COMMONWEALTH OF AUSTRALIA

PARLIAMENTARY DEBATES

SENATE

Official Committee Hansard

RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE

(Consideration of Estimates)

THURSDAY, 27 FEBRUARY 1997

BY AUTHORITY OF THE SENATE CANBERRA 1997 CONTENTS

THURSDAY, 27 FEBRUARY

Department of Transport and Regional Development— Program 1—Aviation—Subprogram 1.1—Aviation policy ...... 3 Subprogram 1.5—Civil Aviation Safety Authority— Subprogram 1.6—Federal Airports Corporation ...... 27 Subprogram 1.7—Airservices Australia ...... 28 Department of Primary Industries and Energy — Program 1—Industries development— Subprogram 1.1—Livestock and pastoral ...... 45 Subprogram 1.2—Crops ...... 58 Subprogram 1.3—Fisheries ...... 67 Program 2—Industry and community services— Subprogram 2.2—Rural ...... 68 Subprogram 2.1—Natural resource management ...... 76 Program 1—Industries development—Subprogram 1.4—Petroleum . . 78 Program 2—Industry and community services—Subprogram 2.1—Natural resource management ...... 79 Program 4—Corporate management and policy ...... 82 Program 2—Industry and community services—Subprogram 2.3—Quarantine and Inspection Service ...... 84 Program 3—Research and assessment—Subprogram 3.2—Australian Bureau of Agricultural and Resource Economics ...... 85 Program 2—Industry and community services—Subprogram 2.3—Quarantine and Inspection Service ...... 87 Thursday, 27 February 1997 SENATE—Legislation RRA&T 1

SENATE Thursday, 27 February 1997 RURAL AND REGIONAL AFFAIRS AND TRANSPORT LEGISLATION COMMITTEE

Portfolios: Primary Industries and Energy; Transport and Regional Development Members: Senator Crane (Chair), Senator Conroy (Deputy Chair), Senators Calvert, Bob Collins, McGauran and Woodley Participating members: Senators Abetz, Boswell, Brown, Brownhill, Chapman, Colston, Cook, Eggleston, Ferris, Forshaw, Gibbs, Harradine, Ian Macdonald, Sandy Macdonald, Mackay, Margetts, Murray, Neal, O’Brien, Schacht, Sherry, Tierney and West

The committee met at 11.49 a.m. CHAIR—On 6 February 1997, the Senate referred to the committee particulars of proposed additional expenditure in relation to the parliamentary departments in respect of the year ending 30 June 1997. The committee will consider the proposed additional expenditure at hearings today. On Tuesday evening, we will reconvene to consider any programs that remain outstanding—hopefully, there will not be any. Committee members and participating members have been provided with portfolio budget statements for each of the portfolio areas to be considered. I propose to call on the estimates by subprograms as they appear in the hearing schedule as determined by the committee, which has been circulated. I add here that these programs are the ones that have been identified by individual senators as programs on which they wish to ask questions. There are a couple there for which there was not expenditure, but we decided to let people ask their questions anyhow. The committee is required to report to the Senate on the consideration of these additional estimates by 6 March 1997. Answers to questions on notice arising from these hearings should be received by the committee no later than Wednesday, 26 March 1997. The committee has authorised the recording and broadcasting of its proceedings in accordance with rules contained in the order of the Senate of 23 August 1990.

DEPARTMENT OF TRANSPORT AND REGIONAL DEVELOPMENT Proposed expenditure, $3,306,000 (Document A). Proposed provision, $364,380,000 (Document B). In Attendance Senator Alston, Minister for Communications and the Arts Department of Transport and Regional Development— Executive Mr John Bowdler, Deputy Secretary

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Program 1—Aviation Subprogram 1.1—Aviation Policy Mr Peter Harris, First Assistant Secretary Ms Carol Boughton, Assistant Secretary, Aviation Industry Mr Daryl Quinlivan, Assistant Secretary, Airports Subprogram 1.2—Aviation Operations Mr Paul Merner, First Assistant Secretary Dr Hugh Milloy, Assistant Secretary, Sydney West Airport Taskforce Mr John Elliott, Assistant Secretary, Aviation Environment Branch Mr David Southgate, Director, Operations Section, Aviation Environment Mr Lloyd Binks, Director, Policy and Standards Section, Aviation Security Mr John Gratton, Director, Operations Section, Aviation Security Subprogram 1.5—Civil Aviation Safety Authority Mr John Pike, Deputy Director Mr Terry Wilson, General Manager, Flying Operations Ms Sue Leitch, General Manager, Airways Surveillance and Regulations Mr Frank Grimshaw, General Manager, Airworthiness Mr Rob Elder, General Manager, Corporate Relations Subprogram 1.6—Federal Airports Corporation Mr Peter Snelling, General Manager, Network Airports Mr Allan Gray, Chief Financial Officer Subprogram 1.7—Airservices Australia Mr Bill Pollard, Chief Executive Officer Mr Peter Evans, General Manager, Air Traffic Services Mr Tom Grant, General Manager, Corporate and Employee Relations Mr David Gale, General Manager, Facilities Management Mr Andrew Fleming, Chief Financial Officer, Corporate Finance Program 2—Land Transport Subprogram 2.1—Road and Rail Policy Mr Bruce Gemmell, First Assistant Secretary Mr Neville Potter, Assistant Secretary, Roads Ms Robyn Beetham, Assistant Secretary, Rail Subprogram 2.2—Federal Office of Road Safety Mr Peter Makeham, First Assistant Secretary Dr Tony Ockwell, Assistant Secretary, Road User Mr Lindsay Evans, Director, Policy and Emissions Section Subprogram 2.3—Australian National Mr Andrew Neal, Managing Director

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Ms Laurel Black, Corporate Business Manager Program 3—Maritime Subprogram 3.1—Maritime Mr Kym Bills, First Assistant Secretary Mr Neil Ada, Safety Team Subprogram 3.2—Australian Maritime Safety Authority Mr Brian Munro, General Manager, Corporate and Commercial Services Program 4—Regional Development Subprogram 4.1—Regional Development Mr Stephen Hunter, formerly First Assistant Secretary, Regional Development Program 5—Corporate Direction and Support Subprogram 5.2—Management Support and Advice Mr Bill Ellis, First Assistant Secretary Mr Peter Robertson, Acting Assistant Secretary, Finance and Services Department of Finance— Mr Bert Johnston Mr Kevin McAndrew Ms Josephine Zikas CHAIR—The first portfolio to be considered is transport and regional development. I welcome the honourable minister and officers of the department and associated authorities. At the last hearings I applied what a number of chairmen did—the 15-minute rule. After 15 minutes of somebody in continuous questions, I will offer other members of the committee the chance to ask questions. Everybody liked it last time and it worked, so I intend to apply the same rule again, unless I am overruled. Minister, would you like to make an opening state- ment? Senator Alston—No. Program 1—Aviation Subprogram 1.1—Aviation policy Senator BOB COLLINS—Mr Harris, if I were driven from Parliament House to the Canberra airport in a Comcar and caught an aircraft from the Canberra airport to Darwin, would the Comcar be able to get to the Darwin airport in time to pick me up and take me to my electorate office? Mr Harris—I think that is extremely unlikely. Mr Bowdler—Unless there were severe problems with the flight. Senator BOB COLLINS—It looks like that option is out for me then. If we could go to the portfolio estimates statements in respect of the savings on Adelaide airport, I note that there is a sum of $20.6 million listed there as a saving. Was it the department’s original view that it was likely that money would have been spent in this particular financial year? Mr Harris—No, Senator.

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Senator BOB COLLINS—Are you in a position now to advise what money is likely to be spent this year and in 1997-98 and 1998-99? Mr Harris—The estimates that have been provided are the best estimates that we have available to us right now. I have to say that I am not 100 per cent certain that all that money that is currently allocated will be spent this year. A lot of it depends on the timing of the Joint Public Works Committee’s decision on the FAC proceeding with the works. Senator BOB COLLINS—Where is that at the moment? Do you know? Mr Harris—My understanding is that Joint Public Works Committee has had hearings, but a decision is about a fortnight away. Senator BOB COLLINS—On the Adelaide airport, I wanted to ask a number of questions about the noise effects of the runway extension, which as you know is a fairly live topic. Is it true that, as a result of the runway extension, that ANEF levels will prevail in some areas around the airport which, if they occurred in Sydney, would attract insulation assistance? Mr Harris—I cannot answer that question, Senator. Senator BOB COLLINS—Is there anyone who can? Mr Harris—Perhaps Mr Southgate, who is our in-house expert on environmental impacts of noise of airports, can provide you with an answer. Mr Southgate—It is my understanding that in Adelaide there are already areas within the 30 ANEF and there will continue to be areas within the 30 ANEF. At Sydney airport, if their residences are within the 30 ANEF, they are eligible for inclusion in the residential insulation program. Senator BOB COLLINS—In broad terms—if you can be more precise, please do so—what will be the effect of the extension on the noise contours? Mr Southgate—I do not have very detailed knowledge of Adelaide, but, in essence, the extension is to the south, therefore, if aircraft are departing from the southern end, there will be an increase in noise from the aircraft departing to the north. It will allow aircraft with a higher payload to depart, for example, over the water, therefore Glenelg may well receive higher noise levels on single events as those larger aircraft depart. Senator BOB COLLINS—Can you explain, that being so, why no assistance at all is being provided or, as far as I am aware, even being contemplated for residents who are affected by these noise levels when, if they were living in Sydney suffering the same noise, they would automatically attract compensation? Mr Harris—It may be relevant that the net impact might be vastly less. It depends on the number of aircraft that might be using it for that purpose. The impression I am left with is that there may be relatively few aircraft whereas in Sydney, obviously, the noise impact occurs not only because of each single event but the net effect of it. Senator BOB COLLINS—Just refresh my memory, does not the ANEF system take that into account? Mr Southgate—Basically, for example in Adelaide, they have considerably fewer movements, therefore, to achieve that 30 ANEF you have, as Mr Harris was saying, a smaller number of movements at a higher noise level, whereas Sydney would have more movements at a lower noise level and achieve the same total amount of noise. Senator BOB COLLINS—What is the government’s current policy so far as the department is aware on the question of noise amelioration at airports other than Sydney?

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Mr Southgate—That is a matter for discussion. There is no decision on that issue. Mr Harris—I have no information on that, Senator. Mr Bowdler—There is a noise insulation acquisition program in Sydney and that is all we are operating at the present time. Senator BOB COLLINS—Minister, would you mind taking on notice for Mr Sharp whether the government is contemplating the establishment of any other noise programs other than at Sydney airport? Senator Alston—Yes. Senator BOB COLLINS—Thank you. The reason I ask the question is that, as you are aware, the previous government did make commitments in this area on the basis of equity. Has the department done any work at all on estimating—and I have no doubt the department has done this—what level of expenditure would be required and what number of houses, for example, would attract this at Adelaide airport should such a policy be introduced. In terms of the options available, I have no doubt that the department has done that work. Mr Harris—If we are going to stay on noise, perhaps we could get Paul Merner up as well because he heads the division that is responsible for that. Mr Merner—Some work has been done inasmuch as, as Senator Collins mentioned, the previous government gave a commitment to undertake noise audits, as they were described, at airports other than Sydney. Some work was commenced under the aegis of the previous government to look at the issue at Adelaide and at Coolangatta. Subsequent to the change of government, that work was brought to a close. I do not have ready details in terms of hard numbers with me today. Senator BOB COLLINS—That is fine. Could you find out whether that analysis, in so far as it was done, is an analysis that properly can be made available to the committee? If so, could you make it available to the committee? Mr Merner—Yes, I will certainly look at that, Senator. Senator BOB COLLINS—Thank you. I have seen public statements from the South Australian government suggesting that it might impose a state government noise tax at Adelaide airport. Is anyone in the department aware of those proposals or how they might work? Mr Harris—I am not. Mr Merner—No, neither am I. Senator BOB COLLINS—This is not the proper place to ask the question, but I was intrigued to see that suggestion because I was not quite sure on what constitutional basis the state government would impose such a tax. Senator FORSHAW—I would like to ask a number of questions about the proposed second airport for Sydney. In November last year a publication was produced and circulated to the community in the southern part of Sydney as well as to other groups. It was titled ‘Sydney’s second airport proposal’ and contained various maps and the options to be looked at in the EIS. Who actually produced it? Mr Merner—It was produced by Rust PPK, the consultants engaged to undertake the development of a draft environmental impact statement. Senator FORSHAW—Was it checked by the department before it was printed and published?

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Mr Milloy—Yes, the department provided some comments on a draft brochure before it was printed by Rust. Senator FORSHAW—I note that it has Rust PPK identified on the last page, but on the cover sheet it clearly shows Transport and Regional Development and has the Australian coat of arms. So, in that context, it is an official document of the department, is it? Mr Merner—It certainly is a document that the department has some association with by virtue of having developed the options and having engaged the EIS consultants. Senator FORSHAW—So you would take some responsibility for it? Mr Merner—I think we would have to. Senator FORSHAW—Can you explain to me why the maps are wrong in that at least three of the suburbs are identified in the wrong location. I am sure that you will agree with what I am saying. I know that they are wrong because I happen to live in one of the areas. Can you explain to me how that occurred? Mr Milloy—I can explain that the detailed draft brochure was prepared by Rust. It was submitted to the department and we reviewed it to look for basic consistency with government policy and consistency with the strategic approach which has been taken to the development of the airport. There were a number of errors which have stuck through the editorial process conducted by Rust, and to an extent the department did not pick up those editorial inaccuracies in the document. Senator FORSHAW—I understand that at the end of the day it may not matter one way or another, because there are other maps in the brochure which get the suburbs in their correct location. But it is not a very good start to a process which is supposed to involve thorough community consultation and awareness. When you are putting out a brochure which has maps in it which have runway configurations as options on them, you cannot even get correct basic information as to where the suburbs are located. You are nodding your head; I take it that is a yes. Mr Merner—I think it is an error we could have done without. Senator FORSHAW—But it was Rust PPK who got it wrong and it slipped past the department. Is that right? Mr Merner—Dr Milloy is saying that we looked at a level of consistency with government policy. I do not think anyone in the department sat down and compared it with a Gregory’s. Senator FORSHAW—I think I actually offered to supply Gregory’s to them. Senator BOB COLLINS—It is not as bad as the $1.2 billion mistake that the Department of Finance has just made, I was delighted to see. Senator FORSHAW—It goes to the competence of the consultants. Has the department received any complaints, other than complaints from the community—I know there are a lot of them—about Rust PPK’s performance to date on the EIS? Dr Milloy—The only correspondence that we have received refers to some complaints raised as part of the community consultation program which Rust is undertaking. Senator FORSHAW—That is that there has not been enough community consultation. Is that correct? Dr Milloy—There have been some individuals in the community who felt that Rust could have perhaps provided more information earlier than was available through the studies. Rust has been asked to attend an enormous number of community and smaller meetings. They have

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 7 applied quite considerable resources to the community consultation program. It has not apparently met the expectations of all members of the community. That is regretted, but I think it is a question of Rust applying extensive, but limited, resources to the program and managing those resources in a way in which they think the dollars and the effort are best spent. Senator FORSHAW—My recollection was that there was a figure of about $11 million for the EIS. Is that correct? Could you tell me how much Rust PPK is being paid to undertake and prepare this EIS on Holsworthy. Dr Milloy—The budget allocation for this year for the whole of the EIS process is $12 million. The Rust contract which we have with them just now specifies that, with disbursements, the total contract is $3.36 million. We also have a contract with a planning group led by air plan which, with disbursements, is $1.78 million. There is one important component of the Rust contract which is not included in that estimate—that is the community consultation aspect of it. To the end of January we have spent $441,000 on community consultation. The estimate for February and March is a further $486,000. Senator FORSHAW—Who spent that—the department or Rust PPK? Dr Milloy—Rust. Senator FORSHAW—But that would be cost reimbursed. Dr Milloy—That is their cost of staffing, information centres, preparing brochures, running the hotline and engaging in public meetings. Senator FORSHAW—The minister has just announced that there will be a further two months delay before the draft EIS is released. I think it was announced yesterday. Does that mean that there will be additional cost to what has already been outlined by yourself? Dr Milloy—It means that there will be additional costs to the ones I have quoted for the community consultation program, because that will have to extend until the draft EIS is completed. We do not anticipate that there will be an extension to the technical work being undertaken because that is covered by the existing contract. The minister’s statement yesterday did not expand the scope of work for the technical studies. Senator FORSHAW—How much extra for that community consultation; can you tell me? Dr Milloy—It is very difficult to estimate because the community consultation program is by definition responsive to community needs. We would anticipate a spend rate of about the same as that being incurred up to date. It would be difficult to estimate exactly how much Rust would need to spend between now and the release of the draft because it is a responsive program. Senator FORSHAW—You said that there had been some complaints from individuals in the community regarding the community awareness aspect of the EIS process. Are you aware as to whether or not the Snowy Mountains Engineering Corporation, who have been appointed by the Minister for the Environment as the independent auditor, have also made complaints regarding Rust PPK’s performance, particularly in the area of community awareness? Dr Milloy—There have been dialogue established between SMEC and the community. Some of the community’s concerns have been transmitted to SMEC and SMEC have raised some of these concerns with Rust in the normal part of the interaction between the proponent’s consultant and the auditor, yes. Senator FORSHAW—That is a major factor, isn’t it, as to why the date has been extended—to ensure that the community consultation and awareness that should have already

RURAL AND REGIONAL AFFAIRS AND TRANSPORT RRA&T 8 SENATE—Legislation Thursday, 27 February 1997 taken place will in fact take place or at least, hopefully, will take place over the next two months. Mr Merner—It is certainly a factor that was mentioned by the minister in making that statement in the House yesterday. Senator FORSHAW—Okay. This may not be a matter for you, so you could respond accordingly. Can you tell me whether or not the contract between SMEC and the government has been signed, yet? That is the contract for them to be the independent auditor. As I understand it, they were appointed to that role about six months ago and, as at February, the contract had still not been signed. Dr Milloy—The contractual arrangements between the Commonwealth and SMEC are being handled by Environment Australia—not by this department. Senator FORSHAW—I am sure we can pursue that somewhere else. With regard to the EIS guidelines that have been released, in those guidelines—I am sure you are very much aware of them—one of the options to be considered in addition to the option of an airport at Badgerys Creek and the option of an airport at Holsworthy is the option of what is called ‘ do nothing’. Why is that option included in the EIS guidelines? Dr Milloy—Once again, Senator, it is not this department which is responsible for drawing up the guidelines. The guidelines are drawn up by Environment Australia, so they would be perhaps best placed to answer questions on what topics are and are not in the guidelines. But I understand, nevertheless, that it is a standard clause in any Commonwealth guidelines which requires the proponent to address the ‘do nothing’ option. Senator FORSHAW—If that is the case—maybe the minister might tell me this—can someone explain why the Minister for Transport and Regional Development, Mr Sharp, put out a press release headed ‘Environmental impact statement for Holsworthy’ in May last year, where it stated very clearly in the first paragraph: Sydney is to be guaranteed a second international airport regardless of the outcome of the Environmental Impact Statement at Badgerys Creek. Then it goes on to talk about the fact that Holsworthy has been included as an alternative backup option. Can the minister—maybe the minister at the table should actually get involved here—explain how it is that the minister for transport makes such a clear-cut statement, that Sydney is guaranteed to have a second international airport regardless of the outcome of the EIS at Badgerys Creek, and, yet, the guidelines that have been released, and that have been used to prepare the draft proposals, include the possibility of no airport at all at either site? Senator Alston—I do not know whether that is the correct interpretation. Senator FORSHAW—It is not an interpretation, Minister. It is a fact. The documents state that it is a fact. Mr Merner and Dr Milloy have just acknowledged that there is a ‘do nothing’ option in the EIS guidelines. If you want to have a look at them, I will show it to you. Senator Alston—I am not sure that that is referring to any additional environment protection arrangements or whether it is talking about the location of an airport or siting of a second airport. If it is referring to the siting, then I would have thought that it is fairly standard practice to insert the base case amongst a number of options. Senator FORSHAW—That might be. It might be standard practice, but what I want to know is why the minister made such a clear cut statement on such a fundamentally important issue as this. Furthermore, while you are thinking about an answer to that, I draw to your

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 9 attention to the fact that the Prime Minister himself repeated that assurance in a newsletter to the electors of Bennelong—I cannot actually identify the date, but it was certainly after it— using exactly the same words: Sydney is to be guaranteed a second international airport regardless of the outcome of the Environmental Impact Statement at Badgerys Creek. Are we to be guaranteed a second international airport or not? Senator Alston—The short answer is, yes. You asked why it is that the guidelines insert the possibility of ‘do nothing’ as you call it. Presumably, that is in order to establish a base from which you can then make assessments about additional costs and environmental implications. But to my knowledge, and I will check it, the government has not resiled from the position set out in Mr Sharp’s press release of May. Senator FORSHAW—Minister, I think that it might be better if you do check rather than flying blind on this, if you will excuse the pun. What is the department’s view about that option being in the guidelines; that is, at the end of this expensive exercise, you may not end up with either site being selected. Senator Alston—I do not think you should be asking them their view on it if you are asking them what is government policy. I will get back to you, if you are not satisfied with my answer. Other than that, the policy stands. Senator FORSHAW—I am not sure whether it is a policy matter, because it goes to the issues to be canvassed within the EIS process. The Department of Transport and Regional Development has had a very big role in actually laying down— Senator Alston—But you are actually wanting to know about policy— Senator FORSHAW—No. I am not asking about policy. I am asking why is it that there is a policy position? There is also a practical, real situation out there where there is an investigation going on that identifies that the policy itself may end up being irrelevant. Senator Alston—You can ask them why the guideline is expressed in that way. Senator FORSHAW—Could the department representatives answer that. If they do not feel competent to do so, they can usually handle themselves. Mr Merner—Senator, I think, as Dr Milloy has indicated, at the end of the day, we accept the guidelines that are established. Under the Environment Protection (Impact of Proposals) Act and the procedures, the responsibility rests with the environment ministry to what effectively amounts to setting the exam paper for an EIS which we have to answer. Senator BOB COLLINS—What mark did you get? Mr Merner—Pass. It is still to be determined, Senator. Senator FORSHAW—I am aware that there would be a lot of people in Badgerys Creek who would say, ‘It would be terrific if the do nothing option got up’—some people in Holsworthy would feel like that as well. But that is not the point. The point is that the decision of the minister and the government was to expand the EIS into Badgerys Creek to guarantee that the process would come up with a site. Yet it is now clearly acknowledged that that process is flawed because both sites could be ruled out. You would then have no more sites, because the EIS is not looking at any sites other than those two.

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Mr Merner—At the end of the process, the government must take a decision that takes account of what is in the EIS and associated studies. I just do not think we can speculate as to what that might be. Senator FORSHAW—I just have one further question in this part of my questions. Are you also aware that the consideration of do nothing option—that is, that neither the Badgerys Creek nor Holsworthy sites are ultimately accepted—also includes consideration of what consequences that has for the operations of Kingsford Smith airport? Mr Merner—Yes. Senator FORSHAW—So this EIS process is also a process looking at what might happen at Kingsford Smith airport in terms of increased movements, curfews, the whole gamut. Isn’t that correct? Mr Merner—It would need to detail what the implications would be if a second airport were not built. Senator FORSHAW—I am sure that people living around Kingsford Smith airport would be very interested in that aspect of what comes out of this. I have a few other questions. There have been FOI requests for particular documents to be made available with respect to the decision to establish an EIS into Holsworthy. Dr Milloy, you actually made the decision, as I understand it, to decline to release these documents. Are you aware of what I am talking about? Dr Milloy—Yes. Senator FORSHAW—Can I quote some of the reasons you gave. Firstly, you indicated that they were ministerial briefs, and then you stated: I recognise that there may be a public interest in releasing the document. However, having regard to the nature of the documents which include advice, recommendations and express opinions on possible changes to the direction of the environmental impact assessment process for Sydney West airport, I form the view that to release the document could mislead the public and encourage ill-informed speculation as to the government’s decisions in relation to the location and development of a second Sydney airport. I therefore came to the view that the release of the document would not, on balance, be in the public interest. Dr Milloy, the reason for the request for the release of those documents is that a lot of people do not understand why it is this government changed its position and extended the EIS into examining Holsworthy, a site that had been rejected as totally unsuitable some years earlier. I get a lot of complaints saying that the sort of reasoning that you have given for not agreeing to the request for the release of the documents is spurious, because the release of those documents would add to community understanding and community awareness and would answer a lot of questions that people cannot get answered at the moment. Can you indicate why it is that you believe it would have caused, according to your words, ‘ill-informed speculation’? Dr Milloy—Can you please remind me of which documents were requested? Senator FORSHAW—The documents are all draft cabinet submissions dealing with the development of the second Sydney airport. I can give you numbers. I do not know what they say because I have not seen them. Dr Milloy—Just in summary, are you referring to basically the request for access to the cabinet documents which related to the decision concerning the extension of the EIS? Senator FORSHAW—They were requests for ministerial briefs, yes.

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Dr Milloy—Cabinet documents and related advice which went to the cabinet decision? Senator FORSHAW—Yes, but you went on to say that you acknowledged there was a public interest and that to release these documents would cause confusion out there. What I am asking is: what led you to that conclusion given that what the information people are seeking is, I would suggest, information that would answer a lot of questions and clarify in people’s minds what the reasons were that led to Holsworthy being put back into the process? Dr Milloy—There were a number of documents which were identified in our research as covering the ambit of the request. The reasons for releasing the documents and for not releasing the documents varied considerably from document to document. I think I am right in saying that it would be highly unusual if cabinet documents were publicly released. I should also add that the decision which I made was not accepted by the group which lodged the FOI request, and they asked for my decisions to be reviewed. That was done through the normal FOI processes. Senator FORSHAW—I would understand if you said, as you said at the outset, ‘These are ministerial briefs, they are cabinet documents. I’m not going to release them.’ People would have understood that. They would not have liked it, but they would have understood it. But you then went on to say, ‘There is a danger in releasing this material because it will confuse the public.’ The very question the public is asking is: what was the advice of the department of transport that influenced the government to make a decision to put Holsworthy back in the process? You went on and gave those extra reasons. When that answer goes back to members of the public, they will have further questions. They will ask: why would you come to the conclusion that the public would be confused? That is what I would like an explanation for. Senator BOB COLLINS—Perhaps I should remind you, Dr Milloy, of what you said. You said: I formed the view that to release the document could mislead the public and encourage them to form speculation as to the government’s decisions in relation to the location of Sydney West as the second Sydney airport. I therefore came to the view that the release of the document would not, on balance, be in the public interest. Dr Milloy—What document does that refer to? Senator BOB COLLINS—File No. H96-379, folios 158 to 175. This is a ministerial brief. I understand precisely the point that Senator Forshaw is making. The document has been exempted, under section 36 of the FOI Act, as being a deliberative document. As Senator Forshaw said, it is interesting that there was not just a full stop after that. But you go on to say: I recognise that there may be a public interest in releasing the document. However, having regard to the nature of the documents, which included advice, recommendations and express opinions on possible changes to the direction of the environmental impact assessment processes for Sydney West, I formed the view that to release the document could mislead the public and encourage ill-informed speculation as to the government’s decisions in relation to— I guess the point Senator Forshaw is clearly making is that the explanation that has been given for not releasing it could give rise to a great deal of speculation. Senator FORSHAW—I might add, this is the explanation you gave in respect to a whole series of documents—just about all the documents that were requested. Dr Milloy—Perhaps I should categorise the documents in three categories. There were documents that are directly related to the cabinet process, which we exempted. There were documents which were working documents on our files which were of a deliberative and

RURAL AND REGIONAL AFFAIRS AND TRANSPORT RRA&T 12 SENATE—Legislation Thursday, 27 February 1997 preliminary nature, which I thought would not assist the public debate because they were preliminary working documents on the present status of our thinking as we developed the issues. My view was that preliminary documents such as that, which are basically in draft form, would not help the debate. Then there were documents which were related closely to the cabinet documents, which contained advice the department was providing to its minister through the normal channels. They were documents which I regarded as being confidential to government. Senator FORSHAW—These documents relate to briefings that were given to the cabinet before the minister announced the decision to expand the EIS; do you agree with that? Dr Milloy—Some of them certainly were. Senator FORSHAW—Some of them do. You also would agree, wouldn’t you, that one of the fundamental questions that certainly the residents of Sutherland shire in and around the Holsworthy location and indeed a lot of other people have is: what was it that led the government to a decision to put Holsworthy back on the agenda for consideration as a site when the government had said quite clearly prior to the election that it supported Badgerys Creek? That is a fundamental question. Are you saying that you did not feel that it was in the public interest for people to know the answer to that question? Dr Milloy—No, I am saying that that decision was a cabinet decision. We discussed this at a previous hearing and we explained that that cabinet decision was developed in the normal process of government. The department provided advice when it was requested to its minister, but the decision was a cabinet decision and the cabinet documents, following normal practices, were not released through the FOI process. Senator FORSHAW—You are going back again to the first reason that we all accept—a reason that is often put forward about principles of cabinet confidentiality and so on. We may not like it, but it happens. But I still want you to try to explain to me what it was that led you to the conclusion that it was not in the public’s interest to know because they would have been confused if they did know. Dr Milloy—What I am saying is that the public would have been confused if they had an isolated access to working documents which were of a preliminary and draft nature. Senator BOB COLLINS—So a viable option to avoid that possibility would be to let them have everything, wouldn’t it? Dr Milloy—That would not necessarily give them a complete picture of the story because our files would only cover certain developments of certain aspects of the debate. Senator BOB COLLINS—But in your view would the release of ministerial briefs such as this be likely to cause a greater degree of confusion than ill-informed speculation outside the cabinet room? Dr Milloy—My view is that the explanation of government policy is something which is best handled at a political level— Senator BOB COLLINS—But, in relation to Senator Forshaw’s question about why Holsworthy was chosen, you said that that in fact was the decision of the government. Dr Milloy—That is a matter of government policy. Senator BOB COLLINS—That is like someone from the Christian church using the explanation of faith for things that cannot be explained, isn’t it—like the miracles of the loaves and fishes? When there is no rational or logical explanation for anything, the explanation is

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 13 that the reason there is no rational or logical explanation for it is that it is a government decision; isn’t that right? Senator Alston—I am sure you shared the faith until March last year. Senator BOB COLLINS—That faith was sadly misplaced, Minister; but only time will tell. Senator FORSHAW—In any event, do you stand by your statement in your decision— Dr Milloy—As I say, my decision has subsequently been reviewed. Senator FORSHAW—What has happened to your decision in the review? Mr Cunliffe—I reviewed what I think is the same decision. There were a number of additional documents which in my judgment could be made available for release. Of course, you would be aware that the Freedom of Information Act has a further avenue of review for people who are dissatisfied once the internal review has been conducted, which includes access to the Administrative Appeals Tribunal. I just wonder whether it might be useful to point to the fact that there is a specific part of the freedom of information legislation which deals with cabinet documents or documents which would disclose the deliberations of cabinet. There is separate coverage for internal working documents which require a consideration of the public interest. Without knowing exactly which documents are in question here and without going back to the documents themselves, it sounds to me like there is potential for confusion between the two because in some instances it is incumbent upon a decision maker to consider the public interest. Senator FORSHAW—We are in a bit of a catch-22 situation, though, because until we see the documents we cannot really tell and say ‘Gotcha.’ Mr Cunliffe—Part of the issue is that freedom of information is not necessarily tied to direction questions. It is to disclose the documents that are there or to identify what documents come within the set. There is a mix of motives, obviously, in an inquiry in some cases. Senator FORSHAW—Can I then take you to another document which I understand exists. In the Sydney Morning Herald on 10 February there is an article by Murray Hogarth, an environment writer, headed ‘Report sees serious flight path problems for airports.’ It says that draft report considerations of the second airport sites indicate that serious flight path problems will be created at both Kingsford Smith airport and the two sites for a new airport. Can you confirm whether that is correct or not. Mr Cunliffe—That is a not question which I am in a position to answer. Senator FORSHAW—I will direct that back to Dr Milloy, Mr Merner or Senator Alston. Mr Milloy—The article was based on a draft working paper prepared by the EIS team which discusses the airspace management options which are available if you are going to introduce a second major airport in Sydney. The airspace design for the second airport is crucial to the site and environmental issues. The work must account for, as far as it can, the interaction between the airspace used by Kingsford Smith, Bankstown, Hoxton Park and Camden airports. The paper, which was an early draft, discusses in general terms what the implications for second airports are and what general use of airspace the second airport might require under any of the five options that are being studied. CHAIR—I just remind people that the committee is actually an extension of the Senate, and we are not allowed to take mobile phones turned on into the Senate. I request that everybody turn their mobile off. I think that is the third time one has rung. Senator BOB COLLINS—It is actually the same one ringing three times.

