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Finance and Public Administration Legislation Committee
26/05/2015
Estimates
PRIME MINISTER AND CABINET PORTFOLIO

PRIME MINISTER AND CABINET PORTFOLIO

In Attendance

Senator Cormann, Minister for Finance.

Senator Cash, Assistant Minister for Immigration and Border Protection and Minister Assisting the Prime Minister for WomenOutcome 1

Overview

Ms Rebecca Cross, Head of Domestic Policy

Ms Elizabeth Kelly, Deputy Secretary, Governance

Outcome 1— Prime Minister and Cabinet

Domestic Policy Group

Ms Rebecca Cross, Head of Domestic Policy

Dr David Gruen, Deputy Secretary, Economic

Mr David Hazlehurst, Executive Coordinator

Ms Helen Wilson, Assistant Secretary, Industry, Infrastructure and Environment Division

Mr Neil Williams, Assistant Secretary, Industry and Communications Branch

Ms Kelly Pearce, Assistant Secretary, UNFCCC Taskforce

Ms Anastasia Carayanides, Assistant Secretary, Energy—Strategic Policy, Industry, Infrastructure and Environment Division

Ms Nina Davidson, First Assistant Secretary, Economic Division

Ms Jo Laduzko, Assistant Secretary, Commonwealth-State Relations Branch

Mr David Williamson, First Assistant Secretary, Industry, Infrastructure and Environment Division

Mr Paul Morris, First Assistant Secretary, Agricultural Competitiveness Taskforce

Mr Brad Archer, First Assistant Secretary, Renewable Energy Target Review Secretariat

Mr Troy Sloan, Acting First Assistant Secretary, Social Policy Division

Ms Joann Wilkie, Assistant Secretary, Office for Women

Mr Jason McNamara, Executive Director, Office of Best Practice Regulation

Mr Tony Simovski, Deputy Executive Director, Office of Best Practice Regulation

Mr Peter Saunders, First Assistant Secretary, Office of Deregulation

Ms Lisa Elliston, Assistant Secretary, Office of Deregulation

Mr Wayne Poels, Assistant Secretary, Office of Deregulation

Mr David de Carvalho, First Assistant Secretary, Federalism Taskforce

Ms Alison Larkins, First Assistant Secretary, National Ice Taskforce

Mr Jason Russo, Assistant Secretary, G20 Policy Branch

Mr Jason McDonald, Acting First Assistant Secretary, Northern Australia Taskforce

National Security and International Policy Group

Dr Margot McCarthy, Associate Secretary, National Security and International Policy

Mr Allan McKinnon, Deputy Secretary, National Security and International Policy

Mr Richard Sadleir, First Assistant Secretary, National Security Division

Ms Lynette Wood, First Assistant Secretary, International Division

Ms Lynwen Connick, First Assistant Secretary, Cyber Policy and Intelligence Division

Governance Group

Ms Elizabeth Kelly, Deputy Secretary, Governance

Ms Amanda McIntyre, First Assistant Secretary, Financial Services Division

Mr Ben Neal, First Assistant Secretary, Corporate Services Division

Ms Pip Spence, First Assistant Secretary, Ministerial Support Division

Ms Philippa Lynch, First Assistant Secretary, Government Division

Mr Jamie Fox, First Assistant Secretary, Cabinet Division

Mr Peter Rush, Assistant Secretary, Parliamentary and Government

Mr Peter Arnaudo, Assistant Secretary, Legal Policy Branch

Committee met at 08:59

CHAIR ( Senator Bernardi ): I declare open this meeting of the Senate Finance and Public Administration Legislation Committee. Today the committee will continue examination of the budget estimates for the Prime Minister and Cabinet portfolio with examination of the department. The committee may also examine the annual reports of the departments and agencies appearing before it. The committee is due to report to the Senate on 23 June 2015 and has fixed 10 July 2015 as the date for the return of answers to questions taken on notice.

Today the committee will examine outcome 1 of the Department of the Prime Minister and Cabinet, including the Office for Women at 5:30 pm. The Office of the Official Secretary to the Governor-General will be examined at 9 am tomorrow morning, prior to the commencement of the Finance portfolio, and outcome 2 of the department relating to Indigenous affairs will be examined on Friday at the cross-portfolio hearing.

Under standing order 26 the committee must take all evidence in public session. This includes answers to questions on notice. I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee, and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee.

The Senate, by resolution in 1999, endorsed the following test of relevance of questions at estimates hearings. Any questions going to the operations or financial positions of the departments and agencies which are seeking funds in the estimates are relevant questions for the purpose of estimates hearings. I remind officers that the Senate has resolved that there are no areas in connection with the expenditure of public funds where any person has a discretion to withhold details or explanations from the parliament or its committees unless the parliament has expressly provided otherwise.

The Senate has resolved also that an officer of a department of the Commonwealth should not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters policy and does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted.

I particularly draw the attention of witnesses to an order of the Senate of 13 May 2009 specifying the process by which a claim of public interest immunity should be raised.

The extract read as follows—

Public interest immunity claims

That the Senate—

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

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

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

(1) If:

   (a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and

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

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

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

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

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

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

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

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

(Extract, Senate Standing Orders, pp 124-125)

Witnesses are specifically reminded that a statement that information or a document is confidential or consists of advice to government is not a statement that meets the requirements of the 2009 order. Instead, witnesses are required to provide some specific indication of the harm to the public interest that could result from the disclosure of the information or the document. Officials are requested to keep opening statements brief or seek to incorporate longer statements into Hansard.

I welcome back the Minister for Finance, Senator the Hon. Mathias Cormann, representing the Prime Minister, and officers of the Department of the Prime Minister and Cabinet. Minister, do you wish to make an opening statement?

Senator Cormann: No, thank you.

CHAIR: Ms Cross, do you wish to make an opening statement?

Ms Cross : I would like to confirm previous advice to the committee that, due to overseas travel commitments, I am only available until 3 pm today. Senior officers after that time will make every attempt to answer questions, but due to some recent staffing changes there may be some that we need to take on notice.

CHAIR: Thank you, Ms Cross. We will now go to Senator Wong.

Senator WONG: Ms Cross, thank you for that advice. I am sorry I was not aware of it previously. Remind me which bits you cover that we would need to get done before 3 pm.

Ms Cross : Social policy, and that there may be some questions for the Industry, Infrastructure and Environment Division.

Senator WONG: International is Ms Kelly or Dr McCarthy?

Ms Cross : Yes.

Senator WONG: Can you table another current organisation chart for the department, please, particularly given that evidence that things have changed. I will move on, if it is okay.

Ms Kelly : We have that. We are just grabbing it.

Senator WONG: Yes, if you can table it, I will keep asking questions. I do not have anything on that at the moment. Back to the perennial answers to questions on notice, can you tell me on what date PM&C submitted its answers?

Ms Kelly : Answers were submitted to the committee secretariat on 9 April and 12 May; 42 answers in relation to questions on notice taken in relation to Indigenous affairs were provided on 9 April, and the remaining 128 were submitted on 12 May.

Senator WONG: Can you tell me why it is that Senator Scullion was able to comply with the time frame of the committee but the Prime Minister—or Senator Abetz—was not?

Ms Kelly : Senator Wong, as we have explained on previous occasions, the questions are submitted to the Prime Minister's office, the Prime Minister gives them great priority but has many other demands upon his time and the office processes them as quickly as it possibly can.

Senator Cormann: Also just to put it into context, if I look at parliamentary questions, for example, addressed to the Prime Minister and the Prime Minister's department, in 2012 and 2013 there were 64 and 22 respectively and in 2014 there were 482. We are in 2015 and already about 300 have been logged, so there is the sheer volume. There is a lot of duplication, a lot of double up, that needs to be properly sorted through. There is obviously a volume, a quantity, here that is quite unprecedented.

Senator WONG: Ms Kelly, we have had a long discussion previously about PM&C taking its responsibility to the parliament seriously. It just seems that you are serially in complete defiance of Senate orders.

Ms Kelly : As I have explained, Senator Wong, we have dealt with the questions on notice as quickly as we possibly could. As Minister Cormann has mentioned, there has been a significant increase in the number of estimates questions, parliamentary questions and FOI requests. We do not get additional staff to deal with the increase in those matters.

Senator WONG: If you would just tell us more then I would not have to ask questions or put in an FOI request, Ms Kelly. There is duplication—and I do not want to get into a tit for tat with the minister because we get on very well generally in this committee and get a lot of information—but if PM&C actually answered some questions then we would not have to do multiple questions.

Ms Kelly : As I said, Senator Wong, we will continue to deal with them as quickly as we possibly can and we do take our responsibilities to the Senate and to this committee very seriously.

Senator WONG: I might remind Mr Thawley of that at a subsequent hearing if this continues.

Ms Kelly : Senator Wong, do you want me to table the organisational chart now, although I must note that it does not yet include the changes announced by the Prime Minister yesterday in relation to the appointment of the CT Coordinator?

Senator WONG: Sure. That is fine. Could you provide on notice an updated one that reflects the changes that were announced?

Ms Kelly : Yes, we will take that on notice.

Senator WONG: Thank you. You mentioned, Ms Kelly, that the department submitted draft answers to the PMO. I do not think you indicated, despite the order, when—oh, I am sorry, you did. This is relevant ministers' offices. Can you tell me why you submitted draft answers to the PMO after 10 April? There are a range of draft answers submitted after 10 April. I am just wondering why that is the case.

Ms Kelly : Senator Wong, as I think I have explained—

Senator WONG: Is it the same answer?

Ms Kelly : on previous occasions, the process of preparing responses to the questions on notice is an iterative one and the answers are sent up as they are prepared and that extends over a period of time. That is all set out in the response to Senate motion No. 299.

Senator WONG: Thank you. In relation to this, are there any draft answers that are the subject of the answer that you just referenced in relation to 299 which were submitted to the Prime Minister's office more than once?

Ms Kelly : That is possible, and that would be part of the iterative process.

Senator WONG: Can you tell me which ones? You would be able to track them. There is a brief that goes up. We all know how this happens. How many were resubmitted?

Ms Kelly : I am not sure whether our systems would allow us to identify that, but I will take that on notice and see whether we are able to do that.

Senator WONG: They used to be able to. Unless they have changed, I do not know how they would not.

Ms Kelly : My recollection is that we have looked at this issue on previous occasions and not been able to definitively give you an answer on that question.

Senator WONG: You have also previously told me that your system does not enable you to tell me which staff member signed off on the brief. Now I do not think that is true.

Ms Kelly : Senator Wong, I think that the answer on previous occasions to your question was that yes, some travel through the system but others might not necessarily go through that route and there may be discussions. So, in terms of providing a definitive answer, my recollection is that that is not possible.

Senator WONG: The name of the approver is on the brief.

Ms Kelly : As I said, Senator—

Senator WONG: Do you agree with that?

CHAIR: Sorry; I just want to get the ground rules absolutely clear. If a witness has been asked a question, they should be able to answer it without being interrupted—and vice versa; Ms Kelly, if Senator Wong or any other senator is asking a question, you should not be interrupting them.

Senator WONG: If she could answer the question, it would be useful.

CHAIR: Senator Wong, you know full well you can ask the question and they can respond how they want and we can have a to and fro, but I do not want to get into the interruption game, because it is unproductive.

Senator WONG: I am happy to do that, but we can be here for two days on PM&C if we keep having a long, repetitive answer. Is it not the case, Ms Kelly—

Senator Cormann: If you ask the same question, you will get the same answer. That is a very important point here. The problem with the questions on notice, if I may say so, is that a lot of the questions—

Senator WONG: How is this not wasting time?

Senator Cormann: put forward by Senator Wong and others from the opposition are repetitive and duplicate questions asked in other areas. Obviously there is a lot of unnecessary work involved just working through all of the double-ups and repetition.

CHAIR: Minister, thank you for that. We are mindful of that, but let us just not interrupt. Let us allow people who have been asked a question the courtesy of answering it in the way they see fit, and what will elapse will elapse.

Senator WONG: Ms Kelly, surely Slipstream records the transfer of briefs between the department and PMO and vice versa.

Ms Kelly : It certainly does record some of those movements. I think the difficulty in the past—

Senator WONG: Sorry; I am going to interrupt there. What do you mean by 'some of those movements'?

Ms Kelly : That is what I was going on to explain. There may be movements and there may be discussions in relation to particular answers that are not necessarily recorded on the Slipstream system. That is the difficulty in providing you with a comprehensive and accurate response to your question.

Senator WONG: I accept that Slipstream may not record discussions unless there is an annotation. I am just asking about movements. You are looking doubtful again.

Ms Kelly : The response to Senate motion 299 records the movements of the questions when they were sent to the Prime Minister's office on numerous occasions between 13 March and 11 May.

Senator WONG: In relation to those 127 responses, I would like to know whether there are any which have gone from the department to the PMO and back to the department and resubmitted.

Ms Kelly : To the extent that that is recorded on the Slipstream system, I am happy to take that on notice and make that inquiry.

Senator WONG: I appreciate it.

Senator Cormann: Let me just add to the answer here that the processes followed in relation to questions on notice through estimates or through the parliament are entirely consistent with the processes followed by the previous government, except that the volume of questions submitted to the government through this portfolio has significantly—and I say 'significantly'—increased, more than 20-fold from 2013 to 2014.

Senator WONG: Ms Kelly, you just indicated to me that the Slipstream date is the basis of the answer to 299.

Ms Kelly : That is my assumption, because that would be the place where we would find that date.

Senator WONG: Are you able to tell me—perhaps someone could get this information and come back to us later today—does this identify the first, second or final time the draft was submitted to the PMO? Do you understand what I am saying?

Ms Kelly : Yes.

Senator WONG: If Slipstream does indeed record more than one submission to the PMO, someone has made a decision about what which date is recorded, so I would appreciate it if that information could be provided.

Ms Kelly : I will make that inquiry.

Senator WONG: Which staff member approves answers to estimates questions in the PMO? Is it the Prime Minister's chief of staff?

Ms Kelly : Not usually. I usually work with a number of advisers, depending upon the area that the question relates to.

Senator WONG: Do you have the information here as to how many answers are submitted to Ms Credlin and to other advisers and how many were signed by Ms Credlin?

Ms Kelly : I can see whether our system—whether we send them to a specific adviser or we send them and then the office distributes them within. That might not be something that we have visibility of.

Senator WONG: But you would have the returned—

Ms Kelly : We certainly deal with multiple people in relation to the responses.

Senator Cormann: There is an important point I have got to add to this answer. I am not sure where Senator Wong is going here and whether she wants to make this about ministerial staff again, but the reality is that we as ministers, from the Prime Minister down, take responsibility for the decisions that we make. I am very disappointed with Senator Wong's line of inquiry here because obviously we all have staff who support our activities, the same as the previous government had staff who fulfilled the same roles and who provided the same service to their ministers. But, in the end, from the Prime Minister down, it is the ministers who take responsibility, and I think the questions really, instead of focusing on individual staff, should be focused on the ministers.

Senator WONG: Staff being off limits, Senator Cormann, might have been something that the Treasurer spoke about before he laid into an opposition staff member personally in question time yesterday. I am asking a very legitimate question.

Ms Kelly, perhaps we should do it this way: I appreciate that Ms Credlin might be the approver on the brief, or she might be copied in, and that might be farmed out to another adviser, but still I want to know how many went up to her. More importantly, I want to know how many were signed off by the chief of staff and other staff.

If you could pass this on to Mr Thawley: this department has failed to answer a single non-Indigenous affairs question on time. I appreciate the evidence you have given about the number of questions and, obviously, we have availed ourselves in opposition of the institution that is the Senate's accountability measures, as we are entitled to do. I do not think failing to answer a single question by the time frame is an example of taking your responsibilities of the Senate seriously.

I will move on. Ms Cross, I am conscious that you are leaving, so I might jump around a bit if that is okay?

Ms Cross : I am not leaving until 3 pm.

Senator WONG: Yes, but I want to spend as much time with you as possible.

Senator LUDWIG: It comes around very quickly.

Senator WONG: That is right. Firstly, you and I had some conversations about paid parental leave, if not on the last occasion perhaps the time before?

Ms Cross : Yes.

Senator WONG: I think you indicated previously that you were the lead agency for the development of the then paid parental leave scheme.

Ms Cross : I do not believe I would have Senator. I think it is led by the Department of Social Services. Obviously we participated in the—

Senator WONG: Let me just get the Hansard for you.

Ms Cross : Yes, I am happy for you to.

Senator WONG: Here we go. I assume that you are mistaken rather than having changed your evidence Ms Cross. Perhaps Ms Cross could be handed question number 235. I asked a series of question. The answer was, 'The department of PM&C co-chairs jointly with the Department of Social Services and RDC to provide strategic direction and coordination to develop and implement the new PPL scheme. PM&C lead the work on the PPL scheme as it is a whole-of-government priority.'

Ms Cross : I think our engagement was through the IDC. I am happy to say that might—

Senator WONG: Do you want to correct your evidence Ms Cross?

Ms Cross : No. I will continue. We certainly—

Senator WONG: At that corrected.

CHAIR: Senator Wong—

Ms Cross : Senator, I am not even—

CHAIR: No, no. Senator Wong—

Senator WONG: Chair, would you like to see this? She is giving inconsistent evidence.

CHAIR: Senator Wong, Ms Cross is allowed to—

Senator Cormann: Stop badgering the witness.

CHAIR: Order! Minister—thank you. Senator Wong, Ms Cross is entitled to complete her answer and then you can pull her up on any aspect of it that you would like to.

Senator WONG: Yes, I will. I do not like people changing their—

CHAIR: Let her complete it, Senator Wong.

Ms Cross : I am happy to check what I said earlier, but I do not think the two things are—

Senator WONG: Chair, on a point of order.

CHAIR: Order!

Senator WONG: Chair, can the witness be provided with the question?

Ms Cross : Can I just—

CHAIR: Order! Order! Just a moment Ms Cross.

Senator WONG: Can the witness be provided with the question as a matter of fairness?

CHAIR: There is a point of order.

CHAIR: What is your point of order, Senator Wong?

Senator WONG: The witness, as a matter of fairness, should be provided with the answer to which I am referring so she can look at her previous evidence.

Ms Cross : Yes.

CHAIR: No, you have asked a question and the officer is responding to that. You can put forward further information at a time after she has concluded her response. Ms Cross?

Ms Cross : I was just going to say that I am not sure that the two statements are inconsistent because all of the work on the scheme, the development of legislation and any implementation arrangements are in the Department of Social Services. PM&C's role was as co-chair of that committee and we also led discussions with the states and territories. I took the intent of your question initially to be who did the work on PPL. That was all done in the Department of Social Services. We had a policy coordination role. We did not actually work on the legislation or the scheme implementation. So I am not sure that the two are inconsistent.

Senator WONG: PM&C leads the work on the PPL scheme as it is a whole-of-government priority full stop?

Ms Cross : That is in the context of the policy work that was being done through that IDC, and, as I also said, we led the discussions with the states and territories. I would not want you to think there was a division of staff in PM&C doing the actual work on the scheme. The implementation, the legislation, the detailed work on the scheme, was done in DSS. If my wording was imprecise in terms of that answer, I apologise, but I stand by the work being done in DSS.

Senator WONG: Now we have got over that, Ms Cross, when did you actually inform the committee that you were departing today?

Ms Cross : Last week we spoke to the committee to see if we could schedule the department for Monday and departmental agencies for Tuesday so that I could be here for all of the questions, but the committee was unable to accommodate that request.

Senator WONG: Is it official travel or personal?

Ms Cross : It is personal travel.

Senator WONG: With the—I think—agreement that the statement 'PM&C leads the work on the PPL scheme as it is a whole-of-government priority' remains correct, bearing in mind that obviously there was an IDC and there are a whole range of detailed issues that were discussed, I would like to ask a number of questions about the process of the change in policy. I think you told me on a previous occasion that your department jointly chaired the IDC in relation to the then government policy of paid parental leave.

Ms Cross : Yes.

Senator WONG: Was that you or another member of your team?

Ms Cross : That was a member of my team.

Senator WONG: And you also were managing, as you referenced in your answer, the negotiations with the states.

Ms Cross : That is correct.

Senator WONG: And I think you indicated to me that a number of discussions had occurred at SOMs, senior officials meetings.

Ms Cross : That is correct.

Senator WONG: Also I think there were at least two COAGs where this was discussed. I really do think it would be beneficial if you could read your own answer. Do you have that there?

Ms Cross : I do not have it with me. I do not think this is from the last hearing. I think it must be from a couple of hearings ago.

Senator WONG: Correct.

Ms Cross : I have got questions from the last hearing but not before.

Senator WONG: Surely, of the many people in the next room, somebody can find question No. 235. It might be helpful.

Ms Cross : I am sure they are looking for it.

Senator WONG: It is online.

Ms Cross : But, yes, it was considered by COAG as well.

Senator WONG: Yes. This says: COAG meetings, 13 December 2013 and 2 May 2014. Was there a COAG meeting subsequent to 2 May 2014 where this was discussed?

Ms Cross : I would have to check the COAG record. It certainly has not been on the agenda for the last few meetings. We are just getting that question.

Senator WONG: Is there someone who can tell me whether or not PPL was discussed at a COAG meeting subsequent to 2 May?

Ms Cross : We will take that on notice because we will have to check—

Senator WONG: Is that not possible?

Ms Cross : We will see if we can get it for you during the hearings, but we will have to check the records of the meeting.

Senator WONG: As at June last year, you had already had seven senior officials meetings: October 2013, November 2013, December 2013, March 2014, March 2014, April 2014 and June 2014. In relation to PPL, how many subsequent meetings were there?

Ms Cross : Again, I would have to check that, because there was a point in time where we took the negotiations with the states to the point where they said, 'We can't negotiate further until we see the legislation.' At that point, because the legislation had not been introduced or released, we left the matter as something to come back to with the states once the legislation had been drafted.

Senator WONG: When was the department informed that the Prime Minister had abandoned this scheme?

Ms Cross : My recollection is it was his announcement in the media, but I will check that for you.

Senator WONG: Thank you. Can you remind me of the date of that?

Ms Cross : I would have to take that on notice. I do not have that information with me.

Senator WONG: So the department became aware of it when the Prime Minister announced it?

Ms Cross : I believe that is the case, but I will check for you.

Senator WONG: There was no advice sought from the department in relation to the change in policy prior to the announcement?

Senator Cormann: That was obviously a political judgement made by the government and one that the government takes responsibility for.

Senator WONG: Sure, I am not asking that. I just want to know: if there was no advice provided then that is the answer. Was there any advice provided in relation to the change of policy before the announcement?

Ms Cross : Sorry, Senator?

Senator WONG: Was there any advice provided by PM&C in relation to the change in policy prior to the announcement?

Ms Cross : I do not think so, but I will check for you.

Senator WONG: Sorry, Ms Cross, did you want to—

Ms Cross : We are just looking at a brief here, which says that the Prime Minister announced he would be considering childcare and paid parental leave arrangements over the summer period. He announced that on 7 December. On 2 February 2015, he announced that the expanded PPL scheme would not be going ahead.

Senator WONG: I think your evidence is that the department was informed when the Prime Minister announced it publicly, so that would be in February 2015?

Senator Cormann: It was actually in a speech to the National Press Club on Monday, 2 February 2015, if I remember it accurately.

Senator WONG: That is when the department was informed, Ms Cross?

Ms Cross : We would have been aware of the announcement that he was considering it, but the decision not to go ahead with it was the public announcement, is my recollection.

Senator WONG: Do I understand from that, therefore, that the IDC was only informed the Prime Minister had abandoned his PPL scheme as a consequence of the public announcement?

Ms Cross : Again, I would need to check whether the IDC was still meeting at this point in time because, as I said, a number of things were in abeyance until the legislation was finalised.

Senator WONG: Was there any consultation with the states and territories before the Prime Minister abandoned his Paid Parental Leave Scheme?

Ms Cross : Again, I cannot speak for my Department of Social Services colleagues, but not from PM&C that I am aware of.

Senator WONG: And have you had any subsequent discussions with state officials?

Ms Cross : Not on PPL, that I am aware of.

Senator WONG: So the states and territories were informed in the same way you were, which was the night the Prime Minister made the announcement?

Ms Cross : We were informed before Christmas that he was considering it and then the decision was announced in February.

Senator WONG: A lot of work was done on the scheme, a lot of staff time and official time, before it was abandoned. I mean, there were seven COAG SOMs, there were targeted consultations with key stakeholders by DSS, there were Heads of Treasury meetings, there were COAG discussions and there was a lot of public servant time spent on this before it was abandoned.

Senator Cormann: No, in answer to that comment, let me just say that this is, of course, a scheme that the Labor Party never supported. This is a scheme that the Labor Party, on many occasions, called on the government to abandon. I would have thought, having made the decision that is consistent with what Labor had been promoting for some time, that there would be an absolute party of bipartisanship going on in Australian politics subsequently. So I am not quite sure of the point that you are trying to make here, other than just a very basic political point. I would have thought that the Labor Party was entirely supportive of the decision that the Prime Minister announced on 2 February 2015.

Senator GALLAGHER: Ms Cross, in relation to the discussions with the states and territories at those COAG meetings—and I do declare I was part of some of those discussions and I am just trying to refresh my memory; this is a long time ago now—the discussions centred on the organisation and arrangements about how the state public service schemes could align with the Prime Minister's at-the-time scheme, which was more generous than the state public service schemes.

Senator Cormann: Our policy going into the 2013 election was that the states and territories would continue to contribute at the same level as they were, but the status quo would essentially be maintained at a state and territory level and that to the extent that the federal scheme was more generous than existing state and territory schemes, the Commonwealth would incur the marginal costs. The discussions between the Commonwealth and state and territory governments was on how in practice that could best be achieved in the most efficient and positive way.

Senator GALLAGHER: That is right. That is my recollection and we were unable to reach an agreement essentially around the mechanisms for payment, from memory.

Ms Cross : I think, we had agreed a couple of potential mechanisms. One was where states would continue to pay their staff and another one where Commonwealth would pay on behalf of the states. I think there were a couple of different mechanisms and different states were looking at which one suited their circumstances best. But a decision was taken that, while in principle people were happy to consider those mechanisms until the legislation was available, the work could not be progressed further. I think the main point of discussion was how it was actually how it was going to be administered, whether the state would continue to pay their employees and the Commonwealth top up, or whether the Commonwealth would pay and then the invoicing arrangements for each model would be slightly different. That is my recollection because it was some time ago.

Senator GALLAGHER: But the nature of the discussion was around certainly public servants being eligible to access both schemes.

Ms Cross : That was one of the things we were working through so that people who had more generous schemes were not disadvantaged, if I recall correctly.

Senator GALLAGHER: From those meetings, it was very clear that the Prime Minister wanted to implement a scheme—remind me, was it 26 weeks—

Ms Cross : Yes.

Senator GALLAGHER: of paid leave. Again, was this with the cap in place by this time? I cannot recall.

Ms Cross : Certainly, when we started the negotiations it was 150, 000. I cannot recall the change to 100, 000. It probably happened during the course of the negotiations, but I would have to check.

Senator GALLAGHER: In relation to the state and territory schemes, there seemed to be a very conscious understanding that there was an eligibility under EBAs to a certain amount of leave, which did not reach the 26 weeks leave. I think the most generous was 18 weeks leave in the states.

Ms Cross : Yes, I think the states have that information. I do not think we had details on all of the different schemes that they operated. From memory, some had provisions which gave them access specifically to the Commonwealth scheme and their own scheme. Others had the provision for their own paid parental leave. But the states held the detail on all of the different agencies in their jurisdiction and what their separate arrangements were, and there was quite a variety.

Senator GALLAGHER: There was quite a lot of work done to look at how a person accessing the Parental Leave Scheme under a truly national scheme, where the states and territories aligned or complemented the Commonwealth, could access leave up to 26 weeks, seamlessly. That is how I remember the discussion at the time. So there were no concerns raised, at that point, by the Prime Minister around women or the primary carer accessing entitlements covered under EBA and then topping up or accessing a scheme over and above that.

Senator Cormann : These are two different issues I think that you are conflating here. One is for public servants, state and federal, to have access to one integrated scheme, where essentially the pre-existing state cost is rolled into the overall cost of the scheme. Then there is a separate issue which you are now referring to which is where public servants, state and federal, are able to access, effectively, two schemes: the scheme at the replacement wage under their enterprise bargaining agreement and the separate government default scheme on top of that. Our policy in the lead-up to the last election, certainly as it relates to the Public Service, was that the taxpayer should not be required to fund two schemes. In fact, that was a central part of our pre-election costings when it came to the Paid Parental Leave Scheme, where we made provision for a saving from preventing public servants accessing two taxpayer funded schemes.

Senator GALLAGHER: Perhaps this is because I am new, but could you tell me where the savings were identified in the pre-election costings? What document could I refer to?

Senator Cormann: If you look at the information released at the time as part of the pre-election costings. This is 2013. I obviously have not got our pre-election costings document here with me, but I can send you about one dozen transcripts of interviews that I gave personally in the lead-up to last election, where I explicitly referenced this as a key part of our policy. When we were questioned on how we would fund it, there were obviously various components to it—the temporary paid parental leave levy and various other components. But one of the savings that was built into the system that we took the last election was that we would stop public servants from accessing two taxpayer funded schemes, and that was part of the conversation very explicitly in the lead-up to last election.

Senator GALLAGHER: I must have missed that in terms of a specific focus on public servants.

Senator Cormann: I see Senator Wong shaking her head. I am happy to send you the transcripts.

Senator WONG: Dear me. I do not think you are saying no double-dipping before the last election. I think the double-dipping fraud—

Senator Cormann: Dare I say, I have actually use that terminology before the last election.

Senator WONG: I am sure that most Australians would not have—

Senator Cormann: I am very disappointed that you did not listen to my interviews in the lead-up to the last election, even though we spent a lot of time on interviews together at that time.

Senator GALLAGHER: Sorry, but if this is the case, why was all the discussion at COAG about how to access two schemes?

Senator Cormann: No, I think you are conflating two issues. I was trying to perhaps inadequately explain the difference.

Ms Cross : In terms of the discussions at COAG, there was no intention that you would get the 26 weeks from the Commonwealth and then the 18 weeks from the state government. The issue was how you had a single paymaster and that people were not disadvantaged. So if they accessed the Commonwealth scheme, how we then invoiced the states, and if the state wished to continue paying the employee, how we organised that invoicing. Senator GALLAGHER: But they were eligible for 26 weeks.

Ms Cross : They were eligible for 26 weeks—

Senator GALLAGHER: Which they are not eligible for now.

Ms Cross : which was the Commonwealth scheme. They were never going to be eligible for 26 weeks from the Commonwealth and 16 or 14 weeks from the state employer.

Senator Cormann: The key point here is that our proposal at the time, which incidentally the Labor Party violently opposed, was to have one integrated national scheme at 26 weeks and to effectively roll-in the pre-existing state schemes into that one consolidated scheme. There was never a suggestion that people in the Public Service would be able to access a 26-week scheme and an 18-week scheme on top of that. It is a very important distinction.

Senator GALLAGHER: But it is very different to what they can access now in the last iteration, which is—

Senator Cormann: Sure. It is a matter of public record that having considered community feedback, having considered, obviously, the prospects of getting the policy we took to the last election through the parliament, that we made to the judgement to prioritise investment in child care at this point in time. We very publicly, obviously, walked away from the policy in relation to PPL that we took to the last election. That is a matter of public record and we take responsibility for that.

Senator GALLAGHER: What are the savings involved with the wind-back of the Paid Parental Leave Scheme across the forward estimates?

Senator Cormann: I think that that is probably most appropriately a question addressed to the Finance portfolio.

Senator WONG: I have a process question in relation to the new budget measure, removing double-dipping from paid parental leave pay which is at BP2. In light of PM&C's prior involvement in the paid parental leave policy, can you tell me what, if any, involvement PM&C had in the development of this measure?

Ms Cross : You would be aware that PM&C is involved in the budget process through ERC, so that was the nature of our involvement.

Senator WONG: Just as you, or whoever it is these days, have representation on the ERC, there was no IDC or other policy process, interdepartmental processes associated with this measure?

Ms Cross : Not that I am aware of.

Senator WONG: Or not that PM&C was involved in?

Ms Cross : It may have been that there were some conversations at a very junior level, but not that I am aware of.

Senator WONG: Sure. The policy proposal for this: from which department did it come?

Ms Cross : The measures in the Department of Social Services—

Senator WONG: So, the—

Ms Cross : They have carriage of PPL.

