Senate Estimates Committee Hearing on ATLA

Hansard transcript of the Senator’s Estimate Committee of Questions by Senator Xenophon to ORIC about ATLA – refer pages 12-19 (highlighted in red)

COMMONWEALTH OF AUSTRALIA Proof Committee Hansard SENATE FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Estimates (Public) FRIDAY, 30 MAY 2014 CANBERRA BY AUTHORITY OF THE SENATE [PROOF COPY] CONDITIONS OF DISTRIBUTION This is an uncorrected proof of evidence taken before the committee. It is made available under the condition that it is recognised as such. INTERNET Hansard transcripts of public hearings are made available on the internet when authorised by the committee. To search the parliamentary database, go to: SENATE FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Friday, 30 May 2014 Members in attendance: Senators Bernardi, Lundy, McKenzie, McLucas, Moore, Peris, Siewert, Smith, Tillem, Wong, Xenophon. Friday, 30 May 2014 Senate Page 1 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE CROSS-PORTFOLIO INDIGENOUS MATTERS In Attendance Senator Scullion, Minister for Indigenous Affairs Department of the Prime Minister and Cabinet Outcome 1 Overview Ms Elizabeth Kelly, Deputy Secretary, Governance Ms Liza Carroll, Associate Secretary, Indigenous Affairs Mr Richard Eccles, Deputy Secretary, Indigenous Affairs Program 1.1: Prime Minister and Cabinet Indigenous Affairs Group Mr Mike Fordham, Acting First Assistant Secretary, Schools, Youth and Evidence Division Mr Stephen Goodwin, Assistant Secretary, Aboriginal and Torres Strait Islander Education and Youth Branch Mr Mark Laduzko, Assistant Secretary, School Attendance and Community Engagement Branch Mr Mathew James. Assistant Secretary, Evidence and Evaluation Branch Ms Anne-Marie Tovers, Acting Assistant Secretary, Remote Attendance Strategies Branch Ms Nadine Williams, Acting First Assistant Secretary, Employment and Economic Development Division Ms Rachel Marczak, Acting Assistant Secretary, Indigenous Employment Programmes Branch Ms Ryan Bulman, Acting Assistant Secretary, RJCP Delivery Branch Ms Brenda Love, Assistant Secretary, Economic Development and Strategic Partnerships Branch Ms Lynne Stevenson, Assistant Secretary, Employment Transition Taskforce Mr Darren Hooper, Acting First Assistant Secretary, Programme and Support Division Ms Belinda Campbell, Assistant Secretary, Remote Housing Branch Ms Ursula Carolyn, Senior Adviser, Remote Housing Branch Mr Pat Sowry, Assistant Secretary, Remote infrastructure Branch Mr Andrew Davitt, Assistant Secretary, Land Branch Ms Amanda Doherty, Assistant Secretary, Recognition and Reconciliation Branch Ms Tania Rishniw, Assistant Secretary, Employment Review Taskforce Mr Paul Salmond, Assistant Secretary, Environment Programmes Branch Ms Maria Jolly, Assistant Secretary, Programme Review Branch Mr Neil Harwood, Assistant Secretary, Community Safety Branch Mr Robert Ryan, Assistant Secretary, Local Solutions Branch Ms Marsha Milliken, First Assistant Secretary, Delivery and Network Division Ms Michelle Kinnane, Assistant Secretary, Indigenous Portfolio Bodies Mr Gavin Matthews, Assistant Secretary, Remote Network Design Branch Ms Jenny Goolagong, Assistant Secretary, Network Operations Branch Mr Simon Crowther, Acting First Assistant Secretary, Change Management Team Governance Group Ms Amanda McIntyre, Acting First Assistant Secretary, Corporate Services Division Mr Ben Neal, Assistant Secretary, Corporate Services Division Ms Pip Spence, First Assistant Secretary, Ministerial Support Division Ms Myra Croke, Assistant Secretary, Ministerial Support Division Agencies Torres Strait Regional Authority Mr Joseph Elu, Chairperson Page 2 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Mr Wayne See Kee, Chief Executive Officer Mr Chris de Mamiel, Chief Financial Officer Office of Township Leasing Mr Greg Roche, Executive Director Office of the Registrar of Indigenous Corporations Mr Anthony Beven, Registrar Committee met at 09:03 CHAIR: I declare open this meeting of the Senate Finance and Public Administration Legislation Committee. Today the committee will continue examination of the budget estimates with a cross-portfolio hearing on Indigenous matters. The committee will begin examination of Indigenous agencies and then proceed to outcome 2 of the Department of the Prime Minister and Cabinet and the Department of Health in relation to Indigenous health issues, as listed on the program. The program has been grouped into the themes and issues that relate to the Prime Minister and Cabinet portfolio and the Health portfolio. The committee may also examine the annual reports of the departments and agencies appearing before it. The committee is due to report to the Senate of 24 June 2014 and has fixed 11 July 2014 as the date for the return of questions to answers taken on notice. Under standing order 26, the committee must take all evidence in public session. This includes answers to question on notice. I remind all witnesses that in giving evidence to the committee they are protected by parliamentary privilege. It is unlawful for anyone to threaten or disadvantage a witness on account of evidence given to a committee, and such action may be treated by the Senate as a contempt. It is also a contempt to give false or misleading evidence to a committee. The Senate, by resolution in 1999, endorsed the following test of relevance of questions at estimates hearings. Any questions going to the operations or financial positions of the departments and agencies which are seeking funds in the estimates are relevant questions for the purpose of estimates hearings. I remind officers that the Senate has resolved that there are no areas in connection with the expenditure of public funds where any person has the discretion to withhold details or explanations from the parliament or its committees unless the parliament has expressly provided otherwise. The Senate has resolved also that an officer of a department of the Commonwealth shall not be asked to give opinions on matters of policy and shall be given reasonable opportunity to refer questions asked of the officer to superior officers or to a minister. This resolution prohibits only questions asking for opinions on matters of policy and it does not preclude questions asking for explanations of policies or factual questions about when and how policies were adopted. I particularly draw the attention of witnesses to an order of the Senate of 13 May 2009 specifying the process by which a claim of public interest immunity should be raised. The extract read as follows— Public interest immunity claims That the Senate— (a) notes that ministers and officers have continued to refuse to provide information to Senate committees without properly raising claims of public interest immunity as required by past resolutions of the Senate; (b) reaffirms the principles of past resolutions of the Senate by this order, to provide ministers and officers with guidance as to the proper process for raising public interest immunity claims and to consolidate those past resolutions of the Senate; (c) orders that the following operate as an order of continuing effect: (1) If: (a) a Senate committee, or a senator in the course of proceedings of a committee, requests information or a document from a Commonwealth department or agency; and (b) an officer of the department or agency to whom the request is directed believes that it may not be in the public interest to disclose the information or document to the committee, the officer shall state to the committee the ground on which the officer believes that it may not be in the public interest to disclose the information or document to the committee, and specify the harm to the public interest that could result from the disclosure of the information or document. (2) If, after receiving the officer’s statement under paragraph (1), the committee or the senator requests the officer to refer the question of the disclosure of the information or document to a responsible minister, the officer shall refer that question to the minister. Friday, 30 May 2014 Senate Page 3 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE (3) If a minister, on a reference by an officer under paragraph (2), concludes that it would not be in the public interest to disclose the information or document to the committee, the minister shall provide to the committee a statement of the ground for that conclusion, specifying the harm to the public interest that could result from the disclosure of the information or document. (4) A minister, in a statement under paragraph (3), shall indicate whether the harm to the public interest that could result from the disclosure of the information or document to the committee could result only from the publication of the information or document by the committee, or could result, equally or in part, from the disclosure of the information or document to the committee as in camera evidence. (5) If, after considering a statement by a minister provided under paragraph (3), the committee concludes that the statement does not sufficiently justify the withholding of the information or document from the committee, the committee shall report the matter to the Senate. (6) A decision by a committee not to report a matter to the Senate under paragraph (5) does not prevent a senator from raising the matter in the Senate in accordance with other procedures of the Senate. (7) A statement that information or a document is not published, or is confidential, or consists of advice to, or internal deliberations of, government, in the absence of specification of the harm to the public interest that could result from the disclosure of the information or document, is not a statement that meets the requirements of paragraph (1) or (4). (8) If a minister concludes that a statement under paragraph (3) should more appropriately be made by the head of an agency, by reason of the independence of that agency from ministerial direction or control, the minister shall inform the committee of that conclusion and the reason for that conclusion, and shall refer the matter to the head of the agency, who shall then be required to provide a statement in accordance with paragraph (3). (d) requires the Procedure Committee to review the operation of this order and report to the Senate by 20 August 2009. (13 May 2009 J.1941) (Extract, Senate Standing Orders, pp 124-125) Witnesses are specifically reminded that a statement that information or a document is confidential, or consists of advice to government, is not a statement that meets the requirements of the 2009 order. Instead, witnesses are required to provide some specific indication of the harm to the public interest that could result from the disclosure of the information or the document. Officers are requested to keep opening statements brief or seek to incorporate longer statements into the Hansard. We are dealing with three agencies this morning. We will start with the Torres Strait Regional Authority. Torres Strait Regional Authority [09:07] Senator Scullion: Chair, just before we go to questions of the Torres Strait Regional Authority I want to beg leave to make a short opening statement. CHAIR: I will get to you, and you will have that opportunity in just a moment. I welcome the Minister for Indigenous Affairs, Senator the Hon. Nigel Scullion, Mr Joseph Elu, Chairperson of the Torres Strait Regional Authority and officers. Minister, I invite you to make your opening statement now. Senator Scullion: Thank you. First of all I would like to acknowledge the traditional owners of country and acknowledge the elders past and present. This is Reconciliation Week, and I thought I would just briefly like to acknowledge all the people and organisations who are doing such a fantastic job in celebrating this week. As we move to constitutional recognition of our first Australians I think it is important that we take advantage of this week and take a positive attitude to all our relationships we have with our first Australians. I was actually at the launch of the AFL Indigenous round as part of Reconciliation Week, and there was certainly a sense of excitement. I hope that we can hold that excitement over the next few years. The AFL Indigenous round will be played and, importantly, it will be televised too many people across Australia who enjoy AFL. People will note that this is centred around the Recognise symbol. Again, I would like to take the opportunity to acknowledge the fantastic work that Recognise is doing in moving towards constitutional recognition. I think that constitutional recognition might be a good start. But in the meantime we have to get on with the business of reducing Indigenous disadvantage. The results of COAG are, at best, extremely disappointing. Most targets are not on track. I know that, particularly this committee and, I am sure, all Australians are very concerned about that. We need to make sure that those targets get back on track. That is why we are reshaping the way we do business. Page 4 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE The 2014-15 budget announced a fundamental change in the way that the Australian government will engage with Indigenous Australians through a new Indigenous Advancement Strategy program and the Remote Community Advancement Network. The Indigenous Advancement Strategy is the new structure for Indigenous affairs activity managed through the department. It focuses on ensuring resources are targeted towards the outcomes in the government’s priority areas of getting children to school and adults into work, and in community safety. Under the strategy, $4.8 billion will be invested over four years through five simplified, streamlined programs Jobs, Land and the Economy; Children and Schooling; Safety and Wellbeing; Culture and Capability; and Remote Australia Strategies. The investment in Indigenous Australia through the department is much larger, though—in the order of around $8.5 billion over four years, that is if you take into account the special appropriations and the payments we make through states as a part of the partnership agreements. They are not being changed, which is why they have not been a big focus during the budget. The five programs replace approximately 150 programs and activities transferred to the department as part of the machinery of government changes in September 2013. As a result, it will reduce red tape, inefficiency, duplication and ensure we deliver what is needed, where it is needed to make the lives of Aboriginal and Torres Strait Islander people better. It will allow greater flexibility to put in place community developed and led approaches, as well as respond to emerging issues quickly and effectively. This new approach will provide an opportunity for improved practical engagement with Indigenous Australians, service providers, business and government to ensure solutions are tailored to local needs. The new strategy and five programs will be implemented from 1 July 2014. Transitional arrangements have been put in place to ensure key services continue uninterrupted and that service providers are given time to adjust to the new arrangements. This will involve many organisations who have received long-term funding, and whose funding is due to expire on 30 June 2014, being offered a six- or 12-month contract extension to allow for a smooth transition. Those being offered a six-month contract are invariably those in the education space, where it is a calendar-year-type of contract rather than a financial-year-type contract. There will be some savings made across Indigenous programs in the order of $239.5 million across forward estimates, as there has been across all government expenditure. These will be achieved primarily by streamlining and efficiency in delivery. The Indigenous Advancement Strategy will be supported by the establishment of a Remote Community Advancement Network in Prime Minister and Cabinet, which will lead engagement and negotiations with communities, service providers and all levels of government to drive the outcomes in the government’s priority areas. The network will move to a regional model rather than our current state and territory management arrangements. This will enable decisions to be made closer to the people in the communities they affect. Regional offices in the remote community advancement network will be located according to business need, following further consultation with staff and Aboriginal and Islander people. However, it is not expected there will be wholesale changes to the location of offices, but there will be a significant change in focus. Our staff on the ground will spend more time on community engagement and we will continue to have staff based in remote communities. The new Remote Community Advancement Network will be rolled out over the next 12 months, starting from 1 July 2014. The new Indigenous Advancement Strategy and the Remote Community Advancement Network will have a significant positive impact on how we operate within the department and provide a clear focus on outcomes for Indigenous people. CHAIR: Thank you. Mr Elu, do you wish to make an opening statement? Mr Elu: Yes, thank you. We want to acknowledge the traditional owners on whose land we are meeting here today and pay our respects to all traditional owners around Australia. We also want to acknowledge the importance of this week being National Reconciliation Week and remind the Australian community about the significant journey that we are on as a nation to protect the rights, culture and interests of Australia’s first peoples, while living together in harmony as Australians regardless of where we have come from. I thank your committee for inviting us to give evidence here today. This is our second appearance since I have been the chairman, and I thank the minister. Senator McLUCAS: Thank you, Mr Elu, for coming down for this hearing. I want to go specifically to the cuts that TSRA will experience over the next four years, and want to confirm the figures so that we are all agreed about what the cuts are. My reckoning puts cuts of 1.272 in 2014-15, 1.093 in 2015-16, 1.086 in 2016-17 and 0.613 in 2017-18. Is that your assessment as well? Mr See Kee: Good morning. My name is Wayne See Kee. I am the CEO of the Torres Straight Regional Authority. Can I pay my respects as well as on behalf of the administration to the traditional owners here today Friday, 30 May 2014 Senate Page 5 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE and also acknowledge the significance of National Reconciliation Week, and pay our respects to traditional owners and elders who are present here today. In relation to that question those figures, are correct. Senator McLUCAS: Thank you. I want to go to how—and I found it a bit tricky going through the PBS to work out where that will then result in changed activities in the Torres Strait. Do you want to explain from your perspective—and then that might answer some of my questions and we can then tidy up the ends—where will the cuts appear in the different programs of the authority? Mr Elu: We can give you the workings of the administration. Our board meeting is next week, which these figures will be presented to, and the board may change those. Senator McLUCAS: Sure. Mr Elu: Our process is that is goes to the executive before the board meeting. They thrash it out with the administration and then it goes to the board and a decision is made. We can certainly, of course, give you those figures after the decisions have been made. Mr See Kee: That is correct. The board meeting is next week, and I suppose one of the things that the chair has indicated in preliminary discussions is that key priorities are to make sure that there is not any reduction in staff numbers and also in terms of what we are able to do on the ground in program delivery, especially those key priority projects. Senator McLUCAS: But are you going to share with me what you are going to put the board, or is that inappropriate? Mr See Kee: Just in how we do the budget there: it goes to the board and then after that we actually can release that to the public because, as the chair has indicated, it might change. Senator McLUCAS: Okay. Then I will go to the portfolio budget statements to see if I can understand here. On page 313 of the PBS it shows that in the current year grants go from $26.3 million down to the 2017-18 year to $12.999 million. That is basically a halving. Can you explain what that indicates, please? Mr de Mamiel: With regard to your question on page 313, are you referring to table 3.2.3? Senator McLUCAS: Yes. Mr de Mamiel: At the top then, we are talking about graphs for 2014-15 down through to $12 or $13 million over the forward estimates. The significant levels of funding in there are associated with measures passed, including infrastructure programs and CDEP wages. Those measures will cease over the forward estimates and new policy proposals are likely to be developed so that those numbers are likely to increase. It is timing. But currently, we will see the end of the Major Infrastructure Program 5. The funding for that phases out at the end of 2016. So what we would like to do next year is to put up a new policy proposal, pre-empting that, for major infrastructure funding with the states into 2017-18 and the out years. Senator McLUCAS: So what does that line capture? It captures CDEP and the MIP. What else does it capture? Mr de Mamiel: It captures funding activity for grants that TSRA provides to eight programs. That funding covers off activities under eight programs. Senator McLUCAS: Eight? Mr de Mamiel: Eight programs, yes. Senator McLUCAS: What are those eight programs? Mr de Mamiel: Governance and leadership— Senator McLUCAS: Oh— Mr de Mamiel: The internal programs within the Torrens Strait Regional Authority— Senator McLUCAS: I understand. Mr de Mamiel: which we have mapped to the five plans that have been identified through the Indigenous Advancement Strategy. Senator McLUCAS: Yes. So that grant program covers CDEP, the Major Infrastructure Program and the grants program. Is there anything else that is covered? Mr de Mamiel: Yes, there are a significant number of activities in each of the eight programs. If you wanted that detail we could certainly provide that. We do not have it here today. Page 6 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator McLUCAS: That might help, actually. If you could provide that on notice— Mr de Mamiel: We will take that on notice. Senator McLUCAS: I am looking for a disaggregation of CDEP. When does that finish? The MIP5—that finishes and, yes, I understand that you are hoping to get another MIP up. But then, with all those grants, even if you could break them down to the eight programs that would assist in trying to work out the halving of that income over the forward estimates. Mr de Mamiel: Yes. Senator McLUCAS: On page 314, table 3.2.2, ‘cash and cash equivalents’ go from $6.7 million down to $302,000. Can you explain what is happening there? Mr de Mamiel: Which line item are you referring to? Senator McLUCAS: The top line: ‘cash and cash equivalents’ goes from $6.7 million down to $302,000 over the four years. Mr de Mamiel: We have a situation where we try to ensure that where we have cash available for use within the program that we do not actually leave it sitting in a normal bank account. We allocate it to an investment account. If you have a look at the line down there called ‘other investments’, what we like to do is to actually allocate it to an investment account so that we are getting a better return on those funds to ensure that we can actually put additional funds into the TSRA programs. Where we have ‘other investments’, those are cash. We use that cash for infrastructure programs over the forward estimates. So you will see that we have a significant cash holding at the moment actually to fund the infrastructure that we are planning to invest in over next year and the forward estimates. Senator McLUCAS: But both those lines go down over time? Mr de Mamiel: Yes, they do. The reason for that is that the investments that we have at the moment we are actually investing into infrastructure. If you look at the ‘land and buildings’ line item under ‘non-financial assets’ that increases over the same time from 33 to 53. Senator McLUCAS: Yes. Mr de Mamiel: It is exchanging one asset for another, being cash for infrastructure in island communities. Senator McLUCAS: Sure. Does ‘land and buildings’ cover the sewage treatment plant at Mabuiag Island? Mr de Mamiel: No. This is infrastructure that TSRA needs to operate in the 20 communities in which it operates across the islands—17 islands. Senator McLUCAS: Does TSRA actually own infrastructure on the outer islands? Mr de Mamiel: The TSRA owns infrastructure on the outer islands. We are currently negotiating ILUAs—Indigenous land use agreements—to ensure that we are able to put infrastructure in communities to support employment opportunities out there into the future. For example, a ranger program. Senator McLUCAS: Right, okay. So TSRA would own that asset, rather than TSIRC? Mr de Mamiel: It is hoped that there would be an arrangement with prescribed body corporates to have opportunities to have infrastructure into the future as well. An arrangement would be put in place, but there is nothing sorted at the moment as to what that would be. They would have to go through the detail. Senator McLUCAS: My understanding, and correct me if I am wrong, is that TSRA does not have assets that are owned by the authority in the outer islands. There are some assets on TI, of course. Mr de Mamiel: Correct. Senator McLUCAS: Okay, you have explained what is going to happen, but I am trying to ascertain what is going to change on the ground when you cut $3.5 million out of a program that is serving some of the most disadvantaged people in Australia. I am trying to get an understanding of what you are going to do. I suppose, Mr See Kee, you are telling me that you will not really know that until your board meeting of next week? Mr See Kee: That is correct. Senator McLUCAS: I might wait until you can provide the committee an explanation of what your budget will look like in 2014-15 post your board meeting. But the other thing I noted, and you said this earlier, Mr See Kee, is that staffing is intended to go from 136 in 2013-14 to 146—so that is 10 more people. In what areas will those people be engaged? Friday, 30 May 2014 Senate Page 7 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Mr de Mamiel: The average staffing level was 137 to 146. This year we started recruitment for positions for economic development, fisheries programs and within the range of programs. Because they are average staffing levels, they take a while to catch up because that took place in the second half of the year—this year. Senator McLUCAS: Right. Mr de Mamiel: Next year they will be at the front of the list, so we expect that they will remain for the full year. But they are right at the front, at the coal face of the organisation. Senator McLUCAS: The other two lines that I found of interest were the net cost of services going from $49 million down to $36 million over the forward estimates—that is on page 313. Is there an explanation for that? Or is that really covered in CDEP? Mr de Mamiel: Could you just repeat that line item again? Senator McLUCAS: Net cost of services. Mr de Mamiel: Yes, the reduction in appropriation results in the reduction of services that we are able to provide. But, again, over time we hope to put up new policy proposals to ensure that the revenue streams we have to achieve on the ground will be maintained into the future. But, yes, it is to do with the phasing out of CDEP wage contributions, and also the Major Infrastructure Program coming to an end. Senator McLUCAS: When does MIP5 finish? Mr de Mamiel: MIP5 finishes in June 2016. That is when the phased funding is to be completed. Senator McLUCAS: And an explanation also of the total unsourced revenue going from 13.9 down to 11.7. It is not such a big jump down but, like everything else, it is going down. Mr de Mamiel: Yes, it is. And the unsourced revenue is the funding agreements that we enter into with other agencies—some of them state and some of them Commonwealth. One is the ranger program, which has a five-year life. That is likely to be renegotiated at the end of the existing agreement. Senator McLUCAS: I certainly hope so. Mr de Mamiel: Yes, certainly! And there are other funding agreements that we have with state and territory organisations. In this next year we anticipate that 25 per cent of our revenues are likely to come from non-appropriation; so engaging and leveraging that with other funding authorities, certainly assisting us to achieve more of that round. Senator McLUCAS: I will finish my questions with one last question, which I hope you will take on notice. Can you give me a list of services or programs that will not continue in 2014-15 or 2015-16, please? Mr Elu: Yes, we will take that on notice. Senator McLUCAS: Thank you. And thanks for coming down. CHAIR: How many loans have been offered under the home ownership scheme this year? Mr Elu: We have two home loan programs going. One is on Thursday Island itself, which is freehold. We average about one a month. It has slowed down because of the price on— CHAIR: Prices are going up there too? Mr Elu: Yes. But on Indigenous land we have not had one yet, because we are negotiating with the state government on land tenure on DOGIT and all the Indigenous lands. CHAIR: What is the status of those negotiations? Mr Elu: It is very hard right now because there is native title plus DOGIT, deeds of grant in trust; PBCs; land trusts—it is all very complex bits. Senator McLucas will know this. Dealing with the state government up there is very difficult right now because they have had their own budget cuts, and of course native title is very much in the forefront of all of that. Mr See Kee: I can advise that in our home loans portfolio we have 30 home loans current with a portfolio value of about $4.4 million. We probably average about one to two home loans a financial year, based on the market there. CHAIR: May I ask whether the home loans are all in good standing? Mr See Kee: Absolutely. They are. CHAIR: What is the process when a loan is not in good standing anymore? Do you go through the same process that a bank—any normal bank—would go through? Is there a three-month grace period, or do you have a different process? Page 8 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Mr See Kee: We engage quite proactively with the clients, so we manage the arrears to ensure that we get it to a point that is manageable. I think for the home ownership program at this point in time our arrears rate is less than one per cent. CHAIR: Good. Mr See Kee: And for the business-funding scheme—because we do the business loans—the arrears rate at this point in time is zero. CHAIR: Thank you. Gentlemen, I understand that there are no further questions for the Torres Strait Regional Authority. I thank you on behalf of the committee for your attendance this morning. We appreciate it, and we look forward to seeing you again at another estimates. You might not look forward to that, but we do! Mr Elu: We always look forward to coming! CHAIR: You are very generous, Mr Elu! Office of Township Leasing [09:32] CHAIR: I welcome Mr Greg Roche, the Executive Director of the Office of Township Leasing. Mr Roche, do you wish to make an opening statement? Mr Roche: With your permission, Mr Chairman, I would like to make some opening remarks. CHAIR: Please proceed. Mr Roche: I thought it might assist the committee if I made a short statement simply to explain my role and how township leasing in particular operates. The position of Executive Director of Township Leasing, often known as the EDTL, is that of an independent statutory officer created under section 20B of the Aboriginal Land Rights (Northern Territory) Act. I am the second occupant of the position and have been appointed for a five-year term which expires in February 2018. On 30 August 2007, the first township lease was signed over Nguiu, now known as Wurrumiyanga. The first headlease has a number of features which are unique. The headlease is for 99 years at first instance. The traditional owners received an initial payment of $5 million as a down payment towards the first 15 years of rental income. This payment was an advance from the Aboriginals Benefit Account, to be repaid out of rent collected by my office. The year before the signing of the lease, the traditional owners received approximately $2,000 in rent for Wurrumiyanga. In this financial year, we anticipate collecting approximately $748,000 in rent. On current trends, the traditional owners can expect to start to accrue direct rental payments in about three years time. In addition to the down payment, there was a community benefits package which funded a community wellbeing centre, extra housing, upgrades to the football oval and work on the cemetery. The lease also established the consultative forum, which meets three or four times a year to discuss all the land use proposals for the community. Consultative forums are now a characteristic of all township leases. History records that the EDTL has agreed with all of the consultative forum recommendations on land use. Since the signing of the lease, my predecessor and I as EDTL have issued approximately 100 subleases in Wurrumiyanga over 350 lots. Wurrumiyanga