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COMMONWEALTH OF AUSTRALIA
Proof Committee Hansard
SENATE
ENVIRONMENT AND COMMUNICATIONS LEGISLATION
COMMITTEE
Budget Estimates
(Public)
WEDNESDAY, 29 MAY 2013
CANBERRA
BY AUTHORITY OF THE SENATE
[PROOF COPY]
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This is an uncorrected proof of evidence taken before the committee.
It is made available under the condition that it is recognised as such.
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SENATE
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Wednesday, 29 May 2013
Members in attendance: Senators Abetz, Back, Bilyk, Birmingham, Boswell, Cameron, Colbeck, Heffernan,
Joyce, Ludlam, Ian Macdonald, McKenzie, Ruston, Singh, Waters, Williams, Xenophon.
Wednesday, 29 May 2013 Senate Page 1
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
SUSTAINABILITY, ENVIRONMENT, WATER, POPULATION AND COMMUNITIES
PORTFOLIO
In Attendance
Senator Farrell, Minister for Science and Research and Minister Assisting on Tourism
Department of Sustainability, Environment, Water, Population and Communities
Executive
Dr Paul Grimes, Secretary
Mr Malcolm Thompson, Deputy Secretary
Dr Kimberley Dripps, Deputy Secretary
Mr David Parker AM, Deputy Secretary
Ms Donna Petrachenko, Chief Adviser International Biodiversity and Sustainability
Australian Antarctic Division
Dr Tony Fleming, Director
Dr Rob Wooding, General Manager, Support Centre
Dr Nick Gales, Chief Scientist
Mr Matthew Sutton, Finance Manager
Biodiversity and Conservation Division
Mr Sean Sullivan, First Assistant Secretary
Ms Claire Howlett, Assistant Secretary, Biodiversity Policy Branch
Ms Charmayne Murray, Acting Assistant Secretary, Program Delivery South Branch
Ms Peta Lane, Acting Assistant Secretary, Program Delivery North Branch
Ms Lisa Nitschke, Acting Assistant Secretary, Indigenous Policy Branch
Mr Nathan Sibley, Director, Program Support Branch
Dr Julie Anorov, Director, Program Support Branch
Mr Joshua Thomas, Director, Biodiversity Policy Branch
Environment Assessment and Compliance Division
Mr Dean Knudson, First Assistant Secretary
Ms Barbara Jones, Assistant Secretary, North, West and Offshore Assessment Branch
Ms Deb Callister, Assistant Secretary, Queensland and South Australia Assessment Branch
Mr James Tregurtha, Assistant Secretary, South-Eastern Australia Assessment Branch
Mr Shane Gaddes, Acting Assistant Secretary, Compliance and Enforcement Branch
Ms Carolyn Cameron, Assistant Secretary, Strategic Approaches Branch
Ms Mary Colreavy, Assistant Secretary, Great Barrier Reef Taskforce
Mr James Barker, Assistant Secretary, Regulatory Reform Branch
Supervising Scientist Division
Mr Richard McAllister, Acting Supervising Scientist
Mr Keith Tayler, Director, Supervision and Assessment
Wildlife, Heritage and Marine Division
Ms Alex Rankin, First Assistant Secretary
Mr Paul Murphy, Assistant Secretary, Heritage North Branch
Mr Matthew White, Acting Assistant Secretary, Wildlife Branch
Ms Lara Musgrave, Assistant Secretary, Marine Environment Policy and Programs Branch
Mr Geoff Richardson, Assistant Secretary, Marine Biodiversity and Biosecurity Branch
Ms Jennifer Carter, Acting Assistant Secretary, Heritage South Branch
Page 2 Senate Wednesday, 29 May 2013
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Environment Quality Division
Dr Diana Wright, First Assistant Secretary
Mr Andrew McNee, Assistant Secretary, Environment Protection Branch
Mr Matthew Dadswell, Assistant Secretary, Environment Standards Branch
Mr Bruce Edwards, Assistant Secretary, Waste Policy Branch
Sustainability, Policy and Analysis Division
Mr Mark Flanigan, First Assistant Secretary
Mrs Mary Wiley-Smith, Assistant Secretary, Sustainability and Communities Branch
Dr Kathryn Collins, Assistant Secretary, Environment Research and Information Branch
Parks Australia Division
Mr Peter Cochrane, Director of National Parks
Mr Charlton Clark, Assistant Secretary, Commonwealth Marine Reserves Branch
Mr Mark Taylor, Assistant Secretary, Parks and Protected Areas Programs Branch
Policy and Communications Division
Mr Stephen Oxley, First Assistant Secretary
Mr Howard Conkey, Acting Assistant Secretary, Communications and Ministerial Services Branch
Corporate Strategies Division
Ms Dianne Carlos, Chief Operating Officer
Ms Lily Viertmann, Chief Financial Officer, Financial Services Branch
Water Efficiency Division
Ms Mary Harwood, First Assistant Secretary
Mr Colin Mues, Assistant Secretary, Water Recovery Branch
Mr Richard McLoughlin, Assistant Secretary, Irrigation Efficiency Northern Branch
Mr John Robertson, Assistant Secretary, Basin Communities and On Farm Branch
Ms Lucy Vincent, Assistant Secretary, On Farm and Urban Water Programs Branch
Water Reform Division
Mr Tony Slatyer, First Assistant Secretary
Mr Greg Manning, Assistant Secretary, Aquatic Systems Policy Branch
Commonwealth Environmental Water Office
Mr David Papps, Commonwealth Environmental Water Holder
Mr Steve Costello, Assistant Secretary, Policy and Portfolio Management Branch
Dr Simon Banks, Assistant Secretary, Environmental Water Delivery Branch
Office of Water Science
Ms Suzy Nethercott-Watson, Acting First Assistant Secretary
Agencies
Bureau of Meteorology
Dr Rob Vertessy, Director of Meteorology
Dr Ray Canterford, Deputy Director, Services
Ms Vicki Middleton, Deputy Director, Corporate
Mr Graham Hawke, Deputy Director, Climate and Water
Dr Neville Smith, Deputy Director, Research and Systems
Mr Barry Hanstrum, Acting Deputy Director, Research and System
Mr Trevor Plowman, Assistant Director, Finance
Great Barrier Reef Marine Park Authority
Dr Russell Reichelt, Chairman
Wednesday, 29 May 2013 Senate Page 3
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Mr Bruce Elliot, General Manager, Environment and Sustainability
Ms Margaret Johnson, General Manager, Communication and Policy Coordination
Mr John Barrett, Director, Corporate Services
Mr Adam Smith, Director, Environmental Assessment and Management
Murray-Darling Basin Authority
Dr Rhondda Dickson, Chief Executive
Dr Fraser MacLeod, Executive Director, Joint Programs Internal Review Taskforce
Mr Russell James, Executive Director, Policy and Planning Division
Mr Frank Nicholas, Executive Director, Corporate Services Division
Ms Jody Swirepik, Executive Director, Environmental Management Division
Mr David Dreverman, Executive Director, River Management Division
National Water Commission
Mr James Cameron, Chief Executive Officer
Ms Kerry Olsson, General Manager Industry and Sustainability
Mr Matt Kendall, General Manager Planning and Evaluation
Committee met at 08:59
CHAIR (Senator Cameron): I declare open this public hearing of the Senate Environment and
Communications Legislation Committee. Today the committee continues its examination of the Sustainability,
Environment, Water, Population and Communities portfolio. The committee has set Friday, 26 July 2013 as the
date by which answers to questions on notice are to be returned. Under standing order 26, the committee must
take all evidence in public session. This includes answers to questions on notice. Officers and senators are
familiar with the rules of the Senate governing estimates hearings. If you need assistance, the secretariat has
copies of the rules. I particularly draw the attention of witnesses to an order of the Senate of 13 May 2009
specifying the process by which a claim of public interest immunity should be raised, which I now incorporate in
Hansard.
The extract read as follows—
Public interest immunity claims
That the Senate—
(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly
raising claims of public interest immunity as required by past resolutions of the Senate;
(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance
as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;
(c) orders that the following operate as an order of continuing effect:
(1) If:
(a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from
a Commonwealth department or agency; and
(b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest
to disclose the information or document to the committee, the officer shall state to the committee the ground on which the
officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify
the harm to the public interest that could result from the disclosure of the information or document.
(2) If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer the
question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the
minister.
(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to
disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground
for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or
document.
(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from
the disclosure of the information or document to the committee could result only from the publication of the information or
document by the committee, or could result, equally or in part, from the disclosure of the information or document to the
committee as in camera evidence.
Page 4 Senate Wednesday, 29 May 2013
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement
does not sufficiently justify the withholding of the information or document from the committee, the committee shall report
the matter to the Senate.
(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising
the matter in the Senate in accordance with other procedures of the Senate.
(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal
deliberations of, government, in the absence of specification of the harm to the public interest that could result from the
disclosure of the information or document, is not a statement that meets the requirements of paragraph (1) or (4).
(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency,
by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of
that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be
required to provide a statement in accordance with paragraph (3).
(Extract, Senate Standing Orders, pp 124-125)
Department of Sustainability, Environment, Water, Population and Communities
Murray-Darling Basin Authority
National Water Commission
[09:00]
CHAIR: I welcome Senator the Hon. Don Farrell, Minister for Science and Research, representing the
Minister for Sustainability, Environment, Water, Population and Communities; and portfolio officers. We now
turn to outcome 4, and I call officers from the Murray-Darling Basin Authority together with officers from the
department in relation to program 4.1, water reform, and officers from the National Water Commission. Does
anyone want to make an opening statement?
Senator Farrell: No, thank you, Chair.
Senator JOYCE: Can the department please provide a list of expenditure under each of the following
programs for all of the financial years beginning in 2007-08, including the most up-to-date spending for the
current financial year? Can the department also provide forecasts or projections for these programs over the
forward estimates? No. 1, Restoring the Balance.
Ms Harwood: Just to clarify, you are wanting the expenditure by year for Restoring the Balance?
Senator JOYCE: Yes. From 2007-08, including the most up-to-date spending for the current financial year.
Ms Harwood: The total administered expenditure in 2007-08 was $30,775,346.76; in 2008-09 it was
$373,989,659.45; in 2009-10 it was $780,188,070.82; in 2010-11 it was $357,676,795.46; in 2011-12 it was
$540,896,438.63; and this year, as at April, it is $700,992,671.58.
Senator JOYCE: Okay. The Sustainable Rural Water Use and Infrastructure Program.
Ms Harwood: I might have to take that on notice. I could come back to it during the morning. I just need to
find it amongst my many tables.
Senator JOYCE: If you take it on notice, when will you get back to us?
Dr Grimes: We might just give Ms Harwood a small opportunity to find the material quietly.
Senator JOYCE: While you are looking for that, I am also going to be asking about the National Water
Security Plan, the National Rainwater and Greywater Initiative and the Green Precincts Fund. We probably won’t
get a chance to get these back on notice, so I need to, as best we can, get these answers now.
Dr Grimes: Yes, we will seek to assist you with that.
Mr Parker: I am sure we can draw those numbers together for you during the course of these hearings.
Senator JOYCE: Today?
Mr Parker: Yes.
Senator JOYCE: Okay. What I will do, Ms Harwood, is leave those with you. It is going to be Restoring the
Balance, the Sustainable Rural Water Use and Infrastructure Program, the National Water Security Plan for Cities
and Towns, the National Rainwater and Greywater Initiative and the Green Precincts Fund. I want to get those
numbers because we want to try and work out where we are going with the department.
Can the department indicate what elements of this funding has already been allocated? Can you answer that
now or do you want to get back to me on that?
Mr Parker: Over the forward estimates?
Wednesday, 29 May 2013 Senate Page 5
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Senator JOYCE: Yes.
Mr Parker: We will have to take that on notice. We will endeavour to get those numbers to you today.
Senator JOYCE: I want to get an update of where your intergovernmental agreements are with the states in
regards to the implementation of the basin plan. Who is the best person to answer that?
Mr Slatyer: The intergovernmental agreement is still going through its development process.
Senator JOYCE: It is still going through its development process. What areas of disagreement are there
currently?
Mr Slatyer: We are not in a position to say that, Senator. There are many issues covered by the
intergovernmental agreement, and until it is finalised we are not able to advise of the attitudes of different parties
to different provisions.
Senator JOYCE: Are we going to get to an agreement?
Mr Slatyer: The governments are working actively on that agreement. That is as much as the department is
able to say about that.
Senator JOYCE: How often are we having meetings about trying to get to an intergovernmental agreement?
Mr Slatyer: There have been a large number of meetings at the officials level between water agencies of the
Commonwealth and state governments, and there have also been interactions between agencies at central
government level. So considerable work has been done to finalise the agreement.
Senator JOYCE: What happens if we do not get an agreement.
Mr Slatyer: The intention is to get an agreement, Senator.
Dr Grimes: I think that it is appropriate to indicate that we are really at the very final stages of the finalisation
of the intergovernmental agreement. As Mr Slatyer has indicated, we are not in a position to give you an update
on every aspect of that just at this moment. They are matters being considered by governments. But it is very well
positioned and we are in the very final stages of consideration of the IGA.
Senator JOYCE: Can you tell us which states still have issues outstanding?
Dr Grimes: I do not think it would be appropriate to go into that level of detail in these hearings. But I am
very comfortable in advising you that the discussions between officials have been very productive, and
governments are in the very final stages of the consideration of the IGA.
Senator JOYCE: Do you have a draft version of the intergovernmental agreement?
Dr Grimes: Yes, there are draft versions of the intergovernmental agreement, and those are very advanced.
Senator JOYCE: When is the next meeting between the states and the Commonwealth to discuss the
intergovernmental agreement?
Mr Parker: There is not presently a meeting scheduled between all officials. There are bilateral discussions
taking place, and discussions between water officials are substantially complete, as Dr Grimes has said.
Dr Grimes: It is for that reason, because the process is so advanced, that it is not at the point of large-scale
meetings. It is really at the very final stages of the IGA consideration by governments.
Senator JOYCE: We are now in the process of basically bilateral agreements to finish things off?
Dr Grimes: We are essentially making sure that all final details that have been raised by jurisdictions are
properly considered and finalised. But, as I have indicated, it is at the very final stages of the process.
Senator JOYCE: Have you reached an agreement on Nimmie-Caira? That seems to be belted around all the
time.
Mr Parker: Not yet.
Senator JOYCE: Is that one of the problems we are having with New South Wales, coming to an agreement
on Nimmie-Caira?
Mr Parker: There are active discussions between the Commonwealth and New South Wales on the Nimmie-
Caira proposal.
Senator JOYCE: Is it true that there are discussions also in regard to the purchase of the water from Nimmie-
Caira by an external party that might be out there?
Mr Parker: That has not been discussed between the Commonwealth and New South Wales.
Senator JOYCE: What are the areas with Nimmie-Caira that are causing problems? Where does the issue lie
there?
Page 6 Senate Wednesday, 29 May 2013
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Mr Parker: The Nimmie-Caira proposal is a very interesting, large and important proposal. It has basin-wide
implications, being effectively at a chokepoint near the confluence of the Murrumbidgee and Murray rivers. It is a
complex proposal involving water purchase and land management arrangements, and those issues are being
actively worked through between the Commonwealth and New South Wales on a daily basis.
Senator JOYCE: If you do not purchase the water, there is nothing to stop a state-owned enterprise from
another country purchasing that water and developing it, is there?
Mr Parker: Nothing within water policy, that is right. The foreign investment rules are potentially applicable.
Senator JOYCE: Are you aware of Chinese interest in purchasing the water at Nimmie-Caira?
Mr Parker: I have seen press reports to that effect.
Senator JOYCE: Can you give me an update on the progress of Menindee?
Ms Harwood: Working with New South Wales, we have agreed the scope of a suite of infrastructure changes
at the lakes that would enable them to be run more efficiently, and thereby produce savings in terms of
evaporative losses. The next step is to move to the full costing, design and development of the infrastructure side,
and also to work with the other states who have an interest in how that project unfolds in terms of the water
management at the lakes. We have commenced discussions with South Australia and Victoria on the proposal and
how it would work. That is where it is up to.
Mr Parker: We are envisaging that before too long a public consultation process would start on the project.
Senator JOYCE: Menindee seems to be hanging around forever.
Mr Parker: It has been a multiple-decade exercise.
Senator JOYCE: Upon the conclusion of Menindee, how much water will we have saved?
Mr Parker: That number remains to be finally settled. It depends upon a complex interaction of the changed
infrastructure proposals at Menindee. As Ms Harwood mentioned, there is substantive agreement on the possible
infrastructure changes at Menindee. It also depends upon the rules of operation of Menindee and where water is
held and where it is released from. The present modelling exercises that are being undertaken point to substantive
possible savings. How that will be accounted for under the Basin Plan, including the SDL adjustment mechanism,
is presently being worked through with New South Wales.
Senator JOYCE: So what is the number we come up with?
Mr Parker: Well, the number has not been finally settled.
Senator JOYCE: Is there a range?
Mr Parker: It is in the order of 80 gigalitres.
Senator JOYCE: How much money has the government spent on Menindee thus far and what has the money
been spent on? My question is how much water has been saved, but no water has been saved at this point in time.
But we are looking at a roundabout 80 gigalitres when we complete?
Mr Parker: That is correct. The savings come from the implementation of the project.
Senator JOYCE: So could I get the number of how much we have spent at Menindee?
Ms Harwood: The expenditure to date at Menindee—that is, all the technical studies and work so far—is
around $24 million. I can get you a precise figure.
Senator JOYCE: Since we started talking about it to where we are now we have spent only $24 million?
Ms Harwood: That is since 2008.
Senator JOYCE: Do we have studies for $24 million?
Ms Harwood: We have a very extensive study of the groundwater resources in the region. It is a major piece
of work, using new technologies to get a much better understanding of the groundwater resources in the region,
because that is relevant. Part of the project is also making sure that Broken Hill's water supply is secure.
Senator JOYCE: So how much have you spent on studying groundwater? How much of that $24 million was
into studies of groundwater?
Ms Harwood: The cost of the groundwater work is in the vicinity of $22 million.
Senator JOYCE: So $22 million on groundwater studies. What has been the outcome of those studies?
Ms Harwood: An interim report was released last year from Geoscience Australia that is up on our website. A
final report, which is an extensive technical report on the work, will be released soon. The result is a completely
Wednesday, 29 May 2013 Senate Page 7
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
new understanding of the scale, distribution and character of the groundwater resources in the region. It is major
new information.
Senator JOYCE: In your own words, give me a rundown of how it works.
Mr McLoughlin: The work by Geoscience Australia has identified in the study area—approximately 100
kilometres or so north and south of the Menindee Lakes on the Darling flood plain—some 14 new aquifers that
were previously unknown to groundwater science, with a very large volume of water currently stored in those
aquifers. The final reports will be available, as Ms Harwood said, in coming weeks. That should underpin that
part of the election commitment from 2007 that relates to water security for Broken Hill.
Senator JOYCE: How much water, in your estimation, is stored in those aquifers, and what is the
conductivity of it?
Mr McLoughlin: The draft report released last year, with the final numbers made public in coming weeks,
estimated current storage volumes of up to around 3,000 gigalitres of groundwater. There is a lot of work to go
yet on finalising that, and storage volume is not the same as the sustainable yield of potential groundwater.
However, Geoscience Australia will have estimates of that, including sustainable yields, potentially available for
the summary reports and new work that is being released shortly.
Senator JOYCE: What is the conductivity of that water, the saline content of that water. I know that you
understand that, but for the purpose of Hansard—
Mr McLoughlin: Yes, I do. It varies substantially between aquifers and between the depths of the aquifers. I
do not have the reports in front of me, but there are substantial quantities of water that is effectively freshwater or
less than 3,000 microsiemens.
Senator JOYCE: Is there any perviousness between the aquifers? If you take water from the bottom aquifer
does it affect the top aquifer?
Mr McLoughlin: One of the technical criteria for this work was that they were semi-confined aquifers so that
there was no impact on surface groundwater or on groundwater dependent vegetation. So that has been a key
component of the work.
Senator JOYCE: But if you tap a bottom aquifer do you affect the aquifers above it?
Mr McLoughlin: Potentially, and that would have to be tested. If one of these aquifers were ever to be
utilised as a drought security supply for Broken Hill, pump testing would need to determine that and what the
risks of surface water would entail.
Senator JOYCE: I am interested to know how you go about doing that. This is not a trick question. How do
you go about finding out whether taking water from the bottom aquifer might affect the top aquifers?
Mr McLoughlin: As part of the work, Geoscience Australia drilled test bores in the areas and put data loggers
in the bores. They have been watching the height of those aquifers over the last two years or so in various places.
The pump testing would need to determine what the response of the aquifer was to a draw down in terms of what
the water table did in response to pumping.
Senator JOYCE: Do you generally find that there is a bit of a response effect—what is your terminology for
it?—in the upper aquifers?
Mr McLoughlin: I assume that there would be, but I am starting to get out of my technical depth here. That is
maybe a question that we can take on notice for Geoscience Australia.
Senator JOYCE: Is that a unique feature just down there or would that be a pertinent feature of most
aquifers—that if you take water from the bottom aquifer it affects the aquifers above?
Mr McLoughlin: I think that is a question we would take on notice. It is one of those things that would be
dependent on the geology of the area and the aquifer concerned, I would have thought.
Senator JOYCE: That is an interesting question in regards to the coal seam gas. When will we start to do
some earthworks at Menindee? Obviously everybody is fascinated by the studies, but they really want to see
something actually happen. I know that you have to go through all of the preliminary studies, but ultimately
people will want to walk out there and say 'We are doing this.' When does the earthmoving and the sorts of tactile
construction components of Menindee start actually happening?
Mr McLoughlin: We are in discussion or negotiation with New South Wales on a draft funding agreement for
the New South Wales Office of Water to prepare a detailed project plan for implementation of the agreed
infrastructure. We have done some preliminary costing on that. It is a matter of, over the next six to 12 months,
preparing detailed construction plans, environmental approvals, and planning approvals and processes.
Page 8 Senate Wednesday, 29 May 2013
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Mr Parker: Any construction timelines are contingent on the weather and in particular the amount of water
coming down the Darling. It would not be technically feasible to start the construction right now, for instance.
Senator JOYCE: How much water has been saved at Menindee by any works? I suppose none has been
saved yet by any works. How much do we actually have stored at Menindee at the moment?
Ms Harwood: The authority might be able to answer that question.
Senator JOYCE: We have not booked any savings of water at Menindee yet have we?
Ms Harwood: No.
Mr Parker: No.
Senator JOYCE: In construction work you have done thus far, what are the savings that you have booked?
Ms Harwood: I could work through those in detail, but the major projects that have water efficiency savings
for which the Commonwealth has received a share for the environment would include the Northern Victorian
Irrigation Renewal Project and the Private Irrigation Infrastructure Operators Program, which is now all under
contract. The Commonwealth On-Farm Irrigation Efficiency Program has substantial yields of water. The first
two rounds of that are well underway. Some of the projects are completed, and the third round will be under
contract soon. Then there are other state priority projects which yield water, including the Queensland on-farm
program. The New South Wales farm modernisation program is getting underway with the first tranches of
contracts there, and the pilot for that program yielded water. The early projects in the Basin Pipe program in New
South Wales will be bringing their yields forward, and the private irrigation infrastructure program in South
Australia has also yielded water savings for the Commonwealth. I can provide you with a detailed list of the
sorts—
Senator JOYCE: I suppose what everyone is interested in really is what it adds up to.
Ms Harwood: The water recovery through infrastructure as of 30 of April is 313 gigalitres.
Senator JOYCE: How much did you spend doing it?
Ms Harwood: I should say also that that went up just a couple of weeks ago by another 30 gigalitres because
the final contract came in with Murrumbidgee irrigation.
Senator JOYCE: So we are up to 343. How much have you spent to get that 343?
Ms Harwood: I will take that on notice. I would need to add up all the contracts that go with that 313.
Senator JOYCE: Plus the 30 on top of that.
Ms Harwood: Yes.
Senator JOYCE: What is the status of the draft recovery strategy and when will it be finalised?
Ms Harwood: We received comments from a range of bodies and individuals on the draft water recovery
strategy and we will be preparing a final. We are working on that at the moment—to take in those comments and
to prepare. When I say a final, it will be a first edition of that because it will need to be an evolving document that
reflects the changes that occur as we proceed through to the full implementation of the basin plan. It will need a
major review in 2016 when we know the results of the SDL adjustment mechanism.
Senator JOYCE: Sorry, I am trying to work out when it will be finalised. When will the draft recovery
strategy be finalised?
Ms Harwood: I do not have a precise date for the release of that.
Senator JOYCE: So we are reviewing it in 2016. We have to finish it before we can review it.
Ms Harwood: We will release it this year, I just do not have a precise date for when the first formal version of
the Commonwealth water recovery strategy will be released.
Senator JOYCE: How much water does the Commonwealth Environmental Water Holder currently have?
Ms Harwood: Is that in terms of the actual registered holdings for the Commonwealth?
Senator JOYCE: Yes.
Ms Harwood: The contracted is the 313 gigalitres. That is under a works contract. Sorry, the total water
recovery in contracted recoveries is 1,600 gigalitres. That has been recovered towards the 2,750 of the basin plan.
That comprises 1,119 gigalitres of secured water purchases; 313 gigalitres, as of April, for infrastructure; 11
gigalitres gifted by Queensland; two gigalitres from the Water Smart Australia project; and 154 gigalitres
recovered through state government actions, as at September 2012.
Wednesday, 29 May 2013 Senate Page 9
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Senator HEFFERNAN: How much supplementary water is in that? It might be even better just to break it up
into high security, general allocation and supplementary—bearing in mind that supplementary used to be off
allocation. It should never have been licenced.
Ms Harwood: I can give you the figures for supplementary for water purchases secured. I just need to do a
breakdown. There is not much supplementary through the infrastructure programs. There is for some for things
like metering where you get a pro rata water yield from the projects, but in general the infrastructure projects
yield general security of high security. Apart from, I should say, the Northern Victoria Irrigation Renewal Project,
where the savings reflect the character of the reconfigurations that are taking place. There are some low reliability
water shares from that.
Senator JOYCE: All I am trying to work out is how much water the Commonwealth Environmental Water
Holder currently holds, because where I really want to head to is how much we are actually using, how much are
we storing, how much have we lost and carried over and how much could have been basically sent back to the
farming sector because we could not use it and we lost it?
Ms Harwood: The Commonwealth Environmental Water Holder is a separate outcome and he is on after this
session.
Senator JOYCE: Great! Then we will prepare ourselves for that question so that when they turn up we get an
answer. If you just go back to Menindee, what flow conditions do you need before you can start work at
Menindee?
Ms Harwood: I think it is how much water there is in the lakes at the particular sites where the works are
going to occur. I do not have the precise figures on that, but for some of the things where you are changing outlet
regulators or points of connection between the lakes, you need the Lakes to be empty or near empty to do the
works.
Senator JOYCE: When are these conditions likely to occur, given what is in the system?
Mr McLoughlin: There is some surface water infrastructure that could potentially go ahead, including a new
outlet regulator from Menindee Lakes. But one of the issues for the inefficiency of Menindee Lakes is the amount
of dead storage volume in the lakes. Looking at opportunities to reduce that dead storage volume by drainage
channels to new outlet regulators is part of the mix of potential surface water infrastructure. That could not be
done unless the lakes were dry. It is not likely with current storage levels, as I understand them, that Menindee
Lakes itself would be dry potentially for another couple of years, even in wet conditions. So dry conditions would
be needed for quite a while.
Senator JOYCE: You are going to need a drought before you can get back into it, aren't you?
Mr McLoughlin: Into the lake itself, but some of the other surface water infrastructure can proceed.
Senator JOYCE: I want to refer you to a discussion paper, Trading of Commonwealth environmental water,
released in November 2011. The document was released for comment until May 2012. On your website it says:
The next step in the process will be the public release of a position paper with our responses to the issues raised in the
submissions. This will inform development of operating rules which will establish the general framework within which trade
will occur.
When will the position paper can be released?
Mr Parker: We can take that question under outcome 6.1.
Senator JOYCE: So you have an answer, and you will take that question in a subsequent outcome.
Senator HEFFERNAN: Will you answer it in that outcome?
Mr Parker: We will endeavour to give you the best possible answer.
Senator HEFFERNAN: Do you know the answer yourself?
Mr Parker: I will give you an overview. The precise time line for the release of that paper has not been
determined.
Senator JOYCE: There is your answer.
Ms Harwood: I have those figures you wanted. Do you want me to read those into the record?
Senator JOYCE: Yes.
Ms Harwood: The green precincts funding, I should say, is reported inside the National Water Security Plan
for Cities and Towns, so I will start with that program. In 2007-08—and these are rounded figures—the
expenditure was $10 million; in 2008-09 it was $13.5 million; in 2009-10, the figure was $18.8 million; in 2010-
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
11, the figure was $22.4 million; in 2011-12, the figure was $86.4 million; and the figure for 2012-13, which I
think is the total budget figure, is $58 million. For the National Rainwater and Greywater Initiative, starting in
2008-09, the figure is $600,000; in 2009-10, the figure is $4.7 million; in 2010-11, the figure is $2.3 million; and
in 2011-12, the figure is $200,000. That program concluded in that year. Under the National Urban Water and
Desalination Plan, the first year in which there is expenditure is 2008-09, where the figure is $24 million. Then in
2009-10, the expenditure for that program is $92.8 million; in 2010-11, the figure is $51 million; in 2011-12, the
figure is $320.2 million; and in 2012-13, the figure is $117.9 million.
I will also read you the Sustainable Rural Water Use and Infrastructure Program figures. In 2007-08, the figure
is $137,127,000; in the next year it is $82,853,000; in 2009-10, it is $235,815,000; in 2010-11, it is $270,606,000;
and in 2011-12, it is $608,339,000. The expenditure for this year will be close to $590 million. I will need to
adjust that figure. We are not quite at the end of the financial year, but our expected expenditure for this year is
between $590 million and $600 million.
Senator BIRMINGHAM: For those of us who do not take shorthand, is it possible to get Ms Harwood to
table the information that she has given Senator Joyce across these programs and the funding?
CHAIR: Ms Harwood, is that possible?
Ms Harwood: Yes. We can prepare that and submit it to the committee.
CHAIR: What is the time frame?
Mr Parker: Today.
Senator BIRMINGHAM: While we are still in session would be good.
Senator RUSTON: Could you also table the same information for the Strengthening Basin Communities
program as well?
Ms Harwood: Yes, I will.
Senator JOYCE: In answer to question number 46 from the last estimates, the department stated that it had
$180 million unallocated from the Sustainable Rural Water Use and Infrastructure Program. How much do you
have left unallocated now?
CHAIR: Ms Harwood, before you go into that, is it possible for one of your officers to start preparing those
documents. Mr Parker said 'today' and there is obviously some concern at trying to get the documents as soon as
practicable. So could you get someone working on it?
Ms Harwood: Yes. I think that the remainder in SRWUIP remains about that level. I will confirm that.
Senator JOYCE: So it is still $180 million?
Ms Harwood: Yes.
Senator HEFFERNAN: That would be the sort of money you would use on Nimmie-Caira?
Ms Harwood: The unallocated amount in SRWUIP is money that has no speaking against it. New South
Wales has $208 million of state priority project funding agreed through the 2008 intergovernmental agreement,
which it has yet to allocate to a specific project. That is separate and different from the $180 million that is
unallocated.
Senator HEFFERNAN: The proposition that New South Wales has put to you on the buyback of Nimmie-
Caira is out of this bin?
Ms Harwood: No, it is not.
Senator HEFFERNAN: Well where is it out of?
Ms Harwood: New South Wales's proposal is to do the project as a state priority project, and it would be
proposing that the funding for that comes from the remaining $208 million which New South Wales has available.
Senator HEFFERNAN: Which is for water buybacks.
Ms Harwood: No. It is part of the sustainable rural water use and infrastructure program.
Senator HEFFERNAN: It does not matter if you spend most of the money on the land and not on the water.
Given that you agreed before they issued the licence—
CHAIR: Senator Heffernan, please allow officers to respond—even to take a breath to get a response would
be good.
Senator HEFFERNAN: Just for the record, as you know, before the licences were issued under this
proposition—which is only a proposition at this stage from New South Wales—there was an agreement before the
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
licences were issued to pay 2¼ times the value of the water to acquire the water and the land. I can go into great
detail on why I think that is a fraud of the public purse but we'll leave it at that.
Senator JOYCE: I really need to clarify over what years that $180 million is unallocated.
Ms Harwood: It has no project; it is not subject to any commitment. There is about $570 million of other
money in SRWUIP which is the sum of the remaining funds under the original state priority projects. So each of
the states has state priority projects underway. Some of them have the majority of their funding out. But in each
state there is an amount of funding from the original amounts committed in the IGA of 2008, which has yet to be
assigned or come in under contract for a specific project. So that money is committed but it is not contracted. The
$180 million has no project assigned or aligned against it.
Senator JOYCE: Over how many years can that $180 million be allocated?
Ms Harwood: SRWUIP covers a very wide array of contractual commitments.
Senator JOYCE: Could it be 10 years?
Ms Harwood: The program runs until 2019-20.
Senator JOYCE: We should have it all parked away before the great depression starts.
Ms Harwood: Yes. We basically manage within the appropriation provided for SRWUIP each year in both
the Treasury and the departments administer appropriation and manage the stream within that. So the $180
million sits in that stream.
Senator JOYCE: There is no definitive place where it sits—it is just between now and 2019?
Ms Harwood: In essence, yes. It is in the space where we stack up all the contracted commitments in each
year. We have are an amount remaining in each year that has yet to come under contract.
Senator JOYCE: How much water has been recovered towards the basin plan target?
Ms Harwood: There has been 1,600 gigalitres recovered so far in long-term average annual yield terms
towards the 2,750. Plus very recently we signed the final Private Irrigation Infrastructure Operators Program in
New South Wales with Murrumbidgee Irrigation, which yielded, from memory, 30 gigalitres or around that. It
might be 33.
Senator JOYCE: Of that 1,600 gigalitres, how much is buyback?
Ms Harwood: There is 1,119 gigalitres of secured water purchases.
Senator JOYCE: How much of this water is from infrastructure savings? I suppose it is the remainder, is it?
Ms Harwood: Three hundred and thirteen gigalitres of it is from contracts for infrastructure works.
Senator JOYCE: And there is another 30 about to happen?
Ms Harwood: Yes. The 30 has just come under contract, but these figures were for the end of April.
Senator JOYCE: So there is another 30 on the way?
Ms Harwood: Yes.
Senator JOYCE: In making the rest up to 2,750, what is the plan at the moment? Where are you looking?
Ms Harwood: For the rest of the way to 2,750, we are expecting to get at least another 270 gigalitres from
infrastructure projects. That is to achieve a total of 600 gigalitres in long-term average annual yield terms from
the Sustainable Rural Water Use and Infrastructure Program.
Senator JOYCE: Eighty of that will come from Menindee. Are you budgeting for that?
Ms Harwood: Menindee is an interesting case in that it is evaporative savings. Without complicating things, it
is not necessarily a gap-bridging saving. It may be more of a SDL adjustment to account for the evaporative
savings of the project. The effect will be the same. If it achieves an 80 gigalitre offset to the 2,750 then it counts
either way.
Senator JOYCE: I am just trying to work this out. I am a simple soul. You have 1,600 gigalitres long-term
average. Out of that—and I'm doing it very quickly—you have 1,119 from buybacks, so that would mean that
there is about 481 that is sort of left over. You have 313 of that from infrastructure. Am I getting the numbers
right, because I'm just doing them in front of me as I go? We are still short some numbers here, aren't we?
Mr Parker: I might give you a sort of top-level answer. If we start at 2,750 as the starting point specified as
the gap—
Senator JOYCE: If my maths is correct, you are still looking for about 130.
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Mr Parker: I think that it is slightly more than that. We start at 2,750. There is a potential under the SDL
adjustment mechanism from environmental works and measures and other measures to reduce the actual recovery
of water by up to 650 gigalitres. That is written as a mechanism in the plan. So it is 2,750 minus up to 650
gigalitres. Then, as Ms Harwood said, we are expecting in the vicinity of 600 gigalitres from infrastructure. So
2,750 minus 650, minus 600 takes you to 1500 gigalitres of, effectively, water purchase. I am talking here in
round numbers. So there are approximately 300—
Ms Harwood: If the 650 of offsets is achieved, of the SDL adjustment, that would leave 550, at least 270 of
which we are expecting to get through infrastructure to bring the total to 600. That would mean the remaining
water purchase would be 280 gigalitres.
Senator JOYCE: What areas are we strategically behind? Where is that 280 gigalitres of buyback? That in
essence reflects an economic effect on a district. Where is that coming from?
Ms Harwood: We are operating the water buyback program in the interim essentially with an assumption to
allow space for the full 650 gigalitres of offsets to be achieved. What that means is that there is still water
recovery to do in New South Wales to bring them to the point where, if they got their full share of the 650, the
gap would be breached. But in Victoria and South Australia, in the short term, there is no requirement for water
buyback to bridge the gap. Because if they got their full offset value out of the 650 gigalitres allowed for, then the
gap would be bridged in those states.
Senator JOYCE: So this 280 gigalitres is predominantly going to come from New South Wales and
Queensland?
Ms Harwood: There is also water recovery to proceed in Queensland. The other thing we are doing at the
moment is, in the northern basin, focusing on where there is an in-stream gap at the moment, allowing space also
for the northern basin scientific review to take place so that if there is a change to the figures of the distribution or
the apportionment of the downstream component in the northern basin, we don't overshoot the mark in some way.
And you would have seen that we have had three tenders in the Condamine-Balonne. There is only a limited
number of catchments where there is an in stream gap to bridge in the northern basin.
Senator JOYCE: So there could be a review in the northern basin which would affect whether that 280 is
280—it might be less or it might be more.
Ms Harwood: The review in the northern basin might affect where we recover the water to meet the
adjustment, if there is an adjustment, to how the SDLs are set in the northern basin or how the downstream needs
are to be met in the northern basin.
Senator JOYCE: When will that review be completed?
Ms Harwood: The authority is leading that review.
Senator JOYCE: Whereabouts are they at the moment?
Dr Dickson: The review program has already commenced. The work is due to be completed over the next
couple of years. We are working closely with the Northern Basin Advisory Committee and with local
communities in managing that process. It is going to be looking at the environmental water requirements and the
SDLs and the potential for different recovery mechanisms, so to speak, that might improve the efficiency of the
outcomes in the northern basin. So it is looking particularly at the Barwon-Darling, where there is a downstream
need from many of the tributaries, and it is also looking at the Condamine-Balonne.
Senator JOYCE: Have you been in negotiations with the new owners of Cubbie Station for purchases of
water from them?
Mr Parker: The answer is no.
Senator JOYCE: So if you don't get the water from Cubbie Station, where are you going to get it from.
Mr Parker: I was answering your quite specific question. It is open to the owners of Cubbie Station to put
offers into the tender process. That is the way that we conduct the purchase arrangements. People come in through
the front door through tender processes. There has been one example where, as a result of the very complex
nature of the offer, we entered into negotiations, and that has been subject to discussions in this committee before.
But we are not undertaking negotiations with Cubbie over any offers that they may have made.
Senator HEFFERNAN: If you were, it would be the overland allocation or the extraction allocation?
Mr Parker: That would depend, hypothetically, on what they offered.
Senator HEFFERNAN: If it were overland, which is in the press, how in God's name can you buy that water
back and shepherd it to somewhere else in the system when it is peculiar to that landscape?
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Mr Parker: That is a very interesting question, Senator. The issue of shepherding is a matter of substantive
discussion between ourselves and New South Wales.
Senator HEFFERNAN: Could I also get you to note the cost of the earthworks to shepherd the water, and
that that flood plain is peculiar to a lot of other flood plains in Australia in that the water actually leaves the river
and is extracted as overland flow. But if nature had its way, it actually returns to the river so that the 271/2 per
cent of mean flow at the Darling that the Culgoa used to deliver, which is now 4 1/2 per cent, will not be fixed
with that proposition.
Senator JOYCE: How much of that 280 do you intend to get from Queensland?
Mr Parker: We don't have a precise figure split for that, Senator, but in the Balonne there is an in-stream gap
to bridge set in the basin plan of around 100 gigalitres, and we have made—
Senator JOYCE: You already have some of that, haven't you?
Ms Harwood: Yes, we have. I would need to check exactly how much remains.
Senator JOYCE: Is it 35 or 40?
Ms Harwood: I think there is more than that still to recover.
Senator JOYCE: No, that is how much you have got.
Ms Harwood: I am not sure if it is up to 40, but I will check.
Senator JOYCE: The problem being, of course, that if it is between 35 and 40 then it is between 60 and 70
still to recover, and that would mean devastation to St George. If Cubbie Station is not in the market place, then
you are starting to run out of places you can go for it. Did you buy Clyde's water? You bought a section of Todd's
water.
Ms Harwood: Sorry, I am looking at this and listening at the same time.
Senator JOYCE: I am just trying to work out where we are going to get the water from. Because it is
anecdotal, but I am sure it is a reflection of other parts of the basin. You have to start asking the question of where
on Earth this water will come from.
Ms Harwood: The recovery to date in the Condamine-Balonne is 33 gigalitres in long-term yield terms.
Senator JOYCE: It is close to 35. Okay. So you are looking at 67. If Cubbie have no offer on the table, where
is that 67 going to come from?
Ms Harwood: We have been running a series of tenders in the lower Balonne in Queensland. We have run
three this year and are securing water sequentially through those. We have until 2019 to bridge the gap, and we
have a sort of steady measured presence in the market to achieve that. Also, we have infrastructure projects
operating in that catchment as well. So far, two of that 33 has come from infrastructure, but Queensland has asked
to expand their on-farm program by using their remaining money from their state priority project of $40 million to
make the total expenditure on their on-farm program greater. So we would be expecting further yields through the
infrastructure program as well.
Senator JOYCE: But you also have to get some of that 143-gigalitre shared amount from the Condamine-
Balonne, don't you?
Ms Harwood: The connectivity of the catchments and the extent to which they can contribute to the
downstream recovery is really one of the issues that is central to the northern basin review.
Senator JOYCE: If it is currently about 50 gigalitres and you still need 65 or 67 gigalitres, then it is 110. The
total usage around St George is only about 250. That would be half the town gone.
Ms Harwood: It is a hypothetical question, Senator. Because we do not know yet the relative contributions of
the catchments. We also have a very significant on-farm investment program operating in Queensland, and much
of that water could be achieved in ways that had a positive socio-economic impact.
Senator JOYCE: Such as?
Ms Harwood: Modernisation of on-farm systems, reducing evaporation from storages on-farm et cetera—
basically sharing savings from farm upgrades in that catchment.
Senator JOYCE: And you have programs going on that now?
Ms Harwood: Yes. Queensland has put the lion's share of its state priority project funds towards a long run
on-farm irrigation efficiency program.
Senator JOYCE: That water goes down and across the Culgoa flood plain and bifurcates. Some ends up in
Narran Lakes at the terminal wetland. So the connection is not as apparent there. I was talking to water resources
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
engineers and they say that if you try to shepherd water from the Namoi dam you would be lucky to get 10 per
cent to South Australia. So how on earth are you going to go getting water from Queensland across a bifurcated
flood plain? What happens if they prove there is not the connection there, what are you going to do then?
Ms Harwood: I think that that is a matter for the authority in terms of how the—
Senator HEFFERNAN: It won't work; I can tell you now.
Ms Harwood: review unfolds in the north.
Dr Dickson: Senator, that is one of the key things that the science review is going to be looking at—that is,
the connections between the northern tributaries and the Barwon-Darling. As you say, there are very limited
connections between some tributaries in the Barwon-Darling and for others it is not clear-cut. It is precisely that
distribution, rather than doing it equally between them, which does not make any sense, that the whole process is
to look at—that is, what the real connections are to be able to determine the relative contributions from the
different tributaries.
CHAIR: Senator Joyce, before you go on can I just indicate that I do have a lot of senators seeking the call.
Can you manage another 10 minutes?
Senator JOYCE: Sure. It becomes a trick of mathematics, because we are not getting it from the northern
catchment. I will be honest: I think it is more a theoretical concept than an actual concept. I live there and it just
doesn't pulsate through. It becomes terminal wetlands, and there is an absorption of about one megalitre per
hectare. It looks great on a map but it just doesn't work in practice, unless you want to create channels and
completely change the nature of what is going on. I think then the conservation movement will go off and get
very excited, and so will the local farmers, too, by the way. But that means that if you are not getting the water
from there, you have to get it from one of the catchments as you go south. So where are we going to—the
Gwydir, the Namoi? Where are we going to get this water?
Dr Dickson: It is probably worth saying that we are talking about the in-stream and the downstream shared
amount for the Barwon-Darling. The in-stream amounts are all to look after the health when there is no
expectation there will be any water going through from there. How the downstream amount for the Barwon-
Darling is allocated between the different tributaries is a different issue, and that is the one that we will be looking
at through the science review of where those connections can be made.
Senator JOYCE: Thank you, Dr Dickson. But the problem is that we have the legislative cap in place, so we
are now trying to do the research that would actually affect what would be possible to get in that legislative cap.
We seem to be doing post hoc research. It is calling into question our capacity to meet the water of that cap. I
wish you all the best of luck in trying to do the on-farm works to get, probably, 120 gigalitres from around St
George and Dirranbandi. Unless you are into Cubbie Station, it is just not possible. Even if you did get it, you
would not be able to get it downstream, and if you are not getting it downstream and you have to play to a
legislative cap, that means you have to get it from another catchment. That means all the other catchments come
back into play and they start asking questions about what is going to happen to them. How do we answer that
question for them to try and make this thing stick together?
Dr Dickson: In the basin plan the downstream was not allocated at the time, and it was left to having further
considerations for that through the review we have been talking about. The capacity to do this extra work was
something that was wanted by the communities. We got the message fairly clearly that they wanted to have an
opportunity to review some of the science and how the tributaries contribute. So that is the purpose of doing that.
Senator JOYCE: If we find that that there are only a couple of catchments that are actually connected to the
Darling, does that mean that they will have to contribute all of the 143 gigalitres? Let's take the Mooney, for
instance: you would have to take every licence and even that would only get you 20 or something.
Dr Dickson: That is one of the issues. Already there are some contribution to the downstream. I cannot
remember exactly what it is. We can get that to you later, but it is in the documents. But that is what is a fair
distribution of the contribution to the downstream element from those catchments. I do not think we can comment
on that yet. We made some assumptions earlier on. We want to have those thoroughly tested over the next couple
of years.
Senator JOYCE: Where it becomes extremely tenuous, of course, is the social impacts that would be derived
from those catchments that, unbeknownst to them at this point in time, might be about to contribute vastly more
water. Therefore, with the economic impacts for those towns, villages, or communities—who have every right to
be protected, just like a person in Sydney, Brisbane or Melbourne—how are we going to look after them? This
would mean we would have to take all their water.
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Dr Dickson: I do not think it will end up in that sort of situation, but in the process that we have over the next
couple of years we are doing some extensive additional work on social and economic issues. A lot of it is about
working with communities to get a better understanding of the key things that are of concern to them in that.
Senator HEFFERNAN: So it is the overland flow you are talking about.
Senator JOYCE: No, it would be licences.
Senator HEFFERNAN: What sort of water do you want to buy?
Dr Dickson: The most efficient way to get the recovery with the least impact and still get your environmental
outcomes is a key focus of the review.
Senator HEFFERNAN: But in Senator Joyce's territory this is the problem.
Dr Dickson: So we do not have any predetermined assumptions on where it might come from.
Senator HEFFERNAN: This is the basic problem—not yours; you did not cause it. There is 1,500-odd
gigalitres of on-farm storage for a river system that has 1,200 gigalitres of mean flow and an 830 per cent
variability. What you are talking about is mission impossible—I am sorry—if you know the figures and know the
game. I will not use the bush language I would use.
Senator JOYCE: I might quickly go through this. What volume of water entitlements have been secured for
Murray-Darling Basin to go towards the sustainable diversion limits. You have answered that question, haven't
you? That was 1,600. How much has been spent on the infrastructure projects that have delivered or are expected
to deliver water savings into the Murray-Darling Basin to contribute to the SDL set by the Basin Plan? Have you
answered that?
Mr Parker: I think we may have, but could you just repeat the question?
Senator JOYCE: How much has been spent on infrastructure projects which have delivered or are expected
to deliver water savings into the Murray-Darling Basin to contribute towards the SDL set by the Basin Plan?
Mr Parker: Yes, I think we have answered it, and that will be part of the document that we are preparing for
the committee today.
Senator JOYCE: How much water under the Living Murray Initiative has been carried over to 201213?
Ms Harwood: I am sorry, could you ask that again?
Senator JOYCE: How much water under the Living Murray Initiative has been carried over to 201213?
Ms Harwood: The authority will take that one.
Ms Swirepik: In the Living Murray we had 123 gigalitres carried over from last year.
Senator JOYCE: Where is that water?
Ms Swirepik: It is within the Murray system. So it does not get held anywhere in particular. Actually, your
entitlement gives you a right to access the resource, and the river operator decides where that is coming from. So
it is not held in a particular storage.
Senator JOYCE: So if I wanted to, not that I do but just so that I can, any model only stands to reason if you
can question the reason behind it and get delivery of the outcomes into it. In fact, if I want to buy that water back,
where would I be getting it from?
Ms Swirepik: If you wanted to buy it back, you would buy it back off us.
Senator JOYCE: But where would I stick my water pump in?
Ms Swirepik: The physical nature is not linked in the way that you are suggesting. What you do is buy the
water back on the market and that then gives a different person the right to access part of the resource in the
Murray system. So at any time anybody culls their water, whether that is us or an irrigator, what the river
operators will do is actually assess whether that need can be met from flows in stream or whether they have to
release from storages. So noone's water is actually held in any particular storage.
Senator JOYCE: So for someone listening to this, if someone is talking about 123 gigs held over, this is
really just a theoretical aspiration. You could not actually find the water, if you wanted to; it is not actually there.
It is an aspiration. It is part of a model rather than the actual water itself. The water has long gone.
Ms Swirepik: No. The water is part of the resources of the system and it is water that was not used last year,
which any user can choose to carry over within the rules that apply to the users in that state.
Senator JOYCE: Is any of it held in the public storage?
Ms Swirepik: As a long-term average, yes, of course some would be held in the public storage.
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Senator JOYCE: How much is held in the public storage?
Ms Swirepik: That is not something that you can determine because, until you order the water and an operator
assesses whether they can meet all of the orders in stream—
Senator JOYCE: It is a book thing in a paper tray, isn't it?
Ms Swirepik: It is a paper tray, but it does relate to what is physically in the system. So in just the same way
as there has been a very large amount of carryover from other users in the system over the recent years, basically
that does mean that water is held in the various dams in the system—it is not in a particular dam—and, depending
on where that flow is called to, an operator will decide whether they release water from Menindee Lakes, from
Lake Victoria or from the Hume Dam.
Senator JOYCE: Just going back to buybacks, how much water is going to come from buybacks in the
southern system under the water recovery strategy?
Ms Harwood: I am sorry, Senator?
Senator JOYCE: How much water is left to come from buybacks in the southern part of the system under the
water recovery strategy?
Ms Harwood: Of that remaining 280, to get to 2,750, under the hypothesis that the full 4,650 of offsets is
achieved, from memory, it is about 200 gigalitres in the south and 80 in the north. But I will confirm that, if that is
wrong.
Mr Parker: You asked a question about the carryover?
Senator JOYCE: Yes.
Mr Parker: The carryover figure from 2011-12 into 2012-13 is now reported as 564 gigalitres. That has
reduced from earlier reports of 615 gigalitres because of, firstly, a spill in the Macquarie, which reduced the
carryover accounting but obviously brought about environmental benefits in doing so, and also the settlement of
an accounting issue in New South Wales which reduced the carryover but increased the allocation this year.
Senator JOYCE: And the 200 gigalitres in the south includes any carryover, does it?
Ms Harwood: No. And I should say that you asked me for the proportion of the buyback. But of course, the
amount that comes from the buyback will be what has not been recovered through infrastructure. So, depending in
both the north and the south on the rollout of additional contracted water infrastructure projects, that will
influence the amount that needs to be purchased, in that the purchase is just for the remainder essentially. We
have negotiations underway on a range of projects in the basin for further water efficiency projects and we would
only need to purchase the water that does not come. So if a catchment has a large water infrastructure project, that
catchment might not need to have much water buyback. I guess that is the point, that the water buyback is not a
set amount that we are going and getting. We are moving in a very steady and measured way at a slow pace of
water buyback, allowing space for both the infrastructure rollout and for the offset SDL adjustment projects to be
explored through to 2016.
Senator HEFFERNAN: But a carryover of 173 net, 370-odd gross, would fix the book. Are you being held to
political ransom by New South Wales in that regard?
Ms Harwood: No would be the short answer.
Senator HEFFERNAN: Can I just—
CHAIR: You have a couple of minutes left, Senator Joyce.
Senator JOYCE: Can you provide the committee with the model annual inflows of the Murray-Darling for
every year since 1895? Please include these up to the latest year possible. Obviously, I want that on notice; I am
not going to ask you to do it now. Is it possible to get that in the next—
Ms Harwood: I am sorry; what was the—
Senator JOYCE: Can we get model annual inflows into the Murray-Darling for every year since 1895?
Ms Harwood: Yes.
Senator JOYCE: Has the MDBA appointed members to the Advisory Committee on Social, Economic and
Environmental Sciences yet?
Dr Dickson: Yes; we announced that some time ago. I will have to check on the exact date. I think it was last
year—in fact, yes, November last year.
Senator JOYCE: Whom have we appointed?
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Dr Dickson: The chair is Dr Brian Walker. We also have Professor Stuart Bunn, Professor Tom Kompas—I
am sorry; I have a list of them here. We have Dr Poh-Ling Tan from Griffith University, Dr Kate Auty from
Victoria and we have just recently replaced Dr Bill Young with Dr Mike Stewardson.
Senator JOYCE: What is the latest position on the funding for the MDBA? Do you need to make any
additional cuts to the services that the MDBA provides, as a result of reductions from the state government?
Dr Dickson: Yes. Out of the reductions for this coming financial year, we are reducing some programs. If you
can just give me a moment, I can tell you what they are.
Mr Parker: Senator, while Rhondda is looking for that answer, I would just like to correct an earlier answer
which we gave in response to your question about spending in the Murray-Darling Basin. I misheard it as the
broader—
Senator JOYCE: Can you just speak into the microphone? I am sorry, but I just cannot hear you.
Mr Parker: Yes. The microphone is a major problem; we are all having a problem hearing each other. I
would just like to correct an earlier answer to your question, Senator. You asked a question about spending in the
Murray-Darling Basin?
Senator JOYCE: Yes.
Mr Parker: I had not picked up that particular nuance from your question. So we would just like to correct
that and provide the answer.
Ms Harwood: You asked the question about expenditure on infrastructure projects in the Murray-Darling
Basin. To date, to 30 April, it is a total of $1.2 billion since the inception of the program.
Senator JOYCE: We are talking now about the cuts. With the latest position on the funding for the MDBA,
do you need to make additional cuts to the services that MDBA provides as a result of reductions in funding from
the state government?
Ms Harwood: First, the decision on what programs were reduced was made by the governments; it is not a
decision that the MDBA makes. The four governments and the Commonwealth made a decision on which
programs to reduce. The overall funding reduces this year. For 2012-13, it was $92,864; and, for the next
financial year, it is $89,678. That reduction reflects the known reduction from the New South Wales cuts. I am
sorry, I meant millions. Yes, $92,864,000 and $89,000,678.
Senator JOYCE: The environmental watering strategy, where is that up to? Has that been completed?
Ms Harwood: The environmental watering strategy has a two-year timetable under the Basin Plan. So that is
due to be completed by November 2014.
CHAIR: Senator Joyce, I am going to have to wind you up after this one.
Senator JOYCE: Okay. Just tell me: where are we with the development of the environmental watering
strategy? Obviously, the whole thing is pointless unless we have tactics on how to hit environmental assets with
the water that we are purchasing. Are we halfway developed? Do we have it in train somewhere? Has it been
rolled out already in certain areas or is it still in a theoretical position and there will be no sort of rollout of this
program until such time as it is finished?
Ms Harwood: There are a number of parts to the environmental watering plan. The environmental watering
strategy is one of those. The first thing that we have in train is the annual environmental watering priorities, which
we will do obviously every year. They will be coming out at the end of June, as required under the plan. The
environmental watering strategy is the broad, long-term strategy on which state long-term plans will be based.
Yes, there has been a lot of development and there will be a fair amount of consultation on that over the next six
months; that is our intention. The time it takes to develop that is not going to delay the proper use and the
effective use of environmental water in the meantime. In regard to the work that the states and water holders do in
their planning for environmental water, already they are looking to be consistent with the Basin Plan in doing that,
and the annual environmental watering priorities will also guide that.
CHAIR: Senator Ruston.
Senator RUSTON: Before I get on to some specific projects, can I just seek clarification on a matter. On
Tuesday of this week, the AuditorGeneral brought down his report and there is a line in the report that actually
says that as at 28 February 2013, the Commonwealth held water entitlements totalling 1,523 gigalitres in 17 of the
19 catchments across the basin, which equates to between 35 per cent and 42 per cent of the Commonwealth
Environmental Water Holder's anticipated final entitlement holdings. If I equate that out, that would suggest that
it is somewhere between 4,351 and 3,626 gl that we are intending to take back. Am I missing something here?