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CHAIR—It was the third ring I have heard. Senator FORSHAW—Just pretend you are inside an aircraft. I think this will be my final question for the moment. There are obviously lots more for the future. Now that the date has been extended by two months, as I understand it, for the release of the draft recommendations, what will be the timetable then for further community consultation, consideration of the recommendations and then a final set of recommendations. Can you tell me how long that process will take? Mr Merner—Once the draft EIS is finalised and released, it is a matter for the environment minister to determine how long it will be on public release. That, I do not think, has been formally determined yet. The question then of how long it takes to move from the public consultation phase to a final set of recommendations really depends on how many and what level of complexity there is in the submissions that come from all the interested parties on the draft. The EIS consultants are required to assess all of those comments and to take them into account in preparing final recommendations. It is a little speculative to try to put a firm timetable on that. Senator FORSHAW—As I understood it, the rough timetable was that the draft EIS recommendations would come down in March this year, with a decision to be made by the end of this year. I think I recall the minister saying that. Mr Merner—Indeed. Senator FORSHAW—Given that the EIS is now going to take a further two months, can we just assume that we get a decision early in 1998? What are you looking to? Mr Merner—That would be the corollary of extending it for, as Minister Sharp said yesterday, at least two months. The objective that he had indicated late last year was for the government to be in a position to have all the information available to make a decision. Senator FORSHAW—If Senator Alston cannot tell me, can I ask that the question be taken on notice and, if possible, a firm answer be given as to the timetable on this, because people do want to know. Mr Merner—Yes. Senator FORSHAW—I have one other question which relates to the current operations of Mascot airport and the noise amelioration program and so on. We have been changing the flight paths there so often that I cannot figure out where they are any more, and I have just seen more of them. Is there anything contemplated or in train for providing or including Kurnell in the program for noise insulation, air conditioning and so on? We are talking about the houses, not the school. The school is already included, as I understand it. Mr Merner—There is nothing firm on that. The government will review the boundaries of eligibility of that program when it has taken final decisions on the Airservices Australia report, which proposes a restructuring of the airspace and modes of operation of the airport. That report was released on 5 February. There is a public comment phase that is going on at the moment until March. The minister has indicated that decisions will be taken on that following the public comment phase. When final decisions are taken in relation to the modes of operation and flight paths, there will be a review of the eligibility of different areas for assistance under the noise amelioration program. So we are still working towards that. Senator FORSHAW—Thank you. Senator BOB COLLINS—Mr Harris, you would be aware that the Senate has been examining the matter of the purchase of PADS.

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Mr Harris—I am aware, Senator. Senator BOB COLLINS—In a letter that was provided to us, your name leapt off the page at me. It is a letter that John Wallis, the minister’s senior adviser, sent to the newly appointed chair, Mr Forsyth, in August last year. I am sure you are familiar with it. The letter is dated 5 August 1996. It states: Dear Mr Forsyth, I refer to your letter of 4 August addressed to the Minister regarding SAR and PAD System. The Minister discussed your letter with me and has asked me to respond. He is concerned that you are not satisfied with the explanation that you have received from Airservices regarding the efficiency and safety of their search and rescue equipment. The Minister wishes me to ask you on his behalf to commence right away on making arrangements for a fly-off... There has already been considerable preliminary inquiries . . . regarding the manner in which such a fly- off can be conducted. The First Assistant Secretary of the Aviation Policy Division, Mr Peter Harris . . . can be of assistance... Mr Harris, can you explain just exactly what your involvement was in this matter when you first became aware of your role in this and what happened? Mr Harris—The background to the department’s involvement—my involvement in particular—in this area relates initially to a press release that the minister put out on a decision he took, which resulted in that press release, to undertake a review of search and rescue arrangements per se across both AMSA and Airservices. I think that press release was put out on 27 May. A review was put in place—it was to last six weeks, if I recall correctly, and was to be undertaken by Mr Pat Crone—of the nature of future search and rescue operations. Particularly in mind, although not a fate accompli, was the idea that we should have a single search and rescue organisation in Australia rather than the possibility of some miscoordination between the different agencies which have a responsibility in this area. Senator BOB COLLINS—A very good idea, I might add. Mr Harris—I was involved in some parts of that, including discussions about the establishment of this with the minister’s office and within the department both between the maritime division and my own division. Subsequent to that, 60 Minutes put to air a report which demonstrated the use of PADS equipment, and the minister put out a press release. I do not actually have that press release, but he certainly said that tests will be carried out on the different varieties of search and rescue equipment and that trials will be undertaken by the new search and rescue organisation that Pat Crone is reporting on in July. So, by dint of being involved in search and rescue per se and the Crone review, we were also involved in the question of the new organisation taking up the assessment of PADS. I think the expectation at the time that press release was put out was that the search and rescue organisation could be up and running within a ‘reasonable time’, which was actually specified in the press release. The minister said that if the new organisation is unable to complete the task within a reasonable time then the testing will be transferred to Airservices Australia and be verified by an independent expert with a respected reputation in the marine and aviation industry. It was effectively my job in particular to communicate that to Airservices and to discuss how these things might take place if, indeed, a new organisation was not up and running within a reasonable time.

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Subsequent to that, Mr Gruzman contacted me and put the proposition that he had every expectation that this testing of PADS equipment would take place within a very sort time frame. He actually had a specific period in mind. It was not clear to me that that specific period was within a reasonable time or not, but it was not a judgment call for me in practice. Effectively, those are the circumstances which took place prior to 4 or 5 August. Senator BOB COLLINS—Mr Harris, the letter from Mr Wallis says that you had extensive discussions with Mr Gruzman—accepting as I do that extensive discussions are the only kinds of discussions that you can have with Mr Gruzman. Mr Harris—That is worth noting, Senator. Senator Alston—He must be a ripper if you could not get a word in. Senator BOB COLLINS—I surrendered on day one, let me assure you. Mr Harris, are you saying that the only occasion on which you spoke to Mr Gruzman was this single occasion? Mr Harris—No. I do not take telephone conversation notes or anything like that, but I can recall at least two occasions, principally because of the length of the phone calls, on which I spoke to Mr Gruzman, but there may have been more. They centred on this issue of when, where and how and what operational aspects might be relevant to this question of testing the PADS equipment. I explained to Mr Gruzman that operational aspects were not my territory. Nevertheless, it was obvious that the minister had a particular policy in mind and it was my job to ensure that that was communicated to Airservices and that what the minister expected to take place did take place in practice. Senator BOB COLLINS—In real terms, then, it was effectively Airservices rather than the department that actually organised the detail of the fly-off and so on? Mr Harris—Quite right, as it should be. Senator BOB COLLINS—Absolutely. Were you or anyone else in the department involved in this aware that only a short time before this the minister had in fact been extensively briefed on the major concerns that existed? I am sure you know that, even thought there has been a long history to this, there were a small number of units purchased on my initiative in 1990 after the loss of the Rockin’ Robin for testing. That testing proved unsatisfactory. In 1995 the RAAF research unit—a unit which, I might add, has an international reputation—delivered a comprehensive report on PADS that found that it posed a real danger to the lives of the rescue crews that were delivering it. Minister, can I say to you that the reason I raise this is because it is becoming a matter of great frustration to me and, I might add, to others to hear constant statements from the minister—it was again only yesterday in question time—where the minister continually refers to the superiority of the PADS equipment in respect of accurately finding the target, a matter which has never been in dispute by anyone. But that totally ignores the major problems that are occurring at the other end of the static line, problems which the RAAF identified were so dangerous that the RAAF concluded that there should not even be any further testing of this equipment until the deficiencies had been ironed out because it was placing the lives of the crews in the aircraft at risk. Were you or anyone in the department aware of that? Did the department make any efforts at all to draw this to the attention of the minister in the same way that Airservices themselves had prior to this letter of 5 August?

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Mr Harris—I was certainly aware that Airservices had provided information to that effect to the minister, and others in the department were as well. Senator BOB COLLINS—Fine. Mr Harris—In terms of the effort that the department made to draw this to the minister’s attention, I would have to say I think any effort that we made was subordinate to comments made by Airservices. Thus, in practice, I do not think there is anything that is specifically referred to by way of a formal briefing on paper. I have no doubt, given the discussion that had taken place between myself and the minister’s office on these issues over the phone, that there would have been some reference to this, but it would have been, by definition, subordinate to the effort made by Airservices. Senator BOB COLLINS—Mr Harris, can I say that I do not question that at all. I agree with you, but the primary responsibility did lie with Airservices. You were aware that the minister had been briefed by Airservices. Mr Harris—Yes. Senator BOB COLLINS—I guess your attitude in the department is that, if the minister is stupid enough and irresponsible enough to ignore this advice, be it on his own head, which indeed it currently is. I have to say that the letter from Mr Forsyth to John Sharp concerned me greatly. In fact, it was a dear John letter. It said: Dear John, I believe there is a significant probability that should a search and rescue require the use of any Airservices equipment at best it would be inefficient and at worst it would fail. This is an interesting letter when you consider the international commendation we just received for the rescue that was in fact carried out with that very equipment. But the new chairman goes on to say this, and this is a serious statement indeed: The explanation I have received from Airservices does not stand up to scrutiny. That is a serious criticism of the level and the quality of advice that the new chairman has received from his new organisation. Were you aware, Mr Harris, or was anyone in the department aware, that the chairman of Airservices Australia had so fundamentally rejected the quality and professionalism of the advice that he had got from Airservices to the point where he said that it would not stand up to scrutiny? Mr Harris—Senator, you are asking me to recall something from some time ago. Senator BOB COLLINS—If any other officer is here who was directly involved in this, I would be happy for them to take the question. Mr Harris—With that caveat in mind, no, I cannot recall anything which would suggest that I was aware that there was such, as you have construed it, a fundamental— Senator BOB COLLINS—It is trenchant criticism, you would agree with that. After you had ensured that Airservices had the matter in hand and were doing what the minister had instructed them to do, did the department have any ongoing role in the fly-off testing? Mr Harris—No, certainly not that I am aware of. Senator BOB COLLINS—So, as far as you were aware, there were no departmental briefs, either oral or written, that went to the minister subsequent to— Mr Harris—On the nature of the fly-off, do you mean the success or failure thereof? Senator BOB COLLINS—Yes.

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Mr Harris—No, not to my knowledge. Senator BOB COLLINS—Thank you, Mr Harris. Mr Chairman, for your advice and the advice of officers, I have no further questions on programs 1.2 down to— CHAIR—Well, let me call them and then you can say no. Senator BOB COLLINS—Okay. CHAIR—That finishes program 1.1 on aviation policy. Are there any questions on program 1.2? If not, we will move to program 1.5. Are there any questions on 1.5? Senator BOB COLLINS—Yes, Mr Chairman. I am in your hands on this. Seeing as though you want to break for lunch at 1 o’clock, do you want to actually start the process now? CHAIR—Could I suggest then, because there is only four minutes to go, that we break for lunch now and resume at 1.45 p.m. Sitting suspended from 12.46 p.m. to 1.45 p.m. [1.48 p.m.] Subprogram 1.5—Civil Aviation Safety Authority Senator BOB COLLINS—I have some questions about the purchase of PADS equipment by Airservices Australia. Very shortly after his appointment, the Chairman of the Board of Airservices Australia, Mr Forsyth, wrote to your chairman, as I am sure you are aware, Mr Pike, about the certification of search and rescue equipment. Mr Pollard has advised us that he forewarned you about the letter. On receipt of that letter, which was faxed to CASA on 7 August, did you consider that there might be a review of what should be appropriate as far as the regulation of search and rescue was concerned? Mr Pike—Just before answering, I offer the apologies of Mr Leroy Keith, Director of Aviation and Safety, for not being able to appear today. He had a longstanding commitment to address the International Aerospace Congress in Sydney, which is a gathering of a couple of hundred scientists, academics, pilots and engineers from across Australia and around the world. He is briefing that group on the improvement programs which are currently under way in CASA. As I say, he offers his apologies for not attending. CHAIR—Thank you. Mr Pike—To answer your question, Senator, no. Senator BOB COLLINS—The final paragraph of that letter stated—and it is a rather dramatic statement, in fact: Failing written approval from CASA for either or both of the systems . . . by the end of the test on 24 August 1996, Airservices Australia will be without rescue equipment. Can you tell the committee what action you took to follow up on that letter and, in particular, the final paragraph that I have just quoted? In other words, the chairman of Airservices Australia was saying to the chairman of CASA that, ‘Unless you take immediate action to correct this, on 25 August Australia will not be able to fulfil its domestic and international obligations for search and rescue.’ Mr Pike—On 16 August 1996 the CASA chairman wrote back to Mr Forsyth. I will quote just a short excerpt from that. Senator BOB COLLINS—Just for the record: in the meantime, as you know, he had received a second letter from Mr Forsyth on the 14th of that month, because Mr Forsyth had

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 19 failed to get an answer to the letter that I have just quoted from. So there were at that stage two letters from Mr Forsyth. Mr Pike—Right. The chairman commences his response by saying: Thank you for your letters of 7 and 14 August 1996... He continues, as part of that letter: As you know, the Authority— that is CASA— has previously advised Air Services of the regulatory requirements applying to SAR operations. Under the existing Civil Aviation Regulations . . . CASA does not have any statutory power to approve or certify equipment used in SAR operations, as such equipment does not constitute an ‘aircraft component’. As you will appreciate, CASA can only approve or certify equipment when it is legislatively empowered to do so. Then he goes on to say that any such proposal to give CASA that approval would require an amendment to the civil aviation regulations. Senator BOB COLLINS—That is correct. In that second letter Mr Forsyth invited CASA to be part of the evaluation of search and rescue equipment that was to be overseen by Mr Frank Young. Indeed, in the letter that Mr Justice Fisher wrote back to Mr Forsyth, he said this: However, in view of the concerns you have expressed about Air Services’ SAR operations, I suggest that your evaluation of such operations include a dropping trial of both Air Services’ equipment and PADS. The dropping trial can then be overseen by staff from the Authority’s Flying Operations Branch to determine whether approval under CAR 149 is required. Mr Terry Wilson, General Manager, Flying Operations Branch will contact Mr Frank Young, as the Chairman of your Evaluation Committee, to make the necessary arrangements for the dropping trial. The final paragraph, which is also important, says: . . . a dropping trial of both Air Services’ system and PADS to determine whether approvals under CAR 149 are required. This appears to be the only approval that may be required from CASA in relation to SAR operations. Can you tell the committee just exactly what role CASA played at that fly-off and who was involved in it? Mr Wilson—As indicated in the letter that you read out, our role was to ascertain whether the equipment—PADS plus the other equipment was being evaluated—was towed or dropped. If it were towed, it would require an approval under CAR 149. We sent a flying operations inspector down there and an airworthiness inspector, I seem to recall, and that was their role. During that fly-off there was the lack of a safety pilot—on one day, I think it was—and the CASA’s flying operations inspector performed that role, which gave him a better look at the procedures as a whole, anyway. Senator BOB COLLINS—I presume he then reported on the test? Mr Wilson—Yes, he did. Senator BOB COLLINS—In what form? Mr Wilson—Essentially he reported that the— Senator BOB COLLINS—I am sorry, was it a written report or an oral report? Mr Wilson—Yes, he provided a written report. Senator BOB COLLINS—To who?

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Mr Wilson—To me, which I then passed on to the executive of the authority. Senator BOB COLLINS—Can the committee have a copy of that report, please? Mr Wilson—Yes. Senator BOB COLLINS—Thank you. If you cannot recall this, Mr Wilson, do not worry about it. Can you recall the general nature of that report? Mr Wilson—The general nature of the report was that it really just covered the issue of whether the items were towed or dropped. It concluded that the PADS and one of the previous pieces of equipment was towed and did not require CAR 149 approval. Senator BOB COLLINS—That basically was the extent of it? Mr Wilson—That is right. Senator BOB COLLINS—As I have just said, Mr Justice Fisher, in this letter dated 16 August last year from which I have just quoted, replied to both of those letters from CASA. That letter, as you know, said that CASA was only responsible for certifying aircraft components. He said that, if there were any changes to the current arrangements, there would have to be significant justification on safety grounds. He then said in a statement, which frankly astonished me: I have no evidence— no evidence— to suggest that effective application of the present requirements will lead to an unsafe situation. Mr Justice Fisher signed this letter, but I have no doubt in the normal way the draft of the letter itself would have been prepared by CASA management, which is the reason I am asking you these questions. CASA were represented on the SAREDs—that is, the RAAF—evaluation of PADS, and I know that CASA would have been, as a result, well aware of the serious reservations that the Royal Australian Air Force had with this equipment. As you know, so grave were those reservations that the recommendation of the RAAF report was that no further testing be carried out because of the danger the equipment posed to the crews of the aircraft. I stress again, because this sadly seems to be—and I do say ‘sadly’—a blind spot that the minister has developed when he keeps on reiterating how wonderful PADS is because it hits the target nine times out of 10, or eight times out of nine. The problem, of course, is what is happening up the other end. I put it to you Mr Pike, and I know the only answer you can give to this: in search and rescue—and I might add, it is a major policy problem that I worry about all the time—a lot of attention obviously is given to the distress of the people in the water. But it is a fact, is it not, that the crew of those search and rescue missions fly on occasions in extremely hazardous conditions and literally put their lives on the line to carry out some of these rescues? That is correct, is it not? Mr Pike—That is correct, yes. Senator BOB COLLINS—I remember the Rockin’ Robin and the photographs of the sea conditions brought back by the RAAF, which I have never forgotten. I could not believe that people were actually flying an aircraft around in that sort of stuff, and I tip my lid to them absolutely. In that respect, it would also be true, would it not, that a major priority of search and rescue should at least be a relative degree of safety for the crews who are actually performing the rescue?

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Mr Pike—Correct. Senator BOB COLLINS—CASA, as I say, were represented on that evaluation. I know CASA were aware of the RAAF report and the problems with PADS. The significance of that RAAF report again, as you know—and it is not ancient history—is that the very problems that were identified by the RAAF are still the problems that have now caused this equipment to have its certification removed and to be sitting unused in a shed in Melbourne somewhere. I want to know if to your knowledge the Chairman of CASA, Mr Justice Fisher, was at any stage briefed on the history of PADS—that is, the RAAF report, the negative reports and so on? Mr Pike—If I could answer that question in a rather oblique fashion. Senator BOB COLLINS—I would expect no less, Mr Pike. Mr Pike—The problems that were identified by the RAAF are not the same as the problems that have currently led to the suspension of operations. Senator BOB COLLINS—In respect of the static line? Mr Pike—In respect of the static line. The RAAF was concerned because the static line was developing some rather wild oscillations. When that was investigated, it was found that there had been an unapproved modification carried out to the release mechanism at the end of the static line. When that particular modification was rectified, then that, essentially, took it back to square one. It was not until the latest series of tests, including the video footage that I know you have seen— Senator BOB COLLINS—Where you see graphically a wildly oscillating static line? Mr Pike—Yes, but for a different reason. Here we have a line that is not just oscillating but is stretching and recoiling back over the tail of the aeroplane. Senator BOB COLLINS—Indeed. Mr Pike—I just wanted to get it on record that there were two separate problems. One was rectified following the RAAF evaluation, but neither the RAAF nor ourselves, obviously, were aware of the current problem until it surfaced during the tests. Senator BOB COLLINS—You assert categorically that the problem that the RAAF identified was rectified. How was that determined? Mr Pike—To answer that— Senator BOB COLLINS—This is news to me, I have to tell you. Mr Pike—I might ask Mr Grimshaw to answer that. But just to complete my answer to your original question, the board, including the chairman, was briefed about the history of PADS at the regular board meeting in August of 1996. Senator BOB COLLINS—The CASA board? Mr Pike—The CASA board was briefed. Senator BOB COLLINS—I have to say with great relief that that puts them a mile in front of the Airservices Australia board, who were not. Mr Grimshaw—I do not believe the problem with the oscillating static line has been overcome. As you are probably aware, in the latest series of videos you see it quite graphically. As Mr Pike mentioned, the reason for the airworthiness directive which effectively prohibits the use of that system was not the oscillation per se but the recoil whereby the static

RURAL AND REGIONAL AFFAIRS AND TRANSPORT RRA&T 22 SENATE—Legislation Thursday, 27 February 1997 line can fly over the horizontal tail plane and possibly cause a jamming of the rudder or elevator of the aeroplane. Senator BOB COLLINS—It could potentially make life extremely interesting indeed for those on board. Mr Grimshaw—At 100 feet and 120 knots, yes, Senator. Senator BOB COLLINS—In very turbulent conditions, et cetera. Mr Grimshaw, can I thank you for clarifying that issue because Mr Pike, as I am sure you would be aware, I should have more correctly said, having read all of these reports, that one of the problems identified by the RAAF had not apparently been rectified. It would have been more correct for me to have said that when you said ‘rectified’—Mr Grimshaw of course has clarified your answer. I asked the question very much as a result of what we now know was a profoundly flawed testing program that was carried out by this evaluation panel with Mr Young. That evaluation panel—and I am sure you are familiar with this—in broad terms did not have any independent engineering or testing of the thing. This is all on the record of the committee, as am I sure you are aware. They simply accepted the manufacturer’s assertions that the problem had been fixed and ignored the obvious personal interest the manufacturer would have in the matter. In fairness to them I should note that there was one test, which they kindly described, where they threw the equipment into the back of Mr Gruzman’s ute and drove down a rough road and, because it did not blow up, they were satisfied that it was okay. That is why I was intrigued by Mr Pike’s assertion that the problem had been rectified. I still want to come back to that. So far as CASA was concerned, when that piece of equipment was replaced, how did CASA satisfy itself that the problem, which clearly is still going on, had been rectified? Mr Grimshaw—Perhaps to clarify this, the only piece of equipment that we classify as aircraft equipment is this static line which is attached to the aeroplane. In approving that static line, the criteria that we take for the approval is that it creates no hazard to the aeroplane, interference with the aeroplane or to the people on board. At each stage when a new aircraft type is proposed to have the static line used with it, the Reg 35 engineer, if I can use that term loosely, approaches the CASA district office at Bankstown with a proposal to flight test the system. They go and do some flight testing of the static line with the cone and do some drops. They provide the results of that flight test— which has been to date about three flights—to CASA and, as a result of that, they end up with a certification that the system is adequate. Senator BOB COLLINS—Would that testing report be available, do you know? Mr Grimshaw—Yes, it would be, Senator. I could get you a sample of one, if you would like. Senator BOB COLLINS—That would be fine, thank you, if you would not mind doing that. Was any brief provided from CASA to the minister last year about the role of CASA in the certification of search and rescue equipment? Mr Pike—I would have to take that on notice, Senator. I could not tell you now. Senator BOB COLLINS—I ask because of the rather dramatic nature of this correspond- ence from Mr Justice Fisher, and it is a dramatic indeed. Basically, it says that if CASA does not do this, that or the other....;Might I just say as an aside that I found it passing strange that this matter was handled by the chairman—and I made all these comments on the record

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 23 last time—purely by way of correspondence, as a brand-new chairman with no personal contact with either the chair or the management of CASA. I would have thought a far more productive way of handling it, frankly, would have been to have some human contact, sit around a table somewhere and talk about it. But, nevertheless, we all have a different style of approaching things. After all, Mr Forsyth did tell me that his philosophy on life was that, if a job was worth doing, it was worth doing quickly. He obviously had a different grandmother to me. She always told me that, if a job was worth doing, it was worth doing well. If you could just check on advice from CASA to the minister. I also want to ask some questions about a suspension of the PADS equipment. I understand that happened on 19 February, is that correct? Mr Grimshaw—The airworthiness directive was issued on 19th with effect on the 20th. Senator BOB COLLINS—Can you take the committee through the sequence of events that led to the suspension and any action that has been taken since? Mr Grimshaw—Certainly, Senator. As a result of some tests that Airservices had contracted an organisation called Aerospace Technical Services to conduct, I was invited to attend a presentation from Mr Michael Jones, the general manager, on 4 February when he was presenting some results of his testing to his customer, which was Airservices. I was accompanied by the airworthiness branch test pilot, my manager of the certification section and senior flying operations inspector from Terry Wilson’s flying operations branch. We were shown the video I understand you saw at the last session. Senator BOB COLLINS—Yes. Mr Grimshaw—My reaction to that, after consulting with those staff that accompanied me, was that we believed it was an unsafe condition with that static line. The unsafe condition resulted from the failure of the PADS canister to always immediately release at the end of the 330 metres of trail line. Because it did not immediately release, the static line was then stretched and it recoiled like a rubber band. The very next day after that presentation, I was in the process of putting together a letter to Mr Gruzman to advise him of what we had found and seek his comments on that when he sought an interview with the director, who was not available, nor was the deputy director. So my test pilot and I spent some two-odd hours discussing the situation with Mr Gruzman and Mr Peter Henderson. Following that discussion, I undertook to provide a copy of the appropriate sections of the report that was to be produced by Aerospace Technical Services for Mr Gruzman, to allow him some time to comment on that before we took any action. At the meeting, I did indicate that, in light of compelling evidence of an unsafe condition, we needed to take some action. Mr Gruzman subsequently was given a copy of not the whole report but the appropriate sections of it on which to form his own views and respond to us. After some voluminous correspondence and exchanges, it became apparent that I could not delay making the decision to take the airworthiness directive action any longer and advised Mr Gruzman that, if I had not heard anything substantial in terms of technical argument why there should not be an airworthiness directive, it would be issued with effect on the 19th. I guess we could provide the range of correspondence if you required it. Senator BOB COLLINS—If you wouldn’t mind. I am aware of most it. Mr Grimshaw—That is basically the sequence.

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Senator BOB COLLINS—Thanks. Where is it at now and where does it go from here? Mr Grimshaw—At the present time, the airworthiness directive prohibits the use of the PADS system in other than a real emergency. I am having discussions with Mr Anton Gruzman, Mr Laurie Gruzman’s son, in an endeavour to very clearly and precisely outline what CASA would need to be shown to be satisfied that the unsafe condition had been rectified. We have not reached agreement on just exactly what that should be. Search and Rescue Pty Ltd have some difficulty accepting that there is in fact a safety problem. So we have a few issues to resolve. Senator BOB COLLINS—Search and Rescue Pty Ltd have a profound problem in accepting that there is a safety problem. Mr Grimshaw—So there is no resolution today. Were I not here, I would be working on a letter to Mr Gruzman to outline what he should or should not do. Senator BOB COLLINS—Is that supposed to make me feel guilty? Mr Grimshaw—Not at all, Senator. Senator BOB COLLINS—Mr Gruzman has made an allegation, that I am sure you are familiar with, in writing. I did find it most curious that the static line that was used in the latest tests did not meet CASA standards and did not conform with the regulations. The reason I found that most curious—and I would like you to comment on it—is that even if you accepted that that was true, surely the responsibility for that happening would have been with the manufacturer, wouldn’t it? Or am I missing something? Mr Grimshaw—I don’t think you are missing anything, Senator. The static line, to the best of the information that I have available, complies with the specification on the approved drawing. It is usual in aviation matters for manufacturers of aviation equipment to take some responsibility for their product. Senator BOB COLLINS—Mr Gruzman, of course, is heavily into conspiracy rather than stuff-ups.I could only construe from that statement that there was some kind of implicit suggestion from Mr Gruzman that an officer of CASA or ASA or whoever had secretly and illegally switched a static line in order for the static line to fail the test. I assume that is what he was trying to get at. Mr Grimshaw—Senator, I wouldn’t profess to know what was in his mind. Senator BOB COLLINS—I would like to ask some questions about the Turtle Air report. As I understand it, the SAREDs process that I have just referred to exposed deficiencies in the certification of search and rescue equipment and that led directly to the Turtle Air operation and the report. I understand that work was commissioned by CASA. Is that correct? Mr Grimshaw—No, Senator. I believe it was commissioned by the CAA search and rescue area. Senator BOB COLLINS—Yes, sorry. It has all changed since then. That is right, it was CAA. I understand the committee was chaired by John Swan and was set up to address the issues raised in the Turtle Air report. Is that correct? Or are you aware of it? Mr Grimshaw—I believe there was a committee set up to address the issues. That is right, Senator. Senator BOB COLLINS—The final report, which I have read, was available in the middle of 1995. A number of issues that were raised in that report were CASA issues. Is that correct? Mr Grimshaw—I think that is correct, Senator.

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Senator BOB COLLINS—Thank you. They were matters that went to the whole question of airworthiness and operational matters. Could you outline for the committee in general terms what aspects of that report were in your area of responsibility—that is, the CASA area of responsibility? Mr Grimshaw—I think I would have to have the report in front of me to know specifically. Senator BOB COLLINS—Mr Grimshaw, can I just say to you where I am coming from on these questions. I never mind you knowing. I am as transparent as a sheet of glass on this business. I am sure you are aware of it. I am raising all this because of the evidence that was given on the record by officers of Airservices Australia as to their extreme frustration—they made no bones about it—about what they saw as a profound lack of interest or energy on the part of CASA to progress this question of identified problems with certification of search and rescue equipment. Mr Grimshaw—I think I can respond in part to some of their concerns. There was a perception in some people’s minds that CASA should have some responsibility and certify the adequacy of search and rescue equipment. CASA has taken the approach that CASA is responsible for aircraft equipment and that search and rescue equipment, in so far as it is not aircraft equipment, is not within our purview under our regulations. For example, I would treat the PADS system as a bale of hay if it did not have a piece of equipment attached to the aircraft and was towing a piece of equipment from the aircraft. I think the frustration that some people in Airservices may have had was that CASA was not about to take on responsibility for things for which it had none and attempt to certify the adequacy of a life raft that may be used in search and rescue operations. CASA quite freely and appropriately accepts responsibility for a life raft which is required equipment in an aircraft, but that is not a piece of equipment which is used for search and rescue. Senator BOB COLLINS—Sure. Mr Grimshaw—So I think some of the frustration and difficulty related to what some people might call subtlety—that black and white line that we have attempted to draw. Senator BOB COLLINS—Leaving aside PADS for a moment and just going to the general area of search and rescue equipment, is it not a fact that the SAREDs process did identify deficiencies as they saw it in certification of search and rescue equipment? Is it not a fact that the Turtle Air report then specifically identified a whole range of issues which, in the view of the reporters, were properly matters for CASA? Mr Grimshaw—I believe that is correct. Senator BOB COLLINS—Fine. We will come back to that in a minute. In evidence to the Senate, Mr Swan said that he prepared a paper for the CAA—as you rightly say, it was the CAA board then. He said that the CAA agreed that they needed to look at it. Mr Swan said that that went to the board or was supposed to go to the board. Is anyone at the table aware as to whether CASA did look at it? I will not press you on it if you cannot remember. Would you mind taking that on notice, Mr Pike? Mr Pike—Not at all. Senator BOB COLLINS—Is it the view of CASA that the findings of the Turtle Air report in the area of certification requirements for search and rescue were in fact important and that CASA did have a proper role to respond to them? The Turtle Air report, which was commissioned by the CAA itself, identified in some detail what they saw as being deficiencies in the entire area. You know what I am getting at. I do not disagree with the text of Mr Justice

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Fisher’s letter. I think it is factually accurate. To say that the regulation currently only requires us to do this is not in dispute. It utterly begs the question that a fairly major exercise was conducted—which this letter seems to have totally ignored—that those regulations in themselves are deficient. That was absolutely identified by the Turtle Air report. Mr Pike—I think what may well have happened—again I am speaking with the advantage of a failing memory—is that the regulations regarding search and rescue will be picked up as part of the review of regulations which is currently under way in CASA. I am sure you would be aware that there are a couple of major reviews under way. Senator BOB COLLINS—Yes. Mr Pike—As part of that, we are looking at all the regulations. Senator BOB COLLINS—Correct. That is prospective, and I am delighted to hear it, but it begs the question. I know that will happen. I think the proposal to have a single body—and I am sure the government will make sure it is implemented—responsible for search and rescue is an eminently sensible one and will avoid all the problems that used to occur between AMSA and the CAA and so on. But that was not even in prospect. That review you are talking about where all these things, no doubt, will be taken into account—I am sure they will—was not even in prospect when all this preliminary work was done. The reason I am asking the questions—the Senate, I know, will want to get answers—is that to this point, in terms of the very compelling evidence that was given by Airservices Australia, there is no evidence that CASA actually did anything about the Turtle Air report. The evidence on the public record so far is that despite the fact that this report commissioned by the CAA identified serious deficiencies in the current regulatory regime for certification, the CAA did nothing about it. If you can disabuse us of that, I would be delighted. In fact, I invite you to do so. Mr Grimshaw—I think I can in part. Following that report, CASA and Airservices were two new organisations. CASA staff and Airservices staff did sit down in the spirit of cooperation to address how best we were going to resolve these differences of opinion about what CASA should or should not certify. A team approach was proposed. I understand from memory that there were two meetings between CASA staff and Airservices staff. Unfortunate- ly, the Airservices manager, whose name I believe was Darryl Cathro, was transferred. There was some difficulty with SAR in Airservices, and the little project team effort died a dull death, if I can use that terminology. Senator BOB COLLINS—That is the assumption I made myself, and I thank you for clarifying that. I tend to go on at some tedious length on occasions, don’t I, Senator Alston? Senator Alston—On occasions. Senator BOB COLLINS—You finally nailed it down, and I am grateful for it. You understand how frustrating it is for people outside of the bureaucracy knowing that there is a problem. I am talking about organisations that I consider to be professional. There seems to be a huge problem with this fact that the staff change. It is all in the Hansard. I referred to a serious event that is still causing huge problems for the horticultural industry in Australia where, in respect of AQIS, a problem had been identified with papaya fruit fly in northern Australia. A recommendation had been made by a very competent committee that action be taken to prevent it because it got down to the Torres Strait. A recommendation was made that a huge trapping program be established.