was the first remote community to be surveyed, and this was a direct consequence of the township lease. Fifteen Tiwi families and individuals have entered into long-term subleases to buy their own homes. The Wurrumiyanga home subleases have been funded through loans administered by Indigenous Business Australia. I understand that IBA is also dealing with three other individuals who are interested in buying their own homes. Private homeownership is not for everyone, but it could be a choice for those with the means and inclination to do so. The traditional owners at Wurrumiyanga created Mantiyupwi Pty Ltd to utilise their down payment. Mantiyupwi now owns Tiwi Tours, has converted and upgraded buildings in Wurrumiyanga for accommodation, is developing a 12-room accommodation facility in Wurrumiyanga, is a partner in a mobile takeaway business at Wurrumiyanga and has established a supermarket and retail outlet containing a takeaway, a laundromat, a games parlour and a banking outlet, as well as providing financial support to Mantiyupwi families for funerals and ceremonies, and financial support and sponsorship for the local school, museum and sporting clubs. I should note that the supermarket has been in part funded by a loan from Westpac, a demonstration of how a township sublease can secure investment in remote communities. The second headlease was with the Anindilyakwa Land Trust and was executed in December 2008. The history of this lease signing was all different, as it was part of a broader regional partnership agreement that was signed at Friday, 30 May 2014 Senate Page 9 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE the same time. Under the headlease, the traditional owners agreed to an effective 80-year lease over the Angurugu and Umbakumba communities on Groote Eylandt and Milyakburra on Bickerton Island. The traditional owners received an up-front payment of $4½ million advanced from the Aboriginals Benefit Account. The traditional owners on Groote and Bickerton have invested their payment in a variety of enterprises, including a car hire business, and, unlike the Tiwi, also opted for a partial cash distribution, as is their right. Finally, in November 2011 the parties executed a township lease over the communities of Milikapiti and Wurankuwu on the Tiwi Islands. Although smaller in scale, this lease also incorporated a payment to traditional owners and a package of benefits. The administration of this lease is also going well. I see an important role for myself and my staff in the medium term in attracting investment to support economic development in these communities. We work closely with the traditional owner corporations that have been established to invest the advance payment received as part of the township lease package. As I indicated the last time I gave evidence, I do not negotiate township leases. I do provide parties with technical advice, and of course I have addressed many groups of traditional owners over the years on the characteristics of township leases and their advantages. I am advising the parties in relation to current township lease negotiations in relation to Gunbalanya, Yirrkala and Pirlangimpi. I should also briefly mention that I hold what are known as town camp leases, 40-year leases over 17 town camps in Alice Springs. I also hold 22 executed leases over housing precincts and 40 leases over Australian government assets, such as government engaged and coordinated offices, under section 19 of the land rights act. These leases are all in the Central Land Council region. Thank you, Mr Chairman. I am happy to answer your questions. CHAIR: Thank you, Mr Roche. I am sure there will be some questions, but two things have prompted me from your opening statement. The consultative forums that you referred to were applying to one township lease alone, or is that a common thread across all the township leases? Mr Roche: It is a characteristic of all the township leases. CHAIR: Who is on the consultative forum—not the individuals but what sorts of representatives? Mr Roche: How is it composed? It is nominated by the relevant land council. I am also a member. And it consists usually of the traditional owners, but it is a matter for the land council. In the case of, for example, Wurrumiyanga, they are all traditional owners and their families, so we will get up to 40 traditional owners at a meeting. On Groote it is mostly traditional owners, but there is a senior law man, technically not a traditional owner but a very important person in one of those communities, who has also been nominated. It is largely characterised as being, and it is certainly all dominated by, traditional owners. CHAIR: Do the consultative forums have the defining right to say yea or nay to a proposal? Mr Roche: They are advisory. They are characterised as advisory under the leases. However, as a matter of practice, I and my predecessor have paid very close regard to the views of the consultative forum. In particular, they have knowledge of their communities and of some of the business enterprises. I have to say that the consultative forum almost always support any proposal for economic development, as they should. However, from time to time the consultative forum has not been in favour of certain proposals. In those situations, my predecessor and I have not approved them. CHAIR: I do not want to know specifics, but is it just a general sounding board, or is there a vote? Is there a recording of who is in favour of this proposal and who is opposed to it, or is it just your picking up the vibe? Mr Roche: Like most meetings with traditional Aboriginal people, it works by consensus, and the traditional owners may spend some time getting to that consensus about a particular proposal. To my knowledge, there has never been a formal vote, but we work through to arriving at a view. CHAIR: So you are reaching a consensus within the community and trying to reflect their views? Mr Roche: That is correct. CHAIR: The second point—and it is just a curiosity—is that you said that Westpac had funded the supermarket at— Mr Roche: Wurrumiyanga. CHAIR: Wurrumiyanga. Was that through Westpac’s philanthropic foundation, or is it a commercial loan? Mr Roche: I was not involved directly in the negotiation, but I understand that it is a straight commercial loan. CHAIR: A straight commercial loan—all right. Page 10 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Mr Roche: I should add for the sake of completeness that I am involved in discussions with another one of the big four in relation to another community and another proposal. CHAIR: Thank you. Senator SMITH: I want to explore a little bit more the Westpac loan that you talked about in your opening statement. You mentioned that you were not intimately involved in that, but you are involved in a second commercial loan arrangement that might come to fruition. Can you just speak to us about the dynamics? What is the link between township leasing and the confidence that that gives banking institutions to make loans? Mr Roche: We work closely with developers, usually but not always the traditional owner corporations themselves. In this particular case—on which for obvious reasons of commercial confidentiality I cannot provide much detail—it is a private developer who is familiar with the community and has the confidence of the community. He is looking for a loan in relation to a project which has, it would appear, quite good prospects for a sound cash flow. I am not involved as a lobbyist for this particular businessman. It is a straight commercial arrangement. What I am involved in is providing assurance to the bank that the underlying tenure is sound and capable of being utilised in a mortgage situation for a loan. So my dealings with the bank have been purely about explaining the township leasing mechanism, about how it works, about the security that it offers, but then of course it is a direct commercial negotiation between the parties. Senator Smith: Does the township leasing approach better facilitate bank or private involvement in Aboriginal housing social development? Is it a better mechanism than others? Mr Roche: Senator, that is a matter of opinion. Senator SMITH: It is, yes. Mr Roche: Suffice to say that the mechanism that is available under a township lease, in particular with a sublease, is relatively quick by the standards of dealing in Indigenous land. A section 19, which is the alternate arrangement, can take years. We can turn around a sublease application in a matter of weeks. That is, of course, with the knowledge and agreement of the traditional owners. It also is a standard form of sublease. Section 19 leases can be individually crafted, whereas our standard form subleases are, in some cases, even contained within the head leases themselves so there is a consistency in the documentation. We have tried, as far as is possible, to make it akin to a normal long-term lease which everybody enters into in relation to land. So it provides that degree of comfort to any commercial organisation, both ones that would hold a sublease or ones that may end up as a guarantor or a mortgagor, that they are dealing with a relatively straightforward instrument. I would like to think that those mechanisms and instruments are ones with which most commercial organisations in Australia would be familiar. Senator SMITH: By familiar we also mean confident in terms of their understanding of how they work and the security that they bring. Is there any reason to think that the rollout—and that is my word—of township leases across Indigenous communities will be more successful in some parts of Australia than in others? Are there any particular regional impediments that might slow down the rollout of township leases? Mr Roche: Township leasing is a mechanism that is only available under the Land Rights Act in the Northern Territory. It is true that township leasing has been relatively slow to be implemented. It started with the two smaller land councils, and certainly in relation to the Tiwi Land Council it was very much at their initiative that the first township lease was executed. This is really more a matter for government because it is government that makes the offers, but I am aware that the offers that have been made to date have all been in relation to the larger communities. They are ones which are more capable of supporting economic development and—if I might venture from my experience—it has been where the traditional owners themselves are interested, if you like, in advancing to the next phase of development within their community. So it is a combination of government initiative, demographics and where that particular traditional owner group is at. Senator SMITH: To what extent do traditional owners have a say over the township leasing arrangement? Could you just elaborate on their involvement and the scope of freedom they have. Mr Roche: That is a complex situation. Senator SMITH: That is why we are at Senate estimates. It is an opportunity to— Senator WONG: I raise a point of order. There is half a billion dollars’ worth of cuts from this Prime Minister to Aboriginal affairs. CHAIR: You said there is a point of order, Senator Wong. What is your point of order? Senator WONG: I am just inviting— Friday, 30 May 2014 Senate Page 11 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE CHAIR: A point of order is about the procedure. It is not about you inviting or interjecting on a line of questioning. Senator WONG: I have a procedural request. This is a lengthy discussion, but there are a lot of senators who have questions about the budget. I just wonder if a lengthy briefing could be arranged for the minister’s office, and I am sure the minister would be very happy to provide that to the government senator, rather than spending this time— Senator SMITH: This is not just a game. I am a senator from Western Australia and I am asking Indigenous— Senator WONG: You are a government senator and you have the opportunity for a briefing. CHAIR: This is not helping. Senator Wong, Senator Smith, desist! Senator WONG: You are wasting time. You know what you are doing. You do not want to talk about the cuts. CHAIR: Stop! I am very happy to suspend this committee, if that is what you want to do. The simple point is this: we have three agencies scheduled for this morning. If there are questions of the agencies, it is entirely appropriate for that to take place. Let me make this point: the first agency was called by opposition senators, this agency was called by government senators, and the next agency was called by Senator Xenophon. They are fully entitled to ask whatever questions they like in accordance with the program. You might not like that, but that is what the program is. Senator WONG: All I am saying— CHAIR: You are not helping. You are not contributing. Senator WONG: If there is a lengthy briefing for Senator Smith then it might be more efficient for him to get that himself. CHAIR: You are not contributing in a positive sense and in fact what you are doing is delaying the movement on to the next aspect of the portfolio. If you want to persist with this, you can do that. Senator MOORE: I wanted to clarify: you said that there are three agencies called by the government, by the opposition and by Senator Xenophon. Is it your plan to have equal time for each of them? CHAIR: Clearly not. It depends on how many questions are asked. For example, the Torres Strait Regional Authority was requested also by Senator Waters, who is not here to ask questions. Senator WONG: They told a lie. If you do what Credlin says, they won’t promote you. CHAIR: Senator Wong! Senator WONG: Sorry, I was having a discussion with Senator Smith. CHAIR: Unlike the ego over there, this is not about me. This is about getting outcomes. Senator WONG: I was not talking to you, Chair. CHAIR: You were indeed. Senator WONG: No, I was talking to Senator Smith. Sorry. CHAIR: Okay. It is not about Senator Smith either. Senator WONG: You, Chair, I was not having a go at. CHAIR: I am just trying to facilitate. Senator SMITH: I apologise, Mr Roche, that you had to witness that. Just to provide some context for yourself and for other senators, I am a Western Australian senator that has responsibilities for the federal seat of Durack, which takes in all of the Western Australian landmass to the north of Geraldton and to the border with the Northern Territory. Indigenous issues are of great significance to me as a senator. I readily admit that my level of understanding is not as high as others and I have come to this Senate estimates process today, on the cross-portfolio day, with a genuine interest in understanding the very important issue of township leasing, because it goes to the core of economic development and job creation. Your contribution has been disgraceful, Senator Wong. Mr Roche, you are talking to us about the complexities. Mr Roche: Individual leases simply state that my role is to make the decisions in relation to land use for each of the eight communities covered by township leases. However, it has been, as I mentioned in my opening statement, the practice of me and my predecessor to pay close attention to the views of the consultative forum for a variety of reasons. Firstly, of course, the consultative forum members are well informed and occasionally better informed about developments in their community than me or my staff. Secondly, notwithstanding the existence of Page 12 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE the township lease, I regard it very much as a partnership with the traditional owners and with the community about the development of that community, and so therefore it does not do that relationship any good at all to have a situation where I may make a decision that the traditional owners do not support. And thirdly, of course, in such a situation it would be unlikely that any business venture would survive in the absence of the support of such an influential group in that community. So although it is technically correct, and critics of the township leasing model have said that this is a complete loss of power by the traditional owners, the reality is more complex, and I think it is simply more a method whereby we—as in the Australian government and in particular my position—work with the traditional owners and with the community on economic development. Senator PERIS: Can you give me an update on where your department is with regard to discussions or consultation with the Tiwi Land Council, with Garden Point or with Pirlangimpi with the 99-year lease? Ms Carroll: I think that would be a question to the department rather than to Mr Roche and I am just conscious of where that might come up in the agenda. It depends on the committee— Senator PERIS: If you could do it, would you answer that question? Ms Carroll: We would answer that question but I would have to get the right officers to the table. Do you want to do it now or a bit later when we cover land and housing issues generally? Senator PERIS: Where would it fit in here? Ms Carroll: Under land and housing. It either could come under Closing the Gap or with Indigenous Housing later in the day. Senator PERIS: I will ask it then. CHAIR: My suggestion is this. It is five minutes to 10. There is a break scheduled for 10 till 10.15. If we have completed with this agency, we can then go to Senator Xenophon, who has some questions for the Office of the Registrar of Indigenous Corporations. We will deal with that as quickly as Senator Xenophon can and we can move onto the Closing the Gap COAG reform in the Department of the Prime Minister and Cabinet. It means going to a break now and resuming at 10 past. So I will propose that the committee will now suspend matters. Thank you, Mr Roche, for your attendance today. Proceedings suspended from 09:55 to 10:09 Office of the Registrar of Indigenous Corporations CHAIR:I would like to welcome Mr Anthony Beven, the Registrar of Indigenous Corporations. Mr Beven, do you wish to make an opening statement? Mr Beven: Thank you, Chair. I do not wish to make an opening statement. CHAIR: Thank you, Mr Beven. We will now go to questions and I will turn to Senator Xenophon. Senator XENOPHON: Good morning, Mr Beven. I have a number of questions to ask you. I want to get through as much information as I can as expeditiously as possible. I have been approached by a number of elders and community leaders from the Adnyamathanha Traditional Land Association—not those that control the association but members of that community. I met with them. They are deeply concerned about what is happening with their association and I will get to that soon. I want to go firstly to the Four Corners program on 14 October 2013 headed No Accounting. Are you familiar with that program? Mr Beven: Yes. Senator XENOPHON: You have seen the program? Mr Beven: Yes. Senator XENOPHON: A number of serious allegations were made in relation to the Jawoyn Association. That is correct? Mr Beven: Yes Senator XENOPHON: Can you tell us whether any action was taken or any investigations were undertaken by ORIC in respect of that? Mr Beven: Yes. My office first received a complaint in relation to the Jawoyn Association Aboriginal Corporation on 16 January 2013 and my office commenced an investigation into those allegations on 17 January 2013, so the very next day. As part of that investigation, a number of notices were served on various parties associated with the corporation to request the provision of documentation, including a request for a large volume of documents from the corporation itself. On 5 February 2013, pursuant to those notices, my office obtained a large number of documents from the corporation, and up until the end of February 2013 various parties provided Friday, 30 May 2014 Senate Page 13 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE various documents to my office. My office commenced a review of those documents and then, on 12 March 2013, my office issued a number of notices to attend examinations. Under the legislation we have to provide a minimum of 14 days for people to respond to those notices. Senator XENOPHON: I am happy for you to put some of this on notice, and the time line is very valuable, but I just want to cut to the chase here. As a result of those investigations, was any disciplinary action taken in respect of that? Mr Beven: In relation to that investigation, the outcome was that all of the evidence was reviewed by my office. We determined that there was insufficient evidence to warrant a brief of evidence being put to the Commonwealth DPP. Because this was such a high-profile matter, we consulted with the Commonwealth Director of Public Prosecutions, and the Commonwealth DPP recommended that we engage an independent barrister from the private bar who specialises in criminal law to also review all of the evidence. That occurred, and the independent barrister also came to the conclusion that there was insufficient evidence to warrant a brief of evidence to be put to the Commonwealth DPP. Senator XENOPHON: Let’s go through this. Some of the allegations related to a helicopter for non-work-related matters, costing $300,000 to $400,000. The allegation is that it was to take the CEO and his girlfriends on trips. It is alleged that there were invoices for lawyers for two counts of aggravated assault for a total of $55,000 for the CEO, and a house bought for the CEO allegedly for over half a million dollars. They are just some of a litany of allegations. Were all those allegations investigated by ORIC? Mr Beven: Yes, all those allegations were investigated by ORIC and, as I said, an independent barrister recommended by the Commonwealth DPP also reviewed the evidence relating to those allegations. Senator XENOPHON: And recommended not to pursue criminal matters. But was there a finding by ORIC that that expenditure that was not work related on the helicopter took place? Mr Beven: Sorry, could you— Senator XENOPHON: Did ORIC make a finding that several hundred thousand dollars of expenditure occurred in respect of a helicopter that was allegedly not work-related? Mr Beven: We do not make findings as to whether things happened or did not happen. Our role is to determine if there are any breaches of the legislation and if there is any evidence of that. Senator XENOPHON: In a nutshell, what do you say the threshold is for action to be taken by ORIC? It is not just a brief of evidence then going to the DPP for prosecution; there are other sanctions you can take short of that. Is that correct? Mr Beven: Yes, and there were sanctions taken in this particular case. Senator XENOPHON: So there were sanctions against the Jawoyn Association. Mr Beven: Yes. Senator XENOPHON: Can you tell us what those sanctions were? Mr Beven: After having all of the evidence reviewed, the decision was made that there was insufficient evidence to warrant a brief of evidence to the Commonwealth DPP, and that was in July 2013. On 16 August 2013 my office issued what is called a compliance notice to the corporation. A compliance notice is a notice that is issued by my office when we identify that a corporation may have breached the provisions of its constitution or provisions of the legislation. Where those breaches are not significant enough to warrant a criminal or civil action, the notice is issued and the notice requires the cooperation to take remedial action to correct breaches, or it may say ‘to improve processes and procedures’. As I said, that was issued on 16 August 2013, and on 8 October last year the corporation fully complied with the requirements of that compliance notice. Senator XENOPHON: Is that a public document? Mr Beven: Yes, it is a public document on our website. Senator XENOPHON: So I can obtain that. I wanted to ask about the invoices for lawyers on two counts of aggravated assault for a total of $55,000 for the CEO. Is it your view that a criminal matter or defending assault charges would be a proper use of a corporation’s funds? Mr Beven: I do not want to go into the specific issues, but— Senator XENOPHON: No, I am asking you as a general principle: is it appropriate to be spending corporation funds in respect of defending a criminal assault? Mr Beven: It depends on the circumstances of each case and on the circumstances of the corporation. How a corporation spends its private money not sourced from government funds is a matter for the corporation and its Page 14 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE directors, and it is not the role of my office to tell corporations how they should spend their own private money. That is a matter for the members and the directors of each individual corporation. Senator XENOPHON: Which begs the question: are you satisfied that members are appropriately representative of the Jawoyn Association? Do you believe that the processes are robust and fair so that all members can have a fair say in relation to how the funds are spent? Mr Beven: Yes. My office works very closely with the Jawoyn Association, as it does with many other Aboriginal and Torres Strait Islander corporations. My staff and I personally have attended a number of directors meetings and AGMs of the Jawoyn Association Aboriginal Corporation and I am satisfied that those meetings have been held properly and that all members have had an opportunity to ask questions, put their views and make decisions. Senator XENOPHON: Have you had an opportunity, as part of your inquiries in respect of the Jawoyn Association, to interview some of the people who have made complaints publicly about the Jawoyn Association? Mr Beven: Yes. The vast majority of those people that did make complaints were formally examined as part of the investigations. They provide evidence and documentation on oath. Senator XENOPHON: Are you able to provide your report publicly in respect of that? Mr Beven: No. In the investigation that we conducted, as you would appreciate, people are required to provide documents and to answer questions, so in those circumstances it would not be appropriate to divulge confidential information that they provided to us under obligation. Senator XENOPHON: So, you are saying that, if money is being used by the CEO to purchase a home for his own purposes, that is a matter for the corporation to consider, in terms of the use of its funds? Mr Beven: Yes. Senator XENOPHON: So you were satisfied with the purchase of the home, the purchase cost of almost $600,000. You do not have an issue with that? Mr Beven: No. Our investigations revealed that legal advice was obtained; accounting advice was obtained; a proper resolution went to the board; all the available information to make a fully informed decision went to the board of directors; and the directors made a decision. And on the basis of our investigation there was no evidence to sustain a brief of evidence being put to the Commonwealth DPP. Senator XENOPHON: You are satisfied that, with respect to the expenditure of funds for the benefit of members, the Jawyon Association’s constitution was still complied with, notwithstanding that there were those personal benefits: the helicopter rides, the money for lawyers for assault charges, and buying a home for the CEO? Mr Beven: Yes. As I said on 16 August last year, a compliance notice was issued; some breaches were identified with the corporation’s rule book, but they were not significant enough to warrant a brief of evidence. Senator XENOPHON: There was no reversal of any of the transactions that I referred to? Mr Beven: That you have referred to? No. Senator XENOPHON: Before I go to the Adnyamathanha people, I want to go to a report in The Australian of 7 May this year, ‘Uneven flow of benefits’, by Paul Cleary. It makes mention of a corporation referred to as ‘corporation X’—I have no relationship with it. The article states that the chief executive of the corporation: … secretly doled out more than $1 million in benefits to a handful of directors and elders over a period of a few months, without seeking the approval of members. Are you familiar with those allegations? Mr Beven: Yes. Senator XENOPHON: I do not know which corporation we are referring to, but it contains a number of serious allegations that the expenditure of funds was without authorisation. Is that something that you have investigated? Mr Beven: Yes. Senator XENOPHON: And what conclusions have you reached with respect to that investigation? Mr Beven: We have fully reviewed the documentation in those allegations, and determined that there have been no breaches of the corporations constitution or the CATSI Act. Senator XENOPHON: Did that review include speaking to aggrieved members of the association? Mr Beven: Yes. Face to face, via email, via telephone. Friday, 30 May 2014 Senate Page 15 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator XENOPHON: When did this investigation take place and over what period? Mr Beven: I can take that on notice, but it was this year. Senator XENOPHON: If you can, please provide details in respect of the complaints process. In terms of the 43 or 44 staff that you have at ORIC, how many of them have expertise in investigating allegations such as this? Mr Beven: A significant number of our staff have expertise. But I have 5.6 staff that are specifically allocated to investigations and prosecution. Compared to the overall number of corporations that are regulated by our office, that is more than sufficient, and any matters that are put to us our staff are able to deal with those. CHAIR: Senator Xenophon, I just have one question. Mr Beven, you say, ‘Yes, we have investigated’ the irregularities that have been highlighted by Senator Xenophon. What process does your investigation take? Do you examine the books? Do you interview people? Do you just send them emails and say: ‘Please explain’? How rigorous is your probing of these very serious allegations? Mr Beven: As with any regulatory agency, we follow fairly standard practices. As I referred to in relation to the Jawyon Association Aboriginal corporation investigation; there is an initial assessment of a complaint; a decision is made to commence an investigation; notices are issued for the production of documents; notices are issued for people to give evidence under oath. So when we receive serious allegations, we do take those seriously and we have a wide range of regulatory powers which allows us to gather evidence, to assess that evidence and to make decisions. We rely on the resources of the Commonwealth DPP to also provide us with advice. In relation to the Jawyon Association, can I say that in that particular instance the complainants advised my office that they had also referred their complaints to the Australian Securities and Investments Commission, the Australian Charities and Not-for-profits Commission, the Northern Territory Police, the Corporations Auditor and the corporation’s external accountants. And, as with my office, those bodies also determined that there was insufficient evidence to warrant any breaches of legislation. CHAIR: I have one further thing, Senator Xenophon, if you don’t mind. As a representative of a Senate committee, I have inquired into some activities in some Aboriginal corporations. I found it very difficult to get the appropriate paperwork. Clearly there was an obstructive process going on; it was very tough for us to pierce the veil of secrecy—that is probably not the right term. What happens when you run into that sort of obstruction? Is it regular that you run into that sort of obstruction? Or do you just sense that there is full cooperation in your investigations? Mr Beven: As I said, we have a wide range of regulatory powers. They are quite strong powers. We can obtain documents from any person with evidence relating to the affairs of an Aboriginal or Torres Strait Island corporation. We can also ask people to give evidence under oath. We do not very often encounter a situation where we have to say we cannot take this any further because we are not getting assistance from people. People are required to provide documents and evidence to us, and I cannot recall situation where we have said we cannot take this any further because we are not getting assistance from another agency or a government department or the corporation, its members or directors. CHAIR: Are you empowered, in the event that you are not getting the cooperation that you need, to take control of that corporation? Mr Beven: Yes. We have specific powers under our legislation which enable us to appoint a receiver to a corporation, or what is referred to as a ‘special administrator’, in certain circumstances. CHAIR: I will come back to that about a particular corporation later. Thank you, Senator Xenophon. Senator XENOPHON: Thank you. Mr Beven, let’s say, a helicopter was being used for private use, not for the use of the corporation, or a home was being purchased for the private use of a senior executive of the corporation, or monies were being spent for lawyers for an assault claim. You are saying that that could still be within the purview or the powers of that corporation to spend that money? Mr Beven: Yes. I do not want to go into revealing specific, private and confidential information, but there is a lot more to those allegations than just money being provided to a CEO or— Senator XENOPHON: What do you mean by that? Mr Beven: What I am saying is that, in most of the instances, the corporation obtained legal advice and accounting advice and the directors passed resolutions in relation to most of those transactions