commonwealth of australia official committee hansard · mr mark terrell, senior engineer, vehicle...

COMMONWEALTH OF AUSTRALIA

Official Committee Hansard

SENATERURAL AND REGIONAL AFFAIRS AND TRANSPORT

LEGISLATION COMMITTEE

Consideration of Budget Estimates

THURSDAY, 25 MAY 2000

CANBERRA

BY AUTHORITY OF THE SENATE

Thursday, 25 May 2000 SENATE—Legislation RRA&T 481

RURAL AND REGIONAL AFFAIRS AND TRANSPORT

SENATE

RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION

COMMITTEE

Thursday, 25 May 2000

Members: Senator Crane (Chair), Senator Forshaw (Deputy Chair), Senators Ferris,McGauran, Mackay and Woodley

Senators in attendance: Senators Crane, Ferris, Forshaw, Mackay, McGauran, and O’Brien

Committee met at 8.31 a.m.

TRANSPORT AND REGIONAL SERVICES PORTFOLIOConsideration resumed from 24 May.

In AttendanceSenator Ian Macdonald, Minister for Regional Services, Territories and Local Government

Executive and Corporate ManagementMr Ken Matthews, SecretaryMr John Bowdler, Deputy SecretaryMr Peter Harris, Deputy SecretaryMr Daryl Quinlivan, Acting First Assistant Secretary, Corporate DivisionMs Sarah Brasch, Assistant Secretary, Business Systems Development BranchMr Rick Martin, Chief Finance Officer

Regional Services, Development and Local GovernmentMs Sema Varova, First Assistant Secretary, Regional Services, Development and Local

Government DivisionMs Trudi Meakins, Assistant Secretary, Regional Development and Communications

BranchMs Cathy Parsons, Assistant Secretary, Regional Services and Local Government BranchMr Nick Bogiatzis, Assistant Secretary, Regional Communities Branch

Territories and Regional Support—including National Capital AuthorityMs Rosanne Kava, First Assistant Secretary, Territories and Regional Support DivisionDr Andy Turner, Assistant Secretary, Non Self-Governing Territories BranchMs Dianne Gayler, Assistant Secretary, Regional Support and Self-Governing Territories

BranchNational Capital Authority

Ms Annabelle Pegrum, Chief Executive OfficerMr Lindsay Evans, Executive DirectorMs Julie Cooper, Chief Finance Officer

Air Transport—including Civil Aviation Safety Authority and Airservices AustraliaCivil Aviation Safety Authority

Mr Mick Toller, Director, Aviation Safety

RRA&T 482 SENATE—Legislation Thursday, 25 May 2000


Mr Rob Elder, Executive Manager Government, Industry and International RelationsMr Laurie Foley, Assistant Director, Aviation Safety ComplianceMr Richard Yates, Assistant Director, Aviation Safety StandardsMr Mike Smith, Assistant Director, Aviation Safety PromotionMr John Leaversuch, General Manager, Airline OperationsMr Peter Ilyk, General Counsel, Office of Legal CounselMr Ray Comer, Executive Manager, Corporate Services

Aviation DivisionMr Bruce Gemmell, First Assistant Secretary, Aviation DivisionMs Robyn Beetham, Assistant Secretary, Aviation Industry BranchMr Tony Wheelens, Assistant Secretary, International BranchMr Chris Samuel, Executive Director, International Air Services CommissionMr Jim Wolfe, Assistant Secretary, Security and Olympics Branch

Airports DivisionMr Paul Merner, First Assistant Secretary, Airports DivisionMr Mike Mrdak, Assistant Secretary, Operations BranchMr John Elliott, Assistant Secretary, Planning BranchMr Martin Cotton, Director, Noise Amelioration Section

Airservices AustraliaDr Rosalind Dubs, Acting Chief Executive OfficerMr Tom Grant, Director, Corporate StrategyMr Andrew Fleming, Chief Financial Officer, Corporate Finance Division

Australian Transport Safety BureauMr Kym Bills, Executive DirectorMs Carol Boughton, Director, Safety InvestigationsMr Adrian Beresford-Wylie, Director, Safety Programs and Support

Integrated and Cross Modal Transport and InfrastructureDr Greg Feeney, First Assistant Secretary, Cross-Modal and Maritime Transport DivisionMs Sue Elderton, Assistant SecretaryMs Linda Addison, Team LeaderMr Craig Harris, Team LeaderMr Winton Brocklebank, Team Leader

Maritime Transport-including Australian Maritime Safety AuthorityDr Greg Feeney, First Assistant Secretary, Cross-Modal and Maritime TransportMs Sue Elderton, Assistant SecretaryMs Linda Addison, Team LeaderMr Craig Harris, Team LeaderMr Winton Brocklebank, Team Leader

Australian Maritime Safety AuthorityMr Clive Davidson, Chief Executive OfficerMr Brian Munro, General Manager, Corporate and Commercial Services

Road and Rail TransportMr Robert Hogan, Acting First Assistant Secretary, Land DivisionMr Neville Potter, Assistant Secretary, Roads Investment Branch



Mr Daniel Owen, Assistant Secretary, Rail Industry BranchMr Peter Robertson, Assistant Secretary, Vehicle Safety Standards BranchMs Carole Rowe, Acting Assistant Secretary, Land Policy BranchMr Keith Seyer, Director, Vehicle Standards, Land DivisionMr Mark Terrell, Senior Engineer, Vehicle Safety Standards BranchMr Mike Kimberlee, Director, Approvals and International Policy, Vehicle Safety

Standards BranchMr Ed Cory, Director, Roads Programming

Australian Transport Safety BureauCHAIR—We shall resume. Senator O’Brien.

Senator O’BRIEN—I want to ask some follow-up questions on the report entitledInvestigation into the specification of heavy trucks and consequent effects on truck dynamicsand drivers. Senator Macdonald, as the acting transport minister, released the final report on18 April this year. Mr Bills, at the last estimates hearing, you advised that the Land TransportDivision had continuing oversight of the investigation that was conducted by Road UserInternational. I am in a bit of a quandary as to ATSB’s role in that, given that you haveresponsibility for implementing the recommendations. Perhaps if we go through it and seehow far we can get. I understand that this investigation arose from a number of complaintsabout the handling and operation of particular trucks. That is correct, isn’t it?

Mr Bills—Yes.

Senator O’BRIEN—Can you advise the committee how that led to this particular inquiry?

Mr Bills—There were a number of complaints over a period of about a decade—not alarge number of complaints but a niggling problem. As I understand it, the former FederalOffice of Road Safety, in consultation with others, decided that there was a need to investigatethis further. There was a process of choosing a consultant and, as you mentioned, Road UserInternational was chosen to do the work. There was a widespread call for submissions for anyother trucks that may have been a problem to be considered by the consultants. There wereactually 27 complaints, as I understand it—and Mr Beresford-Wylie will correct me if I amwrong—from a heavy truck fleet in Australia of some 44,000. From the 27 complaints, theconsultant tested five trucks—

Senator O’BRIEN—Before we get to that, who made the decision to establish theinquiry? Was it the minister or the Land Transport Division?

Mr Bills—The minister announced the inquiry, and I believe he would have made thedecision based on the advice from Mr Ellis and his staff.

Senator O’BRIEN—Which particular minister? There have been a few changes in theportfolio over the years.

Mr Beresford-Wylie—Mr Anderson announced it in a media release on 2 December 1998.

Senator O’BRIEN—Thank you. Go on, Mr Beresford-Wylie.

Mr Beresford-Wylie—The study took place, as Mr Bills said, during the course of 1999.There were a series of advertisements placed nationally to draw out any complaints. Of those,27 complaints were received. They related to 31 vehicles. I think 13 of them were tested anddriven and, of those, five complainant vehicles were instrumented for testing along with threebenchmark vehicles. Testing was carried out throughout 1999, and a draft report was



produced in November 1999. That report was issued for public comment. The report wasfinalised at the beginning of this year and tabled in the Senate on 18 April.

Senator O’BRIEN—Who made the decision to have the inquiry conducted outside thedepartment?

Mr Beresford-Wylie—That took place before ATSB became involved. It was obviously adecision by the minister but I would assume on the recommendation of Mr Ellis as the head ofFORS, but that is something that might be best addressed to the Land Transport Division.

Senator O’BRIEN—What type of expertise was needed to conduct this investigation?

Mr Beresford-Wylie—In terms of the actual report and the engineering expertise required,I could probably give you an idea, although that is again probably a question best addressed tothe Land Transport Division. That component of the former Federal Office of Road Safetywhich looked after the formation, if you like, of the contract for the consultant, the decision togo forward and the management of the contract until the report was released was theresponsibility of what is now part of the Land Transport Division. They are the ones who havethe engineering expertise, and questions about those consultants are probably best addressedto them.

Senator O’BRIEN—I have some questions about the establishment of the criteria for theselection of consultants and who was consulted about that. Can you answer them or do I needto put them to Land Transport Division?

Mr Beresford-Wylie—Probably Land Transport Division.

Senator O’BRIEN—I want to find out what the bureau felt would be required asnecessary expertise. For example, given the issues, would a study of vibration be an importantarea in which experience existed, in the sense that the consultants would need that experienceand expertise or have access to it?

Mr Beresford-Wylie—In terms of the consultancy, again, if it relates specifically to theexpertise of the consultants and the reason they were chosen, you might need to take that upwith the originators of the—

Senator O’BRIEN—I am not asking how they made the decision. I am asking what thebureau’s view would be on undertaking a study, given the issues. Is it a fair comment to saythat, to look at these issues properly, you would need to have, or have access to, particularexpertise about vibration dynamics?

Mr Beresford-Wylie—I think the dynamics and therefore vibration were part of the study.That is an issue that has emerged in the report of the study and has been shown to besignificant. I think the study indicates that the consultants did look at vibration. Theysurveyed the available literature and the studies on vibration. There are further studies goingon that we ourselves will be looking at in that context. I think it is a part of the study, yes.

Senator O’BRIEN—There is an organisation that may be known to you, Vipac, who arevibration specialists. Do you know if they were approached to tender for the project?

Mr Beresford-Wylie—I am not familiar with the organisation and I do not know if theywere approached.

Senator O’BRIEN—Do you know what the process for selecting the organisation toconduct the investigation was?

Mr Beresford-Wylie—No, I do not.



Senator O’BRIEN—Was it a tender process?

Mr Beresford-Wylie—I think there was a tender process, yes, but that really originatedbefore the bureau became involved.

Senator O’BRIEN—So questions about the tender process, the method of selection andthe basis for selection should be put to Land Transport? Is that what you are telling me?

Mr Beresford-Wylie—Yes.

Mr Bills—As I said last time, our role really started the day the report was tabled.

Senator O’BRIEN—When did ATSB take over the responsibility for this matter?

Mr Bills—The day the report was tabled, which was 18 April 2000.

Senator O’BRIEN—And you had no involvement or knowledge about the matter beforethat?

Mr Bills—We had some discussions with Mr Ellis and his staff just to keep us in the loop,but we had no carriage of the matter until 18 April.

Senator O’BRIEN—The report itself is entitled Investigation into the specification ofheavy trucks and consequent effects on truck dynamics and drivers: final report. That is nowin your domain, I take it?

Mr Beresford-Wylie—It is, Senator.

Senator O’BRIEN—When this investigation was announced by the transport minister inDecember 1998, he said:

The study will investigate the complaints in order to establish whether there is a systemic safetydeficiency.

Can you tell us if any systemic safety deficiency was found?Mr Beresford-Wylie—Yes, Senator, there was one systemic safety deficiency found. That

referred to a particular vehicle—that is, vehicle F6, as it is identified in the report. Vehicle F6is a Ford LT9513 prime mover, and the systemic deficiency relates to that prime mover fittedwith a particular Hendrickson suspension system. I understand there are approximately 13 ofthose vehicles on the Australian roads.

There were no other systemic deficiencies found by the report. There were problems foundwithin individual vehicles, but they were not considered by the report to be systemicdeficiencies. Those problems related to vehicles F1, F3, F4 and F26. So there were problemswith those specific vehicles as they were tested, but there were no systemic problems withthose particular types of vehicles, if you like. As Mr Bills has said, one thing to remember isthat the report was widely advertised but there were only 27 complaints out of a potential fleetof 42,000 heavy vehicles.

Senator O’BRIEN—I understand the report proposed 16 recommended actions arising outof the investigation. What is planned to be done with those recommendations?

Mr Beresford-Wylie—The recommendations can be divided into three broad categories.Those recommendations which call for action to be taken on specific vehicles arerecommendations 1, 2, 5 and 10. A second set of recommendations relate to improvements tovehicle design, practice and standards, and they could be identified as recommendations 3, 4,6, 7, 8, 9 and 12. A third set of recommendations deal with areas of possible research, andthey would be recommendations 11, 13, 14, 15 and 16.



On 18 April, the bureau wrote to those parties who will be the parties able to implementrecommendations in that first and second category. With regard to the first set, action to betaken on specific vehicles, we wrote to three truck manufacturers—Ford, Kenworth andMack. With regard to the second set of recommendations, we wrote to a broader group whowill be involved with vehicle design, practice and standards, and they included the FederalChamber of Automotive Industries, the National Road Transport Commission and theregulatory authorities in each of the states—that is, the RTA in New South Wales, VicRoads inVictoria and so on—as well as the regulatory area of the Department of Transport andRegional Services, the Land Transport Division. In each of the letters in those first twocategories, we drew the attention of the parties to the recommendations and asked for theiradvice about how they intended to implement those recommendations.

Senator O’BRIEN—Can you supply the committee with a copy of the letters that havebeen sent out?

Mr Beresford-Wylie—Yes, we can.

Senator O’BRIEN—I presume there are two standard letters.

Mr Beresford-Wylie—That is correct. There is a slight complication in that I think one ofthe manufacturers in the first set of recommendations, if you like, also crosses over to thesecond set. So they have received a slightly different version of the letter. But, yes, there areessentially two standard letters.

Senator O’BRIEN—Can we have the three types?

Mr Beresford-Wylie—Sure.

Senator O’BRIEN—I understand the manufacturers are to respond to therecommendations. The letter in respect of the first group of recommendations—that is,recommendations 1, 2, 5 and 10—is to be responded to by 17 May. Has such a response beenreceived from each of those three companies?

Mr Beresford-Wylie—Yes, it has. We received a substantive response from Kenworth on15 May, and we received an interim response, or a holding response, from Ford and a holdingresponse from Mack on 17 May. We received a more substantive response from Mack Truckson 22 May and a substantive response from Ford Motor Company on 22 May.

Senator O’BRIEN—Can the committee have copies of those responses?

Mr Beresford-Wylie—Yes, certainly.

Senator O’BRIEN—Is it the case that at least one of the manufacturers has purchasedsome of the suspect vehicles from complainants or their finance companies?

Mr Beresford-Wylie—One of the vehicles may have been purchased after it had beenrepossessed. I think vehicle F1 was repossessed and purchased by Kenworth. To myknowledge, the other vehicles—that is, F3, F6, F4 and F26—are now with a new owner andstill on the road, but F1, I think, is the vehicle that was repossessed and purchased byKenworth.

Senator O’BRIEN—You imply by saying that that F1 is not still on the road. Do youknow if that is the case?

Mr Beresford-Wylie—I do not know if that is the case.

Senator O’BRIEN—And you think all of the other vehicles, subject to testing, are back onthe road?



Mr Beresford-Wylie—When I say ‘back on the road’ I mean they are still registered, Ithink.

Senator O’BRIEN—It is a reasonable assumption that, if they are still registered and havebeen purchased by other people, they are back on the road, is it not?

Mr Beresford-Wylie—That is the advice I have.

Senator O’BRIEN—Are you aware of any incidents during the testing process of thetruck identified as F6 that involved another vehicle? I am told—and you can correct me if Iam wrong—that during a road test truck F6 veered across the road causing a whiteCommodore station wagon to swerve off the road onto the gravel surface?

Mr Beresford-Wylie—I am not aware of such an incident although I think there mighthave been a press report which I have seen, but I am not aware of—

Mr Bills—My understanding is that the report refers to F6 veering across the road. I amnot aware of the white Commodore part of the story.

Senator O’BRIEN—I think that is one of the vehicles that is back on the road. Do youthink that is a matter that you would inquire into? For example, would you ask the consultantabout the incident and why the truck should not be taken off the road?

Mr Beresford-Wylie—F6 is the Ford vehicle. We do have some advice relating to thatparticular vehicle which has been provided by Ford and which is contained in the letter. Iunderstand that Ford advised us that, since the investigation and F6 was brought to theirattention, they have worked closely with the truck owner and Hendrickson, the supplier of thesuspension system, to improve the feel of the vehicle and that Ford replaced the wornsuspension components to bring the vehicle back to design serviceability intent andHendrickson installed suspension components to improve the response in the airbags tochanging road conditions. The vehicle remains with an owner who operates it, I think, in thelogging industry. He has made some modifications to the vehicle and as such themodifications continue because they are suited to that particular type of operation. Ford havehad some discussions with the owner. Ford has advised us that the owner acknowledged thatthe changes that Ford and Hendrickson made have dramatically improved the operation of thevehicle, but that the vehicle will remain modified because the owner believes themodifications are necessary for the logging operations.

Senator O’BRIEN—Given that my information is that there was an incident with thatvehicle involving another road user, would ATSB intend to inquire of the consultant aboutthat incident to be more familiar with what actually took place, given that the implementationof the report is an area of your responsibility?

Mr Beresford-Wylie—It is certainly something we will look at. I think we are also indialogue at the moment with the owner of the Ford vehicle.

Senator O’BRIEN—Are you aware of a further incident during the testing process of thetruck identified as F1 that again involved another vehicle?

Mr Beresford-Wylie—Me specifically, no.

Senator O’BRIEN—ATSB?

Mr Beresford-Wylie—I cannot say whether ATSB is aware of it, no.



Senator O’BRIEN—I understand that F1 veered off the road and almost collided head onwith an oncoming stock carrier. That is not information that has been drawn to your attention?This is the Kenworth, is it not?

Mr Beresford-Wylie—Yes, that is right; it is the Kenworth.

Senator O’BRIEN—That vehicle is apparently back on the road.

Mr Beresford-Wylie—As I said, my advice regarding F1 is that it has been repossessedand purchased by Kenworth. I cannot say whether it is actually operating on the road.

Senator O’BRIEN—Kenworth do not mention that in their response?

Mr Beresford-Wylie—Kenworth’s comment is, ‘As a matter of record, truck F1 is nowowned by Kenworth.’

Senator O’BRIEN—Do you think that ATSB should inquire further about that vehicle andof the consultant about the allegation that it was a vehicle involved in an incident involvinganother road user?

Mr Beresford-Wylie—We will follow that up.

Senator O’BRIEN—I am told Roaduser International engineers were present when bothincidents occurred and that the trucks were driven at the time by DECA officers and the othersfollowed in cars behind and witnessed the events. In relation to that incident, the minister’sprincipal adviser wrote to Mr Rod Miller, the previous owner of the vehicle, on 8 December1999 advising, ‘The remedial action taken by Kenworth in regard to cracking of airglide 100pedestals was considered by the Federal Office of Road Safety to be appropriate in thecircumstance.’ Do you know what that refers to?

Mr Beresford-Wylie—Not in specific details, no.

Senator O’BRIEN—As I understand it, it has something to do with the replacement offaulty pedestals at half price. Have you got any information as to how appropriate that is?

Mr Beresford-Wylie—The replacement at half price or the—

Senator O’BRIEN—The replacement per se. The cost issue is obviously a different issue.It is more a commercial matter than a matter of safety?

Mr Beresford-Wylie—I cannot say at this moment what the explicit role of the pedestalwould be in any safety related issue and whether or not the cracking was bad enough to justifyreplacement. I can only go on what you have told me. I cannot draw a conclusion whether itwas appropriate or not. I can assume that if the remedial action was undertaken, then theowner and manufacturer saw it as appropriate.

Senator O’BRIEN—I do not think it is much good to the owner. As a result of theproblems with the truck he went bankrupt and, as you have said, it was repossessed by afinance company and purchased by Kenworth. I would be interested to know what the bureauwould suggest for the approximately 1,000 other vehicles on the road with this particular partif this particular part was the subject of a dangerous fault causing a potentially life threateningsituation.

Mr Beresford-Wylie—If it was a dangerous part it would be treated as we would treat allother vehicle issues of safety which involve a specific part. When we received a defect noticeor when it was drawn to our attention we would initiate discussions with the manufacturer tosee whether we could identify the problem. If we were assured that it was a safety concern we



would then engage in dialogue which related to whether or not a vehicle recall process shouldbe gone through.

Senator O’BRIEN—Is there anything in the report which would lead you to theconclusion that further work needs to be done in relation to that vehicle type?

Mr Beresford-Wylie—In terms of the report itself, again I would stress that it did reachsome conclusions on the individual vehicles, but not on anything that was systemic, apartfrom with the Ford vehicle. To the extent that the report indicates that they have carried out anextensive series of testing and have not found anything that would indicate a systemicproblem with that vehicle, then our intention is obviously not to do something that relates towhat might be supposed to be a systemic problem at this stage. We would, however, note thatrecommendation 1 is slightly broader in its scope where it talks about action should be takento identify and evaluate prime movers which have safety deficiencies similar to thoseidentified for vehicle F6. For F6 we would be looking to see what the full scope of thatrecommendation meant.

Senator O’BRIEN—What knowledge does the bureau have of the conduct of the consult-ant in relation to dealings with any of the manufacturers of the vehicles as subject of the test-ing process?

Mr Beresford-Wylie—We do not have any specific knowledge. Land Transport may havesome knowledge. At least one of the manufacturers in writing to us did say that they found theprocess a little difficult because they felt that they as a manufacturer were, if you like, cut outof the process and it was independent from that point of view.

Senator O’BRIEN—Is it a bad thing that it was independent?

Mr Beresford-Wylie—No, I am not making any comment about whether it was good orbad. You asked me whether we had any knowledge of the relationship between themanufacturers and the consultant and that is something that is contained in a response fromone of the manufacturers.

Senator O’BRIEN—Does the bureau have views as to what the manufacturers should bedoing? There is a focus in the recommendations on fixing the vehicles of those who havecomplained. Is it appropriate that there be a broader process of checking vehicles with thesame component parts and models and therefore potentially the same problems?

Mr Beresford-Wylie—We have not formulated a view on that at the moment. Ourimmediate concern has been to notify the manufacturers to make sure that the parties thatrequired the report to be drawn to their attention have it done so and that we receive at leastan initial response from the manufacturers indicating their position on the immediaterecommendations, that first set of recommendations, as I have said. There are broader issueswhich do relate to vehicle design and practice. We have, as I said, sent that set ofrecommendations to a second category of parties and asked for their response at a later dateand that date is in June—I think 14 June.

Senator O’BRIEN—Given that, if there are problems out there, there is a daily risk factor,what timetable has the bureau set to try to resolve the issues that arise from the report insofaras that is within your capacity?

Mr Beresford-Wylie—We have not set any specific time frame at the moment, althoughwe are obviously dealing with the report as quickly as we can. The letters went out veryquickly but that was to give the parties a reasonable chance to respond about what they intendto do. We will obviously have an ongoing dialogue with the manufacturers in question and we



look forward to hearing what the regulators have to say about what might be necessary interms of further action under the second set of recommendations. We ourselves will obviouslylook at the third set of recommendations which deal with research. There is a particular aspectthere of government which is involved. We do have our own research programs. We will belooking at what we do and whether or not we can mesh what has been suggested in terms ofadditional research on vibration and its effect on fatigue into the work we are doing, forinstance, on fatigue. We will also look at the broader research that is going on nationally andinternationally to find out what is the true nature of the vibration question and its effect onfatigue and on broader issues.

In terms of other issues that may be coming forward, the report itself, as I said, isreasonably specific. It deals with those specific issues and with that small set of vehicles interms of that Ford prime mover and the Hendrickson suspension. Naturally, if there are peoplewho come forward with suggestions that they also have problems, we will deal with themthrough our normal process of defect notification, and we will look at the problems they raise.One of the things that I think Mr Bills alluded to in his discussion of this report was that thereport itself emerged from this concern that there might be widespread systemic problems inthe Australian trucking fleet and the report, in the process that was gone through, was aimedat trying to flesh out whether there were any problems and to identify them, and it has comeforward only with that limited number of problems. In fact, at the same time the report wasinitiated, our colleagues in Land Transport did some international soundings in the UnitedStates, UK, New Zealand and Japan to find out whether anybody else had experiences withany systemic problems with these sorts of trucks and such systemic problems did not emerge.There were not any reported. I think there was one complaint that had been reported in theUnited States, but that was all.

Senator O’BRIEN—The quality of the report could well be reflected upon by theinterrelationship—I am not putting this in any particular way—or interaction between theconsultant and particular manufacturers. I understand that there were actually threats of legalaction by Kenworth against the consultant Roaduser International during the course of theinvestigation. Has that been drawn to the attention of the bureau?

Mr Beresford-Wylie—We are aware that there was some concern about the report,although the specifics were not drawn to our attention. We have not seen the details of anysuch concerns.

Senator O’BRIEN—Obviously, if that is the case, some people might have a concern thatthreats of legal action may have had an intimidatory effect on the consultant in the finalpreparation of the report. Do you think that is a matter which the bureau should investigate,given you are relying on the consultant’s report to a significant extent in the pursuit of follow-up activities?

Mr Beresford-Wylie—I am not aware that there was any intimidatory nature of anyresponse by the consultant. That is certainly nothing that has been suggested to the bureau,that there was any intimidation. It is not something I have seen evidence of in my discussionswith the manufacturers. Indeed, as I said, with Kenworth there is no suggestion from theirmind that the report said everything they wanted to say. I am certainly not in a position todraw the conclusion that there was intimidation and I have not heard that suggestion.

Mr Bills—That is probably another one that Land may be able to assist you with.

Senator O’BRIEN—I understand that. I am not saying that you would have had ongoingknowledge of what was going on. I am asking in relation to the implementation of the report



given that allegations are being made that there were threats of legal action by one of themanufacturers against the consultant—I am not sure what defence they would have againstsuch action, and I do not know precisely what sort of action was threatened, if any wasthreatened. What was in my mind was this: if the consultant is preparing a report and may feelthat they are exposed to legal action in the conduct of that exercise, that their actions andconclusions may be the subject of legal action against which they might have limitedprotection and therefore potentially significant financial exposure, I am wondering whetherthat would lead a reasonable person to conclude that there might be some doubt about how farthey are prepared to go with their conclusions in that environment.

Senator Ian Macdonald—Senator, I think we have said that we are not aware of theallegations. Perhaps you could elaborate on those. One would think that if there were thoseproblems someone would have told us about them. I am not sure of your source, but perhapsif you gave us the detail, as sketchy or otherwise as it may be, we could make some inquiries.

Senator O’BRIEN—I thought the minister had received a letter about this because Ireceived a copy of a letter about this matter.

Senator Ian Macdonald—From whom?

Senator O’BRIEN—I have not put the name of the manufacturer on the record at thisstage because I am asking the questions—

Senator Ian Macdonald—Whom was the letter from?

Senator O’BRIEN—The letter was from Mr Millar. By saying that I have identified themanufacturer and that is what I was trying not to do.

Senator Ian Macdonald—I do not mean so much the name, but what sort of group orperson? It was a manufacturer?

Senator O’BRIEN—It was a truck owner who made certain suggestions.

Senator Ian Macdonald—And you say he has written to Mr Anderson?

Senator O’BRIEN—That is my understanding.

Senator Ian Macdonald—All right. Let us follow that up.

Senator O’BRIEN—What I was trying to do in the questions was not to identify particularpeople or manufacturers but a principal issue which goes to the question of what might beperceived.

Senator Ian Macdonald—I understand what you are saying and doing. I think the officersaid that we do not know about it, so we cannot comment.

Senator O’BRIEN—But they can go back to the consultant and ask questions, I am sure.

Senator Ian Macdonald—We will see what we can find out about it, now that you haveraised it.

Mr Harris—It is quite possible that the Land Transport Division people will—if we arebeing televised—have us under observation and will be able to provide advice on this ifindeed it is the case. If it is not the case, we can follow it up.

Mr Bills—I might just say one further thing, and that is, obviously, we will follow up whatactually happened or land division will have the information, but in terms of the hypothetical



that you were positing, it depends also on what arrangements there were in the contract forany legal consequences of the report. I am not in a position to say that because I do not know.

Senator O’BRIEN—Would you look into that issue? The first thing is the question as towhat in fact happened. It would be pretty easy to find out if there were any such threats, Iwould have thought.

Senator Ian Macdonald—We will try to find that out.

Senator O’BRIEN—The second thing is that, if there was an interchange about legalaction, I would like to know the bureau’s view as to the potential for that to call into questionaspects of the report. I do not want to take it any further because I will have to start namingpeople, manufacturers, et cetera.

Senator Ian Macdonald—I am urging you—we have the drift of what you are saying. Wewill follow it through and get back to you.

Senator O’BRIEN—So the bureau is taking that on notice? I am happy for that to be takenon notice.

Senator Ian Macdonald—It will be a government matter if there are threats that influenceany outcomes like that.

Senator O’BRIEN—Without wanting to extend the debate, certain actions have reactions.Whilst a party might think they are properly exercising their rights in a legal sense, sometimesthere is, at the very least, a perception that that action will cause a reaction by the person theyare making the threat against. You might roll your eyes, Minister, but that is a matter which isof concern because we are talking about incidents which potentially affect a lot of people on adaily basis. There are more fatalities on the roads than there ever are in rail or air transport,and it is probably an area we do not give enough attention to.

Senator Ian Macdonald—We will look into that. I understand what you are saying. I amquite sure that none of the players who are giving advice to government would ever conceivethat they were threatened or they altered their views because of it. Anyhow, you have raisedthe issue; we will see what we can find out. Having been alerted to it, we will look at it in thatlight.

Senator O’BRIEN—During the fuel contamination issue, there was an accident insouthern Tasmania where an aircraft flying from Hobart to the south-west of Tasmaniaexperienced engine failure and ditched into the water; luckily there were no fatalities. Iunderstand the bureau sent an investigator to Tasmania to inquire into the matter. What pointhas that investigation reached? Has it been concluded, or is it ongoing?

Ms Boughton—I am not aware of one of my investigators going to Tasmania. We did havean investigator looking at the situation. We have not taken the investigation any furtherbecause, at that point in time, the aircraft had not been recovered.

Senator O’BRIEN—When you say ‘at that point in time’, when was that?

Ms Boughton—I have not been advised since then that the wreckage has been recovered.

Senator O’BRIEN—That may well be true. I have not heard that it has been recoveredeither, but I have not been following it closely.



Ms Boughton—The situation for us is that, unless there is a wreckage there, we would notbe taking the investigation any further.

Senator O’BRIEN—Unless it is out of the water is what you are saying?

Ms Boughton—Exactly.

Senator O’BRIEN—The reason I am asking the questions is that there are a number ofincidents with small planes. This occurred at a time when there was a great debate about thefuel contamination issue. I was wondering what steps could possibly have been taken toestablish that this aeroplane, which was leased by the operator—I think it was Par Avion—might not have been a victim of the contamination?

Ms Boughton—The investigation that was undertaken is based on what the pilot said toour investigator. It was on the basis of that information that it was concluded that, from ourperspective, at that stage there appeared to have been no fuel contamination in relation to theMobil problem.

Senator O’BRIEN—Does the bureau have a view as to what the cause of the accidentwas?

Ms Boughton—I have not seen a final statement on it to be able to give you that, but I amquite happy to take that on notice and give you whatever the final summary has been.

Senator O’BRIEN—Okay. Thank you for that. I do not have any more questions for thebureau.

[9.18 a.m.]

Integrated and Cross Modal Transport and InfrastructureCHAIR—Unfortunately, I could not be here last night, but I have a couple of questions for

Airservices. Rather than putting them on notice, it has been decided that Airservices willcome back and answer them on the spot. I have been told that they are fairly simple to answer.So in due course we will have an officer from Airservices to come back for a few minutes.

Senator O’BRIEN—I am grateful to see that organisations like Airservices are prepared tocome back if there are new questions for them, and I look forward to that opportunity if itarises in the future.

Mr Bowdler—We are always happy to cooperate with the committee.

Senator O’BRIEN—I am certain that is the case and I am glad that it is a bipartisanapproach.

Senator Ian Macdonald—We are trying to avoid taking questions on notice, Senator. Ihope you got the Senate publication that I tabled yesterday. You sought information from thedepartment, but I indicated that I thought there was a Senate publication available. It isavailable. We have tabled it. It does show that, regrettably, our department is the one thatreceives the most questions on notice in the Senate. It was tabled on Tuesday. In fact, apartfrom your leader, you were the next main questioner. So if we are ever a little bit slow ingetting answers, you will understand that our department is under more pressure fromquestions on notice than is any other.

Senator O’BRIEN—I appreciate your compliment, Minister.



Senator Ian Macdonald—That is why we will try to get as few of these as possible takenon notice.

Senator O’BRIEN—I am asking them here. If they are taken on notice, I cannot controlthat, Minister. Heading in the direction of finishing by the appointed hour, I will commence.On page 60 of the budget statement, I wanted some detail on the list of the projects containedin the second box on the right-hand side of that page.

Dr Feeney—Which one: ‘DOTARS will manage’?

Senator O’BRIEN—Yes. For each of the seven projects I would like the followinginformation: who is participating in each project; what the time frame is for their completion;what the objective of each project is; what the cost of each project is; and who is actuallypaying the bills.

Dr Feeney—We will take that on notice.

Senator O’BRIEN—The last sentence in that box says that the projects will be evaluatedbased on the satisfaction of stakeholders, cost and timeliness. I want to know the informationthat I have asked for so that the committee can see the details on which such an evaluationwill be undertaken.

Dr Feeney—That is fine. We will do that.

Senator O’BRIEN—On the issue of imported used diesel engines, which has been dealtwith through the Customs (Prohibited Imports) Amendment Regulation 1999 (No. 9), thisregulation basically bans imported used diesel engines: is that correct?

Dr Feeney—That is not in our area. That is Land—

Mr Harris—I may be able to assist you, Senator.

Senator O’BRIEN—I understand that the effect of the regulation is to ban the importationof used diesel engines: is that correct?

Mr Harris—In a practical sense, probably yes.

Senator O’BRIEN—It has been gazetted and tabled in both chambers, so the 15 sittingdays clock is ticking away. I gave notice earlier that the regulation be disallowed, so I thinkwe have until 20 June to deal with that matter. What consultation was there with the industry,particularly those 85 companies who have been importing these engines, before the regulationwas drafted?

Mr Harris—I am afraid I cannot tell you the precise nature of the consultation, but Iexpect it would not have been as substantial as it would usually have been if this had been aninitiated arrangement—primarily because, as I am sure you are very well aware, it came outof an agreement by the government and the Democrats for the passage of the new tax systemlegislation. Thus, effectively, we were taking it as a need to implement a system, and thuswork went into what kind of a system there ought to be to implement it. But the broadprinciple of ‘should you do this?’ was already predetermined.

Senator O’BRIEN—To the extent that there have been consultations, is it possible toestablish details, beyond the discussions with the Democrats, of whom the department and theminister have spoken to with regard to the promulgation and implementation of thisregulation, both before and after its gazettal?

Mr Harris—I can perhaps better assist you, when our expert from Land TransportDivision is here, on that sort of precise detail.



Senator O’BRIEN—I have a number of questions on this.

Mr Harris—If it is all in that area of who was actually consulted, we have a person—

Senator O’BRIEN—No, it is not all about that. Mr Anderson on the 7.30 Report on 23March said in relation to the regulation:Look, that is a matter of real concern and it needs to be understood—

as I think you have just said—that it was part of the Democrat negotiations.

He then said:I have to say that we are now in receipt of more accurate information which suggests the environmentalbenefits that they were concerned about are not as evident as they thought. They may in fact benegative, and I can confirm to you that I am looking again at this very, very closely right at the momentand will seek shortly to raise the matter again with the Democrats.

Can the committee be provided with the more accurate information that the minister wasreferring to in the interview?

Mr Harris—I think the more accurate information comes from an assessment made of thenature of the existing engines that were being replaced in some cases—and I emphasise onlyin some cases—by these imported engines. Thus, a complete ban on the import of used dieselengines will, certainly in some cases, result in the continued use of what are even older andmore inefficient and therefore more highly polluting engines in rural areas. I think that is thenature of the minister’s comment, that in some cases—perversely, if you like—you may bepreventing the import of something which is less polluting. If your benchmark is a brand newengine of the highest efficiency, certainly imported used diesel engines will in many cases beless efficient and therefore more highly polluting. If your benchmark is a brand new enginethen, yes, you have a more highly polluting engine being imported. But if your benchmark isthe existing engine already in place and operating—for example, on rural properties forpumping out water and things like that—the replacement of that engine by a used enginewhich might be more efficient than the existing one is less polluting. I think that is what MrAnderson is referring to. It is therefore not what I would call—how can I put it—a highlydetailed calculation by an independent expert or by the Bureau of Transport Economics orsomething like that. It is an assessment of the nature of what is being used in the market.

Senator O’BRIEN—Did someone provide the minister with the advice—for example,jointly between this department and the Department of the Environment and Heritage, or justthis department?

Mr Harris—To my recollection, the information was developed jointly betweenrepresentations having been made to the minister, an assessment being made by thedepartment, and advice being passed back to the minister’s office from the department.

Senator O’BRIEN—This department?

Mr Harris—My department; that is correct. I also should add, in case that misleads you inany way, that the matter was discussed between the Minister for the Environment and MrAnderson.

Senator O’BRIEN—When did that discussion take place?

Mr Harris—I would not be able to tell you that. I was present only by accident. In otherwords, I do not even have a note of it. I just know that I was there. It is not unusual if you arethere for another meeting that something else occurs.



Senator O’BRIEN—Certainly. If I understand you correctly, it is Mr Anderson’s view thatthe regulations, as they stand, appear to have a potentially negative effect on the environmentrather than a positive effect.

Mr Harris—It is difficult to put words into the minister’s mouth, obviously, but I thinkwhat the minister is saying is what I have outlined earlier: that, in some cases, certainly, ratherthan achieve a positive environmental impact you may achieve a negative environmentalimpact.

Senator O’BRIEN—What is the value of the imported used diesel engine industry?

Mr Harris—I have information on the value of used diesel engines imported, I believe,from Customs for the development of the regulation impact statement. We will be able to getback to you this morning with that information.

Senator O’BRIEN—Earlier I used the number of 85 importers. Is that the number that thedepartment is working on?

Mr Harris—Again, I would have to confirm that for you—85 importers. We will try to getthis confirmed this morning.

Senator O’BRIEN—Does the department have detail on the end user of the importedengines—in other words, the sectors that the engines go to? It would be a variety, obviously:fishing industry, farming, vehicle engine replacement for transport, other power generation, etcetera.

Mr Harris—Only in the broadest sense; in other words, it is pretty much as you havedescribed there. I do not think the assessment went down to the nature of each individual firmthat may or may not use this.

Senator O’BRIEN—So there is no collection of information that can reliably tell us thatthese are the end users of the engines and this could be the basis for assessing theenvironmental impact or the potential environmental impact?

Mr Harris—No, not that I am aware of. There is, as you know, a regulation impactstatement process. In the course of that, we would have gathered some information. But,given the nature of this agreement, it is a proposition about how we implement rather than ifwe implement.

Senator O’BRIEN—Is there information available or held by the department on theimpact of this regulation on the cost of imported engines?

Mr Harris—Again only indirectly, as I have stated to you. I perhaps should wait until weget hold of the RIS and we can provide you with the information out of that.

Senator O’BRIEN—Is it the government’s intention to proceed with the regulation in itscurrent form?

Senator Ian Macdonald—That is still being considered.

Senator O’BRIEN—Are there still discussions taking place with the Democrats about thisissue?

Senator Ian Macdonald—Again they are issues that we would not normally respond to inestimates, Senator—and we are not going to.

Senator O’BRIEN—With respect, Minister, it is a regulation that has been promulgated. Ifit is not disallowed before 20 June, it will come into force. We have a very limited number ofsitting days in which to deal with it. I think the people affected by the regulation would like to



know whether there is any prospect of it being withdrawn or replaced. Given especially thatsuch a process would affect deadlines and import decisions, I think it is a matter of greatpublic interest.

Senator Ian Macdonald—It might be, but they are matters that the government isconsidering. I will refer this to Mr Anderson. If he wants to indicate to you the consultationshe is having with other political parties, I will get him to get back to you.

Senator O’BRIEN—Is the minister having ongoing discussions with the importingindustry—or any other industries, for that matter—about the impact of the regulation?

Senator Ian Macdonald—The minister would be having discussions with lots of people.

Senator O’BRIEN—Yes, I did not think he was a Trappist monk; I would expect that hewould have conversations with a lot of people. But I am asking a specific question about thisissue to ascertain whether there is an ongoing dialog with those who are affected by theregulation that has been promulgated. I accept that you may need to take that question onnotice.

Senator Ian Macdonald—I think Mr Harris has already answered that. The minister isseeking advice. He and his officers and advisers are having discussions with those involved.Mr Harris has already indicated that to you. I suspect we are probably even discussing it withthe Labor Party—but that is a guess.

Senator O’BRIEN—I think it’s a wild one.

Senator Ian Macdonald—I think that would be right. I am sure Mr Anderson’s adviserswould have been in touch with the advisers of your spokespeople on these things. That wouldbe the normal course of events. You never know, we might get you to support us in somethingthat is positive or good.

Senator O’BRIEN—Minister, you have seen many occasions with your own eyes wherewe have done that. But, in relation to this—

Senator Ian Macdonald—I will not waste my time in trying to think of them.

Senator O’BRIEN—I am interested in knowing whether there is an intent to alter theposition, given comments that have been made to me by a Democrat spokesperson that a dealhas already been made to change the regulation.

Senator Ian Macdonald—Senator, the Democrats may talk to you about discussions theyhave had with various people. We will continue to work with the issue. We will try to get theresolution that is in the best interests of the country. When conclusions are reached, they willbe announced.

Senator O’BRIEN—If I can interpret your remarks, I take it that no conclusion has beenreached.

Senator Ian Macdonald—Do not interpret. If Mr Anderson is in a position to mention afinal conclusion or a conclusion, he will let you know—he will let everyone know.

Senator O’BRIEN—If Mr Anderson is in a position to indicate that, does that mean thatall negotiations on this matter are with this department, or do we need to ask questions of MrHill’s department—

Senator Ian Macdonald—You could ask questions of Senator Hill, but I am sure he wouldgive you the answers I have just given you, Senator.



Senator O’BRIEN—as to whether there is an agreement about whether this regulation isto be proceeded with in its current form?

Senator Ian Macdonald—I am speculating on what Senator Hill might tell you. But I ampretty certain that, if a conclusion has been reached, it will be announced. If a conclusion hasnot been reached, I doubt that he would be saying publicly what sort of consultations,agreements, discussions or negotiations are occurring—except in a broad general way, asMr Harris has already answered.

Senator O’BRIEN—I just do not understand. If, on the one hand, there is agreement not toproceed with the matter, why is it not a matter of simply saying so? On the other hand, if thereverse is the case, why can’t the industry be made aware that a different position has beenreached?

Senator Ian Macdonald—I will put that to Mr Anderson, as I said five minutes ago.

Senator O’BRIEN—I have been told things in the chamber by the Democratsrepresentative on this matter to the effect that some weeks ago there would be anannouncement. Certainly there has not been such an announcement. I do not want tomisrepresent the government’s position on this matter, and I am giving the government anopportunity to say whether they are proceeding with the regulation or not.

Senator Ian Macdonald—I am sure that, when the matter is resolved, Mr Anderson willmake an announcement.

CHAIR—The minister has said twice that he will refer it to Mr Anderson. I think it is timeto move on.

Senator O’BRIEN—The next matter is intermodal and maritime. I have some questionsfor Dr Feeney, so we will proceed with those. I want to start by going to performanceindicators for the waterfront set out by Mr Reith in April 1998, entitled Waterfront reform:seven benchmark objectives. In that announcement, the benchmarks were: first, a nationalfive-port average of 25 crane movements per hour by April last year; second, 97 per cent ofships calls finding a berth available within four hours of the scheduled time by April last year;third, industrial action per 1,000 employees no more than the national average by April lastyear; and, finally, no more than 64 work related injuries per 1,000 employees and no fatalitiesby 1 January this year. I understand the latest publication of Waterline was released in March.Is that correct?

Dr Feeney—Yes.

Senator O’BRIEN—The five-port average in the first of the benchmarks was down to 19from 19.6 in September of the previous year. Is that correct?

Dr Feeney—From 19.6 in the September quarter last year down to 19 in the Decemberquarter last year.

Senator O’BRIEN—One of the reasons for the fall in the performance of the docks was ashortage of labour and equipment breakdowns at P&O in Melbourne.

Dr Feeney—That is correct.

Senator O’BRIEN—There were also industrial problems at Patrick in Sydney. That is theother reason, isn’t it?

Dr Feeney—I do not think there were any industrial stoppages, but there was someindustrial unrest.



Senator O’BRIEN—Yes. This must be seen by the government as a very disappointingresult. You set yourself a target of 25 to be achieved some time ago. You got to 19.6 inSeptember. It has gone down to 19. You are a long way off the target. You spent a lot ofmoney to get to this target, remember.