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Mr Parker: We will take that question.
Ms Harwood: First of all, this is a matter for the Commonwealth Environmental Water Holder, who is on in
the next session, but it is the difference between entitlement value and long-term average annual yield. So the
holdings come into the Commonwealth as paper value—entitlements that say they are differing liabilities. The
megalitre amount on them may be quite different from the long-term average annual yield. So the amount that the
Commonwealth Environmental Water Holder would end up holding in long-term average annual yield terms will
be less than 2,750, because some of it will be held by the states.
Senator RUSTON: I suppose I bring that up only because it confused me. It rang an alarm bell but it also
confused me. It makes it very difficult when there is a discrepancy across the nomenclature. Anyway, the
Auditor-General is not here to answer that, so I will not pursue that any further. Can I ask you about the Water
Industry Alliance's River Murray Improvements Program, the $265 million announced in October last year via a
combined release by the Premier of South Australia, Jay Weatherill, and Minister Burke. It was announced that
$180 million would be made available from SRWUIP funding and a further $85 million under a national
partnership agreement with the South Australian government. Could you give me some idea of where that is at
and when we are likely to see that money flowing—just generally an overview of what is going on there?
Ms Harwood: The project is under development. We have just received this week, from the South Australian
government, the business case for the project.
Senator RUSTON: Can I just say something here? At the last estimates, you said exactly the same thing to
me: 'just this week we have received'.
Ms Harwood: We had a draft business case at the last estimates and we provided extensive feedback to South
Australia.
Senator BIRMINGHAM: So the first one clearly was not good enough.
Senator RUSTON: Yes. We have $265 million on the table, as announced. What we really need to know now
is: when are we going to see that $265 million actually start coming out and being spent—because it does say that
it will be spent in this forthcoming financial year. Whereabouts in the budget papers that I have is the $180
million that is coming from SRWUIP funding?
Ms Harwood: Assuming that the project goes through and is approved, it would roll out over a number of
years. The part funded from the SRWUIP part would come from within the overall SRWUIP profile. We do not
have a partitioned budget line for all the hundreds of things that come out of SRWUIP. It would be funded from
within the available appropriation for SRWUIP in any year.
Senator RUSTON: Can I just take you back to something that you said at the start of your response to that
question: 'if the project is approved'?
Ms Harwood: It has yet to go through final due diligence. There have been discussions with South Australia
about South Australia's wishes to make some adjustments to the structure of the program as announced and
agreed in October.
Senator RUSTON: Subsequently there has been a request to change what was announced.
Ms Harwood: Yes.
Senator RUSTON: So on that basis—because I note that the minister did say up to $180 million, subject to
due diligence assessment—where are we at with that due diligence process?
Ms Harwood: We are just commencing the formal due diligence on the project having received the final
business case this week.
Senator RUSTON: Do you have a time frame in which you think it is likely that that will be undertaken?
Ms Harwood: We have undertaken to do it as quickly as we can, but I would not be able to put a precise do-
by date on it.
Senator RUSTON: The other thing is that there does not seem to be any specific mention of the $85 million.
Where do I actually get some sort of understanding about whether there is $180 million still considered within—
in program estimates, where do I find the $85 million; or is that not in your department?
Ms Harwood: The $85 million is in the contingency reserve.
Senator RUSTON: So at this stage there is still $265 million potentially able to be expended on this project in
South Australia, subject to the satisfactory conclusion of the due diligence process.
Ms Harwood: Yes.
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Senator RUSTON: Do you have an idea, in the process of establishing this, of two things? One is: how much
money will be consumed in the administration of the project—because at this stage it is in your department;
wherever the other $85 million comes from, the South Australian government obviously has some role in it. Do
we have an administration cost?
Ms Harwood: We do not have a precise figure on that, but the department's side of it does not come from
within the $265 million. That is, the departmental funds for the people working on it in SEWPAC are covered by
other means. In terms of the administrative costs of the South Australian government in delivering the program,
they would normally be in the order of six to eight per cent across the board for projects of this sort. But I do not
know what the precise figure is that South Australia is intending to posit as its administrative costs for running the
program.
Senator RUSTON: So the South Australian government will be the lead player, in terms of the administration
of the funding—subject, obviously, to its approval?
Ms Harwood: Yes.
Senator RUSTON: Has any work been done on the establishment of the criteria or guidelines under which
people would become eligible for actually accessing this funding, or is that something for the South Australian
government?
Ms Harwood: Work is underway by the South Australian government to develop a full description of the
program architecture and the eligibility and assessment criteria for people to apply for funds under the program,
and that forms part of the business case.
Senator RUSTON: Just finally on that particular project, one of the concerns that was expressed to me by
some of the people who possibly might like to access this fund is—have you any idea of the difference between
what they are actually paid for their water, which is obviously determined by the infrastructure cost of otherwise
achieving that water, and the actual price of water? Is it to be treated as a capital gain?
Ms Harwood: We do not normally arbitrate or comment on the taxation treatment of the grants. It depends
very often on the precise corporate circumstances of the recipient as to how the moneys—received under
SRWUIP grants, a program through the state or whatever—are received. There is in front of the parliament a bill
to amend the tax act to provide essentially a potential additional choice for treatment of moneys received under
SRWUIP, for tax purposes; that has been sought by the industry. Regardless of that, I would say that it is up to the
applicant to ascertain for themselves the likely tax treatment of any moneys they receive and to understand that
matter before they accept the grant, if it is of concern to them.
Senator HEFFERNAN: It would be an easy definition between repairs and maintenance and capital work.
Ms Harwood: It really does depend on the corporate structure as to how the tax treatment to SRWUIP grants
applies.
Senator RUSTON: Obviously, you are sympathetic to the issue that is on the table.
Ms Harwood: Yes.
Senator RUSTON: Can I just come back to a particular line item in the budget? In the portfolio budget
statement of the MDBA—the explanatory notes—there is an amount from last year's MYEFO of $155 million
over seven years to be provided to undertake the South Australian Riverland Floodplains Integrated Infrastructure
Program just to restore the health of the flood plains. Of this, $55 million is being transferred from existing
resources within the department. Could you just give me a quick outline of what that money is being spent on?
Ms Harwood: We could probably cover that between us. It is a project that South Australia sought for,
essentially, environmental works and measures on a flood plain in South Australia. It was funded by $55 million
of South Australia's state priority project funding. So, essentially, $55 million of the $155 is coming from
SRWUIP—from the state priority project funding—and that was transferred to the authority.
Senator RUSTON: That was from the state—
Ms Harwood: Priority project funding. But the project in its entirety is to be managed by the authority. I am
sorry; I should say that the other 100 was a new appropriation for that. For simplicity of management, the
authority is responsible for the whole project. We have transferred the $55 million to the authority as administered
funding, so they now have the full project line to manage the project.
Senator RUSTON: Have you quantified how much water will be recovered by this program?
Ms Harwood: It is not in the character of a water efficiency project, but it is arguable that it would have an
SDL offset potential as a project. But I would let the authority comment on that.
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Senator RUSTON: Also in that same budget statement there are additional departmental appropriations over
11 years et cetera. It refers to environmental works and measures, $39.358 million from 201314, and advanced
environmental outcomes, $31.592 million through to 2020. Do we have any idea what works are to be undertaken
on either of those two projects?
Ms Harwood: Could you just give me the page number that you are working from?
Senator RUSTON: Page 185 of the portfolio budget statement.
Dr Dickson: I think you are referring to the funding for the SDL adjustment work which is over that period of
time. That is departmental funding to support the work that needs to be done for the assessment of SDL offsets
and all the subsidiary work to support that.
Senator RUSTON: Where is that collective $70 million coming from?
Ms Harwood: The funding for the states to undertake business case development for environmental works
and measures—this is basically in pursuit of the potential 650 gigalitres of offsets?
Senator RUSTON: Yes.
Ms Harwood: It is essentially a sort of 'bring forward' of funds, in simple terms, from the total allowance for
environmental works and measures that is being provided for. That comes into the Sustainable Rural Water Use
and Infrastructure Program and it would go to the Treasury papers, in terms of being paid out to the states through
the FFI. But, essentially, it is a modest amount of money for the states to prepare the business cases and technical
project design to submit to the authority for the SDL adjustment mechanism.
Senator RUSTON: So it is not actually coming out of the $200 million.
Ms Harwood: Unless I am misunderstanding—
Dr Dickson: No. The funding that you are talking about is actually the departmental funding that comes to the
authority—
Ms Harwood: My apologies.
Dr Dickson: for the SDL adjustment and the constraints management strategy. The funding that Ms Harwood
was talking about is separate funding for the states. This funding is to support both the constraints and the SDL
work, which is over seven years and 11 years. There is a lot of modelling, analysis and evaluation of those
projects that the authority is doing, so that is the funding for that.
CHAIR: Senator Ruston, can I ask you to wind up? I am happy to come back.
Senator RUSTON: Okay. I will ask about one specific project, if I can get some more information on that.
Can I just ask you quickly about the Chowilla regulator project that is happening in the Riverland? My
understanding is that the original price of the project was $42 million. Could somebody give me an idea of how
that is tracking against budget?
Dr Dickson: I will ask Dr Dreverman to give us the background.
Dr Dreverman: The project at Chowilla was started in about August 2010. It has had major overbank flow
conditions, major floods. It was under water for many months and we have been back working there since about
May last year. The project is a little over half completed at this stage. It should be completed within about another
nine months, provided that we do not get further flows. I do not actually have with me the current total estimate,
but the total cost of the project has gone up because of flood claims and the cost of standing down the contractor
and then remobilising the contractor back to site. But, other than that, the cost is basically on original track.
Senator RUSTON: On that basis, I would ask you to get me what you think the final cost of the project is
going to be. Could you also confirm whether, in the contract, the contractor was paid $66,000 a day for down time
when they were unable to work and actually what that $66,000 equates to in a total amount for the number of days
that were down and who is responsible for the paying of that $66,000 a day, if it is actually a correct figure?
Could you also—if you do not have the answer now—provide me with some information about where the
negotiations are currently at with the landholder. My understanding is that we do not have an agreement with the
landholder in relation to any compensation that is to be paid to them. So the question is: what is the government's
liability, what is the taxpayer's liability in relation to this particular person who has, so far, not got a contract with
the department for the consequences of the inundation of his land in relation to the infrastructure?
Dr Dreverman: I will take all of that on notice because some of those are quite complex commercial matters
between the state of South Australia and the contractor or between the state of South Australia and the landholder.
So they are not matters that the authority is directly responsible for. We fund the overall project, but the project is
Wednesday, 29 May 2013 Senate Page 21
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
delivered by the state of South Australia on behalf of four governments. I will have to take that on notice because
I will have to go back to the state of South Australia to get that information.
Senator RUSTON: Perhaps you could just let me know where the liability rests if there is an unsatisfactory
conclusion to the negotiations with the landholder, despite the fact that we have a regulator—
CHAIR: Senator Ruston, we need to move on.
Senator RUSTON: and who will pay. Thank you very much, Mr Chairman.
CHAIR: Dr Dickson, your chair, Craig Knowles, addressed a thematic debate at the UN General Assembly
recently and gave a speech. Are you aware of that?
Dr Dickson: Yes.
CHAIR: You probably wrote it. The speech starts off with a quote from Tom Trevorrow from the
Ngarrindjeri people. It says:
Our traditional management plan was don't be greedy.
Don't take any more than you need and respect everything around you.
That's the management plan—it's such a simple management plan, but so hard for people to carry out.
The speech goes on:
The simple fact is that you might have all the science and evidence in the world to support the need to make change, but if
you don't have people willing to be a part of that change, you will not succeed.
Does that apply to coal seam gas in the Murray-Darling?
Dr Dickson: Thank you for the question, Senator.
Senator HEFFERNAN: That will cause fear in the heart!
Dr Dickson: The quote that our chairman referenced involved probably the guiding principles on which we
conducted the basin plan. We, in fact, quoted Tom Trevorrow in our draft documents. So that was the ethos there.
Coal seam gas is not an area that the Murray-Darling Basin is involved in, so it is probably not for me to
comment.
CHAIR: You are not involved in it?
Dr Dickson: Not involved in coal seam gas activities, no.
CHAIR: Are there any coal seam gas activities within the Murray-Darling catchment area?
Dr Dickson: There are. I am sorry; I was probably a little bit too broad there. The issue that we are involved
in—should be; we are not at the moment—is really looking at the sustainable levels of water extraction. The
management of the projects themselves is not within our responsibilities. But we do look at the impacts on the
quantity and quality of water, and that is the issue. That applies to any other use of water—industrial use,
agricultural use or human use. So it is the actual use that we look at and the impacts on the water rather than any
particular project or activities.
CHAIR: Who should we be talking to in relation to the impact of coal seam gas, if it is not the Murray-
Darling Basin Authority, Dr Grimes?
Dr Grimes: The matters can be handled by the department. We obviously have the Office of Water Science in
the department, and that reports to Mr Parker. We also have our role in conducting environmental assessments in
relation to coal seam gas developments. As Dr Dickson indicated, the Murray-Darling Basin Authority is
involved to the extent that it goes to sustainable use of water in the Murray-Darling Basin. But more substantive
questions around coal seam gas are probably best directed to the department; and, if there are matters that the
MDBA is involved in, Dr Dickson can contribute.
CHAIR: Mr Parker, those quotes that I have given you from the chair: is that an overarching principle that the
department would see as being appropriate to apply to coal seam gas?
Mr Parker: They were very broad sentiments expressed by Mr Knowles. What the department is doing in this
space, as mentioned by Dr Grimes, is that where there is a matter which falls under the Environmental Protection
and Biodiversity Conservation Act, with respect to the regulator in the department, functions under that act for
approval of the coal seam gas project will come into play. I should mention, of course, that there is a piece of
legislation currently before the Senate which would extend the reach of Commonwealth regulatory power in that
matter to matters where there is a significant impact on water resources.
The other thing that the department is doing—and I have just been joined by my colleague Suzy Nethercott-
Watson—is a new program which the department is running, which is in the area of improving a number of the
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
scientific underpinnings of the regulatory processes, firstly to provide a heightened level of scientific advice both
to the Commonwealth and to the states for regulatory purposes as they relate to coal seam gas and large coal
mining. The second element of that program is a research program to fill in knowledge gaps as they relate to a
number of groundwater matters relating to coal seam gas and large coal mining. The third element of that is a
bioregional assessment program.
CHAIR: But none of those points—and they are all very valid; I do not have an argument with them—go to
what Mr Craig Knowles has indicated are the critical lessons from the Murray-Darling authority; that is, without
community support, having the science is not enough. I am just concerned that there may be cumulative effects
and issues that may not be properly addressed by the individual assessment and approval process for coal seam
gas issues.
My concern is that there is now an argument that simply says that, if you give the farmers more money, it is
going to be okay and it can come on. But that then creates a bigger problem, in my view, in that the
environmental impacts from one farm to another and the degradation of some areas become a problem. That then
feeds in to this community concern. On one hand, I have been to CSIRO briefings and they are pretty convincing
that even fracking can be done without a problem. That is the scientific assessment they have made. But I think
the community assessment is, 'That's rubbish.' I am just wondering how we get this balance. I think the
department has an obligation. I would have thought the Murray-Darling Basin Authority would also have its eye
on this, to try and deal with what is going to be an emerging, very tough debate for a long period into the future. I
am not sure how you are coordinating that.
Senator HEFFERNAN: Could I add to those remarks, Chairman?
CHAIR: I do not know whether Mr Parker wants to go to any of those points that I have raised; then I will
come to you.
Dr Grimes: I am happy to say a few things. Obviously, the government has made a very substantial
investment in scientific analysis here through the Office of Water Science. Ultimately, this is an issue that
requires diligent examination and regulation by the relevant authorities, both state and Commonwealth. We
certainly take our responsibilities in this area very seriously. It does require good information for the community
and continual information for the community. The government has certainly identified the need for good scientific
research as being quite fundamental, both to inform the community and to underpin the decision making that is
being made by regulators at the Commonwealth and at the state level.
Senator HEFFERNAN: The advice given to the Queensland government—you are right on the money—was
that there had been no consideration—that was when Anna Bligh was there and I did the inquiry—of the
cumulative impact. It is all right to say that we have had 200 wells by Santos at Roma, but we are going to have
4,000 or 10,000. There is no solution to the accumulation in those three tenements in Queensland—some of which
are in the Murray-Darling Basin; of course, the tail water is going into the top of the Condamine from some of
that—of 700,000 tonnes a year of salt. If you do not think that is an issue for the Murray-Darling Basin—phew!
That is the most toxic substance to agriculture. They have an environmental approval, without an environmental
solution, to go ahead with the mining. An amount of 700,000 tonnes of salt, as I said, at 806 kilograms per cubic
metre, stacked at 32 degrees, is a bloody big stack, several kilometres long, for which there is no known solution
at the present time.
The CSIRO, Mr Chairman, has said that it could take hundreds of years to rebalance the aquifers. We do not
know the scientific answer. So it is a huge unknown. You are right, Mr Chairman; they think it is about a set of
footy jumpers for the local footy team and a few thousand dollars to the farmer to shut them up to let them in—
and in 50 to 80 years time we are all going to say, 'Oh my God!' as they have done in America, where the
Bakersfield municipality is suing for $2 billion over the destruction of their water supply.
Dr Grimes: As part of the conditions for those Queensland projects, the Commonwealth imposed a
requirement that there needed to be full oversight by an independent expert scientific committee. There is a
specially dedicated—
Senator HEFFERNAN: But noone has to take any notice of their advice; that is the flaw in that. They can
listen to it but they do not have to take it.
Dr Grimes: The companies are obliged to produce water management plans and related matters, which are
formal Commonwealth conditions, and they need to be completed to the satisfaction of the environment minister.
We will have officers here this afternoon who are involved in that work who can answer more detailed questions,
if necessary. But there is very considerable work going on in that area.
CHAIR: What area is that in?
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Dr Grimes: That is in our environmental regulation area.
CHAIR: What program?
Dr Grimes: Program 5.2 this afternoon.
CHAIR: Program 5.2 at four o'clock.
Dr Grimes: Yes. But there is very considerable work being done by Queensland, by the companies, and the
companies cannot progress without having completed the water management plans to the satisfaction of the—
Senator HEFFERNAN: Let me know when they have solved the salt.
Dr Grimes: Indeed, there is a lot of work going on in salt management—
Senator HEFFERNAN: There is, indeed; but they have not solved it.
Dr Grimes: by the companies. There are a number of pathways through to the proper management of salt.
Senator HEFFERNAN: Mr Chairman, could I take some advice? Can we come back? I want to talk to—
CHAIR: Yes. The reason I have raised it in this area is because it is about adaptation to climate change, and
CSG is being seen as a transitional approach to that. It is secure water supplies and the health of the rivers. I think
it does fit here. Is it agreed, Dr Grimes, that the issue of CSG does fit here to some extent?
Dr Grimes: Indeed. Questions on CSG and water appropriately fit here. When it comes to the regulation of
the Queensland projects, Dr Dripps and I will probably make a fair fist of things this morning; but, if there were
very detailed questions, we would probably refer them for officers at 5.2.
CHAIR: So we come back in 5.2.
Dr Grimes: But the general issue of coal seam gas and impacts on water are appropriately handled here.
Indeed, we have officers from the Office of Water Science who are available to answer questions.
CHAIR: I have agreed with Senator Xenophon that he will get 15 minutes at 11 o'clock, after the break, and
my proposal is that we will then return to this matter at 11.15.
Senator HEFFERNAN: I want to ask some questions—with your advice, Mr Chairman—on the Wah Wah
scheme buyback.
CHAIR: Not now, because we are about to suspend for morning tea. Senator Xenophon will have the call at
11 am.
Proceedings suspended from 10:45 to 11:01
CHAIR: We will go to Senator Xenophon to 11.15 and then come back to the coal seam gas issue. You have
until 11.15, Senator Xenophon—go for it.
Senator XENOPHON: Further to Senator Ruston's line of questioning in relation to the Water Industry
Alliance funding of $265 million for South Australia, can the department indicate whether it has received a
business plan from the South Australian government in relation to this?
Ms Harwood: Yes, we have just received a final business case from the South Australian government for
$240 million, for the River Murray Improvements Program.
Senator XENOPHON: When was that received? There have been various drafts. My understanding is that
the South Australian draft was received on 21 December, 2012 from the South Australian government.
Ms Harwood: That was an early draft. I think it was in February. I will have to remember when we received
the draft. The final came either on Friday of last week or Monday of this week. I will need to check that.
Senator XENOPHON: How long will it take for that to be processed?
Ms Harwood: The precise date for finishing the due diligence I would not be able to give. We have
undertaken to conduct the due diligence on that as quickly as we can.
Senator XENOPHON: Can I ask the minister whether the government can provide a guarantee that this
funding will make it to the Riverland before 14 September?
Senator Farrell: You can ask me, Senator, but I would have to consult with the minister himself about that. I
cannot give a statement on his behalf.
Senator XENOPHON: Sure; if you could take that on notice.
Senator Farrell: What is the significance of election day as the date for—
Senator XENOPHON: I just thought that was a convenient date. It is three and a half months away.
Senator Farrell: What about if it was a day before; would be that a problem?
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Senator XENOPHON: I said 'by that day'. They have been waiting a long time for these funds. Can I go to
one of my favourite topics—the Private Irrigation Infrastructure Program for South Australia; $110 million
allocated. How much has been allocated to projects under this program? How many years has the program been in
place?
Ms Harwood: From memory, it commenced in 2009. So far there have been two rounds of applications under
that program, with Commonwealth grants totalling $14.4 million.
Senator XENOPHON: Still $14.4 million?
Ms Harwood: That is because there have been no further rounds, at the request of the South Australian
government.
Senator XENOPHON: But is it your information from irrigators that, because a level of water efficiency
already exists, it is quite difficult for the criteria to be met for those grants under that program?
Ms Harwood: I do not believe that to be case. Since then the South Australian NRM Board submitted an
application for our On-Farm Irrigation Efficiency Program and was successful. We had a $100 million round right
across the southern basin and, from memory, $35 million of that was allocated to a South Australian
proposition—basically a grant in-principle to them. There are clearly opportunities and interest from South
Australian irrigators in improving their efficiency on-farm.
Senator XENOPHON: But it is acknowledged that the bar is higher in South Australia for on-farm efficiency
programs by virtue of the fact that there are pre-existing levels of efficiency already in place?
Ms Harwood: I would not say it is peculiar to South Australia.
Senator XENOPHON: No, I did not say 'peculiar'. I said: do you agree that the bar is somewhat higher as a
general rule for South Australian irrigators because they are already more efficient than other parts of the river
system, on the whole?
Ms Harwood: Across the border there are pipe systems which have similar forms of technology upgrade
having been applied. It is true that the delivery system in South Australia is more efficient than the average
efficiency elsewhere, in terms of it having been piped in earlier years. On-farm many farmers in the Riverland are
using dripper, and more conservative, technologies—but those technologies are used in other districts in the basin
as well.
Senator XENOPHON: How does the department audit the efficacy of funds awarded under the On-Farm
Irrigation Efficiency Program? By way of background, I note the advice that was provided to my office by the
department, which states: 'Monitoring and evaluation activities are currently under way within each of the
programs, which include progress reports, audits and site visits focusing on reviewing the technical and financial
aspects of the project.' I have also received information from a constituent suggesting that not all auditing
agreements have been finalised to the program's delivery partners. Can you advise whether the department has not
finalised all auditing agreements with delivery partners?
Ms Harwood: We have, so far, three rounds. There is a first round where, largely, many of the projects are
complete. There is a second round where those projects are in train. There is a third round which is currently in
stage two of the assessment. There may be aspects of audit processes that still have to be developed, but it is a
program that flows through time and some of the projects have yet to come under contract.
Senator XENOPHON: So not all of the auditing process have been developed for this program?
Ms Harwood: I would say yes in simple terms to that, because the program continues and we have new
delivery partners coming on stream in the current round with whom we have yet to form a contractual
relationship.
Senator XENOPHON: I guess my direct question was: has the department not finalised all the auditing
agreements with delivery partners?
Ms Harwood: I might just ask my colleague. If you are referring to the existing delivery partners, I will check
that. The auditing requirements are actually specified in the contracts with the delivery partners where we have
got to the contract stage. The answer is that, for those, the auditing requirements are in place and agreed in the
contract. For delivery partners who are still to come under contract with us—for instance, the ones under round
three—their contracts will specify the auditing requirements, but those contracts are not made yet. For the projects
in train, rolling out under contract, yes, there are auditing requirements in place and they are specified in the
contractual arrangements with the delivery partner.
Senator XENOPHON: Without breaching any commercial-in-confidence requirements—there must be, I
presume, generic auditing requirements—are you able to provide copies of those?
Wednesday, 29 May 2013 Senate Page 25
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Ms Harwood: We could provide you with copies of the standard clauses, yes.
Senator XENOPHON: Yes, that would be useful. In terms of assessing the merit criteria regarding the
competitive grants model basis for these efficiency programs, you are saying that all the auditing agreements are
in place?
Ms Harwood: There are two things here. One is assessment. At the front of the project, when we receive
applications to a round under the program, all the applications go through a competitive assessment, which first of
all looks at eligibility and then looks at merit criteria in terms of ranking the applications according to the set
merit-based criteria. Much of that is focused on the efficiencies that will be achieved through the project and the
value for money that those projects will deliver in terms of water return for the environment against
Commonwealth investment. That is the assessment process. When we get to a point of a recipient delivery partner
coming under contract to deliver a tranche of individual on-farm projects, then the audit requirements are
specified in the contract with that delivery partner.
Senator XENOPHON: Do you not have to look at the merit criteria and tie that in with the auditing
requirements to make sure that there will be a robustness in terms of whether the merit criteria are achieved or
not?
Ms Harwood: If you are talking about an assessment of the commercial viability of the enterprise applying to
be a delivery partner, yes, that forms part of the assessment on the way in. It is not so much audit as ensuring that
they are capable, professional, and have the skills necessary to deliver the tranche.
Senator XENOPHON: Can you outline—I am happy for you to take this on notice because we have limited
time—what documents delivery partners provide to the department to demonstrate that appropriate auditing of
projects have occurred?
Ms Harwood: Yes, we will take that on notice.
Senator XENOPHON: Can the department provide advice on how much delivery partners receive for the
administration of projects? For instance, is it on a sliding scale based on the amount awarded? Is there an
acceptable or benchmark percentage of total funding awarded? Are there any rules in place to ensure that projects
do not allocate an unreasonable amount on administration costs? Finally, how can you be sure, if all projects do
not have their auditing arrangements robustly in place?
Ms Harwood: We will provide a more comprehensive answer on notice. In essence, there is a sort of
benchmark of eight per cent; that would be the normal maximum that we would allow in a contract for project
administration costs as opposed to funds going to projects on-farm. We were talking earlier about that. For most
infrastructure projects, in that six to eight per cent tends to be where the project administration costs fall.
Senator XENOPHON: This is a very broad question, but since 2007 I think $13.7 billion has been allocated
to return the Murray-Darling Basin to health. Again, I am happy for you to take this question on notice: can you
indicate how much of this remains unallocated and unspent? What projects are in the pipeline? In other words,
how much of that money has not actually been allocated yet?
Ms Harwood: Specifically for the Sustainable Rural Water Use and Infrastructure Program, which is $5.6
billion of administered funding, around $180 million of that has yet to be allocated to a specific project. In terms
of commitment, there is also about, from memory, $570 million—perhaps $520 million, with the move to the
regulators in the Riverland—which is committed to the states but which has not yet come under project for state
priority projects. The broader $13.7 billion includes urban infrastructure programs, funds going to other agencies,
et cetera. For the remaining unspent moneys in the global $13.7 billion, I would need to take that on notice.
Senator XENOPHON: Sure. Finally—Chair, I am within time, you will be pleased to know—an agreement
was entered into with the government in 2009 in relation to an additional allocation of stormwater harvesting
grants projects. The criteria were altered to encourage more local projects. Can you outline—now or on notice—
what the progress has been in relation to the allocation of that additional funding for stormwater projects,
particularly allowing for those smaller community-based projects, rather than having much higher criteria?
Ms Harwood: The third round of the stormwater program closed at the end of 2011. Then in 2012 the nine
successful in-principle grants were announced. Of those, eight have taken up the funding offer. Those projects are
in train and under contract. I can read out the funding recipients, if you want.
Senator XENOPHON: No. Because of time constraints, I would be grateful if the department could provide
that on notice, and obviously a breakdown of where those projects are and, further, what unallocated funds there
are in respect of that stormwater program.
Ms Harwood: Yes, we can do that.
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Senator XENOPHON: That might be the most convenient way to do it. There you go, Chair; 30 seconds
within time.
CHAIR: Thanks very much, Senator Xenophon; you were very disciplined, for a change.
Senator XENOPHON: Chair, you will withdraw that, won't you? Come on!
CHAIR: Mr Parker, we will come back to the coal seam gas issue. As you are aware, there has been
legislation going through to try to deal with the protection of water in relation to coal seam gas. It seems to me
there is now an increased push in the media by mining companies. Some reporters are being ferried around at the
expense of the coal seam gas companies, writing reports to try to push coal seam gas.
I do not have a problem with coal seam gas if it can be done in an environmentally sustainable manner, but if
the resolution to this is that you simply provide individual farmers more of a cash incentive to individually accede
to coal seam gas development—and I think that is the question that Senator Heffernan and I were alluding to—if
it is simply giving them more money, how do you then balance the cumulative impact of those individual
developments, which could go into the thousands of coal seam gas exploration wells? How do you deal with that
under the current legislation?
Mr Parker: There are probably two parts to that. One is the approval process. Perhaps Kimberley Dripps
could talk to that. Then there is the scientific question of assessment of cumulative impacts downstream and with
multiple projects. I will ask—
CHAIR: I would ask Senator Heffernan, after you have responded, not to jump in. I like to hear these
answers. Then we will go to Senator Heffernan. Dr Dripps.
Dr Dripps: Under the current EPBC provisions, there is an assessment of prospective coal seam gas projects
under the EPBC Act when there is likely to be a significant impact on matters of national and environmental
significance. In the case of the very large coal seam gas projects that are progressing in Queensland, there was an
assessment during the period 2008-2010, with approvals in 2010 and 2011 of those three large projects. The
reason we were able to undertake those assessments was that the current listed matters of NES—threatened
species and communities, Ramsar wetlands, heritage properties and the other things with which you are quite
familiar, those projects—
CHAIR: Excuse me, Dr Dripps. Senator Ruston, Senator Xenophon, can you guys go outside? Thanks.
Dr Dripps: So those projects were approved with a large number of conditions, including a requirement that
the minister approve a number of different plans. Mr Gaddes, who is next to me, will provide some detail about
those plans. One of those plans is the water management plan for the operation of the facilities. We have
appointed a special panel in Queensland, an expert panel on coal seam gas that pre dates the Independent Expert
Scientific Committee, which you might be slightly more familiar with. This panel meets very frequently and with
a high degree of detailed analysis of the work that the companies are intending to undertake, including analysis of
potential impacts on water, disposal of salt and other such things. That committee provides advice to the minister
in deciding whether or not he approves the subordinate plans of those companies. Those subordinate plans must
be approved before the companies are allowed to progress with their work.
Would you like Mr Gaddes to provide a little more detail on that?
CHAIR: Yes, that would be good.
Mr Gaddes: As Dr Dripps has told you, those projects were approved, with substantial conditions. In March
2011, the minister set up an expert panel to provide advice to him on those detailed plans. They are very detailed
plans. The last I saw of the QGC plan, it was in the order of 800 pages. It takes a lot of time to go through and
assess those plans. The panel met on 16 occasions to go through them. A lot of the times the panel goes through,
provides advice back to the companies saying, 'You need to do more work', 'You need to provide more detail',
'We understand that you have done the modelling but it is not in the plans'—that sort of thing.
I will go through the requirements in each of the plans. In the stage one plan there is groundwater monitoring
and management measures requirements; groundwater draw down limits for each targeted aquifer are required; a
schedule for aquifer connectivity studies and monitoring of relevant aquifers; a schedule for field piling of aquifer
re-injection of treated CSG water; early warning indicators of where draw down thresholds are being approached.
There are requirements for information on hydraulic fracturing, which includes but is not limited to estimated
numbers and distribution of boreholes to be fracked; details of constituent components of fracking agents and any
other re injected fluids; their toxicity as individual chemicals and total effluent toxicity and eco toxicity; surface
water quantity and quality monitoring plans, including number and location of monitoring sites upstream and
Wednesday, 29 May 2013 Senate Page 27
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
downstream of proposed CSG water discharge points and the frequency of monitoring at those points; baseline
data for each monitoring site—
CHAIR: Mr Gaddes, how long will this take?
Mr Gaddes: This could take quite some time.
CHAIR: Can I then propose that what you do is take this on notice and provide us a graph or a detailed plan
on how this works. In a graphical way would be good, so we can have a quick look at it.
Senator HEFFERNAN: And table what he is reading from.
CHAIR: Yes, and table what you are reading from. I would rather get a schematic that we can look at, if that
is possible. Maybe we will stop there. We will deal with the science and then we will go to Senator Heffernan.
Ms Nethercott-Watson: The Independent Expert Scientific Committee considers the project proposals, with
particular questions from the regulator. As part of the consideration of projects, it looks at both the individual
impact of the project as well as the cumulative impact, based on known and understood information and science.
There have been a number of advices that the Independent Expert Scientific Committee provided to the regulator
in which it expressed the precautionary principle about looking at cumulative impacts. A number of the advices
that are publicly available that the committee has issued do mention looking across a number of project proposals
and what the potential cumulative impacts might be, based on what the committee understands to be the available
science or the expert knowledge.
CHAIR: Senator Heffernan, you have got it.
Senator HEFFERNAN: Could I just ask a simple question. Where are we up to with British Gas, Santos and
Origin? Are they approved, the mining licences?
Dr Dripps: Those projects are approved under the EPBC Act, with some subordinate plans required. The
material we are just having copied for you will show you where the projects are up to with regard to the water
management plan.
Senator HEFFERNAN: Yes, but Queensland has given it the tick and the mining is proceeding.
Dr Dripps: Yes, that is correct.
Senator HEFFERNAN: Fracking will not be an issue, let me assure you of that, once they sort out the
patenting arrangements with the people that have got this new fracking material. You can drink the water if you
want to. The fracking thing is fixed, for all intents and purposes. That is commercial in confidence. But there is
the accumulative impact. It is difficult to imagine how this could happen. With the 40,000 wells in Queensland,
there is no solution scientifically for what they are going to do with the salt.
Dr Dripps: Of what they are going to do with what, I am sorry?
Senator HEFFERNAN: The salt. They have got an environmental approval to go ahead without an
environmental solution for the salt.
Dr Dripps: They have an environmental approval to go ahead, subject to the minister's approval of their water
management plans. Their water management plans need to include what they intend to do with the salt.
Senator HEFFERNAN: They do not have a solution. How can they go ahead with it until they find out? They
thought Penrite was going to solve the problem, and then they thought the glass industry and the aluminium
industry would. There is no solution. It is the most toxic substance. There are 700,000 tonnes a year just for the
three tenements that have been licensed. There is no solution. The CSIRO advises us, and the chairman was at the
meeting, that it will take several hundred years to rebalance the aquifers. They do not know how long it will take
but it could take several hundred years.
Mr Gaddes: I have some advice in that regard. The default position for the companies that have had their
plans approved to date is that the salt will either be re injected into the aquifer or it will be buried in secure
landfill.
Senator HEFFERNAN: Let me go to that. There is only one site. They all thought they would be able to re
inject it. It is not going to work. Could you please explain to me how you would safely bury a stack of salt that is
at 32 degrees, at 860 kilograms a cubic metre that will be 11 kilometres long, 30 metres wide and 10 metres high?
That is per annum? Can you explain that to me?
Mr Gaddes: There are state regulations around how toxic substances like this are required to be stored.
Senator HEFFERNAN: Twenty million tonnes for the life of the known tenement. If I were in charge, if I
were in charge of the Murray-Darling Basin, I would be saying do not store it in Australia's most productive area,
the Murray-Darling Basin. You do not know what they are going to do with it. We do not know.
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Mr Gaddes: Would you like me to provide advice, on notice, because I do not have the details of each of the
storage facilities to hand—
Senator HEFFERNAN: I do. Never ask a question unless you know the answer.
Mr Gaddes: I can provide some documentation for you.
Senator HEFFERNAN: Can I tell you, this is a serious problem.
CHAIR: So you are clear, Mr Gaddes, you should provide that advice to the committee.
Dr Dripps: Thank you, Senator. We are very concerned about the salt issue as well, which is why we have got
the detailed conditions. We will take that question on notice.
Senator HEFFERNAN: All right. I do not really want to dwell on this. I want to go back to water. Obviously
there are low geological fault lines which at the present time are naturally balanced between the aquifers, but
there are fault lines. When you depressurise one area, fault lines start to work and you contaminate, as happened
in the Walloon. So what do you do by way of compensation when the legal obligation of the miner ceases when
the well is sealed, when you have a contaminated aquifer? What do you do about that?
Mr Gaddes: Under the EPBC Act—
Dr Dripps: The compensation of farmers after mining activities is beyond the responsibilities of this
department.
Senator HEFFERNAN: No, this is not about compensating farmers or footy jumpers for the local football
team. This is about Mother Earth and the long-term contamination of the aquifer. How do you make good a
contaminated aquifer?
Dr Dripps: Our intention is to ensure that the aquifers are not contaminated in the first place.
Senator HEFFERNAN: They already are.
Dr Dripps: So what we are endeavouring to do through the application of conditions to these projects is
ensure that the companies are responsible, that there is detailed monitoring—
Senator HEFFERNAN: Yes, I accept all that.
Dr Dripps: and there is re-injection or virtual re-injection where that is possible, which the companies have
claimed for a long time is possible.
Senator HEFFERNAN: We should learn from Bass Strait. In 1969, there was the environmental approval.
Now no-one wants to fix the better than 50 per cent chance of the coastal subsidence in the Gippsland area. We
should learn from that in regard to this. I will not go through the detail because we do not have time.
CHAIR: Just before you go to another matter—and you will get time to ask the question—there is the issue of
different types of agricultural capacity in different regions. Some of the coal seam gas in Queensland has been
done out in the back blocks, to use the colloquial term. There are now big debates about Liverpool Plains. I was
involved in the Liverpool Plains with some of the coalmining projects. The aquifers and the watercourses are
extremely complex and difficult to map. How do you deal with coal seam gas and the accumulation issue in an
area like the Liverpool Plains?
Dr Dripps: Under the current law, we deal with that from the perspective of potential impacts on matters of
national environmental significance. So we require consideration and advice by the Independent Expert Scientific
Committee on the adequacy of the environmental impact assessment statements that have been undertaken by
companies. We have in fact referred 23 projects to either the interim or the final Independent Expert Scientific
Committee. Ms Nethercott-Watson could give further information on the kind of advice that that committee
provides back to us.
We look at the water balance, the likelihood of connectivity. We require companies to undertake detailed
groundwater modelling. We then require validation of that groundwater modelling before they are allowed to
progress with the stages of their project.
CHAIR: Is there any provision federally for an assessment of the economic benefits of coal seam gas in the short
term—it is not a renewable resource—against the long-term farming capacity of an area like the Liverpool Plains?
How do we balance that?
Dr Dripps: The EPBC Act has in its objects the principle of ecologically sustainable development. That
means that social matters and matters of economic outcomes may be considered by the minister in making
decisions under that act. That act essentially enables the minister to determine whether the long-term ecological
impacts are worth the shorter term or medium-term economic growth that may come from an activity. That is the
principle that is embedded in the act.
Wednesday, 29 May 2013 Senate Page 29
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
CHAIR: Thanks. Senator Heffernan.
Senator HEFFERNAN: There is roughly about a million cubic metres per annum of granulated mid course
salt. This is where you are going to store it safely underground?
Dr Dripps: A million?
Senator HEFFERNAN: A million cubic metres per annum for 30 years.
Dr Dripps: Senator, as Mr Gaddes—
Senator HEFFERNAN: Do you understand the logistics of that?
Dr Dripps: We do, Senator. As Mr Gaddes has advised, we will provide you with some more information
about our understanding of how that is to occur.
Senator HEFFERNAN: This is 'don't ask and don't tell' with the industry. We would all like it to work, but
we want to protect the earth. They are saying, 'Well, maybe we can centralise it,' or 'Maybe we can take the brine
to the sea,' or 'Maybe we can reinject it.' But how, in God's name, did we and you and everyone else involved give
an environmental approval when there is no environmental solution? I will move on. If I could go to Nimmie-
Caira. In the last estimates in February I asked questions about the study of Nimmie-Caira. My understanding
today is that the money to purchase the asset of the land and the water is going to come out of a New South Wales
fund, not the Commonwealth.
Ms Harwood: The New South Wales proposal for the project in its entirety, which involves the acquisition of
land and water and works and other things, was that that be funded as a state priority project. That is
Commonwealth funds in the Sustainable Rural Water Use and Infrastructure Program.
Senator HEFFERNAN: So it is a Commonwealth matter.
Ms Harwood: But it is money that is allocated or committed to New South Wales for state priority projects in
the 2008 IGA.
Senator HEFFERNAN: I was wondering why you were involved if it was not your money; but it is your
money, allocated to New South Wales.
Ms Harwood: Yes. It is Commonwealth—
Senator HEFFERNAN: So this is in the $200 million that is in the kitty?
Ms Harwood: No. As I explained before, it is part of the remaining funds in state priority projects—
Senator HEFFERNAN: How much is in the kitty there?
Ms Harwood: For New South Wales there is $208 million of state priority project funding that they have. I
am sorry, I thought you were referring to the other—
Senator HEFFERNAN: No.
Ms Harwood: unallocated—
Senator HEFFERNAN: So they are going to pay for it. You said in the last estimates in February that there is
a study underway. Where are you up to with final due diligence?
Ms Harwood: We are in the final stages of due diligence on the project business case.
Senator HEFFERNAN: If you are in the final stages of due diligence, is the due diligence going to take into
account the environmental damage of the alleged removal of water from the floodplain?
Ms Harwood: The due diligence looks at all aspects of the proposal, including the environmental use of the
water. That is, if the water entitlement held by the Nimmie-Caira landholders were put to environmental use, how
that would work. It looks at the infrastructure works that would be done to make the best use of that water.
Senator HEFFERNAN: As you know, the gross figure is approximately 380 gigs; correct?
Ms Harwood: Of entitlement value.
Senator HEFFERNAN: Yes. As you know, the agreement, in theory, to buy the entitlement back at 2¼ times
the value of the water, so you can cover the cost of the land and the windmills and the fences et cetera, was agreed
to before they issued the licences; correct?
Ms Harwood: The proposition that New South Wales has put to us—
Senator HEFFERNAN: It is correct.
Ms Harwood: has embodied in it an understanding reached between New South Wales and the landholders in
the Nimmie-Caira, but that is a matter between New South Wales and the landholders.
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Senator HEFFERNAN: Yes, but surely if I know, you know that that is what happened.
CHAIR: Senator Heffernan—
Senator HEFFERNAN: Yes, okay.
CHAIR: Last question.
Senator HEFFERNAN: Are you sure? This is pretty serious stuff. I think is the perpetration of a fraud.
CHAIR: I am happy to come back to you, but there are other senators seeking the call.
Senator HEFFERNAN: Can I just ask then, in your due diligence study to get to the 380 gigs, and I know
this country backwards, to get to the outer limit of the floodplain, which happens about once every seven or eight
years—the gross is 380, the net is 173. In the 380 event, how much of that water is supplementary and how much
of it is flood?
Ms Harwood: I might also ask the authority to come in—
Senator HEFFERNAN: I can assure you it is not supplementary.
Ms Harwood: In a major flood event there would be overland flows that are separate and different from the
water that would be allocated to the supplementary licence—that is, the 381,000 litres of supplementary—
Senator HEFFERNAN: How many times has the 380 gigs been allocated as supplementary water to that
floodplain?
Ms Harwood: The modelled long run yield from the supplementary licence in question in terms of the long
run average water provided from that is 173 gigalitres.
Senator HEFFERNAN: That is correct. One of the cons in this job is that the outer limit people and I know
them; one of them was here the other day and was not too happy, but I said, 'Good luck to you if you get it
because it's lotto.' They only get it once in a blue moon. Yet they are going to get paid for it as if they got it all the
time.
Mr Parker: I do not think that is right, Senator.
Senator HEFFERNAN: I can assure you it is right. I can take you to the places.
Mr Parker: We have been there ourselves, Senator.
Senator HEFFERNAN: I have had cattle there, made and mustered them and done all the things that you do.
I will come back to that. This is the perpetration. If they get away with it, are they—
CHAIR: Let me indicate for the senators that I have Senator Birmingham seeking the call, Senator Waters
seeking the call
Senator HEFFERNAN: Yes, I have just one little question.
CHAIR: Senator Joyce again and then I will come back to Senator Heffernan. We have got until 12.15. I will
go to Senator Birmingham now.
Senator HEFFERNAN: Could I just ask a question and put it on notice? I have a query from the Ulonga
Grazing Company, which has to do with the Wah Wah scheme and the buyback of Murrumbidgee water. I would
like to come and deal with you on this because it is very peculiar. SEWPAC, your people, have committed $4,200
a meg to the buyback of the Wah Wah scheme. I think it is a great idea to put it in a pipe and send it down the
channel. The same water, Murrumbidgee water—bearing in mind that comes out the back end of the irrigation
area—the same water at Darcoola, which is just across the road; it is about 15 kilometres across Murrumbidgee
water; New South Wales is paying $2,200 a meg for the water. Is there some reason why you have been nearly
double the price for the same water?
Ms Harwood: If you are talking about the net cost of water achieved through the Murrumbidgee irrigation
project, that would be for a wide array of infrastructure, modernisation and some changes, including the Wah
Wah scheme.
Senator HEFFERNAN: Yes, all of the above.
Ms Harwood: I do not know if we are comparing like for like here.
Senator HEFFERNAN: Can I just put it in simple terms to you?
CHAIR: You will have to do it very quickly.
Senator HEFFERNAN: There is about 9,000 gigs of freight water that you are buying back. You are paying
$4,200 for a gig of freight water and yet it is only $2,200 for active water. Could I, through you, Mr Chairman,
indulge on the minister—
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CHAIR: No, there is no indulging.
Senator HEFFERNAN: to have a private briefing on this matter from the Ulonga—
CHAIR: You can ask for a private briefing any time.
Senator HEFFERNAN: Because this thing is an absurd proposition which was about a farmer from
Ulonga—
CHAIR: Senator Heffernan, you said you wanted to put a question on notice. I am happy for you to put that
on notice. You can put all the detail you like in a written question. I will now move to Senator Birmingham. I will
come back to you.
Senator BIRMINGHAM: Thanks, Chair. If I can pick up on a couple of issues from Senator Joyce this
morning and a few other pointers. Firstly, in answer to Senator Joyce's question on notice No. 67, at that stage you
indicated that approximately 20 successive versions of the proposed intergovernmental agreement on
implementing water reform in the Murray-Darling Basin have been circulated to and discussed with basin states.
How many different versions of the agreement are we up to now?
Mr Slatyer: Senator, we would have to take on notice that precise number. In the early development of the
draft there were a number of interchanges with the states, as the draft iterated. That would be quite normal in any
complex process of this nature. As a general observation, I would say the curve would flatten out rapidly as the
negotiations proceed.
Senator BIRMINGHAM: So it was more than 20 several months ago. Would you say it is 30 or 40 now,
Mr Slatyer?
Mr Slatyer: I will not say, Senator. I will take that question on notice.
Senator BIRMINGHAM: It was more than 20 a few months ago. It is obviously more than 20 now, one
would assume, given that it has not been settled yet. Dr Grimes or Mr Parker said it was substantially complete,
but it is still going through the development process. When is the deadline for completion of it? Does it have to
still be signed off by the ministerial council?
Mr Slatyer: It is not going to ministerial council. It will be an agreement signed between first ministers. There
is no prescribed deadline for that process. When the draft is finalised it will be submitted by the Prime Minister to
premiers.
Senator BIRMINGHAM: Is there a reason why it has to go through first ministers as against the ministerial
council?
Mr Slatyer: It is the normal process for an intergovernmental agreement, Senator.
Senator BIRMINGHAM: Does there need to be a COAG meeting for that to take place?
Mr Slatyer: It is not a requirement.
Senator BIRMINGHAM: It can be done out of session of COAG to have it signed?
Mr Slatyer: The normal process would be, and we are envisaging this process, though you might address
these questions to the Prime Minister's department, that—
Senator BIRMINGHAM: I think they have been and gone.
Mr Slatyer: the Prime Minister would send the document to the relevant premiers for their consideration and
signature.
Senator BIRMINGHAM: Is it the government's ambition to have it completed and signed before the
caretaker mode?
Mr Slatyer: It is a question you would have to direct to the government.
Senator BIRMINGHAM: Is the department working towards a time line to have it completed and signed
before the caretaker mode?
Dr Grimes: Senator, I hope you do not mind me taking this one. My evidence this morning was that we were
very much in the very final stages of finalisation of the IGA. It has not been signed off by first ministers yet. It is
outstanding in that sense. Discussions are very, very well advanced. It is in the final stages at this time.
Senator BIRMINGHAM: Is the June meeting of the Murray-Darling Basin ministers still proceeding?
Mr Slatyer: There is not a scheduled meeting in June.
Senator BIRMINGHAM: There was last estimates.
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Mr Slatyer: I am not aware that there was a formally scheduled meeting. There are normally two meetings a
year of the ministerial council.
Senator BIRMINGHAM: Has the ministerial council met this year?
Mr Slatyer: No, Senator.
Senator BIRMINGHAM: When will it meet?
Mr Slatyer: When meetings are scheduled.
Senator BIRMINGHAM: Is there a scheduled meeting for the remainder of the year?
Mr Slatyer: I am not aware of a scheduled meeting at this point in time.
Dr Dickson: There is the scheduled in November there—there are the two yearly meetings, June and
November—but there is not one scheduled in June. At the moment one is scheduled in November, but this may
change.
Senator BIRMINGHAM: There is usually a June meeting and a November meeting. There will not be a June
meeting this year, or there is not one scheduled?
Dr Dickson: There is not one scheduled.
Senator BIRMINGHAM: And it would be a miracle to schedule one a week before June.
Mr Slatyer: Can I clarify: it depends. There have been meetings in March, April, May and June. Sometimes
there are not meetings in that period. These matters are determined by ministers each year.
Senator BIRMINGHAM: Are there matters that should be going to a ministerial council to finalise the IGA
or other matters in relation to how the plan will be implemented that now will have to wait until November?
Mr Slatyer: The council can operate through regular, conventional face to face meetings, but it can also deal
with matters out of session. It is quite normal for regular business that needs attention, as the year proceeds, to be
dealt with out of session, if required. That process has been availed of and can be availed of this year.
Senator BIRMINGHAM: Does the current draft of the IGA include a cap for New South Wales?
Mr Slatyer: We are not able to comment on the content of the current draft, Senator.
Senator BIRMINGHAM: It is always worth trying. How many submissions were received on the draft water
recovery strategy?
Ms Harwood: I think around 22, but I will correct that if that figure is not right.
Senator BIRMINGHAM: Approximately 22. Those submissions were received back in March, were they
not?
Ms Harwood: Yes.
Senator BIRMINGHAM: What consultation is necessary now to finalise that strategy?
Ms Harwood: I think we have the input from people who are commenting on the draft strategy. I have also
had meetings with bodies like the Irrigators Council discussing the content of the strategy and with others. So we
will now prepare the final version—that is, the first formal iteration of the water recovery strategy. But, as I said
before, it will be an evolving document as the water recovery landscape evolves.
Senator BIRMINGHAM: Is there anything that—
Mr Parker: Just to correct that answer, it is important to note that there are ongoing discussions between
water officials and the Commonwealth and the states. That happens regularly, including around the table of the
so-called basin officials committee. When you asked the question about consultation, there is not a black and
white consultation process formally scheduled on the finalisation of the water recovery strategy, but it is not, in a
sense, a private process just in Canberra.
Senator BIRMINGHAM: Given that this draft was released in November last year, and noting that more
than half of the water has already been recovered, is there anything preventing the immediate finalisation of the
strategy so that it is transparent to all as to what the strategy of the Commonwealth is working towards?
Ms Harwood: No. We are just working our way through the comments that we have received and preparing a
robust final that respects and reflects the input that we have received.
Senator BIRMINGHAM: When will it be finalised?
Ms Harwood: I cannot give a precise date, Senator.
Senator BIRMINGHAM: Does it require ministerial sign-off?
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Mr Parker: It does not require ministerial sign-off by the council; it is a Commonwealth document.
Senator BIRMINGHAM: Does it require sign-off by Minister Burke?
Mr Parker: I expect Minister Burke will want to approve the document, yes.
Senator BIRMINGHAM: When does the department hope to get it to Mr Burke?
Ms Harwood: Again, we do not have a precise date for that, Senator.
Senator BIRMINGHAM: Are you talking about days, weeks or months?
Ms Harwood: Weeks.
Senator BIRMINGHAM: You indicated in response to Senator Joyce that in terms of the bridging the gap
arrangements, working through what might be achieved by works and measures and what might be achieved by
infrastructure, there were still some 280 gigalitres that you indicatively expected to need to purchase. The draft
water recovery strategy seems to indicate a figure of 239 gigalitres as the indicative residual water purchase. Why
has that changed from 239 to 280?
Ms Harwood: I am not sure. It may be that my calculations on the spot here were not correct. I will take that
question on notice.
Senator BIRMINGHAM: If you could have a look and if the department is able to correct the record today, I
am sure many people would like to be certain of what the case is in that regard. Can I go to some of the funding
issues. The department has rephased, deferred—whatever the nice words are that are always used in these terms—
expenditure on the restoring the balance program, which of course is the buybacks program, and has pushed out
around $110 million or so beyond the forward estimates; is that correct?
Ms Harwood: There have been a number of reprofilings and movements of funds for the restoring the balance
program. That is correct. So the actual funds available for water purchase in the near years are less than they used
to be.
Senator BIRMINGHAM: Is about $110 million right, on my rough sums?
Ms Harwood: It sounds right.
Senator BIRMINGHAM: It sounds right to you, Ms Harwood; excellent. Leaving, according to your table,
$91 million for the 2013-14 year for water buybacks?
Ms Harwood: Yes.
Senator BIRMINGHAM: That would be, according to the table that you have presented, the lowest figure in
terms of water buybacks since the program first commenced in 2007-08?
Ms Harwood: Correct.
Senator BIRMINGHAM: Ms Harwood, what would the figures for water buybacks look like now for the
2017-18 and 2018-19 financial years—those years that come after the crunch time for achieving the 2,750 in
2019?
Ms Harwood: My understanding is that the agreed expenditure profile for capital for water purchase is
published by the government up to 2016-17. I am unaware of whether we normally provide the information
beyond the forward estimates.
Senator BIRMINGHAM: I am interested in whether you have the information beyond the forward estimates.
If you do then norms aside, essentially the point I am trying to get to is: is there a risk that there is now, with the
deferral of this $110-plus million, these big lump sums sitting in the final year or two of implementation that
could see significant tenders needing to be undertaken and an almighty rush to try to get things completed, which
of course would have the commensurate impact of driving prices higher?
Ms Harwood: I think the volume of water purchased in those years will be affected by a number of factors.
One is how much of the 650 gigalitres of SDL offsets are achieved through the SDL adjustment mechanism when
that applies in 2016, and we will not know that until 2016. The second is: how much water will we secure under
contract in infrastructure projects? The more yield we get from infrastructure projects, the less that needs to be
purchased. So there will be a significant review point in 2016 as to the remaining quantum of water purchase
required to bridge the gap to 2,750 by 2019.
Senator BIRMINGHAM: How much of the 239 or 280, whichever it is, would you expect to acquire over
the period of the forward estimates to 2016-17?
Ms Harwood: I will take that on notice because I would need to do some estimations in terms of the likely
yield from the available expenditure profile through to the end of the estimates.
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Senator BIRMINGHAM: Is the available expenditure profile, including this deferred $110 million, purely
dedicated towards achieving 239 gigalitres or 280 gigalitres, whichever it is, or is there surplus potentially within
restoring the balance that could allow for greater buybacks if that proves necessary—or will that have to be
funded out of presumably there being lesser expenditure in SRWUIP?
Ms Harwood: I would probably say there is the gap there that relates to what is the water purchase task if the
full 650 is realised from an offset process. There are also some small aspects of water purchase. For instance,
although there is a sort of generalised pause in terms of water buyback in Victoria because we have already got to
the point of what you would acquire by 2016, there is a small water purchase program in Victoria, by agreement
with Victoria. There are water sales from points in the Goulburn-Murray connections program where farmers are
exiting from channels that have been decommissioned and wish to sell their water. So that is by agreement with
the government, the irrigators and Goulburn-Murray corporation. So the landscape of water purchase ahead is on
bridging the part of the gap that goes to the point where you allow for 650 but also some additional acquisitions
through small programs like that.
Senator BIRMINGHAM: What is the status of identification of the constraints that are required to be able to
make any progress on the additional 450 gigalitres?
Ms Harwood: I will pass that to the authority.