you are referring to. Senator XENOPHON: What do you say to Warren Mundine, the Chair of the Indigenous Advisory Council who says, in relation to the Jawyon Association, that ORIC had to be dragged kicking and screaming to the table? Page 16 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Mr Beven: As I said, the complaint was made to my office on 16 January last year. An investigation was started on 17 January. From my recollection, that complaint came in on the night of the 16th. I cannot see how we could have commenced an investigation any quicker than that. Senator XENOPHON: Your year book says that in 2012-13 ORIC responded to a total of 662 complaints during the year, a nearly 22 per cent increase over the previous years. It says that: on average, straightforward complaints were answered within two working days; on average, detailed complaints were finalised in 13 days; and, on average, the most complex complaints were resolved in 53 days. Were there any complaints that took more than 60 days to resolve? Mr Beven: I will have to take that on notice. Senator XENOPHON: Can you take on notice: more than 60 days, more than 90 days, more than six months, more than 12 months, more than two years. Mr Beven: I would just add: it would be a very small percentage; it would be less than five per cent. But we assess each complaint on its merits and its circumstances, rather than just sticking straight to a KPI. So, if a complaint is complicated and warrants longer than 90 days attention, we will put that attention to it. But it would be a very minimal percentage. Senator XENOPHON: I should just clarify that Warren Mundine’s comments, in relation to traditional lands and a complaint, was not about Jawyon; I apologise for that. Mr Beven: Do you wish me to address that one? Senator XENOPHON: Briefly, if you would. Mr Beven: That particular matter that Mr Mundine was referring to was relating to litigation that was commenced by an organisation against my office in the Administrative Appeals Tribunal. Those proceedings went for, from memory, 18 months to two years. The proceedings were thrown out by the Administrative Appeals Tribunal as being vexatious and frivolous. So that was the determination of the court, not my office. Senator XENOPHON: I understand. Thank you. I want to go to the Adnyamathanha traditional owners. Constituents I met with made a number of complaints in relation to the way that ATLA, the Adnyamathanha Traditional Lands Association has conducted itself. I will go to those briefly. Are you familiar with a complaint that was sent to you by one of the elders back in 17 June 2013? It was a letter to ORIC. I do not want to name the person, because I am concerned about her wellbeing. Are you familiar with those complaints about ATLA? Mr Beven: Broadly, yes. Senator XENOPHON: A number of documents were provided in relation to concerns about the funding, where the funds have gone, the conduct of meetings and the like; allegations of intimidation about the way the meetings were conducted and the way the corporation was conducting itself. Has that been investigated? Mr Beven: Yes. Senator XENOPHON: How was that investigation conducted? Mr Beven: The process of the investigation? Senator XENOPHON: Yes. Mr Beven: In that particular case, my office conducted an assessment of the complaints and the matters that were raised. We determined that the best way to approach that was to appoint an independent examiner. That is a person who has the powers of my office to go in and review all of the books and records of the corporation, and look at its governance standards and its financial position, but also to look at complaints that may be in existence in relation to the corporation. So an independent examination occurred. That examination revealed some procedural and process issues at the corporation where it was not meeting the requirements of its constitution. In that particular case a compliance notice was issued by my office. Senator XENOPHON: When was that? Mr Beven: I will take that on notice, but it was last year. Senator XENOPHON: When I met about 16 elders and members of this association in Port Augusta in April this year, they said that they had not received any response from ORIC that dealt with their concerns. Did you interview any of the complainants in respect of this process? Mr Beven: I will take that on notice. But my view at this stage is: definitely, yes. Some of those complainants have corresponded directly with me and I know I have directly corresponded back with them— Friday, 30 May 2014 Senate Page 17 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator XENOPHON: If that is the case, you are aware that a complaint was that the meetings are unsafe, that there is intimidation at meetings, that people feel afraid of actually raising concerns about where the money is being spent. Are they the sorts of matters that the independent examiner examined? Mr Beven: Yes. But I do not want to go into details because those matters are currently before the Supreme Court of South Australia. Senator XENOPHON: In what forum? Is that a defamation action? Mr Beven: As far as I am aware. It is not an action that my office is involved in. But I understand those matters are before the Supreme Court of South Australia. Senator XENOPHON: Can you give some more details on that, please. Can ORIC provide whistleblower protection for directors who want to complain about ATLA? Mr Beven: Yes. There is a statutory protection in the CATSI Act for directors who wish to make complaints to myself, an auditor or the police. There is statutory whistleblower protection. Senator XENOPHON: That is a protection that is offered by ORIC? Mr Beven: Yes. Senator XENOPHON: How often have you offered that protection or has that protection been provided? Mr Beven: It is not that ORIC offers it. It is when someone approaches us, they say, ‘Can I have whistleblower protection?’ If someone asks for whistleblower protection, we advise them of what that entails and what the protection is to the complainant. Senator XENOPHON: But it is your call, is it not, as to whether they get that? Mr Beven: No. Senator XENOPHON: Who’s call is it? Mr Beven: It is up to complainant to raise it and say, ‘I am claiming whistleblower protection.’ We do not make an assessment of yes or no, for if they have it. Senator XENOPHON: How will they know whether they have got protection or not? Mr Beven: There is information on our website. Our complaints staff are trained for when a director or an employee of an Aboriginal corporation raises certain complaints and they may be entitled to whistleblower protection. It depends on the nature of the complaint. Senator XENOPHON: If you could just explain this, because I really want to get through this very quickly. With whistleblower protection, if a claim is made for whistleblower protection, how does that person know that they have that protection and that protection is afforded to them under the act? What is the trigger in respect of that? Mr Beven: As I said, my staff are trained. Senator XENOPHON: I know your staff are trained. How does that person know that they have actually got whistleblower protection? Mr Beven: My staff are trained. If it seems that they are entitled to whistleblower protection by the nature of the complaint that is being made, my staff will say, ‘Are you aware of the whistleblower protections? Would you like to make a claim for whistleblower protection?’ We then note on the complaint that the person is making a particular complaint and is claiming whistleblower protection. By the nature of the complaint coming in, my staff will provide that advice. Senator XENOPHON: Once their claim is made for whistleblower protection, does that mean that they actually have whistleblower protection? Mr Beven: As I said, the role of my office is not to say, ‘Yes, you have it,’ or, ‘No, you have not.’ Senator XENOPHON: How do they know whether they are protected if they come forward? Mr Beven: That is a matter for the courts. Under the legislation, the whistleblower protection says that adverse action cannot be taken against a person—who is a director or employee—who makes a complaint to my office, an auditor or the police. If adverse action is taken against them, they have the protections. That is a matter for the court. My office does not say, ‘Yes, you are entitled to it,’ or, ‘No, you are not entitled to it.’ Senator XENOPHON: One of the complaints I have had is that people are frightened of coming forward, because they do not know whether they will actually be protected or not. That is because that might be determined by a court. You can understand the dilemma that there might be a number of directors in corporations around the Page 18 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE country who are reluctant to come forward, because they are worried about being sued for defamation by raising these matters, for instance. That is a common threat that is made. Ms Bennett: My suggestion is for those complainants, if they are worried about those circumstances, to approach my office and my staff will give them more information on what whistleblower protections are. Then they can make a determination whether they will to proceed with the complaint. If they do and claim whistleblower protection, as I said, we do that record that in any complaints. Senator XENOPHON: How many claims for whistleblower protection were made, on average, in the last couple of years? Can you take that on notice? Mr Beven: Yes, I will take that on notice. Senator XENOPHON: Were there a number of claims made or a handful? Mr Beven: A handful. Senator XENOPHON: Can I suggest to you that there is only a handful because of the ambiguity in respect of the framework for whistleblower protection? Mr Beven: I disagree with that. Most people who do come to our office with serious complaints, as directors or employees, are aware of the whistleblower protections that they can possibly claim. It is not an issue that has been raised with me that there are ambiguities within the provisions. We have staff who are trained in relation to the whistleblower protection provisions. We have specific guidance on our website around the whistleblower protections. Senator XENOPHON: In terms of funding, I just want to go to that before I conclude. The complaint I have had from the Adnyamathanha constituents is that they say that the books are not transparent, because it has been shifted into a trust. Millions of dollars have gone into a trust arrangement. You have clearly got jurisdiction to look at trust arrangements under your act. Mr Beven: Trusts are not registered with my office. Senator XENOPHON: Are you sure about that? Mr Beven: Yes. Only Aboriginal and Torres Strait Islander corporations are registered with my office. Senator XENOPHON: Doesn’t the act refer to the affairs of the body including business, trading, transactions and dealings, whether alone or jointly with any other person or persons. It includes transactions and dealings as agent, bailee or trustee. Mr Beven: Yes. Where a corporation acts as trustee, we can look at its role as trustee. But as I said, trusts are not registered with my office. Senator XENOPHON: If a corporation that is registered with you decides to siphon money into a trust, you do not have jurisdiction over that? Mr Beven: It would depend on the circumstances. Senator XENOPHON: There could be circumstances where you would not have jurisdiction? Mr Beven: Yes. Senator XENOPHON: Do you see that as an anomaly, in terms of your overview powers? Mr Beven: It was a specific issue that was considered when the legislation was being considered. When the C(ATSI) Act was introduced, there were wider powers given to the registrar to look into trusts or associated trusts. But, yes, there are a number of instances where trusts are outside of the purview of my office. In particular, if an ASIC company is the trustee, if an association is the trustee of the trust or if an individual is a trustee. Senator XENOPHON: You do acknowledge that there could be situations where millions of dollars in an Indigenous corporation could be going to in arrangement of trust, over which you have no jurisdiction? Mr Beven: Yes. There are situations where I can, but you are right. There are situations where I cannot. Senator XENOPHON: Does that concern you, as registrar? Mr Beven: That is a matter for government, as to what the ambit of the registrar’s powers are. CHAIR: Can I just clarify: does that mean that if an Aboriginal corporation is the trustee of the trust, you can go in and examine it? But if it is a non-Aboriginal corporation—so a $2 shelf company, an individual or an association, as you said—you are unable to? Is that the distinction? Mr Beven: It is very technical. If the Aboriginal corporation controls the ASIC company that is a trustee—in effect, more than 50 per cent of the ownership of that trustee—then, yes, we could possibly look at it. In the Friday, 30 May 2014 Senate Page 19 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE situation you are putting, where it is a straight-out ASIC company that is the trustee and there are no linkages in terms of ownership or control between an Aboriginal corporation and the ASIC company as trustee, then—yes—that would be. CHAIR: Are you able to examine the trust deed at all? Mr Beven: Once again, if there is a sufficient nexus and linkage between the Aboriginal corporation and the trust, yes. Senator XENOPHON: There is potentially a massive loophole in respect of that. Mr Beven: There are situations where I have no powers. Senator XENOPHON: Minister, you have heard the interchange in relation to this. The complaint I have had in relation to the Adnyamathanha Traditional Lands Association is that my constituents feel that they cannot get an account of where the money has gone—we are talking about millions of dollars—because of the trust arrangement, which Mr Beven says in some circumstances ORIC does not have authority over. Is that something that the government will look at from a policy perspective? It seems to me to be a loophole. Senator Scullion: From what I have heard today, I generally do not have too many concerns. As you would be aware, I have sat on your side of the table for a very long time in this place. I shared the same concerns, I have to say. Often, as other people around the table would have, I have Aboriginal communities or corporations registered to ORIC come to me as a senator and they would expose their side of the story. I would bring it to estimates and provide that to Mr Beven. As has happened today, I think he has given you a comprehensive assessment and a response to all of those matters. On this particular area, I will seek a further brief from Mr Beven. If there is further information that I can provide you on that particular matter about the extent of the powers of ORIC, I will. I think there is no suggestion that ORIC has not gone far enough. But, as you indicated— Senator XENOPHON: It does not seem to have the statutory powers. Senator Scullion: As to whether it has particular statutory powers and the extent of that, I will seek a brief on that and I will provide you with a comprehensive answer in a brief. Senator XENOPHON: A number of people that I met in Port Augusta in April this year told me that they were removed from receiving benefits of royalty money because they disagreed with the chairman. There were many other allegations in the course of this meeting that if you did not play the game, if you did not agree or if you were a dissident, you were punished. Is that something that ORIC has the power to investigate? Mr Beven: Yes. Senator XENOPHON: And did you investigate in in relation to ATLA? Mr Beven: In relation to events in April of this year, or last year? Senator XENOPHON: No, in relation to the complaints made. Mr Beven: Last year? Senator XENOPHON: Yes. Mr Beven: Yes. Senator XENOPHON: If these allegations had not been investigated by you, are you prepared to investigate any new matters? Mr Beven: Yes, definitely. Senator XENOPHON: That is fine, and I think you will be getting a very long letter from me with a number of complaints, because these people feel that they have not been listened to for quite some time. CHAIR: Mr Beven, just before you go, in 2013-13 the former government funded the Arrulka Business Aboriginal Corporation to the tune of over $1 million—$1,091,000—to hold a festival in Alice Springs in October of last year. Can you provide an update on the status of that corporation? Mr Beven: Yes. The Arrulka Business Aboriginal Corporation was incorporated on 3 February 2009 and it is a small corporation based in Alice Springs in the Northern Territory. Its major function since it was incorporated in 2009 was to manage the Mbantua festival in Alice Springs in October 2013. In relation to the role that my office has played in its dealings with Arrulka, in December 2013 and January 2014 there were some media reports in relation to several artists that had performed in the Mbantua festival not being paid for their services and also some other trade creditors within the Alice Springs community. My office first became aware of this, as I said, in January of this year, and we wrote to the directors of the corporation on 29 January to seek further information but more specifically to remind them of their obligations against trading while insolvent. We then, on 13 Page 20 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE February, issued a notice requiring documents to be provided to our office in relation to the financial position of the corporation so that we could undertake an assessment as to the financial position of the corporation. Arrulka complied with that and then on 12 March this year we commenced an examination of the books and records of Arrulka Business Aboriginal Corporation, and that was completed in late March of this year. What we found is that the corporation had a negative net liability position of just under half a million dollars. It only had $99 in the bank and it had creditors in excess of $495,000, largely relating to the Mbantua festival in October 2013. What we have done since that examination was completed at the end of March is that we have undertaken a natural justice process with the corporation and on 16 May we issued a compliance notice to the corporation indicating that in our view the corporation was insolvent and the corporation needed to address that. We have required the corporation within 30 days to appoint a voluntary administrator, to appoint a liquidator and most importantly to cease trading immediately. So, 30 days from 16 May, the corporation has to respond to my office, and that compliance notice is a public document available on our website. CHAIR: Apart from finding that it has only got $99 in the bank and $500,000 or thereabouts in creditors, did you identify any financial irregularities or governance issues attached to the corporation in your investigation? Mr Beven: Yes, and those have been referred for investigation. CHAIR: What were they? Mr Beven: I cannot go into those because, obviously, as the investigation is still current, we do not want to tip hour hand as to what we are particularly looking at and which direction we may go down. But I can say that we are conducting an investigation and, in terms of our requirement to have a voluntary administrator or liquidator appointed, we would also be looking to that person to assist with our investigations. CHAIR: Who are the directors of the corporation? Mr Beven: At the moment the corporation only has two directors: Mr Neville Perkins and Mr Francis Woodbury. CHAIR: Mr Perkins and Mr Woodbury. Is that the same Neville Perkins who was a former Labor MP? Mr Beven: I am not aware. CHAIR: The determination to give this $1,091,000 to the corporation would not have gone through you. It would have gone through the department. I should address this to the minister. Is that correct, minister? Senator Scullion: I would have to take that on notice. I am assuming many of these funds flowed prior to the Mbantua Festival of 2013. That would have been in a different jurisdiction. It would have been a matter for the previous government, so I would have to take that on notice. To clarify your question, what did you want to know? CHAIR: I would like to know the process that comes about. As far as I am concerned, $1,091,000 is a lot of money, notwithstanding the billions in this budget area. It has been granted to a corporation that has been formed for a particular purpose. The end result of this is that performers have allegedly not been paid and it is half a million dollars in debt. People are going to get done over as a result. There has got to be a process of acquittal to determine whether this is an appropriate grant of money made by the former minister—I presume it was Minister Macklin—to people that she may or may not know. The department has to do an assessment and make a recommendation whether these sorts of things go ahead. If the assessment is deficient, I think we need to rectify it. If the department has said, ‘No, we don’t think you should have this grant,’ why was it made? If the department has said yes, I think you have got to review the process attached to it. Senator Scullion: Just for clarification, I understand that this was an Aboriginals Benefit Account process under which the committee and the board of the Aboriginals Benefit Trust Account have applications. This would be in what they call the large round. That application would be considered, and with that application there are a range of issues under which people have to sign off on certain outcomes. The process then goes to the minister. I have to say I would not have thought that the Mbantua Festival would have been something that we would have considered favourably. No doubt the other minister would have. The question is about the fact that those funds obviously were not acquitted correctly. There are a lot of disappointed people in and around Alice Springs, and this has been something that has been on the public record for some time. That is unfortunate The capacity for some organisations to run quite large events obviously was lacking in this particular area. But, in terms of the process, I am not sure that it was a process. It was one of those processes where a grant was provided and there were some guidelines under which that grant could be acquitted. But it would not have been in the normal way that government would provide a grant in that, once the grant was out of the door in terms of the Aboriginals Benefit Trust Account, it was probably not subject to the same acquittal processes as it would have been if a Friday, 30 May 2014 Senate Page 21 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE government grant had been provided. They are slightly different, and perhaps on notice I could provide some of those differences. CHAIR: That is great, but there is a— Senator WONG: Ms Carroll has something to add on this point. Ms Carroll: I was just going to add that there are acquittal processes. The particular grant, I understand, has not been fully acquitted yet. But we could take on notice the details of what those acquittal processes are. CHAIR: Thank you. I would appreciate that. I will be brief, Senator Wong, because I know you want to move on, but what I am interested in is the process to this grant. There is an application made and there is obviously a recommendation made about whether it goes forward. The process to recommend that government provide this grant to this corporation is in question. Who is responsible for making that recommendation to the minister? Is that your department, Ms Carroll? Ms Carroll: As the minister has outlined, there is a process around the Aboriginal Benefit Account grant. There is a process with the committee, as well as a process where, at the end of the day, it is the minister who signs off on those particular grants. Advice would come from the department as well. CHAIR: Did the committee recommend this grant go ahead? Ms Carroll: I would have to take that on notice. I would have to check about whether we actually regularly made that kind of information available. CHAIR: Okay. Did the department recommend that this grant go ahead? Ms Carroll: I would have to take that on notice and look at the process as well. But, normally, that would be advice to government, which we would not normally reveal during the course of this— CHAIR: Ms Edwards has clearly come to the table to be helpful. Are you able to shed any light on this? Ms Edwards: Only a very small amount of additional information, just to say that I am aware there was an ABA grant given in February 2012 and that all funds have been released; all funding activities have ceased, but the final reporting is yet to happen. I do not have anything additional in relation to the additional matters. CHAIR: You are unable to tell me whether this grant was recommended by either the committee or the department to the minister? Ms Edwards: I would have to take that on notice and have the details of all the various grants. CHAIR: Okay. Thank you for that. I would like a response— Senator WONG: It is impossible for us to get to the department. It is 10.40 and the program says— CHAIR: No, the program says 11 o’clock, so we will move on now, unless there are any other questions. Senator McKenzie? Senator WONG: Oh, come on! Anything but the budget! Anything but a half-a-billion-dollar cut— CHAIR: Senator Wong! Senator WONG: Everybody watching this knows the government is trying to avoid scrutiny of a half-a-billion-dollar cut— CHAIR: Senator Wong, we do not need your commentary! I am trying to comply with the program. You are making it very difficult in order for people to ask their questions. Senator McKenzie has the call. Senator WONG: Senator Peris has questions, we have questions, opposition senators have— Senator McKENZIE: Thank you, very much. I have a whole range of questions which, clearly, to satisfy Penny Wong I will have to put on notice. But just in the brief amount of time that we have available to us according to the program: Mr Beven, could you outline the role played by ORIC in training, capacity building and dispute resolution? Mr Beven: My role is very unique in regulators in that I have a strong regulatory focus. Under the statute that creates my role, my office has a strong focus and aim to build the capacity of Aboriginal and Torres Strait Islander corporations. There are currently just over 2,600 Aboriginal and Torres Strait Islander corporations registered with my office. We devote approximately 50 per cent of our budget and resources to building the capacity of Aboriginal and Torres Strait Islander people. So far this year we provided free corporate governance training to over 900 participants—Aboriginal and Torres Strait Islander people who have represented 160 Aboriginal and Torres Strait Islander corporations. Page 22 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE With the training that we provide: the reason that we do it, rather than the private sector, is that 60 per cent of the corporations registered with our office are in remote or very remote parts of Australia. They do not have the access to corporate governance training that maybe a corporation based in a capital city or a major regional centre would have. Most of those corporations also do not have the resources. So we fill the gap, particularly in that remote and very remote area of Australia, in helping Aboriginal and Torres Strait Islander people to improve their governance capacity. As I said, it is a significant chunk of our budget and our resources and so far this year we have given that training to over 900 participants, which is the highest number of participants in the history of our organisation. In addition to corporate governance training, we also provide a number of other free services to help corporations. In 2012 we established a pro bono legal panel, with the major legal firms around Australia. So, corporations registered with us can access free, high-quality legal services from some of the best law firms in the country. That is an important part of ensuring the capacity of organisations and ensuring that the directors have appropriate advice and information before they make, in many cases, complicated decisions. We also provide assistance with recruitment. At the moment we are particularly focused on assisting corporations to recruit independent directors. We have developed some work with the Business Council of Australia, the Australian Institute of Company Directors and a body in Western Australia, and with Women on Boards as well. We are helping the corporations to source independent directors so that they have access to skilled and experienced people to sit on their boards. That has been quite successful as we have trialled that over the last couple of years. CHAIR: Senator McKenzie, I will have to ask you to put your further questions on notice, given that I am trying to facilitate the requirements of the opposition and comply with the program. Senator McKENZIE: Yes, Chair. Senator WONG: Thank you, Senator. CHAIR: In accordance with my open-mindedness, Senator Moore did have a question in this area so I will give her the call. Senator MOORE: Mr Beven, about the information you just shared with us: is most of that on your website? Mr Beven: Yes. Senator MOORE: And also in the annual report? Mr Beven: We do not have an annual report. Senator MOORE: But you actually put it up on the website, an annual report on what you do? Mr Beven: Yes, that is right. Senator MOORE: Thank you, and thank you, Chair. CHAIR: That was it, Senator Wong? Mr Beven, on behalf of the committee, may I thank you. I think you have been very helpful in your attendance today and I do appreciate your time. The committee will now move to the department of Prime Minister and Cabinet. Department of the Prime Minister and Cabinet [11:01] CHAIR: Welcome to officers of the Department of the Prime Minister and Cabinet. We will start with outcome 2, Indigenous. I invite Ms Carroll to make an opening statement if she wishes. Ms Carroll: I do not have an opening statement. Senator WONG: I want to talk about the cuts to Indigenous affairs programs in this budget. I want to start with Budget Paper No. 2, page 185—the measure description. It says: The Government will achieve net savings of $534.4 million over five years … In relation to Indigenous programs. Ms Carroll, can you confirm that means a cut of over half a billion dollars to Indigenous programs under this government? Ms Carroll: The number referred to in the budget paper is a net saving—a net figure—for the Department of Health and for the Torres Strait Regional Authority. However, for the Department of Prime Minister and Cabinet there are a number of other measures that are listed on pages 184, 185 and 186 that are spending measures that— Senator WONG: Ms Carroll, can I just stop you there? This is a budget paper which says ‘net savings’. So that is a net position—correct? I just want you to confirm that there is a net saving of $534 million— $534 million Friday, 30 May 2014 Senate Page 23 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE worth of cuts to Indigenous programs. We will give you the opportunity to go through other programs shortly. That is the case, isn’t it? Ms Carroll: It is a savings figure, yes. It is a net figure. Senator WONG: Right. So, in his first budget, the so-called ‘Prime Minister for Indigenous affairs’ has ripped over half a billion dollars out of Indigenous programs? Correct? Ms Carroll: The— Senator WONG: It is probably a question for the minister, actually. You can answer it if you want, but it was a political point. CHAIR: Well, let’s just get an answer. Ms Carroll or the minister: feel free to respond to the question as appropriate. Ms Carroll: I was just going to clarify the numbers. The way they are expressed in the budget papers makes them not as clear, perhaps, as they could be in that notion of a net figure. So, when you get to the Prime Minister and Cabinet portfolio budget statement and the amount of money that has been appropriated for the next financial year in 2014-15, the amount of money appropriated against the five new programs takes off the saving identified there but includes the spending measures that are also there. Senator WONG: Sure, but, Ms Carroll, you would agree that Aboriginal people and Indigenous communities are not going to look at how much is in Prime Minister and Cabinet, how much is in Health and how much is in Education. The top-line message from Prime Minister Abbott to our first peoples is, ‘We’re taking over half a billion dollars off the services you need.’ Is that not right? Ms Carroll: I am making a technical separation between the Department of Health and the Department of the Prime Minister and Cabinet, and that is outlined there. For the Department of the Prime Minister and Cabinet, when you include the spending measures, the net figure is a reduction of $239 million over four years, excluding departmental costs. Senator WONG: Sure, on top of which there are cuts in other areas which lead to the net cut of $534 million. That is what the budget papers say. Ms Carroll: The budget papers do say that. I am not disagreeing with the budget papers. Senator WONG: Thank you. So I want to understand, because the government has not wanted to explain, exactly what will be cut, and I think that will be something Senator Peris, Senator Siewert, Senator McLucas and Senator Moore certainly will be interested in. But I will just do a few things. For example, there are a number of programs that were highlighted in the Closing the Gap budget paper in 2013-14 which I assume have been subsumed into this rationalisation and budget cut, and I just want you to let me know, if you are able to, what the status of some of these programs is—Communities for Children, Indigenous parenting services. Will that continue or is that being cut? Ms Carroll: In the transition to the new program, all current funding agreements have been honoured in the new program and service providers that have had ongoing funding have been informed that they have a six- or 12-month extension. Senator WONG: Yes, six to 12 months. So I am talking about the next four to five years where you have got the half-billion-dollar cut. Has the government made a decision beyond any transitional arrangements in relations to Communities for Children? Ms Carroll: The government has not made any decisions on the future funding. What it has made a decision about is the new program structure and the transition period. Senator WONG: Is there any guarantee that the services currently provided under Communities for Children will be continued beyond the six to 12 months? Ms Edwards: Communities for Children is partly in PM&C and partly not. The element that is in PM&C is the Stronger Communities for Children and it is continuing under the National Partnership for Stronger Futures in the Northern Territory. Senator WONG: Okay. What I am interested in is not the six to 12 months—and, to be brutally honest, I am also not particularly interested in a long technical discussion about which bits are funded where. I am interested in the real-life outcomes. Ms Edwards: That program is not within the rationalisation. It is separately— CHAIR: Ms Edwards, it is helpful if the senator is allowed to finish her question, just as I will ask her to be patient while you conclude your answers when the opportunity arises. Page 24 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator WONG: Sure. If you are not able to answer it, that is fine, but I am interested in whether the government has made a decision in relation to a number of programs to guarantee the continuation of that service subsequent to the transitional arrangements. Ms Edwards: I just mentioned that particular program because it happens to be one that is not included among the suite of services that have been rationalised; it is actually separately done under the National Partnership Agreement on Stronger Futures. Senator WONG: Did you hear my question? Ms Edwards: And it has not been affected, so that one will continue. There has been no change to the plans for that particular program. Senator WONG: Will the government guarantee the continuation of that service over the forward estimates? Ms Edwards: There is funding for that particular service which is allocated for the 10-year period of the national partnership. Senator WONG: Stronger communities? Senator SIEWERT: I just want to clarify that that they are then exempt from that six-month or 12-month contract process. Ms Edwards: They are not included in that process. But, to be clear, the Communities for Children broader program is with the Department of Social Services. It is only the Stronger Communities for Children which is in our department. Senator WONG: Is Stronger Communities for Children guaranteed to continue to be provided over the forward estimates? Ms Edwards: That is the program we have just been referring to. Senator WONG: I was talking about the Indigenous parenting service. Ms Edwards: The Indigenous parenting program you mentioned first, and then you moved on to the communities for children. Senator WONG: As to the line I have here out of the previous closing the gap—I am trying to understand this, and I would really appreciate it if we could assist, because I have certainly had, and I am sure other senators have had, a lot of concern about what is going to happen on the ground. So it would be really helpful in these estimates if we could just get a sense of this. I appreciate the government makes political decisions. We fundamentally disagree with it. But I am actually asking: what is the effect on the ground? What I am trying to glean is whether the government has made a decision to guarantee the continuation of a particular program or services under that program or not. I started with: Communities for Children—Indigenous Parenting Services. Has the government made a decision that the services provided under that program will continue over the forward estimates or not? Ms Carroll: If I can come back to the explanation of the transition period to the new program structure—and the reason I am coming back to that is that the new program structure effectively ceases all the existing programs— Senator WONG: I understand that. Ms Carroll: and the decisions about who will be funded under the new program structure— Senator WONG: Haven’t been made. Ms Carroll: in a long-term way have not been made. And there is a transition period where people have had funding limits extended. Senator WONG: I understand that. Ms Carroll, I understand. And what I am saying to you, therefore, is: your answer to that question would be no, because the government has not yet made a decision to continue that service under the new program. So maybe I will formulate the question this way: can you confirm that the government has not made a decision to guarantee the continuation of the services currently provided under Indigenous Parenting Services? Ms Carroll: As I have said, the government has made a decision to do a short-term extension for the transition period. That is not to say that those services will not necessarily get funded, but we have to go through the transition period first. Senator WONG: So the government has not made any decision to guarantee the continuation of that service? Ms Carroll: It has not made a decision yet. Friday, 30 May 2014 Senate Page 25 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator WONG: You have not been told, ‘We want this service to continue’? Ms Carroll: There has not been a decision yet. Senator WONG: As to the community development fund—is it in the same position: no guarantee of continuation post the transition? Ms Carroll: There have not been any decisions past the six- or 12-month extension. Senator WONG: And for remote Indigenous housing? Ms Carroll: Remote Indigenous housing is a national partnership, so it is not— Senator WONG: Yes, that is right. The Army Aboriginal Community Assistance Program? Ms Carroll: There has been no decision. Senator WONG: Municipal and essential services? Ms Carroll: Municipal and essential services was only ever funded for one year. It has had a number of one-year fundings. Its funding is due to finish at the end of this financial year, and we are currently in negotiations around that. Senator WONG: I will come back to that. The Bringing them Home and Link-Up programs for the stolen generation? Ms Carroll: No decisions have been made. Senator WONG: The Indigenous Youth Careers Pathways program? Ms Carroll: The same—no decisions have been made. Senator WONG: The Indigenous education targeted assistance programs—there is a suite of programs there; I can go through them: National Indigenous English Literacy and Numeracy Strategy; Sporting Chance Program; school nutrition program— Ms Carroll: There have yet to be decisions made. Senator WONG: Teach Remote Stage 2? Ms Carroll: The same—yet to be made. Senator WONG: Indigenous Support Program? Ms Carroll: Yet to be made. Senator WONG: Australian Indigenous Education Foundation and scholarship program? Ms Carroll: The same. Senator WONG: Indigenous legal assistance? Ms Carroll: The same. Senator WONG: Indigenous community broadcasting program? Ms Carroll: The same. Senator WONG: Stronger Futures in the Northern Territory—they will continue to be funded? Ms Edwards: That is the national partnership you mentioned earlier. If I could just go back to Indigenous legal assistance: I am not sure that that is one of our programs. I do not recognise it by that. There is legal assistance in the Attorney-General’s Department and there is legal assistance in PM&C which will be part of this process, and there is also an amount which is within Stronger Futures. So that is a mixed answer. The name of that program does not accord with one that I can immediately place. I think it might be a mixture of various things. Senator WONG: Improving School Enrolment and Attendance through Welfare Reform? Ms Carroll: The SEAM program—again, any funding agreements would be honoured. It is the same process, however, within the SEAM program; a lot of those things have more ongoing funding already, because they have been only newly established. Senator WONG: Are there any programs that are the subject of this rationalisation where a decision has been made to guarantee to continue services beyond the transition period? Ms Carroll: The services that will be continuing are where funding agreements already exist beyond the 12 months. The first point is that all funding agreements are being honoured. If the funding agreements run out three years then they are honoured for three years. For all other services providers there is a transition period where Page 26 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE there will be engagement with community service providers about the structure of the new program and decisions will be made during the course of the 12 months. Senator WONG: I should just give you some notice that I suspect senators will want to come back to know precisely which arrangements there are current funding agreements in which subsist beyond the six to 12 months. I am just giving you a flag because I suspect my colleagues will want to get to that. Senator SIEWERT: It would be great if we could have a list. Senator WONG: If you had a list, that would be useful. Could I get to the process of allocating these cuts. Who is determining which services will be ended as a result of the half-billion-dollar cut? What is the process for that? Ms Carroll: Again, the funding that came into the Department of the Prime Minister and Cabinet and into the different programs as they came in over the course of this financial year has been reallocated into the five new programs. We are fundamentally changing the way that we look at the programs. Rather than looking at the micro— Senator WONG: Ms Carroll, you had more money before and you have got less money, so there is going to have to be a decision. You can dress it up as the minister does with, ‘We are consolidating five large programs,’ and all of this sort of stuff, but you have half a billion dollars less. All I want to know is the process of looking at this services currently being delivered and funded and which ones will not be included in the five programs. I just want to understand the Public Service and political process across government around giving effect to those cuts. Ms Carroll: Sorry to be difficult about this, but the savings within Prime Minister and Cabinet are only about $239 million over the four years. That is what we are looking at. Senator WONG: Your own budget? Ms Carroll: Our own budget. That is what we are looking at the allocation for. Senator SIEWERT: Sorry, $239.5 million? Ms Carroll: Yes. Senator WONG: So for the other almost $300 million in Indigenous programs in other areas, which is referenced in the budget paper, is the minister part of making decisions about how that is structured? If what you are telling me is that your net cut is $239 million, there is almost $300 million that has been taken out of Indigenous programs in other portfolios then, if it is a net save. People are interested in what it means for their lives. We can talk about programs and portfolios and try to dress up the numbers, but I think it is incumbent upon this estimates, and senators on this side of the table certainly would like to understand what it means for people’s lives. That is why I am asking these questions. What is the process by which the government is working out which services currently funded by the Commonwealth will not be delivered under your five programs given that there is half a billion dollars in cuts? Senator Scullion: Perhaps, for clarity, I could go through Budget Paper No. 2 again. I understand there is some difficulty because sums in health that have come across— Senator WONG: You do not want to talk about the effect on people’s lives, Minister, do you? CHAIR: Senator Wong, allow the minister to respond to your question. You said that people are very interested. Senator WONG: I am talking about what happens to people. CHAIR: You said that people are interested and indeed they are. And I am interested, as are many people, in the minister’s response. Senator Scullion: There is no one more interested in the impacts of this on people’s lives. I can assure you of that. Senator WONG: Then you should have fought harder against the cuts if you care— CHAIR: Senator Wong, this is inappropriate. I will take the call away from you if you are going to continue to be belligerent. Senator Wong interjecting— CHAIR: Senator Wong, I will take the call away from you if you continue to interject on the minister. Minister, you have the opportunity to respond. Please do so. Senator Scullion: For the $234.4 million which is in the budget paper, the best way to deal with it is to say that there is $121.8 million that is allocated to the health. Then you add to that—or subtract as well—the $3.5 Friday, 30 May 2014 Senate Page 27 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE million that is taken off the grant for the TSRA, which leaves you $109.2 million. There is a little over $54 million in the department save, which leaves you with $355 million in a program save. The $355 million does not include the new spending of $115 million. That is how we get to the $239.5 million. That is around a 4.5 per cent save. I have a very high level of confidence that, with the rationalisation of the existing 150 programs with their bits of administration and duplication across those programs, the 4.5 per cent is a modest save and it can be achieved through an efficiency dividend across the programs. That is why we are moving to a rationalisation of 150 programs and activities into five programs. Senator, you are saying, ‘How is this going to have an impact on the lives of the people?’ This is an administrative dividend and it will not have an impact on the ground. I do not think services will change. In fact, I hope they will be delivered more effectively and more efficiently on the ground. Senator WONG: Minister, your own budget paper says $534 million—over half a billion dollars—cut from Indigenous programs. Before the election— Senator Scullion: I am sorry; that is not correct. Senator WONG: Well, if it is not correct, you should raise it with the Treasurer and the finance minister, because it is in the government’s budget—a net saving of over half a billion dollars from Indigenous programs Senator Scullion: That is just not accurate. It is not Indigenous programs. Senator WONG: It says ‘Indigenous affairs program rationalisation’. Before the election Australians were told by the Prime Minister, ‘Should we win the election, Aboriginal people will be at the heart of the new government in word and in deed.’ What deed are we witnessing? This is an absolute betrayal of Indigenous Australians and you as minister have presided over it. CHAIR: What is your question, Senator Wong? Senator WONG: I have two points. First, the minister just said that it will have no impact on the ground, so will the minister give a guarantee that these cuts will not widen the gap but will close the gap? Senator Scullion: First of all, I reject your assertion that somehow we have let Aboriginal Australia down. You are saying that the cuts are $534 million out of programs. We have already indicated— Senator WONG: No, I am not saying that. Your budget says that. Senator Scullion: Allow me to finish and to make a clarification. CHAIR: Allow the minister to respond. Senator WONG: You do not know your own budget. CHAIR: This is not going to work, Senator Wong, if you make assertions and you do not allow the minister to respond to them. Senator WONG: It is in his budget paper. CHAIR: Your questions are full of assertions and the minister— Senator WONG: Yes, but that one was a fact. CHAIR: The minister is entitled to rebut them in the course of answering your ultimate question. Senator Scullion: I can reassert that the actual program cuts—rather than savings in terms of the department and in other areas, particularly in health, which we have indicated—are a 4.5 per cent efficiency dividend. It is not going to have an impact. In response directly to the senator’s question in regard to closing the gap, perhaps you were not here in my introductory remarks but I acknowledged that the COAG Closing the Gap targets were not closing. We believe that, instead of continuing to do the same thing that had been the process of previous governments, it was time for a change. We can have a sharper focus on this and, because it is an efficiency dividend effectively across administration of the programs, I think there will be no diminishing of resources available to the programs. I am very confident that these programs are going to be delivered far more effectively and efficiently on the ground. Senator WONG: So you guarantee that these cuts will help close the gap? I think that from where many Indigenous Australians sit it looks like a recipe for widening the gap. Senator Scullion: In my time in this place, particularly over the last five years, I do not think there are many Aboriginal people or commentators who would say that we should keep doing exactly what we have been doing in the past, because the gap is not closing. This is a change in our approach. It is a positive change in the approach as a function of consultation over the last three or four years about how we need to have a new and fresh approach. As I have indicated, the 4.5 per cent is an efficiency dividend across administration, and we do not believe that it will have an impact on the program delivery. We have a high level of confidence— Page 28 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator WONG: You need to correct that. You are going to need to correct the record— Senator Scullion: This process is going to create a much better environment, and we would have a high level of confidence that we can start changing the target to then close the gap. Senator WONG: Minister, I think you are going to need to correct the record. It is not an efficiency dividend on administration; it is a substantive cut. Senator Scullion: It is an efficiency dividend of 4. 5 per cent— Senator WONG: Half a billion dollars on— Senator Scullion: 150 programs that— Senator WONG: It is not an efficiency dividend— CHAIR: The Hansard staff— Senator Scullion: It is a significant change and provides a significant efficiency dividend. It is an efficiency dividend of $60 million out of $1,200 million a year. It is a modest efficiency dividend that we are very confident can be achieved. Senator WONG: Ms Carroll, does the $500 million include direct funding, as opposed to administered appropriation and grant funding? Not just departmental funding? Ms Carroll: Yes. Senator WONG: Thank you. So therefore it is not an efficiency dividend on administration. You are talking about cutting funding that goes directly to communities, Minister. You do not even know what your own policy is. Can I go now to municipal services? Senator Scullion: I just— CHAIR: I do believe that it is appropriate for the minister to respond to that allegation. Senator WONG: Sure. Senator Scullion: I do have a clear understanding of what we are doing. Senator WONG: The numbers do not reflect— Senator Scullion: The fact that we are taking 150 activities and programs down to five more streamlined programs means we do have the opportunity to harvest an efficiency dividend from duplication both in administration and delivery of services— Senator SIEWERT: So, yes, programs will be cut. Senator Scullion: That is how we are going to make sure that there is no impact on the ground. CHAIR: Senator Siewert, you are not helping! Senator WONG: Can I just ask about municipal services? Ms Carroll, I understand—I think—that your previous evidence was an annual extension, so I accept that— Ms Carroll: Six to 12— Senator WONG: No. This is on top of that. This was previously done annually—annually funded this arrangement. Correct? Ms Carroll: Yes—for about the last three years. Senator WONG: I was going to say that it has been in place since—what?—2010? 2011? Ms Carroll: The municipal and essential services have been in place for a long time, but there has been an annual extension for about the last three years. Senator WONG: Yes. I am sorry, I cannot recall this, but how long was the program itself, or its predecessor program, in place? You said it had been in place for some time. Ms Carroll: Yes, it has been in place for quite an amount of time. But as part of the— Senator WONG: Five,? Ten? Fifteen years? Ms Carroll: Yes: 10 or 15, as part of the National Partnership Agreement on Remote Indigenous Housing. It was part of negotiating that with the states. There was an agreement for the Commonwealth to move out of municipal and essential services. That was included in the national partnership agreement that was negotiated with the states. There were clauses in that to move towards the Commonwealth getting out and states taking over Friday, 30 May 2014 Senate Page 29 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE that responsibility. The annual extension occurred as the handing over of municipal services did not occur during that period of time. Senator WONG: Because there was an agreement? Ms Carroll: That is right. Senator WONG: Including in the Northern Territory—correct? Ms Edwards: In the Northern Territory that funding is now part of the Stronger Futures National Partnership Agreement. Senator WONG: Where was there not agreement with— Ms Edwards: It also runs in Queensland, South Australia, Western Australia and Victoria. Senator WONG: Did any of them agree? Ms Edwards: No. Senator WONG: Correct me if I am wrong: you are talking about water, sewerage, garbage collection and road maintenance? Those sorts of services? Ms Carroll: In some remote communities. Senator WONG: In remote communities. Is it over 300 remote communities across the states you described? Ms Carroll: Yes. Mr Sowry: Yes, that is correct. It is in the order of about 300 communities. Senator WONG: Right. Would it be, maybe, 40,000 Indigenous Australians affected? Would that be about right? Mr Sowry: It is under 30,000, by our reckoning. Senator WONG: I have 38,000. Do you want to take that on notice? Mr Sowry: We will. Senator WONG: So at this stage, the states have not agreed to take over these services. So the former government refunded on an annual basis because, ultimately, whatever negotiation problems there are between the states and the Commonwealth we do want these communities to continue to be able to have their garbage collected—correct? Ms Carroll: Yes. Senator WONG: That funding will not continue—is that right? Ms Carroll: We are in negotiations with the states and territories at the moment around municipal and essential services—around future arrangements. Senator WONG: It is this government’s intention that they go back to being the responsibility of the states and territories. In terms of municipal services processes, it beggars belief to know that the Commonwealth is actually delivering municipal services. That is the government’s policy position, is it? Senator Scullion: Essentially, in speaking about policy perhaps I might provide a response. Senator WONG: Is that the policy position? Senator Scullion: Absolutely. We would rarely agree with Labor on anything, but it was indeed your policy. That is the reason that the forward estimates do not show your municipal funding. In fact the previous minister— Senator WONG: Which was— Senator Scullion: Perhaps I can just quote Jenny Macklin on this particular matter? On 11 May she said, ‘Municipal and essential services are primarily the responsibility of state governments’. This is all part of a whole suite of— Senator WONG: Which— Senator Scullion: releases from the previous government that say that they should not be delivering the services. We agree with the previous government—we agree with your party—on this policy. We are currently in what I have to say are very fruitful negotiations to ensure that we transfer the responsibilities to the state and territory governments where those responsibilities should lie. Senator WONG: Have you made a decision no longer to fund municipal services—is that right? Senator Scullion: No. I have made a decision to negotiate with the various jurisdictions to ensure that the obligation moves to where it should be for the delivery of municipal services, and that is not the Commonwealth. Page 30 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator WONG: All right; I will ask the question in a different way. Ms Carroll, is there any funding for municipal services in the forward estimates? Ms Carroll: There is funding. Senator WONG: For which year? Ms Carroll: It is not announced, because that is part of the negotiations with the states and territories. Senator WONG: So there is a provision made, is there? Ms Carroll: Yes. Senator WONG: In the contingency reserve? Ms Carroll: Yes. Senator WONG: For a year? Ms Carroll: I would not want to go into what the provision is for. Senator WONG: Minister, can you guarantee that you will not cease that funding unless you get agreement with the states to pick up services? Senator Scullion: I hope you understand that, whilst we are in negotiations with the states and territories, I would like them to take that responsibility over. I am just not inclined to go into the details of that. As I said, they have been very positive. I think that by and large they realise that it is probably pretty inappropriate for the Commonwealth government to be delivering municipal services. As the officers have indicated, we do have funds aside in the contingency reserve to ensure that municipal services will continue. Senator WONG: But you are not prepared to give a guarantee? It is fine—I am just giving you the opportunity. Senator Scullion: It is very easy to say, ‘Will you give a guarantee?’ As I said, I feel very confident that the negotiations with the states at the moment are very fruitful and we will just see how that goes. Senator WONG: I am not asking— Senator Scullion: I cannot guarantee what the outcome is going to be— Senator WONG: No. But perhaps I could repeat the question because, with respect, you are answering a different question. I am not asking whether or not you think the outcome with the states will be fruitful. I am asking whether it is the government’s position that regardless of whether it gets agreement from the states to pick up these services, it will discontinue funding? Senator Scullion: I cannot guarantee the funding will continue. Senator WONG: Thank you. You mentioned national partnerships, and they have been mentioned a couple of times. I think you said in the Senate, Senator Scullion’, that there had been some changes to the National Partnership Agreement on Remote Indigenous Housing. I am sure that my colleagues will explore this in a bit more detail but, Ms Carroll, are you able to tell me what changes have been made to the national partnership agreements that impact on Indigenous Australians? Ms Carroll: Yes. In relation to the National Partnership Agreement on Remote Indigenous Housing, at the moment the funding et cetera has not changed. But as part of the implementation plans that get negotiated with the states and territories we are talking to them about how they are looking at things like property and tenancy management to make sure that that is occurring properly, what the future build profile looks like et cetera. As part of that we are looking at how we actually maximise work opportunities around the Indigenous housing program. We have also had a number of representations about things like transitional housing and how those models can work within the national partnership agreement. Senator WONG: I asked the question more broadly, though, about any changes. Ms Carroll: Yes. I can go through each of the national partnership agreements. The remote public internet access agreement expired in June 2013, so it is no longer in existence. The Indigenous economic participation national partnership agreement, again, expired in June 2013. The Indigenous early childhood development national partnership expires in June this year. There are three elements to that national partnership agreement. Element One, which is about the child and family centres, expires in June this year. Element Two— Senator WONG: Sorry, can I just make a suggestion, because I think it might be more expeditious. Friday, 30 May 2014 Senate Page 31 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Ms Carroll: Yes. Senator WONG: Would you be able to give us—and then people can ask questions on it—the list of national partnerships that you are reading out and where there has been a change that has an impact on Indigenous Australians, which would then enable my colleagues to ask— Senator McLUCAS: We would need to have a full list, as well. Senator WONG: Yes, the full list. Ms Carroll: I may not be able to give you this exact list, because I have other material on it. Senator WONG: We do not mind getting your notes, too, but I figure we might not do that! Ms Carroll: We could give you the list of the names of the national partnerships. Senator WONG: I will move to a different topic now, so maybe that might give you time to prepare those. Ms Edwards: Just to be clear, we will give you the list of the Indigenous-specific national partnerships—it will not include every national partnership—that have an impact. Senator WONG: Sure. CHAIR: That would be good. While Senator Wong is exploring another topic, perhaps you could compile that list into an appropriate format and then we can arrange to have it distributed to the committee through the chair. Senator Wong, you wanted to move on to another subject area? Senator WONG: Yes, I do want to ask a couple of questions about the employment of Mr William Johnstone and, in particular, your statement to the Senate, Minister. We heard—I think it was last night—that Mr Johnstone was employed on, I think, a non-ongoing contract for three months. But in the statement to the Senate it appears that he was employed for closer to six months. I was just wondering if you can cast some light on that. Senator Scullion: Mr Johnstone was employed, as we have indicated, in mid-November in 2013 on a non-ongoing contract. Around three months later, to the best of my recollection, that became an ongoing contract. Senator WONG: Right, so he was employed non-ongoing for three months and then at the conclusion, or prior to or just after, he became an ongoing employee. Is that right? Senator Scullion: That is correct. Senator WONG: You said to the Senate that he completed his private interest disclosure, as all staff are required to do. Are you able to tell me how long after he was employed he provided you with that, approximately? Senator Scullion: It was quite a short time. I cannot recall the exact time, but it was not long after he was employed. Senator WONG: So that would have been when you would have become aware of his involvement in—remind me of the organisation. What was it called? His financial interest which has caused the concern. Indigenous Development Corporation? Senator Scullion: There were two. I think there were the— Senator WONG: IDC and ICP? Senator Scullion: IDC and Indigenous Corporate Partners. Senator WONG: Did you become aware of those when he provided you with his interests? Senator Scullion: I did. Senator WONG: You were not aware before employing him? Senator Scullion: No. Senator WONG: You said in the Senate that there were a couple of items which required follow-up. Can you just explain to us what you meant when you said that. Senator Scullion: In terms of both the IDC and Indigenous Corporate Partners, I needed to have some clarity around the nature of the organisations, the sort of work that they did and at what operational level they were taking place. They were the considerations afoot. Senator WONG: Were you aware that the IDC was a business that was on a list of favoured suppliers for the government? Senator Scullion: Not at the time of the declaration of interest. I am now. But I also understood from the declaration of interest that, since that company was not operating, it did not have an impact on that particular interest, which was all part of why we had to take a bit of time to sort through those matters. Page 32 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator WONG: Were you aware that Indigenous Corporate Partners was, essentially, a lobbying company which enabled clients and assisted clients in lobbying and negotiating with government? Senator Scullion: I was not then but I am now. Could I just correct some of the assertions made by the Fairfax Media. I am advised that whilst Mr Johnstone was a founder of the Indigenous Corporate Partners concept—like the idea—he has never been a shareholder, a director or a service provider since