Senator Ian Macdonald—Yes, it is a good political point, and I appreciate you making it,but I am not going to answer whether we are disappointed with the results. That is a matterthat is subjective and for you or anyone else to form their own opinion of. We can give youthe facts. You can draw your own conclusions from them.

Senator O’BRIEN—I certainly can draw my own conclusions. I would have thought thatthe government would be very unhappy with the performance. I will go to the berthavailability indicator issue on page 7 of Waterline. In December, the figure was down to 88per cent against Mr Reith’s target of 97 per cent last April.

Senator Ian Macdonald—What is the question?

Senator O’BRIEN—Is that a fair reflection of the report?

Dr Feeney—The December quarter last year is down to 88 per cent. The previousSeptember quarter was 93 per cent.

Senator O’BRIEN—So there was a fall from 93 to 88 per cent in a three-month period onberth availability?

Dr Feeney—There was that reduction. That is right.

Senator O’BRIEN—On the same page, the report states:Average waiting time for ships unable to obtain a berth within four hours of the scheduled berthing timewas 21 hours ...

That is down from 22 hours in the previous quarter.Senator Ian Macdonald—What is the question?

Senator O’BRIEN—Is that a fair reflection?

Senator Ian Macdonald—This document that you are quoting from is put out by thebureau with government support. I would hope that every bit of information in it wasaccurate. That would be the case, wouldn’t it?

Dr Feeney—That is right, Minister.

Senator O’BRIEN—The reported average waiting times in these quarters were well abovethe reported figures in the previous publications of 11 hours and 14 hours reported for the firsttwo quarters of 1999.

Dr Feeney—In relation to most of those quarters and some of those benchmarks, theWaterline report indicated that, from July to December last year, there was something like a15 per cent increase in the number of containers moved through Australia’s ports. That cameat the same time as some of the stevedores, in particular P&O, were restructuring. With a 15per cent increase in traffic, it is probably not surprising that that has had some impact on theability of the stevedores to move the vessels through the ports.

Senator O’BRIEN—So a 15 per cent increase in container volume leads to increases ofsomewhere between 75 and 100 per cent in waiting times?



Dr Feeney—No, the relationship is probably not linear. I am just saying that that couldhave been one of the reasons why it was an unusual half year. There was a very large increasein volumes leading up to the Christmas period.

Senator O’BRIEN—What about berth availability? Can you give me some explanation asto why the indicator has declined so badly?

Dr Feeney—Again, there are two reasons. One is the increase in volumes, and the other isthe restructuring that P&O was undertaking at that time. As in all restructuring exercises,there is some disruption. I think that was shown in the case of Patrick. Since then, at least onthe Patrick side, once they have had their enterprise agreements in place and the newworkforce settle in, we have seen their productivity rates increase quite dramatically. In someports, they are getting close to the 25. One would assume that P&O will go through the sameexperience.

Senator O’BRIEN—What are the details by operator? Have you got these figures brokendown by operator?

Dr Feeney—When we collect them with the BTE we do have them by operator. We do notpublish by operator at the moment because of an agreement we have had historically with thestevedores ever since Waterline has been producing this information. The minister directed usto initiate some discussions with the stevedores to see whether in the future we will publish byterminal.

Senator O’BRIEN—I am interested in that because you have just given us someinformation about one of the operators which might suit the convenience of the government.It might even suit the convenience of the operator. If it is intended to assist in drawing apicture, then we need all of the information, don’t we?

Dr Feeney—I think the operators would be happy enough with the description I justgave—saying that Patrick have increased their productivity in most ports since they settledthe new agreements—but they are not happy about giving out precise numbers. Again, I couldtake that request on notice. Obviously, we have to refer that back to the operators as well.

Senator Ian Macdonald—You have said that Mr Anderson has asked you to institutediscussions to that end. If those discussions turn out in a certain way, then we will certainly beable to make them available to everyone.

Senator O’BRIEN—Yes, there are minister selective publications of information. Forexample, the port of Burnie is advertising that it is going to achieve record cargo movementlevels, I think for the month of May. That is a good thing. On the other hand, they weremoving record numbers of containers leading up to the waterfront dispute. These areinteresting benchmarks from the point of view of expenditure of government on waterfrontreform. Can you provide the committee with the latest data on the level of industrialdisputation? How have those numbers run over the last 12 months?

Dr Feeney—Yes, I can. The latest figures I have are up to February this year with ABSIndustrial Disputes collection for stevedoring. It gives working days lost per month. InFebruary 2000, there were zero. In January 2000, there were 200. In December 1999, therewere zero. In November 1999, there were 100. They are the latest figures that we haveavailable for those four months.

Senator O’BRIEN—Have you any idea how that compares with the national average?

Dr Feeney—Comparing with the benchmark for the industry, that benchmark is currently328 working days lost per month.



Senator O’BRIEN—But those figures indicate that this is well below the benchmark?

Dr Feeney—That is right.

Senator O’BRIEN—So industrial disputation in that sense is not an explanation for poorperformance—that is, days lost is not an explanation for poor performance? The benchmarkthat the minister set does not indicate that industrial performance is lacking?

Dr Feeney—No, that is working days lost whereas I think some of the reasons for theproblems relating to the figures that were published in the last Waterline were more to do withdamage to equipment and things like that. That is an industrial matter, but it was not through astrike or days lost.

Senator O’BRIEN—Are you saying that there was an organised campaign to damageequipment?

Dr Feeney—In the case of Patrick they had to institute procedures where, with everychange of crane drivers, a supervisor or a manager inspected the cabin because, until then,they had had a lot of damage to equipment.

Senator O’BRIEN—Last August you told us that you were not aware at that time whetheror not the government had commissioned an independent report on progress in occupationalhealth and safety in the stevedoring sector, as promised by Mr Reith in 1998, but that youwere going to follow that up. I have not seen a response on notice to that question. Can youadvise us whether that work has now been done and what the result was?

Dr Feeney—This is the information on the injury and fatality rate?

Senator O’BRIEN—Yes.

Dr Feeney—Apparently the raw material has been provided by the National OccupationalHealth and Safety Commission to the Department of Employment, Workplace Relations andSmall Business, but it is not yet available in the appropriate format. That is the informationthat I have to hand at the moment. It is out of our portfolio.

Senator O’BRIEN—So the following up of that particular benchmark is for the otherdepartment, not this one—or will they give you the information as part of their suite ofresponsibilities on waterfront reform?

Dr Feeney—They are aware of our interests in this and when they have that information inthe appropriate format they will be providing it to us. We will then obviously be putting it inthe context of the benchmarks.

Senator O’BRIEN—Can you give me the latest data on the occupational health and safetyperformance in this industry so that we can make a comparison?

Dr Feeney—That is the task that they are doing, and that information is still not available.

Senator O’BRIEN—So they are collecting the information but this matter is yourresponsibility?

Dr Feeney—No, it is their responsibility to collect the information, but I am saying that ina package approach, in terms of responses to the benchmark objectives, we will undertake topackage that information.

Senator O’BRIEN—Do you have an expected time line for when that information will beready?

Dr Feeney—No, we do not know about that at the moment.



Senator O’BRIEN—Can you find out and let the committee know?

Dr Feeney—Yes.

Senator O’BRIEN—I take it that you have data on industrial disputation and the nationaltrend over the past year?

Dr Feeney—Yes.

Senator O’BRIEN—Can you make that available to the committee in a simple form?

Dr Feeney—Yes.

Senator O’BRIEN—Did you collate the occupational health and safety data in thisindustry over the period since the reform package was put together?

Dr Feeney—Again, occupational health and safety information is the responsibility of theEmployment, Workplace Relations and Small Business portfolio.

Senator O’BRIEN—I thought the information would come to you in terms ofadministering the benchmarks.

Dr Feeney—I am saying that when we put forward a package to address progress on thebenchmarks we will then be consulting with them to get that information. But on a day-to-daybasis they would not normally provide us with that sort of information unless we specificallyasked, and that has not been an issue for us lately.

Senator O’BRIEN—Turning back to the Waterline document, in the section onstevedoring charges per TEU, page 14 states that the average cost for February to June 1999was $181. The report states that no number for July to December was available at the time ofprinting. Are such figures now available?

Dr Feeney—I think we would have to check that with the BTE. Maybe Mr Slatyer will behere a bit later on, and we can check with him.

Mr Bowdler—We will follow that up and try to get an answer to you as soon as we can.

Senator O’BRIEN—Perhaps we can come back to that, and perhaps Dr Feeney may ormay not be able to assist us on that matter when the information is available later thismorning.

Mr Bowdler—I will see what I can do.

Senator O’BRIEN—Can you confirm whether Centrelink has met the terms of its contractto date this financial year in relation to the Tasmanian Freight Equalisation Scheme or, if therewere any irregularities, can you tell me what they were and why they occurred?

Dr Feeney—They met the terms of their contracts quite well.

Senator O’BRIEN—Are they still required to provide a monthly business report?

Dr Feeney—Yes, and they have provided those to us.

Senator O’BRIEN—Is the situation the same for the Bass Strait Passenger VehicleEqualisation Scheme as it is for the TFES?

Dr Feeney—Yes. But, as you would appreciate, the Bass Strait scheme involves us makingpayments only to the operator, who then passes that on to the passenger, so administratively itis a much less complex scheme than the TFES where we have 4,000 claimants or thereabouts.

Senator O’BRIEN—Should I ask you more questions about that or is that a matter for MrSlatyer?



Dr Feeney—No, you can ask us.

Senator O’BRIEN—In the performance measures for the Bass Strait Passenger VehicleEqualisation Scheme in the last budget statement, 1999-2000, as set out on page 81 in thesecond box on the right-hand side of the page under the heading ‘Quantity’, there is areference to 25 claims per annum and $11.204 million. Is that right?

Dr Feeney—Yes, that is right.

Senator O’BRIEN—In this year’s statement, on page 56, last box, right-hand side, againunder the heading ‘Quantity’, the reference is to 140,000 accompanied vehicles and the cost is$16.543 million.

Dr Feeney—Yes.

Senator O’BRIEN—So can you tell me how many accompanied vehicles attracted asubsidy in 1998-99 and 1999-2000?

Dr Feeney—We expect 120,000 passenger vehicles during 1999-2000. That is a smalldecrease over last year’s figures.

Senator O’BRIEN—So the 1998-99 figures were more than 120,000?

Dr Feeney—Yes.

Senator O’BRIEN—Do you have a figure?

Dr Feeney—For 1998-99 there were 124,000 vehicles.

Senator Ian Macdonald—I think these statistics are all published in our annual reporteach year.

Senator O’BRIEN—In October, perhaps.

Senator Ian Macdonald—We must publish them somewhere. I have seen them regularly,just by way of assistance to you.

Senator O’BRIEN—Yes, that might be the sort of material we do not normally get in atimely fashion, Minister.

Senator Ian Macdonald—Ask me a question every now and again about them, Senator.

Senator O’BRIEN—I asked you a lot, remember? You told me about all the questions thatI asked.

Senator Ian Macdonald—Ask in the chamber. That way you will get an instantaneousresponse rather than having to wait.

Senator O’BRIEN—I like a considered response to a lot of my questions.

Senator Ian Macdonald—If it is timeliness you are worried about, there is youropportunity.

Senator O’BRIEN—Timely and considered is the way that I like my answers, Minister.The figures do not seem to indicate there is strong growth in demand for the scheme, althoughI understand there were certain special factors for the current financial year 1999-2000.

Dr Feeney—Demand exceeds the capacity that TT Line have, so the only area where theyhave been able to increase capacity is by using the Devil Cat. The Devil Cat this year has hada few difficulties in its operations, so I assume that that is the main reason for the—



Senator O’BRIEN—There was also a problem with the Spirit of Tasmania which put it offthe run for a period, and that attracted a lot of publicity. My assumption is that if you excludethe periods of the problem with the Spirit of Tasmania the demand would be growing.

Dr Feeney—Demand is definitely growing. The difficulty for TT Line is that the currentinfrastructure is virtually at capacity, so the only way to increase the number of people carriedis for them to find other vehicles, and the Devil Cat is one of them.

Senator O’BRIEN—When was this scheme last reviewed?

Dr Feeney—The review was the TFES review in, I think, 1997, but the review wasimplemented in the budget of last year.

Senator O’BRIEN—Is there a planned period for the next review?

Dr Feeney—Not for a substantive review. That was sort of a blank page review. What iscurrently under way is a re-estimation of the parameters to check new freight rates, what theexperiences are. That is being done by the BTE and has just started recently.

Senator O’BRIEN—And when is that expected to be concluded?

Dr Feeney—In the next month or so.

Senator Ian Macdonald—You are switching between passenger vehicles and freight. Towhat were you referring then?

Dr Feeney—Sorry, I thought you were referring then to the TFES, Senator.

Senator O’BRIEN—No, I was referring to the passenger vehicle equalisation in thosequestions. You said, as I understood your answer—perhaps we should check this—that thereview of the Passenger Vehicle Equalisation Scheme took place at the same time as the TFESreview.

Dr Feeney—No, sorry. I apologise. The rates for the Bass Strait passenger scheme arereviewed annually, and that will next be done in December this year.

Senator O’BRIEN—I do not think the government wants you to call it a passengersubsidy.

Senator Ian Macdonald—No, we have a name for it.

Dr Feeney—The Passenger Vehicle Equalisation Scheme.

Senator O’BRIEN—Sorry, when was that going to be reviewed again?

Dr Feeney—In December of this year.

Senator Ian Macdonald—Senator, by way of assistance again, I have confirmed thefigures on the passenger vehicle scheme come out quarterly. They are certainly in the annualreport. But I have been told that there are some new figures coming to me very shortly. Theyare on the way to me, and when I get them I will be making them publicly available—thelatest figures.

Senator O’BRIEN—So that will be the March quarter figures—is that what you mean? Orthe June quarter figures?

Dr Feeney—I assume it will be the March quarter. It will not be the June quarter,obviously.

Senator O’BRIEN—Okay. But you have given the figures that are basically up to date,have you? The 120,000?



Dr Feeney—That is estimate of the final outcome for this financial year.

Senator O’BRIEN—Thank you for that. You make the payments to the shippingcompanies, so you have got a fairly quick turnaround in the detailed returns?

Dr Feeney—Are we talking about the Bass Strait scheme?

Senator O’BRIEN—The Passenger Vehicle Equalisation Scheme.

Dr Feeney—We make payments directly to the operators.

Senator O’BRIEN—Do you acquit payments monthly or quarterly with them?

Dr Feeney—We pay them monthly.

Senator O’BRIEN—Monthly in arrears, obviously?

Dr Feeney—Yes.

Senator Ian Macdonald—I just want to clarify again: the payments are to the passengervehicle owners, or drivers, but for convenience we pay them to the shipping companies. So itis not a subsidy to the shipping company; it is a subsidy to the passengers.

Senator O’BRIEN—I understand what the subsidy is. But I am asking the questionsbecause in terms of collection of information it is obviously quite convenient to have onereturn from one operator rather than 50,000 from—

Senator Ian Macdonald—The only reason I raise it is that sometimes people write to meand say, ‘Why are you subsidising a shipping company?’ and, ‘Why are you subsidising theTasmanian government?’ I just want to make it clear we are subsidising passengers toTasmania, not shipping companies.

Senator O’BRIEN—It is part of the national highway scheme or something, isn’t it?

Senator Ian Macdonald—Can Hansard record that I laughed?

Senator O’BRIEN—I am sure it can. So it is an issue that is certainly alive and out there,Minister. In terms of the TFES, you have given me the details of the review process. I take itthat the answers to my earlier questions that we have just gone over and corrected were in factanswers in relation to the Tasmanian Freight Equalisation Scheme?

Dr Feeney—Yes.

Senator O’BRIEN—In the current budget statement, the 2000-01 budget statement, onpage 56 you say you expect over 4,000 claims for 2001. How does that compare with theactual number of claims in 1998-99, experience to date and projections expected for 1999-2000?

Dr Feeney—For 1998-99, it is about 4,300 claims for assistance.

Senator O’BRIEN—What about the current year? Do you have any figures on the currentyear?

Dr Feeney—For 1999-2000, this year, it looks like we will handle about 4,800. It iscurrently around 4,200. So projecting that forward would give you roundabout that figure.

Senator O’BRIEN—You say it is currently 4,200. When will the 4,200 take us up to?

Dr Feeney—Probably up to the end of the last month.

Senator O’BRIEN—The end of April.

Dr Feeney—Yes.



Senator O’BRIEN—Is the claims experience even over the year, or does it have peaks andtroughs?

Dr Feeney—No, it does fluctuate throughout the year. Obviously, given the products thatare being moved, there is a lot of seasonality about it.

Senator O’BRIEN—On page 62 of last year’s statement—output 2.2—is a performancemeasure you identified against the function of investigations of maritime accidents andincidents. Is this your area?

Dr Feeney—That is ATSB’s responsibility now, but Mr Bills is here.

Mr Bills—Senator, would you like to know about the Marine Incident Investigation Unit?

Senator O’BRIEN—Yes. In that performance measure on page 62 you identify against thefunction of investigations of maritime accidents and incidents: to identify circumstances andestablish causes in an average time of 27 weeks to complete investigations and finalise report.Mr Bowdler told us last June that the average time taken to produce reports was 35 weeks.Can you tell me how effective the Maritime Incident Investigation Unit has been in meetingthe target? You picked this up part way through this year, did you not?

Mr Bills—No, we have had it since 1 July 1999. So we have ownership of it. When ATSBwas formed there were 11 marine incidents under investigation. Ten of these have beencompleted and reports published, and a further 10 investigations have been initiated. In termsof timeliness, the measure in there of 27 weeks median time was the best ever achieved, in1996. The Inspector of Marine Accidents is a hard taskmaster for himself, because he keepsputting the best ever median time in there. At the moment he is tracking at about 36 weeks,and it might even get a little bit longer.

There are several reasons for that. One is that some of the investigations have been prettycomplex, so there has been a need for outside technical assistance. Increasingly, parties arelitigious, and that also adds to the delay in the process. With foreign flagged ships there is aneed to write out internationally and to find the ships when they are in port, and that alsoimposes a delay. And, finally, we had a retirement, and there is some training of investigatorsunder way, so that has slowed things down. But I think, really, the 27 weeks, which is again inthe 2000-01 PBS, is a pretty optimistic and tough target to set. The only way we would meetit, assuming that incidents do not decline, would be if we increased staffing, and at themoment we have other priorities.

Senator O’BRIEN—This is the figure that you publish. Are you saying that it is onlyattainable in exceptional circumstances?

Mr Bills—It was only attained in 1996. I myself had not realised that, but in preparing forthe estimates I did.

Senator O’BRIEN—So you will be changing it next year.

Mr Bills—We cannot change, obviously, for 2000-01, but I suspect the year after we willbe more realistic, rather than being more challenging on ourselves.

Senator O’BRIEN—You will have to go for it—it is the year of the Olympics, you know.Thank you for that, Mr Bills. Going back to shipping reform, in relation to the Manser reportlast May, Mr Slatyer advised us that recommendation 13, which related to second registers,was still under consideration by the minister, and we were advised that the issue was sent offto a second working group, which reported in April of last year. What is the status of thesecond register option now?



Dr Feeney—It is still an option in the context of shipping reform. Those issues are stillbefore the minister.

Senator O’BRIEN—So they are still under consideration.

Dr Feeney—Yes.

Senator O’BRIEN—Can you provide the committee with a schedule of all of therecommendations from the Manser report and the second shipping report and detail what hashappened to each of them.

Dr Feeney—Would you like that now?

Senator O’BRIEN—If you can, yes. If you have a document there, we will justincorporate it in the record.

Dr Feeney—Yes. I can read it out, but if you want a written response I will put that onnotice.

Senator O’BRIEN—You can read it out if you do not have a document that you can puton the record. You were so confidently responding to my question that I thought you mighthave a table already prepared.

Dr Feeney—As I said, I can go through the various recommendations, if you wish.

Senator O’BRIEN—I am in your hands as to how you want to do it.

Senator Ian Macdonald—Can you do it concisely?

Dr Feeney—Yes, I think I can. Recommendation No. 1, which is a package of reformmeasures, is as a package under consideration.

Senator O’BRIEN—This is Manser’s one.

Dr Feeney—Yes, this is Manser’s recommendation. They were talking about significantlabour reform and some winding back of cabotage and establishing the second register. Therehas been some liberalising and streamlining of the cabotage regime, but the other elements ofthe package are still before the government. Recommendation No. 2 was companyemployment. As you would be aware, the government withdrew AMSA from theadministration of the seamen’s engagement system in 1998. That has facilitated a move fromindustry employment arrangements to company employment arrangements. Since then,company employment has been the norm in the industry.

Recommendation No. 3 was about the leave provisions and crew to berth ratio. Underthose company employment arrangements leave entitlements are now a matter of negotiationbetween companies and their employees, the seafarers. Obviously, leave entitlementstherefore reflect the requirements of the company and the employees, and thereforecommunity standards. In relation to recommendation No. 4, I think since the publishing of theShipping Reform Group report the employers, in particular, have not been as keen onabolishing the separate seafarers compensation scheme. I think they still see that there is aneed for some adjustments to it, and I think their greater satisfaction has something to do withthe new company employment arrangements. Again, that is one area that I understand is beinglooked at. But that is in Mr Reith’s portfolio. That is combined with the occupational healthand safety issues that Mr Reith’s portfolio covers.

Recommendation No. 5 was the redundancy provisions. Those redundancy issues havebeen dealt with in the context of company employment. There were about 200 employeesmade redundant. The redundancy cost of $13 million was met by the industry.



Recommendation No. 6 is about the winding back of cabotage. As you will be aware, thegovernment has not formally responded to the recommendations. But, as I said earlier, therehas been some liberalising and streamlining of the guidelines that cover the coastal tradingprovisions.

Senator O’BRIEN—Single and multiple voyage permits?

Dr Feeney—And single voyage permits. Also, cruise liner shipping has been exempt andChristmas Island trade has been exempt.

Senator O’BRIEN—There has been a lot of trade near Christmas Island.

Senator Ian Macdonald—Coming the wrong way, though.

Dr Feeney—Recommendation No. 7 was about safety and environment. The governmentand AMSA continue to give a high priority to the safety of vessels. Recommendation No. 8was in relation to Commonwealth-state safety regulation harmonisation. Some of those issuesare being reviewed under the Navigation Act stage two review. Also, the Commonwealth andState governments have agreed to jurisdictional separation, so that all vessels over 500 grosstonnes are the responsibility of AMSA, with the exception of vessels that are purely intrastateand vessels less than 500 tonnes, which are the responsibility of the states. There is a morecomplex description of that. I do not want to go through the details, but that is the gist of theharmonisation.

Recommendations Nos 13, 14 and 15 are all to do with the second register—I think I havecovered those. Recommendation No. 16 was continuing shipping industry consultation, andwe are constantly consulting the industry on all the shipping related issues. The industry wasrepresented on the shipping reform working group that reported to the minister, as you said,last year. That covers it, Senator.

Senator O’BRIEN—That covers all the Manser recommendations. What about the secondshipping report? You have incorporated the responses to the second shipping report?

Dr Feeney—That second report has not been released yet, Senator.

Senator O’BRIEN—In respect of cabotage, is there an expected time line for thegovernment to respond fully to that recommendation?

Dr Feeney—It is under consideration by the government at the moment.

Senator O’BRIEN—It has been that way for a long time, hasn’t it?

Dr Feeney—There have been a number of considerations within the government over thisissue. There was the introduction of company employment in June 1998, and there arechanges to some of the cabotage arrangements.

Senator O’BRIEN—When is it intended to reveal the second shipping report?

Dr Feeney—That is a matter for the minister.

Senator O’BRIEN—I wonder if you could take that matter on notice.

Senator Ian Macdonald—I will see if Mr Anderson wants to make any comment on that.

Senator O’BRIEN—I have asked if you would take it on notice, and we will get theanswer at the appropriate time. On MIFCo, is the deed of agreement between MIFCo and theCommonwealth on the public record?

Dr Feeney—I will get Linda Addison to answer. She is a team leader in the Cross Modaland Maritime Division and the secretary of MIFCo.



Ms Addison—No, Senator.

Senator O’BRIEN—The answer is that it is not a public document at this stage? Can it bemade available to the committee?

Mr Harris—We would perhaps need to give that some due consideration as well, Senator.

Senator O’BRIEN—How much start-up funding was provided to MIFCo by thegovernment?

Ms Addison—It was $2.75 million.

Senator O’BRIEN—That is to be repaid isn’t it? Or is that a grant?

Ms Addison—It was paid in the form of a grant.

Senator O’BRIEN—Was it specified how it was to be used?

Ms Addison—It was to meet MIFCo’s administrative start-up costs.

Senator O’BRIEN—Have all those funds been expended?

Ms Addison—Yes, Senator.

Senator O’BRIEN—Presumably, that has been acquitted to government—there has beensome audit of the expenditure of the money?

Ms Addison—Yes, Senator. It is reported in MIFCo’s financial statements—and theAuditor-General is MIFCo’s auditor.

Senator O’BRIEN—Busy person, the Auditor-General. So the last annual report was 7October last year; that is the one I should look to?


Senator O’BRIEN—That report advised that MIFCo funded 969 redundancies at a cost of$117,313,927: can you bring us up to date on the current position on redundancies and theamount expended?

Ms Addison—It is actually the same position as was reported on 2 May, Senator. It isapproximately $178 million that was expended and there were 1,486 redundancies.

Senator O’BRIEN—How much did you say?

Ms Addison—It is approximately $178 million.

Senator O’BRIEN—You can give us the precise number on notice, can you?

Ms Addison—Not really, Senator. The figure changes because, when the funds weretransferred to the companies they were transferred into trust funds, and those trust fundsaccumulated interest The interest in those trust funds in effect reverts to MIFCo, thereby theCommonwealth, reducing the amount that MIFCo eventually funds for redundancies. So weuse the figure of $178 million until all of the final redundancies have been reconciled, becausethe interest figure is obviously constantly changing.

Senator O’BRIEN—Is it possible to get an update of the list that appears on page 19 ofthe report, which gives a breakdown of payouts by company?


Senator O’BRIEN—It also listed 14 deeds that had been finalised: is that the most up-to-date list as of now?

Ms Addison—No, Senator; there would actually be 17 deeds, I think.



Senator O’BRIEN—Could you update that list for us?

Ms Addison—Certainly, Senator.

Senator O’BRIEN—The report said that the whole redundancy process would becompleted by last October.

Ms Addison—Yes, that is true, Senator. And all of the redundancies that have been fundedby MIFCo had taken place by that time. As we discussed last time, there are still some peoplewho have made claims for total and permanent disability who are waiting for resolution ofthose claims. As you are aware, if they are successful in obtaining total and permanentdisability, they would not receive a redundancy from MIFCo. However, if they areunsuccessful, MIFCo will fund a redundancy. There are still three people in that situation.

Senator O’BRIEN—Only three. The individual redundancies at issue are down to three.There are only three possible individual redundancies at issue?

Ms Addison—Yes, that is correct. But in terms of the actual completion of theredundancies they all had occurred by October last year.

Senator O’BRIEN—I just wanted to go through the money trail for this process. Startingwith the companies, where does the money go?

Dr Feeney—You are talking about the companies who are paying the levy or paying theredundancies?

Senator O’BRIEN—The levy. I assume it goes to the department, then consolidatedrevenue, then back out to MIFCo and then to the bank for redundancies?

Dr Feeney—Yes, that is right. The levy is paid by the stevedores into our department. It isput in consolidated revenue. We then pay MIFCo the amount they require to meet theirobligations. We are also permitted to use those funds to pay for administrative costs inrelation to our administration of the scheme and also our administration for collection of thelevy. So, for example, we have an auditor auditing the levy program and we pay that out ofthe levy funds. As you recall, it was stated that this was not to be at any cost to the taxpayer,so it is important that all our administrative costs are funded out of that scheme as provided inthe legislation. So we either pay for our administration costs or we pay the money to MIFCo.

Senator O’BRIEN—Can you give us the detail of the payments made to the departmentfor your administration costs and the costs of collecting the levy?

Dr Feeney—Yes, we can.

Senator O’BRIEN—Obviously there is a period since the commencement of the schemethat we are looking for.

Dr Feeney—Yes, Senator.

Senator O’BRIEN—You have the process of the money coming in and going throughthose stages. How is it acquitted at each point? You receive it from the companies, then youhave to acquit to consolidated revenue, presumably, what you have received and then MIFComakes the request for money and you go to consolidated revenue and ask for that money andpay it to MIFCo.


Senator O’BRIEN—Explain a bit of process. What sorts of authorisations and proofs arerequired in that process?



Dr Feeney—The payment actually to MIFCo: I will let Ms Addison talk about the actualapproval, who has the delegations for that.

Ms Addison—The acquittal within the department for payments to MIFCo and from CRFare obviously acquitted in accordance with the Department of Finance and Administrationguidelines for authorisation and acquittal of those funds. At this stage, the department makesan assessment of how much levy has been received. MIFCo has received some funds last yearand that was acquitted on the basis that the department assess the amount of levy received andthat was transferred to MIFCo to be held until its requirement to commence repaying its loanoccurred. So the authorisations are internal delegations within the Department of Finance andAdministration and within the Department of Transport and Regional Services itself.

Dr Feeney—In relation to the other two categories, the administrative payments, thepayments for the administration of the collection of the levy, the delegation for that is with meand I authorise those payments. The authorisation for the other administrative payments iscurrently with the minister, and he would need to approve that.

Senator O’BRIEN—Who audits that whole process?

Dr Feeney—The Auditor-General is obviously the departmental auditor. So it is in thecontext of the department’s financial statements.

Senator O’BRIEN—What conditions are imposed on the stevedores by MIFCo as part ofthe payments process? In other words, they are receiving money—and I think you talkedabout trust accounts and the like. Can you give us more detail on that?

Ms Addison—The payments to the stevedores were made in accordance with the deedsagreed between MIFCo and the stevedores. Most entities that received funding—there were acouple where we made direct payments to the employees so there was no deed—entered intoa deed with MIFCo and those deeds set out the arrangements by which MIFCo transferred thefunding to them. Generally it involved the provision of what was called a provisionalcalculation notice which set out the details of all the relevant employees and calculations fortheir payment. On the basis of that, the funds would be authorised by the MIFCo board to betransferred to the stevedore.

Subsequently, MIFCo’s accountant then would, in combination with the company, reviewall of the payments and they could come up to a final figure for payment of redundancy. Theboard would then authorise those payments to proceed. The payments then would be made—cheques or rollovers or whatever, because obviously when you are making payments to thestevedores they have choices about what they might do with their redundancy payments sopayments can go to a number of places. Someone might not actually even get a cheque intheir hand at the end of the day. But in order for those things to take place, the employeeswere required to execute a deed of release in favour of MIFCo and the Commonwealth. Onexecution of the deed of release and photographic evidence such as a drivers licence toMIFCo’s accountant, who received a deed of authorisation from the Commonwealth and apower of attorney to MIFCo to execute the deed of release on behalf of those two entities,they would then sign the deeds of release and then the payments would be transferred inwhatever form the employee had designated, where the payments had been drawn from thetrust account.

Senator O’BRIEN—From the company’s trust account?

Ms Addison— From the company’s trust account, yes; and then the companies wereproviding, as they went along, reports to MIFCo reconciling the payments, which were then



reviewed by our accountants. And then the accountant reports back to the board to say themoneys have been acquitted satisfactorily. At the finalisation of the process, there is a finalbank reconciliation of the trust bank accounts and all the other payments, and then theaccountants provide a sign-off on that to MIFCo.

Senator O’BRIEN—So all of these administrative costs of MIFCo are being paid for outof the levy, aren’t they?

Ms Addison—They are being paid for currently from MIFCo’s loan funds. Initially, theywere paid for out of the $2.75 million grant. MIFCo is self-funding from its own loan funds,so to the extent that the levy will ultimately repay the loan, yes, but it is not as direct as that.MIFCo only uses or has made a draw down from its loan to meet its administrative expenses.It will make another draw down from its loan in the near future to do that, because the loanwill actually be cancelled on 15 July this year. Thereafter, MIFCo will just hold sufficientfunds to meet what we have estimated to be its administration costs to the conclusion of theloan.

Senator O’BRIEN—So the loan will be cancelled on 15 July this year?

Ms Addison—Yes.

Senator O’BRIEN—This is the loan that is funding the redundancies? Is that the one youmean?

Ms Addison—Yes.

Senator O’BRIEN—What do you mean by ‘cancelled’?

Ms Addison—We still have a loan. The loan was in the form of a cash advance facility andthe cash advance facility ceases to be available on 15 July.

Senator O’BRIEN—Does that mean it is totally drawn?

Ms Addison—No, Senator. We will only have drawn what is required. The cash advancefacility, as we reported, is $220 million, but we will not draw that amount.

Senator O’BRIEN—How much is expected to be drawn?

Ms Addison—Probably in the order of $192 million to $197 million. It is because we arecapitalising interest at the moment. What will actually have been drawn will be in the order of$180 million and then capitalised interest and charges will be on top of that. So when we getto 15 July, the amount will obviously be higher than $180 million, once you add thoseamounts on top.

Senator O’BRIEN—Does that depend on a variation in interest rates or is there a fixedinterest rate on the loan?

Ms Addison—The MIFCo board last September, with the government’s authorisation,undertook and fixed the interest rate on $150 million of its borrowings, so currently theinterest rate fluctuation makes no difference to that proportion. However, the balance of itsborrowings above the $150 million is subject to the floating interest rate. However, we workon three-monthly funding periods, and it is a floating rate fixed every quarter; and the lastquarter was fixed in April and so we are not subject to the current interest rate fluctuations.

Senator O’BRIEN—What is the interest rate that is applying?

Dr Feeney—To the $150 million?

Senator O’BRIEN—That should be easily ascertained.



Ms Addison—I would have to take that notice.

Senator O’BRIEN—All of these are calculations that have been discussed in some detailwhich affected ultimately amendments which went through the Senate and were adopted bythe House on the available guarantee for the loan.

Dr Feeney—I think Ms Addison is just saying that she does not have that figure in hand atthe moment.

Senator O’BRIEN—The actual interest rate for the totality— in other words, how youwork out between the fixed interest and the variable interest components and draw togetherthe total interest rate being paid for the funds which have been borrowed?

Dr Feeney—The total interest bill will not be able to be calculated until at least July.

Senator O’BRIEN—The interest rate?

Dr Feeney—I do not think that is commercial-in-confidence, but we will simply have totake that one on notice, Senator.

Senator O’BRIEN—In terms of the loan, is there any change to the expected repaymentdate based on levies received?

Ms Addison—As I explained, the MIFCo board undertook to fix the interest rate on $150million of its borrowings. At the time it did that, its bankers determined a fixed repaymentschedule. The fixed repayment schedule has repayments on the $150 million determined until2010. The floating proportion that will be fixed around 15 July will have a differentrepayment schedule—fixed, however—and a different end date; but at this stage, because the$150 million had the interest rate fixed and a fixed repayment schedule determined to 2010,the final date for the loan repayment will be as per that current repayment schedule.

Dr Feeney—The MIFCo board do look pretty regularly at their major obligation, which isthe loans. If at any stage, because of the flow of funds from the levy, they think they canreduce the interest bill by renegotiating the terms, they will. But you realise they arerenegotiating a fixed interest loan. Depending on where interest rates are going, you might beable to make money on it. Sometimes the penalties of moving away from that interest rateoffset that, but they have it under review regularly.

Senator O’BRIEN—I think, Dr Feeney, you said in an earlier answer that the volume ofcargo had increased by 15 per cent. Does that have an impact on levy collection?

Dr Feeney—Clearly, it does. We anticipated an increase in the order of five per cent perannum. The levy has now been in place for just a bit over a year, so it is probably still a littleearly to do projections over the next eight years. Clearly, if that trend continues in the future,the levy collection period will be much shorter than anticipated and therefore funds will beavailable much earlier. Again, that is something for the MIFCo board to see whether thatmeans it is advantageous to pay off the loan earlier.

Senator O’BRIEN—If they can renegotiate that $150 million fixed term loan?


Senator O’BRIEN—Which is not entirely within the hands of MIFCo, is it?

Ms Addison—No.

Dr Feeney—Obviously, there is a penalty rate. It really depends on the differentials ofinterest rates at the time.



Senator O’BRIEN—Given that the volume of cargo may trend upwards on an ongoingbasis, is it an option to reduce the rate of the levy?

Dr Feeney—It is clearly an option, but there is no thought at the moment to change that.My feeling is that industry would probably prefer to have the levy terminated sooner ratherthan later. In the end, the levy will collect a certain amount of money, which is the drawdowns plus the interest and some administrative costs. I think the industry would like thatcollected sooner, rather than stringing it out a bit longer. It is an option but, as I said, it is notreally an issue at the moment.

Senator O’BRIEN—So the potential is that, in the scenario that there is a continuingincreased volume of cargo which is more than what was expected when the levy was struck,you would have collected enough levy to repay the loan well before the payments expire?

Dr Feeney—Yes, that is right.

Senator O’BRIEN—So there is an option potentially to curtail the levy well before 2010?That is based upon the current scenario.

Dr Feeney—That is right, because the levy will only go as far as collecting the exactamount of money that is required to repay the loan and administration. As I said, the maincomponent of that is the interest bill and we will have a very good handle on the actual loanand interest bill during this year.

Senator O’BRIEN—Are the performance benchmarks which are the subject of thewaterfront reform a matter between the stevedores and the government?

Dr Feeney—The benchmarks are the same benchmarks we talked about earlier.

Senator O’BRIEN—Is there any acquittal requirement between the stevedoringcompanies and the government in relation to those benchmarks? They signed up to get thefunds, but are there obligations in relation to those?

Dr Feeney—The only obligation is to report six monthly to the government about theirprogress against the benchmarks.

Senator O’BRIEN—I take it there is nothing in the deeds of agreement between MIFCoand the companies which relates to the stevedoring benchmarks?

Dr Feeney—In relation to the agreements between MIFCo and P&O and the ones thathave been done subsequent to that, they have that requirement for the six-monthly reports.

ACTING CHAIR (Senator McGauran)—We will take a 15-minute break.

Proceedings suspended from 10.45 a.m. to 11.00 a.m.

AIRSERVICES AUSTRALIACIVIL AVIATION SAFETY AUTHORITY

CHAIR—We are going to begin this session with issues relating to Derby Air Services andOrd Air Charter. I think that involves officers from Airservices and CASA. My first questionrelates to Derby Air Services and the problems we experienced during the floods in theKimberleys that resulted from the cyclone that went right around Australia. There were anumber of issues raised then. Can I get an update on whether all issues have been resolved?



Ms Beetham—The situation in relation to Derby Air Services was that, following actiontaken by CASA against Ord Air, which is a matter CASA is dealing with, they cut theirservices back to comply very strictly with the CASA rules relating to charter services. Thedepartment, working with Australia Post, was able to affect an arrangement whereby DerbyAir continued to carry not only mail but also other goods and services—fresh food suppliesand so on—on the routes that it serviced. Subsequently, CASA has announced that it is goingto change its policy about the classification of operations of charters and services in the westand generally so that aircraft below 5,700 kilograms are classified as aerial. The effect of thatwas that, once Derby Air was told that, it resumed its normal services and we did not have topersist with the special arrangement we had put in place with Australia Post. The upshot of allof that is that they are now carrying mail, food and other cargo to the people on its route.

CHAIR—Including passengers?

Ms Beetham—They are not carrying passengers at the moment. If operators up therewanted to carry passengers they could apply for a special RPT category and certification thatwould enable them to do that. I think I mentioned last night, in responses on another matter,that CASA is in the process of rolling out that policy of extending special category RPTlicences to operators in the west.

CHAIR—Are all the stations, properties and communities now being serviced by thesenew arrangements?

Mr Beetham—That is my understanding, certainly in relation to Derby Air. Ord Air’sAOC has been terminated, at least for the moment. We are working closely with the Ord Airpeople and they have chartered other carriers to run their routes and provide their services. Tomy knowledge, both the Ord Air routes and the Derby Air services are running as they usedto, short of Derby Air carry any passengers.

CHAIR—What is the status of Ord Air? I understand the legal action has started. Iunderstand that some of this could be sub judice so I have to be careful what I ask and whatyou answer. Is the issue between CASA and Ord Air before the courts now? What is the stateof play?

Mr Elder—Ord Air Charter has taken the matter to the Administrative Appeals Tribunaland the Federal Court and as such we are unable to comment on that. It is essentially subjudice and my colleague the General Counsel, Peter Ilyk, from CASA is available to expandon that if you wish.

CHAIR—I think it would be useful. Can you add anything to the current state of play?

Mr Ilyk—There is nothing I can really add to that. The matter is currently before theFederal Court and the AAT. As such, it is not appropriate for us to be discussing the matter.

CHAIR—Following Ms Beetham’s answer, can I be assured that there is nothing thatrestricts Ord Air Charter from contracting out and providing the services to the stations andthe communities? There are a couple of Aboriginal communities in Arnhem Land as well whoare affected by this, I understand.

Mr Ilyk—There is nothing to stop them provided they cannot do it themselves.

CHAIR—No, contracting out.

Mr Ilyk—Yes.

CHAIR—All the communities and all the stations are covered, to the best of yourknowledge, from the Ord Air Charter side of it, not the Derby Air charter side of it.



Mr Ilyk—I am not aware of the actual details of that.

Mr Elder—That is essentially a matter between the department who is responsible forRAS and Australia Post and the operator.

Ms Beetham—As I indicated, my understanding is that all the services that were beingserviced by Ord Air are continuing but under this arrangement whereby they have charteredpeople to provide those services.

CHAIR—Are there still any emergency powers because of the cyclone and the damage orhas that all been cleared now and finished?

Ms Beetham—I am not aware of that. I do not know the answer to that. We have not hadto invoke them.

CHAIR—I will find out from the state government. Thank you very much.

Senator O’BRIEN—Was that a suspension or a cancellation of Ord Air’s AOC?

Mr Elder—When it came time for renewal of the AOC, the renewal lapsed. It was notrenewed by CASA.

Senator O’BRIEN—CASA declined to renew it. Is that what you mean?

Mr Elder—Yes.

CHAIR—Thanks for coming back. We will now return to Maritime Transport.

[11.07 a.m.]DEPARTMENT OF TRANSPORT AND REGIONAL SERVICES

Maritime TransportSenator O’BRIEN—What are the GST implications in relation to the collection of the

levy, the costs and the costs incurred in administering the levy?

Dr Feeney—The actual payment of the levy is not GSTable. In relation to the costs of ouradministration—

Senator O’BRIEN—Yours and MIFCos?

Dr Feeney—And MIFCos, all those costs are broken up. Salaries for employees areobviously not GSTable, but to the extent that we purchase services such as legal fees,accountancy fees and other consultants, they would be GSTable. But, again, the departmentand MIFCo would be able to claim input credits in relation to that.

Senator O’BRIEN—Thanks for that. Generally you were getting me some informationabout survey material on TEU charges from an earlier question.

Mr Bowdler—Yes.

Senator O’BRIEN—Do you have that now?

Mr Bowdler—In terms of page 14 of Waterline, the figure is $181 TEU for stevedoring. Interms of the currency of that figure, the revision to the $181 will be available in October. It isdone by the ACCC in their monitoring report. It would not appear in Waterline until theMarch edition next year when we do the July-December comparison. We do the interfacecosts in half years.

Senator O’BRIEN—Is there any published material that the department is aware of whichindicates the impact of the GST on TEU charges?



Mr Bowdler—No.

Senator O’BRIEN—Is that something the department will be inquiring into, or is thatBTE’s job?

Mr Bowdler—Are you talking in terms of monitoring, analysis or policy positions?

Senator O’BRIEN—You are monitoring TEU charges. From 1 July I would expect thatthere will be an impact on those charges from the GST. Has the department done any work onwhat that impact will be?

Dr Feeney—I think the only information we have is that the impact on the water transportsector generally is that there will be a reduction of, I think, 4.7 per cent. I cannot rememberexactly. That is the only information we have from that Treasury modelling.

Senator O’BRIEN—That is the Treasury modelling figure but not the actual figures?

Dr Feeney—It is hard to have actuals.

Senator O’BRIEN—I understand that only to the extent that charges have been announcedcould you have those. I am not aware of any publicly available material, but perhaps thedepartment is?

Mr Bowdler—I think the general answer I gave before was no, we have not done anywork in this regard. I suppose we would see GST impacts on a throughput issue like that to bemore of a cash flow issue for the companies and so on involved to be able to claim the credits.It should not have any net impact.

Senator O’BRIEN—As an export, they most certainly would be able to claim the creditswithout an impact on this economy.

Mr Bowdler—Yes, but it should work the other way.

Senator O’BRIEN—But with the other way, wouldn’t the charges impact on thecommunity, that is, they would be passed on? They have to be passed on, don’t they?

Mr Bowdler—In the end a tax like that goes more to the final consumers, but in terms ofthe throughput it should not be a net issue through that port interface. But we have not lookedat this specifically, so that is a preliminary assessment.

Senator O’BRIEN—Okay. We will need to follow that up later. I want to go now toperformance indicators. In last year’s PBS, 1999-2000, and particularly at the last fullhearings in May, Senator Macdonald advised the government was reviewing its maritimepolicy. That was in the May-June estimates; it is mentioned in the 1 June 1999 Hansard, page124. Can someone advise the committee of the outcome of the process of review that wasconfirmed to be under way by the minister last June?