Senator WONG: I am just checking. So in terms of the budget process, the relevant submission would have come from DSS?

Senator Cormann: It is in budget paper 2 as a measure under the Social Services portfolio.

Senator WONG: I know, I just referenced that.

Senator Cormann: So that is a very accurate assumption, Senator Wong.

Senator WONG: Then 'yes' would have been a shorter answer to that.

Senator Cormann: I am just trying to be helpful.

Senator WONG: Thank you. Did PM&C have any discussions with DSS about the development of that policy proposal?

Ms Cross : Our engagement in the budget is through the ERC process.

Senator WONG: No.

Ms Cross : So through that process—

Senator WONG: Were they requested to bring this forward? Were they requested to bring the removing-double-dipping measure forward?

Ms Cross : I am happy to take that on notice; I am not sure whether that level of detail about the budget process would normally be provided, but I am happy to take that on notice.

Senator WONG: It is a process question, it is not a content question. They have been asked and answered. I am just trying to ascertain how—

Senator Cormann: If I can assist you—

Senator WONG: Well, you generally don't, Minister; you generally just waste time. If I can finish? What I am trying to ask is that I just want to understand the process. So the Prime Minister announced in February that they are not proceeding, and I just want to understand how this measure starts. Who decides it? If it is a decision of ERC you can just say it is a decision of government. Or was there some other process by which it came before ERC?

Senator Cormann: I was about to provide you a very precise answer to that question. Any decisions taken in the budget context obviously ultimately go through the ERC process. Any new policy proposals put forward by any portfolio minister as a matter of process require the authority of the Prime Minister to be brought forward. That, again, is the same process as I suspect would have been in place when you were the finance minister and Ms Gillard or Mr Rudd were the Prime Minister.

Senator WONG: Can someone tell me what the current parental leave arrangements available to PM&C staff are? What are the current arrangements? What do you currently have? Sorry—is it a CA, an EA? I have forgotten what the terminology is.

Ms Kelly : I might just get Mr Neal.

Mr Neal : Can you please repeat the question, Senator?

Senator WONG: What are the current paid parental leave arrangements for PM&C staff?

Mr Neal : All employees under our enterprise agreement have access to the same 12 months or 52 weeks of unpaid parental leave. Then there are 14 weeks of paid parental leave under our agreement.

Senator WONG: So until the budget measure was announced, PM&C staff were entitled to the 14 weeks under the CA plus the statutory scheme?

Senator Cormann: If I can just correct this here, because the budget measure is not to take effect until 1 July 2016. So when you say 'until this budget measure was announced' that is actually not accurate. So until 1 July 2016 the existing system continues. The change will occur as of that date.

Senator WONG: Okay. Under current arrangements, and pending the passage of the government's changes, PM&C staff are entitled to the 14 weeks plus the 18-week statutory scheme. Is that right?

Mr Neal : They are entitled to the 14 weeks. There are 52 weeks of unpaid leave.

Senator WONG: I am not talking about the unpaid leave. I am talking about the existing PPO arrangements. Ms Cross is looking to you.

Ms Cross : My understanding is that under the enterprise agreement they are entitled to 14 weeks. They can then, as I understand it, separately claim the government scheme.

Senator WONG: Which is not what he just said.

Mr Neal : I thought you were talking about under the award.

Ms Cross : I think he was talking about the entitlement under the agreement, yes.

Mr Neal : Under the enterprise agreement, we have the 12 weeks in accordance with the maternity leave act, plus the two weeks additional leave that is provided under our enterprise agreement.

Senator WONG: When I say the statutory scheme I am talking about Labor's paid parental leave scheme, the 18 weeks. Let us just be clear. PM&C staff can access the 14 weeks, which they have bargained for. That has been in place for some time, correct?

Mr Neal : Since 2011.

Senator WONG: Prior to that, was there not a shorter entitlement?

Mr Neal : I will have to check the previous agreement.

Senator Cormann: So 2011 was also under the period of the previous government.

Senator WONG: Oh really?

Senator Cormann: Yes, indeed. So when you say some time—

Senator WONG: That is a very useful piece of information.

Senator Cormann: I just thought I would clarify that.

Senator WONG: Yes, we actually did care about work and family.

Senator Cormann: By providing access to two taxpayer-funded schemes when you were opposing one more generous scheme.

Senator WONG: I cannot believe, given what has been on the public record, that you are actually continuing with that line of argument.

Senator Cormann: I am quite relaxed about the fact that this arrangement needs to change. That is my position. You can personalise it, Senator Wong, but that is my position.

Senator WONG: So, Mr Neal, PM&C staff were entitled to both.

Mr Neal : Yes.

Senator WONG: Under what the government has announced in BP2, what will occur in relation to their parental leave entitlements?

Mr Neal : We are currently in the midst of APS bargaining, as you know, Senator, so we are not changing our approach to paid parental leave until we receive word on what their new policy position may be, but certainly we have bargained as if the—

Senator WONG: Sorry, who is the 'they' in that? 'Until we receive word on what "their" new policy position may be'—

Mr Neal : I am referring to the APS bargaining policy, which is quite clear about maintaining current arrangements, and we will continue to do that through bargaining.

Senator WONG: So you do not have any advice at the moment? You have not given staff any advice about what will occur in relation to what effect the government's decision in the budget will have on their entitlements?

Mr Neal : We have not discussed that at the negotiation table as yet, no.

Senator WONG: Do you know what it will be? What is the effect of the budget measure on your staff's entitlements?

Senator Cormann: I will answer that. The government policies for current arrangements where people are able to access a more generous as well as an additional second taxpayer-funded scheme would cease as of 1 July 2016. Obviously that is subject to legislation which has to pass through the parliament. Obviously, if or when that happens, then relevant consequential arrangements will need to be made in terms of the administration of government, and in that context they will be made.

Senator WONG: Mr Neal, you are waiting on advice from APSC about how to deal with this? Is that right?

Mr Neal : Yes and no, Senator. Clearly this is one of the areas where we need consistency across the service. We would look to the APSC for advice on those matters, but with respect to bargaining maternity leave arrangements or parental leave arrangements under our agreement, we are yet to get back to the negotiation table to discuss that.

Senator WONG: You could not actually discuss it with any finality, could you, because, as you say, APSC has to advise you what the policy across the service will be.

Mr Neal : That is my understanding, Senator, yes.

Senator WONG: Okay. Have any negotiations been held since the budget?

Mr Neal : No.

Senator WONG: Do you intend to hold any until this matter is resolved?

Mr Neal : Yes.

Senator WONG: You do.

Mr Neal : Yes.

Senator WONG: But you cannot finalise any negotiations until this matter is resolved.

Mr Neal : We still have a number of outstanding issues with respect to our negotiations.

Senator WONG: That was not my question.

Mr Neal : We are not yet ready to discuss paid parental leave under our agreement.

Senator WONG: Can you finalise negotiations while that is still undecided?

Mr Neal : We could continue on the existing arrangements and then seek to change them should that eventuate at a later date.

Senator WONG: So you are still waiting for the word on what the PPL policy will be for the Public Service.

Mr Neal : I think we are waiting for some consistency of approach.

Senator GALLAGHER: Could I follow up from Senator Wong. Minister, I have just gone back and tried to have a look at the policy before the last federal election and—correct me if I am wrong—it says, 'The period following the birth of a child is one of the hardest financially for parents'. It also referred to the current PPL arrangements as inadequate. Am I reading from the correct—

Senator Cormann: That sounds consistent with what we said in the lead-up to the last election.

Senator GALLAGHER: The reference you made to double dipping seems to me to be the negotiations we were having at COAG—

Senator Cormann: No, that is not right. The negotiation at COAG was about making sure that as part of an integrated, consolidated superior scheme, the resources put into state based, public sector paid parental leave arrangements would be rolled into that overall consolidated scheme so that the Commonwealth would only incur the marginal additional cost. There was no suggestion there of state or federal public servants having access to two taxpayer funded schemes.

To assist you, I have a series here. I will just read them into Hansard and then you can check them out. In an interview on 28 August 2013 on ABC Radio's AM, I very explicitly referenced the part of the policy which prevented access to two taxpayer funded schemes for public servants. That was part of our savings. On ABC NewsCapital Hill on 26 August 2013; on Sky News PM Agenda, 2.30 pm on 22 August 2013; on Fairfax Online Breaking Politics on 22 August 2013—

Senator WONG: Okay, thank you.

Senator Cormann: I can give you a whole long list—

Senator GALLAGHER: I think you undertook to provide them to me on notice, which would be useful.

Senator WONG: Can I just clarify something, if I may, Chair?

CHAIR: Yes.

Senator WONG: That is in the context of you offering a 26-week scheme. At that stage, was it still uncapped at $150,000?

Senator GALLAGHER: That is right.

Senator Cormann: In the lead-up to the last election we were proposing a scheme—

Senator WONG: So the context of your double-dipping supposed suggestion for the last election was in relation to a scheme that was far more generous than the one that you are proposing currently.

Senator Cormann: The context was this: the context in the lead-up to the last election, if you want to relitigate the last election, was that Labor—

Senator WONG: Now you are getting—

Senator Cormann: You have asked me a question about context, so I am happy to provide an answer. The context was this: at the time, Labor was opposing the more generous paid parental leave arrangements that we had put forward in the context of the election while—as you have again confirmed here today—Labor was providing access not to one but to two taxpayer funded schemes for public servants. The point that we made in the lead-up to the last election was that we thought that was unfair and unreasonable. In the context of the last election, we took the view that all mothers across Australia should have access to equivalent paid parental leave arrangements.

That is still our position. Our position still is that, as far as possible, we should ensure that all women have at least access to the government sponsored default scheme. And where women have access to more generous arrangements through their public or private sector employer then the taxpayer in those circumstances should not be expected to fund access to a second scheme, given that most women across Australia can only have access to one scheme.

CHAIR: I do think—

Senator Cormann: I find it interesting that Senator Wong never listens to my answer—

CHAIR: Thank you, Minister—I do not need a contribution from you right now. I do think that as a matter of courtesy, if a question is asked and you try to score a political point—on either side of the table, whatever it might be—that you actually hang around to wait for the response.

Senator WONG: He is giving me a—

CHAIR: I understand that—

Senator Cormann: That was a very precise, direct and relevant answer to your question.

CHAIR: You may indeed be frustrated, but it is just simply a matter of courtesy. If you do not want the longwinded political answers, no matter how factual they may be, then do not ask the questions that provoke them.

Senator WONG: The longwinded political answers will get the respect they deserve.

CHAIR: As—

Senator Cormann: I answered directly the question she asked—

CHAIR: As should the snide questions, which I am happy to rule out if that is what you want. But let's just offer some courtesy to each other in this committee.

Senator WONG: Well, I do not think that anybody is interested in Senator Cormann reading out transcripts of himself—

CHAIR: No—

Senator WONG: Chair—you asked me!

CHAIR: No, I did not. I did not ask you at all.

Senator WONG: And I will make clear—

CHAIR: What I did say—in fact, I did not name you—

Senator WONG: that we are not interested—

CHAIR: You have walked out twice while the senator is responding and—

Senator WONG: Yes, because he is providing longwinded, political answers that no-one is interested in.

CHAIR: He is responding to your questions, or statements, and he is perfectly entitled to do so.

Senator WONG: He is. And I am entitled to ignore them—

CHAIR: I am merely—

Senator WONG: because they are irrelevant.

CHAIR: You are entitled to ignore him and I am entitled to give the call to someone else if that is how you are going to conduct yourself over the course of the day.

Senator WONG: Excuse me, there is a camera on me and I am having—

Senator Cormann: Just for the record, Chair, I was directly answering the question that was put to me by Senator Wong about the context—

Senator WONG: It is not all about you, Mathias.

Senator Cormann: in which we criticised and wanted to bring to an end public servants having access to two taxpayer funded paid parental schemes.

CHAIR: Minister, I am aware of that, which is why I made the statements that I did. You are directly relevant to it, so we are very clear on this. I will go to Senator Gallagher.

Senator GALLAGHER: I promise to be quick. In regard to the policy that was taken to the 2013 election—I think it goes for some 13 pages—there is not any mention in that document of double dipping. It again goes to the point that the first year is the hardest financially for parents. The policy was, at that time, public servants, or anyone with an EBA with parental leave arrangements, being able to access the statutory scheme. The document refers to this as 'inadequate'. You are right in the sense that there is a costings document which goes to the issue of double dipping for paid parental leave in relation to public servants. But it says:

Commonwealth and State public sector employees will be given a choice of using their existing schemes or using the new Coalition scheme.

That is six months at $75,000.

Senator Cormann: That is exactly right. The situation under our policy as announced in the budget is still that. Federal and state public servants, if they have got access to a more generous scheme, are obviously free to access that scheme; but they are not then also able to access the default scheme, also funded by the taxpayer, on top of that. That is the point that we are making. There is a choice there, but we do not think it is fair and reasonable, in the circumstances where some women have access to more generous paid parental leave arrangements through their public or private sector employers, that the taxpayer in those circumstances should be expected to pay for access to a second scheme. We understand that that is the system at the moment. We understand that that has been the system for a period, but we were quite transparent in the lead-up to the last election that, in relation to public sector employees, we wanted to change that. Of course, in the budget we made a decision to change that in relation to both public and private sector employees.

Senator GALLAGHER: I think the point I am making is that what you went to the last election with is not what you are doing now.

Senator Cormann: Well, that is a matter of public record.

Senator GALLAGHER: But you cannot rely on a policy and say, 'We are delivering on what we said' when you are not actually delivering on what you said.

Senator Cormann: It is a matter of public record that we took a more generous paid parental leave policy to the last election and to the election before that, as a matter of fact. But it is also a matter of public record that this was obviously pretty widely debated across the community, that there was reasonably strong opposition from a relevant and material part of the parliament, including, may I say, from the Australian Labor Party. As I said to Senator Wong before, given that the judgement that we made on reflection was consistent with what Bill Shorten and others in the Labor Party had advocated for some time, I would have thought that there would had been a celebration of the fact that we had considered the community's views and considered the views of parties represented across the parliament and that we came to a view that was consistent with the view advocated by the Labor Party.

Senator GALLAGHER: In terms of the language that was used in the lead-up to the budget and in days after by a number of senior members of the government, whose decision was it to use language such as 'rorters' and 'double dippers'? I think 'fraud' was used at some point.

Senator Cormann: I do not believe that any of my colleagues have referred to rorters. I make it a habit of taking responsibility for my own statements. I let my colleagues take responsibility for their statements. I am not going to become a commentator on commentary. As far as I am concerned, there is obviously a system that has been in place for a period where some people are able to access two schemes, whereas most people are only able to access the one taxpayer funded default scheme. The judgement of the government in the context of the budget process was that, on reflection, that was not the fairest way of directing limited resources into support for families and that we wanted to prioritise an investment in child care—helping families get into work, stay in work and be in work—by providing access to simpler, more affordable or flexible childcare arrangements. All things considered, I think we got the balance right in suggesting that, where women have access to more generous public or private sector paid parental leave arrangements, the taxpayer should not be expected in those circumstances to fund access to a second scheme. That is a position that I have certainly supported strongly within government and I think that that is the right position.

Senator GALLAGHER: You do not think that women who access two schemes are rorters, though, do you, Minister Cormann?

Senator Cormann: I have never suggested that and I do not believe that any of my colleagues suggested that. I know that people, in the context of political debates, try to go for a bit of hyperbole and verballing—and I understand that—but I do not believe that any of my colleagues has referred to women in those circumstances as rorters.

Senator WONG: You do not believe that?

Senator Cormann: No, I do not.

Senator WONG: Didn't Mr Morrison tell Sky News that being able to benefit from both schemes was 'a rort'?

Senator Cormann: I do not believe that Mr Morrison referred to women accessing existing arrangements as rorters. I think that that is an interpolation that the Labor Party has put on is comments for political purposes.

Senator WONG: Quote: 'We are getting rid of what is an inequity and, frankly, in many cases, I think it is a rort.' Do you agree with that?

Senator Cormann: I think I have been very precise in explaining that the government's judgement. I was very clear. In circumstances where most women have access to only one taxpayer funded scheme, we do not think it is appropriate for women who have access to more generous public or private sector paid parental leave arrangements to also have access to a second arrangement funded by the taxpayer. We think that that is a fairness and equity measure, and that it what all of us in government have been advocating since the budget.

Senator WONG: Senator Cormann, do you agree with Mr Morrison that 'I think it is a rort'?

Senator Cormann: I am not going to provide commentary on commentary.

CHAIR: I have two minutes worth of questions with regard to the Office of Best Practice Regulation. Should I address those questions to you, Ms Cross?

Ms Cross : Yes. We will get the relevant officers to the table. But you could start with me. I may be able to answer.

CHAIR: How many regulatory impact statements and post-implementation reviews has OBPR overseen in the last three years?

Ms Cross : In the last three years?

CHAIR: Yes.

Ms Cross : I will get the relevant officer, Mc McNamara, to see what information we have with us.

CHAIR: Perhaps while someone is digging that information out, I might ask a more general question. Mr McNamara, what is the purpose of the regulatory impact statement and what is the purpose of a post-implementation review and how do they differ?

Mr McNamara : Essentially, the difference between a RIS and a post-implementation review is a RIS would be trying to inform a forward-looking policy decision as a general rule—so it is something that could be changed in the future—and the post-implementation review was essentially looking backwards. It is something that has happened in the past—a regulatory change that has happened in the past—and is an assessment of the efficiency and effectiveness of the policy as it is currently operating.

CHAIR: On the department's website there is a PIR review guidance note. It says, 'A PIR should outline the original problem and the government's objectives'—I will just selectively quote from this—'and how effective and efficient it has been in meeting its original objectives.' Is that a reasonable characterisation?

Mr McNamara : That would be, yes.

CHAIR: So could a PIR which did not at its essence address the main objectives of the regulation be characterised as meeting best practice requirements?

Mr McNamara : If you are undertaking a post-implementation review, you are trying to test whether it is efficient and effective. That is what you are trying to do in the assessment.

CHAIR: If it did not comply with the main objectives of the regulation—

Mr McNamara : If it was not achieving what it was set to do, you would hope a post-implementation review would conclude that it is not being efficient or effective or could be improved in some way.

CHAIR: But only if the post-implementation review was assessed or conducted as assessing against the objectives of the regulation or legislation in the first place. Is that correct?

Mr McNamara : That is right. That is what it is designed to do.

CHAIR: The guidance that I referred to before has a section entitled 'Not meeting best practice' which lists a number of methods used to assist agencies in drafting PIRs. Has the Office of Best Practice Regulation had any steps relating to that note, such as writing to agencies outlining areas of concern and so forth, with regard to any PIRs that are currently underway?

Mr McNamara : As part of our regular practice it is normal to write to agencies or meet with agencies that are undertaking a post-implementation review. It is fairly typical that an agency would give us a draft of a post-implementation review and that we would provide comments on the post-implementation review in terms of what we consider it needs to change to meet best practice. It is very similar to the RIS process in the sense that it is a fairly interactive process and we tend to try to raise the standard of those documents.

CHAIR: Let's go to one PIR that is currently underway, which is the review of the Tobacco Plain Paper Packaging Act 2011. There was an extension granted by your office to the Department of Health to conduct this PIR. Can you explain to me why that was put in place?

Mr McNamara : I think there was a discussion with the health department about gathering data for the PIR. It is a fairly typical request that agencies have—that is, they want more time to be able to gather data. From memory, I think we have given them until June this year to finish that PIR.

CHAIR: It is topical because it goes to objectives of it, and I notice Senator Leyonhjelm discussed this with the Department of Health during Senate estimates in February 2013. He submitted a written question on notice asking, amongst other things: 'Why did the health department mislead the committee regarding the objects of the act?' That is a very serious allegation. The Department of Health official subsequently wrote to the committee to amend the evidence provided, noting that some of the answers given were inadvertently accurate. While the details of this relate to another department, to me, the process gives rise for questions of your office with respect to the objectives of the PIR and being consistent with the objectives of the act or the regulation that has been enacted.

Mr McNamara : I would consider the PIR to still be a policy document. So I would still see it in terms of the objectives that it is trying to assess. It is trying to address a problem and trying to assess whether the regulations addressed those problems. Objectives can be taken out of the act, but many people who do PIRs would be looking more generally at the policy issues that the government of the day was trying to achieve with the regulation.

CHAIR: Let's just go back to the plain paper packaging PIR. The act says:

(1) The objects of this Act are:

(a) to improve public health by:

   (i) discouraging people from taking up smoking, or using tobacco products; and

   (ii) encouraging people to give up smoking, and to stop using tobacco products; and

   (iii) discouraging people who have given up smoking, or who have stopped using tobacco products, from relapsing; and

   (iv) reducing people’s exposure to smoke from tobacco products; and

(b) to give effect to certain obligations that Australia has as a party to the Convention on Tobacco Control.

They are the objects of the act. Then there is a second part, which is about the intention of the parliament to contribute in how they can establish that. To cut to the chase, there is a PIR which is being conducted by consultants, Department of Health and Siggins Miller. They said:

The objectives of the tobacco plain packaging measure are to regulate the retail packaging and appearance of tobacco products in order to:

reduce the appeal of tobacco products to consumers;

increase the effectiveness of health warnings on the retail packaging of tobacco products;

reduce the ability of the retail packaging of tobacco products to mislead consumers about the harmful effects of smoking or using tobacco products; and

through the achievement of these objectives, in the long term, as part of a comprehensive …

and so on and so on and so on. It strikes me that the first three elements which I highlighted here are not objectives of the act as passed by parliament.

Mr McNamara : They may not be. But I do not think I would comment on that.

CHAIR: But isn't it your requirement to comment on it? The PIR has to be consistent with the objectives in reviewing the objectives of what has been put forward by the parliament? That is what your agency does.

Mr McNamara : Yes. When we would receive a PIR, we would make sure that what the act sets out, if you like, as the performance indicators for the regulation—that there was some assessment against those. That is what we would want to see. If any department—in this case the health department—conducting a PIR had not done that, that would be the type of thing that we would write back to them about and say, 'that is what we need'.

CHAIR: But you have not done that.

Mr McNamara : We have not got the PIR from them. We have not got a PIR yet. When I was talking before about the deadline, we extended the deadline because the agencies told us they needed more time to get data. We may have had discussions with them but we have not received the PIR at all for assessment as yet.

CHAIR: When do you expect to receive it?

Mr McNamara : Very shortly, given that they have a 30 June deadline. They have five or six weeks.

CHAIR: The Department of Health has engaged a consultant to assist with the PIR—that is Siggins Miller consultants—to undertake consultation with stakeholders that have been impacted by the tobacco plain packaging measure. The consultation period runs from 16 February 2015 to 27 March 2015, and they have called for submissions. Yet, in their assessment of what is going on, they are not even relating to the objects of the act according to their own terms. It strikes me that either there is a preconceived response that is coming out of this, because they are not relating to what their mission should be—and I think there is an obvious role for your agency to go in and say, 'How can you have a post-implementation review when you are not even considering the objectives of the act?'

Mr McNamara : We would do that, but we have to actually get the document off the agency first before we can make a comment on them.

CHAIR: Fair enough. But you are going to get the document after they have done the consultation, after they have failed to comply with even the most cursory look at this. It looks to me like it is a stitch-up from the Department of Health.

Mr McNamara : I would not comment on that. I would say that part of our role is to make sure the agency does address the requirements. It will not be unique for an agency not to have addressed the requirements; that is part of our job.

CHAIR: That is why you exist.

Mr McNamara : That is why we exist. If everyone did it perfectly the first time, we would not need to exist. That is our role. And, if the health department, or any other department, is not quite meeting the requirements, that is what we bring them back to.

CHAIR: So what happens? They do the research along the lines of the objectives that they have set themselves that do not specifically relate to the objectives of the act. They spend time and money doing that and they come out with their report. They give it to you, and you say, 'Sorry, this is flawed, because it does not meet with the objectives of the act.'

Mr McNamara : Yes.

CHAIR: What happens then? They go off and do it again and spend more taxpayers' money? Is that how it works?

Mr McNamara : Yes, they would have to revise it—in any case where we get a post-implementation review and it does not meet the requirements. In the past, we have had post-implementation reviews where people have not consulted quite well; they have not asked in consultation the right questions and, therefore, they write a post-implementation review that says, 'We don't know'. We send them back out to consult again.

CHAIR: Mr McNamara, this is not specifically about tobacco—this case is—but it is about the efficiency of government here. Surely there is a means and a mechanism by which your office can be dealt with or consulted prior to the implementation of these sorts of reviews to avoid duplication and waste of resources and inefficient use of government.

Mr McNamara : Yes.

CHAIR: That is my point.

Mr McNamara : That is a fair point. If people come and talk to us at an early stage of the process, then we are always there to offer advice on how to meet the requirements.

CHAIR: Finally, I did ask at the start: how many PIRs have been undertaken over the last three years? Have you been able to get that information?

Mr McNamara : We might have to take that on notice.

CHAIR: I am interested in, basically, how many you have sent back and said, 'You haven't met the review.' You can take that on notice.

Mr McNamara : From my experience, I do not think I have passed a post-implementation review on first draft.

CHAIR: So it is not a unique circumstance?

Mr McNamara : That is what I mean. It is not a unique circumstance. Some are very close at first go, but I have no memory of anyone who has passed on the first go.

CHAIR: Senator Wong has a couple of questions, I understand.

Senator WONG: First, on notice, I do not think I asked this, or could someone come back to the table and tell me: how many Prime Minister and Cabinet staff accessed both the enterprise agreement scheme and the existing statutory scheme since 2011?

Ms Kelly : We will have to take that on notice.

Senator WONG: I have got questions for you, Mr McNamara. There was a Prime Minister's exemption on the RIS provided for the Qantas Sale Act in March last year. How many other prime ministerial exemptions have been (a) sought and (b) granted?

Mr McNamara : There have been no other exemptions granted. I do not think I could give you an answer on the first question because—

Senator Cormann: We might take that on notice. If we can assist you further, we will provide you with that information.

Mr McNamara : We do not necessarily have that information in the Office of Best Practice Regulation.

Senator WONG: That would be a PMO or PM&C—

Senator Cormann: You would assume that any correspondence is conducted properly through PM&C, but let's take that on notice and if we can assist further we will.

Senator WONG: Are all decisions that require a RIS publicly available on your website?

Mr McNamara : Standard and long-form RISs are published on our website as a matter of course. Short-form RISs are not published on our website.

Senator WONG: Why not?

Mr McNamara : Because the government's system is that short-form RISs are not published.

Senator WONG: How many short-form RISs have there been since the change of government?

Mr McNamara : I would have to take that on notice. We do not track how many short-form RISs there are.

Senator WONG: And the decision has been made to not make them public?

Mr McNamara : That is right.

Senator WONG: When was that made?

Mr McNamara : That was announced in March 2014, when the new system and the new handbook were released.

Senator WONG: Can you provide us on notice with a list of all short-form RISs, please, since that announcement?

Senator Cormann: We will take that on notice.

Senator WONG: Yes, 'on notice' I said.

Ms Cross : We will have to see whether we have that information centrally.

Senator WONG: He has got it.

Mr McNamara : No. We will not track that.

Senator WONG: Do short-form RISs have to be submitted to you?

Mr McNamara : No, they do not have to be submitted to us. They are part of the cabinet submission process. What has to be submitted to us as part of the short-form RIS is the costing associated with it.

Senator WONG: In relation to how many short-form RISs has the OBPR received costings? That you should be able to track.

Mr McNamara : We can answer that on notice.

Senator WONG: Thank you, I appreciate that. Could I ask PM&C to provide an indication of how many short-form RISs have been undertaken under this government?

Ms Kelly : We can take that on notice.

Senator WONG: And a list of the decisions that have been publically announced. I do not want to get into an argument about those that have not been announced, but a list of decisions that have been publically announced which were the subject of a short-form RIS.

Ms Cross : Again, we will see if we can provide that information for you.

Senator WONG: Was there a RIS done in relation to the removing of double-dipping from the Paid Parental Leave pay?

Mr Simovski : Yes, Senator. A RIS was done for that proposal.

Senator WONG: A short-form RIS?

Mr Simovski : Yes, a short-form RIS.

Senator WONG: I would ask that that be tabled. You are taking that on notice—is that what that nod means?

Mr Simovski : Yes.

Senator WONG: I want to go to the changes to foreign investment very quickly. In relation to that, the Department of the Treasury chose to complete a short-form RIS. You indicated it was OBPR's view that, for this proposal, a standard-form RIS would have been consistent with best practice.

Mr McNamara : That is right.

Senator WONG: That was the view of OBPR?

Mr McNamara : That is right.

Senator WONG: That was communicated to the Treasury?

Mr McNamara : That is right.

Senator WONG: But they chose not to undertake it?

Mr McNamara : Under the system, they get to make the choice of the form of the RIS and they chose to do a short-form.

Senator WONG: It looks to me like the only thing which was the subject of that short-form RIS was the change to the screening investment for foreign investment in Australia's agricultural sector.

Mr McNamara : In terms of the RIS process, the government has made a number of announcements on a wider scale, not just the agricultural element. The agricultural element needed a RIS, but so did other elements.

Senator WONG: So was there a RIS provided in respect of the real estate investment proposals?

Mr McNamara : Prior to the government's announcement on 2 May of changes to foreign investment, the Treasury has undertaken a standard-form RIS that we have assessed.

Senator WONG: Is that on the website too?

Mr McNamara : Not yet.

Senator WONG: When is that going up?

Mr McNamara : We are in discussions with Treasury at the moment about publishing that.

Senator WONG: How is it that this can be announced in February and we are in May and it is still not public?

Mr McNamara : Because the RIS that Treasury has prepared relates to the decision the government announced on 2 May, not in relation to the announcement—

Senator WONG: Which one was that?

Mr McNamara : That was the broader decision. In terms of the initial decision on 11 February, that was informed by a short-form RIS.

Senator WONG: How many long-form RISs have actually been done under this government?

Mr McNamara : At the moment, this year we have had 20 RISs that we have published. Last financial year, we had 47. A couple of those would have been under the previous government, given that they were in the last financial year. So we are still tracking, and we have quite a number that we are publishing that are coming out of the budget at the moment.

Senator WONG: You cannot even do a long-form RIS on something as important as foreign investment screening. People are avoiding a proper regulatory assessment and public scrutiny by doing a short form.

Mr McNamara : That is the choice of the department.

Senator LAMBIE: I would like to understand how the office of the PM deals with important submissions and reports from the Heydon royal commission into corruption. Has the Prime Minister's office received the interim copy of the Heydon royal commission's report released in December last year?

Ms Kelly : Yes, Senator Lambie. The report from the royal commission into corruption in trade unions has been received by the Prime Minister.

Senator LAMBIE: You may recall that, as part of the Haydon royal commission into union corruption, the Prime Minister should have also received a copy of the confidential report attached to the Haydon interim report, which noted at point 99—and I will quote the royal commissioner:

It is necessary for that volume to be confidential in order to protect the physical well-being of those witnesses and their families. This is unfortunate, because the confidential volume reveals grave threats to the power and authority of the Australian state.

And I will repeat that:

… the confidential volume reveals grave threats to the power and authority of the Australian state.

Did the Prime Minister's office receive that confidential or secret report?

Ms Kelly : I am told that, yes, that has been received.

Senator LAMBIE: How many people in the Prime Minister's office would have had access to a confidential report which reveals grave threats to the power and authority of the Australian state?

Ms Kelly : I do not know the answer to that, but I can take it on notice and make that inquiry.

Senator LAMBIE: Was the Haydon confidential report shared from the Prime Minister's office to other ministers and departments, and if so could you name them?

Ms Kelly : I am not able to say whether it was shared by the Prime Minister's office. In relation to the recommendations in the interim report, the Department of Employment actually has the main carriage of that matter and so may be able to provide greater assistance in relation to the government's response to the interim report and the status of that.

Senator LAMBIE: As you would be aware, the Australian Building and Corruption Commission is coming up and the crossbench senators need to take a vote on this. This is of significant importance. In your experience, is there any way that report or those secret documents could be shown to the crossbenchers, like the DLA Piper Vol. 2when it came to Defence abuse? We were able to view those behind closed doors and sign confidentiality forms not to reveal any of that information. None of that was redacted, as you would know, and we were able to have access to that. Is there any reason, in your experience, why this could not be done with these reports?

Ms Kelly : I have not read the confidential report and I do not know the exact nature of the material in it. I would put great store in former Justice Haydon's marking of the report as confidential as indicating that it is material that would not be appropriate to make public. Whether or not there is some ability to share in some form some of that material is something that I can take on notice and that we can further consider. But as I have not seen the report I would be reluctant to express a view about whether or not it was either possible or appropriate to provide it any further.