it was founded about 18 months ago. I understood that the connection came from a website that they have. Mr Johnstone was featured on the website, as were others. When Mr Johnstone found out about that, he asked for the references to him on the ICP website to be removed, and I understand that that was the case. Senator WONG: Tell me if this is a fair summary of your evidence. You did become aware soon after Mr Johnstone was employed that he had interests in two companies: Indigenous Development Corporation and Indigenous Corporate Partners. And would it be fair to say that you knew that those bodies did have dealings with federal government? Senator Scullion: Not at the time he made the declaration. But, as I said, there were processes to find those things out. I discovered more about those processes between then and— Senator WONG: What were those processes? Senator Scullion: There was a process to find out exactly what those organisations did. There were conversations— Senator WONG: What was the process? Who did this process? CHAIR: I think the minister is just explaining what the process was. Senator Scullion: The process was effectively a number of conversations between Mr Johnstone and me. Senator WONG: And the Prime Minister’s office? Senator Scullion: The Prime Minister’s office was informed of this matter on the day that I became aware there was media interest in the matter. They were not informed, as far as I am aware, at any stage. Senator WONG: Under the statement of standards for ministerial staff the Prime Minister has issued, there is a prohibition on staff retaining a directorship of a company without the written agreement of their minister and the Special Minister of State. Did Mr Johnstone ever obtain written agreement from you in relation to his role in these companies? CHAIR: Just to correct the record, I think the minister has given evidence that the gentleman in question was not a director of Indigenous Corporate Partners. Senator WONG: Yes, the IDC I think it is— CHAIR: You referred to ‘companies’. Senator WONG: Sorry. I understood from the public record that Mr Johnstone was a majority shareholder of Indigenous Development Corporation. Whatever the interest, was there any written agreement provided by you in relation to Mr Johnstone, pursuant to clause 6 of the statement of standards? Senator Scullion: No. Senator WONG: Was there ever an agreement from the Special Minister of State, who is also required to provide written agreement? Senator Scullion: No. Senator WONG: Can you explain why there is a breach of the standards in that regard? They are quite clear. If I have misunderstood the facts, please tell me. They are quite clear that staff cannot have these sorts of interests in any area—and of course here it is even more pertinent because it is in your own area—without these written agreements. Senator Scullion: As I have indicated, that was an ongoing process, and we were still in that process of establishing whether or not there was a conflict of interest before those processes were undertaken. Senator WONG: You are talking about six months. Senator Scullion: As I have indicated, those processes were underway through that time. Senator McLUCAS: Why did you take so long? Senator Scullion: As I have just indicated, there were some processes taking place over that time. Senator McLUCAS: I am trying to get a practical understanding of ‘processes’. You have a meeting with your staff member; the staff member says, ‘I have these two potential conflicts; what do you say? Friday, 30 May 2014 Senate Page 33 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator Scullion: As I have indicated, these are matters of personal interest, and they were an ongoing process. Senator McLUCAS: I imagine that first conversation was in November of last year? Senator Scullion: The process started then and continued until the resignation of my staff member. Senator McLUCAS: What did you ask the staff member to do? Senator Scullion: That is a matter of personal interest; a matter between my staff members and I. But, if you are referring to what the conversations were in the process, as I have indicated there was an ongoing process between the time that he was taken on and the time he left. Senator WONG: Minister, you have said that the Prime Minister’s office became aware when there was media interest, so that would be around May 2014— Senator Scullion: For clarity: that is when I informed them— Senator WONG: Sure. Was the issue of Mr Johnstone’s interests ever raised or communicated to the government staffing committee? Senator Scullion: Not that I am aware of. I am just not aware of what that process would be. Senator WONG: Because the evidence we had in Prime Minister and Cabinet previously is that applications are considered by the government staffing committee and formally approved by the Prime Minister or his chief of staff. So in that process—and you might need to take this on notice—were these interests ever raised prior to the matter being in the media? Senator Scullion: I am not aware of any of those matters at this stage. I cannot recall anything of that nature. Senator WONG: You have referenced on a number of occasions ‘ongoing process’. I appreciate that you may not wish to disclose all the conversations you have with a staff member, but we are talking about a number of months. What is the process that you are describing? Senator Scullion: As I have indicated, it was simply an ongoing process which involved a number of conversations between me and my staff member about his personal interests. Senator WONG: Was there anyone else involved in this ongoing process? Senator Scullion: No. The principal conversations were between me and that staff member. Senator WONG: Thank you. CHAIR: Thank you, Senator Wong. Senator Moore, I will go to you now. Senator MOORE: Thank you. Minister, have the procedures in your office changed now? I know in the area in which you work, in the Indigenous communities, there are a lot of people coming on and off, depending on their personal engagement in the process, just by what happens in your portfolio. Are the procedures changed in the office now about information they provide to you before they come on? Senator Scullion: You might have to rephrase the question. Senator MOORE: Have procedures changed for you when you are looking at employment; what information you gather and how you do it before you put someone on? Senator Scullion: It has certainly changed since I was on that side of the bench. The processes for employing people since I started in government have not changed. The processes of me employing people have been the same to my recollection since I became a minister. Senator MOORE: So all information is absolutely clarified before someone starts working? Senator Scullion: The process is that all staff members are required to provide a process of interest. There is a process whereby we provide that to the Special Minister of State—so that is the same process. Senator MOORE: Before they start employment? Senator Scullion: No. I understand that they are all employed. As they are employed, they are then asked to provide it—and I understand that is the standard process. It has certainly been the process that I am aware of since we started. Senator MOORE: Thank you. CHAIR: Thank you, Senator Moore. Senator Siewert? Senator SIEWERT: I want to go back to the budget in general and further pursue where savings and cuts are being made. We had the discussion over the $534 million. What I want to know is how you can be so precise about the figure if you do not know where those savings are being made. You have made cuts to programs, Page 34 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE including cutting funding to national congress; we have talked about cuts in terms of Torres Strait Islands. Where else are those cuts coming from and how can you be so precise with those figures? How do you know that you are not going to affect front-line services? Senator Scullion: Just to clarify—and not wishing to detract from your question—I think the assertion that we cut funds to congress needs to be corrected. We did not make a commitment. I know that was in forward estimates. We did not make a commitment before the election that we would fund congress. I know the Labor government— Senator SIEWERT: It is in forward estimates. Senator Scullion: We did not make that commitment. As we indicated to them fairly early in the piece, it was suspected that they would not have continuation of funding. But we certainly did not cut the funds. Senator SIEWERT: You can dress it up all you want. I had an argument with Senator Brandis yesterday about words and downgrading. Everybody out there takes it as a cut. Ms Carroll: Senator, if I can explain the way the new program structure will work, that might go towards what some of the transition implications are. With the new structure, as I said, in terms of being precise about the reduction in dollars, one of the things we found when we looked at all the programs and activities that came into Prime Minister and Cabinet was that you could not take one program and say ‘we do not need this anymore’ or ‘all of this working really well’. What we found, program by program, was that there might have been part of a program that was absolutely funding direct on the ground activities and was working more or less effectively—and that was very hard to determine because there is very little evaluative material around about most of the programs. But, within the program amounts, let’s say there was $50 million allocated to a program; $40 million might be allocated for ongoing services and $10 million is for one-off activities, emergency activities and those sorts of things. So one of the things that we are looking at in the new program structure is how we focus more on those front-line services, on the ground, getting outcomes, and less on the one-off activities and one-off funding. We also found, looking at the 4,000 funding agreements that we currently have, that a number of them are service providers that have had one-off funding year-in year-out. Again, they are all service providers that do not know until part of the way during the financial year. There were a lot of, for example, women’s grants that were like that, where the same service provider has money, but for five or six years they have a bit this year and a bit next year and a bit next year. So they have in fact had ongoing funding but they have not had any of that security. So the idea of the new program structure is not to say ‘this whole program has not worked, has not been effective, and is not useful’. It is to say: what are the activities that are making a really big impact on the ground, and then continuing to fund those things. There is a lot of one-off money in the total funding that occurs; are all those one-off activities something that actually should be funded ongoing because they are making a real difference on the ground? I understand that it is hard for service providers because if their funding agreement does finish we have not given them assurance into the future. But we want to refocus their effort. Senator SIEWERT: How do you know that those one-off processes are not working and are not an integral add-on to the other programs that are being funded? They are going to go anyway, regardless, because cuts are being put in. Ms Carroll: What I am suggesting is not all of those would need to go or would be appropriate. So during the 12— Senator SIEWERT: Some are obviously going to have to, because you have made cuts. Ms Carroll: That is right. Some of those will go. But during this next 12 month period, that is what we will be spending the time looking at; what things are more integral and what things are less effective or not needed in an ongoing sense. Senator SIEWERT: This is a huge amount of work and you have also cut 10 people from the unit. We established that on Tuesday. Ms Carroll: Yes. In terms of the departmental savings that are associated with the program change, those departmental savings do not actually start for a year. So in our portfolio budget submission it shows that for 2014-15 the departmental savings, more generally—so I am not talking about the SES officers that you are referring to—associated with the program implementation do not take effect for 12 months. So again we have a transition period both with staffing numbers and with our administered dollars. Senator SIEWERT: I thought we had established on Tuesday that those programs were already being spilled and filled; the process had already started. Friday, 30 May 2014 Senate Page 35 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Ms Carroll: There is a bit of a differential between the senior executives that you are talking about and the broader staffing. So what we are in the process of, in terms of our broader staffing requirements, is looking at what structure do we need to go forward, how we align, how we work as a department with the new program structure, and all of those type of things. As part of that, one of the things that we have identified is that we will have a reduced number of senior executives over time. We have over the next 12 months got some temporary roles. We have already set up a program implementation division, specifically to focus on the implementation of the new programs. Senator SIEWERT: In terms of the six- and 12-month extensions that have been allocated, how did you make that decision between six and 12, and how many are there? Ms Carroll: I will start, but I then might hand over to Mr Hooper. The primary frame, as the minister said, was actually about what a normal funding cycle for a lot of these organisations would be. Education grants are a very good one. They work on a calendar year rather than a financial year. So it is not actually very logical to fund a number of those service providers through to the middle of next year because they operate on a calendar year basis. Mr Hooper could give more information. Mr Hooper: As Ms Carroll said, basically, we have extended predominantly the education programs for six months. There are some programs other than education that we have extended for six months. They are in that area where we need to look at a whole lot of the individual project based funding that we have had for some considerable time. We will be working through a procurement process in early next financial year to look at what we want to purchase in that particular area, so the providers will have the opportunity to apply under the new program structure. Senator SIEWERT: Can we have a list of all the programs that have been given six months and 12 months? Mr Hooper: Conceptually, yes. I think we can do that for you on notice. Senator McLUCAS: The other thing I am looking for with that is where those programs would be considered in the five Indigenous Advancement Strategy items. So you would end up with 150 in one list, whether they are getting six-month or 12-month extensions, and where they would end up. That is a big question mark, I understand that: which of the five streams are they going to go to? Mr Hooper: We are extending some contracts for six or 12 months through the transition period. But, conceptually, the programs that were in existence cease on 30 June this year and the new program starts from 1 July. So there is not actually an extension of the existing programs into the new structure. The new structure starts, and it is a new program structure that enables us to look at more flexible ways of procuring activities and services that meet the needs of communities. Senator McLUCAS: I was actually trying to give some certainty to people who are providing services in Aboriginal communities by asking that question. You have made me more fearful because you are saying that the program finishes at the end of next month. I am trying to find which programs will be considered to go into the five streams and potentially which ones will not. This is the question that we are being asked by many organisations right across this country who are saying, ‘What is happening?’ because they do not know. Senator Scullion: First of all, I think it is very important that people understand that every contract will be honoured and every contract will be extended for six or 12 months. Perhaps it may be useful if Mr Eccles goes into the process. There is a series of guidelines about exactly how this process will take place in terms of what your question is about, which is what programs will go forward. Senator SIEWERT: Before Mr Eccles does that, during that process could you also give us a budget allocation against each of those program areas? Mr Hooper: We just need to clarify that question. Are you after the budget allocation against the new five programs? Senator SIEWERT: Yes. Mr Hooper: They are in the PBS. Mr Eccles: It might be useful to frame this in a context that is a little bit broader. The key thing that we are working on at the moment is a series of new guidelines which are going to govern the way that funding will be allocated under those five broad programs. All the programs that currently exist will have a space within those broader five programs. The focus is going to be, as we have mentioned, on all contracts being honoured and some being extended. We continue to write business, for example, in a number of areas, including in employment areas. It is usual and responsible that we review performance at the end of contracts before we make a decision whether to extend. We will be continuing to do that, but we are going to do it in light of some new guidelines that Page 36 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE are being developed. These guidelines are going to have greater clarity about expectations on service delivery. Those that are making a difference and are realising real results will continue to be supported. The thing that we are going to do in these guidelines—of which there is going to be an overarching set and then specific guidelines, for example, in the jobs area—is outline very clearly what the expectations are, so that those people who expect and want to continue funding will be able to put in place applications to address those criteria. It is going to be a little bit more focused now than it has been in the past on particular results. For example, in the employment area, we would like the people who are employing Indigenous people to be able to provide us with information about the proportion of people who stick in the jobs for 26 weeks or so. We will be developing those guidelines. We will be consulting broadly on those guidelines. Senator SIEWERT: Who with? Mr Eccles: We are in the process of developing a consultation strategy. Senator MOORE: That is a conversation— Mr Eccles: No, no. We are working out a consultation process with the government, but there is a commitment to consult broadly on those. We have raised this with the Indigenous Advisory Council and they will help us identify how we should consult. We are working with our staff. That is why we have got the 12-month transition period. It is really important. The minister has made his expectation very clear that there be continuity of services and front-line service providers will continue. We will work with them, they will see what the guidelines are and they will have time to frame applications for ongoing support. The real emphasis is going to be on a more streamlined process. The companion piece is obviously our new network structure, which I have got no doubt we will talk about a little bit later. Senator SIEWERT: Why do you mean by a more streamlined process? Mr Eccles: Rather than having in the order of 140 different programs—where people will need to essentially sift through to see where they can qualify for support—if you are an organisation and you have got an interest in jobs or economic development, you will be able to see clearly the criteria for you to apply for funding and the government will be able to consider it against those criteria. It is really important to stress that we will be consulting on what those assessment criteria and expectations are. Ms Carroll: Maybe if I can give an example of part of the streamlining that we are looking at. The difference is that one of the things that service providers have been saying to us for a long time is that focus is on the program guidelines and on inputs. They have very little flexibility about how to use their money when they can see a need somewhere else. The shift is to move to what are the outcomes on the ground and what is being delivered. There is less requirement around the inputs. A good example is when we went through all the different programs around retaining young people at school. There is mentoring funding, scholarship funding and accommodation funding. Many organisations have to apply through all the different streams to get the different amounts of funding. The idea in the children and school program is that you could say, ‘The focus of what I am doing is about keeping young people at school and finishing year 12. The cost per head is about this.’ The service provider would have total flexibility in how they used that money, rather than us saying, ‘You can only use that money on a mentor. You cannot use it on a tutor.’ What we are really interested in getting are results. It is trying to help the service providers by being much more flexible and having much less red tape with them having to apply across many programs. They can apply around one. Mr Eccles: A good example is the University of Melbourne. They would have in the order of a dozen different contracts under a range of programs, when really—for an organisation like that, where their aspiration is to assist with student mobility and to do a range of fairly clear things—we should be able to have one contract. Maybe one final illustration ought to help you frame how this is going to work. At times, our front-line staff—the people who are out there working with the communities—are constrained by the programmatic boundaries that we have. They will work with communities and they will say, ‘If you have got this particular issue, you will need to wait until September when this application opens,’ or, ‘We have run out of funding in this area.’ They may say, ‘There is funding here, but it is competitive and you will need to put in place an application.’ A fundamental part of this is the action focus, so that when we work with communities—this is very much about on-the-ground action—we can understand what their priorities are and also frame them with what the government’s priorities are about safe communities, kids in school and jobs. We can come to an integrated approach so that we can fund them without being constrained by the programmatic boundaries that have Friday, 30 May 2014 Senate Page 37 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE inevitably built up over time, like sedimentary layers of programs. That is the principal reason why the government has taken the 150 programs and put them into five. It is to get that on-the-ground flexibility to drive real action. Senator SIEWERT: Let’s go back to the consultation process. Some of these organisations are currently working on six-month contracts. Are you prioritising those areas? Mr Eccles: Absolutely. Senator SIEWERT: Because you have just said there is a 12-month transition. Those organisations will run out of funds in six months. Mr Eccles: Those that are on six-month contracts will be subject of the most immediate consultation on guidelines that are affecting them. As Ms Carroll and Mr Hooper mentioned, they are predominately in the education area. We will be looking to fast-track those so that we can get guidelines out, consult and give those organisations an element of funding certainty into the future. There are others that are going 12 months. Part of the reason for the staggered is approach is workload management, as much as anything. You are dead right and we will be fast-tracking those in those areas that have got six-month extensions. Senator McLUCAS: Can I just get absolute confirmation then that all funding arrangements that expire on 30 June this year will have a transition? Mr Eccles: There are some for activities—it might be to build a building—that we will not extend a contract for. Senator McLUCAS: I am talking about services. Senator SIEWERT: You know what we are talking about. Mr Eccles: For service delivery, yes. Senator McLUCAS: Every single service that has an expiring contract on 30 June this year will get a transition arrangement? Mr Eccles: There are some that have indicated that they do not want to. That is a small number. Senator McLUCAS: Can we have a list of those? Mr Eccles: Sure. Mr Hooper: There are some that are projects that were only ever going to go to 30 June that will naturally cease anyway. Senator McLUCAS: May I have those now, please? Mr Eccles: Yes. Just to be clear, we will get you those that decided to opt out and those where there was a natural end to the work that they were doing, because it was always intended to be time limited. Senator McLUCAS: How many of those are there? Mr Eccles: We would need to take it on notice. The fundamental premise is that we are rolling them over where they had an expectation that they would get funding. If they have had a track record of funding before, we will roll them over. Ms Carroll: We will try to get to you today the breakdown of the total number of funding arrangements. That is, who has got six months, who has got 12 months and who is not continuing. There is probably one other category, which we have not talked about. That is that some service providers may not be performing and, because of underperformance, we would not want to continue. We can pull those together for you over lunch. Mr Hooper: We could certainly get the numbers for you. I think the actual individual details of the organisations will take a bit longer than that. Ms Carroll: Can I just come back to the other thing about funding certainty. I just wanted to clarify what Mr Hooper said. Even though the new programs start, that is a technical finance thing where you cannot have the different lots of programs and monies appropriated to the new program. The funding agreements are just mapped into the new programs. We are really now working off a funding agreement. It is quite complicated about the old programs and the new programs. Senator SIEWERT: Between us we asked about those programs going into the new programs and you said it is different, but you have just said, if I understood you correctly, that they are mapped into those new programs appropriations because of the way the appropriations work. Ms Carroll: The funding agreements are mapped in. Within a program you might have 50 funding agreements to different service providers, so because we need to continue to fund them we map them across. Page 38 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator SIEWERT: I understand that, but surely therefore those programs are mapped in automatically. Ms Carroll: They might cross over different ones depending on what the funding is. Mr Hooper: It is easier to think about activities. The funding agreements are delivering a set of services and activities, and the funding agreements have been mapped to the new— Senator SIEWERT: Can you give us that, then? Senator McLUCAS: I think that is what I asked for, isn’t it? Ms Carroll: We will take on notice what we give you there. Senator MOORE: Can you tell me what the problem is. You looked very distressed when we asked that, and I take that point in terms of the workload. What is the problem in providing us with what we have asked for? Mr Eccles: Because there are 4,000 contracts. Senator MOORE: All of which are in the system. Mr Eccles: We can take it on notice. We went through 4,000 contracts and assessed each of them— Senator MOORE: Which has been done. That work is completed. Mr Eccles: That is right. It is a laborious exercise but important, so we will take it on notice. Senator Scullion: What we were taking on notice was, by exception, those areas that may not be included within the general, ‘If you are on 30 June 2014, you will be extended.’ So we have got those categories. I think we can supply that today. We have agreed we can get that today. For the remainder of those 4,000, were you asking for all of those programs to be provided? Senator McLUCAS: There are 4,000 contracts and there are 150 programs that are going to turn into five. We want to be able to track what is happening between each. If there is an organisation in Yarrabah that is getting a program to work with children after school, is it six months extended or 12 months extended? Is it going to go into the ‘children and whatever’ program? Is that where it will be, and which ones do not end up there? If you cut half a billion dollars out of Indigenous services, some are going to stop. Senator Scullion: It is $239 million over these programs. Senator McLUCAS: Some are going to stop and we, on behalf of our constituencies, are trying to track that. Ms Carroll: We will take on notice that exact tracking. We will not be able to get you that this afternoon, but what we possibly could get you this afternoon is the broad numbers of the other question, which was: how many got six months and how many got 12 months. Senator SIEWERT: That would be useful. Senator McLUCAS: It is a good start. Senator SIEWERT: Just on that, everybody got a letter? I have seen the letter so I know the letter is out there. Every single grant recipient that required notification of ongoing funding got a letter? Mr Eccles: Yes, and phone calls and letters. Senator SIEWERT: And a phone call, did you say? Mr Eccles: Yes. CHAIR: Just for the benefit of Hansard, I know we are trying to facilitate everything, but if we could just go one at a time it would be very helpful for Hansard. Senator SIEWERT: A letter and? Mr Eccles: The state network had been marshalled to make sure that letters went there and that— Senator SIEWERT: That is their job. Mr Eccles: Absolutely, and they are in touch with service providers with assurances around the short- and medium-term funding. Senator MOORE: So personal contact? Mr Eccles: I would need to check in every instance. I can do a quick whip-round of our state managers but I would say it would be the vast, vast majority. There may be some instances where phone calls— Senator Scullion: They certainly all got a letter. Senator PERIS: Just recently, the Prime Minister’s Indigenous Advisory Council’s deputy chair, Dr Ngiare Brown, who is a very highly regarded Indigenous woman, said that inevitably the cuts to Indigenous services will have a dramatic impact on front-line services. However, the minister has said on several occasions, and just Friday, 30 May 2014 Senate Page 39 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE recently, that by getting rid of the waste and duplication in administration you will not have an impact on frontline services. We have spent a bit of time talking about it, but what I really want—because I, like all of us here, have been inundated with the number of Indigenous services that have said they will be affected—is for you to outline what consultation has taken place since last year, which service providers, stakeholders and communities you have spoken to regarding the program cuts and whether you provide specific details on how you have actually now reached an outcome to say that front-line services will not be affected and we are on target to close the gap. We are hearing what you are saying, and we are hearing a different thing. Can you clarify what consultation has taken place up until now. Mr Eccles: There is a lot in that question. I might step through bits, and some might be more appropriate for the minister. The instruction that we have very clearly from the government is that front-line services remain a priority and should be preserved. There is a lot of activity that we support that is front-line services, where there are people who are actually providing essential services to individuals. There is also other activity that we support which may not fall in the definition of front-line services. Our instruction is very clear: where there are front-line services that are affecting Indigenous people, that is the focus of being preserved. That is what the new program structure is about. It is really to highlight that and to prevent the duplication that is going on. That is about the front-line services. I am not aware of Dr Brown’s statement, or the context, so I cannot comment on that. Senator PERIS: You have come to an agreement that is cost-effective and you are wanting to cut the red tape, but what Indigenous communities—stakeholders, who have said, ‘We can achieve this outcome if you cut this layer of bureaucracy’—have you specifically engaged with? Have you talked about reducing reporting requirements and, if so, what data would you no longer be receiving? Mr Eccles: Again, there is a lot in that. The consultation process around the particular guidelines is about to start, as I forecast. We have had discussions—and I am sure the minister has had discussions with constituents—with a whole range of people. We have been testing the notion of that more freed-up approach, particularly for our network staff, where they can go in and work with communities and not be bound by programmatic constraints in developing a far more tailored, action-focused activity, with our local staff held accountable for making changes in the areas of