Dr Feeney—I am not quite sure which review you are talking about.

Senator Ian Macdonald—Have you got the Hansard reference there?

Senator O’BRIEN—Yes, I should have. I thought I had it. No, I do not appear to have itwith me. My note says it is on page 124 of the Hansard of 1 June 1999.

Senator Ian Macdonald—I doubt whether any of us would have that here. That is abouttwo dozen estimates ago, isn’t it?



Senator O’BRIEN—You are gilding the lily there, Minister.

Senator Ian Macdonald—It just feels like it!

Dr Feeney—Is this in relation to the Stevedoring Industry Finance Committee?

Senator O’BRIEN—I noticed that the government was reviewing its maritime policy.

Dr Feeney—I am aware of a question, No. 1242, from estimates last year. That is all aboutthe Stevedoring Industry Finance Committee and about our reviewing the position there. I donot know if that is what you mean.

Senator O’BRIEN—We will come back to that; I will double-check it. On page 47 of lastyear’s PBS, what happened to the drafting of the legislation to implement our internationalobligations and to require proof of adequate vessel insurance? That is in the second box on theright-hand side.

Dr Feeney—The drafting instructions relating to the international maritime obligationswere lodged with the Office of Parliamentary Counsel on 15 June last year, and theinstructions relating to insurance issues were lodged on 27 June last year. We do not have acommitment in relation to when the legislation will actually be introduced.

Senator O’BRIEN—But the drafting is done?

Dr Feeney—Yes. The bill for the insurance is expected to be ready for introduction in thecurrent sittings. We are aiming for introduction in the last week of June, but that is subject toother issues.

Senator O’BRIEN—Will the review of the Navigation Act be completed by June thisyear?

Dr Feeney—Yes. It is almost complete now. They have undertaken quite an extensiveconsultation process with industry and unions, and my understanding is that it will bepresented to the minister in June.

Senator O’BRIEN—Has the review of the national plan to combat pollution of the sea byoil and other noxious substances been completed?

Dr Feeney—No. Again, it is almost complete. I think the committee had their last meetinglast week or the week before, so their final report should be ready before June.

Senator O’BRIEN—The last passage in that box is, ‘Annual monitoring of effectivenessand review of rates for the Bass Strait Passenger Vehicle Equalisation Scheme completed byJune.’ Has that been done? I think you may have referred to that earlier.

Dr Feeney—The annual review of rates was done in December last year.

Senator O’BRIEN—What about the monitoring of effectiveness?

Dr Feeney—The one on effectiveness has just been completed, and it is to be sent to theminister.

Senator O’BRIEN—The review on rates was announced, wasn’t it?

Dr Feeney—There was no change to rates.

Senator O’BRIEN—Who does the review on rates?



Dr Feeney—The BTE.

Senator O’BRIEN—Who does the monitoring and the review of effectiveness?

Dr Feeney—That is the BTE. Sorry, my division does the actual review on rates and theBTE does the effectiveness.

Senator O’BRIEN—Did the following bodies lodge their corporate business plans for1999-2000: the Maritime Safety Authority?

Dr Feeney—Yes, I understand they did.

Senator O’BRIEN—The Australian Maritime College?

Dr Feeney—The Maritime College have developed a corporate plan for 2000 to 2004.They have just considered that recently. They do a four-yearly cycle. Presumably that meansthey did one before they came into our portfolio.

Senator O’BRIEN—Does that meet their obligations under the CommonwealthAuthorities and Companies Act?

Dr Feeney—My understanding is yes.

Senator O’BRIEN—The Australian River Co. Ltd?

Dr Feeney—As you can appreciate, the Australian River Co. is the residual of ANL. It isnot really an operating company, but it did provide its cash flow projections to 2006.Essentially that is all River Co. is: it just has a number of leases. It is not really operating assuch. The information it provided was satisfactory.

Senator O’BRIEN—Does that meet their obligations under the CommonwealthAuthorities and Companies Act?

Dr Feeney—Yes.

Senator O’BRIEN—Has MIFCo lodged a corporate business plan for 1999-2000?

Dr Feeney—Due to its status as a wholly owned Commonwealth company limited byguarantee, it does not need to develop a corporate plan, and it has not.

Senator O’BRIEN—What is the story with the Stevedoring Industry Finance Company?

Dr Feeney—It is not a GBE and it does not have a requirement and it has not developed acorporate plan. Again, its activities are very, very limited.

Senator O’BRIEN—Of those five entities, have all met their other obligations under theCommonwealth Authorities and Companies Act?

Dr Feeney—I am not aware of them not. I will clarify that, but my understanding is thatthey have met them all.

Senator O’BRIEN—I asked that as a broad question.

Dr Feeney—My understanding is that they have met them all.

Senator O’BRIEN—That is all I have in that area. My next questions are for AMSA.

CHAIR—I thank Dr Feeney and Mr Bowdler for being here with us today.

[11.21 a.m.]AUSTRALIAN MARITIME SAFETY AUTHORITY



CHAIR—I welcome the AMSA officers to the table.

Senator O’BRIEN—Mr Davidson, at estimates hearings in June of last year you advisedthat you were meeting your goals in relation to finding people in distress or difficulty. Thatwas a 99 per cent availability of the ground segment of the COSPAS-SARSAT system. Doyou have any data one year on in relation to that target?

Mr Davidson—I have. Certainly during 1999-2000, the COSPAS-SARSAT systemavailability is at 99.7 per cent compared to 99.3 per cent and 100 per cent respectively in theprevious two years.

Senator O’BRIEN—How do you measure that activity?

Mr Davidson—The system is monitored continuously by a remote monitoring system and,when it goes down, the amount of time that it is unavailable is recorded.

Senator O’BRIEN—What does 0.3 of one per cent reflect in terms of total downtime ofthe system?

Mr Davidson—Directly in terms of number of minutes per annum, I do not have thosenumbers with me.

Senator O’BRIEN—I suppose it is calculable.

Mr Davidson—Yes, it is.

Senator O’BRIEN—I am just not quick enough to do the calculation. I have not got acalculator in front of me.

Mr Davidson—Correct. And the other factor that needs to be taken into account is thenumber of actual downtime incidents that take place. It may be off the air for only a matter ofminutes in certain circumstances. In terms of the overall integrity of the system, given theinterrelationship between EPIRBs being activated, satellite passes directly overhead of anEPIRB and so forth, we believe that that has met its overall safety objectives satisfactorily.

Senator O’BRIEN—You would record the number of downtime incidents and the time foreach, as well as the total time, obviously?

Mr Davidson—Yes. The target that we have set of 99.5 per cent takes into account thesafety outcome we are trying to achieve from the system. We believe that is being exceeded.

Senator O’BRIEN—One per cent, by my calculation, is a bit over 3½ days. Half a percent is half of that. So it is slightly under two days a year in total. How many downtimeincidents would you expect in that maximum downtime period that you are targeting for at 0.5of one per cent?

Mr Davidson—I do not have that detail with me. We can come back with that.

Senator O’BRIEN—For the system to be down in one period for that time would be morecritical than 100 small incidents. Do you have a target at all for that?

Mr Davidson—Not down to any specific breakdown that I have with me. There is anoverall system.

Senator O’BRIEN—Can you give us that information on notice, please?

Mr Davidson—Yes.

Senator O’BRIEN—Thanks. You are talking about the INMARSAT services, and we aretalking about the same thing as I said earlier.



Mr Davidson—COSPAS-SARSAT services is what we are talking about there.

Senator O’BRIEN—For INMARSAT you again, as I understand it, have a target of 99.5per cent.

Mr Davidson—Yes.

Senator O’BRIEN—Last year you said you were achieving that goal.

Mr Davidson—Yes.

Senator O’BRIEN—Was the target met throughout the current financial year—that is,1999-2000?

Mr Davidson—We have a marginal average of 99.7 per cent year to date for the PacificOcean region and 99.77 per cent for the Indian Ocean region.

Senator O’BRIEN—Again, downtime incidents are collected and totalled to get thatfigure, are they?

Mr Davidson—That service is provided through Telstra’s earth station in Perth, WesternAustralia, and Telstra maintain the records on that. So I am not sure what details we haveother than we certainly do get—

Senator O’BRIEN—So they tell you yearly, quarterly, monthly?

Mr Davidson—Monthly, yes.

Senator O’BRIEN—So you have monthly figures on downtime statistics. Can they besupplied to the committee?

Mr Davidson—Yes, certainly.

Senator O’BRIEN—On terrestrial communication services, your target last budget wasalso 99.5 per cent. Basically it was the same for the coming financial year.

Mr Davidson—That is correct. From the year to date figures we have got 100 per centavailability on that system. Again it is maintained through Telstra.

Senator O’BRIEN—Output 1.2 from the 1999-2000 budget is on page 113. It refers to asystem to coordinate the location and recovery of persons in distress. The first measure wasthe ratio of persons saved relative to the number of persons at risk. In answer 01 to a questionon notice you advise that the ratio of persons saved relative to those at risk was 95.6 per centin 1997-98 and 96.4 per cent for 1 July 1998 to 1999. Presumably you have the whole yearfigure for 1998-99 available?

Mr Davidson—Yes, we have.

Senator O’BRIEN—What is it?

Mr Davidson—It is 96.4 per cent.

Senator O’BRIEN—So it continued at that rate. What is the ratio for the current financialyear to the end?

Mr Davidson—The current rate to date is 93.75 per cent.

Senator O’BRIEN—What is the definition you apply to get these numbers?

Mr Davidson—A person is defined to be at risk if the person has a chance of surviving theinitial incident. For example, if an aircraft crashes into the sea and there is evidently nochance of survival, those individuals would not be regarded as being brought into those



statistics. But where there has been evidence that there was a chance of survival we will countthat as being an at-risk person.

Senator O’BRIEN—So in your base number for the whole of last year, how many personscomprised the 100 per cent figure?

Mr Davidson—In 1998-99, 279 people were considered at risk, with AUSSAR alsosuccessfully coordinating the rescue of 269 of those.

Senator O’BRIEN—Was that a typical year in persons at risk numbers? There wouldobviously be fluctuations.

Mr Davidson—It seems to be of that sort of order, yes. The monthly average this year hasbeen about 32 people that we considered to be at risk, and that equates roughly to those sortsof numbers.

Senator O’BRIEN—The same answer advised me that the ratio of searches resolved tosearches undertaken was 97.1 per cent in 1997-98, and 98.7 per cent for July 1998 toMay 1999. Can you update those figures for me, please?

Mr Davidson—Those figures are right. For the full year 1998-99, there were a total of 447incidents. Six of those were considered unresolved, which is a 1.3 per cent reduction. So thatis 98.7 per cent. I do not have the previous year’s numbers with me.

Senator O’BRIEN—If you could tell us those on notice, that would be good. I am sorry,but that figure you have given of 447 was for the current financial year to date?

Mr Davidson—No. For the current financial year to date, we have a monthly average ofapproximately 35 incidents, and 26 to date I considered unresolved. That, on our calculation,is 75.4 per cent.

Senator O’BRIEN—What are the targets for those ratios in the coming year?

Mr Davidson—We are targeting 100 per cent in all those categories.

Senator O’BRIEN—Are there special factors which would explain the decline inoutcomes this year?

Mr Davidson—There are. There have been a couple of unresolved incidents: searching formissing fishermen on the Great Barrier Reef and, similarly, a sailor overboard in the TorresStrait. There has also been a larger number than usual of distress beacons which weredeactivated before they were located. So we have had a distress beacon signalling that there issome distress, we have responded to it, and then it has been deactivated and we have not beenable to resolve it. So that has been at a level that is unusual this year.

Senator O’BRIEN—You mean the probability is that someone activated it, got out oftrouble and turned it off—

Mr Davidson—Yes.

Senator O’BRIEN—or it ceased functioning?

Mr Davidson—It could be that. It might have been inadvertent activation and, again, theyrealised that and turned it off, or it may have been a malicious activation that was then turnedoff to avoid detection.

Senator O’BRIEN—In output 1.2 on page 113, I go to the second box on the right-handside under the ‘timeliness’ heading. This was clearly identified by AMSA as an indicator ofperformance in last year’s budget, and an important one. I asked about this particular indicator



at the time. But, in an answer provided on notice—that is, AMSA 02—after those hearings,you advised me that AMSA did not collect this information specifically. It says:

Has that happened now?Mr Davidson—Yes, it has. The incident register was established and is operating and

capturing the raw data from 1 July last year. The nature of this particular key measure is thatwe will only be doing the manipulation of that data at the end of the year. It is quite a complexissue. We will be reporting that in our annual report for 1999-2000.

Senator O’BRIEN—I now go to page 159 of this year’s statement, the second last box onthe right-hand side. Can you tell me exactly what that indicator under the heading ‘timeliness’means? This is the one that says ‘median average time taken to respond by first asset (target:various response times in accordance with the SRU request for tender documentation)’. Ithink it is the same as last year’s.

Mr Davidson—We have gone out to tender for the provision of aviation resources torespond to marine incidents. The nature of that tender has identified that, in certain areas, wecan demand certain response times from providers. But we have to recognise that location ofan incident may necessitate our having different response times, depending on where theincident is and where the unit is located. So we have a range of response times.

Senator O’BRIEN—In your tender documentation?

Mr Davidson—That is correct, yes.

Senator O’BRIEN—The next performance indicator under the old 1.2 on page 113 of the1999-2000 PBS was the total number of reports requiring follow-up actions against the totalnumber of reports received—and this was the target number for last year. Can you give mesome numbers on the total number of reports requiring search actions against the total numberof reports received?

Mr Davidson—I can. During 1999-2000, there was a monthly average of 19,569 Ausrepreports received. Of those, 19 on average each month—or 1.27 per cent—required follow-upaction. During 1998-99, there was a total of just under 250,000 Ausrep reports, with justunder 4,000 requiring follow-up action, which was 1.6 per cent. There were no Ausrep reportsrequiring search action during the year.

Senator O’BRIEN—The next indicator in last year’s paper is related to the number oftraining courses for search and rescue practitioners achieving certification. The target was 30weeks training, five courses, and the target for the actual number of training sessions was setat 81. You told us last year that this indicator related to the training of civil search and rescueunits to use the equipment they hold and training people to be observers, and you had a profileof training output for the authority. You said that profile of training in AMSA would beconsistent with this target. In answer to a question on notice you told me that, for the period 1July 1998 to 31 May 1999, your training school conducted 11 formal courses covering 18weeks of instruction and facilitated a further 84 weeks of on-the-job training assessment andsearch and rescue exercises. Do you have the full data for 1998-99?

Mr Davidson—That was the full data for 1998-99.

Senator O’BRIEN—July to 31 May?

Mr Davidson—I am sorry. For 1998-99, there were 11 formal courses covering 18 weeksof instruction and a further 12 weeks of on-the-job training. So that, in fact, covered off thefull amount.



Senator O’BRIEN—So there were a further 12 on top of the 84 you advised?

Mr Davidson—No. The total for 1998-99 was 11 formal courses covering 18 weeks ofinstruction and an additional—on top of that 18 weeks—12 weeks of on-the-job trainingassessment and search and rescue exercises.

Senator O’BRIEN—The answer to a question on notice that I received in relation to theperiod 1 July 1998 to 31 May 1999 gave those figures as 11 formal courses covering 18weeks of instruction. Then it says you ‘facilitated a further 84 weeks of on-the-job training,assessment and search and rescue exercises’.

Mr Davidson—I will need to clarify that because the 84 weeks does not—

Senator O’BRIEN—It does not compute.

Mr Davidson—It does not compute with me at the moment.

Senator O’BRIEN—Can you give me the data for the current year?

Mr Davidson—In 1999-2000, the school conducted five formal courses covering 19 weeksof instruction and facilitated a further 12 weeks of on-the-job training.

Senator O’BRIEN—These numbers relate to in-house training and training for othersearch and rescue authorities in the Australian Defence Force. I did not think that was afeature of last year’s performance indicator. Is it fair to say that the training was provided on acommercial basis?

Mr Davidson—No.

Senator O’BRIEN—It is funded out of your budget without any financial payments by thecourse attendees who are from outside the safety authority?

Mr Munro—That is correct.

Senator O’BRIEN—Can you give me details of the budget for training?

Mr Davidson—I do not think I have them of that granularity here at the moment. We willcome back to you with that.

Senator O’BRIEN—Thank you. Can you update the data in relation to civil search andrescue units? For the period 1 July 1998 to 31 May 1999, there were 72 training positions, and335 pilots and crew members were being trained. I am asking for the full financial yearfigures for 1998-99 and the current year to date figures.

Mr Davidson—I have not got the complete set of data here, but I will come back to youwith those data. In 1999-2000, a total number of 81 training sessions were conducted,compared with 77 in 1998-99. I will get the balance of that information for you.

Senator O’BRIEN—So 72 became 77, and you have done to date 81?

Mr Davidson—Yes, 81.

Senator O’BRIEN—On page 159 of this year’s budget statement, the second box on theright-hand side covers training. The quantitative target is:... 380 operators and 81 training events based on current year estimate, subject to the outcome of astrategic and pricing review of AusSAR.

Are we comparing like with like here? Can you provide the committee with some detail onthe pricing and strategic review of AusSAR?



Mr Davidson—There will be comparable statistics provided in terms of the average costof searches and so forth. At the establishment of AusSAR, the government determined thatthey would let it operate for a couple of years and then review whether the resources and thescope of its operations and so on were appropriate. That is a separate exercise that is justabout to get under way.

Senator O’BRIEN—Who will be doing the review?

Mr Davidson—It is a collaborative review with the Department of Finance andAdministration, the Department of Transport and Regional Services and AMSA. They will bebringing in appropriate resources and consultants to assist in that review.

Senator O’BRIEN—On page 164 of the 2000-01 PBS, there is a heading ‘BudgetedStatement of Revenue and Expenses’ and a subheading ‘Operating expenses’. Can youexplain those numbers to me? Am I correct in saying that there will be an ongoing reductionin staff numbers over the next couple of years and a related increase in the use of contractors?The numbers there go from $31.8 million and $7.8 million to $21.8 million and $20 million.

Mr Davidson—That is correct, yes.

Senator O’BRIEN—So that means that there will be a reduction in staff and an increase inthe use of contractors?

Mr Davidson—Yes, that is what that reflects.

Senator O’BRIEN—Can you get me the numbers that you are working from for thosecalculations, particularly in relation to staff?

Mr Davidson—Yes.

Senator O’BRIEN—So you have the figures for the current financial year, 1999-2000,you have the projections for 2000-01, and you have a forward estimate for 2001-02?

Mr Davidson—Page 153 provides the estimated actual for 1999-2000 and staff numbersfor the 2000-01 budget year. We will provide you with the subsequent year.

Senator O’BRIEN—Where are the actual staff numbers on page 153?

Mr Davidson—In the grey box at the top, at the last line, where it says ‘Staff Years(Number)’.

Senator O’BRIEN—I see. It goes down from the estimated actual 1999-2000 of 360 toyour projections for the coming financial year, 2000-01, of 269. Will you get me the figuresprojected for 2001-02?

Mr Davidson—We can provide those.

Senator O’BRIEN—How does that fit with your training targets of 30 weeks training andfive courses?

Mr Davidson—That will not be affected at all. Those staff reductions are taking place inour engineering and maintenance operations area, which is lighthouse servicing andmaintenance, and the reduction is as a result of the anticipated sale of the vessel, the CapeGrafton.

Senator O’BRIEN—I will go back to last year’s output 2.3 on page 113 of the PBS. Yourtarget was inspecting 25 per cent of the total number of eligible foreign vessels. We have notcompleted the year which is the subject of that target, but are you achieving that goal?

Mr Davidson—Yes, we are. We are inspecting around 50 per cent.



Senator O’BRIEN—What was the actual percentage for the 1998-99 year, and how do wejudge that target? Do you set yourself a low target and achieve double that? Was that anincrease on the previous year?

Mr Davidson—No. The answer to that is that, under our agreements with port statecontrol, there are MOUs, memoranda of understanding, that operate internationally that settargets for inspection rates. Under the Tokyo MOU, of which we are a member, the target ratewas set at 25 per cent. Historically, Australia had been inspecting it at around 50 per cent, andwe have maintained that. At a recent meeting of the Asia-Pacific MOU, they raised theregional targets to 75 per cent.

Senator O’BRIEN—In an answer that AMSA provided to me in relation to the June 1999estimates, you set out a box with a ‘type of vessel’ categorisation of A1, A2, A3, B1, B2 or C.There is also a range of minimum target inspection levels from 85 per cent through to 15 percent. Firstly, are those target percentages still in place, or have some varied?

Mr Davidson—No, those are still the current applicable rates.

Senator O’BRIEN—Secondly, can you get me some numbers on how effective AMSAhas been over the last year in meeting those various targets?

Mr Davidson—Yes, I will need to provide those to you because I do not have in front ofme the breakdown into those categories.

Senator O’BRIEN—If any of the targets were not achieved, can you provide anexplanation as to why they were not?

Mr Davidson—Yes, certainly.

Senator O’BRIEN—Is AMSA advised of all single and all continuous voyage permitapplications including those of container vessels?

Mr Davidson—No. We are advised of single voyage permits in relation to tankers andbulk carriers.

Senator O’BRIEN—So you receive no notification of single voyage permits outside ofthose two categories.

Mr Davidson—That is correct.

Dr Feeney—I think Mr Davidson is talking about whether we advise them of that beforethey are issued. But in relation to all SVPs and CVPs, we do advise them after the fact of onesthat are issued on a regular basis. But for the general cargo vessels we do not provide thatinformation before approval.

Senator O’BRIEN—When you say after approval, how long after approval?

Dr Feeney—It is on a regular basis. I am not quite sure whether it is monthly or quarterly.

Senator O’BRIEN—If it is quarterly, they could be on and off the coast before AMSA—

Dr Feeney—As I said, in relation to that, we are not seeking their views and we are notconcerned about it. It is for their information in relation to general cargo. As I said, generalcargo is not a concern in relation to the issuing of single voyage permits. We rely on the portstate control process, whereas for higher risk cargo, which is petroleum tankers and bulkcarriers, we do seek their advice beforehand.

Senator O’BRIEN—So you seek their advice and based on that advice you consider theapplication and you let them know whether you have approved the application, I presume.



Dr Feeney—Afterwards we advise them on a regular basis.

Senator O’BRIEN—Can you let me know how frequently? What is the frequency? It isvery good that you seek AMSA’s advice beforehand and that may be enough alert. I am notsure. If they received advice quarterly, it may well be after these higher risk vessels have beenand gone off the coast.

Dr Feeney—We advise the high risk vessels beforehand and get their advice.

Senator O’BRIEN—But as to your action following that advice—that is what I am talkingabout—if you have approved a single voyage permit, for example, or even a continuousvoyage permit, you tell them monthly or quarterly but you are not sure. Can you give us thedetail of that?

Dr Feeney—Yes.

Senator O’BRIEN—AMSA presumably has a recording system which keeps all theadvices and details of communications between AMSA and the department on those issues.

Mr Davidson—Yes, we do.

Senator O’BRIEN—What is it? A database system or hard copy file system?

Mr Davidson—Both. It is a database system but where hard copy is exchanged for sometransactions we would keep records of that as well.

Senator O’BRIEN—When you receive the notification that a permit is being granted,what is the process that AMSA follows then? There is a variety of categories.

Mr Davidson—If an SVP has been issued and we are notified after the event of the SVP,we take no particular action in relation to that. We have a program of inspection under ourport state control regime, which is the target rates that you have on that category of ships. Wewill aim to inspect across the board, and some of them may or may not get captured if theyare currently issued and operating with an SVP.

Senator O’BRIEN—Can you provide the committee with details of how manyoccupational health and safety audits were undertaken on foreign vessels operating inAustralia on permits in 1998-99 and so far in 1999-2000 if that data is available?

Mr Davidson—I will clarify that somewhat. We do not specifically do OH&S audits. Aport state control inspection covers a wide range of aspects associated with the safe operationof the vessel and, to the extent that there are occupational health and safety matters that affectthe operation, they will be picked up in that process. We have instructions to surveyors thatidentify the sorts of categories they are to look for, and we have a marine order in relation tosubstandard ships that also identifies some of those matters. On that basis, during the 1999calendar year we had approximately 316 deficiencies noted in relation to accommodation and208 in relation to food and catering. That represents just under three per cent of totaldeficiencies identified on vessels in relation to accommodation and just under two per cent oftotal deficiencies identified on vessels in relation to food and catering.

Senator O’BRIEN—How many vessel inspections are we talking about?

Mr Davidson—In terms of total number?

Senator O’BRIEN—I am talking about overseas. I am not sure. You talked about thosenumbers. Do they relate to foreign vessels operating—

Mr Davidson—They are port state control inspections. Therefore, they are foreign vessels,yes.



Senator O’BRIEN—Some of those would be on single or continuous voyage permits andsome would be transiting as part of international trade.

Mr Davidson—They would be. I am not sure what the proportion would be. We havesomething like 20,000 ship visits a year into Australia.

Senator O’BRIEN—Yes. And you inspect a variety of numbers depending on the categoryof the vessel, averaging 50 per cent.

Mr Davidson—Yes.

Senator O’BRIEN—Is it possible to break down those numbers on deficiencies intovessels on permits and other visitors?

Mr Davidson—We produce a port state control report on an annual basis which has someof those breakdowns. What I have just quoted you comes from that, so we will provide youwith further details on that.

Senator O’BRIEN—Dr Feeney, is performance at these port state control inspections anissue with single or continuous voyage permits?

Dr Feeney—In relation to the bulk and the petroleum tankers, when we seek advice fromAMSA they normally would comment on the port state control experience of that vessel andthat is factored into a decision.

Senator O’BRIEN—So a poor performance makes it unlikely that they will be granted thepermit.

Dr Feeney—It depends what you mean by ‘poor performance’. The fact that it had somedeficiencies at its last port state control inspection would not necessarily exclude it from beingissued with a continuous single voyage permit. It is a factor that we take into account becauseunder the legislation it is subject to a public interest test and that is the consideration we givethere.

Senator O’BRIEN—Mr Davidson, if a foreign vessel makes a visit and the port statecontrol inspection finds deficiencies and it leaves, when it comes back is it automaticallyinspected again?

Mr Davidson—We will have follow-up inspections generally targeted if it is going toanother port within the operation. If it is going to an external port that is part of our MOUgroup, we will advise them and it will get inspected as a follow-up action at that port. Ourprocess, depending on when it was last inspected and the number of deficiencies, woulddetermine whether it got another inspection at its next arrival.

Senator O’BRIEN—Is there a port state control inspection process to ensure that foreignvessels operating on permits abide by the required rest/fatigue management requirements asnoted in the international conventions?

Mr Davidson—Any vessel that is subject to a port control inspection is checked out for arange of those sorts of things. As to where we stand on that particular matter, I will come backto you.

Senator O’BRIEN—Thanks for that. Does AMSA have a project running called thebusiness improvement project or are you participating in such a project?

Mr Davidson—Yes, we have an internal program which is entitled the businessimprovement program, yes.

Senator O’BRIEN—What is the program designed to achieve?



Mr Davidson—We are looking at the functions, particularly in engineering areas and ourship operations, to see where there are contestable elements that are available from the privatesector and whether we should market test them and whether we should be doing re-engineering and market testing. That is in essence what the program is about.

Senator O’BRIEN—Is that part of the program which we touched on earlier, which was areduction in staff numbers and an increase in contractor services?

Mr Davidson—Yes, it is.

Senator O’BRIEN—Is there any indication you are able to give as to how it will impacton AMSA manning levels in the regional AMSA offices—Cairns, Port Hedland, for example?

Mr Davidson—Not at this stage, but I imagine it would have very minimal impact.

Senator O’BRIEN—Does your annual report set down—I have not noticed it, but it quitepossibly is there—a breakdown of AMSA staff by location?

Mr Davidson—I cannot answer that, but—

Senator O’BRIEN—Could you get me the current breakdown by location, please?

Mr Davidson—Yes, we can.

Senator O’BRIEN—Has there been any progressive winding down of staffing in theregional offices over the last couple of years, apart from lighthouses?

Mr Davidson—Most of the lighthouse numbers are long since gone. Not explicitly than Ican identify.

Mr Munro—There was removal of some corporate services, or centralisation of corporateservices, into Canberra, but not involving significant numbers.

Mr Davidson—We have had adjustments of twos and threes around various areas.

Senator O’BRIEN—So, essentially, the figures that you would give me now, apart fromthat corporate services small number, have not changed over the last couple of years?

Mr Davidson—That would be pretty right. There is one factor: we previously operated aseismic vessel which was then taken off the Australian coast, and there was a reduction of ourship crewing when that happened.

Senator O’BRIEN—Do you have a replacement vessel for it?

Mr Davidson—No, it was a vessel that was being operated on behalf of another entity, andthey ceased operations in Australia.

Senator O’BRIEN—What was your staff doing on the vessel, then?

Mr Davidson—The former Department of Transport in the eighties arranged for thatvessel to be brought to Australia to do certain seismic survey work on behalf of the AustralianGeological Survey Organisation, then BMR, and that was just a continuation of thatoperation.

Senator O’BRIEN—I presume that, when you give me the numbers for 2001-02 as theestimated staffing numbers, they will give an indication of the impact of this businessimprovement project?

Mr Davidson—Yes, they will.

Senator O’BRIEN—Will it be possible to break down those numbers into regionaloffices?



Mr Davidson—We could give a broad indication of where we think the impact will be,yes.

Senator Ian Macdonald—Mr Chairman, just so I can organise myself and the officers, weare going to come back to ATSB, is that correct?

CHAIR—Yes.


Senator Ian Macdonald—Then we have got road and rail.

Senator O’BRIEN—I can indicate I have a limited amount of time to go on this, and areasonably limited time on ATSB.

Senator Ian Macdonald—I was wondering about other senators in relation to road andrail—Democrat or Independent. We have had nothing from them, Mr Chairman.

Senator O’BRIEN—You might have just invited some in, Minister.

Senator Ian Macdonald—I thought there was one in particular who might have somethings.

Senator O’BRIEN—Are you aware that some AMSA staff are canvassing some of yourclients in anticipation of the outsourcing of certain functions?

Mr Davidson—As part of our business improvement program we have actually gone to allof our clients and advised them of the nature of the program, the manner in which it is beingconducted and some of the elements of our anticipated outcomes.

Senator O’BRIEN—That is the official side of it, but what about the potential forunofficial canvassing by staff who see that with your program jobs are going to go so perhapsthey had better establish links that might allow them to become contractors?

Mr Davidson—We have got a code of ethics for AMSA staff and, generally speaking, ourstaff are extraordinarily professional in the way in which they conduct themselves. Part of thereputation of the organisation that I believe exists in this country reflects that professionalism.At the moment, for the engineering maintenance operation group, there are a group of peopleinvolved in that area who are considering whether they would tender for the work. I believethat they are looking at forming themselves into a structure that would allow them to do that.That would not require more involvement than them going and talking with other potentialproviders.

Senator O’BRIEN—Is there a focus on the process of maintaining the necessary corporatememory for an organisation like yours to do its job properly? What I mean by that is thatsome sections of AMSA are likely to be insulated by the review from the outsourcing options.

Mr Davidson—I do not believe so. We have got in place arrangements that will retain ourcorporate knowledge. We have a cell of people which is the designated purchaser group, andthat has been in existence now for over a year and a half. As a cell that existed in the sense ofa small, key policy group, they have developed the skills associated with organising andrequesting work to be done on an internal contracting basis. That has worked quitesatisfactorily—in fact, particularly well to date—and I do not see that we will lose anycorporate knowledge. We have good documentary records. We maintain a good understandingof the nature of the operation.

Senator O’BRIEN—Do you think the navigation, infrastructure and ship inspection areaswould be contestable?



Mr Davidson—They certainly are. Currently we maintain marine navigation aids onbehalf of the Western Australian government. We are a subcontractor to Transfield in thatwork. We maintain the Tasmanian operation for MAST, which is the Tasmanian entity that isresponsible for their marine navigation aids at the state level. And the Victorian ChannelsAuthority have put their work out to a commercial entity. So generally around Australia at themoment there are a number of different methodologies for meeting the engineering servicesfor maintenance of marine navigation aids.

Senator O’BRIEN—So basically everything is up for grabs, or subject to the review.

Mr Munro—Senator O’Brien mentioned ship inspections.

Mr Davidson—No, not ship inspections. That is explicitly not. I will clarify that. Wealready delegate to class certain ship inspection functions related to survey. So if a ship isunder a particular class society, it is under full survey. Some elements of that survey arestatutory requirements, others are not. Some of those statutory surveys we have delegated tothe class societies. But under the high level ISM code—which is the new safety managementcode, internationally structured—we will be the auditor of that, and we continue to retainoversight of that.

Senator O’BRIEN—Can you confirm for me that there was a breakdown in AMSA’scomputer security protocols?

Mr Davidson—Yes, there was.

Senator O’BRIEN—Can you give me some detail on that, please?

Mr Davidson—Under the general network arrangements some elements of the system arepartitioned with secure access, and I understand that for one segment of that area the securitysystem did not provide the protection we expected it to provide.

Senator O’BRIEN—Meaning that unauthorised persons had access to it?

Mr Davidson—Yes.

Mr Munro—To some documentation.

Mr Davidson—To a limited amount of documentation.

Senator O’BRIEN—Do you know who had access to it, or is it just unknown?

Mr Davidson—Anybody on the AMSA network would have been able to enter a drive andlook at the documentation that was there. We actually looked at the issues, and it was not ofany sensitive nature. It was not commercial-in-confidence or personal private material. Thathas been repaired, and proper procedures are in place to ensure that that sort of breach doesnot occur.

Senator O’BRIEN—What caused the fault?

Mr Munro—The issue related to access to network documentation by internal staff. Therewas no external access. The process of setting up the security on those documents failed. Theindividual that did that made an error and left the access open. As soon as it was detected thatthere was access we corrected the situation. Access was then prevented, except for the limitedpeople that have an access right to that.

Senator O’BRIEN—So the individual was a member of AMSA staff.

Mr Munro—Yes.



Senator O’BRIEN—Was it an operational issue with your computer system or just ahuman error?

Mr Munro—An individual made a mistake. After becoming aware of that mistake, it wascorrected.

Senator O’BRIEN—Was it a mistake in how the documents were saved or in what drivethey were put on? I am just trying to understand.

Mr Munro—I can explain the sequence of events. That might be easier. We have a securefolder where we restrict access to some documents to the people that are working on them,particularly because they are about some issues that we are developing. When we went to adda person, so that they could have access, access inadvertently was changed to alloweverybody access, rather than just that one person. For a time everybody in the organisationhad access to that folder, until we realised there was general access, and then we closed accessoff to the restricted number of people again.

Senator O’BRIEN—Was it a change in the software, or was it just that somebody did notclick the right button?

Mr Munro—Somebody did not click the right button. That basically was the problem.

Senator O’BRIEN—Were there security issues sufficient to require that the Federal Policeshould have been called?

Mr Munro—No.

Senator O’BRIEN—Thank you. I have completed AMSA.

CHAIR—I thank the officers from AMSA.

[12.15 p.m.]AUSTRALIAN TRANSPORT SAFETY BUREAU

Senator O’BRIEN—Firstly, on page 64 of last year’s PBS the performance indicatorsshow that your quantitative goal for the Road Safety Black Spot Program was approximately400 projects. Will you meet that target?

Mr Bills—Yes, we will. And Mr Beresford-Wylie will give you a number in just amoment, when he finds it. It is something over 500.

Mr Beresford-Wylie—In fact, it is slightly less. Actually, for 1999-2000 there will be 381projects.

Mr Bills—And next year it will be a higher figure.

Senator O’BRIEN—A second goal was to have 50 per cent of the projects in rural andregional Australia.

Mr Beresford-Wylie—In 1999-2000, as we said, there were 381 projects. Of those 381projects, 227 will be urban projects and 154 will be rural projects. The break-up of fundingbetween the two is $19.27 million to the urban projects and $19.85 million to the ruralprojects.

Senator O’BRIEN—So you are telling me you have got it right on the spending but thebreakdown of the number of projects did not fit the 50 per cent.

Mr Beresford-Wylie—That is right, but the expenditure will be roughly equal.



Senator O’BRIEN—You are indicating to me that you expect for the 2000-01 year toexceed 400 projects. Can you give me some detail on your expectation there?

Mr Beresford-Wylie—I do have some clarification on that. Given that there has been afunding increase to around the $40 million mark, we would expect the number of projects tobe higher, although it is still likely to be somewhere above the 400 mark, rather than closer tothe 500 mark.

Senator O’BRIEN—You have got the same targets—400 projects and 50 per cent ofprojects in rural and regional Australia. Notwithstanding the increase of funding, the targethas not increased.

Mr Beresford-Wylie—Yes, that is correct.

Senator O’BRIEN—On page 84 of the 2000-01 PBS, there is reference to a review of theblack spot program by the Bureau of Transport Economics. Can you give me some moredetail about that review—the rationale for it, its terms of reference and who is paying for it?

Mr Beresford-Wylie—An evaluation of the black spot scheme is to be undertaken by theBureau of Transport Economics. That comprehensive before and after evaluation wasscheduled to commence this financial year. In fact, it has commenced. The BTE had somediscussions with the program’s administrators and also with the state authorities, starting inApril. Our expectation is that they will complete that process by the end of this year or earlynext year—around the December, January or February mark. Waiting until this time was toenable us to have a full three-year set of before and after data at those completed sites. Iwould imagine the process we follow for this evaluation will be similar to that which wasundertaken by the BTE in its previous evaluation of the black spot program. They produced areport in 1997 on the program.

Senator O’BRIEN—Is an exchange of funds going to the BTE for that or is it just out oftheir budget?

Mr Beresford-Wylie—It is being undertaken as part of their normal process of work.

Senator O’BRIEN—I have a couple of questions regarding rail accidents. On the bottomof page 66 of the 2000-01 budget statement, there is reference to the provision of advice forfour safety investigations. Which particular investigations are they? Can you tell us whichfour investigations you are referring to here?

Mr Bills—As I think we discussed last time, the minister has fairly recently announcedthat the Commonwealth will legislate to give us a role to investigate in our own right theinterstate system. We discussed the possible timing of legislation. We are not sure when thelegislation will be introduced and passed. We thought we had to put something in the PBS inthe expectation that the legislation is passed so that we have that capacity for at least part ofthe year. So we have put four in there. It is a stab. We are undertaking no investigations at themoment under our own legislation, because we do not have any, and we may well do someinvestigations on behalf of the states or the Northern Territory. At the moment, we havecompleted the Ararat investigation, so there is none on foot.

Senator O’BRIEN—Have the drafting instructions been prepared on the legislation?

Mr Bills—They are still in preparation, as is the RIS. The RIS is very close to beingcompleted, so that will lead to the next step. As I think I said last time, in terms of the priorityfor the timing of drafting instructions, we are still awaiting the agreed list for the springintroduction of legislation.



Senator O’BRIEN—So there is no chance of it being introduced in the winter session?

Mr Bills—That is correct.

Senator O’BRIEN—To achieve four, you will have to do a lot of work very quickly.

Mr Bills—I am sure there are a lot of incidents around. It is just a matter of whether theycall upon us.

Senator O’BRIEN—That is, when your authority commences. I am almost sure that is allI have for ATSB, so thank you. I will put other questions on notice if I happen to discover any.

Mr Bills—Nothing on road safety? Senator, I am not trying to encourage you, but I wouldhate to let you down.

Senator O’BRIEN—Sorry, I did have the Federal Office of Road Safety. Thank you forreminding me. That is now you, isn’t it?

Mr Bills—It depends. If it is the heavy truck one, you have given us the burst that I thinkwe could handle. The rest is for our colleagues in Land Transport, who are next door. In termsof the Federal Office of Road Safety more generally, it was split between the two—ATSB andland—so it depends which aspect.

Senator O’BRIEN—What about the national road safety strategy?

Mr Bills—That is us.

Senator O’BRIEN—On page 48 of last year’s statement, I refer you to the performancemeasure column on the right-hand side, at the bottom. Under the heading ‘Timeliness’, it talksabout a national road safety strategy by the end of 1999. That did not happen, because thesame performance measure is on page 64 of this year’s PBS. The objective is now to have thestrategy implemented by the end of the 2000-01 financial year. What caused this blow-out inthe deadline?

Mr Bills—I might just say in our defence that we did not set the deadline. This wassomething that we inherited. The process for developing the strategy commenced with theRoad Safety Summit in 1998. There is a road safety panel which includes representativesfrom all of the states, local government, police, other departments, motorcyclists, bicyclistsand AAA—quite a large number of users. The strategy was developed with that group, and itwas taken as a draft document to the standing committee on transport, which is the CEO bodythat reports to ATC, the minister’s body. That occurred a couple of months ago. It went toSCOT, and it went to ATC last week. SCOT asked for some further work to be done on it.There was not a huge urgency, given that the current road safety strategy, which runs from1992 to 2001, has not yet expired. So there was not an enormous imperative to have it in placebefore 2001. ATC has now agreed the key parameters for the strategy, and that was released ina communique on 19 May.

Senator O’BRIEN—I have not seen that. Can you supply us with a copy of thatcommunique?

Mr Bills—Certainly.

Mr Bowdler—I can do that now.

Senator O’BRIEN—Thank you. We can table that; it will save it going on notice. Whilethat is happening, we will proceed. That can be dealt with at the appropriate time. What is theposition with the review of the Australian Design Rules?

Mr Bills—That is one for our colleagues in Land Transport.



Senator O’BRIEN—And is the review of the Interstate Road Transport Act the same?

Mr Bills—Similar.

Senator O’BRIEN—As would be, I expect, the ‘develop a road’ funding?

Mr Bills—Yes.

Senator O’BRIEN—Hopefully, that is it.

Mr Bills—Thank you.

[12.31 p.m.]DEPARTMENT OF TRANSPORT AND REGIONAL SERVICES

Road and Rail TransportSenator FERRIS—Senator O’Brien, I have some questions on the Albury bypass. If you

have any questions on that, you can go first and then I will follow up.

Senator O’BRIEN—You can start with that.

Senator FERRIS—I think my questions would be directed to Mr Potter. Could you gothrough the circumstances which have led to a reassessment of the internal route for theAlbury-Wodonga bypass? I have noted Minister Anderson’s press release in which he talksabout a reassessment and a cost blow-out. Has the department any idea how that costblow-out has occurred so dramatically? Can you give us some detail on where you are at nowin terms of reassessing the routes?

Mr Potter—This project has had a long history and an unfortunate one. When MinisterVaile confirmed the Commonwealth’s decision to fund the internal route back in September1998, the cost at that stage according to the estimate RTA had prepared was $203 million. Wedid seek confirmation at that time that that was the cost, because there were suggestionswithin the community that it was not the true cost, but it was confirmed by RTA.

Senator FERRIS—What year was that?

Mr Potter—That was September 1998. Then in December of that year we learnt that infact the cost for the internal route was going to be higher, and I will come back to the reasonsfor that in time. We met with RTA just before Christmas, if I remember, in 1998. They werequite keen to get an independent assessment of the cost estimate at that stage, so we did that.They reported in early 1999 and there were various revisions. We worked over the report withRTA. The whole thing went on for an extended period.

By September, the advice—and this was after it had been assessed by independentconsultants—was that the cost just for the internal route was going to be $300 million. Theexternal route had risen as well. That was $335 million for that stage.

Senator FERRIS—So you are talking about a jump there within a matter of months from$203 million to $300 million?

Mr Potter—Yes, it was about 18 months or almost a year.

Senator FERRIS—Did you question the methodology of the original RTA assessment?How could it be that that could jump by 50 per cent?

Mr Potter—The original estimate was prepared for the EIS and the EES back in 1992.There were some errors made at that time by the consultants who prepared the costings. Theywere essentially errors relating to costing of earthworks and bridges. So the review canvassedthose things and corrected those errors.



While that was going on, there were still questions being asked, I guess, about what was inthe estimates and what was not in it. That was a bit confused by the fact that RTA asked theindependent consultants to review the costings of the EIS, but at that point they were severalyears old and the design had advanced somewhat since then so it did not pick up a number ofitems, like the bridge at Fallon Street and a drainage item was another one. The independentexperts had not picked that up, but we were assured that that could be dealt with and handledin the contingency part of the project. So the Commonwealth was faced then with funding a$300 million project with the $203 million that had been budgeted at that stage.

Senator FERRIS—And presumably the cost of the independent consultancy had to comeout of the $203 million as well?

Mr Potter—Yes.

Senator FERRIS—How much did the consultancy cost?

Mr Potter—I do not know the exact figure.

Senator FERRIS—Given that errors were found in it, I am sure you would have arguedfor a discount.

Mr Potter—That is an issue.

Senator Ian Macdonald—Was that a consultancy to the RTA or to the Commonwealth?

Mr Potter—No, it was to the RTA.

Senator Ian Macdonald—But we paid for it?

Mr Potter—Yes.

Senator Ian Macdonald—Who selected the consultant?

Mr Potter—The RTA did.

Senator FERRIS—I would be interested to know—and perhaps you could take this onnotice or one of the officers may be able to find it out—the cost of that consultancy.

Mr Potter—Yes. So that was September last year. The government decided that, facedwith a cost increase of that amount, the project would be staged. RTA advised us that wecould fund a first stage of the project —and that was from the Murray River to Ettamogah—for $180 million. On that basis and on the basis that it had been reviewed by independentconsultants et cetera, the minister made that commitment.

