do business and we will learn from it year by year about how to do it better and be a bit more clever about how those partnerships are formed.

Senator SIEWERT —I have been around NRM long enough to have heard that statement about ‘a new way of doing business’ every time we get a new program and we are still at the place we were at. I have worked with the states for a very long time and my experience of the states is that they do not change their spots that quickly, to be quite frank. The ANAO report was very critical of the states. You quote them in your submission, ‘There were significant areas of non-compliance by state agencies.’

Ms Colreavy —It was particularly in regard to the timely payments to the regions—that was the area of major criticism—and then the timeliness of their acquittals back to us. That was the area of primary criticism. It was not a misuse of funds but rather it was around timeliness and reporting. That was the issue.

Senator SIEWERT —There was also their inability to work with some of the regions. I know from on the ground, from talking to the regions and my own personal experience that the states do not always show a lot of support for the regions and have been very active in undermining the regional approach. Now you are expecting them to turn around and work cooperatively with the states in what will turn out to be a competitive process. If the states think that they can get away with not having to cut the regions in to some of this stuff, particularly now that they do not have to put in matching funds, what are you doing to encourage them to be involved with the states and to make sure that they cut the regions in? Also, how do you do that if these regions and the community are not involved in the bilateral negotiations that are currently taking place?

Mr Thompson —There are a couple of things I wanted to say. We are sort of speculating on what might come forward but—

Senator SIEWERT —It is not speculating. It is based on pretty good experience.

Mr Thompson —We have expressed what our expectation is. How we manage that will be through the assessment criteria that can be applied. As we have said earlier, we are still working through finalising our business plan or prospectus. There are a couple of things that we might like to look at. First of all, we do not pay for state core costs. We have got to look at the likelihood of these programs actually happening on the ground, so who are partners in these sorts of things? If you are putting forward a proposal at a landscape scale that involves working with farms, if you have not got the industry bodies involved or Landcare groups or some regional bodies, it clearly is not going to happen. The strengths the states have are in the areas of information and technical expertise. They are not necessarily all that strong in making things happen on the ground, so we look for partnerships that look most effective. There already have been some discussions we know in some states between regions and with states as to how to do this. I know I keep harping back to Reef Rescue, but that is the only largish landscape scale project we have around at the moment. That does have regions and industries receiving the bulk of the money. The Queensland government is not part of the delivery arm.

Senator HEFFERNAN —It does not turn up on the ground. This is doomed to failure. You have my full sympathy, but this is not going to work. Farmers are starting to turn off all this stuff because they are into survival mode now. We really have to think about how you get it onto the ground.

CHAIR —Senator Siewert will have a few questions on notice.

Senator SIEWERT —Yes, I have quite a few questions on notice.

Senator IAN MACDONALD —I think I have indicated the questions I have put on notice.

Senator HEFFERNAN —You have my full sympathy.

CHAIR —To officials from both departments, thank you very much.

Proceedings suspended from 11.21 am to 11.36 am