CHAIR: We will now take a short break.

Proceedings suspended from 10 : 28 to 10 : 46

Senator WONG: Mr McNamara, can you tell me why it was OBPR's view that a standard form RIS would have been best practice in relation to the foreign investment screening changes?

Mr McNamara : We thought it would have been best practice because we thought it was a significant regulatory issue and therefore would benefit from a standard form RIS.

Senator WONG: Does a short form RIS properly identify the costs of the complexity associated with this change?

Mr McNamara : A short form RIS will always identify the compliance cost changes with the change. That is a requirement of a short form RIS.

Senator WONG: What does it not identify that a standard form RIS would have?

Mr McNamara : It depends on what the agency wants to put in a short form RIS.

Senator WONG: What do you think should have been covered with a standard form RIS, given the nature of the decision in relation to foreign investment screening that was—

Senator Cormann: That is asking him for an opinion. What you are asking is what would have been covered rather than what should have been covered.

Senator WONG: He has already given his opinion, as is his right in terms of his position. He has given his opinion, and it is on the website. I am asking the basis of that.

Mr McNamara : We would see that a standard form RIS would provide a cost-benefit analysis of the changes, and that cost benefit would be informed by consultation. That is probably the key things we see in a standard form RIS.

Senator WONG: So there was no cost-benefit of the government's changes to foreign investment screening?

Mr McNamara : As I said, subsequent to that announcement a standard form RIS that does include an analysis of impact and has been the subject of consultation has been prepared.

Senator Cormann: And just in relation to this particular issue, there was of course a committee of the parliament that also conducted some extensive consultations in this entire public policy space, on top of the commitments that we took to the last election. Just to get to the final consequential point in relation to this, the government made the decision that we did. We take responsibility for the decision to use the short form RIS methodology on this occasion, given our decision to get on with the change that we thought was in the national interest.

Senator WONG: Mr McNamara, is it the case that the changes to foreign investment that the government announced, when overlayed onto the range of different commitments that exist under Australia's various bilateral and multilateral trade agreements, create quite a complex set of rules for foreign investors depending on the type of investment and which nation they are from?

Senator Cormann: I do not think that Mr McNamara is an expert in Australia's trade policy framework and the various bilateral and multilateral agreements that Australia is a party to.

Senator WONG: Mr McNamara, I am asking you from an OBPR perspective. This would be part of the context in which the RIS has been undertaken?

Mr McNamara : What I could say is that, yes, as I said previously, we considered the changes to be significant enough that we thought a standard form RIS was appropriate. If we thought the changes were more minor, we would not have asked for standard form RIS.

Senator WONG: There are quite a number of aspects of the changes to the Foreign Investment Framework, which you reference in 2 May. Can you just take me through what RISs are now being undertaken, as yet not public and in relation to what aspects?

Mr McNamara : I can tell you that the standard form RIS was undertaken in regard to the announcements of 2 May and it covers the scope of 2 May.

Senator WONG: So the entirety of the changes which include the stronger enforcement, data matching, stricter penalties, agricultural changes and the Foreign Investment Register. All of those were the subject of the RIS?

Mr McNamara : I could not tell you that. I would have to take on notice the detail of the RIS.

Senator WONG: When is the RIS being published?

Mr McNamara : We are in discussions with Treasury at the moment about publishing the RIS. I would expect it to be very shortly.

Senator WONG: Under the guidelines, what is the government's approach to publication of standard form RISs?

Mr McNamara : The standard form RIS should be published as soon as possible after the announcement of the decision. There are some slight complications with this RIS because it is my understanding from Treasury is that there are some aspects of the RIS that the government has not considered and made a decision on yet. They have got an issue of how they publish that at the moment. That is the issue Treasury is grappling with.

Senator WONG: So the decision of government is required in relation to aspects of the RIS?

Mr McNamara : What Treasury have told us is that at the moment the RIS covers off on elements of the Foreign Investment Framework that the government is yet to make a decision on.

Senator WONG: So they announced it before?

Mr McNamara : They have announced—

Senator WONG: So they have decided some elements—

Mr McNamara : The RIS is a broad document that covers the full scope of what has been announced, but there are other aspects that Treasury tell me that are in the RIS that are yet to be subject to government decision. We would encourage them to publish a redacted RIS because that would be a more appropriate way to move forward.

Senator WONG: And then subsequently publish additional information once the government has made a decision.

Mr McNamara : Yes.

Senator Cormann: If a decision is made.

Mr McNamara : If a decision is made. The idea of the RIS now—

Senator WONG: When did you put that to Treasury, Mr McNamara?

Mr McNamara : Last week. They have not come back yet.

Senator WONG: Is there a cost-benefit analysis undertaken in the standard form RIS that has not been released?

Mr Simovski : It is an early assessment RIS which obviously goes through one of the key RIS questions, which is the impact analysis. So the RIS does talk about the various costs and benefits of the options put forward.

Senator WONG: Does it look at whether or not the changes would have any effect in reducing the amount of foreign direct investment in Australia?

Mr Simovski : I am not aware of the specific details on this matter. I think I will have to take that on notice.

Senator WONG: Thank you. I am finished with that topic, Chair.

CHAIR: Would like to continue?

Senator WONG: I am happy to continue. Ms Cross, while you are still here, could I go to budget preparation. To shorten the questions, do I assume that the role PM&C played in the budget this year is the same role PM&C has generally played in relation to budgets?

Ms Cross : That would be a safe assumption, Senator.

Senator WONG: And can you tell me when budget preparations for this year's budget began?

Ms Cross : I would have to take that on notice, but it would have been sometime last year, consistent with the normal process.

Senator WONG: Is it your evidence that this process was as in previous years?

Senator Cormann: It was a bit earlier this time around because the year before we had had an election and the process essentially started in earnest in December. This time, early November seems to ring a bell but we will get that more precisely for you on notice.

Senator WONG: Ms Cross, would it be your evidence that budget preparations were not delayed this year?

Ms Cross : Every budget that I have been involved with has been slightly different but follows the same broad pattern, and this budget followed the same broad pattern.

Senator Cormann: My evidence, Senator Wong, is that the process started at the appropriate time and it concluded on the second Tuesday in May, as it had to.

Senator WONG: Would it be correct to say that you only started seriously thinking about the budget in February?

Ms Cross : No, Senator.

Senator WONG: So when Mr Fraser is quoted as saying that he planned to begin preparations for the 2016 budget sooner than this year's because it 'shouldn't be something that we start to think of seriously in February. The budget planning process—and I hope we can do it properly this year—should start around November.'

Ms Cross : I cannot speak for the Treasury but certainly from our point of view it started last year, as I indicated.

Senator WONG: So is the new Secretary of Treasury wrong when he suggests, in this public statement to a range of economists that your budget process only really began seriously in February?

Senator Cormann: I have not seen the comments that you are referring to but let me just reassure you again: I am obviously intimately involved in the process myself, in my own right, and the process started last year and I believe it started in November.

Ms Cross : It followed a very similar pattern to all of the budgets I have been involved with. I cannot speak on behalf of the head of Treasury, but from our point of view it was consistent with previous budgets.

Senator WONG: So you do not agree that the government only started thinking seriously about this budget in February.

Ms Cross : As I indicated, the process started in November—

Senator WONG: That was not my question—

Senator Cormann: Let me reassure you: the government thought very carefully about our second budget, for a very long time. Indeed, we started to think about it very seriously in the second half of last year.

Senator WONG: So when did you decide to become Australia's biggest-spending finance minister?

Senator Cormann: That is a ridiculous proposition.

Senator WONG: It is true.

Senator Cormann: We reduced the spending growth trajectory that we inherited from our predecessors, which was taking us to 26.5 per cent by 2023-24 and was taking us to 37 per cent spending as a share of the economy within a few decades.

Senator Wong interjecting

Senator Cormann: Here is Senator Wong again making political comments to try and detract from her own record as finance minister.

Senator WONG: I confess that you do outspend me by, I think, a percentage each year.

CHAIR: Order ! It makes it very difficult for Hansard to pick up the accurate transcript.

Senator WONG: I will move on.

CHAIR: I have mentioned that interjections or questions that are designed to provoke often meet with an infuriating response, I understand, on both sides.

Senator WONG: I am sure you share my bemusement at these statistics.

CHAIR: No, I do not share your amusement.

Senator WONG: Bemusement.

CHAIR: Bemusement. But you do know, Senator Wong, that you get frustrated and sometimes it is your own fault.

Senator WONG: That is probably true. Can I ask: has Prime Minister and Cabinet been asked to provide any advice to the Prime Minister in relation to a possible iron ore inquiry at any point?

Ms Cross : I will see if the relevant area of the department is here. I am not completely sure, Senator. I will just see if someone will come in from the room next door.

Senator WONG: Ms Kelly is leaning forward with her mouth open.

Ms Kelly : I understand the answer to that question is yes.

Senator WONG: Are you able to give me the date on which that was provided?

Ms Kelly : It was very recently.

Senator WONG: We can come back to it. I will not ask the content; I just want to get the time frame. Was it prior to the Treasurer's announcement that there would not be an inquiry?

Ms Kelly : I am sorry, I do not know when the Treasurer's announcement was.

Senator Cormann: It would have been after, obviously, a relevant motion was initiated in the Senate by Senator Xenophon and before the government announced its decision.

Senator WONG: If we can just get the date of that.

Senator Cormann: That is a short window.

Senator WONG: Can I ask: is it you, Ms Kelly?

Ms Kelly : I believe that there was advice provided by two parts of the department, so it would be both Ms Cross and me.

Senator WONG: Dr Gruen is here. Am I allowed to say that we miss you in Treasury estimates, Dr Gruen?

Dr Gruen : I suspect I should say thank you, Senator.

Senator WONG: No, I might have got you into trouble.

Senator Cormann: I miss him in Treasury too!

Dr Gruen : I am sorry, could I ask you to repeat the question?

Senator WONG: I asked the date on which advice was provided to the Prime Minister in relation to a proposed iron ore inquiry.

Dr Gruen : I would have to take the date on notice.

Senator WONG: The minister has surmised that it was likely to be some point between when Senator Xenophon first proposed it and obviously the Treasurer's announcement that the government would not be supporting an inquiry. Would that be correct?

Dr Gruen : As I say, I do not have the date in my head. It is probably best to take the question on notice.

Senator WONG: I am happy with that. Was there more than one piece of advice provided?

Dr Gruen : Not to my knowledge.

Senator WONG: And that was prepared in PM&C?

Dr Gruen : We were involved in the issue, but we did not prepare the advice.

Senator WONG: Which department prepared the advice?

Dr Gruen : I am not certain because I was involved only to the extent of having visibility of the advice. I do not know where it came from.

Senator WONG: Okay. Can we find that out too, on notice?

Dr Gruen : We can certainly take it on notice.

Senator WONG: Advice came in from another department which PM&C then assessed and provided a brief? What was the process?

Ms Cross : We will check that for you.

Senator WONG: And that is not unusual.

Dr Gruen : We are happy to check the details.

Senator WONG: If you could. On 15 May 2015 the Prime Minister stated on the Alan Jones show, 'I think we do need an inquiry' into iron ore pricing. You might need to take this on notice. Did the Prime Minister seek any advice from his department before making this statement?

Dr Gruen : Again, we should take that on notice.

Senator WONG: This is probably a question for the minister. Did the Prime Minister consult any of his colleagues before he made the statement on Mr Jones' program on 15 May?

Senator Cormann: As you would well be aware—and this is again the same process that would have been followed under the previous government, I am sure, the current opposition—when you have to deal with motions in the Senate you have to make judgements on whether you support or oppose them. There was a motion before the Senate from Senator Xenophon proposing a particular inquiry in relation to the iron ore markets. The government, through its established processes, considered its position in relation to that particular motion and, of course, the government's position and decision has since been unequivocally publicised.

Senator WONG: I am asking you—

Senator Cormann: The answer is that we went through usual and ordinary processes when considering these sorts of proposals, and obviously the Prime Minister gave expression to a view in the context of these sorts of conversations.

Senator WONG: That is all very interesting, but I asked a very specific question. Before the Prime Minister made it clear on Mr Jones' show on 15 May that 'I think we do need an inquiry', had he had any consultation with his colleagues?

Senator Cormann: As I have said to you, the Prime Minister and the government go through the usual process in considering these sorts of matters when they come before us. On this occasion the matter came before us as a result of a motion initiated in the Senate by Senator Xenophon. On reflection—again, this is also a matter of public record—and having consulted further the government made a decision that it would not be appropriate to proceed with an inquiry at this point in time.

Senator WONG: This will probably have to be taken on notice as well. Did the Department of the Prime Minister and Cabinet have any discussions with Treasury, the department of industry or any other department—and, if so, which—about the inquiry proposal?

Ms Cross : We will take that on notice.

Mr Gruen : We will have to take that on notice.

Senator WONG: Did the government give any undertakings to Mr Forrest or anyone else that it would support the establishment of an inquiry? Would you like me to repeat the question?

Senator Cormann: Are you asking me?

Senator WONG: It probably is a question for you, unless Ms Cross can answer it, but I doubt it.

Senator Cormann: I can only speak on my behalf. I am not aware that the government has given any such commitments, so let me take that question on notice to ensure I can provide you with an accurate answer.

Senator WONG: Okay. My next section is quite long.

CHAIR: We will go to Senator McKenzie for the next 15 minutes or so. Senator McKenzie.

Senator McKENZIE: Thank you. I have some questions about the free trade agreements. When were negotiations for the free trade agreements with China, Japan and Korea started?

Dr McCarthy : I will just go to my brief, which has some of those details. Was your question on when the negotiations were started?

Senator McKENZIE: Yes, for China, Japan and Korea.

Dr McCarthy : We do not have that detail. We have details about the conclusions of the negotiations. We can take on notice—

Senator McKENZIE: What about how many rounds of negotiations?

Dr McCarthy : We do not have the details on how many rounds. Certainly that is something the Department of Foreign Affairs and Trade would be able to advise you on.

Senator McKENZIE: Okay. I will go to DFAT on that. You say you cannot go to the number of rounds conducted under the last government and why the agreements were not concluded sooner. That is also for DFAT?

Dr McCarthy : That is right.

Senator McKENZIE: Could you comment on the immediate effect on tariffs applying to Australian exports to Korea on the entry into force of the Korea FTA on 12 December?

Dr McCarthy : We will need to take that detail on notice. Again, that is a technical detail that I think Foreign Affairs and Trade is best placed to answer.

Senator McKENZIE: All right. Further information on tariff cuts and cars?

Dr McCarthy : They are technical details.

Senator McKENZIE: No problem. What about when the China FTA will enter into force? Do you have details on that, and the process remaining until its entry into force?

Dr McCarthy : Yes, Senator. The China FTA will enter into force following the conclusion of domestic legal and parliamentary processes both in Australia and China. On 30 April the Federal Executive Council approved the English language version of the China-Australia FTA. We are working towards signature of that FTA by mid-year to enable the agreement to enter into force by the end of 2015.

Senator McKENZIE: Broader benefits of the China FTA—you, Ms McCarthy, or DFAT?

Dr McCarthy : I can certainly advise you that it is of enormous benefit to the Australian economy to have greater access to the huge and growing Chinese market. As to the details of the benefits, I think our colleagues in DFAT are best placed to enumerate those.

Senator McKENZIE: Thank you so much.

Senator CONROY: I just want to ask about the ministerial code of conduct. Is that handled here, for ministerial staff'? Is it correct that all ministerial staff are subject to the statement of standards for ministerial staff which is available on the SMOS website?

Ms Kelly : Yes, Senator Conroy.

Senator CONROY: Are there any restrictions on the conduct of ministerial staff employed by the current government beyond those contained in the Statement of Standards for Ministerial Staff? If so, could you please detail what those additional restrictions are?

Ms Kelly : Not to the knowledge of the department.

Senator CONROY: Are there any restrictions that apply to the conduct of ministerial staff following the conclusion of their employment with the government?

Ms Kelly : There is a provision in the standards that relates to that.

Senator CONROY: Can you outline that for us?

CHAIR: Senator Conroy, I do not know if you have another question whilst the deputy secretary—

Senator CONROY: It depends on the answer, really.

CHAIR: I suspect you know the answer.

Senator CONROY: No, I do not, actually. Is there a requirement for a cooling off period following the employment as a ministerial staff member before commencing employment with a commercial entity in a related area?

Ms Kelly : Senator Conroy, there are provisions of that type in the lobbying code of conduct for former MOP staff, but they are not in the Statement of Standards for Ministerial Staff.

Senator CONROY: I am just trying to understand the difference between lobbying versus employment in a related area. Is there a difference or do they have the same—

Ms Kelly : There is a definition of lobbying under the lobbying standards.

Senator CONROY: I am reasonably familiar with that, but I am just looking to find out whether or not—

Ms Kelly : That is a difficult question to answer in the abstract.

Senator CONROY: I can un-abstract that for you. I wanted to draw your attention to the case of Mr Sean Costello, former chief-of-staff to the previous defence minister, Senator Johnston. Are you familiar with Mr Costello?

Ms Kelly : No, I am not.

Senator Cormann: Just for the record, as I understand it, the arrangements in place now in relation to your line of inquiry are consistent with the arrangements that were in place under your government.

Senator CONROY: That is why I am asking whether there are different rules. So you would be familiar with Mr Costello, Minster?

Senator Cormann: I am very familiar with Mr Costello; he is a great Australian who was appointed by your government to the board of the Future Fund, of course, which was an inspired appointment.

CHAIR: Do you think he is referring to a different Mr Costello?

Senator Cormann: Peter Costello. I thought you said Peter Costello.

Senator CONROY: Sean.

Senator Cormann: Sean Costello—sorry.

Senator WONG: Is he a great Australian too?

Senator Cormann: A great Australian as well.

Senator WONG: What do you have to do to be a great Australian?

Senator Cormann: I heard 'Costello' and I was immediately taken to a great part of Australian political history. So, yes, I am familiar with Mr Sean Costello.

CHAIR: We have clarified that now.

Senator Cormann: Sorry, I misheard.

Senator CONROY: That is okay. Just for the record, so it is not lost in confusion, he was the chief of staff to the defence minister between 14 June and 15 January.

Senator Cormann: Yes, that sounds about right.

Senator CONROY: And just a few months later, in April this year, Mr Costello has been employed as the Chief Executive Officer of DCNS Australia, the Australian arm of the DCNS Group, which is participating in the government's so-called competitive evaluation process for our future submarines. Were you familiar with that, Minister?

Senator Cormann: I have read reports to that effect, yes.

Senator CONROY: When did you become aware of Mr Costello's appointment with DCNS?

Senator Cormann: To be honest, I would have become aware whenever it was referenced in the media, so I was not aware of it prior, if that is your question.

Senator CONROY: During Mr Costello's tenure as chief of staff between 14 June and 15 January, did he attend any briefings or meetings with the department, the Prime Minister or the Prime Minister's office in which Australia's future submarine project was discussed?

Senator Cormann: You would assume so. That that would have been part of his area of responsibility.

Senator CONROY: During Mr Costello's tenure as chief of staff, did he provide any briefs, submissions or other information to the department, the Prime Minister, or the Prime Minister's office about Australia's future submarine project?

Senator Cormann: I would have to take that question on notice.

Senator CONROY: Was Mr Costello provided with any briefs, submissions or other information by the department, the Prime Minister or the Prime Minister's office about Australia's future submarine project?

Senator Cormann: I assume that the Minister for Defence would have been provided with relevant briefings in the course of his responsibilities. How documents are handled inside the office of the Minister for Defence is not something that I can personally assist you with, but if there is anything else we can assist you with on notice, we will do so.

Senator CONROY: Good. I would like to turn to his role as CEO of DCNS Australia. In his current role, had Mr Costello had any meetings with officials from the department, representatives from the Prime Minister's office or with the Prime Minister or other cabinet or portfolio ministers?

Senator Cormann: I would have to take that on notice; I am not personally aware.

Senator CONROY: So he has not has any meetings with you?

Senator Cormann: He has not had any meetings with me; I can tell you that.

Senator CONROY: If there were any meetings, could you indicate when they occurred, who attended and/or participated and what the nature of those interactions was.

Senator Cormann: We will take that on notice.

Senator CONROY: Is the department aware of Mr Costello meeting with officials from the Department of the Prime Minister of Cabinet, representatives of the PM's office or with the PM or other cabinet minister portfolios to discuss the future submarine project?

Ms Kelly : I am not aware, Senator, but we will take it on notice.

Senator CONROY: In light of Mr Costello's prior employment, do you have any concerns, Minister, about a potential conflict of interest for that information that has been gained while he was very recently the chief of staff to the minister in charge of putting the process together?

Senator Cormann: The arrangements that are in place in the context of the lobbying code are exactly—in relation to this point—the same arrangements that were in place under the previous government. My understanding is that Mr Costello is not working as a lobbyist under the definition as set by the previous government, of which you were of course a senior member. Beyond that, I really have not got an opinion to express.

Senator CONROY: So you do not have any concerns that there could be a conflict of interest?

Senator Cormann: As I understand it, the employment arrangements of a former staff member are consistent with the terms and conditions and the definitions that were put in place by the previous Labor government. If you are asking me whether it is appropriate for people, after they leave the employ of government, to learn a living in their areas of expertise then I would say, 'yes, of course', as long as they do that in a way that is consistent with all of the relevant rules and regulations. I am not aware of all the facts in relation to this. These are probably more appropriately questions addressed to the Defence portfolio, but as I understand it, when it comes to the application of the lobbying code, which is the area that is relevant to this portfolio, Mr Costello's employment does not fall under that because he does not fit within the definition set by the previous government of what is a lobbyist.

Senator CONROY: The minister's chief of staff gets all of the briefings—you have acknowledged that—and he has been active and involved in setting up a process to evaluate the submarines. Three or four months later he is the chief executive of one of the three companies that has been invited to tender. To be part of a competitive evaluation tender is too generous a description.

Senator Cormann: I think that you will find that there are former senior staff members in your government that left the employ of your government and went into very senior corporate roles immediately after. All I can say again, is that there is a lobbying code in place, which was put in place by your government. There is a relevant definition in that code as to what a lobbyist is. I understand that Mr Costello does not fall under the definition, which was put in place by your government. If your proposition is that people, after they leave government, should not be able to earn a living, then I would have thought that any reasonable Australian would disagree with that proposition.

Senator CONROY: The issue that I am seeking to see whether you have any concern about is that he was directly involved in working on a tender process/competitive evaluation process, which was put in place, and now he is involved with the bidding for one of the three companies that was invited to tender. This is not just getting a job afterwards; it is a job that is involved in an active bidding competitive evaluation process. I am just wanting to know if you think that there is a difference between that and the other types of situation that you have described.

Senator Cormann: By definition Mr Costello is not going to be part of any government decision making in the context of the competitive evaluation process. Under the competitive evaluation process various proposals will come forward. The government will go through rigorous evaluation of their relative strengths and weaknesses, their relative merits and will ultimately make a judgement on the best way forward in the national interest. Of course, that will be guided by our desire to get the best possible submarines for the best possible national security and defence outcomes at the best possible price. Subject to those three guiding objectives we will seek to maximise Australian industry involvement. There will be a number of proposals coming forward, and obviously any suggestion that Mr Costello would have any involvement whatsoever in relation to any of that sort of decision making is, of course, entirely false.

Senator CONROY: So, again, you do not have any concerns that someone who worked on designing the process is now the CEO of one of the three invited companies to be part of the process?

Senator Cormann: Well, he is not going to be a decision maker. There are, obviously, a number of different options that are going to come forward to government. Government will go through a rigorous evaluation of these various options consistent with our various objectives that we have publicly enunciated and that I have assisted you with, again, this morning. For the purposes of this portfolio, really, the only question is whether or not Mr Costello would be in breach of the lobbying code. My advice is that he is not because he does not fall under the definition of lobbyist under this lobbying code which was put in place by the former government.

Senator WONG: While we are on defence, Dr McCarthy, you might recall—and I will come to this in Finance, Senator Cormann, if you can obviate the lecture about asking the questions in Finance, because I actually want to know what PM&C's involvement is, if any—that on Friday the government provided information to Mr Sheridan of The Australian about an audit in relation to the Air Warfare Destroyer project, and Minister Cormann subsequently put out a press release. There was a statement that the government would release the audit, but I understand the audit has not been released. I will traverse most of that with the relevant—

Senator Cormann: Sorry, just to clarify something here, the government never made a statement that we would release the audit. That was not a statement.

Senator WONG: Actually, you did say that, Senator.

Senator Cormann: No. Let me assure you—I am very close to this—the government never made a statement that we would release the audit.

Senator CONROY: Read the newspaper article.

Senator WONG: I am happy to read you a transcript.

Senator Cormann: If you think that newspaper articles are statements by governments, then—

Senator CONROY: You are not suggesting The Australian has verballed you!

Senator Cormann: Let me just reassure you again: the government has never made a statement that we would release this audit. Obviously, there are some significant commercial sensitivities involved in the work that was done.

CHAIR: Order! You have made your point. Senator Wong had the call.

Senator WONG: Just on this, Senator Cormann, I am reading from your transcript of 22 May, in Perth, released the day before the first AWD was launched:

JOURNALIST: Why is the Government releasing the audit today? On the eve of the ship launch?

MATHIAS CORMANN: We are releasing the audit today because it has been received by Government and has been considered by Government this week.

So you yourself said—

Senator CONROY: Did you verbal yourself?

CHAIR: Order!

Senator Cormann: The question that the journalist asked me was in the context of a statement made by the South Australian Premier complaining about the fact that we had released the findings of the audit that day, and of course the findings of the audit were released that day by the government. That is what I had already done. I was asked the question about what the government had already done, and the government had already released the material findings of an audit which is used to rebaseline the costing schedule overruns incurred by this project. Obviously, beyond that, the government is now going into tendering arrangements with two potential options: either entering into a contract with a potential private contractor to become the managing contractor for the remainder of the AWD build of ASC shipbuilding, or to enter into a partnership arrangement to further enhance ASC capability.

Senator CONROY: 'We are releasing the audit today.'

Senator Cormann: So the reference that you make, Senator Wong, is a reference to something that had already been released by the government at the time when I was doing that particular press conference.

Senator WONG: Goodness me! That was very long. Dr McCarthy, just a process question first—

Senator CONROY: Will you release the Winter report?

Senator Cormann: You know what we have released in relation to the Winter report. We have released a relevant summary of the key findings. I am sure, Senator Conroy, that you would appreciate that there are pretty significant commercial sensitivities involved here and that in the Commonwealth protecting the position of the taxpayer and value for the taxpayer, in the context of upcoming commercial negotiations, that is the appropriate way to handle this.

Senator WONG: I will ask some process questions and then I am going to go back to some of what the minister said. First, Dr McCarthy, are you aware of this so-called audit?

Dr McCarthy : Yes. I am aware of the work that was done on the AWD project.

Senator WONG: It has been referred to by the minister at the table as an audit. Are you aware of an audit?

Dr McCarthy : I am aware of the analysis that was done.

Senator WONG: What involvement did PM&C have in this analysis?

Dr McCarthy : PM&C was not involved in preparation of that work.

Senator WONG: Were you aware of which department was involved in the preparation of that work?

Dr McCarthy : Yes. The Department of Finance and the Department of Defence were involved in that work.

Senator WONG: When was PM&C first aware of that work being undertaken?

Dr McCarthy : I would need to take that on notice.

Senator WONG: When did you become aware of the analysis?

Dr McCarthy : I would need to take that on notice.

Senator WONG: Was it before the announcement, Dr McCarthy?

Dr McCarthy : Yes.

Senator WONG: Has PM&C had any involvement in this analysis?

Dr McCarthy : Not in the work of the report itself. We are obviously aware of it and consult regularly with the Department of Defence on all major capability issues.

Senator WONG: I am asking about this analysis. Who made the decision to commence the analysis?

Senator Cormann : If I can just take a step back here. The government, all the way back in December 2013, went public with our concerns about various legacy issues that we had inherited from the previous government when it came to the AWD program in particular—obviously, budget blow-outs and schedule overruns. We also at the time announced our intention to conduct a review. An independent review was conducted by Professor Winter, together with Mr White. That review made various recommendations that the government has started to implement—interim arrangements to lift, in particular, productivity on the ASC shipyard and various other related aspects of the project.

What we did at the same time, as we flagged that we would, was to conduct a forensic audit to essentially identify appropriately and properly the extent of the cost overruns and the extent of the schedule overruns. That work was conducted by the AWD Alliance in accordance with the appropriate standard—IS 4874, project performance measurement using earned value. The Commonwealth had a range of external advisers—first, Marine International, Navanti Australia, BAE Systems and the Commonwealth shipbuilding industry adviser, Barry Barnes—supporting that comprehensive and forensic audit and, of course, providing assurance to the process and outcome.

The reason we needed to conduct that audit into costs and schedule overruns was so that we could define a new baseline in the context of tendering for more permanent arrangements to improve the performance of the AWD project. Of course, our intention is to ensure that from here on in we can bring this very important project to a conclusion at the lowest possible cost and in the fastest possible time, which of course is our responsibility.

Senator WONG: Senator—

Senator Cormann : I was just asked a question by Senator Conroy: why are we not implementing the Winter review? We are implementing the Winter review recommendations, but we are implementing them in a way that protects value for the Commonwealth, bearing in mind that there were very complex, commercial, governance, integrity and probity issues involved here that had to be worked through very carefully. We did as much as we could, in the short term, to lift performance pending more permanent arrangements being put in place. In particular, before we could put more permanent arrangements in place to put the AWD project on the best possible foundation for the future, we needed to go through this forensic audit to redefine the extent of cost and schedule overruns so that we had a new slide, if you like, from which to set up arrangements for the future.

Senator WONG: Senator Cormann, somewhere I think around a third of the way through that very long answer you actually gave us some information about who. I wonder if you could just take us through that again? What you call a forensic audit, which Dr McCarthy calls an analysis, you say was undertaken by whom?

Senator Cormann : Call it whatever you like—a comprehensive cost review, a forensic audit, a re-baselining exercise, analysis. You can use whatever terminology you like, but what the government—

Senator WONG: You used 'audit', which has a particular accounting—

Senator CONROY: You are backing away.

Senator Cormann : No, I am not backing away at all. We went through a forensic audit exercise to ensure that we could appropriately identify the extent of cost and schedule overruns. That is obviously what we needed to do before we could proceed with seeking proposals to enhance the performance of this important project on a more permanent basis. After the Winter review, we put in place some measures on an interim basis to enhance capability at ASC, to improve the performance of the project, and of course this was a very important piece of work—a forensic audit going through all of the things that had happened, the status of where we were at, and putting together all of the necessary information to enable us to identify the extent of cost and schedule overruns moving forward.

Senator WONG: I just asked the name.

Senator Cormann: I went through it in great detail, and I am happy to do it again.

Senator WONG: I understand that you want to make a political point, Minister. You have made the political point, which we have not engaged with. I just want to know the process. Who did you engage to undertake what you have described variously as a forensic audit exercise, a rebaselining exercise and—I think it was—a cost recovery or a cost comparison? Can you just tell me who?

Senator Cormann: Not a cost comparison; a comprehensive cost review, a forensic audit—

Senator WONG: Sorry, a comprehensive cost review. Okay, so those are the three names we have given it. Who did it?

Senator Cormann: Of course, cost was one part of it and schedule overruns were another part of it. The exercise was led by the AWD Alliance in accordance with the appropriate standard, AS4817, project performance measurement using earned value. The Commonwealth also had a range of external advisers—first maritime international, Navantia Australia, BAE Systems and the Commonwealth shipbuilding industry adviser, Mr Barry Barnes—supporting this forensic audit and providing assurance to the process and outcome. And there was also—

Senator WONG: No, I do not—

Senator Cormann: Sorry, there is some further information I would like to share—

Senator WONG: Could I just stop you for a minute there?

Senator Cormann: No, I have not finished my answer.

Senator WONG: It is just—please.

Senator Cormann: Senator Wong, I have not actually finished my answer.

CHAIR: The minister is entitled to conclude his answer.

Senator WONG: Can I just tell you: I cannot write this down as fast as you are saying it, because I do not do shorthand, so I am wondering if we could just get that list tabled; that is all.

Senator Cormann: I will see what we can provide on notice.

Senator WONG: Thank you.