While this was going on, the design of the project was being worked through and therewere lots of consultations with the community and discussions with the New South WalesDepartment of Urban Affairs and Planning and the Environment Protection Authority upthere. So other features, mainly relating to community impact, were built into the project. Butwe were horrified in early April this year when RTA told us that the cost of stage 1—whichwas $180 million—was now going to be something like $345 million.

Senator FERRIS—How could these errors of costing occur, Mr Potter? I always thoughtengineering was a precise science.

Mr Potter—I cannot answer that one; I am not an engineer.

Senator FERRIS—No, it is my comment, not a question.

Mr Potter—There are a whole series of factors at play here. As I mentioned, mistakeswere made in actual costings and things were being left out, but there were a few other thingsas well. A lot of the work—and this is common to all road agencies and I guess departments



generally—was being done by consultants, so RTA told us that they found that that has been aproblem, in that everything is done on a one-off basis and there is very little transferring ofknowledge gained from one particular job to another, et cetera. All of these state roadagencies are operated on a regional basis, so there is the difficulty as well that the knowledgeis not internalised, learnt on, built on and passed on. So there are systemic problems like thatas well.

As I mentioned, there have been additional items put in from changes to scope as a resultof community consultations, et cetera. They mainly relate to noise minimisation and otherplanning requirements. But they also advise us that the original approach in the EIS was basedon the fact that the highway there would be a rural freeway, basically. In fact, it has turned outto be more like an urban freeway, which is a lot more costly. So there is a whole series oferrors there.

Senator FERRIS—It is very difficult to imagine how you could possibly have thoughtthat a road through Albury could be seen as a rural highway. I understand the Ettamogah endof it. But surely even an independent consultant who had never been to Albury would haverealised that part of the road that goes through the City of Albury-Wodonga could never havebeen classified as a rural freeway.

Mr Potter—I think a lot of those points relate to the noise barriers and things like that,which, as I said, were added later on after the consultants had done their work. So normally aproject moves through a whole series in planning, and it starts off with a concept figure,which is pretty much an educated guess, I suppose. As the planning gets more and moredefinite, and as you get closer and closer to start-up, the estimate gets more and more accurateand the degree of risk in the estimate is reduced. But they are not normally subject to suchincreases as this.

Senator FERRIS—It is a pretty sad story, given the conflict that this has caused in thecommunity of Albury-Wodonga.

Mr Potter—It is. We were horrified when we learnt of it.

Senator FERRIS—Have you now heard from Mr Carl Scully on the report and updatedfinal cost for the internal route?

Mr Potter—Yes.

Senator FERRIS—When did you hear from him?

Mr Potter—After we learnt we obviously informed the minister, who was equallyhorrified, and he wrote to Mr Scully asking him to confirm this and to give him formal adviceof that. That advice was received last week.

Senator FERRIS—Mr Anderson has said in his open letter to the community of Albury-Wodonga:Since January this year, I have been waiting on the NSW Minister for Roads, Mr Scully, to provide areport and an updated cost for the proposed internal freeway at Albury-Wodonga. This information isrequired before I—

can lawfully release funds to allow tenders to be called ...

Are you telling me that, now we have that response from Mr Scullly, tenders now can becalled?

Mr Potter—No. All we have really is confirmation that stage 1 will be around$345 million, but that document, the project planning report, is still to be finalised.



Senator FERRIS—And that means that this project cannot go ahead in this financial year?

Mr Potter—No, that is quite correct.

Senator FERRIS—Why do you think the hold-up is occurring?

Mr Potter—It is a very sensitive issue, and the RTA have to get approval from the NewSouth Wales DUAP and Environment Planning Agency up there. I understand it is taking along time to do that.

Senator FERRIS—Why are we still waiting for those approvals? The history of this roadnow goes back three years.

Mr Potter—It is much longer than that, Senator.

Senator FERRIS—You have gone back to three years ago, 1998. Why is it that we are stillwaiting for what appear to be process approvals?

Mr Potter—It is process, I agree, but it is a very important process.

Senator FERRIS—I am not denying that; I am questioning the timetable.

Mr Potter—There have been, as I have said, a whole series of errors, and I am sure theRTA are determined to get it right.

Senator FERRIS—That is commendable but, even with that intention, it still seems to betaking a long time. Has Mr Scully agreed to undertake an assessment of the costs of theexternal route which Mr Anderson also outlines in his letter to the community? Just to refreshyour memory, he has asked for the assessment to be done under the scrutiny of auditors sothere can now be a reconsideration of the internal versus external costings.

Mr Potter—Yes, he has agreed to review the costs of the external route because the latestfigure we have for that is from September 1999. So there is probably some adjustment to bemade there. I hope it will not be of the same magnitude.

Senator FERRIS—If the adjustment is anything like the magnitude of the previousadjustments, nobody would be wanting to count on that. What about the request to complete acurrent report on the internal freeway and supply a final cost?

Mr Potter—I am afraid he has refused to do that, Senator, but that is a very key issue asfar as the community is concerned. I am sorry, you are talking about the internal freeway. Ithought you meant the internal relief route, as it is called.

Senator FERRIS—No, the internal freeway, including its final cost. That is also outlinedin Mr Anderson’s letter to the community.

Mr Potter—That is the project proposal report that we talked about. So, yes, they haveundertaken to complete that as soon as they can.

Senator FERRIS—Why do you think the New South Wales government are holding upthis matter in the way that they are?

Senator Ian Macdonald—In fairness, Senator, that is probably not—

Senator FERRIS—I am sorry, I did not intend it to be a policy question. I intended it tofocus on why these particular reports have not been supplied. Really, if there is no reasonwhich is related to some difficulties with the environment or auditors, I will understand if youcannot answer it.



Mr Potter—The answer I was going to give is that, as I said, RTA have to secure DUAPand ETA’s approval to the design of the project, so that is one of the reasons. I am sureworking through the costs is another reason as well.

Senator FERRIS—Does this put back into a consultative phase the whole question ofwhat the community wants? The committee that looked at the Albury-Wodonga Corporationlegislation just six or eight weeks ago had a number of people from the area come in to focuson the question of the internal versus external route. It seemed then that it was somewhatmore settled than it now turns out to be. Does this raise the whole question of communityconsultation needing to be undertaken again?

Mr Potter—I think your original question was: has this altered in some way thecommunity’s perception of the project? I do not think that is the case.

Senator FERRIS—I have received telephone calls from that community as a result of mymembership of the committee that looked at the legislation, and they seem to indicate thatthere are members of the community who now believe that they have actually had what theyconsider to be a win on this issue and that the external route is now back very firmly on theagenda and that the chances of the internal route being completed are significantlydiminished. Is that going to open up, once again, a fairly significant community campaign onwhich route should be chosen?

Mr Potter—I am afraid that is correct, and that lay behind the minister’s decision to issuean open letter to try to allay a lot of those fears. He made it clear in that letter that the internalroute has not been abandoned. He really needs to look at the costs of the external route and doa comparison.

Senator FERRIS—Do you have any projected date for the receipt of the final cost of boththe internal route, whether it is the internal relief route or the internal route, and the externalroute? Do you have a likely timetable for the receipt of that material?

Mr Potter—For the PPR on the internal route, RTA have said by the end of June, andMr Scully agreed to look at the external route by the end of September. If that timetable ismet, the minister has undertaken to make a decision as swiftly as he can—I think his wordswere ‘a swift and final decision’.

Senator FERRIS—You optimist, Mr Potter! So, when both of those costings are availableat the end of September, the minister will make a decision on the final route to be followed. Isthat what you are saying? So he will then decide, based on costs, whether the internal route orthe external route takes priority.

Mr Potter—Yes, and then planning can proceed further on that basis.

Senator FERRIS—Therefore, members of the community who believe that the actualdetermination of the highway through that area is now back in the melting pot are correct?

Mr Potter—The fact that the cost has more than doubled has certainly put the internalroute in some doubt.

Senator FERRIS—Quite so.

Mr Potter—There is another element in all this, that is, it is not just external versusinternal. The community are agitating and they believe they want a second river crossing inAlbury. So just building an external bypass is not going to solve that internal problem. Thevirtue of the internal route was that it solved the Albury-Wodonga internal traffic problems aswell as the external ones. If the Commonwealth were to build the external route it leaves open



the question of what happens to the internal relief route, as it is known, to distinguish it fromthe bypass. The minister asked Mr Scully to fund and plan for that eventuality and that is whatI referred to before.

Senator FERRIS—And Mr Scully has agreed to do that?

Mr Potter—No, he has refused.

Senator FERRIS—Presumably that will also go out to an independent consultancy andone can only wonder about the costs of that.

Mr Potter—Yes, one can.

Senator FERRIS—I am interested in the errors in the costings by these independentconsultants and the answer you gave to my question which related to the fact that differentindependent consultants have been used on several occasions and, therefore, the corporatehistory has not been passed on. When you use external consultants, does RTA try to choose aconsultative team that does have corporate history in issues? It seems to me that the blow-outhere has occurred through a range of quite mysterious factors, including the lack of corporatehistory in this particular region.

Senator O’BRIEN—It might have been the first costing that was wrong.

Mr Potter—It is both actually, Senator. I am not familiar in detail with how they do thesethings. I suspect not. Each one will be looked at on its merits. It is bid for and assessed on acompetitive basis. Obviously, prior knowledge would count, but I cannot really say.

Senator FERRIS—I would have thought it would count quite significantly in terms ofsomething as precise as this.

Senator O’BRIEN—The minister placed a full page advertisement in the Border Mail. Ipresume he published the open letter in the Border Mail?

Mr Potter—He published the open letter, that is right.

Senator O’BRIEN—It was not disseminated in any other form, was it?

Mr Potter—No.

Senator O’BRIEN—Was that done by the minister’s office or the department?

Mr Potter—When you say done by, what do you mean?

Senator O’BRIEN—How was the letter constructed, placed and paid for?

Mr Potter—The department paid for that.

Senator O’BRIEN—What was the cost of that?

Mr Potter—I think it was $2,000 from memory.

Senator O’BRIEN—The media release refers to the minister’s determination to appoint anindependent third party auditor to oversee further work conducted by the RTA on the Alburybypass. How would that operate?

Mr Potter—We are still to work out the final details, but I would envisage some kind ofsteering committee on which RTA and the department would be involved. TheCommonwealth would be assisted by consultants that we had appointed to review the materialand advise us. We do not possess the skills to review these things.

Senator O’BRIEN—Is the minister going to have a review on each report or costingprepared by the RTA?



Mr Potter—Yes, but perhaps I should explain. Albury is an extreme example. Theproblem of cost estimating in RTA has been a problem for some time now not just on federalprojects but state projects as well. We have been working with RTA to fix the problem. One ofthe things they are doing is to restructure their operations and the organisation to have thatcentral body of knowledge that I talked about and to also centrally review in detail all theestimates of costing projects. That review will happen automatically. Obviously, we willgreatly scrutinise estimates as they come forward.

Senator O’BRIEN—Is it the minister’s intention to have ongoing reviews as theseprojects develop or to wait until the final stage of approval and then do a review and satisfyhimself before he ticks a project?

Mr Potter—What RTA is doing is really improving the process each step of the way.Essentially, that final review is very important because that is what we sign off on.

Senator O’BRIEN—Do you have any idea how much this consultant service will cost?

Mr Potter—The independent—


Mr Potter—No, it depends on the degree of involvement they are going to have and howmuch work they have to do. I could pluck a figure out of the air, but it would be no more thanthat.

Senator O’BRIEN—Will that come out of the department’s budget or the budgetallocation for the particular projects?

Mr Potter—That has not been determined, but we would look to the program to fund thatrather than the department.

Senator O’BRIEN—That is a matter that will be determined by the minister, is it?

Mr Potter—We will canvass all the options for him and give advice as to what is possible,yes.

Senator O’BRIEN—What is the estimated cost of the main road 92 project?

Mr Potter—Estimates vary. There is a range of estimates. I am not trying to drag this out,but the route in detail from Nowra to Nerriga has been studied and there has been nodetermination as to what the optimal route would be west of Nerriga. Depending on whereyou wanted the road to go it varies from $160 million to $300 million.

Senator O’BRIEN—Is that based on dual carriageway, B double access, maximum speedlimit?

Mr Potter—It is certainly heavy vehicle access, but it is not dual carriageway.

Senator O’BRIEN—What is the minimum benefit cost ratio for road projects to attractfunding?

Mr Potter—There is no formal bar or hurdle to be gotten over.

Senator O’BRIEN—Is there an informal one.

Mr Potter—We certainly look to fund projects with as high a BCR as possible. If we didthat we would end up funding roads in the cities. There would be nothing in regional areas.The BCR is one element. Certainly, one would be a minimum that we would look to.

Senator O’BRIEN—What is the BCR for main road 92?



Mr Potter—It varies from 0.5 to about 1.5, I am advised.

Senator O’BRIEN—It depends on where it goes?

Mr Potter—Yes, that is right.

Senator O’BRIEN—For the higher BCR you have a higher cost?

Mr Potter—Where the route goes depends on the traffic that it is going to attract, whichagain is going to impact on the BCR—so it is both cost and traffic.

Senator O’BRIEN—I wanted to see if there was a correlation between those two sets ofnumbers. There may not be. You are saying there is, are you? Do you want to take that onnotice?

Mr Potter—I just do not recall the detail. But Mr Cory says he does not think so.

Senator O’BRIEN—Sorry, he doesn’t think—

Mr Potter—He doesn’t think that the correlation exists, that the highest cost has the lowestBCR.

Senator O’BRIEN—In making the assessment you have a number of route options—highcost, lower cost. You have a less than optimal BCR at the bottom level and a marginallyacceptable BCR at the top level.

Mr Potter—Yes.

Senator O’BRIEN—You do not think that 1.5 figure correlates with the highest number.Does that indicate to you that the route will be selected on the basis of the BCR because itwill not be the highest cost—you get the biggest bang for the buck?

Mr Potter—In principle, yes, we would push for and recommend the highest BCR projectbut a lot of other factors have come in as well—the environmental impact and just how muchmoney the Commonwealth has available, and the state as well, because it is a jointly fundedroad. There are various other factors that you have to weigh up against the BCR as well.

Senator O’BRIEN—So you have the route options and the BCR details. Can you supplythem to the committee?

Mr Potter—Yes.

Senator O’BRIEN—How much has been allocated for main road 92 so far?

Mr Potter—It is $1.3 million.

Senator O’BRIEN—It is a fifty-fifty contribution scheme proposed—state and federalgovernment?

Mr Potter—Yes, that is correct. I am sorry—that is not correct.

Senator Ian Macdonald—I think there is the Shoalhaven council as well.

Mr Potter—Yes, that is what I forgot to mention.

Senator Ian Macdonald—The local people think it is such a good idea that they indicatedthey would put $12 million towards it.

Mr Potter—That is correct.

Senator O’BRIEN—Does that affect the route?

Mr Potter—No.



Senator O’BRIEN—So the total, less $12 million, is divided fifty-fifty between the stateand federal governments.

Mr Potter—Yes, that is the Commonwealth’s offer. No, I am sorry. The Commonwealth’scontribution is cash limited. So the Commonwealth has pledged $34 million.

Senator O’BRIEN—So the Commonwealth will pay 50 per cent up to a maximum of $34million.

Mr Potter—Yes.

Senator O’BRIEN—The council will pay $12 million or up to $12 million.

Mr Potter—They have said $12 million.

Senator O’BRIEN—So the minimum cost is $160 million. That would leave the NewSouth Wales government to pay $114 million.

Mr Potter—Yes, the balance.

Senator O’BRIEN—That is the cheapest option.

Mr Potter—That is if the whole route were to be constructed at this stage, but it would bepossible to stage it, of course. There is another option at $130 million.

Senator O’BRIEN—Why did you exclude that before?

Mr Potter—I forgot, I am sorry.

Mr Cory—This was a late option provided by the New South Wales government. We donot have many details. It was provided subsequent to the conclusion of the studies.

Senator O’BRIEN—Are you going to have an independent third party auditor have a lookat it?

Mr Cory—We will take that issue on notice.

Senator Ian Macdonald—If that is a suggestion, it is probably not a bad one in view ofthe record of the RTA.

Senator O’BRIEN—I thought that was what you were saying before.

Mr Potter—It would be rigorously scrutinised and reviewed.

Senator O’BRIEN—What is the current daily traffic volume on main route 92, so far asthere is a road?

Mr Potter—There is a road. Again, from memory—I stand corrected—it is around 90vehicles.

Senator O’BRIEN—On what criteria was this road designated a road of nationalimportance?

Mr Potter—It was in recognition of its strategic value. It is another range crossing fromthe coast to the southern tablelands and the central west and western area of New SouthWales.

Senator O’BRIEN—Have you any idea when funds will be released to commence theconstruction work?

Mr Potter—That depends on whether New South Wales agrees to jointly fund it. TheCommonwealth has made its money available. So it is a matter for New South Wales torespond to.



Senator O’BRIEN—If I interpret your answers, the Commonwealth would be happy witha process where they would spend up to $34 million on a stage of the road. That is subject tonegotiation obviously. But you said that the maximum commitment is $34 million from theCommonwealth. Is that for the whole road or for a stage of the road? Are they prepared tocommit that towards a stage in the road?

Mr Potter—It was for the road as a concept. If it were to be for stage 1, for example, thatwould have to be a meaningful stage to carry the work out to.

Senator O’BRIEN—I am looking at the numbers. Even on the cheapest option tocomplete the road, you are still talking about $34 million from the federal government, $12million from the council and $84 million from the New South Wales government.

Mr Potter—That is correct.

Senator O’BRIEN—Can you tell me how much funding has been provided by theCommonwealth government for an upgrade of the Princes Highway?

Mr Potter—I only hesitate because under the National Highway Program the answer isnone, but it is likely under previous governments that it might have been funded as a nationalarterial or provincial highway.

Senator O’BRIEN—Thanks for that.

Senator Ian Macdonald—Are we finished with land transport?

Senator O’BRIEN—No, we are not finished with land transport. I have questions whichrelate to the Office of Road Safety, certainly details about the road branch and the rail branch.I have questions about the truck safety report. I certainly have rail questions generally.

Senator Ian Macdonald—But you are finished with roads as such.

Senator O’BRIEN—No, to the extent of the issues encompassed in the subjects that Italked about. I am not sure who from the land transport division was going to answerquestions about the truck safety issue.

Mr Harris—We have somebody.

Senator Ian Macdonald—There is no possibility that by extending for half an hour wecould get rid of the transport issues. Do you think it is going to take more than that?

Senator O’BRIEN—It might, but you would be very optimistic. It is probably better forall concerned to have a break, come back and get it over with.

Proceedings suspended from 1.08 p.m. to 2.03 p.m.Senator O’BRIEN—I will start with the truck safety report. The questions relate to the

report, Investigation into the specification of heavy trucks and consequent effects on truckdynamics and drivers. Can you confirm that the decision to have this inquiry conductedoutside of the department was the minister’s decision?

Mr Seyer—Yes. The minister announced the inquiry in December 1998.

Senator O’BRIEN—What type of expertise was determined to be needed to conduct theinvestigation?

Mr Seyer—It was determined that a broad expertise in and understanding of the heavyvehicle industry was required to conduct the investigation—not only an expertise in thetechnical side of vehicle dynamics and mathematical modelling but also an understanding of



how truckies use their trucks in their normal business. So it was a broad range of expertisethat was required by the consultant.

Senator O’BRIEN—Was that the minister’s decision as to what the expertise was?

Mr Seyer—The minister was guided by advice from the department on that.

Senator O’BRIEN—Did the department consult outside of the department as to whatthose criteria should be?

Mr Seyer—The department determined a set of terms of reference for the investigation.We canvassed not only within the department but also experts in the industry and, inparticular, the Road Transport Forum, which represent the operators, and, indeed, independentheavy vehicle operators as well—the type of people who are actually complaining. So weconsulted with a range of stakeholders, both in and outside the department.

Senator O’BRIEN—Were trucking manufacturers consulted?

Mr Seyer—No, they were not.

Senator O’BRIEN—Are there academics who have specialist experience in these fields?

Mr Seyer—In fact, as part of the investigation, a steering committee was set up to guidethe consultant. Because we wanted a transparent process, an academic was asked to be presenton this steering committee. This person is Dean of Engineering at Queensland University andhas a great deal of expertise in vibration and linear systems analysis—the things that werebeing studied under the investigation.

Senator O’BRIEN—Who was that?

Mr Seyer—That was Professor John Simmons.

Senator O’BRIEN—Was the organisation Vipac, a vibrations specialist, approached to beinvolved in the project?

Mr Seyer—No, they were not. My understanding is that Vipac are a testing organisation,with obviously close ties with vehicle manufacturers of various types. As I suggested before,what was required was a broad range of expertise and understanding of the heavy vehicleindustry, and it was not believed that Vipac had that broad range of expertise. While it is truethey are experts in testing, as a testing organisation, the scope of the investigation was muchbroader than that.

Senator O’BRIEN—What was the process for selecting the organisation to conduct theinvestigation?

Mr Seyer—It was a restricted tender process. The prospective organisations were selectedon past experience in that type of work and on having credentials of both domestic andinternational expertise in this area.

Senator O’BRIEN—So they were able to show what work they had done and who theyhad done it for?

Mr Seyer—Yes, that is right.

Senator O’BRIEN—What was the value of the contract when it was let to tender?



Mr Seyer—I am just seeking advice as to whether that is commercial-in-confidence. Iunderstand the contract to Roaduser was just under $100,000.

Senator O’BRIEN—Can you tell us what the final cost was?

Mr Seyer—The final cost, I believe, was just under $580,000.

Senator O’BRIEN—How did we get a blow-out from just under $100,000 to just under$500,000?

Mr Seyer—I will explain the reasons for that. Obviously the original tender provided for acertain testing program to be conducted, a certain number of vehicles to be inspected anddriven. But, of course, prior to doing the advertising for the actual investigation, there was noway of knowing how many complainants would come forth and how many trucks would haveto be both inspected and driven and also subsequently tested.

Senator O’BRIEN—But how many did you expect to come forward?

Mr Seyer—We did not really know. That was the problem. The original estimate thatRoaduser based their original costing on was five vehicles to inspect and drive, and twovehicles to be fully instrumented for testing. This blew out to 13 vehicles to be inspected anddriven, and to eight vehicles to be fully instrumented and tested and subsequently analysed.So we had almost three times as many vehicles to be inspected and driven, and four times asmany vehicles to be fully instrumented. Then all the data had to be subsequently analysed.

Senator O’BRIEN—Without naming the tenderers, what was the range of tender pricesoffered? You started at $100,000 or just under $100,000 for the lowest?

Mr Seyer—It was just under $100,000. I have to seek assistance from a colleague of mine.We will have to take that on notice to give you an exact costing. But the other tenderers wereabove that figure.

Senator O’BRIEN—Did everyone use the same estimated test group—that is, fivevehicles to be tested and driven and two to be instrument tested?

Mr Seyer—I will have to seek advice on that. This is Mark Terrell, one of my engineers inthe area.

Mr Terrell—In answer to that question, a tender specification was given to the tenderers,and they proposed what they thought was necessary to establish what we were seeking. As ithappens, they were very close in what they had suggested. The other tender was a fair bithigher in price—but I do not have the exact figures, so we will have to get back to you onthat.

Senator O’BRIEN—We will get that on notice. How many tenders were there?

Mr Terrell—Two.

Senator O’BRIEN—So it would be pretty easy to get the range. We have the bottom, andwe will get the top. So Roaduser International was chosen on price?

Mr Terrell—There was a selection process: a number of selection criteria were identifiedin the tender document. A selection committee went through those one by one and prepared aselection based on those. Price was one of the factors, but there were several others.

Senator O’BRIEN—Where did the funding for this inquiry come from? The department’sbudgets, or a special allocation?

Mr Bowdler—Departmental funds.



Senator O’BRIEN—Was there a special allocation for that, or was it to be taken out of thenormal funding?

Mr Harris—In part, there was. We provided supplementation to the relevant area.

Senator O’BRIEN—How much was the special allocation?

Mr Harris—As I recall, it was $285,000 of the full cost. I am pretty sure that is right.

Senator O’BRIEN—Was that known at the start of the process, when the successfultenderer was selected?

Mr Harris—I do not believe so. In other words, the supplementation was because the costhad increased substantially beyond that which was originally expected.

Mr Bowdler—I think the supplementation was probably about the September quarter lastyear.

Mr Harris—That would be broadly right.

Mr Bowdler—But that is supplementation to the division; it is not supplementation to thedepartment. It is just reallocation of some resources into—

Senator O’BRIEN—It is out of the department’s budget—taken from one area to pay forthis?

Mr Bowdler—Yes.

Mr Harris—We have, as I think you have heard previously, an internal reallocationprocess for significant projects that occur within the department.

Senator O’BRIEN—Can you outline the expertise Roaduser International demonstrated tomeet the selection criteria?

Mr Seyer—Roaduser International’s managing director is a Dr Peter Sweatman. He hasrecognised international credentials in not only investigating heavy vehicle crashes but alsolooking at heavy vehicle dynamics. He has a group of technical people who can domathematical modelling, which is one important aspect of the investigation, basically to inputcertain road conditions in a computer model to examine what happens to the actual heavyvehicle and trailer in certain road conditions. Dr Sweatman was also chairman of an OECDgroup looking into heavy vehicle safety. That very briefly outlines Dr Sweatman’s and hiscompany’s expertise in the area.

Senator O’BRIEN—His organisation had experience in general research into the truckingindustry?

Mr Seyer—Yes, that is correct.

Mr Terrell—There was a statement of their sort of background and so on with the initialpress release at the start of the investigations. We can give you a copy of that, if it would beuseful.

Senator O’BRIEN—Yes, that would be helpful. Roaduser International obviously wouldnot work just for the Commonwealth. They would have told you what sort of projects theyhad been engaged on and by whom, wouldn’t they, as part of the process?

Mr Seyer—Yes. We examined any issues of conflict of interest. During the investigation,the only vehicle manufacturer they did work for was Volvo on a totally unrelated issue. Butthey certainly have had a lot of dealings with heavy vehicle operators in the industry, working



for independent operators as well as fleet operators in examining various vehicle dynamicsissues.

Senator O’BRIEN—Presumably their background was the subject of departmentalresearch in the assessment of their tender?

Mr Seyer—They themselves have done work for the department in the past, not only inthis area but in other land transport policy areas.

Senator O’BRIEN—In short, the department could not identify any issues relating topotential conflicts of interest?

Mr Seyer—That is correct.

Senator O’BRIEN—Was it relevant that Dr Sweatman, the managing director of RoaduserInternational, is also president of the Australian Road Transport Suppliers Association?

Mr Seyer—In relation to conflict of interest?


Mr Seyer—The department did not feel that that was necessarily a problem, bearing inmind that Roaduser International and Dr Sweatman in the past have been heavily involved indoing work for heavy vehicle operators, who were the people actually making the complaints.

Senator O’BRIEN—As I understand it, the Australian Road Transport SuppliersAssociation includes as its members organisations like Kenworth and Mack: is that so? Or isthe department not aware of who were the members of the Australian Road TransportSuppliers Association?

Mr Seyer—I personally would have to take that on notice. I am not aware of the actualmembership of the association.

Senator O’BRIEN—To assist you in that, I have found reference to the role of ARTSA inthe July 1999 edition of Truck and Bus magazine, and that article was announcing the re-election of Dr Peter Sweatman as their president. On the role of that organisation, the articlesaid that ARTSA ‘represents the road transport industry’s equipment and service suppliers astheir public voice and in government negotiations’, and that it also runs the ‘annual nationaltechnical and maintenance conference in association with the Australian TruckingAssociation’. Can you ascertain whether the department was aware of Mr Sweatman’s role inthat organisation at the time the tender was processed which led to the successful awarding ofthe tender to his organisation?

Mr Seyer—I believe that the conflict of interest issue was looked at in view of the possibleconsultants working directly for a particular vehicle manufacturer—and, to our knowledge,that was not the case.

Senator O’BRIEN—But the implication of that answer is that you were not aware of, ordid not look at, the ARTSA issue.

Mr Seyer—I personally was not aware of that; I do not know whether other officers in thedepartment were.

Senator O’BRIEN—Can you check that and advise the committee, please?

Mr Seyer—Yes, certainly.

Senator O’BRIEN—In a letter from the minister’s office to Mr Rod Miller, dated 7January 1999, Mr Stephen Oxley, who I understand is the minister’s chief of staff, advised,



‘The consultant has provided a conflict of interest disclaimer’—referring there to RoaduserInternational. Can the committee be provided with a copy of that disclaimer?

Mr Harris—I think we will have to consider that. Obviously, if we get further and furtherinside a tender process, we can make life extremely difficult and make the department a veryunattractive environment for people to bid in the future. We are not unaware of the nature ofyour question, but we would want to consider how, if we are able to provide it, we canprovide it.

Senator O’BRIEN—This is not a request out of the blue. I think you can very clearly seewhere this matter is going, and the minister is clearly aware of the issues. As I have said, therehas been correspondence to the minister about this issue and his chief of staff has providedthat information.

Mr Harris—Provided the information that one has been provided?

Senator O’BRIEN—That there is a disclaimer, yes.

Mr Harris—We make appointments to government boards; we receive similar statementsfrom people. We do not tend to provide those on the basis that inter alia it makes it difficult toput appointees on boards. I merely say that we would like to consider the matter. Weunderstand the interest that you are expressing, but we would like to consider the matter.

Senator O’BRIEN—How did the investigators call for input to the inquiry from truckowners?

Mr Seyer—An advertisement was put in the national press. Mr Terrell might have to helpme out on the particular details.

Mr Terrell—I do not have the full details of advertisements, but they are in an appendix tothe report. Basically, the advertisements are in both national and industry media. They adviseowners of the investigation and the subject of the investigation and call for them to contact theconsultants if they believe that they have had problems with things like those which might beidentified in that process.

Senator O’BRIEN—For the completeness of the record here, can you supply that copyfrom the appendix? That would express the totality of the advertising?

Mr Terrell—Yes. It is listed quite explicitly and it has a copy of the advertisements.

Senator O’BRIEN—Thank you for that. I think we were told earlier that RoaduserInternational received 27 responses from truck owners to their advertisements.

Mr Terrell—That is right. A few responded after the closing date, and they were includedin the list in the report. So 29 are listed in the report. One or two of those represented morethan one vehicle, but most of them were single-vehicle owners.

Senator O’BRIEN—Just on the advertisements, will appendix A of the report tell us howlarge the advertisements are and where they are placed in the newspapers?

Mr Terrell—From memory, I think it does; it has a copy of at least one of the ads.

Senator O’BRIEN—But, if it does not, can you supply us with that information?

Mr Terrell—Certainly.

Senator O’BRIEN—As I understand it, the ads appeared from late December 1998through to February 1999.



Mr Terrell—That sounds familiar, but I would have to check with the appendix to be sure.But, as I have said, it is all in there.

Senator O’BRIEN—That is not a time of the year during which everyone pays closeattention to the newspapers, is it?

Mr Terrell—I do not know the practice of newspaper reading of truck owners—

Senator O’BRIEN—Neither do I.

Mr Terrell—But there is not much of a question that there was wide publicity of theinvestigation—and not only in terms of advertisement, but also there was plenty of awarenessof it among owners. It certainly was not kept quiet.

Senator O’BRIEN—So the department is satisfied with the media coverage, theadvertising campaign? Is that true?

Mr Terrell—I think so, yes. I cannot speak for the department as a whole.

Mr Seyer—But there was a media release by Minister Anderson announcing the report,and there were subsequent advertisements. So I guess that all I can say is that there was agreat deal of media or at least a good attempt, I think, by the department to get people whomight have had problems to come in and report to Roaduser International.

Senator O’BRIEN—But my question was: was the department satisfied with thiscoverage, with the advertisement campaign in the media? Was the department satisfied, or didit not have a view on the matter?

Mr Seyer—I am not quite sure I can objectively answer that question.

Senator O’BRIEN—Do you want to take it on notice and come back to us? It may havebeen that the minister had to be satisfied.

Mr Seyer—We did specify that the advertisements had to be placed in the national pressand also magazines or journals that truckies normally would read. I guess, from thatviewpoint, those parameters were satisfied, so I guess the department is satisfied.

Senator O’BRIEN—I am inviting you to check that, if you want to. I am happy to go withthe answer you have given so far, but it is up to you.

Mr Seyer—If we have more to add, we will provide that on notice.

Senator O’BRIEN—Thank you for that. Did the department take any action of its own toencourage or call for submissions and input into the inquiry?

Senator Ian Macdonald—Members of parliament who expressed some interest wereadvised, and I am sure that they would have been in touch with their constituents who raisedthe issue.

Senator O’BRIEN—How many members of parliament were specifically contacted?

Senator Ian Macdonald—I do not know, but I am personally aware of Senator Harris. Iam not personally aware of others, but Senator Harris certainly raised it with me—both inrelation to Queensland and Victorian constituents, I think. Nobody else raised it with me or inthe Senate. I think Senator Harris might have asked a question or two at question time;nobody else did. I assume that, if there were others raising issues with Mr Anderson,Mr Anderson’s office would have let them know when the inquiry was to be—well, theywould have been aware themselves.



Mr Terrell—There was also a letter that the department wrote to owners who hadcomplained to the Federal Office of Road Safety. It was written at the closing date ofsubmissions, and the department wrote to those owners who had complained to the FederalOffice of Road Safety but had not complained to Roaduser, advising them that theinvestigation was taking place and suggesting that they contact Roaduser. Some of them didso; some of them chose not to.

Senator O’BRIEN—So there were more people who expressed concerns about the matterthan made submissions?

Mr Terrell—That is correct.

Senator O’BRIEN—There were 29 who made submissions. How many others wereknown to the department as having expressed concerns about the matter?

Mr Terrell—In rough terms, from my memory, it was somewhere between 10 and 15 overan extended period of time.

Senator O’BRIEN—The investigation was due to be completed in March 1999 as per theminister’s press release of December 1998. The report was only released in April 2000. Canyou explain the reasons for the delay of this report?

Mr Seyer—In large part, that had to do with the increased number of vehicles that wereinspected and driven—that increased from five to 13—and the increase in the number ofvehicles that were fully instrumented and then had a subsequent analysis done of them. Thatwas from two to 8.

Senator O’BRIEN—That in large part answers it. Were there any other factors?

Mr Seyer—There were a number of legal actions in place by some owners with some ofthe manufacturers. Also, the owners obviously have to make a living, so those externalitiesmade getting hold of the vehicles sometimes difficult in the timing for Roaduser. There areobviously delays in getting some of those vehicles for testing, inspection and driving.

Senator O’BRIEN—I have been told that some owners effectively park their trucksbecause of safety concerns. Do you know what the impact of the delay on these truck ownerswas?

Mr Seyer—I am unable to comment on that.

Senator O’BRIEN—Did the department oversee the investigation in any way?

Mr Seyer—Only inasmuch as the setting up of the steering committee, which was chairedby a member of the department and had a representative of the Road Transport Forum and theacademic who I mentioned.

Senator O’BRIEN—Did the steering committee receive ongoing reports on the conduct ofthe investigation?

Mr Seyer—Yes, the steering committee met from time to time to receive progress reportsfrom the consultant.

Senator O’BRIEN—I have been told that there were some significant incidents in thetesting of the vehicles. Were they reported to the steering committee?

Mr Seyer—To the best of my knowledge, yes, they were.



Senator O’BRIEN—Was the steering committee made aware of an incident involvingtruck F6, which veered across a road causing a white station wagon to swerve off the roadonto the gravel surface?

Mr Seyer—Because the steering committee meetings lasted only short periods of time,there was obviously not time to go into specific details.

Senator O’BRIEN—But that is a fairly significant event in the context of this inquiry,isn’t it?

Mr Seyer—Yes, it is.

Senator O’BRIEN—That was not drawn to the attention of the steering committee?

Mr Seyer—It probably was towards the latter part of the project, when the draft report wasbeing prepared. The test and evaluation of the instrumented trucks was towards the latter partof the investigation.

Senator O’BRIEN—I am told that there was an incident involving truck F1, which veeredacross the road almost colliding head-on with an oncoming stock vehicle. Was that drawn tothe attention of the steering committee?

Mr Seyer—I should point out that I was not present at all the steering committee meetings.

Mr Terrell—There are a couple of incidents through the test program that are mentionedand analysed in some detail in the final report.

Senator O’BRIEN—The final report does not mention any other vehicles involved inthose incidents, as I understand it.

Mr Terrell—I do not think it does, but members of the department were not at the testing,so we cannot either confirm or deny what may be claimed by people who were there.

Senator O’BRIEN—No, I asked a question about what was reported to the steeringcommittee.

Mr Terrell—I do not think it was reported to the steering committee in the terms that youhave quoted.

Senator O’BRIEN—In relation to correspondence from a Mr Rod Miller, the minister’sprincipal adviser wrote to that gentleman on 8 December 1999 advising ‘the remedial actiontaken by Kenworth in regard to cracking of Airglide 100 pedestals was considered by theFederal Office of Road Safety to be appropriate in the circumstances’. Can you advise thecommittee what that action was?

Mr Seyer—That was a field service action, if memory serves me, to allow the owners ofKenworths with Airglide 100 suspensions, which had problems with pedestals cracking, toupgrade their vehicles to a different type of pedestal. The type of action comes under theumbrella of the Australian Transport Safety Bureau. If the Senate wants further details, Icould probably seek those details from the ATSB.

Mr Harris—I think we actually asked this of the ATSB.

Senator O’BRIEN—I think I did, but I was not sure where the overlap was here.

Mr Harris—I do not have a problem with getting you a written answer. I just want to besure that they did not already answer that question. I must say, I was not concentrating onevery word said at that stage.



Senator O’BRIEN—I have a note ‘LT’ next to this, which means ‘land transport’. Myrecollection is that I was asked to refer this matter to land transport.

Mr Harris—Then we will certainly get you an answer on that. I am a little surprised at thatmyself because it is an ATSB matter. It may be that the officers at the table may not have beenaware of the specific circumstances. We can get you a written answer on that.

Senator O’BRIEN—Is the department aware of any threats of legal action by Kenworthagainst consultant Roaduser International during the conduct of the inquiry which wereperhaps with regard to the inquiry itself?

Mr Seyer—From a personal point of view, I have not been in any meetings whereKenworth and Roaduser have been present where any threats of legal action have been made.I obviously cannot confirm or deny actions outside my presence.

Senator O’BRIEN—Under the contract with Roaduser, would they be obliged to report orreveal any potential impending legal action involving themselves and an organisation whichhad an interest in the outcome of the inquiry—in this case, specifically a truck manufacturer,but it could be others?

Mr Seyer—I do not think I can answer that straightaway. I am not totally au fait with thedetails.

Senator O’BRIEN—It is all right if you need to take it on notice. It may be a bit technical,but I think it is a relevant question.

Mr Seyer—We will take it on notice. I am not aware of the actual details of that contract.

Senator O’BRIEN—Those are the questions I wanted to ask about that matter. I want tonow go to the roads branch. Mr Potter, can you tell me how many people are currentlyworking in the roads branch and what the establishment number is, please?

Mr Potter—It varies, but it is around 27 or 28.

Senator O’BRIEN—Do you have the same information for the rail branch, or do I need toask them?

Mr Owen—Again, it varies. It is 20 to 21 people.

Senator O’BRIEN—So the rail branch has gone up a little since the last full round ofestimates and the road branch has gone down from 30?

Mr Potter—Yes, I do remember 30 a year or two ago.

Senator O’BRIEN—Going back to last year’s PBS—1999-2000—on page 48 in the right-hand corner box, one of the performance measures under ‘Road Transport’ was a reference toa report on a network of nationally significant roads to be completed by November 1999. Canyou confirm that that work was done and a report prepared?

Mr Potter—The work was certainly undertaken. We have not finalised that report yet. It isbeing done through AustRoads, which is the Commonwealth-state body. I think thegovernment’s response to the Neville report talked about doing this as a joint Commonwealth-state initiative. So unfortunately that has taken longer than we had hoped, but we are nowworking towards a final by June this year, but I suspect it will go on a bit longer than that

Senator O’BRIEN—A bit longer is a month, a quarter, half a year, a year?

Mr Potter—I think half a year.

Senator O’BRIEN—So the end of the year is your realistic target date?



Mr Potter—Yes, I hope so. It gets involved in Commonwealth-state relations, Senator.

Senator O’BRIEN—On page 63 of this year’s budget statements, the third box down onthe right and left, there is reference to a review of arrangements for the funding of themaintenance of the national highway, and the performance targets refer to the provision ofbetter targeting of national highway maintenance funding. Can we have some detail of howthat review will be conducted, what time frame you are looking at, and who is going to do it?

Mr Potter—It has been ongoing since last year, basically. We did seek some advice fromsome consultants, because it is a very technical area and we wanted to be able to develop abusiness case that we could argue with Treasury and Finance as to maintenance needs, but itis very difficult to establish a link between the condition of the highway and the actualamount of dollars you need. So we contracted with a firm to help us develop a business case,but unfortunately the outcome of that was an even more complicated set of technicalindicators. That was not much use to us, so I have now contracted with the Australian RoadResearch Board in Melbourne. They have been working with the states developing a wholeseries of deterioration models of the pavement. They have now got all the national highwaydata in terms of pavement and are analysing that. Again, we are running a bit behind schedulethere, but putting a timetable on it is difficult. We were going to be finished by June, but itwill probably be September, I would now say. We are just about to meet with the states to gothrough the methodology and all the data to make sure they are happy with the data and thatthey understand what we are doing. Then ARRB will run the models and we will look at theresults and analyse them. Then, as I said before, we have to make the connection to the dollarsthat are needed, which is going to be the difficult bit.

Senator O’BRIEN—So there will be more consultants involved?

Mr Potter—I would imagine so, yes.

Senator O’BRIEN—Can you give me an outline of the consultancy involvement to dateand the cost?

Mr Potter—Yes, the first firm that I mentioned was Indec Consulting, and we paid them$75,000. The work with ARRB—the Australian Road Research Board—is being funded outof our normal contribution to that body, so there is no net cost to the department.

Senator O’BRIEN—What percentage of the annual roads budget goes to maintenance? Ipresume it is a fairly standard figure.

Mr Potter—Yes, it is. I am just trying to recall what it is. It is something like $300 millionout of the $800 million. It is $293 million out of $832 million next year, 2000-01.

Senator O’BRIEN—Is it a simple task to get the numbers and percentages for total fundsfor the 1998-99 financial year and the current financial year?

Mr Potter—For maintenance and the totals? Yes, that is quite easy.

Senator O’BRIEN—In the same box in the PBS there is reference to the development of abridge upgrading for strategic freight routes: what is involved in that?

Mr Potter—The minister announced some months ago—I cannot remember the date—thathe would make available $30 million to upgrade key strategic freight routes off the nationalhighway. He called for bids from the states for projects to be funded by the $30 million, andthey are due at the end of this month. That is what that item refers to.

Senator O’BRIEN—That relates to the increasing mass limits for trucks?



Mr Potter—Yes, it does. I am sorry; that is quite correct.

Senator O’BRIEN—Can you tell me where the review of Australian design rules is up to?

Mr Robertson—Senator, there are some 68 ADRs that need to be reviewed at this stage,of which 24 have been reviewed—mainly dealing with emissions and lighting. The projectruns until May 2001, so obviously there is about a third of that effort done.

Senator O’BRIEN—What was the number again?

Mr Robertson—Twenty-four out of 68.

Senator O’BRIEN—The target last year was 50 per cent completion, so you are wellbelow that. Can you tell me what factors impeded achievement of that target?

Mr Robertson—To get down to that level of detail, I would need to invite Mr Seyer to talkabout that again, because he has been managing that project. Mike Kimberlee has also hadsome involvement in that and might be able to help.

Mr Kimberlee—The reason I am sitting here is that I used to look after this area untilcomparatively recently. So I am aware of the situation. The consultation process for reviewingthe ADRs is quite complex, involving state and territories and normal stakeholders—industry,manufacturers, et cetera. This process has been complicated somewhat by the inclusion of thetrans-Tasman mutual recognition arrangement, which means that we also involve NewZealand in this process to develop first what are now know as trans-Tasman vehicle standards.Once they have gone through that consultation process we make them the Australian designrules and New Zealand makes them their land transport safety regulations. So it is quite acomplex process, and we have been gratified with the cooperation that is being shown by allthe parties. Really, the extension is more to do with taking the matters through the totalprocess, finishing up with COAG.

Senator O’BRIEN—It might not be fair to ask you this: given that the 50 per cent targetwas not achieved because of those factors, does that mean that the 100 per cent target thiscoming financial year—2000-01—is an optimistic assessment?

Mr Kimberlee—I am sorry, I cannot answer that. That is Mr Seyer’s area.

Mr Seyer—Perhaps I can give you the current situation. I hope I am not repeating theanswer.

Senator O’BRIEN—It is 24 out of 68, we are told.

Mr Seyer—That is correct. Two days ago the public comment on another 12 rules closed,so we are starting to analyse the public comment currently for those 12. It is hoped by thebeginning of July there will be another 10 issued for public comment. I can only give you abest guess at the moment and say only that the May 2001 deadline is, we believe, achievablecurrently.

Senator O’BRIEN—Another performance target in last year’s statement was theimplementation of recommendations of the review of the Interstate Road Transport Act to becompleted by June this year. What were those key recommendations flowing from thereview?