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A paper war then ensued between the Commonwealth and Queensland as to who was going to pay for it. No-one disputed it should be done. Because various people shifted out of the Commonwealth departments and Queensland departments, after two years of this, nothing happened. As a result of all that, we got papaya fruit fly, which has already directly cost some $60 million in damage, and will continue to cause damage. What you are saying to me effectively—it is dismaying to hear it—is that with the difficult shift of people out and the effluxion of time, this is what has effectively happened with this. Mr Grimshaw—Yes, Senator. Senator BOB COLLINS—I am sure that CASA is familiar with the evidence that was given. But just to remind you, I put a direct question to Mr Peter Evans in respect of the Turtle Air report and its recommendations. He gave me a very blunt response, which was that most of the recommendations in that report had been implemented. They were the ones that were the responsibility of Airservices Australia. He said the only ones that have not been implemented are the ones that are the responsibility of CASA. Would you agree with that? Mr Grimshaw—Yes. Senator BOB COLLINS—It is terrible when people give you honest answers; you don’t know where to go. I suspected that that was the case. You would agree—I think this is where we left it with ASA—that it is vitally important that with the formation of this new organisation, there is a round table. I might add—and I am sure you accept this—that I am not asserting for one minute that the recommendations made by Turtle Air are necessarily the correct ones, but at least there should be an agreement as to what you agree on and what you disagree on and the matter has progressed and finalised in some way. Mr Grimshaw—I agree that the differenceS of opinion about what CASA is and is not responsible for need to be set to rest in other people’s minds. Senator BOB COLLINS—Thank you. Can you give the committee an assurance that so far as CASA is concerned, the matter will be resolved. Mr Pike—We will certainly address it. Senator BOB COLLINS—Oh, well— Mr Pike—I am not going to say we are going to agree with the recommendations. Senator BOB COLLINS—That was not the question. I will clarify the question. I just said the opposite. I am not suggesting that you have to agree with the recommendations. But one way or the other, will you give an undertaking to the committee that the matter will be resolved? Mr Pike—Yes, I will. That is not a problem. Senator BOB COLLINS—I have a few other questions, but I am happy to place them on notice. CHAIR—There being no other questions on subprogram 1.5, that completes that subprogram. Subprogram 1.6—Federal Airports Corporation CHAIR—I welcome officers from the Federal Airports Corporation to the table. Senator BOB COLLINS—How are the environmental impact studies on the two sites for the second Sydney airport proceeding? Mr Snelling—The corporation has nothing to do with the EIS for the second Sydney airport.

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Senator BOB COLLINS—Nothing at all. Mr Snelling—No, sir. Mr Bowdler—Senator, that rests with the department under subprogram 1.2. Senator BOB COLLINS—Thanks. I assume this is being handled by the asset sales task force. But, so far as the FAC is concerned, can you advise the committee where we are at in terms of the airport sales? Mr Bowdler—The FAC may have a view, Senator— Senator BOB COLLINS—Yes, I am inviting it. Mr Bowdler—Essentially, though, that matter is with the Office of Asset Sales and, to a lesser degree, the Department of Transport and Regional Development. CHAIR—That comes under subprogram 4.1? Mr Bowdler—No. It would come under subprogram 1.1. CHAIR—Right. Senator BOB COLLINS—I note the time, Mr Chairman. I am quite happy to put the remaining questions I have to the FAC on notice so that we can be finished by 3 o’clock. CHAIR—Do you want to hand them up now? Senator BOB COLLINS—No, I will clean them up and hand them up later. CHAIR—That deals with subprogram 1.6, and we have some question from Senator Collins to go on notice. Are there any questions on subprogram 1.7? Senator BOB COLLINS—Yes. Subprogram 1.7—Airservices Australia CHAIR—I welcome officers for subprogram 1.7. Senator BOB COLLINS—Mr Pollard, Mr Evans, were you present in the room during the last 10 minutes of evidence from CASA? Mr Pollard—Yes, sir. Senator BOB COLLINS—Good. I think you are already on the record in a previous committee as giving an absolute undertaking, so far as ASA is concerned, to get this matter resolved one way or the other. We now have a commitment on the public record from CASA to do it. So I assume that means it will be done. Mr Pollard—There is one party that you have not mentioned, but we certainly hope so. Senator BOB COLLINS—One party I have not mentioned? Mr Pollard—That is the manufacturer. Senator BOB COLLINS—I am sorry, Mr Pollard— Mr Pollard—You backed the Turtle Air? Senator BOB COLLINS—Yes. I am talking about the Turtle Air report. I have to say, Mr Pollard, that one would have thought the manufacturer, in his own best interests, would be anxious to take the best advice he could possibly get. I have some questions about the consolidation of the search and rescue service. I would just like you to advise the committee briefly where that is currently at. Mr Pollard—We have an implementation committee, an amalgamation committee, that has been established with AMSA and headed by one of their senior people. We are providing two

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 29 search and rescue people to that committee. We are working through personnel issues and terms of transfer. We are also working on space considerations, ultimately, for the one centre they would have. I would say it is progressing very well. We have had certain problems, but most of them centre around personnel and administrative issues. There is nothing operational at this time. I am quite confident that, from an amalgamation standpoint, we will meet the 1 July deadline, although we may have some residual services that we will provide in Airservices. Senator BOB COLLINS—Mr Pollard, can you advise the committee of the thinking that was behind the consolidation to Melbourne and the abandonment of the Brisbane operation? You would obviously be aware of local dismay about the fact that it is leaving. Mr Pollard—Sure. I can give you my perception of that, and I will ask Mr Evans to contribute to that also. As you certainly are aware, the rescue portion of the activity that we actually prepare for the most part is a communications function, and it does not matter if you have six or one. I guess the basic point is that we could do it from one, it was more efficient and that was our efforts. Peter, would you like to add to that? Mr Evans—That is broadly the story. I will give you I suppose a little bit of further history on that. There were originally 10 search and rescue centres. As the technology became available, particularly with SAR beacons and other things, it became easier to do it from a single centre. The proof of concept was in the two major centres of Melbourne and Brisbane. We decided to consolidate to a single centre as the viability had been proven with the two. While Melbourne was stated as being the likely centre, the final decision had never been carried through because the Crone report sort of overtook it with the amalgamation of AMSA and Airservices and SAR happened. Senator BOB COLLINS—The only question I have in a technical sense is: what is the situation with the back-up arrangements with that ‘all eggs in one basket’ operation in Melbourne? Mr Evans—The consolidation to Melbourne has not taken place. Now there will be a single consolidation to AMSA. AMSA are aware of that. In fact, from an Airservices perspective, for crisis management we have looked at alternatives to our own building. There are a number of facilities in Canberra which have the communication capability which could be used. I think the department of transport is one. Without going into the detail, there are a number of alternatives with satisfactory communication capability. Senator BOB COLLINS—What effectively determined it should be Melbourne rather than Brisbane? Mr Evans—As I said, there really was never a final decision. Melbourne was preferred because the building space was available. In Melbourne we could better use the building space. Brisbane was one option, but the final cost benefit analysis never carried through because of the AMSA-Airservices amalgamation. Senator BOB COLLINS—Is it correct that at the time of the announcement of this consolidation the general manager of the Brisbane operation, Mr Pat O’Keeffe, was stood aside? Mr Evans—It was not to do with the announcement of the consolidation. It was to do with an audit report which I had initiated on search and rescue. It was not just an operation on finance and other things. Some issues came out of that. I had some concerns about the

RURAL AND REGIONAL AFFAIRS AND TRANSPORT RRA&T 30 SENATE—Legislation Thursday, 27 February 1997 management process and style that I believe needed to be tightened up. I moved Pat sideways, and subsequently he took an early retirement package. Senator BOB COLLINS—So he has now retired from— Mr Evans—He has retired from the organisation. It was a management decision and associated not with the consolidation but with an audit process. Senator BOB COLLINS—Mr Evans, in respect of that concern, and I understand the nature of it, and the fact that Mr O’Keeffe subsequently resigned, were the problems that were identified by you in terms of the management confined to only Mr O’Keeffe, or were they much more broad than that in respect of the management group at that operation? Mr Evans—There were problems generally with the administration of the area in Brisbane that were identified. I believe it was appropriate to get somebody new in there to tidy it up. Senator BOB COLLINS—What was the form of investigation that was in fact carried out into the activities of the staff at Brisbane? Mr Evans—It was not. It was a formal audit of both Melbourne and Brisbane operationally and a normal corporate type audit. The practice we have been using with our internal auditing process is to combine operational and finance and admin audits. It was a combination of those. There was an initial draft report. Most of the issues identified in that have been covered off or are in train to be covered off by dates this year. Senator BOB COLLINS—Was any counselling provided to the staff at Brisbane flowing from that audit and the decision to stand Mr O’Keeffe aside? Mr Evans—Senator, I would have to check that, but my understanding is that individuals were spoken to separately. Senator BOB COLLINS—If you would not mind checking that for us and confirming that that is the case. Mr Evans—Certainly. Senator BOB COLLINS—I assume that the board was advised of the difficulties at Brisbane. Were they? Mr Evans—We had a discussion the other day about the 4 April briefing. I think it contained some advice about the changes in Brisbane. I believe that paper went to the board at the time as well. Senator BOB COLLINS—Mr Pollard, perhaps as a member of the board you might be able to answer this question more effectively. What I actually meant was: to your recollection, Mr Pollard, was a specific discussion ever held at the board about the difficulties with the management of Brisbane? Mr Pollard—I do not recall a direction along those lines or a discussion. However, there is a possibility. With my not being there I would not know. The discussion could have occurred with our safety committee or with our audit committee, based on it being both an administrative audit and an operational audit. Senator BOB COLLINS—To the best of your knowledge was the minister briefed at any stage on the difficulties in Brisbane? Mr Pollard—I would assume that we had covered it off in the briefing that we gave the minister after his movement into the position—just a package, not specifically on that topic.

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Senator BOB COLLINS—Within Airservices Australia there is a unit called the air traffic services safety and quality management section. Was that the unit that carried out the audit at Brisbane? Mr Evans—They would have been the operational audit. Corporate Audit and Quality Assurance carried out the admin and finance side of it. Senator BOB COLLINS—Can those audit reports that were done of the two places you mention, Brisbane and Melbourne, be made available to the committee? Mr Evans—Internal circulations are ordered in confidence, but I will check if— Senator BOB COLLINS—Would you mind just examining whether it would be appropriate to make them available to the committee and, if there are any difficulties, could you just let the committee secretary know? In terms of the amalgamation of the rescue coordination centres into a single centre, did ASA make a formal submission with respect to the merger of ASA’s and AMSA’s rescue responsibilities? Mr Pollard—I, along with others on my staff, met Mr Crone, who actually did the evaluation. We had discussions early on, and there was probably even a follow-up. We had opportunity to comment on his draft report and had an opportunity to make input to the department on the report. Senator BOB COLLINS—Has ASA identified at this stage any potential costs—in respect of redundancies, training administration, et cetera—to you as a result of the amalgamation? Mr Pollard—It is certainly anticipated—accurately, I might add—that we will have some redundancy costs. Some people will not go over. Some of those, obviously, would be bringing forward costs that we would have in out years, but there will be redundancy costs to Airservices. Senator BOB COLLINS—Alternatively, Mr Pollard, have savings been identified? Mr Pollard—From our standpoint, the report basically did not identify any savings. The thrust that we have had with AMSA is that we should not have the amalgamation—I think AMSA supports this totally—without some efficiencies, and there are expected efficiencies once we consolidate. Senator BOB COLLINS—Was a review of search and rescue conducted in 1995 by Mr John Rolland? Mr Evans—Yes, there was a review commissioned by the previous minister. Senator BOB COLLINS—Was that report ever released? Mr Evans—No. It was commissioned by the minister and, with the change of government that lapsed, the report has not been released. Senator BOB COLLINS—Is that available? Mr Evans—I am not sure of the status of it, Senator. Senator BOB COLLINS—Would you mind finding out? Can you take on notice a request from the committee to make it available if it is appropriate to do so? Mr Evans—Yes. Senator BOB COLLINS—Thanks. In terms of any potential cost—I do not need to pursue the detail of that—how will Airservices Australia, in terms of the amalgamation, fund them?

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Mr Pollard—This will ultimately be determined, I guess, through the request to government. But at this point it certainly appears that redundancies are something that Airservices will wear. There is the potential that there will not be reimbursement for those. Senator BOB COLLINS—I think the potential is terrific that there will not be any reimbursement for them. The Air Services Act requires Airservices Australia to provide a search and rescue service. I may, indeed, have canvassed this in the other committee. I think I did ask this question. Do these new arrangements require legislative change? Mr Pollard—I think that is certainly a possibility. There will be some legislative changes required. Another option would perhaps be from a contractual standpoint. If that does not happen quickly enough, we would continue to provide those services. Senator BOB COLLINS—Thank you. Did the Crone report recommend that ATC take full control of in-flight emergencies? Was that one of the recommendations, do you know? Mr Evans—As I recall it, yes. But the expectation is that the only thing that will be transferred to AMSA is the search and rescue part of it. It is either that the aircraft has hit the ground or the water or is about to, and the process will be handed over. Up to that point the responsibility will stay with Airservices. Senator BOB COLLINS—Do you know what training has been given to the ATC in this activity or are incidents simply passed on to the RCC? Mr Evans—No, they are not. In fact, as a consequence of this amalgamation process, we have discovered that there is some difference between the Brisbane and Melbourne ends of our organisation. Senator BOB COLLINS—Yes, there is. Mr Evans—One is better prepared than the other to do it. We recognise it is an issue that has got to be addressed. We are aiming to have that finalised by 1 July. Most recent graduates have been given some form of IFER training. There is a formal document process being gone through now to ensure that it is there by 1 July. Senator BOB COLLINS—That being so, could you explain to the committee how in-flight emergencies will be handled under these new arrangements? Will AMSA then be taking the leading role? Mr Evans—No, in-flight emergencies—anything that happens while the aircraft is airborne or in flight—will be handled by the operational side. As examples, a 727 between Sydney and Melbourne that has an explosive decompression would probably be referred to the search and rescue centre at the moment as some sort of phase involving search and rescue. It never leaves an air traffic control frequency. It will operate through the air traffic control system and a local emergency system handled by the local airport emergency procedures at the tower concerned. We have an issue with outside radar coverage. That is basically the major point we have got to address by 1 July. The east coast is easily covered. The bulk of the country out over the desert has some issues. Senator BOB COLLINS—So ATC will handle the emergency all the way down, but AMSA will take over when it gets to the ground—if it does hit. Mr Evans—If it hits the ground at a controlled airport— Senator BOB COLLINS—Hopefully I will not be on board at the time. Mr Evans—If something hits the ground at a controlled airport, it was not a SAR issue in the current organisation. It is a local airport emergency procedure which the airport owner,

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 33 the FAC, the local authorities and ourselves have a plan for. The search and rescue organisation is broadly to find the aircraft if it is lost or has crashed and it is unknown where the crash took place. Senator BOB COLLINS—Is Airservices Australia or anyone at the table aware of an incident involving aircraft VH-JFT? The aircraft was the subject of an in-flight emergency and landed, as I understand it, with very little fuel on board. Mr Evans—Yes. Senator BOB COLLINS—Are you familiar with it? Mr Evans—Yes, that was HS-125. In fact, it had been owned by the Civil Aviation Authority. It had been sold and was on its delivery flight. It was Melbourne to, I think, Port Hedland or Broome. Senator BOB COLLINS—BASI, presumably. That is what I thought. That was the old Airservices Australia aircraft, wasn’t it? Mr Evans—Yes. It was the HS-125. It was a delivery flight after it had been sold. It apparently got lost— Senator BOB COLLINS—So it was out of your hands at that stage? Mr Evans—Yes. Senator BOB COLLINS—I could see some frantic nodding in the back of the room. So it was not your responsibility? Mr Evans—The in-flight emergency and assistance was ours. But the aircraft was not, no. Senator BOB COLLINS—No, I meant in terms of what actually happened and the fuel problems. You had sold the aircraft at that point? Mr Evans—Yes, it was in the hands of the owner. Senator BOB COLLINS—Thanks. I have got some questions about air traffic control training. As I understand it, air traffic control training was being conducted in Brisbane for some time. Is that right? Mr Evans—There is a long history of air traffic control training. It was Launceston for about five years and Melbourne for about 25 years before that. We established two campuses— Melbourne and Brisbane. Again, the peak of our training requirement for the new system is over about the end of this financial year. We have decided to consolidate to a single centre in Melbourne. Senator BOB COLLINS—How many centres are there currently? Mr Evans—There are Melbourne and Brisbane right now. Senator BOB COLLINS—Yep. What does it cost in rough terms to train an air traffic controller? Would you like to take it on notice? Mr Evans—It is about $100,000 a head for the training aspect of it. I can give you a more accurate figure if you wish. Senator BOB COLLINS—Thank you. As I understand it, there is a proposal around for these new arrangements—you have mentioned that there will be new arrangements. Can I ask you if these new arrangements basically involve several weeks in Melbourne, five months in Bath in the United Kingdom, back to Australia, some field training and then straight out onto approach control?

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Mr Evans—I will give a little background to the process. Some years ago we took a decision that we would stream-train air traffic controllers: that, rather than the two-year course that currently ran, we would put them through training specific to the function they were going to perform on graduation. The en route training aspect of that training was to be carried out in Melbourne and Brisbane. There is a reasonably substantial report on the logic of putting it close to a major centre. Tower training, by joint agreement, will be done at RAAF East Sale, which has a tower training simulator. We have got a memorandum of understanding—an agreement—on how that process will take place. The third element of our training that was required was terminal area training. Our concentration has been on en route training for the last couple of years to get into the TAAATS system. We have an identified need for terminal area controllers. We went to public tender, albeit restricted. I think about eight international organisations potentially could provide the training to supplement the Melbourne and Brisbane training—Melbourne specifically, because that is where the radar simulator is. The process is down to negotiation with a single supplier now. There is no contract signed at the moment, but it is in the final stages of negotiation. I cannot recall the exact time, but there is a period in Melbourne, then a period at Bath in England at the college there. There are two courses scheduled. Senator BOB COLLINS—So, in terms of the requirements for training air traffic controllers, there is simply not the capacity within Australia to conduct all that training here? Mr Evans—That is correct. Simulator capacity is the major issue. We did not have the resource to do it at the time this was planned. It has taken a little longer to get the process completed than I would have preferred, but it was a capacity issue, yes. Senator BOB COLLINS—Is that likely to be the case for some significant period of time into the future? Is there any anticipation that at some point training for air traffic controllers will be able to be conducted in Australia? Not that I am suggesting there is any inherent advantage in doing so. Mr Evans—Tower training used to be done by the RAAF. En route training will continue to be done by us. There is one element of it: we will contract for two courses. The additional benefit out of it is that we own the course content and documentation after the two courses are completed. We did not have the resource to develop that part because it was a new concept for us. Terminal area training everywhere else in the world is something that is done directly from the street to on-the-job training. The FAA system recruits on exactly the same basis from ab initio trainees who are put through a specific training course and put into terminal area operations. So, while it is a new concept for us, it is not internationally different. Senator BOB COLLINS—Has any analysis been conducted to this point in time—you mentioned the figure of around $100,000—as to what these new arrangements will cost? Mr Evans—I probably need to confirm it, but broadly the difference in cost is going to be the travel aspect of it. But the benefit is that we get the course at the end, which would have cost nearly the same as the travel aspect. Senator BOB COLLINS—How will this be organised? Will the trainees spend five months in London and— Mr Evans—It is out of London, but in England. Senator BOB COLLINS—claim travel allowance while they are there? I can tell them where they can go to a course on that.

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Mr Evans—The course is in fact residential. As I said, there is no contract signed so I really cannot say— Senator BOB COLLINS—It is okay; you can ignore the question. It was just a chance to have a cheap shot; that was all. Mr Evans—It is a residential college that trains air traffic control staff of 48 other countries. CHAIR—We have to finish this session at 3.30 p.m. and come back on Tuesday night for the rest of it. All the officers from subprogram 2.1 onwards can leave, if they wish. It is up to you, John. I just make the point that we will not get past subprogram 1.7 by 3.30 p.m. Mr Bowdler—That is fine with us, Chairman. I will stay, if you like, with my colleagues. CHAIR—Yes, certainly; we need you. Mr Bowdler—People from the other subprograms can go. CHAIR—They are subprograms 2.1, 2.2, 2.3, 3.1, 3.2 and 4.1. Senator BOB COLLINS—I am sure they have all enjoyed their day in Parliament House. I have always understood that the position of approach controller is the most difficult of the air traffic control positions. Is that correct? Mr Evans—Most approach controllers will tell you that. Senator BOB COLLINS—That is right, especially when it comes to negotiating the award. What is the current situation in terms of those premiums—it is the wrong word for it, I know—that were negotiated originally for Sydney in respect of the acknowledgment of the greater workload, and then of course immediately Melbourne— Mr Evans—I am trying to remember which EBA. We have had three rounds of EBAs. I think in the first round of EBAs that was wrapped up into salary. There is still some salary differential between Sydney and Melbourne and Brisbane. Senator BOB COLLINS—But that has basically been incorporated into a salary? Mr Evans—Yes. Senator BOB COLLINS—I am pleased to hear that. I want to ask a few questions on PADS. Is it correct that Airservices Australia has now engaged a legal firm to advise you on how best to deal with PADS? Mr Pollard—No, sir. Senator BOB COLLINS—So you have not employed Freehills? Mr Pollard—Freehills is basically on contract to us all the time. Senator BOB COLLINS—A hired gun? Mr Pollard—Yes. We have not engaged them for a specific purpose. We have asked a question as far as patent rights and those types of things are concerned, and we have asked them for determination. But, specifically to ask them about how we deal with PADS, the answer is no. Senator BOB COLLINS—The reason I ask the question is that in evidence that was given to the Senate we were told that Airservices Australia was considering whether or not to take action with regard to the quality of the independent evaluation report. Can you tell me what decisions have been taken in respect of that issue, if any? Mr Pollard—Our immediate goal basically is to get it up, get it operational, make it usable, and then I think we will reflect on what we are going to do.

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Senator BOB COLLINS—I understand that, but the difficulty I have with that—and, frankly, I am sure you do too—is that it is the primary responsibility of the manufacturer to do that. I do not dispute the efforts that are being taken to turn what is inherently a very good concept into something that will not kill the people delivering it. Mr Pollard—I think I answered that for you once before, and I still have the same opinion. Yes. Senator BOB COLLINS—That being the case, there is one thing that still does concern me. I noted the answers that Mr Forsyth gave. I put a question to Mr Forsyth, I remember, as to whether he would be satisfied and happy if he discovered that the independent evaluation panel that he set up had simply relied in effect in most cases on assurances from the manufacturer that things had been fixed rather than independently testing whether they had or not. His answer to that was yes, he would be. I am dissatisfied with that. Accepting that that is in fact the evidence that we were given—that that was the case—is Airservices Australia examining its contractual relationship with that evaluation panel and whether or not the evaluation panel effectively discharged its obligations under that contract. Mr Pollard—It is not something that we are actively pursuing at this time; it is something that, as I say, as we ultimately look back on this, we will pursue. We will certainly— Senator BOB COLLINS—You understand, of course, the reason that I asked the question and the reason that is particularly relevant to these committees. We are currently in a situation where $1½ million—of that order, in terms of training and all the rest of it—has been effectively eroded. Mr Pollard—Sure. Senator BOB COLLINS—We are also aware that that process has not yet concluded. Currently that equipment is useless for the purpose for which it was purchased—at this point in time. I do not disagree in terms of, for example, the conversations I have had with Michael Jones—Australia’s answer to Chuck Yeager. Mr Pollard—He is younger! Senator BOB COLLINS—He is a bright young bloke. I have no doubt at all, from the very professional job that he has done and the conversations I have had, that it is a resolvable problem. The difficulty is that it seems impossible to get any kind of acknowledgment from Airservices Australia that there is anything wrong with the equipment at all. Mr Pollard—You mean search and rescue? Senator BOB COLLINS—Yes, sorry. Despite the fact that we know they have already replaced the tennis balls with Australian tennis balls and the venetian blind cords with other things, they still will not concede that there was anything wrong with the equipment. Leaving that aside, the concern that I have—and it is a legitimate concern, with respect—is in respect of where we are with the money. Rightly or wrongly, the chairman of Airservices Australia, Mr Forsyth, relied utterly—and we know that he did—on the independent evaluation of this panel. Mr Forsyth put to the committee what I thought was an astonishing proposition—that he had not read the RAAF report that highlighted the major deficiencies in this equipment— and in fact has not read it to this day—because he wanted to have a hands-off approach and did not want to be biased in any way. You were there when the evidence was being given. Apparently he thought that he was incapable of actually reading a report that may have equipped him to analyse the final report he got more effectively than he clearly did.

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Because of the utter reliance that was placed on this evaluation panel job, the chairman, at least, relied on their professionalism to produce a piece of equipment which Airservices Australia obviously expected to work on day 1 after they bought it, and that clearly has not happened. I just wanted to alert you to the fact, obviously, that I will be interested in pursuing whether Airservices Australia got value for money from its panel and what responsibilities—even residual responsibilities—they may still have to Airservices Australia for their obvious failure to adequately test the equipment. Mr Pollard—I note your concern, and, as I said, I think it is something we will evaluate, in addition to potential action even against the manufacturer, depending on the outcome of the system. Senator BOB COLLINS—And, as I say, leaving all that aside, with the primary concern— and I have got no question that you will have this as your priority—of actually getting this stuff to work at the end of the day. I have received information which might be wrong or right about misuse of funds that I am obliged to ask you about. I have no idea whether these concerns that have been raised with me have already been investigated or what the outcomes of any investigations might have been; I just put them to you fairly and you can comment on them. What I have been told is that a senior manager at assistant general manager level, on temporary transfer to Canberra from Perth, commuted weekly to Perth for approximately one year. Is that correct? Mr Pollard—I think without more specifics we are probably unable to answer that. The only person that I am aware of— Senator BOB COLLINS—So this is not something which in fact is in the front of your mind at the moment—or that of Mr Evans. Mr Pollard—Nothing has surfaced to me as a problem. We did have one individual from Western Australia working on a joint review of civil and military air space, but the circumstances you describe do not fit that assignment. Mr Evans—That is what I was going to say. Somebody for a large part of last year was involved, but it was travel around the country as well as in Canberra; there was no temporary transfer. Senator BOB COLLINS—Perhaps I can just give you everything I have been told, and you might be able to identify the individual involved more clearly. I feel like somebody on one of those quiz shows on television, but you don’t get a prize if you get the name right at the end of it! What I have been told is this: a senior manager at assistant general manager level on temporary transfer to Canberra from Perth commuted weekly to Perth for approximately one year. I am told the person was then promoted to that position and then commuted to Melbourne each weekend from Canberra. Does that make it any clearer? Mr Evans—No. Senator BOB COLLINS—Would you mind taking that on notice and letting the committee know whether or not that is correct. If so, I would like to know, obviously, how long the arrangement lasted—that is, the alleged Canberra-Perth weekly commuting, what the total cost was of having that person act in the Canberra position, and, of course, information about the promotion and the commuting to Melbourne each weekend.

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I also have questions about air traffic control redundancies. Since 1991, there has been an Australian Taxation Office approved early retirement scheme that was designed to facilitate staff reductions through voluntary redundancies. I am told that one of the conditions of that scheme was that there was a veto in place to prevent the departure of staff that were required to carry out core functions at an appropriate standard. What I would like to know is—given that one of the core functions of Airservices Australia is air traffic control—how many air traffic controllers took one of these packages. Mr Evans—I cannot give you the number—I will take that on notice—but I will just give one point of explanation. In the last five years, since that process was put in place, we have done substantial consolidation, and one of the conditions in the redundancy process was that the option of redundancy was there if your job transferred from one place to another. For example, some Perth functions transferred to Melbourne, some Adelaide functions to Melbourne, and some from Sydney to Brisbane and Melbourne. There have been redundancies as a consequence of that. The offer of redundancy inside Airservices Australia or the CAA at the time was a general offer, not specific, and if there was an identified surplus and the person could be released then some were released, I think out of Melbourne and Brisbane. But it was very limited numbers. Senator BOB COLLINS—I will just give you these questions on notice. I will read them into the record rather than handing them up. I would just like to know the number of air traffic controllers that took these packages, the circumstances that surrounded them—that is, did the job function itself cease to exist, was the position moved or did people just basically put up their hand for the package? I would like to know how the controllers were replaced—whether it was by way of a transfer into the new location or employment of a trainee. I would also like some details of those air traffic controllers who took the package—not by name, of course. I would like to know how old they were, what their experience level was at that point as air traffic controllers, what their job function was at the time the package was taken, and any special circumstances that were attached to those packages—in other words, were they ill at the time from stress or whatever. You can also take my next question on notice because of the time. Could you also provide the committee with advice on the extent to which Airservices Australia was offering air traffic controllers packages but at the same time recruiting and training new air traffic controllers. It is obvious why I want to know that. And there is one question you could perhaps address now. So far as Airservices Australia is concerned, do you currently have, in your view, enough experienced air traffic controllers in the system in respect of your training requirements. Mr Evans—Yes. We have got a transition program to TAAATS which is our critical training function this year, which will be delivered on time. All our estimates are there for that. Senator BOB COLLINS—Thanks. I have another question on notice in respect of that string of questions before. Could you also tell me whether or not any of the air traffic controllers who have taken packages have been re-hired since by Airservices Australia in any capacity. Mr Evans—Yes. Senator BOB COLLINS—Re-hired on contracts and so on. I would also like to know if any other areas of your operations have had similar processes—that is, if employees of

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Airservices Australia other than air traffic controllers have taken redundancy packages and then subsequently been re-employed by the organisation. I am not sure if you know this, but I was told today that Mr Gruzman demonstrated his PADS equipment at the Avalon air show despite a CASA directive that had been issued the previous day. Is that correct? Mr Pollard—I do not think that is the case. I know he did demonstrate his equipment the first two or three days of the air show, but my understanding was that after that he did not demonstrate it any further. Senator BOB COLLINS—Would you mind just clarifying that. Mr Evans—He did one demonstration the day before the AD became effective, and there were no other demonstrations. Senator BOB COLLINS—Thank you. If you can be that definite, fine. I want to ask about the Red Baron. In regard to the inquest into the death of Mark Whelan, is it a fact that Airservices Australia selectively sent documents to the Tasmanian coroner, despite a request for all documents, including reports, to be forwarded? Mr Grant—No, that is not correct. There was no selective sending of documents to the coroner. A series of documents over a period of time were sent to the coroner. So our package of documents were not sent all at one time. We discussed with the coroner’s office the documents that they wished to receive, and everything they asked for we sent them. Senator BOB COLLINS—My next question is one that I have pursued on an earlier occasion: were the original agreed minutes from the joint Airservices-AMSA meeting that was held on 21 December 1995 which discussed AMSA’s poor handling of this incident also sent to the Tasmanian coroner; that is, the original minutes? Mr Grant—I know that the coroner did have access to all versions of those minutes. I am not sure whether the coroner received them from us first. We certainly offered to provide those, and my recollection is that the coroner’s office said they already had them at the time we made that offer. Senator BOB COLLINS—Could you also just for the record clarify whether that was the case. I am happy for you to take that on notice. Mr Grant—Yes. Senator BOB COLLINS—Were a set of minutes which had not been agreed to by all those present at the 21 December meeting and which were, I am advised, only agreed to by two out of the four people present at the meeting despite protests, I am told, from the secretary of that meeting—were they sent to the coroner? Mr Grant—I think that is correct, yes. Senator BOB COLLINS—Can you confirm the accuracy of what I have just said. To your knowledge, is it a fact that two out of the four people that were present at that 21 December meeting did not agree to the changes and that in fact the secretary of that meeting protested? Mr Grant—I can confirm that the secretary of that meeting or rather the minute taker— Senator BOB COLLINS—The minute taker— Mr Grant—did have a different opinion. Senator BOB COLLINS—Thank you. Were any documents that pertained to the Red Baron incident withheld from the coroner?