Dr Dickson: You are asking about the progress of the constraints strategy?
Senator BIRMINGHAM: Yes.
Dr Dickson: This year, as you know, we are required to do a strategy by the end of November. So is your
question about the rollout of the funds?
Senator BIRMINGHAM: No, about the progress on the development of that strategy.
Dr Dickson: We have done quite a lot of work in advance, with some discussions with communities and a lot
of discussions with the states, and have a lot of the technical work done. We have been, over this month and will
be over the next two or three months, having a lot of detailed discussions with communities, basically reach by
reach, in individual areas to work through the issues and risks in relation to those particular areas, and look at
trying to identify what are some of the mitigating options. That is all part of the development of the strategy.
Senator BIRMINGHAM: To be clear, if the constraints cannot be removed then the 450 gigalitres cannot be
acquired; is that correct?
Dr Dickson: There is nothing in the plan that puts a condition on the removal of constraints on the
450 gigalitres.
Senator BIRMINGHAM: So the 450 gigalitres could be acquired by the Commonwealth regardless of
whether constraints are removed?
Dr Dickson: There are three activities that are all coming to a head for consideration in 2016 for the SDL
adjustment. That is the work on the offsets, up to 650, the work on the constraints strategy, and governments will
have quite a lot of involvement until then on which are the value for money constraints that they want to address,
and also on the development of the program for the 450.
Senator BIRMINGHAM: I am being given the wind-up. One final issue: what will be the cut to the MDBA
as a result of South Australia's budget cuts? We received, in answer to some questions on notice, identification of
what is going to be cut as a result of New South Wales budget cuts. What decisions have been made in relation to
SA's budget cuts?
Dr Dickson: The decisions that the ministerial council have made on the joint programs is only for this
coming financial year. They are yet to make any decisions on what they are going to change for the future
financial years. We have not yet seen South Australia's budget for next year, so we do not know whether the
forecasts they made at the end of last year for their cuts are going to be factored into their budget for forthcoming
years. We really need to wait on that. In terms of the decisions made, they are only being made for one financial
year. The ministerial council asked all the basin officials to look through what some of the options might be for
the long-term funding of joint programs. That is the process that is happening for the rest of this calendar year.
Senator BIRMINGHAM: Has the government sought or received any assurances from South Australia that it
will reinstate the funding?
Dr Dickson: I cannot talk for the government. South Australia have agreed to maintain their funding
contribution for this coming financial year. As I said, with the future arrangements, as yet there has not been any
consideration by ministerial council. They are awaiting advice from officials.
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Senator BIRMINGHAM: Mr Parker, can you add anything?
Mr Parker: In respect of your question, we are awaiting the outcome of the South Australian budget
deliberations this year.
Senator BIRMINGHAM: In response to the Victorian minister's suggestion of a Productivity Commission
review into the management and funding of river operations, Minister Burke stated on 30 March that it was an
'extremely constructive suggestion from Victoria and I will start the processes to see whether it's possible'. Has
Minister Burke started the process and can and will there be a Productivity Commission review into the
management and funding of river operations?
Mr Slatyer: The ministers did call for a process to be set up last year to look at the joint funding arrangements
for the authority. As a result of that, officials have recommended approaches to the budget arrangements for the
coming financial year. As part of that process discussions are occurring as to the value and role of an independent
inquiry into the joint activities of the Murray-Darling Basin Authority—not just River Murray water operations
but more broadly the joint activities of the authority—and whether and how such a review should be conducted.
Those matters are under consideration currently.
Senator BIRMINGHAM: Consideration at ministerial level or at departmental level?
Mr Slatyer: The Commonwealth is considering the issues in regard to a possible inquiry by the Productivity
Commission. Ultimately, if it is a Productivity Commission inquiry process then that would be finalised and
settled in accordance with the normal process for establishing such inquiries.
Ms Harwood: Chair, with your indulgence, could I correct a figure I gave earlier to solve the 239-280
problem. My apologies; I made an arithmetic error in going through the process of working out the remaining
water to purchase that goes if we get the full 650. There is 2,750 to bridge the gap under the basin plan. Of that,
we have recovered 1,600. If you set aside 650 of that as allowing space for the offsets or SDL adjustments to be
achieved, and we assume a further 270 from the rest of the infrastructure projects, that leaves 230 gigalitres,
which is much more in tune with the figure in the water recovery strategy. My apologies for getting those sums
wrong earlier.
CHAIR: Senator Waters.
Senator WATERS: I want to go to the document that was distributed a little while ago: the summary of
requirements about the water monitoring and management programs. In both the Santos and the QGC columns
you note that, in the expert panel review of stage 1 of those plans, the minister decided not to approve those plans.
Santos then proceeded on to stage 2 without stage 1 having been ticked off. From your table here, it looks as
though Santos still do not have their water management and monitoring plan ticked off. What happens now? Are
they operating? Why was approval issued if the water problems still, almost two years on, have not been able to
be properly dealt with?
Dr Dripps: I might have to take that question on notice. I have lost Mr Gaddes. I have sent him to do
something else—
Senator WATERS: Can he be brought back?
Dr Dripps: He can be brought back. He is in the building, but he is not here right now. There was a degree of
complexity—
Dr Grimes: I was just going to make one suggestion, Senator. These matters would typically be covered
under item 5.2. We are trying to take as much here as we possibly can, but Mr Gaddes will be available for item
5.2 this afternoon.
Senator WATERS: Okay. I have a number of other questions for that session too.
Dr Grimes: Indeed, we could pick up questions there, if we cannot get him back a little sooner.
Dr Dripps: As we indicated in the evidence provided previously: there have been a lot of meetings of the
Queensland expert panel and a lot of detailed technical analysis of the plans and the work that has been
undertaken by the proponents in preparing their water management plans. The precise detail about what was
approved on what date?—you have the piece of paper in front of you; I no longer do. I am sorry about that. But
we did find, as you would expect in areas where there is an adaptive management approach, that there were things
that were prescribed to be in the stage 1 water management plans that it was unreasonable to expect could have
been completed in the time frames of the stage 1 plans. So they have been incorporated into the stage 2 water
management plans.
Senator WATERS: Which still have not been ticked off for Santos. Yet their approval was issued years ago
and presumably they are operating.
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Dr Dripps: They are not able to operate in a manner covered by things in the water management plan until
their water management plan has been approved by the minister.
Senator WATERS: So are they extracting gas from the wells?
Dr Dripps: I do not have that information to hand. My understanding would be that, if they are having an
impact on water that is covered by the water management plan and that water management plan is not yet
approved by the minister, they would not be operating.
Dr Grimes: There is no doubt that those projects are not operating at anything like their full scale because the
processing facilities have not yet been completed. The processing facilities have to be completed before there are
going to be commercial levels of extraction at the coal seam.
Senator WATERS: That is true, but even the pilot and exploration levels of extraction can have water
impacts, as you well know.
Dr Grimes: We have officers who can provide you with further information on that.
Senator WATERS: Great.
Dr Grimes: The more significant issues are related to when you ramp up to very large scales of production.
Senator WATERS: With respect, the scientists say otherwise. They say that there can be groundwater
impacts even from an exploration stage. But I will leave that, given my limited time. Can I take you to the matters
that are required to be dealt with in stage 1 of a water monitoring and management plan? The fourth bullet point
in the first item, groundwater monitoring, says that early warning indicators of where drawdown thresholds are
being approached need to be addressed. Can you outline for me what sort of early warning indicator, and how that
matches up with the evidence from CSIRO and the water commission that say that sometimes these impacts are
not detected for decades and possibly hundreds of years? How can you have an early warning indicator when
water moves slowly?
Dr Dripps: As you are aware, we are only able to regulate water as it relates to matters of national
environmental significance. With the projects in Queensland, those matters are mound springs—mound spring
dependent communities—so they are some distance away from the actual operating of the coal seam gas facilities.
Without doubt, the operation of coal seam gas extraction does have an impact on water levels in the immediate
vicinity. We have worked with the companies and with the expert advisory committee to develop extremely
conservative thresholds of what would be a natural variation in levels of aquifers on the pathway between where
the coal seam gas extraction activity is taking place and the mound spring so that there is an early warning.
Senator WATERS: How is that able to be fixed? If you detect that the threshold is reaching that danger zone
level, what measures are then put in place to remedy that?
Dr Dripps: You are going slightly beyond my area of technical expertise, but my understanding of things is
that there are a number of options, including either slowing down or halting the extraction of coal seam gas as
well as the provisions around reinjection into aquifers that have been impacted by coal seam gas extraction.
Senator WATERS: Again I think there is some significant scientific concern about whether or not that is a
successful process. Perhaps I will revisit this in 5.2, but my general concern is that approvals have been given.
When we have fundamental detail about water impacts and we do not even know whether they can be managed,
why were the approvals given in the first place? Does the department advise the minister as to the propriety of
issuing such highly conditional approvals? Should the department advise the minister that perhaps it would be
more sensible to be in possession of the information about water impacts and how and if they can be managed
before giving these major projects the approval?
Dr Dripps: It is regular practice under the EPBC Act for companies to apply for their approvals at quite an
early stage of the consideration of the potential economic activity. This aligns with their investment time frames
and essentially the need not to make investment decisions that would subsequently be overruled by environmental
concerns or conditions. As you are aware, we do give approvals for projects with a number of detailed and
subordinate plans and activities that need to be undertaken before the activity is able to progress, and that is the
same case in these coal seam gas activities in Queensland.
Senator WATERS: So if the water management and monitoring plan can never meet the satisfaction of the
minister, what happens to the status of the overarching approval?
Dr Dripps: It is a condition of the project that the water management plan be prepared to the satisfaction of
the minister.
Senator WATERS: So the approval is void if those subsidiary plans cannot be satisfactorily ticked off by the
minister?
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Dr Dripps: That would be the most likely option.
Senator WATERS: I want to take you also to your bullet points there about information relating to hydraulic
fracturing. You have listed two items there which need to be examined in a stage 1 water plan in relation to
fracking issues. What is not listed there is the environmental impact of the mobilising of naturally occurring
BTEX by the fracking process itself. Evidence was given to this committee in the course of my bill—or it might
have been the government's water bill; one of the water bills—which was to the effect that fracking can mobilise
naturally occurring BTEX. That is not included on your list here of issues that companies have to address in their
plans. Is there an intention to revise this list and add that?
Dr Dripps: We regularly revise these kinds of lists as new information comes to light. I am happy to take on
notice what we have done with that particular evidence from the inquiry. I am not personally familiar with exactly
what we have done with that.
Senator WATERS: Thank you. I would be very keen to know that that is being attended to and reflected in
the standards. Coming back to the East's bioregional planning, can you give me an update on where that is at and
how it is progressing; and are we filling those gaps in our water knowledge?
Dr Dripps: I will pass you to Ms Nethercott-Watson for an update on the bioregional planning process.
Ms Nethercott-Watson: I am sorry, Senator; I am not sure if you are after one particular one, but I can give
you a feel of where the program is up to.
Senator WATERS: The overarching one first would be great.
Ms Nethercott-Watson: Yes, sure. As you know, six bioregions have been identified. A number of them have
been broken into the relevant subregion areas based on the appropriate geology and hydrogeology of the region.
There are around 15 subregions that we are looking at. At the moment, four priority subregions have been
identified which will be the first areas subject to bioregional assessments. Those four areas include Galilee,
Namoi, Gloucester and Clarence.
So far, in terms of what the program has been doing, the main focus has been on the construct of a scientific
methodology to undertake bioregional assessments. This has been done in conjunction with our partner agencies:
CSIRO, Geoscience Australia and the Bureau of Meteorology. Very, very detailed planning has gone into that
methodology and it has been the subject of a lot of conversations with the Independent Expert Scientific
Committee.
We have commenced some detailed stakeholder consultations in a lot of these regions—particularly the four
subpriority regions—talking to councils, natural resource management organisations and mining companies about
the commencement of bioregional assessments and what the scientific methodology is looking to do. That would
include bringing together a wide range of products—technical and scientific products—that would be released as
part of bioregional assessments through a number of phases. The first phase would be a contextual analysis phase;
the next phase would be a data modelling phase; the third phase would be an impact analysis phase, and the fourth
would be a risk analysis phase. Particular scientific products are being identified for each of those phases under
the scientific methodology.
We are starting to talk to people about what those approaches might be and also to utilise the work we have
undertaken with the 29 natural resource management organisations that we have contracted. It is important to
concentrate on the fact that that is local knowledge; that is identifying local water assets and receptors. That forms
the basis of the scientific methodology to take in and understand what might be the potential impacts on and risks
to those water assets and receptors. So a lot of discussion has commenced and the data analysis is starting to be
brought together. A fair bit of work is going on within the scientific agencies at the moment to better understand
the availability of data that might be around to draw in and then work through each of those phases, on top of the
water asset and receptor information that is coming from natural resource management organisations.
CHAIR: Thank you, Senator Waters; we have to move on. I am going to run this through to 20 past, so you
have only a few minutes each. I still have Senator Joyce, Senator Heffernan and Senator McKenzie. I am sorry
about that, but that is what we have.
Senator JOYCE: In your initial report on the Murray-Darling Basin, you say:
We also acknowledge that this has meant that implementation planning is still in its early stages. Ideally, such planning would
have occurred concurrently with the development of the Basin Plan. Because, for the most part, that did not occur, the
establishment of a clear implementation pathway is the next critical step. Until a pathway is in place, we consider that there is
a real risk to realising all the benefits of efforts and investment to date.
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In your view, what ideally would have occurred has not occurred; for example, environmental watering plans,
water recovery strategies, et cetera?
Dr Grimes: I do not think that is a matter that officials can comment on.
Senator JOYCE: Because the plan has not occurred, what do you see as the key risks?
Mr Cameron: I think the comments made in that report reflect the view of commissioners that, in an ideal
world where full information was available, the authority and relevant parties would be in a position to discuss
and put in place a set of understandings about the roles, responsibilities and accountabilities for implementation
steps, including considerations of the interdependencies between the various roles of parties in implementing the
Basin Plan. It would not necessarily be the case that all systems and structures would be in place. You made
reference to environmental water plans and other strategies. I do not think from the commission's perspective that
we would have expected to see all of those processes in place; but certainly a clearer understanding of the
agreements and implementation strategies from the various parties would, in an ideal situation, be required. But
we do not live in an ideal world. For that reason, we have indicated in the report that we will be looking for the
early implementation of those strategies and certainly at coming back in 2015, which is when we propose to do
our next audit, to identify whether those arrangements are in place.
Senator JOYCE: I note that you have three new commissioners and a new chair—and a new commission
there for the first time in February. Is the new commission taking the NWC in new directions?
Mr Cameron: You are correct; we have new commissioners. We have four commissioners currently in place.
The commissioners had some early discussions about the direction of the organisation at that February meeting
and agreed that when they next meet—which is next week—they will have a discussion about the strategic
direction of the organisation. I would expect that would result in some decisions about priorities for our work
program over the next couple of years and areas of particular interest to commissioners to pursue in relation to
water reform.
Senator JOYCE: What are they doing? How is the NWC involved with Western Australia? What is going on
there?
Mr Cameron: The National Water Commission has a role to report and to provide advice on water reform
across the country. Western Australia, like all states and territories, is a signatory to the National Water Initiative.
We have discussions with the Western Australian government and report on the performance of the Western
Australian government through our various reports.
Senator JOYCE: I notice that there was some stuff there from Karlene Maywald. She said that the National
Water Commission sees urban water reform as an area that was underdone in the 2004 National Water Initiative.
What elements of water reform does the National Water Commission see as undone?
Mr Cameron: The National Water Initiative contained a relatively small number of commitments in relation
to urban water reform relating to water efficiency labelling, work in relation to water sensitive urban design and
some commitments which apply across the country in relation to pricing principles and institutional arrangements.
But unlike water management in regional Australia, the National Water Initiative does not, in the commission's
view, present a coherent framework for best practice water management in urban areas. In our report on urban
water which we released in 2011, we indicated that we felt there was room for the development of a national
articulation of principles in relation to institutional design and accountabilities and responsibilities and for
discussion about the role of the urban water sector, particularly in relation to new areas, such as the objectives of
liveable cities, but also a recommitment to implementing those important economic and environmental principles
around urban water management.
CHAIR: Senator Joyce, I am going to have to go to Senator McKenzie.
Senator McKENZIE: I am following up on a question on notice which Senator Birmingham touched on
earlier in his questioning, and that is question 228, around the jointly funded programs in the Murray-Darling
Basin and the list that was provided. My question 3 was: 'Have any other basin states'—that is, Victoria or
Queensland—'indicated that they will also be reducing funding to these jointly funded Murray-Darling Basin
programs?' In your answer at the time you suggested that no other jurisdiction has indicated they will be reducing
their contribution to the joint program. So I am just following up on whether that is still the case.
Dr Dickson: That is still the case, yes. South Australia has that forecast for the following financial year.
Neither Victoria nor Queensland has made any comment on that. But all jurisdictions have wanted to make this
for one year, the next financial year. For future financial years, it is going to be contingent on doing the review of
the future for the joint programs.
Wednesday, 29 May 2013 Senate Page 39
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Senator McKENZIE: New South Wales has not made any further announcements?
Dr Dickson: No.
Senator McKENZIE: I will ask the rest in another area.
CHAIR: I am just trying to get Senator Heffernan in here. I did promise that I would give him a couple of
minutes.
Senator JOYCE: We are up to the Commonwealth Environmental Water Holder.
Environmental Water Office
[12:19]
CHAIR: We are now moving to program 6. I call officers from the Commonwealth Environmental Water
Office together with officers from the department in relation to program 6.1: Commonwealth environmental
water. Senator Joyce.
Senator JOYCE: Congratulations, you are now the biggest irrigators in the nation, are you not? You would
have the largest amount of water compared to any other body in Australia?
Mr Papps: As I understand it, we are the single largest holder of water.
Senator JOYCE: On the books, how much is that water worth?
Mr Papps: That water is valued at about $1.89 billion.
Senator JOYCE: How many staff do you have?
Mr Papps: The current full-time equivalent staff numbers are 55.66.
Senator JOYCE: What is the average cost of each staff member?
Mr Papps: I would have to take that on notice.
Senator JOYCE: Over the past five years, how much water has the water holder delivered to the
environment?
Mr Papps: The total delivered since the commencement of the program five years ago to 30 April is 2,359
gigalitres.
Senator JOYCE: You were allocated 2,978, is that correct?
Mr Papps: The figure I have is 2,812 gigalitres, but I will check that during the day and let you know.
Senator JOYCE: So there is about a 550 difference between the two or something, is that correct?
Mr Papps: About 450, according to my numbers.
Senator JOYCE: What did you do with that water?
Mr Papps: The difference?
Senator JOYCE: Yes.
Mr Papps: The difference is made up of the fact that the 2012-13 water year has not yet finished; so there will
be more water used. There have been some evaporative loss deductions during the life of the holdings. In
accordance with the normal state rules, there has been a very small amount of forfeit and then the balance is made
up of carryover that we are expecting into 201314.
Senator JOYCE: What do you mean by 'forfeit', for the purpose of Hansard?
Mr Papps: Forfeit or reallocation by basis states is a process whereby essentially—if you cannot use your
water, you are not entitled it carry it over and you have not traded it—under certain circumstances, given the rules
in each basis state, you forfeit it or lose it.
Senator JOYCE: Use it or lose it! How much forfeit water was there?
Mr Papps: Over the life of the program, the total forfeiture for the Commonwealth environmental water
holdings is 0.464 gigalitres.
Senator JOYCE: So that is at 46,000 megs or something?
Mr Papps: Yes.
Senator JOYCE: Is there any chance of selling that on to anybody? Seeing that we are going to lose it, is
there any chance of selling it to farming communities or something like that that might want to buy it?
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Mr Papps: Not really in the time that we have been operating, simply because, particularly since the Basin
Plan has come into force, there are new rules governing the trade by the Commonwealth Environmental Water
Holder. I have to be compliant with those rules before I can trade, and I am not yet in that position.
Senator JOYCE: So just for the purpose of Hansard, 46,000 megs is about half of Beardmore Dam. Do laws
need to be changed so that you could actually trade that water back into the market? Are there things that we need
to change so that could happen?
Mr Papps: No. I think the trade question is reasonably settled. With the new provisions in the Basin Plan as it
now exists and the requirements on me and, indeed, every irrigator within the basin states—they have got their
own sets of rules and regulations—as far as I am concerned, as the Commonwealth Environmental Water Holder,
I simply have to address those requirements so that I am in a position to trade. At this stage, I do not see any
changes that are necessary.
Senator JOYCE: You should read the notes just beside you.
Mr Papps: Thank you.
Senator JOYCE: You are welcome. How many people do you have in the field?
Mr Papps: How many people in the field?
Senator JOYCE: Yes.
Mr Papps: Do you mean based outside Canberra?
Senator JOYCE: I mean in the field, where your environmental assets are—driving around in the field and
checking out how the trees are growing.
Mr Papps: We do not have any staff at the moment permanently located outside Canberra. We are in the
process of employing six local engagement officers who will be employed within the basin, outside Canberra.
Having said that, I should also say that the staff within Canberra travel across the basin very frequently and very
widely, particularly those staff involved in the delivery of Commonwealth environmental water, because they
undertake this process in a very collaborative manner with a wide range of other agencies, interest groups, local
communities and the like. Those sorts of relationships and that sort of interaction can only be facilitated by direct
contact throughout the basin. So while they are not based in the basin, they are certainly out there a great deal.
Senator JOYCE: You have a $1.89 billion asset. You have 55 staff based in Canberra. The water, the asset, is
out there across the Murray-Darling Basin. In regard to your environmental assets, you are supposed to be
watering them out there as well. If you were a company, you would be in probably the top five or six per cent, in
terms of size, of companies in Australia. So we are talking about a big show. Don't you think it would be good to
have some more sort of ontheground staff permanently applied next to your environmental assets? If that is what
we are supposed to be doing all this for, how do we know it is actually achieving its objectives?
Mr Papps: There are two elements in response to that question. The first, as I alluded to before, is that the
Commonwealth Environmental Water Holder and, indeed, the Commonwealth environmental watering process is
an extensively collaborative one. In other words, we undertake both our planning for water use and our delivery
of Commonwealth environmental water in collaboration with a range of other agencies and entities, particularly
the state-based agencies: in New South Wales, for example, State Water and the Office of Water; with river
operators, for example, the Murray-Darling Basin Authority; and with private companies, for example,
Murrumbidgee Irrigation. So the total resources available to the Commonwealth Environmental Water Holder are
less relevant; it is the collaborative work that we conduct across the basin.
In terms of monitoring outcomes, it is fundamentally important for us to be able to demonstrate the effect that
our water is having. Of course, given that we have a commitment and an obligation to an adaptive management
framework, you cannot do that without monitoring the impact of our watering activities. We have an
environmental monitoring program and we are seeking to expand that.
Senator JOYCE: What will be the value of your asset at the end? How much water will be the book value?
What do you anticipate to be the ultimate value that you will have on the books for your water by the time the
plan is completed?
Mr Papps: I am not able to answer that at the moment; it is not information that we have available. I can take
it on notice.
Senator JOYCE: Roughly, over $2 billion?
Mr Papps: I would expect so.
Wednesday, 29 May 2013 Senate Page 41
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Senator JOYCE: And the increment of that asset as it increases, will that be booked as a capital profit, or
how will we deal with that? Obviously the value of the water goes up; so the value of that asset would go up. How
will the government deal with it?
Mr Papps: I will just ask my colleague.
Mr Costello: They are characterised as intangible assets. So they come on to the books at cost but they are
revalued. Each year, we have a look at all of the trades through the state water registers and then see whether there
has been a significant decline or increase in the value of the assets so that they can be written down. They can
only be written up to cost, if they go beyond that.
Senator JOYCE: Can you provide figures on a catchment-by-catchment basis, that is, how much water has
been allocated in each catchment in each year and how much water has been delivered in each catchment in each
year?
Mr Papps: We can provide those figures. I will take that on notice. We can probably provide them today.
Senator JOYCE: Thank you very much for that. How much have you lost over the past five years; that is,
how much water were you allocated that subsequently could not be used? Was that just the forfeit amount?
Mr Papps: Essentially it is just the forfeiture amount in the way that we interpret that. So, in effect, from our
perspective, there are four broad uses that water can be put to: we can use it for environmental watering activity;
we can trade it; where we do not trade it and do not use it, subject to the rules that apply, we can carry it over, as
can other irrigators; and then the fourth category is forfeit, and I have given you the figures on forfeit.
This year, because it is essentially a rolling program where the ledgers, if you like, are squared off at the end of
each water year, if we go to 2012 13, which are the figures represented in some of the recent reports, we are in a
position where we are forecasting total use of around 1,125 gigalitres, but that may go up because we are still
contemplating a number of water activities and we are forecasting a carryover of about 350 to 400 gigalitres.
Again, the precise nature of that number will not be known until the end of the water year. It is dependent on, as I
say, a number of watering activities that we are still contemplating before the end of the water year. As you would
be aware, Senator, carryover water is not water lost; it is still available to us. We would expect to utilise it in the
early stages of the next water year.
Senator JOYCE: Do you ever get to a point where you just say, 'Look, we can't use the water we've got. It's
not being used. Let's get this back to farming communities. Let's at least sell some of it.' If it does not have an
environmental use and there is no prospective environmental use because it might have flooded, you could do
something with the water. Tell me about that process.
Mr Papps: Sure. Our principal focus is obviously on environmental water and use. That is why the water has
been purchased. That is why it has been given to the Commonwealth Environmental Water Holder. That is my
legislative remit, to protect and restore the environmental assets of the Murray-Darling Basin.
Having said that, the Water Act gives me the capacity to trade. Without going into the detail of it, which I
would have to read out to you anyway, there are very limited circumstances in which I can trade, the net effect of
which amount to, if I cannot use the water for environmental purposes for some reason or if I could get a net
environmental gain from trading in the water then I am entitled to trade and it is my intention that, once all the
processes are in place, including the Chinese walls that I am required to implement under the basin plan, we
would trade. Having said that, my expectation is that our trading activity would be a minor part of the portfolio.
Senator JOYCE: Even as a minor part, it would be a massive asset. You would be one of the biggest water
traders in the market.
Mr Papps: I think that is speculative. I really cannot comment on that.
Senator HEFFERNAN: If you traded, would it be a gross or a net trade?
Mr Papps: I do not know, Senator. I would have to get back to you on that.
Senator HEFFERNAN: Do you know what I am talking about?
Mr Papps: You are talking about the specific rules that apply.
Senator HEFFERNAN: If you have got environmental water and, as Senator Joyce correctly points out, you
want to trade it to someone and it is in a dam somewhere and I order it halfway to Adelaide, what am I buying
when I buy 300 gigs? What comes out of the dam and what gets halfway to Adelaide?
Mr Papps: The simple answer I have to that—and my colleagues may be able to provide more detail—is that
what you get is what you are entitled to get under the trading rules of the basin state in question.
Senator HEFFERNAN: So if it takes 900 gigs—
Page 42 Senate Wednesday, 29 May 2013
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
CHAIR: Senator Heffernan, I have not given you a call. I think you are diverting Senator Joyce's questioning.
Senator Joyce.
Senator JOYCE: How much do you expect to be allocated in the 2012-13 year?
Mr Papps: I am sorry?
Senator JOYCE: How much water do you expect to be allocated in the 2012-13 year?
Mr Papps: In the 2012-13 year—that is, this year?
Senator JOYCE: Yes.
Mr Papps: Our allocation this year—our holdings are 1,583. What is available for use is 1,610 gigalitres.
Senator JOYCE: You expect to use how much?
Mr Papps: We have approved already for delivery 1,223 gigalitres. But, as I said, there are some watering
actions still in the balance, still being contemplated, so I cannot give you a precise final figure.
Senator JOYCE: There is no environmental watering plan set down yet, is there?
Mr Papps: The Commonwealth Environmental Water Holder has watering plans. For 2012 13 there are
watering plans. We are currently working on finalising the watering plans for 2013 and 2014. Those plans, and
certainly the next plan, the 2014 plan, will reflect the objectives and other obligations within the environmental
watering plan, which is chapter 8 of the basin plan.
Senator JOYCE: But there is not a finalised environmental watering plan, is there?
Mr Papps: It depends how you define 'environmental watering plan'. The environmental watering plan
terminology—I am taking you to mean chapter 8 of the basin plan.
Senator JOYCE: That is correct.
Mr Papps: Chapter 8 is a final environmental watering plan. I think you are probably alluding to the fact that
the environmental watering plan does not identify specific obligations on watering activities catchment by
catchment. It sets up a series of processes, a series of principles, a series of objectives. It, for example, gives me
guidance on how to identify priority environmental assets—
Senator JOYCE: How do you do that?
Mr Papps: I apply the rules in the environmental watering plan. For example, priority environmental water
assets would include Ramsar-listed wetlands. They would include water dependent ecosystems that contained
listed threatened species or ecological communities. They would include water dependent ecosystems that are rare
or unique. They would include water dependent ecosystems that are representative, so they show the
characteristics of a once widespread wetland. There is a series of criteria that help me, and other water holders, of
course, because other water holders are bound by the same plan, to identify those assets.
Senator JOYCE: When you have two Ramsar wetlands, how are you going to choose between the two?
When it is the lower lakes or something upstream from them, how are you going to define the lossage? You can
say: 'Well, I can get 80 per cent of the job done here or 20 per cent of the job done at the lower lakes.' How are
you actually going to go through that process?
Mr Papps: That is a very complicated question. If there were a trade-off required—so I am assuming you are
talking about if water was constrained and we did not have sufficient environmental water to meet the needs of all
of those assets—then you would go through a process of examining the condition of those assets. Most require
wetting and drying cycles, as you would understand, so we would make an assessment of where they are in the
cycle. We would make an assessment of their health. We would make an assessment of what had occurred in
prior years. Where we are dealing, for example, with a wetland that because of natural wetting was in good
condition and had developed ecological resilience and therefore could perhaps go without environmental—
Senator JOYCE: I get the gist of what you are saying. Who makes those decisions?
Mr Papps: In the end I make those decisions.
Senator JOYCE: You make them presented on the evidence of who?
Mr Papps: I am provided with formal advice from the Commonwealth Environmental Water Office, which is
a division in the department. They, in turn, draw on a wide array of advice. I have referred to them before. I do
not necessarily want to go through them in great detail. They would draw on advice from a scientific advisory
panel that we have set up, they would draw on advice from the Murray-Darling Basin Authority, the relevant state
agencies and, of course, Senator, as you would appreciate, local community knowledge.
Wednesday, 29 May 2013 Senate Page 43
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Senator JOYCE: I refer to the Auditor General's recent report on environmental watering. In that report it
stated that the CEWO is preparing to make changes to its water use guidance and materials and introduce
additional reporting to meet the requirements of the recently introduced basin plan. What are the changes you are
preparing to make?
Mr Papps: To a large extent those changes have already been made. Before I defer to my colleague for more
detail, for example, the decision making framework that guides how I make my decisions about the allocation of
environmental water required some minor modification to better reflect the obligations imposed on me by the
environmental watering plan in the basin plan. So those changes were made.
Senator JOYCE: The Auditor General notes that in January 2012 the CEWO engaged the Australian
Government Solicitor to identify and assess the sources of the CEWO's strategic, legal and governance risk and
identify appropriate treatments. The detailed assessment finalised in June 2012 indicated that risk treatment could
reduce the ratings of most risk sources to medium or low. Can the CEWH provide a copy of this report?
Mr Papps: Yes, Senator.
Senator JOYCE: What were the risks which were identified?
Mr Papps: I do not have the detail in front of me. I can provide that information, though.
Senator JOYCE: Will that also deal with what risk treatments could reduce the ratings of most risk sources
from medium or low?
Mr Papps: Yes, Senator.
Senator JOYCE: The Auditor-General's report states that, in the absence of long term monitoring and
evaluation, the CEWO has adopted a measured approach to short term ecological monitoring and evaluation that
is based on delivery partner monitoring activities and detailed studies at key locations where Commonwealth
environmental water has been delivered. Why is there not a long term monitoring and evaluation strategy?
Mr Papps: We are working on one now. We are in the last stages of developing a long term intervention
monitoring program because we recognise, through our own experience, that there were limitations in the short
term processes. Ecological processes, for example, often take a long time to manifest themselves. We have
commissioned consultants to prepare the scientific background for the long term intervention monitoring and later
this year we will move to implementing that.
Senator JOYCE: What would happen if your oversight over the department—what would actually happen to
the water asset if you guys were not there?
Mr Papps: I have never actually contemplated that. The legislation, the Commonwealth Water Act, provides
me with the statutory responsibilities to make decisions over Commonwealth environmental water. If I did not
exist I would have to assume that the Commonwealth Water Act no longer existed or had been amended.
Senator JOYCE: What would happen to the water?
Mr Papps: It would be, I imagine, a stranded asset.
Senator JOYCE: Where would it be stranded? It would just be that an unallocated amount of water would go
down the river?
Dr Grimes: I think we are actually straying a little bit here into speculative matters. It is very difficult for
officials to be able to comment, as you would appreciate, on hypothetical examples.
Senator JOYCE: What I am getting at is the differentiation of holding an asset. We hold an asset, a $1.89
billion asset, and we are managing it. I am just thinking that if we said those licences do not exist anymore, they
are no longer there, that asset just becomes like an unallocated measure of water and it goes down the river like
any other piece of water.
Mr Papps: Or, more importantly, Senator, again acknowledging what the secretary says about being
speculative, I think the more important outcome of such a scenario would be that we would fail to address the
very purpose of the Commonwealth Environmental Water Holder, which is to protect and restore the
environmental assets of the Murray-Darling Basin.
Senator JOYCE: I am glad you are holding the asset. It is valuable. Whilst you are holding the asset and
whilst the nation is running out of money, people are going to start looking at that asset to try to work out how
they save money. Someone will say, 'Well, if you're holding a $2 billion asset, could you hold a $1 billion asset?'
When the nation hits its credit limit it is going to look everywhere to try to work out how to save money.
Senator HEFFERNAN: Over my dead body.
Page 44 Senate Wednesday, 29 May 2013
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Senator JOYCE: You will not have much say in it because the cheques will be bouncing. What other
agencies, state or federal, will be involved in metering and monitoring CEWH's watering actions? Have there
been funding cutbacks within any of these organisations which will impact on the metering and monitoring of
CEWH's environmental watering?
Mr Papps: I cannot speak on behalf of other agencies or entities. I do note that our long term intervention
monitoring program is set in the context of other monitoring programs undertaken by the Murray-Darling Basin
Authority and relevant state agencies.
Senator JOYCE: In response to question No. 129 of the last estimates you stated that the accumulated
impairment relating to the water entitlements held and managed by the Department of Sustainability,
Environment, Water, Population and Communities was $313.470 million. In effect, that means that the
Commonwealth has made a loss of more than $300 million on water buybacks. Why did the Commonwealth pay
too much for water?
Mr Papps: I will ask my colleague.
Mr Costello: The impairment loss reflects the change in the value of entitlements over time. Not just our
entitlements but all water entitlements have decreased in value over the last couple of years.
Senator JOYCE: Where did you make your biggest loss? Which purchase was the worst one?
Mr Costello: The impairment figure looks at the holdings as a whole. I have not broken it down.
Senator JOYCE: How about the Twynam purchase? What is the value of that on the books now?
Mr Costello: I would have to take that on notice. I do not have that.
Mr Papps: Could I provide some generic overview rather than the detail. The Commonwealth environmental
water holding has enormous value, as you would appreciate—I think you have already acknowledged this—in
addressing the problem that it was established to address. It is fair to say that while there is an obligation on me
over time, particularly using trade to balance the portfolio if I think it needs balance—that is, if I could sell some
water and buy water that has greater environmental utility—overall you would have to see it as an asset that has
great value, and difficult to assign a dollar value to in terms of the ecological impacts it has.
Senator JOYCE: You have all your officers in Canberra. Whereabouts is your office in Canberra?
Mr Papps: It is in the John Gorton building.
Senator JOYCE: When does the lease on that run out?
Mr Papps: I do not know.
Senator JOYCE: Is there any reason it could not be in Albury?
Mr Papps: That is a question that is often asked. My view is that our effectiveness and our efficiency in
managing the environmental watering is best served by having officers based both in the regions, in the basin—
Senator JOYCE: But we do not have any officers in the region.
Mr Papps: But we will. By the end of this year, we will.
Senator JOYCE: Whereabouts?
Mr Papps: We are yet to work that out. We are negotiating with hosting agencies within each basin state. But
going back to the original question, there is merit, I believe, in retaining some Canberra based staff because, first
of all, it is beneficial to have a critical mass, rather than spreading a smaller number of staff across a wide array of
locations. Secondly, there are real synergies involved in being in Canberra where, for example, the Murray-
Darling Basin Authority has its headquarters, and where we are very capably supported by the department, both in
an administrative way and, more importantly, by interactions with other water groups and biodiversity groups
within the department. There are real synergies and benefits in being located here. Having said that, I
acknowledge the value that we would derive from working more closely with local communities in the basin.
CHAIR: Senator Joyce, your colleagues have indicated they are seeking the call as well.
Senator JOYCE: My final question is: could the states do your job? Could the state water holders do your
job?
Mr Papps: I do not believe so. In any case, it is largely an academic question because we work so closely
with the states that it is already a seamless collaborative exercise.
Senator McKENZIE: I want to follow up on question on notice 135 about the Commonwealth local
engagement officers, which I think are the positions you were referring to in answering Senator Joyce.
Mr Papps: That is correct.
Wednesday, 29 May 2013 Senate Page 45
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Senator McKENZIE: I got a vague answer and I want to see if you are any further along the line of
appointing, how many you intend to appoint and where you want them. Similarly, you say they are going to be
working closely and collaboratively with state agencies. Will they be superseding or doing work that is already
being done? Given the long process that we have been going through with getting this right, doesn't that expertise
already exist on the ground and wouldn't it be a better way rather than you paying for people on the ground?
Mr Papps: I will try and address each element of your question in turn. Our intention is to appoint six local
engagement officers across the basin. As I said in reply to Senator Joyce, we have not made final decisions about
where they will be located.
Senator McKENZIE: Who are you discussing that with? Who is part of that decision making?
Mr Papps: We issued a public request for tenders from interested agencies and organisations to host a local
engagement officer. We believe, and we still believe, that this was going to facilitate the integration of these
officers, although they will be performing Commonwealth duties—I will come back to that in a moment—both
into the local community and into the relevant agencies and entities within the basin. We invited, as I say, those
organisations to tender. We received a number of tenders. We are in the process of analysing those.
Senator McKENZIE: How many tenders?
Mr Papps: I believe it was 10.
Senator McKENZIE: Across all basin states?
Mr Papps: Yes. So we are in the process of analysing those. Not surprisingly, we are looking at both the offer
of hosting organisations—the level of resource support, and also support in terms of integration into existing
processes and systems. Also, we are looking at where we have our environmental assets, where our key
environmental assets are, where most of our water is distributed, where there are particular local community
concerns or a particular desire to be involved in the decision-making process. A combination of all those factors
will lead us to decide where they will be located.
Senator McKENZIE: Have the position descriptions been done?
Mr Papps: No, they are being finalised at the moment.
Senator McKENZIE: I am getting that there is an engagement bent but also a bit of a PR component?
Mr Papps: I probably would not use the term 'PR' but I would certainly acknowledge that there is a large
component about community engagement. They will be involved in the decision-making process to support me
and my decisions around Commonwealth environmental watering. We are also keen for them to be involved in
capacity building within local communities across the basin.
Senator McKENZIE: I am conscious that Senator Heffernan has some questions. How much has been
allocated in the budget for these six positions, and obviously their ongoing support?
Mr Papps: It is approximately $5 million.
Senator McKENZIE: I might apply for one, Mr Papps!
Mr Papps: That is over seven years, Senator.
Senator McKENZIE: Okay. We will do the maths.
Mr Papps: You might want to reconsider that.
Senator McKENZIE: So $5 million over seven years for six positions?
Mr Papps: Yes.
Senator McKENZIE: I might have some questions on notice on that.
CHAIR: I am sure somebody else would take your position in the Senate, if you were successful.
Senator McKENZIE: The Nationals in Victoria have depth.
Senator HEFFERNAN: I am not too sure who is buying the water, so I might seek some guidance—the Wah
Wah water.
Mr Papps: Who is buying the water?
Senator HEFFERNAN: Wah Wah water—is that going to the environment?
Mr Papps: That is a question you should direct to Ms Mary Harwood.
Mr Parker: I am sorry; Mary has departed.
Senator HEFFERNAN: What I am curious about is that the Wah Wah scheme is a channel scheme that
comes out the back end of the irrigation area. There are 9,000 megs in the allocation for the conveyance. They are
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going to pipe it, which is a good idea. But they are paying $4,200 a meg for that water, which is conveyance
water, and $2,200 a meg—same water, different scheme, the Darcoola scheme. Who decides the price of water?
Mr Parker: I would have to take that on notice. The price of water which comes out of irrigation
infrastructure projects depends very much on the composition of the project and the investment.
Senator HEFFERNAN: It is not the value of the water, is it? You can value the water so that you can take the
cost of the piping of water out of the water account by charging so much for the bloody water, but it is actually
not for the water; it is paying for the pipeline.
Mr Parker: Correct.
Senator HEFFERNAN: Which is what the Nimmie-Caira thing is all about it; it is a dodging of the books.
The bulk of the money there—
Mr Parker: If I could—
Senator HEFFERNAN: No, there is no getting away from it. The bulk of the money there is for the land.
Mr Parker: The Nimmie-Caira proposal includes water, it includes the land and improvements and it also
includes infrastructure.
Senator HEFFERNAN: It includes a whole lot of things, but it is the dodgiest deal I have ever come across. I
thought the Tandall deal was bad enough. That was 230 gigs. Were you blokes involved in the Tandall buyback?.
It was 230 gigs at $350 a meg, which was net 11 gigs at the Murray, and they thought that was a good deal.
Mr Papps: We were not directly involved in those purchases.
Senator HEFFERNAN: It has financially saved Tandall. It just befuddles me. I will, minister, take up this
issue of the Ulonga matter and the Wah Wah scheme versus the—
CHAIR: Senator Heffernan, you have a couple of minutes. I have some questions.
Senator HEFFERNAN: In the last drought this particular Ulonga Grazing Company had water allocations on
the Murrumbidgee River. I actually have a place in the region, so I know about it. It is 23 kilometres out to the
One Tree Plain. They sold Murrumbidgee water for $1,663 a meg to the feds and built a pipeline to save a lot of
water, because the Lachlan was buggered. They were also fully participating in the Wah Wah scheme, which is
different water that comes down and waters the same property, but there was no water in the scheme: They are
beside themselves about how they can get equity, having done what they have done. That is what it is all about.
We will have to talk about it.
CHAIR: Mr Papps, Senator Joyce was asking you about a $300 million loss. You said basically you had to
look at the ecological value of the asset. Could you just explain that a bit more in terms of the context of someone
looking at this as a loss and then saying this scheme is not working? What are the values that you should put on
the scheme?
Mr Papps: It was intended as a contextual commentary about the Commonwealth environmental water
holding, which has a dollar value because water is a tradeable commodity and can be bought and sold; so there is
a dollar value. I was simply providing a contextual comment that there is a value that that water holds in restoring
and protecting the critical environmental assets of the Murray-Darling Basin which is hard to quantify in dollar
terms but nonetheless should be taken into account in our consideration of the value of it. There is, of course, a lot
of literature around assigning dollar values to ecosystem functions and ecosystem services. We are not in a
position to do that with environmental water holdings. I do want to make the point that it has that enormous value
to the basin. Again, if I can go back to a contextual comment, it is certainly my view that a healthy economy in
the basin is dependent on a healthy ecosystem.
CHAIR: There was, again, what seemed to be some implied criticism from Senator Joyce in relation to your
management system. You have indicated that that will devolve to some extent as you go on. I have had a look at
your business plan for 2012-13, and in 2.1 it talks about active management, how you deal with it. It talks about
how you make decisions, how you develop options for the use of the water and how you assess your potential
actions, including seeking local and expert advice. We only have a couple of minutes. Could you, in a couple of
minutes, advise us how that is going?
Mr Papps: Yes. From my perspective it is going very well. We already had a reasonably well-established
decision-making framework before the basin plan was finalised and with it the environmental watering plan. I
think the Murray-Darling Basin Authority folks had been alluding to the fact that we had been environmental-
watering; there had been Commonwealth environmental water used before the basin plan. So we already had a
decision-making framework. It was based on best available science and it engaged with local communities and, as
I have said before, other entities in the basin.
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We have refined that over time, based on experience. Again. the adaptive management framework, which we
are obliged to implement, means that we go back and look at what we have done and we compare what happened
with what we thought would happen and we make adjustments year by year. The more formal process that we
have engaged in recently is making sure that the decision making framework now properly reflects the obligations
on me generated from the environmental watering plan in the basin plan. That has further emphasised the role of
best available science and the role of local communities, which is one of the reasons why, for example, we have
established the local engagement officers to give better effect to our commitment to ensuring that local knowledge
is incorporated into decisions.
CHAIR: It might be a bit difficult before September, but on a number of the other committees that I have
been involved in, when senators are not aware how the management system is working, we have actually gone
and visited the authority or the government body. Would that be an option after September, to come and look at
how you are going?
Mr Papps: I would be happy to accommodate senators.
CHAIR: Would there be any benefit in that for the Senate? If there is no benefit, I would not want to do it.
Mr Papps: I would need a better understanding of what you were looking to enhance in terms of your
understanding of our approach. But based on those conversations—
CHAIR: A briefing outside the estimates atmosphere might be constructive, I think.
Mr Papps: In the first instance that is probably a more productive way to go. I am happy to oblige, of course.
CHAIR: We might organise that for after September.
Mr Parker: Chair, Mr Slatyer can provide an answer to a question asked during the course of the morning by
Senator Birmingham.
CHAIR: Yes, Mr Slatyer, as long as it is not a long-winded answer.
Mr Slatyer: Senator Birmingham asked how many further versions of the draft intergovernment agreement
had been prepared since the answer was given on question 67. There have been five further iterations to the
agreement since that time. They have been relatively minor iterations.
CHAIR: We will suspend for lunch. We will be back at 2 pm.
Proceedings suspended from 13:00 to 14:00
CHAIR: I welcome Minister McLucas to the table. Dr Dripps, I have some questions on this area. We are
now up to program 5. I call the officers from the department in relation to program 5.1, conservation of Australia's
heritage and environment. Dr Dripps, are you aware of proposals to build a bridge in Windsor?
Dr Dripps: Yes, I am aware of that.
CHAIR: There is very, very significant local concern about the implications for Thompson Square.
Dr Dripps: Yes.
CHAIR: As I understand it, Thompson Square is described as not only rare but unique. Is that your
understanding of Thompson Square?
Dr Dripps: I have read correspondence that has made that suggestion, yes.
CHAIR: Apparently it is the only 18th century civic square in Australia.
Dr Dripps: I cannot answer the question about whether it is the only one, but I have certainly read the
correspondence around the matter.
CHAIR: Senator Boswell, I am having difficulty hearing Dr Dripps.
Senator BOSWELL: You must have supersensitive hearing.
CHAIR: I have. You just have a big voice, Senator Boswell. If you want to talk, can you talk outside, please.
Thompson Square, which is called the conservation precinct, has evolved over 217 years. So it is 217 years old. It
is considered Australia's earliest remaining civic square. Is that consistent with your understanding of it?
Dr Dripps: As I have said, I have read the incoming correspondence.
CHAIR: I also understand that there has been an application for a heritage listing.
Dr Dripps: Yes. It was considered by the Australian Heritage Council in its consideration last year and not
recommended for further assessment work.
CHAIR: Is that the end of it as far as a listing is concerned?
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Dr Dripps: I will just pass you over to Ms Rankin for the detail of the consideration by the Australian
Heritage Council this year.
Ms Rankin: The nomination is going to go back to the Australian Heritage Council for reconsideration again
this year.
CHAIR: It is going back for reconsideration?
Ms Rankin: Yes. So they can consider it two years in a row. This will be the second year that they are able to
consider whether they want to recommend to the minister that it goes on the priority assessment list for further
assessment work to see whether it meets the criteria for national heritage listing.
CHAIR: Were there reasons provided for not listing?
Ms Rankin: They did not think that it met the criteria for national heritage listing.
CHAIR: Let us deal with that. So it is the only 18th century civic square in Australia. That is either factual or
not. Are you aware of that?
Ms Rankin: I do not have the extra detail about whether that is the case or not, as Dr Dripps has said.
CHAIR: If it is the only 18th century civic square in Australia, and if we cannot get a heritage listing, there
must be reasons for that. Take on notice to provide details of the reasoning why this unique and rare example of
early Australian settlement is not considered of heritage value.
Ms Rankin: We will do that.
CHAIR: I understand that there are some issues of timing on this and some urgency to dealing with this. In
the submission made by New South Wales Transport, Roads and Maritime Services, they say in terms of heritage
approval that the project to build this bridge is not supported by the Heritage Council of New South Wales. Do
they have an input to the national heritage assessment?
Ms Rankin: They would certainly have had the opportunity to provide comment on the nomination.
CHAIR: And the Heritage Council say that Thompson Square is listed on the state heritage register and has
potential national significance, but that was rejected by the national heritage assessment last year?
Dr Dripps: It was last year and, as Ms Rankin has indicated, the Australian Heritage Council will consider
that matter again this year and provide their advice to the minister about what ought to be considered for listing in
the future.
CHAIR: The Heritage Council of New South Wales is saying that if this bridge goes ahead, there will be
irrevocable damage to Windsor and Thompson Square. They say that the project should be refused on the grounds
of heritage impact. The problem we have is that unless there is a listing on this square, the New South Wales
government's development process will deal with this as a priority project and then we have lost this rare and
unique heritage square. Is there a fast-track option that can be taken by the Heritage Council when you are faced
with impending destruction of a heritage value site?
Dr Dripps: There is a provision under the EPBC Act for emergency national heritage listing of a property.
CHAIR: And how does that work?
Dr Dripps: If I recall correctly, a request is put to the minister for emergency heritage listing. The minister
then asks the department for advice and has a time period in which to make that decision, which is quite short,
although I do not have the act in front of me. During the period of time that a property is on the emergency
national heritage list, it is referred back to the Australian Heritage Council for a full assessment of its values.
CHAIR: Do you have details of when this assessment would be made of the Windsor site?
Dr Dripps: I am not aware that we got a request to consider emergency heritage listing of the site, Chair.
Mr Murphy: There was an application last year for the minister to use the emergency powers under the EPBC
Act and that was in parallel to the Australian Heritage Council's consideration under the normal process. As the
council advised the minister that it did not meet the criteria for national heritage listing, the minister decided not
to use the emergency powers.
CHAIR: Is that being reconsidered just as a matter of form or because there is a concern that they may have
got it wrong?
Mr Murphy: The reconsideration by the Australian Heritage Council is a standard process, where if it is not
successful in the first year, the legislation requires reconsideration in the second year.
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CHAIR: I know Windsor Square. If you cannot get some heritage protection there, I just do not understand
what the act does if it cannot protect one of the oldest and only examples of that type of architecture in the
country.
Dr Dripps: We might take that as a comment, Senator, if that is okay.
CHAIR: Pass it on. It really is of significant community concern as well. I know that you get significant
community concern on certain issues. Mr Murphy, you did not answer my question about what the timeframe
would be for a decision, even if it is not an emergency decision. What would be the timeframe for the second
assessment?
Dr Dripps: The minister generally makes his decisions about inclusion of items on the priority assessment list
for the Heritage Council by the end of the financial year or early in the next financial year. So the minister would
be expected to be advised reasonably shortly of the council's recommendations.
CHAIR: I might move on to another issue of heritage that I did raise some questions about at the last
estimates. That is the question of the New South Wales state government implementing what is described as a
standard instrument local environmental plan. Are you aware of these standard instrument local environmental
plans in New South Wales?
Dr Dripps: Yes. We are aware of them.
CHAIR: The Blue Mountains Conservation Society have written to me and spoken to me about this issue.
They are an active organisation with a big membership in the Blue Mountains. They are concerned that this
standard instrument local environmental plan could potentially risk the continuing World Heritage listing of the
World Heritage area because of development outside abutting the Blue Mountains World Heritage area. Are you
aware of those concerns?
Dr Dripps: I have heard of those concerns, yes.
CHAIR: Are you aware of what the standard instrument LEP from the New South Wales government is
intended to do?
Dr Dripps: At the broadest level I am, in that it is intending to apply a standard approach to development
across New South Wales and thereby, one assumes, remove regulatory burden.
CHAIR: The Blue Mountains Conservation Society claim that it means the application of inappropriate zones,
decreased information and mapping, significantly decreased assessment of the environmental impact of
development, less stringent and certain language in terms of what needs to be considered and addressed when
undertaking development, and the exclusion of comprehensive environmental and landscape overlays. That is
what they have put to me. How would the department deal with that concern?
Dr Dripps: It is not our approach to assess planning schemes as such. We are interested in developments that
have or may have a significant impact on matters of national environmental significance, so we do not assess
statutory plans made by state governments specifically except in circumstances where the state governments or
others have called for something like a strategic assessment to be done of such a plan or for a conservation
agreement to be developed that applies to a particular area. So there are a couple of examples in Sydney where
those instruments have been used. There has been a strategic assessment of western Sydney to protect the
Cumberland Plains grassy woodlands in partnership with the New South Wales government. There is work being
undertaken on a conservation agreement to protect the heritage values of Parramatta as they relate to the
viewscapes from Old Parliament House.
CHAIR: What the Blue Mountains Conservation Society is saying is that they believe it will have a
significant impact and that you should act under part 2 of the EPBC Act. Do you need someone to bring this to
your attention to assess it? What happens?
Dr Dripps: We would undertake an assessment of a planning scheme generally at the request of the planning
authority if they were seeking to ensure that they optimised and maximised the environmental outcomes. We
would also have consideration of the planning measures as part of looking at the management plan for the World
Heritage property, although there are limitations to the extent to which that can be considering activities outside
of the property.
CHAIR: If the New South Wales government implements the standard instrument LEP and then development
starts taking place, and consistent with that standard instrument LEP it has a significant impact on the World
Heritage area, would it not be better for us to actually have a look at the standard instrument LEP now and make
an assessment as to whether it is appropriate for development abutting a World Heritage area?
Dr Dripps: That might be a very strategic way to go about things.
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CHAIR: How can we deliver that assessment if the New South Wales state government says, 'This is our
business. We don't want you to be involved in it?' How can we do something about it?
Dr Dripps: I am not sure that the provision of policy advice is part of the role of officials attending this
committee. But there are a number of measures that could be used.
CHAIR: I am not asking how the act works.
Dr Dripps: I was just going to go there. There are a number of measures that could be used, including
undertaking a strategic assessment of the local environment plan in that area.
CHAIR: What are the others?
Dr Dripps: We would need to take a look at the extent to which the management plan for the World Heritage
property is able to consider matters outside of the area of the World Heritage property and the way in which they
are undertaken. Another option available is should there be an action that is likely to have a significant impact, the
onus is on the proponent to refer that. If they do not refer that, there are penalty provisions of various kinds under
the EPBC Act.
CHAIR: One of the issues that has been raised by the Blue Mountains Conservation Society is that they make
an application to UNESCO. That seems to me to be a last resort type option. They would seek a World Heritage
endangered listing. I really do not think we should be going down that path. So the other issues you have raised
would be done before you would do something like this, would they not?
Dr Dripps: Well, I would certainly hope so. But people have liberty to make their own choices about these
things.
CHAIR: I am just trying to get a practical way forward to address the concerns that the conservation society
and the public have in the Blue Mountains area without them having to make applications to UNESCO. I may
have some discussions with you outside estimates, because I would like to try to help get this resolved. That is
good. Thanks for that information. My last issue is shooting in New South Wales and recreational hunting in New
South Wales national parks. At question No. 073, I asked about New South Wales reserves where recreational
hunting is done. Does the Blue Mountains World Heritage area abut any of the New South Wales reserves where
recreational hunting has been approved? Your answer was that the Blue Mountains World Heritage area abuts the
Goulburn River national park. That is one of the reserves listed by the New South Wales government as being
assessed for the supplementary pest control program, which is political speak for hunting by amateurs in the park.
If we have an abutment to the Blue Mountains World Heritage area and you are going to have recreational
amateur hunters wandering around the Goulburn River national park, how will those hunters delineate when they
are in the Goulburn River national park or in the Blue Mountains World Heritage area? When does abutting
become encroaching?
Dr Dripps: They would know that they had moved from one estate to the other if they had a GPS tracking
device or if they were very good at reading maps.
CHAIR: These are amateur hunters. What if they are not good at reading maps and they do not have a GPS
device?
Dr Dripps: Then they may not be aware that they have moved from one property into the other.
CHAIR: So there are implications for this legislation in New South Wales for the World Heritage area in the
Blue Mountains?
Dr Dripps: Well, there—
CHAIR: That would be the logical conclusion you would have to come to?
Dr Dripps: That would be one conclusion. The World Heritage area, as you know, Chair, is listed for its
values. Whether a very small number of recreational hunters would have an impact on those values I think is
probably a matter for debate. But I would lean towards it being reasonably unlikely.
CHAIR: So if we have one of the World Heritage area rangers going about their business in the Blue
Mountains World Heritage area and we have these amateur hunters tramping around the Goulburn River national
park abutting the World Heritage area firing at whatever they want to fire at, what are the health and safety
implications for staff employed by the World Heritage area or your department?