Mr Hogan—The review of the Interstate Road Transport Act, which sits behind theFederal Interstate Registration Scheme, is still proceeding. As yet there have not been anyrecommendations.

Senator O’BRIEN—So implementation next month is out of the question?



Mr Hogan—I think you could say that, yes.

Senator O’BRIEN—What is the new time line?

Mr Hogan—The current timetable is the drafting instructions in the winter sitting and forintroduction of legislation in the spring sitting. But I would not be 100 per cent confident thatwe will achieve that.

Senator O’BRIEN—What is a realistic timetable, then?

Mr Hogan—You could be certain we will have achieved introduction by the sitting afterthat.

Senator O’BRIEN—You mean next year?

Mr Hogan—Yes.

Senator O’BRIEN—Subject to the desires of the government, of course.

Mr Hogan—Subject to the desires of the government?

Senator O’BRIEN—So it will have gone through a process of drafting instructions anddrafting and then the matter is out of your hands, but it will certainly be ready forintroduction, in your view, by February next year?

Mr Hogan—Yes.

Senator O’BRIEN—The PBS says by the end of this year, but you do not think that isrealistic?

Mr Hogan—I do not think it is realistic. We have had some delaying factors which havemade what was probably a fairly optimistic target even harder to achieve.

Senator O’BRIEN—And what are those factors?

Mr Hogan—First amongst them would be the fact that we have had to introduce thesecond charges determination in the interstate road transport legislation, and that has turnedout to be a far more extensive drafting process than we had envisaged.

Senator O’BRIEN—So other tasks have got in the way?

Mr Hogan—Yes. The resources that might otherwise have been directed towards thereview of the Interstate Road Transport Act proper since about last December have to asignificant extent been consumed in getting the charges into place.

Senator O’BRIEN—On page 70 of last year’s budget statement, in the first box, under‘activity’, it states:Develop a road funding research program and fund and administer various projects and promote thoseprojects.

In performance measures for 1999-2000, the measure was 30 projects totalling $2 million.Mr Seyer—In the 1999-2000 PBS the statement there reflects the structure of the area

prior to a change during this financial year, and half the responsibilities there are now with theATSB. The current PBS reflects the current structure and the split-off of the responsibilities.

Senator O’BRIEN—So where in the current PBS do I find the remnant part of that?

Mr Seyer—The vehicles standards research part of it now resides with Vehicle SafetyStandards Branch.

Mr Robertson—It is on page 64, Senator; it is the fourth dot point.



Senator O’BRIEN—Yes. So that is 10 not 30 projects, and $1 million not $2 milliondollars?

Mr Seyer—If we refer back to page 70 of last year’s PBS, you will note that there is afurther 10, and that refers to that 10. So $1 million went to the ATSB for their projects, and $1million came to Vehicle Safety Standards Branch for those research projects.

Senator O’BRIEN—Thanks for that. How many statistical reports have been publishedthis year? The target from last budget was 25.

Mr Hogan—Sorry, that is a question you would have to ask the ATSB.

Senator O’BRIEN—Okay. They get a question on notice. The remainder of my questionsare on rail. Thank you, gentlemen. I will start and we will see how we go. On the issue ofnational rail safety, can you tell me whether the industry codes of practice were introduced byMarch this year, which was the target date set out on page 49 of the 1999-2000 PBS?

Mr Owen—In terms of the performance measure there relating to the major industry codesof practice standards and protocols—those are the ones you are talking about—they cover notonly safety issues by nature but also are mainly to do with operational uniformity acrossAustralia. The four codes were developed and released for first round public consultation atthe end of 1999. Following that consultation there were a range of fundamental questionsraised about the content and the direction that they were taking. Subsequently there has been agreat deal of work done, and in November 1999 ATC signed off an IGA between allCommonwealth and state and territories—

Senator O’BRIEN—IGA?

Mr Owen—Sorry, intergovernmental agreement—which created a new unit, the AustralianRail Operations Unit, within the department. So it sort of took a bit of a different directionthere to grapple with the codes and to take them from the previous body that had worked themup and put them into an implementation framework. That is happening now—that unitcommenced on 1 January 2000. The codes are being reviewed to consider whether theyshould be broken down into smaller chunks, if you like, and the implementation of those isproceeding.

On that front, two of the codes—one called the interface management and generalrequirements code and another called the operations and safe working code—are now to gothrough a regulatory impact statement process, working with industry, and the expectation isthat they will be finalised in September of this year, 2000, subsequent to that regulatoryimpact statement being completed, and in fact the second of those will be trialled prior toimplementation. So it has become a much more targeted process to the implementation of thethings. They were actually drafted according to the timetable there.

Senator O’BRIEN—Does that mean the process will be ongoing and you will just pick offbit by bit?

Mr Owen—That is right; rather than taking it as a whole mass. I think the feedback fromindustry was that that was going to be too big a bite and that they were not targeted enough toallow for that sort of massive implementation in one go. So they have been broken down intomodules, and it will be modularised and introduced over time. As part of the set up of thatnew unit there has also been a new industry advisory group established to facilitateconsideration of implementation.

Senator O’BRIEN—What is the name of unit again?



Mr Owen—The Australian Rail Operations Unit.

Mr Hogan—It has an industry advisory committee.

Senator O’BRIEN—And that is the unit within the department.

Mr Owen—It is within the department and it is within the rail branch, which relates to thatinitial question of yours.

Senator O’BRIEN—How many staff does it have?

Mr Owen—I think the unit has three or four staff.

Senator O’BRIEN—Does it vary, or are you not sure?

Mr Owen—It does vary a bit, because that section does other things. But we did answerthat in a question in the last round in specific detail, which I could just quickly try to track ifyou like. It covered the qualifications of the people and that sort of thing as well.

Mr Harris—Perhaps you could go on, Daniel, and I will look it up.

Senator O’BRIEN—If you just give me the reference, we could find it. In last year’sbudget statements under output 1.1, rail policy—which is on page 49, top boxes left andright—there was a reference to a review of the national rail safety arrangements and thedevelopment of a national rail safety regime and associated processes. Is that the same thing?

Mr Owen—It is covered in the same box, but it is a separate exercise. That review wasconducted, and a report went to the Australian Transport Council meeting at the end of 1999,in November. The progress towards unified safety arrangements was noted by ATC and therewere decisions taken in terms of some of the structural arrangements within that at thatmeeting.

Senator O’BRIEN—It also referred to the development of national uniform rail standardsand operational requirements.

Mr Owen—That is the previous exercise I was talking about, Senator, with the AROU.

Senator O’BRIEN—So they have been rolled in together. The performance measure wasthe review of safety arrangements to be agreed by the ATC by November 1999.

Mr Owen—Yes, and that occurred.

Senator O’BRIEN—If we go to page 66 of this year’s statement the activity is describedas the development and implementation of the Australian Rail Operations Unit uniform railoperational requirements for the interstate rail network. Is that a redescription of the activitywe have just been dealing with?

Mr Owen—It is, yes.

Senator O’BRIEN—I think we understand where we are going with that. Can you tell meexactly where the sales process for National Rail is?

Mr Owen—Yes. There was a press release issued by the minister yesterday whichconfirms that agreement has been reached between the shareholders of National Rail as to thebasic tenets of a joint sale process, and that sale process is to be managed by the Office ofAsset Sales and IT Outsourcing, which is a Commonwealth entity attached to the Departmentof Finance and Administration. That process is essentially and finally about to kick off as ajoint sale of 100 per cent of the shareholding in National Rail.

Senator O’BRIEN—Managed by OASITO.



Mr Owen—Yes.

Senator O’BRIEN—Is there a time frame for the completion of that?

Mr Owen—The time frame for the completion is reflected on page 66 of this year’s PBS,which is the sale of NR by the end of 2000-01.

Senator O’BRIEN—The end of this coming financial year?

Mr Owen—Yes.

Senator O’BRIEN—The last deadline was the end of 1999 and there was an 18-monthextension. Can you explain why that was necessary?

Mr Owen—It was necessary. I note in explaining that there has been a great deal of workdone in the interim in terms of how we would approach such a sale. But, essentially, while theCommonwealth is the major shareholder in the company, we could not proceed in a joint saleprocess, by definition, without the support of the other shareholders, Victoria and New SouthWales. The process of reaching that agreement has taken that time.

Senator O’BRIEN—Thank you for that.

Senator Ian Macdonald—You also have to get a bill through the Senate, Senator, whichyou might be able to help with.

Senator O’BRIEN—So are the legislative drafting instructions being prepared?

Mr Owen—The legislative basis for the sale of NR is in fact in place. It may be that thereis another bill that we are very interested in getting some cooperation on, which is for thewind-up of Australia National.

Senator O’BRIEN—Is that drafted?

Mr Owen—That is drafted. It is part of a bill which is before the house at the moment.

Senator Ian Macdonald—That is the one that is bogged down in the Senate withmandatory sentencing amendments.

Senator O’BRIEN—Oh, that is the bill where you were dealing with parliamentarysecretaries in the Northern Territory, for some reason.

Senator Ian Macdonald—We are now onto mandatory sentencing to get AustraliaNational sold.

Senator O’BRIEN—What is the nature of that bill again? It is an omnibus bill, is it not? Ithought there were decisions made in the past to avoid them.

Senator Ian Macdonald—You can help, Senator, by helping us to get it through.

Senator O’BRIEN—You could probably deal with the matter easily by disaggregating itand introducing some other bills. It would probably expedite that matter.

Mr Harris—Earlier we were trying to work out the size of the Rail Operations Unit. Theanswer on notice we think now is in the estimates before last. It is certainly not in the bunchwe have just provided to you. We are pretty confident that answer says what Mr Owen said,which is the rail unit is between three and four people. I think it says the same thing.

Senator O’BRIEN—Is it possible to get a more precise answer for this estimates?

Mr Harris—We are happy to make it four now, if it helps to avoid taking a question onnotice.

Senator O’BRIEN—It is four, is it?



Mr Hogan—The simple fact is that people are working on other things. I think the coreunit is three people, but there is a couple of other people who flit in and out on various tasks.

Senator O’BRIEN—That is the best we are going to do for the moment, I would imagine.In the performance measures for the very fast train on page 49 of last year’s PBS—in the thirdbox on the right-hand side—is proving up of the process by October of last year. Where arewe actually in relation to that item?

Mr Owen—The three governments involved received the proved up Speedrail bid on 19November 1999, in fact. That has been assessed by officials. There is an ongoingconsideration of that by the three governments.

Senator O’BRIEN—Can a copy of that be made available to the committee?

Mr Harris—I doubt it, Senator. It comes under substantial confidentiality restrictionsbetween the three governments.

Senator O’BRIEN—How much has that work cost to date?

Mr Owen—Again, Senator, I answered this at the last session.

Senator O’BRIEN—It might have changed. I cannot recall whether there wereoutstanding accounts.

Mr Owen—There was a joint agreement by the three governments that each governmentwould commit $1 million to that process, totalling $3 million. The exercise was supportedfrom our end—as against Speedrail’s end—within that budget, and the final accounts are stillcoming in for this year. The process has essentially been completed.

Senator O’BRIEN—So the maximum cost is $3 million, but you do not actually knowwhat the number is until all the accounts go through.

Mr Owen—That is right.

Senator O’BRIEN—Did the Australian Rail Track Corporation and the National RailCorporation comply with all provisions of the Commonwealth Authorities and CompaniesAct?

Mr Owen—Those that were relevant, yes, they did. Neither of those companies isestablished subject to the full CAC Act obligations. The Australian Rail Track Corporation isestablished under the Corporations Law and the National Rail Corporation is similar—supported by initial or enabling legislation but not a 100 per cent Commonwealth ownedentity. So it sits in some quite unique territory there. We have vigorously exercised ouropportunities to oversight those entities and to ensure they are accountable in theirperformance.

Senator O’BRIEN—Were they required to lodge corporate or business plans?

Mr Owen—Yes, they were.

Senator O’BRIEN—Did they do that?

Mr Owen—Yes, they did.

Senator O’BRIEN—What is the total expenditure to date by the federal government onthe Alice Springs to Darwin rail link?

Mr Owen—The expenditure to date has not been significant and has not been separatelyaccounted. My estimate would be that our involvement in that exercise has engagedapproximately half of the time of one officer at the $50,000 annual salary level over the lastyear. We have, in contributing to that exercise, helped to clarify and look at issues such as



native title, contamination of the land and some other titling issues and have put some efforttowards the negotiation and finalisation of a deed of grant for the Commonwealth’s overallcontribution.

Senator O’BRIEN—So it is about $25,000 plus on-costs. What is the projected totalfederal government spending on this project? We are talking about a multimillion dollarproposal.

Mr Owen—The projected commitment to the project relates to the government’scommitment of $100 million under the Federation Fund and $65 million as additionalcontribution towards the project—so, $165 million.

Senator O’BRIEN—The Prime Minister announced in October that 7,000 jobs would becreated by this project. Is there a breakdown of that figure by state and job type?

Mr Owen—No, there is not. The figure comes from the 1998-99 annual report of theAustralasian Railway Association, which is the entity that has been set up by South Australiaand the Northern Territory. It quotes a figure of 7,100 jobs anticipated to be created in the2001-02 financial year as part of the project.

Senator O’BRIEN—So the Prime Minister was relying on the accuracy of that forwardestimate. Do you have any idea of the proportion of those positions that might go toindigenous people?

Mr Owen—No, I do not.

Senator O’BRIEN—What about the long-term unemployed?

Mr Owen—Again, I do not.

Senator O’BRIEN—Is there any plan which would allow this project to assist in theacquisition of new skills through apprenticeships in regional Australia?

Mr Owen—I am unable to answer the question.

Senator O’BRIEN—You are not aware of any.

Mr Owen—I am not aware of any, but I would stress that the Commonwealth’sinvolvement in the project is essentially one of providing our inputs to that process. Theproject is being managed by, and some of those issues would be the responsibility of, thecompany and the governments who are hands on with it.

Senator Ian Macdonald—Senator, this is no factual answer to what you ask, but I wouldthink there will be new skills related jobs. More particularly in terms of your comment aboutindigenous workers—again, I have nothing factual—Torres Strait Islanders interestingly havea reputation for rail building, which they apparently got constructing the Adelaide to Perthrailway decades ago. It always seems incongruous to me that Islanders, who would have hadlittle exposure to railways, would be good at that but, apparently, in those circles they have areal reputation. That being the case, I would imagine there will be lots of opportunities.

Senator O’BRIEN—I imagine there will. It will be interesting to see how it works out.Was an environmental impact statement completed for the Alice to Darwin rail link?

Mr Owen—A full environmental impact statement was conducted. An exercise concludedin May 1984 in which the Commonwealth, including the Australian National RailwaysCommission of the time, and the Northern Territory governments conducted an environmentalimpact assessment and issued a statement for public consultation.

Senator O’BRIEN—So the statement is 16 years old. Does it need upgrading?



Mr Owen—It has been substantially updated. I could go on with a little bit of achronology. In 1994 when the project was revisited—and some of the survey and design workthat had stopped earlier, when the funding problems were experienced back in 1984,recommenced—to satisfy the Northern Territory environmental legislation and theEnvironment Protection (Impact of Proposals) Act, which is a Commonwealth act, and tocomplete the assessment that had started 10 years before, the Northern Territory environmentdepartment sought a notice of intent to be issued and a environment management plan to beprepared. That was done over subsequent years. An environment management plan wasdeveloped by Dames and Moore and was issued in 1997. On 23 January 1997, thisdepartment designated the Northern Territory Department of Transport and Works as theproponent, under the appropriate environmental legislation, to again take the exercise into anassessment process, and that followed the gift of the Alice to Tarcoola line into the proposedproject. In May 1997 Senator Hill, as the delegate under the EP(IP) Act, declared that no PERor EIS was needed for the project. A new path was proposed, through Darwin, as a result ofsome issues that had arisen. That was then reassessed, and a senior official from Senator Hill’sdepartment again determined, as recently as December 1999, under the EP(IP) Act that nopublic environment report or EIS was required. They did advise some assessment notes interms of how that construction should occur. So it has been a very comprehensive process.

Senator O’BRIEN—What was the feasibility study into this project that the governmentrelied upon when it made its decision to increase its financial contribution to the project?

Mr Owen—I am not aware.

Senator O’BRIEN—You are not aware of any such feasibility study?

Mr Owen—There have been a number of feasibility studies conducted over the years intothe line since it was first mooted at the beginning of the century.

Senator O’BRIEN—They would be a bit old.

Mr Owen—Yes, they would be a bit old. There were ones done during the 1980s.Certainly, a number of different exercises were conducted.

Senator O’BRIEN—What cost-benefit analysis was completed before the announcementof the federal government’s commitment to the project?

Mr Owen—That would have been inherent in any sort of assessment. I am not aware ofthe results of those exercises.

Senator O’BRIEN—Could you find out if there are any such exercises that thegovernment relies upon and what they are?

Mr Owen—As I said, there certainly were numerous exercises done.

Senator O’BRIEN—Can you find out which of those the government relies on?

Mr Owen—Yes.

Senator O’BRIEN—Does the Northern Territory government contribution come onlyfrom the Northern Territory government? By that, I mean: are there any undertakings orarrangements in place for the federal government to assist the Northern Territory governmentto meet its contribution to the project?

Mr Owen—Not that I am aware of.

Senator O’BRIEN—Could you check that and let us know?

Mr Owen—Yes.



Mr Bowdler—As I understand it, the Commonwealth commitment is the $165 million.

Mr Harris—I am not sure that latter question would be ours to take on notice. It is not ajob for this department to make that assessment where funds are provided under theFederation Fund. It is a question directed to Prime Minister and Cabinet, but we can ask.

Senator O’BRIEN—I guess I will just put the question on notice and the minister cancomplain about that at the next estimates.

Senator Ian Macdonald—You can complain if we don’t answer it.

Senator O’BRIEN—I’ll do that. You know that.

Senator Ian Macdonald—It is not our responsibility.

Senator O’BRIEN—Is the funding from the federal government for the start-up, or isthere any commitment to recurrent funding?

Mr Owen—The funding relates to the construction of the line.

Senator O’BRIEN—Has the government made hard and fast commitments that recurrentfunding from government sources will not be available?

Mr Owen—Sorry?

Senator O’BRIEN—Is there a statement from the government on this proposal that thereis an absolute limit on the government’s involvement to the construction phase and that therewill be no funds for recurrent funding?

Senator Ian Macdonald—As I understand it, and as I think you would be aware, this is aprivate enterprise operation to build and operate the railway line. There was a shortfall in thecapital available to make it happen. The three governments made a contribution towards thecapital costs, but there is no commitment to ongoing costs and no expectation that we will beasked to.

Senator O’BRIEN—What is the cost to the federal government of the gifting to theprivate consortia of the 830 kilometres between Tarcoola and Alice Springs?

Mr Owen—The cost will relate to a transfer of an asset which is held at the moment by theAustralian Rail Track Corporation. In terms of transaction costs, I do not understand that therewill be significant costs involved, but it is an active and working asset which will betransferred as part of the government’s commitment to the project.

Senator O’BRIEN—What is the value of the asset?

Mr Owen—It is very difficult to determine in terms of which way you might value thatasset. The Commonwealth funded the construction of the track, which was opened in October1980. The cost of that exercise was $145 million in 1980 dollars. The written downreplacement value, as I understand it from the ARTC at the moment—and that is areplacement value—is $400 million.

Senator Ian Macdonald—What would its value be as a return on investment?

Mr Owen—I am not aware of that, but it would be factored into the ongoing reports of theARTC.

Mr Harris—Depreciation alone on a replacement value like that would eliminate anyrevenue. The net revenue earned on the line is not significant.

Senator O’BRIEN—But it is an asset, nevertheless, which has a value in the constructionprocess in terms of it being at least a partly constructed railway.



Senator Ian Macdonald—As the officer said, it depends on how you value it. Mostvaluations commercially are done on fixing a six or seven per cent return—perhaps not thatmuch these days—and then working out what the capital cost would be to give you that returnfrom the income that is there. If you use that form of valuation, the value of the item would berelatively modest.

Senator O’BRIEN—Let us make another assumption, Minister: if you said, ‘Youconstruct the other part of the line and we’ll keep the Tarcoola to Alice section,’ that partwould be much more valuable, I suggest.

Senator Ian Macdonald—As part of an ongoing right-through thing, perhaps it would be,yes. But, again, I would emphasise what the officer said: it depends on how you value it.


Senator Ian Macdonald—I gave a valuation method that had not been mentioned, and sohave you. Now you have the benefit of everyone’s thoughts on it.

Senator O’BRIEN—We have the official position, which is probably more important thanthe position that you or I might adopt at this time in any case. They are the questions that Ihave on this portfolio. I thank all of the officers and, to those who had to wait longer, Iapologise, but that is how it works out.

Proceedings suspended from 3.27 p.m. to 3.47 p.m.Executive and Corporate Management

Regional Services, Development and Local GovernmentSenator MACKAY—Has the department undertaken any research on the impact of the

GST on regional Australia?

Ms Varova—No we have not.

Senator MACKAY—Are you aware of any research that has been conducted in relation tothe impact of the GST on regional Australia?

Ms Varova—I am not aware of any.

Senator MACKAY—Is anybody in the department aware of any?

Mr Harris—No.

Senator MACKAY—As the coordinating agency, would it be fair to say that if work hadbeen conducted you would be aware of it?

Mr Harris—I would expect that we would.

Senator MACKAY—So you are not aware of Treasury having undertaken any analyses?

Ms Varova—I am not aware of any.

Senator MACKAY—If Treasury had, would you, as the coordinating agency, be aware ofit?

Ms Varova—I would imagine so, but that is all I can say, of course.

Senator MACKAY—So it would be a fair summation to say that there has not been anywork done on the impact of the GST on regional Australia?

Ms Varova—I would say so.



Senator MACKAY—Has anybody in the department been involved in discussions withthe National Farmers Federation?

Mr Harris—On what issue?

Senator MACKAY—Regional Australia.

Mr Harris—Officers of the department have been engaged in discussions with theNational Farmers Federation from time to time across a very wide range of issues. The Dieseland Alternative Fuel Grants Scheme is one I recall.

Senator MACKAY—Have there been any discussions or meetings between thedepartment and the National Farmers Federation on infrastructure?

Mr Harris—Perhaps Mr Bowdler can help. I could take you to specific issues not thegeneral issue.

Mr Bowdler—I have not personally taken part in any such discussions. I was aware thatthe NFF was arranging a briefing with some of our people working in the Regional SummitUnit to discuss work they had done on regional infrastructure. I cannot enlarge on that at thisstage.

Senator MACKAY—What time frame are we are talking about for this briefing inparticular? Was that recently?

Mr Bowdler—In the last three months or so.

Senator MACKAY—Was this is in relation to the infrastructure recommendations arisingout of the interim report?

Mr Bowdler—I cannot give the exact context because I was not party to the discussions.You would be aware that the NFF does have an interest in infrastructure and they have beendoing some work on it and were keen to talk to the department.

Senator MACKAY—Are you aware of any discussions in relation to roads? Is anybody inthe department aware of any?

Mr Bowdler—Not in terms of roads. We do not have our land division here now. I am notsure whether the NFF participated in the Moree congress. They may well have and there mayhave been discussions between our representatives, but I could not pin anything down on that.

Senator FORSHAW—Who normally initiates the discussions that you have with the NFFthat you have been referring to in those answers? Has it been in response to requests from theNFF for meetings or have they been—

Mr Bowdler—The one I referred to on infrastructure, which is the only one I really haveany involvement in, was raised with me by an NFF staffer at a cricket match when we wereboth in the same side. He said that he had done some work and was keen to facilitate adiscussion with the department and I followed that up.

Senator FORSHAW—It is good to see Commonwealth diplomacy is still at work in itshistoric and purist form. What is the general situation? Does the NFF as a representativegroup contact the department or do you actually say, ‘We have these issues, we should talk tothe NFF?’

Mr Harris—When the NFF has expressed a view publicly that we were not previouslyaware of, to my recollection, we have initiated discussions. In other circumstances where theminister’s office has said, ‘The NFF has a view on this, you should consult them as youconsult other parties,’ we do that.



Senator FORSHAW—This is slightly off the topic. I will say that because I know I willget the minister’s attention.

Senator Ian Macdonald—Most of the questions about the NFF have been slightly off thetopic, but we will be cooperative.

Senator FORSHAW—I am beginning to wonder what is really on the topic.

Senator Ian Macdonald—Yes, you are right.

Senator FORSHAW—I am really beginning to wonder what you do, Minister, if everyissue that relates to regional Australia is someone else’s responsibility. That is why I madethat comment. Recently the ACF and the NFF made an announcement about salinity issuesand called for substantial government public funding to address those problems. Whilst Iappreciate that primarily it would be a matter for the minister for the environment, it clearly isrelevant to AFFA and, I would have thought, this department in the overall context ofgovernment spending in rural and regional areas. Has there been any contact with yourdepartment, Minister, or with you about that issue or is it purely a matter for Senator Hill?

Senator Ian Macdonald—Salinity and those natural resource managements are—

Senator FORSHAW—And Senator Minchin also gets a say in this.

Senator Ian Macdonald—I was going to say that Mr Truss as Minister for Agriculture,Fisheries and Forestry and Senator Hill have the carriage of the Murray-Darling Basin andthose natural resource matters rather than this department.

Senator FORSHAW—I appreciate that. Some of these issues, particularly rural andregional Australia issues, as we know, require a whole of government or a broad approachfrom various departments. I would have thought that this department would have at least aninterest in the issue because clearly at the end of the day what happens in that area will have areal impact upon the fortunes of rural and regional Australia and the towns that depend uponwater supplies and so on.

Senator Ian Macdonald—We do have an interest in a lot of those matters. If you weremore specific, I could be more specific in saying what our involvement is—whether it is anup-front involvement, whether it is a consultative role or whether it is drawing the partiestogether.

Senator FORSHAW—The announcement was only made last week and we know thatthere has been a response from the Minister for the Environment and Heritage and there hasbeen a fair amount of public speculation, if not advised comment, that this is an issue wherethere are different views within the government.

Senator Ian Macdonald—What exactly are you talking about?

Senator FORSHAW—For instance, the question of what role the federal governmentshould play in respect of funding the salinity issue and the extent of it.

Senator Ian Macdonald—We have no direct role in that. There is a secretaries committeeon natural resource management in which our secretary is involved.

Senator FORSHAW—Thank you. I will leave it at that.

Senator MACKAY—Page 40 of the PBS refers to the recent Beef 2000 exposition. I amcurious as to why DTRS was involved rather than AFFA.

Senator Ian Macdonald—Involved in what way?



Senator MACKAY—In all the ways that are outlined in the PBS on page 40.

Ms Varova—We were involved in providing sponsorship to the Beef 2000 expo primarilybecause we do have an interest in regional development issues. It seemed appropriate anduseful that the expo did cover those issues as well, which I understand it did. We also used itas a vehicle to publicise more widely the Rural Transaction Centre Program, our RuralCommunities Program and a wide range of the programs and the activities we undertake. Itwas also linked in a way to our pre-work to do with the Northern Forum. We were veryinterested in being involved primarily because we were going to have a significant number ofconsultations and a final forum in Katherine, so obviously Queensland was important in that.There were a variety of reasons for our involvement.

Senator MACKAY—Who were you approached by in terms of the DTRS involvement?

Ms Varova—That would have to be based on my recollection. I think it was the organisingcommittee. I would have to check that to be absolutely accurate.

Senator MACKAY—So they came to DTRS and said, ‘We would like some financialassistance’?

Ms Varova—I think it was probably a representation to Minister Anderson, who wouldhave referred it to us for consideration.

Senator Ian Macdonald—It was a representation to Minister Anderson and also to me atvarious times in my contacts with the Beef 2000 people in Rockhampton.

Senator MACKAY—Where did the $250,000 come from?

Ms Varova—That was provided from departmental funds.

Senator MACKAY—I cannot find it in the PBS other than on page 40.

Mr Martin—I will correct Ms Varova. It was administered fund program funding awardedby government in the recent budget process. However, it is a one-off payment which hasactually been made in the current financial year, not the new budget year. It is still describedas a new measure simply because it is that. It is a new initiative that was not in any of theprevious budgets.

Senator MACKAY—So it was from internal departmental resources?

Mr Martin—No. It was new funding, new moneys.

Senator MACKAY—New moneys from Treasury?

Mr Martin—Yes.

Senator FORSHAW—Just on Beef 2000: was there a particular reason why thedepartment decided to provide some sponsorship funding for this year as distinct fromprevious years? Is this the first time a request had been made?

Senator Ian Macdonald—No. Someone might correct me if they have the detail, but I cangive you a bit of anecdotal history. Beef 2000 of course is only held once—Beef 2000.

Senator FORSHAW—Yes, but beef is sold every year.

Senator Ian Macdonald—They previously had a beef expo, about three or four years ago,where, I think, the Commonwealth government also assisted at that time. I do not think youwould call it a regular event, but it is something they run relating to the beef cattle industryevery two or three years.



Senator FORSHAW—I may be slightly confused here, but I know that, for instance, everyyear there is a beef week promotion held, certainly in northern New South Wales. I may standcorrected, but similar things happen in other states, and they happen with other products. Irealise it was Beef 2000, but what is special about this one, other than it being Beef 2000?

Senator Ian Macdonald—It is a fairly major thing. They have been run in Rockhamptonbecause that was the headquarters of the Cattlemen’s Union, and of course Rockhamptonclasses itself as the beef capital of Australia. I suspect others may well challenge that, but Iam on Rockhampton’s side—I think it is right.

Senator FORSHAW—People in Casino and Grafton wish they were, but times are tough.

Senator Ian Macdonald—It is a very significant event. Perhaps if I could get you a copyof their program, you would see the sorts of activities which range right across the wholespectrum of cattle, country, science, research and exports.

Senator FORSHAW—Are there any plans to have any other similar sponsorships,industry expos or forums like this?

Mr Harris—If someone puts up a proposition, we would consider it.

Senator FORSHAW—They probably will.

Senator MACKAY—Are you aware of any? Let us say, sugar or wheat?

Senator Ian Macdonald—We are always being approached for sponsorship. As I think wehave been through, we sponsored the ABC’s Haywire program and the Young Australian ofthe Year.

Senator MACKAY—But, in relation to this, is the department aware of any furtherrequests for sponsorship in terms of a sectoral representation?

Ms Varova—None that I know of are in the pipeline but, as Mr Harris has indicated, oftenthere may be preparations for events later down the track—that is usually when they approachus.

Senator Ian Macdonald—The answer is no. I cannot remember any that are currentlybefore me but, as I say, as you move around people will always approach you. I think I have asponsorship request before me for women in business. There are always things around, butthere are no current plans for anything out of the ordinary.

Senator FORSHAW—Our question should not be taken as criticism.

Senator Ian Macdonald—No, I appreciate that.

Senator MACKAY—Just coming back to you, Mr Martin: you have actually got newmoney from Treasury for this in the current financial year?

Mr Martin—That is correct.

Senator MACKAY—Under what particular appropriation? Can you give me the name ofthe appropriation in Treasury from which this money came?

Mr Martin—It comes back to one of the discussions we had yesterday. In reprofiling ourexpenditure over the years, we moved an amount of money out of this year into future years.In the ordinary course of events, that reduces, at least administratively, the amount of money



we can spend this year. However, there was still an amount of appropriation that would nothave otherwise been exhausted. So, technically, the money will still come from our ownexisting appropriation. However, I guess, when you do my job from day to day, there is a bigdifference between funding and the actual appropriation authority.

Senator MACKAY—Okay, I understand now. I have an aggregate question: I am trying toget a picture of how much money this part of the department has got in the new budget—thatis, extra money, new money?

Mr Martin—In the next financial year?

Senator MACKAY—Yes. As I recall from our conversation from the other day, we have$0.9 million for IOTs.

Mr Martin—Technically IOTs are not necessarily Ms Varova’s division.

Senator MACKAY—What about the regional services, local government and territoriessections of the department?

Mr Martin—Largely speaking, the items on page 37 are the extent of our new measures assuch. Sure, there are a few things like indexation and the reprofiling issue that we havediscussed, but generally speaking the items on page 37 summarise our new initiatives. As youcan see, the only two that apply to the current division are the Year of the Outback and Beef2000.

Senator MACKAY—And $0.9 million for IOTs?

Mr Martin—That is correct.

Senator MACKAY—The other $2 million is from internal resources?

Mr Martin—The $2.9 million will go to IOTs; the other $2 million will come fromsomewhere else in the department.

Senator MACKAY—Could you say that again?

Mr Martin—An additional $2.9 million of services will go to the IOTs; the other $2million will be found through a business planning and resource prioritisation exercise withinthe department.

Senator MACKAY—We traversed this the day before yesterday: I understood you to saythat $0.9 million is new money of the $2.9 million; the $2 million is from internal resourcesfrom within the department. In relation to the rest that we were talking about, as outlined onpage 37, how much new money has this section of the department got?

Mr Martin—This division of the department?

Senator MACKAY—Yes.

Mr Harris—In practice, if you look down the columns, you will see that the answer to thatis it is in the current financial year where the other two items apply—as in 1999-2000. If yourun down the second white column headed ‘2000-01 Budget’, you will see that there are zerosagainst those for the coming financial year. They are one-offs in the current financial year. Soin terms of the calculation you are trying to do—I am just trying to point out—you areswitching across financial years as you do it.



Senator MACKAY—I appreciate that. I am trying to understand what is actually beingfunded internally, and what has come from an external source, such as Treasury.

Mr Harris—In the coming financial year, I think Mr Martin is saying that it is $0.9 millionbetween territories and regional. In the current financial year, it is $3.1 million—sorry, theyare outputs. This is again another mixture. If you are just doing administered, working upfrom the bottom, you will see Beef 2000 at $1.1 million and Year of the Outback at $1.1million.

Senator MACKAY—And that is money that is coming from not within the department?

Mr Martin—Everything on page 37 represents adjustments to money to the department.So everything under the expenses column is new money, except obviously those which have aminus sign next to them, which are a reduction in funding to the department.

Senator MACKAY—So there is really only $0.9 million coming from Treasury?

Mr Martin—For the areas in question that you are interested in, yes; as well as the RASprogram, which is obviously an important regional program as well.

Senator MACKAY—In counterbalance to that, we have the two per cent for embeddedwholesale sales tax, the ongoing dividend question and the other issues that we discussed theother day.

Mr Martin—That is correct. Keep in mind that the items on page 37 represent adjustmentsto the existing forward estimates, not necessarily adjustments between this year and the next.If you look at the table which is on page 47, which is a list of all the different programs of thedepartment, they are not classified by division, but I am sure you can see the ones which areregionally focused. You can see the difference between the current year and next year’sfunding. So there are a number of programs in there which actually do have significantlymore funding next year than the current year—such as the RTCs program. There are a numberof minor adjustments against the forward estimates themselves, which are also displayed inthat table. Most of those are actually the reprofiling exercise we talked about yesterday andgeneral indexation.

Senator MACKAY—That is right. It is understanding the carryover that we talked aboutthe other day. Going to some of the questions we got on notice on Tuesday, we asked aquestion last time in relation to whether there had been any reviewing of previous governmentprograms, such as Building Better Cities and REDOs or whatever. The response from thedepartment was that there has been ‘no formal evaluation by the department of the REDO’.This is No. RSDLGO2. It says that the NCA prepared a report on the Building Better Citiesprogram. Why did the NCA prepare that report? Why was it given to the NCA?

Senator Ian Macdonald—On the Better Cities program?


Senator Ian Macdonald—Senator, I think this happened three or four years ago, didn’t it?If it is a question for this budget estimates committee at all, it should have been put in one ofthe—and I am sure this is without exaggeration—20 estimates committee hearings we havehad since they did the work.

Senator MACKAY—Minister, this is an answer to a question on notice. Right? If youhave a look at your standing orders, you can ask questions about questions on notice.



Senator Ian Macdonald—I think it happened before this government came along. Icannot answer for why the National Capital Authority or for what might have been aroundfour years ago. When was it done?

Ms Meakins—I think the report in question was completed over a year ago.

Senator Ian Macdonald—By the National Capital Authority?

Ms Meakins—That is right. The National Capital Authority at the time were givenresponsibility for the wind-down of Better Cities at the time of the abolition of the BetterCities program and the creation of this department. In that exercise, the wind-downresponsibilities, as Mr Bowdler explained at the last estimates, were given to the NationalCapital Authority.

Senator Ian Macdonald—When did the program finish?

Ms Meakins—It would have been 1996, roughly.

Senator MACKAY—You should have your own little estimates, Minister.

Senator Ian Macdonald—Senator, it is so long ago.

Senator MACKAY—The report for the NCA was completed a year ago: is that right?

Ms Meakins—I would really have to check. It is since I have been in this position and it isat least a year ago.

Senator MACKAY—What happened to it? Where is that report?

Ms Meakins—I am not sure, because actually at that stage the responsibility for the oldprograms was with another branch. I would need to take that on notice and check.

Senator MACKAY—I would like that taken on notice, thank you. Also I would like it ifyou could take on notice—and you will need to check this—our wanting a copy of it. But youwould need to check whether we can have one or not, obviously. I have one final questionwith regard to understanding regional Australian research data grants. Now I understand thatthere is one I did not finish the other day. We did get the guidelines, as we talked about. Isthere a time line for starting the funding applications for these programs? Having said that, Ithink the minister may have put a press release out recently in relation to that.

Ms Meakins—Yes. Applications for grants were sought in an advertisement that wasplaced last weekend, and the closing date for applications for this round is 22 June.

Senator MACKAY—Ms Meakins, take me through how the applications are going to behandled.

Ms Meakins—At this stage, applications will be assessed within my branch and then theywill be put to the Understanding Rural Australia Advisory Committee and then to theminister.

Senator MACKAY—Are the applications going to be announcements on a quarterly basisor an annual basis or—

Ms Meakins—At this stage, that is yet to be decided, as we were actually looking at thelevel of interest elicited first up.

Senator MACKAY—Mr Matthews, on a question on notice we got from the department,we asked a number of questions at the last estimates with regard to the foundation. The advicewe received from the department is that that request has gone to the Australian GovernmentSolicitor and that we would be apprised once that advice had been received. Given the



effluxion of time since presumably this was responded to and now, has the advice beenreceived yet?

Mr Matthews—Yes. We rushed it through; and yes, I received it yesterday.

Senator MACKAY—What was contained in it?

Mr Matthews—Perhaps I could try to answer a series of the questions you asked last timetogether.

Senator MACKAY—That would be excellent, thank you.

Mr Matthews—I will just take you through it, and feel free to come back with anyquestions. As I said at the end of the last session about the foundation, I said I would seek tohave a discussion on the board of the foundation about the issues that were being raised.Essentially, those issues in my mind were how I should respond properly in this forum—given that I am a Commonwealth officer and should be responding as fully as I can, but giventhat I only have access to that information by virtue of my presence on the board; in otherwords, I have legal obligations as a board member and I have legal obligations specifically tothe Senate committee as a Commonwealth officer.

I spoke to the chair of the foundation and I have written to him as well and I have askedthat we do have that discussion at the next meeting of the board. That meeting has nothappened yet, but it is scheduled and that item will be discussed on 30 May, next week. It islisted for discussion. I have also sought and now received advice from the AustralianGovernment Solicitor. The essence of that advice is a process suggestion along the lines that Iproposed to you in the first place—that is, that there should be a discussion in the board andthat we needed to settle what information should be provided and the best way of providingthat information to the Senate committee. That discussion will happen on Tuesday. The onlyother thing I can say at this stage is that the chair is very keen that it not become an issuebetween the committee and the board, because there are, in his view, a range of mechanismsfor providing information that he and I are confident will be the solution. But I feel we doneed to have that process discussion in the board.

Senator MACKAY—Is there some difficulty here with giving us some pointers as to whatthe advice received said in relation towards the legal position of the foundation and theparliament?

Mr Matthews—I would not say that there is a difficulty. But the convention, as I am sureyou know, is that legal advice is generally treated as legal advice. For that reason, at this stageit has been kept to myself. But I have told you the essence of the process that has beensuggested in it.

Senator MACKAY—Are you the only person who has a copy of the legal advice?

Senator Ian Macdonald—Until now. I am currently reading it.

Senator MACKAY—Have you seen it Ms Varova?

Ms Varova—Yes.

Senator MACKAY—Mr Matthews, we asked a number of questions on notice for whichthat broad brush answer was provided in relation to the Australian Government Solicitor. Areyou in a position to answer any of those questions? For example, what is the length of theterm for board members? That was one of the questions we asked.



Senator Ian Macdonald—I thought we answered all of these, Senator. We indicated whatMr Matthews’ arrangements were under the trust deed. But then other directors, I think, comewithin the companies law. Is that right?

Mr Matthews—That is correct.

Senator Ian Macdonald—And the directors are reappointed by the company, as theynormally are under the companies law, in accordance with their memorandum of articles. Ithink in Mr Matthews’ case, he is there at the pleasure of the minister. Is that right?

Mr Matthews—Correct.

Senator MACKAY—Have you seen the answer to the questions on notice, Minister?

Senator Ian Macdonald—I think I signed them off.

Senator MACKAY—We asked a number of questions, and the answer was that thedepartment was seeking advice from the Australian Government Solicitor. This is what I amattempting to find out now: given that there were eight questions taken on notice for whichthat was the answer, are there any questions that the department took on notice that thecommittee can be apprised of now that do not come within the purview of the AustralianGovernment Solicitor’s advice?

Senator Ian Macdonald—The length of term of board members I think we answered lasttime, and I have just given you an answer again.

Senator MACKAY—I did not hear it. What was the answer?

Senator Ian Macdonald—Senator, I am sure we went through all of this and it would bein the Hansard. We have not got it here because I am sure we went through it all at theestimates three weeks ago.

Senator MACKAY—Most of these were taken on notice.

Senator Ian Macdonald—The specific difficulty Mr Matthews found himself in, whichwe spoke about last time, is that it is a separate company, it is not a government agency.

Senator MACKAY—I remember all of that.

Senator Ian Macdonald—Mr Matthews, following some discussions he and I had, thencame to the obvious conclusion that there is a difficulty in that he is required to maintain someconfidentiality about his role as a director of that company as opposed to his and thegovernment’s obligation to properly account for the $14 million-odd of taxpayers’ money thatwe are contributing to it. Mr Matthews last time gave you an indication of where he thoughtyou would be going. As I understand what he has just said now, the legal advice confirms inrelation to that matter that that is the case, and the case is that Mr Matthews still believes thathe should be discussing it with the chairman before—

Senator MACKAY—So, Minister, you think the question ‘What is the length of the termfor board members?’ was answered in the last estimates?

Senator Ian Macdonald—Let me quote, Senator. Why we go through these estimateshearings I am never quite sure, because we answer them and then we get asked the samequestion next time. Let me just quote:

Mr Matthews —There were questions about the process for appointing directors. The situationis this: the board constitutes at least five directors and not more than 15; there were initial directorsnominated and provided for in the constitution—from which I am quoting—by the Sidney Myer Fund.The minister has the right from time to time to appoint an individual as a director and they become



directors of a different nature from the others because they have standing. The other directors areselected in the normal way in which directors of any other company are selected under company law.That process has led to a board of seven directors at this time. A third of the directors are up forreappointment and must retire at the annual general meeting—the most recent directors—but thatexcludes the first two that I was talking about, the nominee of the minister and the nominee of theSidney Myer Fund.

You also asked about directors fees and the like. Again, from the constitution, the position isthat out-of-pocket expenses incurred by a director in performing his or her duty as a director are eligiblefor reimbursement. A service which is rendered to the company—that is, to the foundation—by adirector other than a service as a director is reimbursible as well, but such a service has to be endorsedby the rest of the board. That is obviously a provision to make sure there is no conflict of interest. Ithink, in my own words, what that means is that there is no remuneration beyond out-of-pocketexpenses.

Senator MACKAY—The question was: what is the length of the term for board members?Can you answer that question?

Senator Ian Macdonald—Can I repeat—

Senator MACKAY—It is not there.

Senator Ian Macdonald—The Hansard states, ‘The other directors are selected in thenormal way in which directors of any other company are selected under company law.’

Senator MACKAY—Yes, but what is the length of term?

Senator Ian Macdonald—It continues:That process has led to a board of seven directors at this time. A third of the directors are up forreappointment and must retire at the annual general meeting—the most recent directors—

Senator MACKAY—Hang on. The question is: what is the length of term of boardmembers?

Senator Ian Macdonald—Can’t you work that out, Senator?

Senator MACKAY—You tell me.

Senator Ian Macdonald—A third retire annually. That means that every three years theycome up for re-election. So the answer is three years—except for Mr Matthews and thenominee of the Sidney Myer foundation, who are treated differently.

Senator MACKAY—Let me read you this bit of Hansard:Senator MACKAY —What is the length of the term for board members?

Mr Matthews —I think they are standing appointments. Ms Meakins?

Ms Meakins —I would have to check the constitution. I do not know off the top of my head.

Senator MACKAY —So you will take that on notice?

Ms Meakins —Yes.

Senator Ian Macdonald—Senator, that is why we came back to this three pages later inthe Hansard. We went and got the constitution, we read it out to you and we explained it toyou. This really is a classic example of why this committee is the only one still sitting, whywe are still going. It is because there are these stupid questions asked—not last time but againthree weeks later. We have answered all those questions. Sure, what you have read is correct.But if you go over three pages you will see where, to help you out, we went and got a copy ofthe constitution and gave you the information.