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Mr Grant—Well, that is a very general question. Senator BOB COLLINS—It is indeed. Mr Grant—In terms of relevant documents, I think the answer is there were no relevant documents withheld. We went to a great deal of trouble to discuss with the office of the coroner exactly what documentation they required. Senator BOB COLLINS—That was not the question, Mr Grant, as you know, because relevance can be a very subjective thing indeed. Mr Grant—I am not trying to— Senator BOB COLLINS—I know you are not. Let me repeat the question because I chose the words carefully: were any documents that related—I said pertained—to the Red Baron incident withheld from the coroner by Airservices Australia? Mr Grant—To my knowledge, I do not believe any documents that related to the inquiry were withheld. Senator BOB COLLINS—Thank you. So as far as you are concerned, all documents that properly should have gone to the Tasmanian coroner went. Mr Grant—I ensured that legal counsel assessed that question and determined what documents should go. Senator BOB COLLINS—Again, that was not the question, Mr Grant. I have no doubt that legal counsel did make a determination about what should go and what should not go. Can you give the committee an assurance—you have just said and I might add because I am asking you to repeat the assurance—that, as far as you are aware, all documents that related to the Red Baron incident did go? Can you confirm that, as far as Airservices is concerned, all documents held by Airservices Australia that related to the Red Baron incident went to the coroner? Mr Grant—I have already answered that question. Yes, I can confirm that. Senator BOB COLLINS—I would not have pursued it, Mr Grant, except you then said that legal counsel had assessed which should have gone— Mr Grant—What I was trying to give you a feel for was the extent to which we checked out the process that should be followed in providing documentation. Senator BOB COLLINS—Did the minister or any of his staff at any stage request a briefing from Airservices Australia in regard to the Red Baron incident? Mr Grant—I cannot remember whether the minister requested it—there was a briefing provided. I believe it was initiated by us but I would like to take that on notice. Senator BOB COLLINS—Thank you. So far as Airservices Australia is concerned in terms of the extent of your knowledge following that briefing, what action did the minister or indeed his advisers take in relation to this matter? Mr Grant—I do not recall any specific action taken. Senator BOB COLLINS—Is it a fact that the original of the search and rescue log completed by Airservices Australia’s Melbourne Rescue Coordination Centre contained a number of what were described to me as incredulous references to AMSA’s stance that the EPIRB alert was in fact a false alarm? Mr Grant—I do not personally have knowledge of that. Senator BOB COLLINS—Can you take that on notice?

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Mr Grant—We will take it on notice. Mr Evans—The log was provided to the coroner. Senator BOB COLLINS—Can you ask the minister—if he is not prepared to attend these hearings—to at least not distract from them or, alternatively, just shut the door on him. Is it possible for the committee to obtain a copy of the original Melbourne RCC log; is that available? Mr Evans—Yes, it would be available. Senator BOB COLLINS—Can you provide it to us? Mr Evans—We will provide that. Senator BOB COLLINS—Apart from these contested minutes of 21 December which we have canvassed before, were any other documents altered before they were sent to the coroner? Mr Evans—I am certainly not aware of any being altered. Senator BOB COLLINS—Is it a fact that it is Airservices Australia’s policy to treat all beacon alerts where the signal has been heard by an aircraft as genuine? Mr Evans—That is correct. Senator BOB COLLINS—Given that it is only about two hours flying time from Melbourne, why was an all-weather, direct finding, winch equipped helicopter not despatched to locate the source of this signal? Mr Evans—It may be appropriate to provide you with a copy of the coroner’s findings on this. It summarised it all in some detail. I cannot talk about the detail now. I would prefer to take it on notice. Senator BOB COLLINS—If you are in a position to do that, that would be helpful? Mr Evans—It is a public document. Senator BOB COLLINS—If you have got it, that will save me chasing the coroner’s office. If you would not mind just providing the committee with a copy of that, I would be grateful. Mr Evans—Certainly. Senator BOB COLLINS—Is the question of whether any of the helicopters so equipped were actually available in Victoria on that night covered in that report? Mr Evans—To the best of my recollection, yes, it is addressed, because the issue of helicopters available in Tasmania was also addressed. The coroner covered it at some length. Senator BOB COLLINS—Are there any infra-red equipped helicopters, do you know, available in Victoria for infra-red detection? Mr Evans—The police helicopter was, but I will have to take it on notice. Senator BOB COLLINS—Is the question of whether the RCC actually sought the availability of an infra-red equipped helicopter also canvassed in that coroner’s report? Mr Evans—I would have to check that, I am not sure. Senator BOB COLLINS—If you would not mind checking whether that is addressed and, if it is not, could you provide the committee with advice as to whether there was any attempt by the RCC to seek the availability of infra-red equipped choppers? Mr Evans—Certainly.

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Senator BOB COLLINS—I am advised that Airservices Australia commissioned an inquiry into the handling of this incident by both the ATC and the RCC staff; is that correct? Mr Evans—My recollection tells me that I did ask for something to be done, but I would have to check that. If there is a report, I will be happy to provide it. Senator BOB COLLINS—If there is a report, could you give it to the committee? Mr Evans—Certainly. Senator BOB COLLINS—Is it correct that Airservices Australia SAR management has made a decision not to supply drop training to crews from the Townsville RFDS, which now operates the former Queensland Emergency Services Super King Air BE 200 aircraft? What I am told is that this aircraft is in fact effectively the best aircraft for this purpose in northern Australia. Mr Evans—Senator, as you would aware, because of the PADS process that we have gone through over recent months there have been some difficulties in which training process we were going to carry through with. I cannot recall the exact detail. But what we have done is ensure that there is a CSU available at every point around the coast, if we can manage it, and that they are current on the current equipment. It may be that one of the organisations is not up to scratch on it at the moment. I will get an answer for you. Senator BOB COLLINS—If you would not mind. While you are doing that, if that was correct, if you could just tell us what the reason was for that decision and if you could advise the committee who actually does take the decision; that is, is it formally a decision for the minister, for Airservices Australia or for whom? Mr Evans—It would be a decision for Airservices. Senator BOB COLLINS—I would have thought so, but if you could just confirm that. Mr Evans—Yes. Senator BOB COLLINS—Can you tell me whether the Indonesian search and rescue region abuts the Brisbane search and rescue region Mr Evans—It definitely abuts the Australian search and rescue region. Senator BOB COLLINS—The reason I ask is: is it correct that there is an annual exercise that involves both countries? Mr Evans—That is correct. Senator BOB COLLINS—Can you tell me whether people from the Brisbane RCC or the Melbourne RCC attended the last combined exercise? Mr Evans—I would have to check, but my recollection is that the Brisbane people attended the last one. There was some discussion this time as to whether Melbourne or Brisbane would attend the one that is coming up. It is either on about now or early next month, I would think, but I would have to check dates. Senator BOB COLLINS—Would you mind taking that on notice? Mr Evans—I can take it on notice. Senator BOB COLLINS—But your recollection is that it was Brisbane rather than Melbourne that attended the last one. Mr Evans—Yes, it was Brisbane last year and there is one due about now. I am not sure who the representation is for that.

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Senator BOB COLLINS—That is it with four minutes to spare. CHAIR—So you are finished with subprograms 1.6 and 1.7? Senator BOB COLLINS—I have indeed. CHAIR—We will move an adjournment of the Department of Transport and Regional Development to next Tuesday night at 8 p.m. in this room. Can I thank the minister and the officers at the table for their assistance this afternoon. Sitting suspended from 3.27 to 3.45 p.m. CHAIR—On 6 February 1997, the Senate referred to the committee the particulars of proposed additional expenditure in relation to parliamentary departments in respect of the year ending 30 June 1997. The committee will consider the proposed additional expenditure at hearings today and on Tuesday’s evening will reconvene to consider any programs that remain outstanding. Committee members and participating members have been provided with portfolio budget statements for each of the portfolio areas to be considered. I propose to call on the estimates by subprogram as they appear in the hearing schedule as determined by the committee, which has been circulated. The committee is required to report to the Senate on the considerations of these additional estimates by 6 March 1997. Answers to questions on notice arising from these hearings should be received by the committee no later than Wednesday, 26 March 1997. The committee has authorised the recording and broadcasting of its proceedings in accordance with rules contained in the order of the Senate of 23 August 1990. [3.45 p.m.]

DEPARTMENT OF PRIMARY INDUSTRIES AND ENERGY Proposed expenditure, $16,755,000 (Document A). Proposed expenditure, $14,710,000 (Document B). In Attendance Senator Parer, Minister for Resources and Energy Department of Primary Industries and Energy— Agriculture and Forests Group Mr Geoff Gorrie, Executive Director Crops Division Mr Bruce Lilburn, Assistant Secretary Mr David Mortimer, Assistant Secretary Mr Ian Coleman, Director AgVet Chemicals Mr Ray Jeffery, Assistant Secretary Land Resources Division Mr Mike Lee, Acting First Assistant Secretary Mr Peter Thomas, Assistant Secretary Mr Ross Walker, Assistant Secretary Mr Charles Willcocks, Acting Assistant Secretary

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Livestock and Pastoral Division Mr Steve Hoare, Assistant Secretary Mr Barry Schick, Assistant Secretary Australian Bureau of Agricultural and Resource Economics Dr Brian Fisher, Executive Director Mr Vivek Tuple, Senior Research Economist Australian Plague Locust Commission Dr Graeme Hamilton, Deputy Director National Registration Authority Mr Greg Hooper, Acting Chief Executive Australian Quarantine and Inspection Service Mr Paul Hickey, Executive Director Mr Digby Gascoine, Director Mr Bob Biddle, Director Mr Brian Macdonald, Director Mr Denis Paterson, Director Mr Tim Carlton, Manager Mr Bill Roberts Dr Bill Hetherington Mr Peter Buckland Mr David Wilson Bureau of Resource Sciences Dr Peter O’Brien, Executive Director Prof. Snow Barlow Dr Roger Bradbury Headquarters Group Mr Ken Matthews, Executive Director Parliamentary, Planning and Projects Division Ms Venessa Tripp, First Assistant Secretary Ms Paulette Quang, Assistant Secretary Corporate Affairs Division Mr George Zuber, First Assistant Secretary Mr Martin Dolan, Assistant Secretary HQ Group Support Mr Bob Gillingham, Group Administrator Rural Division Mr Bernard Wonder, First Assistant Secretary Mr Bob Calder, Assistant Secretary

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Mr Onko Kingma, Assistant Secretary Mr Jeff Harris, Assistant Secretary Resources and Energy Group Coal and Minerals Division Mr Robert Rawson, Acting First Assistant Secretary Electricity and Gas Reform Division Mr Mike Todd, Assistant Secretary Mr Bill Handke, Assistant Secretary Mr Don Williams, Manager Energy Division Mr Philip Harrington, Assistant Secretary Australian Fisheries Management Authority Mr Richard Stevens, Managing Director Petroleum and Fisheries Division Dr Alison Turner, First Assistant Secretary Ms Mary Harwood, Assistant Secretary Mr Rick Pickering, Assistant Secretary Department of Finance— Mr Mark McGovern Mr Khadija Haq Mr Dave Hammond Mr Phil Hutchinson CHAIR—The next portfolio to be considered is primary industries and energy. I welcome the minister and officers of the department and associated authorities. In terms of questioning, I point out that if there are a number of senators at the table I will apply what has been loosely known as the 15-minute rule. Minister, do you wish to make an opening statement? Senator Parer—No, Mr Chairman. [3.48 p.m.] Program 1—Industries development Subprogram 1.1—Livestock and pastoral Senator BOB COLLINS—Can you advise me why there is additional funding required from industry for BTEC? Mr Hoare—The extra money is in fact revenue which is being recovered from industry. The convention is that government operations are part of the 50 per cent industry cost recovery as well as field operations. This year we have taken on the request to provide the leadership in the arrangements which might apply after 1997 so far as assurance once we achieve provisional freedom is concerned. The industry has asked us to take on the leadership which has cost us some money so they are paying half that cost.

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Senator BOB COLLINS—That clarifies that, thank you. Can you provide the committee with advice as to what involvement, if any, the Commonwealth currently has with respect to the anthrax problem? Mr Gorrie—Perhaps I will lead out and Mr Hoare might add to some of the information. Essentially the activity is being managed and supervised by Victoria. Our involvement is more on the international trade side, but we have been keeping a very close watch on what is happening. The statistics that have come out in the last few days are somewhat more reassuring than they have been previously, but in very general terms 82 properties have been affected, 370 farms are subject to quarantine, so they are in the quarantine area, and about 54,000 animals have been vaccinated. We have since had some further supplies of vaccine imported so that the prospect of having a shortage of vaccine has now been alleviated. Mr Hoare may like to add to that. Mr Hoare—Basically, the approach now is one of putting up a trade buffer zone around the infected properties. We have four properties covered by quarantine movements for every one that is infected. That program is now stabilising in Victoria but it will probably take at least two weeks for the program to be a complete success. That is how long it takes for the vaccine to take full hold, for full immunity to be gained. Senator BOB COLLINS—Who bears the cost of the vaccination? Mr Hoare—The Victorian government is paying for the vaccine, the delivery of the vaccine and for all the on-farm costs which involve disinfection as well as destruction of dead animals. On the trade front, a number of Asian markets are fairly sensitive to anthrax. Anthrax is an endemic disease which is known to cause human deaths in a number of these overseas countries. So we have been very intensively lobbying through our overseas posts. Senator BOB COLLINS—I know AQIS are here and can probably address this more effectively later, but in question time today Senator Woodley raised a list of alleged failures of AQIS, most of which I disagreed with. One of them was anthrax. One of the features of this particular virus, as I understand, is its extraordinary strength and capacity to hang around for ever. Perhaps you could advise the committee of the latest state of advice on this but, as I understand it, there is not any firm view about what has caused it and perhaps never will be. One of the possibilities that I have seen is that, in fact, the outbreak could have been caused by organisms that have been around for generations. Mr Hoare—Anthrax is caused by a bacterium, not by a virus. It lies dormant in the soil and has been recorded as lying dormant for up to 80 years and then shooting out spores and causing disease. It is an endemic problem. It has not been imported with any product. There is a region of northern Victoria and parts of New South Wales that tend to be more prevalent to outbreaks. They tend to follow century old stock routes where the problem was very serious 100 years ago. Senator BOB COLLINS—But the essential feature of it is that it is endemic and, therefore, cannot be characterised in any sense as a breakdown of quarantine. Mr Hoare—That is quite correct. Mr Gorrie—I think AQIS needs to be applauded because of the extremely effective processes they used to get the vaccine into Australia when we were looking as though we might be short. CHAIR—Do you have a record of the advent of anthrax in Australia—I am not asking you to write a history on it—when and where it has occurred?

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Mr Hoare—We can give you a book on the history of anthrax in Australia but, in essence, it was first recorded over 100 years ago in colonial times. Senator BOB COLLINS—I will have the book, thanks, if that is on offer. CHAIR—We will have the book, but if you do have a one- or two-page summary of the dates— Mr Hoare—Historically, 100 years ago it was quite a serious disease which broke out. The bacteria tended to deposit along old stock routes when cattle used to be moved to markets through the long paddock. It is not much more sporadic now than it was, but it does occur every few years. Mr Hickey—I understand the first detection of anthrax in Australia was in the 1870s and there have been sporadic outbreaks, even in the past five years, in Queensland, Western Australia, New South Wales and Victoria. So it certainly is endemic around the country. Senator BOB COLLINS—Thank you, Mr Hickey. I think the committee would find it useful if you could canvass for us the actions that AQIS took in order to get the vaccine into Australia. Mr Hickey—When the concerns about access to a sufficient quantity of the vaccine began to arise, AQIS—through our veterinary council networks in Europe and North America—made contact with potential suppliers of vaccine to establish whether we could safely import large quantities of it. The concern was not so much with the importation of the anthrax bacterium itself but with the medium in which it is held. There was a very intensive process of assessment of the various media that are used by the various producing companies in the lead up to the decision being made. That decision, of course, was not one that just AQIS takes alone; it was done in cooperation with all the state chief veterinary officers. It was, in fact, an effort between all of the Commonwealth and state interests. Senator BOB COLLINS—But the bottom line of all of this is that there is no longer any real concern about the availability of the vaccine. Mr Hickey—That is correct. Senator BOB COLLINS—The last question I had on this is: has the matter of compensation been addressed at this point? Mr Hoare—There really is no liability, Senator. Animals get infected and they die because they are infected. They do not become infected because of any failure to act by governments. Senator BOB COLLINS—So, effectively, this is a disaster in real terms that will simply have to be borne by the property owners affected? Mr Hoare—Yes, the loss due to the animals dying is a loss that they will carry. All the other control actions, the vaccination and the disinfection of the property, are being carried by the government. Senator BOB COLLINS—Thank you. I have a question on the calicivirus. Did the department request a brief from the Attorney-General’s Department assessing liability and possible settlement options for compensation claims from the rabbit industry following the official release of calicivirus? Mr Hoare—Yes, the government has had claims put on it. A response has been coordinated through the Attorney-General’s Department. But at this stage the government has not made a policy decision on the matter.

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Senator BOB COLLINS—Was that a departmental initiative or was it on request of the minister that that advice be sought? You could take that question on notice, if you do not mind. Senator Parer—Senator, we had estimates the other day, and this matter was raised by CSIRO. Senator BOB COLLINS—I am sorry, Minister, I did not realise that. Senator Parer—I understand that CSIRO sought advice because they were the ones who let it escape. Senator BOB COLLINS—That is right; it was not us. Sorry, it was not. I know it was CSIRO. Thank you, Minister, I was not aware that the matter had been raised. I will have a look at the Hansard. Could you tell me how many claims for compensation have been lodged to this point in time? Mr Hoare—I am sorry, I do not have the number. Senator BOB COLLINS—Would you take it on notice? Mr Hoare—Yes. Senator BOB COLLINS—How are these claims now going to be progressed? Mr Hoare—The complaint is against the environment and science portfolio. Attorney- General’s are coordinating the submission with them. We are cooperating on the basis of expertise that we can provide to that. As I understand it, it would be subject to the normal ex gratia process in a general term. That would be the process under which this would be considered. Senator BOB COLLINS—My understanding was that if proper process was followed under the provisions of the Biological Control Act then that in fact was legal protection from the consequences of the authorised release of this agent. Is that the understanding of the department? Mr Hoare—Yes. The claims we are looking at cover that period when the virus escaped from Wardang Island up to the stage where the decision was made under the legislation. There is no compensation being considered post the official release authorisation. Senator BOB COLLINS—That clarifies it for me, thank you. Are the claims made against the Commonwealth or the state? Mr Hoare—No, effectively they are made against CSIRO. The Wardang Island trial was conducted under the control of CSIRO. Senator BOB COLLINS—Has any estimate—not in respect of legal action—been made of the commercial value of the rabbits affected? Mr Hoare—Yes, we have estimates for what the rabbit harvesting industry was producing. We know the value of meat from field rabbits and we also now have a feel for field rabbits which have been used for felt hats. Senator BOB COLLINS—You may take this next question on notice. I know that this information has been provided before, so I just want an update on it if it needs to be updated. Could you advise the committee of the current value of annual production of skins, the level of employment and whether there are any potential exports from the industry? I do not expect you to know that now.

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I heard an interview with one of the principals of Akubra in which he said that the matter was something that his company was well planned and well prepared for and that they were going to be quite adequately importing their skins from overseas. This might be a matter for AQIS, but is there any quarantine problem attached to the importation of rabbit skins? Mr Hoare—There would be some, but I would not know the detail. Senator BOB COLLINS—I am happy to pursue this when AQIS comes to the table later, but I foreshadow that I would like that question answered. From the interview I heard, obviously there is going to be a significant escalation, hopefully, and I would be really pleased if it was 100 per cent of the skins that have to be imported. I would have to say that the depressing part about that interview with the principal of Akubra was that, at the end of it, he said he did not think it would be a longstanding problem for the company because his money was on the rabbit. I hope he is wrong about that. In the press statement issued by the minister—I think it was on Tuesday week—he referred to the establishment of a monitoring and surveillance program, obviously an extremely important exercise, to assist the effectiveness of the virus. I dare say that it is an exercise in which there would be a fair bit of international interest as well as domestic interest. Can you provide the committee with the details of how that is going to be done? Is it a joint Commonwealth-state initiative? How much is it going to cost, and so on? Mr Hoare—We could certainly provide those details. We do not have them in great detail with us. Senator BOB COLLINS—Would you mind just taking that on notice. If you could just give the committee a brief— Mr Hoare—Yes. BRS actually looks after that on-ground activity. Senator BOB COLLINS—Fine. If we can dispose of that now, that is good. Dr O’Brien—It is a joint state-Commonwealth program. It is a national program. There are 10 intensively monitored sites which actually involve detailed counts of rabbits and an examination of their impact: the impact of the disease on rabbits, on vegetation, on competitors of rabbits and predators—there are some 50 broadscale monitoring sites across the country where the studies are less detailed—to give a broad picture of what the disease is doing and to inform us about how best to use it in the future. Senator BOB COLLINS—Is it a combined state-Commonwealth initiative? Dr O’Brien—It is. Senator BOB COLLINS—Do you know how it is going to be resourced? Dr O’Brien—The Commonwealth’s contribution to the program is in the order of $1.8 million this financial year. Senator BOB COLLINS—Is that being made available by way of additional supplementa- tion? Dr O’Brien—Yes. Senator BOB COLLINS—Wow! Has there been any level of international interest in the monitoring? Dr O’Brien—There has been limited international interest. Most interest is from New Zealand, who are also interested in evaluating RCD as a biological control. There is also—

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Senator BOB COLLINS—What is the current position with New Zealand? The last time I looked at this, they were still looking at whether it affected kiwis, weren’t they? Dr O’Brien—That work was done and the answer was in the negative. They are going through a process of assessment under their legislation at the moment, which involves consideration of public submissions with their decision anticipated later this year. CHAIR—I was in New Zealand two weeks ago and they are very keen to get it into the South Island, let me tell you. Senator BOB COLLINS—Thank you, Mr Chairman. That is all I have on that. The attachment to that press release indicates, at least to a layperson like me, that the strike rate of the virus seems to be quite low; that is, there were 350 release sites and only 90 of them had obvious virus activity. Is it a low strike rate or is that what you expected to get? Dr O’Brien—That is a very coarse measure of the impact of the disease on rabbits because it was about current activity. We expect that in some cases the virus is still causing mortality in the populations, although it is not grossly apparent. But it is true that, in some areas, in higher rainfall areas, tablelands and coastal environments, the disease does not have the impact it is having in the arid, where mortality in excess of 90 per cent is the rule rather than the exception. Senator BOB COLLINS—I assume that it is far too earlier, yet, in respect of the release, to be able to draw any conclusions about what its likely effectiveness will be? Dr O’Brien—I think it is too early, Senator. Senator BOB COLLINS—Thank you, very much. CHAIR—You talked about arid verses wet. Has there been any assessment as to why it will go out and clean out one valley, miss the next one and be quite prevalent in another? That is quite common, for example, across the south coast of Western Australia. Dr O’Brien—There are hypotheses at this stage, but no explanations. The hypotheses include the irregular distribution of the vectors that are spreading the virus from warren to warren or valley to valley. The other possibility is that in some areas the disease has already passed through and there are a significant proportion of animals that have antibodies that are now immune to the disease. It is too early yet for us to really have an understanding of what is going on in those situations. CHAIR—That is certainly not the case over there, because it has not been released over there. Senator BOB COLLINS—One of the things that was being continually emphasised in respect of the calicivirus was the absolute need not to simply lay back in the straps with other control methods and to do ripping and all the rest of it, considering the practical problem of course that most of these control methods are not inexpensive. Has there been any assessment made by state departments as to how effectively people are in fact backing up the virus with traditional methods of control? Dr O’Brien—I am not aware of any assessment. Senator BOB COLLINS—I actually consider this to be a reasonably important issue. Would you mind just taking that on notice and finding out whether the state departments do in fact have any view at the moment as to whether the level of associated rabbit control activity is, as far as they are concerned, satisfactory. I just thought that, with the virus out and about, there might be a tendency—an understandable one—for people to say, ‘Well, if I’ve

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 51 got to make a decision about whether to spend $10,000 or $20,000 ripping warrens this year, I won’t.’ If you can just get a view on that, I would appreciate that. Dr O’Brien—Sure. Senator BOB COLLINS—Thank you. CHAIR—Anymore questions on 1.1? Senator BOB COLLINS—I have some questions on the meat industry. As far as I know, it is in 1.1. In a media release dated 24 June 1996, the minister committed himself to: * assess the implications for the meat industry of the Government’s industrial relations reform legislation; * consider the scope for wider industry adjustment measures with due regard to essential internal budget disciplines; and * join with industry in improving overseas market access through flexible approaches that address the practicalities on a market by market approach, particularly in the growing Asia-Pacific region. Could you advice the committee of the action that is currently being taken on each one—I am happy to repeat them one by one if you want me to—of these commitments by the minister. What actions have been taken so far? What outcomes have arisen from those actions? And what plans does the government have to pursue further outcomes? Perhaps we could just take the first one first: assess the implications for the meat industry of the government’s new industrial relations reform legislation. Mr Schick—In answer to your question, Senator, Mr Anderson has had a number of discussions with Mr Reith on the workplace relations bill as it was first drafted and subsequently as it was passed by the Senate. Those two ministers have also had a number of discussions with representatives of the meat industry, including individual processors as well as the National Meat Association and the Country Meatworks Association. The Department of Industrial Relations is carrying forward this process and there will be a survey of a number of aspects of the bill in relation to its impact on the meat industry. That work is just commencing and it is anticipated that, within about three months, DIR will be in a position to make some firmer statements as to where it will proceed. Senator BOB COLLINS—Thank you. The second point is to consider the scope for wider industry adjustment measures with due regard to essential budgetary restraints. My interpretation of that, I might add, was that that is what you would do. You would consider it and, in line with the essential budgetary restraints, you would not actually do anything about it; is that correct? Mr Schick—Senator, I think you are referring to the review of the rural adjustment scheme; is that correct? Senator BOB COLLINS—No. This is the press release from the minister with regard to the meat industry. It is dated 24 June 1996. If that is not something you are familiar with, I will not pressure you on it. Mr Schick—Can I take it on notice? I took up this job at the beginning of June last year, and I am afraid I— Senator BOB COLLINS—I see. Mr Schick—I can take it on notice, if you wish.

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Senator BOB COLLINS—Yes, if you would not mind. Sorry, I can appreciate that. The particular quote again, if I could direct your attention to it, is from the press release of 24 June, which states: * consider the scope for wider industry adjustment measures with due regard to essential budget disciplines. The interpretation I placed on that was that the government would give some consideration to resources for potential adjustment. As I say, I just assumed that the ‘due regard to essential budget disciplines’ meant that, with all good intentions, the government would not actually do anything. The last part of the release states: * join with industry in improving overseas market access through flexible approaches that address the practicalities on a market by market approach, particularly in the growing Asia-Pacific region. Mr Schick—Yes, Senator. We have been very actively working with industry on market access issues, particularly in those countries where there are barriers to access either through excessive tariffs, tariff quotas or other restrictions. This has led us to negotiations in a number of countries such as Taiwan, Korea and, to a far lesser extent, Japan. We are keeping constantly in touch with industry on these issues. Where barriers are identified, we work out joint approaches as to how these can be best addressed and how the barriers can be removed. In the case of livestock, as you are probably aware, there is a joint Australia-Philippines working party to address these issues as well. In the case of Indonesia, there is a similar working party. Those working parties have been meeting approximately every six months with, I believe, quite a deal of success. Mr Hickey—AQIS is constantly undertaking a series of negotiations with a range of countries for access for meat and animal products. There has been quite a heavy focus on Asia. We can give you information on recent access achievements in that regard. The other measure that is relevant is the minister’s announcement recently of more flexible arrangements for export of meat products out of Australia, with the main objective being into the Asian region of material from what are currently called domestic plants. There have been approaches from the domestic meat industry over the years to amend the Export Control Act to enable meat to be produced on the basis of state certification of the health and hygiene of that meat. The minister has agreed to amendment to the legislation to enable such exports to proceed. Senator BOB COLLINS—Mr Hickey, in respect of that issue, could you provide the committee with some advice, not necessarily in great detail, as to what is the current state of health from an inspection perspective of abattoirs? The reason I ask the question is that we got a bit of a bath some time ago from the US of great concern and some fairly critical comments, as you are aware, of major defects in processing plants. Has there been a tangible improvement in that sense? Mr Hickey—Yes, there has. Following that review in late 1995, which was critical of the procedures, we agreed with the industry to what is now referred to as a scheme for corrective action, a process which pays attention to meat processing companies who, on the basis of a range of indicators, are not performing as well as they should be. That, in turn, clearly means that our inspection system is also not performing as well as it should be. There is a much intensified process of cost review by senior technical veterinary staff to lift the performance of those plants.

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It is quite clear to us that the impact of that concerted effort over the period has brought quite a significant and continuing reduction in the rate of rejection of Australian product at port of entry inspection into the United States. Senator BOB COLLINS—Is that still trending down? Mr Hickey—Yes, it is. Senator BOB COLLINS—Great. Mr Hickey—From memory it was about 0.5 per cent through 1995 and about half of that through 1996. For the first month of 1997, it had dropped to 0.07 per cent, still on the basis of some quite significant export volumes. There have been two more reviews since then. One reflected what we would have hoped—some improvement in the system. The last review, which concluded in December last year, had, of the 30 plants that were inspected, two to be re-reviewed and none delisted. I think that was an indication of a substantial improvement in standards across the industry. Senator BOB COLLINS—So it is fair to say that the corrective action that AQIS put in place, in co-operation with industry at that time, has actually paid off. Mr Hickey—Yes. Senator BOB COLLINS—That same media release that I just referred to and quoted from also contained this statement: To assist with this bilateral market access approach, the Meat Industry Council will co-ordinate industry linkages with government in a joint effort to achieve the best results. Could you actually explain what that means? Mr Schick—There was a feeling that there was a need for closer co-operation between government and the industry in planning attacks on market barriers and to improve market access. What has happened is that there is a joint working group from the department, which works with industry representatives. That meets at approximately three monthly intervals or when particular issues arise to assess what action can be taken. It is, to a degree, an ad hoc committee. But, so far, it has been able to address a number of issues that have been seen by industry as problems. Sometimes they were proved not to be problems but were, nevertheless, seen as such, and we have been able to co-operate quite well. Senator BOB COLLINS—The Meat Industry Council developed a strategy plan called the meat industry strategic plan, which was one of the principle purposes for setting it up—that is, to get an inclusive coordinated approach to the industry for what its future might be. I assume there was a strategy put into place which was designed to implement that plan. Was there? Mr Schick—The MISP, as it is commonly known, has been widely adopted and supported by individual processes as well as private industry councils. The implementation is really up to the individual processes in councils themselves rather than in government. However, government has encouraged, at all opportunities, the adoption of the MISP and the following of the strategic directions set out in the MISP. There has also been quite a deal of joint work undertaken by government and industry under the auspices of the MIC in what it calls its referral groups. These have been dealing with matters such as hygiene, food safety, food quality, grading and so on. That work is continuing. Senator BOB COLLINS—Can you tell the committee what role the department has in the implementation of the strategic plan?