Dr Dripps: Senator, we do not have World Heritage area rangers employed by this department. The ranger
arrangements are done by the New South Wales government rangers. We are not experts in occupational health
and safety risk analysis in that regard. But there would be a possibility of there being an unintended interchange
between hunters and rangers.
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CHAIR: An unintended interchange. You mean somebody could get killed?
Dr Dripps: That is possible.
Ms Rankin: We would have to assume that as part of any arrangements New South Wales is making in
relation to their consideration of this legislation, they would be considering these issues and putting in place
mechanisms.
CHAIR: Why would we assume that, Ms Rankin? Why would we assume anything if you are under political
pressure from a sectional pressure group to bring in recreational hunting and you have expended a lot of political
energy in doing a deal with them? Why would you assume that they are going to look after this?
Ms Rankin: I cannot imagine any government would want to see a situation arise where there was a chance of
somebody being accidentally killed.
CHAIR: Well, you may not, but that is not the debate that is taking place in New South Wales at the moment.
Senator BOSWELL: You are leading the witness.
CHAIR: We are not in a court, Senator Boswell. The officers know when they are being led. They are smarter
than me. So you have conceded that there could be someone killed in the Blue Mountains World Heritage area
because of this amateur hunting that is going on in the Goulburn River national park. Can you take on notice and
provide me details of what actions we could take at the federal level to try to minimise someone who is using the
Blue Mountains World Heritage area in a recognised way not being killed by some amateur shooter in the
Goulburn River national park?
Dr Dripps: We can certainly make inquiries about that and take that question on notice.
CHAIR: Thank you.
Senator LUDLAM: I have a couple of general questions on the heritage portfolio. I want to start with some
quick true or false answers. I will work my way through the budget papers and you can tell me if I am reading
them right. Staff cuts in environment regulation and heritage from 588 to 540? Staff cuts in the environment
regulation and heritage area were from 588 to 540. Does that sound about right?
Dr Dripps: So 48 people. Yes, I gave some evidence to Senator Waters yesterday on this matter.
Senator LUDLAM: Heritage grants cut from $7.4 million to $4.4 million across the forward estimates?
Dr Dripps: That is right.
Senator LUDLAM: Your total program expenses cut from $56 million to about $50 million in the forward
estimates?
Dr Dripps: Yes.
Senator LUDLAM: And that is off the back of the year on year cuts that I have been asking about in here
since about 2008. So of the 40 staff or thereabouts who are cut from environmental regulation and heritage, how
many were cut specifically from heritage?
Dr Dripps: As I advised Senator Waters yesterday, it is approximately 15 staff. The other thing I should add
to my evidence from yesterday which I failed to recall at the time was that the balance of the numbers that were
not included in yesterday's evidence is from the regulatory reform taskforce within the division, which at the start
of the financial year was undertaking the approvals bilaterals work with the states.
Ms Rankin: I want to clarify that figure. Dr Dripps just mentioned the 15 relates to cuts from the combined
heritage, wildlife and marine functions.
Senator LUDLAM: I do not want to traverse ground that Senator Waters covered yesterday if it is already on
the record. I am specifically interested in the heritage side of the portfolio. Is it possible to carve out how many
fewer people are working on heritage post budget than before, or is that not possible?
Dr Dripps: We would like to take that question on notice, if we could, please, Senator.
Senator LUDLAM: In the last four years, how many people in total have been cut from heritage? Maybe take
that as a supplementary on notice, if you like.
Dr Dripps: Yes.
Senator LUDLAM: It appears that the Commonwealth's capacity around heritage matters has been severely
degraded. The budget of a fortnight or so ago has not given us any good news. Sticking specifically to the heritage
portfolio, what programs and services will these most recent cuts specifically impact?
Ms Rankin: Senator, are you referring to just heritage?
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Senator LUDLAM: Yes. I will leave the environment side to Senator Waters. From our perspective, I am
interested specifically in heritage.
Ms Rankin: When we talk about heritage in my division, heritage and wildlife functions are combined
together.
Senator LUDLAM: I am interested in the human heritage side inasmuch as you are able to disaggregate
programs.
Ms Rankin: One action we will be taking is reducing the number of branches from five to four. That means a
reduction in the number of SES officers working in the area. We are going to be adopting a much more, I guess,
triage focussed approach to providing advice on the potential impacts of proposed developments that are going to
have an impact on heritage matters. The timelines that will be taken to undertake some heritage listing
assessments are likely to be extended and will have to take longer than under a circumstance where we had more
resources. In a number of cases, we have had to extend the legislative timelines for the assessment of places
nominated for a national heritage list out to the maximum legislative timeline.
Senator LUDLAM: Thanks for being so forthright. It sounds as though we have indeed degraded our
capacity even further. Am I correct in assuming that the national heritage strategy still does not exist?
Ms Rankin: That is right.
Senator LUDLAM: Has it been affected in any way by the most recent budget cuts?
Ms Rankin: No. It is still an issue that is being discussed with the Australian Heritage Council.
Senator LUDLAM: The last time I picked this up was at question on notice No. 130. Thanks for your reply to
that from January. It said that the timing of the final strategy has not yet been determined. What is taking so long?
This is not going to be thesis length. This is going to be, I expect, a fairly short document. Why is it taking more
than three years for it to be developed?
Ms Rankin: There have been a lot of considerations about what the best approach to the strategy would be. A
number of iterations have gone backwards and forwards, with the Australian Heritage Council providing
comment on drafts. They are proposing to consider it again at their next meeting. They most recently were
interested in looking at a comparison between the approach taken with the draft heritage strategy they were
considering with the cultural heritage policy that was released and to make sure that there was some cohesion and
alignment between the approaches being taken by the two broad policies. So that probably came out after their
last meeting. That is something they have asked us to look at again and provide them with some advice on.
Senator LUDLAM: Can you give us some advice on when it might be tabled and when we might actually see
it?
Dr Dripps: That is really a matter for the minister, Senator. I might add to Ms Rankin's comments. I think it is
fair to say that out of the stimulus package and the jobs fund there was a substantial investment in heritage which
has come off. So the fundamental question for the strategy is: what does national leadership in heritage actually
mean and how does one best engage in heritage in the oversight of the management of properties, in the setting of
standards and in enabling people to protect their heritage? That has been a fundamental challenge for the people
involved in drafting the strategy.
Senator LUDLAM: I can imagine it has, as you are seeing resources running down before your eyes. I will
move on. A response by the minister to the AHC's report on the outstanding universal values of the Dampier
Archipelago in the Burrup Peninsula was received more than a year ago—last April. What is happening? Is
anything at all progressing in the matter of the World Heritage listing of the Burrup or, indeed, anything at all?
Mr Murphy: The report from council identified two of the World Heritage criteria that may be met by the
Burrup and enable a successful nomination. It also identified that much more work would need to be done with
the traditional owners and custodians of the area on identifying the cultural values of the engravings. The minister
has written to the Murujuga Aboriginal Council and asked for that work to take place. He has also asked the
Australian Heritage Council to consider adding similar cultural values to the national heritage listing.
Senator LUDLAM: In the interests of time, because I have one other question on a different matter, could
you provide us in writing and on notice any other information regarding the Commonwealth's policy on World
Heritage listing for the Burrup? I have framed that very broadly. Anything at all you can tell us beyond the fact
that you have put the ball back into the court of the Murujuga association. My last question is on buildings and, in
particular, empty buildings. What grants are currently available for adaptive reuse? Is there any work at all being
done on an Australian adaptive reuse code or standard for bringing heritage properties that are currently empty
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back on to the market for either residential, commercial or cultural use? Any thinking going on at all in that
space?
Ms Rankin: Not that we are aware of. The Australian Heritage Council recently considered and released a
report on, I guess, the inherent energy values in heritage buildings and the potential benefits of how you need to
factor that into your potential energy costs versus rebuilding a new building.
Senator LUDLAM: I do not think the benefits are in any way in dispute. It is more whether anything is being
done to bring heritage properties or precincts back into active service. We have an acute homelessness and
housing affordability crisis. We have businesses that cannot afford rent in our town centres anymore and we have
a large amount of empty and vacant space in our cities and towns. Is anything being done in your branch to bring
those two agendas together at last?
Dr Dripps: As the officer advised you, Senator, we are not aware of any work of that type being done. In
terms of the heritage grants that are available, as you indicated when you were reading from the budget papers,
the potential of those grants to fund the kind of activities that you are talking about would be quite limited.
Senator LUDLAM: Okay. Because we have run capacity down so far. I will leave it there, Chair, thanks.
Senator BOSWELL: What is the current status of the work on a World Heritage nomination for Cape York?
Mr Murphy: Consultation with traditional owners is continuing to take place on their interest in proceeding
with a nomination for Cape York.
Senator BOSWELL: Is the government working with some traditional owner groups with the intention of
lodging a World Heritage nomination prior to the federal election?
Mr Murphy: The minister has made it clear that the timing of a nomination or submitting a nomination is in
the hands of traditional owners.
Senator BOSWELL: You have said that you are working with groups of Aboriginals to seek World Heritage
listing, so you are obviously looking for groups to make a consent to the process. Is that correct?
Mr Murphy: Yes. Any nomination would be subject to traditional owner consent.
Senator BOSWELL: What form would this consent process take?
Mr Murphy: The form of the consent is really up to the traditional owners, and discussions with various
groups about what that consent might look like is ongoing.
Senator BOSWELL: This would have to be done by an Indigenous land use agreement, I would assume?
Mr Murphy: Well, Indigenous land use agreements are used under the Native Title Act and World Heritage
per se is not a matter of native title. There have been some discussions on the use of Indigenous land use
agreements, but at this stage no group is proposing to use that mechanism.
Senator BOSWELL: Is the intention of the department to achieve World Heritage nomination before an
election?
Mr Murphy: As I answered before, the timing of any submission is really in the hands of traditional owners.
Senator BOSWELL: There is a huge number of traditional owners. The only way that you would get a true
agreement would be by an Indigenous land agreement. Otherwise you can go and get this little group here of three
or four people and five or six over here, but that is not getting Aboriginal consent. The department must know that
you are just not going out there on a fishing expedition. You must know how you are going to get this consent and
what process you are going to use.
Mr Murphy: The form of the consent is up to the traditional owners. For example, if an area of land is owned
through a trust, then not only would perhaps the traditional owners give consent; they may then go to the owners
and seek their views. If the owners of the land consented, and they did not want to pursue other mechanisms, such
as Indigenous land use agreements, then that consent would be good enough for that particular area.
Senator BOSWELL: How many groups of people have you contacted and who are they?
Mr Murphy: We have a number of different contracts in place.
Senator BOSWELL: Who are they with?
Mr Murphy: We have contracts with eight country based planning groups.
Senator BOSWELL: Who are they?
Mr Murphy: We have Mapoon, Laura, Pormpuraaw, Kuuku Y'au, Olkala and there is another one in the
Hopevale area. To the north, there are contracts in place for Mapoon.
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Senator BOSWELL: When you say contracts, what is a contract? You go to certain people and say what?
How do you contract with them?
Mr Murphy: The country based planning groups started with the Queensland government. There was a co-
investment from the Commonwealth.
Senator BOSWELL: How much was that?
Mr Murphy: We funded half of the cost of that. So the Australian government component was approximately
$920,000.
Senator BOSWELL: Those contracts were agreed by the Queensland government with those eight traditional
owner groups?
Ms Rankin: And as part of the terms of those contracts, Senator, one of the outcomes we were seeking
through our co-investment was advice about whether those groups consented to World Heritage nomination and
over what areas, if they did consent.
Senator BOSWELL: This is the problem. We have numerous people out there. Some live on land but they
are not traditional owners. Some traditional owners may live in Brisbane. Some traditional owners may live in
Cairns or Townsville. But they are the custodians of the land. You cannot make a decision without them. If you
try and give someone's land away to World Heritage without consulting them and getting their agreement, you
will start World War III. So you just cannot go out and select a group of Aboriginals that happen to be on an area
and get an agreement with them. Those agreements must be locked down to the people that traditionally own that
land. The only way I see you do it is with an Indigenous land agreement. To do it without that would be really
putting it up the Aboriginal people.
CHAIR: Senator Boswell, I am sure the officers are thoughtfully advised. You have one minute left for
questions.
Senator BOSWELL: Are there any offers to these eight groups of some form of incentive if they agree?
Dr Dripps: No.
Senator BOSWELL: What is the World Heritage covering? The whole of Cape York or just some areas in
Cape York?
Dr Dripps: As Mr Murphy has advised, there will be the submission of a World Heritage nomination for Cape
York only when there is agreement to participate by the relevant traditional owners in the appropriate areas.
Senator BOSWELL: Is the department trying to seek World Heritage over the whole cape or just parts of the
cape?
Dr Dripps: We are running a process that identifies the values in the cape. At this stage, we do not believe
that the values cover the entire cape.
Mr Murphy: The minister has made it clear that there will be no blanket listing of the entire Cape York
Peninsula.
Senator BOSWELL: That is good to know. I am sure there will be very serious interference in this
parliament if you go out and seek to get a listing without getting full consultation with the traditional owners.
Anything other than that will be fraught with danger. Thank you.
Senator COLBECK: I want to ask some questions on the process for the nomination of 170,000 hectares in
Tasmania for World Heritage listing as a minor boundary adjustment. Can you give me the parameters to start
with of what qualifies as a minor boundary adjustment?
Dr Dripps: If I recall correctly, a minor boundary modification is generally a modification of about 10 per
cent of the total area of a World Heritage property.
Senator COLBECK: About 10 per cent? Up to about 10 per cent?
Dr Dripps: If I recall correctly. I do not have the procedures of the World Heritage Committee in front of me.
Mr Murphy: Senator, that is correct. The committee does not have a specific number. But from the decisions
it has made in the past, it has indicated that it is quite comfortable with extensions of around 10 per cent.
Senator COLBECK: So extensions in excess of that would normally go through the full process rather than a
minor boundary adjustment?
Mr Murphy: Every extension is a decision that the World Heritage Committee would make.
Senator COLBECK: But their parameters are around up to 10 per cent. In respect of the community
consultation opportunities that come with a minor boundary adjustment versus a full nomination, how does the
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government look at the opportunities that are provided in a minor boundary adjustment versus a full nomination?
How does the government see that they have been satisfied in this particular circumstance?
Ms Rankin: The nomination for the minor boundary adjustment to the Tasmanian wilderness area was
undertaken as part of, as you know, a lengthy negotiation process around the Tasmanian forests.
Senator COLBECK: I understand fully the circumstances by which it came about.
Ms Rankin: So, as part of that process, there was extensive consultation that occurred between a range of
different interest groups. The only areas that are covered by the proposed boundary extension are areas that are
already preserved as national parks or some sort of state owned land. So the Tasmanian government has been
consulted or consented to that. There were a couple of small areas of private land where we were specifically
requested by the owners of those areas to include them within the extension nomination.
Senator COLBECK: So the inclusion of private land under those circumstances is an accepted part of the
process?
Dr Dripps: Yes. That is right, Senator. Not every country has the same land tenure arrangements as Australia
so it is quite common for World Heritage properties to encompass private land.
Senator COLBECK: I do not have an issue with that. But the circumstances of the forest agreement were
between two particular parties—that is, the forest industry and the environment movement. As you would be very
well aware, that whole process has been very, very contentious with respect to other parties that were not included
in that negotiation. So how does their exclusion from that process satisfy the requirements for broader community
consultation?
Ms Rankin: The requirements for consultation are largely related to people that are directly impacted by the
proposed extension. In this case, the areas of land that are covered are, as I mentioned, already crown land owned
by the Tasmanian state government or by private landholders who specifically requested that areas be included.
Senator COLBECK: So what about those that might have boundaries with those pieces of land? What about
the impacts on them? We heard through questions earlier in the hearing that you have people with an interest in a
World Heritage area complaining about provisions that might occur outside the boundaries of them. So there is
clear inference, even from that line of questioning from Senator Cameron, that there is an expectation of impact
outside the World Heritage boundaries. My understanding is that there are considerable areas of private land that
abut the proposed boundaries. So what about the impact on those people and their opportunity to be consulted as
part of the process?
Mr Murphy: The legislative requirement is that the consultation takes place with the owners and occupiers of
the proposed area.
Senator COLBECK: Well, has that occurred?
Dr Dripps: Yes. There has been consultation.
Senator COLBECK: Of the occupied area, the area being nominated? What about the people on the
boundary who are obviously impacted by that process? There is an expectation in the New South Wales case that
Senator Cameron talked about about planning requirements outside. I would not expect that to be any different
anywhere else. That is a given. I am not arguing about that. There are considerable areas of private land—farming
land—that are operated for very different purposes on the boundaries that we know of. Those people who will be
impacted by this process have had no opportunity under that process to have their say. How has that then become
a legitimate part of the process? How is that considered as part of this nomination?
Dr Dripps: As Mr Murphy has indicated, the legislative obligation is to consult with the owners and occupiers
of the land included in the nomination. I think it is fair to say also that during the Tasmanian forestry process
there was a range of views provided to the government from a range of different stakeholders who may or may
not have been part of the formal negotiating process. So in terms of the views and concerns, I think it is fair to say
that the government was well aware of them in submitting the nomination.
Senator COLBECK: Let us go to the boundaries themselves. In a letter to Jane Calvert, who was one of the
negotiators within the process, the minister said on 30 April that the boundaries were not finalised. Are the
boundaries finalised for that nomination?
Ms Rankin: Senator, the boundary submitted to the World Heritage Committee is finalised. What we are
doing at the moment is working through a process of detailed technical, I guess, GIS refinement to make sure that
when we gazette the boundary and actually produce it, if subject to a decision being taken by the World Heritage
Committee, it is actually meaningful on the ground. When we overlay different data layers, what has actually
been described needs to make sense and align with roads and not create little strange cut-offs in things that were
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not intended. So we are going through quite a detailed technical process of verifying the data to make sure that the
technical mapping of the boundary is correct.
Senator COLBECK: But my understanding from that letter is that it related to some coupes that were still to
be logged that were inside the boundaries of the World Heritage area. My understanding or inference from the
letter—if I am wrong, I am wrong—is that there were some attempts to remove them from the World Heritage
proposal so that the principles of not logging within a World Heritage area could be maintained if the listing were
accepted. So on what basis can you say in that circumstance that the boundaries are finalised?
Dr Dripps: There have been a number of matters like that which have been under active discussion, Senator.
The commitment from the forestry authorities in Tasmania was that where there were such coupes that were
scheduled for logging, they would be logged in advance of consideration of this matter by the World Heritage
Committee and then allowed to regrow as part of the World Heritage property.
Senator COLBECK: Have they been logged?
Ms Rankin: I think the provision was up to 14 June. There were some small numbers.
Senator COLBECK: My understanding is that there is still a number of coupes to be logged, which was
legitimately the point of the discussion. I am not complaining about that. It is legitimately the point of the
discussion.
Ms Howlett: I may be able to assist you here. As you would be aware, the negotiations around the forestry
agreement have been quite complex.
Senator COLBECK: I do not want to revisit that. I have a very, very short period of time. I just want to know
if the boundaries are finalised. While you are on that, what impact does the decision by the Tasmanian parliament
to excise 35,000 hectares from the area nominated have on the listing application?
Ms Howlett: I will just take you back to your question about coupes being logged within the World Heritage
area, Senator. In the preparation of the nomination there were a number of what are termed by the signatories and
Forestry Tasmania transitional coupes. A number of those coupes are scheduled for logging to be completed by
14 June. So in any coupes that were included in the World Heritage area, logging will be completed by 14 June.
There was a small number of coupes that could not be completed by 14 June, and they were excised from the
nomination.
Senator COLBECK: At what point were they excised?
Ms Howlett: They were excised prior to the Australian government lodging the nomination at the end of
January. Then there is a third set of coupes—those you refer to being excised by the Tasmanian legislation.
Senator COLBECK: It is not a set of coupes. It is 35,000 hectares.
Mr Thompson: For those coupes, the effect of the Tasmanian legislation is that they cannot be formally
proclaimed as reserves by the Tasmanian government prior to either or both of the World Heritage Committee
making a positive decision on the World Heritage area and the Tasmanian government obtaining forest
stewardship certification for their forestry operations. That legislation does not have an impact on whether or not
the World Heritage Committee makes a decision about the World Heritage boundary extension. So if the
nomination is successful, those coupes will be covered by the EPBC Act and protected as World Heritage. Further
to that—
Senator COLBECK: But that is clearly not the intent. I spoke to the member who moved the motion. The
intent of that motion was to excise that 35,000 hectares from the World Heritage listing. There is no question in
my mind about that.
Ms Howlett: I cannot speak for the intent of the member. But the effect of the legislation—
Senator COLBECK: What you are saying is the effect of the amendment that he moved is as you have just
described?
Ms Howlett: It has an impact on the Tasmanian government's reserve making powers. It does not have an
effect on the World Heritage listing.
Senator COLBECK: I have another question and it relates to the ICOMOS report to the World Heritage
Commission in relation to consultation with the Indigenous community. We just heard Senator Boswell talking
about that, so perhaps that throws some light on what is happening. Why was consultation not done? What is
happening with that consultation?
Ms Rankin: We have started that process of consultation, including writing to a number of Aboriginal groups
in Tasmania. The minister wrote to them earlier this year to say that the Australian government was wanting to
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work with them to undertake the process of describing and properly identifying the cultural heritage values of that
proposed minor boundary extension area. I guess the primary focus of the original nomination to the World
Heritage Centre was on the natural values of the extension area. We clearly identified in our submission to the
World Heritage Centre that the Australian government was very committed to continuing to undertake work in the
timeframe required to work with Aboriginal groups to allow them to properly identify those cultural heritage
values and that we would come back to the World Heritage Committee at a future date once those consultations
had been completed.
Senator COLBECK: Before or after the assessments considered?
Dr Dripps: The intention would be after. We have a previous decision relating to this property that requests
that Australia come back with information on Indigenous cultural values at the meeting in 2015.
Senator COLBECK: So why is the approach for the Cape York Indigenous community different from the
approach for the Tasmanian Indigenous community?
Ms Rankin: It is not.
Senator COLBECK: Well, it clearly is. The Cape York Indigenous community have control over whether the
listing goes ahead or not. The Tasmanian Indigenous community get the opportunity, which they did not even
know about until the ICOMOS report came out, to start having consultations after the nomination has been
submitted. How is that the same?
Dr Dripps: This property has been listed since 1982.
Senator COLBECK: Not the extension.
Dr Dripps: I was going to go on with that to say that it has been listed for its mixed cultural and natural values
for that period of time. The property has been considered for a number of boundary extensions over the period of
time between then and now.
Senator COLBECK: Do you consider that clause 40 from the RFA has been given full consideration as part
of the nomination?
Dr Dripps: I am sorry, but I do not have the RFA in front of me, Senator. Can we take that question on
notice?
Senator COLBECK: Yes, certainly.
CHAIR: Senator, you will have to wind up.
Senator COLBECK: Really, was this not just the government trying to get, as Senator Boswell was talking
about before, a nomination in before the election? Was that not what this was all about? This area is clearly larger
than 10 per cent. My understanding is that the government continues to communicate with the World Heritage
Commission on this submission. The boundaries, from what I have read, are not finalised. How can the
community fairly get the opportunity to comment on this submission when the boundaries are still being modified
by the process, their submissions were supposed to be in by 28 February, and that process, from a government
submission perspective, continues potentially right up to the consideration by the World Heritage Commission of
the nomination? How is that a fair process?
Dr Dripps: As the officials here have described, it has been a process in line with the Australian legislation
and driven clearly by the Tasmanian forestry process. In terms of its fairness, I am not at liberty to provide a view
on whether that is fair or not.
CHAIR: I do not think we will use the full time with the Office of the Supervising Scientist, but we will need
a fair bit of time. Senator Singh and Senator Waters still wish to make a contribution. I will run past a bit on this.
Are you just about finished, Senator Colbeck?
Senator COLBECK: Just one question and I will finish. Are you satisfied that this listing has been made in
full compliance with the guidelines?
Dr Dripps: That is my understanding, Senator.
Senator COLBECK: I will leave it at that.
Senator WATERS: Can you, firstly, tell me how many government officials will form part of the delegation
to the Cambodia World Heritage Committee meeting?
Dr Dripps: As I indicated, I think, yesterday, I will be leading the delegation. Have you got the list there?
Senator WATERS: I do not need the names as such. Just the number will be fine, thanks.
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Dr Dripps: There will be four Commonwealth government officials, one official from GBRMPA, one official
from DFAT, one official from Tasmania and a technical expert from Tasmania.
Senator WATERS: How many days will the delegation be there for?
Dr Dripps: It does depend a little on the agenda for the World Heritage Committee, Senator. The properties
are discussed in a particular order, so the attendance of officials will be based on the likely timing of discussion of
those matters. The meeting runs for 12 days.
Senator WATERS: I want to take you to the draft decision of the World Heritage Committee around the
Great Barrier Reef—decision 37.COM/7B.10—which I am sure you are well aware of. Will the delegation be
seeking to have discussions with other participants to that meeting with a view to changing the terms of that draft
decision?
Dr Dripps: We have been advised by the World Heritage Centre that the item will be opened up for
discussion. So we expect that we will be approached by various state parties to present the position of the
Australian government. The position of the Australian government has not yet been finalised. There are
discussions with Queensland and, obviously, amongst members of the Australian government around what that
should say. However, it is fair to say that there are a number of announcements by the Australian government that
are not reflected in the draft decision, probably reflecting the timing of those announcements, along with the
timing of the drafting and translation of the draft decision. In particular, the Prime Minister's announcement of 24
April about the $200 million worth of investment in Reef Rescue is a very significant contribution and addition to
the preservation of this property.
Senator WATERS: Sure. Beyond those funding announcements that were made subsequent to the draft
decision being released, are there other matters that the delegation will seek to amend in that draft decision?
Dr Dripps: There are not any matters that I can comment on at this time, Senator, because those decisions
have not yet been made.
Senator WATERS: Given about a year or so ago the World Heritage Committee expressed extreme
concern—their words—about the reef, has the minister requested advice on whether there are any other issues
arising with the management of our other World Heritage properties?
Dr Dripps: I do not recall the minister specifically asking for that advice, Senator.
Senator WATERS: If you could just take on notice and double-check, that would be helpful. The Great
Barrier Reef Marine Park Authority yesterday, in response to some of my questions about the release of Legacy
Mine Water in Queensland, said that they thought there were likely to be significant impacts on the river systems,
the estuarine systems, as opposed to the marine park itself. Has the department looked into this issue at all—the
release of the contaminated mine water authorised by the Queensland government?
Dr Dripps: Dr Reichelt referred to localised impacts on rivers in Queensland. I am not aware of whether we
have or have not. It would probably be a question best answered by the folk from the environment assessment and
compliance division. Now they have a heads-up, they can come armed with that answer later, if that is okay with
you, Senator.
Senator WATERS: Thank you. Particularly given that that program was extended yesterday, in fact, was the
minister or the department consulted by the Queensland government on the extension of that program?
Dr Dripps: Which program is that, Senator?
Senator WATERS: The Legacy Mine Water program.
Dr Dripps: I am not aware of consultation that may have occurred yesterday, Senator. We can take that
question on notice.
Senator WATERS: Or obviously consultation prior to the announcement yesterday. Thank you. Have you
advised the minister, either at your own initiative or in response to a request from the minister, about the potential
environmental impacts on matters of national environmental significance from the repeal of those wild river
declarations?
Dr Dripps: I can recall a number of verbal discussions with the minister on that matter. We would have to
take on notice whether there were specific briefings. It would not have been from officers from this area.
Senator WATERS: Which area would that have been from?
Dr Dripps: It may have been outcome 5.2 or it may have been officers from the water part of the department.
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Senator WATERS: If you could take that on notice on their behalf, that would be great. Have you advised the
minister on whether or not any of those rivers formerly protected under those declarations have national heritage
values?
Dr Dripps: The advice that we have provided the minister on national heritage values is based on
consideration by the Australian Heritage Council after nomination of those properties for consideration by the
Australian Heritage Council.
Senator WATERS: So you do not do a proactive advice? You wait for a nomination to be made before
providing input?
Mr Murphy: The general process is as Dr Dripps said. For example, if the minister wanted to consider an
emergency listing, we might provide advice for that purpose.
Senator WATERS: Has advice around an emergency heritage listing been provided to the minister for any of
those formerly declared wild rivers?
Dr Dripps: We would have to take that question on notice, Senator. We are not immediately aware.
Senator WATERS: Have you advised the minister on any other ways to protect those rivers using the means
available to the federal government?
Dr Dripps: I think we will need to wrap that question up with the others we have taken on notice, Senator.
Senator WATERS: Thank you. I want to go back to the broader World Heritage areas. You said earlier you
were not sure whether the minister had requested advice on whether there are any other issues about the
management of our World Heritage properties. You have taken on notice to check on that. Is there any sort of
regular review or public reporting process either to the Australian public or to the World Heritage Committee on
how each of our World Heritage properties are faring?
Dr Dripps: Yes, this is, Senator. As an example, I draw your attention to the State of conservation report that
has been prepared for Macquarie Island that is available on the World Heritage Committee's website, which
commends Australia for the management effort over the past about half a dozen years in controlling rats and
rabbits on Macquarie Island. That is an example. There is a regular process of reporting back to the World
Heritage Committee on the management of the properties, which becomes more frequent if there is a level of
concern.
Senator WATERS: And how regular is that? Is it every year?
Dr Dripps: No. It is not every year.
Senator WATERS: You said it is regular, but it is not every year. That is not terribly regular, in my books.
Dr Dripps: It is more like every five years. But I am not certain, Senator, so we would prefer to check that
with the guidelines.
Senator WATERS: Are those reports then made available on the SEWPaC website?
Mr Murphy: I think the periodic reports are available on the World Heritage Centre's website.
Senator WATERS: The full text and not any sort of summarised or edited version?
Mr Murphy: Yes.
Senator WATERS: Great. Do those reports address not only the state of the property but also any pressures
that they are facing and any funding variations that might have occurred?
Dr Dripps: Yes. They cover those things.
Senator WATERS: They cover all aspects—administration as well as pressures. Good. Lastly, has the
department briefed the minister on what additional steps he could take to implement the World Heritage
Committee's requests that we fix our limited progress on their recommendations?
Dr Dripps: As I indicated previously, there have been a range of announcements made since the draft decision
was drafted by the World Heritage Committee. It would not be my view, and, as I said, the Australian government
has not completed the process of forming its view, that that statement is true. We do brief the minister on a range
of matters relating to Queensland—the strategic assessment and the progress of the implementation of the
findings of the World Heritage Committee.
Senator WATERS: Beyond wanting the Reef Rescue funding to be properly referenced in the World
Heritage Committee's reports, have you provided any advice to the minister about additional steps that he could
take to address the concern of the World Heritage Committee around the management of the reef?
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Dr Dripps: As I indicated, Senator, we provide advice to the minister on a range of different things relating to
the management of the World Heritage area—the progress of the strategic assessment and the way in which the
recommendations might be read. In addition to the $200 million of funding, there has also been the release of the
report card and some correspondence with the World Heritage Committee around factual inaccuracies in the draft
decision.
Senator WATERS: Sure. That all goes to things that are currently afoot. Have you provided any advice to the
minister on additional measures beyond what is already being undertaken to address the World Heritage
Committee's concerns?
Dr Dripps: Senator, I have provided as much advice as I am able to. I think I have answered the questions two
times so far as best I can.
Senator WATERS: Well, you have talked about an update on existing initiatives. Have you provided advice
on additional new things that the government could do to address the concern of the World Heritage Committee?
Dr Grimes: Senator, I think this is really starting to stray into the possible policy advice given to the
government. Dr Dripps has indicated—
Senator WATERS: I am not asking what the advice was. I am just asking if it has been provided.
Dr Grimes: Dr Dripps has indicated that there has been advice provided to the minister in relation to the draft
decision that has been submitted to the World Heritage Committee. I think she has provided as much information
as we can here this afternoon.
Senator SINGH: This time last year at budget estimates, I asked about the Cascades Female Factory at the
historic site in south Hobart. I asked specifically about UNESCO and the Commonwealth. Conditions had been
placed on the visitors centre because it was anachronistic and, therefore, would need to be demolished. You took
on notice most of that question. In your response, you have provided me with the fact that there was a deed of
agreement established between the Commonwealth and the Festival of Tasmania requiring the ownership of the
site to be transferred to the state government of Tasmania but that the demolition of the fudge factory, which is
the anachronistic part of the site, be done prior to the handover to the state government in 2009. The last time I
looked, that building had not been demolished. If the inclusion in the deed of the transferring of ownership of the
property to the state government included the demolition of that building and it is part of the Commonwealth and
UNESCO's position in its World Heritage listing, what has gone on?
Ms Rankin: Senator, there is probably not much more that we can add to the answer on notice that we took
last year. The situation has not really changed.
Senator SINGH: You handed it over with that deed in place saying, 'This anachronistic site needs to be
demolished for the Commonwealth to hand it over' but did not stick to the wording in the deed? What happened?
Ms Rankin: We are continuing to have conversations with Tasmania about their undertaking that they would
do that. We do not have any way of forcing them to do it.
Senator SINGH: You had the option, I would have presumed, to have held on and not handed it over until the
requirements in that deed were met.
Dr Dripps: Senator, if I recall the answer to the question last year, that deed of agreement was made at a very
long time in the past. So the officers here are not able to explain to you why it was that the required activity did
not occur at that time.
Senator SINGH: So why did 2009 get decided as the date to do the handover without meeting the
requirements in the deed?
Dr Dripps: I do not think we have the information available here to answer the question, Senator, I am sorry.
We will have to take that further question on notice.
CHAIR: Thank you. I think that concludes the questioning for the department here. We will move to the
Office of the Supervising Scientist.
[3.14 pm]
Office of the Supervising Scientist
CHAIR: Mr McAllister, would you like to make an opening statement? I think this is your first appearance.
Mr McAllister: It is my second appearance as Acting Supervising Scientist. I will if I can, actually. I would
certainly like to acknowledge the efforts of my predecessor, Alan Hughes, whose input, I believe, to this
committee was significant over his tenure of eight years as the supervising scientist. He goes out as the second
longest serving supervising scientist. I think his input has been significant over that time.
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CHAIR: I think we would all accept that, Mr McAllister. Senator Ludlam will introduce himself, as he did to
your predecessor.
Senator LUDLAM: I am always very polite. Please do pass on my regards to Mr Hughes.
Mr McAllister: I will.
Senator LUDLAM: He will be missed. I am sure you will be happy to fill his shoes.
Senator BIRMINGHAM: I do not know how much he will be missing us.
CHAIR: Yes.
Senator LUDLAM: Not at all. You have introduced yourself as the acting SS. Can you just describe what
arrangements are in place for that handover?
Mr McAllister: At this point in time, Mr Hughes is currently still on long-term leave before retiring in
February. During that process, the process of replacing the supervising scientist will be undertaken.
Senator LUDLAM: We will just get straight to it, then. Can you tell how the OSS, if at all, has engaged with
the Western Australian government on the Toro project, which is under Commonwealth environmental impact
assessment at the moment?
Mr McAllister: We have been providing significant levels of advice through the environmental assessment
compliance division as part of their EIS process and as follow-ups to some of the issues surrounding conditions in
terms of the clarification of information.
Senator LUDLAM: A number of conditions have been applied to that project before the minister has said he
will sign the final piece of paper. Are you guys in the mix of that process as it unfolds?
Mr McAllister: Yes.
Senator LUDLAM: Are you able to describe what particular elements you are advising on or what your role
is?
Mr McAllister: Most of the information we have been providing advice on has been around tailings
management in terms of free board arrangements around the tailings dam.
Senator LUDLAM: It is quite different circumstances to what you are used to dealing with in the Alligator
Rivers region—a different climate, a different geology, different final tailings disposal concepts and so on. What
are you able to tell us about the degree of confidence, noting that the minister did hold up, I think on two
occasions, his approval before it was finally conditionally granted? What are your views on the likely stability of
the tailings facility at Wiluna mine, given that it is meant to be parked across a dry water course in a seasonal lake
bed?
Mr McAllister: In terms of our advice, we have been purely advising on radiological conditions and in terms
of some of the suggestions around capping. That has been the extent of our advice, as well as some information
around best practice in terms of free boards for tailings dams.
Senator LUDLAM: Which is what exactly?
Mr McAllister: We have been providing advice around setting, I guess, the amount of space that is allocated
above the maximum operating level of a tailings dam in terms of the amount of free board for storm events.
Senator LUDLAM: Is this just a temporary structure, or are you talking about the final disposal of the
material back into the pit voids? The intention is not to leave the tailings structure on the surface; that is my
understanding.
Mr Tayler: My understanding of the plan—and I have to say I have not dealt with the physics for a little
while—is that the tailings were going to be placed into the mined out pit void so there is only that as the tailings
repository.
Senator LUDLAM: That is my understanding as well. So it is not anticipated, I would have thought, at the
end of the mine life that you would have structures that are above the existing ground level, or is that not correct?
Dr Dripps: Senator, I think you are asking questions that go beyond the questions that have been asked to the
supervising scientist division by the environment assessment and compliance division. We would be more than
happy to take these detailed questions about the conditions and the final form of the project in section 5.2. If the
relevant officers have arrived in anticipation of section 5.2, perhaps they could come to the table.
Senator LUDLAM: If you like. The conversation was going fine as far as I was concerned, but if there are
other experts in the room, I am happy for you to bring them up. That is fine.
Dr Dripps: They are not here.
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Senator LUDLAM: We will just continue as we were. Is it your understanding that the company proposes to
leave the tailings structures as they are, progressively backfilled as the company moves through the deposit, and
not being lined at the base of the structure?
Dr Dripps: I think, as I indicated, Senator, these officers were consulted in the preparation of the final
conditions but did not draft the final conditions. If we could come back to those questions when the other officers
are available, that would be most appreciated.
Senator LUDLAM: I might have to draw on the advice of the chair. We have less than an hour with you. I
understand Senator Macdonald has questions. How long or how far away are those officers?
Dr Dripps: Well, the other officers are scheduled for the four o'clock to six o'clock section this afternoon,
Senator.
Senator LUDLAM: We will come back to it. Something that is probably a bit more squarely in your remit is
the EIS guidelines and expected timeline for Ranger 3 Deeps in Kakadu. Can you give us an update on the status
of that project?
Dr Dripps: Again, Senator, the environment assessment and compliance division has the responsibility for
running the assessment of that project. We do seek detailed technical advice from the supervising scientist on
relevant matters. I would not expect them to have a detailed knowledge of the timeline of the assessment of that
project.
Senator LUDLAM: Dr Dripps, even a general appreciation of the timeline would be useful. Mr Hughes was
always able to provide us with the information. I am not asking questions outside the remit of the OSS. These
officers are intimately involved in the project. I think some general answers would be fine.
Dr Dripps: Certainly. We will get the general answers. But I am just drawing to your attention that Mr
Hughes often elegantly said what I just said.
Senator LUDLAM: I guess.
Dr Dripps: Probably more elegantly.
Senator LUDLAM: Go ahead, Mr McAllister.
Mr McAllister: I would certainly back up Dr Dripps on that. We are involved in the drafting of the EIS
guidelines, but I am not aware of the actual dates for public display of those guidelines at this point in time.
Senator LUDLAM: Thanks. This might have to come in on notice. Again, you might shunt me off to the
other officers a bit later in the day. I am interested in your understanding of the actual scope of the project itself in
terms of what tonnage the company is expecting to bring back to the surface. How many millions of tonnes of ore
is the size of the project, as you understand it?
Mr McAllister: Keith might be able to back me up here. On the last advice we were given, the tonnage of ore
would be limited to 500 million tonnes.
Senator LUDLAM: Five million.
Mr McAllister: Five million, sorry. Five million tonnes of ore.
Senator LUDLAM: If it is 500, then we are having a whole different conversation.
Mr McAllister: Five million tonnes of ore.
Senator LUDLAM: As far as your office is concerned, what are the implications of the planned R3D project
for closure and rehabilitation planning at Ranger?
Mr McAllister: From what we have been provided, it has no significant implications in terms of closure.
Senator LUDLAM: I would have thought having a live underground mine operating using the same
processing plant had quite significant implications. There are no further ore bodies to be processed at that plant
apart from R3D?
Mr McAllister: The proposal as it stands still fits in the same timeline for closure. So Ranger's milling
operations need to cease by 2021. What the ore that they are extracting out of the decline is replacing is ore that
they would have processed out of existing lower grade ore stockpiles. So the impact is minimal in terms of
tailings volumes and of rock.
Senator LUDLAM: So as far as the OSS is concerned, the R3D project could go ahead and the company
could still meet its licensed closure and rehab obligations without pushing for an extension to the lease?
Mr McAllister: That is what they are proposing, yes, at this point in time.
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Senator LUDLAM: Thanks. That is useful. Can you just advise us on measures taken, again within the remit
of your office and not outside of it, to stabilise cracking in the pit wall at Ranger? What is the current status of the
instability that the company had identified?
Mr McAllister: The issue of cracking of the pit wall was identified towards the end of 2012. ERA have fairly
significant radar instrumentation on the pit to determine the safety around the pit. That radar technology picked up
some acceleration in some movement in the pit. That indicates to the geotechnical engineers, from my
understanding, that there is a potential for shifting of that side of the pit. The side we are talking about is the
north-eastern or eastern side of the pit. When they identified that, they put in place some contingencies around
ensuring that that area was not at any point inundated, which may exacerbate the problem. Subsequently
following that, they constructed a levy bund outside the current access road to ensure that at periods of high flow,
Magela would not cover the area over which the cracking was occurring. Subsequently, following that, the
acceleration ceased and there has been no further significant movement to the point that we actually had quite a
significant earth tremor or earthquake—about 7.2—in the Banda Sea that was felt both in Jabiru and Darwin and
they noticed no significant movement at that point in time. We now have the situation where the pit is
substantially backfilled as part of the closeout. That has essentially ensured that the pit remains buttressed at that
point and they do not expect any further movement.
Senator LUDLAM: Ultimately, the pit will be backfilled to above the height of the instability and there
would be no possibility of a collapse or anything like that?
Mr McAllister: Yes. That is correct.
Senator LUDLAM: How far away do you think they are from being able to completely eliminate it as a risk?
Mr McAllister: I believe that they have eliminated the risk at this point in time.
Senator LUDLAM: I will come back to Ranger in a tick. Could you advise us on the status of rehab works,
including reveg, at the former Nabarlek uranium operation? Is that something that you have any visibility of?
Mr Tayler: I was out at Nabarlek most recently, just in the last dry season; access, obviously, is difficult
during the wet season. There are a few pieces of infrastructure remaining—the old oil tank and other things out at
Nabarlek. The revegetation effort is progressing quite well. Weeds were a significant challenge at Nabarlek and
UELA has put considerable resources into weed management, and to quite good effect, which is something that
we continue to encourage them to do. So that manages to keep fire out, which is the largest threat to the
revegetation there. The old camp area has been substantially cleaned up. There was a lot of asbestos and other
material there, which has been collected up and buried on site. So there are still some outstanding jobs to be done,
but over the last few years it has actually been progressing quite well.
Senator LUDLAM: Staying in the same part of the world, there was a recent federal budget allocation of $1½
million for continuing remediation works at Rum Jungle. Could you just advise us specifically on the work that is
being undertaken there and the role of OSS, if any, in that?
Mr McAllister: OSS are part of what is called the Rum Jungle working group. We assist in advice around
potential closure options, which is where the current project is at. The Northern Territory government, with the
aid of the working group, have produced a final draft of options for remediating that site. I believe that report
should be finalised in the next month.
Senator LUDLAM: Is that with the NT mines minister? Who has final sign-off on that?
Mr McAllister: The NT mines minister.
Senator LUDLAM: Do you have any sense of when it is likely that that would occur?
Mr McAllister: The release of the report?
Senator LUDLAM: Yes.
Mr McAllister: It is expected in June.
Senator LUDLAM: So the minister would have to table that once he or she had signed off on it?
Mr McAllister: I am not quite sure of the details of it becoming public or not, but my understanding is it will
be finalised in June as a report.
Senator LUDLAM: Are you able to take on notice for us whether it is your expectation that that will be a
public document? I cannot see any reason why it would not be.
Mr McAllister: That would be a question for the Northern Territory government.
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Senator LUDLAM: I guess it would. It is a shame they do not come. Could you provide, staying in the same
region, an update on the activities and outcomes of the effort to rehabilitate the other former uranium projects in
the Alligator Rivers region?
Mr McAllister: If you are referring to the South Alligator Valley, yes. Three years ago, works were
undertaken in the valley to contain remnant infrastructure and waste, including a significant amount of tailings
from the South Alligator Valley mill. Those works were completed—correct me if I am wrong—three years ago.
We have been aiding Parks Australia with investigating or following up inspections of the containment to ensure
that it is meeting the criteria set by ARPANSA at the time.
Senator LUDLAM: Thank you for that. I just have a couple more. We are nearly there. Has the OSS provided
any agency response to the March 2013 report of the Queensland uranium mining implementation committee?
Mr McAllister: We have not provided a response.
Senator LUDLAM: Thank you. The Queensland report does recommend that the Queensland government
seek to engage the OSS as specialist adviser. We have recommended effectively the same for WA. It sounds as
though you are performing that role at Wiluna to the proposed state uranium mining oversight committee. Has
this been formally or informally raised with the OSS?
Mr McAllister: No. It has not.
Senator LUDLAM: That is interesting. Anything else—capacity, resourcing issues, the rest of it—is
hypothetical, I guess. Have you got a view on whether that would be a good use of the agency's time?
Mr McAllister: I do not have a view necessarily, no.
Senator LUDLAM: You are probably not allowed to answer that. It was a bit cheeky of me to put it to you.
But you have not been formally or informally approached by the government of Queensland to take part in that
process?
Mr McAllister: No. Not by the government of Queensland.
Senator LUDLAM: These are the last couple of questions for me. It is approaching the 10-year anniversary
of the Senate report into the adequacy of federal regulation of uranium mining that I think Democrat Senator Lyn
Allison chaired. Are you familiar with that report? It was 2003. I do not know what the committee would have
been called at that stage. It might have been a committee.
Dr Dripps: I am aware of that report, Senator.
Senator LUDLAM: The report was actually highly critical of the regulatory regime at Ranger. It described it
as complex and inadequate. Could you provide detail on how OSS has addressed the recommendations of that
inquiry as they had bearing specifically on the Ranger operation?
Dr Dripps: We would appreciate the opportunity to take that question on notice, Senator. I do recall extensive
conversations with Mr Hughes about this and I think previous evidence on this that we would like to be able to
refer to to ensure that we are not contradicting ourselves.
Senator LUDLAM: That would be good. If you could take it on notice, I might be a bit more specific in my
questions relating to it. As I say, it is approaching 10 years and it would be fantastic to get a review and some sort
of response from the OSS and/or the department, if that is seen to be appropriate. If you are going to take these on
notice, are there any recommendations pertinent to the operations of the OSS or Ranger that have not been
advanced or responded to by the government? I might be directing this somewhat to the minister.
Dr Dripps: My understanding is that there are not but that it is a very complicated story to point out the events
that were occurring at the same time through which those recommendations were fully addressed. But that is a
recollection, Senator, and we would prefer to take the question on notice.
Senator LUDLAM: If there could be some kind of formal response, be it from the department, OSS or the
government as a whole, I think that would be greatly appreciated. I think I will leave it there. I understand that
other senators have questions. Thanks for your time.
Senator IAN MACDONALD: The Lyn Allison committee report would have been dealt with at the time by
the government, would it?
Dr Dripps: I am sorry?
Senator IAN MACDONALD: The Lyn Allison committee report that Senator Ludlam raised would have
been dealt with by the government at the time? There would have been some response from the government,
would there? We are going back into history now.
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Dr Dripps: My recollection, Senator, is that there was a response but there was also another inquiry at much
the same time that traversed similar territory. So I would like the chance to check our records and to respond on
notice to precisely what the response was.
Senator IAN MACDONALD: My questions relate to the Jabiluka activities. I understand that colleagues of
mine have discussed this at some length with you or your predecessor at previous estimates. There are quite
extensive regulations to which ERA is subject on this mine. Is that correct? There is very extensive oversight?
Mr McAllister: Are you talking about Jabiluka?
Senator IAN MACDONALD: Yes.
Mr McAllister: They have a set of conditions and environmental requirements in place, yes.
Senator IAN MACDONALD: And they are regularly reviewed by your office?
Mr McAllister: As part of the mine site TL committee process and engaging with the Northern Territory
government, yes.
Senator IAN MACDONALD: Have there been any material breaches of any of those regulations since we
last spoke about this in estimates?
Mr McAllister: None.
Dr Dripps: Senator, are you on Jabiluka or Ranger? Jabiluka is in care and maintenance at the moment rather
than an active mine.
Senator IAN MACDONALD: Indeed. Can you tell me about Jabiluka? As I understand it, it is in long-term
care and maintenance. Is that correct?
Dr Dripps: That is right, yes.
Senator IAN MACDONALD: And any proposal for development would need the consent of the traditional
owners. Is that correct?
Dr Dripps: That is right.
Senator IAN MACDONALD: The brine concentrator at Ranger is, as I understand it, very important to
Ranger mine's water treatment plans. Are you aware if that project is proceeding?
Mr McAllister: Yes, it is proceeding on time and on budget, I believe.
Senator IAN MACDONALD: It is on time and on budget. Is ERA following the correct regulatory approvals
for the Ranger 3 Deeps exploration decline project?
Mr McAllister: Yes, they are.
Senator IAN MACDONALD: You keep a fairly close eye on that?
Mr McAllister: Indeed.
Senator IAN MACDONALD: Is the environment surrounding the Ranger project area something you keep a
very close eye on?
Mr McAllister: Yes. We have significant monitoring programs in place. We have a surface water monitoring
program that includes continuous monitoring in both Magela and Gulungul, the main tributaries to the Magela
floodplain. They take continuous monitoring data at about 10-second intervals. We also have biological
monitoring programs in place that study the species diversity in the aquatic environment in terms of fish
communities and macro invertebrates. We also have a fairly significant radiological monitoring program in place
that determines both impact to human health and the environment in terms of radiological exposure.
Senator IAN MACDONALD: Thanks for that. I know that the Northern Territory had a lower than expected
rainfall over the 2012-13 wet season. Do you think that ERA has the capacity to manage water should Ranger
mine still experience a heavy rainfall event in the 2013-14 wet season?
Mr McAllister: Yes. Certainly it was what we would call a dryer than normal wet season, if you can have a
dry wet season. The total rainfall was in the order of 1,200 millimetres. Significantly, one of those events was in
the order of 300 millimetres. So prior to that, at the end of March, the Jabiru area was looking towards one of the
driest wet seasons on record. That, in combination with a raise in the level of the tailings dam crest, has meant
that ERA have quite significant capacity to manage process water and pond water inventories into the future.
Senator IAN MACDONALD: So from your office, no worries about that regardless of what rainfall there is?
Mr McAllister: No. Not at this point in time.
CHAIR: Thank you. I think that concludes questions of the Supervising Scientist Division.
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Proceedings suspended from 3.33 to 4.03 pm
CHAIR: I call officers from the department in relation to program 5.2, environmental regulation.
Dr Dripps: Chair, I have a correction of evidence provided this morning during the segment on coal seam gas.
I told the committee that there had been 23 projects referred to the interim and statutory independent expert
scientific committee. That is not, in fact, correct. There have been 22 projects referred to the statutory committee
for advice and 23 projects referred to the interim committee, bringing the total to 45. So I apologise for that
misrepresentation this morning.
CHAIR: Thanks, Dr Dripps.
Senator COLBECK: I will start with a procedural matter. During the last session I was given some evidence
in relation to the finalisation of the boundary of the nominated area for World Heritage listing in Tasmania. My
discussion was in the context of a letter that had been forwarded by the minister to Ms Jane Calvert, who is one of
the signatories to the Tasmanian agreement. In that letter it says:
My officials continue to work closely with the Tasmanian government and Forestry Tasmania to refine the management
boundary for nominated extensions to the Tasmanian wilderness World Heritage area. Agreed objectives of this process are to
maintain the size and values of the nominated World Heritage area.
To me, that indicates that the boundaries are not yet finalised, which is in contrast to my interpretation of the
evidence that was given to me. I seek to table the letter and ask the department to consider the evidence that was
given.
CHAIR: That is fine. Can we get resolution to accept all tabled correspondence or letters?
Senator COLBECK: If it is possible to get something back pretty quickly on that, given that particular—
CHAIR: Just be patient. All those in favour? Against? Declare it carried.
Senator COLBECK: Is it possible to get some resolution as quickly as possible, given where that issue is in
its broader process?
CHAIR: I am sure Dr Grimes can have a look at that, if it is possible and practical.
Dr Grimes: Senator, we would be happy to have a look at that in the time that we have available, noting that
officers are here giving evidence.
Senator COLBECK: I understand that. I thank the official for that. Very quickly, there has been a key
threatening nomination process for marine seismic surveys around nine species. Can you tell me about that
process? Is it here or not here? Do I go at another time?
Dr Dripps: We will just get the relevant officer up to the table, Senator.
Senator COLBECK: The nomination has been made, as I understand it. Can you just give me a sense of the
process and timelines around it, please.
Mr White: Yes, sure. The nomination will be considered by the Threatened Species Scientific Committee in
their upcoming meeting on 4 June. The committee will then provide its advice on whether or not to prioritise that
nomination to the minister by approximately early July. From that point on, the minister will make a decision as
to whether or not an assessment will be undertaken.
Senator COLBECK: So it is a nomination to an assessment process. What is the cycle around the
assessment?
Mr White: Well, it is an annual assessment cycle.
Senator COLBECK: But how long will an assessment take?
Mr White: The committee will provide a recommendation. The Threatened Species Scientific Committee will
provide a recommendation to the minister on a timeframe if it is recommending something for assessment. The
minister will make a final decision on that timeframe. It is an annual cycle that is generally published before 1
October each calendar year.
Senator COLBECK: And what is the impact of the process once something becomes accepted through the
assessment?
Mr White: Well, if something, first of all, were determined as a priority for assessment and then, say, it was
listed as a key threatening process, one important part of the decision-making is whether or not there will be a
threat abatement plan that applies to that key threatening process. A key threatening process in itself is not a
matter of national environmental significance under the act, but threat abatement plans are taken into account in
environmental decision-making under the act.
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Senator COLBECK: Thank you.
Senator BACK: I would like to ask some questions, if I can, regarding the circumstance with cattle in the
north of Queensland at the moment, particularly with the opportunity for some state national parks to be opened
up for grazing under these circumstances. Can someone assist me in that process? Firstly, can I confirm my
understanding that the parks in question have in fact been at some time in the past cattle stations that have now
been with Queensland and, I think, federal government support turned into state or national parks. Is that correct?
Dr Dripps: There are a variety of properties which have been cattle grazing properties in the past. Some of
them have been gazetted as national parks in Queensland and some of them have not yet been gazetted as national
parks in Queensland. Yes, the ones that are subject to public intention at the moment have been purchased jointly
with NRS funding.
Senator BACK: So of those that have not been gazetted as national parks, there is no reason why they cannot
be used immediately to turn cattle back into them? Would that be a correct assumption?
Dr Dripps: Senator, my colleague Mr Thompson, who is responsible for this area, gave some evidence on this
yesterday. If I recall correctly, the issue that is being discussed at the moment is the fact that they were partly
purchased with NRS funding and that that funding comes with a funding agreement about the progressive
removal of stock from those areas.
Senator BACK: As I understand the position, if you could confirm it or advise me if I am wrong, the
Queensland government has now moved to actually support cattle being returned into these areas as a result of the
bushfires, the drought and the excess of cattle that were not exported to Indonesia and other markets. Is it the case
that the Queensland government favours these areas being opened again for grazing?
Dr Dripps: The Queensland government has written to the Commonwealth ministers requesting support for
that kind of proposition, yes. I believe they have passed laws as well.
Senator BACK: From a procedural point of view, would it require the acceptance of both the Queensland
government and your minister, Minister Burke?
Dr Dripps: Well, as we indicated to the committee yesterday, there is a range of advice being prepared for the
minister regarding the potential interventions that he might make on this matter.
Senator BACK: And is that being prepared by your department?
Dr Dripps: Yes. That is right.
Senator BACK: And are you able to assist us with some understanding of the factors that are being taken into
account in preparing advice to the minister?
Dr Dripps: The general factors, as we indicated yesterday, are the funding agreement for the NRS purchase
and the general obligations under the EPBC Act that exist for people undertaking actions that might have a
significant impact on a matter of national environmental significance.
Senator BACK: And would you be taking into account animal welfare significance as well as environmental
significance?
Dr Dripps: The animal welfare issues are not directly covered by the acts that we administer.
Senator BACK: Is there federal legislation at all pertaining to animal welfare that should be the subject of
consideration in preparing advice to the minister?
Dr Dripps: If there is, it is outside of this portfolio.
Senator BACK: Again, the advice that I have is that in consideration of these areas having been cattle
stations, some at least, if not most, are fairly heavily covered with buffel grass. Is that your understanding as well?
It is an introduced species. Obviously, buffel grass was introduced as a cattle feed many years ago. It was highly
successful in the Queensland pastoral cattle industry. From the advice available to me from people in the industry,
they tell me that is the case. I am just wondering if you are also of that understanding.