Senator Cormann: The comprehensive cost review, the forensic audit, was also overseen by a panel, an executive of around 30 people, which comprised representatives of the AWD Alliance, ASC, Raytheon, the Commonwealth industry adviser and ASC and AWD production and financial managers. In addition, experienced shipbuilding management personnel from BAE Systems and Navantia supported the panel members in conducting the audit under the interim phase arrangements. Two FMA representatives observed and participated in the audit as well.

A number of factors have contributed to the cost overrun and schedule delay, which include price indexation, increases in production costs, extension of delivery schedule and extension of the design contract. It is a matter of public record that the delivery of the three AWDs has been significantly delayed. Ship 1 is now expected to be delivered in June 2017, the second ship in September 2018 and the third in March 2020, against the original schedule of December 2014, March 2016 and June 2017 respectively.

Since the government announced the AWD interim reform phase in December 2014, the AWD program has of course benefited from the advice and expertise of Navantia SA and BAE Systems, and there have been positive improvements in labour utilisation and productivity. There have also been senior management changes at ASC which have introduced substantial Aegis destroyer shipbuilding experience into the AWD program, including through appointing Mr Mark Lamarre as interim chief executive officer of ASC AWD shipbuilder pty limited. But this forensic audit which was conducted was an important piece before we could move to the next phase of the reform agenda, which is to seek proposals for either a management contractor or further enhancements through a management partnership agreement of ASC capability.

Senator WONG: The process and the people involved in what you variously described as forensic audit, comprehensive cost review or rebaselining exercise—as I said, I do not take shorthand, and you read through the names very quickly—I wonder if you could possibly table. I do not need all the other stuff in your brief—that obviously is a matter for you—but the structure involved.

Dr McCarthy, when did you become aware of this forensic audit/rebuilding exercise/comprehensive cost review?

Dr McCarthy : I would need to take that on notice.

Senator WONG: Is there no-one who can tell us when PM&C became aware of it?

Dr McCarthy : We can try to get that detail for you as soon as possible, but we do not have that with us.

Senator WONG: Can someone find it, because we are here until 11 o'clock, so I am sure someone can find out. I do not need the exact date, but was it yesterday; was it two months ago; was it three months ago, et cetera? Is that possible?

Dr McCarthy : We will endeavour to find out.

Senator WONG: Thank you. Have you seen it?

Senator Cormann: Let me assist you, and let me assist Ms McCarthy. Obviously the report was considered by government in the appropriate way and, indeed, it is a matter of public record. The defence minister has already made that point publicly—that the relevant report and the recommended way forward was considered by the National Security Committee of Cabinet last week.

Senator WONG: Last week, by NSC? Do you still attend NSC, Dr McCarthy—actually, I am happy not to ask that if it is not appropriate. That is fine. But have you seen the report?

Senator Cormann: You are asking the same question in a different way, in effect.

Senator WONG: No, I am not.

Senator CONROY: No, that is not right.

Senator WONG: Have you seen the report?

Dr McCarthy : I have not seen the report. It was a report for the shareholder ministers, as I understand.

Senator WONG: Fair enough.

Senator Cormann: It did go to the National Security Committee, so whatever.

Senator CONROY: I think he thinks you should have seen it.

Senator Cormann: I do not know.

Senator CONROY: Minister, you said the AWD Alliance conducted the protest, from the way you described it. I may have misunderstood the matrix that you were outlining.

Senator Cormann: The audit was conducted by the AWD Alliance in accordance with the appropriate standard, which is—

Senator CONROY: They are the people who are actually doing the bills?

Senator Cormann: Yes. And there were some external advisers involved who reviewed it. A lot of this work literally involves assembling information from various sources about the extent of cost overruns, the extent of contingencies that have been run down or the extent of contingencies required into the future. As audits inevitably are, it is a very mechanical exercise to try and get to the bottom of the extent of cost and schedule overruns. But obviously the audit was conducted to the appropriate standard, and it also involved oversight by appropriate external advisers with relevant expertise who ensured that there was a level of independent oversight.

Senator WONG: Who made the decision to call in a forensic audit?

Senator Cormann: I would have to take that on notice.

Senator WONG: Was that just part of the briefing of Mr Sheridan?

Senator Cormann: I do not know what you are referencing there.

Senator WONG: Did you personally brief Mr Sheridan?

Senator Cormann: No, I did not.

Senator CONROY: Did your office personally brief him?

Senator Cormann: I do not believe that my office briefed Mr Sheridan, no.

Senator WONG: Did the Prime Minister's office brief him?

CHAIR: I am not sure that this is relevant to budget estimates.

Senator Cormann: I cannot speculate about where Mr Sheridan got his information from. What I can say is that on 22 May, together with the Minister for Defence, I released relevant information about the extent of cost and schedule overruns that we had inherited from the previous government and which we are working hard to address. As a result of the previous government not dealing with these issues earlier, we are now dealing with $1.2 billion in additional costs and more than 30 months in delays for each single ship, which Defence—

Senator CONROY: You should implement the Winter report. You cannot hide any more.

Senator Cormann: The Winter report is a report that we initiated—

Senator CONROY: Yes, but you have not released or implemented it.

Senator Cormann: and which we are implementing in a way that is consistent with—

Senator CONROY: You are not implementing it at all.

Senator Cormann: seeking to maximise value for the taxpayer.

CHAIR: Senator Conroy, you are not helping with your interjections. It encourages the minister to be more comprehensive, which then infuriates Senator Wong.

Senator WONG: Minister, you are representing the Prime Minister here. Firstly, is the report confidential?

Senator Cormann: The audit report is confidential. We have said that as a matter of public record.

Senator WONG: Why, then, is the leak of the results of a confidential report to NSC to Mr Sheridan not being investigated?

Senator Cormann: What is not confidential, because it is a matter that the government has obviously publicly announced, is the extent of the cost and schedule overruns. But there are obviously various other aspects to the audit report which are directly material to likely future contract negotiations, depending on whatever judgements the government makes as a result of various processes that we are about to engage in.

Senator WONG: Will the government release a redacted copy of the report?

Senator Cormann: I will take that on notice.

Senator WONG: You were happy to brief it to the media.

Senator Cormann: I have not briefed anything to the media. I have made a public statement, together with the Minister for Defence, and that is on the public record.

Senator WONG: Did the National Security Committee authorise a selective briefing of one media outlet in relation to this report?

Senator Cormann: I reject the premise of the question. But, as you know, I would not ever comment in any way, shape or form on what may or may not have been discussed at the National Security Committee.

Senator WONG: Did you authorise it?

Senator Cormann: I was not involved in leaking any information. I am involved in providing information to the public in the form of a public statement, which was released on 22 May from memory, together with the Minister for Defence.

Senator WONG: Given that the report appeared in the paper that day, before you stood up, were you aware, prior to the publication of Mr Sheridan's article, of any briefing of the media by any member of the government or their staff?

Senator Cormann: I was obviously aware of the findings of the audit that had been considered by government.

Senator WONG: That was not my question.

Senator Cormann: And I was aware that I was about to make an announcement, together with the Minister for Defence. On 22 May I made that announcement.

Senator WONG: You have avoided my question.

Senator Cormann: I am not avoiding your question.

Senator WONG: I will repeat my question. If you do not wish to answer it, that will tell us volumes. Were you aware of aspects of this report being briefed to a selected journalist by a member of the government or their staff before you saw it in the paper?

Senator Cormann: I am aware that the government considered the findings of a very important audit into cost and schedule overruns in a project which was mismanaged by the previous government and which we are working to improve. I was aware that, together with the Minister for Defence, I was to make a public statement in relation to the key elements of that report on 22 May. Obviously I have made that statement.

Senator WONG: Was the release of the information authorised by government?

Senator Cormann: I will take on notice whether there is anything else I can add to the information.

Senator WONG: Please take it on notice, because you have now refused three times to answer. You are refusing to answer whether you knew, before you read the paper on Friday, that selected aspects of a report to the National Security Committee had been provided to the media. I would like to know whether or not the provision of that information was authorised by anyone in the government. Are you able to answer that?

Senator Cormann: You just asked me to take it on notice. I have assisted you as much as I can. Let me assist you again. Let me just summarise it for you. I was obviously aware of the findings of the audit that had been conducted when it comes to the level of cost and schedule overruns in the AWD project. I was aware of the information that the government had decided to make public, because we obviously had prepared a relevant statement to go out from me and the Minister for Defence on 22 May, and of course that information has been made public. To the extent that I can assist you further, I will have to take that on notice.

Senator WONG: I am asking again: were you aware of the details—

CHAIR: The minister has taken the question on notice.

Senator WONG: Yes, I just want to be clear.

CHAIR: But he has provided answers to the extent he can, and he has taken the rest on notice. There is no need to repeat them.

Senator WONG: I do not think you can tell me not to ask questions, Chair.

CHAIR: No, but I can ask you to move along, because he has responded already to your questions.

Senator LUDWIG: No, you cannot even do that.

CHAIR: And he has taken the remainder on notice.

Senator WONG: We will summarise. Was any member of government or their staff authorised to provide information about the report that the National Security Committee had considered to Mr Sheridan?

Were you aware at any point prior to reading the report that that information had been provided? Was any member of your staff aware of or involved in the provision of that information?

Senator Cormann: I will take those questions on notice. Can I just reconfirm again that obviously I was aware of the information that was to be made public, and, of course, information was made public in the form of a joint media release between the Minister for Defence and me.

Senator WONG: I have asked you to provide a copy of the report and, in doing so, I would suggest to you, Minister, for your consideration, that if it is good enough for a single journalist to be briefed about the findings, why is it not good enough for the parliament and the people to be aware of key aspects of that report?

Senator Cormann: I reject that assertion completely because parliament and the people were of course provided with that information because it was in a joint media statement released by the defence minister and me. All of the relevant information that the government had decided to publicly release is contained in my media release, together with the Minister for Defence, which is available for everyone to review.

Senator WONG: Senator Cormann, while we are on this, has any member of the alliance contacted you or your office or, to your knowledge, the department to request a copy of this report?

Senator Cormann: I will have to take that on notice. Obviously, the alliance was involved in putting the report together. Let me take that question on notice.

Senator WONG: If you could, because I would like to deal with this tomorrow when ASC is before us to understand what they have been provided with, because a great many people appear to not know what this report is.

Senator Cormann: Let me just assist you with this bit, because this goes beyond PM&C but I am the shareholder minister for ASC. Let me reassure you that ASC was briefed on the findings and the way forward as a result of the audit after it was considered by NSC and before it went public.

Senator WONG: Who was briefed? I will get you the names of who was in the briefing, but certainly there was a briefing of the appropriate people at ASC. I will get the names.

Senator WONG: And when it was.

Senator Cormann: Sure.

Senator WONG: I have a submarine question. Dr McCarthy, since the last round of estimates, has the department had any engagement with the government of Japan in relation to the Future Submarines Program?

Dr McCarthy : Not PM&C. That engagement has been led by the Department of Defence.

Senator WONG: Has Mr Shearer from the Prime Minister's office had further contact with his Japanese counterparts in relation to submarine procurement?

Dr McCarthy : I will take that on notice.

Senator WONG: To your knowledge, has he?

Dr McCarthy : Senator, that is a question for Mr Shearer, which I will take on notice.

Senator WONG: Do you have any knowledge of it, though? Has he requested any advice? Have you been asked to set anything up? I am asking about what your involvement is?

Dr McCarthy : I can speak to PM&C's involvement but I will take on notice the questions about Mr Shearer's contact with any counterparts.

Senator WONG: Tell me about your involvement and tell me about any involvement that PM&C has in facilitating Mr Shearer's engagement with the government of Japan or his counterparts.

Dr McCarthy : I am not aware of any involvement that PM&C might have in any contact that Mr Shearer may have had. But, as I said, I will take on notice the question for Mr Shearer.

Senator WONG: Has PM&C supported Mr Shearer in any further visit to Japan since the last round of estimates?

Dr McCarthy : No.

Senator WONG: Do you know if he has gone to Japan again?

Dr McCarthy : Mr Shearer has accompanied the Prime Minister on visits to Japan. I think you may be referring to an earlier visit by Mr Shearer.

Senator WONG: I am asking, since the last round of estimates—because I think we discussed it at the last round—whether Mr Shearer, to your knowledge, has undertaken—

Dr McCarthy : No, not to my knowledge.

Senator WONG: Not to your knowledge?

Dr McCarthy : No; he has not travelled to Japan.

Senator WONG: There was a report in The Australian Financial Review earlier this month which quoted a Japanese spokesperson saying, 'The relevant ministries in Tokyo are discussing how we can help Australia' and confirming that confidential data about the Soryu class submarines would be handed over to Australia in May. Is PM&C aware of whether or not this data has been handed over?

Dr McCarthy : Questions on the engagement with Japan on that sort of information exchange are best put to Defence, which is leading that process.

Senator WONG: I will ask them, Dr McCarthy, but given the interest of the Prime Minister and his office on this, I am simply asking if you are aware of this.

Dr McCarthy : We will take it on notice.

Senator WONG: Because you do not know or you do not wish to answer?

CHAIR: The question has been taken on notice.

Senator WONG: Do you know?

Dr McCarthy : The Department of Defence and Japanese counterparts are engaging regularly. I do not have day-to-day knowledge of all of the information that has been passed and when it has been passed. I can take it on notice.

Senator WONG: Have you been asked to provide advice in relation to the provision of any data from Japan of the sort that I have outlined?

Dr McCarthy : Advice to the Prime Minister?

Senator WONG: Correct.

Dr McCarthy : No advice to the Prime Minister on that issue.

Senator WONG: Are you telling us that Prime Minister and Cabinet have no involvement in the discussions with Japan about the—sorry, what is the correct pronunciation? I have heard it a number of ways.

Dr McCarthy : I am not a Japanese speaker, but I think Soryu.

Senator WONG: Soryu class submarines?

Dr McCarthy : I am not a Japanese speaker. I have some colleagues who are; perhaps they can help us during the break.

Senator WONG: I am asking you: what involvement does the Department of Prime Minister and Cabinet have in relation to dialogue with Japan in relation to the Soryu class submarines?

Dr McCarthy : We brief the Prime Minister on the Future Submarine project regularly, as you would imagine. We are not in direct contact with Japanese counterparts. That process is being led by the Department of Defence.

Senator Cormann: This is an important point, because obviously, as the government has announced, there is a competitive evaluation process underway which will involve the assessment and evaluation of various options that are on the table, and that process is conducted, appropriately, under the auspices of the Defence portfolio. Obviously, any minister who is on the NSC—including the Prime Minister—will receive advice from his or her department in relation to matters that come before NSC or before cabinet, for that matter. There is nothing unusual about that. But, in terms of the management of what is a proper and methodical process, that is conducted by the defence department.

Senator WONG: Dr McCarthy, since the last estimates round, has Prime Minister and Cabinet prepared any brief to the Prime Minister, taken any notes or provided any advice to the Prime Minister in preparation for any dialogue with Prime Minister Abe and, if so, on what occasions?

Dr McCarthy : As I said, we regularly brief the Prime Minister, but I would just like to check. You have identified a quite specific time frame, and we will check for you as soon as we can and come back to you.

Senator WONG: Thank you. Are you aware as to whether or not, since the last estimates, the Prime Minister has spoken to Prime Minister Abe?

Dr McCarthy : My colleague Ms Wood will know about any phone calls. I just need to check the time frame. And, of course, those conversations can be about any number of issues, and we would not go to the detail of the conversations or what was discussed.

Senator WONG: Have I asked that? I have not asked that.

Dr McCarthy : Just in case, Senator.

Senator WONG: Just in case—fair enough. Is it possible for Ms Wood to provide some advice to you before the end of the day, please?

Dr McCarthy : I am sure it is, Senator.

Senator WONG: Thank you. I have finished on that topic, Chair.

CHAIR: Thank you. Senator Gallagher.

Senator GALLAGHER: I have a series of questions on the PM&C enterprise agreement. Who would they go to?

Senator Cormann: While we are moving on, I might be able to add to an answer I gave to Senator Wong before in terms of who was briefed when and was aware of what. Finance provided a briefing to ASC on the way forward with the air warfare destroyer project as a result of government deliberations on Wednesday, 20 May. The people that were present at that meeting were Bruce Carter, the ASC Chairman; Mark Lamar, the interim CEO of ASC Shipbuilding; Wendy Hoad, who is the ASC General Counsel and company secretary; and Martin Edwards, the General Manager, Current Operations AWD Alliance. The outcomes of the audit were already fully understood by ASC, as ASC was intimately involved in its preparation.

CHAIR: Thank you, Minister. Senator Gallagher, perhaps you would like to repeat your question?

Senator GALLAGHER: Mr Neal, when did the PM&C enterprise agreement expire?

Mr Neal : On 30 June 2014.

Senator GALLAGHER: Can you update the committee on the status of negotiations for the new agreement?

Mr Neal : Sure, Senator. We put an offer to staff for consultation in early February, which comprised a pay offer of 2.17 percent over three years, which was one per cent in the first year and 0.65 and 0.52 over the subsequent years. We have embarked on a pretty detailed consultation process with staff following the release of that deal to ascertain the likely areas of support and the areas we lacked support in negotiations, with the sole purpose of coming back to staff with the best deal we could possibly make that is both consistent with the APS bargaining policy as well as affordable and fully offset by genuine productivity gains.

Senator GALLAGHER: So the offer of the 2.17 over three years had been ticked off by the Public Service Commissioner?

Mr Neal : That had been through the clearance process, yes.

Senator GALLAGHER: And was then not put to a staff vote?

Mr Neal : No, it was not put to a staff vote.

Senator GALLAGHER: And why was that?

Mr Neal : We received significant feedback from staff that the deal was not something likely to be voted up, so we have spent the time since then working on and dealing with the main issues that staff had with that agreement.

Senator GALLAGHER: And what were they, aside from the pay?

Mr Neal : Well, clearly the pay offer was the primary concern.

Senator GALLAGHER: Pay was an issue. Yes, I presumed that.

Mr Neal : Perhaps the most telling other issue is that we currently have 10 sets of terms and conditions in the department preserved by the minister's section 24(3) determination, which essentially preserves the terms and conditions of the enterprise agreement prior to the machinery-of-government changes that brought Indigenous Affairs into Prime Minister and Cabinet. So what we have is a significant pay disparity issue. We have, at some classifications, some people being paid less than their pre-machinery-of-government change PM&C employees at the same classification. That pay disparity is a fundamental issue in negotiations and one which we think we have developed a fairly innovative solution for, but still it is meeting with some resistance from staff in terms of how quickly we are able to close that gap.

Senator GALLAGHER: Can you just explain to me: on average, what would be the pay disparity? Does it flow through the classification structure?

Mr Neal : Yes, and it is not as easy as saying it relates to a FaCSIA or Department of Social Services employee compared with a PM&C employee. At all of the classifications the top pay points vary. It might be Employment and Education at the APS5 or APS6 level, it might be Finance at the EL1 or EL2 level in terms of the tops, and then the bottoms vary as well. It is very difficult to say that there is an average disparity per classification.

Senator GALLAGHER: But some officers coming into the department are at a financial disadvantage to some of their colleagues?

Mr Neal : At least on paper, but, when you look at the pay classifications, the top of some of the agreements is not near the top of some of the other agreements. What we know to be happening in reality is that a lot of people are at the top of those salary structures and therefore would not have incremental advancement open to them under the current agreements. Some people in the other agreements are not yet at the top of theirs, so the pay disparity in reality is not as great as it would appear on paper, if that makes sense.

Senator GALLAGHER: Yes, I understand. But it is a core issue.

Mr Neal : It is.

Senator GALLAGHER: For all staff or in terms of the feedback you get?

Mr Neal : I think it stands to reason that it is less of an issue for the employees at the top of the classification structures and more of an issue for those that are at the bottom.

Senator GALLAGHER: So in the MoG changes, was it the officers coming from Indigenous Affairs—I do not know the correct name—

Mr Neal : The Indigenous Affairs Group.

Senator GALLAGHER: Yes, the Indigenous Affairs Group. They were the ones that were most noticeably different in terms of pay scale.

Mr Neal : I think that is a fair assumption.

Senator GALLAGHER: You do?

Mr Neal : I think that is a fair characterisation.

Ms Kelly : Although, Senator Gallagher, we also received staff for the Office for Women and the Office of Deregulation. The Office for Women staff came from the former FaCSIA and so would be similarly affected as staff in the Indigenous Affairs Group. The deregulation function from the Department of Finance would be differently affected.

Senator GALLAGHER: How many staff came though the MoG changes?

Ms Kelly : Eighteen hundred.

Senator GALLAGHER: So it is a sizeable part of your department.

Ms Kelly : It is most of our department. The rest of PM&C has about 500 people.

Senator GALLAGHER: Next to the pay, that is the main issue?

Mr Neal : Yes.

Senator GALLAGHER: Are there other conditions that have been sought? There are productivity questions there.

Mr Neal : The other one that I would have to mention if I am talking about the primary issues affecting staff would be that the pre machinery of government part of PM&C operated on a 38-hour working week. All other people transferred in through the machinery of government changes are on a 37½-hour week. We are seeking to move, therefore, about three-quarters of the organisation onto a 38-hour week because we are unable to bring the pre machinery of government part of PM&C back to a 37½-hour week, because that would be an enhancement under the bargaining policy.

Senator GALLAGHER: So the bargaining policy prevents that?

Mr Neal : That is correct.

Senator GALLAGHER: The bargaining policy also has instructions on how to not enhance career advancement or classification structures. You mentioned before that you have come up with an innovative solution to the issue of the different pay disparities created by the different classification structures. I am interested to know: how can you do that and be in line with the bargaining guidelines or policy?

Mr Neal : Unless you provide a disproportionate across-the-board pay rise—I know that is a contradiction—if you give some people a larger pay rise at the bottom of those scales and a smaller pay rise at the top, then you can close the gap that way. If your intention is to provide a standard across-the-board pay rise to your staff, which is our intention, then the only way to close the pay equity gap is through the rates of incremental advancement. What we are hoping to do, noting that some people at the top will be held at the top, is essentially slow down the top and speed up the bottom through incremental advancement so that, over time, we close the pay disparity gap.

Senator GALLAGHER: Is that something that you have discussed with the Public Service Commissioner?

Mr Neal : With the commission? Yes.

Senator GALLAGHER: I was reading the wages policy, or the bargaining policy, last night and to me it looked quite clear about enhancing advancement through classification structures.

Mr Neal : There are certainly some limits to what is achievable under that model, but, as long as the average remuneration increase in the agreement does not exceed the 1.5 per cent, how you balance the combination of the across-the-board pay rise and the increments is entirely flexible.

Senator GALLAGHER: The feedback you got on the February 2015 offer—was that put to staff?

Mr Neal : It was not put to staff formally. If you are talking about a consideration period, then no. We did a series of face-to-face consultations where we spoke with—I think it was around 1,300—staff. We also received a great volume of feedback through our mailbox. We did a survey as well about what was most important to our staff, although that happened earlier. So we knew we could match up some of those things that were most important with the feedback we were getting through the consultation process.

Senator GALLAGHER: I think some concerns were raised last night—that the CPSU was the culprit blocking pay rises in agencies or preventing agreements being voted for. But you are telling me that you had feedback from 1,300 staff. That is in an organisation of about 2,200, is that right? That sounds pretty comprehensive—over 50 per cent.

Mr Neal : There are only 1,900 eligible staff for the EA.

Senator GALLAGHER: So it is an even higher percentage.

Mr Neal : For the EA, yes. We spoke to 1,300 of about 1,900. I could not tell you off the top of my head how many of those staff raised each of those particular issues.

Senator GALLAGHER: But there were broad themes.

Mr Neal : We did a thematic analysis, as you say, and there were some broad themes that came up.

Senator GALLAGHER: So it is not a union conspiracy, given that level of feedback from staff. Union members and non-union members alike seem not to be supportive of the arrangements at the moment.

Mr Neal : I think it is reasonable to assume that staff would want the greatest possible pay rise that they can get and that the one on the table at the moment is, in their mind—based on the feedback—not in line with their expectations.

Senator GALLAGHER: How did you come to the 2.17 per cent? We heard last night that it has to be found within agencies and that indexation is not really on offer because of the efficiency dividend. So how are you funding the 2.17?

Mr Neal : As the policy requires, the 2.17 is fully offset. A great portion of that comes from moving most of the organisation to a 38-hour working week. There are significant savings out of that. But there are a range of other measures that we are required to remove, or have taken the decision to remove, from nine of the 10 agreements. These include things like a healthy lifestyle allowance that some employees got under their previous agreements but that does not exist in eight of the agreements. Clearly it would be an enhancement to those other eight agreements to provide a healthy lifestyle allowance to them. Instead, we are removing it from the two that currently get it and that returns a cash saving to the department—which can fund the pay rise. Our idea has been that, where we have taken something away, we have then put that into the bucket that goes back to staff in the form of a pay rise.

Senator GALLAGHER: In short, in order to get 2.17 over three years, staff are having to work an extra half an hour and potentially lose other allowances if those allowances are more favourable than those that staff coming in under other agreements get. Is that right?

Mr Neal : Yes.

Senator GALLAGHER: What is the way through? It is almost 11 months since the expiration of the agreements. Has it ever taken this long before? That probably predates your arrival, but does it usually take until more than 12 months after the expiration of an agreement to settle a new agreement?

Mr Neal : It does not normally take that long, no. But this one is particularly difficult, as you are aware. The department is fundamentally committed to making the best deal it can with staff. We are speaking with staff on a very regular basis—and directly. We are also in dialogue with the CPSU. We have had 26 negotiation meetings.

I think it is a demonstration of how committed we are to regularly speaking with the negotiation group. I would say negotiations are still characterised by being transparent and reasonable. It is certainly not a dance. It is not a waste of time. The reasons that we are meeting are we are still discussing live issues. First and foremost, though, I would like to say that we have taken that feedback from staff seriously and around those number of issues that we have discussed we are trying to see how we can come up with a better offer. That better offer is in the process of being finalised at the moment.

Senator GALLAGHER: But it is one that cannot exceed 1.5 per cent per annum.

Mr Neal : That is correct.

Senator GALLAGHER: Is this your area's major focus? I imagine it is consuming a fair bit of time.

Mr Neal : I have a fairly large division. One of the areas is responsible for—I have a team of four or five people working on the agreement. But that is not their only job—

Senator GALLAGHER: Is that all the time, full-time?

Mr Neal : No, we do not have anybody working full-time on the on the enterprise agreement.

Senator GALLAGHER: In relation to morale, bargaining time is always pretty stressful across organisations. I can imagine with this round it is more stressful than most. Do you do workforce culture surveys in PM&C?

Mr Neal : Like most agencies now we rely on the Australian Public Service employee census which is a once a year whole-of-service census. We then complement that with a small poll survey in the off six months. But that only goes to a representative sample of the organisation, not to the whole organisation.

Senator GALLAGHER: I am not after all the details of it, but in general, what does that tell you about your organisation?

Mr Neal : I think we would say that staff are generally satisfied but any time you ask people what they think about the organisation there are going to be some people who have some concerns—

Senator McKENZIE: Do you believe you have good workplace culture of openness?

Mr Neal : We regularly seek their feedback. I think, without going through the survey results in detail, I would not be able to draw any parallels with bargaining and the impact that that is having on that.

Ms Kelly : This year's survey, the APSC survey, is currently out with staff so we will be very keenly watching for the results of that. Our staff are very dedicated and professional. They are all very committed to their work and so have continued to show that level of commitment and professionalism in their work despite the protracted negotiations.

Senator GALLAGHER: Are the results of the APSC survey released?

Ms Kelly : They are published by the Public Service Commission. Towards the end of the year, the full report is published in the state of the service report. I think that is about October.

Mr Neal : October or November.

Ms Kelly : Yes, October or November.

Senator GALLAGHER: I am just going back to some of the transition arrangements. Is it possible for a person who secures a promotion under one set of conditions to another to actually be promoted but not necessarily receive any increase in pay?

Mr Neal : That is not an easy question to answer. It will depend on the job from which they were promoted and the job they were promoted into because it may—as I said, we have 10 sets of terms and conditions in the department. One of the things that the minister's section 24(3) determination does is identify that those jobs that came across with the machinery of government changes will still be bound by those terms and conditions. So if the employee is transferred into one of those jobs they essentially stay on the conditions that came across in the MoG. I know I am not making that very clear but it will depend on the situation personally. No-one would be worse off, of course.

Senator GALLAGHER: In terms of new recruits to the agency, are they recruited under the PM&C agreement?

Mr Neal : Yes.

Senator GALLAGHER: So you are not exacerbating the problem?

Mr Neal : We try not to, but, if you are recruited into Indigenous affairs and that is an Indigenous affairs role, then you would come onto the relevant agreement.

Ms Kelly : It is not necessarily under the former PM&C EA that new staff are recruited; it depends upon the nature of the position that they are recruited to, because it is preserved under the 24(3).

Mr Neal : That is right. We have a breakdown of how that works, and I would be happy to provide that on notice so that I do not get it technically incorrect.

Senator GALLAGHER: That would be useful. In terms of the efficiency dividend, are there going to be further job losses in the coming financial year?

Ms Kelly : We do not envisage that. We have managed our budget carefully so that we will start the year well within our affordable staffing, managed over the course of the year, so we do not envisage that we will require any further staffing reductions.

Senator GALLAGHER: Just on your separation rate: do you have that?

Mr Neal : Total separation or voluntary?

Senator GALLAGHER: Total.

Mr Neal : The total separation rate is somewhat skewed by the end of the G20 Taskforce last year as well as a big series of voluntary redundancies we did, so the total turnover rate is 28 per cent for the year.

Senator GALLAGHER: And unskewed?

Mr Neal : The natural attrition rate is 7.8 per cent.

Senator Ludwig interjecting

Senator GALLAGHER: Yes, it is half!

Senator WONG: There are departments with worse rates—

Senator LUDWIG: Twice as bad in some instances.

Senator GALLAGHER: Permanently skewed.

Ms Kelly : It is very low, historically, with PM&C.

Senator WONG: That is right.

Mr Neal : PM&C is typically between 20 and 30 per cent per year on a voluntary separation basis.

Senator WONG: You might get more now you are dumping them on parental leave!

Senator GALLAGHER: Has the department recently undertaken a bulk recruitment exercise?

Mr Neal : Yes, we have had a number of recruitment exercises over the last 12 months.

Senator GALLAGHER: Why is that, considering that we have just had a lot of voluntary redundancies as well?

Mr Neal : We have been very careful not to recruit to the roles that have been made redundant, but there is still from time to time, for many reasons, the need to go through recruitment processes. You might be looking for specific skills at certain levels. There might be new work for which we do not have a workforce in PM&C. There is also the requirement to normalise acting arrangements and things like that which happen from time to time. There have been a number of exercises both in the non-SES and the SES levels.

Senator GALLAGHER: Perhaps you could take on notice what that bulk recruitment exercise was, how many jobs it was for and also, just for my information, how many VRs were—

Mr Neal : We did 271 VRs in the process. One hundred and twenty of those occurred in the 2013-14 year because they happened just before 30 June. The balance of those happened in the 2014-15 year, with everyone exiting the department by about the end of September.

Senator GALLAGHER: That is a lot of jobs. Do you have the number of the bulk recruitment exercises?

Mr Neal : I do have some information here that I can provide you on recruitment. Actually, it might be better if I come back, because they are not all bulk recruitment exercises. There have been some for individual specialist roles.

Senator GALLAGHER: Okay. Do you want to provide that on notice?

Mr Neal : I can do that. Otherwise I can just provide you with the total number of recruitment exercises.

Senator GALLAGHER: That would be useful.

Mr Neal : We have done 87 recruitment exercises since the interim recruitment arrangements came into place.

Senator GALLAGHER: Thank you.

CHAIR: I just have some questions about the use of the coat of arms. Ms Kelly?

Ms Kelly : Yes.

CHAIR: I know there are rules about using the coat of arms.

Ms Kelly : Yes.

CHAIR: Do organisations or individuals need to seek approval before they use it?

Ms Kelly : I might get some assistance from Mr Rush on this. The department publishes guidelines and information on the use of the coat of arms on its website, and those guidelines provide for the circumstances in which the coat of arms should be used.

CHAIR: Am I right to surmise people do not need to seek approval before they use it?

Ms Kelly : Could you repeat that question, Chair?

CHAIR: Mr Rush, my question was about whether approval needed to be sought prior to using the coat of arms, and I have been informed that there are guidelines available on the department's website that organisations do have to formally seek approval.