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Mr Schick—Fundamentally, its role is through the referral groups to which I just referred— participating in those to encourage industry to follow the strategies set down in the MISP. Senator BOB COLLINS—At the moment there seems to be a complete preoccupation with what I consider to be one of the less important parts of the plan—and that is the actual structure of the industry groups. I would actually be interested to know if there is an assessment of where everything else is up to in the plan. Does the department actually have a document, or can you prepare a document, that would actually tell the committee that state of the implementation of all of the other aspects of the plan? Mr Schick—I will take that on notice, Senator. Senator BOB COLLINS—Are you aware of when a final decision will be taken on these industry structures and what is going to happen to the AMLC? Mr Schick—All I can say on that is that the minister is in the process of taking final decisions, which he will take to cabinet for endorsement. He expects that that will happen very soon. Senator BOB COLLINS—I am gravely concerned that if this drags on for much longer in terms of some of the more loopy proposals I have heard around the place, that inclusivity which I think the council and the department successfully brought about is going to start falling apart around the edges. Minister, those comments are directed to you. I am concerned that the minister does finally resolve this issue. What is the current position with the chairmanship of the AMLC? Who is actually chairing it? Mr Schick—There is no chairman at the moment. As you realise, the former chairman’s appointment expired at the end of January. The minister has under consideration some recommendations as to future courses of action. As for individual meetings, the remaining members of the council elect an acting chairman to chair that particular meeting, which is provided for in the legislation. Senator BOB COLLINS—Who do those nominees have to be checked with—Senator Harradine, I assume, Senator Colston and various other people? Mr Schick—That is not a question I can answer in those terms. Senator BOB COLLINS—I would like to ask a few questions about live cattle exports. Allegations have been made—I am sure you are aware of them—that a licensed exporter of live cattle falsified records in relation to the export of cattle to the Philippines in February 1996. Are you aware of this matter? Mr Schick—I am aware of the allegation. Senator BOB COLLINS—I understand there has been correspondence between the Minister for Primary Industries and Energy and the Minister for Trade, Mr Fischer, and the AMLC in respect to these allegations. Is that correct? Mr Schick—There has been correspondence. Senator BOB COLLINS—In so far as you are able, can you outline to the committee the actual nature of the allegations that have been made? Mr Schick—There are allegations of falsification of export documentation and also falsification of import documentation in terms of the weight and sex of the animals being imported into the Philippines. The allegation went further—that this falsification of documentation was undertaken to avoid Filipino duties. It was fundamentally an issue for the Filipinos. The matter was investigated by the AMLC as well as by AQIS in relation to

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 55 documentation for export. No evidence was found to substantiate the allegations, albeit there was significant investigation. Senator BOB COLLINS—From what I understand—and it was confirmed—the allegations involved essentially an attempt to cheat the Philippine end of it. Do you know whether the Philippine authorities are satisfied with the outcome of the investigation? Mr Schick—A senator in the Philippines government undertook an investigation as well. We have seen no result of that investigation. The informal advice we have is that it was considered judicious to drop it at the Filipino end. Senator BOB COLLINS—I do not think I will take that any further. I would like to ask some questions about the buffalo industry. This is a longstanding issue. A number of concerns have been raised—I am sure you are familiar with them—by the Northern Territory Buffalo Industry Council directly with the minister concerning alleged discrepancies in buffalo levies. Is it correct that the minister has investigated a claim by the council that $224,033 in levies has not been accounted for by the AMLC? Mr Schick—The minister has received representations from the Buffalo Industry Council, which she has referred to the department, which we in turn took up with the AMLC. There were levies beyond those originally stated by the AMLC, which were passed to the AMLC for buffalo industry affairs. These related to the period 1982 to 1984. It was a period when the AMLC accounting system did not segregate the sources of particular levies. The AMLC has now acknowledged that those levies were received. I am sorry, but I cannot tell you how they worked that out, but they have acknowledged receipt of those levies. They still maintain, however, that the amount spent on the buffalo industry as a whole would have exceeded in their mind the levies received from the buffalo industry on the whole. Senator BOB COLLINS—The difficulty being that, so far as the Buffalo Industry Council is concerned, there is no persuasive case for actually demonstrating that that is true. I realise the assertion has been made, but it seems to be on the basis of simply accepting the AMLC’s declaration that that is so. Mr Schick—Mr Anderson has just recently written to the AMLC chairman asking— Senator BOB COLLINS—You just said there isn’t one. Mr Schick—Before there was not one. He asked the AMLC to reconsider this situation with a view to finding an acceptable solution with the BIC. Senator BOB COLLINS—Oh good. I am delighted to hear that the minister is of the same mind that I was and that there is some sympathy there. I know you understand the case. I have to say from a levy payer’s perspective that it is fairly easy to understand the concern of levy payers when they cannot actually have in front of them an accounting of the money. With respect to that, as I understand it, the minister advised the council earlier this month that the levies management unit had confirmed that it had received $736,033 in levies since 1982 and had passed this on to the AMLC, but AMLC receipts show that it had spent only $512,000 during that time. Mr Schick—That is correct. Senator BOB COLLINS—I understand that the minister advised the council at the same time that the AMLC had accounted for most of the discrepancy and firmly believes that it holds no unspent buffalo industry levies. Is that correct? Mr Schick—That is the AMLC’s position, yes.

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Senator BOB COLLINS—Are you aware of how the AMLC itself accounted to the minister for what on paper at least is a discrepancy? Mr Schick—As I mentioned, the AMLC’s accounts in the early years did not distinguish the actual industry source of the levies, the species source if you will. While it received sums, it was not able to say specifically in those two years I mentioned that these came from buffalo industry or these came from beef or chicken meat. Senator BOB COLLINS—Do you not agree therefore that because of that lack of clarification in respect of levies and how they were spent, it can equally be said on the other side that it is very difficult to understand how the AMLC can say with absolute certainty that the money was spent? Or I have missed something? Mr Schick—I do not think you have missed anything. Senator BOB COLLINS—I am sure you know what I am getting at. I want to know if the situation has improved since I was around. I understand the argument. We have done all kinds of things in a portfolio sense across the portfolio that the buffalo has benefited from in terms of our assistance to the industry—something which the industry was then profoundly unimpressed by. Apart from simply asserting that they have received the money, the AMLC were not actually able to specify the specific things that had been done. Is that situation still the same or have they actually given to the new minister a specific assessment of where they did spend that money? Mr Schick—There has been an assessment which gives specifics in relation to some of the money but not the totality of it. It is this very reason that Mr Anderson has asked the AMLC to reconsider their position. Senator BOB COLLINS—That clarifies it absolutely. That is the assumption I drew from that. It would be fair to say from that, that the minister at this point in time is not satisfied with the explanation that has been received from the AMLC? Mr Schick—The minister accepts that records do not enable a detailed accounting to be produced. That is a fact of life, but in the light of that he has asked— Senator BOB COLLINS—Bloody bureaucrats. Okay I give up. You win. CHAIR—I had better not say anything. Keep going Senator Collins. Senator BOB COLLINS—I will get off this now. If there is anything that occurs about this issue—I do not mean in respect to this committee—could you let me know. I have taken the opportunity to say it here as I have a particular interest as you can understand. There is a letter, obviously, from the minister. As you say, the matter is still ongoing. Mr Schick—I understand it will be considered at next week’s AMLC board meeting as well. Senator BOB COLLINS—Fine. We can pursue that then if it is going to be next week. CHAIR—If you do get information regarding this so as it can be cleared up, please forward it to the committee. Senator BOB COLLINS—If you would not mind, thank you. Mr Schick—Yes. Senator BOB COLLINS—I would like to move now to the wool industry if I may, Mr Chairman. Could you advise me where the Global Wool Ltd proposal currently is at? Mr Sutton—Senator, the Global Wool proposal is very much still a proposal. It is in the hands of the proponents—Wool International, Elders, Wesfarmers, Dalgety. There are certain

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 57 issues that need to be addressed at the commercial level. Those commercial level negotiations are still going. The involvement of Wool International is still uncertain. At this point we have before the government proposals which would not directly involve Wool International. But growers who currently hold equity or will shortly have equity in Wool International will have the opportunity of converting payments they will receive from Wool International into equity in a growers trust which might then invest in the joint venture. Senator BOB COLLINS—How exactly is Wool International going to fit in? On the assumption that this thing gets up—and it may not—how will Wool International fit into it? Mr Sutton—Administratively, Wool International has expertise and is setting the ground work, as it were, for the establishment of the growers trust and will facilitate the transfer of technology, the sale of technology, they hold in a range of areas. Forward marketing is certainly one area where Wool International has particular expertise that is not held widely in the private sector. That is the main involvement. If Wool International takes a direct interest in any way in Global Wool or proposes to, that will be subject to a decision by the minister, which will be referred to cabinet and subject to the tabling requirements that he has already undertaken to commit to. Senator WOODLEY—Is there going to be a transfer of growers equity in Wool International to Global Wool? Mr Sutton—No, there will not be a direct transfer. That was an initial proposal, but the arrangements now look as if they will be along the lines of payments by Wool International to growers and then growers will exercise their own discretion as to whether they take up interest in this investment trust. Senator BOB COLLINS—I would hope so. Mr Sutton—And then into the Global Wool joint venture. Senator WOODLEY—You said there would be no direct transfer. It would only be an option if wool growers exercise that option themselves? Mr Sutton—That is the case. Senator BOB COLLINS—I assume that the minister has approved in some way Wool International progressing the matter to this point, has he? Mr Sutton—No, the minister has not taken a decision yet. There is a sequence that needs to progress in terms of the allocation of equity and entitlements in Wool International. Senator BOB COLLINS—I understand that. I am sorry, I phrased my question badly. In terms of the current discussions that are going on between all of the parties as to whether this thing even gets off the ground, is Wool International doing this with ministerial approval or is that not required? Mr Sutton—The minister is being kept informed of the discussions. As I mentioned there are very difficult and complex commercial matters that need to be resolved. As and when a government decision is required, he will then take it, but at this point there is no endorsement of the proposal. Senator BOB COLLINS—Thank you. CHAIR—Would you be able to table for the committee a copy of the booklet that was sent to all levy payers?

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Mr Sutton—Yes. CHAIR—There was a book sent out about three weeks ago. I think that would be useful. Mr Sutton—There was an information booklet on Global Wool. I can leave that. There is also a chairman’s report, I think, which was probably in the time frame you referred to. CHAIR—As there are no more questions on subprogram 1.1, I thank the officers who have been involved. We now move to subprogram 1.2, crops. Subprogram 1.2—Crops Senator WOODLEY—I refer to the outbreak of sorghum ergot in crops in New South Wales near Narromine, which was signalled in the press yesterday. I presume these questions might be a bit premature, so they can be taken on notice, but is the department doing any investigation into the effect of that outbreak, how the spread of the damage can be prevented and the likely cost of the damage? Mr Roberts—Sorghum ergot was detected in Queensland in I think April last year on one particular property. Senator WOODLEY—Whereabouts? Mr Roberts—I would have to take that on notice, actually. Subsequent surveys showed that it was extremely widespread in Queensland and had presumably been there for some time. We are unable to say how long that would have been, but probably at least a couple of seasons before the detection. The belief at that time was that the disease would be found quite widespread in eastern Australia where sorghum was grown. At that time, New South Wales agriculture considered interstate quarantine controls but decided that they were unlikely to be effective, given that the disease is wind borne. The issue for New South Wales was that by the time it was detected in Queensland there were no suitable sorghum crops left in New South Wales to check properly for the disease. I have just been informed that the first detection was near Toowoomba in Queensland. Therefore, New South Wales agriculture took no interstate quarantine action. So the of the disease in New South Wales this season was entirely expected. Senator WOODLEY—Can you describe the nature of the disease for me? The press reports were not very specific. Mr Roberts—It is a fungal disease that affects the heads of the sorghum and produces a sort of sticky exudate. This is the easiest stage to pick the disease up. But that exudate is only produced in that form under fairly humid environmental conditions. The disease can potentially be there at a very low level and be quite difficult to detect. It really becomes very obvious, though, when it reaches this sticky, runny stage. Senator WOODLEY—It sounds to me as though the crop is then very hard to harvest? Or is it unharvestable altogether? Mr Roberts—I am not a sorghum expert, so I cannot answer that directly. It is believed that the diseases will not be a significant production problem, except in certain breeding lines. The normal hybrid sorghums that are grown, I understand, are quite resistant to the disease. It is only when you have pure breeding lines or experimental lines for various reasons that you get severe disease. Senator WOODLEY—Did you say it was spread by being wind borne? Mr Roberts—Yes. It has a spore stage that can be wind borne.

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Senator WOODLEY—And that is how it is being spread? Mr Roberts—That is the belief, yes. Senator WOODLEY—Is there any indication yet as to the origin of the outbreak in Queensland? Mr Roberts—No. The disease is very widespread in almost all sorghum producing areas around the world. Previous to this outbreak, we had already had a similar, related sorghum ergot disease. There is no good information on how it may have come in. There is a lot of speculation that it could have come in accidentally on someone’s clothing, that it could have come in in smuggled seed material, for example, or as incidental contamination on people’s goods, and so on. There is no clear information on that. Given the fact that when it was detected it was found to be very widespread, the original outbreak is not necessarily the primary source of the disease as well. It is quite possible that it was at a very low level somewhere else in Queensland and then had been spread to that area where environmental conditions were very good for the disease. Senator WOODLEY—Is it speculation by New South Wales farmers saying it came from India or a couple of other places? Mr Roberts—The countries that were mentioned are countries with the disease. To make any definitive statement more than that is impossible. Senator WOODLEY—Is there any calculation as to the money value of crops lost through the disease? Mr Roberts—Not that I am aware of. In normal sorghum production areas it is not an issue. It is an issue only where you have purebred lines, mainly for breeding purposes. Indeed, the original outbreak last year was very severe on certain breeding lines that were just there as part of the breeding program and was fairly insignificant in the normal sorghum production areas. CHAIR—Is it the same ergot as we get in rye grass, wheat and barley? Mr Roberts—No. It is a related fungus but a different species. There is a whole range of different ergots. CHAIR—Is it poisonous to livestock? Mr Roberts—No. There is no evidence at all that it poses any poisoning risk. It does not appear to contain any of the alkaloids that are associated with the other ergots that do cause poisoning. CHAIR—So therefore it is quite different. Because the others poison livestock. Mr Roberts—It is different from that point of view, but I think it is the same genus of fungi. The biology of the disease is fairly similar. Senator BOB COLLINS—Can you explain why there are savings of $3 million from the tri-state fruit fly strategy? Mr Lilburn—It is $3,000, rather than $3 million. Senator BOB COLLINS—Is it? Mr Lilburn—The provision in the budget was $94,000. Senator BOB COLLINS—Don’t worry about it. If I’d known it was only $3,000, I would not have bothered you.

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Senator BOB COLLINS—Can you tell me what the size and value of the last peanut crop was? Can you take it on notice? Mr Lilburn—We will take it on notice. Senator BOB COLLINS—Is there any assessment as to what extent we are about to meet domestic demand for the product in Australia? Mr Jeffrey—From domestic supply? Senator BOB COLLINS—Yes. Are we importing peanuts at the moment? If so, where from? Mr Jeffrey—We will need to take that on notice as well. We do not have those figures. Senator BOB COLLINS—Paul Hickey would be able to tell me. Why don’t you just stay there, Mr Hickey. Mr Hickey knows where I am going on this one. Mr Hickey—Well, the answer is yes. The principal market, as I understand, has been China. We could give you details of import clearance over the past 12 months. Senator BOB COLLINS—Have we exported any peanuts? Mr Hickey—I will have to get back to you on that one. Senator BOB COLLINS—Can you tell me what the cadmium MRL for peanuts is? Mr Hickey—Pass on that. I will get back to you on that as well. Senator BOB COLLINS—More importantly, has that been varied in recent times? Mr Hickey—The National Food Authority have been reviewing the MRL for cadmium. Whether they have come to a final conclusion, I am not sure. We will advise you on that. Senator BOB COLLINS—Can you just briefly advise the committee as to the process that has to be followed when MRLs are varied? Mr Hickey—I will have to ask for some help. Mr Biddle—The MRL procedure in respect of contaminants, which I believe is the senator’s specific question— Senator BOB COLLINS—Cadmium, specifically. Mr Biddle—is more about the regulatory procedure attached to maximum permitted concentrations. The term ‘MRL’ is not used in a strict sense in this area, but the decision- making process is not dissimilar. It requires expert advice from a toxicological evaluation undertaken under the auspices of the health portfolio. That is then considered within the Australia New Zealand Food Authority context and a proposal is made to vary the Australian standard in respect of the concentration. Opportunity for public comment is typically provided under that process. Senator BOB COLLINS—As you are aware, this is a longstanding matter and is still engendering the controversy in the industry that these things normally do. In that respect, has the department done any work on the potential economic impact of the variation that is being sought to the domestic peanut industry? Mr Jeffery—I am not aware of any— Senator BOB COLLINS—As you are aware, the impact is that any increase in the tolerable levels is going to potentially permit imports into Australia from places that currently cannot bring them into Australia. Has the department done any work? You are not aware of any? Mr Jeffery—No.

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Senator WOODLEY—Are you aware that the industry itself has expressed a lot of concern about this possibility? Mr Jeffery—Yes, we have had a number of letters and that from the industry. That really comes back to the issue being discussed here about the maximum permitted concentration and whether the permitted concentrations in Australia are in line with international requirements in that regard. Senator BOB COLLINS—Can you provide the committee—and I am happy for you to take this on notice—what the MRL limits are for countries that do import peanuts into Australia? Could you provide that on notice? Mr Jeffery—Yes. Senator BOB COLLINS—I would like to move to wheat now, unless people have other questions. Mr Mortimer can tell us what is going to happen to the Australian Wheat Board restructure. Mr Mortimer—I am not sure that we are in a situation to say much at all at this stage. As you would be aware, and I guess you are asking me where we are at on this— Senator BOB COLLINS—Absolutely. Mr Mortimer—As you would be aware, a series of consultations are being undertaken with the industry and the Wheat Board on this matter. Senator BOB COLLINS—I understand the working group is going to meet next week; is that correct? Mr Mortimer—That is right, yes. On the issue of a structure after 1999, no decision has been reached at this point. Senator BOB COLLINS—Do you expect a final position to emerge from the meeting next week? Mr Mortimer—That is our anticipation. Senator BOB COLLINS—If that should happen, could you tell the committee what the process would be from there? Mr Mortimer—Clearly this is a matter for the minister to consider. It is something that I expect he would want to consult other ministers with and probably go to cabinet with, as it is going to entail a change of legislation down the track. So it will be a full government consideration of the matter. Senator BOB COLLINS—Can you remind me when the original deadline for this process was to have been concluded? Mr Mortimer—Grains week of this year. Senator BOB COLLINS—Has there been an amended deadline? Mr Mortimer—No, there has not been an amended deadline. When the minister gave his speech at grains week last year he asked for a decision by grains week of this year, which is in the middle of April. The issue I think you are alluding to is that there are a series of issues to be worked through and at this stage the issue that has taken a bit longer than was expected is a matter of the broad shape of the structure which would prevail after 1999. There are further matters of detail to be filled in around that when that is settled. Senator BOB COLLINS—Is the government accessing any expert advice on this issue other than the advice that it is getting from the department?

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Mr Mortimer—The working party has contracted Bankers Trust Corporate Finance and Mallesons Australia for both financial and legal advice on the matter. Senator BOB COLLINS—Who is paying for that? Mr Mortimer—That is being paid for by the Wheat Board and that is being for out of WIF funds. Senator BOB COLLINS—My understanding is that the Grains Council was also getting some work done. Is that correct? Mr Mortimer—No, not that I am aware of. Senator BOB COLLINS—As I understand it, the minister will have before him, hopefully in the near future, the views from the industry, the views of the department, the views of the Australian Wheat Board and the views of all of these independent experts. Will they all be singing the same tune, do you know? Mr Mortimer—That is impossible to say, Senator. Senator BOB COLLINS—I think you could have put the full stop after ‘impossible’. Can you advise the committee where the issue of the import grain trials is up to? Mr Hickey—The minister asked the Bureau of Resource Sciences to undertake a desk audit of all of the matters that had preceded the decision last year to suspend the transportation trials. Senator BOB COLLINS—The funding was withdrawn in April last year, was it not? Mr Hickey—That is correct. I believe the BRS is in the final stage of the finalisation of that report which would then go to the minister. Senator BOB COLLINS—Thanks. Could someone advise me of the rate of return on the WIF for the year ending December 1996? Take it on notice if you would not mind. CHAIR—Any further questions on wheat or grains? We will move to citrus. Senator BOB COLLINS—Can the committee be advised of what actual programs were cut from the citrus development grant scheme as a result of budget outcomes? Mr Lilburn—There were no cuts to particular programs because uncommitted funds exceeded the reduction in the funds available. Senator BOB COLLINS—I have some questions on the Australian Horticultural Corporation. CHAIR—Any other questions on horticulture? Senator WOODLEY—We are still on 1.2, aren’t we? CHAIR—Yes. Senator BOB COLLINS—I have some questions on horticulture. I thought I would defer to others if they had other questions on citrus. In the last budget the Commonwealth contribution to the AHC was terminated a year early. The statement said that the AHC would have to review its structure and operations to ensure that it could meet the requirements of increased industry competitiveness with less funding. You advised the committee at the time that both the AHC and the HRDC were reviewing their operations with a view then of possibly combining their operations. You said that at the same time there were also discussions in the same process of reviewing the industry levies. I wonder if you could tell the committee where all that is at now?

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Mr Lilburn—The parliamentary secretary received a report from the boards of the Australian Horticultural Corporation and the Horticultural R&D Corporation on their consultations with industry regarding the issue of possible amalgamation. They reported that there was a majority view that that should not proceed. The parliamentary secretary accepted that advice and he has dropped the issue of possible amalgamation. Senator BOB COLLINS—Levies? Mr Lilburn—There has been a request from the apple industry and the pear industry for an increase in the marketing levies. The citrus industry has also requested an increase in the R&D levy. The matter was put to the Treasurer and the Prime Minister by Minister Anderson and they have all agreed, and those increases are now being pursued through the increases in the levies under regulation. Senator BOB COLLINS—I refer you to a letter from the Australian Citrus Growers Association dated 9 January this year which was addressed to the Deputy Prime Minister but copied to both the minister and Senator Brownhill. The letter refers to a meeting between Mr Fischer and representatives of the citrus industry on 3 January. One issue raised at that meeting was the apparent anomalies between the anti-dumping regimes in the United States and Australia. The letter suggested that in the US the onus of proof is on the exporter to prove that they are not dumping their product on the domestic market, whereas, as I understand it, the reverse is the case in Australia in terms of that onus. Is that correct? Senator WOODLEY—Quite right. Mr Lilburn—That is a matter for the minister for customs and the Customs Service to give an answer to that. Senator BOB COLLINS—I am aware of that. The reason I raise it—and I will not press it here—is that I just thought that, considering the importance of this issue to this portfolio, there might have been somebody here who could respond? There is not? Mr Lilburn—No. Senator BOB COLLINS—That is fine. I will not press it. I will take it up with the appropriate agency. As I understand it, that is in fact the case. Senator WOODLEY—I want to ask a further question on that though but it will probably get the same answer. Who then would be responsible for legislation amending the anti- dumping legislation to make it more appropriate for our situation? Would that be also the customs minister. Mr Lilburn—Yes. Senator BOB COLLINS—By the way, where is the secretary? Mr Matthews—The secretary is in Melbourne for an ARMCANZ meeting. Senator BOB COLLINS—That is tomorrow, isn’t it? Mr Matthews—That’s right. The minister is travelling down tonight and that is why a number of witnesses will be leaving later tonight, too. Senator BOB COLLINS—Because of the absolutely crucial importance of this issue to the portfolio, I assume there is some sort of ongoing contact between the portfolio and customs on this dumping issue. There is a fair bit of concern in the industry about it, as you know. Mr Lilburn—That is true. We do keep in touch with Customs. There has been a review of the anti-dumping arrangements. I understand there have been some changes, but I have not got the detail.

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Senator BOB COLLINS—Can you tell me who it is in this portfolio who is responsible for that liaison on this issue? Does anybody know? Mr Lilburn—On citrus? Senator BOB COLLINS—On dumping. Mr Matthews—On general anti-dumping the corporate policy division, which is program 4, has some responsibilities. But on particular industry divisions such as Mr Lilburn’s branch will deal with specific commodity by commodity dumping anti-dumping issues. Senator BOB COLLINS—So those officers who are here for program 4 can take questions on the role that the DPIE has on the dumping question. Mr Matthews—Yes, that is right. But Mr Lilburn’s first point is also true, that anti-dumping policy is essentially with another portfolio. Senator BOB COLLINS—I understand that. I am sure you would agree that this particular portfolio would have and should have a robust view to express on the matter in terms of its own constituents. Senator WOODLEY—I would hope they have. Senator BOB COLLINS—It is a proactive role I hope, not simply a reactive role. Mr Matthews—It is certainly true that we have firm views on anti-dumping and anti- dumping policy and we take opportunities to put them to the other portfolio whenever that is appropriate and we put advice to the minister about those sorts of things as well. Senator BOB COLLINS—Thanks. What I will do—and I am sure Senator Woodley may wish to do the same—when we get to program 4, just for the record, rather than seeking answers I will simply express my concerns about these issues. Then the department could—and I am giving forewarning to those officers who are in that division—simply address those at a later stage. Mr Matthews—Thanks for the warning. Senator BOB COLLINS—There was a letter—and I do not know, Mr Lilburn, whether you are familiar with this one—from the industry to Mr Anderson dated 9 January which referred to tax arrangements for trees. Are you aware of the content of that letter? Mr Lilburn—Yes. Senator BOB COLLINS—The letter stated that the government can provide some incentive by allowing a tax write-off over four years, which of course is consistent with grapes, for restructured citrus plantings. The present sliding scale arrangement based on anticipated tree life, the industry asserts, is both vague and cumbersome and provides very little incentive to citrus growers. The letter continued: Your colleague Mr Fischer suggested that the upcoming budget can provide an opportunity to consider this question. I was quite encouraged by this statement by the Deputy Prime Minister. I draw your attention to this matter because it may well be given some air time at the National Party conference at the weekend. Mr Fischer has in fact indicated that the budget will provide an opportunity to consider this question, and I am sure that citrus growers would have assumed from that, rather than simply passing the buck, this is an indication from the Deputy Prime Minister that he has some sympathy for their position. Given that the letter was written to your minister and given that the industry is one for which the department has

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 65 responsibility, I assume, Mr Lilburn, you would be involved as well as Treasury in actually analysing this option? Mr Lilburn—Yes, that is correct. There has been an analysis undertaken by the department. It will be put to the minister shortly. It will be up to him as to whether he takes it to the Treasurer. Senator BOB COLLINS—Can the committee have a copy of that analysis? Mr Lilburn—This will be an advice to the minister. It is in preparation. Senator BOB COLLINS—Just thought I would ask. Are you aware of any work that is being done by the ATO or the Treasury on the option? Mr Lilburn—The Treasury is looking at all tax expenditure in the context of the next budget. Senator BOB COLLINS—Are you actually going to do this through an IDC? Mr Lilburn—This is being handled by the corporate policy area of our department. Senator BOB COLLINS—That is program 4, too, is it? Okay. We will raise that with them. Has Mr Anderson responded to the letter, do you know? Mr Lilburn—Yes, he has and he has advised them that it is being reviewed by the department. Senator BOB COLLINS—Can I go to a letter dated 8 January again from the citrus growers to Mr Fischer and copied to Mr Anderson. The letter relates to the same meeting and goes on to the question of wholesale sales tax. It refers to the small business deregulation task force report which addressed the question of WST and, in particular, the report recommended the streamlining of wholesale sales tax. Have there been any discussions with the ATO, the Treasury, the office of the Minister for Small Business and Consumer Affairs or his department about the rationalisation of wholesale sales tax as it might impact on industries for which DPIE is responsible? Mr Lilburn—I am not aware. I think that letter was to the Deputy Prime Minister. Senator BOB COLLINS—It was. That is what I said. It was sent to Mr Fischer and copied to Mr Anderson. Mr Lilburn—I think it was his portfolio which will be taking that forward. We have not been directly involved in that. Senator BOB COLLINS—I am aware that is his portfolio. I wondered whether you had any informal involvement. It is worth noting in this regard that the Prime Minister said at the launch of the small business deregulation task force report on 1 November last year: I can guarantee that you will have a comprehensive response and the community will have a comprehensive response to all the recommendations in this report by no later than the middle of February. Senator WOODLEY—One day to go. Senator BOB COLLINS—Yes. CHAIR—You do not know February. Senator BOB COLLINS—That is true. He did not specific which February. I have some questions on the citrus market diversification program. Can you advise the committee on how the funds have been spent to this time and what the outcomes have been? Mr Lilburn—The first year of the citrus diversification program was in 1994-95. In that year approximately $350,000 was allocated—about two-thirds on export market promotion

RURAL AND REGIONAL AFFAIRS AND TRANSPORT RRA&T 66 SENATE—Legislation Thursday, 27 February 1997 and one-third on the promotion of fresh juice sales in Australia. That was the first year. In the second year, which was 1995-96, $2.4 million was spent. The ratio is approximately the same, although I think a bit less was spent on juice that year, about a quarter. Three-quarters was spent on export development, export promotion and support for the industry’s export drive. This financial year there has been $2.16 million allocated—$1.5 million has been committed, again, partly on promotion of fresh juice with a majority going into export development. In terms of the outcome, it is difficult to relate increased exports directly to this program. Senator BOB COLLINS—I understand that. Mr Lilburn—But I can give you a good story there in that exports in the last six months of last year increased by 35 per cent in total and in the previous six years had increased three times. Up until June last year exports were contributing 50 per cent of income to citrus growers although with only 20 per cent of their total production. Exports are really providing citrus growers with their major source of income now. That is increasing at a very good rate. Fresh juice sales have been maintained and slightly increased. That is the other major source of income for valencia growers. Valencias going into the concentrate return very little. Senator BOB COLLINS—That is the very reason that I raised this issue. I think it is fair to say that the export effort that has been made by the citrus industry has been very good, has it not? Mr Lilburn—It is bearing good results, yes. ACTING CHAIR—You were speaking about promotion for fresh juice. Just in practical terms, how do you go about that? What is the practical expenditure? Mr Lilburn—It is organised by the Australian Horticultural Corporation in conjunction with the producers of fresh juice on a dollar for dollar basis. There have been both in-store promotions and promotion of the fresh juice logo which was developed by the Australian Horticultural Corporation. Fresh juice can be sourced only from Australian citrus, whereas beverages made from concentrate can be sourced from imports, principally from Brazil. The promotion of fresh juice is a direct benefit to the Australian citrus industry and citrus growers. That is now taking a much larger volume of fruit than the concentrate production. Senator BOB COLLINS—Is it correct that market conditions changed at the end of last year with stable world prices ending, coupled at the same time with a big world crop, and that this has impacted severely and adversely on local valencia orange growers? Mr Lilburn—Yes. The international price of concentrate has fallen substantially and that has impacted directly on the returns to growers from fruit going into concentrate production and indirectly through depression of returns on other sales. Senator BOB COLLINS—I am told by growers that the industry will have to look at a real restructure out of valencia. Is that correct? Mr Lilburn—That has been happening. It was obvious many years ago that the price of concentrate was not attractive so that many growers have diversified either to alternative citrus varieties or into, say, wine grapes. There are still a number of growers who are heavily dependent on valencias and they are the ones in the most difficulty at the present time. Senator BOB COLLINS—I see a significant number of wool growers are moving into the wine industry. Both words start with ‘w’ and have four letters in them, I suppose. ACTING CHAIR—Are most of those valencias in the Mildura district?

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Mr Lilburn—No. Probably the biggest number are in the Leeton and Griffith area. There are a significant number in the Mildura area as well. Senator BOB COLLINS—Does the department have under consideration any programs to provide additional assistance to the industry to undertake this restructure? Mr Lilburn—Basically the assistance provided is through the citrus market diversification scheme, through the tristate fruit fly activity, as well as normal RAS support to individual growers for their restructuring under the farm— Senator BOB COLLINS—Are you looking at any kind of rebate scheme? Mr Lilburn—For taking out valencia trees? That was looked at by the citrus market diversification group before Christmas. That group decided not to put funds into that program. ACTING CHAIR—Why was it decided? Mr Lilburn—They believed that it was not a good investment of their funds. That was the majority view. There were different views amongst some of them, but the majority view was that that was not the way to invest their money. ACTING CHAIR—How much is left in the funds? Mr Lilburn—In the citrus market diversification program, uncommitted at this point is $3.5 million. ACTING CHAIR—Is there a deadline on that expenditure? Mr Lilburn—There is another two years. This is the third year of five-year program. So that will be spent primarily in the last two years. ACTING CHAIR—There have really only been two initiatives, promotion for fresh juice and export promotion. Mr Lilburn—Yes, but export is quite a large and diversified program. It is both research on disinfestation on fresh fruit, developing new markets, promoting, in particular, old and new markets. So there is quite a range of programs in the export sector. ACTING CHAIR—Who is undertaking that, the industry? Mr Lilburn—The industry in collaboration with the Australian Horticultural Corporation and the R&D corporation. Both corporations are involved. Subprogram 1.3—Fisheries Senator BOB COLLINS—I have only got one question for AFMA. There is a reference in the budget papers to a ‘minor parameter adjustment’. Can you tell me what that means? Mr Stevens—I am sorry, I cannot. Senator BOB COLLINS—I could not work it out either. Mr Stevens—I will take it on notice. Senator BOB COLLINS—It is a pity you had to come all the way here to take that on notice. Can you find out what that means? Mr Stevens—Yes.