Dr Dripps: I do not have a detailed understanding of the vegetation that exists on those properties.
Dr Grimes: It is the case that the Queensland government, in making representations, has made that point
around buffel grass, so that has been made in correspondence from the Queensland government.
Senator BACK: I would make the point also, of course, when considering advice to the minister under the
EPBC Act, that buffel grass, once dried off, is highly flammable. I am not sure of the plant species or the
vertebrate species that would be in those areas, but I understand that gidgee is one plant species that is actually
throughout those areas and I know to be highly fire sensitive. Is that the type of thing that you would also be
taking into account in preparing advice to the minister?
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Dr Dripps: We would be undertaking a desktop review of the kinds of matters of national environmental
significance that might be present—so whether there are bilbies, squatter pigeons or gidgee grass.
Senator BACK: An interesting thing about animals is they do not stand still except those that are falling
down. Time is of the essence in this circumstance. Again, the advice available to me from people who provide
produce to the industry in Queensland is they basically have run out of conserved feed. When speaking to a feed
produce provider from Clermont the other day, he gave me to understand the scale. He obviously has a contract
whereby cattle being trucked south to abattoirs are unloaded. He looks after them for a period of time, whatever
the requirement is. They get fed, watered and put back on the truck. He said to me, 'I normally deal with 30 decks
a fortnight.' He said, 'I am dealing at the moment with 180 decks a fortnight.' So that is the scale of animals being
moved south—those that actually can still stand up and be put on a truck. The prelude to my question is: how
urgently are you preparing this advice to Minister Burke, because time is absolutely of the essence? As we know,
in a significant number of instances, Dr Dripps, these are in calving cows. They are going into their final trimester
of pregnancy when they start getting dragged down by the unborn calf. Again, we are not often talking about dry
cows or younger animals, although they are also at risk. Can you just give us some understanding of the
timeframe in which this advice will be made available to Minister Burke?
Dr Dripps: As we advised the committee yesterday afternoon, that advice is being finalised with great
urgency.
Senator IAN MACDONALD: Is the minister back in the country yet?
Dr Dripps: Yes, he is, Senator.
Senator IAN MACDONALD: So he has got the advice now that we spoke about yesterday?
Dr Dripps: The department is still in the process of finalising the advice.
Dr Grimes: The department has to provide advice in two areas. One is in relation to NRS, or national reserve
system, properties and the other is in relation to EPBC Act advice. Those advices are being finalised or, in one
case, may even be close to having been finalised already.
Senator IAN MACDONALD: But, as I said to you yesterday, the minister has been aware of this since 14
May and it has taken the department until yesterday and now even today to get this urgent advice and send it
back. Senator Back has mentioned, perhaps more graphically than I did, the necessity for urgent advice. When do
you expect to have it across to the minister?
Dr Grimes: Very, very shortly. We traversed this territory, of course, yesterday, Senator, and I do not think I
have anything to add to what we covered off yesterday.
Senator IAN MACDONALD: But I am hoping that a day later the advice might have gone.
Dr Grimes: In relation to these matters, it is imminent.
Senator BACK: Thank you. I have no other questions on that.
Senator WILLIAMS: Do you have a problem with hard-hoofed animals grazing in those national parks?
Does the department?
Dr Dripps: We are interested in things that might cause a significant impact on matters of national
environmental significance. At certain stocking densities, it is well known that hard hoofed animals can have
negative impacts on some matters of national environmental significance.
Senator WILLIAMS: A lot of these parks have wild goats, feral pigs, brumbies and deer et cetera. Do you
take action to remove those hard-hoofed animals out of those national parks?
Dr Dripps: We encourage people who are managing those properties to implement management plans that
minimise the impact of those animals.
Senator WILLIAMS: Managed? National parks that I see are certainly lacking management. Thanks, Chair.
Senator IAN MACDONALD: Has Mr Burke's office been able to get back to you since yesterday on whether
he received that email at 1.54 pm on 14 May?
Dr Grimes: I do not have formal advice on that at this stage, Senator. Obviously, the email address in
question is the minister's Parliament House email address. We have referred that to the minister's office.
Senator IAN MACDONALD: Do you think we might have an answer by the time you are relieved from your
duties with the estimates committee?
Dr Grimes: I do not know, Senator.
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Senator IAN MACDONALD: Senator McLucas, is there any chance that you might get the minister's office
to assist the committee by just confirming that he received that at 1.54 pm on Tuesday, 14 May? That is the letter
from the Queensland government.
Senator McLucas: I will ask the minister's office what advice they can provide the committee.
Senator IAN MACDONALD: If they cannot, for some reason, could you let us know that they are not able to
advise that and why they are not able to advise that?
Senator McLucas: I will certainly ask the question, yes.
Senator IAN MACDONALD: Thank you. That is all on that.
Senator WILLIAMS: I know Senator Macdonald raised the issue of flying foxes at the last estimates. Since
that time, my home town of Inverell has been inundated with millions of them. Who is the flying fox expert?
Dr Dripps: We have officers here, I believe, who can talk to us about flying foxes.
Senator WILLIAMS: During the summer months at Inverell in northern New South Wales where I live, the
little red flying fox has decimated plenty of the sheoaks and willows along the Macintyre River through the centre
of the town to the point where the council is now seeking funding to remove or cut trees back. They have made a
real mess of them. The ballpark to do all this work is around $40,000. I understand the little red flying fox is not
threatened but protected. Is that correct?
Mr White: Under federal environment legislation there are two species listed as threatened. One is the grey-
headed flying fox and the other is the spectacled flying fox. The red-headed flying fox is not a matter of national
environmental significance.
Senator WILLIAMS: So under federal law, the little red flying fox is not threatened?
Mr White: That is correct. It is not listed as a threatened species.
Senator WILLIAMS: Is it protected under any state laws?
Mr White: I cannot answer that.
Ms Rankin: We would have to take that on notice, Senator.
Mr White: We could take it on notice.
Senator WILLIAMS: So if that little red flying fox is not listed as threatened or is not protected, can action
be taken to move them on?
Ms Rankin: We can only answer in relation to their protection under Commonwealth environment legislation.
As they are not listed under Commonwealth environment legislation, there is nothing under our national
environmental law that prevents that. But, as I said, we would have to take on notice what their protection status
might be under state legislation.
Senator WILLIAMS: I would appreciate it if you could, please. Are you able to shed any light on what the
two national census counts have revealed as to the flying fox numbers?
Mr White: I do not have those numbers in front of me. Yes, two counts have come out to date—one in
February and one in May.
Senator WILLIAMS: Can you give me any details of those numbers through the different varieties or species
of the flying fox? You can take that on notice, can you?
Mr White: Yes. The count is being undertaken certainly in relation to the grey-headed flying fox and the
spectacled flying fox. It is a long-term monitoring project, of which the first two counts are available. They are
available publicly, so we can supply them on notice.
Senator WILLIAMS: At what point is a species vulnerable or protected?
Mr White: There is a range of criteria that need to be met under the act. Some of them are around numbers,
for instance. Some of them are around change in numbers. It only requires one of those criteria to be triggered in
order to be determined to be threatened under national environment law. They are quite stringent criteria.
Ms Rankin: It has to be listed on the national environmental threatened species list. To get listed, it needs to
go through an assessment process to see whether it meets that criteria.
Senator WILLIAMS: So going on a numbers count will determine whether they are listed on the threatened
species list. Correct?
Mr White: Well, we will be looking at the trends in numbers, not just the overall numbers.
Senator WILLIAMS: The trends in numbers?
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Mr White: Yes.
Senator WILLIAMS: Who makes a decision to delist if the numbers get too high in the count of them? State
or federal? It depends on which one has listed them, I suppose?
Ms Rankin: Yes. They could be listed under both state legislation as well as federal legislation. If there were
to be a review, there is always the opportunity to review the status of species on the list, but that requires advice
from the threatened species scientific community to consider evidence about whether the criteria are still met for
either listing or listing in a different category, and then advice to the minister, who makes the final decision under
national environment law. Obviously, the states have a different process for their listings.
Senator WILLIAMS: To your knowledge, does this little red flying fox carry any of those dangerous
diseases, such as lyssavirus, et cetera? Have those diseases been known to be carried through all the species of the
flying fox?
Mr White: I believe that to be the case. I do not know definitively if it is all species. There is an issue,
obviously, that not all types of bats carry the virus.
Senator WILLIAMS: So if this little red flying fox is not on the threatened list and is not on the protected
list, do you have any advice on how to move them out of the centre of a town? Is there any protocol or procedure
that the department has taken to move them on?
Dr Dripps: There has been extensive and successful work undertaken by some of the state governments in
moving flying foxes on. A particular example that springs to mind is that of the Victorian government, who
moved flying foxes out of the botanic gardens and up the river to Ivanhoe in Melbourne. So there are protocols
and procedures for doing this available. We could undertake to provide you with some information on that on
notice, if you do not mind.
Senator WILLIAMS: So off hand you do not know how they actually did it?
Dr Dripps: If I recall correctly, it was a combination of sound, encouragement and the provision of feeding
sites at the location where the government wanted them to move to. It was quite a difficult and expensive
procedure.
Senator WILLIAMS: This is my final question. Are there any special funding areas you can point me to as a
one-off to help clean up the environmental damage, the mess, they leave behind as far as the destruction of trees
et cetera and the general mess? Do you know if there is any federal government support to assist the clean-up?
Dr Dripps: I am not aware of any funding like that. But we can take that question on notice and check for
you.
Senator IAN MACDONALD: At last estimates you told me that there was a process underway to look at
possibly delisting the spectacled flying fox. How far has that process progressed?
Mr White: That is what the national flying fox monitoring project that is underway at the moment is looking
at for both the spectacled and the grey-headed flying fox. It is getting a way better understanding of numbers
before any assessment is undertaken of whether or not it may or may not be eligible for delisting.
Senator IAN MACDONALD: Is it an offence under the EPBC Act simply to move them on by some noise,
or is the offence if you try to kill them or cull them?
Ms Rankin: I think the offence is if you take an action that is likely to have a significant impact on the
threatened species. That may vary depending on if you are attempting to move a roost on during peak breeding
periods, for example. That could constitute a significant impact, but at another time it may not. So it is quite
situation specific, I think, and we would need to make a case-by-case assessment of that.
Dr Dripps: And, as you would perhaps recall from our last outing on this topic, we have been in the process
of developing a conservation agreement whereby Commonwealth approval for those kinds of actions will not be
required if they are undertaken in a particular way. So we have been working with the state governments in New
South Wales and Queensland in particular to develop this conservation agreement so that it is not necessary for
people to apply for permits under the EPBC Act in order to manage these bats.
Senator IAN MACDONALD: We spoke about that, what, two months ago. It was February, so three months
ago. So are those agreements with Queensland and, I guess, New South Wales completed yet? Where are we at
with them?
Mr White: They are in the final stages of negotiation with the states.
Senator IAN MACDONALD: Can you tell us what is in the agreements? Will it allow states to move them
on?
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Mr White: Basically, the conservation agreements are aimed at allowing the states to approve actions under
their own state regulatory mechanisms where they are consistent with the conservation agreement, which is
ultimately making sure that it meets the standards of national environment law but allowing them more flexibility
in making those decisions through the agreement.
Senator IAN MACDONALD: Is it right to say that once these agreements are signed, the Commonwealth
will no longer have an oversight or any role in their management?
Mr White: Where a particular action is consistent with that conservation agreement, there might be actions
that are still planned to be taken that are not consistent with the conservation agreement. They would need to be
referred as per the usual process. But the conservation agreement is designed to capture most of the current issues
of managing flying foxes that we are presented with now.
Senator IAN MACDONALD: In this one instance—and I am sure it happens everywhere—at Yungaburra,
these actions may have an impact on flying foxes. But I guarantee that the actions of the flying fox are having a
deleterious effect on the health and wellbeing of human beings. They cannot sleep. They cannot talk. They cannot
sell their houses. There are so many properties on the market for sale in this particular area. There is some
urgency. People are still having their health impacted because of this roost that came there after Cyclone Yasi into
a replanted area; it is not a natural forest. Nobody wants to kill them. They just want to move them on by blowing
a few horns and clanging a few tins and getting rid of them. That is why it is so very urgent that this work be done
very, very quickly. When you say the agreements are nearly finished, I will not hold you to this, but could you
give me a rough guess? Would you think a couple of weeks or a couple of months?
Dr Dripps: Just in terms of those time lines, Senator, the minister for the environment wrote to the
environment ministers in Queensland, New South Wales, the ACT, Victoria and South Australia in May last year.
There has been a pretty protracted process in receiving responses from the state governments. The revised draft of
the conservation agreement was sent to New South Wales after consultation with them in November last year.
The written comments on that draft were received on 13 February this year. So we have had several rounds of
engagement with the states on this conservation agreement and we believe that it is quite close to finalisation.
Senator IAN MACDONALD: Well, that is New South Wales. I am more interested in Queensland. I respect
that New South Wales is important. I want to put on notice this question: what is holding up the Queensland
agreement? If you can tell me that, I will use what little influence I have in Queensland to make sure the
Queensland minister addresses it immediately. I would be surprised if he is not, because I have been talking to
him and he is very, very aware of the position. In fact, he and his leader have both made commitments regarding
it. But on notice I ask you to indicate what the hold-up is insofar as Queensland is.
Dr Dripps: Yes, of course, Senator.
CHAIR: Just on this issue, I would not argue with Senator Back or Senator Williams in terms of their
knowledge of this issue. So when I am in that position, I will just go to the conversation, where there are a
number of debates taking place with PhD students, senior lecturers and academics and experts in the field. The
two issues that seem to come through in a lot of these debates is moving the bats on does not work and culling the
bats does not work. They say that if you try and cull them, there is what is called a pteropucidal effect. Is anyone
aware of what that is?
Dr Dripps: I am sorry, but I would have to look that one up, Senator.
CHAIR: Well, there you are, Dr Dripps. I am doing pretty good today, I tell you. I will quote from this article:
Achieving local eradication through mass culls is also doomed to failure. Because they migrate over long distances in
response to food availability, culling a local population of flying-foxes creates a vacant niche. This draws in more animals
from farther afield, which are then also culled. This vicious cycle has been described as a “pteropucidal black hole”.
I am sure the experts are looking at all of these issues. Would I be correct in that?
Mr White: Well, there are a number of things that are considered in the conservation agreement as it is
currently drafted in terms of the best methodologies. But I suppose these things are also being looked at through
the monitoring project, which is to get a better understanding not only of the number of flying foxes but their
movements et cetera. So there is still quite a bit that is not understood about the movement of flying foxes that we
are trying to get a better understanding of under that monitoring project.
Dr Dripps: I think it is fair to add to that comment, Senator, that the provisions of the conservation agreement
are primarily directed at moving bats at a particular time of year. There is a bat moving season, if you like, when
they are not heavily pregnant and not likely to be negatively impacted by those kinds of procedures.
Mr White: That is right. And non-lethal methods.
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CHAIR: We have spent a bit of time on this. Senator Macdonald, do you have any further questions? If not, I
will go to Senator Waters.
Senator WATERS: I want to start with the issues that we touched upon earlier about the Santos and QGC
coal seam gas approvals and those water monitoring and management plans. Firstly, your useful table here reveals
that a good 2½ years after Santos have had their approval granted, they still do not have tick-off on their water
management and monitoring plan. Can you confirm that that is the same project which Four Corners revealed in
April this year, where the public servant who was drafting the Coordinator-General's report was instructed not to
write a chapter on groundwater?
Dr Dripps: I think we would have to check with the records from the Four Corners project, Senator, on the
last point.
Senator WATERS: Well, I did that earlier today and it is in fact that project. We have the Coordinator-
General—this is a state level process which has not properly analysed the proponent's claims about water—and
then the federal government, 2½ years after issuing the approval, having not yet ticked off on the water
management and monitoring program. What is going on with this industry with approvals being issued with
information lacking and still not being granted almost three years after the fact?
Dr Grimes: Senator, this was addressed by Mr Gaddes this morning. He indicated the careful and diligent
process that is being followed in the consideration of the water management plans. Clearly, we would as a
department take that very, very seriously, working through those water management plans with the assistance of
the expert panel in Queensland and, ultimately, in giving advice to the Commonwealth minister. So that is a
careful and diligent process that we are following, and it is being done in an appropriate way.
Senator WATERS: Sure. I would not seek to imply that the veracity from the department should be less; far
from it. It is just interesting that it has taken the proponent 2½ years and they still have not been able to satisfy the
department. That is a red flag there for me that perhaps they are scrambling and they cannot actually manage their
water impacts. It sounds like you are voraciously attending to that; great. I will move on to the QGC project,
which you also detail in your table. I have some questions here about what happened at the end of what you call
stage 2. The minister approves the plan against reduced requirements and varies the conditions to establish a
requirement for a stage 3 plan. I have two issues with that. First of all, why were the requirements reduced? What
were the requirements that were reduced in the conditioning of that project?
Dr Grimes: It may be appropriate for the officers directly involved in that to answer that, Senator.
Mr Gaddes: Thanks for your question, Senator. The requirements were not reduced so much as they were
staged. So the conditions remain the same. The company was not able to meet some of the requirements of those
conditions. So instead of saying, 'Well, we're going to approve a plan which is below par', to allow the company
to go ahead with some of the work for which the components of the plan were adequate, we approved that
component so they could go ahead with that part of the work. We put another plan into the conditions to say, 'You
will deliver the remaining components of the conditions by the end of'—I think the date was 31 December, and
that is when it had to be implemented by. But it delayed the timing of the delivery of certain components of the
conditions until a later stage. It was 22 December, sorry. So there was no reduction in the protection to the
environment. The expert panel specifically considered whether or not that process would reduce the protection
afforded to the listed matters. The advice was that it would not, so it was staged accordingly.
Senator WATERS: So, Mr Gaddes, they had a chance in stage 1 and it was not approved. They had a chance
in stage 2 and it was not approved. So now they get an extra chance rather than their approval being varied and
perhaps revoked? How many more chances will they get?
Dr Dripps: Senator, there are detailed requirements of those water management plans. As Mr Gaddes has
indicated, there has not been any dilution of those requirements through this process. What there has been is a
recognition that we did not know everything about the complexity of implementing those conditions at the
beginning of the process. So the process has been designed in such a way that the company can progressively
demonstrate its performance in this area.
Senator WATERS: So on that point about not understanding the complexity of the issue at hand more
broadly, again, I harken back to this insistence on the conditional approval model. How can the minister be
issuing approvals when fundamental information about how water impacts can be managed are not known, when
the department themselves acknowledge the complexity and when the proponent is not able to satisfy two stages
of a plan and has to then be given a third stage to continue to examine these impacts? How is that consistent with
the precautionary principle under the act?
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Dr Dripps: Senator, as we indicated earlier, it is not uncommon to approve projects with subsequent
management plans that are required to be approved before various pieces of work are undertaken. So our role is to
identify the environmental outcomes that need to be achieved by these projects and then to ensure that an
appropriate framework of environmental management is in place before the work substantively commences.
Senator WATERS: On that point, I am interested in whether the department has either done any work itself
or sought any external advice on whether adaptive management, which is clearly what is being employed here, is
or is not consistent with the precautionary principle.
Dr Dripps: I think we would have to take that question on notice. I do not have the policy officers
immediately available to answer that question.
Senator WATERS: Would you be able to take that on notice and get back to us before the end of this
session?
Dr Dripps: I will do my best, Senator.
Senator WATERS: Thank you. That would be great. I just want to clarify, because your table here that you
handed out earlier does say that the minister approved the plan against reduced requirements. But you have just
said that the conditions were not in fact reduced. I just want to confirm. What did you mean by reduced
requirements?
Mr Gaddes: The same standard is required. It is just that each component of the conditions is delivered at a
different time. So the ones that could not have been met or were not able to be met at that time were carried over
to a later time when more information was available to inform those plans.
Senator WATERS: Thank you. I want to move now to the reef. We heard from GBRMPA yesterday that they
are now conducting their own modelling of dredging and dump spoil movement and they are now looking at deep
ocean currents and 3D modelling, which is a welcome development. They are doing that for the Abbot Point
proposal. My question goes to whether the Gladstone proposal was subject to modelling that looked at both 3D
and deep ocean current effects on dredging and dumping.
Dr Dripps: Senator, as Dr Reichelt advised yesterday, there is a project that is funded out of the regional
sustainability program that GBRMPA is undertaking on our behalf to do further monitoring. We would have to
take on notice and check the documents surrounding the approvals of dredging in Gladstone Harbour to be able to
answer the question around precisely which modelling was used to inform that decision.
Senator WATERS: Dr Dripps, is there anyone here that would be able to answer that? Given it has been
subject to such concern by UNESCO, I am sure the department is able to shed some light rather than just take it
on notice.
Dr Dripps: No. I am sorry, Senator. That decision was taken in 2010, I believe, so we do not have
documentation on that decision with us here. We can call back to the branch and give it a go.
Senator WATERS: Thank you. I appreciate your efforts in that respect. I am after the detail of the modelling
that did occur by Gladstone Ports Corporation and under the auspices of your department in order to get the
approval and whether or not it included the deep ocean current modelling and the 3D modelling, just for clarity. I
will leave that with you. Can you give me an update as to where the coastal strategic assessment is at, the one that
is being undertaken by the Queensland government?
Dr Dripps: The Queensland coastal strategic assessment? Yes, Senator. My understanding is that the
Queensland government has been undertaking quite a lot of work on their coastal strategic assessment. As you are
well aware, the Queensland government is also contemplating and undertaking changes to its planning
arrangements. That has introduced a degree of complexity into the work that their staff are doing. But my
understanding is that that work is well progressed.
Senator WATERS: And when will that be out for public comment?
Dr Dripps: I cannot answer that question, Senator. It does depend on when the Queensland government
submits that work to us and whether that work is adequately progressed to be able to go out on public exhibition.
Senator WATERS: Do they have a deadline to submit to you?
Dr Dripps: Well, the ultimate deadline of the process is that it needs to be completed in time for us to report
back to the World Heritage Committee in 2015.
Senator WATERS: So you have not given the parameters for when you would like to receive their first
version of that?
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Dr Dripps: There is no legislative timeframe for a strategic assessment. I think there were some aspirational
timeframes that might have suggested that that might be out in the third quarter of this year. I am not sure whether
or not that will be achieved. It depends on the progress of the work by the Queensland government.
Senator WATERS: Do we know what is holding that up if that timeframe is not going to be met?
Dr Dripps: I think I have said all I can about the state of progress by the Queensland government on this
matter, Senator.
Senator WATERS: On the issue of strategic assessments, in response to a question on notice last time, you
advised that there are about two or three officers working on each EPBC strategic assessment. How many
departmental folk are working on that coastal strategic assessment?
Dr Dripps: On the Queensland one there are more officers. I might ask Ms Colreavy to come and report to
you on that.
Ms Colreavy: Senator, we have six staff responsible for working on the strategic assessment. My team
comprises about 14 staff overall. Six of them are specifically focussed on working on the strategic assessment
issues.
Senator WATERS: The coastal or the marine?
Ms Colreavy: Well, they cross over a lot of work. But of the people with a specific focus on coastal work,
there are three and a director. But they are supplemented from time to time depending on what comes in and
reports that are being assessed et cetera by a range of other people. So there is a core group of three staff
supervised by a director plus supplemented by others as needed.
Senator WATERS: And the numbers for the marine strategic assessment?
Ms Colreavy: It would be the same—three.
Senator WATERS: The same folk or an additional three folk?
Ms Colreavy: No. A different three.
Senator WATERS: What impacts will the recent staffing cuts have on the veracity of those strategic
assessments, if any?
Ms Colreavy: We do not expect to have any cuts to the taskforce.
Senator WATERS: Will there be any impacts on the broader EPBC project assessments or referral
assessments from those staff cuts?
Dr Dripps: Senator, as I indicated to the committee I think first up yesterday morning, there are four staff
within the environment assessment and compliance division who have been offered voluntary redundancies.
There are also potentially additional resources that were announced by the government in the budget to provide
for staff working on the water trigger. So we are not expecting a significant impact on staff as a result of the cuts.
Senator WATERS: That is good to hear. Just before we leave coastal issues, again, the advice from
GBRMPA yesterday was that as part of their marine strategic assessment, they are conducting eight reports on the
impact of primarily dredging but also dumping and that they had done four so far, which were in draft format and
had been given to certain stakeholders but not, sadly, to others. Can you advise whether the department has
received either a briefing or any information from GBRMPA about those new studies that relate to Abbot Point?
Ms Colreavy: The reports that were referred to yesterday were component parts of one overall study. So there
will be seven component subsidiary reports and one overarching final report. The so-called sharing of the report
data in the formulation of it was in the interests of testing some of the findings and getting feedback on the
validity of the findings. So GBRMPA and the researchers that were involved in the project identified parties that
they felt would assist them in developing those reports. It is part of the normal scientific exploration and
consultation. My team in the department have received the first four subsidiary reports, but we have not yet got
the four that are still under production. We are waiting to receive them. That includes the final. So the bringing
together of those findings and the summation of it we are still yet to see.
Senator WATERS: When is that due to be completed?
Ms Colreavy: We were hoping for it to be completed by the end of June. I suspect it might drift over into
early July by the time they bring together the final report and get it to us. But the end of June to mid-July should
be the finalisation.
Senator WATERS: Earlier, Ms Colreavy, you said it had been given to parties. I was only aware that it had
been given to the Queensland Ports Association for consultation. What other parties have received a copy of those
draft reports?
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Ms Colreavy: I think it was Queensland Ports Association and NQBP.
Senator WATERS: Well, they are the proponent.
Ms Colreavy: They are party to it. I cannot remember. I will have to get back to you, I think.
Senator WATERS: If you could, because I am concerned that it has been a highly selective consultation so
far. I am interested in who has had the chance to eyeball it.
Ms Colreavy: Bear in mind, Senator, that these reports have been formulated for the purpose of being put out
for public consultation. There is room for further comment and for further adjustment. So all of these reports
are—
Senator WATERS: But that early input is obviously very influential. Has the department advised the minister
to wait to receive those seven components and the final report before making his decision on the Abbot Point
project?
Dr Dripps: Senator, the process of the minister making final consideration of projects is one where we brief
the minister formally when we have the required information about the impacts of the project and how that is
likely to impact on the environment draft conditions and such things. It is generally at that time that he asks for
further information if he requires further information. So we do not have a policy approach of essentially
providing him with information about every project as it comes to mind. We have 450-odd projects on the books.
In order to streamline the engagement with the minister's office, we brief him when we are satisfied with the
standard of the assessment and the draft conditions that have been prepared. Then if he has further issues of
concern, we address them.
Senator WATERS: That all sounds fine. But my question was: will the minister wait for that information
before making his approval decision?
Dr Dripps: Well, I cannot answer the question of what the minister will do at some stage in the future,
Senator. Certainly he is aware of the issues and concerns around Abbot Point and he will make the decision on
those projects when he is satisfied that all of his concerns and issues have been fully addressed.
Senator WATERS: I would have thought it would be a fairly relevant consideration if he proceeded in the
absence of that information. Anyway, I will not bore you with that now. Still on that Abbot Point proposal, I
understand that the offshore dump site has now been deselected, for want of a better word, and a new site for
dumping that three million cubic metres is yet to be specified, which seems unbelievable to me given the approval
is due to be issued in about six weeks. Will the minister require a final dump site to be specified before making
his approval decision?
Mr Knudson: The minister will have to take into account all relevant considerations in determining what the
potential impacts on matters of national environmental significance would be. In determining that, he will need to
take a look at things along the lines of the proposed site for disposal and the potential impacts related to that site.
Senator WATERS: Will you be advising the minister around his procedural abilities to hold off on his final
decision until such information is within his purview?
Mr Knudson: Our advice to the minister will be when we are at a point where we believe that the minister
can acquit his responsibilities under the act appropriately.
Senator WATERS: Sure. I would suggest that he needs to know where the dump spoil is going to go before
making that decision, but I think we have established that the process will roll out as it does. I want to ask quickly
about the Fitzroy terminal project. Some materials have been released under FOI that show that advice was sought
by the minister to GBRMPA by email on 8 August 2011. That advice was provided. The advice itself is dated 31
August. It is noted by hand as being received on 6 September. The decision on the project to make it a controlled
action was made on the 5th. So if the hand notation is accurate, the decision to make the project a controlled
action as opposed to clearly unacceptable was made before receipt of the GBRMPA advice. I am just wanting
some clarity. Is that indeed the case, or is the handwritten notation a little misleading?
Dr Dripps: Senator, I do not have the copies of the material that you have in front of you. It is the usual
departmental practice to seek advice from a range of different expert bodies in formulating decisions that are
taken under the EPBC Act. In this case, the delegate did receive advice from GBRMPA and fully consider that
advice in making the controlled action decision. That is evident in the decision brief on that matter. That advice
from GBRMPA was fully considered in making the decision at that time.
Senator WATERS: Even though it was received the day after the decision was made, according to the
handwritten notation?
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Dr Dripps: I suspect that there may have been advice provided by GBRMPA to more than one person on
more than one occasion. I have personally reviewed the decision document quite recently and there is no doubt
that the GBRMPA advice was fully taken into account.
Senator WATERS: I am pleased to hear it. Why was it not heeded?
Dr Dripps: I would, again, have a different interpretation of the decision than you would, Senator, in that
regard. The views of GBRMPA about the potential impacts of the project were recognised in the decision brief.
The decision that was taken was to undertake a full environmental impact assessment, which is something that we
regularly do. So I do not consider that decision to be inconsistent with GBRMPA's advice.
Senator WATERS: Well, GBRMPA's advice was that there would be extreme consequences for both the
marine park and the World Heritage area, so I would suggest that perhaps a clearly unacceptable decision might
have been more appropriate. But evidently that is my view alone. Can I have just another five minutes, Chair?
CHAIR: Sure.
Senator WATERS: Last time, we spoke about issues regarding the Whitehaven Coal approval. Have we got
the right folk there? What is the progress of that investigation into the potentially false and misleading statements
made by Whitehaven as regards their offsets to obtain their approval?
Mr Gaddes: We generally do not provide comments on the status of investigations. I can provide you with
advice that it has gone through the preliminary stage and has been allocated to one of our specialist investigators.
But, beyond that, I could not provide you any more details without prejudicing that investigation.
Senator WATERS: Can you just tell me that again? It has gone through the preliminary stage?
Mr Gaddes: It has gone through a preliminary stage. Last time we spoke, I spoke to you about how we triage
our cases. It goes through and we make sure that there actually is a case to answer. Then after that, it goes through
into the investigation stage. It has been through the triage stage. It has been allocated to an investigator.
Senator WATERS: Does that mean there is a case to answer, under your definition?
Dr Dripps: It means that it will be investigated, Senator.
Senator WATERS: Mr Gaddes, is there a case to answer?
Mr Gaddes: The result of the investigation will reveal that.
Senator WATERS: Have the Maules Creek coalmine and the Boggabri coalmine lodged their surface and
groundwater assessments?
Mr Gaddes: That is not my area.
Senator WATERS: Sorry. Musical chairs here.
Mr Knudson: Senator, we are in the process of assessing their documentation to ensure its adequacy.
Senator WATERS: Sure. Have they lodged their surface and groundwater assessments yet?
Mr Knudson: Not their final versions.
Senator WATERS: Will they go to the independent expert committee for examination?
Mr Knudson: Senator, at this point, what we need to ensure ourselves of is that there is adequate review of
the plans to make sure that we can provide advice to the minister as to the sufficiency of those plans. That will
entail us looking at a range of options as to whether we feel that we have sufficient expertise within the division
or whether we need external advice.
Senator WATERS: And you would consider that independent expert committee to be the external advice
source?
Mr Knudson: That would be one of the potential sources of external advice.
Dr Dripps: It is one of the potential sources. I think it is worth putting on the record that it is not the role of
the independent expert scientific committee to provide post approvals advice on projects. Their role is to make
sure that the scientific matters are considered appropriately before approval and that appropriate conditions are
applied.
Senator WATERS: I am very interested in that. They are allowed to advise on the fact that conditional
approval should or should not be granted. According to your earlier evidence, a lot of the detail about how those
impacts will be managed are left until later. But the independent scientists are not being allowed to participate in
that process—
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Dr Dripps: I did not say, Senator, that they are not allowed. I said that it is outside of their current role and,
indeed, their current resourcing. What we do within the division in looking at the post approvals work is look at
whether we need expert technical advice that is beyond the capability of the department to provide. Where we do,
we commission that work specifically. It is very difficult to anticipate precisely what that work might be. We
resource it on a case-by-case basis.
Senator WATERS: Will the water trigger, if it passes the Senate, change the scope of the independent
committee's jurisdiction in that regard? Will they then be able to have an involvement post approval, or is it not
contingent on that?
Dr Dripps: I do not believe that is the intention of the water trigger, Senator.
Mr Tregurtha: I will clarify a point Mr Knudson made previously in relation to whether or not the final water
management plans have been submitted for either the Maules Creek or Boggabri projects. Whitehaven Coal has
lodged draft surface and groundwater management plans with the department. We are in discussion with the
company in relation to those plans.
Senator WATERS: So we said not yet, but in fact they have lodged a draft?
Mr Tregurtha: They have lodged a plan. We are currently undertaking an analysis of the plan. I cannot tell
you now whether it is the final one or not because we are still going through that analysis.
Senator WATERS: Thanks for clarifying that. Lastly, has the minister requested advice from the department
on what steps he could take to permanently rule out industrial development in the Fitzroy delta?
Dr Dripps: Senator, as the secretary and I covered earlier, the minister has asked for a range of pieces of
advice around a range of matters that relate to the coast of Queensland, the draft findings of the World Heritage
committee, the progress of the strategic assessment and the consideration of ports in Queensland.
Senator IAN MACDONALD: I was with people in Yungaburra who are the people that most recently have
raised this with me. It was only a week or so ago. They showed me a letter that they have given me a copy of.
With my normal precise filing system, I cannot put my hand on it. It was a letter from your department. They had
written and asked if they could move the bats in the morning. The letter came back, as I recall it—someone has
just jogged my memory on this—saying, 'Well, you can, but if you have an impact on them, you're in trouble.
You have to self-assess what is appropriate and what is not.' They were sort of saying, 'Can we make a noise
between these hours?', and the letter came back saying, 'Well, you can self-assess that. We don't do that. We don't
help you. But if you've got it wrong, we'll throw you in jail.' Is that the way the EPBC Act works—that people
have to self-assess? If they are then wrong, they are the ones that are in trouble?
Dr Dripps: Senator, we do provide a range of guidance to people in deciding how to self-assess in these
circumstances. It is fair to say that the obligation of the EPBC Act is for people to refer actions for assessment if
they believe that there may be a significant impact. I would appreciate the opportunity, if we could add some
more to that, by having a look at the correspondence that you refer to.
Senator IAN MACDONALD: I will try to get it. But that is what I understood they did. They wrote and said,
'Look, give us some guidance', and the answer came back, 'Well, that's up to you. Read the act and you self-
assess. But be aware that if you get it wrong, you'll be in jail.' So you say that that does in fact occur, but you
usually do give—
Dr Dripps: There are a range of different forms of guidance available from the department on different topics,
including the opportunity to have a conversation with relevant officers. I have agreed that we should take on
notice some further investigations into the case that you refer to, Senator.
Senator IAN MACDONALD: Thanks. That is very generous. I am sorry that I am so ill-prepared that I do
not have the letter, but I will get it and make it available to you. Perhaps I might just send it to you as a senator
rather than put it in as a question on notice at estimates so that you might be able to give me a more speedy
response. Well, I will think about that. I will check with the secretariat which is the best way.
Mr Knudson: There is a part on the website that is a generic guideline that is relatively short which talks
about what a significant impact is likely to look like for matters of national environmental significance in general.
The thresholds are obviously matter by matter specific. But it does give some guidance to individuals like that
who would not necessarily be fully familiar with the act as a daily matter of their business. That would be
definitely a place to start.
Senator IAN MACDONALD: These are elderly people, mainly retirees. They are ordinary people. One of
them was a former employee of a government department in this area, I might say. But they were all confused.
They did not know, so they wrote and asked for advice and were told, 'No, we don't give advice. But you've got to
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self-assess.' Anyhow, I will try to get the letter and refer it to you. My raising the issue is not so much in this
individual case. If we do have Commonwealth acts that provide for severe penalties, one would think that perhaps
people should be able to get some advice if they say, 'At six o'clock in the morning we're going to blow some car
horns and belt some tins. Is that allowed or not allowed?' They got a response saying, 'Look, sorry, you've got to
self-assess if there is an impact. If you're wrong, pack your toothbrush for jail.'
Senator HEFFERNAN: Is that a reverse onus of proof, then?
Senator IAN MACDONALD: Yes.
Dr Dripps: Senator, as I have advised, we do provide guidance on a range of different matters of national
environmental significance and a range of different industries and circumstances, so on that basis it would be
much appreciated if we could see the correspondence.
Senator IAN MACDONALD: Can you give me the advice you would give in relation to a movement on a
flying foxes?
Dr Dripps: Certainly.
Senator IAN MACDONALD: And we will see how easy they are to interpret.
Dr Dripps: Indeed.
Senator HEFFERNAN: I want to clarify that. In the regime where you have a self-assessment going wrong,
is there a reverse onus of proof on the party?
Senator IAN MACDONALD: It is.
Mr Gaddes: That letter most likely came from the compliance and enforcement branch. So the wording of the
letter is normally that if you have any uncertainty, you should refer the matter to the department for assessment
and decision. If you do not refer it, then you could be subject to substantial penalties. So generally we say to
people, 'Look, here's the way you can self-assess whether or not you need to refer it to the department for
approval. If you decide after that that you do not want to refer it, then you could be subject to penalties.' So we
provide them with advice and always say, 'If you are in any doubt, you should refer it to the department for
approval.' So it is not really leaving them—
Senator IAN MACDONALD: Thanks. I think they did ask and they were told, 'You self-assess.' Anyhow,
we will work this out. I would be interested in getting the advice you would give on the removal of bats and how
you would self-assess.
Senator LUDLAM: I have a couple of follow-up questions from questions that I was putting to the OSS
about their advisory role in helping the minister assess the Wiluna uranium project in the north-east goldfields of
WA. Dr Dripps helpfully deferred a bunch of questions to you folks, so here you are. You would be aware,
obviously, that the minister issued his conditional approval a short time ago for this project. It is the conditions
that I am most interested in getting some advice on from you now. Can you first tell us where the project is and
what your visibility of the project is at this time?
Ms Jones: The minister approved the project on 2 April. At this point, it is up to the company to progress the
conditions and submit any required management plans to the minister for approval before commencement. The
primary plan is the environment management plan, which details all of the trigger levels and compliance criteria
for surface water and groundwater and radiation requirements and incorporates a mine closure plan. So that is the
primary plan required under the conditions.
Senator LUDLAM: And how long has the company got to complete all of that documentation?
Ms Jones: Senator, it is in the hands of the company to develop that plan. The timing is up to them.
Obviously, they will have their own financial and economic timeline they are working to. But the timing is in the
hands of the company, largely.
Senator LUDLAM: So, in theory, it could take up to five years before they have to write back to the minister
and say, 'We want more time?' So five years would technically be the maximum period of time?
Ms Jones: Well, before they would need to confirm with the minister that they are able to proceed, yes,
Senator.
Senator LUDLAM: The mine closure plan is within condition 3. I guess I found it objectionable, actually,
that the company had not submitted a mine closure plan before they had posted their documents to the
Commonwealth in the first place and remarkable that it was approved without such a document sighted. How
much documentation did the company provide to the Commonwealth to give the minister such that the minister
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was able to form a conclusion that the company knows how it is going to close this facility up at the end of the
mine life? How much have you actually seen?
Ms Jones: Well, these requirements cross a range of the areas of assessment of this project and are embedded
in the mine closure plan. Of course, such a plan was required at the state level as well. That is the first step. The
plan must be submitted to the department of mines in Western Australia and subsequently to us for assessment.
Senator LUDLAM: But how much work around mine closure had been assessed by the minister?
Presumably, something must have been done or he would not have had the confidence to give this thing the tick,
even a conditional tick?
Ms Jones: Through the assessment process there were assessment documentation in draft and final form.
Supplementary information was sought by the minister from the proponent on issues that cut across this matter.
To give a succinct response, I would probably have to take that on notice and come back to you, Senator.
Senator LUDLAM: Maybe if you could, yes. I am interested in the degree to which the approval conditions
side is open-ended. Does it have any lapse date at all, or is this an approval in eternity? If the company comes
back in 20 years, will it be live, or does it have a lapse date?
Ms Jones: It is really the five-year requirement. There is an expiry date of approval. This approval has effect
until 31 March 2043. That is on the front page of the actual approval decision.
Senator LUDLAM: If they do not get their plans in before the year 2043, this will have to be assessed again.
That is thinking ahead.
Ms Jones: Again, we have the five-year condition, Senator.
Senator LUDLAM: But the five-year condition is just that they need to write to the minister to say, 'Hey,
guess what? We're still keen. We'll be in touch before 2043.' There are no conditions attached to what would need
to be in that letter. I am not trying to labour the point, but that is not like a request for further approval. That is just
letting the minister know that they are still in play.
Ms Jones: There is an opportunity for the minister at that time, Senator, to look at whether the conditions still
represent best practice at that time and to consider whether conditions may be varied or otherwise.
Senator LUDLAM: A short time ago, the legislative council of the state parliament of Western Australia
unanimously passed a resolution which took me a bit by surprise. Nonetheless they did. It acknowledged that the
best practice policy of 10,000-year mine waste isolation, which is followed in the Northern Territory and applies
in Kakadu, should also apply at Western Australian uranium facilities. Can you show us where in these conditions
that resolution of the Western Australian legislative council has been met or attended to at all?
Ms Jones: The conditions refer to a requirement that the proponent and the risks must be managed to be
acceptable in the long term. Conditions 17D and 18A are examples of where that requirement is embedded in the
condition set.
Senator LUDLAM: Long-term risk. I am looking at 17D now. Where is the definition of long-term set down?
Ms Jones: It is not defined in the condition set, Senator.
Senator LUDLAM: Long-term might be 100 years. That sounds long term to me. Is your answer in fact that
there is no reference to that 10,000-year mine closure or tailings isolation clause that applies in Kakadu or that
was referenced by the Western Australian parliament?
Ms Jones: The condition set does not refer to a 10,000-year long-term definition. There has been modelling
undertaken as part of the assessment to look at the fate of surface water seepage from the tailings. It has
demonstrated that the impact would be acceptable over a 10,000-year period. But for the condition sets in the
manner you have asked me, no.
Senator LUDLAM: Acceptable over a 10,000-year period. That is taking on a remarkable degree of
confidence for people who live 10,000 years hence. Is that actual date referenced anywhere in the minister's
statement of reasons or in these conditions? I could not find it.
Ms Jones: Only in relation to modelling.
Senator LUDLAM: It is my understanding that the company does not propose to line the base of the tailings
cells as they are progressively backfilled as the company moves through the deposit. Is that your understanding,
and is it acceptable to the Commonwealth that the water seepage will just be able to drop straight through the dam
and into the groundwater?
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Ms Jones: Condition 18 refers to the tailings storage facility, Senator. There is a reference in 18C to a
compacted clay liner of 300 millimetres thickness and a certain permeability. Whether that applies to the actual
floor of the facility I would need to take on notice and come back to you.
Senator LUDLAM: I can let you know, to save you the trouble of looking it up, that it does not.
Ms Jones: It is normal practice in the creation of ponds to compact in order to have a reasonably stable floor
in such a facility. The test of that will be in condition 19, where the minister has required that the storage facility
design must be reviewed by an independent scientific expert. So there is another check and balance in the system
there, Senator.
Senator LUDLAM: Would that be somebody like the OSS or a consultant to the company? Who would that
be?
Ms Jones: That party needs to be approved by the minister and is yet to be determined, Senator.
Senator LUDLAM: I hope that would be the OSS. In terms of current standards of best practice, could we
apply current standards of best practice meaning what is occurring at Ranger at the moment, where about 150,000
litres a day are falling through the floor of the tailings dam, or at Roxby, where vastly larger quantities of
contaminated water are seeping out of the base of the tailings dam, which is also unlined? Is that what the
minister refers to here by current standards of best practice? That is the prevailing status quo. Or are you trying to
improve on that performance?
Ms Jones: I do not think I can respond to that, Senator. The conditions require a best practice standard to be
demonstrated.
Senator LUDLAM: Can you tell us what that means?
Ms Jones: And world’s best practice. Again, the minister would be looking for the company to specify and
demonstrate that. Once submitted, the minister will consider whether he needs to seek advice on that or approve
it.
Senator LUDLAM: Let me phrase this in a different way. I want to get down to what standards of best
practice actually mean. Otherwise this is not worth the paper it is printed on. Do current standards of best practice
mean lining the base of the tailings dam so that water does not simply fall straight through the floor of the
facility? Would that be one example of best practice?
Mr Knudson: I would point out that in terms of providing our advice to the minister, we sought a number of
external sources of advice, including from Geoscience Australia, the Australian Radiation Protection and Nuclear
Safety Association and the Office of the Supervising Scientist. They would be in a far better position to provide
the exact details on individual best practice. We would certainly be happy to take this question on notice and
come back to you if there are particular areas of what is considered best practice that you would like to have a
better understanding of. We could come back on that.
Senator HEFFERNAN: Have you taken their advice?
Mr Knudson: It would be through the question on notice, absolutely.
Senator LUDLAM: I suspect that if I chase Geoscience Australia, they will refer me straight back to you as
soon as I refer to this project. I am not trying to be cute here. I am also not trying to cloud the issue. It is a very
specific issue. When you talk about best practice—I am actually more interested in your view; you are doing the
assessment—does that mean contaminated water laced with radionuclides and other chemical contaminants
should be allowed to fall and seep through the floor of the dam, as is current practice at other uranium mines in
Australia or not? It just means lining it. That is the question.
Ms Jones: Again, we would like to take that on notice because I am confident that this issue was looked at as
part of the assessment process. I would like the opportunity to review that aspect of the assessment and come back
to you.
Senator LUDLAM: Talk me through how the process would work. The independent scientific expert has
taken what Toro has produced, assessed it and given his or her view to the minister, who has already had to
approve that scientific expert as being an appropriate body to undertake that work. Will that assessment be put
into the public domain of the independent expert?
Ms Jones: That is a future consideration, Senator. It would be open for the minister to do so at that time.
While the conditions do not specifically specify that requirement, it will be open to him or her to consider that.
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Senator LUDLAM: I will ask you to take this on notice and then we will move on. If you want to refer back
to Geoscience Australia, that is fine, I guess. What is the department’s understanding of what current standards
are best practice for tailings storage for this sort of contaminated material? What would it actually look like?
Dr Dripps: Senator, the officer has already indicated that she will take that question on notice.
Senator HEFFERNAN: With respect, surely a tailings dam, whether it is world's best practice or not, should
be a dam and not a leaking pond. Would not the most basic principle be that it should not leak?
Mr Knudson: Obviously we would have looked at—
Senator HEFFERNAN: That was a nod.
Ms Jones: Yes, Senator. That is why I am saying that you would expect that the assessment process for this
project would have looked at that.
Senator HEFFERNAN: You would expect it not to leak.
Ms Jones: That is exactly right.
Senator LUDLAM: That would be world's best practice in my view as well. You have nailed it there, Bill.
Ms Jones: In this matter, the primary concern was the movement of water through where the tailings facilities
were. The seepage of that water was less of an issue.
Senator LUDLAM: That is also my understanding of how the assessment was conducted. So this is a set of
tailings cells where the material has been dumped back below ground level across an ephemeral water course in a
lake bed in an area that floods ephemerally. That is what we are proposing here. So the company, with the
collusion of the Western Australian state government, said, 'Why don't we line the sides so that that lateral flow in
a flood event is reduced?' They have not, however, proposed to line the base of the dam, which means, as is
happening at Ranger at the moment, you get flow directly down into the groundwater mound beneath the water
course. That was more of a statement than a question.
Ms Jones: Senator, there are a range of conditions that go to the issues you have raised, including the bunding
of the bund walls to prevent surface water going into the pits. There are other aspects of the condition set that
address those issues. There are a number of requests for statements of reasons with regard to the minister's
decision on this project. The minister provided his statement of reasons on 16 May, and that has been published
on the department's website—
Senator LUDLAM: I have it right here.
Ms Jones: for everybody to reference. So the best explanation for the minister's decision is contained in that
statement of reasons.
Senator LUDLAM: I have that here.
Ms Jones: Other than that, the questions on notice will supplement.
Senator LUDLAM: I have a lawyer looking over that for me right at this point.
Ms Jones: The minister has required a capacity to apply a bond over and above what the Western Australian
government will require, albeit that is yet to be—
Senator HEFFERNAN: And when is the bond retrievable?
Ms Jones: When is the bond retrievable? I am unable to answer that, Senator, because—
Senator HEFFERNAN: You might take that on notice.
Ms Jones: There are a few steps to go.
Dr Dripps: We will take that on notice.
Senator LUDLAM: I was going to head to the same place. This is my last bracket of questions.
CHAIR: I am going to move in a minute.
Senator LUDLAM: We will wind it up. Can you describe for us, firstly, your understanding of whether the
Western Australian government requires the company to post the bond upfront rather than over the period of the
mine's life? Secondly, just outline for us, if you would, what the Commonwealth minister has asked the company
to provide over and above their state obligations.
Ms Jones: The requirements are set out in conditions 24 to 27, Senator. So, again, we are talking about a
process that is yet to be commenced. The company is developing an environmental management plan, which
incorporates the mine closure plan. The Western Australian government is yet to set the level of the bond. The
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
minister, in condition 25, has asked for evidence of the cost of the bond set by the WA government. The minister
has the capacity to set an additional bond—
Senator LUDLAM: Over and above?
Ms Jones: If he believes that is required.
Senator LUDLAM: So the Commonwealth has not imposed any obligation over and above the Western
Australian obligation, but they have left themselves open to do so?
Ms Jones: Correct.
Senator LUDLAM: We are taking an awful lot on faith here, are we not? We do not even know how much
the clean-up is going to cost. There is no mine closure plan. We do not know how much of a bond they will be
required to post. There is a lot being taken on faith here, considering what they are proposing to do with the water
course. Maybe this will be my very last question. The Chair has been extremely patient. In the statement of
reasons, point 47 on groundwater quality notes that tailings seepage into groundwater from the TSF could be
significantly slowed by a clay liner. Was that condition ultimately adopted in the set of conditions the minister
posted? Sorry, it is a clay liner or a high density polyethylene barrier around the TSF.
Ms Jones: Yes. That was taken up in the condition set.
Senator LUDLAM: The barrier around was? Again, I am back at the floor of the dam, I am afraid, because
that is where the water seeps out.
Ms Jones: And we are taking that question on notice, Senator.
Senator LUDLAM: That is where we are left. Thanks, Chair, for your indulgence.
Senator HEFFERNAN: I presume the base there was shale or a porous gravel. It should have been clayed
before they even thought about it. I want to go to the issue of salt. The three main mining tenement approvals for
coal seam gas in Queensland involve approximately 40,000 wells. There is great variation because of the quality
of the seams that are being mined for coal seam gas. They estimate 700,000 tonnes, which is very unequally
divided between the tenements, with Santos having the best tenement. There is environmental approval, and the
mining licence has been issued. The environmental approval has been given. Could you explain to me what they
are going to do with 700,000 tonnes of salt a year, given that the approval has been given to mine?
Dr Dripps: As we indicated this morning, the management of salt is a key consideration in the development
of the water management plans. Mr Gaddes has had the opportunity to look further into this matter since we last
spoke on it. I will just pass over to him.
Mr Gaddes: We did undertake to give you more detail about the brine management and the salt crystal
management on notice. I do not have a lot more to provide than that at this time. I am aware now that APL and
QGC are undertaking trials to reinject. I am aware that Santos—I followed up since we had our discussion—has
had some success in that regard. Their crystal salt management will be a lot easier and they will not need to store
so much.
Senator HEFFERNAN: As I said this morning.
Mr Gaddes: What I did not get to reflect this morning is that there is a period of time for them to resolve
these issues. So while there is a great deal of salt to be produced, there is a period of time for them to solve these
issues.
Senator HEFFERNAN: So the environmental approval and the commencement of mining assumes that there
will be a solution, but we do not know what the solution is?
Mr Gaddes: Well, the worst case scenario—
Dr Dripps: The environmental approval is conditional on there being a solution developed and approved by
the minister.
Senator HEFFERNAN: But the mining commenced, and that is an afterthought, as I understand it. There is
no provision. The trap that has been set for this gas is they have forward sold some of it to get the banking right
and bill Gladstone et cetera. The market has sort of semicollapsed because of the abundance of availability in
some areas where they do not give a rats about the environment. So the make-good provisions, where they get
their bond back when the well is sealed, are meaningless.
Dr Dripps: The projects were approved in 2010 with an extensive and exhaustive set of conditions, including
water management plans.
Senator HEFFERNAN: I am right across it.
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Dr Dripps: They include the requirement to adequately manage salt.
Senator HEFFERNAN: They say in their response to that that they will make good. But saying they are
going to make good does not mean anything. How do you make good? How do you make good?
Senator Conroy: That is a rhetorical question. Do you have an actual question?
Senator HEFFERNAN: Settle, Minister. How do you make good the contamination between the Wiluna and
the Springbok aquifer? How do you make good that aquifer?
Dr Dripps: Senator, as we have indicated in our evidence already today, the approvals that have been given
require that the companies undertake a water management plan to the satisfaction of the minister. That water
management plan does need to include descriptions of how they intend to manage the salt. If they are unable to
find ways to manage the salt, it is unlikely that their water management plans would be developed. As the
secretary indicated earlier, while these projects are progressing, the LNG facilities on Curtis Island have not yet
been completed, so they are not mining yet.
Senator HEFFERNAN: So if there is the requirement for make good, have you done a model of the money
that would be available through the bond system?
Ms Jones: The modelling that is being undertaken is modelling of the aquifers and the degree of connectivity
and the likelihood of impact. If there are unacceptable impacts that cannot be managed, the activity will not
progress.
Senator HEFFERNAN: Prior to the change of government, I had a deep discussion with Anna Bligh and her
people about this. There is no solution. They have not got a plan. They just say, 'We will make good.' That is what
has happened in the Bass Strait. No-one is going to make it good. There is better than a 50 per cent chance of up
to a 17-metre subsidence of the coast down there and no-one wants to pick up the responsibility. The exact same
thing is going to happen in Queensland. So you say this morning—thank you for your information—that maybe
one of the options is to store it underground.
Mr Gaddes: I said the default position is to store it underground. The proponents are working on options
which are better than that.
Senator HEFFERNAN: And, per annum, approximately a million cubic metres of medium course salt has to
be stored.
Mr Knudson: And that will be the responsibility of the proponents to come forward with how they can
actually do that.
Senator HEFFERNAN: If they have to do that, they will not be able to meet their financial commitments on
the market price of gas. They have made no allowance in their sums for anything to go wrong.
Dr Dripps: They are commercial considerations for the proponents.
Senator BIRMINGHAM: I want to cover off a couple of issues quickly in the time available, if possible.
Firstly, on the legislation that is before the parliament at present, which relates to some of the issues we have been
discussing—the amendments to the Environment Protection And Biodiversity Conservation Act that will establish
a new trigger in relation to water in the EPBC Act—what is the total cost to government of implementing those
amendments?
Dr Dripps: I am sorry. Senator Heffernan was speaking. I did not hear the question, Senator Birmingham.
Senator BIRMINGHAM: Senator Heffernan is noticed even when he is not behind the microphone. What is
the total cost to government of implementing the amendments to the EPBC Act relating to the water trigger?
Mr Barker: There is an allocation in the budget indicated in the budget papers relating to the implementation
of the water trigger. It is approximately $38 million over the forward estimates. The amount that relates
specifically to the environment assessment and compliance division's function is approximately $7½ million over
the coming financial year. That includes a component for the core assessment function, a component for the
compliance function and related components for support functions for that as well.
Senator BIRMINGHAM: Thanks, Mr Barker. That is $38½ million, as you indicate, that is identified over
the forward estimates. I might come back—
Mr Barker: Sorry, Senator. I have just been corrected. It is about $34½ million. So $34½ million relates
specifically to the environment assessment and compliance function. There is also an element that relates to the
Office of Water Science as well in that. I referred earlier to the fact that the $38 million figure is a global figure
set out in the budget papers. But the amount that is involved specifically relating to the assessment function, the
compliance function and those support functions that I referenced is about $34½ million.
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Senator BIRMINGHAM: Thanks, Mr Barker. That $34 million is also related to, presumably, providing the
scientific advice, information and assessment analysis that the department needs to undertake the assessments and
so forth?
Mr Barker: Yes. That is correct.
Senator BIRMINGHAM: That is $38½ million of taxpayers money in quantum to do that administrative
cost. The budget papers also indicate that the cost of the reforms will be partially offset through enhanced cost
recovery arrangements from July 2014. These changes are estimated to increase revenue by $17.7 million over
three years. Can I be clear here: is that $17.7 million offsetting the $38.5 million, or is it offsetting the costs of the
reforms in totality and, in fact, is an additional degree of funding required to implement them on top of the $38.5
million?