Mr Rush : Yes. The practice is that the Commonwealth coat of arms is reserved to identify the authority of the Commonwealth and the guidelines, which the department promulgates, inform people that the coat of arms is not available for public use. When people seek to use the coat of arms, there are a number of restricted situations where the department has the ability to provide permission—for instance, for educational purposes or for international sporting teams and the like. Other than that, the department does not provide permission for use, except for Commonwealth agencies and organisations.

CHAIR: What about reports of unauthorised use of the coat of arms? Who follows up on that?

Mr Rush : If the department receives advice about unauthorised use, we would follow that up directly. Usually, if you draw attention to that misuse—people often do not realise that using the Commonwealth coat of arms is inappropriate in some circumstances.

CHAIR: Sure; it is not necessarily malicious or anything or an intentional breach of the code.

Mr Rush : Yes.

CHAIR: How many inquiries about unauthorised use have been implemented in the last few years?

Mr Rush : I do not have that information at hand, but we can certainly take that on notice.

CHAIR: I am interested in the outcomes of the inquiries too, whether there was a sanction or was there a provision—actually, that is a question: is there a provision for a sanction if someone—

Mr Rush : No, there is not.

CHAIR: So it is just, 'this is the honour system; please do not use it'.

Mr Rush : Effectively, yes.

CHAIR: I do not want to be more of a wowser than is my reputation already—

Senator McKENZIE: Don't ruin that!

CHAIR: but what about satirical use of the coat of arms?

Mr Rush : The approach that the department takes is to, first of all, determine whether the symbol that is being used is the Commonwealth coat of arms. There are many different coats of arms, and each coat of arms is comprised of a range of elements. If it is evident that the symbol that is being used is, largely and obviously, a version of the Commonwealth coat of arms, then whether it is satirical or not the same assessment would take place about whether or not the individual or organisation was entitled to use the arms.

CHAIR: Mr Rush, in the interest of brevity, I am going to table what clearly is a satirical portrayal of the Australian coat of arms: it has a kangaroo with a nappy on it and an emu with a pearl necklace; I think my state is represented as a nappy—a nappy!—and there is a dummy-spitting state and so forth. It is satirical, but it is clearly meant to represent a whack at the government coat of arms, or the government I guess at some point. I am just wondering, out of curiosity, whether such a thing is a complainable action, or can people just create something that is intended to poke fun at our national coat of arms?

Mr Rush : In my experience, those kinds of satires—some of them are taken in good humour, but some can cause offence. People do, from time to time, complain to the department about satirical use of the Commonwealth coat of arms. If we receive a complaint, we follow that up with whoever was responsible for using the arms in that way.

CHAIR: So even if there is a complaint, there is no judgement from your perspective? If you have received a complaint, you follow it up with the individual or the organisation—is that right?

Mr Rush : We do if we consider that the Commonwealth coat of arms is represented, and if the use is not authorised.

CHAIR: I will table this and you can have a look at it.

Ms Cross : Could we very quickly respond to some earlier questions from Senator Wong?

CHAIR: Please do.

Dr McCarthy : Senator Wong, since the last estimates, the Prime Minister and Prime Minister Abe have spoken by phone on 24 March and have met and spoken briefly on 29 March, at Mr Lee Kuan Yew's memorial service in Singapore.

Senator WONG: Ms Kelly was taking something else on notice that has not come back yet.

Ms Kelly : That was in relation to the clearance process for estimates questions on notice. I have clarified what the process is, and those questions do not go up. They of course are estimates questions, so they are not treated in the same way as parliamentary questions. They do not go up under a brief; they go up progressively into a folder, and then the office deals with the relevant approval process to the relevant advisers. They are not under a cover brief directed to a particular staff member.

Senator WONG: I will ask some questions about that when we return.

Proceedings suspended from 12:31 to 13 : 30

Senator McLUCAS: I want to ask questions about the northern Australia white paper and the task force.

Ms Cross : Yes. The officers next door will come through.

Senator McLUCAS: Should I begin, or shall I wait?

Ms Cross : You might be able to ask an easy question first that I could answer.

Senator McLUCAS: An easy question: when will the white paper be released?

Ms Cross : I will let the—

Senator McLUCAS: So that was not easy?

Ms Cross : I think the answer is 'quite soon', but I will see if we have more detail for you than that.

Mr McDonald : As the Prime Minister said, the white paper will be out before midyear.

Senator McLUCAS: Can you explain to the committee why this has been such a protracted process? It was originally to be released within 12 months of the election of the government, then before Christmas, then in February and now before the middle of the year. What is causing this delay?

Mr McDonald : Well, we are in the process of getting it right. There have been a couple of other delays that have been part of the process. As you know the Entsch committee and their report, Pivot North, are quite integral to the white paper, and they got an extension for a few months. Then there was the Queensland election, and engagement with the Queensland state government was a bit delayed because of that. They are sort of at the margins, but it is basically about getting it right.

Senator McLUCAS: Can you explain to the committee the engagement with the Queensland government? What did that entail? I have heard that from a number of sources and, as you can imagine, I have spoken to the Queensland government myself. So I would like to hear it from you as to why the Queensland election was such a delaying factor.

Mr McDonald : I do not think I said it was such a delaying factor; I said it was one of the issues at the margin. We are working with the Queensland government and the other jurisdictions in the North to ensure that the white paper is as comprehensive as possible—engagement and understanding their position and perspective on certain issues.

Senator McLUCAS: And, because there has been a change of government, that perspective may have changed?

Mr McDonald : It may have changed.

Senator McLUCAS: And has it?

Mr McDonald : That is part of confidential discussions. On issue by issue it is potentially different.

Senator McLUCAS: When was the northern Australia infrastructure audit provided to the task force?

Mr McDonald : I am not sure. I will have to go back through my notes to have a look at that. I will have to take that on notice.

Senator McLUCAS: Dr Gruen?

Dr Gruen : We are happy to take it on notice and we may be able to provide you with an answer before the end of the day.

Senator McLUCAS: That would be great. What is the status of the task force in preparing the white paper?

Mr McDonald : The status?

Senator McLUCAS: Yes. 'Role' is perhaps a better word.

Mr McDonald : We have provided advice to the Prime Minister on how the white paper is progressing. We have engaged with external stakeholders and stakeholders inside government and assisted with the drafting of the white paper.

Senator McLUCAS: Who, or which entity, will have carriage of implementing the recommendations from the white paper?

Mr McDonald : That is a matter for government.

Senator McLUCAS: It is not implicit in the white paper's construction?

Ms Cross : Often with white papers, depending on what measures are in them, more than one department can be responsible for implementing different measures—

Senator McLUCAS: And that will be evident?

Ms Cross : and then there may be an oversight mechanism to keep track of the whole white paper. But quite often, it is spread across government.

Senator McLUCAS: And you would expect PM&C to have that oversight role?

Dr Gruen : Not necessarily. It will be a question of what measures are decided upon and what portfolio responsibilities they fall under.

Senator McLUCAS: At additional estimates in February, you indicated to us that $2.3 million had been provided or used to develop the white paper. Then you provided an extra question on notice—and I appreciate that—of almost $450,000. Can you update those costs for the committee?

Mr McDonald : I can. Up until April, there has been roughly $3½ million used in total, $2.9 million of it being directly related to the task force, with the difference just being the secondee staffing costs.

Senator McLUCAS: So are the seconded staff still the same seconded staff from Agriculture, Environment, Treasury, and Foreign Affairs and Trade?

Mr McDonald : No, they have changed a little. The Agriculture and DFAT secondees have lapsed in that time.

Senator McLUCAS: Can you indicate to us why you did not second anyone from Infrastructure to the white paper process?

Mr McDonald : There are a lot of Infrastructure staff already in the task force. There are four from the Office of Northern Australia.

Senator McLUCAS: But from ONA, rather than the old transport department, so to speak?

Mr McDonald : I think some of them are actually from that part as well, not necessarily from ONA.

Senator McLUCAS: On notice, can you provide us a breakdown of travel and accommodation costs for the white paper process?

Mr McDonald : Yes.

Senator McLUCAS: Have the Western Australian, Queensland and Northern Territory governments been provided with a copy of the white paper to this point in time?

Mr McDonald : We have been having discussions with them. I am not sure what you mean by 'a copy of the white paper', but we have been having discussions with them about elements of what they are interested in seeing from the white paper.

Senator McLUCAS: You say you are not sure what I am asking. I am asking: have those governments been provided with a copy of the white paper?

Mr McDonald : Well, the white paper is not a thing at the moment. It is not finished, so—

Senator McLUCAS: You have answered my question. The answer is no. Is there an approval process from those state and territory governments? What is the role of those governments prior to it being released? Do they have to approve it? What do they do?

Mr McDonald : That is a matter for government, but they are involved through the strategic partnership in developing and helping to assist the development of the white paper and have been involved to that process. But the finalisation of it is still a matter for government.

Senator McLUCAS: Will the white paper include within it funding for projects that have not been announced already in the budget?

Mr McDonald : I cannot really discuss what may or may not be in the white paper. That is still a matter for government.

Senator McLUCAS: We will just have to wait until before the middle of the year. As the task force, how were you engaged with the process by which the $5 billion concessional loan facility was established? What role did the task force have in the development of that policy that was announced in the budget?

Mr McDonald : Like all the measures that were related to northern Australia, we were involved in the development of that. It is obviously now within the Treasurer's remit, and in the Treasury portfolio, but we were obviously involved in the development of that from inception.

Senator McLUCAS: When did those conversations start—around the policy outcome that we got?

Mr McDonald : The issue of infrastructure deficiencies in the north has been around since the start of the white paper, so it is very hard to pick a particular date where an infrastructure lending facility became part of the solution to that problem. I would say almost from the beginning, there was the concept of a lack of infrastructure, or deficiencies—

Senator McLUCAS: I am not asking that question, Mr McDonald. I am asking when—

Senator Cormann: We will review the question you have asked, and if there is something more helpful that we can provide by way of information on notice, we will do so. I do not think that there is much more that the officer can add in response to that question.

Senator McLUCAS: To be very clear, I am not asking: 'when did we know there was a vacuum for infrastructure in northern Australia'. Everyone has known that for a very long time. The question I am asking is: when did we come to a view that a concessional loan facility would be a solution?

Senator Cormann: And that is exactly the question that I have taken on notice; to see whether we might be able to provide you with a precise date for that.

Senator McLUCAS: Thank you, Minister. Of the submissions that were made to the white paper task force, did any of those submissions call for such a facility?

Mr McDonald : There are 170 submissions directly to us, and there are something like 350 to Mr Entsch's committee as well. I would have to go back and review those. It would be a pretty time-consuming effort. But as I say, I think the number one issue—across almost every stakeholder—is the issue of infrastructure in the North.

Senator McLUCAS: Sure; I live in northern Australia. I know that. But the question is, why we did end up with this as the policy response to that problem? And where did that idea come from?

Dr Gruen : We will take it on notice.

Senator McLUCAS: Are you saying that you do not know where it came from?

Ms Cross : I think we were undertaking to go through a large number of submissions—

Senator WONG: No; that was a separate question.

Ms Cross : because I think the first question was whether it had been raised in any submissions—

Senator WONG: That was the second question.

Ms Cross : and so we are taking that on notice. We would need to see whether it was in any of the submissions before we could answer the—

Senator WONG: Was it an initiative of—did the Prime Minister request an NPP in the budget process, in this form?

Senator Cormann: I have already taken on notice the question of when the idea was first considered by government. In that context, I am very happy to add to that response—to the extent we can if that information is readily available—who it was that first put the proposition on the table. Suffice to say, in this government there are orderly and methodical processes when it comes to the consideration of policy options, and they were applied in relation to this particular proposal. It went through the usual process—including getting authority from the Prime Minister—for a proposal like this to be brought forward in the context of our budget process.

Senator WONG: Who sought the authority?

Senator Cormann: I will take that on notice.

Senator WONG: The senator might have asked this, but why was this budget measure included ahead of the white paper being finalised?

Senator Cormann: Because the government made a decision, which is reflected in the budget papers, to announce some measures as a down payment, if you like, on the broader white paper on northern Australia. And we have done the same in relation to agriculture—which is yet to be finalised and released, in terms of its totality.

Senator McLUCAS: Was the facility a recommendation of the advisory group?

Mr McDonald : That advice does talk about infrastructure as an issue. The particular measure—I would have to take that on notice and go back through the advice.

Senator McLUCAS: I am surprised you do not know this. This is the centrepiece of the budget response; surely someone can recall where the idea came from—and if, in fact, the advisory group recommended that we establish a $5 billion dollar concessional loan scheme?

Senator Cormann: The reality is this—and I very much appreciate, Senator McLucas, that as a senator from Queensland who lives in northern Australia, you have acknowledged that there is an infrastructure shortfall across Australia. That is an assessment that the government obviously agrees with. The government has considered various options on how best to respond to that deficiency in terms of infrastructure in northern Australia, and the decision that we have made is that this is an important part of an overall response to that particular challenge. It is all focused on strengthening growth and opportunity across northern Australia, as part of an effort to strengthen growth across Australia as a whole.

I understand that in Senate estimates these sorts of questions get pursued from time to time. But in the end, in government you have a lot of people who consider a lot of challenges and, somewhere along the way, obviously ideas emerge in a sort of an iterative, team-focused process. To the extent that we can assist you, I have already said that I will take on notice to provide any information that we might be able to share with you relating to the first time that this proposal was put forward and, if possible, by whom. At this point in time, I am not sure that there is much else that we can do to assist. But I have to be honest: do you oppose this particular measure as a way to address the infrastructure shortfall?

Senator McLUCAS: I ask the questions, Minister, thank you. Mr McDonald, can you list the submissions or any other representations that discussed difficulties in attracting finance for Northern Australian development projects?

Mr McDonald : We can take that on notice.

Senator McLUCAS: Thank you. Were the Queensland, Northern Territory and Western Australian governments advised of the budget announcement of the facility prior to the budget being announced?

Mr McDonald : I am not aware of them being advised.

Senator McLUCAS: You are not aware. Would it be you I should ask or should I ask that question of Treasury?

Ms Cross : I think there is usually a letter to premiers on budget night outlining the major measures. In my recollection, it is co-signed by the Prime Minister and the Treasurer. That may well have gone to this matter in the versions that went to those premiers.

Senator McLUCAS: But you would have to take that on notice, right?

Ms Cross : Yes.

Senator McLUCAS: The Infrastructure Australia Northern Australian Audit has called for improved processes around cost-benefit analysis before investment decisions should be made. Would you be involved, as the Northern Australian Taskforce, in development of cost-benefit analysis of the money that is to be invested in northern beef roads? What is the role of the taskforce in the process of identifying which of the beef roads will be funded and when?

Mr McDonald : The question about which roads and the process of doing that should be redirected to the Department of Infrastructure and Regional Development. We were part of the policy process to develop that policy but the actual implementation and the picking up the roads and use of the transit model—they are questions for the Department of Infrastructure and Regional Development.

Senator McLUCAS: Thank you, that is good advice. From the taskforce perspective, can you give the committee an understanding of why $101.3 million was arrived at is an appropriate figure?

Mr McDonald : Obviously it is a matter for government, but I do not know if you have you read the transit report by CSIRO where—

Senator McLUCAS: I am aware of it but I have not read it all.

Mr McDonald : They do a couple of case studies which show the benefits from targeted amounts of money in terms of improving particular parts of the road. You can scale up on those. Some of them are around $7 million, for example. You can get an assessment of what might be needed for particular roads.

Senator McLUCAS: So it is the CSIRO report that—

Mr McDonald : It is the CSIRO report.

Senator McLUCAS: I refer to the $3.7 million provided to the Northern Australia infrastructure pipeline. What was your role in that recommendation?

Mr McDonald : Like the other proposals, we were involved in the development of that policy.

Senator McLUCAS: I think that they should go to the line agency. Now, on the Northern Australia Strategic Partnership and the advisory group, please—an update on the meetings of the strategic partnership. When have they met?

Mr McDonald : There have been three of those meetings, Senator, and they have all been in the margins of COAG. I can let you know the dates.

Mr Gruen : On the days of COAG.

Senator McLUCAS: They are on the COAG days, and the attendees at the meeting are the relevant first ministers.

Mr McDonald : And the Deputy Prime Minister.

Senator McLUCAS: And the DPM. Okay. You do not need to do that on notice. Has the Prime Minister attended those meetings as well?

Mr McDonald : Yes, he has.

Senator McLUCAS: All of them?

Mr McDonald : Yes.

Senator McLUCAS: Information on any future meetings of the strategic partnership—will that continue into the future?

Mr McDonald : Obviously that is a matter for the first ministers, but it is likely that they will continue, Senator.

Senator McLUCAS: Thank you. The advisory group, now: with the white paper being released nearer to the middle of the year, is it still in existence?

Mr McDonald : It has completed its report and provided it to the task force. That is the final report, and I am not sure what the terms and the conditions are—whether they have technically wound up now—but they are very close to winding up.

Senator McLUCAS: So they have not actually wound up?

Mr McDonald : I am not sure whether technically they are wound up, but their final report has been provided.

Senator McLUCAS: It does actually say, if you go to the government board's website, it is part of the PM&C cabinet portfolio and functions in an advisory capacity, and then it says that everything is vacant—so it exists, but with no membership. That website has had problems in the past, I know that, but I am just trying to ascertain if it is still there. Have they received a letter saying, 'Thanks very much, see you later'? What has happened?

Mr McDonald : I can take on notice what the terms of the actual agreement are with the board—about when their terms run out—but the final report has been provided to government.

Senator McLUCAS: And you will tell us when they are finished.

Mr McDonald : I will let you know whether that satisfies the terms of their engagement.

Senator McLUCAS: Could I also get an indication of the expenses of the advisory group over the period they were in operation?

Mr McDonald : It is around $80,000, which I do not think has changed much, if at all, from the last time, because the only costs are related to their travel and other expenses.

Senator McLUCAS: They were not paid sitting fees, were they?

Mr McDonald : No.

Senator McLUCAS: That final report—is that an internal document or is that public?

Mr McDonald : It is an internal document, Senator.

Senator McLUCAS: Why can't it be published?

Mr McDonald : I did not say it could not be published, but it is an internal report at the moment and still for the consideration of government and the task force.

Senator McLUCAS: Minister, is there consideration that it might be published?

Senator Cormann: I will have to take that on notice. It is outside my direct area of responsibility, so if we can assist with that information, we will.

Senator McLUCAS: That would be great. Thank you. I have just a couple more questions, if that is okay.

CHAIR: Senator McLucas, there are other questions in regard to the Northern Australia Taskforce. We are going to remain on this topic for a little while.

Senator McLUCAS: Good. Can I continue?

CHAIR: Yes, please—continue.

Senator McLUCAS: The Prime Minister recently visited Cairns in North Queensland to launch Infrastructure Australia's audit of northern Australia's infrastructure. The reason I am asking this question is I want clarification. It is reported: 'Prime Minister Tony Abbott has pledged his government's support for the Nullinga Dam project, advising that it is a priority project.' That says to me it is funded. What are the circumstances? What is the state of the Prime Minister's position on the Nullinga Dam?

Mr McDonald : I can talk about it in terms of the task force. All projects that stakeholders have put forward are under consideration as part of the white paper.

Senator McLUCAS: Then perhaps I should ask someone else from Prime Minister and Cabinet if they can clarify that statement when it comes to the Prime Minister's position on the Nullinga Dam and what a 'priority project' actually means. Does that mean it is funded?

Mr McDonald : As far as I am aware, no funding has been allocated to Nullinga, but issues around infrastructure in northern Australia that have been raised by stakeholders are being considered as part of the northern Australia white paper, as they were considered in the northern Australia infrastructure audit.

Senator McLUCAS: Yes, but if the Prime Minister is being quoted as saying that it is a priority project, what can the community lean from that? What do they take home from that?

Dr Gruen : The white paper is, as we have said, due by the middle of the year, and it will be clear when the white paper is released exactly what the status of all projects is. It really is a matter for government what government intends to do with that project, as with others. The outcome of those considerations will be the white paper which will be coming out within a month and a bit.

Senator McLUCAS: So you cannot assist the committee in explaining what a priority project means?

Senator Cormann: Obviously there are announcements that are yet to be made that will provide further information for you and the community as a whole on what that means. Suffice to say, obviously, the statement the Prime Minister made stands on its own. It is a very high priority for the government, and that is why we are proceeding with the various initiatives that we have put forward as part of this approach.

Senator McLUCAS: Thank you for that, Minister. The report, quoting the CEO of the Chamber of Commerce, states: 'Mr Abbott also announced the establishment of the Northern Australia Insurance Premium Taskforce and advised that funding will be made available for the Hann Highway upgrade.' Is that accurate?

Mr McDonald : Is this a second-hand report?

Senator McLUCAS: This is a report from the Cairns Chamber of Commerce. I cannot find funding for the Hann Highway in the budget, so I am trying to ascertain whether or not the Prime Minister has been accurately reported.

Dr Gruen : We will have to take that on notice. We are not in a position to pass commentary on statements that have been made about what the Prime Minister said.

Senator McLUCAS: I agree. It is hard, but if these statements have been made, I am trying to verify their accuracy.

Senator Cormann: And we will do that for you.

Senator McLUCAS: Thank you.

Mr McDonald : Both the Nullinga Dam and the Hann Highway were identified in Mr Entsch's report, which is a key input into the Northern Australian white paper. So, obviously, they are being considered within that process.

Senator McLUCAS: Can the community come to a view that there will be money made available for the upgrade for the Hann Highway?

Ms Cross : I think the previous advice was to wait for the white paper to be released, because that is the point where the government will announce what is and is not being funded.

Dr Gruen : In response to an earlier question, we have some more information for you. The letters from the Prime Minister and the Treasurer sent on budget night included the following text in the letters to Western Australia, Northern Territory and Queensland: 'The Commonwealth looks forward to working with you to progress much needed infrastructure as part of the Northern Australia Infrastructure Facility. Under this facility the Commonwealth will provide concessional loans to support infrastructure in Australia's north. The facility will open for applications from 1 July 2015. '

Senator McLUCAS: Yes. I will ask more specific questions of Treasury.

Dr Gruen : You could, certainly do that.

Senator McLUCAS: That is the right place. Can I come back to the rationale behind the response to infrastructure needs in the north being a loan scheme. Why was northern Australia treated differently, say, than East West Link? Victoria got $3 billion for something that they voted against, and northern Australia got a loan facility to say we have got to pay it back.

Mr McDonald : The decision is a matter for government.

Ms Cross : Senator, again I think you could direct questions to the infrastructure department, but I am sure there are other infrastructure projects funded through the same program as East West link in all states and territories. So you could refer questions on fully funded or government funded infrastructure to that department.

Senator Cormann: Indeed, there are—and I am sure you would be aware of them—significant infrastructure investments. I believe there is $6.8 billion or thereabouts in relation to upgrades and expansion of the Bruce Highway. There is significant investment—without the need for a mining tax to fund them, by the way—in the north of Western Australia, the north-west coastal highway. We have invested several hundred million dollars in expanding that. There is of course investment in the Northern Territory as well. This is an additional initiative to further boost the level of infrastructure investment in a very important part of Australia which has, as you have also rightly identified, a level of infrastructure gap which the government is committed to address through innovative and creative policy measures.

Senator McLUCAS: You said that with a smile on your face.

Senator Cormann: Because I am very excited about this. It is a very important initiative.

Senator McLUCAS: There is a question in the north about why a loan scheme is the right approach to finish—

Senator Cormann: This comes on top of significant investment of course.

Senator McLUCAS: If we could have a debate about the Bruce and how much is in fact in the forwards and what is different from when we were in government—

Senator Cormann: It does depend to a degree on the speed with which state governments are able to do the work. There is always a process. The Commonwealth helps fund various important road infrastructure projects across Australia but of course the actual practical work is managed at the state level. This is the same as was the case when the previous government was in government. Subject to certain milestones being met, payments are made according to an agreed timetable. Sometimes that is adjusted along the way, but suffice it to say there is a very significant investment in road infrastructure across Queensland, the Northern Territory and Western Australia in addition to this particular measure.

Senator McLUCAS: It is a bit hard to justify, Minister.

Senator SMITH: Just following on from Senator McLucas's questioning and just to be clear, the delay in the release of the white paper is attributed to the change of government in Queensland but also the delay in the joint select committee releasing its final report Pivot North?

Mr McDonald : I think I said that the government is taking the time to get it right.

Senator SMITH: I heard that and that is very important—

Senator WONG: That is a new excuse—

Senator Cormann: Let us just be very clear. The government takes responsibility for the time taken to put this together. We want to have the best possible white paper into northern Australia to ensure that we have the policy absolutely right and that we have a policy that delivers value for money and makes the best possible contribution to future growth and job creation across northern Australia.

Senator WONG: It is fine. That is just a new excuse, that is all.

Senator Cormann: It will be released very soon. Indeed, officers have already indicated that the intention is for it to be released by the middle of the year.

Senator WONG: It used to be—

Senator Cormann: At any one point in time there are various developments that have an impact and influence on the government decision making but ultimately it is our responsibility and it is our judgement about what the appropriate timing is given where the work in relation to this is at.

Senator SMITH: Western Australia are keen for it to be comprehensive and to be right.

Senator WONG: But you are the ones who said something different.

CHAIR: Order! Senator Wong, we spent half an hour listening to Senator McLucas asking questions in respectful silence. I ask you to extend the same courtesy while Senator Smith—

Senator WONG: I am responding to the political response.

CHAIR: You do not need to respond to the minister. You will have an opportunity later on.

Senator WONG: It is a ridiculous timeline. You said 2014 and 2015 and now it is going to be 2016.

Senator Cormann: I just said to you very candidly—

CHAIR: Minister, we do not need any further contribution there. Senator Smith has the call.

Senator SMITH: I actually want to get, just for Senator Wong's interest, to the very significant issue of land tenure arrangements across northern Australia, which Senator McLucas would agree was a key element in the Pivot North report and which is a key element in the development of Indigenous communities. So that is where I am heading, thanks, Senator Wong. Mr McDonald, could you share with us what announcements have been made to date in regards to the northern Australia work?

Mr McDonald : There is the $5 billion concessional loan facility, which Senator McLucas was asking questions about before. There is the $100 million cattle road strategy. There is the $15.4 million tropical medicine initiative. There is the announcement of the insurance review, which Mike Callaghan is heading. Hopefully I have not missed any. There may be one or two others, but they are the major ones.

Senator SMITH: You mentioned earlier that there had been approximately 170 submissions to the task force and another 350 submissions to the joint—

Mr McDonald : Sorry, could I just clarify. There were 185 submissions to our white paper, not 170. There were 170 meetings as part of that process.

Senator SMITH: So there were 185 submissions, 170 meetings—

Mr McDonald : Yes.

Senator SMITH: Plus the submissions and meetings.

Mr McDonald : And there were 350 submissions to the Entsch committee as well, which are considered submissions to the white paper.

Senator SMITH: In that, how often was the issue of land tenure raised with the work that you have been responsible for?

Mr McDonald : The green paper had six main themes, one of which was land—based on earlier stakeholder feedback about the issues that are important to the north. I would say a substantial number of submissions discussed land plus stakeholder feedback was also very strongly of the view that there are land issues in the north which are different to those in the south, and for some stakeholders it is very important.

Senator SMITH: Land tenure arrangements are primarily governed by states and territories, so what is the plan to address land tenure given that the primary responsibility sits with state and territory governments?

Mr McDonald : That will be an issue for the white paper and its announcement.

Senator SMITH: So the white paper process is conscious of the land tenure issue, conscious that it is primarily a state government responsibility but will contain some discussion or plans about how best to start addressing that?

Mr McDonald : There are three areas of land tenure: pastoral leases, which are a state issue; Indigenous leasehold, which can be both; and obviously native title as well. All three of those issues were outlined in the green paper as to what the government intends on doing about them with or without the northern jurisdictions—that will be a matter for the white paper when it is released before midyear.

Senator SMITH: Can we expect that land tenure arrangements might become the focus of the federation discussion that the Prime Minister is apparently having in July with state premiers and territory leaders?

Mr McDonald : I am not aware of that. All I am aware of is getting the white paper finished by midyear.

Senator SMITH: So how many initiatives will be in the white paper?

Mr McDonald : That will be a matter for government.

Senator SMITH: I thought I might try a different approach.

Senator GALLAGHER: In relation to the Northern Australia white paper—I came in a bit after Senator McLucas had started—can I confirm now that it is due now in the middle of 2016?

Mr McDonald : It will be in 2015.

Senator GALLAGHER: Yes, I am a year ahead of myself. What is the cost to date of developing it?

Mr McDonald : I have already answered that to Senator McLucas. It was 3 ½ million dollars up until April with $2.9 million of it being for costs related to the Department of the Prime Minister and Cabinet and the Department of Infrastructure and Regional Development.

Senator GALLAGHER: The answer from Ms Cross to another question from Senator McLucas about some particular infrastructure projects was that it was required to have finished the white paper before individual infrastructure projects would be either supported or progressed. Is that right? I am not verballing you, Ms Cross; is that what you said?

Ms Cross : That is consistent with what I said.

Senator GALLAGHER: Budget Paper No. 2 provides for this infrastructure loan facility. The question I have is: how can a loan facility be established before infrastructure priorities are agreed? From some of your answers it seems that we have to wait for the white paper to be progressed. However, on the other hand, the loan facility is being established and, I understand, available to take applications from July this year.

Senator Cormann: The important point here is that the concessional loan facility is an alternative source of funding for important infrastructure projects into the future and it seeks to leverage investment by other parties. But the most important point here is that no decision has actually yet been made on the allocation of those funds for specific projects. Essentially the decision to establish a loan facility as an alternative and additional source of potential funding for important projects is not inconsistent with the fact that decisions will continue to be made on appropriate prioritisation of relevant projects into the future.

Senator GALLAGHER: So the important infrastructure projects will be determined before the loan facility is open for applications from 1 July 2015?

Senator Cormann: The appropriate priorities will be determined before any funds are deployed by way of concessional loans, yes.

Ms Cross : I think we mentioned one of the measures already in the budget was the cattle roads. That has been announced as a down payment. That is separate to whether you then have a loan facility.

Senator GALLAGHER: I may have missed this and I apologise. You can just direct me to the Hansard. What was PM&C's role in developing that initiative?

Mr McDonald : I do not want to say you should have a look at the Hansard but, like all of the measures, PM&C has been involved with the development of the Northern Australia budget measures.

Senator GALLAGHER: Okay.

Senator Cormann: Essentially the Expenditure Review Committee is chaired by the Prime Minister. It has got the Treasurer, myself, the social services minister, the Assistant Treasurer and the Deputy Prime Minister on it. Obviously all of us receive advice from our respective departments in all matters that come before the ERC. This is obviously a measure that was considered by ERC and so in that context there is nothing unusual in all of the relevant portfolio agencies, including the Prime Minister's department, being involved in those processes as part of the budget process.

Senator GALLAGHER: With that loan facility, have governance arrangements and eligibility guidelines been established for that facility?

Mr McDonald : Yes, apart from the public statements that have been made about it, those questions about how it should operate really should be referred to the Treasury.

Senator GALLAGHER: So PM&C has not had any role in providing advice around the eligibility and governance guidelines?

Senator Cormann: That is a level of detail that is appropriately dealt with through the Treasury portfolio.

Senator WONG: Minister, you know and Mr McDonald knows, yes, they are the lead agency and we will ask them as well. We want to know what advice you have provided.

Mr McDonald : We have been in discussions with them about the potential gaps in Northern Australia infrastructure and how they could potentially be addressed. We have been involved with them and are assisting them in developing that policy.

Senator Cormann: To put context around all of this, obviously there is the policy consideration, which is quite separate from the implementation consideration. The question that you are now asking goes to implementation. There is nothing really that PM&C can usefully contribute to questions on implementation given that PM&C does not have responsibility for implementation of this particular measure.

Senator GALLAGHER: The role that PM&C plays in governance and integrity measures around the loan facility referred to Treasury, is it?

Senator Cormann: Because they have the responsibility for implementation, so PM&C was appropriately involved as part of the budget process in providing advice to the Prime Minister and through the process of the ERC but the implementation side of it is very much a Treasury matter.

Senator McLUCAS: I have a question around the beef roads. Are those roads across the three jurisdictions or are we just talking about the $100 million going to the Queensland Gregory highway?

Mr McDonald : They are all northern roads. So it is Western Australia, Northern Territory and Queensland.

Senator McLUCAS: I understand there was a conference today where the chair of the joint select committee indicated that it was going to the Hann and the Gregory; it is more than that though?