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[5.28 p.m.] Program 2—Industry and community services Subprogram 2.2—Rural Senator WOODLEY—My questions relate to support for Australian agribusiness. Is it true that the federal Department of Primary Industries and Energy has frozen all programs of assistance to agribusiness? Mr Wonder—No, it is not true that all programs have been frozen. The government has decided to discontinue the former agribusiness programs, but the government has made money available for ongoing projects to be completed through a budget appropriation this year. Senator WOODLEY—You mean ones that had been approved previously? Mr Wonder—That is correct. Senator WOODLEY—But there are no new ones? Mr Wonder—There are no new applications being called for because the government has not appropriated money for that purpose. Senator WOODLEY—So frozen was perhaps the wrong word but discontinued is an appropriate word? Mr Wonder—That is correct. Senator WOODLEY—What is the department’s intention regarding its agribusiness support program? Mr Wonder—The agribusiness program has been discontinued and the current work of the department in that regard revolves around a number of projects which are yet to be completed, of which there are quite a few. These projects will be completed through the course of the year. The other major activity in regard to agribusiness that the department is involved in is with regard to the government’s supermarket to Asia initiative. Senator WOODLEY—I was aware of that. My office tried to get information because of requests from constituents about the agribusiness program and the supermarket to Asia initia- tive was the only offer that was made in response to those requests. This may be a question for the minister. What rationale is behind the cancellation of those programs? I understood that at least some of them were very successful. Mr Wonder—I think perhaps Senator Collins asked this question at the last estimates hearing— Senator WOODLEY—I must have missed it then. Mr Wonder—I understand that. The rationalisation was straightforward and the department indicated that it was a direct saving to fiscal outlays. Senator WOODLEY—That was the reason for the discontinuation. Mr Wonder—That is correct. Senator BOB COLLINS—If there had been a Labor government it would still be there. Senator WOODLEY—That was my next question. Is the Productivity Commission looking at or doing an investigation into the department’s programs of support for agribusiness? Mr Calder—I am not aware of the Productivity Commission doing any specific study or looking at the agribusiness programs of the department. Last year the Bureau of Industry Economics did a study looking at the agrifood industries, and that report is publicly available.

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Senator WOODLEY—Did DPIE make a submission to that particular inquiry again? I suppose it was not asked to. Mr Calder—I would need to check on that, Senator. I cannot recall. Senator WOODLEY—If you could, it would be useful to know what kind of submission the department made. I imagine that would be publicly available. Mr Calder—Yes. Senator WOODLEY—So there are some continuing programs. What kind of funding is being provided for in the current budget? Can you give me some idea of the funding that there is in the current budget for the continuing program? Mr Wonder—There is an amount for the continuing projects of $1.4 million, which is financing the projects which are current. That is the sum total of funding under the agribusiness program. The only additional funding outside the agribusiness program is that the government has committed some $3.4 million. I can give you the details with respect to the supermarket to Asia initiative, if you are interested. Senator WOODLEY—The details of the supermarket to Asia program? Mr Wonder—Yes, of how that money is expended. Senator WOODLEY—I would not want you to do a great exercise, but it would be helpful if you have a broad outline of that available, because I get inquiries. Mr Wonder—The majority of the money has been committed to technical market access initiatives overseas. The remaining funds have been committed to studies and consultancies to be undertaken under the supermarket to Asia initiative. There is some ancillary funding for running cost related expenses in this portfolio and the Department of Industry, Science and Tourism. Senator WOODLEY—I think this is a fair question: do you know if there will be some of those continuing programs still requiring budget assistance in the next budget? Mr Calder—At this particular point of time, we expect that the $1.4 million, which has been made available for the widening up in an orderly manner of the agribusiness programs, will be sufficient and will be expended this particular year. Senator WOODLEY—Thank you. Senator BOB COLLINS—The rural community’s access program evaluation commenced, as I understand it, on 16 September last year. Can you advise the committee of the outcomes of that evaluation? Mr Wonder—Yes, Senator. There is no particular outcome at this point. I will bring you up-to-date with progress on the evaluation. The evaluation has been undertaken under the guidance of a steering committee involving a number of stakeholders and other players. A consultant was hired to undertake some aspects of the evaluation work and the review report has been completed. The next stages of the process are that the department is preparing a management response, as is normal through this type of process. When the management responses are finished in the department, it will be supplied to the minister for his consideration. Senator BOB COLLINS—From memory, I think there was, in broad terms, around half a million dollars cut from the budget for the program for both the 1996-97 and 1997-98 financial years. Is that correct? Mr Wonder—It was an amount in excess of that, Senator, I could give you the details.

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Senator BOB COLLINS—It does not matter; it is not important. Does it mean that this program is likely to be the source of further savings in the next budget, or, as a result of those budget cuts I have just referred to, is it one of the protected programs referred to by the Treasurer, Mr Costello, when he released the midyear review of the budget on 28 January? Senator Parer—Senator, all I can tell you is that the minister is currently considering the report referred to earlier and the review is part of the budget process. Senator BOB COLLINS—But Mr Costello did say that they will not be going back to the well of programs that have already had significant cuts, as has this one. Senator Parer—There were some specific mentions, but I think that you can just say this is part of the budget process. Senator BOB COLLINS—Can you provide the committee on notice with up-to-date numbers, state by state, of farmers currently receiving support through exceptional circumstances drought relief payments? Mr Wonder—Yes, in aggregate about 1,700 farmers would be receiving RAS exceptional circumstances assistance. Senator BOB COLLINS—Thank you. I would like a state breakdown of that, and could you also advise how many of these farmers are no longer in EC areas and therefore when their payments will cease? Mr Wonder—I would have to take that on notice. Senator BOB COLLINS—I would like to go through the progress, or lack of it, being made on all regional restructuring packages, that is, the drought regional initiatives and the rural partnership program initiatives that were funded through the RAS reserve. Again, if the detail is available now let us dispose of it, but if it is not I am not going to die in a ditch over it, and we will just get you to take it on notice, if you would not mind. I suspect the answer to this question is not going to be one I particularly want to hear, but how many farmers have actually opted to leave the land in south-west Queensland and how effective has the land consolidation strategy been for those viable farmers who remain in the area? The reason I raise the question is that that strategy is now in its second year, from memory; is there any indication of how many have actually left? Mr Wonder—Yes, but we would have to take the question on notice. Senator BOB COLLINS—I am happy to do that. You may take the following questions on notice to save a lot of mucking around. I would like you to provide us with a breakdown of each component of the strategy, with the expenditure noted next to it, and for Eyre Peninsula, if you would not mind. I suspect that the number who have actually exited is zero, but please tell me. I would like to know how many farmers on the Eyre Peninsula have opted to take the enhanced re-establishment grants. As you will remember, we provided for a doubling of them. The policy guidelines were issued on 9 August last year, so in effect that program has been up and running now for about six months. I would also like advice in similar vein to the other projects, that is, the Atherton Tablelands, the western division of New South Wales, north- eastern Victoria, the Lodden, Murray, Sunraysia, the south coast of Western Australia and the Murchison, Gascoyne. I just want an update on where it is all at. Mr Harris—Yes.

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Mr Wonder—I will just indicate there, Senator, that a number of those that you mentioned are in fact not under way so there will be a progress report on where we are at with respect to negotiation of the program itself with the community. Senator BOB COLLINS—Thank you very much. With rural counselling, in answers that we got to questions that were placed on notice during the last estimates round we were advised that the rural counselling program had received a cut of $300,000 in the 1996-97 financial year. In that answer we were advised that the savings were to be achieved through a cut in funding for administrative support. Could you just explain briefly what that means in the sense of whether there will be any impact on the actual workers in the field? Mr Wonder—In general terms, right now we are running about 96 rural counsellors. That is where we are at. We would expect that, come 30 June, we will potentially run that number down to about 81 so we are reviewing 15 of the current services. On the other hand, working in the other direction, you will recall, Senator, that the government announced last November a further drought related package. In that package were included funds—$500,000—for expenditure in 1997-98 for drought counselling related activity. How much that actually spins out in terms of the number of counsellors that can be hired with those moneys will eventually depend on what sort of arrangements the Commonwealth can enter into with the states and other players—in other words, how far the money can be stretched so to speak. Our anticipation at this stage is that it could be up to 10 additional counsellors hired as a result of that funding. So without being categorical about it, we could in fact still be, come 1 July, in the 90 region or thereabouts in terms of the number of counsellors. Senator BOB COLLINS—Thank you very much. In regard to ACIS, the department advised the committee at the last estimates hearing that an evaluation of the Australian Country Information Service was under way and would be completed by December. Did that happen and is there a report? Mr Wonder—The evaluation that you refer to is, indeed, part of the review of the rural communities access program that I referred to earlier. So, yes, that review has occurred. The review has been completed. The management response has been prepared and it will be forwarded to the minister. Senator BOB COLLINS—Is that service still operating from 19 sites? Mr Wonder—Yes, that is correct. Senator BOB COLLINS—So it still is. None of them has been closed down. Thank you very much. Yes, we have also got an answer—I think it was the most recent advice available— that in the 1995 calendar year the program received about 55,000 inquiries. Is there any information available for the 1996 calendar year? Mr Wonder—This would be the Countrylink program, rather than ACIS? Senator BOB COLLINS—Yes, I am sorry, I meant Countrylink. Oh, it is ACIS. This was about 50,000 inquiries in relation to the Australian Country Information Service for the 1995 calendar year. Dr Kingma—The figure is correct. I am not sure what the update is but we still have 19 facilitators out there. I suspect the figure will be well above 50,000. Senator BOB COLLINS—Dr Kingma, if you would not mind, if the 1996 figures are available would you let us know?

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Dr Kingma—Yes, sure. Senator BOB COLLINS—The important thing this committee was told last year was: ‘There are no cuts planned to the program in the 96-97 and 97-98 financial years.’ Is that still the case? Dr Kingma—You are talking about ACIS? Senator BOB COLLINS—Yes, I am. Dr Kingma—That is correct. That figure is correct. Senator BOB COLLINS—Thank you. Mr Chairman, there were some questions asked earlier about agribusiness. I would like to ask a few. CHAIR—Yes. Senator BOB COLLINS—There was about $500,000 cut from the budget of the Agrifood council last year. But the advice I got at estimates was that the impact of those cuts would not be identified until the new council had an opportunity to meet and set its priorities within the smaller level of funding. The new marketing council was then launched by the Prime Minister on 12 September. In that press statement there was a list of issus that the council was to pursue which inlcuded ‘the removal of unnecessary government regulation, a cut in the cost of doing business and the opening up of new market opportunities.’ In a speech to the AGM of the Australian Food Council, the Prime Minister said that primary producers faced inefficient middlemen and inefficient processes and he saw the council as having a key role in both opening up markets and cutting the costs of production. He then put out a statement on 26 September announcing the first meeting of the council. I would like to know whether, in fact, the budget for the council was determined at that meeting, or whether one has been determined at any subsequent meetings of the council. Mr Wonder—I referred to the overall funding of the council earlier in my answer to Senator Woodley’s question. That was a reference to $3.4 million that the government has made available for supermarket to Asia related activities, some of which concerns the funding of the supermarket to Asia secretariat, some of which concerns funding of technical market access related positions in particular overseas markets, some of which relates to funding of consultancies and the studies to be undertaken through the supermarket to Asia secretariat, and some of which relates to financing departmental activity in this portfolio and the industry, science and tourism portfolio. Senator BOB COLLINS—What I was specifically interested in was whether the council has allocated or plans to allocate funding for the perishable foods export program. Do you know? Mr Calder—As you are aware, the perishable foods export program was an initiative of the prior government which was also not proceeded with as a consequence of— Senator BOB COLLINS—It was a good initiative, wasn’t it? Mr Calder—The initiative never had a chance to get going, Senator. Senator WOODLEY—It was choked at birth, was it? Before birth! Mr Calder—It was an initiative which was announced in January 1996. Senator BOB COLLINS—I might add, and you are aware of this, that the initiative, in fact, came directly from what I found at the time was an astonishing and compelling list of extraordinary case studies of enterprising Australian companies that had had the most awful

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 73 things happen, through no fault of their own, in getting new markets established for Australian products overseas. You are aware of all that, of course. Mr Calder—I would like to point out, however, that in relation specifically to perishable products of course there was a further report which was done last year—the House of Representatives Jet fresh: paddock to plate report, which has made a number of recommenda- tions which are very pertinent to the export of perishable goods. That report is under consideration by the government. Mr Wonder—Could I just add, Senator, to Mr Calder’s answer. In as much as the Supermarket to Asia Council has now established a number of working groups which are chaired by a number of ministers and leading industry people, certainly the issues to which you refer will be further pursued in those working groups. Those working groups are meeting for the first time over this month and next. Senator BOB COLLINS—Good. The Prime Minister’s statement actually said the council would meet again in six weeks. That would have been the week, I think, commencing 28 October. I assume the council met that week. Did it? Mr Wonder—The council met for the second time on 18 December. Senator BOB COLLINS—Can you tell me how many ministers attended that meeting? Mr Calder—Senator, all the ministerial members of the council attended. Senator BOB COLLINS—The government stated that it is prepared to provide additional funding to the council if that is required to enable it to fully implement its strategy. Has any such request at this point been made? Mr Wonder—The situation with that particular issue is basically dependent upon the outcome of the working groups. That is, it is really in the working groups’ hands to further develop the strategies that are required to realise the objectives of council. When they are further down the track with that, I would expect that any funding related issues the working groups believe need to be addressed will be taken back to council for council’s consideration. Senator BOB COLLINS—So it is a little too early to determine? Mr Wonder—As I said, these working groups are only meeting for the first time this month and next month. Senator BOB COLLINS—Thank you. By the way, where is the secretariat actually located? Mr Wonder—The secretariat of the Supermarket to Asia Council is located in Canberra. Senator BOB COLLINS—How many staff has it got? Mr Wonder—It has four staff. Some of those staff are seconded from Canberra based portfolios. Senator BOB COLLINS—What is its budget for a full financial year? Mr Calder—The amount of $910,000 has been made available for the secretariat. Part of those funds are provided directly to the secretariat, and some of those funds are retained by DIST and DPIE for the officers who are seconded to the secretariat. Senator BOB COLLINS—What level of staffing has been provided by the departments involved? Mr Calder—Both of the departments, DIST and DPIE, have provided one senior officer grade B to the secretariat. Senator BOB COLLINS—Has there been any contribution from industry itself?

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Mr Calder—We are not aware that there has been at this point in time any direct funds provided to the secretariat company providing the services. However, it is expected that there will be some funds provided. Senator BOB COLLINS—Has the council released any details of its work program for this year? Is that available? Mr Wonder—The council has put out some documentation outlining the activities of the concerned working groups. The council also undertook some time ago through some of the industry participants a detailed scoping study of what it is they intend to focus on in terms of the main strategic areas. So there are some documents available. Senator BOB COLLINS—Would they be available to the committee? Mr Wonder—Certainly, the scoping study report would be available. Senator BOB COLLINS—That would be good. Do you know how often it is proposed for the Prime Minister to attend meetings of the council? Mr Calder—The Prime Minister has chaired the two meetings which have occurred to date. Senator BOB COLLINS—I knew that, which I found rather encouraging. Mr Calder—It is anticipated there will be four meetings of the council per year. Senator BOB COLLINS—So it may be that the Prime Minister will chair each one of them? Mr Calder—That is the expectation. Senator BOB COLLINS—In relation to the rural counselling program, an answer I got to a question on notice in the last round stated, ‘The government will continue to monitor family counselling issues.’ Can you advise the committee of who actually does that monitoring, and have there been any outcomes from it to this point? Dr Kingma—We have been working closely with the Attorney-General’s Department on a program relating to family counselling and a review. AG’s is putting together a document at the moment which will summarise their findings in relation to the needs of counselling in the bush. That will be available about June this year. In other words, their field work will finish. Senator BOB COLLINS—As far as you know, is that going to be a public document? Dr Kingma—I would hope so. Senator BOB COLLINS—I turn now to rural telecommunications upgrades. Can any advice be given to the committee about what projects are going to be funded under this program in terms of how many have been selected? Mr Wonder—My understanding of the situation for 1996-97—if the program I think you are referring to is the one I am thinking of—is that there was an upgrading program under the previous government and it was discontinued for 1996-97. The previous government spent something in the order of $1 million in that area, but this program was discontinued. Senator BOB COLLINS—Just to clarify this, the information we got last year—in fact, it was contained in the actual notes in the budget papers—was that the cuts to this program ‘would impact on two or three districts’, without actually specifying it. Is it possible to specify whether we now know what districts have been adversely impacted on by the cuts?

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Dr Kingma—The evaluation of sites that came forward from Telecom at the time were not proceeded with. Therefore, there is no answer to your question. The program was discontinued, so no evaluation has taken place. Senator BOB COLLINS—The telecentres review was something we found out about last year. Has that been completed? Mr Wonder—All these ones you are referring to are components of the rural communities access program. The rural communities access program itself has been evaluated, including these various components. The situation is the same as I advised with respect to the earlier programs you raised. Senator BOB COLLINS—I know, but the department made a very positive commitment about the role of this program. Dr Kingma—I wish to add to Mr Wonder’s comment. A separate review of the telecentres program was proceeded with and also folded into the RCAP review. There will ultimately be a separate telecentres report as well. Senator BOB COLLINS—I am just reminded of something; it is linked. I refer to the combined program with the NFF on Internet access. Do you know where that is at? Dr Kingma—The farm wide program? Senator BOB COLLINS—Yes, that is the one. Dr Kingma—That is still under way. Senator BOB COLLINS—Do you have any idea how many primary producers have involved themselves in it? Dr Kingma—One thousand. Senator BOB COLLINS—Have they all taken it up? Dr Kingma—Yes, they have. Senator BOB COLLINS—When is it proposed to assess the impact of it and the success of it? Dr Kingma—I believe this year, but I am not sure. Senator BOB COLLINS—Would you mind taking that on notice and just letting us know. Dr Kingma—Yes. Senator BOB COLLINS—The expenditure of the promotional component of Countrylink in 1995-96 was $122,265.55. Can you advise what the level of expenditure of this part of the program has been to this point in the financial year 1996-97 and how that compares with the expenditure for the corresponding period last year. Dr Kingma—I would have to take that on notice. CHAIR—Under subprogram 2.2, I understand there were some questions asked with regard to exceptional circumstances. Is that correct? Senator BOB COLLINS—Yes, on notice. CHAIR—I do not know whether I should or not, but there is an application for exceptional circumstances in Western Australia at this moment. Our family properties are in those areas. If there is an interest, I should declare it now just to cover my own position as having chaired this committee. I make that declaration. I do not know whether or not I have to. I just put that on the record so there are no misunderstandings and I do not get any more letters.

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Subprogram 2.1—Natural resource management Senator WOODLEY—I note that the department has requested an extra $610,000 for landcare funding in the 1996-97 year. I am aware of a report by the Commonwealth Ombudsman. As chair of a landcare inquiry, I also have some concerns myself about the possibility of landcare funds being spent inappropriately. I wanted to ask some questions about that. I am aware that there has been quite a lot of controversy, but I would like to ask questions about the two cases that concern me. This relates to appropriations because if the department is seeking additional appropriations, maybe they should also look at whether some savings might be made. The one that the Commonwealth Ombudsman was looking into was $29,000, which was claimed to be inappropriately allocated through the Boorowa community landcare group. I understand that the Commonwealth Ombudsman actually upheld that accusation. However, when the matter was referred to the New South Wales police for investigation, my understanding is that an officer of the national landcare program, administered by the federal department, wrote a letter to the police recommending against the investigation. Can you tell me whether that is so? Mr Walker—An officer did write to the New South Wales police. That officer had no authority from his superiors to do so. Senator WOODLEY—So it was not authorised by the department? Mr Walker—No. CHAIR—So it was done in his own private capacity? Mr Walker—I am not certain in what capacity it was done, but of his own volition, he actually wrote. Senator WOODLEY—Did the New South Wales police proceed with a prosecution? Mr Walker—I do not have any further information on that, Senator. It is up to them. Senator WOODLEY—We will follow that up in other ways. The concern I have is not about the police investigation; that is an issue for other people. I am worried about the guide- lines. Let me make the suggestion and you can debate it with me. It seems to me that there may have been inappropriate uses of landcare funds. Is that the fault of the guidelines, do you believe? Do we need to tighten the guidelines in any way? That is my question. That is what I would like to get an understanding of. Mr Walker—As part of the Ombudsman’s review process, a commitment has been made to review our processes and guidelines. It was our belief before this particular case arose that the processes whereby community endorsement was sought of all particular projects would protect against some of the claims that have been made. On top of that, we have a community dominated review process and state assessment and regional panel assessment processes which were meant to try to prevent these particular problems occurring. It is fairly clear that the Boorowa situation and the Ombudsman’s review have indicated that we need to do some further checking. We are in the process of doing that. We will almost certainly be developing some instructions to community groups which clearly reinforce their responsibilities in terms of being accountable for Commonwealth funds, and other associated steps will be taken. The other important thing I would flag is that since that particular incident, steps were taken in a completely separate process to ensure that more than one signature was lodged on behalf

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 77 of the group. At least two people now have to sign application forms on behalf of a group before we would accept the grant application. Senator WOODLEY—The other example is this, and in this case I understand that the national Landcare assessment actually has the concerns I have. Can you confirm that if you are aware of the situation? It is to do with the Eacham Shire Council in Far North Queensland. I am not sure of the amount. I keep getting different amounts. It is either $400,000 or $2 million. Apparently this has been allocated but not spent. The project is a sewage treatment plant so that the septic systems which are used in Yungaburra, a town on the Atherton tableland, can be replaced. I understand that a very sketchy application was made, but it was because there were suggestions that there was pollution of Lake Tinaroo from the septic systems. However, I have never seen—and I have not been able to secure from any source— any evidence of that pollution. The Eacham Shire Council itself put press statements out when it received the funding to say it would be able to use it to sell 500 extra residential blocks in the town. Its environmental aspect therefore has rather a question mark over it. I wonder whether you are aware of that problem, and whether or not the national body is concerned and investigating that issue further. Again, it is to do, I believe, with guidelines. Mr Walker—I understand that there have been differences in the community about the application and the exact purposes for which the funds are to be spent. I would have to take on notice any questions you wanted to pursue with us on that because I personally am not across the issues. Senator WOODLEY—I would certainly be happy for you to do that, and I will just add a couple of questions so that I will not waste your time. I was approached on a number of occasions about this, and then I finally went there and met with the ratepayers association and the business association. There seemed to be a very strong concern in the town about whether or not the sewerage system would do what it was supposed to do, about the cost of it and about a whole lot of issues. In other words, there is obviously very strong community concern and I wonder if you might take that on board—in other words to say how seriously you would take that community concern. My other questions are these. First, was there a Landcare group there through which the application was processed? Mr Walker—I can respond to that. We are, obviously, concerned. I cannot tell you exactly the details of how the application was processed and lodged. I would have to flag that if these allegations arise we are at any time more than happy to have a look at our guidelines and processes to try and get them sorted out. We have undertaken a fraud risk analysis of the grants process, and there is no doubt that there are some chinks there that need to be policed in terms of making certain that there is general community endorsement of the project proposals. Wherever possible, we push that line very hard. There is no use having a project which is so-called community endorsed which turns out six months later not to be endorsed overall by the community. The other point I would flag is that the National Audit Office has just completed a fairly major review of our program, operations, guidelines and efficiency, and that report is scheduled to be tabled fairly shortly. It will also shed some light in terms of our processes and associated activities. Senator WOODLEY—Obviously there are political implications, but beyond those what is more important is that in the Senate’s own review of the Landcare program we actually look

RURAL AND REGIONAL AFFAIRS AND TRANSPORT RRA&T 78 SENATE—Legislation Thursday, 27 February 1997 at these things to see if we can do a lot better. I believe it is probably not at the national level but maybe at the state level where perhaps it was falling down in this particular instance. I have a couple of other questions. If there are any surveys done on the level of public health concern, any documentation supporting the original claim that it was to assist in the environmental protection of Lake Tinaroo, I would be pleased to get it, because it was very hard to find out if there was any. I have another page of questions. I will simply put them on notice. That will save the time of the committee. Senator BOB COLLINS—Out of courtesy to the officers present, I flag that I have a number of further questions on this item. We have dealt with fisheries at 1.3. I can put all of the questions that I have got on 1.4 and 1.5 on notice. I am happy to do that. So unless anyone else has any questions on those, I think we can dispose of those now as well. Senator WOODLEY—I have just a couple on 1.4. Senator BOB COLLINS—What about 1.5? Senator WOODLEY—No, nothing about 1.5. Senator BOB COLLINS—Perhaps we could take the questions you have on 1.4 now, because we can then get rid of 1.3, 1.4 and 1.5 completely. CHAIR—The only problem with that is that if we do not finish 2.5 and 2.3 tonight we will have to bring them back next Tuesday. Senator BOB COLLINS—I understand that, but there is an opportunity here to get rid of at least some people for the purposes of estimates. CHAIR—Can you put your questions on 1.4? Senator Parer—It is better if they are answered straight away if possible. Senator BOB COLLINS—I have quite a few questions on 2.1, especially on forestry. I know you do not like jumping all over the place, but because I know I can dispose of all my questions on 1.4 and 1.5, if we pause at this point, if Senator Woodley only has two questions on 1.4 we can get rid of the three sections. CHAIR—I am flexible if everyone is happy with that. We will defer any questions on 2.1 until we deal with 1.4 and 1.5. There being no questions on 1.5, we will go to 1.4. Program 1—Industries development Subprogram 1.4—Petroleum Senator WOODLEY—I want to ask a couple of questions on ethanol. The first one is this. I wonder if you or the department has seen a study done by the centre for agricultural and regional economics in Armidale. Senator Parer—Yes. Senator WOODLEY—One of the major findings of this study was the potential for regional impact and certainly for regional production of ethanol in New South Wales. I was wondering whether you give any credence to the study in terms of the projection that New South Wales could sustain up to 28 ethanol plants, which could produce 50 million litres of ethanol a year. Senator Parer—I can give you a quick answer, and then our expert, Ms Radke, can give you a bit more. I read the report with great interest, because naturally we are interested in these alternate fuels. But let me say to you that on the figures that I saw—Ms Radke may have a

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 79 different tack—it came out I think with a figure of 44c per litre that you could produce ethanol at. If you take that 44c per litre into account, compared to the price of petrol, then add the excise that applies to petrol and state excise on petrol, you would have to come to the conclusion that if those figures were right they should be all over New South Wales, because they are well in front in regard to the cost of producing ethanol. Senator WOODLEY—My final question is this. I am not even trying to be political on this one. Senator Parer—I realise that, and I am giving you straight answers on this. Senator WOODLEY—You are giving me straight answers, thank you. Has your department considered the whole issue of ethanol as a replacement for petroleum, given that on current estimates, certainly in Australia, we will run out of petroleum in about 14 years time. Senator Parer—I think this is the basis of the green paper on which the white paper will be developed. It is concentrating on, among other things, alternate forms of energy. Senator WOODLEY—Thank you. That is all I want to know. Senator BOB COLLINS—In order to expedite this, I can also play along. I only have two questions on 2.4, which I am happy to place on notice, so we can dispose of this one com- pletely as well. Senator Parer—I am wondering whether there are any questions on 3.1 and 3.3, AGSO and BRS. Senator BOB COLLINS—No. CHAIR—We still have questions on 2.1, 2.5, 4, 2.3 and 3.2. Senator BOB COLLINS—Correct. CHAIR—We will return to subprogram 2.1 Program 2—Industry and community services Subprogram 2.1—Natural resource management Senator BOB COLLINS—Has a public relations strategy been developed to promote RFAs? Mr Lee—Yes, it has. It is currently under consideration by ministers. Senator BOB COLLINS—How much money has been allocated for the purpose and how long is it proposed the strategy will run? Mr Lee—It is $1.5 million over three years. Senator BOB COLLINS—There has been some sort of steering committee established to oversee this strategy—is that correct? Mr Lee—Yes. It is a whole of government approach, and it is managed through the forests task force, but there is involvement of Environment Australia, DPIE and the task force. Senator BOB COLLINS—Can you tell me when the committee was established? Mr Lee—It is not a formal committee. It is one of the many working groups in the task force. The task force has a very flexible structure. Senator BOB COLLINS—Who is on it? Mr Lee—The working group is Alan Grant from DPIE, a representative from Environment Australia and an officer in the forest task force. The line of accountability is to the board of management of the forest task force, which includes representatives of the three portfolios.

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Senator BOB COLLINS—Fine. It is essentially a departmental exercise, is it? Mr Lee—Yes, it is, Senator. We have developed a strategy within the group with some external professional assistance and that is being considered by ministers now. Senator BOB COLLINS—You just mentioned the expertise. What are you doing in respect of research, both qualitative and quantative, that needs to be done for this sort of thing? Mr Lee—We can go to a company to do some market research on this issue. Senator BOB COLLINS—Do you know who that is? Mr Lee—Sorry, Senator, I do not know the name. Senator BOB COLLINS—It doesn’t matter. Would you mind taking that on notice and let us know about it? Mr Lee—Certainly. That company has done some focus group work in the cities and regional areas, and it has done some analysis of that research. We will build the strategy on the outcome of that research. Senator BOB COLLINS—With that company that successfully got that, was that done through a normal tender process? Mr Lee—I think so, Senator. I would have to take it on notice and get back to you on that. I assume so. Senator BOB COLLINS—Is there no-one here who can send us information about it? Mr Lee—It was managed through the forest task force so I would need to see PM&C. Senator BOB COLLINS—Fine. I would be happy if you took that on notice, if you wouldn’t mind. You said the research had been completed, didn’t you? Mr Lee—It has been completed. Senator BOB COLLINS—Is that a confidential document or is it available? Mr Lee—I do not see it as in any way confidential, Senator. Senator BOB COLLINS—No, I didn’t think it was from what I have heard about it. Could you provide a copy of it to the committee? Mr Lee—I can see no problem with that, Senator. Senator BOB COLLINS—Thanks very much. Could you let the committee know how the wood and paper strategy is progressing? Mr Thomas—The wood and paper industry strategy consists of a fairly large number of elements. The main item is the farm forestry grants and we had an exchange on that in the last Senate estimates. Senator BOB COLLINS—Yes. Mr Thomas—That comprises some half of the total funding for the package. Without more specific questions, I find it difficult to answer. Senator BOB COLLINS—That is fine. I understand. What I would like to know is: has the membership of that council changed in any way from when it was originally set up? Mr Thomas—Ministers are still considering a membership of that council and how it should be established. The structure has not yet been finalised. Senator BOB COLLINS—Has there been no final decision taken on any of that yet? Mr Thomas—No, there hasn’t.

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Senator BOB COLLINS—Okay. Originally, the former government provided $3.5 million over four years. Is that funding still in place? Mr Thomas—$3.5 million for what? Senator BOB COLLINS—To assist the council meet its objectives—$3.5 million in funding supporting the council. Mr Thomas—I am a little lost. Are you talking about the national forest policy advisory forum? Senator BOB COLLINS—Yes, the national forest policy council. Mr Thomas—Okay. That council no longer exists and a new structure was to be created which provided advice on forest policy as well as industry development—the forest product processing. That is what has not been decided yet. That matter has not yet been resolved. Senator BOB COLLINS—The government’s policy statement, which is contained in the document known as ‘Reviving the heartland’- if you remember that—says in part: A Liberal-National government will implement the $38 million wood and paper industry strategy. Can you tell me what time frame is being applied to that funding? Mr Thomas—Again, I am finding it difficult to answer the question unless you identify different parts of the statute. Senator BOB COLLINS—The commitment was given by the coalition, in the document Reviving the heartland, that this new government would implement the $38 million wood and paper industry strategy. Is that still in place? Mr Thomas—Yes, it is. Senator BOB COLLINS—And the funding is still in place—the $38 million? Mr Thomas—The funding is not $38 million. Funding provided in the last budget for the wood and paper industry strategy was— Senator BOB COLLINS—$26.51 million. Mr Thomas—I would have to come back to you on that. Senator BOB COLLINS—You can take that on notice. My understanding was that it was $26.51 million. Mr Thomas—That is close to the mark, yes. Senator BOB COLLINS—Yes. So they have short-changed us. We knew they would. If you would take that on notice. What I want to know basically, of course, is the reason for the difference in the figures. We were promised $38 million and from my reading of the budget papers we ended up with $26 million. Mr Thomas—The level of funding to be provided was reduced as part of the budget process. Senator BOB COLLINS—Like everything else, except Defence, of course. Seven million allocated for 1996-97—is that correct? Mr Thomas—Again, I do not have the figures in front of me. Senator BOB COLLINS—Take it on notice if you would not mind. The minister put out a press statement on 7 February announcing expenditure of $2.5 million on 11 research and development projects. Are you familiar with that statement? Mr Thomas—Yes, I am.