Mr Barker: No. It would not be on top of that figure. The cost recovery figure is projected to commence in
the 2014-15 financial year. The cost recovery relates to the assessment specific function. There is a cost recovery
impact statement that details the analysis underlying the costings for that particular function. So that is an amount
of funding that would be delivered into consolidated revenue from cost recovery and then a budget allocation of
the department to perform that specific function.
Senator BIRMINGHAM: So $38.5 million is the cost there. Then industry in future will be levied for an
aspect of that cost. Insofar as it fits into the forward estimates, it is estimated to be about $17.7 million. Thank
you. You indicated before that the cost to the department in the first year is about $7.5 million. Is that because
there is $1 million off to the Office of Water Science?
Mr Barker: That is correct.
Senator BIRMINGHAM: So essentially there is $1 million in each of the forward years to the Office of
Water Science of the four, and the rest is purely departmental administrative costs in terms of undertaking these
functions. Note that beyond the first year they bounce around, a touch over, a touch under, $10 million. Is that
expected to basically be the ongoing required cost to administer this function of the EPBC Act?
Mr Barker: On the best available information to us, that is the projected estimates that have been arrived at.
Senator BIRMINGHAM: So in terms of $10 million a year for this amendment, what is required in terms of
costs there? Presumably the bulk of that cost is in additional staff?
Mr Barker: That is correct.
Senator BIRMINGHAM: So how many additional staff are required to undertake the assessments and
associated activities?
Mr Barker: Our estimate of the additional staff, again referring to the staff in the environment assessment and
compliance division, is in the first financial year approximately 43, increasing up to around 50 in the following
years. That is an element of staff that relate to the assessment function. There would be approximately 30 once
there is a fully ramped up staffing profile to implement the water trigger and then approximately 15 for the
ongoing compliance and post approval monitoring function and then approximately five staff on average over the
out years for support functions, such as policy and policy development and training and, again, those sort of
support functions to support both the compliance and the assessment component of that.
Senator BIRMINGHAM: So 43 in the first year, ramping up to 50 in the following years, initially essentially
all of them helping to get the assessment side of things working but gradually transitioning to have fewer on
assessments, down to about 30 and 15 in compliance type activities and five working for support across both?
Mr Barker: I should also add that as with all matters of national environmental significance, assessments are
done on a whole-of-project basis so that one particular project may obviously have impacts on a number of
different areas of national environmental significance. So the assessment would be a wrapped up assessment of a
number of those things.
Senator BIRMINGHAM: Indeed. Mr Barker, to that end, what is the total cost of administering the EPBC
Act?
Mr Barker: I am sorry, Senator, the total cost of implementing the water trigger or the EPBC in total?
Senator BIRMINGHAM: The EPBC Act.
Mr Barker: I am sorry, but I do not have that figure in front of me at the moment.
Dr Dripps: We will just have a quick look in our papers and see if we can answer that question. It will be
outside Mr Barker's responsibilities.
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Mr Knudson: In terms of the division as a whole—so beyond incremental funding to the water trigger—our
budget in terms of 2012-13 was $32 million.
Senator BIRMINGHAM: There was $32 million to the division, and this is the division of the department
that basically exclusively deals with EPBC Act assessment and compliance matters?
Mr Knudson: That is correct.
Senator BIRMINGHAM: So that $32 million will grow to $42 million as a result of this increase, or are you
having to take a haircut like other aspects of the department this year?
Mr Knudson: It is a fair point that if we add in the $8 million or so for the water trigger, roughly we would be
looking at a budget notionally of around $40 million for the division.
Senator BIRMINGHAM: Around $40 million, looking into the future for the cost of running the EPBC Act.
How many staff are currently in the division?
Mr Knudson: As of 30 April, we had 210 employees in the division.
Senator BIRMINGHAM: With obviously, as we have ascertained, you looking to potentially a further 50
over the forward years from adding on this additional area of regulation. Related to that, the budget papers also
show a reduction in funding. That reduction in funding goes to some of the recommendations from the Hawke
review. It indicates that $9.7 million will be reduced in funding over four years because of the delayed delivery of
the government's response to the Hawke review. Were these types of measures recommended in the Hawke
review to try to somehow streamline the operation of the EPBC Act? Would they be included in what was
envisaged to occur within that $9.7 million envelope?
Dr Dripps: There were a number of measures contained in the government response to the Hawke review that
require legislative change in order to deliver them. So they are the measures that have been delayed currently.
Senator BIRMINGHAM: Part of those measures include aspects that were intended to make the operation of
the EPBC Act more efficient or more streamlined, were they not, Dr Dripps?
Dr Dripps: Some of them were. Some of them also included the implementation of cost recovery, the creation
of a new matter of national environmental significance and a number of other things.
Senator BIRMINGHAM: So when have those measures been delayed until?
Dr Dripps: Those measures have been delayed until the next period of parliament.
Senator BIRMINGHAM: Until the next period of parliament?
Dr Dripps: Yes.
Senator BIRMINGHAM: So does that mean a new decision by whoever the government is after the
election? Is that what you are saying, Dr Dripps?
Dr Dripps: Yes.
Senator BIRMINGHAM: So there is no current commitment within government that those changes to the
EPBC Act will actually be implemented. It will be a matter for future judgement?
Dr Dripps: The legislation has not yet been introduced into the parliament, so that would necessarily be the
case. Ms Colreavy is able to provide further information to Senator Waters on the Gladstone issue, if that is the
desire of the committee. But I do not want to—
Senator BIRMINGHAM: Ask your question, Senator Macdonald.
Senator IAN MACDONALD: I found my letter. It is a series of emails, which I have given to the secretary to
table and to give to you. It has the applicant saying it has given all the details. It says the conclusion is explaining
it all—that they do not have to apply. They say to the officer, 'Do you agree?' The officer says, 'I'm unable to
provide comment. It's up to you to determine whether the action should be referred to the department. But please
note that if you get it wrong, compliance action may be taken.' It is all in that letter, but I have tabled it there.
CHAIR: There are two pieces of correspondence tabled here. One is the correspondence that Senator
Macdonald has just alluded to. The other one is a link that provides guidance on the management of flying foxes,
as requested by Senator Macdonald and other senators, from the department. So both those documents are tabled.
Senator IAN MACDONALD: That is good. I think my constituents actually had that and they referred to it.
Senator BIRMINGHAM: If we are having a brief interlude, we may as well, as long as it is a brief response,
whoever was about to give it.
Dr Dripps: Ms Colreavy has some further responses on the Gladstone dredging matter.
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Senator WATERS: Thanks, Senator Birmingham. Thanks, Ms Colreavy.
Dr Grimes: Chair, in addition, Senator Colbeck had indicated previously that he wanted a reaction to a certain
matter dealing with the boundaries of the World Heritage area in Tasmania. We are able to provide further
information at an appropriate stage if the committee would like us to do that this afternoon. We are very much in
the hands of the committee.
Senator BIRMINGHAM: Not right now would be my response. After that interlude, we were just having a
look at the government's response to the Hawke review of $9.7 million—
Senator WATERS: I think we have not had the interlude yet.
Ms Colreavy: Senator, you asked about the modelling. The modelling for the western basin dredging project
was similar to the modelling that was undertaken by GBRMPA in their recent research project. So, in essence,
that was your question.
Senator WATERS: Yes. That is it, thank you.
Ms Colreavy: I have asked the staff to investigate the documents for it. Unfortunately, it is really complex.
There was certainly extensive modelling undertaken. We have got a lot of documents on the modelling. We
referred that for expert advice. We are unable to pull it together quickly enough during this interlude to actually
give you a definitive answer on what was investigated and what was not. I have a copy of the statement of reasons
that was provided. I have gone through it. I am happy to give you a copy, but I do not think—
Senator WATERS: I think I have already read that one. It does not really shed any light on that particular
question.
Ms Colreavy: No. I was just going to say I do not think it really helps you go to the technical detail of the
question. But we could take that on notice and actually provide you with an overview, if you like, of what the
modelling was and what it covered in that project.
Senator WATERS: I would appreciate that. As promptly as you can would be greatly helpful.
Ms Colreavy: We will do our best.
Senator WATERS: Thanks very much.
Senator BIRMINGHAM: So, to be clear, at present, the $9.7 million that has been stripped out is not delayed
funding; that is removed funding?
Dr Dripps: That is funding that would have been expected to have been received as a result of cost recovery
being implemented.
Senator BIRMINGHAM: Are you sure about that? I think you will find that the deferral of cost recovery
revenue relates to $17.8 million.
Dr Dripps: I am happy to check.
Senator BIRMINGHAM: There are two measures there. There is the reduction in funding for the delayed
introduction of amendments to the act, which is $9.7 million. I was going to come to the cost recovery measures,
which have been deferred to 1 July 2014, which reduce revenue by $17.8 million.
Dr Grimes: I am going off memory here, but I think they are linked. It is that the offset of the full $17 million
was considered more broadly in the budget process and is in incorporated in other budget measures that are not
linked to cost recovery as such. If you like, the department had to make up part of the gap in the funding that was
provided to the department.
Dr Dripps: That is right.
Dr Grimes: I think the officers will be able to confirm that that is the case.
Dr Dripps: I just remembered.
Senator BIRMINGHAM: So $9.7 million was to make amendments to the act that may or may not have
included aspects required for the cost recovery but also included changes related to the efficient operation of the
act as well as changes related to listing practices and the addition of a new trigger and all of the things that the
government theoretically accepted as part of the Hawke review recommendations. That $9.7 million has been
withdrawn as funding to the department and there is no timeline for that funding to come back on for those
measures to be undertaken. That much is correct?
Dr Grimes: Essentially, with the deferral of the $17 million, we were asked as a department to provide some
savings to help offset that impact on the budget bottom line. Obviously the deferral has an impact on the overall
budget bottom line. There is less revenue coming in. I have not got the figures in front of me here, but I am going
Wednesday, 29 May 2013 Senate Page 87
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
off the figures you are using of $9.7 million. Anyhow, there was certainly a requirement of the department to
reduce its expenditure in order to fill some of the gap from the cost recovery.
Senator BIRMINGHAM: Which, according to the budget paper, is following a decision to delay the
introduction of amendments to the EPBC Act until 1 July 2014. It says:
The legislative amendments will support the delivery of the government's response to an independent review of the act.
Not will, but would have, I think, is the way it should read. It goes on, though:
The cost recovery measures are not being delayed indefinitely. They are only being deferred by a couple of years.
Dr Grimes: To 1 July 2014.
Senator BIRMINGHAM: That is right. So they are still happening and that revenue will still eventually
come in. What level of revenue will come in under those cost recovery measures in the budget years from 1 July
2014?
Dr Grimes: I do not have those figures with me, but we might see whether any officers have it. Otherwise we
would have to take that on notice. We are looking towards our budget staff in the rear to see if they have got those
figures on cost recovery revenue.
Senator BIRMINGHAM: If they can look into that while we continue.
Dr Grimes: They can look at that while we continue. If we can help you now, we will.
Senator BIRMINGHAM: Thank you. My concern here is the inconsistency, I guess, in the fact that measures
that would include measures to streamline or improve the operation of the act have been deferred indefinitely but
those measures that bring cost recovery actions into the act have been deferred only by a couple of years. Can the
department give any confidence that the types of changes to the act that had been envisaged and accepted,
allegedly, by the government in its response to the Hawke review will be legislated any time in the forward
estimates?
Dr Dripps: We are well advanced in the drafting of those legislative changes, and the introduction of those
changes will be subject to the views and priorities of the government.
Senator BIRMINGHAM: The department will need funding if it is to be able to enact those changes, and
that funding has been withdrawn.
Dr Dripps: We have some funding and we have the ability, to a limited extent, to reprioritise within the
existing activities of the department. But, for the purposes of the budget, all of the measures that were included in
the Hawke review were also considered and accounted for in the current budget.
Senator BIRMINGHAM: Were also considered and accounted for in the current budget. Does that mean
they could be delivered within the current budget, or does that mean the funding has been withdrawn in the
current budget?
Dr Dripps: As the secretary indicated, there is a delay in the potential receipt of cost recovery funding. That
cost recovery funding would have funded assessment activities. The funding that had previously been used by the
department to deliver those assessment activities would have been made available to deliver reform activities.
That particular sequence of events is not happening in the immediate period.
Senator BIRMINGHAM: Does the department consider that $10 million per annum to administer one new
aspect of the EPBC Act is excessive? Is there any way that could be done cheaper, or is that just the cost of such
regulation?
CHAIR: A bit of an opinion is being asked for.
Senator BIRMINGHAM: Well, in terms of administering the act and administering the amendment, is this as
low a cost mechanism as is possible?
Dr Grimes: Clearly this will be a new set of activities for us. The implementation and administration of a
water trigger will be a new function for us. We make our best estimates. Those estimates are subject to a pretty
robust budget process, including scrutiny with the Department of Finance and Deregulation through the budget
process. It is our best estimate of the costs of administration. It is not intended to be a biased estimate one way or
another but rather our best estimate on the information we have. But this is a new activity for us. We have not
done this before. We will implement with the budget that we have got.
Senator BIRMINGHAM: Until a few months ago, it was not envisaged that you would do this activity
either, was it?
Dr Grimes: This was a recent decision by the government.
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Senator BIRMINGHAM: I want to quickly move to one other issue. Hopefully, you can get those cost
recovery figures before six o'clock. The department has confirmed that it is assessing an application from the
Border Protection Command relating to the Environment Protection (Sea Dumping) Act 1981 to get a permit in
relation to that act. Where is that application assessment up to?
Mr Knudson: The assessment is currently underway, Senator. In terms of what it proposes to do, it is looking
at different sites for the safe disposal of vessels. There is a range of potential sites; I believe it is 11, including two
around Christmas Island. As I mentioned at the beginning, it is currently under assessment, and that assessment is
not yet complete.
Senator BIRMINGHAM: Currently under assessment. So it was lodged, as I understand it, on 11 February
2013. Is there a timeline for assessment from there?
Ms Callister: In terms of an update of where we are up to with the process, we actually met last week with
AFMA and with the Border Protection Command. I have written to them about a number of questions that we had
in relation to their application seeking further information. In terms of the statutory timeline through the sea
dumping process, it is different to what we have with the EPBC Act, where you stop the clock and it holds it at
the current timeframe. Under the sea dumping act, you revert back to day zero. So effectively we still have quite a
lot of time under the clock to assess that process. They have also approached us in relation to a possible waiver of
the fee for that. We are looking into whether or not that would be possible or appropriate. So I would say that it is
actually progressing well and that we had some very, very constructive discussions about it last week.
Senator BIRMINGHAM: What would the fee be? What extra information have you requested?
Ms Callister: I do not have all the full details of the information we sought. It was several pages of
information about a range of things, such as how they were intending to dispose of the vessels, what they would
be taking off them and how they would be burning them.
Senator BIRMINGHAM: Could those things not have been included in the initial application?
Ms Callister: Not in the full detail that we felt that we needed to be able to fully assess it. I am just trying to
see if I can find information on the sea dumping fees, which I thought I had here. I cannot actually locate it. It
would just be the standard fees that are applicable under the act.
CHAIR: Senator Birmingham, there are a couple of corrections and statements that need to be made before
we wrap up, so if you could make this your last question, we will go back and get some clarification.
Senator BIRMINGHAM: Border Protection Command indicated that their last permit expired in 2005. Is
that correct? How is it that they have been operating for eight years without a permit? Does it mean that they have
been in breach of the sea dumping act?
Ms Callister: I am not aware when their last permit expired, so I would need to take that information on
notice.
Senator BIRMINGHAM: Well, that is what they told me in Senate estimates earlier today, so let us take
their word for it that it expired in 2005. If, according to them, they have been operating for eight years without a
valid permit and in that time they have sunk hundreds of vessels, more than 400 vessels just in the last two years
alone, according to the evidence they gave me today, have they been operating in breach of the act?
Ms Callister: As was discussed with you the last time at Senate estimates, and I think there was further
information provided to you on notice, there are actually provisions under the act that allow for the disposal of
vessels when they are under circumstances where they might cause harm or damage or risk to safety either to the
vessels or to the people involved. I think in a number of these instances these vessels are in a very poor state of
repair. So it would be appropriate for them to be disposed of at sea.
Senator BIRMINGHAM: Well, if they did not need a permit beforehand, why do they need a permit now?
Ms Callister: They have sought to get one for us to provide them with a greater range of operational options
about how they can dispose of those vessels. We are progressing with assessing their application on that basis.
Dr Grimes: In the first instance, Chair, Senator Birmingham was seeking information on cost recovery
revenue estimates. I have the current updated estimates. The figures for 2012-13 are zero. For 2013-14, it is
$160,113. The reason why there is a bit of cost recovery in those years is that there are increases in wildlife
permit fees, which are not related to legislative change. They will be through regulation or like instruments.
Revenue in 2014-15 is $7,853,951. In 2015-16, it is $12,002,943. In 2016-17, it is $14,184,504. They are our
updated revenue estimates.
CHAIR: Is there anything more?
Wednesday, 29 May 2013 Senate Page 89
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Dr Grimes: I think Ms Rankin has a response to those issues that were raised by Senator Colbeck.
Ms Rankin: As requested by Senator Colbeck, we have reviewed our evidence in light of the 30 April 2013
letter from Minister Burke to Ms Jane Calvert. We confirm our previous advice that the Tasmanian wilderness
World Heritage boundary is settled for the purposes of the nomination. The department's answer is consistent with
the text in the letter, which states:
My officials continue to work closely with the Tasmanian Government and Forestry Tasmania to refine the management
boundary for the nominated extensions to the Tasmanian wilderness World Heritage Area. Agreed objectives of this process
are to maintain the size and values of the nominated World Heritage Area …
To provide further detail, the Australian government is currently facilitating the detailed mapping process for the
purpose of refining the boundary at the scale required for a gazettal boundary, which does not happen until after
the World Heritage Committee has made its decision. We are continuing to work closely with technical advisers,
the Tasmanian government and Forestry Tasmania to ensure that a workable management boundary is achieved.
The final adjustments to the boundary for the extension will not adversely affect the ability of Forestry Tasmania
to supply 137,000 cubic metres of high-quality sawlogs annually and will preserve the World Heritage values for
which the Australian government submitted its request to the World Heritage Committee for an extension of the
Tasmanian wilderness World Heritage area.
CHAIR: Thank you. That concludes the examination of the Sustainability, Environment, Water Population
and Communities Portfolio. I thank the minister and officers for their attendance. We will now suspend for dinner .
Proceedings suspended from 18:01 to 19:01
Page 90 Senate Wednesday, 29 May 2013
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
BROADBAND, COMMUNICATIONS AND THE DIGITAL ECONOMY PORTFOLIO
In Attendance
Management and Accountability
Mr Drew Clarke, Secretary
Mr Abul Rizvi, Deputy Secretary
Mr Ian Robinson, Deputy Secretary
Ms Nerida O’Loughlin, Deputy Secretary
Outcome 1 - Develop a vibrant, sustainable and internationally competitive broadband, broadcasting and
communications sector, through policy development, advice and program delivery, which promotes the
digital economy for all Australians.
Program 1.1 –Broadband and Communications Infrastructure
Mr Ian Robinson, Deputy Secretary
Mr Mark Heazlett, Acting First Assistant Secretary, Telecommunications Division
Mr Philip Mason, Assistant Secretary, Telecommunications Regulation Branch
Mr Daniel McCarthy, Assistant Secretary, Shareholder and Technical Advice Branch
Program 1.2 – Telecommunications, Online and Postal Services
Mr Abul Rizvi, Deputy Secretary
Mr Richard Windeyer, First Assistant Secretary, Digital Strategy Division
Mr Keith Besgrove, First Assistant Secretary, Digital Services Division
Mr Andrew Maurer, Assistant Secretary, Spectrum
Mr Brian Kelleher, Assistant Secretary, Convergence Implementation
Mr Chris Drew, Acting Assistant Secretary, National Security and International
Program 1.3 - Broadcasting and Digital Television
Ms Nerida O’Loughlin, Deputy Secretary
Dr Simon Pelling, First Assistant Secretary, Broadcasting Division
Ms Marianne Cullen, Project Director, Switchover Division
Mr Jason Dickie, Assistant Secretary, Public Interest Broadcasting Branch
Ms Ann Campton, Assistant Secretary, Broadcasting Policy Branch
Ms Sylvia Spaseski, Assistant Secretary, Broadcasting Restack Program
Corporate and Business
Mr Simon Ash, General Manager, Corporate and Business
Ms Anne Fleischer, Chief Financial Officer, Corporate and Business
Australian Broadcasting Corporation
Mr Mark Scott, Managing Director
Mr David Pendleton, Chief Operating Operator
Mr Michael Millett, Director Corporate Affairs
Australian Postal Corporation
Mr Ahmed Fahour, Managing Director and CEO
Mr Paul Burke, Corporate Secretary
Ms Christine Corbett, Executive General Manager, Retail Services
Mr Chris Blake, Executive General Manager, Corporate Affairs and People
Ms Catherine Walsh, General Manager, Human Resources
Ms Jane McMillan, General Manager, External Affairs
Special Broadcasting Service Corporation
Mr Michael Ebeid, Managing Director
Mr Peter Khalil, Director Strategy and Communications
Wednesday, 29 May 2013 Senate Page 91
ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Mr Jon Torpy, Chief Financial Officer
Australian Communications and Media Authority
Mr Chris Chapman, Chair
Mr Chris Cheah, Full-Time Authority Member
Mr Richard Bean, Deputy Chair
Ms Andree Wright, Acting General Manager, Digital Economy Division
Mr Giles Tanner, General Manager, Digital Transition Division
Ms Maureen Cahill, General Manager, Communications Infrastructure Division
Mr Andrew Kerans, Executive Manager, Spectrum Infrastructure Branch
Mr Mark Loney, Executive Manager, Operations Branch
Ms Jennifer McNeill, Acting General Manager, Content, Consumer and Citizen Division
Mr Brendan Byrne, General Manager, Legal Services Division
Mr Carsten Larsen, Acting General Manager, Corporate Services and Coordination Division
NBN Co Limited
Mr Mike Quigley, Chief Executive Officer
Mr Ralph Steffens, Chief Operating Officer
Mr Kieren Cooney, Chief Communications Officer
Mr Robin Payne, Chief Financial Officer
Mr Gary McLaren, Chief Technology Officer
TUSMA
Mr Robert Lomdahl, Chief Executive Officer
CHAIR: The committee will now commence its examination of the Broadband, Communications and the
Digital Economy portfolio. The Senate has referred the committee to the particulars of proposed expenditure for
2013-14 for Climate Change, the Broadband, Communications and the Digital Economy portfolio; and the
Sustainability, Environment, Water, Population and Communities portfolio and other related documents. The
Committee must report to the Senate on 25 June 2013. The committee has set Friday 26 July 2013 as the date by
which answers to questions on notice are to be returned. Under standing order 26 the committee must take all
evidence in public. This includes answers to questions on notice. Officers and senators are familiar with the rules
of the Senate governing estimates hearings. If you need assistance, the secretariat has copies of the rules. I
particularly draw the attention of witnesses to an order of the Senate of 13 May 2009 specifying the process by
which a claim of public interest immunity should be raised and which has been incorporated in Hansard.
The extract read as follows—
Public interest immunity claims
That the Senate—
(a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly
raising claims of public interest immunity as required by past resolutions of the Senate;
(b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as
to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate;
(c) orders that the following operate as an order of continuing effect:
(1) If:
(a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document
from a Commonwealth department or agency; and
(b) an officer of the department or agency to whom the request is directed believes that it may not be in the public
interest to disclose the information or document to the committee, the officer shall state to the committee the ground
on which the officer believes that it may not be in the public interest to disclose the information or document to the
committee, and specify the harm to the public interest that could result from the disclosure of the information or
document.
(2) If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer
the question of the disclosure of the information or document to a responsible minister, the officer shall refer that
question to the minister.
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(3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to
disclose the information or document to the committee, the minister shall provide to the committee a statement of the
ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the
information or document.
(4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result
from the disclosure of the information or document to the committee could result only from the publication of the
information or document by the committee, or could result, equally or in part, from the disclosure of the information or
document to the committee as in camera evidence.
(5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement
does not sufficiently justify the withholding of the information or document from the committee, the committee shall
report the matter to the Senate.
(6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from
raising the matter in the Senate in accordance with other procedures of the Senate.
(7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal
deliberations of, government, in the absence of specification of the harm to the public interest that could result from the
disclosure of the information or document, is not a statement that meets the requirements of paragraph (I) or (4).
(8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an
agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the
committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who
shall then be required to provide a statement in accordance with paragraph (3).
(Extract, Senate Standing Orders, pp 124-125)
Australian Broadcasting Corporation
[19:02]
I welcome the Honourable Senator Stephen Conroy, Minister for Broadband, Communications and the Digital
Economy and portfolio officers. I now call officers from the Australian Broadcasting Corporation. Mr Scott,
would you like to make an opening statement?
Mr Scott: No, thank you, Chair.
Senator LUDLAM: Mr Scott, you would be aware that the Greens recently supported the parliament in
passing an amendment to the ABC's charter, partly to defend your online activities. I think this is something that
you have advocated for in public in various fora. Can you tell us what material difference, if any, that will make
to the services that ABC provides online?
Mr Scott: Senator, as you would be aware, the ABC charter was, as I understand it, written in 1982 and
passed in 1983 in a pre-digital world. We always felt that the activities we took on in the online space were valid
under the previous charter but, every now and again, it would be put to us that it was not. We now are in a place
with the digital media services recognised the way they are in the charter that clearly all the activity that we have
done in recent years is absolutely core and essential to what it means to be a public broadcaster. So that means our
host of online services, the apps that we have rolled out, the service like iview—which has proven to be
immensely popular—are all clearly central to what it now means to be a public broadcaster in the digital era. This
charter resolution makes that absolutely clear and of course greenlights our ability to prioritise and develop this
online service in this way. So I think it is a good endorsement for the work that we have done and, again, it helps
us to set our strategic direction around continued investment in online and mobile services. All the data that we
see demonstrates enormous growth in the desire of the audience to consume content at a time they want, on a
device they want and in the format they want. Particularly when it comes to the consumption of our content on
mobile phones and tablets, we are seeing extraordinary growth.
Senator LUDLAM: Thanks for that. I might come back to that towards the end if there is time. I want to ask
you about another thing that has been raised recently of which you may be aware and about which you have made
your views known in the past—a campaign that may or may not eventually emerge from the Victorian Right of
the Liberal Party to privatise the ABC and the SBS. Could you give us your headline views on that idea?
Mr Scott: It was an issue that had a very brief burst of publicity and was immediately ruled out by the Leader
of the Opposition, the shadow communications minister and a number of others on the frontbench. I must say
that, in my time as managing director of the ABC, I have identified absolutely no public sentiment for privatising
the ABC. As you know, under our charter we operate in areas of broad appeal and specialist interest. We have
strong accountability to the public and to the parliament through the Auditor-General and various other ideas. I
must say though that the kinds of things we do as a public broadcaster are clearly things that the private sector
would not be in a position to provide. It would be highly unlikely that a privatised ABC would be able to make
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the same kind of investment in high quality news and current affairs, high-end drama, children's content and
providing services to regional and rural areas. A privatised ABC would greatly affect the diversity of content and
the investment in content that is available on Australian screens.
We know, because we survey it, that nearly 90 per cent of the Australian public believe that the ABC provides
a valuable or very valuable service. Around 70 per cent of Australia's tune in, listen, watch or log onto our
services every week. It is viewed globally as an outstandingly successful model of public broadcasting and there
is no reason to change any of the fundamentals that have underpinned this now for 80 years.
Senator LUDLAM: I might just correct you there. I believe the opposition communications spokesperson
said he thought it was a dumb idea, to paraphrase him. But the Leader of the Opposition said he thought it was a
debate worth entertaining.
Mr Scott: I do not have his quote here and, of course, he can speak for to himself. Bu my understanding was
that he immediately dismissed it as an idea.
Senator LUDLAM: Obviously the ABC does not run at a profit. What would be the consequences of
privatisation? Are there any similar broadcasters anywhere in the world where the private sector has been given
the opportunity—
Mr Scott: Not that I can recall. There are other broadcasters around the world that take advertising—and, of
course, there is the SBS model here.
Senator LUDLAM: We can wind that back.
Mr Scott: But if you look at the broadcasters that are like the ABC, the big national public broadcasters that
take advertising, my study of them has suggested that they fundamentally change the nature of the broadcaster.
You are no longer providing content for citizens and for audiences, you are providing content to attract
advertisers. It fundamentally change the nature of the content that you create, or purchase, and deliver, and
fundamentally it dilutes the impact and quality of the broadcaster. Certainly in my time in the role there has never
been any sentiment or desire to put advertising on the ABC as well.
Senator LUDLAM: Good, I am glad to hear you reaffirm that. I have one last question on this and then I will
leave the topic. If the ABC were to be privatised in whole or in part, would you have to shift your content
emphasis towards broader mass-market appeal and—
Mr Scott: Yes. I think what you can see if you look across the media landscape now is that, when you are
driving a media organisation for profit, you make decisions that are in the interests of the shareholder return.
When a program that might be of good quality, that might be distinctive, is not driving the profits, the
consequence is that the programs disappear. There are umpteen recent examples of this. You can look at the
demise of the Bulletin. You can look at the demise of the Sunday program on Channel 9. You can look at the
cutting of investment in journalism at newspapers around the country. These are all examples of the case that,
when the profit motive is driving the decision making of commercial media entities—as it should; it is their
responsibility to deliver back to shareholders—they will make their decisions in terms of the shareholders. What
we do at the ABC is make decisions in terms of citizens, our taxpayers, who are the audience that funds us. So
you get a totally different range of decision making when you have got a commercial entity or a privatised media
entity than you do when you have got a public broadcaster that is delivering this content to be of value to the
public and to citizens.
Senator LUDLAM: Thank you. To be continued. As I understand it, there are a number of coalition MPs who
have signed up to a Facebook group proposing to privatise the ABC. So I am not quite as sanguine as you appear
to be that the idea is necessarily dead and buried. But we will see.
I want to ask you about the production facility in Perth. Could you provide us, on notice if you wish, a
breakdown on how the ABC Perth production facilities are being used, with particular regard to co-production
ventures, the time that it is rented to external entities, the time it is standing empty—I think there are two big
stages there—and the time it is being used purely for in-house ABC.
Mr Scott: Yes, we will get that on notice for you.
Senator LUDLAM: This is probably before your time, but did the ABC know when it was constructing those
facilities that it really had no intention of continuing their use?
Mr Scott: It was opened in 2003 and that was before my time. I understand that a deal was struck, if we go
into the history of it—and I think this is documented. There was a lot of debate at the time as to whether a studio
should be built, and the decision went back and forth a bit it. Part of the thing that pushed in favour of the
decision was a deal with ScreenWest to make a number of productions in Western Australia. So it was a funding
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deal that was done together with the state government of Western Australia. That funding has not continued at the
same level, I think it is fair to say, but those were the factors that gave rise to the decision to build a studio. I will
give you another example. When we built the new building in Brisbane we did not build an equivalent television
studio there, but we are building a television studio as we do our new building in Melbourne.
Senator LUDLAM: We have discussed RN in the past and the loss of the drama unit and the value of some of
Radio National's specialist radio programming, which is also of a very high standard. Could you provide us with
an update as to what has happened with the creative audio unit?
Mr Scott: I saw a reference to it the other day. Let me take that on notice and come back to you on that.
Senator LUDLAM: So you are not sure what has happened to that?
Mr Scott: I believe it is developing as planned and as announced—I think that was the reference I saw to it—
but I will have to come back to you with more detail.
Senator LUDLAM: How much has RN spent on outsourcing programs in the last financial year? I understand
it is in the order of a quarter of a million dollars.
Mr Scott: 'Outsourcing programs'—what do you mean by that exactly?
Senator LUDLAM: As opposed to in-house production, how much does Radio National spend on contracting
or subcontracting?
Mr Scott: Again, I would have to check that. If you look at public broadcasting around the world, on radio it
is often a mixed model. The vast majority of our content is developed in house, but that is not to say that there are
not talented Australian producers who do not actually want to be staff members for us that can develop a season
of radio content, and we are happy with that in the mix.
Senator LUDLAM: I get that.
Mr Scott: I can come back to you with the detail on it.
Senator LUDLAM: I understand. I am not necessarily speaking about co-production. I mean buying in things
like This American Life.
Mr Scott: Our model on Radio National and NewsRadio does allow us to buy in some content. I would be a
great defender of the policy that allows This American Life to go to air. It is regarded around the world as one of
the finest examples in the genre of factual storytelling. It is very popular online as well; we have a good audience
response to it. I think it is a pretty reasonable thing to have as part of the mix. There has always been a level of
repeats on Radio National; that has been part of the programming. I am happy for us to put some programs like
This American Life into the mix. We will bring details of that to you.
Senator LUDLAM: I am not offering a critique of that particular program, by the way; I was just using it as
an example. Could you provide us with the proportion that RN spent on that kind of content?
Mr Scott: Yes.
Senator ABETZ: Does the ABC stand by the Four Corners story 'Hacked', which was broadcast on Monday
night, and are there now any qualifications or additions to be made to the program?
Mr Scott: I am aware of the debate around it and I asked questions late this afternoon. My understanding is
that the ABC stand by the thrust of that story. If there are specific issues that people want to raise about that story
for us to subsequently investigate, we will of course do that under our complaints process. But I am aware of none
of those specific matters at this point.
Senator ABETZ: Are you aware of a recent university study in regard to journalists' political leanings, by
Folker Hanusch, to be printed in the next issue of the Australian Journalism Review?
Mr Scott: I am aware of the research, I am aware of the report in The Australian and I am aware of the
academic's comments on that report.
Senator ABETZ: Despite the admittedly limited sample size do you have any sense—
Senator Conroy: That is quite a vicious bite!
Senator ABETZ: Do you mind, Minister! Mr Scott, do you have any sense that the recent survey which found
that 41 per cent of ABC journalists said they would vote for the Greens, 32 per cent for Labor and 15 per cent for
the coalition generally reflects ABC journalists' political leanings?
Senator Conroy: He could not possibly know.
Mr Scott: No. There are about 1,000 journalists who work across the ABC in news, radio, rural divisions and
others. The ABC pool—
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Senator ABETZ: You have given me an answer and I accept that it was a very limited sample size.
Senator Conroy: Frankly, I was shocked by that survey!
Mr Scott: Senator Abetz, you asked me about the survey and I think I need to put it in context. You have
studied it. I think it is there to say that, if we have 1,000 journalists and 34 were contacted—which means that 14
identified themselves as Green—
Senator ABETZ: I think more were actually contacted but 34 responded.
Mr Scott: So 14 out of 1,000 identified themselves as Green. Like the academic, I would not be drawing
meaningful conclusions from such a small sample.
Senator Conroy: I was shocked!
Senator ABETZ: Do you have any concern about bias at the ABC?
Mr Scott: I would draw your attention to a much bigger survey commissioned by The Australian in February
this year.
Senator ABETZ: I am asking about you. Do you have any concerns?
Senator Conroy: Malcolm Turnbull gets on far too often, doesn't he, Senator Abetz? You would agree with
that!
Mr Scott: There was a poll that said the vast majority of people do not believe there is an issue of bias at the
ABC. I appreciate that there might be some people who believe there are issues—
Senator ABETZ: Including your former chairman, Mr Newman, who might be in a position to know.
Mr Scott: I also understand that, from time to time, people will have issues with certain programs, coverage
of certain issues or certain interviews. But the Australian public, who fund us and watch us, indicate in survey
after survey that they overwhelmingly believe that we do a good job around fairness, balance and impartiality.
There is also research that demonstrates that, overwhelmingly, the ABC is regarded as the most trusted media
institution, and that is regardless of the political affiliation of those who have been polled. The reality is that some
of the criticism that has been pushed at us is by people who are pushing certain political, commercial or other
agendas. But I have never said in all my appearances here that we are flawless in our performance and that from
time to time we do not live up to the standards that we set for ourselves. But do I believe it is an overwhelming
problem? No, I do not.
Senator ABETZ: You are aware of the answer to question No. 12 from the February estimates about ABC
employees and contractors breaching your own social media policy on social media platforms. Yes, there were
comments against Labor politicians and coalition politicians but surprise surprise there were none against Greens
politicians. Once again, I suppose, that is just another sample to be discounted!
Mr Scott: The only thing I would say is that the ABC is the absolute leader in the use of social media in the
Australian media landscape. We have hundreds of social media sites.
Senator ABETZ: Then why does it never offend against the Greens?
Mr Scott: Senator, I am really happy to engage with you, as I always am, but if you ask me a question I would
like the opportunity to answer it.
Senator ABETZ: That is a fair comment.
Mr Scott: We have literally hundreds of Twitter accounts and Facebook accounts that are providing a constant
feed of updates through the day every day. Probably hundreds of thousands of messages are going out on those
accounts. To go to the answer to your question about breaches that have been identified, we found a total of six.
We are not flawless and I have never said that we are. But if you are going to draw sweeping conclusions from
such a tiny sample, I think that is overstating it. I would not be drawing those conclusions from this data.
Senator ABETZ: Do you believe that any serving member of parliament would want a 'race war' with
Australia's Indigenous community?
Mr Scott: I do not understand the context of that question.
Senator ABETZ: But can we be agreed that that is quite a ridiculous proposition?
Mr Scott: I would like to know the context of the statement; it is clearly an issue that you are referring to.
Senator ABETZ: Why do we need to contextualise it. Do you believe, in your knowledge of public affairs,
that there might be any parliamentarian currently serving who would want a race war with Australia's Indigenous
community?
Mr Scott: I would not have thought so.
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CHAIR: Senator Abetz, these are estimates for the ABC. I think you are drawing a long bow in not
contextualising it. I think Mr Scott is entitled to understand the context as to the ABC in what you are asking.
Senator ABETZ: All rights, let's contextualise it. Why then on 5 May this year would your recently appointed
fact-checker, Mr Russell Skelton, have retweeted 'Abetz and Christian fundamentalists want race war. Begins in
September'?
Mr Scott: Who originally tweeted it?
Senator ABETZ: Marcia Langton. Russell Skelton retweeted it.
Mr Scott: Firstly, Mr Skelton was not an employee of ours at the time. Also, if you go to my account, you will
see that I place on my account—and many of our staff place on their accounts also—no suggestion at all that a
retweet is an endorsement of a view. Often a debate is raging and is circulating. A retweet is not necessarily an
endorsement at all. Sometimes it is can be almost the opposite—'can you believe what is being said here?'—and it
is kicking it into the debate. I am certainly not going to sit here and judge that behaviour as suggesting that any
retweet done by any ABC staff or any journalist is necessarily or tacitly an endorsement. Among people who are
familiar with and understand how social media operates and look at the guidelines that is pretty commonly
understood.
Senator ABETZ: Why would you retweet something if you fundamentally found it offensive or disagree with
it?
Senator LUDLAM: For precisely that reason.
Senator ABETZ: It is amazing how the Greens assist the ABC in answering!
Mr Scott: I would like to explain it but not in this context. Let me explain to you how social media works.
Senator ABETZ: I know how it works. I am only asking why your employee would retweet.
Mr Scott: Let me tell you why I would put that up on my account. Sometimes you see extraordinary things
online, you see bewildering statements made by people, and you think it is something that those who follow you
should be aware of and should be engaged in and you should let the debate rage. I would think that those people
who today retweeted Eddie McGuire's comments were not endorsing Eddie McGuire's comments, they were
putting those comments into wider circulation for debate. That is how it works.
Senator ABETZ: Yes, but Eddie McGuire actually said something and I did not. I only happened to find out
about this yesterday. I find it highly offensive and, of course, it is completely and utterly without foundation. And
yet your Mr Fact-Checker has gone about retweeting it.
Mr Scott: If you have issues with what people are saying about you on social media, you are not alone. That
is the social media experience that we have all had.
Senator ABETZ: 'Race war' might just be in a little bit of a different category, with great respect.
Mr Scott: I am not going to those facts—
Senator ABETZ: Very conveniently not!
Mr Scott: Nor am I going to talk about individual retweets by people. This person was not even employed by
the ABC at the time, so I cannot comment on that. I can talk about how social media operates. Often retweet are
not endorsements and they are not viewed as endorsements.
Senator ABETZ: Can we believe that Mr Skelton will be impartial when checking the public statements of
politicians when just last July he tweeted 'Abbott's extremism on display'? Are we to assume this is a display of
impartiality by Mr Skelton?
Senator Conroy: It could have been factually accurate!
Mr Scott: I am happy to talk about the fact-checking unit if you would like to talk about that.
Senator ABETZ: No, I am asking you about a specific tweet.
Senator Conroy: It could have been very factually accurate, Senator Abetz!
Mr Scott: I am not going to sit here and go through the tweet history of all our staff, let alone people who do
not work for us. But I can tell you what the fact-checking unit will do.
Senator ABETZ: I did not ask that, Chair.
Mr Scott: But that you did ask how—
Senator ABETZ: This is a deliberate winding down of the clock by an experienced participant at these
committees.
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Mr Scott: Chair, I was asked about—
CHAIR: I will tell you my view on this. Senator Abetz, you have raised the linkage between the fact-checking
unit and individuals and tweets.
Senator ABETZ: Not the unit, the fact-checker personally.
CHAIR: Mr Scott, in my view, is entitled to go to that issue.
Mr Scott: Let me tell you why I am confident he will do a good job. The fact-checking unit is to test
statements, to look at the evidence that is on the record, to come to a conclusion about whether the statement is
true or false and to provide information that is clear and accessible to audiences. It is to look at the evidence and
the data that is on the record and then to communicate that in a way that will be clear and accessible. It is not
expressing opinions. It is not criticising opinions. It is checking significant claims using credible sources and
providing transparent and accountable information that will be available on our website and through news
programs—and there will be accountability for that performance. Mr Skelton is a very—
Senator ABETZ: Chair, come on!
CHAIR: Mr Scott, I think you have explained it pretty well. Senator Abetz obviously wants to keep on
questioning.
Senator ABETZ: You talk about individual tweets, Mr Scott—and that smile acknowledged it, Mr Scott; I
appreciate that—
Senator Conroy: In my view that tweet is likely to be completely factual and true!
CHAIR: Order! Senator Abetz.
Senator ABETZ: Thank you. Can I ask about this tweet from your fact-checker, which is also about Mr
Abbott: 'No statesman, with no style'. Is this also indicative of an objective mindset?
Senator Conroy: No, an accurate one. A factually accurate one. That would check against the facts!
Senator ABETZ: The way the minister says it I think tells the whole story for us. What about last August,
when Mr Skelton tweeted 'Mr Abbott was revealed to be the shameless opportunist that he is and he was red
faced. Windsor nailed him to the floor'? Is that another clear exhibition of the absence of bias by Mr Skelton?
Senator Conroy: I am confident that that was a factually accurate statement!
Mr Scott: His job will be to test statements against objective facts. I am confident that he has the capacity to
do that.
Senator ABETZ: You know that his job includes—and the advertisement said so—'the editor will, amongst
other things, deliver engaging content that builds a reputation for accuracy, impartiality and clarity'. Impartiality is
one of the very conditions that the ABC set down for this job, and here we have tweet after tweet after tweet
indicating the complete opposite—namely, impartiality.
Senator Conroy: In your biased view.
Mr Scott: The difficulty of this analysis is that journalists come from different backgrounds and have different
views on a range of issues. It is how they do the job.
Senator ABETZ: We will get to that later.
Mr Scott: The question is: is this the kind of person who will be able to test statements, draw a conclusion on
whether a statement is true or false, be able to find the evidence and bring it, and to be accountable for that.
Senator BIRMINGHAM: And to be impartial, Mr Scott.
Senator Conroy: It is completely factually accurate!
Mr Scott: He will be judged on the work that is done and the evidence that has accrued. There is a team of
people doing this. It is not simply a one- or two-line judgement is passed down, it will be what evidence is
brought to bear. He is testing the evidence.
CHAIR: Mr Scott, you have made that point on a number of occasions. Senator Abetz.
Senator ABETZ: What about Mr Skelton's wishful tweet about a Nielsen poll 'Abbott now a liability, a
proverbial albatross'?
Senator Conroy: That would be factually accurate as well!
Senator ABETZ: Mr Scott, how can you credibly maintain that Mr Skelton will bring impartiality to this
sensitive and newly created role?
Mr Scott: He will be judged on his work.
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Senator ABETZ: What about your impartial fact-finder making it his personal business to cross swords with
Mr Abbott when he responded directly to a tweet from Mr Abbott about repealing the carbon tax by tweeting
'Don't you have to get elected first?' You might be surprised to learn that Mr Skelton's prolific attacks are not only
confined to Mr Abbott and me. Can you tell me why Mr Skelton would have recently retweeted the accusation
that Senator Joyce is 'a dense, opportunistic carpetbagger' as well as another tweet suggesting that 'the electors of
New England were fools if they elected Senator Joyce'?
Senator Conroy: Both would be factually accurate! What is the problem?
Senator ABETZ: These are just part of the series of offensive Skelton tweets about Senator Joyce.
Senator Conroy: It is you biased political view that they are offensive.
Senator ABETZ: Mr Scott, we could be here all night. I have here more than a dozen examples of Mr
Skelton's tweets denigrating Liberals such as Senator Brandis, Scott Morrison, Joe Hockey and other current and
former Liberal leaders.
Senator Conroy: He knows his facts, doesn't he!
Senator ABETZ: So how can you credibly maintain that Mr Skelton is impartial and a suitable choice to be
the ABC's fact-checker? I will give you a few examples: 'Gordon nails Brandis'; 'Morrison, the LP's one-trick
pony'—
Senator Conroy: Absolutely factually accurate at all points! What is your problem?
Senator ABETZ: 'The Liberal bird-brained backbencher slams Gestapo data retention'—
Senator Conroy: There are many different definitions!
Senator ABETZ: that was about Mr Ciobo. 'Joe's not the sharpest pencil in the box when it comes to
numbers'; 'Rudd wept and Julia triumphant'; 'The honeymoon will be too long for the monk'—all these from Mr
Skelton. Are you still saying you will not comment on individual tweets? There are dozens and dozens of them
showing a partiality against the coalition.
Senator Conroy: In your biased view.
Senator ABETZ: Mr Scott, do you understand that we in the coalition do not accept that this man will go
about his task with impartiality given his past track record of complete and utter partiality, including some quite
offensive tweets? What I would invite you to do is take all of these tweets on notice and come back to the
committee and explain how this builds confidence in the community's mind that Mr Skelton will go about his task
with impartiality. I will table those for the committee.
Mr Scott: I will take that on notice. Let me simply say in response to the broad thrust of that that Mr Skelton
is a very experienced and award-winning journalist. We thought, on the criteria that were spelt out, on his ability
to provide and lead a team that is testing statements, coming to conclusions and providing the evidence behind
that, that Mr Skelton is an appropriate person to lead that division. Finally though, the performance of that
division will be the responsibility of the ABC. It will be the responsibility of the news division that delivers it.
There will be a number of people who work in it. Finally, as editor in chief, I am responsible for that outcome. So
I expect that the real test of Mr Skelton's professionalism in undertaking this role will be the performance of the
unit over time. That is a matter I suspect will come to the attention of this committee and we will discuss in the
future. But fundamentally the test of any of our journalists is: how do they act in the role? Mr Skelton has only
been working with us for a matter of days; the test will be how he performs in the role. I understand your qualms
about the appointment and I understand your concerns at some of those tweets. But fundamentally the judgement
will be on the performance of the role: is he seen to be fair, balanced and impartial; does he act without fear or
favour; and is the evidence accrued to back up the judgements that are made by that unit?
Senator ABETZ: Is this the same award-winning journalist that has been twice criticised—once for a one-
sided story about the Aboriginal intervention and a second time in relation to his Age story 'A town without hope',
about Aboriginal degradation in Balgo'? Skelton did not go to Balgo, and that story was accompanied by pictures
of a camp 300 kilometres away. My source? The ABC's Media Watch. In addition, is this the same award-
winning journalist who has been accused of grossly inaccurate journalism and even making up interviews?
Mr Scott: I am not aware of that detail. In the 20 years of Media Watch a great number of journalists have
come to its attention. Mr Skelton is an experienced and award-winning journalist but, finally, he will be held to
account for delivering to the ABC's editorial policies, which are the highest standards that operate for the practice
of journalism anywhere in the country. There is a full accountability mechanism around that. Part of that
accountability mechanism comes from the work of this committee. If there are concerns about the performance of
that unit, I am sure they will generate attention here.
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Senator ABETZ: Yes, but it will all be too late after the election.
Mr Scott: Sorry, in what respect, Senator?
Senator ABETZ: Now let me compare all those opinions about coalition members by your independent,
impartial fact-finder with his views on the Prime Minister. What would you say about this tweet: 'Extraordinary
times. JG at last behaving like a PM. ALP vote up, not down. Beware the pundits'? Isn't this shameless barracking
pure and simple?
Senator Conroy: You just have a biased view on it, Senator Abetz.
Mr Scott: Senator Abetz, I really think there is little point in going through a whole series of tweets—
Senator ABETZ: What about this tweet: 'Another take on Julia Gillard PM: grace under pressure'?
Senator Conroy: A factually accurate statement!
Senator ABETZ: That is one Kevin Rudd would not even agree with. This is just cheer squad stuff from the
person you have now appointed as an allegedly impartial fact-finder. Do you still believe, given all this evidence,
that Mr Skelton is a suitable appointment to this task?
Mr Scott: We will judge him on the work that he does.
Senator ABETZ: Would it surprise you to learn that Mr Skelton has sought to walk away from his
endorsement of the highly contested assertion that 97 per cent of scientists believe in human induced climate
change? I am only talking about the percentage figure not the issue of climate change. He only walked away from
it after being challenged by the reputable foundation chair of environmental engineering at the University of
Tasmania, among others. We have the tweets. Mr Skelton said 'Yes, there really is 97 per cent scientific
consensus on global warming' and then when challenged he lamely sad 'Not my facts. They belong to somebody
else'. So what sort of fact-checking does he do when he is willing to tweet stuff without knowing its veracity and
then, when he is picked up on it, simply says 'Not my facts'? Do you know what, that last tweet occurred on 22
May. I think he might have already been your fact-checker at that stage. Does this indicate a prejudice on a
controversial issue, and a lack of intellectual integrity, or not?
Mr Scott: We will judge the performance on the performance. We have guidelines in place; we have editorial
oversight on the operation of that division. And, finally, I think it will be a matter for review over time.
Senator ABETZ: And all these Tweets, some of which I accept were undertaken prior to his appointment—
Mr Scott: He has only been with us for a couple of days, so you have recounted nearly all of them.
Senator ABETZ: You told me not to interrupt, and I graciously accepted your admonition. Let's make that a
two-way street.
Mr Scott: Certainly Senator.
Senator ABETZ: All these Tweets I have read out now appear under the Twitter account 'Russell Skelton,
Editor, ABC Fact Checking Unit, Sydney, Australia.' Can you point me to where Mr Skelton says, on his Twitter
account, that just because he Tweets something it does not necessarily mean that he endorses it?
Mr Scott: I expect it will be there imminently.
Senator ABETZ: Yes, it will be there very, very, very shortly. But can you not see why the coalition, as a
major player at this election, at a minimum, is concerned about the credentials and clear bias of Mr Skelton?
Mr Scott: As you know, I speak regularly to MPs and senators from both sides of parliament. I think there
have been questions about a fact-checking unit: should we create a fact-checking unit, and what role will it play?
There has been apprehension, irrespective of personalities, as to why we are doing this. We think it is a
contribution that can be played there. But, finally, it will be judged on its performance. The staff there will be
judged on their performance. And I just think you need to keep in mind that it is not a one-word verdict that is
handed down; the evidence that is used to back that verdict is also handed down. So I cannot think of anything
that will be more open and transparent. People will be able to come to their own judgements.
Senator ABETZ: Oh, this is very transparent, I agree!
Mr Scott: But let's hear about the performance of the unit, Senator. The performance of the unit will be
transparent. The evidence that is behind its judgements will be there for all to see, and people will come to a
judgement as to whether they feel that that has been fair, accurate and balanced or not.
Senator ABETZ: Do you really believe that this prolific expression of bias qualifies Mr Skelton to hold this
position where impartiality is such a vital quality and ingredient and make-up of the individual that gets to
undertake that role?
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Mr Scott: Let's just dig into what—
Senator Conroy: You might want to be seeking to intimidate, Senator Abetz, but that is your character
assessment—nothing more. It does not hold as a fact at all; it is just your own biased attempt to intimidate.
Mr Scott: Senator, I just say broadly that I have experience in two major Australian media organisations now
but I know a lot of journalists who work in a range of media outlets. Journalists have views; journalists have
perspectives; journalists vote. The test is not what their views are, what their perspectives are or how they vote;
the test is how they do their work.
Senator ABETZ: And how they Tweet.
Mr Scott: The test will be whether Mr Skelton can execute this job with fairness, balance and impartiality.
You will be able to come to a judgement on that. But just because he may have held some views or made some
comments does not say that he cannot now—or has not in the past—executed his journalism with fairness,
balance and impartiality.
Senator ABETZ: Your own media watchers pinged him.
Mr Scott: What that suggests is that he is not perfect; I am yet to find the journalist who is.
Senator ABETZ: Writing stories about places you have not visited!
Mr Scott: I am not across the detail of that. But, I must say, a mention in dispatches on Media Watch is
something that many a journalist in the country has had to deal with over the past 20 years. I am not saying he has
a flawless track record; I am not aware of those issues you raise. What I do know is that he is a respected and
highly accredited journalist, and the test will be: can he execute his job with impartiality?
Senator ABETZ: Let's go to execution of his job. How on earth, given Mr Skelton's public denigration of Mr
Hockey—that he is 'not the sharpest pencil in the box when it comes to numbers'—
Senator Conroy: That is so seriously factual it is indisputable!
Senator ABETZ: How can Mr Skelton possibly claim to be unbiased and fairly assess the coalition's
economic statements—
Senator Conroy: John Howard demoted him—
CHAIR: Order, Senator Conroy.
Senator Conroy: He was actually demoted by John Howard.
Mr Scott: Working upstairs, along the corridor in the press gallery, are many journalists, many of whom write
opinion pieces and commentary and analysis, sometimes quite withering, of different politicians' performance
over time. What I would simply say is that they may have a view about a certain performance at a certain time.
Does that mean that they are all disqualified from exercising judgement that is fair, balanced and impartial?
Senator ABETZ: But this is a general judgement. It is not about whether Joe Hockey stuffed up here or there.
Mr Scott: You do not know that, Senator.
Senator ABETZ: This is a general comment that he is not the sharpest pencil in the box. That is just personal
denigration.
Senator Conroy: It is just a colourful and accurate description.
Mr Scott: I am not here to defend the previous Tweet. I am not sure you are aware of the context of that
particular Tweet.
Senator ABETZ: I am absolutely aware of all of them, and you will get them at the end of this estimates to go
through and then hopefully reconsider this appointment. Isn't it a fundamental requirement that the position of fact
checker be filled by a person without any perceived biases? Here there is the task of not only actual bias but also
perception of bias.
Mr Scott: Yes.
Senator ABETZ: That is why a lot of people in various positions say: 'I will disqualify myself from a
particular position or decision making because of the perception of bias. Albeit I believe I would not be biased,
the perception of bias is such that I should remove myself.' Now, with this track record, how on earth could
anyone assert that there is not at least a perception of apprehended bias? How on earth could you not come to that
conclusion?
Mr Scott: I think people will come to a conclusion on the performance of the unit when they look at the
product that is produced by it, which includes all the evidence that is around that. The operation of this fact-
checking unit is not just on political matters; it will be on a range of matters that are brought out.
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Senator ABETZ: Can we go to another matter?
Mr Scott: The judgement will be on the performance of the unit and the evidence that is brought forward.
Senator Conroy: It will be tough job. To analyse a coalition policy you need a fact.
Senator ABETZ: Is it a medical fact, Mr Scott, that marijuana smoking does not impact on lung health?
Mr Scott: It is not an area I have given close study to.
Senator ABETZ: I thought you might say that. So, can I ask: would it surprise you if someone tried to
propagate the view that smoking dope does not compromise lung health? And, in that context, can you explain
why Mr Skelton Tweeted, 'Pot smokers don't puff away lung health: study'. Really, Mr Scott—
Mr Scott: Was there a link to the study?
Senator ABETZ: Wouldn't Red Skelton have been a better choice than Russell Skelton for this position?
Mr Scott: Was there a link on that Tweet to that study?
Senator ABETZ: Yes, there was. But the British Lung Foundation completely debunks that assertion. And,
what's more, the ABC's own health and wellbeing page contradicts that which Mr Skelton is seeking to propagate.
So, what is the fact? Is it what ABC has on its health and wellbeing page, or is it that which Mr Skelton seeks to
Tweet?
Mr Scott: Well, I am not in a position to comment.
Senator ABETZ: It is quite obvious that you are not, and it is very difficult for you, I understand. So can I
ask: how did we end up with Mr Skelton? Firstly, was Mr Skelton known to you prior to his engagement in the
role of fact checker?
Mr Scott: I have known Mr Skelton. He was a senior journalist at Fairfax, and I knew him—
Senator ABETZ: So he was known to you?
Mr Scott: Yes. I would simply say—
Senator ABETZ: Thank you. So, did he ever raise—
CHAIR: Senator Abetz, please let Mr Scott finish.