Mr McDonald : It is a question best directed to the department of infrastructure about where the funding is going, but I can confirm it is certainly Western Australia, Queensland and the Northern Territory.

Senator McLUCAS: I was just making sure that Senator Smith knew that the hundred million was going to Queensland.

CHAIR: If you are provoking a response from Senator Smith, you are not going to get one.

Honourable senators interjecting—

CHAIR: Order. Whilst we are there, could I put a pitch in for South Australia. We need extra funding. There are no further questions on the northern Australia white paper.

Senator GALLAGHER: In relation to the agriculture white paper that was due last September, I believe, can you provide us with the reasons for the delay of that white paper and the new timetable for release?

Unknown witness: I think it is the Agricultural competitiveness white paper.

Senator GALLAGHER: Thank you for that.

Mr Morris : The paper has been undergoing a very extensive consultation process last year. We had both an issues paper and a green paper that underwent very detailed consultation with stakeholders and that concluded about December last year. Then through the course of this year, we have been going through government processes in terms of finalising it. In terms of when it is due, it is in coming weeks so very soon.

Senator GALLAGHER: So it is finished?

Mr Morris : It is not finished; it is still going through government processes. It will be out very shortly.

Senator GALLAGHER: Do you have the cost of developing that white paper to date?

Mr Morris : The cost of the task force?

Senator GALLAGHER: The costs associated with the development of the white paper—whatever you can help me with, really.

Mr Morris : Up until 30 April this year, we had expended just over $3 million on the development of the white paper—about $3.044 million, something like that.

Senator GALLAGHER: And we can expect it in the coming weeks?

Mr Morris : Yes.

Senator GALLAGHER: Are there officers actively working on that white paper now or has it reached the point where it is heading off through those government processes?

Mr Morris : The task force is still active.

Senator GALLAGHER: So there are dedicated staff working on it?

Mr Morris : Correct.

Senator GALLAGHER: How many are involved in the task force?

Mr Morris : As of today, 11.

Senator GALLAGHER: Are you responsible for the federation white paper?

Mr Morris : No, fortunately.

Senator GALLAGHER: Lucky.

Ms Cross : I can take questions on that while the relevant officer comes to the table.

Senator GALLAGHER: Okay. It is along the same lines. I think a green paper was due to be released in the first half of this year and a white paper by the end of this year—is that right?

Ms Cross : We will check the original commitment, but I think at COAG there was discussion of having a leaders' retreat in July and the green paper would be released following that retreat, and then the white paper, I think we said at the last estimates hearing, would be early 2016.

Senator GALLAGHER: Have the five issues papers that have been released to date all fed into the green paper?

Ms Cross : Yes. The issues papers set out the context in health, education and the various areas. Once the green paper is released, the government will be putting forward possible reform options and obviously there is a process with the expert panel, states and territories that leads into that green paper.

Senator GALLAGHER: The green paper might be the product of a leaders' retreat—the outcome may well?

Ms Cross : The intention is for the green paper to be discussed at the leaders' retreat and released shortly afterwards.

Senator GALLAGHER: And just along the line of questions I asked around the ag paper, you have obviously got staff actively working on the green paper. Could you tell me about that?

Mr de Carvalho : Yes, we have a task force. We have 20 staff, including myself, on the task force. You were asking also after cost to date I assume?

Senator GALLAGHER: Yes.

Mr de Carvalho : From 2013-14 and 2014-15, the cost to date has been $2.209 million.

Senator WONG: This is on the ag—

Mr de Carvalho : No, federation.

Senator WONG: So what were the equivalent costs for ag?

Dr Gruen : About $3 million.

Senator GALLAGHER: So the reform of the federation process is tracking on time?

Mr de Carvalho : The federation white paper is due in early 2016. We have a green paper due in the second half of this year, so before the end of the year.

Senator GALLAGHER: So it is slipping from that original—

Senator Cormann: As Ms Cross has already indicated, at the most recent COAG meeting the Prime Minister, the premiers and the chief ministers decided to hold a leaders retreat in July. It is obviously appropriate for the outcomes of that leaders retreat to be reflected in the green paper, and, as such, the timing has been adjusted for that.

Senator GALLAGHER: Okay. In relation to the tax white paper—a lot of the issues around the federation reform will cross over into issues relating to tax. How are those two pieces of work being either aligned or managed from within PM&C?

Mr de Carvalho : We are working very closely with our Treasury colleagues on that issue. We have regular coordination meetings where we track how we are progressing on our matters, and they update us on how they are progressing on their matters, particularly on issues where there are matters that are likely to interact. The basic demarcation, if you like, is that the tax white paper will be looking at matters about how revenue is raised—things like rates and bases et cetera—whereas our bailiwick is more how the total revenue pool is distributed according to expenditure responsibilities. It is those expenditure responsibilities, how they are allocated between different levels of government, that is the subject of our process. So you can see how, while they are related, we do have some relatively well-defined lines of demarcation.

Senator GALLAGHER: Yes, I agree. I still think that ultimately they are going to have to align at some point.

Mr de Carvalho : Yes, and that is why COAG has repeatedly said that the two processes are to progress together.

Senator GALLAGHER: So does that mean the tax green paper and white paper will be released concurrently with the reform of the federation?

Senator Cormann: Strictly speaking, that is a matter for Treasury, but as the officers have already indicated—

Senator GALLAGHER: I was just wondering if you could be helpful.

Senator Cormann: Sure. I agree with the principle of the proposition that you are putting forward, which is that there is obviously a very significant correlation between both processes and, as the officers have indicated, that is why there is very close cooperation between the Prime Minister's department and Treasury in relation to the processes of both of those white papers. But in terms of specific questions on timing and specifics on the tax white paper review process, that really would have to be dealt with through Treasury.

Senator GALLAGHER: No problem; thank you very much.

Senator WONG: Ms Cross, can I just confirm in summary the total cost to date that you have given evidence about on the white papers? It was $3 million on the agricultural paper?

Ms Cross : That is correct.

Senator WONG: Just over $2 million on federation.

Ms Cross : Yes.

Senator WONG: And what was it on northern—3.5?

Ms Cross : Yes, that is right.

Senator WONG: And on tax, PM&C's expenditure or cost to date?

Ms Cross : I do not think we have had any direct costs, just staff time where we would normally interact with Treasury.

Senator WONG: So $8½ million on three white papers yet to be released, to date, just out of PM&C?

Ms Cross : Yes.

Senator WONG: Which would not include the costs of other departments?

Ms Cross : In some cases—

Mr de Carvalho : Our task force has some secondees on it from other departments, and they are contributing to our costs.

Senator WONG: Does the $8½ million to date, on the three white papers yet to be released, include all costs across the Commonwealth or costs attributed to PM&C?

Ms Cross : I think we have given you the direct costs of the task forces—

Senator WONG: Correct.

Ms Cross : but in other departments there may be staff involved in briefing their minister or providing updates, so I do not think those indirect costs have been included.

Senator WONG: And would they be trapped? Would they be identified?

Ms Cross : I do not think separately. That would just be people as part of their day-to-day work advising on occasion on issues to do with the white papers, rather than being directly engaged on the task force.

Senator WONG: Mr de Carvalho, Mr McDonald, was there something—

Mr de Carvalho : In relation to the 2.209 figure that I gave you, that is PM&C's direct costs for its own staff. There are, as I mentioned, about four or five secondees, which their home departments pay for, and those costs are not included in the 2.2.

Senator WONG: Are you able to take on notice—you will probably need to refer it to the relevant departments—the costs of those staff members?

Mr de Carvalho : Yes, I can do that.

Senator WONG: Can we do the same in relation to northern Australia and ag?

Mr McDonald : We can, except I think I have given it already—it is $2.9 million for Department of the Prime Minister and Cabinet and department of infrastructure, and then the other $600,000 comes from the secondees.

Senator WONG: So yours is already—

Mr McDonald : Ours is in toto.

Senator WONG: So we are not apples and—

Mr McDonald : You are not apples and apples.

Senator WONG: whatever the phrase is.

Mr de Carvalho : And we have had two secondees, for various periods of time, from the states.

Senator WONG: Perhaps on notice, I just want the total costs, insofar as you can provide them, for all three.

Ms Cross : For the staff directly involved in the task forces? Yes.

Senator WONG: Thank you. I had some questions about the COAG retreat that Senator Cormann raised, but I am happy to come back to that.

CHAIR: We will come back to that. Senator Smith?

Ms Cross : Senator, can I just remind you I will be leaving at three, so it would be helpful if they were before three o'clock.

CHAIR: Okay. Let's do the COAG retreat now.

Senator WONG: Sorry, Senator Smith. I think Senator Cormann raised the subject of the COAG retreat.

CHAIR: I think Ms Cross raised it.

Senator Cormann: Ms Cross referenced it, I think.

Ms Cross : I will take responsibility.

Senator Cormann: But I am quite happy. It is hardly a secret that COAG agreed to hold a leaders retreat in July.

Senator SMITH: It was in the papers.

Senator Cormann: I think it was published, yes.

Senator WONG: Yes. In fact, the Prime Minister held a press conference. That is not what I am asking about. I am asking about this: when will the retreat be held, where and—

Ms Cross : We—

Senator WONG: Shall I just ask all the questions and see how you go?

Ms Cross : I was just going to say that we have not yet finalised all of the arrangements, but we are hoping that a final decision on the location and specific arrangements will be made shortly. It will be in mid-July.

Senator WONG: Where will it be held? Has that been resolved?

Ms Cross : We are just in the process of finalising that.

Senator WONG: What are the options that you are in the process of—

Ms Cross : We have been looking at venues in New South Wales. I am happy to take on notice the various options that have been considered.

Senator WONG: Lifestyle retreats? What sorts of venues? Are they going to do yoga?

Ms Cross : No. The day after the retreat, there will be a normal COAG meeting.

Senator Cormann: There is nothing wrong with yoga, surely!

Senator WONG: You are telling me that?

Senator Cormann: Exactly. I just thought I would place that on the record. If we got some beneficial outcomes for the good of Australia out of it after the yoga, I think it would be a good idea.

Senator WONG: I have been on a yoga retreat.

CHAIR: I regret the yoga retreat has been—

Senator SMITH: You won't be surprised that I haven't!

CHAIR: Ms Cross, can I draw you back to the substantive question.

Senator WONG: And the substantive question is: what are the venues which are under consideration?

Ms Cross : I was just going to say that one of the considerations is that, the day after the retreat, there will be a full COAG meeting, a special COAG meeting, and so you need a venue that can both host a retreat for first ministers and the panel but also hold a full COAG meeting, which has more complicated logistics associated with it. So we have been looking at venues that can accommodate both.

Senator WONG: My question stands.

Ms Cross : And I said I am happy to take on notice the specific—

Senator WONG: You do not want to tell me now?

Ms Cross : I was just going to make sure I had the right information for you.

Senator Cormann: We never want to mislead you.

Ms Cross : Again, I could try to do it from memory but I suspect I would get it wrong. I will check for you, Senator, and then provide the information

Senator WONG: Who will meet the costs?

Ms Cross : The costs of COAG are met within the Prime Minister and Cabinet budget.

Senator WONG: What is your budget for it?

Ms Cross : We have a broad budget across the department. Normally there are two COAG meetings a year. This will be a third meeting so we will seek additional funding, if we need it, from within the department's budget to cover those costs.

Senator WONG: Do you have an indicative budget?

Ms Cross : I think it is normally in the order of $30,000 or $40,000 per COAG meeting.

Senator WONG: But this is a retreat so it is going to be more than that.

Ms Cross : We do not expect it will be significantly more, but it will be a third meeting rather than usual two meetings.

Senator WONG: Is it intended that political staff be present for the retreat?

Ms Cross : I think the statement made by the Prime Minister at the press conference was that it would be first ministers and the expert panel only, certainly in the room. That is what was announced by the Prime Minister.

Senator WONG: And officials?

Ms Cross : No, he said first ministers and the expert panel.

Senator WONG: So the Prime Minister's personal staff will not attend?

Ms Cross : If there is a change in arrangements—and as I said, we are finalising arrangements at the moment—there might be, but based on what was said at the press conference, the intention at the stage was it would be first ministers and the panel.

CHAIR: Ms Cross, at the COAG meeting in April I understand from press reports that the focus of discussion was about ice, domestic violence, extremism and things like that. Is that intended to be the focus of the leaders' retreat?

Ms Cross : The leaders' retreat will be looking at the federation green paper. There will then be a normal COAG meeting or a special COAG meeting the morning after and we are still finalising the agenda for that meeting. I believe the communiqué indicated that counter-terrorism would be discussed at the special meeting the day after the retreat. Obviously, it is open to COAG to look at the ice or domestic violence at that same meeting if they choose.

CHAIR: And you said that they are going to look at the green paper.

Ms Cross : The federation green paper.

CHAIR: What about the tax white paper?

Ms Cross : What was announced was the federation green paper but obviously COAG has always considered the two white papers to be closely aligned. So in their briefings and discussions they will be cognisant of the tax white paper.

CHAIR: Is it fair to say that states and territories have been cooperative on both of those papers or constructive?

Ms Cross : All of the COAG communiqués have preferred to the close collaboration and cooperation between the Commonwealth and the states on the white papers.

CHAIR: Thank you. Any other questions on the federation white paper?

Senator SMITH: My questioning is very similar to that of Senator Wong and Senator Bernardi. In one of the media reports it said that the topic of the retreat in July would be fundamental reform of the federation. Was that an accurate media report?

Ms Cross : Just going from memory, they certainly said they would be looking at the green paper and certainly we—

Senator SMITH: It is a report by Fleur Anderson in the Australian Financial Review dated 17 April. The reason I ask is that other elements of the media report appear to be accurate, given what you have just shared with us about attendees. It says that the topic of the repeat will be 'fundamental reform of the federation'.

Ms Cross : The ambition of COAG is to look at fundamental reform of the federation rather than simply looking at incremental changes. Obviously, that will be the subject of their discussions and the green paper will have options in it.

Senator SMITH: It is my understanding that the Australian Local Government Association attends COAG meetings as an observer. Is that correct?

Ms Cross : I will check for you. They may be a member of COAG. I am not sure. They certainly attend the meetings.

Senator SMITH: Does the Business Council of Australia attend the meetings?

Ms Cross : No.

Senator SMITH: At the moment, the retreat will just be first ministers?

Ms Cross : And the expert panel and the expert panel has a range of people on it.

Senator SMITH: So the agenda for the retreat will be set by who? Is it set by the Prime Minister? Is it set by the Prime Minister in consultation with first ministers?

Ms Cross : The normal procedure is for the agenda to be set by the Prime Minister as the chair of COAG, but through a process of consultation with premiers and chief ministers. He does make the final decision on the agenda.

Senator SMITH: Right. And the agenda will be built around what is in that federation white paper response? That is my understanding. Or may it actually include issues beyond that?

Ms Cross : It would be built around the green paper. Just to confirm earlier evidence: when I said that first ministers, chief ministers and the expert panel would be there, the president of ALGA is also a member of COAG.

CHAIR: Ms Cross, we are interested in obtaining full use of your skills before you have to leave. There is some clarification about particular areas which you may be able to address. Senator Wong, what areas did you want to cover? We will see if it falls under this.

Senator WONG: First, remind me who handles hospitality. That is you, Ms Kelly? Good. And who oversees trips?

Ms Kelly : That would be me, too.

Senator WONG: So much to look forward to! We had some questions, also, about the official residences.

Ms Kelly : That is me, Senator Wong.

CHAIR: You might get an early mark, Ms Cross.

Senator WONG: Maybe not. There may be some I have missed, but I have tried to do the two or three social policy things we thought you were needed for. Nothing jumps to mind for me, but I can just proceed with—

CHAIR: Let's just proceed as normal, but understanding Ms Cross will be leaving at 3 pm.

Senator WONG: My first question is about the Waldorf Astoria. Can you confirm that PM&C officials spent $40,000 on accommodation at the Waldorf Astoria New York between 18 and 26 September last year?

Ms Kelly : I cannot, Senator Wong, offhand.

Senator WONG: Perhaps we will come back to it: question number 1667, a question on notice—I think it was a chamber one, which has been answered by Senator Abetz.

Ms Kelly : We will just get that.

Senator WONG: You might want to get that first. I will come back to that. Minister, can I ask you, as the Minister representing the Prime Minister, did the Prime Minister authorise any member of his staff to brief the Daily Telegraph yesterday that he would: ' … announce today, after cabinet last night approved the policy, that a bill will be introduced before the end of June that would strip dual national terrorist sympathisers of their Australian citizenship'?

Senator Cormann: I am unaware, and I will have to take that question on notice.

Senator WONG: Are you aware, as the Minister representing the Prime Minister, of how it is that the Daily Telegraph came to be briefed to that effect?

Senator Cormann: I am not aware, but I am happy to seek further advice and see whether I can assist the committee further.

Senator WONG: Can you confirm, as has been popularly reported, that cabinet considered the issue by way of a discussion paper on Monday night?

Senator Cormann: I do not talk about what is or is not discussed at cabinet, as is consistent with convention and past practices by previous governments of both persuasions.

Senator WONG: Process questions have been asked tonight, and answered. Was there a discussion paper, dealing with this issue, discussed by cabinet last night?

Senator Cormann: I am not going to get into the agenda that is before cabinet. I will take the question on notice and to the extent that I can assist you further, I will.

Senator WONG: Can you also confirm that Mr Turnbull asked Mr Abbott in the meeting whether or not the newspaper had in fact been briefed?

Senator Cormann: Again, I am not going to get into conversations that may or may not have happened in cabinet. Obviously, for the good governance of Australia, it is very important that cabinet can have proper and robust conversations on matters of public policy across a whole range of issues to ensure that the best decisions are taken in the national interest. That is the way that our government is conducting the affairs of the nation.

Senator WONG: And good government would require, wouldn't it, that a newspaper not be briefed about a matter that pre-empted a cabinet decision?

Senator Cormann: You are speculating about what may or may not have happened. I am not aware of what you are referring to. I am not aware of what may or may not have happened in the context of what you suggest.

Senator WONG: The exclusive article on page 1 of The Daily Telegraph today states:

Prime Minister Tony Abbott will announce today, after cabinet last night approved the policy, that a bill will be introduced before the end of June that would strip dual national terrorist sympathisers of their Australian citizenship.

Senator Cormann: Who wrote the story?

Senator WONG: Mr Benson.

Senator Cormann: I suggest you ask Mr Benson whether he can assist you.

Senator WONG: You are a cabinet minister. How is it possible that Mr Benson is told by a member of the Prime Minister's staff or some other person in the government about what cabinet will decide before cabinet has considered it?

Senator Cormann: You are speculating when you are making various assertions in that question. As far as I am aware, I am not personally aware of how Mr Benson received that information. Obviously, if anyone can assist you with it, it is a question that Mr Benson might be able to answer. I certainly cannot answer it.

Senator WONG: I am asking you as the Minister representing the Prime Minister.

CHAIR: The minister has provided his answer.

Senator Cormann: As the minister at the table, I am being as helpful as I can be and I am not personally aware of how certain information got into the newspaper.

Senator WONG: If we could recap the question, and I understand you have taken it on notice: did any member of the Prime Minister's staff or other member of the government or their staff brief The Daily Telegraph about the proposed announcement prior to cabinet consideration?

Senator Cormann: I am happy to take the question on notice and, to the extent that there is anything that we can do to assist you, we will provide that information for you.

Senator WONG: It just seems strange that you get one newspaper being briefed about what cabinet will do and then suddenly the next day another newspaper brief that cabinet actually had not made the decision, and that the Prime Minister was in fact asked to confirm that the first newspaper had not been briefed at all.

Senator Cormann: In my relatively short period in politics, I have read many things in newspapers that sometimes were entirely wrong and sometimes were close to the mark. I have long given up trying to figure out how various journalists get their hands on certain information. But, at the end of the day, obviously, only the journalist in question can explain to you how they got hold of certain information.

Senator WONG: How are we going with the Waldorf Astoria? Do you have the question?

Ms Kelly : They are just printing the question out now. But I understand it is correct.

Senator WONG: I have a copy. Do you want me to give you mine?

Ms Kelly : That would be useful.

Senator WONG: Could you copy it because it my only copy. I have not written anything rude on it1

Ms Kelly : I think mine is just coming in now.

Senator WONG: So just under $40,000. Can you tell me how many PM&C officials stayed at the hotel?

Senator Cormann: This is in relation to an answer that has already been provided on the public record. The dollar figure that you referenced has of course already been made publicly available some time ago.

Ms Kelly : The answer refers to the number of rooms. I will have to work out the number of staff involved.

Senator WONG: I am going to ask a few questions about this. Maybe we could get the officer to the table who keeps leaving the room, and then we can be quicker. I am happy to move to something else while you do that.

Senator Cormann: In the meantime, can I assist you. The contract in relation to the Waldorf Astoria related to the Prime Minister's visit to the United States to participate in a high level meeting of the United Nations Security Council to address the threat posed by foreign fighters. While in New York, the Prime Minister also delivered Australia's national statement to the United Nations General Assembly and met with key leaders ahead of the G20 leaders meeting in Brisbane in November 2014. Accommodation, temporary office accommodation, meals, electrical upgrades to support IT equipment and storage for displaced hotel furniture and various other bits were part of this contract, which of course was published some time ago in the usual way.

If we want to go down this path, I guess we can start talking about Ms Gillard's $900,000 trip to Brazil. We can talk about various other trips that were conducted by the previous government.

Senator WONG: You know what? You do not need to do this, because actually it is not even his costs.

Senator Cormann: You are choosing to go down this path.

Senator WONG: It is not even his costs.

CHAIR: Thank you. It does not assist with the interventions.

Senator WONG: Talk about an overreaction. You should not do everything—

CHAIR: Minister, have you completed your answer?

Senator Cormann: If you are going down this path, we all know—

Senator Wong interjecting

CHAIR: Order! Minister and Senator Wong, stop. Minister, have you completed your answer?

Senator Cormann: I am just making the point. Obviously prime ministers travel overseas, and obviously, when they travel overseas, they have to stay in accommodation where they are supported in an appropriate way for what they do on behalf of Australia. I understand that Senator Wong is trying to pursue a political attack, but, just to put this into context, previous prime ministers, including previous Labor prime ministers, equally travelled overseas representing Australia, and similar and at times significantly higher costs were incurred for these sorts of trips.

Senator WONG: Ms Kelly, can you confirm that these costs do not actually relate to the Prime Minister; they relate to PM&C staff?

Ms Kelly : That is correct.

Senator WONG: Thank you.

Ms Kelly : And just in relation to your previous—

Senator WONG: Talk about an overreaction.

Senator Cormann: They are related obviously to the Prime Minister—

Senator WONG: The Prime Minister did not stay at the Waldorf Astoria, did he? Your staff did.

Ms Kelly : The costs relate to the five PM&C staff that were with the Prime Minister supporting the Prime Minister during the visit. Of course, the Prime Minister used the other facilities that are within the amount charged—the room for the temporary office that was set up for the Prime Minister and the equipment that was required in order to support the Prime Minister during his visit. But it is not his accommodation costs.

Senator WONG: Thank you. The Prime Minister stayed at a different hotel on that occasion?

Ms Kelly : I cannot confirm that, but certainly those costs do not—

Senator WONG: Yes.

Ms Kelly : We understand that he stayed at the same hotel, Senator Wong.

Senator WONG: So these costs only relate to you?

Ms Kelly : The Department of Finance meets the Prime Minister's accommodation costs.

Senator WONG: Can you take on notice to provide me with an indication of the Prime Minister's costs for that visit?

Ms Kelly : You can ask that of the finance department.

Senator WONG: I can ask you and you can refer it.

Ms Kelly : We have no visibility of that.

Senator WONG: I can ask you because you are his department, and you can refer it. How about we do it that way?

Ms Kelly : Okay, we can do that.

Senator WONG: I appreciate it. So these are departmental costs; correct?

Ms Kelly : Yes, they are the costs for the five staff and the support that was required for the Prime Minister.

Senator WONG: The five staff were DPM&C officials?

Ms Kelly : Yes.

Senator WONG: Not personal staff?

Ms Kelly : No.

Senator WONG: Is it usual for the Waldorf Astoria to be used for officials?

Ms Kelly : I think the usual practice is for the support staff for the Prime Minister to stay at the same hotel so that they are available to the Prime Minister whenever the Prime Minister requires that support.

Senator WONG: I think you said five staff. My question was: how many officials stayed at the hotel? Would five be the answer to that question?

Ms Kelly : Yes.

Senator Cormann: Which compares favourably to the 52-strong contingent that travelled with Ms Gillard to Brazil in relation to a climate change related talkfest that was described as an epic failure. Obviously, under this government, the level of expenditure and the level of staff and officials travelling with the Prime Minister are significantly less.

Senator WONG: Can I get a breakdown of the costs, please, on notice?

Ms Kelly : Yes.

Senator WONG: Thank you. I am aware that we have a mission in New York. In fact, ministers have occasionally stayed there. It is quite a large accommodation and facility. Can you tell me why the Prime Minister needed a temporary office when we have facilities there?

Ms Kelly : I understand that this is the practice not just for this government. It has long been the practice that, when the Prime Minister travels, the Prime Minister has an office and support provided in the hotel in which the Prime Minister is staying, so it was a continuation of that practice. As to—

Senator WONG: Sorry, I should say that I have mixed up the accommodation with the mission. We have both.

Ms Kelly : As to the particular forms of support that are provided to the accommodation and whether they are available at the mission, I would have to take that on notice and check on whether the particular forms of support that were provided by the staff would be available at the mission.

Senator WONG: Okay. Was this bill the only cost incurred by PM&C in association with the PM's visit in September?

Ms Kelly : There may have been some minor allowances for some of the staff involved—incidentals, meals; things of that nature. I would have to check on that.

Senator WONG: Do you want to take that on notice?

Ms Kelly : Yes.

Senator WONG: Check if there are any other costs. I think you answered this, but was it your evidence that the Prime Minister and his travelling party stayed at the Waldorf Astoria during the New York visit?

Ms Kelly : Yes.

Senator WONG: Do you have information as to how big the travelling party was?

Ms Kelly : No, we do not.

Senator WONG: How come?

Ms Kelly : We provide the staff that the department provides to support the Prime Minister, and we set up that support for him in the hotel, but—

Senator WONG: Ms Kelly, knowing how well organised to within an inch this is—every detail is covered on a prime ministerial visit—I find it extraordinary that none of the department can tell me how big the Prime Minister's travelling party was.

Ms Kelly : I cannot tell you. It is possible that someone in the department can tell you, so I can take that on notice and make that inquiry.

Senator WONG: When I ask you a question, I am obviously not saying you personally unless I indicate that; it is a question of the department. Does anyone in the department know who went on that trip?

Ms Kelly : Neither Ms Spence nor I can tell you that, but there may well be others.

Senator WONG: I assume that an order of arrangements was produced for the trip, as is produced for any prime ministerial or ministerial trip.

Ms Kelly : I might hand that to Ms Spence, who is—

Senator WONG: It is not possible that you did not prepare one.

Ms Spence : The normal practice is obviously to prepare one. We do not have one with us. I can take the question on notice.

Senator WONG: That would list the travelling party, wouldn't it?

Ms Spence : Yes. I would expect it would have the details of that.

Senator WONG: The front of it is the travelling party assisted. Can someone check—

Ms Spence : Yes, I am checking.

Senator WONG: You are? Thank you.

Ms Kelly : Could I just return to clarify the answer. I am told that the mission could provide some support but not the same support as is provided by the department to the Prime Minister, so the standard practice is to set up the Prime Minister's office in the hotel in which the Prime Minister is staying.

Senator WONG: Okay.

CHAIR: Just a reminder: it is eight minutes before Ms Cross needs to go away.

Senator WONG: This is a little bit spooky, this countdown! It is making me nervous!

CHAIR: I think she is looking forward to it!

Senator GALLAGHER: She is getting happier through the day!

Senator WONG: It's the first time I've seen her smile all day!

Senator Cormann: She will be back.

CHAIR: She will be back—in the next role.

Senator GALLAGHER: I just have some questions around the Lodge. When will the works be finished?

Ms Kelly : We try always to manage our expectations in relation to that. It is managed by the Department of Finance. We are very hopeful that we will be in a position to reoccupy the Lodge in early July—the end of June or early July. The works will not be complete at that time, however, although we are hopeful that the interior works will be completed at that time. There will still be some exterior works to be completed, and that will take an additional period.

Senator GALLAGHER: Just refresh my memory. This started prior to October 2013, didn't it?

Ms Kelly : It started in September 2013, I believe.

Senator GALLAGHER: September 2013.

Ms Spence : I think it was first announced in 2011.

Ms Kelly : Yes, it was first announced in 2011.

Senator GALLAGHER: Was that the program of asbestos removal from the roof?

Ms Kelly : The scope of the work has changed over time. The initial work related to the asbestos removal.

Ms Spence : As well as the slate roof.

Ms Kelly : And the removal of the slate roof, which had substantially deteriorated, meaning that the building was no longer watertight.

CHAIR: Just to assist: Ms Spence, when you are advising Ms Kelly, we can actually hear it already, so it is like getting an echo, and Ms Kelly responds, so perhaps either speak directly into the microphone to respond or communicate a little more discreetly with Ms Kelly.

Senator GALLAGHER: The scope of works has changed, you said. Can you just update me on what the changes have been?

Ms Kelly : The full details are obviously a matter for the Department of Finance, but we did extend the scope of work. The Department of Finance extended the scope of works. In 2011, the scope included replacing the badly deteriorated slate roof, replacing the 1920s electrical and plumbing systems, removing asbestos from the building and installing a commercial kitchen to address work health and safety issues with the existing kitchen. In the 2014-15 budget, the Department of Finance received additional funding for the continuation of the remedial building works at the Lodge to address some security matters and some building compliance and safety matters. Those matters included building fit-for-purpose guardhouses for the AFP at both entrances to the Lodge; undertaking health and safety works on the staircases, the balconies and the staff areas; and installing a wheelchair accessible toilet.

Senator GALLAGHER: Was that in the 2014-15 budget?

Ms Kelly : Yes.

Senator GALLAGHER: The cost of the project has risen from, I think, just around $3 million originally?

Ms Kelly : That is a matter for the Department of Finance. We do not have—

Senator GALLAGHER: You do not get updated on that?

Ms Kelly : No.

Senator GALLAGHER: That is okay. We are seeing them tomorrow, I think. As, I presume, one of the key stakeholders, is PM&C kept informed of the works?

Ms Kelly : I might let Ms Spence deal with that.

Ms Spence : There is a governance structure in place which includes a steering committee which PM&C is a member of, where Finance provides us with updates on progress on the works at the Lodge.

Senator GALLAGHER: So it is as a report to you rather than consulting with you, or do you have some—

Ms Spence : It is more of a reporting, more of a way of keeping us informed of progress. The actual responsibility for the project lies with the Department of Finance.

Senator GALLAGHER: How does the Prime Minister himself have input into this, presuming that he is going to live in this house one day? How does that happen?

Ms Kelly : The department manages the Lodge, and that has been a long-established practice. We of course keep the Prime Minister's office updated in relation to progress, but the department really manages the Lodge property.

Senator GALLAGHER: The Department of Finance?

Ms Kelly : The Department of the PM&C manages the property. We are the client at the property. We obviously keep the Prime Minister's office updated about what is happening with the property.

Senator GALLAGHER: So it is more than a reporting role from Finance? You are the client then of Finance for these works—

Ms Kelly : Yes.

Senator GALLAGHER: so presumably Finance come to you and say, 'We need to do this.' The scope of the work has increased—particularly, by the sounds of it, for security reasons. Are you the decision maker that approves that expansion of the scope of works?

Ms Kelly : In fact, I think the 2014-15 budget was the approval process for the expanded scope of works.

Senator Cormann: This was last year's budget.

Ms Kelly : Finance sought approval through that process, and approval was given through the budget process.

Senator GALLAGHER: So you were not involved in the development of that bid?

Ms Kelly : We were kept informed of that and certainly were supportive of it.

Senator GALLAGHER: So a lot of these questions I should really be asking Finance?

Senator Cormann: Yes.

Senator GALLAGHER: In terms of the contract—

CHAIR: Just with that break in proceedings—I beg your pardon—Ms Cross, I think you could be excused now.

Senator WONG: We could break out into The Sound of Music: 'So long, farewell'—

Ms Kelly : The Marseillaise would be more appropriate!

CHAIR: Thank you very much for your attendance, Ms Cross.