priority. We have raised that in a number of meetings with Indigenous communities. For example, one off the top of my head was the Murdi Paaki people a few weeks ago. It was almost ‘tolerance testing’ the idea. There have been no discussions that we have had that indicate that there is not support for that new approach, partly because it addresses the issue that is a frustration to everyone—that there is a lot of work associated with so many small funding agreements that can cripple and really tie up community leaders. This, in part, is going to address that. We are also talking about the notion of a little bit of earned autonomy. We ask those organisations with a strong track record of performance to report on outcomes. These are some of the things that we have been discussing with communities, peaks and state governments. But I do not have a list of everyone who I have spoken to, nor does the minister. Senator PERIS: Are you able to table some sort of documentation of the list of people that you have actually consulted with? Mr Eccles: There are so many people in our department and there are so many people with the minister, the parliamentary secretary and others that it would be a significant body of work for everyone who we have had discussions with. Senator MOORE: Mr Eccles, do you have a strategy document for how this process operated? Mr Eccles: We do have internal documents. Senator MOORE: Can we have the strategy document, for which Senator Peris is trying to establish what the consultation model was to reach this point? Mr Eccles: I do not think there is a consolidated single strategy document about how we got to here. There are budget papers, obviously, and the lead-up to budget considerations. Senator MOORE: Budget papers do not talk about consultation, which was the point of the question. I am talking about whether there is a— Senator Scullion: Perhaps I can assist, Senator. Senator MOORE: Please do, Minister. Mr Eccles: I am not trying to be difficult. Senator Scullion: In terms of the consultation, when we came to government we had a look at the budget. I had specifically looked at all of the programs. We had an internal program review. We were able to ascertain, Page 40 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE without consultation, that we could very much improve the delivery on the ground. I personally spent my time in opposition, as many as you will know, not only as part of this committee but also, as part of my own work, in talking to communities and all of the peak groups about how they thought the programs were running. The universal feedback I have had—and I suspect the previous government had—is that we cannot just keep doing it the same way. There were some efficiency dividends, and we have spoken in the budget context about those efficiency dividends, but I think it is not only around there that we need the improvement. We are going to be able to deliver more flexible services. As you would all be aware, the delivery of services in Western Sydney and in Yuendumu need to be contextualised differently. We really believe that this is going to be a better deal. In terms of the consultation, I will acknowledge that this was a decision by me. But it was reflective of a lot of consultation that I have had, not only personally. It is reflective of a wider view not only of many of the peak bodies but of many of the people who are commentators in this area. Senator McLUCAS: When it is all gone through, do you expect that there will be fewer organisations providing services, particularly in remote communities? Ms Edwards: Obviously that is a long way in the future, but we certainly do not have any expectation of fewer organisations. We have a very high expectation that each of those organisations will have many fewer funding agreements. The way going forward is to make sure that we support and give every opportunity for local, Indigenous controlled organisations to be part of the new programs so that they can come forward in the new, flexible environment and say these are the activities that we need to do on the ground in order to get school kids to school or to solve the grog problems in our community or whatever it is, and so that they can be funded through a single funding agreement to do what it is they need to do and have appropriate, streamlined reporting. But it is certainly not part of the idea to reduce the number of organisations. Senator Scullion: I am not sure if you were here, senator, although I suspect you were, but I remember giving evidence of where one organisation was reporting against 68 different programs. I cannot remember the exact community—I suspect that is probably appropriate. I am not sure how many extra people they had, but they acknowledged that we need to have those people delivering services not reporting back to government on this constant red tape. It is about having so many different tasks to do at once. We are trying to streamline that rather than saying any particular number of people who are actually providers of services. Senator McLUCAS: We also have organisations that have one contract, and they are the ones I am thinking about. Senator Scullion: I do not think we should need to send a clear message that we are guaranteeing every organisation. We are going through a process of assessment. If we think that the programs and the outcomes on the ground are being delivered, no doubt they will be supported. If that is not happening, then we need either a different sort of program or a different approach. That might be more resources. It might be a slightly different program. That will be our approach. But if you are looking for a guarantee that exactly the same communities will be delivering exactly the same program, that would be the definition of no change, and we are not supporting that. Senator McLUCAS: You would be aware, minister, that there is a lot of concern from niche organisations that are providing very specific services that under your streamlined model they are going to be competing against larger service providers. It is going to be harder for them to make their case to be continued funding. Senator Scullion: Unsurprisingly—I have said this many times around this committee—I think it is very important that Aboriginal organisations have the capacity and have a capacity build. In fact, that is one of the particular streams. As you no doubt would have heard, Aboriginal organisations often say we have the proliferation of extremely large NGOs, and their capacity does two things. First of all, the contracts are too big. They are huge. Often they say, because they cover spatially a large area, it is simply beyond the ken of an emerging Aboriginal organisation, for example. That is why our approach will be if it can be an Aboriginal organisation, and it needs some capacity build and some more resources, we would prefer if they were doing it. You have got to value add where you can. We need to ensure that an Aboriginal organisation, which is very likely to employ Aboriginal people, should be part of the application. So if you are talking about niche organisations that are Aboriginal organisations that employ Aboriginal people to deliver those services, they should be pretty confident that they are the sort of people that we want delivering the services. As long as those outcomes are improved, that is what we are looking for. Senator McLUCAS: Can I ask more corporate questions, please, going back to the issues that Senator Siewert was canvassing before around staffing. Senator Wong raised these questions earlier this week. Can we start from the broad and then come down to what is happening. From estimates on Tuesday, we understand that the net ASL reduction will be between 350 and 400 staff across the department. Is that correct? Friday, 30 May 2014 Senate Page 41 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Ms Carroll: Yes. Senator McLUCAS: I also understand that there is currently no set plan to disaggregate that figure across the individual outcomes. Ms McIntyre: No, there is not an intention to disaggregate that across the outcomes, primarily because the department has flexibility. If a staff member leaves voluntarily from one area of the organisation, whether that is outcome 1 or outcome 2, we have the ability to replace that staff member at our discretion, and so therefore we are not targeting particular parts of the organisation from that perspective. Senator McLUCAS: Can you describe to the committee the ‘spill and fill’ process that is underway. I know it was described in the other committee. Mr Neal: As I explained on Tuesday, the ‘spill and fill’ process is consistent with the APSC—Australian Public Service Commission—guidelines on how these processes are to be undertaken and is quite a common process when we have more people than we have available positions for those people. This spill and fill is a merit-based selection exercise where we would ask employees to submit an expression of interest against the senior executive leadership capability framework, which again is an Australian Public Service Commission document—generic selection criteria, essentially. We would then have a panel sit and decide on the relative merits of those applications and then a delegate would choose who will be placed in those positions. Senator McLUCAS: The spill and fill works across the whole of the organisation or just the SES level? Mr Neal: It can be used at any level or any cohort of the organisation. The aim of a spill and fill is always to contain it to the group that we would call ‘in scope’. Where the positions are similar or in a like part of the business, we would try to contain it to that area so that it did not cause a massive upheaval or disruption in the rest of the organisation. Senator McLUCAS: I understand that 241 expressions of interest have been received for VRs. How many of those are from staff working within the Indigenous affairs part of PM&C. Mr Neal: I do have that data if you bear with me for one second. Ms McIntyre: We have definitely got it. We can get it for you. Senator McLUCAS: I will leave it and you can provide it after lunch or something like that. I am also looking at what APS level they are at. Mr Neal: I have that information now. Of the 241 requests— I think it is actually 250 as at today—200 have been requested from the Indigenous Affairs Group. Senator McLUCAS: Have been expressed by people currently working on Indigenous affairs? Mr Neal: That is correct. Senator McLUCAS: So 200 have expressed interest but the reduction has to be between 350 and 400. Am I reading that correctly? Mr Neal: You have read that correctly, but we have also factored into that the natural attrition that we have had over the period, and we have seen 99 staff leave as well. So that, in addition to the more than 200 that we would expect to see out of the 250 estimates, puts us pretty close to the reduction that we are seeking overall. Senator McLUCAS: And 99 people have left over what period? Ms McIntyre: Since the machinery of government changes, so since the section 72 was completed transferring those staff into the department. Senator McLUCAS: I am interested that it is 350 to 400 and I am surprised there is not a figure. Ms McIntyre: The reason there is not a figure is that part of this is to manage the efficiency dividend that we are subject to over a period of time. That is obviously a budget number, so it is a financial number as opposed to a people number, and it depends on what level people leave from. Senator McLUCAS: Budget Paper No. 2 shows a funding cut of $409.2 million to PM&C as part of the rationalisation of Indigenous programs. What proportion of that saving will be achieved through staff reductions? Ms Edwards: Departmental is $53.9 million over the forward estimates. Senator McLUCAS: Over four years. Can you disaggregate to the year-by-year basis, please. Ms McIntyre: It is roughly $18 million a year. Ms Carroll: It is on page 24 of the portfolio budget statement that separates out the departmental from the administered. Page 42 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator McLUCAS: Is it possible to detail staff reductions by APS level? It says here ‘program area’, but I do not think we are actually allocating staff to program area. Ms McIntyre: Do you mean the VR estimates to date? Senator McLUCAS: The overall—you cannot really do that, can you? If you could do it for the expressions of interest on VRs, that would be helpful, I think. Mr Neal: We could definitely provide you with a breakdown of the people that have left voluntarily via natural attrition from the group over that period by classification. We could take that on notice. The voluntary redundancy estimates would be a little bit more difficult. I could give you a breakdown of the ones that have agreed to separate—the ones that have taken a formal offer of voluntary redundancy—and their classification profile. Senator McLUCAS: And that is a current occurring thing. Mr Neal: That is currently— Senator McLUCAS: So that will be changing over time. Mr Neal: That is correct. Senator McLUCAS: When do you expect the process to be concluded? Mr Neal: By 30 June. Senator McLUCAS: If you give us that, that might give us a flavour of what is occurring. Mr Neal: I can do it. Senator McLUCAS: The minister’s introductory comments talked about having a remote community advancement network. I think that is the name of the new program. Is that right? Senator Scullion: For clarification, that is not correct. It is just the identification of a group of individuals across Australia. Senator McLUCAS: Is this the old ICC staff? Mr Eccles: Sort of. Senator Scullion: No, it is not. Senator McLUCAS: Mr Eccles says ‘sort of’ and you say ‘no’. That is helpful. Mr Eccles: Sorry. Senator Scullion: That is all right. Indeed. Perhaps it is not ‘sort of’; it is a network that focuses very much on remote and very remote, because the delivery of services in remote and very remote by all marks is just appalling. For example, only three per cent of children in those committees are getting an education—three per cent. Without lecturing this committee, I am sure you are all aware they bear disease burdens that are the worst not in Australia but probably in the world. So remote and very remote cannot be considered in the context of delivering these same sorts of programs. We have to have a different focus and so we think we have some staff around Australia within PM&C that have particular skills in that area, and we want to ensure that we have a team that have some particular skills in focusing on changing those outcomes in remote and very remote communities, which is the motivation of that. Senator McLUCAS: I am looking at staffing; that is all. What is proposed to happen to staffing non-Canberra-based with regard to location and numbers? Ms Carroll: We have a network of staff that have come into the department and we are also facilitating the new remote/very remote network and what that structure will look like. As the minister said in his opening statement, we are moving to a regional approach. The exact numbers have not actually been finalised. But broadly, as the minister said, we think the footprint is not necessarily going to change significantly. But it is about how our staff work on the ground and what they do. There is a broad set of numbers, and we still have to work that through and, obviously, have a consultation process with staff about regions and what that might look like, and all of those sorts of things. It is in progress and it will happen over the next 12 months. Senator McLUCAS: I think at last estimates I did ask on notice—and I have not brought that with me— about the number of staff we had across the whole of PM&C coming in from various places. I am pretty sure we got that. I do not know if we— Ms McIntyre: Yes, that is 1,800 in total. Friday, 30 May 2014 Senate Page 43 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator McLUCAS: Can you give me the current staffing numbers and levels at all locations that are non-Canberra based. I think, Ms Carroll, you are saying there has been no decision to this point in time on changing any of that? Ms Carroll: No, that will happen over time. But the decision that has been made is to start to focus on a regional basis—but not about individual staff. Senator McLUCAS: I am not sure I know what you mean. We have a regional basis. There is an ICC in Cairns. It is down the road. Ms Carroll: That is right. But it is getting some consistency in what that looks like. The question that you were going to before was: is that ICC staff? Actually, it is saying that we have got a new PM&C network that has brought together ICCs, government business managers, the old ROCs—which were the regional operation coordination centres—and a number of staff from around Australia that had slightly different functions to have a more concerted look. So, yes, we do have a regional basis, but we are actually thinking about what occurs in that region and what decision making is available to the senior leaders and senior managers and staff in those regions. It does not just go to who the staff are but, actually, to the accountability and decision making that they have. Senator McLUCAS: That is all the questions I have on corporate. Thank you very much. CHAIR: Were there any other questions on this area from non-government senators? Senator McLUCAS: I just want to flag, Chair, that we have had to spend this time in this area because of the complexity of the issues. We have not got to Health yet, and I would like to indicate to the Health people that we will, when we come back from lunch, have some questions around health. CHAIR: Senator McLucas, Health is scheduled for once this is completed. But I would note that, for the last hour and 40 minutes or so, non-government senators have had the floor and had a fill of this. Senator McLUCAS: That is what estimates is for. CHAIR: No, estimates is for senators. It is not ‘Labor estimates’. Senator McLUCAS: We can debate about this when we get back into the chamber. CHAIR: You can have as many debates as you like. But it is called ‘Senate estimates’, not ‘McLucas estimates’ or ‘Greens estimates’ or anything else. Senator SIEWERT: Yes, and government senators can just go and ask the minister. CHAIR: Senator Siewert, it is not your estimates either. It is ‘Senate estimates’. We will now go to coalition questions in this area, and I will ask Senator Smith. Senator SMITH: Does Senator Wong have any further questions? CHAIR: Senator Wong is no longer here. Senator SMITH: I just want to go to Mr Eccles’s evidence in responding to some of the questions from other senators in the last hour or so. You talked, Mr Eccles, about the new arrangements providing greater clarity in service delivery. You talked about the new approach outlining clearly what the expectations are of organisations delivering programs, and you also went on to say that the new approach will be a little bit more focused than in the past on results. Am I correct then to assume that the previous approach lacked clarity— Senator McLucas interjecting— Senator SMITH: No, no. This is important when we get to the issue of results and outcomes. CHAIR: Ignore the interjections, Senator Smith. Senator SMITH: Sorry, Chair. Is it the view that the previous approach did not have as much clarity, was not as well funded— Senator McLUCAS: Is that asking for the opinion of Mr Eccles? CHAIR: Senator McLucas, this will take an extremely long time if you continue to interject. Senator McLUCAS: I do not think you can ask an officer for an opinion. CHAIR: You cannot complain about time after using an hour and 40 minutes. If you did not familiarise yourself with the agenda prior to it being finalised, it is not my fault. So it is your issue. Senator McLUCAS: I do not think Mr Eccles can answer a question that is asking for an opinion. CHAIR: What I can say to you, Senator McLucas is: if you want cooperation on the agenda, you should deal with it two days before this hearing. Let’s go. Senator Smith, ask Mr Eccles your question. Page 44 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator SMITH: Mr Eccles, was the previous approach not as focussed as it could have been, not as integrated as it should have been, in order to deliver on the results that the community would expect in terms of improving Indigenous disadvantage? Mr Eccles: My job is to give effect to the government’s intentions in Indigenous affairs, and their intentions are to have a very action-focused and on-the-ground presence with a smaller number of programs, fewer contracts and clearer expectations. Senator McKENZIE: Did you say, ‘more action on the ground’? Mr Eccles: As I said, my job is simply to give effect to the government’s intentions and advise them on how best to do it. And their intentions, as the minister said earlier, is to have fewer contracts, fewer programs, greater flexibility and a real focus on measurable outcomes. Senator Scullion: Our intention was simply motivated by closing the gap results, which we have all focused on around this committee. They simply have not been moving in the right direction. All but a few are on trend not to succeed. So we have to change what we are doing; we have to have a real focus on the ground. Senator SMITH: In Senator Wong’s opening remarks, she pointed to a table at page 185 of the budget paper No. 2 document in regard to budget measures and quoted from the first paragraph, but failed to quote from the second paragraph, which specifically says, ‘this rationalisation will eliminate waste and duplication’. I am curious: has there been, in the past, waste and unnecessary duplication in programming for correcting Indigenous disadvantage? Senator Scullion: I think it is self-evident, looking at the numbers of programs and, as has been indicated before, there has been organic growth—over the years there have been these layers of growth. I think over long periods of government—and this is not a political comment—sometimes it is time to have a rationale. I think these programs have been developed with the best will in the world; I do not think there was any mischief from the previous government or governments before them. But, given that the plethora of programs does not appear to be delivering on the ground—and it is confusing—there is obviously duplication. We have done an internal review of some of the programs. We indicate there is a fair bit of duplication, and, as we have already gone to before, there does appear to be quite a lot of red tape. The reporting against outcomes for some of these organisations can certainly be streamlined and we think that can create some real differences on the ground. Senator SMITH: So when we see the words ‘waste and duplication’ in the budget papers, they are words that have been chosen because internally the new government has reviewed existing programs and has come to that conclusion? Opposition senators interjecting— Senator Scullion: That is in fact the case. We have had a program review. We have looked at the programs and we have seen that we can do this a lot better. The reason we brought them down to programs is—the problem is the number of programs and activities, the reporting processes and the red tape that goes with that, and particularly the duplication, we think across some of those programs. Senator SMITH: How do you respond to this suggestion in the community that more money for Indigenous programs means better outcomes? Senator Scullion: First of all, I could not accept the hidden assertion in your question that there will be less money for the programs. As I have indicated, a modest efficiency dividend—I suspect there is more efficiencies to be had than that saving to the budget. And, if we can, we will hypothecate that back into the programs. Those efficiencies are potentially in some areas going to deliver more funds to those programs. In the past we have seen statements like: ‘What are you doing about this?’ And there is a number: ‘We are investing $15 million’—’We are doing these sorts of things’. What I am attempting to do is start measuring our outcomes—and my outcomes—that we deliver in terms of the outcomes on the ground, rather than how many dollars we actually invest in this. Because it is not too difficult to point to what money is spent, but it has been difficult in the past to point to the outcomes that that money has delivered. We are very focused on the outcomes; we are measured through the COAG targets on the outcomes. And so our processes should be directed at meeting those targets, which means changing the outcomes not marking ourselves down about how many dollars we spend. Proceedings suspended from 12:45 to 13:31 CHAIR: I will reopen the proceedings of the Senate Finance and Public Administration Legislation Committee and continue with the hearings of the Senate budget estimates. Friday, 30 May 2014 Senate Page 45 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator McKENZIE: I thank Senator Smith for his line of questions on the significant change to the budgeting process, because what we have been doing in the past has not been working in this area. Targeting outcomes will hopefully work towards closing the gap between Indigenous Australians’ experience and other Australians. Can I just go to an article from The Australian on 15 May, which talked about the $239 million of savings that will be found through efficiencies of the process that you have outlined recently. There have been reports of a $165 million amount being cut. I am just wondering if you could clarify, because that amount has not come up in any discussion around the budget this morning. It is a $165 million cut. Ms Carroll: We would have to have a look, but we certainly do not have a $165 million figure for us. Senator McKENZIE: The quote is: … an additional $165m being cut from indigenous health, peak indigenous lobby groups fear that efforts to close the gap are being being compromised. Where did the $165 million reported in the paper come from? Ms Carroll: Certainly, on page 185 of budget paper No. 2 there is a line item that is about changes in health, but that does not add up to the amount that you are describing. That adds up to $121 million. Senator McKENZIE: Why would that not add up to what is being reported in the papers? Ms Carroll: I do not know. Senator SIEWERT: How much did you say it was? Ms Carroll: I will just check. The total health figure is $121.8 million. Senator McKENZIE: Hopefully it will be fleshed out in other questions during health. Mr Eccles: If I might, I am tabling some information that was requested by the senators regarding our programs and the number of contracts. It is the numbers of which are extended and ceasing. CHAIR: Thank you, I appreciate the timely manner in which you have done that. If that can be brought to me, we will circulate it amongst the committee. In the absence of any further business here, we will move onto health issues. Department of Health [13:44] CHAIR: I welcome Ms Mary McDonald, the acting deputy secretary of the Department of Health, and officers to join the officers of the Department of the Prime Minister and Cabinet for this session on health issues. Senator McLUCAS: I want to go first of all to the global cuts in Indigenous health. Budget Paper No. 2 shows a different figure to what Ms Carroll just referred to. I add that up to $125.1 million. I wonder, Ms McDonald, if you could go through the cuts to Indigenous health from your reckoning. Ms McDonald: You are on page 185? This is the PM&C section and then there is a Health line there and there is further information in the Health PBS. The situation for the health cuts is that the pattern is a little bit different to the situation for PM&C and the programs are a little bit different as well. You can see that the savings are taken from 2013-14 onwards, and there are net increases in the longer term as well. It is a reconfiguration pattern that is shown in the estimates. The initiatives in relation to health are one component and, similar to PM&C, there are other initiatives as well which relate to Indigenous health that are in the budget and they are in the health section of the measures statement. The situation for Indigenous health is that over the forward estimates—2014-15 to 2017-18—there is actually growth in funding overall, and that is shown in the Department of Health’s PBS. It is under outcome 5. Senator McLUCAS: Let me ask the question differently. I am trying to understand what the difference between the forward estimates of the 2013-14 budget were compared to the 2014-15 budget, and what the comparative cut between the two budgets is. Ms McDonald: What is happening between the two budgets is there is a change in approach to investments in Indigenous health and that then relates to the pattern that you can see. The focus is clearly on Closing the Gap and efficient and effective health services for Aboriginal and Torres Strait Islander people. Senator McLUCAS: I am interested in the numbers, please. Ms McDonald: There is around $121 million in net savings to the budget which are then reinvested in the medical research fund. There is a change there. However, where they are coming from and the reason for the front-ending of them is that the savings are coming from a pause in some increased investments that will not be Page 46 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE given out. Where there was funding that would have been allocated in this next period, there will be a pause. Where there are vacant positions and funding has not been spent for some programs, there will be a pause in recruitment. There are a number of reviews that the government is going to undertake in this current year, and those reviews will help inform allocation methodologies for the future and priorities for what is a growing lot of investments in Indigenous health to help improve health outcomes and provide better services for Aboriginal and Torres Strait Islander people. For the savings that are here, there is no cut in essential front-line services. There is a commitment that the services through the AMS, as the clinical services that are provided, will continue while the reviews are underway and, prior to the budget, there was a commitment to the sector to continue the funding the clinics receive for core services at their existing levels at that time. Senator McLUCAS: Let me read some figures to you, and you may have to take this on notice. A calculation that has been done between the 2013-14 budget and the 2014-15 budget shows that in the 2013-14 year there is a cut of $51 million, in the 2014-15 budget there is a cut of $96 million, in the 2015-16 budget there is a cut of $107 million and in 2016-17 there is a cut of $72 million. Ms McDonald: I am not sure where those figures come from, but they do not match with the situation. In regard to the figure that you mentioned in 2017-18, there is no cut at all in 2017-18, there is a $44 million increase. I think that what is happening is that someone has had a look at figures that include historic programs that were handed over to PM&C. So they are not comparing like with like. There have been changes where some of the programs that were formerly in the Department of Health have moved to PM&C, and they show in some of those earlier figures. Senator McLUCAS: An Aboriginal person receiving a health service does not care whether it is being funded by the Department of Health or by PM&C. So I think for fullness we need to aggregate the two budgets and come up with the total answer of what the real cuts are over Indigenous health services. I wonder, Ms McDonald, if you could take that on notice. The figures that have been provided to me are worth being interrogated. If you could provide a table for me that shows the cuts globally for PM&C and Health that have occurred between the 2013-14 budget and the 2014-15 budget. Ms McDonald: Certainly, I can give you the consolidated figures for the Health side. I will just have to talk— Senator McLUCAS: I wonder if Ms Carroll then— Ms McDonald: I could tell you what has moved from Health to PM&C. Ms Carroll: That other information you will get from us about what funding agreements have six- or 12-month extensions and all of that will include those health activities. You will have it in two pieces, but we can work with the Department of Health to pull that together. Senator McLUCAS: Basically, there is a bit of discussion in the health sector about what the real cuts are. I think it is important that we use this opportunity to shine the light on it and find out what the real cuts are, because that figure adds up to $226 million over four years, not $121 million or $125 million. This is the chance. Senator MOORE: [inaudible] CHAIR: I thought we had moved on from that. Senator MOORE: No. CHAIR: It was at your request, was it not, that we moved on. Senator MOORE: I refer to the health line in the budget. I am sorry, I would never do that. In terms of the process, a lot of confusion has been around, and we know that there are other bits in the health budget where it explains things that are coming in and expenditure items. I really want to know what figures were used to come up with the line item in Budget Paper No. 2. In Budget Paper No. 2, for Department of Health and that series of figures there, I just want to know exactly what was harvested to reach those figures each year. Ms McDonald: Those ones for the budget initiative? Senator MOORE: Yes. I would like to get