Mr Scott: Mr Skelton is known. He is one of the best-known journalists in the country. He is known by
thousands of people. But I can tell you that I did not interview him for the job, that the position was advertised,
that I understand that Mr Skelton applied, that we convened a selection panel, and that Mr Skelton was viewed as
the outstanding candidate for the job.
Senator Conroy: He's just not a cultural warrior for you guys, is he?
Senator ABETZ: Did Mr Skelton ever raise the idea of a fact-checking unit with the ABC prior to his
appointment?
Mr Scott: Not with me.
Senator ABETZ: With anybody else? Take that on notice, please.
Mr Scott: I can tell you that the idea did not come from Mr Skelton; the idea came from me, working with our
director of news, as we were putting together our tri-funding submission.
Senator ABETZ: The job advertisement for the editor of the fact-checking unit said. 'The editor will lead and
manage the unit to deliver engaging content that builds a reputation for accuracy, impartiality and clarity'.
Mr Scott: That is exactly right.
Senator ABETZ: Clearly, Mr Skelton is not impartial, is he?
Senator Conroy: In your biased opinion.
Mr Scott: But, as I said, the judgement of the unit will be whether in fact the content it produces is fair,
balanced and impartial. And it is the same with any journalist, irrespective of their personal views, irrespective of
what they said. The question is, can they produce content that is fair, balanced and impartial? And we will know
that when we see the material that is produced.
Senator ABETZ: All these Tweets, and many, many more, show that Mr Skelton is incurably biased.
Senator Conroy: In your biased view. Stop trying to use Senate estimates to intimidate.
Senator ABETZ: This appointment will cause you and the ABC a degree of grief. Did you actually fact check
Mr Skelton prior to his appointment and come across all these Tweets?
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Mr Scott: I am not aware of that. What I can say, though, is that there was certainly an interview with him and
discussion and understanding of his record. But fundamentally, if I accept your premise, the same principle
applies for every journalist. If in fact you are saying that if there is a journalist who supports the coalition, a
journalist who supports the Labor Party, a journalist who supports the Greens, then therefore they are
disqualified—
Senator ABETZ: Why do you need a journalist to be a fact checker?
CHAIR: You would have to close News Limited down!
Senator Conroy: I can name at least a dozen former Liberal staffers and former Liberal MPs on radio! The
proposition is absurd.
Senator ABETZ: Can you stop the mutual admiration society?
Mr Scott: You put a proposition, Senator. I am saying, though, that the test of Mr Skelton's impartiality comes
with the product the unit produces. You are expressing scepticism about his ability to do that. I am saying he has a
very strong record of professionalism. I am saying that we will judge his performance on the outcome of this unit
and I expect that that will be a matter that you will pay close attention to, as will I.
Senator ABETZ: But if people want to have confidence in the decision making, you have to get rid of
apprehended bias.
Senator Conroy: In your apprehended-biased view.
Senator ABETZ: It is not good enough for a Supreme Court judge to say, 'I am not going to disqualify
myself; wait for the decision and see if I am biased'. It is too late.
Mr Scott: But Senator, I have—
Senator ABETZ: That is why, when people set themselves up—
CHAIR: Senator Abetz, I am just going to indicate to you that we have been going for—
Senator Conroy: Tedious repetition is a breach of standing orders.
CHAIR: We have been going for 35 minutes on this one issue. I do not think you are making much progress,
other than starting to lecture.
Senator ABETZ: I will let the public make an assessment of that.
CHAIR: Well, let the public make that determination.
Senator Conroy: We all heard you threaten the ABC. Don't worry; we all heard you!
CHAIR: Order! I am trying to get an idea of timing—
Senator ABETZ: I have another topic, and I will try to get through it as quickly as possible. Short answers
would be very helpful. So, let me move on to this Vote Compass. You are aware of the dubious history of
howshouldivote.com, which was set up by GetUp! Are you aware of that, Mr Scott?
Mr Scott: Not particularly.
Senator ABETZ: I would have thought when you set up something like Vote Compass you might have
informed yourself of—
Mr Scott: We informed ourselves by talking to the Canadian Broadcasting Corporation, who did it, and then
the Wall Street Journal, which used Vote Compass in the last presidential election. We have spoken to a lot of
people who have used this process in the past.
Senator ABETZ: All right. Let us move straight to the Canadian Broadcasting Corporation. You are
modelling yourself on that?
Mr Scott: No, but we paid attention to it. They were one of the first organisations to use it. It has had a
number of iterations since, one example being in the Wall Street Journal. It has also been used in Europe. Our
version of it will be different to theirs. We have learned a bit from the Canadian experience, so we have not just
picked it up and dropped it in this environment.
Senator Conroy: Did Karl Rove run the one on the Wall Street Journal? Has he called Ohio yet?
Senator ABETZ: I will quote from Antony Green's blog about the Vote Compass:
For that reason we know some Vote Compass participants will be surprised by where their attitudes line up in relation to
the political parties. As we stress, Vote Compass is not a how-to-vote tool.
But in a sense it will lead people, potentially, to change their vote, won't it, if they put in certain information and it
tells them that their views are more aligned one way or the other? Hold that thought, because when Canadian
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Vote Compass model that you say informed you was used by Queen's University political science professor Kathy
Brock she found that even though she completed the survey three times using three distinct strategies she was
aligned each time with the Liberal Party. In Canada the Liberal Party is in fact the left wing party. Each time, no
matter what she put in—and she is a professor of political science—it just happened to spit out exactly the same
thing that the GetUp compass did when Andrew Robb tried it. It just seems that these compasses always tend to
point to the west or to the left, no matter what information you put in.
Mr Scott: Why do you think that the Wall Street Journal picked it up and used it?
Senator ABETZ: Pardon?
Mr Scott: Why do you think that the Wall Street Journal picked it up and used it if they did not think that it
was a credible tool?
Senator ABETZ: If you want to start asking questions, we can change positions. Let us move on.
Senator Conroy: I thought that it was a very pertinent point.
Senator ABETZ: There was a premonition by Mr Green that people will be surprised because, no matter what
they put into this Vote Compass, it always goes to the west; always goes to the left.
Mr Scott: What is your question, Senator? Do you have a question on Vote Compass?
Senator ABETZ: Yes. How are you going to make sure, seeing that you say that you know nothing about
GetUp's—
Mr Scott: I have not studied it.
Senator ABETZ: But you do know about the Canadian one, which always skews the needle of the compass to
the left or to the west. How can we be assured that yours will not have the same design fault?
Mr Scott: We are not designing it. It is a partnership that has developed. We use a group of independent
academics—
Senator ABETZ: Oh, great!
Mr Scott: who provide—
Senator ABETZ: Can you mention those names?
Mr Scott: I can get those names for you.
Senator ABETZ: Quickly? I am sure that they are online.
Mr Scott: I am not sure that they are online. But I can provide you with background on it. The situation is that
this has proven to be—and the CBC version of it was quite an early version of it—a useful tool. We get the
policies from the parties. The policies are provided by the parties rather than by us.
Senator ABETZ: And if we do not provide the policies?
Mr Scott: A lot of those policies would be on the public record, of course, Senator.
Senator ABETZ: What about the Greens, who have already indicated that they will not be announcing
policies but just making general statement? How are we going to deal with that?
Mr Scott: I am not sure, Senator. There will be—
Senator ABETZ: This is going to be telling people how their vote should be or is aligned.
Mr Scott: It is not.
Senator ABETZ: Is aligned.
Mr Scott: Yes. It will actually provide a more in-depth exploration around the policies of the various parties. I
must say that—
Senator ABETZ: You claim that it is in depth. Professor Brock said that it is a gimmick that impoverishes the
level of discussion in our democracy. That is her considered view.
Senator Conroy: No, that is called the Australian.
Mr Scott: That may have been an academic's view. Our reading of it in the context of how it was used in
Canada and then subsequently in the other places that it was rolled out—and it was most recently used by the
Wall Street Journal—is that has proven to be a popular and engaging way of encouraging people to think about
policies in the context of the election campaign.
Senator ABETZ: Will the Vote Compass tell voters if they can actually trust a party to implement its
policies? Surely, you would agree that that is a fundamental consideration? When people say, 'There will no
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carbon tax' and that then aligns you to the Labor Party or they say, 'We will turn back the boats,' on the day of the
election on the front page of that terrible News Ltd paper only then to immediately dismantle the policy after the
election—
Senator Conroy: How about saying after the election, ''I considered resigning for misleading the Australian
public but I decided on balance not to?' That is a quote from Tony Abbott.
Senator ABETZ: Doesn't that make my point, Minister?
Senator Conroy: Tony Abbott lied to the Australian public.
Senator ABETZ: You are unwittingly making my point. Thank you very much, Minister. Can Mr Scott now
answer?
Mr Scott: Any tool has its limitations. I expect that this will more look at issues like education policy, health
policy, tax policy, environmental policy. The different policies that are on the record will be there and it will
allow—
Senator Conroy: We will have to get the ABC policy.
Mr Scott: voters to be able to interact with it. We look forward to ABC policies if they are released as well.
Senator ABETZ: If a party does not release its policies, what happens? And who is going to determine what
the actual policy of a party is? Will it have to be signed off by party headquarters that this is the actual policy that
you can put on the compass or is it going to be—
Mr Scott: I am not sure if we are getting into core or non-core issues here. I am not sure. I will have to come
back to you on that.
Senator ABETZ: You do not have to worry about core and non-core issues. Mr Howard had to, because there
was a $10 billion black hole.
Senator Conroy: Oh!
Senator ABETZ: You have been given $10 million extra by a Labor government that has been the most
partisan government—
Senator Conroy: Write that down!
Senator ABETZ: in recent history to fund this Vote Compass and to fund—f
CHAIR: Senator Abetz, I am going to move to someone else if you are going to continue to preach your point
of view.
Senator Conroy: All you are here to do is hector and intimidate—
Senator ABETZ: Why didn't you get Senator Cameron as a fact checker?
CHAIR: I would be a very good fact checker.
Mr Scott: I will come back to you on the precise detail of it works. There are questions that we need to deal
with. We will come back to you. Part of the guidelines that we are looking to create are to do with what is official
policy and what are other statements that are being made. There will be a standard around that. We think that it
will be a valuable tool. We expect that we will be judged on it. I take comfort from the fact that an organisation
like the Wall Street Journal, after looking at the experiences elsewhere—
Senator ABETZ: If you get it wrong, how do we appeal it?
Mr Scott: We will be held to account for our—
Senator ABETZ: Yes, after the election when it is too late. That is the problem with this.
Mr Scott: It is part of the coverage. We are going to put policies up online. We believe that there will be
benefit to come from this. We think that there is desire from a section of our audience—
Senator ABETZ: You—
Mr Scott: to get involved in a more in-depth discussion. This is part of the feedback that we had after 2010.
People wanted more focus on policies. This provides a mechanism for doing that.
Senator ABETZ: Will Mr Scott take these, please.
CHAIR: He already indicated that he would.
Mr Scott: Yes, I did.
Senator ABETZ: You have? Thank you very much. Thank you, Chair.
CHAIR: I want to take you through a couple of issues, Mr Scott. The ABC are an independent organisation?
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Mr Scott: Yes.
CHAIR: You make the decisions in terms of employment and people allocated to work?
Mr Scott: Absolutely. We are totally independent.
CHAIR: Are you aware of any other broadcasting organisation in the country who does a tweet check before
employment?
Mr Scott: No. I have never heard it raised before.
CHAIR: Do you think that this is something for the future?
Mr Scott: As a broad question, this has been raised. It has been more in association with younger people, with
the kinds of social media histories that people are spelling out through tweets and Facebook posts and the like.
But I have not been cognisant of us doing it.
CHAIR: Mr Skelton has now been the subject of quite a forensic investigation by Senator Abetz. Mr Skelton
has just taken the job up, has he?
Mr Scott: Yes, in recent days.
CHAIR: You say that he will be judged on his capacity to undertake the job as described and deliver.
Mr Scott: Like any journalist, he will be judged on the content that he produces and the tests that apply to
that—fairness, balance and impartiality—that exist under our editorial policies will apply to him as we everyone
else. As we know and have discussed at this committee quite often, we have senior journalists who have worked
for the Labor Party. We have senior journalists who have worked for the coalition. We have people who have
gone to work as staffers on either side. Their track record and history is not relevant. What is relevant is whether
they can do the job and deliver content that is fair, balanced and impartial. That is how Mr Skelton will be judged
as well.
CHAIR: In my view, the issues of fairness, balance and impartiality is not something that permeates the
media—and not just the ABC; the print media as well.
Mr Scott: There is no doubt that the ABC has more comprehensive and rigorous editorial policies than other
media organisations and a self-regulatory framework that exists nowhere else in the Australian media. We take
this very seriously. It is part of the responsibility of the board under section 8 of the ABC Act to ensure that our
performance is to these editorial standards. That is a key thing that makes the ABC different. Our board is not
trying to drive a share price to deliver a profit and a return to shareholders; they are trying to uphold the standards
and the accountability that are spelt out in the ABC Act. They are part of the safeguards and part of the
reassurance that the public can have around our commitment to those journalistic standards.
CHAIR: My concern with this, as a former union official—if you did not know—is whether Mr Skelton
getting a fair go here? I would ask—
Senator Conroy: It was just an attempt to intimidate. It was blatant intimidation.
CHAIR: Given the performance from Senator Abetz, will the politic attacks on Mr Skelton, provided he does
his job in the manner that you expect, be a problem for his continued employment?
Mr Scott: We will judge Mr Skelton on his performance. He is a very professional and very experienced
journalist. The proof of the pudding is in the eating. I suspect that people will look at the work of that unit and
make their judgments accordingly. But he is a very experienced journalist. I am sure that he has been criticised in
the past. He will just put his head down and do the best job that he can in these circumstances.
CHAIR: And he will be treated in the same manner as other ABC employees?
Mr Scott: Absolutely.
CHAIR: Good. I hope he joins the union if he is not already a member.
Senator BILYK: I have a couple of questions. I want to go back to the issue of the production unit in Tassie
being closed. Do you have a final number on how much the redundancies cost?
Mr Scott: I will get that on notice for you, Senator.
Senator BILYK: Out of all of that, there was going to be one position left. Has that been filled?
Mr Scott: I think so. Again, I will come back to you on that point.
Senator BILYK: Could you take that on notice and let me know. I was wondering whether it had been filled
and whether in fact Mr Skelton might be based in Tasmania.
Mr Scott: No, he will not be Tasmanian based.
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Senator BILYK: He is not? So that is not that position.
Mr Scott: No. The unit will be—
Senator BILYK: Tassie will gets its own—
Mr Scott: We were creating—
CHAIR: Now we have dragged Senator Abetz into sanity, I think!
Senator BILYK: I was just thinking of the two issues.
Mr Scott: There is a Landline position that we are creating there. I will get you an update on that.
Senator BILYK: Okay. Thank you. In the public hearing of the ABC diversity inquiry in Hobart there was a
quite a lot of discussion regarding the large number of hours of BBC programming that appears on the ABC.
Given that you have lost the contract with the BBC from July 2014—
Senator Conroy: There will be holes in the schedule.
Senator BILYK: how do you expect to fill the programming void? Do you see it as an opportunity to
program more Australian content?
Mr Scott: Yes and no, I think. If you look at the BBC contract, one of the things it has delivered us over the
years is a volume of content. We pay quite a lot for that, but it does produce hundreds of hours of content on our
schedule over a year. The general rule is—and this is part of the tension, I think, that has underpinned the issues
of internal-external production, coproduction and the like—that it is actually a lot cheaper to buy content than it is
to make it. We would probably purchase a top-quality British drama for about 25 per cent of what it would cost
for us to contribute to making it in Australia. If in fact we were to take that BBC money and put it into domestic
content, we are going to have a lot of blank airtime.
That is not to say, though, that we are not looking pretty carefully at the mix of content that we will be making
and purchasing and trying to get that right. There might be some increase, but it is not simply a case of taking that
BBC money and putting it into domestic production, because we would be way short.
I would say a few things about the BBC contract. I think it is important for people to understand that not all the
British content we have shown has been BBC content, so programs that are very popular like Grand Designs,
Midsomer Murders and Doc Martin are not covered under this.
Senator Conroy: Doctor Who.
Mr Scott: Doctor Who is, of course, important to the minister. I have assured him that we have the rights for
Doctor Who across all time and space—
Senator BILYK: I know the minister would be very upset if that were not the case.
Mr Scott: We have all time and space continuums covered in this market for Doctor Who, so that continues.
Senator Conroy: ABC funding is safe.
Mr Scott: There are a range of independent producers that we can acquire content from, not just in the UK but
in other markets in Europe and the US as well. We were disappointed in the BBC's decision and we were
disappointed that, after 50 years of being an outstanding distributor of their content for them, making this their
strongest market anywhere in the world, we were not even given an opportunity to talk with them about this
contract. But they make their decisions—
CHAIR: It wasn't because you knocked back the job, was it?
Mr Scott: No, Senator—
Senator Conroy: I think there was a bit of tit for tat there!
Mr Scott: That is not true, Senator. So we were disappointed. Finally they will come to their judgment as to
the kind of audience that will see that content now on pay TV, which has a penetration of about 30 per cent
compared to the ABC, which has a penetration of 100 per cent. It will be seen by a smaller audience. We may yet
still engage with the BBC around purchasing some of that content for a second run, but we are unsure about that
at the moment.
But we are confident there is a lot of content out there. Television, of all the entertainment sectors, is very
vibrant. There is great content coming out of the US and Europe, and the content that is working best for us, that
we get the strongest response from, is our Australian content. The new drama telemovie that we are rolling out,
Cliffy, had great audiences when we showed it on Sunday night. So our priority is the Australian content and we
want to do as much as we can afford to do whilst filling our schedule.
Senator BILYK: So you are not going to have just half-hour episodes of blank air?
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Mr Scott: No. There will be television on, I can assure you of that.
Senator BILYK: Can you tell me a bit more about ABC's digital platforms and what they have to offer
people.
Mr Scott: Absolutely. This was an important part of the triennial funding that was delivered by the
government in this budget. Part of that funding was to provide money for the online delivery of our digital
content.
Senator BILYK: How much did you get for that?
Mr Scott: We got $30 million over three years. I think this was an anachronism, really, in our funding model.
We had been always funded for radio distribution and television distribution. They are the big towers that you see
that allow us to beam it out so everyone can hear the radio and see the television, but we had never been funded
for digital delivery—and the growth in digital delivery is very large, very significant, for us. That is delivery of
content on our websites, our apps and our online services like iView. iView is a good example: iView plays are
up 86 per cent in the last 12 months—and it is not just Senator Conroy, either; others are watching it as well.
Senator BILYK: Senator Bilyk as well.
Senator Conroy: I am not all of that. There are only so many episodes of Doctor Who you can watch.
Mr Scott: Yes indeed. But what has really been very significant about that is that it is only a little over a year
ago that we put iView out on tablets and mobile phones, and now the traffic we are getting on mobile represents
well over 50 per cent of the iView traffic. So, as we see the growth of smart phones ever increasing—60 per cent
going through 70 per cent, and 90 per cent in two years time—we just know that more and more of our audience
are going to be wanting to consume our content on mobile phones and on tablets. There is a significant cost that
goes behind that, and this funding helps us to meet that demand.
There are other things we want to be able to do. We have an Android app for iView in development. We have
further services we want to be able to deliver. The public want us to be able to increase the bit rate. One of the
interesting challenges of this is that you can improve the services you are delivering, but what we are also trying
to manage is just how fast that demand take-up is as well. So we will try to balance that budget well. We are very
grateful for the funding that has been provided. We think it is a very important moment for our audiences. We
have been real leaders in Australian broadcasting in this digital space, and this will allow us to maintain that
leadership.
Senator BILYK: I just want to go back again to the position in Tassie—that one position.
Mr Scott: Yes.
Senator BILYK: If the position has not yet been filled, or the person has not yet started, can you give me a
time line in your response as to what that might be.
Mr Scott: We will come back to you on notice.
Senator SINGH: Last time we were together I asked you whether the ABC was centralising film archive
footage in Tasmania.
Mr Scott: Yes.
Senator SINGH: You said that you had to take that on notice. I have now received the answer to question No.
7, which actually shows that the ABC started centralising its film archive at least five years ago.
Mr Scott: Yes, that is right.
Senator SINGH: I am amazed that you had to take that on notice last time, that you were not aware of the
centralising of ABC's film archive footage, which started in 2008. That is quite amazing.
Mr Scott: Senator—
Senator SINGH: I have not got to the question yet. Brisbane, Perth, Adelaide and Melbourne—there is none
in Canberra or Darwin—have been and are being centralised to Sydney. Now that we know Tasmania is, why
have you decided to centralise film archives in Sydney? Surely the rent in Sydney would be higher than any one
of the regions where the ABC has a presence, such as Tasmania, WA or South Australia. Why is everything
outside of Sydney and Melbourne being dismantled and taken back to the ABC in Sydney?
Mr Scott: Mr Pendleton manages this area. I think he is the appropriate person to answer your question.
Mr Pendleton: The film archive has been brought back to Sydney because of the very nature of the content
itself. The film in particular requires—
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Senator SINGH: I know that. But why does it have to be in Sydney? That same climatically controlled
environment and all the necessities for storing film footage, and I can understand is a very particular operation to
do so, could happen anywhere. It does not have to happen in Sydney.
Mr Pendleton: But the ABC's facilities for our film archive were built in Sydney, back in 2002. The vaults on
our level 3 archive services, specifically designed to manage our film, were designed into that building. The
equipment to convert that film to digital format resides in Sydney and nowhere else within the country.
Senator SINGH: Because you have chosen to make it in Sydney. That is what my question is. Why?
Mr Pendleton: It was always in Sydney.
Senator SINGH: But in 2002 nothing had been centralised.
Mr Scott: But in 2002 most of the material was in Sydney. There was more in Sydney than anywhere else. A
building was commissioned—
Senator SINGH: I don't know about that. If you add up all the regions.
Mr Scott: There was some in many states but none in Canberra and Darwin. But a very significant asset was
held in Sydney. A new building and facility was being built in Sydney and a decision was made to make the
capital investment there. The decision then having been made, and Sydney being able to hold the entire facility, it
would be duplicative to replicate that around all the states. If the facility was there in Sydney, not to use it in that
way would I think be a questionable use of the assets. That is why the call has been made. There have been
broadcasters around the world, including the ABC, that have not treated their film archive well. There has been
deterioration and content has been lost. We have had difficulties with this in the past. That is why this strategy has
been in place. It is only the film. I was in Tasmania only last week and there is other significant archival content
that remains in Tasmania, including a lot of the news footage. Some of that stuff will be digitised over time to
make it accessible by our staff anywhere. But where are we going to keep the perishable film content and digitise
it? That is Sydney.
Mr Pendleton: The centralisation of this film makes the content available to program makers down in
Tasmania, whereas—
Senator SINGH: I am not denying any of that. I am asking why it has to be centralised in Sydney. Are you
aware of this view of the ABC being an organisation that is based out of Sydney. In fact, it is known as—
Mr Scott: There is a tension that we have to try to manage. I understand that. I have visited—
Senator SINGH: Are you aware of that, Mr Scott.
Mr Scott: I have visited every state and territory capital of the ABC in the last six weeks. I talk with staff. Am
I aware of that perception, from time to time? Yes. I am also aware of the tension that we have a responsibility to
be efficient and effective. So if in fact there is this facility in Sydney that was planned and built over a decade
ago, then to be efficient and effective and say you have to put it in one place—it would probably be negligent of
us not to use the facility that is there.
In our discussion, do we look for opportunities to deploy staff or groups of staff outside Sydney and
Melbourne? Yes, we do. In fact, important services are delivered out of Adelaide: our payroll and financial
services staff operate from there. Part of our international broadcast team operates out of Adelaide. So we do look
for that kind of opportunity. But there are efficiencies that come with centralisation, as well. So holding that
tension is I think a unique challenge for us as a public broadcaster.
We clearly do not centralise everywhere. We have 60 local radio bases out there. But we do try to find a
balance between efficient use of resources and also recognising that we are a national broadcaster.
Senator SINGH: With the recent closure of the whole Tas production unit, how much of the file footage that
would have been located there has been archived to Sydney, and how much has not been?
Mr Scott: Does the content of the final paragraph answer your question: 3,700 cans are moving to Sydney and
Hobart archives still house and manage the 9,109 videotapes in the collection, the digital archive of one-inch
tapes and the news service, as well? So some has gone to Sydney but a significant amount still remains in Hobart.
Just the film has gone, not the videotape.
Senator SINGH: I am talking about film.
Mr Scott: The film has gone. All the film is coming into one place.
Senator SINGH: Was any film thrown out during the closure of the production unit?
Mr Pendleton: No, I am not aware of any film being thrown out.
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Senator SINGH: Could you take that on notice?
Mr Pendleton: Yes.
Senator SINGH: How was the closure of the production unit handled.
Mr Scott: I think we have discussed this. There was—
Senator SINGH: How was it dismantled? What happened?
Mr Scott: Are you talking physically or about the staff?
Senator SINGH: Physically.
Mr Pendleton: The movement of the tape?
Senator SINGH: What happened to everything?
Mr Scott: I was there last week. There are some empty edit suites at the moment. We are looking at how that
facility is best used. Some of that facility was at end of life. Other parts of it will be redeployed and used for
spares. The operations unit is currently working through that now.
Senator SINGH: What happened to the editing suite?
Mr Scott: The editing suite is still there at the moment. As I was briefed on it last week, we are looking
through to see. I got the impression that some of that edit suite will be moved elsewhere in the country, but it is
largely at its end of life and it might be used for spares, I think—
Mr Pendleton: Spares.
Senator SINGH: I presume the ABC has some kind of strategy when it closes down parts of its operation,
whether it happened in WA or in Tasmania, and you would seek to ensure that things are done in a systematic
way so that certain file footage, for example, that is of value I am sure to the ABC, and certainly to the broader
community, is looked after, filed and archived in the appropriate way.
Mr Pendleton: If you are talking about the technical equipment of the facilities itself—the edit suites that are
down there—by and large most of that equipment is at end of life. It will be—
Senator SINGH: What do you do when it is at end of life? Do you throw it out?
Mr Scott: If there were still production there it would be part of the capital replenishment process as we went
through and refreshed the facilities. Those facilities will not be refreshed. Because of extending the life of our kit
the way we do, we will take a lot of that stuff and use it for spares in other facilities around the country.
Senator SINGH: Can you provide the committee with details of what happened with the closure of that unit,
and whether things were taken as spares.
Mr Pendleton: I do not think we have taken anything out of there yet, but it is certainly being considered.
Senator SINGH: Mr Scott was there last week. I think he would know what it looks like.
Mr Scott: People were working on that last week when I was there. I was told that, as Mr Pendleton said, a lot
of that equipment was at end of life and that—
Senator SINGH: But even if something is at end of life you do not necessarily throw it out.
Mr Scott: No.
Mr Pendleton: No.
Senator SINGH: It could be used for community broadcasting, radio and what have you. It is not necessarily
at the complete end of life.
Mr Pendleton: We re-purpose it.
Mr Scott: And we often try to re-purpose it. We can give you the detail around that. The work around that
planning was going on when I was there last week.
Senator SINGH: I would like the details. That would be great.
Mr Scott: Yes.
Senator SINGH: Getting back to something Senator Bilyk was talking about, which is the very disappointing
loss of the BBC contract to Foxtel. Obviously there are BBC programs that you will lose now, like In the Thick of It and Silent Witness and the like. You obviously have this new triennial funding.
Mr Scott: Yes.
Senator SINGH: You now have a hole with some of these BBC programs that will not be aired on ABC,
which is disappointing for some viewers I am sure. There is an opportunity here is there not for there to be more
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Australian content to be aired now that you have to fill this with something? Or are you just aiming to fill it with
more British or European content from elsewhere, because I think I heard you say to Senator Bilyk in your answer
that there was no thought about your actually looking at Australian content to fill this.
Mr Scott: That is not what I said. I said that we are looking at the mix. I said that there is a difficulty, though,
given that on ABC1 we have I think 250 hours to fill. Given the money we paid for the BBC contract and given
that Australian production is much more expensive than purchasing content that is made elsewhere, we have a
problem to solve. We have a problem in that we have to fill the schedule and we do not have more money
available to fill the schedule, so there will be this sweet spot there. This is an issue that our new director of
television, who starts on Monday, will be addressing, but I have discussed it with the television executive and the
acting head of television now.
We are open to the prospect that there might be some more programs that we could commission but the
fundamental challenge we face is not our levels of Australian production. We have had a very significant
increase, say, in the levels of Australian drama in recent years, thanks to the funding provided by the government.
It is now 80 hours of new Australian drama, up from 20 hours just a couple of years ago. The challenge is that if
in fact you just try to do more of that, if you try to replace Call the Midwife with an Australian drama like that
then the money you have spent on the BBC contract is not going to go very far and you are going to have
scheduling problems.
Senator Bilyk wanted an assurance that there was not going to be blank time on the television. We have to fill
it, so I would hope that we would be able to do some Australian production, but the vast majority of that money
will go on—
Senator Conroy: VFL, Tassie Football League.
Senator SINGH: That is a very good example, Minister.
Senator Conroy: You could show more of the doggies. The doggies are still in the AFL, aren't they?
Mr Scott: The vast majority of it will go on acquisitions, because that is how we can make our schedule work.
Senator SINGH: You may have to take my next question on notice. How much does the ABC currently
spend on BBC programs?
Mr Scott: This contract was worth around $15 million per annum.
Senator SINGH: The ABC was spending $15 million per annum on BBC programs?
Mr Scott: Yes.
Senator SINGH: And you are saying that it is going to be too costly to fill the gaps—
Mr Scott: I am saying that that was delivering hundreds and hundreds of hours of content.
Senator SINGH: Sometimes there are re-runs as well.
Mr Scott: But that is how the schedule comes together. An hour of quality Australian drama, just with us
paying a licence fee, costs about $450,000 an hour. A program like Cliffy, which we showed last Sunday night,
costs much more than that. So that eats into your $15 million very quickly, and we have hundreds of hours of
content we need to fill.
We have spent about $240 million on television, of which about $35 or $40 million is on acquisitions. The rest
is on our making and creating things. That $35 to $40 million we spend on acquisitions provides hundreds and
hundreds of hours of content. If in fact you were just trying to replace that with Australian content you would
need three, four, five or six times as much money as we are currently paying on the BBC contract to fill that gap.
So it is a problem we want to solve.
Our instinct, I want to assure you, is that given the chance and the opportunity—with the exception of Dr Who
for the minister!—our aim is to do as much Australian content as we can possibly do, given the budgets we
operate under.
Senator SINGH: I think it is your charter. It should not just be your aim—it is called the ABC, not the BBC.
Mr Scott: The charter talks about programming of wide appeal and specialist interest. ABC television has
been on-air now for more than 55 years. In every one of those 55 years international content has been a part of the
service we have delivered and it has been very popular with the Australian public. I am pleased to say, though—
and this is one of the things I would say about the BBC contract—it would have been a decade ago that some of
our very top rating programs came out of the BBC contract. That is now no longer the case, I think. Some of our
most popular international programs do not come from that contract, but some of our most popular, highest-rating
programs are ones that we make at the ABC or commission at the ABC. There is a great thirst for quality
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Australian content, which we are helping to meet. We need to find many hours of programming with the absence
of the BBC contract, but it is not as though we have lost programs that we view as the crown jewels. Our crown
jewels are our Australian content in this era.
Senator BIRMINGHAM: Firstly, I want to deal with the principles. Senator Abetz dealt with some of the
points of detail around things like fact-checker and Vote Compass. Fact Checker purports basically to decide on
what is or is not factually correct, and in doing so will deal with often contentious matters. Vote Compass will
purport essentially to tell people which party they best align with once they have answered a few questions—
Senator Conroy: Christian Kerr has already left. You have missed the story—it has gone to print—
Senator BIRMINGHAM: Don't these types of activities risk the credibility and the reputation of the ABC.
Aren't these the type of activities that are better left to commercial enterprises that can blatantly—
Senator Conroy: Let's let The Australian do a fact check—
Senator BIRMINGHAM: take a side if they want to, because that is their commercial right. It is not the
ABC's commercial right—
Senator Conroy: That is true. The Australian has a right to be the Liberal Party's cheer squad—
Senator BIRMINGHAM: and the ABC should be protecting its reputation at all times. Isn't this an
unnecessary risk for the ABC?
Mr Scott: That is an interesting question. I think it is one we have considered. We have looked at this at an
executive level and, also, both of these factors have been considered by the board. I would say on fact-checking
that we view this as complement to a lot of the other work we are doing. As I said earlier, the ABC has been the
absolute leader in social media. I think by creating News24 we have helped add to the frenzy that can be the 24-
hour news cycle. Assertions can be made very quickly and distributed very widely in this time in a very short
period of time. With the amount of spin, online commentary and claim and counter-claim that there is out there,
often around what is truthful, what are the facts, we thought that there was a benefit for our audience that would
come to bear by having a specialist team that we could put to one side and, when the audience really does not
know which way is up around some of these things, because of all the contesting claims around what the facts
actually show, to have an independent group that actually goes and looks at the facts and reads the reports to
provide some analysis. Some people have said to me on this, 'Isn't this what journalists are meant to be doing
anyway?' And of course they do. Our long-form current affairs teams are doing this kind of work. But we felt it
was an important addition in the news service we are providing to have a specialist team to do this. I say to you
that we will do it in an ABC way that will be quite different to some of the other fact-checking operations that are
going to go on out there that—
Senator Conroy: I could be accurate—as opposed to the one going at the moment!
Mr Scott: the commercial broadcasters might develop. We will be far more accountable for the work of that
than any other organisation because of the accountability mechanisms that are built into the ABC. But, if you are
asking whether in fact—
Senator BIRMINGHAM: And when somebody takes issue—
Senator Conroy: I can understand why you are terrified of a fact-checking operation.
Senator BIRMINGHAM: with the determination of the facts by the ABC fact checker, the ABC will be
dragged into a debate over the issues and the position the ABC has taken on the issue rather than the ABC simply
reporting what other people have said.
Senator Conroy: The job is not just to report what Malcolm Turnbull said. I know it happens a lot, but that is
not its job.
Senator BIRMINGHAM: This will be the ABC taking a position on the facts.
Mr Scott: I would say to you to look at Four Corners over 50 years. Four Corners through its investigative
reporting has attempted to dig into deep and complex issues and to find the kernel of truth in those issues. As
Four Corners has done that there are some people who have taken exception to that, but that is the nature of
journalism. The nature of journalism is not simply to say he said this and she said this; it is an attempt to dig and
to discover where the truth lies. I think part of the risk of the 24-hour news cycle is that we simply retreat to he
said, she said, one the one hand, on the other hand element. There is some of that reporting that goes on in the 24-
hour news cycle, and we do that too.
Senator Conroy: Extensively.
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Mr Scott: But is there a role for digging? I simply say, to provide you wish some reassurance, is that it is not
just that a judgement is reached but that the thinking, rationale and facts behind that are then accrued. I expect that
there will from time to time be debate around that, and let that debate happen, but I can tell you there is debate
around our programming all the time. We do not always with a Four Corners, a Lateline, a 7:30 or a background
briefing seek the path of no controversy; we seek the path of good, robust journalism. That is why there might be
some risk in execution. There is risk in execution with a lot of what we do. We are confident that, with a good
team, good leadership and good policies, we should be able to execute it well.
Similarly, around Vote Compass: we thought very seriously about this. We talked with academics around the
world. We looked at how it had rolled out everywhere. I felt that, after the 2010 campaign, where there was very
serious criticism of the way the 24-hour news cycle dominated all levels of media coverage and the thirst there
seemed to be from some in our audience to dive deeper and engage with policy, we needed to look for some
mechanisms that enabled that. There was some controversy around the CBC element, but that was an early
rollout. The model has been fine-tuned since then. I really think that, if it were endemically biased against the
right as Senator Abetz had suggested, there is no way an organisation like The Wall Street Journal would have
embraced it, endorsed it and used it in the US campaign.
Senator BIRMINGHAM: That sort of makes my point there. That is a matter for the judgement of a private-
sector organisation to decide how they want to play a card.
Mr Scott: I am saying that, when we do the risk management of it, we have looked at the experience
elsewhere. Is there benefit for providing opportunities for some members of the audience who want to engage
more substantively around policy issues? We think there is.
Senator BIRMINGHAM: You do not need to give them a compass or a guide at the end of the day to engage
more substantively on policy issues. There are many ways you could provide deeper coverage of policy without
saying, 'And, by the way, that's where you stack up in how you should vote.'
Senator Conroy: If any ordinary Australian says, 'I want to work out which party will deliver a real NBN,' the
obvious vote pendulum is very simple. That vote compass will point to the Labor Party. It is just that simple. If an
ordinary bloke goes, 'I support the NBN,' it will just point straight at the Labor Party.
Senator BIRMINGHAM: Nobody could undermine your case than the guy sitting to your right, Mr Scott.
Mr Scott: I can assure you that Vote Compass is not going to—
Senator Conroy: Straight at the Labor Party.
Senator BIRMINGHAM: Is that how Vote Compass is going to work?
CHAIR: Order!
Mr Scott: Vote Compass in the incarnation that we are rolling out does not tell people how to vote.
Senator BIRMINGHAM: To a different issue quickly: how many times has Radio Australia's signal into
Asia been jammed over the last 12 months?
Mr Scott: I would have to check on that. My experience on this here and also in other media outlets is that
signals or website can go down or disappear from time to time and then come back. We are given no notice when
they go down and we are given no notice when they come back. It is a mystery to us in some respects.
Senator BIRMINGHAM: Is there a level of frequency?
Mr Scott: No. I would say it is at best from time to time.
Senator BIRMINGHAM: What does 'from time to time' mean?
Mr Scott: Two or three times I can recall over recent years. Often it emerges as a transmission issue. This is
short wave.
Senator BIRMINGHAM: Was there an issue earlier this year?
Mr Scott: There was an issue this year. For a period of time it went down and then came back.
Senator BIRMINGHAM: How long a period of time?
Mr Scott: Ten days or two weeks—something like that. I can check that and put it on notice.
Senator BIRMINGHAM: Ten days or two weeks is a rather long period of time to have your signal down.
Mr Scott: Yes, but, as I recall, there were numbers of international broadcasters whose radio signals could not
be heard in China for a period of time. We were simply aware that ours came back.
Senator BIRMINGHAM: The BBC said at the time that these actions were indicative of a well-resourced
country such as China. Is that something the ABC shares?
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Mr Scott: We do not know a great deal about it. I think that, clearly, the ability to block websites or to block
short-wave transmission shows a level of technological capability. We can make our assumptions on what has
caused that even though I do not think it is always straightforward to know what a particular trigger was for that
level of intervention.
CHAIR: It could have been Menzies House!
Senator BIRMINGHAM: We wouldn't be blocking the signal into China though!
Senator Conroy: No, you'd just be installing someone's equipment!
Senator BIRMINGHAM: Mr Scott, you and Mr Spiegelman were in China a couple of months after the
nearly two weeks of signal blocking. Did you raise the issue with any authorities in China?
Mr Scott: It did not specifically feature in our discussions. We had been looking—and did—to sign a number
of memoranda of understanding with Chinese broadcasters, which creates opportunities for our radio and
television content to go to far broader audiences in China. There were formal and informal discussions around and
ease of distribution of content. The strategy that we have pursued over a number of years has been around getting
landing rights for Australia Network. One of the things we are now working more extensively on is delivering
blocks of our content to be delivered on Chinese broadcasters. Mr Spiegelman and I went to a location north of
Beijing where ABC Children's Television is doing a joint production with Central China Television. I expect that,
when that program lands, it will instantly find an audience far greater than any Australian television program
made in the 50-plus years of television in the country. So that was the focus of the planning of that meeting.
Senator BIRMINGHAM: Surely there are pretty limited prospects of getting landing rights for the Australia
Network in China if in recent times they have been blocking the Radio Australia signal for up to two weeks.
Mr Scott: You put a deep science and strategy to it. I would simply say that the BBC's radio service was not
available in China for that time but BBC Television does have landing rights. So one does not necessarily follow
the other at all.
Senator BIRMINGHAM: Okay. Last issue: is Mr Ross still covering technology issues for the ABC?
Senator Conroy: Oh, here we go!
Mr Scott: He is the editor of the technology and games section, yes.
Senator Conroy: Malcolm's intimidation continues to work at full. I am glad to see you are just his pawn.
Senator BIRMINGHAM: In response to some of Mr Ross's writings Media Watch looked at this matter on
11 March. Mr Bruce Belsham, head of ABC Current Affairs—
Senator Conroy: Keep running the intimidation routine.
Senator BIRMINGHAM: was quoted as 'having discussed with Mr Ross the importance of providing a
diversity of perspectives and the importance of analysis being underpinned by accurate information. He is aware
of the need to ensure this.'
Senator Conroy: He has been, and the truth hurts.
Senator BIRMINGHAM: Has he been counselled by ABC management?
Mr Scott: I understand there were discussions with him on his editing of the site.
Senator BIRMINGHAM: Has he been counselled on more than one occasion?
Mr Scott: I am not sure of the specifics of it. I would say that he reports into a line of the news division, so I
imagine there is ongoing discussion on the performance of the site and an ongoing discussion around his editing
of the site. That is the kind of editorial oversight that exists around every program for every editor.
Senator Conroy: Stop trying to intimidating him out of fact checking the proof of what fraudband Malcolm
Turnbull is offering to the Australian public. Just keep going, Senator Birmingham. You used to actually believe
in a few things, but clearly intimidation of ABC staff is high on your list.
Senator BIRMINGHAM: I believe you are an idiot. Honestly, this is the most unprofessional conduct I have
seen by a minister in any of these estimates over the three days.
Senator Conroy: You just sit there and keep intimidating ABC journalists on Malcolm's behalf, and you want
to talk about professional conduct?
Senator BIRMINGHAM: What is intimidating about what I have asked? I quoted Media Watch, and Mr
Scott confirmed the guy is being counselled. Honestly!
CHAIR: Okay—
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Senator Conroy: Malcolm with the glass jaw. The truth really hurts.
CHAIR: Order, Senator Conroy!
Senator BIRMINGHAM: You are the precious one here, mate.
CHAIR: Senator Birmingham, you should note bite. You know what happens. Senator Williams.
Senator WILLIAMS: Thank you, chair. Mr Scott, I asked some time ago ABC television would ever
consider reintroducing a northern New South Wales bulletin each evening. Did that ever make any progress? I
think you said at the time it was something worth considering.
Mr Scott: What I think I indicated to you at the time was that fast broadband and digital media gives more
opportunity for us to distribute local video news conference and find audiences with it.
Senator Conroy: Except under their plan, to correct you. If you are going to use the copper, it is really going
to struggle.
Mr Scott: I think the prospect is of us being able to use digital television spectrum to do that and to break it in
for part of the state. Over time, there will be more localised video content. One of the things we were funded for
in the budget was for more state based current affairs coverage. We are keen that we get the local news element
right and deliver it to the biggest audience that we can.
Senator WILLIAMS: Good. Disregard Senator Conroy; of late, when the Sydney Swans have been thrashing
Collingwood, he gets very much on edge and quite intolerant!
Senator Conroy: It is all right; he's got me there! I'll have to shut up for at least five minutes now!
Senator WILLIAMS: Is the ABC going to broadcast from a tally room at the federal election?
Mr Scott: We are still working on that. It is a very interesting question.
Senator WILLIAMS: I notice some of the commercial channels will not be.
Mr Scott: We want to deliver the best service we can for audiences. We traditionally get a very big audience
on election night. Some of the state elections have moved away from the tally room. I think the last leader to
appear in the tally room goes back 20-plus years, so we will look at that and review that over time. We will let
people know when we have come to a final decision.
Senator WILLIAMS: On the election issue: ABC regional radio services is compelled to keep an accurate
log of political stories they run after the writs are issued—in other words, to see the balance on the record.
Mr Scott: Yes. We debate about it and still record share of voice, but the other thing we do is keep a log or
diary of where offers for interviews were made, because sometimes share of voice can get out of kilter because
one party or another does not want to be interviewed or want to appear on air. So we keep a pretty comprehensive
log of those matters.
Senator WILLIAMS: If someone lodged a complaint if they thought someone was being biased, how do they
complain and how speedily is that complaint dealt with bearing in mind the election would be just around the
corner?
Mr Scott: We do significant monitoring of our election campaign. You will see on our website that we have
good processes for people to lodge complaints. There is a 60-day window, but I appreciate that, if there were a
contentious issue during an election campaign, we would try to fast-track some of that.
Senator WILLIAMS: On another issue, earlier this month the ABC suspended rugby league caller David
Morrow for alleged racist comments before a game although that suspension has now been lifted. Was there no-
one on the studio panel in the broadcast who could have cut the remarks before they went to air? Have you
inquired into that?
Mr Scott: There was clearly a difficulty in the communication about that. He was live on air. The way that
radio operates, we go in to delay when we are dealing with the public. There is a seven-second delay and there is
somebody there ready to press the dump button on that. But often our broadcasts are not in delay.
CHAIR: I wish we could do that in Senate estimates.
Mr Scott: In fact, when our broadcasters are on air they are not in delay. We go into delay for that part so that
is why we could not have done anything.
Senator WILLIAMS: I think they are looking at a 14-second delay when they interview Senator Conroy.
How many complaints did you receive and what was the nature of those complaints about Mr Morrow?
Mr Scott: I would have to take the tally on notice. There were a number of concerns raised and I can get the
precise number.
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Senator WILLIAMS: Could you also get the comments in support of Mr Morrow.
Mr Scott: I think I should add that the investigation is now complete. Mr Morrow has accepted these actions
were in breach of the editorial policies, the code of conduct and the ABC values. He has apologised for that.
There have been some consequences that have been noted for that. They will work their way out.
Senator WILLIAMS: I am of the opinion he is very popular. He has apologised. He is the best radio rugby
league caller you have. And now he is banned from calling NRL finals and State of Origin matches. I suppose we
all say things in life we wish we had not at some stage. Would it be considered at some time in the future that
David Morrow would be back calling NRL finals and State of Origin matches?
Mr Scott: As I understand it, that is for this year.
Senator WILLIAMS: So he may be back next year?
Mr Scott: Yes, that is right.
CHAIR: Senator Williams, could you have a talk to Senator Abetz about that set of values?
Senator WILLIAMS: Yes I could. I would like to hear him even call some AFL when the Swans are
thrashing Collingwood again.
Senator McKENZIE: Mr Scott, I have questions about how well resourced you feel the ABC is to deliver
that high-quality service. Would you say you are pretty well resourced?
Mr Scott: We get given a lot of money but we do a lot with it. We can compare the volume of our output
across domestically four television networks, five radio networks, a host of digital radio services and other online
services such as iview. I think we represent great value for money.
Senator McKENZIE: I think regional Australia would agree. Are there any areas you would consider
understaffed in the organisation?
Mr Scott: I am sure if you spoke to our staff they could identify many areas they feel are understaffed. We try
to manage this well. Broadly, a significant point is I saw some figures a little while ago that said the ABC has 25
per cent fewer staff than it had 25 years ago. If you compare the ABC now to 25 years ago, with less money in
real terms, with far fewer staff we create far more content.
Senator McKENZIE: You do. I am just conscious of time. I only have you for eight minutes and I have
already put a lot on notice. I appreciate that workplace has changed in 25 years.
Mr Scott: What we try and do is manage the workload of our staff so that with we are managing the output to
the staff that we have. If we had more staff and more dollars we would be able to create more output and invest it
in programming.
Senator McKENZIE: I want to be clear, from a management perspective, there are no significant issues of
understaffing either in geographies or in areas within the organisation?
Mr Scott: I can come back to you on notice on it. I think all our divisional heads would like more staff. I think
all our production teams would like more staff, but we manage best we can. The issue that remains a challenge for
us—the minister is across this and aware of this—is around capital. We are conscience that to be the kind of
broadcaster we are now in a digital era puts very significant demands on our capital budget. We are concerned
that we need more capital funding to fund the footprint of local radio stations and the eight state territory capitals
that we put out. We have had independent reports that have validated that. That is a matter we raised with the
previous government, we have raised with this government and we will continue to raise in our budgetary
negotiations.
Senator McKENZIE: I am taking it out of the PBS that you have got an average staff of 4,542. Could you let
me know on notice—unless you can get it quickly—how many staff are employed in the 51 regional radio
stations.
Mr Scott: We will take that on notice, yes.
Senator McKENZIE: I would also like a breakdown of full-time, part-time and casual. For those casuals, I
would like the average number of hours worked per week.
Mr Scott: We will get a team to work on that.
Senator McKENZIE: I am sure the statistics will be somewhere quite easy to find. In the regional radio
context, when you are delivering this diverse, high-quality service what happens when you cannot staff your local
radio stations—in times of staff going on holidays, for instance, or sickness or accidents?
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Mr Scott: What we will sometimes do is just broaden the footprint of where the broadcast goes, so sometimes
an adjoining local radio station's program will go across. One area I would say we are watching and we are
concerned about is the increased demand that emergency broadcasting has brought to the ABC over the last
decade. I think it is true to say that there was not a weekend from the beginning of November to the end of March
that we were not emergency broadcasting somewhere in the country. Of course this hits us at the peak of summer,
which is a time when a lot of our staff are normally away. There seem to be more emergencies, and those
emergencies are declared earlier, and this has put us under significant pressure, particularly in radio and in
regional radio—remote areas as well.
Senator McKENZIE: Can you talk us through what broadening your footprint looks like on the ground?
Mr Scott: I will give you an example from New South Wales of how it works every night. The local radio
program out of 702 Sydney also goes to 1233 Newcastle, 666 Canberra and all through New South Wales. What
may happen if someone is away, and we cannot get a replacement in or the budget is particularly tight, is that a
local radio station on, say, the mid-north coast of Queensland would go into Far North Queensland and the
broadcaster would know that they are travelling all that way and their program would be tailored accordingly. We
flex that way quite often. We have national programs on local radio, we have state-wide programs and we have
programs that go into more than one local radio area.
Senator McKENZIE: Yes, I understand that in the evenings that tends to happen.
Mr Scott: And it will sometimes happen at breakfast or morning.
Senator McKENZIE: You said budgets are tight. Could you flesh that out?
Mr Scott: For example, emergency broadcasting is expensive. We can bring in extra staff, we can bring staff
in from leave, we have to fly them around—that comes out of the radio budget. If there is no more money in the
radio budget for that, sometimes Mr Pendleton provides supplementation but sometimes we have to make these
budgets work.
Senator McKENZIE: I am assuming that is program 1.1 on page 64. What proportion of the radio budget is
dedicated to or has been spent, maybe in the last 12 months, on emergency broadcasting? You are saying it comes
out of that?
Mr Pendleton: Yes.
Mr Scott: It comes out of that. Sometimes there is additional money that we have had to provide quarterly to
top it up.
Senator McKENZIE: I would like to see over time, since you have had that increased responsibility, what
impact that has had on your budget bottom line.
Mr Scott: Yes, we are happy to provide that.
Senator McKENZIE: In terms of how often you have had to increase your footprint—and I am thinking
particularly of morning radio in regional areas specifically, not Tony Delroy into Bendigo—
Mr Scott: There is no bigger footprint than Tony Delroy.
Senator McKENZIE: You are not telling me anything I do not already know! How often does that occur?
Mr Scott: I am sure we can give you a sense of that.
Senator McKENZIE: Mackay residents waking up to Mount Isa and Bendigo waking up to Ballarat might
seem quite close together when you have got the big map, but they are very distinct communities with very
diverse needs. In the ABC's desire to grow their digital footprint and the different technologies they are using to
communicate their news to us, it is very important to remember that you do not just operate in your five city
metropolitan markets. Your greatest percentage of listeners are in regional Australia and they deserve to get a
quality service.
CHAIR: We have run out of time, Senator.
Senator McKENZIE: I look forward to getting your answers. If there are 30 seconds, I have direct
representation from a member in my party room who is most concerned about spending public money—
CHAIR: But Senator Abetz is already here!
Senator McKENZIE: No, actually, this is a true Bourke-ian representation moment. I would like to know the
amount of public money that has been spent on the program Minuscule.
Mr Scott: It is an acquisition.
Senator McKENZIE: It is and it is a French program.
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Mr Scott: No program divides our audience more with passionate supporters and those who detest it. Which
category does your question come from?
Senator McKENZIE: I cannot tell you that, but please note: there are seven credit slides in what is less than a
five-minute program.
Mr Scott: Animation does that. I thank you for—
Senator McKENZIE: Details of the cost of this French program in public dollars would be appreciated.
Mr Scott: Yes, Senator.
Senator McKENZIE: And also an explanation of why your major presenters—your big names; your Tony
Joneses of the world—are on salary packages.
CHAIR: Mr Scott, you should take that on notice. I am glad the National Party are interested in Minuscule—I
am not surprised.
Committee Suspended from 21:02 to 21:22
Telecommunications Universal Service Management Agency
CHAIR: Welcome, Mr Lomdahl. I am not sure if this is your first appearance.
Mr Lomdahl: Yes, it is.
CHAIR: Welcome to estimates. Also, broadcasting have indicated that they have a problem with telephones
interfering with the microphones, so please try to keep mobile phones away from the mikes. We have lost all of
Senator Abetz's tirade against the ABC because of bad communications—only kidding! Thank you for attending
today, Mr Lomdahl. Would you like to make an opening statement?
Mr Lomdahl: Thank you, Mr Chairman and Senators, I have a very brief introductory statement. The role of
the Telecommunications Universal Service Management Agency is to administer contracts and grants to ensure
that all Australians have reasonable access to universal telecommunications and public interest services. TUSMA
commences a process of moving to a flexible and innovative contract based model. Tonight I would like to update
the committee and provide some background about my role. I commenced as the permanent CEO of TUSMA in
November 2012. The role of the CEO is to manage the day-to-day operations of TUSMA. My staff and I provide
advice to the chairman and members, who are responsible for decisions about TUSMA contracts and grants. We
operate in a transparent and accountable manner. We will publish the first TUSMA corporate plan by 30 June this
year. We have set out details of the contracts we administer on our website and report on the performance of
contracts in our annual report.
A key focus in our first year has been the competitive tender for the National Relay Service, which is an
Australia-wide phone service for people who are deaf or have a hearing or speech impairment. After the
completion of a successful tender process, the minister announced two new service contracts: one is for the
operation of the National Relay Service and the second is for supporting outreach and communications services.
The new contracts take effect from 1 July 2013. They continue and improve existing services and allow us to
introduce new services. The improvements include a two-way internet relay service, a smart phone application, an
improved website and extended helpdesk hours. The new services are an SMS relay service, including access to
emergency services, a video relay service and web based caption telephony. The new services will be provided
within the existing National Relay Service budget, highlighting the value and innovation that is possible through a
competitive tender process. News services will deliver major improvements to the national relay service that will
make a real difference to people who are deaf or have a hearing or speech impairment. Services will be rolled out
from 1 July progressively to allow users to become familiar with each service as it becomes available.
Our other priorities for this year include continued management of standard telephone service and payphones
under the universal service obligation; and emergency call services and safety net arrangements for the NBN. The
safety net arrangements mean people who have basic telephone services will be assisted to migrate to the fibre
network, and we will also support communications to make sure they are adequately informed of their options.
Under the TUSMA agreement with Telstra, regulatory determination set out the performance standards for the
USO services, and we will report on outcomes later this year.
Finally, I would like to note the contribution of our acting chairman and acting CEO and provide some details
about our new chairman Mark Darass. On 23 February the minister announced the appointment of Mr Darass for
a four-year term. Mr Darass was the Deputy Chairman of Australia Post. He is special counsel with Sparke
Helmore Lawyers, a director of John Holland Engineering and has been a member of the Takeovers Panel since
early 2012.
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Finally, I would like to take the opportunity to acknowledge the contribution of the acting CEO Sylvia
Spaseski and the acting chairman Peter Harris to the establishment of the agency. Mr Harris and Ms Spaseski set a
strong direction for the agency and recruited a team of enthusiastic and professional staff who I have the pleasure
of working with. Thank you for the opportunity to update the committee.
Senator McKENZIE: Telstra has contractual obligations to provide telephone services to all Australians. Is
TUSMA aware of any instances of Telstra failing to provide telephone services to a premise because the NBN is
to be switched on at that premise in the near future?
Mr Lomdahl: I am not aware of a specific example but, if there is a specific example, then I would be happy
to take up the example and investigate it.
Senator Conroy: Could you just explain?
Senator McKENZIE: My question was is: TUSMA aware, not am I aware—
Senator Conroy: No. I just wanted you to, if you could assist the committee, explain the context of your
question.
Senator McKENZIE: The context of my question is: I would like to know if TUSMA is aware of where
Telstra has failed to provide a telephone service as a result of the NBN being about to be connected. My
understanding of the answer was: they are not immediately aware but are going to check whether they are aware.
Senator Conroy: I am seeking clarification on whether or not, for instance, it was the NBN was about to be
connected the next day or within three months, six months or 12 months? There is a policy reason for asking for
that context, because it depends on whether or not it is a particular period of time. Telstra have some exemptions
but must provide a telephone service in most cases, depending on what the exemptions are so that is the context I
was seeking to understand from you, Senator McKenzie. It is a fairly broad question in the way you have phrased
it. There are occasional cases that I am made aware of where customers are told by representatives of Telstra that
no, they are not going to connect and then, after some discussion, it is determined what the legal position is. There
are criteria.