Senator MACKAY—I read all that. I was asking the question: what was the length of termof board members?

Senator FORSHAW—Why don’t you just say three years?

Senator MACKAY—Why don’t you say three years instead of raving on?

Senator Ian Macdonald—I expect that you are able to read and understand, Senator. Ifthat is not the case and I have to explain everything in one syllable words to you, theseestimates are obviously going to go much longer.

Senator MACKAY—If you are going to talk all the time, they will.

Senator FORSHAW—If you explained things in one-syllable words instead of waxinglyrical and reading out a page and a half of Hansard, we might actually get somewhere. Thefact is that what you just read out—

Senator Ian Macdonald—One-third retire annually?

Senator FORSHAW—Yes.

Senator Ian Macdonald—You cannot work out that that means the term is three years?

Senator FORSHAW—I can work that out, yes. But you said that those directors wereappointed in the normal way.

Senator Ian Macdonald—It is the normal way.

Senator MACKAY—What is Mr Matthews’ term?

Senator Ian Macdonald—Again, I am sure we have been through this. It is in theconstitution. As I just said before, I think he is appointed at the will of the minister.

Senator MACKAY—That is right. Is there a fixed term for Mr Matthews?

Senator Ian Macdonald—As I understand it, it is at the discretion or wish of the minister.

Senator MACKAY—So the answer is no? There is no fixed term?

Senator Ian Macdonald—Which is what we said last time, three weeks ago.

Mr Matthews—Three days ago.

Senator Ian Macdonald—Three days ago, I am reminded.

Senator FORSHAW—Minister, isn’t it reasonable that an appointment at the discretion ofthe minister does not necessarily mean that the appointment cannot have a fixed term? Thediscretion is that the minister gets to make the appointment. They decide who it is andpresumably can decide the term. Saying that it is at the discretion of the minister does notreally answer the question. Has Mr Matthews been appointed for a fixed term, or is this somesort of day-to-day appointment? Can he be told the day before a meeting that he is no longer adirector? What does that really mean?

Senator Ian Macdonald—It is at the pleasure of the minister. Where is the constitution?We do not have it. I can understand why we do not have it. It is because we went through it adinfinitum three weeks ago.

Senator FORSHAW—Most appointments that I am aware of by government to boards arefor specific terms. A term will be nominated, and they may vary between—

Senator Ian Macdonald—Not in Mr Matthews’ case, if I can hasten the proceedings bytelling you that. Most of the appointments that I have been involved in are at the pleasure ofthe Governor-General, whose appointment is at the pleasure of the government.



Senator FORSHAW—So is the appointment of the Prime Minister and ministers, if itcomes to that.

Senator Ian Macdonald—I wish that we could have said that the Prime Minister’s term ofappointment by the Governor-General was 25 years, because that would be tremendous forAustralia. That is not how things work, unfortunately.

Senator FORSHAW—We would still have Bob Hawke or Paul Keating.

Senator MACKAY—What is the level of remuneration for the CEO? This was notanswered last time, Minister.

Senator Ian Macdonald—Mr Matthews answered it five minutes ago. He has certain legaladvice talking about the difficult process. He said that he wanted to talk it through with thechairman of the board at the meeting on Tuesday and that these things will be discussed atthat time.

Senator MACKAY—If you listened to what I said and if you did not intervene all thetime, you would know that my question was: in relation to the questions that we put on notice,are there any questions that he is able to answer now, given that you are not prepared toprovide us with the advice that you have from the Australian Government Solicitor? I askedMr Matthews—and I am sure he is much more capable of answering these questions than youare, Minister—are there any questions which are on notice that he can now apprise us of thatare not caught up in a catch-all answer in relation to the Australian Government Solicitor? MrMatthews has the questions on notice there. If there are any he can answer, I would like tohear about it. If he cannot, that is fine.

Senator Ian Macdonald—Mr Matthews, please repeat what you said five minutes ago andanything else you want to add.

Mr Matthews—With the obvious exception of, ‘When is the next meeting of the boardscheduled for?’ which is next Tuesday, I am really not in a position to answer until after I havehad the board discussion, partly because when I took these questions on notice I was reallyexpecting a bit more time. I regret that I have not gone back and got some of them, whichcould have been readily answered by today. But the rest of them—and many others that mightcome to mind—do warrant a discussion in the board. That continues to be the advice that Ihave got and the position that I am in.

Senator MACKAY—Mr Matthews, to truncate this conversation, how about we put aseries of questions on notice to you which we were intending to ask today, appreciating thefact that you have not had the chance to apprise the board of them yet? Once you haveapprised the board of them, you may be able to provide us with the answers on notice. If youcannot, just indicate so and why. Is that all right?

Mr Matthews—Yes. If you give me that list, I can have that as background to thediscussion in the board.

Senator MACKAY—That would be very useful.

Senator FORSHAW—You keep saying that it is a matter for discussion by the board.Does that mean—and does the legal advice say—that it is a matter for decision by the boardas to whether or not that information can be provided to this committee or can be provided tothe Senate?

Senator Ian Macdonald—That is going to the substance of the advice.

Senator FORSHAW—I know.



Senator Ian Macdonald—We do not usually make that available.

Senator FORSHAW—This is quite amazing.

Senator Ian Macdonald—We do not usually make it available.

Senator FORSHAW—That is not true. Where there is a position adopted where someinformation cannot be provided to a Senate committee because of legal advice, certainly frommy experience we would usually be given some indication as to why and on what legalgrounds. Is it a matter that is commercial-in-confidence? Is it a matter that goes to people’sprivate rights? In the absence of our knowing what the grounds are, it really is difficult toknow what questions we can ask. That is why I asked the question. Mr Matthews has said ona number of occasions that this is a matter for discussion by the board. I am trying to ascertainwhether ultimately the decision as to whether or not this committee, the Senate and theparliament can be provided with this information is a matter that is within the power of thegovernment or the minister or whether it is in the power of the board. I would have thoughtthat was a reasonable question to ask.

Senator Ian Macdonald—Do you have any more questions?

Senator FORSHAW—That was a question.

Senator Ian Macdonald—What was the question?

Senator FORSHAW—You were not listening. You were just being your usual arrogant,ignorant self. Mr Matthews was listening. I asked the question: is it a matter for the board todecide whether the committee can be provided with or denied the information, or is it a matterthat the minister and the government can determine?

Senator MACKAY—Who is refusing to provide the information?

Senator Ian Macdonald—Which information?

Senator MACKAY—The bit of paper you have got in your hands.

Senator FORSHAW—The answers to the questions that have been asked.

Senator MACKAY—The legal advice.

Senator Ian Macdonald—As I have said before, it is not normal for legal advice to bemade publicly available.

Senator FORSHAW—I do not know whether the answer to the question contains legaladvice.

Senator Ian Macdonald—Do you want me to finish, or do you just want to keep talking?

Senator FORSHAW—I do not know what I really want you to do. I wish you wouldbasically either answer questions or keep quiet.

Senator Ian Macdonald—I am trying to answer them and you keep interrupting me. Ifthat is the way it is going to go, we might as well all go home now. If I am asked a question,you have to hear the answer. Whether you like the answer or not is another thing.

Senator FORSHAW—It is not an answer, Minister.

Senator Ian Macdonald—You have to allow me to finish answering it.

Senator FORSHAW—Tell us what you were going to tell us that you told us five minutesago.



Senator Ian Macdonald—Ask me the question again. The question keeps answering. I amnot sure which of your five interruptions I am supposed to be answering.

Senator MACKAY—The question keeps answering?

Senator FORSHAW—The question is this. Is it a matter for the board to decide whetheror not this information can be given to this committee or to the Senate or to the parliament—let me finish—because Mr Matthews has said that he has to have a discussion with the boardand that there is legal advice but we do not know what that legal advice is? So my question is:as to whether or not we can get this information, is that a decision for the board to make or isthat a matter that can be determined by the minister?

Senator Ian Macdonald—Which is ‘this information’ you are talking about?

Senator FORSHAW—The information is the answers to the questions—

Senator Ian Macdonald—You were talking a minute ago about the legal advice; now youare talking about ‘this information’. What is ‘this information’?

Senator FORSHAW—No, Minister, the information that Mr Matthews understands verywell and you know very well, and that is the answers to the questions that have been put onnotice that Mr Matthews and you have said at this stage you cannot provide answers tobecause of certain legal advice and because Mr Matthews has to have a discussion with hisfellow board members about the requests. He can go off and have that discussion at the boardmeeting, but I want to know: is it within the power of the board to decide whether we actuallyget the answers or is that a matter that the minister or the government can determine?

Senator Ian Macdonald—Let me go through the—

Senator FORSHAW—Can you just answer; just say yes or no.

CHAIR—Please! Let the minister answer. He started—

Senator FORSHAW—He doesn’t ever answer the question.

CHAIR—You didn’t give him a chance. He had three words there—

Senator FORSHAW—Listen, you haven’t even been here, Mr Chairman. We have beengoing over this for half an hour, and the question is very straightforward, very plain, and canbe answered very quickly.

CHAIR—There’s only one reason I haven’t been here all afternoon, and it is because I amnot well. You let him have three words and then you interrupted. Please let the ministeranswer.

Senator Ian Macdonald—If you want yes and no, the answer is yes and no, because thereare about five questions. The answer to some is yes; the answer to the others is no.

Senator FORSHAW—There’s only one question that I’ve asked. The question I’veasked—

Senator McGAURAN—Not again, please, Michael.

Senator FORSHAW—The question I’ve asked is—

Senator Ian Macdonald—You said ‘the questions on notice’.

Senator FORSHAW—Minister, are you as thick as you make out to be? The question Iasked is this: will it be the decision of the board as to whether or not we can be provided withthe answers to those questions on notice, or is that within the power of the minister to decide?That is what I want to know.



Senator Ian Macdonald—Some of the questions on notice we have already told you theanswers to. On some of them, I refer you back to what Mr Matthews has already said—that hewill talk to the board about it. Again, I can go back to all the discussion we have had 10minutes ago and three weeks ago, and that is this: it is a non-statutory foundation. Theconstitution of the foundation has certain provisions in it, and we have given you someanswers to those. With respect to things like ‘When will the next meeting of the board bescheduled?’ I assume that, seeing that the foundation board has not met since we last met, thatis what Mr Matthews is talking about when he says he will raise it at next Tuesday’s boardmeeting. When is the first annual report likely to be available? I assume they will talk aboutthat at their next meeting after three weeks ago when you asked these questions.

In relation to the CEO position—who were the headhunters for that—actually we wereasked last time if that could be formally taken on notice. The answer to that is that he will talkto the board about it and try and work out that complex situation which we discussed threeweeks ago when we advised that this is not a government board; it is an independentfoundation which we have a nominee on. But we acknowledge, as we said last time, thatbecause $14 million of taxpayers’ money is being spent, there has to be some accountability.What Mr Matthews has to do, in consultation with his fellow directors, is try and workthrough those issues. That is what he said at the beginning of this discussion and that is all hecan say at the end. Another question: what is the level of the remuneration for the CEOintended to be. I repeat what I have said. They are the answers to the questions you have puton notice. They are the answers I give to them. They are not yeses or noes; they are notsimples, but they are answers we have given any number of times. No matter how long youkeep asking the same question over and over again, you are going to get that answer yetagain.

Senator FORSHAW—Minister, I didn’t ask that question. We know that those questionshave been put on notice and we know that Mr Matthews is going to talk to—or in his words—have a discussion with his fellow board members at their next meeting.

Senator McGAURAN—Point of order, Mr Chairman.

Senator FORSHAW—All I am asking is: does that mean that at that discussion of theboard they will decide whether or not Mr Matthews can provide the answers to thosequestions or whether it is a matter that you as the minister can decide? That is the question Iam asking. It is a question about process, about who decides whether or not we get theanswers to these questions. As you know, when questions are put on notice, where there is anability to provide the answer, we are told that, for instance, the minister has decided that hewill not release that information because it is confidential or whatever. All I am seeking to dois find out now—because the meeting will be held in the near future or whenever—is whetherit is going to be at that board that the decision will be made whether or not we get the answersto the questions on notice. That is what I am trying to get the answer to.

Senator Ian Macdonald—Mr Chairman, I have already answered that.

Senator FORSHAW—You haven’t answered that.

Senator Ian Macdonald—We are not going to achieve anything by my repeating that.

Senator FORSHAW—With all due respect, Minister, you haven’t told me. Mr Matthews,are you able to tell me the answer to that question?

Senator McGAURAN—Point of order, Mr Chairman. I think there is something to sayabout the minister mentioning that this is the only committee still sitting in the whole of



parliament. That is because we are getting into long dissertations before we get to a question.If I hear Senator Forshaw ask that question again! We know the question you are asking.Everyone knows and understands it.

Senator FORSHAW—No-one is telling me the answer.

Senator McGAURAN—You’ve been given the answer and you can’t go beyond that.

Senator FORSHAW—What is the answer, Senator McGauran?

Senator McGAURAN—Therefore I ask you, Mr Chairman, to rule that dissertations ceaseso we can all get home and that questions be succinct and that answers given be accepted.

Senator FORSHAW—What is the answer?

Senator McGAURAN—If you want to raise it in the parliament again like you did lasttime, I am more than happy to walk in with the Hansard to defend the minister. It is an absurdnumber of times that those questions—

Senator MACKAY—You didn’t last time.

Senator FORSHAW—Well, what is the answer? Is it the board that decides whether weget the information or not?

Senator McGAURAN—Why don’t you raise it in the parliament, because it is greatmaterial for us?

Senator FORSHAW—This is the parliament! This is the Senate estimates committee.

Senator McGAURAN—Raise it in the parliament. I am happy to read the number of timesyou have asked the same question.

CHAIR—I have listened very closely and I have been watching on the TV in my room,because I am not well, and I think the minister said it quite clearly. I think he went throughfive questions then, and he mentioned in every one that Mr Matthews would be—

Senator FORSHAW—Talking to the board.

CHAIR—discussing it with the board next week. You are a lawyer: I’m not. But one of theprocesses that exist in law that I am aware of in this place is that if you are a member of aboard you cannot release information from that board until such time as you get clearancefrom that particular board. My assessment of those answers is that Mr Matthews will beseeking that clearance at the board meeting next week and he will pass on the information ashe is entitled to do from that discussion.

Senator FORSHAW—Thank you very much, Chair. You have just answered the questionthat the minister refused to answer. I am glad that is your interpretation.

CHAIR—Is that correct, Mr Matthews? Is that an accurate assessment of what the ministersaid? Let me ask you that.

Senator Ian Macdonald—Mr Matthews is not here to assess what I have said, MrChairman.

CHAIR—No, what I said.

Senator Ian Macdonald—Well, I don’t know that he is here to assess what you’ve saideither.

Senator MACKAY—That is a reflection on the chair.



Senator Ian Macdonald—Mr Chairman, we’ve answered the question and I suggest wemove on.

Senator MACKAY—This is why these estimates go so long.

CHAIR—Anyhow, I believe that is what the answer is. Next question?

Senator FORSHAW—In the absence of legal advice, I will accept your advice.

Senator MACKAY—Thank you very much, Chair. I cannot not comment that the reasonthese estimates go so long—

Senator Ian Macdonald—Are there any other questions, Mr Chairman?

CHAIR—Next question?

Senator MACKAY—The reason these estimates go so long is that—

CHAIR—We don’t even need to know why they go so long. We all know that.

Senator MACKAY—I am going to say it. The reason these estimates go so long is—

CHAIR—Because you’re here.

Senator MACKAY—because the minister raves on endlessly. I am attempting to be—

Senator Ian Macdonald—Mr Chairman, if there are no other questions, I and thedepartmental officials will leave.

CHAIR—Next question, please.

Senator MACKAY—succinct here. Because I am attempting to be succinct—

CHAIR—Senator Forshaw, I call you.

Senator MACKAY—I will ask a question in relation to rural transaction centres.

Senator Ian Macdonald—Thank you.

Senator MACKAY—The question is: what advice has been provided to applicants inrelation to rural transaction centres on the impact of the GST?

Senator Ian Macdonald—Sorry?

Senator MACKAY—Am I going to have to repeat every question or are you going tolisten? Ms Parsons?

Ms Parsons—A letter has been sent out to all grant application grantees advising them ofthe situation in relation to the GST, and there are a number of aspects in the letter whichexplain what they need to know.

Senator MACKAY—Can you provide a copy of that to the committee? Is it readilyaccessible or will you have to take it on notice?

Ms Parsons—No, we can provide it to you during the hearings.

Senator MACKAY—Thank you. If you are able to do that then I may, once I get that,come back and ask some questions in relation to it, or do you wish to give me a summation atthis point?

Ms Varova—Senator, we might have it copied. We have only got this one copy with us so,if you do not mind, we can get a copy and we can table it.

Senator MACKAY—Thank you, Ms Varova. While we are doing that I might ask MsParsons another few questions. I understand we have apprised you of the particular projects



we wish to talk about, in the interests of being cooperative in relation to the time of thedepartmental officials. With regard to the Welshpool and District Advisory Group Inc—whichreceived project funding of $140,000 to establish an RTC, I am advised—the minister’s pressrelease indicated that Welshpool’s last branch had closed. Ms Parsons, are you able to adviseus when the last bank branch closed in Welshpool?

Ms Parsons—The last bank in Welshpool closed in 1997.

Senator MACKAY—And which bank was that?

Ms Parsons—It was the ANZ.

Senator MACKAY—Which financial institution is linked with the RTC in Welshpool?

Ms Parsons—The ANZ is offering the financial services.

Senator MACKAY—So the bank that closed the branch three years ago has now got therelationship with the rural transaction centre?

Ms Parsons—That is correct.

Senator MACKAY—In partnership with the rural transaction centre?

Ms Parsons—That is correct. The community determined, out of a number of options,which financial service provider they wanted, and they chose the ANZ bank.

Senator MACKAY—In your view, is there a potential here for banks to withdraw servicesfrom regional communities because they know that they can actually link back into an RTCand establish funding that way?

Senator Ian Macdonald—That is not a fair question for the officers.

Senator MACKAY—To ask the officer?

Senator Ian Macdonald—Whether it is her view that something might happen.

Senator MACKAY—What is your view?

Senator Ian Macdonald—It is not a question I would answer. I do not know. It ishypothetical.

Senator MACKAY—Minister, do you think it is quite appropriate that government fundshave been used to effectively assist ANZ maintain its income after it in fact closed a branch inthe community? Do you think that is appropriate?

Senator Ian Macdonald—Senator, the government’s view is that, if the community want aseries of services, that is for the community to determine, not for the government. If thecommunity determine how they want those services to be delivered that is a matter for thecommunity, because the government take the view that we should work in partnership withcommunities; we should treat the communities as equals—or better than equals, even—andthat the community is the one that should decide.

Senator MACKAY—Is that a yes?

Senator Ian Macdonald—The community have, in the instance of Welshpool, made theirdecision. I am aware that they had a couple of choices. But that was done and it was done in away that the bank meets all of its own costs. We are not contributing to the bank or the bank’sprofits. We are helping the community to provide itself with a service.

Senator MACKAY—Monosyllabic responses are appropriate. I am happy. So the answeris yes. Okay? What about the fact that the RTC would not have been needed and $140,000 of



government funds would have been saved if the ANZ had in fact retained its branch inWelshpool? Do you have any comment in relation to that?

Senator Ian Macdonald—Just let me take you up on the other one. You have given aninterpretation of my answer. I just want to make it clear I do not agree with your interpretationof any of my answers.

Senator MACKAY—What is your answer?

Senator Ian Macdonald—I gave you my answer to the previous one—

Senator MACKAY—No, you didn’t.

Senator Ian Macdonald—and you said, ‘Monosyllabic answers are sufficient, so theanswer is yes.’ I am just saying to you now that is not the answer I gave.

Senator MACKAY—All right. What is the answer to the previous question? What is youranswer?

Senator Ian Macdonald—I am not going to repeat it. I have already given that.

Senator MACKAY—You just told me all about the RTC guidelines. I know all about that.

Senator Ian Macdonald—All right, we can move on then.

Senator MACKAY—I will ask the question again. Okay?

Senator Ian Macdonald—Okay.

Senator MACKAY—Do you think that it is appropriate that government funds have beenused to effectively help ANZ maintain its income after it in fact closed a branch in thecommunity?

Senator Ian Macdonald—I do not agree with your premise. The facts in the question areinaccurate.

Senator MACKAY—All right, I will ask another one. Do you recognise, Minister, that theRTC would not have been needed and $140,000 of government funds would have been savedif the ANZ had maintained its presence in Welshpool?

Senator Ian Macdonald—If the other major banks had opened up in Welshpool any timein the last two years again it would not have been necessary. They are not questions for me toanswer. You make a judgment on that, if you want to.

Senator MACKAY—Does ANZ have a contract with the RTC, Ms Parsons?

Ms Parsons—I do not know whether they have a contract. Normally all the financialservice providers and anyone else providing a service needs to provide a contract to the RTCoperator. But that is a matter for them what the contract is and whether there is one inexistence.

Senator MACKAY—I am asking: does the ANZ have a contract with this RTC?

Ms Parsons—That is a matter between the RTC and the bank. I do not know.

Senator MACKAY—Can you take that on notice?

Senator Ian Macdonald—We do not have a contract with the ANZ; we have a contractwith the community organisation, in this case the Welshpool and District Advisory Group Inc.

Senator MACKAY—Does the department know whether there is a contract with the ANZand the RTC?



Senator Ian Macdonald—They have already said no, they do not know.

Senator MACKAY—But the guidelines actually require a financial commitment frompartners on the establishment of RTCs.

Ms Parsons—We ask for that commitment in the application but we do not require acontract between the RTC operator and any of the service providers that they negotiate with.That is not part of our contract requirement.

Senator MACKAY—So you are genuinely not aware whether there is a contract betweenthe ANZ and the RTC?

Ms Parsons—That is right.

Senator MACKAY—Are you aware what service commitments have been made by theANZ to the RTC?

Ms Parsons—No, I am not.

Senator MACKAY—Why isn’t the department aware of this? Given that there is$140,000 worth of taxpayers’ money going into this RTC, why isn’t the department awarewhat level of service is being provided?

Ms Parsons—I know what level of service is being provided, but I do not know if there isa contract which says that is being provided because it is in the contract.

Senator MACKAY—So you do know what level of service is being provided.

Ms Parsons—I know what level of service is being provided, yes.

Senator MACKAY—Fine. What level of service is being provided by the ANZ?

Ms Parsons—The centre is open between 11 a.m. and 4 p.m. on Mondays to Fridays toprovide most of the services, including banking. Then it is open at other times to provideInternet access.

Senator MACKAY—All banking services, or just certain banking services?

Ms Parsons—No, the banking services are provided between 11 and four.

Senator MACKAY—Full banking services?

Ms Parsons—Yes.

Senator MACKAY—Including business banking?


Senator MACKAY—Are you aware whether the ANZ is actually training staff atWelshpool?

Ms Parsons—No, I do not know.

Senator MACKAY—Can you take that on notice.

Ms Parsons—Again, it is a matter between the service provider and the RTC operator as towhat level of training is provided. I am aware that when the RTCs are set up they do providetraining to the staff, but I do not know about any ongoing arrangements. Again, that would besomething between the service provider—

Senator MACKAY—What information do you hold when an RTC is established?

Ms Parsons—We hold information about the application itself.



Senator MACKAY—So there is an application made; it is approved or not approved.What other documentation does the department hold? Is that it?

Ms Parsons—That is pretty well it, yes.

Senator MACKAY—And that includes service provision standards, banking, et cetera.

Ms Parsons—It will set out what the intention was in terms of the service provision at thetime of the application, yes.

Senator MACKAY—Can you provide us with a copy of that application?

Senator Ian Macdonald—I do not think we normally do that. I will give that somethought. Even if I was inclined to, we would have to seek the permission of the group itself,because it contains information that really belongs to them. Right across government, as far asI am aware, we do not normally make organisations’ applications to government for grantspublicly available.

Senator MACKAY—If there is commercial-in-confidence information in there, I amhappy for that to be blacked out. That would be the normal process. What I am interested in iswhat the level of service delivery is. That is what I am interested in, not commercial-in-confidence matters.

Senator Ian Macdonald—But we have given you that. That has already been answered.

Senator MACKAY—It has in relation to banking.

Senator Ian Macdonald—Yes.

Ms Parsons—And the other services as well.

Senator MACKAY—We can go through it all if you want.

Ms Parsons—Centrelink, Medicare Easyclaim, computing, business support and so on areall available in those same timeslots. As well as that, I mentioned that Internet access wasavailable at other times, until 7 o’clock on Thursdays and between nine and midday onSaturday.

Senator MACKAY—How many people are staffing the RTC. Are you aware of that? Isthat contained within the application?

Ms Parsons—It may be in the application but, again, that is a matter for the RTC as towhether there are peak periods and whether they want to take on staff beyond what we fundedthem for. That is again a matter for them. They would indicate in the application what theintention was in terms of staffing.

Senator MACKAY—So is it in this application? I think we gave you notice about thisone. While the officer is checking we will continue. Did the community consider any otherpartners for the RTC, apart from the ANZ?

Ms Parsons—Yes, they considered a credit union and Bendigo Bank.

Senator MACKAY—We are advised that this RTC is charging $6 an hour for Internetaccess, which seemed to be quite expensive. Is this a normal amount to be charged in relationto Internet access?

Ms Parsons—I do not know that there is a normal amount. That, again, is a matter forindividual RTCs. I know some of the places charge a lot less, but that is really a matter forthem.



Senator MACKAY—On what basis do RTCs determine how much they charge forInternet access?

Senator Ian Macdonald—I have got to intervene. These are not matters for thedepartment. Our program is to help a community get services for itself. Every community isdifferent. They have a board of management. They work these things out. As you no doubt areaware, there is no one size fits all in rural and regional Australia. These are matters forindividual governing bodies of the people who apply for grants. So we do not have thisinformation. We trust the community. We believe that they are capable of making their owndecisions in these areas. All we do is help them set it up. Then they run it, as any othercommunity group does. So we do not have the information.

Senator MACKAY—We have heard that spiel a lot. I am just asking specific questions. Ifyou do not know or if the officer does not know, it is quite appropriate to say, ‘I do not know.’

Ms Parsons—Can I just finish on that one? The application advised that the staffing was tobe a centre manager, a part-time assistant and a pool of up to five other part-time assistantsand volunteers to draw on as required.

Senator MACKAY—Thank you. Which financial institution is providing the services forthe St Marys RTC?

Ms Parsons—It is the Trust Bank.

Senator MACKAY—Colonial Trust Bank?

Ms Parsons—That is what it is probably called now.

Senator MACKAY—It is very hard to keep up, might I say. I understood that the thenTrust Bank—now Colonial Trust Bank—already had a branch in St Marys.

Ms Parsons—My understanding was that they had indicated that they were closing, and, infact, they had closed.

Senator MACKAY—Did they close their branch prior to being aware of the potentialestablishment of a rural transaction centre?

Ms Parsons—I do not know the date and how it coincided with the announcement aboutthe RTC program.

Senator MACKAY—Is this one of the RTCs where—as I understand it—you haddiscussions with Australia Post in relation to some logistical difficulties, particularly with theseparate entrances issue? Did that go to some of the issues in this RTC, because I understandit operates out at the Post Office but there are separate entrances?

Ms Parsons—I do not know that there were specific discussions about St Marys, but therewere general discussions about the separation.

Senator MACKAY—I have been advised that when you ring the phone number that isadvertised on the web site for St Marys RTC the staff answer the phone as Australia Post. Areyou aware of this?

Ms Parsons—No, I am not aware.

Senator MACKAY—I am advised we have a situation where the Post Office is offeringthe normal Post Office services—giroPost, et cetera—and the RTC is actually offeringColonial Trust Bank accounts. Do you regard this as an efficient use of resources?



Senator Ian Macdonald—That is not for us to judge—we have approved theapplication—that is up to the organising committee.

Senator MACKAY—Ms Parsons, could you just take me through the business planningissues and the basis on which money was provided to Young in New South Wales andRobertstown in South Australia?

Senator Ian Macdonald—Senator, while Ms Parsons is looking for that, as I said to youthe other night, if you—or someone else—think there is a problem with the way the RTCanswers the phone and answers it saying, ‘This is the Post Office,’ drop me a line, and if it hasgot anything to do with the government we will investigate it and get you a response. If youhave a complaint about the way they answer, or if anyone else does, please feel free toapproach us, and we will look into things.

Senator MACKAY—I have done it here, so I will take you up on that. What about Young,Ms Parsons?

Ms Parsons—The Young Shire Council applied for business planning funding. Theassessment was done under the new arrangements by officers in my branch, and we made arecommendation to the minister. Subsequently, the Young Shire Council were provided withfunding to the extent of $6,000 to enable them to prepare a business plan.

Senator MACKAY—So they put an application in to you in relation to it?


Senator MACKAY—Why can’t that be provided to the committee? We are not talkingabout any commercial-in-confidence, I presume. I stand to be corrected by you, if we are.

Senator Ian Macdonald—Senator, I have answered that before.

Senator MACKAY—No. It is a different question, Minister. The first one was a full-blown RTC; this one is business planning.

Senator Ian Macdonald—So you are asking for a copy of the application. I did not hearyou ask for that. But, if you are, the answer will be the same: we do not usually makeapplications for government grants across the board available. I will have a think about it andlet you know. If I were inclined to, again, I would have to seek the concurrence of theapplicant.

Senator MACKAY—You have a think about it; that is fine. The reason this one isdifferent is that it is not a full-blown RTC proposal; it is simply an amount of money beingprovided for business planning. Could you take that on notice and let us know what you thinkabout that. What about Robertstown, Ms Parsons?

Ms Parsons—The application from Robertstown, South Australia came in last year, so itwent to the advisory panel and was considered as part of the round 3 review. It wassubsequently approved by the minister with funding of $7,500.

Senator MACKAY—Take Robertstown as an example. They get $7,500 to undertake anassessment as to whether they feel they require an RTC: what do they do with that money?

Ms Parsons—Normally, they would have in mind a broker or somebody who could do thebusiness plan for them. That person would do a survey of the community to establish itsinterest in an RTC and the sorts of services it wants and, usually, they would hold some publicmeetings—again, to discuss the sorts of services and the type of location an RTC might be in,and so on.



Senator MACKAY—So the broker would access some of those funds in return for his orher services?

Ms Parsons—Usually, the money is for the broker.

Senator MACKAY—As we discussed previously, the department produces a list ofsuggested brokers, but they do not have to come from that list of suggested brokers.

Ms Parsons—No.

Senator MACKAY—Has Robertstown used the departmental list?

Senator Ian Macdonald—The question is: is the broker that they engaged one of thosethat are on our list?

Senator MACKAY—I think she might have got that, actually.

Senator Ian Macdonald—Who is the broker?

Ms Parsons—According to this, they have not yet engaged the broker. There have been anumber of discussions. Whilst it was announced earlier this year, they themselves haveorganised a number of meetings in the community. I do not have any information whichwould suggest that they have a broker in place yet.

Senator MACKAY—What about Young in New South Wales?

Ms Parsons—Young has engaged a broker from our list.

Senator MACKAY—Do you know which one it is?

Ms Parsons—Davis Consultancies, which is a broker in Canberra.

Senator MACKAY—Do you have any data as to which broker is engaged by each of thecommunities—as the business planning approvals are made?

Ms Parsons—We do not keep it as a routine. We find out if they come back. If they aregoing to apply for project assistance applications then they will give us the name of thebroker, because the business plan will go with the application. But we do not routinely ringthem up and ask: who is your broker?

Senator MACKAY—So when they come back with the business plan, the broker’s nameis in that business plan?


Senator MACKAY—And, when you provide them with funding, you provide them withthe list of suggested brokers at the same time?

Ms Parsons—We provide them with a pro forma or an indication of what a business planneeds to contain and the information about the brokers register.

Senator MACKAY—Have there been any procedural changes since the last estimaterounds in relation to probity checks on brokers?

Ms Parsons—No, there have not been.

Senator MACKAY—Mr Matthews, I would like an update—and I am sure SenatorForshaw would as well—as to what aspects of the summit steering committee interim reporthave been actioned, or considered to be actioned, and which aspects are still to be actioned.

Mr Matthews—I will try to be brief as brief as I can. There are perhaps a dozen key pointsin the summit steering committee interim report, and there have been responses in variousways over time to each of them. There should be a vision for regional Australia. That was



endorsed in the ministerial budget statement. The proposal for a 10-year plan was alsoacknowledged in the ministerial statement overview. The suggestion was made that thereneeded to be reform of the relationship between different levels of government and thatinitiatives needed to be developed in that area, and that was initiated by the ministers in theirmeeting of regional development ministers on 29 March and the task force which has flowedfrom that, which I mentioned three weeks ago. The idea of having communities form theirown partnerships to determine their own needs has been a feature of some of the programs—including RTCs and the regional forums, and so on—already in existence, and it has also beena characteristic of the budget.

There is employment as a key to health and social cohesion. That has continued to betackled by the ACCs, the RAP and the community development and employment programexpansion announced in the budget. Then there were messages in the interim report aboutlevels of service in regional Australia vis-a-vis metropolitan standards, and there are a wholerange of budget measures there, including assistance for isolated children and Abstudy initia-tives, and so on—and, particularly, the communications services. There is a new priority fortaking regional interests into account in government decision making, and that has been thereview of regional impact statements and the Prime Minister’s commitment on the retentionof regional services.

The final one is the need to make government programs, services and agencies more visibleand accessible in regional Australia. The initiatives there include the Regional AustraliaCommunications Strategy; the Commonwealth, state, territory and local government taskforce, which is working on one-stop shops; and the work with the Office of GovernmentOnline that has been happening across government, but particularly with the ACCs, topromote government programs. That is a catalogue of the 11 features in the steeringcommittee report, and our catalogue of how they are being responded to.

Senator MACKAY—So what is outstanding in relation to the interim report?

Mr Matthews—I do not think there is anything outstanding. Some of those areas, as I havebeen trying to draw out, are continuing—that is, they are initiatives which have been in placeand new initiatives which were introduced in the budget, and they will be areas we will needto continue to work on. I do not think there are significant propositions in the steeringcommittee report that have not been addressed at all.

Senator MACKAY—What about the extremely important section of the report dealingwith the regional infrastructure issue?

Mr Matthews—There are a whole range of initiatives that are happening in that area,particularly in communications and roads. Those have been brought out in the budgetstatement. Minister Macdonald engaged in a discussion with you about that on our lastoccasion, so I do not think there is anything I can add to that.

Senator MACKAY—Can I take it that the government is satisfied that therecommendations of the interim report have been sufficiently addressed?


Senator FORSHAW—Since the summit, what requests have come in to your departmenton specific infrastructure projects in regional Australia? I should preface that by asking: haveyou invited communities to put forward proposals for appropriate infrastructure projects intheir area?



Mr Matthews—Input is received from communities all the time through a variety ofmechanisms. Again, they were touched on at the hearing three weeks ago. They comesometimes to ministers’ offices, to the department, to members of the steering committee or toProfessor Chudleigh. I think that is just the general business of government in the regionalarea—to receive and deal with those sorts of things. If your question was, ‘Has there been anopen invitation for people to make proposals?’ the answer is, ‘No, there hasn’t.’

Senator FORSHAW—My question was prompted because the areas you have mentionedand the areas mentioned in the statement on regional infrastructure put out by MinisterAnderson and Minister Macdonald are very much the normal business of government. Iassumed—as did a lot of organisations and local governments particularly in areas that I amaware of—that the summit would lead to opportunities for investing and for the federalgovernment to be looking at more investment in regional infrastructure and particular projectsthey might have. Is that an incorrect view to adopt out of the summit, Minister? Is there goingto be a specific drive to increase infrastructure in regional areas beyond the normal businessof government?

Senator Ian Macdonald—I cannot comment on what the perception of groups or thecommunity may be. Again, that is a matter for your judgment or mine. The normal functionsof government, I guess, will continue to apply. People will continue to ask for assistance withinfrastructure projects. I am sure it will continue as long as there are governments, and I amsure it has continued in the past. Governments will attempt to help each year as funds becomeavailable.

Senator FORSHAW—I am trying to understand the difference between the commitmentgiven at the summit that investing in regional infrastructure was a major priority and theongoing normal business of government for infrastructure.

Senator Ian Macdonald—I am not sure what commitment you are talking about.

Senator FORSHAW—It is one of the areas identified by the steering committee in theirinterim report. I am reading from the web site of April 2000, which says:The Committee has identified three key strategic areas within which changes are proposed.

The first one is ‘Community Empowerment’, and you have talked about that. The second oneis ‘Economic and Business Development in Regional Communities’, and the third is ‘Equityof Services in Regional Communities’. Within that second heading, it says:Investing in regional infrastructure

Fostering Business Innovation and Rural Industries in Regional Australia

Encouraging Sustainable Natural Resource Management

Beyond just saying, ‘We believe investing in regional infrastructure is a noble objective whichwill help regional and rural communities,’ I really want to know what that means. Does itmean anything beyond the normal business of government? Are you looking at a specialprogram for assisting regional infrastructure?

Senator Ian Macdonald—The budget contained a very significant package of money forinfrastructure. The summit was all about engaging with communities and working out the bestway to go. I think you were at the summit, and you would have heard a lot of the communitysaying that they know governments do not have huge buckets of money to do things with.They were focusing on different areas, and there was a lot of talk about private investment ininfrastructure. The Foundation for Rural and Regional Renewal may, depending upon howtheir board finalises their objectives, have money available for infrastructure. So it is an



ongoing program of government, but the summit brought together a lot of good ideas andfocused a lot of attention, and the government will continue to work on that to see how wecan help in the days, weeks, months, years, decades ahead.

Senator FORSHAW—So what you are saying is that the summit was an opportunity forpeople to come together and put ideas forward. Whilst there were some goals identified,including a high priority, as I understand it, on federal government investing in ruralinfrastructure, there is no specific program to be developed that would come under thatheading. Rather, it is, ‘We have allocated X amount for road funding and that will continue.’ Iknow there is the black spots program, but that has been around for a number of years. I knowthere are a couple of bridges over the Murray River.

In relation to roads, if I can pick that one—and please do not tell me it is the department oftransport—one of the things that you constantly hear in parts of rural and regional Australia isthat, because of the age of roads and particularly bridges, they are becoming an everincreasing priority for local government, who think that, if there are going to be some bigincreases in infrastructure spending by this government, that might be a very suitable area todirect it to. At the moment it is the responsibility of local government to maintain thosehundreds and hundreds of old timber bridges and roads. Do you have any particular programin mind for that area?

Senator Ian Macdonald—Senator, the government has an ongoing commitment to look atways we can help with infrastructure, with social infrastructure, with the provision ofservices, and we keep working on those. We keep engaging the community in how to dothem, what are the priorities, where you get the money from. It is an ongoing process.

Senator FORSHAW—I know it is an ongoing process. Government is an ongoingprocess. Estimates is an ongoing, ongoing process. But the point is that the summit was seenand marketed both before and after by this government and by Minister Anderson, and byyourself no doubt, as a sort of watershed, circuit breaker, or whatever you want to call it, thatwas going to lead to some new initiatives. From reading the reports and visiting the web site, Iand certainly the people involved in local government believed that, because this wasidentified as a real priority, the summit would lead to some specific things. Maybe theybelieved wrongly, but there was an expectation created at the summit that there would besome substantial commitments given in this area beyond the normal business of government.But you are telling me that that is not the case.

Senator Ian Macdonald—Senator, some of your preamble is your interpretation. You arewelcome to that.

Senator FORSHAW—It is not just mine, Minister. I am telling you what I have been toldbecause I think you are entitled to know.

Senator Ian Macdonald—Thanks for letting me know. That is a view. Maybe it is morethan one view, but it is a view in the broad sense, and thanks for that. I can only repeat what Isaid before but, in the interests of time, it might be better if I did not repeat it.

CHAIR—What is the question?

Senator FORSHAW—The question has been answered, Mr Chairman.

CHAIR—We just listened to about a three-minute statement. Next question please.

Senator Ian Macdonald—It was 105 seconds actually.

CHAIR—It just seemed like it, I am sorry.



Senator FORSHAW—If the views of local government who provide all these servicesacross my state of New South Wales alone take 105 seconds to be expressed at this Senatecommittee, I do not make any apology for that, particularly when they are under anexpectation that some commitments would be coming out of the summit in relation to thatarea.

CHAIR—The biggest expectation local government has had was addressed in rural health,and we put $560 million into that.

Senator FORSHAW—You should come and talk to some of the councils that I do.

CHAIR—I do.

Senator FORSHAW—They do not even know who you are.

CHAIR—I think they might know me a little better than you, and that is not saying verymuch, I admit.

Senator MACKAY—Are we going to have a debate or are we going to continue withestimates?

CHAIR—I have invited you to ask another question.

Senator MACKAY—How is the working group that was established as a result of thestate regional development ministers meeting going?

Ms Varova—It is going very well, Senator. We have had two major teleconferences todate. At this stage, we are working on a penultimate draft by officials which will go todepartmental CEOs and ministers for in-principle consideration and their comments beforewe finalise the document so that it can be considered at the next regional developmentministers meeting.

Senator MACKAY—Who is on the steering committee? What level? Is it officials?

Ms Varova—Yes, it is. Are you talking about the Commonwealth-state task force?

Senator MACKAY—Yes, that is correct.

Ms Varova—It is officials.

Senator MACKAY—Is it departmental secretaries?

Ms Varova—I am chairing that, and my counterparts at state government level areparticipating. The Australian Local Government Association is also represented.

Senator MACKAY—When is the end point in relation to this?

Ms Varova—The task force is going to deliver its report in about the first week of July,and then it will be a matter of availability of ministers as to when they meet. They may not beable to meet that week, so it may be a bit later. But they will have received therecommendations from the task force.

Senator MACKAY—Is it intended to reconvene the same meeting, or is it intended tohave a COAG meeting?

Ms Varova—At this stage, it will be a meeting of the regional development servicesministers. There will be a meeting in, say, July so those ministers can come together toconsider the recommendations from the task force and any other items that they feel may beappropriate for consideration by that meeting.



Senator MACKAY—So it does not prohibit a COAG meeting? The reason I raise this isthat most of the state regional development ministers that I have personally spoken to regardCOAG as the appropriate forum, but that is not a question for you, and I appreciate that.

Ms Varova—No, that is a matter for the government.

Senator MACKAY—How is Countrylink going?

Ms Varova—Countrylink is going reasonably well. Mr Bogiatzis is not here, but we canget statistics and figures, if you do require. It is fulfilling a very important function, as youwell know, when it comes to phone call referrals. We will be reviewing it this year and havinga look at the relevance of its program objectives and its delivery mechanisms.

Senator MACKAY—Sorry, Ms Varova, I am having trouble hearing you because of theminister.

Ms Varova—As I was saying, technology has changed, and there is much more emphasisnow in working across government with other government agencies. So, taking all of that intoaccount, we will have a look at how we can better enhance the service.

Senator MACKAY—The 1999-2000 performance measures actually mentioned shopfronts, but they are not mentioned in this document?

Ms Varova—We do not have a shop front in Canberra at the moment, nor are we intendingto. It certainly does not warrant it. We do provide information to many service centres acrossAustralia. The provision of that information is continuing. Documents such as the Rural Bookare very widely circulated and disseminated.

Senator MACKAY—The reason I ask is that the 1999-2000 PBS actually said that one ofthe performance measures was positive client feedback from Countrylink shop fronts. Whatdid that explicitly refer to?

Ms Varova—That explicitly refers to information that is provided in different servicecentres across the state, not specific shop fronts.

Senator MACKAY—Not Countrylink shop fronts?

Ms Varova—That is right. That is badly worded.

Senator MACKAY—How much did the Rural Book cost?

Senator Ian Macdonald—Whatever it was, it was a great investment.

Senator MACKAY—You have announced it twice. It must have been.

Senator Ian Macdonald—I thought we had actually given this to you last night, MrChairman, but I am told we did not. Perhaps it is an appropriate time to table both the RuralBook and the Commonwealth Assistance for Local Projects booklet.

Senator MACKAY—Is that a recent one or is that the same one you announced during thesummit?

Senator Ian Macdonald—This is the one we have announced several times.

Senator MACKAY—If I can just clarify this. It was released and announced during thesummit. I noticed there was another press release put out jointly by you and MinisterAnderson. I, somewhat naively, assumed you had updated it. Is it the same book?

Senator Ian Macdonald—I am embarrassed to say that it was first published in 1987.That was one of the better ideas of your government. There have been nine editions since. The



latest one was released at the time of the summit. The Commonwealth Assistance for LocalProjects is also—

Senator MACKAY—Has there been an update since the summit? Is a new book availablesince the summit?

Senator Ian Macdonald—No.

Senator MACKAY—So the press release was a re-announcement of the launch of the twobooks at the summit?

Senator Ian Macdonald—The CALP booklet was first published in 1980.

Senator MACKAY—In relation to Countrylink, you obviously maintain a comprehensivedatabase of information?

Ms Varova—Yes, we do.

Senator MACKAY—What is contained in that information other than the programsthemselves?

Ms Varova—We have statistics on where people call from if that is provided. We take afew statistics on the issue that people are raising. That is done in global terms. We areobviously not recording that very specifically. Certainly some of the statistics about the areaof service they happen to be interested in—whether it is a Commonwealth, state or localgovernment issue—and those sorts of issues are recorded.