exactly what was counted to save that. We are aware of transitions, and we are aware that there are other bits of the budget paper that talk about spends, which is fine. Just because this is the overriding document, can we please have exactly from the Health perspective what makes up those figures? Ms McDonald: We can take that on notice. Senator SIEWERT: You have taken money out of Aboriginal health and put it into the health research future fund. Is the $44 million that comes in in 2017-18 coming out of that fund? Friday, 30 May 2014 Senate Page 47 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Ms McDonald: No, it was the net save. If you have a look at the Budget Paper No. 2 line, there is the figure of $121 million, which is that Health line, which is a mixture of spends and saves. It is the net save that went in. There is a statement at the bottom of that section that says: Health portfolio savings from this measure will be invested by the Government in the Medical Research Future Fund. Senator SIEWERT: I understand that. If you look at the line item on that page for the Department of Health, where it says where the money is coming out, it says in 2017-18 there is $44 million going in. So you are cutting funds for four years and then saying money will be invested in 2017-18? Ms McDonald: There is a mix of things happening with that money. There is a pause on some activities and— Senator SIEWERT: Sorry, can we come back to that issue. Could you answer the question I just asked. I would really like to hear what you are saying but I want that first question answered, please. What is that $44 million that is coming in in 2017-18? Is that what you are stopping and pausing and all those sorts of things, or is it new investment? Ms McDonald: There is a mixture within the funding for the other years as well with new investment. The new investment that is there, and it starts in earlier years as well, is for child and maternal health programs. There is a number of new programs and I think they are listed in here. Senator SIEWERT: I understand that there are new programs, and I will come to that, but there are still cuts being made. All that funding is still funding cuts. Ms McDonald: The funding that is shown as savings there is largely reductions in money that is not yet allocated or areas where activities did not get underway. There is a pause in starting those up while the government undertakes its reviews. There is then a period where the results of the reviews will be known, but it takes time to get personnel out on the ground. It takes time to allocate the money for services, to get people out doing the work when the decisions are made about what is going to be happening. There is a staged process after that, which is why you see that pattern. Senator SIEWERT: I will change tack. Can you give us a list, please, of all the programs that have been paused or not committed—in other words, where this money is coming from? Are you able to give it to us before we finish this afternoon? Surely you have got that information fairly ready to hand. Ms McDonald: I can tell you what they are for the current year. The allocations after the review will depend on the outcomes of the review. Senator SIEWERT: I want to know where the money is coming from that you have identified. Ms McDonald: The areas that we are looking at are where there was unallocated growth funds which had not been allocated previously for primary healthcare activity—it was for expanding services—and those funds have not yet been allocated out and they are a component. There is a tackling smoking program where not all positions were filled. There is a pause in filling positions while there is a review looking at the best ways to address Indigenous smoking issues. Senator SIEWERT: We have a very short amount of time. What I would like, please, is a list of the amounts and the programs that have either been paused or cut, or programs not filled, against programs and the money. I think that is going to be the most efficient use of time. Ms McDonald: We will have to take that on notice. Senator SIEWERT: If you could, please, that would be good. In terms of the funding for the AMSs, they have only got a funding contract, as I understand it, for 12 months? Ms McDonald: That is correct. Senator SIEWERT: In your review of all these programs, are you taking into account the impact of the GP copayment on the AMSs? I understand through conversations with some of them that they feel that they may have to absorb some of that cost. Have you taken that into account? Ms McDonald: At the moment the reviews will look at the Medicare money as part of the pool. Regarding the issue of the copayment, we are not the best people to talk to about that. The issues regarding copayment belongs to the area that looks after Medicare and they will be at estimates on Monday. Senator SIEWERT: I understand that. My question still stands. Ms McDonald: The review will look at the money that is coming through the primary healthcare and Indigenous-specific programs. Page 48 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator SIEWERT: If you are looking at the effectiveness of those programs, why are you not looking at decisions that have been made in the budget and their impact on Aboriginal health? Ms McDonald: We would not be specifically looking at one particular thing but at the whole suite of issues, and certainly services will get a chance to raise issues that they have. In relation to AMS funding, most of AMS funding comes through our program. About $700 million Indigenous-specific money goes out for services. The Medicare component going to Aboriginal clinics is about $45 million. Senator McLUCAS: Have you done any modelling on the cuts that will occur with the copayment? Ms McDonald: Medicare is not our responsibility; it belongs to another division. Senator SIEWERT: You have responsibility— Opposition senators interjecting— CHAIR: If the Acting Deputy Secretary is responding, it would be courteous not to speak over her answer. Ms McDonald: The answer is that my area has not worked on that. It is the responsibility of another division in the department and they are able to answer questions on Monday at estimates. Senator McLUCAS: Do you expect that that part of the health department has done the modelling that is required to be done on the impact of the copayment on the business model of AMSs. Ms McDonald: You would need to talk to them on Monday. Senator McLUCAS: Do you expect that you would do that work in your part of the department? Ms McDonald: No. We do not look after that area. The area responsible would look after any specific issues. They would generally talk to us about things. But at this particular point in time the review you are referring to, we are currently doing the scoping work. We have not undertaken the review as yet. And it is probably a bit speculative to look at what it may or may not do. But certainly the focus of it will be around the use of the grant money and the best investments for that grant money in terms of closing the gap and improving Indigenous health. Senator MOORE: I just want to clarify the structural process. It has always been my understanding that the area of Indigenous health worked across the board with other areas on issues that were pertinent to Indigenous issues. And, in our health estimates, we would talk with people who had different specialties but with the expectation that where anything touched the Indigenous area they would automatically have a discussion. That was built into the work program. I am interested in the discussion we have just had about the major budget impact of the changes to the way Medicare will operate and the specific issues around AMSs. What would be the process when that happens—allowing the primary ownership of the whole budget process with this area would belong to another area of the department—what actually stimulates them talking with you specifically about what has been identified without doubt will be a major impact for AMSs? How does that work? Ms McDonald: For a range of measures there certainly have been discussions and certainly the area that looks after the Medical Benefits Schedule has been talking to my people about a range of things. There have also been discussions with the minister. And Assistant Minister Nash is responsible for Indigenous issues and she has done a roundtable on this issue with Indigenous groups and is listening to their issues. She has said she is prepared to hear what they have to say and look at any issues they might have about any level of disadvantage or problems. Minister Dutton himself has also said in a press release that he is interested to hear from groups. Senator MOORE: Will that automatically involve you—these processes around Indigenous health? Ms McDonald: It did involve the MBS area, and our area has also had a watching brief and an interest in it. But we are not the Medicare area and we do not run the policies of that area, but we do work together. At this stage people are listening to the views of the sector, and we are willing to accept information from people and have a look at it. Senator McLUCAS: Prior to the policy change to introduce a $7 copayment on a standard consultation, was your section asked to comment on how that would affect the operation of the Aboriginal Medical Services. Ms McDonald: During the budget process? No, I was not aware of anything. Senator McLUCAS: Can I go to the issue of tobacco smoking now, please. I think this is the one area we need to get the detail for. Can we just go back to the whole program as it was prior to this budget, and identify those elements that are being paused and those elements that are not being proceeding with, in the tobacco smoking area. Friday, 30 May 2014 Senate Page 49 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Ms Palmer: Currently we have about 59 teams in 54 organisations that serve 58 regions, tackling smoking and healthy lifestyle activity. Those teams are having their recruitment paused because they have not achieved full levels of recruitment at this time. Every team is very different. The officers in our grant services division will be working with each team on how their allocation will be issued in this coming year, while we do the review. So we have issued an immediate freeze on recruitment so the teams must stay at the level they are currently recruited at, and they will not be able to recruit new people to those teams while the review is being undertaken. Senator McLUCAS: How many positions are not filled? Ms Palmer: About 80 per cent are filled at the moment. Senator McLUCAS: So how many people in a team? Ms Palmer: It depends. The teams are of varying sizes, depending on the size of the region that they serve. Senator McLUCAS: Rather than going ’20 per cent’, what is the number of positions that are not filled? Ms Palmer: It always goes up and down. Let me see what I have here—210 people are currently recruited as at the time we were able to connect—that was about early May—and the FTE was 173. So you have some part-time people in those teams. Senator McLUCAS: The recruited personnel was FTE 173 and 210 people—as a headcount. And how many unfilled positions in that? Ms Palmer: The funded FTE is 344. Senator McLUCAS: So, if I take 173 from 344, I will find the unfilled spaces? Ms Palmer: Yes. Senator McLUCAS: What was the work that these teams were undertaking? Ms Palmer: The teams work on the ground to do a range of activities, including health education and promotion in those regional areas. They were working with our national coordinator, Doctor Tom Calma, who provides mentoring and support to those teams. They were doing health promotion and social marketing activities at a local level, including the identification of local role models and champions. They will continue to do that work while the review is on. We also have some activity with smoking relating to the Quitline services. We provide funding to the Quitlines around the country so they can have Aboriginal staff and provide Aboriginal culturally appropriate services for Aboriginal people who call the Quitlines. That is one of the cessation supports. There is also training and resources for those workers as part of that activity, and we have provided support for ACCHOs to become smoke-free workplaces. Senator McLUCAS: What was the total budget in 2013-14 on an annual basis? Ms Palmer: I will look that up. Senator McLUCAS: Maybe, Ms Palmer, I can ask the question a different way—no, I am about to get the answer. Ms Palmer: It is $67.35 million. Senator McLUCAS: And the save in the 2014-15 year? Ms Palmer: In the 2014-15 year it is about $30 million. Senator McLUCAS: And in 2015-16 what is the save? Ms Palmer: I do not have that with me, I am sorry. Senator McLUCAS: But you could find it and provide it? Ms Palmer: Yes, of course. Senator McLUCAS: Would you know the 2016-17 figure yet? Ms Palmer: We are doing the review. All of the funding in the Indigenous Australians health program is together in a flexible pool. We will do the review and provide advice to government. They have flexibility around how they are going to allocate that money. One of the important things about the establishment of this broad program is that it allows us to think more strategically about how we can make sure that we have smoking cessation built into all the activity that we do, rather than seeing it just as a particular program within that broader activity. That is one of the things that, really, are very important. Government has made a very strong commitment to reducing Indigenous smoking, and we need to look at how much more we can embed cessation Page 50 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE support into every intervention that we currently fund, or that we will fund in the future, within the Indigenous Australians health programs right across the board. Senator McLUCAS: My recollection is that this program has been running for just on 18 months. Is that right? Ms Palmer: No, it was part of the establishment of the Indigenous Chronic Disease Package and fund back in 2009. Senator McLUCAS: Has any evaluation been undertaken about the effectiveness of this element of that program? Ms Palmer: Yes. We have had that evaluation done as part of our Sentinel Sites evaluation, which looked at a number of sites right across the country and the implementation of the different components of the Indigenous Chronic Disease Package. This was one of those components. I have some of the information about what it found. It found that the current program model had been hampered by difficulties in recruitment and retention of the staff within the teams, which is one of the issues for us. It found there had been a very strong focus on general awareness-raising, when better support for evidence based behavioural change interventions could lead to higher rates of cessation. So one of the things we need to do in the review is look at the best available evidence about how to support that cessation. It also found that there were limited linkages in communication within the GP sector. We have a disconnect between the awareness and then turning that into action in the clinic, in the primary health care end, not only in the ACCHO sector but across the GP sector. We think about 50 per cent, or maybe 60 per cent, of Aboriginal and Torres Strait Islander people are going to Aboriginal medical services, but quite a number of people are going through to a mainstream GP. So the program was not working as effectively as the reviews thought it needed to in the connection between that awareness-raising activity and the movement to cessation and intervention in the doctor’s room. Senator McLUCAS: Perhaps I could just confirm: there is a cut of $30 million in this coming financial year, and you will provide me the figure for the 2015-16 year when you have it. Ms Palmer: That is right. We are going to work—if you do not mind me adding—very closely with each of the teams to minimise the impact on the workforce. This has been a program where there have been significant underspends over time because of those recruitment difficulties. And that funding is still available within those services, as we have extended this funding agreement for another year. So, whilst you have that save in the context of next year, you still have significant available funding in terms of that recruitment not having occurred in the past two or three years, depending on the time and the life cycle of that team—when that team started—because they were rolled out in tranches. We will be working to make sure that the employment of all the staff in the teams, as they are currently formed at their current level, is supported with the available underspends as we go into the 2014-15 year. Senator McLUCAS: I want to go back to the broader question about trying to track where the money is, or is not. Budget paper No. 2 shows a funding cut of $125.1 million across the forward estimates for the Department of Health, as part of program rationalisation. Table 8 of budget paper No. 1 shows a reduction of $324 million in expenditure on Aboriginal and Torres Strait Islander health from the 2013-14 budget across the forward estimates. Can I get an explanation— Ms McDonald: Can you just give us that second page number that you referred to? Senator McLUCAS: I cannot, because it has been provided to me as commentary. But it is table 8 of budget paper No. 1. Ms McDonald: Sorry, I do not have of a copy budget paper no. 1. Ms Carroll: Senator, is there a comparison between 2013-14 and 2014-15? It is probably the transfer to Prime Minister and Cabinet—the other component of the reduction. Senator McLUCAS: It is on page 621, I think, what I am referring to. Ms McDonald: Could you read to me the 2013-14 figure from that paper? Senator McLUCAS: It is ‘$324 million in expenditure on Aboriginal and Torres Strait Islander health from the 2013-14 budget across the forward estimates’. I think you are right, Ms Carroll, but I am trying to get the total expenditure cuts on Indigenous health. Ms Carroll: We are just tracking down budget paper No. 1. But could I also refer you to the Department of the Prime Minister and Cabinet additional bill—bills 5 and 6. It actually shows the transfer in from the Department of Health to the Department of the Prime Minister and Cabinet and it shows an amount from 2014-15 of $157 million, then $163 million and then $167 million. That is for the programs that came in. From just Friday, 30 May 2014 Senate Page 51 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE listening to the numbers, I think, broadly, that accounts for the additional reduction out of Health because it has been transferred into Prime Minister and Cabinet. We can check those budget papers and confirm that for you. Senator McLUCAS: I think if you could add up the cuts in both— Ms Carroll: And show you which booklet it is, we can give you the tracking. Senator McLUCAS: and where they come from, that would be very helpful. Senator SIEWERT: I have two questions. Just going back to budget paper No. 2, it says: ‘the Health portfolio savings from this measure will be invested by the government in a medical research future fund with the other savings redirected by the government to repair the budget and fund policy priorities.’ With the ‘other savings redirected by the government’, how much is going to the fund and how much is being redirected ‘to repair the budget’—blah, blah, blah; fill in the blank—which we have had at every estimates so far this week? Ms McDonald: Probably the Health estimates next week would be the best one to talk to people about what other funds are going to the medical research fund. This is a document written by, I think, the Department of Finance at a broad level. What we have here are some Health savings, which have been separately identified from the PM&C savings, going into the medical research fund. There are other things in the Health portfolio where there are savings that are being paid into the medical research fund as well. Senator SIEWERT: From Aboriginal health? Ms McDonald: No, not from Aboriginal health—more broadly from Health savings. That is part of the Health portfolio, so that is probably better looked at next week, when the relevant experts are there. I am not the relevant expert on that area. Senator SIEWERT: You are saying that, out of the $165.8 million that has been cut here, all of that is going into the health fund? Ms McDonald: The Health component. Senator SIEWERT: But I am reading from the Department of Health. It says: $40.7 million, $67.3 million, $46 million, $11. 8 million, which is $165.8 million—which is where, by the way, Senator Mackenzie, that figure comes from. That is all going to be put into the fund. Senator McLUCAS: No, I do not think that is what Mary is saying. Senator SIEWERT: No, I did not think that either. Only some of that money is actually— Ms McDonald: Sorry. All the net savings, from the Department of Health line, this is telling you, are reinvested by the government into the Medical Research Future Fund. I assume the other bit of it refers to other savings. Senator SIEWERT: But where do those savings come from? Ms McDonald: The PM&C component, I assume. Senator SIEWERT: So all the Health cut goes in there, and the PM&C Indigenous expenditure savings go into other. Is that what you are saying? Minister or Ms Carroll, is that what that is saying? Ms Carroll: The savings— Senator SIEWERT: I am asking how I should be reading this, so that I am crystal clear. The Health savings go into the fund. The other savings, from the Department of the Prime Minister and Cabinet—which add up to $110.4 million—go into the other savings redirected by government to repair the budget. Ms Carroll: That is right. They have gone to the budget bottom line. Can I just be clear that it does not give you a cumulative total. So, regarding the way you are reading that table on page 185, the reason we were saying the Health saves add up to $121 million is that— Senator SIEWERT: You take off $44 million? Ms Carroll: you take off $44 million—yes. Senator SIEWERT: You take off $44 million of $160 million. But that is in the very last year? Ms Carroll: That is right. That is the total over the five years. Senator SIEWERT: I do not want to leave here without knowing that the $10 million for dialysis Central Australia—I know I am a broken record—is still available? Ms McDonald: Under active consideration, it is available. Senator SIEWERT: What does that ‘under active consideration’ mean? Ms Palmer: The government is considering it. Page 52 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Ms McDonald: The government is looking at a range of options to be able to get those services into place. Senator SIEWERT: So the $10 million is still there and you are working out how to spend it? Ms McDonald: Yes. That has not been taken as savings; that is there. Senator Scullion: Senator, I will continue to champion that cause where I can, under difficult circumstances. Senator SIEWERT: As will I, as you know, Minister. Senator Scullion: I know we have been focusing on the savings or the cuts. I hope I do not provide any confusion, but to the best of my recollection across the Indigenous specific programs we are investing $3.1 billion, which is $500 million better than the previous estimates, and I know that there is some growth in that. But for the benefit of those who are in the receipt of these funds I think we should also note that all the funds to primary healthcare front-line services are being maintained. We are providing an additional $94 million to maternity care through a new program. That was indicated in the budget, and there is another amount—perhaps around $36.2 million, I think—that is going into chronic disease. That is being spread across 32 Aboriginal controlled health organisations for chronic disease. So, there are some new initiatives as well, and I think they should be noted. CHAIR: Senators, have you completed your questions for the moment on health outcomes? Are you happy then if we move onto education and employment? Senator McLUCAS: Thank you, and we may have some more questions to you after we have been to Health on Monday. [14:15] CHAIR: We will now proceed to the session on education and employment. Senator PERIS: My question is to the minister. Of the 38 children and family centres throughout the country, how many have you visited since you became minister? Senator Scullion: None. Senator PERIS: Is there a reason why? Senator Scullion: No, but I have been around various jurisdictions and they have been a focus of discussion for the states and territories. I guess a visit would be interesting. It is a building with a very high level of amenity that I am familiar with because I know the standards at which the previous government built those buildings. But, actually visiting them—no doubt I will get around to them. As you would be aware, where you and I come from in the Northern Territory—they were the last ones to be completed. I am looking forward to visiting some of those. In terms of why I have not visited them, I do not have any particular reason. But, certainly, they have been a focus of discussion with the various jurisdictions. Senator PERIS: With regard to the 38 services around Australia that engage with the family and children centres, with the funding cuts that have been spoken about recently, that is going to end— Senator Scullion: This is in regard to the family and— Senator PERIS: Yes. Is it $14.1 million—indigenous early childhood development. Senator Scullion: The national partnership agreement? Senator PERIS: Yes, that is correct. Those 38 children and family centres are in that national partnership, is that correct? Senator Scullion: Yes, they are indeed. Ms Carroll: The national partnership comes to an end at the end of this financial year, and there was no money in the forward estimates. Element 2 has been extended by a year and element 3 is ongoing, but the child and family centres are in element 1 and its funding ceases at the end of this financial year. Senator Scullion: That is what would have been expected, because element 1 was about the bricks and mortar and building something. It was about finishing that contract to build a building. Element 1 was the provision of the build. There has been much said—mostly from the Labor Party—about why we do not we have anything in forward estimates. This has been something we have been in concurrence with the Labor Party about—the previous government did not have anything in forward estimates either. I have been able to have some very fruitful discussions with the various jurisdictions and I have explained that the particular level of amenity that they have been built to allows them to become a childcare centre. They are still available to apply for the state, territory and Commonwealth programs that can be run out of that process. Senator PERIS: Is there any money available for these services to continue? Friday, 30 May 2014 Senate Page 53 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator Scullion: What particular services? Senator PERIS: The 38 childcare centres that you are talking— Ms Edwards: The money under the national partnership agreement was paid for the establishment of the 38 centres. All but five of them are already complete and the other five are about to be completed. The money spent for those centres runs a variety of services—childcare centres and all sorts of other things. In various places, those will have separate state, territory or Commonwealth funding to run the services. But it is a separate process. Without looking at each particular one and exactly what is being run by the state there, we could not answer you. We have not affected the funding that runs the services in those centres. The national partnership agreement was about building the centres and that is now complete. Senator PERIS: We have all, I suspect, been inundated with calls from SNAICC, the core body that services them, expressing concern that funding to them will cease. If I can give an example, the minister is talking about Closing the Gap, and a significant amount of Indigenous remote areas are highly disadvantaged with education. There is a child care centre in the APY lands that has been operating quite successfully and previously had received $700,000 over the past three years. When you hear statements from elders saying that ‘this family wellbeing centre builds vital life skills’, ‘it transforms lives’ and ‘niti tjutu’, which means ‘all clever little children’, my question to you, minister, is: you say you have a passion for health and education and to Closing the Gap, but where do you sit in all of this? Yes, you want to save money. But how can you not invest money in this area when we know that to keep an Indigenous child incarcerated in a youth detention centre costs $233,000, and that is all that this childcare service requires to function and have the opportunity to change an entire community’s life. Senator Scullion: First of all, I can break this down and into two parts. The second part of your question has nothing to do with arrangements on the first because the childcare centre you are talking about is not, in fact, a family community childcare centre that was built under the national partnership agreement. When you talk about the cessation funds, the funds were to build something. When you finish building it, the money for the building ends. That is element 1. That is over. The building is built. Then we move on to element 2. Element 2 was a $25.9 million investment particularly for vulnerable disengaged youth. That is yet to be rolled out and is maintained. There is no direct link between the rolling out of this that is particularly associated with the building of that infrastructure. That is disconnected. But if I could just go back to that $700,000 issue about some cuts of funding. I am not sure about the details of that. That is a separate issue. If you can provide us with the details of that, I will take that on notice and get back to you as soon as I can. Senator PERIS: What arrangements or undertakings have been made with states and territories for transitional arrangements from NPA funding to new funding arrangements beyond June 2014? Ms Edwards: As we said, the money for the first six years was for establishment of the centres. They were paid to states and territories on the basis of the broad milestones. Some of those states and territories would have used that money for things other than bricks and mortar, and it is true to say that states and territories have asked repeatedly for operational funding after the centres were built. That was nothing that was ever budgeted for or anticipated. So it is a separate issue. The minister has written to the states and territories that have children and family centres in remote areas saying we should have discussions with them about how to best manage the centres going forward and whether we can provide advice or assistance. So we will have ongoing discussions with the ones in the Northern Territory which are soon to be finalised—the one at Pukatja and the other ones in remote areas. In relation to the children and family centres that are outside remote areas, the minister has written to them to say that it is a matter for them how they continue to work with those centres, although there is always the capacity to make sure the centre is available to get child care benefit and child care rebate and to have changed arrangements for the centres’ operational arrangements. We have been working with officials throughout the period of the partnership to say that after we have built these facilities you need to be planning how you are going to manage them going forward. Senator PERIS: So what you are saying is that it is up to the states to finance them. Senator Scullion: Indeed, and that was certainly the understanding with the previous government. Senator McLUCAS: I do not know that it was. Senator Scullion: I am sorry, Senator McLucas, I have been in discussions with the jurisdictions, and I do not think that any of the jurisdictions are claiming to me that this is part of the national partnership agreement. In fact, it is available for your perusal. The agreement says no such thing. It says element 1 is finished when the expenditure is finished on the buildings: beginning and end of story. The states and territories have had some discussions, and those who believe that they have an efficiency dividend from the build have asked if they would Page 54 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE be able to use that for the running for a period of time. By and large we think that is a reasonable thing to do. They are the sorts of agreements we have come to with the other jurisdictions. Senator McLUCAS: So why is it that the Queensland Minister for Education was expressing his extreme disappointment and argued strongly for a reconsideration? You are saying that it is the Labor Party people who are saying the centres should have been funded into the future. But Mr Langbroek is not a member of my party, I can tell you that. Senator Scullion: No he is not. I am quite sure Mr Langbroek, who I know well and have a lot of respect for, would see an opportunity in a change of government to somehow say, ‘Well the other government was not going to provide it, perhaps we need to provide a bit of push and leverage from the current one.’ I will be having negotiations on this matter with Mr Langbroek and I am quite sure we will have a positive outcome. Senator McLUCAS: I hope so, because he says: Without ongoing funding support, it is unlikely that service integration and early childhood development outcomes for Aboriginal and Torres Strait Islander children will be sustained. Senator Scullion: That is a view and I disagree with it. As I said, these family and child centres that were built by the previous government were built to a particular level of amenity and standard so they can get access to particular funds. As I have said, they have access to Commonwealth and state initiatives in this area. Particularly in metropolitan areas and outer metropolitan areas, I think the conversations I have had is that they will be quite sustainable. That is why we have had a different approach to those in remote and very remote Australia, where the critical mass may be of some issue. So we will continue to discuss those particular differences with the jurisdictions. Senator PERIS: As you would probably very well know early childhood education gives a child the best preparation to their life. Given that you are prepared to provide $18 million to boost truancy officer programs but not to fund vital and culturally appropriate early childhood centres, which encourage Indigenous children to engage with learning, is there a reason why that is not given as high consideration as the truancy? Senator Scullion: There is no doubt about it that we now know that if we are not focusing on outcomes in the Australian early development index—ADI scores—then we are missing the boat. But this government, and I think to a degree to previous government, has focused on early development and we have made significant investments in that area. I think we have all moved on from saying, ‘We’ve done this so why did we afford a submarine? Why did we buy a submarine when we needed to build a bus stop?’ I do not think it is particularly appropriate or sophisticated about making an investment. And I have to say, in terms of outputs, the attendance rate under the previous five years of the government of your predecessors went down by 14 per cent—that is three per cent a year. Not only in a very short period of time have we levelled that out but on every measure we have improved it. Senator PERIS: Could you please provide an update on the number of truancy officers in each school and the latest attendance rates? Senator Scullion: With attendance rates: as you know, the jurisdictions are responsible for education. With each jurisdiction we have a different set of arrangements about the provision of the attendance data. Some of them have provisions where we are allowed to use it but we are not able to pass that on at this stage. We would like that change, but there are some that we are able to use and publish publicly. We will be able to provide those ones that have no provision of confidentiality. I will have to get back to you on that on notice. There are some privacy issues around that I would have to clarify before I could say you would be able to pass those on. But within those restrictions, for example, I do not think it would be difficult to pass on the headline numbers. When it comes down to particular schools in particular jurisdictions there may be some differences. I would like the numbers to be consistent, so in terms of those conditionalities I will take that on notice. Mr Fordham: With the numbers of people employed on the ground at the moment, as of yesterday there are 102 student attendance supervisors, 413 student attendance officers—they are the part-time officers—and another 133 in what we call ‘the pipeline’—recruitment in a pool. Senator PERIS: There was a recent article in The Australian that indicated a high staff turnover in some of the areas, notably in the APY lands, where 10 out of the 16 truancy officers initially employed have since left their positions. Can you provide further turnover rates for all locations since the program has begun? Mr Fordham: To provide them for all locations we would have to do that on notice, I am sorry. There has been some turnover in the APY. There has been turnover in most locations, as you could imagine, with the nature of the work and the labour pool. They are mainly part-time positions. In some cases the turnover is because people get jobs. In that APY case there were three people who got jobs and moved on to other roles. Others choose for other reasons. Friday, 30 May 2014 Senate Page 55 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator SIEWERT: Are you doing exit interviews with people who are leaving? Mr Fordham: We are, yes. We are not the employers. It is up to— Senator SIEWERT: Do you require them to be done? Mr Fordham: No, we do not require them to be done. Senator SIEWERT: Do you know how many have been done? Mr Fordham: I would have to take that on notice. Senator SIEWERT: Could you take on notice, please. Mr Fordham: Yes. Senator SIEWERT: Why are you not requiring them to be done? To understand this new program, I would have thought it would be useful to know why there is that high turnover. Senator Scullion: Perhaps I can throw a little light on it. This is only anecdotal, from my observations, and I am sure you have made some that are the same, Senator. I insisted that this program would employ 100 per cent Aboriginal people. In some circumstances that has been challenging. A few of the people who are now employed have been employed before, but most of them were unemployed. It is not because they did not have the set of skills. The skills they have are understanding deeply the circumstances of the community, the circumstances of families. They live in the community and have a degree in Yuendumu or Wingellina; that is why they have been selected. But this job, like all jobs, is not for everyone. I have to say that by and large they have done a great job. It is not that people were sent away. Sometimes this is an intense job. Sometimes you have to knock on doors and confront people, and you might think that that is not necessarily for you. I suspect it is a suite of issues. Sometimes they will leave, but I hope they will gain confidence, as was just indicated by Mr Fordham. Losing people is not a bad problem to have. I have just been told that on Palm Island we have lost three people. We have lost them to the school, the education system. They have full employment. We are losing people. Invariably we are losing people to other jobs. So they are getting a sense of confidence and they are moving on to another job and we are backfilling those. But it is not a bad problem to have. Senator SIEWERT: It would be useful if you could take that question on notice, please. Senator MOORE: Ms Carroll, is it not standard practice to have exit interviews? Is that not a standard expectation? Ms Carroll: As Mr Fordham said, we are not employers. Senator MOORE: I know. Is it not PSC standard that, when you set up, as a basis you pass that standard on? Ms Carroll: We are certainly asking the service providers to talk to people as they are leaving, which is why we know that a number of people have moved on to other jobs. We have not got it as a clause in the funding agreement at this point, but it is certainly one of the pieces of feedback. This is a very new program and we are working out how it works, what key things we need to collect and what information— Senator MOORE: So you are actually asking them to talk to people before they leave? Ms Carroll: We are encouraging them to have that discussion as they leave. We met with some school attendance supervisors and officers in Canberra yesterday, and some of them described that there were two reasons for exit. One is that someone gets another job. The other is that as they come into the job they find being in the job hard. Some of it is because of the type of work and some of it is that they are not used to being in work. We are certainly trying to find out those things. Senator MOORE: Maybe in the review you could look at having standard exit interviews. That could be something to look at. Senator PERIS: Last time we had estimates, Minister, I asked about whether you are providing additional funding—the $13 million—for the truancy officers program and whether you would provide funding for vehicles for transportation of the kids to school. Has anyone put any proposals to you with regard to funding for vehicles? Senator Scullion: I did not wait for a proposal to be put. We did an audit of the transport arrangements, and some of it was pretty abysmal at the start. They would borrow the headmaster’s car and wobble around. Because I am on the ground all the time, as I was, I have realised that we need to do a lot better in that regard. We have done an audit. We have worked out exactly the nature of the fleet that we are currently making that investment in. Is that right, Mr Fordham? Page 56 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Mr Fordham: That is right, Minister. At the moment we have about $600,000 worth of vehicles on order. I could not tell you the number of vehicles already out there, but we could certainly provide the details of the audit. It is by community and by vehicle. Senator PERIS: That would be fantastic. Senator McLUCAS: Mr Fordham, you have given us the number of people as well as the number of people in the pipeline. How many vacancies do we have as of today or sometime around now? Mr Fordham: I will have to take that on notice, Senator. Senator PERIS: Will the Remote School Attendance Strategy be reviewed or undergo evaluation? If so, when? Is there a time frame? Mr James: We are already getting an unprecedented level of data from jurisdictions on this, including daily data from many jurisdictions. There is certainly weekly data from all, apart from one, which is four weekly. We are getting an incredible amount of data, and even the education departments themselves are telling us that in many cases they have never looked at the data in such detail before, centrally. We will have an evaluation of the Remote School Attendance Strategy. We have already been talking to the Northern Territory government about how to do that, including accessing and doing things with their data—matching with Commonwealth data and the like. The NT government in particular is very keen to start that process as soon as we can. The fact that we are getting so much data means it is going to be a lot easier to do it than often is the case with an evaluation, where you are trying to get data after the policy has already been in place for quite some time. Senator PERIS: Will your data include student-to-teacher ratios? I know in the earlier days you had an abundance of kids coming to school because of that. The communities were saying, ‘We have an influx of kids and there are not that many teachers to cater for them.’ Mr James: Yes. That is one of the things that we have been looking at. As we have been looking at the data we have been looking at things such as: what effect has the extra children coming in had on teacher ratios and the like? That will be part of it, yes. Senator PERIS: When will that be available? Mr James: We have not yet agreed on an evaluation strategy with the jurisdictions. The focus at this stage has all been on monitoring. We have not set dates for that evaluation. The Remote School Attendance Strategy has only been going for just over one term, so it is a bit early for an evaluation. Having said that, it is a good point to start to think about that now so we will be prepared for it. Senator Scullion: Senator, perhaps I can outline one of the other significant changes. Regarding all of the changes in these programs, in the past I think it could be reasonably described as a bit of a ‘set and forget’—we would do it and then we would have an evaluation. Now, perhaps if not daily then at least every second day, I am pulling my hair out about what is happening in one school or another, because I know it on that day. The data that comes in is the raw data about how many kids and which kids are at school or not at school. We are doing a lot of research about what is not happening. Yes, it is interesting to know who is at school, but those kids are actually not who we are interested in. We are interested, really, in the people who are not at school. Families, footy, funerals and Fridays are all particular challenges around mobility of families and those sorts of things. In each of these areas we are developing strategies about how we can assist in each of those areas. For example, many funerals are held not far from a community and they always have a school there. Even if people come from somewhere else, it is the provision of transport, as you indicated. Somebody appropriate can drive the vehicle and get into the area and out of the area to get schoolkids. We are engaging with the cultural authorities around the country to ensure that we are provided with accurate advice about how, where it is not necessary for children to be, we can best ensure that the children are tracked and go to the school adjacent to that area. We are having what I think are some very promising discussions with the AFL. As you know, the first points game of the AFL is about to be played in Alice Springs. Whilst we are all overjoyed at that, I am pretty down in the lip because I reckon we are not going to have anyone in school in the area from about Thursday to Tuesday. They understand that. We have all got to work—and I am looking forward to working with you, Senator—around this area. We need to understand better how we can put initiatives in place to help people get home, if that is the issue. We have done a lot of work on better understanding the reason that children are not attending on Fridays. It is a four-day week, and they believe that school is open for four days. It has been a convention for some time, and we think it is associated with the hangover from CDEP going for four days and the administrative people saying, ‘We have just got to do all the paperwork on the Friday,’ so no-one comes to work on Friday. I am going to make sure, for example, the RJCP participants and the activities are five days a week. We have to start changing the Friday, 30 May 2014 Senate Page 57 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE convention about how government does things if we are going to expect a change in how community does things. I assure you that I am working very diligently not just to set and forget; as we are getting this information in, we are trying to change the way we do something—and that is on a weekly and monthly basis. We are not waiting until the end of it anymore before we do something. In terms of your question about an assessment, the story of our journey will always be available. Yes, at some stage, we will no doubt do a more formalised assessment, but this is a very dynamic area. Again, there is no set and forget. Every day we know what is happening, and we are changing our behaviour and our resources appropriately. Senator McLUCAS: Mr Fordham, you said you would take on notice the number of vacancies. What is the ballpark figure for that? Mr Fordham: I have been trying to go through my spreadsheet and take away the target numbers that I have there. I think we have 90 vacancies at the moment. That is largely made up of the stage 2 schools, which started term 2. So obviously it is a phased rollout for them. Senator McLUCAS: Mr James, I wonder if you could indicate which states and territories are reporting attendance data and at what frequency? Mr James: I can read them all out, if you like. Senator McLUCAS: Please. Mr James: The Northern Territory government gives us daily attendance data but weekly—that is, for the five days for each day of the week on a weekly basis. The NT Catholic Education Office are doing weekly data. The WA government are providing weekly data on attendance and enrolment level. The WA Catholic Education Office are providing weekly data on attendance and enrolment split by year level, and the WA government are providing day of the week. The WA independent school that we have is also providing weekly data and daily data. I could go through it, if you like. Senator Scullion: I would like to intervene for a moment. I know that the assistant secretary is faithfully providing information in answer to the question and thus far probably has not offended one of the jurisdictions he is about to get to. Given that one of the jurisdictions he will read out will be a different amount, I really would like to check with them. These are very delicate arrangements we have with receiving the data, and if I can provide the remainder of that on notice, because I would like to check with the jurisdictions. The jurisdictions that we have already spoken about are quite happy to publish, but the others are challenging and have not released that. I ask to take the remainder of that question on notice, and I will get back to you as soon as possible. I do not want to offend the jurisdictions by making announcements about how quickly or not they are providing that data. If I can take that on notice, I would really appreciate it. Senator McLUCAS: Could we get that now? The piece of paper that is being— Senator Scullion: That would mean that I would have to contact the jurisdictions. I will get it to you as soon as possible, but I do not think that I am going to be able to get in touch with those jurisdictions today. Mr James: I just want to clarify one thing. In terms of the data that jurisdictions allow us to release, I read out the data they are providing us—that is not the same as what they agree to release. When the jurisdictions agree to release, they tend to agree to release what they call verified data for a whole term or, in some jurisdictions, a whole semester. So, in many instances, we have the detailed data and we use that for operational purposes. If we want to release the data, it is always a case of us checking with that individual jurisdiction to make sure that they are happy with that, because if we do not respect that we may stop getting the data. So we have to respect that provision. Senator McLUCAS: We are not asking for Mr James to release the data. I can understand that there would be sensitivities around that, but the frequency of reporting is surely something that should be in the public arena. You are running a program. It is costing a lot of money. There has to be some evaluation component to it. I acknowledge that you do not want to report on a certain school in a certain community on a daily basis, but the frequency of reporting is a reasonable thing for us to know. Senator Scullion: The only frequency of reporting that is of real use to us is weekly. I can assure you the sensitivity of that matter and how we have managed to come to where we are now has been a long and tortuous process. It is very difficult for the jurisdictions to be able to provide information, even if it is raw data—some, as I said, was only available to themselves at every semester. They are all making significant efforts to be able to provide data weekly and— Senator McLUCAS: Are you telling me— Page 58 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator Scullion: as I have said, some have done better than others. And it is a sensitivity. I would prefer it if I could provide that to you on notice. CHAIR: The minister has taken it on notice. Senator McLUCAS: I think you said that they are all reporting on a weekly basis. Have I heard you correctly? Senator Scullion: They are not all reporting on a weekly basis, which is why I have indicated— Senator McLUCAS: All right, I will let it go. CHAIR: I believe that concludes this part of the program. We will now move to the session on Indigenous housing with officers from the Department of the Prime Minister and Cabinet. [14:45] CHAIR: Senator McLucas, would you like to lead the questioning here? Senator McLUCAS: Yes, I would. Earlier today, Senator Wong canvassed some of the issues around the municipal and essential services funding. I just want to get some of the detail of the previous program. In my understanding, it was $44.1 million in 2013-14 and covered 340 remote communities across WA, SA, Queensland, Victoria and Tasmania. Can I get the split of funding across those various jurisdictions, please? Mr Sowry: Yes. For Western Australia, it is in the order of $28.4 million per year. For South Australia, it is in the order of $9.6 million; Queensland, $3.5 million; Victoria, $0.9 million; and Tasmania $0.36 million—so it is $360,000 for Tasmania. Senator McLUCAS: And the number of towns that were being serviced in each location—do you have that, too? Mr Sowry: Yes, I do—in Western Australia, 168 communities; South Australia, 81; Queensland, 41; Victoria, two; Tasmania, one. Senator McLUCAS: Okay. Regarding the discussions with states and territories, can you give me an understanding of what the nature of those negotiations are to this point? Ms Carroll: With the state governments? Senator McLUCAS: Yes. Ms Carroll: The minister has had engagement at a ministerial level and, then, both Mr Sowry and I have been speaking with the state and territory government officials both in the premiers’ departments and in line departments around the arrangements for the future. Senator McLUCAS: And is that about quantifying the costs to the state? What are the nature of those discussions? Ms Carroll: The nature of those discussions goes to the future of the municipal and essential services, and what might be able to be negotiated. Senator McLUCAS: Currently, the money is given directly to the state and then the state—no, it is a direct grant to the local authority, I think you are saying. Mr Sowry: It varies. Senator McLUCAS: Can you give me an understanding of that, then. Mr Sowry: Depending on each jurisdiction, it can be a mix of provision direct from the Commonwealth to service providers. There are some payments made to the states and some payments made to local government. Senator McLUCAS: Service providers? Private service providers? Mr Sowry: Local Aboriginal corporations, Aboriginal trusts and the like. Senator McLUCAS: Okay. There are local communities that do not have a local authority; how are you getting through there? Mr Sowry: That is part of the negotiations with the states for the ongoing servicing. Senator McLUCAS: And in those towns the state may be contracting, or the Commonwealth may contract directly to an organisation? Mr Sowry: Correct. Now, the service is provided as a direct contract between the Commonwealth and a local service provider, a local organisation. Senator McLUCAS: Do you and your officers identify those services or is that done through the state? Friday, 30 May 2014 Senate Page 59 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Mr Sowry: It is being done through the Commonwealth. Senator McLUCAS: Is it fair to say that most of these funds were used for waste removal? Mr Sowry: No. Senator McLUCAS: Can you give me an understanding, then, of what the split is? Mr Sowry: We do not have a split as such in the provision of the different services. The way it generally works is that an organisation or service provider is engaged. They might provide a range of services for a community or a region—that is, a number of communities—incorporating services that might be required for each and every community. Those services could include waste management, airstrip and road maintenance, dust control, fire prevention, dog control—the sorts of things that are needed in communities. It could be lawn cutting and grass cutting to reduce fire hazards. Senator McLUCAS: General local government type services. Mr Sowry: Yes, local council type services. Ms Carroll: In a number of those communities that is not the only funding provided. Senator McLUCAS: Of course. They will have financial assistance grants and all sorts of things. Ms Carroll: That is right. They will have other state government funding. The mix of funding that goes into it varies from state to state. Senator McLUCAS: You have predicted my next question, Ms Carroll. Is there a formula you use which says: a community of that size with that many people in this state equals this amount of money? Mr Sowry: No, there is no formula. Senator McLUCAS: How do you work it out then? Mr Sowry: As Ms Carroll alluded to, the Commonwealth generally only supports or supplements other forms of funding which may be available through state resources that filter down through local government areas. It is a matter of need. A lot of the provision of and funding of services has been done on an historic basis, and each community is a bit different. So there is no real formula that could be applied to meet a common goal. Senator McLUCAS: I understand there are negotiations with various states and territories, but the feedback that we are receiving from some states and territories is that there is a lot of push-back, having to fill this gap straightaway. In my state it is $41 million. and you have just got to find it or those services will not be delivered. The point I am trying to make is: this has been an ongoing, rolling, annual allocation for many years and, whilst there has been desire from the Commonwealth probably for as many years to devolve these services to states and territories, this is the first time that a state has opened up the budget and found there is $44.1 million missing and they are going to have to fill the slack. I understand you are going through negotiations, but I think we need to get some clarity on where those negotiations are getting to. That is probably not a question for you, Mr Sowry, but maybe the minister might want to answer. Senator Scullion: I just think we have been successful. I am determined where other governments have not been. I know that your government was determined to do this and was not able to. As I have said, by and large yes, it is a difficult matter; but currently in my negotiations the ministers responsible understand the inappropriateness of the Commonwealth providing for this. There has been a long period of time under which things have been funded in different ways in different places. Senator McLUCAS: I do not know that I said ‘inappropriate’. It is historic. Senator Scullion: I think it is inappropriate to be delivering municipal services. The Commonwealth should not be delivering municipal services. It is as simple as that—and, I have to say, my predecessor, Minister Macklin, had the same view. Senator McLUCAS: Nobody can speak on behalf of Minister Macklin. Senator Scullion: I am obviously alert to the concerns of those governments. We are negotiating very positively, I think, with those jurisdictions to ensure that the responsibility goes to where it should be. I am more than happy to report back on those negotiations at the next estimates. Senator PERIS: I want to talk about the Tiwi Islands. Can you please outline the current status in relation to the proposed lease on Melville Island and the detail of the offer to the Tiwi Land Council in relation to the lease? Ms Edwards: I am happy to tell you where the process is up to. We would not provide detail of our negotiations while those are continuing. You would be aware that a state of commitment was signed, which is effectively an agreement to have discussions. Page 60 Senate Friday, 30 May 2014 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE Senator PERIS: When was that made? Ms Edwards: On 14 March this year, with an expectation of concluding negotiations during this year, by November. There are ongoing discussions with traditional owners, and we expect the presentation of a proposal to those owners within the next week. Senator PERIS: So you are going to Tiwi to discuss what you are going to propose to them? Is that right? Ms Edwards: That is right. Senator PERIS: With the hope that you will have some sort of agreement reached by November? Ms Edwards: Correct. Senator PERIS: You cannot tell me any details of the proposed lease, such as where on Melville Island you are proposing the lease? Ms Edwards: In relation to the Pirlangimpi community, I cannot talk about what the boundary would be. Broadly speaking, the content of the offer is a matter to be presented to the traditional owners for their consideration. We would not normally disclose the contents of those sorts of things while negotiations are continuing. Senator PERIS: Is your consultation just with the Tiwi Land Council or would it also have the Munupi people, the traditional owners, involved as well? Ms Edwards: It would involve traditional owners. Senator PERIS: So it would be broader than just the Tiwi Land Council? Ms Edwards: I do not have with me exactly who is expected to be present; but it is not limited to the Tiwi Land Council. Senator PERIS: When is that? Is it 4 June? Ms Edwards: That is my understanding, yes. Senator PERIS: Are you across Yirrkala? Ms Edwards: Yes. Senator PERIS: Can you describe how you determine who the traditional owners are in relation to the township leasing in Yirrkala? Can you outline the consultation you have taken with Banduk Marika in relation to the Yirrkala township leases and your understanding of her position? Senator Scullion: The process within the Northern Land Council area of establishing traditional owners has always been that they are identified by the Northern Land Council. The process in Yirrkala was that we decided there should be a period of time under which we could say, ‘The department is here to answer any questions for a period of time.’ In terms of the township leasing, there has been lots of what I think has been very positive discussions, questions and answers, over that period of time. There will be a time when people sit down and more seriously discuss those matters; they will do that at some stage in the future. As for Ms Marika, I do not know exactly what her position is on this. But I have met with her on a couple of occasions to speak about this and other matters and, no doubt, when I am in her country again I will be doing the same. Senator PERIS: That lies, then, with the Northern Land Council. Is that what you are saying? Senator Scullion: There is no selection. Your question went to who the traditional owners are? Senator PERIS: Yes. Senator Scullion: That is not for us to decide. The process of establishing the traditional owners is run by the Northern Land Council. They determine that for us. We do not decide that. Senator PERIS: Minister, you would be aware that there has been a recent petition signed by more than 400 people, including eight of the 13 traditional owner groups, with regard to the proposed lease agreement over Gunbalanya. We both know and have been talking about the fact that when decisions are imposed on Aboriginal people you are going to get a fair bit of reluctance from them. Shouldn’t a change as significant as this have to achieve widespread support, rather than widespread opposition, before it proceeds? Would you hold off this lease until you gain full support? Senator Scullion: What needs to be clearly understood, and what needs to be understood also by the proponents who were waving around for people to sign a document—and that was the land council; I have spoken to the full land council about this matter, as you may be aware—is that the process is not dictating anything. We are simply saying there is a period of time to negotiate. Friday, 30 May 2014 Senate Page 61 FINANCE AND PUBLIC ADMINISTRATION LEGISLATION COMMITTEE For those people, the land council, it is in their interest. They are saying, we do not like 19A leases. They want the section 19 leases that they are in control of. So I think it is a terrific thing for traditional owners now to have a bit of competition in the marketplace. I am offering a lease which is significantly better—it is a Rolls Royce lease from a traditional owner’s perspective. The Northern Land Council have the V-dub lease, which is a terrific lease. It is a 40-year lease. You are not able to actually bank it. We will have those conversations, and it is really a matter for the traditional owners and then a matter for the community. I know that somebody has gone round and humbugged them for signatures. That is not particularly hard to do in communities. But we are not imposing any leases on anyone; we are simply giving people an opportunity to understand that there is an alternative to the current arrangements, and we are more than happy to support that. Senator McLUCAS: And I am aware of the time. Just to flag that we will have some questions on the NPA for Remote Indigenous Housing. I understand there are some developments that have happened today, so there will be some questions on notice to clarify that. And I will leave it at that. Senator McKENZIE: I had a brief line of questioning around the alcohol management plans from 2012 and the impact of the five minimum standards introduced by the previous government on the rollout of those plans. And I realise this is not a housing matter, but I am confident that the department would actually be able to comment on that. CHAIR: I thought you were going to put a question on notice, Senator McKenzie. I feel dudded! Ms Carroll? Ms Carroll: We can answer that on notice. CHAIR: Thank you. That concludes budget estimates for this session and the cross-portfolio on Indigenous matters for today. May I thank all the officers that have appeared. Thank you, Minister. Thank you, secretariat, honourable senators and Hansard for your forbearance over the last week. Committee adjourned at 15:02



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