Mr Lomdahl: There are regulatory determinations that Telstra must meet under the universal service
obligation, so we would be happy to investigate any particular case.
Senator McKENZIE: Thank you but I am asking if there are cases. I am more than happy, if you have made
decisions that that were well within the bounds of the regulations and common sense prevailed, for you to set that
out and if there are other instances where that may not have been the case. What is the process for people to
complain about Telstra not complying with its contractual obligations in relation to the provision of a standard
telephone service?
Mr Lomdahl: There are a number of avenues open to customers who have got complaints.
Senator McKENZIE: I have never had to make one so, if you could just outline them for me, that would be
great.
Mr Lomdahl: The usual process is that customers are encouraged to directly contact their retail service
provider. If they do not get satisfaction through that avenue, they have the option of going to the
Telecommunications Industry Ombudsman. In relation to the performance standards that I oversee through the
contracts, they could certainly draw breaches to my attention and to the attention of TUSMA. Similarly, ACMA
polices regulatory standards. So dissatisfied customers could contact ACMA in relation to those matters. There
are a wide range of avenues open to people who have problems with their services.
Senator McKENZIE: How does TUSMA work with the TIO to ensure that Telstra is complying with its
contractual obligations?
Mr Lomdahl: We have had a number of initial discussions with the Telecommunications Industry
Ombudsman. As we get the point where we are assessing Telstra's performance, I envisage that we will sit down
and consult with them. We have certain duties in legislation to provide them with information about our activities.
So we see that there is an opportunity to consult with the Telecommunications Industry Ombudsman about
performance of the contractor under the contracts.
Senator McKENZIE: So there is the opportunity to have that conversation. Do you have regular—
Mr Lomdahl: We have had several conversations with the Telecommunications Industry Ombudsman so far.
Senator McKENZIE: Who were they instigated by—you or them?
Mr Lomdahl: I have visited the TIO and we have had a number of meetings with them. Both parties are
interested in having that conversation and dialogue about the outcomes for customers with the
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
telecommunications service, whether Telstra is meeting its obligations under the TIO scheme and whether Telstra
is meeting its obligations under the various regulatory determinations that it has to meet.
Senator McKENZIE: Is Telstra subject to penalties for not complying with its contracts with TUSMA?
Mr Lomdahl: There are provisions in the contract which require them to notify us of a material breach. We
can ask them to take action to rectify breaches. We have the right, if they do not rectify them, to withhold
payments to them. So there are performance clauses. In the case of an extended failure to comply with the
conditions of the contract, there are more drastic solutions even leading to the termination of the agreement. But
there are a range of mechanisms in the contract for us to address any failures.
Senator McKENZIE: They are the ones that will actually let you know? They notify you?
Mr Lomdahl: We have regular contact with Telstra to discuss their performance. If we are aware of breaches,
we will draw those matters to their attention and ask, 'What steps are you taking to rectify these matters?' or 'What
is the situation in this particular case?'
Senator McKENZIE: Where do you gather that information from so that you can actually walk in to your
conversations with Telstra with that?
Mr Lomdahl: This is our first year of operation. We are endeavouring to set up contact with appropriate
stakeholder groups and community groups.
Senator McKENZIE: Such as?
Mr Lomdahl: For example, in the last couple of weeks I have been to the Local Government Association of
Queensland. I visited the Isolated Children Parents' Association and the New South Wales farmers' federation. We
have programs that we are endeavouring to roll out. That is a mechanism. I would also encourage groups or
consumers that have problems with their telecommunications that are relevant to our responsibilities to contact us
directly. In relation to things like the National Relay Service, we are setting up formal consultative arrangements
with groups representing the deaf community to make sure that they are involved in the provision of the service
and can give us feedback on the quality of the service. So I see that there are a range of mechanisms that I can put
in place to get feedback directly as well as receiving the official reporting from Telstra.
Senator McKENZIE: According to the DBCDE's guide to migration of voice-only services, 12 months after
NBN services are activated there is a first stocktake period where regional service providers have to identify the
remaining voice-only customers who have not migrated over to the NBN yet. Given that the NBN presented
material to the joint NBN committee indicating that eight sites had been activated for a period of greater than 52
weeks, can you tell me how the migration is tracking?
Mr Lomdahl: Our responsibilities are in relation to what is called fibre serving area modules that are being
disconnected. The first of those are being disconnected in May of 2014, working back from May 2014 by six
months, through retail service providers we will be sending letters to consumers with voice services, because
those are the sorts of consumers that we are responsible for under the safety net arrangements. We will be sending
letters to those consumers informing them that they need to take action to connect to the NBN or their service will
be disconnected. We also be funding telephone calls to priority assistance customers, those are customers with
medical conditions, to make sure that that contact is followed up. After those activities, if customers have not
moved, we were also going to fund a further contact program to make sure that the customer is adequately
informed. That will be in addition to all of the communication activities that the NBN will be undertaking, so we
will be at the end of quite an intensive communication process in those areas.
Senator McKENZIE: In October 2012 the NBN Co. informed that the first disconnections of roughly 25,000
houses would be occurring in November, despite the fact that some sites have already been connected to the NBN
for 32 months. Is there a reason why the first disconnections are going to happen after the September election?
Mr Lomdahl: I could not comment on—
Senator CONROY: I do not think Mr Lomdahl can comment on either the timing of the federal election or—
Senator McKENZIE: Is there a reason why the first disconnections are going to happen after September?
Mr Lomdahl: That is a matter for NBN Co.
Senator CONROY: You might want to ask them.
Mr Lomdahl: I have got responsibility for contacting customers when these dates are set by NBN but I have
no control over their schedule.
Senator McKENZIE: As of November, approximately 25,000 premises will be the first to be disconnected
from Telstra's legacy copper network—four sites in Armidale, Brunswick, George Town, Kiama, Kingston, South
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
Morang, St Helens, Townsville, et cetera. Some of these sites, as of March 31st, have take-up as low as 15.7 per
cent, specifically that relates to South Morang in Tasmania.
Senator CONROY: And how long had that been open?
Senator McKENZIE: I am not aware of that. So my question is: do you have a comment to make around why
the process of migration of services has been slow in these areas, given that you are going to be tasked with the
shifting? You have outlined a staged communication process to make that happen in conjunction with the
communication that the NBN Co. will be conducting. I guess you would be watching these closely to have some
understanding of why people shift and how best to shift them.
Mr Lomdahl: It is my understanding that the first release sites for those FSAMS that will be disconnected
will be disconnected in May 2014 In the lead-up to those events, we will be working with the retail service
providers to make sure that we are contacting the voice-only customers that have not disconnected. I am really not
in a position to comment on take-up rates; it is a matter for the NBN Co.
Senator CONROY: Sorry, can I just clarify, which areas were you referring to? Can you just tell me the
suburbs again?
Senator McKENZIE: Four sites in Armidale, Brunswick, Deloraine, George Town, Kiama, Kingston, South
Morang, St Helens, Townsville, Triabunna and—
Senator CONROY: I think you are probably working on some older—
Senator McKENZIE: I might be.
Senator CONROY: or a little bit out of date now figures, that was the only point I wanted to make. I mean I
am happy to, I think, and I am sure Senator Birmingham is familiar with it. This is an NBN Co. presentation to, I
think, CommsDay, which I suspect has slightly more updated figures than March. I am guessing, I cannot quite
see.
Senator McKENZIE: That is fine, Minister. My question actually goes to TUSMA's role in assisting in the
migration. That was merely an example of issues of migration and what thinking TUSMA had put into migrating
people across. I think it is a fair enough question. I may have used an out-of-date example—
Senator Conroy: It is a fair question. You confused me because you described South Morang as being in
Tasmania. That is what really threw me.
Senator McKENZIE: Yes, I did. I thought it was a suburb of Melbourne.
Senator Conroy: Yes, it is. I suspect you are referring to South Hobart. That was why I specifically said,
'What date?' I was thrown because South Morang has not been on that long. I just needed to clarify that because it
did genuinely confuse me.
Senator McKENZIE: Thank you.
Mr Lomdahl: Our task is to identify the voice-only customers who have not migrated and to make sure that
they are contacted in a timely way and then to follow up those who still have not migrated after we have
undertaken the first rounds of contact.
Senator McKENZIE: The reasons why they have or have not migrated, or convincing them of the virtues, is
not something that has played a part in your thinking of the communication strategy?
Mr Lomdahl: We want to have the clearest possible communication to those customers, and we will work
with the retail service providers and NBN to get any understanding of why people may not have migrated and
tailor messages appropriately. It is really a matter of having the simplest to understand kind of communication to
people saying, 'Well, if this service is going to be disconnected you won't have a telephone service. Please do
something.'
Senator McKENZIE: That is pretty clear.
Senator Conroy: One of the other reasons that I did start asking questions of you, Senator McKenzie, was
that I thought your characterisation, particularly if it was based on outdated information, was just fundamentally
wrong in terms of take-up. They are world leading take-up rates.
Senator BIRMINGHAM: They might be world leading, Minister, but 'world leading' is a description, not a
fact, and you might try to address that.
Senator Conroy: They are world leading if you compare it to dial-up, ADSL, HFC or even Verizon fibres.
Senator BIRMINGHAM: Do you want to tell us the take-up rate for South Hobart?
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Senator Conroy: I do not have it handy because I got confused between South Morang being in Hobart, and
South Hobart.
Senator McKENZIE: Can I have the take-up rate for Morang and South Hobart.
Senator Conroy: I will see if I can find the information during the course of the evening for you. I am just
looking at a very interesting chart here that NBN Co. published.
Senator BIRMINGHAM: I have seen plenty of NBN charts over the years. Most of them do not come true.
Senator Conroy: This is a reporting of fact.
Senator McKENZIE: Has TUSMA begun paying any RSPs for reasonable connection costs? Can you please
tell me how many instances this payment has been incurred. What are the total costs for payments to RSPs to
date?
Mr Lomdahl: We have not started paying retail service providers at this point. We will be paying them after
they undertake the activities, which will be at those milestone dates I mentioned before. The first round of activity
would be November of this year.
Senator McKENZIE: When you say 'activity', does that mean completion of work? Or is it a culmination of
work that is occurring now for the RSPs?
Mr Lomdahl: It will have to be following them undertaking the work and whatever review and audit
processes we put in place. We are negotiating the arrangements at the moment, and when they are finalised I
would be in a position to tell you the payment arrangements. But, of course, we would have to make sure the
work is undertaken and appropriately tested.
Senator McKENZIE: DBCDE's guide to migration of voice-only services states that RSPs can seek
reimbursement from TUSMA for reasonable connection costs incurred in connecting eligible voice-only
customers to voice-only services on the NBN fibre network. Is TUSMA aware of how other incentives for voice-
only service providers may affect their inclination to migrate users?
Mr Lomdahl: I am not sure of the nature of the question. Are there other incentives being put in place by
retail service providers to get customers to take up their offers?
Senator McKENZIE: Yes. That is one aspect of the question, and what impact and have you done any
analysis?
Mr Lomdahl: We have not done any analysis of that. I have to say a lot of the activity to date that you see in
the market has been about attracting customers to take up broadband and bundle offers. That has been the main
focus of the activity that you see in the market to date.
Senator McKENZIE: According to an analysis by JP Morgan there are few incentives for existing voice-only
customers to migrate to voice-only services on the NBN. Current Telstra voice only services start from $22.95 a
month, but JP Morgan's analysis states: 'An NBN voice-only service would cost the provider about $24.30 a
month in NBN charges. In a competitive market, providers are likely to offer voice as a low-cost upgrade to a
broadband package or encourage them to use a VoIP phone or an analogue telephone adapter over their
broadband service. Meanwhile, a basic mobile plan can be had for around $30 a months. In this context, we
cannot see enough space in the price spectrum for voice only. Customers will migrate to broadband plus voice,
broadband only with VoIP or mobile.' Does TUSMA share the view that the incentives for voice-only customers
are stacked against migration to the NBN?
Senator CONROY: You are now asking an opinion of the officer and it is a longstanding practice that you
cannot ask for an opinion.
Senator McKENZIE: Okay.
Senator CONROY: It may be that you want to rephrase the question.
Senator McKENZIE: Could you comment on JP Morgan's assessment of the market?
Senator CONROY: No. Mr Lomdahl's job is not to comment on merchant bank's view of the world. He is
here to answer your questions about Senate estimates. If you would like me to answer, I would just say they are
wrong.
Senator McKENZIE: Thank you, Minister—how novel.
Senator CONROY: Perhaps, you might get a chance tomorrow to ask Mr Quigley or the NBN officers what
the switchover is like, how many people have already switched over to voice only et cetera, so you get some
factual information as opposed to speculation from a merchant bank.
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Senator McKENZIE: I asked a question earlier about the incentives. Mr Lomdahl mentioned that he was
aware of incentives out in the market. It will play into the conversation he is going to have to have with citizens
around the migration and I would appreciate his perspective. And I am assuming if he is wanting to make that as
successful as possible on your behalf for the NBN then he will have had to have done some analysis.
CHAIR: Senator McKenzie, you are asking for an opinion.
Senator CONROY: He can give you a factual analysis of how many people have moved from X service to Y
service and things like that. But to ask him what does he think about—
Senator McKENZIE: Has TUSMA done any analysis along similar lines?
Mr Lomdahl: We take a rather defined view of our responsibilities—namely that we would have to contact
customers who have not migrated. If there are any insights to be gained on why they have not migrated, we will
take that on board. But it is a bit early in the process for us to comment on that.
Senator CONROY: You are probably expanding their purview of responsibility a little bit, but it is a very fair
question.
Senator McKENZIE: You will be looking at that between the letter and this follow-up.
Mr Lomdahl: If there are any insights into why people have not migrated that can help us shape the
communication, perhaps because they speak a foreign language or a particular demographic group, then that
would help us tailor the communications. That is the sort of thing that I have in mind.
Senator McKENZIE: Thank you.
CHAIR: Thanks Mr Lomdahl. That concludes the discussion with TUSMA. I now call officers from the
Australian Communications and Media Authority.
Australian Communications and Media Authority
[21:49]
CHAIR: Mr Chapman, would like to make an opening statement.
Mr Chapman: No thank you.
Senator BIRMINGHAM: I want to get through a range of issues tonight so we will bolt through some of
them quickly. Can ACMA provide a progress report on the development of the plan to transition wireless
microphones out of the 700 megahertz band?
Ms Cahill: We have been working with the wireless microphone community since 2010 and the
announcement of the realisation of the digital dividend. Since that time we have provided a raft of information in
relation to the possibilities of use of the mobile digital dividend for wireless microphones. We have provided
information on our website in relation to the progress report as well as an indicative channel plan, which gives an
indication where the white space—which is how the wireless microphones are used—can be used into the future.
We have also more recently updated a LIPD—low interference potential devices—class licence, which indicates
how long wireless microphones can be used in the digital dividend spectrum. We have also indicated and
provided links on our website to the department's website which provides the restacked timetable. We have been
working very closely with the sector for two years and have provided advice and assistance.
We are also in the process of updating further information in relation to supply to the market of equipment. We
will be requiring suppliers to provide information in relation to the availability of the equipment to be purchased
and for how long it can be used in the digital dividend. There is a lot of information currently out there. We are
very on-board in relation to providing the transition plan that was required by the committee recently.
Senator BIRMINGHAM: What is the budget for this transition plan?
Ms Cahill: The budget for the transition plan is that it will be absorbed within the current operating budget of
the communications infrastructure division. We have not identified a separate budget. Through the course of our
normal consultations and any major activity associated with spectrum refarming or changing is part of our
ongoing activities.
Senator BIRMINGHAM: And you believe that communications with users of such services and equipment
can be met within your existing arrangements?
Ms Cahill: We are being very innovative in our approach. One of the more recent innovations we have used is
to use the eBay and Google ad words. If you type in 'wireless microphones' the first thing that comes up on the
site is information about the ACMA's process and the use of those devices. They are very cost-effective means.
Significant members of this community will reach through our website electronic means as well as direct mailouts
to peak bodies. We feel that is sufficient.
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Senator BIRMINGHAM: How, for example, would a typical school music teacher be advised that their
equipment may need to be replaced?
Ms Cahill: The ACMA is going to produce a series of Q&As, which we will provide to the full raft of people
who are actually captured and use wireless microphone. We will be doing major mailouts to school associations,
parents and citizens associations, churches and other community groups. We also will be directing those people to
our website as well as the website of the suppliers of wireless microphone equipment, who will be providing
details on exactly where by state or by postcode wireless microphones can be used, which make and model can
still be used in relation to the transition.
Senator BIRMINGHAM: What expertise will be made available to assist schools or anybody else to ensure
that they have the right equipment and are able to operate on the right band for their devices?
Ms Cahill: We have been working closely with the suppliers of the equipment, so firstly those who will be
supplying the equipment to the market will be required to provide information to new purchasers. We also
encourage, as part of our mailout and web information, current users to deal with the suppliers or go to their peak
group in the state who will provide advice on the make and model of the equipment that the person has, whether it
can still be used, and if it can still be used how it might be retuned and if it cannot be reused, what options there
might be for new equipment.
Senator BIRMINGHAM: What is the average value of such devices that might be held and is there any
financial assistance that anybody may be able to access as a result of them becoming redundant?
Ms Cahill: Given the wide and disparate use of this equipment, we are talking about professional industry
sectors where equipment could cost into the many tens of thousands of dollars to a piece of equipment that you
might purchase from a local supplier which might cost you $25. It is very difficult with any accuracy to provide
you with the information you request.
Senator BIRMINGHAM: Is there any waste strategy in place to deal with the removal and disposal of this
equipment?
Ms Cahill: Not at this stage, no.
Senator BIRMINGHAM: Has the ACMA looked at that or is it in discussions with the environment
department or anybody else?
Ms Cahill: We have not had direct discussions with the environment department.
Senator BIRMINGHAM: Will you be looking into it?
Ms Cahill: We certainly will.
Senator BIRMINGHAM: How many individual users visit the ACMA website every month?
Mr Chapman: We will have to take that on notice—I am not sure.
Senator BIRMINGHAM: Okay, but the type of advertising you are undertaking through Google and
otherwise will be attempting to drive people to your information services as well?
Ms Cahill: Yes it will.
Senator BIRMINGHAM: Does the ACMA believe there are any suburbs or business districts where
insufficient spectrum will be available following the restack for the continuance of normal business use in this
type of area?
Ms Cahill: No, we are fairly confident that the processes put in place will ensure that there is still, as we have
committed to do, a transition path for wireless microphone users. It may be that some will have to retune
equipment, it might be that some will have to purchase new equipment, but in terms of the material spectrum that
would have been available it is comparable, in terms of volume, to what is available now.
Senator BIRMINGHAM: Have there been any concerns from industry about whether appropriate spectrum
is going to be available?
Ms Cahill: There have been concerns from industry in relation to certainty around where the spectrum might
be available rather than, I would believe, the amount of spectrum. There have been concerns expressed about lack
of clarity about where exactly these white space devices can operate.
Senator BIRMINGHAM: Have the successful bidders, such as they are, for the 700 megahertz spectrum
been advised by ACMA of the extent of the users of wireless microphones that could still be trying to use that
spectrum after 1 January 2015?
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Ms Cahill: As part of the process of disclosure in relation to the information provided to potential bidders,
there was information provided that there is a clearance process around wireless microphones. Certainly it has
been out in the public domain that there is a clearance process around wireless microphones.
Senator BIRMINGHAM: When you say a clearance process, what is the commitment or otherwise that has
been given to Optus or Telstra that they will take possession of clear spectrum, free of interference from these
devices?
Ms Cahill: The ACMA's amendment in relation to the low-powered devices means that at the end of
December 2014 wireless microphones will not be able to be operated as a licensed product. Use will be illegal.
Senator BIRMINGHAM: So you are going to prosecute the local music teacher or parish priest who is
illegally using their wireless microphone—no.
Ms Cahill: The ACMA has a graduated approach. We would assist in relation to making sure that everybody
is complying with the requirements of the licensing frameworks.
Senator Conroy: We are confident we will have resolved that, but here is your big chance, Senator
Birmingham: would you like to make an election commitment about some funding for the transition—here is your
big chance. Come on! Chance your arm.
Senator BIRMINGHAM: Are you, Minister?
Senator Conroy: Chance your arm. Come on. Just say you are going to put X dollars on the table if you get
elected.
Senator BIRMINGHAM: I did not think you were, Minister.
Senator Conroy: It was your big chance to steal the show.
Senator BIRMINGHAM: ACMA has made frequent references to the ability of some wireless audio devices
to be retuned. What proportion of devices currently operating the 700 megahertz band are realistically capable of
being retuned?
Ms Cahill: I would have to take that on notice. I do not have the details.
Senator BIRMINGHAM: Are you acting on advice when you talk about the potential for retuning; and is
there a realistic belief that it is a significant enough part to hold out that hope for people?
Ms Cahill: There is a raft of equipment, as I have said, that ranges from very sophisticated equipment used by
professional production houses that have significant tune ranges. The details of that I do not have but I will take
that on notice.
Senator BIRMINGHAM: You talked before about a graduated approach to compliance. What is that
graduated approach that will be applied in this instance?
Ms Cahill: The ACMA's general approach in matters of areas of unlicensed operation or in breach of licensed
conditions is that we work, firstly, to educate the person who is the licence holder and to achieve compliance. A
lot of the time it is because people are unaware of their obligations, so part of that is the education role. We can
escalate, should it be a matter that is of a grievous nature, and we can issue a penalty in lieu of infringement, a
penalty in lieu of prosecution. We can under the Radiocommunications Act—
Senator Conroy: We are confident we will be able to avoid any of those sorts of issues, Senator Birmingham,
and, any time you want to make any commitments about it, feel free to take to the microphone. We are confident
that we will avoid any of those sorts of issues.
Senator BIRMINGHAM: Thanks, Senator Conroy. I am delighted in your confidence and I am pleased to
know that you are confident. It was a rather factual question that I think Ms Cahill was answering in terms of
what the graduated approach to compliance is. I think Ms Cahill was almost at the end of her answer.
Ms Cahill: I will clarify: I was just responding in terms of the general approach, and of course there are other
mechanisms that we could use. Our first approach, however, is to achieve compliance through education and
awareness with all licence holders.
Mr Chapman: Expressed another way, Senator, we typically, right across the full range of what we do,
communicate, we tolerate, we educate and we escalate and the ultimate actions taken are very dependent on
circumstances. In this particular case, what you are alluding to is that there will be many, particularly
professionals, who are doing it in an amateur way. We find many examples where class licence usage cuts across
APRA artists spectrum licensing and we approach it in an escalated way with sympathy and understanding for
circumstances. That is our usual practice and that is what we would do if this circumstance arose.
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Senator BIRMINGHAM: With regard to newly imported equipment, I understand there is or will be a
labelling requirement in place. When will that requirement be put in place—or has it already been?
Ms Cahill: We are in the throes of finalising the discussion paper on that. We expect to release that in the next
two weeks. We expect that that will come into force by August this year.
Senator BIRMINGHAM: So by August this year it will be a requirement for newly imported equipment to
carry some type of—
Ms Cahill: Advice to purchasers.
Senator BIRMINGHAM: Is there a strategy for existing stock and stock that will be imported prior to
August this year?
Ms Cahill: We have been made aware by the major suppliers into Australia that they have not been importing
equipment that is going to be impacted by this matter. They have been working to ensure that that product is not
available to the market. We do not have a direct strategy in relation to the equipment that has been supplied that is
already out there, so that is where we are going to use our education awareness roles.
Senator BIRMINGHAM: Just to be clear, the major suppliers are not importing stuff that will not work
anyway?
Ms Cahill: That is what they have indicated to ACMA in our discussions with them.
Senator BIRMINGHAM: For the sake of completeness or surety, you are still going ahead with a labelling
requirement in any event?
Ms Cahill: That is right.
Senator BIRMINGHAM: Will it be a labelling requirement with a limited life applying through the
transition period but then lifted? Or will it be something that will continue until a future ACMA or government
decides to remove it?
Ms Cahill: It will continue until there is a future decision to remove it.
Senator BIRMINGHAM: Is there a reason why it needs to be ongoing? Once you get to a certain point,
surely it can be lifted easily enough and not remain as a regulatory burden?
Ms Cahill: I am sure that will be the case. At this point, however, it is hard to predict exactly how long we
may need that regime in place. We will, as with all our regulatory instruments and regimes, review that as, in this
case, the issue matures and we transition.
Senator BIRMINGHAM: Has any consideration been given or is any consideration being given to pairing
the 733 and the 748 megahertz sections to create a 25 megahertz band available for wireless audio devices, even if
it is just as an interim measure until relisting of spectrum for auction?
Ms Cahill: I would have to take that on notice. I am sorry, but I do not have the details.
Senator BIRMINGHAM: Moving along, can I just quickly deal with a couple of tender questions. ACMA
published a tender to do with economic analysis of commercial broadcasting program requirements for a cost of
$79,639 on 12 April 2013. What is the purpose of this tender or project?
Ms McNeill: The purpose of this research is to inform an inquiry that we are conducting. We have called it the
'contemporary community safeguards inquiry'. The idea behind it is to establish the core principles that should
guide the content of broadcasting codes in a contemporary environment. We see the economic research as being a
valuable input because it will help us assess the costs of the current regulatory obligations in codes. So it will be
an important input into that inquiry's process.
Senator BIRMINGHAM: Who is undertaking it?
Ms McNeill: I think the tender has been let to PwC.
Senator BIRMINGHAM: Is there any requirements of the broadcasters in terms of their participation in this
or is PwC simply looking at it on the basis of the codes and information provided by ACMA?
Ms McNeill: They will use a range of inputs, but we are seeking input from the broadcasters.
Senator BIRMINGHAM: Will the study be made publicly available?
Ms McNeill: No decision has been made on that but, given that it is informing the inquiry and the inquiry will
have a public-facing output, my expectation currently is that the outcomes of the research at least will be evident
in the course of the outputs of that inquiry.
Senator BIRMINGHAM: On 3 January ACMA published another tender for a contract value of $37,800 for
a digital citizenship consultancy. What is that?
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Dr Wright: Part of our Cybersmart remit is to look at the role of Australians in an increasingly digital society
and digital economy. This research focuses perhaps less on responding to problems that have emerged and more
on the positive approach to educating citizens on identifying the types of offline ethics and principles that guide
their lives that translate into the online world and then matching the tools that we have in our Cybersmart program
to those. For example, you could take a quiz on how cybersmart you are or how good a digital citizen you are. If
you got two out of five you would then be directed to particular resources that would help you skill up in that
area. If you get six out of seven you are directed elsewhere. If you get 10 out of 10 basically we just direct you to
have a look at Tagged because it is fun.
Senator BIRMINGHAM: That contract period, in theory, is complete. So you have received information to
inform your work there, Ms Wright?
Dr Wright: Yes.
Senator BIRMINGHAM: Is that work being released to the public?
Dr Wright: We are looking to release it shortly. I think it will be midyear. At the moment we are mapping, for
example, our own resources best to the various pillars of cybercitizenship to see how it can be a living program
where people can further enhance their skills to participate in the digital economy and digital society. I think we
are one to two months away from launch.
Senator BIRMINGHAM: I await the launch with bated breath. What is the status of the television regulation
of live odds betting, from ACMA'S perspective?
Senator Conroy: Can you just be a little clearer? Do you mean the registration process going ahead at the
moment—
Senator BIRMINGHAM: I mean the processes that currently exist in terms of the code being developed and
changed. There are changes to the code underway. Indeed, there were updates from the industry and the
government in the last week on what will be in and what will be out and where it is at in terms of becoming a
formally recognised part of the code.
Senator Conroy: I am not sure Mr Chapman would have received a letter from me yet, but I have written to
Free TV just confirming what to the Prime Minister announced on Sunday. I think Free TV have indicated that
they will submit a revised code to ACMA. But I doubt ACMA has received that yet. So I am not sure they can
give you much of an update. Perhaps there is something Mr Chapman might be able to add.
Mr Chapman: I will let Ms McNeill lead.
Ms McNeill: I can articulate for you what the current code provisions are around gambling promotions, but
none of those are directed specifically at live odds. As the minister has made clear, we have not received any
proposed codes for registration since the minister made her announcement last Sunday.
Senator Conroy: I should just say that officers have let me know that we did copy the letter that we sent to
Free TV to Mr Chapman.
Senator BIRMINGHAM: Have ACMA had any cause to have discussions with Free TV since Sunday's
announcement by the Prime Minister about the timeline for presentation of a revised code?
Mr Chapman: I have spoken, as has Ms McNeill, to the chief executive of Free TV. He has indicated to me
that they are going to be working expeditiously to get us a code seeking registration. I acknowledge that. We
likewise will, upon receipt, work expeditiously to go through the various steps we are required to under section
123 of the Broadcasting Services Act. The short answer your question is, yes, I have spoken to the chief executive
of Free TV.
Senator BIRMINGHAM: How quickly can Free TV do that within a regulatory framework? Is there a
mandatory consultation period, et cetera, that will still apply?
Senator Conroy: Before Mr Chapman jumps in, could I indicate that a letter sought the broadcasters to
submit the revised code by 10 June. Notwithstanding that, I am sure Mr Chapman will outline the ACMA
process. We have also indicated we expect it to be in force, at least voluntarily, while the final parts of the
registration are done by the TV stations themselves.
Senator BIRMINGHAM: Sorry, Minister, you got a little quiet towards the end. You also expect it to be in
force by regulation or voluntarily if the regulation cannot be in force.
Senator Conroy: There is a process which Mr Chapman or Ms McNeill will take you through.
Senator BIRMINGHAM: Is that an expectation by 10 June as well?
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Senator Conroy: We have indicated to the TV stations that we expect them to start enforcing it once they
have submitted it.
Senator BIRMINGHAM: And it has to be standard by 10 June?
Senator Conroy: Yes. Then there is the process which Ms McNeill will take you through now.
Ms McNeill: Senator, in response to your question concerning a mandatory consultation period, there is no
mandatory consultation period under the Broadcasting Services Act. Before the ACMA can register a code it has
to be satisfied that members of the public have been given an adequate opportunity to comment on the code. It is
an interesting situation in which we potentially will find ourselves because each of the broadcaster groups, I think,
has been out to public consultation on a proposed code in relation to live odds already. Once we have the revised
proposed codes we will be able to make an assessment about whether members of the public have been given an
adequate opportunity to comment on them.
Senator BIRMINGHAM: Minister, have you had any conversations with Premier Weatherill about his
proposals for South Australia and how they may interact with, or conflict with, the federal proposals that you have
outline?
Senator Conroy: I have not spoken to Mr Weatherill. I think officers may have been in touch over the last
week or so.
Senator BIRMINGHAM: Perhaps on notice of sorts you can ensure that before we get to the broadcasting
section of the department tomorrow, which is probably the relevant place to ask those questions of
communication between your officers.
Senator Conroy: I am aware there have been communications.
Senator BIRMINGHAM: I am sure your office can ensure you are briefed by whatever time we get to the
section tomorrow.
Senator BILYK: Last week was National Cyber Security Awareness Week, can somebody update me on
what ACMA did in regard to that?
Dr Wright: Yes, I would be delighted to do that, Senator. One of the things that we published last week was
what was considered some positive news on young people's actions in relation to managing their digital reputation
and their digital footprint. Our research has shown us that the majority of 12- to 17-year-olds are actually setting
their profiles to private on social networking sites.
Senator BILYK: Even if they should not be on them until they are 13.
Dr Wright: Increasingly private messaging is being used by teens. For example, for 16- to 17-year-olds in the
period that we were in the field, 89 per cent of them were using private messaging during that period. We are very
pleased with this outcome. As you know we devote a number of our resources and programs to assisting young
people to manage their digital reputation. We were very pleased to have the positive feedback that these programs
are assisting. I refer, for example, to the fact that we have resources on our website. Since the launch of that
cybersmart website in the middle of 2009 we have 2.6 million visits to the site. We get about 73,000 visits a
month and that is steadily rising. We have particular resources that do educate and empower young people. For
example, we have Zippep's Circus for the littlies. We have Hector's World, NetBasics and the Cybersmart
Challenge suite of activities for young people to explore those issues in relation to privacy and digital reputation.
We feature in all our lesson plans and our presentations to schools information in that area. In fact, we are very
frequently told by teachers—especially in upper primary and lower secondary school—that after one of our
presentations to students the young people say, 'The first thing I'm going to do tonight when I go home is put my
settings on private.' We think that that is a pretty good outcome.
Senator BILYK: Was the research that you mentioned done by ACMA or independently?
Dr Wright: The one on digital reputation that I just referred to was commissioned research. We have plans to
release the full research report midyear, but we particularly wanted to highlight those positive results at this time
when there is a lot of focus on kids and their security concerns. Overall, it is a broad study. It particularly focused
on young people and social networking. We commissioned that research and we will use it as a lens over the
resources that we have to work out what we should refresh, what we should discard and what we need to develop.
This research will be a major follow up to the Click and connect report that was released in 2010. We know that
many other entities and organisations in the cyber space in Australia drew very heavily on that research to shape
programs and messaging. We would anticipate that this research study will have a similar effect.
Senator BILYK: Is the outreach program still going strongly?
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Dr Wright: It is going very strongly; in fact, it is going so strongly that we have just had a revamp of that
professional development training that we provide free to teachers. It is a day session. We now have a foundation
module and we have moved to some customised modules so that the particular schools can choose out of the
series of modules which are the ones that focus most on their issues. We want to offer that extra choice and
flexibility. We are piloting that this term.
Senator BILYK: Where will that be piloted? Have you targeted some schools or a specific state?
Dr Wright: All the schools that we will be visiting at that time will have that choice. It is a pilot in the sense
that we will then assess who it is working and whether those additional modules are hitting the spot. As you
know, the content of our day long professional development programs are usually completely refreshed every six
months.
Senator BILYK: Do you have any statistics with you—and if not, could you take this on notice—about how
many schools that you have been to since the beginning of the financial year?
Dr Wright: Overall, since we launched the program we have approached 76,000 teachers. We will reach 700
teachers in those face-to-face day long presentations per month.
Senator BILYK: I know that you do this, but I just want to check that you still do it. I have attended some of
it. Do you do things for parents as well? Is that still running?
Dr Wright: Yes, we do that. Through those school presentations to parents, we reach about 1,600 parents a
month through those various schools.
Senator BILYK: Okay. It sounds like great work. The other thing that I wanted to ask about was the citizen
conversation forums. Can someone tell me what they are going to be about and how the public can get involved? I
do not think that they have started yet.
Ms McNeill: This takes us back into the territory of the contemporary community safeguards inquiry that I
flagged earlier. In fact, the ACMA has conducted two citizen conversations over the last couple of years. Both of
them had a focus on young people. One was focused on young people in a changing media world. The other was
focused on children's television. But we have an exciting program of citizen conversations coming up in June.
There are six public events, which we invite anyone who is interested to participate in, either in person at our
Sydney officer. They will be webcast and there will be an opportunity to participate through social media.
The first day sees two conversations, one dealing with classification and the time shifting audience and the
second one dealing with decency and the regulations in broadcasting around content that ought not be broadcast.
The second pair of citizen conversations are focused on the news and facts side of things. They are focused on
accuracy but also on fairness and the presentation of viewpoints. The third paired citizen conversation day will
see one session focused on privacy protections and broadcasting and a second one focused on advertising in a
changing media world. They are the conversations. I have the dates to hand for all readers of Hansard who might
be interested in attending.
Senator BILYK: Can you apply to go or do you have to be invited to attend?
Ms McNeill: The registrations are open on our website. If we are deluged with hundreds of subscribers, which
we would be delighted with, then we might need to make some difficult calls. But registrations are open at the
moment. The dates for each of the sessions are as follows: 6 June is the classification and decency pairing,
Tuesday 18 June is the accuracy and fairness and balanced viewpoints pairing and 25 June is advertising and the
changing world and privacy pairing.
Senator BILYK: Thanks for that.
CHAIR: Just on that one on decency, I always get a bit concerned that it is code for stifling different points of
view. Who are the speakers? Are there different points of view on this?
Ms McNeill: There will be different points of view on this. I do not have the speaker panel list to hand, but I
think that it has already been published on our website.
CHAIR: I tried to find it but I could not.
Ms McNeill: For both the classification and the decency sessions there are a range of views. We have what
you would call libertarians and we have people with a particular interest in the protection of children. We—
CHAIR: They are not the two opposite ends. Being a libertarian does not mean that you do not protect
children.
Ms McNeill: Indeed.
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Senator BIRMINGHAM: I refuse to let you embarrass your wife by talking about 50 Shades of Grey again,
Senator Cameron!
CHAIR: Thanks very much! I am still in trouble.
Senator BILYK: You are never out of trouble.
Senator SINGH: I will come to your aid and move right along. I wanted to pick up on some questions from
Senator Birmingham in relation to the government's new announcement of the new limits on sports betting
advertising during TV broadcasts. The process has been fairly well canvassed. Obviously, it is in a bit of a
holding pattern or waiting situation until new codes are presented to ACMA. Have you received complaints about
gambling ads that are broadcast? Do you know how frequently gambling ads appear during live broadcasts of
sport? Do you have any kind of data in that regard and particularly on how frequently gambling ads appear during
times when children would be watching—children's viewing times?
Ms McNeill: In answer to the question about whether we receive complaints in this space, I can tell you that
in the calendar year to date we have received 22 email complaints about gambling advertising in sports
broadcasts. That is the first part of the question. We do not currently have information available about the
frequency or intensity of gambling advertising.
Senator SINGH: Okay. Has ACMA done any work looking at whether gambling or gambling advertising is
harmful or detrimental to certain members of the population, namely children?
Ms McNeill: We have in fact commissioned some qualitative research into community standards and attitudes
about live odds and gambling advertising, but not into what you I think that you are describing as the social harms
potentially associated either with gambling or the promotion of gambling activities.
Senator SINGH: What is the qualitative research that you have done?
Ms McNeill: It is in the field at the moment.
Senator SINGH: When are you hoping that you will have that?
Ms McNeill: We are expecting top line results imminently. We would expect to have an analysis of those
results available within weeks.
Senator SINGH: You provided some kind of guidelines or terms of reference or the like to whoever is doing
the research.
Ms McNeill: Yes. That is right. It is a relatively modest undertaking. A series of questions have gone out to
quite a significantly sized group, but I do not have the numbers with me.
Senator SINGH: Okay. You did not think about looking at whether there are harmful effects? That did not
come into the picture?
Ms McNeill: Not by way of canvassing the community. That is a more scientific undertaking. It is much more
likely that that style of information would be available through literature research rather than through a
community survey.
Senator SINGH: Okay. Thank you.
Senator LUDLAM: Do we have the right people at the table to ask about uses of section 313 of the
Telecommunications Act to block website?
Senator Conroy: Are you still hunting for that central agency that is coordinating it?
Senator LUDLAM: Maybe I have found them. I have been waiting for this all week.
Mr Chapman: When you say 'the right people', Ms McNeill has a tangential exposure to 313, so I will let her
lead.
Senator LUDLAM: Ms McNeill, we will try to keep this on message. Please go ahead.
Mr Chapman: On what aspects?
Senator Conroy: If you were to ask a question, that would help.
Senator LUDLAM: Yes. I will. Is anyone in ACMA aware of the extent of the use of section 313 of the
Telecommunication Act to block websites? Start with the AFP. We know that ASIC is doing it. Who else is doing
it?
Ms McNeill: The knowledge that I have is gleaned from a meeting convened by the department recently at
which a number of agencies were represented.
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Senator LUDLAM: All right. I was not at that meeting, so that would be a really good place to start. When
did it occur and who was there?
Ms McNeill: The meeting occurred on 22 May.
Mr Chapman: Before we go on—
Senator Conroy: That was a meeting convened by my department, I think. The questions are probably best
directed to them. They are coming up shortly, as in tomorrow morning, so we could—
Senator LUDLAM: The department?
Senator CONROY: Yes.
Senator LUDLAM: That is okay. I am not asking ACMA to answer any questions outside its ambit. Because
Senator Conroy was kind enough to inform us on Monday night that no-one is in charge, I need to go agency by
agency to find out who knows what. That is what I am doing.
Senator Conroy: Have you used any?
Mr Chapman: We have no direct responsibility for 313 notices. I frankly think that having been invited to a
meeting not organised by the ACMA, it is not appropriate for us to relate second hand what we gleaned from that
meeting.
Senator LUDLAM: Okay. Does ACMA have any formal or ongoing role in the AFP's use of these notices to
compel ISPs to block against the Interpol list; the 'worst-of' list?
Ms McNeill: It has no formal ongoing role.
Senator LUDLAM: Is that purely between the Federal Police and the service providers?
Ms McNeill: It is. The only way in which potentially the ACMA could be drawn into that is by reason of its
role in administering and enforcing the Telecommunications Act.
Senator LUDLAM: These notices are being issued pursuant to your aim with that—is that correct?
Senator Conroy: It is not the ACMA's act.
Mr Chapman: We are not responsible for every line and provision in that act. We have a number of
responsibilities that reside within that act. Those provisions in that act actually empower other federal and state
enforcement agencies, and we are not one of those.
Senator LUDLAM: I shall leave it there. We will pick this up in the morning with the department.
Senator BIRMINGHAM: I go to the issue of the spectrum auction that was recently completed. Mr
Chapman, you were recently quoted as describing the spectrum auction as flawless. How can you suggest it is
flawless when the outcome clearly did not deliver the results that the government was seeking?
Mr Chapman: The ACMA is charged with the responsibility of the most effective allocation and use of
spectrum in the national interest. Those objectives are set out in the Radiocommunications Act. We have just
released, through the auction program, 200 megahertz of spectrum for wireless broadband. It is the realisation of
about a 10-year program, when you think back to the start of digitalisation. The comments that you are alluding to
are accurate and they are attributed to me. I was talking about the ACMA's execution against our role. We
planned the planning of the digital dividend spectrum in a 700-megahertz band; we released 126 megahertz of
spectrum, the largest quality digital dividend released in the world; we worked to refarm the 2.5-gigahertz
spectrum. As you would be aware, 700 megahertz and 2.5 gigahertz have strong complementarity. We devised an
auction program through the combinatorial clock auction that had the capacity to allow package bids and
therefore not stranded assets, and it had the internal capacity to deal with both low demand and high demand
scenarios. We developed the software auction methodology. We had a risk that there would be poor engagement
with potential participants in view of the CCA complexity. I think we effected a very tight and highly engaging
stakeholder strategy to overcome that risk. We started the auction program and completed it within the
foreshadowed time period. We released 200 megahertz of spectrum. My consultations with those participants
confirmed the professionalism of what the ACMA did in that role. So, from my perspective, we executed
flawlessly.
Senator LUDLAM: Thanks, Mr Chapman. I appreciate that the ACMA had to operate within the directions
of the government as well in doing so. I pick up on one statement you made, just to get an understanding. You
said that one of the risks was poor engagement in view of the CCA complexity. Could you explain that, for
knowledge as much as anything?
Mr Chapman: The CCA, the combinatorial clock auction—
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Senator Conroy: How long do you have?
Mr Chapman: software program is the leading and most enhanced auction software methodology that can be
employed. It has some leading-edge features that can be intimidating to people who use it for the first time. It can
suppress an understanding of the way in which participants should work their way through the clock rounds, the
supplementary rounds and the assignment rounds. That can lead to some unexpected consequences. That was the
case in our auction. We worked our way through the clock rounds, the supplementary round and the assignment
round. I was at pains to establish with each of the participants their level of comfort about their knowledge, the
nuances of that process and the various strategies they may employ. They each confirmed to me that they were
thoroughly satisfied with that stakeholder engagement and that they felt very comfortable going to the process.
Indeed, after the process they felt that they got what they bargained for and that the process was seamless and
flawless.
Senator BIRMINGHAM: Is it accurate to say that optimal utilisation of spectrum is a policy objective?
Mr Tanner: It may be semantics, but we are principally engaged, through the Radiocommunications Act,
with the most efficient allocation and use of spectrum in the national interest. If you are talking about what I am
talking about, then the answer is yes.
Senator BIRMINGHAM: Is it the most efficient and appropriate allocation of spectrum not to utilise it?
Mr Tanner: The principal objective I just outlined is not the only objective set out in the
Radiocommunications Act. ACMA generally is injuncted to work consistently with government policy, and
ACMA also recognises that the government of the day has, through the minister, the prerogative to arbitrate, if it
sees it is necessary, between the risk of not selling all the spectrum and the risk of selling the spectrum for an
inadequate return to the public purse—consolidated revenue. There are no easy answers to that trade-off. ACMA
was cognisant of those right throughout. There is a very healthy balance between ACMA's role and the
government's ability through formal directions to make the ultimate judgment call.
Senator BIRMINGHAM: Numerous commentators, not just those associated with any particular company in
the process, have been predicting there may be a failure to successfully sell all the bundles of spectrum prior to
going into this auction for some time in advance of it, and they have been highlighting concerns such as the dig
market and the lack of participants, and of course, related to that, the setting of the reserve price by the minister.
Did ACMA express concerns in the lead-up to the auction? Are there concerns that it may fail to—
Senator Conroy: Officers at the table are not in a position to go to the content of advice.
Senator BIRMINGHAM: Then you can tell us, Minister.
Senator Conroy: You can ask, 'Did you give advice?'
Senator BIRMINGHAM: Did you receive advice, Minister?
Senator Conroy: I am not going to reveal to you advice that is passed backwards and forwards from ACMA
to the government. But the government made its decision after Vodaphone indicated it would not be participating.
So there was a very strong chance there would be only two participants in the auction for the 700, as turned out to
be the case.
Senator BIRMINGHAM: Mr Chapman, once the minister accepted the reserve price, were there additional
steps that you tried to take to facilitate a successful auction process, given the reserve price that had been set?
Mr Chapman: You might need to help me out with that question, Senator. I am not quite sure what you are
trying to tease out of me.
Senator BIRMINGHAM: Did you do or try to do anything different in the conduct of the auction process,
following the minister's intervention in setting the reserve price against the recommendations of ACMA, that you
would not have done had ACMA's recommendation for the reserve price stood?
Mr Chapman: I have just consulted with Mr Tanner who, as you know, was the general manager responsible
for the digital transition division and had conduct of the auction within his bailiwick. We think the answer to your
question is no. We were cognisant always that we needed to provide a system that had the inbuilt agility to deal
with high and low demand scenarios that dealt with a reserve price established by us or by the minister. I cannot
think of one thing we changed, in the overarching construct of what we did, that was affected by the minister's
formal direction on reserve price.
Mr Tanner: We were clearly cognisant, and the government was cognisant after communications from Voda
in September last year, of the real risk of unsold lots. Our combinatorial clock auction, like any worthwhile high
spaced allocation system of allocating spectrum, deals with an imbalance, with supply exceeding demand by
basically functioning so as to sell at the reserve price. The CCA was as ready to deal with the contingency of
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unsold lots as it was to deal with any other contingency. Once we had the reserve price we had the auction ready
to go and the auction proceeded. It has built into its system the capacity to deal with that contingency. We were
aware of that, but there was nothing to change inside the auction.
Senator BIRMINGHAM: Is there a difference, as some commentators have said, between the use of a
starting price mechanism in an auction versus a reserve price mechanism in an auction? Was it a change in
historical practice at ACMA to opt for a reserve price type mechanism?
Mr Tanner: I was not in those organisations at the time the auctions were run, but my understanding is that
the Australian Communications Authority and the Spectrum Management Agency, which are the antithesis of this
part of ACMA's function, conducted a series of often very major auctions during the late 1990s and early
noughties. A couple of those options were very lucrative. ACMA and the SMA did use starting prices. Basically,
as I understand it, those starting prices perform the function of reserve prices. I understand that, at least in some
cases, they were often relatively low compared to the reserves we use today. You see very wide variations in
reserve prices overseas in more recent auctions. There is not a lot of difference between the starting price and the
reserve price, but the starting prices used in some auctions were considerably lower.
Senator BIRMINGHAM: Would that be an attempt to attract more bidders to the process?
Mr Tanner: When you are setting a reserve price you are doing a number of things, but the critical thing is
balancing two risk. One is the risk you will not settle all your property—and you will potentially do that if you
pitch your price high and if there is low demand—and the other is that in a shallow market, a market where there
is not a lot of demand relative to supply, you will cause the lots to be sold at a return which is unreasonable for
the vendor.
If you want a generalisation about spectrum auctions around the world, what you do see quite frequently is
that, where there is confidence that demand is going to exceed supply, there is a preference to set reserve prices
relatively low and allow the auction bidding to set the market price. The bidders learn a great deal about the
valuation of other bidders from watching the behaviour of the auction. So, if you are relatively confident there is
going to be an excess of demand over supply, you will find that the administrations tend to pitch the reserve
relatively low and let the bidders do the work. If there are grounds to believe that there is going to be a surplus of
supply over demand, the reserve price is pitched higher if your concern is that the properties not all go at a fire
sale and the vendor be dudded.
In our present option I would make the observation with the 2.5 lots, there was considerably more evidence by
September, October, November last year that there was a surplus of demand over supply then there was for 700
was for seven hundred. The reason for our pessimism about 700 was the withdrawal from the auction of one of
three mobile players in the country. In those circumstances, I guess, we had a considerable apprehension that
demand was shallow and may not outstrip supply at any reasonable price. With 2.5, we did have such an
apprehension.
When you look at the reserve prices you will find that the ACMA actually set a lower reserve, relative to
international values obtained for 2.5 than the minister set for 700. That is quite a predictable thing to see in a
scenario when you are anticipating that the supply is too large for demand at the time the auction is being held.
Senator CONROY: If I can add—just because you have drawn attention to commentary, which continues to
be misinformed, partially due to Mr Turnbull and yourself—Vodafone, as I have stated already, I think
withdrew—
Senator BIRMINGHAM: There are far bigger experts than me in this one, Minister.
Senator CONROY: Vodafone withdrew in October and November, I think, as the Mr Tanner indicated—they
did not indicate the publically, but they did indicate that to us. And, if I can quote you from Mr Russell who now
runs Optus in Australia, he said:
'We required 700[MHz spectrum] for core 4G coverage—in-building coverage in metro and broader geographic coverage in
regional,' Russell said on a media call as Optus released its financial results for the quarter ending 31 March.
Our view from the start was that 10MHz of spectrum would be more than adequate in terms of delivering that capability.”
He goes on to say:
The coverage element is more than satisfied by the 10MHz of 700 …
So commentary is just that: commentary. The hard facts are that there were two bidders and, as Optus have
indicated afterwards, they were probably only looking for 10.
Senator BIRMINGHAM: So, Minister, are you confident you got the optimal result out of your interventions
in this?
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Senator CONROY: I am sure that Treasury and Finance would have preferred to have more bidders. It is
always the case but it was an auction and, as Mr Chapman said, it was very efficiently run. In Australia we have
three now—four possibly, as a new entrant did actually purchase some of the spectrum, despite clamouring
analysis. I remember breathless analysis from you, Mr Turnbull and others saying there would be no bidders. But
there were two bidders and—three? Three in the other?
Mr Chapman: Three and the 2.5.
Senator CONROY: Three and—2½. So commentary, which you are quoting from beforehand, is, you know,
fish-and-chip wrapping today.
CHAIR: Thanks, Senator Birmingham. I have got some questions now on the issue of consumer service by
ACMA. I have just been looking at the Ofcom website and done a comparison with yours—Ofcom is the UK
regulator. They have what they call their price accreditation scheme logo. Are you aware of that? They do what
they describe as rigorous, independent audits for companies who provide advice to consumers about the best deal.
Are you aware of that?
Ms McNeill: Senator, I do have some knowledge of this. I understand it is an accreditation scheme so that
rather than, for example, the regulator doing its own assessment of the best deals, they accredit companies to
publish information about the best deals—typically in telephony, I think.
CHAIR: There are six companies in the UK: two are accredited for mobiles; two are accredited for digital TV
and cable, landline and broadband services; and two do broadband services on their own. I just had a look at it,
and you would have some confidence that the regulator is saying: 'Here's where you can get a decent comparison.'
Because one of the most complicated things, I suppose—and it is getting more complicated with packages—is
getting a decent deal for all the telecommunications equipment that you are using.
Has ACMA given any thought to providing such a service to consumers here? I looked for companies that are
providing this advice and there is a range. I would not have a clue if any of them are a bit like the health
companies that just do a deal with a number of health funds and they really spruik the health funds. It is an issue
we should have a look at. If you have not had a look at it, do you have the capacity to do something like that? Do
you think it would be appropriate and is it within your remit to do something like that?
Ms McNeill: The difficulty that consumers face, as you say, when they are making choices between complex
products and services ought not to be underestimated. It is something we are acutely conscious of that the agency
traversed when it conducted its Reconnecting the Customer inquiry. Coming out of that inquiry were a raft of
code improvements which enhance transparency and make it simpler for consumers to compare offerings across
providers. That includes not only through the critical information summaries that providers are obliged to now
provide to people, which allow comparison between providers across the key information that those summaries
contained, but also pricing information. The cost of a two-minute call, a SMS and a megabyte of data can all be
directly compared. I accept they are a different proposition from commercially available sources or endorsement
of the sources, but we think that they are important improvements in transparency.
CHAIR: Where are you doing these?
Ms McNeill: These were outcomes which are embedded in the Telecommunications Consumer Protection
Code. A series of very significant improvements over the previous version—
CHAIR: The companies have got to comply with these?
Ms McNeill: That is correct.
CHAIR: This is different from what I am talking about, as you are aware. What I am talking about is that
Ofcom provide a service that says we have looked at these comparison companies, we have given them our seal
of approval so you can go there confidently and know that you are dealing with a reputable company. One click
on the Ofcom website will take you to this area you would think would be safe, regulated and available to
consumers. Would that be something that is in your remit? Is it something you should look at? Is it a service you
should provide to consumers in Australia? I think there is a proliferation of companies that say we can get you the
best deal but that do not tell you they only do the best deal for a number of companies at a price—that is the
problem.
Mr Chapman: When we launched our Reconnecting the Customer inquiry 2010-11, it led to the enhanced
Telecommunications Consumer Protection Code 2012, which is now the most complete, holistic, advanced
consumer protection in telco space in the OECD.
Behaviour economics and people's inability to adequately process comparative information, which is in part
what you are alluding to, was at the forefront of what we did. We took the most pragmatic course we could within
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ENVIRONMENT AND COMMUNICATIONS LEGISLATION COMMITTEE
the confines of our act. One of the things that occured to us at that time was the production of league tables. It is
not an idea that we have let go of. We decided, to be honest, to approach it in stages. We have now got the TCP
code bedded in. We have been very active in the auditing and enforcement. And I think there is a mindset change
within the telcos in Australia. They, I think, are very grateful the race to the bottom in customer care is over. You
will have seen, over the last several months, each of the chief executives of the major telco companies talk about
the new telco company for them is owning the customer and keeping the costumer—
CHAIR: I have heard all these anecdotes before, Mr Chapman. Owning the customer does not really turn me
on, I must say, when it comes from some companies.
Senator Conroy: I am not sure we need to know what turns you on, Senator Cameron, but we appreciate the
sentiment!
Mr Chapman: What I was going to finish that observation with was that we concluded at the time that we did
not necessarily have the legislative remit and the protection afforded by legislation to be seen to be endorsing
companies or to be accrediting. That was my recollection from 2011. What I would like to do is take your query
on notice and give you a better answer.
CHAIR: Could you also look at Ofcom and what their legislative capacity is to deal with it? If we have a
problem, we should deal with. I think consumers need that support from ACMA to get a decent deal.
Mr Chapman: Certainly, Chairman, I will do that.
CHAIR: Thanks very much. Once again, it has been very interesting.
Senator Conroy: Sorry, I think we have just got some information.
Ms McNeill: Sorry, Senator. There is just one matter that I wanted to clarify while we had the opportunity,
and it might be appropriate to draw it to Senator Ludlam's attention. Earlier in the evening in response to a line of
questioning, there was a question raised about whether the ACMA could rely on section 313 of the
Telecommunications Act and seek assistance from carriage service providers for the purposes specified in that
section. The answer is that we can but have not done so. I just wanted to clarify that matter.
CHAIR: Thank you.
Senator Conroy: Chair, before you conclude, it has been noted that the process of the auction was, as Mr
Chapman said, first class. I just wanted to particularly note that. For those of us who are not aficionados and do
not quite follow it as closely as Mr Tanner does, the process was overseen by him and, as has been noted, it was
an excellent process. I did have to, at various times, get trapped in a room with Mr Tanner. With the amount of
planning, preparation and organisation that went into something like that auction, it is easy just to tick it off and
say, 'Great,' but I think Mr Tanner deserves some recognition for doing a very first-class job in pulling it together
over many years. It is not something that happens easily, so I just wanted to put on the record appreciation for Mr
Tanner's—
Senator BIRMINGHAM: I think those of us who have been confused—
Senator Conroy: I was trying to be kind, Senator Birmingham.
Senator BIRMINGHAM: appreciate fully his professionalism, skills and knowledge.
CHAIR: Especially on the clock auction.
Senator Conroy: I think we should have special estimates just on the clock once more.
CHAIR: Thanks very much, Mr Chapman, and I thank the officers. I thank the minister and all officers for
their attendance. The committee will continue examination of this portfolio at 9 am tomorrow morning. Senators
are reminded that written questions on notice should be provided to the secretariat by close of business
Wednesday, 12 June. A resolution to accept all documents has been moved and passed.
Committee adjourned at 23:03