Senator MACKAY—So do you record information with regard to state governments?

Ms Varova—If there is a query and it is really within the purview of a state government,then that is recorded. We try to assist as much as we can. If we have any referral informationwe provide them with what they may do about it. Obviously, we do not have the level ofdetail we might have for Commonwealth programs. That is recorded as an inquiry about aparticular state level service. How we record the statistics would be quite global.

Senator MACKAY—Are Countrylink staff still contractually hired?

Ms Varova—No, they are mainly permanents at the moment. Over the last year we haveconducted recruitment processes so that they are permanent.

Senator MACKAY—How many are there?

Ms Varova—We have six.

Senator MACKAY—How much has been budgeted to operate Countrylink in this comingfinancial year?

Ms Varova—I might be able to get that information for you. We have not actually finalisedour budgets for this year departmentally, as we have mentioned before. I can provide you witha figure for this financial year. Perhaps that might be an indication.

Senator MACKAY—You are assuming a similar figure?

Ms Varova—I am not expecting any change.

Senator MACKAY—Given the review—

Ms Varova—I am not expecting any change. It is just that I cannot formally say that nextfinancial year we have X amount of dollars.

Senator MACKAY—How is the liaison officer in Longreach going?



Ms Varova—We are very pleased with the progress of that project. The officer works veryclosely with the communities there on a number of fronts. Obviously, he is a very importantsource of information about programs that communities can access at the Commonwealthlevel. Certainly, that has been his prime focus. It has kept him very busy. He covers quite awide region. Similarly, he has been an important source of providing reports and feedback tothe department. That has assisted a lot in the assessment of our program grants, for example.He has worked a lot with communities on the rural transaction centre front explaining to themwhat the program is and how it might work. There has been quite a strong level of interestfrom that area. All in all the pilot is working very well.

Senator MACKAY—The extension of this was a recommendation from the summitsteering committee?

Ms Varova—Yes, it was.

Senator MACKAY—Is the department looking at extending it?

Ms Varova—Obviously that will depend on budgetary considerations. The pilot was for aperiod of two years. We have not made any attempt at this stage to pursue that.

Senator MACKAY—So there is no plan for that this forthcoming financial year?

Ms Varova—No, we do not have any plans to extend.

Senator MACKAY—Presumably an assessment of the pilot program will be made at theexpiration of the two years. There is not a proposal for an interim assessment or anything likethat, is there?

Ms Varova—We get regular reports from the officer. We will be looking at that evaluationclose to the end of the two years. The government had decided it would be a two-year pilot. Iwould expect that they would make any judgments about the expansion or otherwise of theprogram once we have concluded that evaluation.

Senator MACKAY—Despite the summit recommendations, you are not aware that thereare any proposals to expand this in the coming financial year?

Ms Varova—No, I am not.

Senator MACKAY—Does the Longreach liaison officer come to Canberra much?

Ms Varova—Not often. But certainly he does. He has been to Canberra on two occasions.That was mainly to catch up with the department, with briefing.

Senator MACKAY—To get out of Longreach.

Ms Varova—That is right, I suppose, although he enjoys it immensely, I must admit—butjust to catch up and find out what is going on and participate in some of the departmentalactivities.

Senator MACKAY—What are the oncosts for this officer?

Ms Varova—I think in total—and I will check that this figure is accurate—$270,000.

Senator MACKAY—That includes rental space, et cetera?

Ms Varova—That includes everything. That is right. But I will check the accuracy of thatfigure. I am working from recollection at the moment.

Senator MACKAY—That is fine. How is the Eden Regional Adjustment Program going?



Ms Meakins—You would be aware that project applications were called for on26 November and applications closed on 18 February. A total of 45 applications worth inexcess of $14 million were received, and they are currently being assessed by the advisorycommittee.

Senator MACKAY—Does the advisory committee have a time line as to when they arelikely to announce the successful applicants?

Ms Meakins—I did check with the staff member in my branch who looks after thisprogram, and his best understanding of a probable time line was perhaps around late June, butthat was an estimate rather than a formal time line.

Senator MACKAY—So to date there has not been any disbursement of the funds?

Ms Meakins—No, there has not been.

Senator MACKAY—As I understand, the minister has a determinative say in relation tothis based on recommendation from the advisory committee, as I recall.

Ms Meakins—You will remember that this program technically is managed by theAgriculture, Fisheries and Forestry portfolio but that applications were jointly called for byMinister Macdonald and Minister Tuckey. My understanding is, as you said, both ministerswill have the final say.

Senator MACKAY—Have a copy of the guidelines been finalised yet?

Ms Meakins—Yes, the guidelines have been finalised.

Senator MACKAY—Could the committee be provided with a copy?

Ms Meakins—Yes, certainly.

Senator MACKAY—Ms Parsons, how would you assess the LGIP against theperformance targets in last year’s PBS?

Ms Parsons—At the time of those targets being concluded in budget papers we hadassumed that we might have an application based program. But obviously with the focus onGST that was not the case. So there were not 100 LGIP grants handed out.

Senator MACKAY—So it has been totally expended in GST preparation implementation?

Ms Parsons—$2.51 million has been spent on GST implementation.

Senator MACKAY—What is intended for the forthcoming financial year?

Ms Parsons—The minister has yet to consider the options for the next financial year.

Senator MACKAY—There was a shortfall, as I read the PBS. Again, I stand to becorrected. Last year’s budget allocation was, as I understand it, $3.5 million. This year’s PBSseems to indicate that there was $2.51 million spent. Can you explain why there is a shortfall?Or is it a shortfall?

Ms Parsons—No. It is simply the remainder of the funds from this financial year will berolled over into next financial year.

Senator MACKAY—That is a shortfall though, isn’t it? It means the funds have not beenexpended within the financial year.

Ms Parsons—It was decided that we would only spend money on the GST and that was allthat had been required.



Senator MACKAY—Is there any reason why the full $3.5 million has not been or will notbe expended by the end of this financial year?

Ms Parsons—It was decided that it would be more efficient to roll it into next year andhave a larger program next year.

Senator MACKAY—So we are looking at a $1 million rollover?

Ms Parsons—That is right—$990,000.

Senator MACKAY—Did the department ever consider actually increasing the amount ofmoney in relation to assisting with GST implementation to councils out of that $1 million?

Ms Parsons—There were no requests. The associations have been completely happy withthe funds that were provided. So it was not considered to be appropriate to offer more moneywhen there was none required.

Senator MACKAY—Well, they were happy because they thought that was all they had interms of accessing assistance for GST implementation. I can tell you—and, Ms Parsons, youdo not have to comment; in fact, it is not appropriate that you do—that councils are extremelyunhappy. Minister, the fact that there is $1 million underspent in this program when theycould have had that money in terms of GST implementation will not go down well in thesector. Anyway, that is this government’s problem.

Senator Ian Macdonald—I repeat: if you ever have a thought on regional services or localgovernment, please feel free to drop me a note or ask me a question at question time.

Senator MACKAY—Here is a thought: why don’t you use the $1 million that is left in theLGIP funds, ask councils whether they need assistance for GST implementation and disbursethat money?

Senator Ian Macdonald—Why don’t you put to me the proposal? None of the stateassociations have. So you get a proposal together for me and I will have a look at it.

Senator FORSHAW—They have given up.

Senator MACKAY—Have you asked any of the councils how much GST implementationis going to cost?

Senator Ian Macdonald—There have been a number of independent studies done.

Senator MACKAY—Have you asked any councils?

Senator Ian Macdonald—I don’t think so. I do not think too many councils have raisedthe issue with me. Perhaps late at night over a beer one or two might have. There are a lot ofindependent studies around.

Senator MACKAY—So, Minister, you have not received or sought any information on theimplementation of GST costs in local government? Is that correct?

Senator Ian Macdonald—I have not sought or received. As I say, one or two might havespoken to me, but I have received no formal submissions from anyone on them, no.

Senator MACKAY—Ms Parsons, has the office asked any councils about the cost ofimplementation of the GST and whether they are happy with the LGIP?

Ms Parsons—No.

Senator MACKAY—Why not?

Ms Parsons—We accept the fact that the associations have not raised the issues with us.



Senator MACKAY—Have you had any representations from councils about the issue ofthe cost of the implementation of the GST?

Ms Parsons—No, I do not recall that we have had any.

Senator MACKAY—None.

Ms Parsons—No, I do not think so.

Senator MACKAY—Minister, other than the social issue just mentioned, you have nothad any formal representations?

Senator Ian Macdonald—I cannot recall any.

Senator MACKAY—Has your office had any representations?

Senator Ian Macdonald—I think they would have let me know if there had been. If wehad received anything, I would have responded to them formally. Over the last 12 months Icannot remember any. There may have been one or two but certainly not to the extent where itis big in my mind.

Senator MACKAY—Minister, you have made a number of statements on the GST andlocal government including one notable one where you said it would not impact on councils atall. Do you stand by that?

Senator Ian Macdonald—What I have always said is that councils will have some one-offstart-up costs. Again, I have accepted different assessments, different reports. LGAQ is onethat comes to mind and the Arthur Andersen report is another. I accept that they are probablyright. What I have said and what I repeatedly say is that, while councils will pay the GST,they will get it back entirely. So as far as council operations are concerned, there is no impactof the GST. In some of the services councils provide the customer will pay a GST—not thecouncils, the customer—and I have acknowledged that. So that is what I have said. I repeat:councils will not be impacted by the GST because, although they will pay it on their inputs,they will get it back fully and immediately.

Senator MACKAY—But even you concede that there is a considerable start-up cost inrelation to GST implementation? You have just conceded that.

Senator Ian Macdonald—I have conceded there is a start-up cost. An early LGAQ thing,if I remember correctly, said for a small rural council it would be $6,000. I do not think that isconsiderable. It is something, but it is not considerable. I think the Arthur Andersen reportsaid that, for some councils, it would cost $200,000; well, that is considerable, but if that isthe Brisbane City Council, which has a turnover that is bigger than the state of Tasmania, thenit is pretty infinitesimal. But even in the case where there is a start-up cost of $200,000,according to Arthur Andersen in some instances the annual savings for those big councils willwell exceed that.

Senator MACKAY—How do you know the savings will well exceed that? You say that$200,000 will be the savings for an average council. I am not going to dispute that figure withyou; I could, but I will not for the purposes of this argument. You say that the savings willexceed that. How do you know that?

Senator Ian Macdonald—That $200,000 comes to me from the Arthur Andersen reportfor the Victorian government. We have said any number of times at any number of estimatesthat we have not done any assessment or analysis from within the department, nor do we



intend doing it, but Arthur Andersen are a reputable organisation. They said it would cost$200,000. I do not challenge that. Similarly that same report said that, for a regional council,the annual saving would be in the order of $1.2 million per annum; for an inner metropolitancouncil, $1.9 million per annum; and for an outer metropolitan council, $1.2 million perannum. I am not guaranteeing or promoting them. I am just simply saying that the reportseemed to be fair, and that is their assessment and I accept it.

Senator MACKAY—Are you aware that there has been a further report done in Victoria?

Senator Ian Macdonald—I think I heard you mention it, Senator. We have tried to followit through, but no-one else seems to know anything about it. If there is one, let me have it.

Senator FORSHAW—We will take that on notice!

Senator MACKAY—Actually I shall have to consult with my colleagues as to whether ornot we take that on notice! It seems to me—and you say you are entitled to your view,Senator—to be absurd that we are relying on a report prepared for the Kennett government byArthur Andersen consultants and that there has been no assessment done by thegovernment—and I use the royal G in terms of government—in terms of the cost of theimplementation of GST in local government. I honestly think it is absurd. Clearly you wouldnot share that view. Why hasn’t the government undertaken an assessment of how much it isgoing to cost councils to implement the GST?

Senator Ian Macdonald—We have always had the view that councils will do very wellout of the GST. It is a view, I might say, that is shared by the Treasurer of New South Wales,who I think belongs to the Australian Labor Party. We have always accepted—we can debatewhether it will be $70 million, $60 million or $90 million—that there are big savings forcouncils in the removal of the embedded wholesale sales tax. We have always known thatthere will be big savings for councils in their fuel costs. I did my own assessment in my ownshire council in Burdekin, up in North Queensland. They spent $400,000 a year—I think thatwas the figure; I got it two years ago now—on diesel fuel for their trucks, and working atabout a 25c saving a litre, they are going to save $100,000, which I am sure is a lot more thanit will cost them to implement the GST, and that is just in one year.

Senator MACKAY—So you are aware of your own council. What about other councils?

Senator Ian Macdonald—I did that myself, but I rely on Arthur Andersen and the LGAQ,who did some work along those lines.

Senator MACKAY—The LGAQ do not anticipate savings of the order that you have justsaid.

Senator Ian Macdonald—I think they do. I think they gave me a list of fuel usageamongst the various councils. It is a very simple thing to do. You just get every council towork out what is the price of diesel they pay on their big trucks, and then you take about one-fourth of that and that is their annual saving.

Senator MACKAY—It is a bit more complex than that: you have actually got to ask thecouncils first. You have to ask the councils first what the cost of GST implementation is andthen you ask them what the savings are. You have not done either of those things.



Senator Ian Macdonald—The LGAQ, I am reminded, originally said there are $18million of savings Queensland-wide, but now following the rearrangement of the deal, thereare only $9 million of savings.

Senator MACKAY—Have you talked to them recently?

Senator Ian Macdonald—I talk to them all the time.

Senator MACKAY—What have they told you recently about potential savings?

Senator Ian Macdonald—They have not raised the issue with me.

Senator MACKAY—Has any state association raised the issue of GST implementationwith you? No.

Senator Ian Macdonald—I have just been reminded that we have just given out grants toall the state associations to help them help their constituent councils implement the GST.

Senator MACKAY—That was not the question. Have any of the state associations raisedthe issue of GST implementation with you?

Senator Ian Macdonald—Yes, they have because we have been dealing with them. Wehave been negotiating and talking with them, which is the best way to help them. I am notsure whether they raised it with me; I think I in fact raised it with them. There has been aseries of consultations. In fact, I am reminded now that we actually said to the stateassociations—

Senator FORSHAW—Over a beer late at night!

Senator Ian Macdonald—I will not say that in relation to the $1 million, but certainly weasked them initially, Senator, and we have had ongoing consultations in working out how bestwe could help them.

Senator MACKAY—You will not say what in relation to the $1million? Sorry, I did nothear the first bit.

Senator Ian Macdonald—It was something I was going to say, but I will not.

Senator FORSHAW—Could you just remind me, Minister or Mr Matthews, what is thetotal amount that is being provided by the federal government to the state associations for theGST implementation?

Ms Varova—It is $2.51 million.

Senator FORSHAW—Do you know what that works out to be on average per council, inthe state of New South Wales, for instance?

Ms Varova—Yes, we can give you those figures. Just one moment.

Senator Ian Macdonald—I think we could give them to you by referring you to lastmonth’s Hansard.

Senator FORSHAW—I did say initially, Minister, ‘Could you remind me.’

Senator Ian Macdonald—Yes, you did say that. I concede that.

Senator MACKAY—Senator Forshaw was not there.

Senator Ian Macdonald—I am sure we have got these figures, and we can hand them toyou so you can have a look at them.



Senator FORSHAW—Forgive me for not being completely on top of all these things. As Iunderstand the program, the money is provided to the state associations, who in turn areresponsible for distributing it to the councils: is that correct?

Senator Ian Macdonald—Very few of them are distributing it in a cheque to the councils.They are running seminars; they are getting software. Each state had a different approach.Several of them were similar. In addition to that, of course, there is that $2.51 million that wedid distribute to the states. In addition to that, the Australian Taxation Office have provided agreat deal of assistance in consultations, in seminars, in individual sessions with individualcouncils, helping councils through where they had a problem. So the Commonwealthgovernment’s contribution to councils for the implementation is much more than $2.51million.

Senator FORSHAW—And they are still scratching their heads, with six weeks orsomething to go. Maybe if you have it in table form—

Senator Ian Macdonald—It is all there with each state, what each state—

Senator FORSHAW—Would you mind tabling that, Minister?

Senator Ian Macdonald—Yes, I can give that to you straightaway.

Senator MACKAY—It was only given to me, Minister, rather than to Senator Forshaw aswell. I have it, but I do not think Senator Forshaw has. Minister, with regard to the ACCCbooklet, you would have seen the ALGA press release in relation to that?

Senator Ian Macdonald—The ALGA press release in response to the ACCC? I have notactually seen the press release but I have seen the note about it, yes.

Senator MACKAY—I thought you had this. I thought somebody just handed it to you.

Senator Ian Macdonald—Yes, I did see it, straight after lunch.

Senator MACKAY—What is your comment in relation to their claims?

Senator Ian Macdonald—Senator, I will back the ACCC not just because it is the ACCCbut because it confirms the Arthur Andersen report and most any other report that has beenissued in relation to local government. It stands to reason. The GST does not impact uponcouncils because they do not pay it—they pay it but they get it back. There are some one-offstart-up costs, but all my best advice is that they are covered easily by the savings, and so theACCC is correct. I think I will be putting out a press release saying that.

Senator MACKAY—In your press release, will you be advising what methodology theACCC used? Do you know what methodology they used for determining this?

Senator Ian Macdonald—No, I do not. But, as I said, it is a matter of commonsense,because there is $70 million worth of embedded savings; because there are big fuel savings;because of the Arthur Andersen report and the LGAQ and all the other material that is around;because Mr Egan, the Labor Treasurer of New South Wales—a very fine gentleman, and fromthe right faction—did a good budget—

Senator FORSHAW—It was a great budget for the bush: it did all the things that youshould have done.

Senator MACKAY—Yes, that is right.

Senator Ian Macdonald—I will not go that far.

Senator MACKAY—He spent more than you did in your whole federal budget.



Senator Ian Macdonald—He confirms that. So the ACCC are, I am sure, doing it off theirown assessments, but they are simply mirroring all of those people—Mr Egan, ArthurAndersen, the LGAQ. It stands to reason.

Senator MACKAY—The question was: do you know what methodology the ACCC used?


Senator MACKAY—Ms Parsons, do you know what methodology the ACCC used?

Ms Parsons—No, I do not.

Senator Ian Macdonald—Not that I am doubting Ms Parsons, but I think she would haveonly seen the press release at lunchtime as well.

Ms Parsons—I do not know.

Senator MACKAY—I find this extraordinary, because it is the Murphy model that hasbeen used consistently in relation to establishing the impact of the GST. So there was nodiscussion with you or your office from the ACCC in relation to this?

Ms Parsons—No.

Senator Ian Macdonald—It does not surprise me, Senator.

Senator MACKAY—It does not surprise me either, having sat through the estimates for along time. I just find it extraordinary that you do not seek input and they do not ask you forinput.

Senator Ian Macdonald—It is an independent statutory body; it is not related togovernment.

Senator MACKAY—No, not just the ACCC. Treasury do not seem to talk to you either. Itis extraordinary. Anyway, that is not a question, as the Chairman is probably about to remindme. So we have the minister standing by the ACCC. That is fine. Minister, do you knowwhether the ACCC has powers to monitor whether councils increase charges by more than 10per cent?

Senator Ian Macdonald—No, I do not know.

Senator MACKAY—Has anybody from the department inquired as to the determinativepower or otherwise of the ACCC, if charges increase by more than 10 per cent?

Ms Parsons—No.

Senator MACKAY—You do not know?

Senator Ian Macdonald—The answer was ‘no’, not ‘do not know’.

Senator MACKAY—No, the department has not inquired?

Senator Ian Macdonald—That is right.

Senator MACKAY—I do not think they do have the power, by the way—just in case youare curious. With LGDP, there seems to be a carryover of $438,000. Why is that carryoverthere, Ms Parsons?

Ms Parsons—A number of projects have not yet been finalised.

Senator MACKAY—Is the money allocated?

Ms Parsons—The money has been allocated, yes, and the rollover has been approved fornext year.



Senator MACKAY—So the carryover includes allocated funds which will be expended inthe following year?


Senator MACKAY—When will that round be announced—the allocated amounts you justtalked about that has been rolled over until next year?

Ms Parsons—No, sorry; there are no new allocations. They are existing allocations thathave been made from projects that were approved originally under the LGDP.

Senator MACKAY—So they are all out and announced?

Ms Parsons—They are simply just carried over and carried over, that is right.

Senator Ian Macdonald—The program finished last year. It was not in last year’s budget.

Senator MACKAY—It appears in this year’s budget.

Senator Ian Macdonald—As carryover.

Senator MACKAY—That is correct; that is why I am asking the questions. Has anevaluation of LGDP taken place, or are you intending to do one—seeing that the program hasnow expired?

Ms Parsons—We have not done a formal evaluation, even though the program istechnically finished. Because there are still quite a large number of programs that are underway, we have not done a formal evaluation.

Senator MACKAY—Are you intending to do a formal evaluation at any point?

Ms Parsons—We will do some sort of an evaluation.

Senator MACKAY—Has the full list of all the projects that have been funded nowpublicly announced?

Ms Parsons—Yes, they have.

Senator MACKAY—There are no others?

Ms Parsons—No.

Senator MACKAY—Minister, the day before yesterday you assured us that there wouldbe an increase in FAGs to local government under your government. Do you stand by that?

Senator Ian Macdonald—I am sorry, I am trying to get you an answer for a questionasked a long time back, Senator.

Senator MACKAY—Do you want to do that now, and then I will ask the question again?

Senator Ian Macdonald—About the Foundation for Rural and Regional Renewal, I wasjust going to inform you that we have a web site.

Senator MACKAY—I have looked at that. Minister, the other night, you asserted thatthere had been a ‘real terms’ increase in financial assistance grants to local government underthis government. Do you stand by that statement?


Senator MACKAY—You stand by the fact that, during the whole of the government from1996 until now, there has been a ‘real terms’ increase in FAGs to local government? You maywish to seek advice in relation to this question.



Senator Ian Macdonald—There has been, except for the first year when we did notinclude the population element in it. Is that right?

Senator MACKAY—So what happened in the first year?

Senator Ian Macdonald—On coming to government, we found that Mr Beazley hadmisrepresented the books and we had a $10.8 billion black hole that had to be addressed, andthere was a substantial cut in government expenditure right across the board. The governmentat that time—which, regrettably, I was not part of—made a determination that, as federal andstate governments were bearing a share of the deficit that had been hidden by Mr Beazley,local government should make a contribution also. So the CPI increase went in in the firstyear but not the population aspect. Is that right? I am having a disagreement with my officersat the table. It is going back four years now. My recollection of that—and I was not here at thetime—is different to my officers’. But I will check that. Apart from that, it has gone up.

Senator MACKAY—My recollection is that everything was frozen for that one year,which resulted in a cut off the base of $15 million which was not put back in. If that isincorrect, can somebody let me know?

Senator Ian Macdonald—We have a divergence of views at the table. As I say, it is goingback four years and I was not the minister—

Senator MACKAY—It is a critical issue. I wonder whether it could be taken on notice.


Senator MACKAY—Last year’s budget allocation for FAGs was $1.263 billion. Thisyear’s PBS indicated that $1.27 billion was spent. I am sure this is an accounting issue, butcan someone just explain the overspend?

Senator Ian Macdonald—Perhaps if I explain it, I can do so in layman’s language, andMs Parsons will correct me if I get this wrong. Each year you make a payment to councilsbased on CPI plus population increases. But, because population numbers cannot bedetermined until after the end of the accounting period, you pay on the basis of someexpectations. Then, after the end of the year, you see exactly what the populations were—

Senator MACKAY—There is a retrospective variation.

Senator Ian Macdonald—And you retrospectively pay more or pay less. That is with thetotal sum and it is also with individual councils and states.

Senator MACKAY—In last year’s PBS, there was no forward estimate for FAGs fundingfor 2000-01, but this year’s budget allocates $1.322 billion. The minister’s press release fromthis year’s budget indicated that FAGs funding for this year represents a four per cent or$50.9 billion increase on last year’s funding. Can somebody just run me through how thesefigures were arrived at, or do you want to take that on notice as well?

Senator Ian Macdonald—I will just see whether someone can do it. But, first of all, I willcomment on why it was not in last year’s forward estimates. You might recall that the originalnew tax system proposal was that the Commonwealth would not be involved in payment ofgrants. So it was not in the forward estimates last year because the states were going to bepaying it. So that is that.

Ms Parsons—You are asking about how the four per cent was calculated?

CHAIR—I just want to find out what page it is on.

Senator MACKAY—Page 43 for last year’s; page 47 for this year’s.



Ms Parsons—It is the difference between the final entitlement last year of $1.271 billionand the estimated figure this year of $1.322 billion, which is $50.85 million—and that is afour per cent increase.

Senator MACKAY—That four per cent is the CPI and population adjustment?


Senator MACKAY—There is still the provision for retrospective variation, depending onpopulation adjustments?

Ms Parsons—That is correct, depending on the economic parameters.

Senator MACKAY—The minister’s press release also said that $406.4 million of this isfor road grants. I am just curious, Ms Parsons: how much went to road grants last year?

Ms Parsons—I do not think I have the breakdown of last year’s roads.

Senator MACKAY—What about the indispensable Mr Martin’s figures? I am also goingto ask you how that compared to the year before.

Ms Varova—Perhaps I could take this opportunity, Senator, to answer a couple of thequestions that you put previously. The cost of the printing of Rural Book was $82,776. TheCountrylink budget this year is $680,000. Our officer from Longreach visited in October andFebruary, and his next visit will be in June. The budget for the pilot—and that is over the twoyears—is $224,900.

Senator MACKAY—Thank you, Ms Varova, I appreciate that.

Senator Ian Macdonald—I had an answer for Senator Forshaw. But seeing he is not here,I will wait until he is back. It is about our discussion last night about Casino and Lismore. Iwill mention the towns so that that will carry him back after 7.30 p.m., hopefully.

Senator MACKAY—I think he will be returning.

CHAIR—Mr Martin, do you have an answer?

Mr Martin—Was this question: how much were the local roads grants in the currentfinancial year, 1999-2000?

Senator MACKAY—The minister’s release states $406.4 million for local road grants.

Mr Martin—For next financial year?

Senator MACKAY—Yes. What about this year?

Mr Martin—For the current year it is $390.7 million.

Senator MACKAY—That is fully expended obviously, isn’t it?

Mr Martin—It will be. Is there one more quarter to go? That is it.

Ms Parsons—The payment has been made.

Mr Martin—The payment has been made.

Senator MACKAY—This is the historical Federation-based formula, isn’t it?

Ms Varova—This one is lost in the bowels of history, Senator. I do not think anyone canexplain it.

Senator MACKAY—But it does go back to Federation, doesn’t it?

Senator Ian Macdonald—I do not think it goes that far, does it?



Senator MACKAY—I think it does.

Ms Varova—I understand that it is a very long time ago. I do not know whether it isFederation, but—

Senator MACKAY—I think it is. I have done a bit of research into this one.

Mr Martin—For the record, it is about a four per cent increase as well.

Senator MACKAY—How does that compare to the previous year? It is a very bizarreformula, I have to say. I will move on so that Mr Martin can check that out.

CHAIR—It is virtually time to break for dinner. How much more questioning have yougot for these people here?

Senator MACKAY—Chair, I probably have 15 to 20 minutes.

Senator Ian Macdonald—If that is the case, perhaps we can finish that so I can let thesepeople go. Then we have the territories branch, which is a different set of people, andNational Capital Authority. Mr Chairman, perhaps I could ask your indulgence to go foranother little while.

CHAIR—I am prepared to suffer in the interests of good government. That is fine.

Ms Parsons—We also have some additional information that arose out of the hearings theother day that we would like to provide. Senator Mackay asked some questions, and weundertook to get back to her. I wondered whether we could also provide that now.

CHAIR—Yes, you certainly can.

Senator MACKAY—If we do go for another 20 minutes, there are things I have to do inthe dinner break, so I will require an hour’s break. I presume the minister is in the same boat.


CHAIR—We will take an hour’s break. I have 1½ hours of work to do myself.

Senator Ian Macdonald—The reason for doing it—and we have wasted five minutes nowtalking about it—is that it does allow all of the officers to go rather than hanging around foran hour and then coming back.

Senator MACKAY—That is fine.

CHAIR—There are approximately 10 minutes to go. We will finish at approximately 6.50p.m.

Senator MACKAY—Ms Parsons, could you give me that information now?

Ms Parsons—You asked who was at the meeting with Australia Post that we had in April.The two people were: Bob Finch, the national group manager for retail with Australia Post;and Graham O’Brien, who is the manager of the retail operations and policy unit in AustraliaPost.

Senator MACKAY—Okay. Is that it?

Ms Parsons—Yes. You also asked a couple of questions about Moree Rural RoadsCongress. It was organised by the Moree Plains Shire Council in conjunction with theAustralian Local Government Association. The cost of registration as a participant was $680.Minister Anderson and Senator the Hon. David Brownhill were the only members ofgovernment who were there. We have a copy of the communique that came out of thatcongress which we can table. We can also table the list of steering committee members.



Senator MACKAY—Thank you for that.

CHAIR—So we are tabling two documents? One is a communique. What is the other one?

Ms Parsons—One is the list of the steering committee members at the congress.

CHAIR—Thank you. It is agreed that we will table them.

Senator MACKAY—I have received correspondence from Senator Macdonald in relationto the review of the FAGs Act. Obviously that will be undertaken. How will local governmentbe able to have input in relation to the review? It was not made clear to me in thecorrespondence. What is the intention? Perhaps somebody could run me through the reviewprocess. That might be the best thing.

Senator Ian Macdonald—The Commonwealth Grants Commission are doing it. They aregoing to issue a bulletin at an early stage letting everybody know that they are doing it, whatthe terms of reference are and how submissions can be made. They are looking at theirprocedure and processes, and that is going to be mentioned in their first discussion paper. Thatwill be issued in early June, and we will be seeking submissions in late June or early July.They will be having hearings in every capital city and in as many regional areas as they can tofacilitate access for councils and others who want to make submissions. I know all of the stateassociations are aware of it because we wrote to them with the terms of reference, and I thinkfrom the number of letters we are getting from various councils many councils are now aware.I have been talking about it at meetings of groups of councils that I have been going to for thelast six months. I think there is a fairly high understanding that the review is coming. Theformat to follow for councils wanting to make submissions will be advised by the GrantsCommission in their first discussion paper.

Senator MACKAY—I think I got all that. When will the discussion paper be issued? I didnot quite catch that.

Ms Varova—It will be shortly.

Senator MACKAY—Early June, was it?

Ms Varova—Yes, I understand so.

Senator MACKAY—The Grants Commission will presumably travel to each state and asmany regional areas as possible, as the minister indicated. Are those hearings open to thepublic?

Ms Varova—Yes, they do conduct public hearings. Of course, the Grants Commission isan independent body, so it is going to be a matter for their judgment, their timetable andwhere they actually go. I understand at this stage that it will be in every capital city andpossibly in one or two other regional centres in each state and territory. But where they go isyet to be finally determined. In essence, they will be holding those hearings in response tocomments to the discussion paper.

Senator MACKAY—So the discussion paper has been prepared by the CommonwealthGrants Commission, and they are responsible for the promulgation of the discussion paper?

Ms Varova—Yes, they are. That is right.

Senator MACKAY—What is the end point in relation to the conclusion of the review?

Ms Varova—We are expecting them to be able to produce a report by December.

Senator MACKAY—Is the Commonwealth Grants Commission paying for it all?



Ms Varova—Yes. I beg your pardon, it is the draft report in December. We keep talkingabout that. Then in March 2001 there will be a conference to discuss the report. I think it willbe an open conference.

Senator MACKAY—Sorry, I am having a bit of trouble hearing.

Ms Varova—In April 2001, there would be submissions on the draft report, and in June2001 a report to the Minister for Finance and Administration and interested parties.

Senator MACKAY—I am not quite clear on who would be attending the conference.

Ms Varova—Again, that will be a matter for the Grants Commission to determine.

Senator MACKAY—I think that is pretty clear. The only query I have is: why isn’t thereview addressing the interstate distribution of the general-purpose grants?

Ms Varova—At this stage, the minister has those issues under consideration.

Senator Ian Macdonald—As I understand it, that is not what the review is about.

Senator MACKAY—The draft terms of reference that you issued to me say, ‘The reviewwill not address the interstate distribution of the general-purpose and local road grants or thequantum of funds available under the act.’ I am unclear as to the process. Was that a decisionof yours? How did that final sentence appear?

Senator Ian Macdonald—It was a decision of government. That was the situation. I donot want to go into the process of government decision making, but I guess one of the factorswas that last time this was done back in the early 1990s my interpretation was—and I will notquote the words—that it was a wasted exercise. It could not achieve anything.

Senator MACKAY—This is in relation to the interstate distribution of general-purposepayments, is it?

Senator Ian Macdonald—It was discussed in the Commonwealth-state heads ofgovernment meeting in relation to the distribution of the GST grants.

Senator MACKAY—As to whether they wanted to go to the interstate distribution, the percapita issue?

Senator Ian Macdonald—As to the fact that the arrangements would stay the same.

Senator MACKAY—So nobody was prepared to bite the bullet on the per capita issueamongst the state premiers?

Senator Ian Macdonald—The state premiers—

Senator MACKAY—I am aware of the sensitivities.

Senator Ian Macdonald—When I wrote to them all and mentioned that, several of them—am I breaching confidence by saying what the premiers said?

Ms Varova—Probably.

Senator MACKAY—You probably are.

Senator Ian Macdonald—Can I say that a couple of states did not want it. Most of theothers thought that they should have been in it, and one or two I think did not have a view. Iam advised that that might be disclosing a confidentiality issue—

Senator MACKAY—I think I can guess which the two states were.

Senator Ian Macdonald—Actually, you would be wrong. You would be surprised.



CHAIR—You would be surprised.

Senator MACKAY—How do you know, Chair?

CHAIR—Because I talk to my state counterparts regularly, and they give me the odd bit ofadvice from time to time.

Senator MACKAY—I know about Western Australia.

CHAIR—We have a good working relationship with our state governments. We just do notjump as high as all the other people.

Senator MACKAY—On that basis the Commonwealth has decided not to look at the issueof interstate distribution of general purpose and also local. That is one issue. The local roadgrants is a separate issue, a separate formula: is there any reason why that was determined bythe Commonwealth not to be included? Too-hard basket again?

Senator Ian Macdonald—I think the answer to your question is yes, Senator. I could dressthat up in a lot of other words.

Senator MACKAY—Fair enough.

CHAIR—That is the best answer I have heard for a long time.

Senator MACKAY—Is there any reason the government did not decide to extend thereview to look at the actual quantum of FAGs funding? What was the reason quantum was notincluded?

Senator Ian Macdonald—I would dearly love to give welfare, defence, roads, localgovernment and everybody lots more money but, as I always say, we governments do nothave any money; we just use other people’s money. You either increase taxes or borrow orcutback on other expenditure. That is the challenge of government. That is what budgets areall about. There is not room in the budget for additional money.

Senator MACKAY—So the quantum was not addressed on the basis that is the pot ofmoney that is available; there is no plan to increase it?

Senator Ian Macdonald—That is right.

Senator MACKAY—Okay. A couple of estimates rounds ago we actually asked as toresponses to various reports. One of them specifically was Riding the waves of change, whichwas a report in relation to national competition policy, which the department made asubmission to. Also, there was the House committee report Time running out: shapingregional Australia’s future. Both reports in fact point to the issue—as do a number of othernon-government reports or non-parliament reports—of increasing the role of localgovernment in regional development. What expectation does the government have in relationto the role of local government in regional development these days?

Senator Ian Macdonald—I have a view that local government is the best place to dealwith most things in rural and regional Australia. I have always thought that, being electedrepresentatives of their constituency and accountable, they are in the best role to do that. Inmany ways the government pursues that line with the roads grants which you havementioned—they are distributed through local councils. Whilst we have not been prescriptive,I have certainly encouraged councils with our Rural Transaction Centre Program because,again, I see them as the community leaders. I am not saying that others who apply are notdoing a great job. Councils, in my view, have a major role. Again, if I can come back to the



Rural Transaction Centre Program and the rural plan and Rural Communities Program, inmany instances councils are the leading and driving forces in those.

Senator MACKAY—That is all very laudable, and I agree with you. There is a difficultyin terms of resourcing of course. Is there any intention to provide additional resources to localgovernment to assist them in this enhanced participatory role?

Senator Ian Macdonald—As we can provide money for roads, as we provide money forrural plan, as we provide money for rural transaction centres, we do resource them to dothings. In any future government programs we certainly will look very closely at how we caninvolve local government in anything that the government might do in the years ahead. Ishould add of course that many local governments are already doing quite exceptionalthings—

Senator MACKAY—Yes, they are indeed.

Senator Ian Macdonald—In their own backyards. With our national awards forinnovation in local government we try to highlight, encourage and praise those who do thework. I know you know this and would agree with what I am saying. They do marvellousthings. They really do justify their position as community leaders.

Ms Varova—Could we table a couple of documents.

CHAIR—Please do.

Ms Meakins—These are document requested from the previous part of these hearings:copies of advertisements for the Understanding Rural Australia program; and the businessplan for the Year of the Outback 2002. You also asked for information about expenditure onthe regional Australia communication strategy in the last financial year. Regrettably, due to achange in our financial management information system, I only have indicative figures. Thesystem changed part way through the financial year, and our ability to extract reports was verylimited. I can give you an estimated total on non-salary amounts of $413,235, which can bebroken down into broad categories of sponsorships and awards, market research andconsultancies, early summit expenses, delays in exhibitions, advertising, printing and mediamonitoring.

Senator MACKAY—Ms Meakins, I did ask for a fairly detailed response. I wonderwhether you would like more time to take it on notice and provide it to me. Is this sort of it interms of the response?

Ms Meakins—It will be very resource intensive to get more detail. We will actually haveto go back manually to check some of those figures.

Senator MACKAY—Is there any chance in terms of the categories that you mention todisaggregate that $400,000-odd figure?

Ms Meakins—I can give you total figures against those broad categories that areindicative.

Senator MACKAY—That would be fine.

Ms Meakins—For sponsorships.

Senator MACKAY—Just give me a piece of paper.

Ms Meakins—I will provide that on notice. I do not have a clean piece of paper to giveyou.

Senator MACKAY—That will be fine.



Proceedings suspended from 6.48 p.m. to 7.55 p.m.CHAIR—We shall resume. Minister, do you what to make a statement or answer some

questions?

Senator Ian Macdonald—Yes. In 1997-98 the local government grants were increased forinflation but not population growth as part of the government-wide contribution to address thedeficit that the government inherited in 1996. The quantum was not increased by real percapita growth; it was however increased in real terms. However, the effect of the CPI meantthat the dollar term declined. However, I emphasise that the reduction in the dollar amountwas because of the movement in that year’s CPI. If you know what that means, good luck toyou.

Senator FORSHAW—Do you want to take that on notice?

Senator Ian Macdonald—No. I have given my answer; you interpret it as you will. Theywere increased for inflation but not for population growth, which is what I thought and what Isaid. They were increased in real terms but not in real per capita terms, because the per capitabit did not come. I think the clearest way of saying that is that they were increased forinflation but not for the population increase.

Senator MACKAY—This is in the 1997-98 financial year. Now my understanding is thatthe actual quantum that we were talking about was $15 million. Does that sound right?

Senator Ian Macdonald—That is what my note here says, but it does not sound right tome.

Senator MACKAY—Did you say $15 million? I am sorry, I was being talked to bysomebody.

Senator Ian Macdonald—No. I did not say that, but it is in my notes.

Senator MACKAY—I am pretty sure it is $15 million.

Senator Ian Macdonald—Why it went down by $15 million, so I am told, was because ofthat other issue we were talking about—that there had been an amount paid which took intoaccount certain CPI and population increases.

Senator MACKAY—Yes, that is right.

Senator Ian Macdonald—The CPI increase was overestimated, so it was retrospectivelycut back. I am extrapolating that perhaps it was because the population increase had beenallowed for but did not eventuate. That last bit I am not sure of.

Senator MACKAY—I do not know that that is—

Senator Ian Macdonald—Can I take that on notice and give it to you?


Senator Ian Macdonald—I thought I understood it very easily and clearly, but I have nowsucceeded in confusing myself.

Senator FORSHAW—If you could tell us what you are taking on notice, we will agreewith you.



Senator MACKAY—I have got a particular understanding that I would like clarified. So ifyou do take it on notice, we will all be happier.

Senator Ian Macdonald—We will take it on notice.

CHAIR—We shall now formally resume estimates.

Senator MACKAY—I thought Senator Macdonald wanted to give some answers toSenator Forshaw’s previous questions.

Senator Ian Macdonald—I did, too. Senator, I wanted you to be here because I know youare very interested in this. In relation to Lismore and Casino, we have consulted with ourcolleagues in the Department of Employment, Workplace Relations and Small Business—thedepartment responsible for Job Network—and their advice is as follows. In Casino there arefour sites, and in Lismore there are six sites, providing Job Network services. In the previousJob Network contract round, there were three sites in Casino and four in Lismore. There arenow four and six, so it is an increase.

The number of places available in the two communities has also increased. Service levelsin the two communities clearly have increased. The Commonwealth does not comment onstaffing matters for individual Job Network providers as these are commercial matters for theparticular provider. Across the board in rural and regional areas of Australia, Job Networkservices are better than ever before. The number of sites outside capital cities has nearlydoubled, from about 600 to about 1,100. More than 250 localities, half in regional and ruralareas, now have employment services for the very first time. So that is apropos our discussionon Casino and Lismore on Tuesday night.

Senator FORSHAW—I do not want to continue the discussion, but I will respond bysaying that what I raised on Tuesday night was the establishment and then the closure of theEmployment National office in Casino and also the impact of that in Lismore; they werespecific government services. I note that you did not address that issue in your response. As toyour view that the services have increased and my view about that issue, we will debate thatat another time. But I take it that there is no disagreement with what I said, which was that anemployment office was opened in Casino and then it was closed.

Senator Ian Macdonald—That was a provider—Employment National. It closed downbut it was replaced by an increased number of other avenues providing the service.

Senator FORSHAW—As I said, Minister, that is a matter of debate. The closure of anoffice in the main street of a country town and its replacement by other types of services is notjust a simple matter of bean counting, but let’s deal with that some other time.

CHAIR—What an excellent idea. Senator Mackay.

Senator MACKAY—I want to look at the flood mitigation program, which we have nottalked about for a while. Talking about Lismore, the mayor of Lismore has a particularinterest in this. I know that he has lobbied a number of us in Canberra—probably bothSenator Macdonald and me. Ms Gayler, I am keen to get a picture of what has happened withthe flood mitigation program over the years.

Ms Gayler—The flood mitigation program has been allocated $20 million over threeyears. This current financial year is the first year of the program. As a consequence of thetime that it has taken to get the program, which is a partnership arrangement with the states,up and running, although a significant amount of funds have been able to be approved andcommitted to projects in conjunction with each of the states and territories, in terms of actualexpenditure by 30 June this financial year, we expect to have spent—of the $6 million



originally allocated for this year—$2.4 million, but $5.5 million has been approved andallocated to projects. We have made the first payment to all jurisdictions which have signedthe partnership agreement, and that was 30 per cent up-front for each of the jurisdictions. Sofor the $5.5 million that the minister has approved for 43 projects, 37 of those have matchingstate funds and partnership agreements signed and funds flowing to those states.

Senator MACKAY—No pun intended.

Ms Gayler—We were hoping to be able to make the second round of payments for those37 projects before 30 June, but that is reliant on states and territories providing us withprogress information on projects. So some may be paid their second payments by 30 June;others not. As a consequence, some of the unallocated funds have been carried over into thenext two financial years. So the estimate of available funds for the next two financial years is$8.8 million for each of those years. We are already in the process of considering expressionsof interest and applications for the coming financial year.

Senator FORSHAW—Would you be able to supply us with a list of those projects? I thinkyou said there were 37.

Ms Gayler—Certainly.

Senator MACKAY—Forty-three in total, I think.

Senator FORSHAW—So there is 43 in total, and 37 had matching—

Ms Gayler—I can provide you with a list of the 37 which are agreed betweenCommonwealth and state and territory governments.

Senator FORSHAW—Can you tell us about the ones that have—

Ms Gayler—Not until they are settled.

Senator FORSHAW—Thank you. There is to be matching contributions from the statesand territories but with local government making a contribution. Is there any agreed formulafor the level of local government contribution, or is that something that is flexible, dependingupon the particular area?

Ms Gayler—The only stipulation that the Commonwealth has made is that it will providea maximum of 33 per cent of the funding. Generally across the jurisdictions the arrangementis 33 per cent—a maximum of a third—from the Commonwealth. The general approach of allof the jurisdictions is one-third Commonwealth, one-third state and one-third localgovernment, but there are exceptions to that. Some states in exceptional circumstances areproviding more than one-third, to offset local government contributions—where there is acouncil with a very low rate base, for example.

Senator FORSHAW—That was my next question.

Ms Gayler—That is a matter between the state and their local government.

Senator FORSHAW—I can think of a number of situations where—whilst they have notnecessarily told me this—councils along some of the rivers in New South Wales would be inthat position. So the maximum the federal government will contribute is 33 per cent. Is thereprovision to go beyond that in exceptional circumstances to share the extra load with the stategovernment?