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Senator BOB COLLINS—Over what period are these projects intended to run? Mr Thomas—The projects are of varying times, depending on the project. The announcement refers mainly to research and development on sustainability indicators. Senator BOB COLLINS—I do not want you to go into enormous detail on this, but the whole emphasis that has been placed, and rightly, on the encouragement of plantation and farm forestry—what efforts are being put into this? You just indicated, I think, that the money we were just talking about has principally gone into those ecologically sustainable indicators. Mr Thomas—That research and development. Senator BOB COLLINS—That is right. So if you could tell us what is currently being done in terms of initiatives for encouraging plantation and farm forestry. Mr Thomas—There are two elements. There are the grants that were discussed at the last estimates hearing. There is also some additional funding to be provided through the National Heritage Trust. That funding will be provided over the period of the trust. We are finalising or working through the process of looking at criteria under which that funding can be allocated. Senator BOB COLLINS—Thank you. I have one more question, which I will place on notice. I will read it into the Hansard, but I do not expect you to have information on this now. I will finish on this in the hope that we will finish this without Senator Brown actually turning up at all for it. For the farm forestry category, can you give me an indication of how much of that funding has been spent on training, provision of information, establishment of strategic demonstration plantings, and assistance with the establishment of regional tree-grower co-operatives? Just break it. I have finished on that now. CHAIR—Thank you. That completes program 2.1. We will move to program 2.5. Senator BOB COLLINS—I have no questions. CHAIR—Any questions on 2.5? Sorry about that. False alarm. Any questions on program 4, corporate management? [6.24 p.m.] Program 4—Corporate management and policy Senator BOB COLLINS—Can you advise the committee—if you are in a position to do it now, fine, but if not then on notice—with the process that is in place in terms of liaison between Primary Industry and Customs and other relevant agencies in respect of dumping issues? Dr Hearn—Sure. I think there are two levels. The first level is more formal and that is where there are inquiries or major pieces of investigation by the government into anti-dumping procedures, including the international obligations that we have on anti-dumping, then there are the normal formal communications that we have. To give you a recent example of the Willett review which started in June last year: the department made a submission to the Willet review on a departmental perspective on how anti-dumping might be improved, what might be the objectives and what are the hurdles in it. At a less formal level, we have quite regular contact on a day-to-day basis with the relevant portfolios—primarily Customs, of course—in terms of handling what are some of the specifics. As I guess you would well know, there are a lot of day-to-day issues which arise on particular

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 83 products and people do look to the industry departments to give some perspective on those cases. Senator BOB COLLINS—Sure. The department in real terms does play a proactive role in this area? Dr Hearn—Yes, as whenever we need it. We operate it both through the corporate policy division and our industry divisions with their contacts with industry. But we do take a corporate approach to it as and when we need it. Senator BOB COLLINS—Fine. I am not sure whether you were here when I canvassed the particular concern of the citrus industry at the moment— Dr Hearn—Yes. Senator BOB COLLINS—I would simply appreciate some advice on this because I was interested to see it raised by them. That was a letter from the Australian Citrus Growers Association this year to the Deputy Prime Minister, which was copied to both the minister and Senator Brownhill, the parliament secretary. It referred to a meeting between Mr Fisher and representatives of the industry on 3 January. A particular concern of the citrus industry was what they saw as an anomaly between the way in which dumping matters are treated between the United States and Australia. The particular point they made was that in the United States the onus of proof is one that the exporters have to prove that they are not dumping their product; whereas the reverse, according to the citrus industry, is the case in Australia. Do you know if that is correct? Dr Hearn—Yes. We will have to look further at that but what I believe is the situation is that, broadly, there is a code of the World Trade Organisation. One of the things that we find successively in this area is where we try to improve—we have a certain amount of our own what you might call jurisdiction in this area which we exercise to the fullest extent. But at a certain point both the United States and ourselves do have to face up to the broader code of the World Trade Organisation and, frankly, as much good as the WTO does, we do sometimes have to live within the law— Senator BOB COLLINS—Sure. Dr Hearn—That is the parameters we have to look at. When we deal with the United States on this where there are apparent anomalies, we with DFAT will look very closely at what the code is with the WTO as well. Senator BOB COLLINS—Thank you for that. That is useful. I just have a personal interest in it as well, if there is any additional information you have on this that you think might be useful, could you provide it to the committee? Dr Hearn—Certainly will. Senator BOB COLLINS—Thank you, Mr Chairman. I have finished with program 4. CHAIR—Any further questions on program 4? Senator BOB COLLINS—I am happy to go to quarantine.

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[6.28 p.m.] Program 2—Industry and community services Subprogram 2.3—Quarantine and Inspection Service Senator BOB COLLINS—Mr Hickey, the number of export meatworks that AQIS is servicing in 1995-96, as I understand it, was around 213. Is it possible to advise the committee of what that number is now? Mr Hickey—We can provide you with that information. Senator BOB COLLINS—Thank you, I am happy for you to take that on notice. The reason I am asking the question is that it is correct, is it not, that there has been a significant reduction in that number— Mr Hickey—Yes, that is correct. There have been closures— Senator BOB COLLINS—As a result of the problem with prices in the industry and so on. Mr Hickey—Yes. Senator BOB COLLINS—In the last estimates hearing you referred to the establishment of a review team to provide advice on reform strategies for AQIS, and I think there was in fact a media release dated 13 September announcing the establishment of the AQIS meat inspection program steering committee and a supporting task force. Can you advise the committee whether or not that team has reported and how the report will be progressed? Mr Hickey—Yes, that report was provided to the minister late November-early December. It has been released for public comment. We can provide you with a copy, if you have not got one. Senator BOB COLLINS—Thank you, if you would not mind. Mr Macdonald—Senator, I can provide that report now, if you want. Senator BOB COLLINS—I would like to have a look at it. Again going back to a number of plants, the number of meat inspectors employed last year was 881—and again I am happy for you to take this on notice—can you provide me with the current number? Mr Hickey—Yes. Senator BOB COLLINS—What I actually wanted to identify, Mr Hickey, as I am sure you appreciate, is basically where the reductions have actually taken place in terms of establish- ments that have perhaps folded and so on. Mr Hickey—Sure. Senator BOB COLLINS—The Meat Industry Council’s pilot study alternative meat inspection processes, which was known as project 2, can you provide us with any advice of where that is currently at? Mr Hickey—Yes. There was a meeting of the steering committee that has been established by the Meat Industry Council to oversee that project and an associated project that is referred to as project 1, which is the implementation of pilot HRZAR burr sites around the domestic and export sectors. We over a period of 15 to 18 months now have been developing and submitting proposals for the project to trial to Australia’s major meat export markets. We have been involved in an extensive round of briefings and discussions with those markets on the principles of project

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2, its technical design and the like. The situation that we have got to at the moment is that the United States is currently considering the proposal. In advice that I had from the administrator of the FSIS—our counterpart organisation in the US in the last week or so—they expect to provide us with advice on any technical and legal impediments that they see to the trial progressing, with the intention then of moving to published notification of the Australian trial proposal in the US federal register for a period of public comment. In the context of the quadrilateral food safety group, at a meeting of Australia, New Zealand, Canada and the United States about 2½ weeks ago, Canada and New Zealand confirmed their acceptance of the trial and agreed to participate in an international review group that we are proposing to establish to oversight the trial. We have also had positive responses from a number of other key markets. Australia exports meat to about 108 markets. We have, in one way or another, approached most of those about the trial and to this date we have not had any advice or indeed any significant queries about the technical design of the project. The upshot of all of that is that we will be advising the minister on progress once we have some firmer indication from the United States, and judgments will then need to be made in discussions with the companies that are involved about just how exactly that will proceed and when. [6.37 p.m.] Program 3—Research and assessment Subprogram 3.2—Australian Bureau of Agricultural and Resource Economics Senator BOB COLLINS—Dr Fisher, can you confirm that an officer of ABARE travelled around the world in February 1996 to promote a plan to cut greenhouse gasses? Dr Fisher—I can confirm that, Senator. One of my officers, together with a officer from DFAT, conducted a trip related to the release of our book on greenhouse gas policy. Senator BOB COLLINS—Was the trip undertaken before the government had actually promulgated its policy on greenhouse gasses? Dr Fisher—The trip was related to the release of ABARE research which was unrelated in that respect to the development of current government policy. Senator BOB COLLINS—Was the travel approved by the Minister for Primary Industries and Energy? Let me just say that I am not even aware that it has to be. Dr Fisher—The travel was undertaken at my behest given my responsibility for my program. Senator BOB COLLINS—Was the minister or his office made aware of the trip and the details of both the itinerary and the purpose for which the trip was being undertaken? Dr Fisher—No, and we would not normally do so. Senator BOB COLLINS—Dr Fisher, was there any report provided on the trip or was it simply in the form of a contribution to the published research that came out later? Dr Fisher—There are two sets of things we do. First of all, there is a published document, which is a large book, which has been distributed around the world promoting ABARE’s research on climate change policy. According to departmental procedures, under the secretary’s instructions there is an official trip report compiled for every trip undertaken of that nature in ABARE. Senator BOB COLLINS—Is that made available to the minister?

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Dr Fisher—No. Senator BOB COLLINS—Where does that normally go? Dr Fisher—It would be available to the minister if the minister wished to see it, but that trip report is filed within ABARE’s files as part of our requirements to properly account for the way we expend our appropriation funds. Senator BOB COLLINS—Would that report be available to the committee? The trip I am talking about is the one you have identified and was taken between 2 February and 24 February. Dr Fisher—Yes, indeed. Senator BOB COLLINS—I am happy for you to take this on notice, Dr Fisher, if you have to. Do you know what the total cost of the trip was? Dr Fisher—Yes, we can probably tell you that. Senator BOB COLLINS—That will save putting it on notice. If you cannot find it, do not worry about it. Dr Fisher—If you just bear with me a moment. Senator BOB COLLINS—Sure. I have not got the time constraints on me, so take as long as you like. Dr Fisher—The gross cost of the trip to us was $16,233.67. We recovered some moneys from our colleagues in the Department of Foreign Affairs, Defence and Trade, leaving a net cost to ABARE of $8,822.45. Senator BOB COLLINS—How many officers were involved? Dr Fisher—There was one officer from ABARE and one officer from the Department of Foreign Affairs, Defence and Trade. Senator BOB COLLINS—And that money simply came out of ABARE’s normal budget? Dr Fisher—The net amount came out of ABARE’s appropriation. That part of the appropriation was some of the money we were expending on the Megabare project, our contribution to climate change research. Senator BOB COLLINS—I presume, Dr Fisher, that the itinerary for the trip will be contained within that report that you are going to provide to us. Dr Fisher—Yes, that is correct. Senator BOB COLLINS—Yes, that is fine. Last year’s budget papers, and you will recall we had some exchanges on this then, said that, despite a subsequent reduction in staffing, it is expected that the majority of existing portfolio services will be maintained so far as ABARE is concerned. Is that still the case? Dr Fisher—Given the budget cuts taken by ABARE and our subsequent requirement to increase our cost recovery for 1996-97, we have undertaken several things. First of all, we have cut costs in both our corporate services area and our research area. Most of that cost cutting has been to do with the provision of statistical services. We have collapsed some of our statistical publications into one. Later this year we will be providing more of those statistics on the web rather than publishing them, which allows us to do it more effectively and efficiently. Secondly, we have reduced our coverage of what we consider to be minor products. We maintain our coverage on the products that contribute the most to Australia’s exports while

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 87 we have reduced our coverage on small products. For example, we no longer provide detailed information on export products such as salt and diamonds because they are in fact making a small contribution to Australia’s export returns. They are obviously still important to those particular companies that produce them, but we cannot cover absolutely every commodity in the detail that we previously did. Senator BOB COLLINS—Dr Fisher, thanks for that overview. You actually said that it was too early last year to give an actual indication of where it all came in. That has obviously been determined now. Can you provide us with a paper that lays out where those programs that you have outlined have been affected? Dr Fisher—Yes, I can do that. Senator BOB COLLINS—Fine. That will do me if you could just take that on notice. I assume that the ABARE outlooks for wheat, wool and beef—I did not have the time, unfortunately, to follow it closely this year—were all laid out in the outlook, were they? Dr Fisher—Yes. I can provide the committee with the full documentation of the conference if that would be helpful. Senator BOB COLLINS—That is all I need, thanks. If you can just give us the documentation. I am particularly interested in wheat and beef, but you can give us all of it. Dr Fisher—I am happy to table the three volumes of papers from the conference. Senator BOB COLLINS—Terrific. CHAIR—Are there further questions on subprogram 3.2? If not, I thank the officers at the table for being here. We shall now adjourn for dinner. Sitting suspended from 6.45 p.m. to 7.33 p.m. [7.33 p.m.] Program 2—Industry and community services Subprogram 2.3—Quarantine and Inspection Service CHAIR—I call the committee to order. We shall resume where we left off. We have subprogram 2.3—Quarantine and Inspection Service, which we have started on and that is all we have left to complete. I welcome you back, Minister. Senator BOB COLLINS—Mr Hickey, could you advise the committee of the current rate of progress for the scheme that is going to replace the Hazard scheme? As I understand it, SCARM has already approved the scheme. Is it in fact going to go to the meeting tomorrow? Mr Hickey—Sorry, replace the what scheme? Senator BOB COLLINS—The Hazard scheme—the weed risk assessment. Mr Hickey—HACCP, I was thinking of. Senator BOB COLLINS—Of course. Yes, this acronym-ridden age we live in. Mr Roberts—Sorry, can I have the question again? Senator BOB COLLINS—The scheme that is designed to replace the existing Hazard scheme—as I understand it, it is going to be called the WRA scheme now, instead of the Hazard scheme—the weed risk assessment scheme. It was supposed to have been considered by ARMCANZ last October, and I am told that SCARM has approved it. Do you know where it is at?

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Mr Roberts—Where it is at with AQIS anyway is that we have been implementing it over about the last 18 months, so it is already in train. We are still waiting for some comments to come in from some different agencies that were consulted on the final detail of it. But essentially the elements of it are in place and in use. Senator BOB COLLINS—Mr Hickey, can you advise the committee how the additional funding—and, from memory, it is $6 million over three years—to open up export opportunities through the placement of additional AQIS officers in overseas posts is being progressed? Mr Hickey—Senator, it was $6 million over three years, $2 million in each of those years commencing in 1996-97. For 1996-97, because of the inherent delays in getting officers posted overseas, approximately $500,000 of those funds have been allocated to a series of four projects that are connected with the broader work of the Supermarket to Asia Council to maintain some of the research and studies that had been going on in the lead-up to the establishment of the council. AQIS had the resources under that program confirmed in the budget sufficient for us to appoint two additional staff overseas, and to employ some additional scientific and technical staff in Australia to undertake the necessary research and technical assessments to mount the cases for access for Australian products. We have advertised all of those positions and selections are being made for appointments to the Australian Canberra based positions. Interviews are being held next week for appointment to the two overseas posts. We are at this stage still discussing with the Department of Foreign Affairs and Trade the location of those two posts. There has been consideration given to a number of Asian countries. The priorities countries that are emerging appear to be Korea and Japan, and the question to be asked is: since it is our intention to locate one plant specialist and one animal specialist overseas, how would we distribute those between the two countries. I expect those decisions to be made in the course of the next couple of weeks, and the appointments made at about the same time. Senator BOB COLLINS—Please take these next two questions on notice. Could you please provide the committee with a breakdown of AQIS staff by classification and location as at the beginning of this year? Mr Hickey—Yes. Senator BOB COLLINS—I also would like to know the number of people employed on an agency basis for AQIS. Mr Hickey—Yes. Senator BOB COLLINS—Mr Hickey, is there any indication at this stage as to whether the additional northern surveillance measures are actually having an effect, for example, in increased detection rates? Mr Hickey—Mr Paterson might have some information on the actual seizure rates at the airports. But certainly in terms of greater awareness through the Torres Strait by virtue of the appointment of quarantine assistance onto each of the islands that has a helipad or an airstrip, that has been very successful. The operation of a sniffer dog and checks of all aircraft coming out of the Torres Strait into Cairns domestic airport has certainly also been successful. If we have any specific data, we can provide it to you. Mr Paterson—Senator, we do have figures to support a general statement which I will make, and that is that our interceptions through northern ports directly as a result of the initiatives through the northern Australian quarantine strategy have improved considerably.

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Senator BOB COLLINS—Excellent. Mr Paterson—I refer particularly to the initiative that we took with respect to Cairns, for example, dealing with domestic traffic out of the Torres Strait as compared to our traditional area of operation in international traffic, and also into Darwin. We are also having significant successes in the Torres Strait itself. As you know, our intention was to keep the threat offshore, so we are doing more work pre- embarkation rather than on arrival in Australia because, as we have discussed in this forum before, only a relatively small proportion of aircraft originating in the Torres Strait come to a defined first port and enable us therefore to take action. So we are trying to get on the other end. It is working most successfully. We could provide you with further statistical information on that if you require it. Senator BOB COLLINS—I would greatly appreciate it if you would not mind. Mr Paterson—My pleasure. Senator BOB COLLINS—Thank you. I am extremely encouraged to hear that that has been such a positive result. Has there been any sort of tangible result from the client focus program which involved horticulture grains and export meats that can be reported on? Mr Hickey—When you say program, there was— Senator BOB COLLINS—It was phase 3, as I understand it. Mr Hickey—We have now undertaken a series of surveys of industry clients across all of the programs that we operate and we are separately engaged in a series of activities within each of those industries that are designed to respond to the sorts of issues that were being raised through those surveys. For example, in the case of the export meat industry, the matters that are dealt with in that report that we tabled earlier are in large measure as a result of the discussions we have had with industry. In the export grain inspection industry, we currently have a formal evaluation under way of the progress that has been made with the various reform measures. There are a lot of specific details that I could give you on the reform agenda as it is being applied within each of those industries, because obviously it varies from industry to industry, including the extent to which they have the capacity to adopt quality assurance systems, the extent to which importing country authorities would permit the introduction of contestable provision of inspection services and the like. But if there were specific matters that you wanted information on we would be happy to provide it. Senator BOB COLLINS—That is enough. Thank you. I think I am correct in saying that you said last year that the cuts in the CSO for the 1997-98 financial year would be absorbed into the overall savings that were recommended in the meat review. Is that still on track? Do you expect to be able to actually handle the cuts? Mr Hickey—The financial issues arising from the consideration of that meat inspection reform report are being taken through the budget processes this year. Senator BOB COLLINS—Thank you. Can you advise the committee on how the training of 27 officers in food technology ordered by the Industrial Relations Commission in September last year has progressed? Mr Macdonald—We have sought the names of 27 officers who are interested in going through the program. We are trying to manage that through the study program that the

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Australian Public Service operates called Studybank, and we are going to put those people through the appropriate courses when they volunteer. Senator BOB COLLINS—I have got some questions about the Bindaree Meatworks near Lismore which I have received some representations on. If I could lay out the facts as they have been given to me, I have been told that Mr Jeff Gill, trading as Hastings Meat Supply, operated at this abattoir from January 1996 to 20 December; he leased the works from Mr John MacDonald; he went into receivership in December with total debts of around $4 million; on 7 January this year Mr MacDonald picked up the management and the workers formerly employed by Mr Gill and commenced trading under the name of Bindaree; that AQIS is holding Bindaree Beef responsible for Mr Gill’s debt, which I understand is in excess of $300,000; and that, as a consequence of this claim, Bindaree Beef has shut down its operation. Is that effectively accurate, as you understand it? Mr Macdonald—In large part. The debt is not $300,000; it is around about $220,000, I think. However, we can give you the precise amount if you want. The debt was incurred by Hastings trading as Fantap. Under the provisions of the PGGOs, prescribed goods general orders, those debts must be paid before a new occupier can be registered under the Export Control Act, and we are negotiating with Mr MacDonald, or his legal representative, at the moment on a scheme of arrangement to enable them to open up. Senator BOB COLLINS—The abattoir is currently closed; it is not operating domestically? Mr Macdonald—It was operating domestically. I am not sure whether they in fact stopped trading or stopped producing for commercial reasons, but they did start up as a domestic abattoir for a while. I do not know at this point if they are still in production. Senator BOB COLLINS—The bottom line of all this, I guess, is that in even attempting to provide any kind of discretion in this area you would be rightly, I would imagine, condemned by those meatworks that are in fact paying the full bill? Mr Macdonald—Yes. Mr Hickey—There has been a longstanding policy by governments, as reflected in the legislation, that those debts are to be paid in full before the registration is reissued to new operators, and the industry position, which has been very firmly in support of that policy, has been confirmed with us again just recently. Senator BOB COLLINS—But the bottom line is in fact that currently Mr MacDonald is in negotiation with AQIS about a scheme of arrangements to pay the debt? Mr Macdonald—Yes. Senator BOB COLLINS—Is it a fact that two importers of Canadian pig meat breached the import protocol last year? Mr Hickey—Last year? Senator BOB COLLINS—Last year. That was the information I was given—1996. Mr Hickey—We would have to confirm the exact numbers for you, but the audit process from time to time does throw up breaches of the protocol, yes. Senator BOB COLLINS—I wonder if you could take it on notice, Mr Hickey. Can you advise the committee if in fact importers of Canadian pig meat breached the import protocol last year, the nature of the breaches and on how many occasions there were breaches? Mr Hickey—Can I clarify that a little. The audit process throws up often some corrective action advices which are not necessarily critical breaches of the protocols but lapses in

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 91 paperwork and so on that are not essential to the quarantine control of the goods. I think you would be referring here to what are regarded as critical non-conformities which would warrant some major— Senator BOB COLLINS—Might I say, Mr Hickey, that is the way it has been portrayed to me. I do not expect you to dig out all the detail on the technical breaches, but these would be substantive breaches. Mr Hickey—Yes. Senator BOB COLLINS—Thank you very much. What is currently the position with the application from Denmark to import pig meat? Mr Gascoine—The application from Denmark has been the subject of an extensive risk assessment. That risk assessment was published some time ago for public comment. The comment has been received on that risk assessment. The issue is also being discussed with the European Union in the context of the veterinary agreement negotiations which are going on at the present time. I will ask David Wilson to add to that answer. Mr Wilson—The comments have come in on the Danish pig meat, and in general terms there is no substantial disease concerns raised. We have indicated that it will be done under similar import conditions to the Canadian pig meat. The extension of the Danish pig meat risk analysis to the EU as a whole is part of the work program under the EU vet agreement we are negotiating at the moment. Senator BOB COLLINS—I have got some other AQIS matters dealing with imported fish and these reports, and at this stage I might defer to Senator Murphy, who I think has some questions about salmon. CHAIR—Before you do that, I have a question for Mr Roberts. I saw him about to leave. Senator BOB COLLINS—Could I also say, for the courtesy of the officers, that I have no further questions in Mr Paterson’s area if he wants to go home. CHAIR—Thank you. Following the outbreak of anthracnose in lupins last year in Western Australia, which eventually extended over much of Australia, has there been a total assessment or report or anything done about the outbreak and where it spread from, et cetera, without me going into a lot of detail? Mr Roberts—There hasn’t been a report pulled together. We have plans to have a meeting of all concerned parties some time in the reasonably near future to attempt to pull the whole thing together. At the moment we have got anthracnose outbreaks in Western Australia, South Australia, Victoria and New South Wales, there are older reports from Queensland and there are recent reports from Tasmania—which shows that it is very widespread. All of the work that has been done on the current outbreaks and the work that can be done on the previous outbreaks where there are fungal strains available suggest that they are all the one strain. The belief of the scientists is that there is a reasonable possibility that all the current outbreaks in Australia date back to some of the original outbreaks in the 1940s and that what we have got is an accumulation of disease in certain production areas, plus favourable environmental conditions, plus obviously fairly intense attention to this particular problem when it was discovered in Western Australia. That has come together to give the appearance of a sudden spread of the disease throughout Australia and a sudden crisis of entry of the disease into Australia, which is not in fact correct if you look at the facts. The facts are that the disease is recorded from the 1940s in Australia. It is recorded sporadically since the 1940s in a number of states. It is recorded going back approximately

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10 years, for example, in Victoria in ornamental lupins, and over that 10-year period the specimens in their collection in the Victorian Department of Agriculture have elicited no comment and no particular action. That is where it is looking to be at the moment, but it will still take some time to pull the whole lot together. They are the tentative conclusions from the scientific findings at the moment. CHAIR—Is the strain the same one that was discovered in the lupins in Western Australia about four years ago which were imported from Germany? Mr Roberts—As far as I am aware, it is the same type. Although the species are the same, you can actually type it using a number of tests. It is the same type in South Australia. No-one has been able to discover any link between the South Australian outbreak and the Western Australian outbreak. It is the same type in ornamental lupins in Victoria, going back as far as they can. I do not know that they have got fungal cultures that far back, so it is difficult to check more than a few years back. But it is the same type there. It is the same type in New South Wales. And, of course, we cannot go back and check the historical data as to which type of this particular fungus was involved. CHAIR—In the ornamental lupins, was it only discovered in New South Wales and Victoria or was it in all states? Mr Roberts—It was initially found in New South Wales, but when Victoria started to look at their own records collected in the Victorian Department of Agriculture—their own specimens—they discovered that they did have valid records of this disease going back a number of years; I think it was about 10 years. CHAIR—In ornamental lupins? Mr Roberts—This is ornamental lupins. It has only been discovered in ornamental lupins, as far as I am aware, in Victoria. Ornamental lupins in New South Wales. I am not certain what the old records were for Queensland. It is in production lupins in South Australia and in Western Australia. CHAIR—Without prolonging this, provided it is not breaching any confidentialities or anything, could the committee get a copy of that report when you pull it all together? Mr Roberts—We are intending to have more or less an open meeting to bring together all the interested parties and we will try to get a report out of that, and we are certainly happy to provide it. It would be a publicly available report. CHAIR—My final question—and you can take it this on notice if you want to—is whether there is any strategy being put together between AQIS and the various departments around the country to handle the situation, as far as the growers are concerned, for the next season at least? Mr Roberts—We have been talking to particularly Western Australia. South Australia have decided to go for an eradication campaign, which will essentially involve affected areas staying out of lupin production for a couple of years and then making certain that they get clean seed if they restart in lupin production. Western Australia, I think, because of the very widespread nature of the disease there, have decided to take a management approach, which I believe will involve a combination of rotation—which in fact is their normal farming system throughout that area anyway—and a clean seed arrangement. Typically, I would expect an affected area to not grow lupins for a couple of years and then, when they restarted the lupin cycle, to make sure that they were getting seed from clean areas.

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The evidence at the moment is that, with those fairly simple steps, the disease will very quickly cease to be a commercial problem in terms of production agriculture. Senator MURPHY—Minister, with regard to the development of the final risk analysis report on salmon imports, was there any new scientific information or technical data that was used to draft this final report that was different or in addition to what was in the draft report and the subsequent second draft report? Mr Hickey—In general terms, Senator—and if any of the officers here have got some specific knowledge or have any further information they could add, otherwise we may need to come back to you on the very detailed elements of the report—when the initial draft IRA was published, I think there was something of the order of 170 responses to it. Many of those did go to the scientific and technical aspects of the 24-odd diseases that were considered in it. And because obviously we do not have most of those diseases in Australia, the lack of direct research documentation and data is not available in Australia, so we are relying on overseas sources. So to some extent the 170 replies that we got would have contained information that added to or in some other way affected the detailed information that was provided in respect of each of those diseases in the first draft IRA. Following the receipt of those 170-odd submissions, there was a further assessment made by a scientific group that was convened by the Bureau of Resource Sciences and involved fish experts from Tasmania and a couple of the other states, as well as the CSIRO. I have no doubt that out of that would have come some further additions to the total sum of scientific knowledge that was contained in that report. Senator MURPHY—If it is now the case that the information that was provided by those people has somehow been able to convince AQIS that it ought to totally change its recommendations with regard to the import restrictions as they related to imported salmon, why were they not sought in the first instance in terms of preparing the draft risk analysis, given that even with the second draft risk analysis and the questions that have been asked previously with regard to this issue, the comment from AQIS officers has always been that they had all of the best information available? Mr Hickey—At the time, the best information that is available, that is published and is accessible through the traditional routes, such as being available on the Internet or through other research libraries and so on, was used. The whole purpose of the draft risk assessment process, which is what that first document was, is to go through, in effect, a peer review of the work that is done by the AQIS experts and which was contributed to by an independent scientist at the time from CSIRO, as well as from the industry technical experts in Tasmania. In that process, when you are dealing with diseases about which often there is not much research information available and which are not widely known to scientists in Australia, it is often the case that there will be some addition to the knowledge that comes from a very broad consultation process. CHAIR—Could I just say that we are finished with Mr Roberts. There is no need for you to hang around unless you feel you want to sit here and listen to us. Senator BOB COLLINS—It is all right, he is an estimates groupie! Mr Hickey—He is waiting for the fruit fly questions. Senator BOB COLLINS—No, not tonight. Senator MURPHY—I would appreciate it then if AQIS could, by way of information, provide to me at least what additional scientific information it had made available to it that

RURAL AND REGIONAL AFFAIRS AND TRANSPORT RRA&T 94 SENATE—Legislation Thursday, 27 February 1997 enabled it to reach the conclusions it now has reached. I have not read every single word of this report, but in the main it does not seem that there is a lot of difference with regard to the technical data and reference being used to either of the previous draft reports. On the basis of that, I am interested to know how we would defend our position, given Canadian and US applications to the WTO. Mr Hickey—We can provide you with some general advice. I do not know that it would go down to every specific change to the scientific analysis of each of the diseases contained in that report, but certainly we can point you to the significant elements of new information or judgments that have been made that have come from the consultative process. We would be quite happy to do that. Mr Wilson—I think it is more than just an issue of data; it was interpretation of that data. As you know, there were 24 diseases involved. There was a lot of information gained but there was also an appreciation that there was a lot of information lacking, and perhaps it was both a clarification of the data that we did have plus a realisation of the gaps in the data as well as some provision of additional information. Senator MURPHY—The minister’s media release, when he announced this on 20 December, said: . . . that AQIS had finalised its decision based on an extensive scientific study of some 24 diseases of salmon, most of which do not occur in Australia. I fully support the AQIS decision, which is based on scientific and technical grounds and which is entirely consistent with Australia’s rights under the Sanitary and Phytosanitary Agreement of the World Trade Organisation. That is why I would like to know, because it does not appear evident in this report, where there are significant differences in terms of the information that you previously had. It worries me, quite frankly, that we have not taken this position, given that the Canadians had a copy of the draft reports previous, and that they would be smirking to themselves and being able to say, ‘Where have they produced any new significant evidence that would allow them to defend their position before the dispute settling tribunal at the WTO?’ It seems to me that the government might be setting itself up to get rolled at the WTO and at least they can say, ‘We tried.’ I find that somewhat unacceptable, given that on page 7 in your executive summary you say: Notwithstanding these advances, there are still many gaps in scientific information, so much so that governments and industries throughout the world are putting significant research effort into understanding better the nature and epidemiology of aquatic animal disease so that productivity can be enhanced and trade facilitated, while at the same time providing quarantine protection. And the minister said in his statement: the significant gaps in knowledge of these diseases including carrier status and infective dose. The last time I asked this question Mr Gascoine told me that for Australia to conduct any significant research into the effect on native fish populations could take us 10 years. I would like to know what this government minister is doing with regard to research if we are to ultimately defend a case or even be able to possibly defend a case against the challenge that is going to come forward at the WTO. Mr Hickey—Senator, one of the principles of the SPS agreement is that if there are significant gaps in the research—and in the case of aquatic animal diseases there are because the development of the trade, particularly in farmed fish, is a relatively recent development

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 95 in world circles and a lot of the research on a lot of the fish diseases has not been undertaken to the extent that it might have been for terrestrial animals, which has gone on for many, many years—countries are entitled to take a conservative position in relation to those matters, which, as the minister said, is precisely what we have done. Senator MURPHY—I take you to page 71, section 1.7.1—the agreement on the application of sanitary and phytosanitary measures. It says in a number of dot points, as you pointed out, that we do have a right when there are scientific gaps or we believe there are. But it also says, among other things: . Members have a right to take sanitary and phytosanitary measures necessary for the protection of human, animal, plant life or health, provided that such measures are not inconsistent with the provisions of the Agreement. . Members shall apply sanitary and phytosanitary measures only to the extent necessary to protect human, animal or plant or health. . SPS measures are to be based on scientific principles and are not to be maintained without sufficient scientific evidence. What raises the question with me is that your executive summary says there are still gaps, the minister says there are still gaps. But when you go further into these points about the application of the agreement, it says: . Members shall accept the sanitary or phytosanitary measures of other Members— other member countries— as equivalent, even if these measures differ from their own or from those used by other Members trading in the same product, if the exporting Member objectively demonstrates to the importing Member that its measures achieve the importing Member’s appropriate level of sanitary or phytosanitary protection. . Members shall base their sanitary or phytosanitary measures on international standards, guidelines and recommendations where they exist, except where it is determined that a higher level of sanitary or phytosanitary protection is scientifically justifiable and appropriate to the circumstances... That is why I ask what we are doing with regard to gathering and/or providing that additional scientific information or data. Mr Hickey—The onus under the SPS agreement—Mr Gascoine can go through the specific principles that will apply in this case should it come to a challenge—is not upon Australia to produce all the scientific evidence that would be necessary to prove conclusively that the risk associated with the potential introduction of these diseases would be so high as to warrant us to take the decision we have. This is because the SPS agreement acknowledges that, in dealing with animal diseases and the like, there will always be gaps in that knowledge. The report and the minister’s statement said that some of the critical gaps in the information are about the epidemiology of these diseases: the dose that may be carried—in whatever part of the process—in the fish, if it were to be admitted uncooked; what the infectious dose would be if that disease which was present in the uncooked flesh were to be transmitted to aquatic animals in Australia; and how those diseases would react in the Australian environment, et cetera. They are serious epidemiology questions which were not able to be answered by thorough analysis of the research. It is not incumbent upon us to undertake that research. Senator MURPHY—I will ask you again. What scientific information or data have you now gained to cause you to essentially do a backflip with regard to the recommendations you now make. I also ask: if there is additional information, what information was not available previously, prior to you making any recommendations or, indeed, prior to the first draft report?