Senator GALLAGHER: The contract that has been published for this work has had 20 variations—this is coming from AusTender. Is that due to the changing scope of works?

Ms Kelly : That is the day-to-day management of the refurbishment, and that would have to go to the Department of Finance.

Senator GALLAGHER: So questions around the contract, management of the contract, cost of the contract and all of that are for Finance to answer?

Ms Kelly : Yes.

Senator GALLAGHER: But the project itself is due to be finished in early July?

Ms Kelly : The works in the house will be able to made available to us in early July?

Senator GALLAGHER: And livable from that point, and workable for all the people that work there?

Ms Kelly : It will actually take us some time to move back into the house. It is quite a process. It has been completely cleared out. So PM&C will take some period to actually coordinate moves in. We have to coordinate with the Australiana Fund in relation to the artworks. We have to get all of the furniture out of storage and ensure that we also do the window coverings: the curtains all have to be put back in place, and there may be a need for some minor additional window coverings. So we need to get the property back before we can move back in and make it habitable again.

Senator GALLAGHER: Do you have a timetable for that?

Ms Spence : We think it will probably take about three to four weeks. But, as Ms Kelly mentioned, there are also the exterior works that need to be completed as well before the premises will be fully available.

Ms Kelly : We are going through the process of planning that at the moment—planning the move back into the Lodge. We are well progressed in that, and so our estimates are three to four weeks.

Senator GALLAGHER: Is it the intention of the Prime Minister to reside in the Lodge once it is able to be—

Ms Kelly : That is certainly the Prime Minister's intention at this stage.

Senator MARSHALL: It is not getting new curtains? Is that what you are saying?

Ms Kelly : No, the curtains will be cleaned before they are rehung. The curtains are quite beautiful and are made specifically for the dining room. They will be cleaned and rehung, but that will be a very big task.

Senator GALLAGHER: Is there a conservation management plan for the Lodge?

Ms Kelly : That is a matter that the Department of Finance would be dealing with.

Senator GALLAGHER: But you are the manager of the property.

Senator Cormann: It is a matter for the Department of Finance, but let me just reassure you up-front that all of the relevant requirements in terms of recognition of the heritage value and so on have obviously been properly complied with. But, in terms of the specifics, Finance will be able to assist you tomorrow.

Senator GALLAGHER: That is fine. I just find it unusual that the client—the manager of the property—is not responsible for a conservation management plan. It just seems unusual to me for that to be with someone who has a relationship around a specific project. The conservation management plan is an ongoing plan to manage a heritage facility.

Ms Kelly : The construct is that Finance is the owner of the building and we are a tenant, in effect.

Senator Cormann: So we are the landlord. We look after the building—all aspects of it. That is right.

Senator GALLAGHER: Okay, I will ask Finance. So are you the tenant of Kirribilli?

Ms Kelly : Yes.

Senator GALLAGHER: So you have the same relationship with Kirribilli House that you have with the Lodge?

Ms Kelly : Pretty much, although there may be some minor variations. I think that in relation to the Lodge we do most of the interior curtains and floor coverings.

Senator Cormann: As tenants would.

Ms Kelly : It is very similar in Kirribilli.

Senator GALLAGHER: Are there works going on at Kirribilli?

Ms Kelly : Not at the present time.

Senator GALLAGHER: It does not have an asbestos problem?

CHAIR: That is a different question.

Ms Kelly : I do not know.

Ms Spence : There are general maintenance issues that arise from time to time, but again that is a matter for the Department of Finance.

Senator GALLAGHER: In relation to Kirribilli, I notice that the Prime Minister, in the declaration of interests, has noted that a standard contribution is being made for, essentially, a tenant at Kirribilli. Was the department notified of this?

Ms Kelly : Yes.

Senator GALLAGHER: In relation to the standard contribution, do you know who calculated it or how it was calculated?

Ms Kelly : I understand it was the department that calculated it based on a formula.

Ms Spence : It is determined by the department. I do not actually have the details of how we determined the contribution but it is based—

Senator GALLAGHER: Could you provide that on notice?

Ms Spence : Yes, we can take that on notice.

Senator GALLAGHER: When you refer to 'the department' that is PM&C?

Ms Spence : PM&C.

Senator GALLAGHER: They determined the contribution. If you could take on notice what the standard contribution is and how you got to it that would be very useful. Is that okay?

Ms Spence : Yes.

Senator GALLAGHER: Thank you.

Senator WONG: Is there a standard formula from past precedents?

Ms Spence : My understanding is that we have used the same approach previously. We have just updated whatever that approach is with inflation and cost of living.

Senator WONG: Yes. Ms Spence, if you are not able to give us any indication about the formula or the amount that Senator Gallagher was referencing—

Ms Spence : I think the weekly amount is $190.

Senator WONG: Sorry.

Ms Spence : But I will take on notice how we actually come up with that but, as I mentioned, the approach has been consistent with what was used previously but just updated for cost of living—

Senator WONG: So $190 a week?

Ms Spence : I will confirm, but I think it is $190 per week.

Senator WONG: I asked a question that I acknowledge, Ms Kelly, did require quite a lot of work, which is question 191 about guest lists and menus for all official functions.

Ms Kelly : We made a valiant effort.

Senator Cormann: In the interests of transparency and openness—

Senator WONG: I am just about to ask why there are so many menus missing from the answer.

Ms Spence : For those ones where there was no menu produced we have not included one. We do not necessarily have a menu for every function.

Senator WONG: Let us play word games then, shall we? So where there was not a printed one you did not give it to me but surely you would have recorded somewhere what was on the menu.

Ms Spence : We included all the printed menus that were—

Senator WONG: That was not my question, Ms Spence.

Ms Spence : I understand, Senator. I am just explaining what we included in the answer.

Senator Cormann: As you have indicated, Senator Wong, we have provided a huge volume of information. I know you would have liked us to have provided even more information but obviously in all of the circumstances we were as open and transparent as possible and responsible, being proportionate in the deployment of limited taxpayer resources to these sorts of efforts.

Senator WONG: But you can spend $8.5 million on three papers that still have not been put out!

Senator Cormann: To strengthen Australia into the future and of course to build a stronger and more prosperous Australia that is safe and secure into the future.

Senator WONG: No matter how much you say that people do not listen. Ms Spence, do you keep a record of non-printed menus?

Ms Spence : I would have to take that on notice.

Senator WONG: You cannot tell me? Someone in PM&C must know what is on the menu even if you do not print one.

Ms Spence : I would have to take on notice how we collect that information.

Ms Kelly : It might be useful, Senator, if you could clarify what was on the menu on what particular occasion.

Senator WONG: I do not know what was on the menu. I was not part of these functions.

Ms Kelly : I am just asking the occasion that you are referring to.

Senator WONG: Surely you can go through and work out which ones you have not provided.

Ms Kelly : Okay, in relation to this question on notice?

Senator WONG: Sorry, that is why I referenced the QON. It is in relation to this.

CHAIR: The officers have taken it on notice.

Senator WONG: Thank you. Could you provide me with menus for all of the functions that you have not provided me menus for on this one?

Ms Kelly : Yes.

Senator WONG: Many of the guest lists in the answer do not provide the names of the guests; why is that? Who made that decision?

Ms Spence : Largely for privacy reasons.

Senator WONG: Who made that decision?

Ms Spence : That was a decision taken by the department when we submitted the responses.

Senator WONG: Was that a decision that was discussed with the Prime Minister's office?

Ms Kelly : We consult with the Prime Minister's office in relation to all Senate estimates responses, as is the normal practice and has been the practice of successive governments.

Senator WONG: Are you refusing to give me the names of a number of the people who attended? Is that right?

Ms Kelly : Senator, the response was intended to provide you with information about the categories of people who attended the functions across that period of time; to give you an idea of who was at the functions and from what particular groups. The response was done to give you that information. If you would like the individual names, then that is not something that we thought was necessary. We were just very conscious of protecting the privacy of individuals who have been invited to functions without knowing that their identities would be disclosed and discussed subsequently.

Senator Cormann: Adding to that answer, I would be very surprised if that level of granular detail, impacting on people's privacy, had been provided in response to similar questions that may have been put in the past.

Senator WONG: Actually, it has; Ms Kelly has previously provided guest names; well, maybe not Ms Kelly—

Senator Cormann: I would be very interested to see that level of detail in relation to these sorts of functions by the previous government. I would be very surprised.

Senator WONG: I think guest lists have previously been provided, and I would make the point that these are public events, so the issue of privacy—it is not a private event; it is a taxpayer-funded public event.

Senator Cormann: There are many publicly funded private events that are organised in pursuit of the public interest.

Senator WONG: I would like the guest lists, excluding children, for these events.

Ms Kelly : For all of the events or for any events in particular, Senator Wong?

Senator WONG: If you would like me to look at it and see if it can be narrowed, I will do that. I cannot do that right now.

Ms Kelly : That would be useful. Thank you, Senator.

Senator WONG: That is all right. I would like to go now to the Prime Minister's trip to Europe.

Ms Kelly : Is that the most recent trip, Senator?

Senator WONG: In April; that is the most recent, I think.

Ms Kelly : Yes.

Senator WONG: Which PM&C officials accompanied the PM on that trip? You can't tell me that?

Ms Kelly : Some of those officials are more junior officials whose names are not normally given. I can certainly give you the names of the SES officers.

Senator WONG: Why don't you give me the names of the SES officers, and then you can just give me the classification level for the others? Would you like to do it that way?

Ms Kelly : Could we just collect that information, Senator Wong? In relation to the SES officers—

Senator WONG: Yes.

Ms Kelly : it was Ms Woods, and the Secretary accompanied the Prime Minister, and it was Ms Ganly, the Assistant Secretary of the Ceremonial and Hospitality Branch. And we will just get the details of the non-SES officers who supported the Prime Minister.

Senator WONG: Yes, that is fine. And did the SES officers you have identified travel on the special purpose aircraft?

Ms Kelly : Yes—to Europe. On the way home, Mr Thawley did not travel on the special purpose aircraft.

Senator WONG: Where did he go?

Ms Kelly : Ah—Senator, could I just correct that: Ms Ganly, who did not travel at the same time as the Prime minister, did not travel on the special purpose aircraft either.

Senator WONG: Okay.

Ms Kelly : That was on the trip across to Europe. So, on the trip across to Europe, Ms Ganly was the person who did not travel on the special purpose aircraft, and on the trip home, I think neither Ms Ganly nor Mr Thawley travelled on the special purpose aircraft.

Senator WONG: I am sorry, who is Ms Woods? Could I just clarify that?

Ms Kelly : Lynette Wood.

Senator WONG: Wood or Woods?

Ms Kelly : Wood; I apologise.

Senator WONG: Wood. And she is FAS of the—

Ms Kelly : The International Division.

Senator WONG: Is she here today?

Ms Kelly : Yes, she is, Senator.

Senator WONG: Which members of the Prime Minister's staff accompanied the Prime Minister?

Ms Spence : We would have to take that on notice.

Senator WONG: Can we ask Ms Wood to come. She might remember who was on the plane, given it was a month ago or thereabouts. Ms Wood, I understand from evidence from the Deputy Secretary that you accompanied the Prime Minister on his visit to Europe in April.

Ms Wood : That is right.

Senator WONG: Did you go to and from on the VIP?

Ms Wood : I did.

Senator WONG: Have you done many such visits before?

Ms Wood : Yes, I am generally part of the Prime Minister's travelling party. I have been on almost all of his trips.

Senator WONG: You are FAS of the International Division, but what is your particular role?

Ms Wood : I work closely with Ms Spence's division on all the arrangements for the Prime Minister's travel. Ms Spence's division is primarily responsible for logistics and the program arrangements. My division is responsible for preparing the policy part of the program.

Senator WONG: Sorry, Ms Spence; where are you on the chart?

Ms Spence : First Assistant Secretary, Ministerial Support Division in Governance Group, under Ms Kelly.

Senator WONG: It says 'Jamie Fox' here. Oh, there you are. They should make you higher. You are the last box.

Ms Spence : It is alphabetical.

Senator WONG: Do you have a copy of the order of arrangements available?

Ms Wood : No, I do not.

Senator WONG: Is that ascertainable?

Ms Wood : We do obviously maintain records of all the details of the trips.

Senator WONG: Can you tell me which members of the Prime Minister's staff accompanied the Prime Minister on that trip.

Ms Wood : I would need to take that on notice.

Senator WONG: Come on! You do not remember?

Ms Wood : I do not have that with me.

Senator WONG: Was the chief of staff on the plane?

Dr McCarthy : We would normally consult with the Prime Minister's office before providing information to the committee about the Prime Minister's staff. Obviously we are here to provide information about the activities of the Department of the Prime Minister and Cabinet.

Senator Cormann: We have taken that question on notice.

Senator WONG: It is amazing; everybody is happy to talk about Peta Credlin to the papers, but you will not acknowledge what she does. It is all in the papers.

Senator Cormann: You may choose to continuously finger and attack individual ministerial staff. The practice of this government is that we are—

Senator WONG: You should talk to Mr Hockey about that.

Senator Cormann: We are accountable as a government—that is, at the ministerial level—for the decisions and judgements and activities of the government. Obviously the officers of the department here are to be accountable to this committee for the performance of the Prime Minister's department in fulfilling their very important role in the context of the budget. If you want to continue to pursue questions about staff, we will take them on notice so that we can appropriately consult the people involved.

Senator WONG: First, that standard has never been applied at this committee, ever.

Senator Cormann: That is actually wrong.

CHAIR: The question has been taken on notice.

Senator Cormann: Senator Wong, having sat in this position as a minister in the past, you would know that we are always at liberty to take questions on notice—

Senator WONG: The standard that Dr McCarthy just outlined.

Senator Cormann: to ensure that we provide a considered and accurate response, based on appropriate consultation with the people that have access to the appropriate information.

CHAIR: Suffice it to say that the question has been taken on notice so, Senator Wong, ask another question.

Senator WONG: I have more to say about that.

CHAIR: It is not about making statements; it is about asking questions.

Senator WONG: These are staff who are paid by the taxpayer and for whom the minister is responsible—the Prime Minister on this occasion. It is a perfectly reasonable question which has been asked, including by you, Senator Cormann, and your colleagues, and answered previously, about which staff attended. It is recorded in the order of arrangements and has been publicly reported, so what is the sensitivity?

CHAIR: You have asked a question, Senator Wong. The question has been taken on notice. It is not a debating point; it has been taken on notice.

Senator Cormann: I am using the prerogative that ministers before me in governments of both persuasions have used in the past, and that is that at any point in time, if I want to ensure that an answer is appropriately accurate and based on the appropriate information, I take the question on notice—and that is what I am doing.

Senator WONG: Okay, why don't you consult over the break: did Ms Credlin travel with the Prime Minister, as she always does, to Europe in April?

CHAIR: The question has been taken on notice.

Senator WONG: Also, take this on notice or perhaps answer it now: what is the sensitivity about telling this committee about whether or not the Prime Minister's chief of staff—who is paid by taxpayers and whose boss is accountable to the parliament—went on a taxpayer funded trip to Europe?

Senator Cormann: Firstly, I do not know the answer to the question, as I have already indicated. I have taken the question on notice, and I will ensure that an appropriate answer is provided to the committee at the appropriate time, consistent with the deadlines provided by the committee.

Senator WONG: Ms Wood, do you remember who went on the trip with the Prime Minister? Do you remember if Ms Credlin was available?

CHAIR: Ms Wood has already taken that question on notice.

Senator WONG: Do you remember?

Senator Cormann: Senator Wong, you can go around and around in circles.

Senator WONG: So sensitive!

Senator Cormann: We have taken the question on notice.

Senator WONG: We spent years answering questions—

CHAIR: Order!

Senator WONG: about Lachlan Harris and David Epstein and various other members of the Prime Minister's staff—

CHAIR: The question you have asked has been taken on notice.

Senator WONG: which you were happy to ask. And all of a sudden, because it is Peta Credlin, you do not want to answer. So sensitive, Senator Cormann, so sensitive!

CHAIR: Senator Wong, order!

Senator Cormann: You can persevere if you wish.

Senator WONG: For years and years you have pursued members of staff.

CHAIR: Senator Wong, order! Let me be very clear here. The questions have been taken on notice. You have made your points. Let us proceed and continue.

Senator WONG: So, Ms Wood, can I just be clear: do you remember or are you simply not prepared to answer?

Senator Cormann: Senator Wong, you may be ignoring this, but—

Senator WONG: I am ignoring you.

Senator Cormann: I, as the minister at the table, have used my prerogative to take that question, and any question rephrasing the same question using different words, on notice. We will provide an accurate answer to the committee at the appropriate time, consistent with the deadlines set by the committee.

Senator WONG: There has never been a rule at this committee or at any other—as you know, Minister—that questions about staffing can be taken on notice, ever.

CHAIR: The question has been taken on notice.

Senator Cormann: You are wrong, Senator Wong.

Senator WONG: The sensitivity about Ms Credlin is clear to the public.

Senator Cormann: You are actually wrong.

CHAIR: Senator Wong, ask another question, or I will go to a senator who has different questions.

Senator WONG: Can you give me an indication, Ms Wood. Maybe you need to go away and look at some documents and come back, but I would like clarity about the Prime Minister's country itinerary. I appreciate that there might be things where you do not want to tell me, but where did he go first; where did he go next; and so forth? Can you take me through that?

Ms Wood : I can take you through it in general terms, Senator Wong. If you wanted a detailed itinerary, I would have to take that on notice.

Senator WONG: Sure.

Ms Wood : The Prime Minister travelled first to Ankara, where he held bilateral consultations with the Prime Minister and the President of Turkey. Then he participated in events in Istanbul which were hosted by the Turkish government, given that Gallipoli and the centenary of Gallipoli are important events for the Turkish government as well. The Prime Minister then travelled to the Anzac peninsula for the centenary commemorations there.

Following that, he spent a day in France on the Western Front, unveiling the winning design for the Sir John Monash Centre at Villers-Bretonneux. On the final day, he had bilateral meetings with the French government as well, which was with President Hollande, Prime Minister Valls and Interior Minister Cazeneuve.

Senator WONG: Did he arrive in Paris on Anzac Day?

Ms Wood : Yes.

Senator WONG: On notice, can you give me the countries by date—the locations he visited by date?

Ms Wood : To provide an accurate answer—

Senator WONG: I just said 'on notice'.

Ms Wood : On notice?

Senator WONG: Yes.

Ms Wood : Of course.

Senator WONG: Did he arrive in Paris on Anzac Day?

Ms Wood : In the evening of Anzac Day, yes, he did arrive in Paris.

Senator WONG: Which airport did he fly into?

Ms Wood : I do not recall the name of it.

Senator WONG: Was it called Le Bourget?

Ms Wood : It could well be.

Senator WONG: It is a business jet arrival and departure airport, not the Charles de Gaulle.

Ms Wood : It is not the main public international airport; that is right.

Senator WONG: Would it have been around 7 pm?

Ms Wood : It was in the evening. We had flown from—

Senator WONG: Were you on the plane at that time?

Ms Wood : Yes, I was.

Senator WONG: Can I just ask this question. Did any staff travel in advance of the Prime Minister?

Ms Wood : Yes.

Senator WONG: Who was that?

Ms Wood : I cannot recall who it was, but it is standard when the Prime Minister is travelling to a city. There are always people who go ahead to prepare the program there.

Senator WONG: So PM&C staff went ahead?

Ms Wood : Yes.

Senator WONG: Which PM&C staff? Were there PM&C staff at the airport waiting for him?

Ms Spence : Yes, there was a CERHOS officer.

Senator WONG: What level?

Ms Kelly : Below SES—an executive level staff member.

Senator WONG: An EL. Were there any French officials present for the meeting?

Ms Spence : There would have been a French official there as part of the official welcome.

Senator WONG: Sorry, I really dislike 'would have'. There was?

Ms Spence : I do not know the name, but there was a French official as part of the protocol arrangements for the arrival.

Senator WONG: Because of this, I would like prime ministerial itineraries to be available at estimates hearings. I can move a motion in the Senate, but perhaps as a matter of courtesy it is not an unreasonable thing to expect officials to be able to answer these questions. Was Mr Shearer there too?

Ms Wood : Yes.

Senator Cormann: Again, we have already taken the questions in relation to any prime ministerial personal staff on notice

Senator WONG: It is a new level of accountability—very sensitive.

Senator Cormann: It has nothing to do with sensitivity.

Senator WONG: Yes, you are very sensitive about the Prime Minister's staff.

Senator Cormann: Senator Wong, as you would appreciate, under your government as well as under ours—

Senator WONG: We asked those—

Senator Cormann: information about staff travelling is, of course, tabled in the normal course of events in the entitlements reports that are released by the Department of Finance. You would be well aware of that as a former Minister for Finance. I understand that you are going through a political exercise here and that trying to target individual personal staff serves your political purposes, but, to be frank, that is just not something that I would—

Senator WONG: Actually, all I have asked is whether someone was there. I do not know how that is targeting them. You are the one who is sensitive.

CHAIR: And it has been taken on notice.

Senator WONG: I would remind you, Minister, of the order of the Senate that the chair read out at the commencement of this hearing. There is no basis on which that could not be answered.

CHAIR: It has been taken on notice.

Senator WONG: In fact, there are pictures online of both Mr Shearer and Ms Credlin.

Senator Cormann: So why are you asking the question?

Senator WONG: Why don't you just answer the question? It is basic accountability. Why are you so paranoid about confirming it?

CHAIR: The question has been taken on notice.

Senator Cormann: Senator Wong, as I have indicated to you, I personally was genuinely unaware. If you were aware of information in relation to who was and who was not in the Prime Minister's travelling party, why are you even asking the question?

Senator WONG: Because I am entitled to ask the relevant officials at estimates.

Senator Cormann: You already know the information. I did not.

CHAIR: The department officials are entitled to take them on notice, which they have. Either we will continue with these questions or I will go to another senator.

Senator WONG: You said that you believe a French official was present, Ms Spence.

Ms Spence : That is correct.

Senator WONG: Were any media present?

Ms Spence : Not that I am aware.

Senator WONG: Would it be correct to describe this arrival as a low-key arrival—non-ceremonial?

Ms Spence : Yes, 'low-key arrival' is appropriate.

Senator WONG: Ms Wood, were you in contact with the CERHOS officer whilst on the plane?

Ms Wood : No, I was not.

Senator WONG: Did you ever become aware that Mr Brady was waiting on the tarmac with his partner, Mr Stephens, prior to the arrival?

Ms Wood : No, I was not. When the plane lands, there is usually quite a scramble for people to get luggage, work out whether to get off at the front or the back and so on. I was not aware of what was going on on the ground.

Senator WONG: At any point while you were on the plane, before the plane landed, were you aware that Mr Brady was accompanied by his partner, Mr Stephens?

Ms Wood : I did not have any awareness of who was on the ground—whether Mr Brady was with or without his partner.

Senator WONG: Are you aware of whether the CERHOS officer on the ground contacted the travelling party on the plane?

Ms Spence : Senator, I understand that the issue that you are referring to was resolved between the CERHOS officer and Ambassador Brady on the ground.

Senator WONG: That was not my question.

Senator Cormann: Obviously I understand where you are headed with this. I just confirm again that the Prime Minister himself was not aware of any issue in relation to—

Senator WONG: I did not ask that.

Senator Cormann: But this is obviously where you are headed.

Senator WONG: I have not asked that question.

Senator Cormann: You are headed to the issue of the media reports—

Senator WONG: Point of order, Chair: he is answering a question I have not asked.

Senator Cormann: which suggested that somehow the Prime Minister had refused to be met by Mr Brady and his partner. Of course, those reports were wrong. The Prime Minister has categorically rejected them. The Prime Minister values Mr Brady and regards him very highly. Indeed, it was the Abbott government which appointed Mr Brady to his current position, and I understand that before the Prime Minister left he, Mr Brady and his partner actually caught up for a private dinner—which presumably might be one of the functions that we have to provide you with some additional detail on in the context of a separate question. But, just to be very clear for the record, as the Prime Minister has indicated—

Senator WONG: Someone is protesting too much. Methinks the minister doth protest too much.

Senator Cormann: I am providing an answer here. That is a ridiculous question. That is an offensive assertion, Senator Wong.

Senator WONG: I have not asked that question.

CHAIR: Order!

Senator Cormann: That is an offensive and inaccurate assertion.

Senator WONG: I have not asked that question.

CHAIR: Minister and Senator Wong, I am a little tired of this.

Senator WONG: I have not asked that question.

CHAIR: The minister quite clearly was anticipating where you were going, Senator Wong, and was providing as much information as he possibly could. Quite frankly, I think at this point I am going to give the call to Senator McKenzie—

Senator Cormann: Can I just complete my answer.

CHAIR: You can conclude your answer and then I am going to Senator McKenzie as she has some questions around the prime ministerial visit that are relevant, and then we will go back to you, Senator Wong.

Senator Cormann: As the Prime Minister has indicated, his understanding was that there was some issue at an administrative level with the arrival arrangements for his recent visit to France. He only became aware of this issue some time after the event. The Prime Minister has known Mr Brady for many years. The Prime Minister has indicated that he of course regards him very highly as a very distinguished public servant and fine representative for Australia. I think that is where the matter should rest.

Senator Wong interjecting

Senator Cormann: That is just ridiculous. If that is the best you can do—

Senator Wong interjecting

CHAIR: Excuse me. Order! It does not help. I have given another senator the call so that she can ask some relevant questions. The banter between the minister and Senator Wong does not assist the committee and it does not assist Hansard and just delays the entire process. If, until we all have a cup of tea at 3:45, we can maintain some decorum, and then we can recollect and regroup.

Senator WONG: He is just very paranoid.

CHAIR: Senator Wong, you are not helping yourself or the committee.

Senator WONG: I can't help it if he is defensive and paranoid.

Senator Cormann: This is ridiculous. Honestly—really. You are trying to oxygen to a slur that was inaccurate and was exposed as inaccurate, and quite frankly I think it is offensive that you would choose to do so.

CHAIR: It may be easier to have a longer break. I am happy to do that, too.

Senator WONG: Glass jaw, mate!

CHAIR: Minister. Senator Wong. Senator McKenzie has the call.

Senator McKENZIE: Could you please outline the protocol for when the PM is travelling overseas without their spouse? What is the usual protocol in this sort of arrangement?

Ms Spence: If I could take it in the reverse, when the Prime Minister is travelling with his spouse then the normal practice would be to be greeted by a greeting party that included the official representatives and their spouses. If he is unaccompanied then the spouses would not be included.

Senator McKENZIE: What was the purpose of the Prime Minister's visit to France?

Ms Wood: The main purpose was to go to Villers-Bretonneux on the day after Anzac Day and hold a function there with local residents and to unveil the winning design for the Sir John Monash Centre, which will commemorate Australia's role there during the First World War. But at the same time the Prime Minister also took the opportunity to visit a centre in the South of Paris called RAID—I cannot tell you what that stands for in French, but basically it is a tactical police centre—and talk to them about counter-terrorism and their approach following the events in January that they had to respond to, and also to hold bilateral meetings with the president and the prime minister.

Senator McKENZIE: You said that the Prime Minister met with President Hollande.

Ms Wood: That is right.

Senator McKENZIE: What were the substantive outcomes of that particular meeting?

Ms Wood: I believe that both sides put out a press release afterwards. President Hollande certainly put out a press release. The Prime Minister also put one out, particularly speaking about increased counter-terrorism cooperation between Australia and France.

Senator McKENZIE: Are there further details?

Ms Wood: No. I do not subscribe to President Hollande's press release service. I am happy to find that for you.

Senator McKENZIE: It would be good if you could go to more detail of those outcomes. Who else did he meet during the visit?

Dr McCarthy: In addition to the evidence that Ms Wood has already provided about the visit to Villers-Bretonneux, the Prime Minister, as Ms Wood indicated, met President Hollande, Prime Minister Valls and Interior Minister Cazeneuve and discussed a range of issues, including global security, counter-terrorism and foreign terrorist fighters. The leaders released a joint declaration in which they committed to deepened cooperation on global security issues, intelligence and counter-terrorism policy, and agreed to establish a program of exchanges in counter-terrorism policing.

Senator McKENZIE: That was from the meeting with Hollande, Valls and Cazeneuve, in its entirety?

Dr McCarthy: They are the key outcomes from the visit.

Senator McKENZIE: Is there a program in place going forward to setting up that sense of cooperation?

Dr McCarthy: We already have cooperation with France on a range of issues. We can take on notice the progress that has been made on the exchange issue since the visit.

Senator McKENZIE: The Prime Minister also went to the French police counter-terrorism force, which you mentioned earlier. What was the main focus of that? You mentioned the issues in France in January. Are there any further details?

Senator WONG: So you have to take questions about staffing on planes on notice, but you have this level of detail. Seriously.

CHAIR: Senator Wong, Senator McKenzie has the call.

Senator McKENZIE: Senator Wong, I am fully entitled to ask the questions.

CHAIR: Thank you. We do not need debate across the table. We are going to continue with you, Senator McKenzie, not matter how much it frustrates those on my right.

Senator WONG: You suddenly have all this detail and you cannot tell me who sat on a plane—

Senator McKENZIE: Thank you, Chair. I just want further details on the meeting of the Prime Minister with the French police counter-terrorism force.

Ms Wood: I am not quite sure I can add much to what I have already said. It was a visit to the centre where this tactical response police unit is based. It was very much focused on a practical discussion about their response to the events in January, in particular the supermarket and how they responded to the hostage-taking in the supermarket. They talked to some of the people who were involved in that and agreed that there was some real scope for practical cooperation between our respective tactical police forces.

Senator McKENZIE: What about the radicalisation of young people in France? Was that also on the agenda?

Ms Wood: Not in that particular meeting.

Senator McKENZIE: You mentioned that the Prime Minister also went to Villers-Bretonneux for the unveiling of the Sir John Monash Centre?

Ms Wood: Of the design of the centre.

Senator McKENZIE: Okay. Who did the design?

Ms Wood: I do not have the details with me of the winning design.

Senator McKENZIE: Would you take that on notice?

Ms Wood: Certainly.

Senator McKENZIE: How was that announcement received by the local community?

Ms Wood: The announcement was made in the context of an event, which locals were invited to. There were speeches by the local mayors and obviously by the Prime Minister and an unveiling of a model of the design. Everyone seemed to be very enthusiastic about it, but I did not have a chance to interact with a lot of the people who were there and find out first-hand what they thought about it. But there was a great deal of goodwill from the locals in that area and their connections with Australia resonate right up to the current day.

CHAIR: What is the purpose of the Sir John Monash Centre? Is it to act principally as a memorial or an education centre? Is it a meeting place?

Ms Wood: It is more as an interpretive centre. There is an existing memorial there at the moment that honours the sacrifice of those who fell during World War One. The intention of the Sir John Monash Centre is to be educational, so that people going there can learn more about what happened and derive even more from their visit to that place.

CHAIR: Will it be multilingual?

Ms Wood: I will have to take that on notice. I do not have the full details of the building nor exactly what the contents will be. But I presume it is going to be multilingual.

CHAIR: But the intention is for those who are visiting that locale to go in and become acquainted with the history and the sacrifice of not just Australian soldiers but other servicemen as well?

Ms Wood: That is right.

CHAIR: I presume they will take away literature and memorial items and things of that nature, as well?

Ms Wood: That is right.

CHAIR: Will it be funded in an ongoing manner by Australia, or in conjunction with the French, or operated commercially?

Ms Wood: I would have to take on notice the details of the funding arrangement.

Dr McCarthy: The Department of Veterans' Affairs I think is probably best placed to provide information.

CHAIR: You can ignore those questions, then. I will put them to the minister.

Senator McKENZIE: Were there any other events that took place during the Prime Minister's visit to Villers-Bretonneux?

Ms Wood: No, there were not. It takes a good part of a day to get there. It is several hours drive from Paris, with a few hours on the ground, and then a drive back, and then going to the south to the police centre was pretty much a full day.

Senator McKENZIE: Do we know if as part of the celebrations of Anzac going forward over the next few years there are going to be any similar projects within France?

Ms Wood: That is probably something that Department of Veterans' Affairs would have more details on. I do not have any details about that.

Senator GALLAGHER: In relation to the $100 million that has been put aside for the interpretive centre, I note there is a panel to oversee the project. Is that an estimate of what the project might cost?

Dr McCarthy: As before, I think the Department of Veterans' Affairs, which is managing the project, is best placed to answer questions on the funding.

CHAIR: We can take a break now or continue with the questions for the next few minutes.