Ms Gayler—No, there is not, with the exception of flood warning systems, where rightfrom the beginning the guidelines for the program have provided that that will be 50 per centCommonwealth, 50 per cent state, with the local authority picking up the ongoing



maintenance and replacement costs for the equipment involved. That is one exception that isspecified in the guidelines. Otherwise, no, there are not any exceptions. Of course, settling onone-third Commonwealth funding means that the available funds can fund more projects.That is the balancing issue, I think.

Senator FORSHAW—Yes, but let’s not get into another debate. It could also mean thatyou might end up funding more projects to only a stage rather than to completion. I think thisis one of the issues that has been raised certainly in the Northern Rivers region. Anway, I donot want to debate that with you.

Senator MACKAY—Ms Gayler, it has been put to me that there is a degree of disquiet inrelation to the amount of funds available for flood mitigation. One of the things that has beenput to me very recently was that there was a far greater level of funds prior to 1996 than thereis now. Could you just apprise me of what happened?

Senator Ian Macdonald—Apprise you of what?

Senator MACKAY—What happened in 1996, then 1997-98 and so on?

Senator Ian Macdonald—Senator, you know me. I try to help where I can, but really thathas nothing to do with either this year’s budget or anything that goes before this. It is not arelated issue. The program we are talking about now is a brand new, never before availableprogram. What other governments may have done in years gone by really is not a matter forthis committee and I doubt that the officer would have the details here anyhow because it issimply not part of—

Senator FORSHAW—Are you saying there has never been a flood mitigation programfunded by the Commonwealth government?

Senator Ian Macdonald—No. I am saying that this particular program is brand new and itfilled in what was a gap when it was introduced.

Senator FORSHAW—A gap that was created by your government.

Senator MACKAY—By abolishing the previous flood mitigation program. Is that right ornot?

Senator FORSHAW—You raised it.

Senator Ian Macdonald—I was not around and I suspect—

Senator MACKAY—I am not asking you personally; you, the government.

Senator Ian Macdonald—We did not come prepared for these questions. I suspect most ofthe officers would not have been in this section at the time.

Senator MACKAY—They might know. Why don’t we try them?

Senator Ian Macdonald—It is not relevant to this, Senator. You are asking to compareapples with oranges.

Senator FORSHAW—Or floods with floods.

Senator Ian Macdonald—It is a different flood program.

Senator MACKAY—It is germane. I just want an answer. If Ms Gayler does not know ornone of the officers know, that is fine.

Senator Ian Macdonald—Ms Gayler should not be asked to comment upon programswhich are not here.



Senator FORSHAW—That’s nonsense.

Senator Ian Macdonald—It is a different program. This is a program that has been verywell received. It is a regional program. There may have been other programs that weredifferent.

Senator MACKAY—There used to be a flood mitigation program which covered urbanand regional. My understanding is that prior to 1996 the funding was upwards of $70 millionto $90 million. Then the first Costello budget abolished it altogether. For a period there was agap where there was no flood mitigation program and then of recent times the government hasintroduced a $20 million program, as Ms Gayler said, over a period of years. I can find thatout separately. I am happy to do that.

Senator FORSHAW—We would like to test our information against the details from thegovernment and the department.

Senator MACKAY—To check whether it is correct.

Senator Ian Macdonald—That is fine. They are good political and debating points, butnot a matter for here. We do not have the information.

Senator MACKAY—They are not political debating points. It is a matter of fact. I amattempting to find out whether this assertion I am making is correct or not.

Senator Ian Macdonald—No, we don’t ask officers to comment upon assertions youmake. You can ask me but you have my answer, so save your breath.

Senator MACKAY—Minister, I am asking about figures in relation to the flood mitigationprogram from 1996-97 compared to 1997-98. That is totally germane in relation to a budgetestimates process because there is a program called flood mitigation. If this government isembarrassed about the fact that it abolished the program, then I will leave it.

Senator FORSHAW—Might I just say, and I want this recorded, but I do not want todebate it now, that, as I am sure the Chair will remember, if you go back a couple of dayswhen the new minister was sitting at the table and we were dealing with Agriculture, Forestryand Fisheries, there were quite a lot of questions asked of the department which trackedfunding, going back a number of years, and relevant because it gives one an opportunity tomeasure claimed progress in the area and so on by the government. On all occasions that I canrecall I never heard either you or any other minister decline to provide that information or todeny the officers at the table the opportunity to provide that information or to take it on noticeand come back to us. I just want to record that because I find it completely contradictory tothe approach that is adopted within this estimates committee in respect of other departments.If anybody needs to check the Hansard on that, you can.

CHAIR—You’ve made your point, but I do not think there was a program in 1996-97, wasthere?

Senator MACKAY—Yes, there was, but we are never going to find out.

CHAIR—Pardon?

Senator MACKAY—Of course there was.

Senator FORSHAW—The point I am making, Mr Chairman—

CHAIR—Yes, I know, I heard your point; you made your point.

Senator FORSHAW—You can go back beyond this last year or the previous year, to lookat a particular issue or area.



CHAIR—So long as it is related to the expenditure in front of us.

Senator FORSHAW—If that is the case, Chair, you are going to have to rule out three-quarters or half the questions that we asked on Monday or Tuesday.

CHAIR—I am a very generous chairman.

Senator FORSHAW—I am asking you to be generous again and instil some of that in theminister.

Senator Ian Macdonald—Can I be particularly helpful and refer you to the relevantannual reports for whichever department it was in those years and I am sure they will have allthat information for you. You can get it then and make the political or debating or whateverpoint you want to make. We do not have it, but it will be available. If it was a governmentprogram, as you say—and I take your word for that—you will find it in the annual report ofthe department.

Senator FORSHAW—But my last point, Minister, is that sometimes what is also putforward—I do not think it can be on this occasion—is that there was a transference in the wayin which a program may have been dealt with from time to time. It may have been fundedthrough this area once and then it is funded through this area the next year and so on.

Senator Ian Macdonald—New program?

Senator FORSHAW—A new program, okay.

Senator MACKAY—How many applicants have you handled so far? I appreciate theissue of projects, but how many applications did you receive?

Ms Gayler—I will look that up and answer shortly, if I can.

Senator MACKAY—How does the actual application process work?

Ms Gayler—For the coming financial year, we agreed with the states and territories tohave an expression of interest process first and that process has been undertaken. As a result,240 expressions of interest were received from across Australia, and states and theirassessment panels have been reviewing those expressions of interests and inviting formal andmore detailed applications from those that they think will be priority projects. Then the stateassessment committees— which consist of state government departmental representatives,generally local government association, Bureau of Meteorology, sometimes SES withCommonwealth as observer—meet and make an assessment of the relative merits of theapplications; and then it is up to the state lead agency to make recommendations to the stateminister on priorities for the coming financial year. Those priorities come to theCommonwealth minister, who takes advice, and the two ministers then agree on whichprojects will be funded for the coming year.

Senator MACKAY—Thank you. That was a comprehensive explanation. Will there be aregular round of announcements or is it more ad hoc than that, or is it dependent upon thetardiness, or otherwise, of the state process?

Ms Gayler—We had anticipated that the announcements would be reasonably hot on theheels of one another. As it has turned out, arrangements have to be made with the relevantstate or territory minister, and those have happened over a period of time. As and whenagreement is reached, the state and Commonwealth ministers have jointly announced theapproved projects.



Senator MACKAY—Who is responsible on the ground for the execution of the projects?Is it the state government or the local government in conjunction with the state government?

Ms Gayler—In most cases it is the local council or local authority, and that might be acatchment management board. In the case of the Northern Territory it is quite differentbecause the state department is responsible for flood mitigation projects. That is an exceptionto the general rule that the local council or the local agency which has had a project approved.To go back to your earlier question on the number of applications for the financial year 1999-2000, there were 37 applications—

Senator MACKAY—And 37 decisions?

Ms Gayler—No, I am sorry—there were 49.

Senator MACKAY—What are the general criteria that are used? Why did some miss out,generally?

Ms Gayler—The funding is for priority projects, and so some assessment needs to bemade of the relative need: properties at risk, numbers of residents at risk and history ofdamage. So all of those sorts of factors are taken into account, in addition to the benefit costratio of the particular project. Then the projects are ranked in quite a rigorous process, andthat is how the states decide which priority projects they wish to recommend.

Senator MACKAY—So the states essentially sign off on which project is regarded as apriority and which project is not within their jurisdiction? Would that be a fair summation?

Ms Gayler—Yes.

Ms Kava—If I could correct Ms Gayler’s wording of my obviously awful writing: thenumber of applications for 1999-2000 was 120.

Senator MACKAY—This may be a bit pre-emptive, but when is the evaluation scheduledfor?

Ms Gayler—For new applications or for the program?

Senator MACKAY—The program.

Ms Gayler—We have already commenced planning for a program of evaluation but,because of the nature of flood mitigation projects, we will need to do the evaluation in stages.We will have an evaluation program by the end of this calendar year, and then we hope tohave the initial first phase evaluation work completed shortly after that. That is expected to bean evaluation of how our administration of the program has been managed, how manyprojects have been approved and what stage they have reached. We will not be able to assessuntil much later when projects are completed, and even when some floods have occurred, howsuccessful overall the program has been. For that reason, we are planning a staged evaluation.

Senator MACKAY—Are there any plans to increase the money for the regional floodmitigation program?

Ms Gayler—That is a matter for governments in future years.

Senator MACKAY—Are there any Commonwealth funds available for urban floodmitigation?



Ms Gayler—Not flood mitigation per se, but urban waterways, yes, under the NaturalHeritage Trust program and there are funds under the Landcare program for natural resourcemanagement projects. I do not think they are confined to rural and regional areas. But as forfunds strictly for flood mitigation, no, apart from under state only programs.

Senator MACKAY—Dr Turner, what services will be targeted with the $2.9 million toimplement the new measures for the IOTs?

Dr Turner—We still have not completed the financial allocation process for theforthcoming financial year, but I expect a good deal of the funds will be devoted to additionalSDAs that are missing. There is some description on page 38 of the portfolio budgetstatement.

Senator MACKAY—There is, but it is fairly scant. Is there any more informationavailable?

Dr Turner—Most of that refers to findings of the Commonwealth Grants Commissioninquiry, which was completed in December 1999, in terms of services which are absent orbelow standard in the territories. They are the areas that we would expect the great majority ofthe $2.9 million will go to.

Senator MACKAY—What specifically are they?

Dr Turner—The examples that are given here are vocational education and training, healthservices covering carer and patient training—

Senator MACKAY—I have got that in front of me. I am curious as to whether there is anydisaggregation of that figure.

Dr Turner—Do you mean in quantums? Not at this stage. It is too early in the planningprocess to know that.

Senator MACKAY—What consultation has taken place or is planned in relation to thedisaggregation issue with the islanders?

Dr Turner—I am not quite sure that I follow.

Senator MACKAY—There is $2.9 million available. The actual allocation dollar-wise,quantum-wise has not been finalised yet in terms of services that are encompassed on page 38of the PBS. Has there been any consultation on that disaggregation or will there be before it isfinalised?

Dr Turner—There were consultations of many sorts. There was extensive consultationwith the local communities on both territories in the course of preparing the GrantsCommission report. There is a standard procedure for consulting with the territorycommunities about the development of new service delivery arrangements, and I anticipatethat will be followed. In the end, costings are a matter for negotiation between us andwhoever the provider agency happens to be. If you mean, ‘Will there be consultation aboutthe provision of services?’ the answer is yes. If you mean, ‘Will there be consultation aboutexactly how the dollars are split up with the local communities?’ the answer is not as suchabout how the dollars will be spent. It is a question of what the services are and how they willbe costed.

Senator MACKAY—When will the islanders be consulted? At what point in that processwill that kick in?



Ms Kava—There is an ongoing consultation process whereby the administrator has set upan advisory committee that comprises representatives throughout the community, and thatmeets on a regular basis. Members of the community are able to nominate items of concern tothem for the agenda for discussion. That is a valuable conduit in terms of consultation on anyissue of concern, and it would include these obvious important ones.

Senator MACKAY—That is fantastic, thanks for that. Can I assume then that the advisorycommittee will be considering this matter? I appreciate Dr Turner’s point about quantums, butpresumably in relation to priorities there will be—

Ms Kava—In general terms, there is the opportunity there to discuss services for theothers, and that would include any additional or new services, as has been suggested.

Senator MACKAY—So this budgetary provision will be the subject of consultationthrough the administrators’ advisory process?

Ms Kava—As Dr Turner has said, not the specific amounts but the issues, the priorities forthe community in terms of services. There will certainly be the opportunity there through thatconsultative forum for them to express their views.

Senator MACKAY—The PBS also mentions grants for islanders ‘in the areas of welfareservices, culture and recreation and assistance to industry’. I take it these will be out of the$2.9 million?

Ms Kava—Yes.

Senator MACKAY—Why were these areas looked at in particular? Is that a result of theGrants Commission findings?

Dr Turner—Yes, the Grants Commission report made some comments about theavailability of those services by comparison with what would be available in broadlycomparable mainland communities, finds that those services are either unprovided or totallyabsent and makes recommendations that they be provided, which the government hasaccepted.

Senator MACKAY—The PBS also talks about the maintenance of air services to theislands. How will that maintenance be funded? Is that out of the $2.9 million?

Dr Turner—The short answer to that is that that depends on the final outcome of a tenderprocess which is yet to be concluded, but the $2.9 million itself is not directed towards the airservices.

Senator MACKAY—The second initiative in the budget is the IOTs InfrastructureDevelopment Program, which, in this financial year, my understanding is $21.9 million butdrops to $15.7 million. I understand this is also a response of the Commonwealth GrantsCommission report.

Dr Turner—Yes.

Senator MACKAY—Please interrupt if I am incorrect.

Dr Turner—That is correct.

Senator MACKAY—How will the outputs be reprioritised to take account of thatreduction?

Dr Turner—You mean the particular projects which are being funded. Well, there are anumber of measures. The department is developing a strategic asset management plan whichwill look at the whole life cycle of our assets, including construction of new assets. There is a



program of works around which that budget is constructed, much of which was gone throughin great detail in the Grants Commission report. Part of that will depend on how much workscan be managed in any particular year and a response to which assets and which services arepriorities.

Senator MACKAY—So there has not been any determination about areas that may beaffected by the diminution of funds?

Mr Martin—In respect of the Infrastructure Development Fund, the reference to thedepartment funding it from existing resources does not mean that we are going to be cuttingor using our operational funding. It refers to the fact that we will actually be using financialreserves which we have accumulated over the years, so it will not have any effect on existingservices in the department.

Senator MACKAY—Am I incorrect in terms of the decrease?

Mr Martin—In referring to the Infrastructure Development Fund?


Mr Martin—Yes.

Senator MACKAY—So, we are talking $21.9 million this financial year for theInfrastructure Development Program, which in the out years drops to, according to the PBS,$15.7 million. Can you just explain to me why that is not a cut?

Mr Martin—It is just that at the rate we are constructing new assets we will do $21million and $22 million next financial year. There will be another $15 million worth in theyear after and so on. It is not a reduction in service, so for example—

Senator MACKAY—If I said ‘service’, I did not actually mean it, because it isinfrastructure; I understand that. So there will be a peak of $22 million-odd and then in the outyears we are talking $15 million to $16 million?

Mr Martin—That is right, we are doing it according to our capacity to do it, as weaccumulate financial reserves. Obviously, we cannot fund the whole program in one year.

Senator MACKAY—Page 39 of the PBS talks about this capital works program, theinfrastructure program. Could somebody take me through the major projects that particularlygo to education, public housing, marine port facilities increase, et cetera, in terms of thatquantum that you were talking about, Mr Martin?

Dr Turner—It is probably most appropriate that Mr Moore takes you through that level ofdetail.

Mr Moore—The PBS on page 39 gives an outline of some of the major projects. Theprojects that are being funded under this capital works program are exactly those outlined inthe Commonwealth Grants Commission report. The government has accepted in the capitalworks field exactly what the Commonwealth Grants Commission recommended.

Senator MACKAY—Good.

Mr Moore—The Commonwealth Grants Commission recommended that a number ofspecific projects be undertaken in the first two years. This financial year and the next financialyear are the first two years of their proposed program. The government has committed to dothat, and that is approximately $20 million—$19.9 million—this year, $21.9 million nextyear. And the Commonwealth Grants Commission recommended a number of projects shouldbe undertaken within the next three years. In committing to implement the Commonwealth



Grants Commission recommendations the government has simply divided the amount ofmoney required to implement those across the three years. That is why they are $15.7 in eachof the three years. It is exactly as recommended in the Commonwealth Grants Commissionreport.

Senator MACKAY—I understood that the Commonwealth Grants Commission reportrecommendation relating to capital works, infrastructure and so on was approximately $90.7million.

Mr Moore—$89 million over a period of five years—$20 million in this current year and$69 million over the next four.

Senator MACKAY—Which adds up to $90-odd million.

Mr Moore—No, $89 million—$20 million this year, and another $69 million. And the $69million is made up of the $21.9 million, and $15.7 million for three years.

Senator MACKAY—That is good.

Mr Moore—I could go through all of the details of the projects, but I think it would beeasier to refer to the Commonwealth Grants Commission.

Senator MACKAY—No, we have got that. It is just that there was an apparentinconsistency in the PBS. You have now explained it. Thank you very much for that. That isgood. What is happening with the casino on Christmas Island?

Dr Turner—The lease for the resort has been sold. The purchaser of that lease has madepublic announcements about their intention to reopen the casino. But as yet, theCommonwealth has no application for the reissuing of the casino licence.

Senator MACKAY—Are you aware, Dr Turner, about the concerns on the island that itmay never actually be reopened as a casino?

Dr Turner—Certainly I am aware of the concerns, yes.

Senator MACKAY—What conditions were placed on the sale? Was it unencumbered?

Senator Ian Macdonald—The land and buildings, or the lease and buildings, were ownedby Christmas Island Resorts. They are in liquidation—a Supreme Court liquidator has beenappointed. The liquidator has entered into a contract quite independently of theCommonwealth in accordance with his liquidation requirements to sell the complex to abuyer, which he has done. Our role is to agree to the transfer of the lease from the formerowner to the next owner and, provided they have a capacity to meet the terms of theirobligations, we have little say in it. We are required to consent, and we have.

Senator MACKAY—Did the administrator pass on to you the concerns of the islanders inrelation to this matter?

Senator Ian Macdonald—No. There were certain things—we had some correspondencefrom the shire chairman. Again, if you go back to the answer I have just given you, they arenot matters of relevance to the Commonwealth. They are not matters over which theCommonwealth has any control.

Senator MACKAY—No, I understand that, Minister. We are dealing with theadministrators, though. But I understand that the concerns were raised with the administrator,who undertook to pass them on to you.

Senator Ian Macdonald—He did—I am aware of them, but I am not sure where I got itfrom. All I am saying is that it is of interesting academic interest, but it is nothing over which



the Commonwealth has any control. He did pass on correspondence, which they asked him topass on, and I think I would have responded to it.

Senator MACKAY—Responded in the terms you just articulated?


Senator MACKAY—So there were no assurances sought by the government in relation tothe site being reused or reopened as a casino or whatever?


Senator MACKAY—Dr Turner, what is the state of play with regard to the air servicescontract?

Dr Turner—The department advertised for a request for proposals in, I think, late January.That request closed in early March. Those proposals have been considered by an evaluationteam and are also subject to consultation with the communities on both Christmas and Cocos.We are in the process now of preparing documentation to move to selected tender, which weexpect to be advertised within a couple of weeks.

Senator MACKAY—I am advised that there is concern amongst the islanders about thatprocess in that, when the meeting was held with the administrator concerning the request forproposals, they presumably—and I am assuming this—because of the commercial-in-confidence aspects, were asked not to reveal details of the meeting. Therein, I suspect, liestheir concern in terms of consultation with their constituency.

Senator Ian Macdonald—What is the question there, Senator?

Senator MACKAY—Is that correct?

Senator Ian Macdonald—That there was a confidentiality requirement? Let me be morespecific. We did set up on both islands a consultative group to look at the original expressionsof interest, which were given to us on the understanding of confidentiality.

Senator MACKAY—Is this commercial-in-confidence?

Senator Ian Macdonald—Yes, and there is some intellectual property, I suspect, in someof the various proposals that have been offered. We wanted to consult the islanders. Wearranged for a consultative group to get together on each island. It was the administratorsadvisory committee, but there were some people who refused to sign the confidentialityagreement, and I understand they left.

Dr Turner—That happened on Christmas Island only. That was not the result on Cocos.

Senator Ian Macdonald—On Cocos, there was no problem at all.

Senator MACKAY—In terms of this intellectual property, which I assume is the issue ofsome tangential thinking in relation to where air services may go, is the issue of a service toboth the mainland and an appropriate Asian port under consideration?

Dr Turner—The way that the proposals have been cast in the documents is to seekproposals which link the islands to Australia but certainly do not constrain the provision ofany service to northern ports. In fact, the documentation encourages them. What thedocuments make clear is the fact that the Commonwealth will not be underwriting services,other than domestic services within Australia. So, whilst operators are encouraged to link theislands, particularly Christmas, to the north, it is made clear, for obvious reasons, that thoseare commercial judgments for the provider to make, and those links themselves will not beunderwritten.



Senator MACKAY—So the underwriting applies to the mainland?

Dr Turner—Domestic routes only.

Senator MACKAY—Does that include the possibility of a regular shuttle betweenChristmas and Cocos?

Dr Turner—We are not ruling out anything at the moment. We are encouraging air serviceproviders to look at what is the best way of servicing that market. Certainly some of theproposals have looked at models other than the existing model of servicing both islands fromPerth.

Senator MACKAY—If there were a regular shuttle, it would not be underwritten by theCommonwealth?

Dr Turner—No, we have not—

Senator MACKAY—You have not ruled that out?

Ms Kava—It has not been ruled out.

Senator MACKAY—It does come within the gamut of domestic.

Dr Turner—It is possible. The only thing that we are not underwriting is a link betweenthe islands and a foreign port because that gets into international aviation; it is not domesticaviation. It is an entirely different game.

Senator MACKAY—What sort of time lines are we looking at here, Dr Turner, in relationto this?

Dr Turner—We are hoping and aiming to have the tender process concluded by about theend of the financial year and a new operator in place by the beginning of October.

Senator MACKAY—What has the department done in relation to the difficulty faced onChristmas Island with regard to the cessation of the analogue mobile phone system?

Dr Turner—The department has been working very closely with local communities andsponsoring proposals under the Networking the Nation program. The board met recently and Iexpect an announcement in the next couple of weeks or so on the outcome. We are looking toreplace the existing analogue system. We have been facilitating proposals from thecommunity or other sources. Also, in the case of Christmas, we have put in a proposal of ourown—as a sort of belt and braces approach—so that if the other proposals do not get fundedthere is a fall back position.

Senator MACKAY—Does that fall back allow mainland mobile phone users to access thenetwork on the island?

Dr Turner—It depends on what turns out to be the best technical solution. The shire hasput in a proposal on Christmas Island to do a scoping study to look at what the best solutionis. That is my recollection, without having the details in front of me. What we have done, as asort of fall back option if that does not happen, is look at a proposal for a stand-alone systemon the island. Clearly the best solution is to have what I might describe as a mainstreamingsystem which links back to the main system, but that is a fairly complicated technologicalissue. How best to do that needs to be looked at carefully.

Senator MACKAY—Presumably the stand-alone option would be the absolute last resort?

Dr Turner—It is better than no system at all.

Senator MACKAY—I know that. I appreciate that.



Dr Turner—I am agreeing with you, Senator. Yes, it is a sort of fall back option. That isthe situation on Christmas. The situation on Cocos is a little different in that the owner of theInternet system on the island is prepared to fund a replacement mobile system on the island. Itis a much smaller system on Cocos and much easier terrain in which to operate, too.

Senator MACKAY—Presumably a lot of this is being done under the auspice ofNetworking the Nation?

Dr Turner—That is the funding source to which we are applying.

Senator MACKAY—Dr Turner, are you aware of the alleged insufficiencies in the serviceprovided by the Christmas Island hospital, any representations in relation to that?

Dr Turner—I am not aware of any complaints about the services provided by the hospital.Are we talking about Christmas Island hospital?


Dr Turner—I am not aware.

Senator Ian Macdonald—I have not had any representations either, for what it is worth.

Senator MACKAY—There have been representations made to Minister Wooldridge. Hasthis not been passed on to this department?

Dr Turner—It may be. One of my officers has just said he has seen a letter but it was notan official representation. I am not aware of it.

Senator MACKAY—Will the department be prepared to chase this matter up withMinister Wooldridge?

Senator Ian Macdonald—Dr Wooldridge does not have anything to do with the hospitalon Christmas Island. I imagine if someone has written to him he would pass it on to me.

Senator MACKAY—They have. I am being constructive here and asking the departmentto chase it up with Dr Wooldridge’s office because I suspect it has gone to the wrong minister.

Dr Turner—We can chase it up but I suspect that if it is a matter which somebody hasbrought up with Dr Wooldridge it is probably about services provided to a Territorian in Perthor somewhere in Western Australia. But it is a matter that we can chase up and find out.

Senator MACKAY—This is part of an SDA? Maybe I can leave it. Can the departmentplease—

Senator Ian Macdonald—What say we shortcut it? If you have got a copy of the letter, ifyou can make it available to us we will follow it up.

Senator MACKAY—Sure. Absolutely. Is the department aware of any services or workbeing done on the hospital on Christmas Island to improve it?

Dr Turner—Do you mean physical work? Not recently.

Senator Ian Macdonald—It is a pretty new establishment.

Dr Turner—It is fairly new.

Senator Ian Macdonald—It is a fabulous hospital that the Norfolk Islanders look at withgreat envy.

Dr Turner—I think we can reasonably say it might be above standard.



Mr Moore—Perhaps I could answer. We are aware of remedial work done on vinyl floorcovering on the Christmas Island hospital, which was fixed relatively recently, within the lastyear.

Senator MACKAY—The best thing ,Minister, is to take up your suggestion. I mightprovide you privately with a copy of this correspondence to Minister Wooldridge. Some of theallegations are quite serious.

Senator Ian Macdonald—We got a letter from the Western Australian minister. Anyway,you make it available and that will short-circuit it.

Senator MACKAY—I will privately provide it to you; I won’t provide it through thecommittee.

Senator Ian Macdonald—Just send it around later. If it is meant for me you will not bebridging confidentiality.

Senator MACKAY—Just out of curiosity, how is the Christmas Island hospital funded?

Dr Turner—There is an allocation each year made to the Indian Ocean Territory HealthService of which the hospital is a part. It is funded through the department.

Senator MACKAY—How much is currently going to the Christmas Island hospital?

Dr Turner—We would need to take it on notice.

Senator MACKAY—You may need to take this on notice as well. How much funding ismade available to fly islanders to Perth for serious medical treatment?

Dr Turner—It varies from year to year. The cost depends on what sort of evacuationprocedure is needed, with what speed and what planes are available. It would be in the orderof $200,000 or $300,000 a year.

Senator Ian Macdonald—I think the answer is, though, that anyone who needs thatservice and who is properly assessed gets it.

Dr Turner—That is right.

Senator Ian Macdonald—It is not a question of budgeting for it; whenever it is needed, itwill be done, regardless of cost.

Dr Turner—That is correct; it is not constrained by funding.

Senator MACKAY—There are some quite serious issues. I may raise them with theminister privately, I think.

CHAIR—That sounds like a good idea.

Senator MACKAY—Dr Turner, we asked about a report last time in relation to staffingissues. First of all, it did not appear on the initial questions on notice list. Then it did appear,and we were advised that it was confidential.

Dr Turner—This is the Council Advisory Program for the shire of Christmas Island?

Senator MACKAY—Correct. Why is it confidential? Is that a fair summation of theprocess that I just outlined?



Dr Turner—The advice that we have is that the practice in Western Australia is that suchreports are treated as confidential to the council to whom they are provided. The practice bythe department is not to release them, and that is reflected in the way the reports are drafted.

Senator MACKAY—So, just to clarify, the issue of confidentiality is a Western Australianpractice. The issue of confidentiality has not been a provision which has been suggested bythe department. It is the Western Australian department that has determined this?

Dr Turner—No. I do not think it is fair to say that the Western Australians determined it. Ithink that what we are saying is that we, the Commonwealth, are following WesternAustralian practice. We are treating the report in the same way, but that is a decision that wemake.

Senator MACKAY—Given that we put this on notice and it is a Western Australianpractice, did you seek advice from the Western Australian department as to whether thisreport could be released to the estimates committee?

Dr Turner—We asked them what their practice is in Western Australia.

Senator MACKAY—And they said, ‘Not to release,’ did they?

Dr Turner—No. They said that, in Western Australia, their practice is not to release themand to treat them as confidential.

Senator MACKAY—When you talked to the Western Australian department, did youbackground them that it was a request from a Senate estimates committee?

Dr Turner—Yes. They were made aware of the circumstances of the request.

Senator MACKAY—Did the department consider asking the shire for their permission forthis report to be released to the committee?

Dr Turner—No. Whether the shire chooses to release it is a matter for the shire—that isentirely a matter for them.

Senator MACKAY—What was the outcome of the December 1999 report into the shire,broadly?

Senator Ian Macdonald—We should take that on notice. One of the reasons why I havedecided to follow the Western Australian practice is that the report mentions some peoplefavourably by name but some others quite unfavourably by name. It is in those circumstancesperhaps not fair that it be made publicly available. We might take that last question of yourson notice.

Senator MACKAY—Minister, can I take it that your motivation was based on the fact thatthere are some comments which people may not want circulated, which, I suggest, would be afair enough reason? Is that the reason?

Senator Ian Macdonald—No. The reason was that that was what was normally done bythe West Australian department when it does these things, which it did under its serviceagreement for us. So I followed their practice, but their practice is no doubt based upon thepremise which would apply in this case as well that some people may be namedunfavourably—some others favourably—but in fairness to those that are named unfavourablyit is better not to make it public.



Senator MACKAY—Who actually instigated this inquiry, Dr Turner?

Dr Turner—I do not think I can add much to the response I gave at the previous hearingsin as much as the inquiry is routine dealings with the shire councils that the WesternAustralian department undertake as part of the service delivery arrangement. TheCommonwealth initiated the service delivery arrangement, but it did not initiate the individualreport on the shire of Christmas Island. That is part of the routine duties that we ask the WAdepartment of local government to undertake for us.

Senator Ian Macdonald—Let us be clear about that. We did not ask the WesternAustralian department to investigate this thing. They do that as part of the general servicedelivery. They do it in Western Australia, and because for all intents and purposes this is partof Western Australia and they do it in the Indian Ocean Territories.

Senator MACKAY—I understand that the report prepared by the Western Australiandepartment indicates that the concern was actually expressed by the Commonwealth earlierthis year.

Senator Ian Macdonald—You substantiate that.

Senator MACKAY—Okay. I have a copy of it.

Ms Kava—You mentioned this year. The report was December last year.

Senator MACKAY—There are two reports.

Ms Kava—Perhaps if you could tell us which two reports you are talking about.

Senator MACKAY—There is a report prepared by the Department of Local Governmentof Western Australia dated December 1999.

Ms Kava—Is that the report you are referring to?

Senator MACKAY—No. Then there is a further report, which I have a copy of in draftform—it might actually be finalised now. Dr Turner might be able to tell me.

Dr Turner—As I understand it, the WA department visited the island again in I thinkFebruary of this year as part of their routine practice. They have prepared a draft report onthat visit which they have sent to the council, as I understand it, and to officers of thedepartment. As I understand it, that report remains in draft and, for all I know, may be subjectto substantial redrafting. I assume that the report to which you refer is their draft report oftheir visit in February.

Senator MACKAY—Yes, I think it is. This draft report says that in early this year concernwas expressed by the Commonwealth about a series of appointments. Is that the case or not?

Dr Turner—I do not know if it is the case. I have not received the report.

Senator MACKAY—No. Let me put it another way. I assert that earlier this year concernwas expressed by the Commonwealth in relation to a number of appointments on ChristmasIsland, not by the Western Australian Department of Local Government. Is that assertioncorrect?

Dr Turner—We had a copy of the report that the department provided to us in Decemberthat makes a number of recommendations—I think a total of 19. There were discussionsbetween ourselves and the Western Australian department about that report, yes.

Senator FORSHAW—And did that involve expressing concerns by the Commonwealth?



Dr Turner—There are I think 19 recommendations dealing with a number of things. Yes,if the Western Australian department reported in the manner of that report, I would besurprised if we did not express some concern about the nature of the report.

Senator MACKAY—The reason I am retraversing this is that we were left with theimpression that it was a fairly perfunctory process of concerns raised by the WesternAustralian department which the Commonwealth were happy for them to investigate. Thisreport alleges—and I appreciate I have only got it in draft form—that the Western Australianstate department are saying that concerns were expressed by the Commonwealth. Now it maywell be predicated on the December 1999 report; I do not deny that. I am just saying that thatis their assertion.

Senator Ian Macdonald—This is a draft report that you have?

CHAIR—Prepared by whom?

Senator MACKAY—The Western Australian state department.

CHAIR—Of?

Senator MACKAY—Local government.

CHAIR—Yes; you identified the first one but not the second one.

Senator MACKAY—They both are.

Senator Ian Macdonald—I do not think I have seen the report.

Senator MACKAY—The department has not received a copy of the draft report yet, DrTurner?

Dr Turner—I think I said already that a copy of that draft has been referred to thedepartment. Officers of my branch have a copy.

Senator MACKAY—Officers of the branch have got a draft copy of the draft report?

Dr Turner—A copy of the draft.

Senator FORSHAW—They would then presumably have seen that comment in the reportthat Senator Mackay just read. I would have thought it was fairly—

Senator Ian Macdonald—I am not for a moment doubting Senator Mackay, but we areagain getting into this situation where, for all we know, you are quoting from a bit of paper.Now I am not doubting that it is accurate, but it is very difficult for us to comment onsomething—

Senator FORSHAW—If we were doing anything else, Minister, you would have us ontoast, wouldn’t you. We are not that silly. A legitimate point is being made to you.

Senator Ian Macdonald—And it is a legitimate point I am making. It is very hard for meor my officers to comment on draft reports that I do not think I have seen.

Senator MACKAY—No, but the officers have. They just said they have got it.

Senator Ian Macdonald—I am not sure that they said that.

Senator MACKAY—Yes, they did.

Senator Ian Macdonald—Let us be specific. What you are saying is: did theCommonwealth express concern? That is your question. Okay. We will take that on notice andsee if we have got a draft report or a final report. If those words are in it, then we will go backand see who expressed the concern and how it was, and we will report to you.



Senator FORSHAW—The test is whether or not that is an accurate description.

Senator Ian Macdonald—That is what I am saying to you.

Senator FORSHAW—You should know.

Senator Ian Macdonald—I have never seen it.

Senator MACKAY—You may not have; I accept that. Can I just say, Minister, that DrTurner has already confirmed that the officers have got copies of the draft report; he just didthat a minute ago. Secondly, he also confirmed that the Commonwealth did express concernpredicated on the December 1999 report. It is all fairly simple.

Senator Ian Macdonald—Senator, he says he has—so I am told, and he can clarify it—acopy of a draft report. Whether it is the same draft report or the same copy as you have got,we do not know. So, if I can cut to the chase, you are asking whether we expressed concern.We will take that on notice and look back at what draft and final reports we have got. If wefind that in the reports we have got, then we will pursue it and find out who expressedconcern and why they expressed concern. How is that?

CHAIR—Is there a date on that report?

Senator MACKAY—Which one?

CHAIR—The second one, the draft report.

Senator MACKAY—The first page says ‘Report of the inquiry into the appointment ofstaff by the shire of Christmas Island after March 1999’.

CHAIR—I think what Dr Turner said, and I was listening fairly carefully, is that he wouldbe surprised if there were concerns expressed.

Senator MACKAY—That is correct; he did say that.

CHAIR—In any event, whether it is written in the draft report or not, I would havethought that the question, ‘Did the Commonwealth express concerns?’ could be answered,surely. They are taking it on notice; they have not got the answer now, and hopefully we willhave that fairly soon. Next question.

Senator MACKAY—I understand that the monitoring panel was recommended by theDecember 1999 report—not the draft report, so we can actually talk about this one. Has thismonitoring panel been established?

Dr Turner—Not as far as I am aware.

Senator MACKAY—We are dealing with the report, Minister; you had a nasty turn there.We are actually dealing with the report that is the finalised report, not a draft report.

Senator Ian Macdonald—If it is the report I think you are talking about, it is the reportthat we have sort of indicated that we did not want to discuss too much, for the reasons I havementioned to you previously.

Senator MACKAY—Dr Turner, quite correctly, said it is a matter for the shire todetermine whether the report should be made public or not. Now they have; they have given itto us. This is the December 1999 report. Dr Turner, is it correct that you are not aware that amonitoring panel has been set up yet?

Dr Turner—That is correct.

Senator MACKAY—What will happen—and maybe the minister wishes to answer this—with regard to Norfolk Island and the government’s proposed moratorium on Internet



gambling? I would be amazed if you are not briefed to the gills on this, Minister. In terms ofSenator Alston’s recent announcement and Senator Newman’s announcement of theCommonwealth’s intended moratorium on Internet gambling, if that moratorium were toproceed, would it apply to Norfolk Island as well as to every other jurisdiction within theCommonwealth?

Senator Ian Macdonald—I am almost inclined to take this on notice, because it is verycomplex. It is Senator Alston’s matter, being telecommunications and he having responsibilityfor communications. But if legislation is introduced, it will apply to all of Australia. I havewritten on two occasions to the Norfolk Island government urging caution and restraint. Thatwould be a nice way to summarise what I have done. I might just indicate to you, Senator, thatthe editorial in the Hobart Mercury is wrong.

Senator MACKAY—I actually was not referring to that; I was actually referring tocomments from Senator Newman on AM, which struck me as a bit odd, because she says:Norfolk Island is very different from the rest of Australia in many respects ...

I actually heard it and got a copy of the transcript. I assume that the Commonwealth wouldnot exempt Norfolk Island from the potential moratorium. I am just checking here that that isthe case.

Senator Ian Macdonald—Norfolk Island has been a full member of the MinisterialCouncil on Gambling, so they have been fully involved in—

Senator MACKAY—That is fine. I am aware of the particular interest of the Tasmaniangovernment. It is—in my capacity here—their business.

Senator Ian Macdonald—Sorry, Senator, you mentioned Tasmania, and Mr Lennonapparently implied that the treatment of the Norfolk Island government in relation to Internetgaming was in some way different from the treatment being applied to other state and self-governing territory governments, and that is not correct either.

Senator MACKAY—Okay, fair enough. There is an issue though, Minister, I suppose, inthat the Norfolk Island government has access to Commonwealth funds under Networking theNation to upgrade its on-line infrastructure for the purposes of Internet gambling. Presumablythat is bad luck for them if the moratorium proceeds?

Senator Ian Macdonald—Well, upgrading their telecommunications infrastructure ishopefully for use for things other than Internet gambling.

Senator MACKAY—I am advised it was primarily the reason, but that is fine. Okay.There was a fairly inflammatory statement by Minister Newman that said about the ACT, inwhich she said and I quote—and I am quoting from the Adelaide Advertiser although I thinkit was also on the front page of the Canberra Times of Saturday, 20 May:They’re not content to be the pornographic capital of Australia; they now want to be the greed capital ofAustralia.

Senator Ian Macdonald—The which capital? Greed, alright.

Senator MACKAY—Canberra. This is what Senator Newman said in one of her moreinjudicious moments, I suspect. I can take it, Minister, that as minister for territories, youwould not agree with that statement?

Senator Ian Macdonald—Well, Senator, I would want to see exactly what SenatorNewman said before I even contemplated saying whether I agreed or disagreed with her.



Suffice it to say that I think that the ACT government does a marvellous job and I think theAustralian Capital Territory is very well governed and a very prosperous and go-ahead place.

Senator FORSHAW—Go, the Brumbies! You are not going to claim the credit for them ifthey win on Saturday night are you? I mean the minister; he is a Queenslander.

Senator Ian Macdonald—We do not want to talk about any football codes tonight.

Senator MACKAY—No. Hear! Hear.

Senator FORSHAW—I just thought he might be claiming credit for that as well.

Senator Ian Macdonald—I had to go to Newcastle on Monday and present some goodnews to an organisation which backs the Knights the very morning after they had just comeback from Townsville and thrashed the Cowboys, so we do not talk about those sorts ofthings.

Senator MACKAY—I am advised that there has been an increased incidence oftuberculosis in the Pacific region. Is anybody from the department aware of that? I am advisedthat the Norfolk Islanders have expressed some concern in relation to it.

Ms Kava—I am not aware of that, no Senator.

Senator MACKAY—Is anybody aware of it? Is anybody in the department aware of it?

Ms Gayler—No.

Senator MACKAY—Right. So I can take it that the Commonwealth has not beenapproached for any assistance with regard to it?

Ms Kava—Health on Norfolk Island is a schedule 2 matter. It is not one that MinisterMacdonald has responsibility for.

Senator MACKAY—No. I understand.

Ms Kava—But I am not aware that we have received any representations on tuberculosis.

Senator MACKAY—If you have not received any representations, that is fine. Minister,the press release you released in relation to Norfolk, Jervis and the ACT states that Norfolkfunding will increase. How much will it increase?

Senator Ian Macdonald—I will ask the officers to perhaps identify that in the papers.

Senator MACKAY—It is headed ‘Federal Budget Funding for Norfolk Island’.

Senator Ian Macdonald—I can quote from that and say that we are paying $400,000for—

Senator MACKAY—No, let’s not waste time, Minister; let’s just answer this question.The first phrase says that funding to Norfolk Island will increase: does that refer to thepayment or is there funding in addition to that?

Senator Ian Macdonald—I assume—when I say that I assume, it’s mine, so—it meansthat the net dollar amounts going to Norfolk Island are more than they were last time.

Senator MACKAY—That is a bit flippant. The release says that funding for NorfolkIsland will increase and includes ‘a payment of some $400,000’ and also a payment of$36,000 to the Norfolk Island Legal Aid Scheme. Beyond that, is there any increase? Is that adefinitive no from the officers behind you?

Ms Kava—They are actually answering a question I have asked.



Senator Ian Macdonald—We must have some figures somewhere, so I will get someoneto—

Senator MACKAY—I think the answer may well be no, that is all. It is just that I wasunsure what the release meant, that is all.

Senator Ian Macdonald—It should be in the figures in the budget somewhere, shouldn’tit? We will try and find our finance officer who can interpret these books. If we can’t findhim, we will have to take it on notice, but we will try and find him.

Senator MACKAY—That is okay. What specifically is the $400,000 payment for the‘continued maintenance and restoration of the Kingston and Arthur’s Vale Historical Area’going to be used for?

Ms Kava—Those funds are used in accordance with a memorandum of understanding withthe Norfolk Island government, where we share expenses for KAVHA—including Arthur’sVale Heritage Area. The Commonwealth contribution is largely in terms of the maintenanceof those buildings in that particular historical and heritage part of KAVHA on Norfolk Island.

Senator MACKAY—So there is no specific projects within that $400,000? There is nodisaggregation of it; it is just an amount?

Ms Kava—There are a series of works activities that are undertaken in terms of thebuildings—restoration, roof repairs, the provision of interpretive signs for those visiting theKAVHA area—and included in that is a small amount for the running of the Norfolk Island-Commonwealth board that oversees that process.

Senator MACKAY—Thank you for that, I appreciate that. Who represents theCommonwealth on that board?

Ms Kava—I do, and with my surname you will see that it is particularly appropriate.

Senator MACKAY—Yes, indeed.

CHAIR—We were thinking about flying over to Fiji tonight, weren’t we?

Senator FORSHAW—You are going on your own.

CHAIR—No, you were telling me you would come too.

Senator FORSHAW—No, I did not. You can get going; you are on your own.

Senator MACKAY—Who else is on the board?

Ms Kava—The other Commonwealth representative is Jane Lennon, who is acommissioner of the Australian Heritage Commission, and there are two Norfolk Islanderrepresentatives: one is Geoff Gardiner, who is the Minister for the Environment and Gamingon Norfolk Island; and the other is David Buffett, who is the Speaker of the Norfolk IslandLegislative Assembly.

Senator MACKAY—Thank you for that. What is the time line for the restoration andmaintenance work?

Ms Kava—As you would appreciate, the maintenance work is ongoing to preserve this.We are certainly working towards developing a five-year plan of management for therestoration works so that we have got a good idea in advance of the work that needs to bedone. There is a conservation management plan in place, and basically the works are done inaccordance with that overall management plan.



Senator MACKAY—Thank you for that. I am just, with some incredulity, checking mybrief for notes; I think I have finished.

Ms Gayler—While there is a hesitation, may I table a list of the 37 flood mitigationprojects approved by the minister?

Senator FORSHAW—Good, now I can ask you about each one of them. No, you cantable it, and I promise I won’t. If they have got the electorates written beside them—

Ms Gayler—No, they haven’t.

Senator MACKAY—Senator Forshaw has a 200-page brief on territories he will now gothrough.

CHAIR—Can I just thank everybody for their contribution. There are two people I want tomention in particular: Paul Hickey is leaving AQIS. I would like to put on the record fromthis committee our appreciation of the work he has done with us. I understand Mr Rick Martinis leaving as well. Thank you for your contribution—no doubt you might visit us again fromtime to time. Come and sit in the audience! Thanks to Hansard, thanks to members of thedepartment, John and Andy, and thank you, Minister.

Committee adjourned at 9.24 p.m.