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Industry would say that you had all the information in the first place; that it was a matter of you not taking any notice of it. Mr Hickey—We have undertaken to respond to that question. Senator MURPHY—Thank you. That is all I have. CHAIR—Apparently there is no application by either Canada or the US before the disputes tribunal of the WTO, is there? Has that been lodged at this point in time? Mr Hickey—No, it has not. CHAIR—So there is actually no dispute at this point. Mr Hickey—That is correct. Senator BOB COLLINS—In relation to the report of the national task force on imported fish and fish products, would I be correct in saying that this is basically the first time there has been a really comprehensive report detailing the extent to which these products are imported into Australia, the extent to which important Australian industries rely on them and the risk factors attached to the imports? Mr Hickey—Yes. Senator BOB COLLINS—As I understand it, this is actually one the few occasions in the world where this has actually be done to this extent, is it not? Mr Hickey—I understand that the sort of work we are doing is at the leading edge. Senator BOB COLLINS—It has come down with some very sensible recommendations in respect of what I think is a practical response to a serious problem. I guess what I am referring to is its recommendation on the progressive risk minimisation strategy approach— simply acknowledging the fact that there are major industries. Is it AQIS’s intention to adopt one of the fundamental recommendations of this in terms of future imports, that they will require the full blown risk assessment process? Mr Hickey—That is broadly correct. The report is part of the overall consideration by the government of a whole series of recommendations in relation to quarantine matters—the Nairn review, this report and some other matters that have been dealt with by Senate committees over the past 18 months. There will be a full formal response to all of those reports after the government has considered that clutch of reports. Clearly the fundamental direction of that report that you have, plus the Nairn report, which recommends the establishment of a more comprehensive set of fish health structures within the DPIE portfolio and indeed through Commonwealth and state forums in Australia generally, is that there needs to be a progressive process of fundamental review of existing access arrangements. For example, we have already acted to put a stop to the importation of freshwater crayfish and prawns that are not for human consumption, consistent with the priorities that are recommended in that report and pending a full risk assessment of those matters. We have also begun the process of establishing a fish quarantine unit within the animal quarantine policy branch in the organisation to work through that whole series of matters. Where there are any new products to be put to us for access, then they would go through the import risk assessment process that will come out of the government’s consideration of the Nairn report. Senator BOB COLLINS—Am I right in drawing a conclusion from this that the PRMS process is not meant to replace the full IRA process, that it simply has to be carried out in

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 97 cooperation with the industries affected? That is basically the conclusion that this comes to. The reason I ask the question is that, even though this is a very new report, I must say it is a fairly substantive piece of work. Has there been any indication to this point—I know how early it is—from the industries affected as to the extent of the cooperation that AQIS is going to receive in the PRMS process, considering that it will not be without its difficulties, I would imagine? Mr Hickey—In relation to the two matters I mentioned, that we had already decided, there have been some representations to us about disruption of trade but, equally, other representations to us arguing that the measures did not go far enough at the time. That is not understandable when we are coming at these sorts of quarantine matters, as you would appreciate, as we were with the pilchards issue some time ago—from a point where access is a given fact and we are looking at reversing that matter, whereas traditionally you are dealing with a new product and starting from a ground zero approach, as it were. There are also some recommendations in there about the importation of live fish for aquarium purposes. There have been representations there expressing concern about possible disruption to existing trade. I think we are going to find, as we inevitably do with most risk assessments, that there will be contrary views about these matters. But I think, given the very broad representation that there was on that task force, and obviously a good deal of good will and give and take that came to those agreed recommendations, we will be able to work our way through that. Senator BOB COLLINS—What prompted me to ask the question particularly, of course, was the fairly significant and understandable dissent in the report by some of the industry representatives on the socioeconomic aspects of the IRA process. Currently, as I understand it, the SPS agreement under the WTO excludes those considerations. That is correct, is it not? Mr Gascoine—I think there is a deal of confusion around about what is covered by the term ‘socioeconomic’. In fact, the SPS agreement allows, and indeed requires, members of the WTO to factor into their risk analysis the potential damage, including economic damage, which might be done by the arrival of a pest or disease as a consequence of an import through quarantine. That economic damage can, of course, extend not only to loss of sales and cost of disease control but also to the impact it has in terms of loss of wages of workers and the adjustment expenses that might be incurred privately or by the public sector. So that would embrace a number of what might be called socioeconomic costs. However, the WTO agreement precludes taking into account in risk analysis the effect of import competition, which may also have wide-ranging socioeconomic effects, but they are out of the frame. Senator BOB COLLINS—There is a little bit of subjectivity in determining where those lines get drawn, I suppose. Mr Gascoine—Well, there is no precedent yet in the WTO system for establishing that. It may well be that there be some blurring eventually found, yes. Senator BOB COLLINS—Is there any indication at this stage that the matter is alive in the terms of any interest in the WTO processes of actually trying to clarify it more carefully or tightly? Or is that likely to simply happen with decisions being made? Mr Gascoine—The answer to that is yes, Senator. It was recognised at the time the agreement was done that it was an imperfect agreement in the sense that all of the terminology was not defined. Senator BOB COLLINS—It would never have been signed off on otherwise.

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Mr Gascoine—It is said that the saving grace of the WTO-SPS agreement was that it was better than some of the other Uruguay Round agreements. That may not be much of an accolade. The SPS committee which was established has been working on trying to get some of those terms defined more clearly—I would have to say without a lot of success so far. There is a review of the agreement due after three years. Senator BOB COLLINS—Is Australia playing any kind of role in that process? Mr Gascoine—We have taken the general position that it is desirable that the meaning of the agreement be clarified. We have taken that view not least because that would be helpful to any dispute settlement panels that came to deal with issues and it would be better if the dispute settlement panels had some guidance, in our view, as to what the terms mean; what ‘sufficient scientific evidence’ means, for example. So far there is only one case on SPS matters before the disputes settlement panel. There is still some time to do some clarification but there is a prospect that there might be some more in the near future. Senator BOB COLLINS—I have actually heard from industry sources that there have been some meetings at least between industry and AQIS in respect of developing the PRMS process. I might add I was given those comments in a positive light—people that spoke to me said that they actually thought that they were of some value to them. Is that AQIS’s view? Has there been, as far as you are concerned, a positive response to this? Obviously I appreciate there is a long way to go, it has only just started. But I was certainly encouraged by the comments that were made to me. Does AQIS agree with the task force estimate that it will take three to five years to put aquatic animal quarantine on a similar footing to terrestrial animal quarantine? Mr Hickey—I think it will not be— Senator BOB COLLINS—Assuming appropriate resources are available. Mr Hickey—I was about to say—we had, as I said, begun to establish a fish quarantine unit within Dr Wilson’s branch in advance of the budget considerations anyway. We felt we had to do that in the light of the matters that were coming through the BRS report and the task force’s deliberations. The Nairn report raises the question in relation to plant products as well as fish and fish products of the need to build a structure broadly equivalent to that that already exists for animal and animal derived food products, and that will not happen in a short period of time no matter how many resources were thrown at it. It is simply a fact, given the general lack of research on aquatic animal diseases, for example, that there are very few specialists in that area in this country. It will take some time to build the capacity and the technical expertise to handle the sort of complex reviews that are envisaged in that report. Senator BOB COLLINS—I must say one of the pieces of information that this report commented on, which I read with some dismay—not surprise, dismay—and I am sure you would agree, was that a fundamental to even beginning this process is to get some kind of authoritative database commenced on all of this. I read at page 140 of the report that in 1993 this work was actually started in a substantive way. A check list of pathogens and parasites of Australian fish and shellfish was completed and AAHL then started to develop this into a database on computer and so on. It says that no further action on the database appears to have been taken, however; the thing has basically lapsed. What I am further advised in respect of this is that some of that original information, because nothing else has been done about it, now effectively will have to be reviewed and brought up to date in any case. Is that the case? Mr Wilson—Most fish disease research is conducted in the northern hemisphere on northern hemisphere problems and a lot of it is not relevant to our situation.

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Senator BOB COLLINS—No. And, of course, I can remember that Mr Hickey pointed this out to me at the time of the pilchard problem because it made sense, naturally enough, that the majority of the research has gone into the more valuable product and things like pilchards, for example, that has fairly low value, has understandably not had a lot of work done on it. I recall many of the briefings I had on that at the time. Most of this research has been concentrated in the Northern Hemisphere because a lot of it is clearly not necessarily scientifically relevant to the Southern Hemisphere. If this is actually going to be treated in a really serious manner, it does pose a potential problem of some significance, does it not, for governments in Australia in terms of the resources that need to be provided if a real job is going to be done on this? Mr Wilson—I think the lack of information will be the factor which retards progress in aquatic animal quarantine. Senator BOB COLLINS—This paints a fairly grim picture. I appreciate this is at a relatively early stage but, in terms of achieving that three- to five-year catch-up—which would be a minor miracle if it happened anyway—has any consideration been given in a perfect world to the level of resources that would be necessary to redress these problems? Mr Wilson—Those matters are being addressed in so far as they relate to the Commonwealth’s spheres of responsibility in the context of the consideration of the Nairn and that report. They will be dealt with through our budget processes. But, obviously, there is a need to have some better coordination of what inevitably are going to be limited resources in this area coordinated through state fishery authorities and also importantly with the industry itself. For example, you will recall, from the days of the pilchard issues, that the tuna industry in South Australia in conjunction with FIRDC is undertaking quite a deal of research in relation to the health issues surrounding the farming of those tuna pens. There is research on some relevant matters going on and it is one of the issues that will be high on the priority of the Fish Health Unit in DPIE, if that is the outcome of the government’s considerations. Obviously, there is going to have to be a better coordinated approach to the overall research activities that will have to be mounted to begin to generate the information. Senator BOB COLLINS—The level of the resources that you are talking about in terms of what is required in here is significant, is it not? Mr Wilson—Yes. Senator BOB COLLINS—On that point, I visited the fishery at Port Lincoln and actually spoke to the scientists that were working on the non-fish feed for the tuna, and at that stage they were very positive about progressing it. Do you know whether they have achieved any additional success in producing something that will allow them to go off pilchards? Mr Wilson—I am not sure. Senator BOB COLLINS—It does not matter if you do not. I am just basically reminding myself to chase it up, now that I am thinking about it. They had actually got the thing scientifically right but to get the thing commercially right was, I think, still the problem. The report actually says that the data collection for this base check list was discontinued after 1992, and consequently the information was no longer current. So, basically, the whole thing would have to be started from square one, I guess. One thing I did want to solicit some comment on from you, Mr Hickey, was in relation to page 97 of the report. I was interested in this in terms of what we were talking about today with anthrax. It says:

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It should be noted that the vaccines used to control some exotic diseases are not currently licensed for sale in Australia so that they will not be readily available should a disease outbreak occur. Can you tell what is actually being done, if anything, to address this or is it simply being done as part of the overall response? Mr Hickey—It would be done as part of the overall response to the series of recommenda- tions that are in the report. Senator BOB COLLINS—Is it proposed that the government will respond to both the Nairn report and these together? Mr Hickey—Yes. Senator BOB COLLINS—That is what I thought. Have you any idea as to what the time frame on that might be at this stage? Mr Hickey—The reports have been taken forward as part of the budget processes, so I assume it will be associated with the budget announcements. Senator BOB COLLINS—I will just turn to the Nairn report. The Nairn report has a silhouette of a beagle—a lot slimmer than mine—on the front cover. One of the recommenda- tions in the report—and I have to say that from the cards that have been sent out and signed you may have already adopted it—is that the quarantine service in Australia adopted the beagle in the same way as Smoky the Bear has been so effectively used to raise public awareness of fires in national parks and so on. Is it the intention of AQIS to do that or, in fact, have you already done that? Mr Hickey—It has happened de facto because of the tremendous publicity and focus that the dogs attract. That has been of inestimable value to the country in terms of increasing awareness and knowledge of quarantine issues. Mr Paterson—I can only add that that has been the case. It has evolved this way and it is presumably one of the reasons that the Nairn committee were attracted to it. To answer your directly, we have not formally adopted it. That is part of our response, and it is being considered in the— Senator BOB COLLINS—It is highly likely you will, is it not? Mr Paterson—If it has worked so well to date, it is a recommendation that we are generally highly attracted to. There are, nevertheless, some down sides and they need to be recognised. Mr Hickey—We found that successive ministers enjoy having their photos taken with the dogs. Senator BOB COLLINS—I noticed that. You know that old theory that owners end up looking like their dogs. Well, my dog has ended up looking like his owner. It is a real problem. Mr Paterson—No comment. Senator BOB COLLINS—You did warn me. Mr Paterson—You gave me an undertaking, Senator, as to the purpose for which we were supplying the dog to you. Senator BOB COLLINS—The kids keep on giving him Kentucky Fried chicken. He would be useless at an airport. Mr Paterson—We understood he was for you, Senator. You had other objectives in mind. Senator BOB COLLINS—You mentioned down sides. What are they?

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Mr Paterson—We have to recognise that the quarantine service is far more than about beagle dogs or, indeed, about dogs altogether. You spend a lot of time on ergot, plant matters and fish and so on. It is one of the issues that you always have to come to grips with when you talk about an organisation such as AQIS—the very broad range of quarantine and export inspection functions. There is no animal made, I guess, that covers the lot. We recognise that. But it is fair to say that in some quarters there has been a small amount of adverse comment about that. We have to take note of it and take a balanced judgment on it. Senator BOB COLLINS—Having had it laid out, I can understand how that would occur. In terms of Mr Hickey’s comment that this has naturally evolved, it has been pretty much a community reaction to the presence of the dogs, has it not? It has resulted in a pretty positive public approach to AQIS, has it not? Mr Hickey—Absolutely. Mr Paterson—It is probably one of the most positive things that has happened in the service for a long time. Senator BOB COLLINS—I know that AQIS is progressively expanding the sniffer dog network in Australia. It is proposed to continue to expand? Mr Paterson—The short answer to that is yes. Our proposal is to have one detector dog team per shift, per airport, in Australia so that every international aircraft and all 7.2 million passengers would have the potential to have to front, so to speak, a detector dog team. It is only one of our efforts with respect to decreasing, if we possibly can, the level of elicit material coming into the country. We have moved down the field of X-rays too. We do not intend to have a dog— Senator BOB COLLINS—That was my next question. Has that trialling or testing of equipment proved to be successful? Does that equipment have any real promise? Mr Paterson—It has a great deal of real promise. We have been monitoring it since the same period when we first looked at the beagles in the United States. That is now nearly six years ago when we had our first discussions with NASA. Yes, the technology that is now before us is of real assistance in the quarantine business. We are actually trialling some of those machines and, more particularly, we have actually just purchased some with the intention of placing them in every airport in Australia. In fact, we will have one in Darwin. Senator BOB COLLINS—So the decision to put them into service been taken already. Mr Paterson—Yes, and you will have one in Darwin. Senator BOB COLLINS—The minister during his public release of the report of the Nairn review committee stated that his intention to establish a steering committee within DPIE chaired by the departmental secretary to oversight what was referred to as a Nairn implementation force. Can you advise the committee of what progress has been made there? Mr Paterson—Yes, that did happen. The secretary established a steering committee. It has two components to it. One of my colleagues from the department has just joined me to explain the departmental effort to look at those broad ranging recommendations that cut right across the department. AQIS itself established a small task force that has been working under that steering committee with the intent of being able to bring back to the minister a departmental response to the Nairn report and the other three or four that Mr Hickey referred to. Senator BOB COLLINS—Thank you.

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Ms Quang—In answer to your question about a steering committee, that has been established under the chairmanship of the secretary. I have a list of the members of the steering committee. It has met twice and it will meet again towards the end of this month as part of its charter to oversight the implementation of Nairn and the report on fish and fish product. I could provide you with a list of the steering committee members and their terms of reference. Senator BOB COLLINS—I would actually like that. If you can provide that to the committee, I would appreciate it. As far as I am aware, in respect to the committee, there was some indication flowing from the committee to indicate that the budgetary costs flowing from the recommendations of the committee are one-off for a specific period or maybe ongoing. As I understand it, the committee has actually produced some preliminary work about the costings that might be involved in adopting particular recommendations of the report. Is that correct? Mr Hickey—The Nairn committee itself put some costings to the recommendations that it has made, but it qualified those costings by saying that the department clearly needed to give a lot more detailed consideration to the matters that it had raised and to produce a better set of estimates. Senator BOB COLLINS—The $9 million and the $2.8 million. Mr Hickey—Yes. All of that is being done as part of the steering committee processes and are the matters that are being taken forward in the budget. Senator BOB COLLINS—One question I would like to ask refers to statistics. I used these very often myself. There is quite a rapid increase in the level of traffic requiring quarantine surveillance in Australia. It is constantly going up and up. In a general sense, are the staffing numbers for AQIS currently coping with that increase? Mr Hickey—In a very general sense, the findings of the Nairn report acknowledge that we are stretched in many areas and that we have had to stop doing some things. For example, surveillance at wharfs is one of the matters that the Nairn report touches on. We have had to reduce that activity and apply the resources that we do have towards direct cargo clearance and inspection activities. So the fundamental findings of the Nairn report in relation to our operational activities are that the service is stretched. Senator BOB COLLINS—I guess the comments I am making are unblushingly for you, Minister. I know you understand the point I am making. I have to say that I found it a very frustrating exercise indeed. I actually fundamentally support the principle of user-pays where it is appropriate. There is the CSO component of the national cost of these intrusions and the big gaps that now exist in ports in terms of those inspections. You only have to look at the papaya fruit fly thing, which effectively was a debate about paying for the additional surveillance that went backwards and forwards between Queensland and the Commonwealth for years. In terms of the initial expenditure of money, as compared with the final cost of the intrusion, it is peanuts in a lot of ways. I guess I was just making a plea for that to be considered when this major response from the government to the report comes down—that there is not simply a wall-to-wall preoccupation with user-pays for resourcing AQIS. There is another thing I want to ask about without going into any detail yet, because I know that it is going to be announced in a package way. Has the government made any decisions or announced any decisions about one of the major recommendations that are contained in this report—that the service should in fact be set up as a statutory authority at arms-length from the government with its own board and so on?

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Mr Hickey—That recommendation is being considered along with all of the others by the government at present. Senator BOB COLLINS—Senator Woodley is not here, so I cannot have another go at him. We heard about ‘no risk’ again in question time today. Of course, the report indicates only too clearly that— The Chair interjecting— Senator BOB COLLINS—That is right. The Queensland Farmers Federation in its submission argued that penalties for quarantine breaches do not reflect the potential threat to native fauna and flora and potential economic cost to Australia of the introduction of exotic pests and diseases. The Australian Banana Growers Council went a bit further than that and suggested that some effort be put into educating the judiciary on the importance of quarantine, given their lack of will to impose maximum penalties. The review committee said in response to these submissions and others: It supports this sentiment and believes that an important element of national awareness . . . the Australian judiciary should reinforce the importance of quarantine by imposing penalties more in keeping with community attitudes. Is this a view supported by AQIS? Mr Hickey—Yes, it is. We have had trouble with penalties under the act in two respects. One is the matter you have referred to—that at least from our perspective sometimes the judiciary have not used the full extent of the powers available under the legislation when they are considering fines. The other problem that we have had is that, of course, the court processes themselves and the relative priority that attaches to quarantine as against other cases means that court proceedings can often be a somewhat drawn out process when people are only here for a short time. It would be far more efficient if we were to handle them under on- the-spot fine arrangements. That legislation has now passed and we are just in the process of giving effect to that in an operational sense. Senator BOB COLLINS—Just in a general sense, Mr Hickey, I would appreciate your comments on this. As you know, throughout the whole process of IRA assessments and so on, there has been a general theme—justified or not, I might add—of a failure of AQIS in terms of its consultation processes; and this, of course, was one of the major elements of discussion when the Nairn committee was set up. I noted in that regard that the report suggested that the industry charging review committees could perhaps have their role expanded to provide for meaningful consultation on issues other than charging. Has AQIS got a view on that? Mr Hickey—Yes. We very much support that recommendation. In fact, a couple of the industry charging review committees that we had established—in particular, in cargo clearance and in dairy—had evolved, in the lead-up to the time when Nairn was appointed, along precisely the lines that he has now recommended. They have been extremely fruitful exercises, from our point of view, in building very good relationships with the industry and in helping focus on strategic directions for the future, rather than the tortuous problems of day-to-day charging and structure of prices and costing types of issues. I think that as part of a natural progression, had Nairn not even made that recommendation, it would have gone that way. There has also been very widespread support for that aspect of his recommendations. Senator BOB COLLINS—In the fish report, I think there was a comment that actually drew attention to the fact that, as far as the imported fish products were concerned, there was no

RURAL AND REGIONAL AFFAIRS AND TRANSPORT RRA&T 104 SENATE—Legislation Thursday, 27 February 1997 kind of industry group that was readily available to expedite that kind of consultation with industry. Mr Hickey—Yes. That is quite right. We have also recently had a very productive exercise as an incidental spin-off from looking at the national trapping systems for Asian gypsy moth. That, in effect, has spawned a consultative arrangement with the timber industry in a way which we have never had before, as well. We would take the criticisms that have been made about AQIS a little to heart in some respects, in that the amount of consultation you can carry on is, in part, a function of the resources available to you. Consultations is a two-way process, and we would expect industries to approach us in the way that they would hope that we would approach them. But in general terms, we would certainly support the directions that Nairn has recommended. Senator BOB COLLINS—In terms of where I come from, one of the things I was interested in—and I would also like you to comment on this—is that, in the submission to the review, Queensland DPI stated that, in the transfer of quarantine and export inspection functions back to the Commonwealth, AQIS lost a direct link with the local level. Are you familiar with that particular concern that was raised by Queensland? Mr Hickey—In general terms, yes. It is a bit hard to understand, in the sense that we still employ essentially the same staff in the same locations, dealing with the same industry groups at the same level. The thing that I personally have found—and I know that my senior colleagues here certainly agree—is that, as a result of the transfer, we get more direct information from the local level about operational issues—which better governs the policy making and standard setting processes that we go through. Part of the concern from the states that have previously operated our quarantine services for us under the agency arrangements is that, because that direct feedback is coming to us, it is not coming to them in the same quantity and at the same time. We have had extensive bilateral discussions with Queensland, particularly in the NAQS context. It is obviously a very important state in that context, and we have established formal consultative arrangements. We have also agreed to provide the Queensland department with the weekly management reports that I get from the operations staff in Queensland, so that they have ongoing access on a weekly basis to all of the operational issues that have been raised with me as part of that management reporting process. With Queensland, we have certainly come to a very amicable and workable arrangement which ensures we both have access to the relevant information. Senator BOB COLLINS—Thank you. In relation to the same issue, the Nairn committee said that the committee is strongly of the view that the Commonwealth should re-establish meaningful formal communication links on quarantine policies and programs with states, including formal meetings of the chief veterinary and plant officers area equivalents and regular meetings of specialist quarantine staff across all disciplines. That was at page 29. Is it intended to do that? Mr Hickey—Underneath the ARMCANZ and SCARM structures there have always been standing committees, previously referred to as the Animal Health Committee and the Plant Health Committee. Those meetings have always taken place, and continue to take place, under the new SCARM structure. So to some extent the recommendation is a little superfluous. There is also a wide degree of consultation on specific matters. I mention, for example, the gipsy moth trapping system that has been set up nationally now and also a national fruit fly surveillance and monitoring system that has been established, which has involved extensive

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 105 discussions between us and the states. We also consult them virtually on a daily basis on important issues like access to the anthrax vaccine and so on. To some extent that recommendation is a little bit of recommending what already happens. I think what it is really driving at is that concern that some of the states have expressed—much along the Queensland lines—that, following the transfer of responsibilities, they have not had access to the same amount of operational detail. We will certainly look at ways of helping overcome those concerns. Senator BOB COLLINS—Thank you. We are just about there. I want to ask the very controversial question about aircraft disinsection, which always raises the hackles. That is currently under review, isn’t it? Mr Hickey—One of Nairn’s recommendations is that we cease disinsection. Again, that is being looked at as part of the government’s overall response. Senator BOB COLLINS—Fine. So we will hear about that at the same time? Mr Hickey—Yes. Mr Paterson—Senator, on that question I have some information that I could add for your benefit. It is true that we have been trialling alternative arrangements for some time. That was running before Nairn and has run parallel with it. We have been trying other arrangements, both offshore and here in Australia. Senator BOB COLLINS—What are the alternatives effectively? Mr Paterson—The problem is that Nairn approached it largely, as you would see, from the point of view of the tourist and being sprayed whilst they were in the air. Senator BOB COLLINS—I do not like it much. Mr Paterson—We have discussed residual disinsection in this forum before, but we have been looking to see whether it is possible to have what one would describe as a pre- embarkation and a post-embarkation, or a disembarkation exercise, so that the travelling passenger was not directly exposed to it. Australia has been doing that in conjunction with the World Health Organisation and quadrilateral countries. We have not been running it on our own. That particular exercise has been running now for about 18 months, and it has pretty much come to a head in conjunction with the Nairn recommendations. As Mr Hickey said, it is now being handled in that context. Senator BOB COLLINS—The Nairn committee commissioned a number of consultancies to provide information on incursions of pests and diseases. As I understand it, those consultancies were designed to identify the number and rate of incursions over the last 25 years and four reports were commissioned. Is that correct? Mr Hickey—Yes, the BRS was commissioned to undertake that work. The summary results were contained in an attachment to the report. Senator BOB COLLINS—I do not actually want the reports, but should I want the full reports, are they available? Mr Hickey—Yes, they are. Senator BOB COLLINS—I noted press reports that there had been an isolated capture of papaya fruit fly at some significant distance from the quarantine zone, and there was an assumption then made that that was probably because someone had carried some fruit in. Can you tell me what the current position is with papaya fruit fly, not just that incursion? I would like to know about that incursion as well, but what is the current position of it?

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Mr Roberts—I will deal with that discrete incursion. That is at Mount Isa. Senator BOB COLLINS—Yes, that is the one. Mr Roberts—On two separate occasions earlier this year, a single fly was trapped. That was assumed to be due to fruit being carried in, from which flies had emerged and been caught. There was no specific action taken on that occasion, but recently three flies were trapped in three separate traps—one fly in each of the three different traps in a fairly short time. Although that is not considered to be an outbreak situation—at least for national action— under our codes of practice for fruit fly including papaya fruit fly, it is close enough to be of concern. The result is that, under QDPI legislation, they have declared a quarantine zone and moved some of the eradication team over from the Cairns area to undertake what we hope is just a precautionary eradication campaign to make certain there is not a breeding population established in Mount Isa. The long-term prospects for papaya fruit fly surviving in Mount Isa are very poor. There are very few host plants in the area, and the area is very inhospitable. That is that specific one. In terms of the main outbreak zone, the control eradication campaign is going very well at the moment. The trap captures have dropped from something like one fly per trap per week being caught down to something like one fly per 1,000 traps. I have forgotten the average numbers but that is now about the capture rate in that area. The area is saturated with control blocks, and there is also bait spraying going on. There are some slight concerns about a few hot spots which seem to be persisting. They may be associated with some populations in the sea almond terminalia—which grows up the coastal strip—and also perhaps with a few organic properties—particularly around the Mareeba area—where they have refused to have the control program carried out. Senator BOB COLLINS—On what grounds? Are you serious. Mr Roberts—Queensland is looking at its legislative arrangements. There is some concern. There are some hot spots. Senator BOB COLLINS—These are greenies? Mr Hickey—Yes. Organic growers do not believe in chemicals. Mr Roberts—The control involves placing chemically dipped blocks on trees and bait spraying with an insecticide attractant in host trees as well. Senator BOB COLLINS—I might revise the views I had about aerial spray. Goodness me, that is a fairly short-sighted approach—would they rather have the papaya fruit fly? Mr Roberts—This is considered part of the reason that there are possibly a few hot spots, but the other problem with the current control program is that you are always slightly behind the game. You find a hot spot with the traps, and then you go in to put your control program there. The breeding cycle of the fly is such that there is always the potential that, by the time you protect it and take action, there could be another hot spot another kilometre down the road. As a result, the current technical recommendation is that we probably will need the sterile insect technique, so that we can flood the area. It is an area-wide approach and it is totally environmentally friendly. It is reasonably expensive but it was allowed for in the original budgeting. Senator BOB COLLINS—From what you have just said, is there still a reasonable hope of eradication at least at some stage? Mr Roberts—There is a very good chance. All the assessments of the program show that we are well ahead—in terms of drop-off in fly numbers—of even the best programs that have

RURAL AND REGIONAL AFFAIRS AND TRANSPORT Thursday, 27 February 1997 SENATE—Legislation RRA&T 107 been successful overseas. The fly numbers are dropping very well. People were talking about maybe a 20 per cent chance at the beginning of the program; they are now much more optimistic. People will not quote figures, but they are very much above that level. Senator BOB COLLINS—Thank you. I have a last question on this. I do apologise—it was in there and I did not ask it before, although you were probably expecting it. On the question of cost, what is the current state and federal situation in terms of how much it has cost so far? Mr Roberts—Off the top of my head, I cannot remember the exact figures that have been spent to date. Senator BOB COLLINS—Roughly will do. Mr Hickey—Senator, this is going to ARMCANZ tomorrow. To that extent, the estimates are still to be ratified by ministers. The original cost estimates, which were hasty estimates made at the time the incursion was first detected, were about $52 million including the sterile insect technology. The latest estimates around that are in the order of $64 million, which is over a five-year period. So far in 1995-96—is this the Commonwealth contribution— Senator BOB COLLINS—That is the Commonwealth alone, isn’t it? Mr Hickey—No; I was talking about the gross figures. Senator BOB COLLINS—Is that the global figure, is it? Mr Hickey—Yes. So far the Commonwealth in 1995-96 has advanced $3.8 million. So you can say $7.6 million has been the total cost in 1995-96. For 1996-97, it is about $6 million, so $12 million would be the total cost. That is to date. As I say, if ministers ratify the adoption of the sterile insect technology—and there are options about how many flies per week would be released; this option is based on 125 million sterile flies per week—the cost would be about $64 million. Senator BOB COLLINS—Has there been any estimate to this point in time of industry cost? I appreciate the difficulties in getting that. Mr Hickey—We would have to consult Queensland about the losses that have occurred within the quarantine zone, particularly in terms of interstate trade. We do not have access to those figures. With respect to the losses in export trade, as you know there was some loss of trade in green bananas to New Zealand which was a very small amount of money at the time. There was the loss of the mango trade to Japan and trade in other fruit fly host commodities out of the quarantine area. Unless Bill has the figure at the top of his head, we could provide you with that information on notice. Senator BOB COLLINS—Take it on notice, please. I would like to know, if you could get this for me, what the Queensland department assesses as the domestic Queensland loss. Mr Hickey—The original ABARE estimates were that their cost benefit analysis based on an eradication cost of about $52 million suggested that the benefits outweighed the cost if there was a 15 per cent chance of eradication. If you ask the technical people to think in retrospect about whether we are well ahead of a 15 per cent change, the answer would be yes, definitely. So on that basis the total cost benefit analysis still points to proceeding with the full eradication program, and indeed the Mount Isa incursions point to the potential problems of opting for a containment, roadblock type strategy in the longer run. Senator BOB COLLINS—Thank you.

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CHAIR—There being no further questions on subprogram 2.3, I thank all the officers at the table, the minister, Hansard, Sound and Vision and the various people of the committee. Committee adjourned at 9.03 p.m.

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