Senator WONG: I have quite a lot of questions about France and the Daily Telegraph story—

CHAIR: We will take a break now.

Proceedings suspended from 15:40 to 15:56

CHAIR: We will resume the Senate Finance and Public Administration Legislation Committee budget estimates hearings, where we are dealing with Prime Minister and Cabinet. We will go to Senator Wong.

Senator WONG: I think we had established, Ms Wood, that the Prime Minister arrived at the Paris Le Bourget airport, which is a commercial airport. I think Ms Spence agreed that it was a low-key arrival. There were no media present. My question first is: how did the travelling party know who was on the tarmac? Was that conveyed by the CERHOS officer, the EL on the ground, to the travelling party?

Ms Spence : I think it would be just from the orders of arrangement that they would have known who to expect would have been on the tarmac.

Senator WONG: Was Mr Stephens listed in the orders of arrangement as being part of the arrival party?

Senator Cormann: You mean Mr Stephen Brady?

Senator WONG: No; Mr Stephens, who is Mr Brady's partner.

Ms Spence : No. It would have just been the ambassador who would have been listed.

Senator WONG: At which point, and how, did the travelling party become aware that Mr Stephens was accompanying Mr Brady? Can you answer that, Ms Wood?

Ms Wood : I cannot.

Senator WONG: Because you were never aware.

Ms Wood : No.

Senator Cormann: If I can just add to this answer—

Senator WONG: Chair?

Senator Cormann: Senator Wong, it does you no credit, it does the Australian Labor Party no credit, that you are choosing to perpetuate an inaccurate slur against the Prime Minister which was published in the media, a slur which you know to be inaccurate. The fact that at 4 pm on Tuesday afternoon the best that the Australian Labor Party can come up with in scrutinising the performance of the government and the issues that have been put forward as part of the budget, the fact that the only thing that you can choose to pursue is an inaccurate slur—

Senator WONG: Chair, are you going to let this pass?

Senator Cormann: I have already advised to the committee and I have already advised you, Senator Wong, that the Prime Minister only became aware of an administrative-level issue—

Senator WONG: He is just avoiding answering questions.

Senator Cormann: with arrival arrangements after the event. There is actually no issue here. I understand that, for base political reasons, which is very, very disappointing, you are trying to build up some sort of smoke and mirrors—some opportunity for some further inaccurate slurs to be perpetuated. There is nothing here. The Prime Minister has conclusively addressed this issue, and it is very clear that there was a misunderstanding at an administrative level which the Prime Minister had no involvement with and was unaware of.

Senator WONG: Thank you for yet another defence in relation to a question that I had not asked, but you—

Senator Cormann: We all know what you are doing, Senator Wong.

Senator WONG: I had not finished actually!

Senator Cormann: We all know what you are doing!

Senator WONG: Chair?

CHAIR: Minister, let her finish.

Senator WONG: Thank you. You yourself just referenced an administrative misunderstanding, so I would like to understand how that so-called administrative misunderstanding, as you say, occurred. So I will proceed with asking questions. Ms Spence, I think you said to me that the travelling party was aware of who was on the tarmac to greet them because of the order of arrangements, and then I asked: did the order of arrangements include Mr Stephens?

Ms Spence : No, it would have just included Ambassador Brady. While we do not know when they would have become aware, certainly once they got onto the tarmac Mr Stephens was in the welcoming party.

Senator WONG: Did the travelling party become aware at some point prior to arrival that Mr Stephens was attending?

Ms Spence : Not that I am aware.

Senator WONG: So you do not believe they were aware?

Ms Spence : Not that I am aware.

Senator WONG: Have you spoken to the CERHOS officer involved?

Ms Spence : Yes.

Senator WONG: And can you tell me their version, the version that you understand, of how it was that the misunderstanding, as the minister described it, about Mr Stephens occurred?

Ms Spence : As I understand it, based on our conversations, the CERHOS officer advised the ambassador that because the Prime Minister was not travelling with Mrs Abbott it would just be the ambassador who would be in the greeting party. The ambassador raised his concerns about that and, as a result, the issue was resolved on the ground and Mr Stephens was included in the welcoming party.

Senator Cormann: Just to be clear here, irrespective of who the partner of any ambassador is—

Senator WONG: You are so sensitive about this. Why are you so sensitive about this?

Senator Cormann: the arrangement would have been exactly the same.

Senator WONG: Why are you so sensitive about this?

Senator Cormann: I understand why you are pursuing it; you are pursuing it for base political reasons.

CHAIR: Order!

Senator Cormann interjecting

Senator Wong interjecting

CHAIR: Senator Wong, order!

Senator WONG: It is just an abuse of estimates—

CHAIR: No, the minister is perfectly entitled to add additional information—

Senator WONG: But he's not; he's just yelling!

CHAIR: and to take questions on behalf of the officials. You will respect that, otherwise I will give the call to another senator.

Senator Cormann: Irrespective of the partnership arrangements of any ambassador, as I understand it protocol arrangements, as a matter of course, are that if the Prime Minister is not travelling with his spouse, then in the ordinary course of events the Prime Minister will be welcomed by the ambassador only. You are trying to make an issue out of this—

Senator WONG: I cannot ask questions if you are running interference.

Senator Cormann: You are trying to perpetuate a slur that was first inaccurately reported in the—

Senator WONG: I am trying to ask questions. Why are you shutting down questions, and why, Chair, are you allowing him to shut down questions? Why do you allow this?

CHAIR: Senator Wong, if you are going to continue to appeal to me, I am going to continue to uphold the standing orders, which include the fact that the minister is entitled to take questions on behalf of the officers. He is providing a full contribution, which you should respect and listen to in silence rather than incessantly demanding to be heard over him, just as I would uphold the virtue that you should be able to ask your questions in silence as well. So if you want respect, you will give respect in this forum. Minister, have you finished your answer?

Senator Cormann: Yes.

Senator WONG: Ms Spence, is the CERHOS officer available?

Ms Spence : No.

Senator WONG: Why not?

Ms Kelly : The CERHOS officer is not an SES officer and it would not be usual for an officer who is not an SES officer to appear before this committee.

Senator WONG: I appreciate that, but we are asked to believe Ms Spence's version of events when they are contrary to some of what has been reported. I appreciate the version she has given, but this could be sorted out very quickly—

Senator Cormann: Which is also the version—

CHAIR: Minister!

Senator Cormann: I am adding to the answer.

CHAIR: The rules are that you can add to the answer after the question has been asked.

Senator WONG: The CERHOS officer would be able to confirm what actually occurred. Obviously what has been reported is different, so can the CERHOS officer be made available?

Ms Kelly : Ms Spence has been briefed by the relevant CERHOS officer and she is providing you with answers on the basis of that briefing. She can do no more than that, and the CERHOS officer, if he were present, would not be able to do more than that. He has provided his account of events to Ms Spence, and she has recalled them to you in response to your questions.

Senator Cormann: Adding to that answer, it is quite extraordinary that the Australian Labor Party, through you, Senator Wong, would choose to believe an inaccurate slur that was published in a media outlet that has since been directly discredited not only by the Prime Minister but also by evidence at this committee. It is unbelievable, and does you and the Labor Party no credit that you would choose to perpetuate this slur, which you know to be inaccurate.

Senator WONG: Was it a 'he', Ms Spence?

Ms Spence : Yes.

Senator WONG: When did you first talk to the CERHOS officer about these matters?

Ms Spence : I cannot recall the date. It was soon after the return from the trip.

Senator WONG: Did you take a file note?

Ms Spence : No.

Senator WONG: Did you take any note?

Ms Spence : No.

Senator WONG: You took no note of the discussion?

Ms Spence : No.

Senator WONG: Did he provide you with a report?

Ms Spence : He provided me with an oral report.

Senator WONG: Tell me what the oral report said.

Ms Spence : As I have explained it to you, the CERHOS officer advised Ambassador Brady, around the protocol arrangements, that his partner would not be included in the greeting line. Ambassador Brady raised his concerns around this arrangement, and, as a result, the issue was resolved on the ground and Mr Stephens was involved in the greeting party.

Senator WONG: Did the CERHOS officer indicate to you whether there was any discussion with the Prime Minister's office prior to his discussion with Ambassador Brady?

Senator Cormann: Senator Wong, I am sorry, but you are pursuing a line of questioning that is completely inaccurate and is based on the premise that an inaccurate slur has some sort of credence to it.

Senator WONG: But she can answer it.

Senator Cormann: As has already been explained to you, the ordinary protocol arrangements, which are not specific to this visit to France, are that when the Prime Minister travels with his spouse he is greeted by the Ambassador and his or her spouse. When the Prime Minister travels without his spouse he is greeted just by the Ambassador only. This is not a specific arrangement in relation to the visit to France and the greeting by Ambassador Brady. Ambassador Brady is held in very high regard by the Prime Minister. He is, indeed, the person that was appointed by the Abbott government to the position that he currently holds. As I understand it, the Prime Minister actually had a private dinner with Ambassador Brady and his partner before they left on their current mission to France. So, I find the whole implication that you are seeking to pursue here objectionable. I find it incredibly disappointing that the Australian Labor Party would choose to go down this sort of path, when you would well understand what happened here. At an administrative level, somebody applied the ordinary protocol arrangements. On reflection, and on the spot, common sense prevailed and some flexibility was deployed—as it should have been. To be frank, I cannot believe that we are still wasting time on this issue.

Senator WONG: This would be over much quicker if we could just have the questions answered, rather than these lectures every time—

Senator Cormann: I am answering your questions, in the way that I choose.

Senator WONG: Ms Spence, was there any contact between the CERHOS officer and the plane, or the plane and the CERHOS officer, before the arrival of the Prime Minister?

Ms Spence : As I have indicated, the issue was resolved on the ground.

Senator WONG: That was not my question.

Ms Spence : I am advising you that the issue was resolved on the ground, and as a result Mr Stephens was included in the—

Senator WONG: Why won't you answer my question? It is a very simple question.

Ms Spence : I am not aware of any discussions between what was happening on the ground and what was happening in the—

Senator Cormann: I have to intervene here. The way this process works, and the way it has worked for time immemorial, is that you have the opportunity to ask questions; we on this side—

Senator WONG: I hope the people who are watching are observing the minister refusing to answer questions.

Senator LUDWIG: What have you got to hide?

CHAIR: Order. Senator Ludwig.

Senator Cormann: That is just ridiculous. The way this process works is that you guys get to ask the questions. On this side of the table we answer the questions.

Senator WONG: This is an abuse of process—

Senator Cormann: You might not always like the answers I have provided, but the answers are the best answers that we are able to provide. I think that we have been extremely helpful in relation to this particular issue.

Senator WONG: I cannot actually ask any questions.

Senator Cormann: I cannot believe that you are still pursuing it. It has no credibility whatsoever.

Senator LUDWIG: It is not a matter for you to—

Senator Cormann: We all understand what you are doing and why.

CHAIR: Order. As much as it might pain me to point this out again, you can ask the questions. You are perfectly entitled to ask reasonable questions. They do not even have to be reasonable; they just have to comply with the standing orders. Likewise, the minister is perfectly entitled to answer in a manner that he sees fit. If you do not like it, you can take it up in the Senate.

Senator WONG: That is true. But I think it is quite clear to—

CHAIR: Ask your question, Senator Wong. If the minister or the officers want to answer them, they will provide the answers they want.

Senator WONG: But the media are already reporting these attempts to shut me down—

CHAIR: No—

Senator Cormann: That is just ridiculous.

Senator WONG: Every time a question is asked, you want to let anyone lecture us. Okay. I will continue asking questions.

CHAIR: Senator Wong, I have done my best to indulge what I think is some intemperance from you, and I do not really want to do that anymore. I want this to be a committee that operates—

Senator WONG: Okay. I am happy to ask questions.

CHAIR: Ask them. Do not interject. Do not make insinuations. Do not play up to the media. Just ask the questions.

Senator WONG: Ms Spence, I ask again: was there any contact, to your knowledge, between the plane and the CERHOS officer prior to the arrival?

Ms Spence : Not to my knowledge.

Senator WONG: Did the CERHOS officer canvass that issue when he reported to you?

Ms Spence : He advised me of what I have outlined to you, which was around how the issue was resolved.

Senator WONG: I asked you a different question, with respect. I asked you whether, in his report to you, he indicated there had been any contact with him by anyone on the plane.

Ms Kelly : With respect, Senator, Ms Spence has indicated what the officer told her. You are asking her whether he told her something which you do not know occurred.

Senator WONG: Then she can just say no, Ms Kelly. If that is the answer, she can just say no.

Ms Kelly : She is telling you the material that was provided to her by the CERHOS officer. She cannot tell you more than that.

Senator WONG: Yes, and I have just asked a question about that. Would you like me to repeat it, Ms Kelly?

CHAIR: Ms Kelly has just answered that question.

Senator WONG: Actually, I asked a question which was not answered, so I will ask it again. In his report to you, did the CERHOS officer who was on the ground indicate there had been any contact with him by anyone on the plane prior to the Prime Minister's arrival?

Ms Spence : No, Senator.

Senator WONG: He did not indicate that?

Ms Spence : No, Senator.

Senator WONG: I will put this to you: is it the case that Mr Brady was instructed that his partner should 'wait in the car'?

Senator Cormann: Sorry—what was that question?

Senator WONG: Is it the case that Mr Brady was instructed that his partner should wait in the car?

Senator Cormann: When you say instructed, I have difficulty with this, because—

Senator WONG: Okay—'requested'.

Senator Cormann: Let me just answer your question. As we have now explained to you on several occasions, whether it is this Prime Minister or any previous Prime Minister travelling overseas, there are various ordinary protocol arrangements that apply; specifically relevant to this particular question before us, when the Prime Minister travels with his spouse, or previous Prime Ministers travelled with their spouses, the protocol arrangements are that in the ordinary course of events, the Prime Minister would be greeted by the ambassador and his or her spouse as well. If the Prime Minister travels on his own, then the ordinary protocol arrangements are that the Prime Minister is greeted by the ambassador on his or her own. You are trying to make an issue out of something where there is no issue. We have already explained that there was some administrative issue at a relatively low level and the Prime Minister was not aware of what took place. The issue was resolved in a common-sense way in Paris on the ground, as was appropriate. To try to suggest there is anything else here is just completely false.

Senator WONG: Are you going to advise him about his intemperance, Chair?

Ms Kelly : If I could just clarify, Ms Spence's evidence was that the CERHOS officer drew it to the attention of the ambassador that the arrangement had been that the spouse not be on the receiving line. I think the use of the word 'instruct' is not consistent with the description that Ms Spence has provided.

Senator WONG: That is fine. Ms Spence—because, as you know, this is an estimates hearing—I am giving you the opportunity again to confirm that there was no contact, as far as you are aware from the report of the CERHOS officer, between the CERHOS officer and anyone on the plane.

CHAIR: The question has been answered.

Senator WONG: I will go to this point. This matter subsequently became public and a story was written, to which the minister has referred. I want to ask you, Ms Spence, about a statement, which was referred to in the media, that the Department of Prime Minister and Cabinet issued in relation to protocol arrangements. Were you involved in preparing a statement for the media which was the basis of an article on 7 May?

Ms Spence : Could you give me a bit more information, Senator, about what you are referring to?

Senator WONG: On 7 May The Daily Telegraph quotes a statement from PM&C and states:

A statement from the department was provided to The Daily Telegraph in response to the tarmac tantrum by Stephen Brady over claims the PM’s office had barred his partner … from attending an official greeting …

Do you have any knowledge of what statement that is, Ms Spence?

Ms Spence : The only statement I am aware of is the one around the advice we provided that the longstanding and accepted practice has been for spouses and partners to form part of an official greeting line.

Senator WONG: When was that statement prepared?

Ms Spence : It was a response to a media inquiry, I think, on 7 May.

Senator WONG: Who was responsible for preparing that?

Ms Spence : I certainly saw it before it was sent back to the journalist.

Senator WONG: Who dealt with the journalist?

Ms Spence : We have a media team within the department.

Senator WONG: You were responsible or partly responsible for preparing the statement?

Ms Kelly : I believe that I saw the response to the media query before it was issued as well.

Senator WONG: Can I have a copy of that statement that was provided to the media?

Ms Kelly : We have a copy but it is part of another email, so we might need to take some time in order to identify—

Senator WONG: If you could come back with that, I would appreciate that. At whose request was that statement drafted?

Ms Kelly : It was in response to a media query.

Senator WONG: At whose request was the statement drafted?

Ms Kelly : We might have to take that on notice. We get numerous media requests everyday and we assist in providing material in response to media queries. We can take that on notice and get the details in relation to this particular request.

Senator WONG: Was the statement drafted at the request of the Prime Minister's office?

Ms Spence : The request would have come from the journalist to the PM&C media team not via the office, is my recollection but I will have to check to make sure that is correct.

Senator WONG: Who provided the statement to the journalist?

Ms Spence : It would have been through our media team to the journalist.

Senator WONG: Was it to the Prime Minister's office?

Ms Spence : I think it went directly to the media team to the journalist.

Senator Cormann: Which is the ordinary process. Some media inquiries are received by departments in their own right; some media inquiries are obviously received by ministers and prime ministerial officers. The evidence of the officer is that this inquiry was received directly by the department and the response provided directly by the department to the journalist.

Senator WONG: At any point did PM&C do Ambassador Brady the courtesy of informing him the statement was to be issued to media?

Ms Kelly : The statement is merely a recitation of very longstanding and basic practice in relation to the protocol of arrivals. It does not refer to any particular individual and I do not believe that anyone outside the department such as the ambassador would have been informed about the response to a media query, setting out a very basic and longstanding procedure in relation to protocol.

Senator WONG: You knew at the time you prepared the statement the context of the media inquiry—didn't you?

Ms Kelly : We were responding to a media query about what was the longstanding practice and we explained the longstanding practice was as we have set out.

Senator Cormann: And as I have explained to you several times today as well. Again, you are trying to create an issue where there is no issue.

Senator WONG: Is this an accurate indication of the department's position:

The Department of Prime Minister and Cabinet has confirmed Australia’s dummy spitting Ambassador to France contravened a longstanding protocol … ?

Ms Kelly : I can read you the response to the media query and the response is:

Longstanding and accepted practice has been for spouses/partners to form part of an official greeting line at the airport on arrival into a country when the Prime Minister is accompanied by his/her spouse.

These arrangements are consistent with how incoming Heads of State and Heads of Government are greeted in Australia.

Senator Cormann: The short answer is no, because obviously you cannot hold officers of the Department of Prime Minister and Cabinet responsible for interpretations and excessive, inappropriate and inaccurate characterisations that the media choose to put on these things. I just repeat again, the line of questioning that you are pursuing relates to an inaccurate slur against the PM, which has been exposed as inaccurate but which you are seeking to perpetuate—which does not do you or the Labor Party any credit whatsoever. Surely, there are more important issues for this committee to consider in the estimates on the Prime Minister's portfolio after what was a very important budget for Australia.

Senator WONG: Ms Kelly, did I understand you took on notice whether or not there was any discussion with PMO about the release of that statement?

Ms Kelly : Yes.

Senator WONG: You are not aware?

Ms Kelly : No, I am not aware. But I did see it. I do not know what happened to it before I saw it.

Senator WONG: Ms Spence, was there a discussion between you and the Prime Minister's office?

Ms Spence : Not between me—the office may have been advised of the response that we were providing. But I would have to take that on notice.

Senator WONG: Could I still request a copy of the call PM&C statement as provided to The Daily Telegraph please?

Ms Kelly : Yes.

Senator WONG: Thank you. The report also refers to the department saying there is a handbook produced by the department outlining these protocols for foreign dignitaries visiting Australia, which also applies to overseas missions. Could I have a copy of that handbook please.

Ms Spence : It is an internal document—

Senator Cormann: We will take that on notice and see if we can assist.

Senator WONG: It is an internal document, but you have referred to it—

Ms Spence : We will take it on notice.

Senator WONG: Thank you. I do not think 'an internal document' is a response to a request.

CHAIR: 'We will take it on notice' is a response.

Senator WONG: I want to be very fair to you is Ms Spence. Your evidence, as I understand it is that the CERHOS officer—I am conscious of Ms Kelly's admonishment try to use a neutral term—raised, discussed et cetera with Ambassador Brady that his partner ought not to be part of the greeting process because the Prime Minister's wife was not in attendance. Is that right?

Ms Spence : That is correct.

Senator WONG: What led him to do that?

Ms Spence : It would have been because he would have—I would have to check that with the officer involved. I think it was more explaining to Ambassador Brady that it would just be him on the greeting party rather than saying, 'Your partner should not be there'.

Senator Cormann: Let us be clear. I am happy with this answer, Senator Wong. That officer was doing nothing else other than his job in the context of longstanding protocol arrangements which would have applied anywhere in the world in relation to a prime ministerial visit, irrespective of the specific partnership arrangement of individual ambassadors. I understand the political point you are trying to pursue but the truth is that I do not think we can be critical of the officer. He was essentially doing his job consistent with what I suspect he would have been trained to do in the context of the processes that generally apply. Obviously, common sense prevailed at the time and appropriate alternative arrangements were made, which is good. But to try to somehow put a different slant on this or query why this sort of particular advice would have been given to the ambassador when that same advice would have been given to any other ambassador in the same circumstances is just entirely wrong.

Senator WONG: Ms Spence, I will pick up on what the minister just said. Senator Cormann just said it would have been given to any other ambassador. My recollection of hierarchy—I do not know what other word to use, and ambassador is a very senior appointment.

Ms Spence : Yes it is.

Senator WONG: Correct. The officer you are discussing is a non-SES officer.

Ms Spence : Yes.

Senator WONG: How often does a non-SES officer give advice to ambassadors about protocol?

Senator Cormann: A non-SES officer who has the job in relation to protocol arrangement in relation to international travel by the Prime Minister—this is the core business for this sort of officer.

Senator WONG: Really?

Senator Cormann: That is just the thing that you have to remember.

Ms Kelly : The officer in question is a very experienced and professional officer who would deal with this matter as a matter of routine. He would deal with matters in relation to protocol issues and managing them on the ground on a daily basis, to including dealing with people such as ambassadors.

Senator WONG: So you think this was a routine thing, do you, Ms Spence?

Ms Spence : That is exactly what we think.

Senator WONG: Ah, right.

Senator Cormann: What does that mean, Senator Wong—'ah, right'? What are you trying to imply? Are you suggesting that the officer was motivated by anything else, other than doing his job in implementing protocol arrangements in these sorts of circumstances as they have applied under governments of both persuasions? What are you suggesting was motivating that particular officer who was doing his job in the circumstances of a Prime Ministerial visit to France?

Senator WONG: I do not know what was in his mind, but I know that so far in this hearing every time I ask a question about this you do your best to make sure you speak a very long time. You raise your voice. You shutdown questioning about the Prime Minister's staff and you seem extremely sensitive about it.

Senator Cormann: I am offended by the imputation and again the comment that you just made. I am honestly offended on behalf of the officer who was doing his job that you would—

Senator WONG: I do not think it is the officer's fault.

Senator Cormann: Whose fault do you think it is?

Senator WONG: I am very interested—I am not going to be distracted. I am going to do what the chair asked me to do, which is to stay on track. Ms Spence, in an article I think the day prior a source is quoted as saying in relation to Mr Brady that he threw a complete fit and that he, more than anyone, knows the protocols. Can you confirm that is not a quote, as far as you are aware, from a member of the Department of Prime Minister and Cabinet.

Ms Spence : I can confirm that is not a quote.

Senator WONG: Is it a quote from the Prime Minister's office?

Ms Kelly : I do not think we are in a position to be confirming or otherwise the source of an anonymous statement in a press article that is not before us.

Senator WONG: I just asked whether you provide a quote about Mr Brady. You provided a statement to the same journalist.

Senator Cormann: Ms Kelly has already provided evidence that the statement that was provided by the department did not relate to any particular individual; it just confirmed the longstanding protocol arrangements in the context of overseas Prime Ministerial visits.

Senator WONG: One of things that is a little confusing to me about the protocol issue, Ms Spence, is that it seems to me it is phrased in the positive but not in the negative—in other words, if the Prime Minister is arriving with his wife, in those circumstances the ambassador would have their partner present, but it does not say that you cannot have your partner there if the Prime Minister does not have his. Do you see what I mean? It is phrased in the positive. I will take this to DFAT as well, but are you seriously asserting to us that there is a protocol for a non-ceremonial, low-key, non-media event that there be any issue about the ambassador having his partner there?

Ms Kelly : What we have said is that protocol matters are governed by convention and practice. The practice was drawn to the attention of the person on the ground. The person on the ground expressed concerned and so, as is often the case in relation to protocol matters, the officer on the ground resolved it by allowing the situation that he had wished to be in place to continue. That is a very usual thing. There are very few hard and fast rules in relation to protocol. The officer drew the usual practice to the attention of the ambassador and then resolved it when concerns were expressed.

Senator WONG: Sure, but agin my point is the practice is not a prohibition against a partner attending.

Ms Kelly : And that is exactly what happened.

Senator Cormann: And indeed in practice that is exactly the way it played out. So what happened here is an example of common sense prevailing. There is a usual practice and the usual practice was obviously applied flexibly, given the ambassador had his partner with him at the airport.

Ms Kelly : And if I might add, it also demonstrates the professionalism of the officer that it was resolved by the officer on the ground.

Senator Cormann: And the Prime Minister was unaware of any of this until well after the event.

Senator WONG: What about his staff, Minister? Were they aware? You are happy to tell us what the Prime Minister—

Senator Cormann: You have received evidence—

Senator WONG: You tell me.

Senator Cormann: If I can answer your question.

Senator WONG: Sure. You tell me.

Senator Cormann: You are being very discourteous again. Ms Spence has already given evidence that, as far as she is aware, there was no contact between the ground and the travelling party on the aircraft. The Prime Minister has made it very clear on the public record that he was unaware of what took place administratively until after the event. I am not aware of anybody else being aware but, consistent with the advice that has been given to you by Ms Spence, I again confirm that this is something that was dealt with administratively on the ground and it was resolved appropriately.

Senator WONG: Okay. Minister, you can take this on notice. Did any member of the Prime Minister's staff have a conversation with a CERHOS officer in which the issue of Ambassador Brady's partner being asked not to participate in the welcome was discussed? If so, who? Perhaps you could take that on notice and get back to us.

Senator Cormann: Well—

Senator WONG: Can I—

Senator Cormann: I am sorry. I am responding to your question. I am happy to take it on notice—

Senator WONG: Thank you.

Senator Cormann: but let me again say that this issue arose not in any way related to the specific circumstances of Ambassador Brady in Paris. This issue arose administratively on the ground, consistent with the way these sorts of issues would have been handled in relation to any other prime ministerial visit in any other part of the world. We are only having this conversation because you are trying to give further credence to an inaccurate slur—and it has already been exposed as an inaccurate slur against the Prime Minister—and that does not do you any credit.

Senator WONG: No, actually I am just asking questions. Ms Wood, obviously the Prime Minister visited the presidential palace to meet with President Hollande.

Ms Wood : Yes.

Senator WONG: And you were involved in at least some organisation of that, I assume.

Ms Wood : Yes.

Senator WONG: Is it usual for the head of mission to drive with the Prime Minister for a leaders meeting?

Ms Wood : It is generally on a case-by-case basis, but it would not be unusual for the head of mission to travel with our Prime Minister to such a meeting.

Senator WONG: Is it the case that Mr Brady did travel with the Prime Minister to the presidential palace?

Ms Wood : I believe he did.

Senator WONG: Did that require a change of passenger—in other words, did a member of the Prime Minister's staff have to get out of the car in order for Mr Brady to get in?

Ms Wood : I am not aware of any changes.

Senator WONG: You are not aware?

Ms Wood : No.

Senator WONG: There was also public reporting that Mr Brady demanded that he sit in the car with the PM on the way to the French presidential palace and one of the PM's staff had to get out of the car and travel in an accompanying vehicle so Mr Brady could ride with the Prime Minister. You were not aware of that?

Ms Wood : I am not aware of that.

Senator WONG: So presumably you are not the source of these assertions.

Ms Wood : That is right.

CHAIR: If it helps, I was not the source either.

Senator Cormann: Neither was I.

CHAIR: No-one else?

Senator WONG: Well none of you were in France. If this was all so normal, routine and nicely handled, why did Australia's Ambassador to France offer his resignation after this event?

Ms Kelly : We are not aware of the ambassador offering his resignation.

Senator WONG: You are really going to give that evidence before this committee?

Senator Cormann: That is the evidence that Ms Kelly just gave and you should not be reflecting on a senior officer in the Department of the Prime Minister and Cabinet like that.

Senator WONG: You are not aware of this being raised publicly? You have not had a discussion with Mr Varghese or any of your colleagues at DFAT? Ms Kelly, let us not insult our intelligence here.

Ms Kelly : I am not aware of the ambassador offering his resignation to either the Prime Minister or the Department of Foreign Affairs and Trade.

Senator WONG: So you have no knowledge of his reaction—of how Mr Brady—

Ms Kelly : Obviously there are things reported in the press but, as you have often found on many previous occasions, they should not form the basis of actions. I am informing you that my knowledge is that the ambassador has not tendered his resignation to either the Prime Minister or the Department of Foreign Affairs and Trade.

Senator WONG: Offered.

Senator Cormann: Because we have long learned—

Senator WONG: No, sorry—

Senator Cormann: Sorry, I am adding to the answer—

Senator WONG: My question was 'offered'. The question was 'offered' not 'tendered'.

Senator Cormann: We have long learnt not to believe everything that is written in the newspaper. As I have already indicated to you, what was reported in the newspaper in relation to the Prime Minister's arrival in Paris and the greeting arrangements was inaccurate. It has been exposed as inaccurate. It has been exposed as inaccurate not only by the Prime Minister but also by officers at this table.

Senator WONG: I am not asking about that. Ms Kelly, I am going to ask you again: at any point have you become aware that Mr Brady offered to resign?

Ms Kelly : No.

Senator WONG: Even from the public reporting of—

Senator Cormann: Sorry, let me just intervene again.

Senator WONG: She is about to—

Senator Cormann: Let me just repeat what I have just said: just because something is asserted in a newspaper does not make it true, Senator Wong. Just because a newspaper article asserts a certain proposition it does not mean that that actually happened. You should know this better than anyone. The officer has already indicated that she at no time has been aware that he had offered his resignation either to the Prime Minister or to the Department of Foreign Affairs and Trade.

Ms Kelly : Perhaps I should qualify it? I would imagine that by offering to resign you would resign to the person to whom you are responsible for your employment, and I would have thought that would have been the Prime Minister or the Department of Foreign Affairs and Trade. The information I have is that no resignation was offered or tendered to either the Prime Minister or the Department of Foreign Affairs and Trade.

Senator WONG: You are aware that there was public speculation?

Ms Kelly : I certainly did see the press reports.

Senator WONG: As a result of that, did you or anyone in the department have a discussion with your colleagues at the Department of Foreign Affairs and Trade to confirm whether that was in fact correct?

Ms Kelly : We certainly have been informed by the Department of Foreign Affairs and Trade that that night the resignation of the ambassador was neither offered nor tendered.

Senator WONG: Ms Wood, can I just go back to this visit to President Hollande. Were you there?

Ms Wood : Yes I was.

Senator WONG: Where did the Prime Minister's car depart from?

Ms Wood : It would have departed from the hotel.

Senator WONG: Were you at the hotel when he got into the car?

Ms Wood : There is usually a range of vehicles moving from one to the other. We are all in place in our vehicles when the Prime Minister gets into his car.

Senator WONG: Did the ambassador get into the car at that point.

Ms Wood : I honestly do not know because I was several cars back in the motorcade, so I did not actually physically see the Prime Minister get into his car.

Senator WONG: Who else from PM&C was present at that—so this is at the hotel prior to the presidential palace visit?

Ms Wood : Mr Thawley also attended the meeting with President Hollande, but it is my recollection he was also in the vehicles ready for the departure.

Senator WONG: Was the CERHOS officer present, Ms Spence?

Ms Spence : I am not sure whether he would have gone on ahead.

Senator WONG: No, at the—

Ms Spence : I am not sure if he would have been in advance of the motorcade leaving, so I would have to take that on notice.

Senator WONG: Did the CERHOS officer provide you with any report about an incident involving a dispute over who would travel with the Prime Minister on that trip?

Ms Spence : No.

Senator WONG: Are you aware of any such incident?

Ms Spence : I have heard some references to it, but only the speculation around it. I have not heard any details of it.

Senator WONG: Where have you heard references to it?